Common use of Other Undertakings Clause in Contracts

Other Undertakings. The Borrower shall cause SEPLAG to: (i) no later than three months after the Effective Date, designate the independent auditors as referred to in Sections II. B.3 above; and (ii) no later than six months after the Effective Date, designate the procurement auditors as referred to in Section I. A.6 above; all under terms of reference and with qualifications and experience satisfactory to the Bank. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. On each March 15 and September 15 Beginning September 15, 2016 through March 15, 2039 2.13% On September 15, 2039 2.02% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.

Other Undertakings. The Borrower shall cause SEPLAG to: (i) no A. No later than three (3) months after the Effective Date, designate the independent auditors as referred Borrower shall have ensured that NACA has recruited, in accordance with the requirements of Section III of this Schedule 2, the following long-term senior technical specialists for the Project (in addition to in Sections II. B.3 abovethose recruited pursuant to Section 5.01(a) of this Agreement): (i) a second financial management consultant; and (ii) no later than six months after the Effective Datea second procurement consultant, designate the procurement auditors as referred to in Section I. A.6 above; all under with terms of reference and with reference, qualifications and experience satisfactory to the Bank. 1B. The Borrower shall ensure that its Office of the Auditor General has cleared all of the audit backlogs: (i) no later than eight (8) months after the Effective Date for Phase I Health Districts; and (ii) by inception of Phase II Health Districts, to the Bank’s satisfaction. C. No later than twelve (12) months after the Effective Date, the Borrower shall have ensured that a detailed social analysis under Part A of the Project has been carried out, as satisfactory to the Bank. D. No later than six (6) months after the Effective Date, the Borrower shall have ensured that all finance and accounting Project staff in the Beneficiary Ministries and NACA necessary for Project implementation have been recruited in accordance with the requirements of Section III of this Schedule 2, all with terms of reference, qualifications and experience satisfactory to the Bank. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by and (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Principal Payment Date Installment Share (Expressed as a Percentage) On each March 15 and September April 15and October 15 Beginning September October 15, 2016 through March Through October 15, 2039 2.132032 2.94 % On September April 15, 2039 2.022033 2.98 % 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.

Other Undertakings. The Without limitations to the provisions of Section 5.08 (b) of the General Conditions, the Borrower shall cause SEPLAG toby October 31, 2012, or such other date as the Bank shall agree upon: (ia) no later than three months after carry out jointly with the Effective DateBank, designate a mid-term review of the independent auditors as referred to implementation of the Project, which shall cover the progress achieved in Sections II. B.3 abovethe implementation of the Project; and (iib) no later than six months after the Effective Datefollowing such mid-term review, designate the procurement auditors act promptly and diligently to take any corrective action as referred to in Section I. A.6 above; all under terms of reference and with qualifications and experience satisfactory to shall be recommended by the Bank. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. On each March May 15 and September November 15 Beginning September May 15, 2016 2014 through March November 15, 2039 2.132029 3.03% On September May 15, 2039 2.022030 3.04% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) . Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.

Other Undertakings. The Without limitations to the provisions of Section 5.08 (b) of the General Conditions, the Borrower shall cause SEPLAG toby October 31, 2012, or such other date as the Bank shall agree upon: (ia) no later than three months after carry out jointly with the Effective DateBank, designate a mid-term review of the independent auditors as referred to implementation of the Project, which shall cover the progress achieved in Sections II. B.3 abovethe implementation of the Project; and (iib) no later than six months after the Effective Datefollowing such mid-term review, designate the procurement auditors act promptly and diligently to take any corrective action as referred to in Section I. A.6 above; all under terms of reference and with qualifications and experience satisfactory to shall be recommended by the Bank. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. On each March May 15 and September November 15 Beginning September May 15, 2016 2014 through March November 15, 2039 2.132029 3.03% On September May 15, 2039 2.022030 3.04% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual. Section I. Definitions

Other Undertakings. The Borrower shall cause SEPLAG to: (i) no later than three months after the Effective Date, designate the independent auditors as referred to in Sections II. B.3 above; and (ii) no later than six months after the Effective Date, designate the procurement auditors as referred to in Section Section I. A.6 A.8 above; all under terms of reference and with qualifications and experience satisfactory to the BankBank and in accordance, if applicable, with the provisions of Section III above. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. On each March April 15 and September October 15 Beginning September October 15, 2016 2014 through March April 15, 2039 2037 2.13% On September October 15, 2039 2037 2.02% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-sub- paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Fiscal Quality Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 14,186,850 Public Sector Fiscal Quality Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - 3,328,111 Public Sector Quality and Innovation in Public Management Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - 4,754,876 Public Sector Quality and Innovation in Public Management Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 3,770,551 Private Sector Development Developm ent Investment and Aggregated Value of Production Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 13,062,421 Private Sector Development PPPs2 Developm ent Investment and Aggregated Value of Production PPPs1 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 3,269,117 Private Sector Development Developm ent Innovation, Technology and Quality Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 29,772,000 Private Sector Developm ent Innovation, Technology and Quality Certification Systems 20.122.050 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 Goods/ works/ recurrent costs 12,090,595 15,978,320 10,200,000 5,018,294 14,956,169 Health Healthy Life Regionalization of Healthcare 10.302.044 Goods/ works/ 178,000,000 61,273,477 164,822,433 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ Services recurrent costs Health Healthy Life Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 490,402,500 Health Healthy Life Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 106,750,000 Education Quality Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 101,957,036 Education Youth Protagonism Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 22,799,853 Education Youth Protagonism Improvement in Quality and Efficiency of Secondary Education 12.362.037 Goods/ works/ recurrent costs 31,648,000 36,124,283 38,349,614 Education Personnel – State Secretariat of Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries costs 492,063,941 501,068,711 517,641,821 258,820,911 510,238,269 Education Personnel – State Secretariat of Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries costs 16,558,167 16,861,181 17,169,741 8,584,871 Education Personnel – State Secretariat of Education Development of Elementary Education 12.361.235 Recurrent costs 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-1938,771,205 Infra- structure Transport Logistics and Development Integration ProMG-Pleno3 Pleno2 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-237,500,244 Infra- structure Transport Network of Cities and Services Pro-Acesso4 Acesso3 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 2 Under ProMG-Pleno and Pro-AcessoPleno, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.

Other Undertakings. By February 28, 2013, or such other date as the Bank shall agree upon, the Borrower shall: 1. carry out jointly with the Bank, a mid-term review of the implementation of operations under the Project (Midterm Review). The Borrower Midterm Review shall cause SEPLAG to: (i) no later than three months after cover the Effective Dateprogress achieved in the implementation of the Project; and 2. following such Midterm Review, designate the independent auditors act promptly and diligently to take any corrective action as referred to in Sections II. B.3 above; and (ii) no later than six months after the Effective Date, designate the procurement auditors as referred to in Section I. A.6 above; all under terms of reference and with qualifications and experience satisfactory to shall be recommended by the Bank. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. On each March June 15 and September December 15 Beginning September June 15, 2016 through March 2015 Through December 15, 2039 2.13% On September 15, 2039 2.022% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.

Other Undertakings. 1. The Borrower shall cause SEPLAG to: (i) no later than three months after ensure that the Effective Daterelevant funds for the financing of Parts A.2, designate B.2, A.3 and B.3 of the independent auditors Project shall be provided as referred required. 2. The Borrower shall, within the limits of its authority, commit to preserve the CDTI and ▇▇▇ at all times during execution and until the completion of the Project, in Sections IIthe present or other format as long as they continue to enhance the mobility and affordability of metropolitan transport for users, particularly those of low-income. B.3 above; In addition, the Borrower shall undertake its best efforts to extend the ▇▇▇ to other modes of transportation and (ii) no later than six months after expand the Effective Date, designate CDTI to include other municipalities of the procurement auditors as referred to in Section I. A.6 above; all under terms of reference and with qualifications and experience satisfactory to the BankSPMR. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. On each March February 15 and September August 15 Beginning September August 15, 2016 2015 through March February 15, 2039 2.13% On September 15, 2039 2.022040 2.00% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.

Other Undertakings. The Borrower shall cause SEPLAG to: (i) shall, no later than three months after the Effective Date: (i) furnish to the Bank at least six Umbrella Agreements, designate all in form and substance satisfactory to the independent auditors as referred to in Sections II. B.3 aboveBank; and and, (ii) no later than six months after adopt a new inter-ministerial resolution (Portaria Inter-ministerial) for the Effective Dateestablishment or reestablishment of the PROAGUA Managing Committee, designate the procurement auditors as referred to all in Section I. A.6 above; all under terms of reference form and with qualifications and experience substance satisfactory to the Bank. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. On each March February 15 and September August 15 Beginning September on February 15, 2016 2012 through March February 15, 2039 2.132023 4.17% On September August 15, 2039 2.022023 4.09% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph subparagraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph subparagraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.

Other Undertakings. A. No later than three (3) months after the Effective Date, the Borrower shall have ensured that NACA has recruited, in accordance with the requirements of Section III of this Schedule 2, the following long-term senior technical specialists for the Project (in addition to those recruited pursuant to Section 5.01(a) of this Agreement): (i) a second financial management consultant; and (ii) a second procurement consultant, all with terms of reference, qualifications and experience satisfactory to the Bank. B. The Borrower shall cause SEPLAG toensure that its Office of the Auditor General has cleared all of the audit backlogs: (i) no later than three eight (8) months after the Effective Date for Phase I Health Districts; and (ii) by inception of Phase II Health Districts, to the Bank’s satisfaction. C. No later than twelve (12) months after the Effective Date, designate the independent auditors Borrower shall have ensured that a detailed social analysis under Part A of the Project has been carried out, as referred satisfactory to in Sections II. B.3 above; and (ii) no the Bank. D. No later than six (6) months after the Effective Date, designate the procurement auditors as referred to Borrower shall have ensured that all finance and accounting Project staff in the Beneficiary Ministries and NACA necessary for Project implementation have been recruited in accordance with the requirements of Section I. A.6 above; III of this Schedule 2, all under with terms of reference and with reference, qualifications and experience satisfactory to the Bank. 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date (“Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by and (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Principal Payment Date Installment Share (Expressed as a Percentage) On each March 15 and September April 15and October 15 Beginning September October 15, 2016 through March Through October 15, 2039 2.132032 2.94 % On September April 15, 2039 2.022033 2.98 % 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date (“Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Eligible Expenditure Programs Project Sector Budget Item Borrower’s Budget Line Numbers (as set forth in the Borrower´s Budget Laws) Expenditure Type1 Amount to be spent by the Borrower in 2008 in R$ Amount to be spent by the Borrower in 2009 in R$ Amount to be spent by the Borrower in 2010 in R$ Amount to be spent by the Borrower in 2011 in R$ Public Sector Tax Efficiency and Simplification 04.129.017 Goods/ works/ services/ recurrent costs 12,690,000 13,985,480 18,278,678 9,331,272 Public Sector Modernization of Fiscal Management 04.129.029 Goods/ works/ services/ recurrent costs 3,010,000 3,232,858 - - Public Sector Professionaliza- tion of Public Managers 04.122.002 Goods/ works/ services/ recurrent costs 4,788,000 4,366,400 - - Public Sector Sectoral Public Reform Agenda 04.122.008 Goods/ works/ services/ recurrent costs 3,770,000 3,770,551 5,243,899 6,825,731 Private Sector Development Simplification of doing business 04.122.013 Goods/ works/ services/ recurrent costs 11,220,000 12,005,663 54,300,001 25,274,086 Private Sector Development PPPs2 04.130.032 Goods/ Works/ services/ recurrent costs 2,290,000 3,269,117 1,500,000 649,038 Private Sector Development Network for Innovation Technology 19.571.043 19.661.043. Goods/ works/ services/ recurrent costs 22,998,000 31,114,000 23,099,216 11,539,608 Private Sector Certification 20.122.050 Goods/ 12,090,595 15,978,320 10,200,000 5,018,294 1 For the purposes of this table, "services" means services other than consultants’ services. Consultants’ services are not eligible 2 No PPP will be part of the Project. Development Systems 20.126.050 20.128.050 20.304.050 20.602.050 20.603.050. 20.604.050 20.665.050 20.722.050 works/ services/ recurrent costs Health Home Healthcare 10.301.049 Goods/ works/ services/ recurrent costs 136,000,000 294,655,000 219,310,000 91,315,909 Health Live Life 10.244.054 10.302.054 Goods/ works/ services/ recurrent costs 35,700,000 88,800,000 65,010,000 45,505,000 Education Management of Elementary Education 12.361.030 12.362.030 Goods/ works/ services/ recurrent costs 95,299,862 99,243,908 155,886,413 74,592,968 Education Secondary Vocational Education 12.363.018 Goods/ works/ services/ recurrent costs 20,680,000 21,714,000 22,438,000 12,340,900 Education Administrative Support to Elementary Education 12.361.235 Recurrent costs/ salaries 492,063,941 501,068,711 517,641,821 258,820,911 Education Administrative Support to Secondary Education 12.362.180 Recurrent costs/ salaries 16,558,167 16,861,181 17,169,741 8,584,871 Education Development of 12.361.235 Recurrent 1,869,713,541 1,903,929,299 2,002,583,237 1,045,007,086 Elementary Education costs/ salaries Infra-structure Transport ProMG-Pleno3 -Highway Maintenance and Recovery 26.782.038 Goods/ works/ services 172,656,674 220,231,461 271,990,000 116,991,806 Infra-structure Transport Pro-Acesso4 26.782.035 Goods/ works/ services 365,823,657 387,051,841 283,283,728 61,447,702 Poverty Reduction Rural Poverty Reduction Program 04.244.191 Goods/ works/ services/ recurrent costs/ salaries/ Community Subprojects - - 20,000,000 10,250,000 3 Under ProMG-Pleno and Pro-Acesso, the eligibility criteria for inclusion under the Project are defined in the Project Operational Manual.