Case 1:08-cv TPG Document 751 Filed 03/02/15 Page 1 of 5

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1 Case 108-cv TPG Document 751 Filed 03/02/15 Page 1 of 5 New York Menlo Park Washington DC São Paulo London Paris Madrid Tokyo Beijing Hong Kong Karen E. Wagner Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY tel fax karen.wagner@davispolk.com March 2, 2015 Re NML Capital, Ltd. v. Republic of Argentina, Nos. 08 Civ (TPG), 09 Civ (TPG), 09 Civ (TPG), and related cases Hon. Thomas P. Griesa United States District Judge U.S. District Court for the Southern District of New York Daniel Patrick Moynihan United States Courthouse 500 Pearl Street New York, New York Dear Judge Griesa We write on behalf of Citibank in advance of tomorrow s hearing to respond to the points raised in Plaintiffs letter of February 26, 2015, as well as the new arguments they made in their supplemental brief. The hearing tomorrow is vitally important to Citibank and its Argentine branch, Citibank Argentina. Citibank Argentina s license and very existence are in jeopardy and its employees are at risk of criminal liability. We appreciate there are larger issues involving the Republic and Plaintiffs with which the Court is concerned, but the hearing tomorrow is not about the Republic. There is simply no basis in the FAA or otherwise to place Citibank Argentina and its employees in such danger. The Argentine Law Bonds are not subject to the Pari Passu Clause and the Injunction does not cover them or Citibank Argentina (Plaintiffs have not met the burden of proof required to modify the Injunction and to extend it to cover the Argentine Law Bonds and Citibank Argentina, and we have demonstrated that the Argentine Law Bonds are not External Indebtedness). The Injunction Did Not Cover the Argentine Law Bonds, So No Modification of the Injunction Is Sought and Citibank Will Not and Need Not Go into Contempt to Be Heard As a threshold matter underscoring how tenuous each of Plaintiffs substantive arguments is Plaintiffs cling to the notion that the previously issued Injunction covers the Argentine Law Bonds and Citibank Argentina. Indeed, Plaintiffs boldly admonish the Court that its intent and clear statements in this regard are inconsequential and irrelevant because, in their view, the Court should be bound by Plaintiffs sweeping interpretation of the Injunction.

2 Case 108-cv TPG Document 751 Filed 03/02/15 Page 2 of 5 Hon. Thomas P. Griesa 2 March 2, 2015 From this novel position, 1 Plaintiffs urge this Court to find that Citibank has no right to be heard despite this Court s express invitation and that Citibank should be required to go into contempt if it wants to address the Court on this matter. The notion that a highly regulated bank must go into contempt to be heard is beyond unreasonable, and has no legal basis. See Gucci Am., Inc. v. Weixing Li, 768 F.3d 122, 130 & n.9 (2d Cir. 2014); see also Aurelius Capital Master, Ltd. v. Republic of Argentina, No (2d Cir. Sept. 19, 2014) (Dkt. No. 167) ( [N]othing in this Court s order is intended to preclude Citibank from seeking further relief from the district court. ). Citibank will not disobey an order of this Court and will not go into contempt. Argentine Law Bonds Are Domestic Foreign Currency Indebtedness Pesificación The complete factual record demonstrates that the Argentine Law Bonds are not External Indebtedness. They are all available only in Argentina, are payable only in Argentina, and have been considered internal indebtedness of the Republic by the bond market because they are subject to Argentine law, have lesser protections than External Indebtedness, and therefore carry greater risks. As the Court has said repeatedly It was my view and still is my view that the Argentine law bonds issued in Argentina, payable in Argentina, subject to Argentine law, are different from the bonds subject to the February 23 order. 2 Plaintiffs February 26 letter suggests that, even if the Argentine Law Bonds were exchanged for bonds redenominated into pesos, those bonds were not actually paid in anything but dollars until they were exchanged for Argentine Law Bonds, when they were again paid in dollars. They are wrong. As established by the Duggan declaration submitted herewith, some pesified bonds were paid, and they were paid in pesos. See Supplemental Declaration of Juan Duggan, dated March 1, 2015 (attached hereto as Ex. A) And those bonds that were not tendered in the 2005 and 2010 Exchanges continue to be payable only in pesos. But more importantly, the FAA defines Domestic Foreign Currency Indebtedness as that issued in exchange for bonds payable in the currency of the Republic. Plaintiffs do not dispute that the pesified bonds were payable by their terms in pesos. That is exactly what Pesificación did i.e., made them payable in pesos. Consequently, Argentine Law Bonds acquired in exchange for pesified bonds fit squarely within subsection (iii)(b) of the FAA s definition of Domestic Foreign Currency Indebtedness. The Republic s conversion of these bonds into pesos in no way rewrites the FAA or breaches its obligations under the Pari Passu Clause. The Pesificación only applied to indebtedness governed exclusively by Argentine law including several bonds that Plaintiffs concede are specifically enumerated in the definition of Domestic Foreign Currency Indebtedness. They were converted into pesos when the Republic could not acquire sufficient foreign currency to pay its debts. See Duggan Supp. Decl But the Republic never attempted to pesify bonds governed by foreign law, like Plaintiffs FAA Bonds, which remained payable in foreign currencies. See Duggan Decl. (Dkt. No. 742) 6 7. Offered Exclusively Plaintiffs offer supposedly new facts in support of their construction of the phrase offered exclusively, but their new facts have been known all along, and their position misses the mark 1 Contrary to Plaintiffs position, the Second Circuit is of the view that the intent of the issuing court is paramount. See United States v. Spallone, 399 F.3d 415, 424 (2d Cir. 2005) (holding that the determining factor in construing court orders is the intent of the issuing court). 2 Sept. 19, 2014 Conference Tr. (Dkt. No. 690) at

3 Case 108-cv TPG Document 751 Filed 03/02/15 Page 3 of 5 Hon. Thomas P. Griesa 3 March 2, 2015 because it entirely ignores the fact that the focus of the FAA is on the indebtedness being offered, and it is governed by New York law, not the federal securities laws. 3 Plaintiffs cannot dispute the following facts with respect to the indebtedness 1. the global certificates are all registered exclusively in Argentina (in the name of CRYL), 2. the global certificates are all deposited exclusively in Argentina (at CRYL), 3. the beneficial owners can only hold their interests in the Argentine Law Bonds through accounts exclusively in Argentina (directly or indirectly at CRYL), 4. they are all payable exclusively in Argentina (through a payment process that can only be executed through CRYL and Caja in Argentina), 5. they were all issued exclusively under Argentine decrees, 6. their terms are all governed exclusively by Argentine law, and 7. the Republic submitted to the jurisdiction of courts exclusively in Argentina with respect to disputes about the Argentine Law Bonds. The fact that all of the steps related to the issuance and payment of these bonds occur exclusively in Argentina makes clear that they were offered exclusively within Argentina, and that they were internal indebtedness of Argentina clearly carved out from the definition of External Indebtedness and, thus, the Pari Passu Clause. The way in which Argentine Law Bonds were offered and their characteristics are very different from the Foreign Law Bonds where 1. the global certificates are all registered in the names of entities outside of Argentina (Cede & Co. or BNY Depositary (Nominees) Ltd.), 2. the global certificates are all deposited at institutions outside of Argentina (an affiliate of DTC and a common depositary of Euroclear and Clearstream), 3. the beneficial owners can hold their interests in Foreign Law Bonds through accounts outside of Argentina (directly or indirectly through DTC, Euroclear or Clearstream), 4. they are all payable outside of Argentina (through a payment process that can only be executed through BNY, DTC, Euroclear, and Clearstream), 5. they were all issued pursuant to indentures, not Argentine decrees, 6. their terms are all governed by foreign law, not Argentine law, and 7. the Republic submitted to the jurisdiction of courts outside of Argentina with respect to disputes about the Foreign Law Bonds. These facts establish that the Argentine Law Bond indebtedness was offered exclusively within the Republic of Argentin[a], which is the issue and the only issue under Section (iii)(a) of the FAA s definition of Domestic Foreign Currency Indebtedness. Plaintiffs Distortion of Citibank Argentina s Role Cannot Satisfy Federal Rule of Civil Procedure 65(d)(2) Plaintiffs now argue, without any evidence and in a blatant effort to mislead the Court, that Citibank Argentina should be bound as a Participant under the Injunction because it acts as a depositary for Clearstream and Euroclear with respect to Argentine Law Bonds. While payments on Argentine Law Bonds fall outside the Injunction for all the reasons Citibank has set forth, Citibank Argentina also falls outside the Injunction s scope because it is not the holder of the global certificate for the bonds, and thus has no indispensable or formal institutional role in paying those bonds. 3 In any event, Plaintiffs argument applies only to the 28% of Argentine Law Bonds that were issued in the exchanges i.e., the same 28% that were issued in exchange for pesified bonds. Plaintiffs do not seriously dispute that the remaining 72% of Argentine Law Bonds were offered exclusively in Argentina.

4 Case 108-cv TPG Document 751 Filed 03/02/15 Page 4 of 5 Hon. Thomas P. Griesa 4 March 2, 2015 On October 26, 2012, the Second Circuit remanded the Injunction to this Court with instructions that it should, inter alia, more precisely determine the third parties to which the Injunction[] will apply. 4 In response, Plaintiffs argued that, consistent with Federal Rule of Civil Procedure 65(d)(2), only entities that served particular institutional roles in the payment process for Exchange Bonds should be bound by the Injunction agents of Argentina, who receive monetary payment for their role under the Exchange Bonds under contracts with Argentina, or those who are in active concert with Argentina under the Exchange Bonds. 5 Notably, Plaintiffs proposed scope of third parties bound by the Injunction encompassed the Indenture Trustee (BNY) and the payment chain down to the relevant clearing systems, but did not seek to include financial institutions that received funds from those clearing systems or entities further down the payment chain. This Court agreed with Plaintiffs proposal, 6 and the Second Circuit affirmed [T]he amended injunctions cover Argentina, the indenture trustee(s), the registered owners, and the clearing systems. The amended injunctions explicitly exempt... financial institutions receiving funds from the DTC. 7 Plaintiffs in their brief on remand identified depositary as one of the institutional roles in the payment process for Exchange Bonds, and defined a depositary as an entity that h[as] agreed to hold each of the physical Global Securities. 8 Citibank Argentina does not hold the Global Securities for Argentine Law Bonds and is therefore not a depositary. On this basis alone, Plaintiffs new argument must be rejected. There is no dispute that the depositary holding the global certificates for Argentine Law Bonds is CRYL, and the designated clearing system for those bonds is Caja, not Clearstream and Euroclear. See generally Ex. B (describing the payment systems for Foreign Law Bonds and Argentine Law Bonds). As financial institutions receiving funds from the relevant clearing system, neither Citibank Argentina nor its customers Euroclear and Clearstream are Participants involved in paying Argentine Law Bonds. Citibank is therefore entitled to confirmation that it is not bound by the Injunction as a downstream entity. Plaintiffs advance the alternative argument that any entity helping the Republic make payment to the ultimate owners of beneficial interests in Argentine Law Bonds regardless of where they fall in the payment chain should be bound by the Injunction. (Pls. Supp. Br. at 35.) But this argument directly contradicts the definition of Agents and Participants proposed by Plaintiffs in obtaining the Injunction, which as explained above made clear that the Injunction did not apply to financial institutions downstream from the clearing systems. More importantly, Plaintiffs proposed expansion of the Injunction would extend far beyond the permissible scope of Rule 65(d)(2). Plaintiffs have previously acknowledged that the Republic s payment obligations are satisfied by the time the payment has been made to the relevant clearing system (which is undoubtedly why they did not request that financial institutions downstream of the clearing systems be enjoined). 9 Citibank Argentina, which is only one of several custodians receiving payments from Caja, therefore does not assist the Republic in 4 NML Capital, Ltd. v. Republic of Argentina, 699 F.3d 246, 264 (2d Cir. 2012). 5 Pls. Br. in Resp. to Remand, filed Nov. 14, 2012 (Dkt. No. 302) at Nov. 21, 2012 Op. (Dkt. No. 424) at 11 ( It would appear that plaintiffs have requested that a reasonable set of parties be bound by the Injunctions, and this is in compliance with Rule 65(d). ). 7 NML Capital, Ltd. v. Republic of Argentina, 727 F.3d 230, 239 (2d Cir. 2013) (citation omitted and emphasis added). 8 Pls. Br. in Resp. to Remand, filed Nov. 14, 2012 (Dkt. No. 302) at Pls. Reply Br. in Resp. to Remand, filed Nov. 20, 2012 (Dkt. No. 310) at 13 ( Argentina s obligation to pay the Exchange Bonds is not satisfied until BNY forwards this payment on to DTC. ).

5 Case 108-cv TPG Document 751 Filed 03/02/15 Page 5 of 5 Hon. Thomas P. Griesa 5 March 2, 2015 fulfilling its payment obligations on the Argentine Law Bonds, because those obligations have already been fulfilled before payment reaches Citibank Argentina. (Pls. Supp. Br. at 35.) In short, Citibank Argentina is in precisely the same position as the downstream financial institutions that were expressly exempted from the Court s injunction as consented to by Plaintiffs and affirmed by the Second Circuit and should be accorded precisely the same treatment. ************************************** Lastly, Plaintiffs continue to assert without any supporting evidence during the last eight months that Citibank has not demonstrated that the Republic will actually impose any sanctions on it if it is [sic] decides to comply with this Court s orders. (Pls. Supp. Br. at 37.) To the contrary, Plaintiffs themselves have submitted evidence to this Court confirming those risks. That evidence shows that officials of the Republic with authority over Citibank Argentina have demand[ed] that [Citibank Argentina] continue acting to further and to protect the interests of the Holders of the Argentine [Law] Bonds, and that failure to do so because of the Injunction would violate Argentine law and undermin[e] the Argentine legal system. 10 Indeed, when the Second Circuit asked the Republic s counsel for assurance that the Republic would not proceed against [Citibank Argentina] criminally or pull its license or do all kinds of other horrible things, counsel responded that [a]s an officer of this Court, I am not able to make a representation about what the Republic of Argentina is going to do. Pls. Ex. 8 (Dkt. No ) at 591 3, As we have demonstrated, and as further amplified in The Clearing House's amicus brief, principles of comity and the separate entity doctrine protect Citibank Argentina from such consequences. Whatever legitimate complaint Plaintiffs may have against the Republic as a result of its contractual obligations under the FAA, Plaintiffs position as to Citibank Argentina and the Argentine Law Bonds is not only wrong, but would lead to an entirely unfair and extremely harmful result for Citibank, an undisputed innocent non-party, and its employees. Very respectfully yours, /s/ Karen E. Wagner Karen E. Wagner By ECF cc All counsel of record (via ECF) 10 Letter from Ministry of Econ. & Pub. Fin. to Citibank Argentina, dated Aug. 6, 2014 (attached, with translation, as Exs. A & B to Letter from Robert A. Cohen to Hon. Thomas P. Griesa, dated Aug. 8, 2014 (Dkt. No. 635)); see also President Cristina Fernández de Kirchner, Speech on Nat l Radio from the Presidential Office in the Casa Rosada (Aug. 19, 2014) (translation attached as Ex. A to Letter from Matthew D. McGill to Hon. Thomas P. Griesa, filed Aug. 21, 2014, Aurelius Capital Master, Ltd. v. Republic of Argentina, No. 09 Civ (Dkt. No. 483)).

6 Case 108-cv TPG Document Filed 03/02/15 Page 1 of 14 Exhibit A

7 Case 108-cv TPG Document Filed 03/02/15 Page 2 of 14 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x NML CAPITAL, LTD., Plaintiff, - against - THE REPUBLIC OF ARGENTINA, Defendant x AURELIUS CAPITAL MASTER, LTD. and ACP MASTER, LTD., Plaintiffs, - against - THE REPUBLIC OF ARGENTINA, Defendant x AURELIUS OPPORTUNITIES FUND II, LLC and AURELIUS CAPITAL MASTER, LTD., Plaintiffs, - against - THE REPUBLIC OF ARGENTINA, Defendant x BLUE ANGEL CAPITAL I LLC, Plaintiff, - against - THE REPUBLIC OF ARGENTINA, Defendant. No. 08 Civ (TPG) No. 09 Civ (TPG) No. 09 Civ (TPG) No. 09 Civ (TPG) No. 09 Civ (TPG) No. 10 Civ (TPG) No. 10 Civ (TPG) No. 10 Civ (TPG) No. 10 Civ (TPG) No. 10 Civ (TPG) No. 10 Civ (TPG) x (captions continue on following page) SUPPLEMENTAL DECLARATION OF JUAN DUGGAN

8 Case 108-cv TPG Document Filed 03/02/15 Page 3 of x OLIFANT FUND, LTD., Plaintiff, - against - THE REPUBLIC OF ARGENTINA, Defendant x PABLO ALBERTO VARELA, et al., Plaintiffs, - against - THE REPUBLIC OF ARGENTINA, Defendant x No. 10 Civ (TPG) No. 10 Civ (TPG) Pursuant to 28 U.S.C. 1746, I, Juan Duggan, declare under penalty of perjury under the laws of the United States of America that the following is true and correct 1. I am a partner in the law firm Hope, Duggan & Silva, and am duly admitted to practice law in the City of Buenos Aires, Republic of Argentina. Information about my main areas of expertise was previously provided in my Declaration dated February 16, 2015 (the February 16 Declaration ), which is incorporated here by reference. 2. I understand that, on the evening of February 26, 2015, Plaintiffs submitted a letter to the Court responding to Citibank s discussion of Pesificación. The letter states, [t]he Republic made clear in its moratorium that it never intended to make payment on the defaulted bonds; thus, according to the Republic, the defaulted bonds were not payable at all, let alone payable in Pesos. See Ltr. at 2; see also id. (arguing that the defaulted bonds were paid in U.S. Dollars until the Republic issued a moratorium on its debts in 2001 ). 1

9 Case 108-cv TPG Document Filed 03/02/15 Page 4 of I have been asked to address Plaintiffs position regarding Pesificación, a process that I described in the February 16 Declaration. Plaintiffs position is unsupported and, in fact, misstates not only the basic facts regarding Pesificación, but also the effect of Pesificación on the nature and payment of the Republic s debt under Argentine law. As detailed below, Pesificación was not rendered an illusory event because of the general moratorium on payments; indeed, under Argentine law, debt subject to the Pesificación ( pesified debt ) became payable only in pesos, remains so to this day, and certain pesified debt was, in fact, paid in pesos despite the moratorium. I. The Moratorium and Pesificación of the Argentine Public Debt 4. Decree No. 471/2002, by which Argentina converted into Pesos all U.S. Dollar denominated indebtedness governed by Argentine law and due by the Republic, the Provinces and the Municipalities, is dated March 8, The moratorium on Argentine public debt was officially implemented by the Ministry of Economy of the Argentine Government on April 25, 2002, through the issuance of Resolution No. 73/ ( Resolution 73 ). 3 A. Bonds Subject to the Pesificación Were Paid in Pesos 5. Pursuant to Resolution 73, Resolution No. 158/2003 of the Ministry of Economy 4 ( Resolution 158 ) and the annual Federal Budget Laws for Fiscal Years Published in the Official Gazette on March 13, Published in the Official Gazette on April 30, Budget Law No. 25,565, approving the budget for Fiscal Year 2002 (published in the Official Gazette on March 21, 2002), had granted powers to the Executive Power (acting through the Ministry of Economy and Infrastructure) to defer totally or partially payments of services under the public debt in order to look after the basic functions of the National State. The moratorium was officially implemented by Resolution 73 issued by the Ministry of Economy. 4 Published in the Official Gazette on March 13,

10 Case 108-cv TPG Document Filed 03/02/15 Page 5 of 14 and 2005, 5 Argentina deferred payment on public indebtedness of the National Government originally incurred prior to December 31, 2001 or under rules issued prior to such date, until (in the case of Resolution 73 and Resolution 158) the end of the then-current fiscal year or (in the case of the relevant Federal Budget Laws) until such time as the Executive Branch of Government has declared the completion of the restructuring process. 6. Each of these regulations, however, lists exceptions that applied to certain Argentine Law Eligible Securities, although these exceptions varied from year to year In the Tapella case, 7 the Federal Supreme Court agreed with the Court s Attorney General that a certain type of Argentine Law Eligible Security (bonds denominated Bocones Previsionales 2º Serie ) held by a person who was more than 75 years of age should be paid to that person pursuant to a deferment exception applicable in Fiscal Years 2004, 2005 and 2006, even though that deferment exception had been terminated with respect to such securities from Fiscal Year 2007 and onwards. 8. In the Tapella case, the Court s Attorney General had indicated that it was the Government s common practice in numerous other similar cases to pay Argentine securities if they qualified for a deferment exception The National Government paid the services of the debt when it included the holders of the securities in any one of the exceptions to the payment deferral contemplated in various rules, without interrupting compliance with such obligation on account of the expiry of the fiscal year or because of the issuance of a new budgetary law, as evidenced by the great number of similar 5 Law No. 25,827 published in the Official Gazette on December 22, 2003; Law No. 25,967 published in the Official Gazette on December 16, Examples of deferment exceptions are (i) certain designated securities, including securities issued in connection with social security liabilities, and (ii) certain other designated securities held by individuals who are 75 years of age or more, or acquired with the proceeds obtained as indemnification for labor related accidents or received as indemnification for expropriations. 7 Tapella, Nestor Carlos y otro c/ EN. Bocones Previsionales s/ amparo ley , Federal Supreme Court docket No. T. 394, XLIV, September 27,

11 Case 108-cv TPG Document Filed 03/02/15 Page 6 of 14 dockets in which this Attorney General has participated and are presently under review of the Court. 9. Following Tapella, I have identified several cases 8 where the Federal Supreme Court upheld the decisions of lower courts to order the payment of Argentine Law Eligible Securities under applicable deferment exceptions, and to order that such payment be made in Pesos pursuant to Decree No. 471/ Annex J to each of the Investment Accounts 9 for fiscal years and prepared by the Contaduría General de la Nación, which describe the financial activities performed by the National Treasury during each relevant period, indicates that Argentina made payments under its deferred public indebtedness pursuant to applicable deferment exceptions. 11. Based on all of the above, I conclude that some Argentine Law Eligible Securities, which had been converted into Pesos pursuant to Decree No. 471/2002, were paid in Pesos by the National Government pursuant to the deferment exceptions in the Federal Budget Laws. B. The Moratorium Was Not Permanent 12. Two things are made clear under all regulations dealing with the moratorium prior to the 2005 Exchange (a) the deferment of payments was a temporary measure, with each deferment set to expire by the earlier of a certain date or the completion of the 8 See, e.g, Barbeito Giomar y oreo c/estado Nacional s/amparo, Federal Supreme Court docket B.492.XLVII; Balestrelli, Juan Domingo y otra c/en-me s/amparo, Federal Supreme Court docket B.493.XLVII. 9 The Investment Accounts are prepared annually by the Contaduría General de la Nacion as contemplated in Section 91 of Law No. 24,156 and submitted to Congress for its approval as established in Section 75(8) of the Constitution of Argentina. 10 Available in Spanish language at http// 11 Available in Spanish language at http// 4

12 Case 108-cv TPG Document Filed 03/02/15 Page 7 of 14 restructuring of Argentina s public debt; and (b) notwithstanding the moratorium, there would be exceptions to the deferment under certain circumstances. 13. In the Galli case that upheld the constitutionality of Decree No. 471/2002, it was said that it should be stressed that the Argentine Republic has not repudiated its public debt Therefore it is not true that the moratorium indicated that Argentina never intended to make payment on the defaulted bonds, as the Plaintiffs say in their letter. As a matter of fact, the moratorium on servicing Argentina s public indebtedness was always conceived as a temporary measure. II. The Pesificación Was Not a Contrivance by the Republic A. The Pesificación Protected the Solvency of the Argentine Economy 15. As explained in the February 16 Declaration, the Convertibility Regime, pursuant to which the Peso was fully convertible into the U.S. dollar at a one-to-one exchange rate, had become economically unsustainable by the end of and it was abolished in the Public Emergency Act (Ex. A to the February 16 Declaration). The collapse of the Convertibility Regime and the subsequent devaluation of the Peso threatened to bring about the insolvency of many individuals and institutions owing foreign currency 12 See Votes of Justices Maqueda and Highton de Nolasco in the Galli case, cited in footnote 23 of the February 16 Declaration. 13 As a result of a major local economic recession that began in 1999, confidence in the banking sector began to erode, triggering a significant run on deposits in By December 31, 2001, total bank deposits (in Pesos and in U.S. Dollars) had declined 23.2% from the level on December 31, 2000, thus threatening the liquidity of the system. To reduce the danger of a collapse of the banking sector, the Argentine Government on December 1, 2001 froze all U.S. Dollar and Peso denominated deposits permitting only the withdrawal of certain weekly maximum amounts. 5

13 Case 108-cv TPG Document Filed 03/02/15 Page 8 of 14 denominated debts in Argentina. 14 The Public Emergency Act declared the existence of a state of public emergency in social, economic, administrative, financial and exchange matters and delegated powers to the President to establish conditions for economic growth that were sustainable and compatible with the restructuring of the public indebtedness and to issue rules to restructure the obligations affected by the new foreign exchange regime. 16. The Argentine Government took various steps in this regard, including converting substantially all current Argentine private and public indebtedness (including Argentine law-governed securities) that were denominated in non-argentine currency into Pesos. This process is known in Argentina as the Pesificación and was explained in greater detail in the February 16 Declaration. 17. The Argentine Government also took various other steps to address this crisis, including nullifying all contractual provisions adjusting prices thereof to the evolution of any type of index or to the evolution of the exchange rate of foreign currency; converting all prices and tariffs under all agreements entered into by the Federal Public Administration expressed in a foreign currency into Pesos at an exchange rate of 1 Peso per U.S. Dollar, and forbidding the contractors from suspending or varying the performance of their obligations under those agreements; amending the Central Bank s charter 15 to allow the Central Bank to print Pesos in excess of its international reserves; imposing a severe exchange control regime, the breach of which could give rise to penalties of a criminal nature; and 14 See Registration Statement, filed with the SEC on July 2, 2004, at p. 97, available at https// 15 As per the provisions of Law No. 25,562 (published in the Official Gazette on February 8, 2002) and Decree No. 401/2002 (published in the Official Gazette on March 5, 2002). 6

14 Case 108-cv TPG Document Filed 03/02/15 Page 9 of 14 freezing and rescheduling term deposits, extending their maturity, and ordering that they be repaid in installments. 16 B. The Pesificación Led to Protests and Legal Challenges by Argentine Residents 18. The Pesificación and the National Government s other measures resulted in depositors protesting in the streets and triggered widespread riots and protests. Appendix A to this Declaration contains photographs from some of these protests. 19. Residents also brought thousands of cases before the Argentine courts demanding the return of the original value of their deposits from financial institutions and/or the Argentine Government The constitutionality of the Pesificación of bank deposits, pursuant to Decree No. 214/2002, was judicially challenged by many depositors, giving rise to protracted litigation all through the years In the Massa case 18 the Federal Supreme Court refused to confirm the earlier decision of an appellate court to declare the unconstitutionality of the Pesificación of bank deposits. 19 The Federal Supreme Court revoked the ruling of the 16 See Decree No. 71/2002 dated January 9, 2002; Resolutions of the Ministry of Economy No. 6 dated January 9, 2002 (published in the Official Gazette on January 10, 2002), as amended by Resolution No. 9 dated January 10, 2002 (published in the Official Gazette on January 11, 2002), No. 18 dated January 17, 2002 (published in the Official Gazette on January 18, 2002), No. 23 dated January 21, 2002 (published in the Official Gazette on January 22, 2002) and No. 46 dated February 6, 2002 (published in the Official Gazette on February 7, 2002); see also Registration Statement, filed with the SEC on July 2, 2004, at p. 96, available at https// 17 See Registration Statement, filed with the SEC on July 2, 2004, at p. 97, available at https// 18 Massa, Juan Agustín c/poder Ejecutivo Nacional dto. 1570/01 y otro s/amparo ley 19986, Federal Supreme Court docket No. M. 2771, XLI, December 27, The Court took into account that various other emergency regulations between 2002 and the date of the Court s ruling mitigated the effect of the Pesificación and showed that no harm was caused to the property rights of the depositors. 7

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17 http//upload.wikimedia.org/wikipedia/commons/2/28/cacerolazo_argentina_ jpg 3/1/2015 Page 1 of 1 Case 108-cv TPG Document Filed 03/02/15 Page 12 of 14 Available at http//en.wikipedia.org/wiki/corralito#mediaviewer/ FileCacerolazo_Argentina_ jpg

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