I make it known that the Federal Senate has approved, and I, Garibaldi Alves Filho, President, in the terms of art. 48, inciso XXVIII, of the Rules of Procedure, promulgated the following

R E S O L U UNK UNK No. 41, DE 2007

Authorizes the Municipality of Pelotas (RS) to hire external credit operation, with a Union guarantee, with the International Bank for Reconstruction and Development (Bird), worth US$ 18,900,000.00 (eighteen million and nine hundred thousand U.S. dollars).

The Federal Senate resolves:

Art. 1º It is the Municipality of Pelotas (RS) authorized to hire external credit operation, with Union guarantee, with the International Bank for Reconstruction and Development (Bird), worth US$ 18,900,000.00 (eighteen million and nine hundred thousand U.S. dollars).

Single Paragraph. The proceeds advected from the credit operation referred to in the caput are intended for the funding of the Integrated Municipal Infrastructure Project of Pelotas (RS).

Art. 2º The credit operation referred to in art. 1º should be carried out under the following conditions:

I-devedor: Municipality of Pelotas (RS) ;

II-credor: International Bank for Reconstruction and Development (Bird) ;

III-guarantor: Federative Republic of Brazil ;

IV-value: US$ 18,900,000.00 (eighteen million and nine hundred thousand U.S. dollars) ;

V-modality: fixed margin loan (fixed spread loan) ;

VI-deadline of disbursement: up to 60 (sixty) months, counted from the duration of the contract ;

VII-amortization: semiannual and consecutive plots, paid on day 15 of the months of January and July of each year, winning the first on July 15, 2012 and the last no later than January 15, 2024, each of the 23 (twenty-three) first installments will correspond to 4.17% (four integers and seventeen hundredths per cent) of the value disbursed and the last to 4.09% (four integers and nine hundredths per cent) ;

VIII-interest: required semester on the same dates of payment of amortization and calculated on the periodic debtor balance of the loan, at a rate comprised of the quarterly Libor interest rate for U.S. dollar, plus a spread to be determined by the Bird at each fiscal year and fixed on the date of the contract signing ;

IX-interest arrears: 0.50% a.a. (fifty hundredths per cent per year) plus interest due and not yet paid, accrued 30 (thirty) days after the expected date for payment of interest ;

X - commission on sight: 0.25% (twenty-five hundredths per cent) on the value of the loan, to be debited on the date on which the contract comes into effect.

Single Paragraph. The payment dates of the principal and financial charges as well as of disbursements may be changed depending on the date of signing of the loan agreement.

Art. 3º It is the Union authorized to grant assurance to the Municipality of Pelotas (RS) in hiring of external credit operation referred to in this

Single Paragraph. The exercise of the authorization provided for in the caput is conditioned on the Municipality of Pelotas (RS) to conclude contract with the Union for the concession of contragaranties in the form of linking the own revenues of which it treats art. 156, of the revenue allocation quotas of which they treat the arts. 158 and 159, all of the Federal Constitution, and others in admitted law, and the Federal Government may retain the transfers of resources required to cover the honoured commitments, directly from the centralizing accounts of the collection of the Municipality or the Federal Transfers.

Art. 4º The authorisation granted by this Resolution should be exercised within the maximum period of 540 (five hundred and forty) days, relied on from its publication.

Art. 5º This Resolution comes into force on the date of its publication.

Federal Senate, on December 20, 2007.

Senator Garibaldi Alves Filho

President of the Federal Senate