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HILLVIEW PARK CONDOMINIUM CORPORATION

“A HOME WITHIN A COMMUNITY”


℅ Alberta Condo Review & Management
Suite 603A – 8600 Franklin Ave.
Fort McMurray, AB T9H 4G8
ACRMinfo@gmail.com
June 3, 2019

Communication to Owners: The Plan & Letter of Intent

Hillview Owners,

The Board of Directors is excited to announce that we have come up with a source of financing
and a plan to complete the project and rebuild all of the homes. We will be appearing before the
Court on July 3, 2019 to seek approval of this plan. Access to the application will be provided by
videoconference in Fort McMurray and by telephone for anyone located outside of Fort
McMurray.

A copy of the Letter of Intent between the Condominium Corporation and Calmac is attached
(the “LOI”). It will be attached to the Condominium Corporation’s materials filed in support of the
application, which materials will be filed and served on June 21, 2019. However, the Board wanted
to provide all owners with a copy of the LOI in advance of June 21 so that you have time to
consider it well in advance of the July 3 court date.

Essentially, the LOI contemplates Calmac deferring payment for all amounts currently owing for
remediation work, but not yet paid, as well as all future amounts that will be incurred for
remediation work until 60 days after substantial completion, at which time the Condominium
Corporation can elect to convert the amounts owed to Calmac into a term loan. The terms
essential terms of that loan are contained in paragraph 4 of the LOI.

During completion of the project, the Condominium Corporation will make interest-only payments
to Calmac, which we estimate will start out at approx. $42,000 and rise by about $5,500/month
ending at approx. $97,000/month at substantial completion. We estimate the total interest payable
will be approx. $722,500. In order to ensure the Condominium Corporation can make these
payments, we need owners to cooperate by paying their condo fees. The Board is hopeful that
with a clear path to completion, owners will want to pull together, pay their condo fees and ensure
our homes are rebuilt.

Calmac, like anyone financing a project, requires security, which is set out in paragraph 5 of the
LOI. Essentially, the Condominium Corporation will be providing Calmac with a general security
agreement, which includes an assignment of all condo fee and special assessment receivables.
Further, if and when the Red Cross funds are released from High Clouds trust account, those will be
assigned to Calmac. If the Condominium Corporation becomes entitled to retain holdback funds
currently held in trust pursuant to the Viceroy contract, these will be assigned to Calmac as well.
Lastly, if the Condominium Corporation has to foreclose on any units that are in arrears and such
units become registered in the Condominium Corporation’s name, Calmac will be given a first
ranking mortgages on these units.

Importantly, any amounts assigned to Calmac or otherwise paid to Calmac during completion of
the project will reduce the amount owing and thus the interest-only payments and the ultimate
debt upon completion. As you will see, the Condominium Corporation can prepay Calmac at any
time, so long as such payments are $5,000 or more. This means that in a foreclosure situation, if a
unit is sold by the court, any proceeds retained by the Condominium Corporation will be used to
reduce the amount owing to Calmac.

A number of “other conditions” are contained in paragraph 9 of the LOI. The Board is in the
process of obtaining approval from the various parties, where such approval is required. We note
that the condition date contained in paragraph 10 has been extended by agreement to July 8,
2019 to allow for the court application to be heard. An amendment to the LOI will follow, showing
this change as well as minor changes to the wording in paragraph 9(e)(iii). These changes will not
impact the nature of the plan or the financing arrangement with Calmac. We will post the
amended LOI to Geniepad as soon as it is executed by Calmac and the Condominium
Corporation.

The Board wishes to point out that Calmac has continually worked with the Condominium
Corporation, going above and beyond to ensure the project did not fail while the Board sought
financial support to complete the project. The Board has faith in Calmac’s ability to complete the
project and is grateful that Calmac is willing to cash-flow the project through to 60 days post-
substantial completion.

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Without any clear roadmap to completion or any access to financing to complete the
remediation work, progress on the project was necessarily slowing down. However, since the
Condominium Corporation entered into the LOI, staffing levels have increased to a regular 30+
people on site with more mobilizing in the next few weeks to 60 total people. We are expecting a
bid for the storm and sanitary system next week for the replacement and repair to be completed
over the summer. We are expecting an updated schedule from Calmac in the next two weeks
which will show how and when the remediation work will be completed, if/when the plan is
approved.

We know this has been a difficult and trying time for everyone. At this time, the Board is asking for
your support of the plan so that the project can be completed. The Board truly believes this plan is
the only way in which the project can be completed. Without it, our homes will not be rebuilt.

Sincerely,
The Owners: Condominium Plan No. 812 0527

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