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EXHIBIT 10.3 







AGREEMENT REGARDING
THE INSURANCE POLICY

FOR EXPROPRIATION AND
CURRENCY INCONVERTIBILITY  



         This Agreement Regarding
the Insurance Policy for Expropriation and Currency Inconvertibility, dated as of
December 12, 2003 (the “Agreement”), is entered into by and among (i) The Bank of New
York, not in its individual capacity, but solely in its capacity as trustee under the
Indenture (as defined below) (the “Insured”), (ii) Unibanco – União de Bancos Brasileiros
S.A. (“Unibanco”), acting through its Grand Cayman branch (Unibanco and the branch
together, the “Issuer”) and (iii) Steadfast Insurance Company (the “Underwriter’’). The
Insured, the Underwriter and the Issuer are herein referred to collectively to as the “Parties.”  



RECITALS 



                  A.    The Parties
contemplate that Unibanco – União de Bancos Brasileiros S.A., acting through its Grand
Cayman branch, will issue and sell certain Insured Notes (the “Insured Notes”) to a
number of investors (the “Noteholders”) in an offering conducted in accordance with Rule
144A and Regulation S under the United States Securities Act of 1933.  



                  B.    In connection
with the issuance and sale of the Insured Notes, the Insured and the Issuer will enter
into an indenture (the “Indenture”), dated as of December 12, 2003, providing for the
issuance of the Insured Notes.  



                  C.    In connection
with the execution and delivery of the Indenture, the Underwriter has issued an Insurance
Policy for Expropriation and Currency Inconvertibility (Policy No. 90-19-926), dated as
of December 12, 2003  (which, together with the Declarations thereto, constitutes the “Insurance
Policy”), the beneficiary of which is the Insured, for the benefit of the Noteholders. 



                  D.    The Parties
wish to set forth herein certain agreements in connection with the Insurance Policy. 



AGREEMENTS 



         The Parties, with the
intention of being legally bound, agree as follows: 



1.    Defined Terms.  



         Capitalized terms used in
this Agreement and not otherwise defined have the meaning assigned to such terms in the
Insurance Policy (as defined above). 



2.    Representations,
Warranties and/or Covenants by the Issuer.  



         The Issuer represents,
warrants and/or covenants that: 



	                  	  	         (1)    all
written information that the Issuer has provided to the Insured in connection with the
Application for Insurance                   is true and correct in all material respects
as of the date on which it was delivered to the Insured and that no
                  material information related to such Application for Insurance has been
or will be withheld; 













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	                               	  	         (2)    it
has or will obtain all such valid licenses and permits as required by law in order for it
to                   enter into and perform its obligations under the Indenture and will
make all applications as required by law to                   extend, renew or modify
such licenses to comply with any new requirement promulgated during the Policy Period; 






	                             	  	         (3)    it
will, after consulting with the Insurer, (i) take all reasonable steps to avoid or
minimize any                   Loss (other than any Loss where Compensation is excluded
or excludable under the terms of Article V of the Insurance                   Policy);
(ii) cooperate fully with the Underwriter in the investigation of any Claim, the
resolution of any                   potential Claim situation and the pursuit of any
Claim salvage; and (iii) not enter into any agreement concerning a                   Loss
or potential Loss without the Underwriter’s prior written consent. In addition, the
Issuer will (i) pursue all                   reasonable diplomatic, legal,
administrative, judicial and other legal means which may be reasonably available to
                  minimize or recover any Loss, and (ii) preserve any legal, judicial and
administrative remedies applicable to any                   Claim and furnish reasonable
assistance in maintaining any rights or property transferred to the Underwriter; and 






	                             	  	         (4)    ]all
information to be provided by the Issuer (including any information provided in any
                  statements, reports, or applications), either directly or through the
Insured, in connection with any Claim or                   potential Claim under the
Insurance Policy will, to the Issuer’s knowledge, be true and correct in all material
                  respects and the Issuer shall not knowingly conceal any material fact
in connection with any such Claim or potential                   Claim. 








         Each of the Parties
hereby acknowledge that in the case of any material breaches or misrepresentations of the
Issuer, the Underwriter may void the Insurance Policy, retain the premium paid therefore
and refuse to compensate the Insured for any Loss. 



3.    Delegation of
Insured’s Duties and Obligations.  



         The Insured hereby
delegates to the Issuer and the Issuer hereby accepts all duties and obligations of the
Insured under the Insurance Policy (the “Delegated Obligations”), excluding, however, any
obligation: (i) to apply for the Insurance Policy; (ii) related to the covenants of the
Insured in Section 6.1(d) of the Insurance Policy; (iii) related to the submission of a
Claim pursuant to Section 7.1(a) of the Insurance Policy; (iv) not to disclose the
details of the Insurance Policy, as provided for in Section 8.7 of the Insurance Policy;
(v) not to cause an exclusion under Article V of the Insurance Policy, insofar as such
exclusion would result from an act or omission by the Insured; (vi) related to
limitations on the assignment, amendment or waiver of the Insurance Policy or any
provision thereunder, as provided for in Sections 8.2 and 8.4 of the Insurance Policy;
and (vii) to maintain and allow the examination of any records related to the Insurance
Policy, as provided for in Section 8.9 of the Insurance Policy. The Insured agrees not to
take any action, or omit to take any action, that might reasonably be expected to result
in the cancellation of the Insurance Policy without the express written approval of the
Issuer.  In the event that the Insured takes any action, or omits to take any action,
that might reasonably be expected to result in the cancellation of the Insurance Policy,
the Insured agrees to undertake to replace the Insurer and the Insurance Policy with
another policy providing equal benefits.  The Insured shall bear the additional fees and
expenses associated with this replacement. 



         The Underwriter hereby
agrees to accept performance by the Issuer of the duties and obligations of the Insured
under the Insurance Policy as provided for herein.  Each of the Underwriter and the
Issuer hereby acknowledges that the information relating to the Issuer contained in the
Application for Insurance has been provided to the Insured by the Issuer and that the
Insured is not responsible for such information. 







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4.    Acceptance of
Terms and Conditions of the Insurance Policy.  



         The Parties hereby
acknowledge that the Insurance Policy has certain terms and conditions that refer to the
Issuer and the compliance by the Issuer with certain terms and conditions of the
Insurance Policy.  The Issuer hereby independently agrees to perform and comply with all
such terms and conditions in the Insurance Policy that call for or require any such
compliance or performance by the Issuer.  The Parties hereby acknowledge and agree that
the failure to comply or perform any such terms and conditions of the Insurance Policy
may result in, among other consequences, the breach of this Agreement and the
cancellation of the Insurance Policy or an exclusion of a Claim thereunder. 



         The Issuer hereby agrees
to and accepts all the terms and conditions of the Insurance Policy, including but not
limited to all duties and obligations which have been expressly referred to as duties and
obligations on the Issuer thereunder, which duties and obligations it hereby agrees to
perform. 



5.    Assignment,
Subrogation and Payment.  



                  (a)    Contemporaneous
with any Compensation payment under the Insurance Policy, in addition to any assignments
required under Section 7.4 of the Insurance Policy and subject to the limitation that any
such assignment by the Insured shall not be in an amount greater than the amount of
Compensation payable by the Underwriter, the Issuer shall assign to the Underwriter, and
the Underwriter shall be subrogated to, all of the Issuer’s rights under the Transaction
Documents in respect of the Loss for which the Compensation is to be paid and all of the
Issuer’s rights of recovery against any person or organization in respect of the Loss.
 The above assignment and subrogation shall be made in proportion to the amount of Loss
for which Compensation is to be paid.  All such assignments shall be free and clear of
all claims, defenses, counterclaims, rights of setoff and other encumbrances, except for
those defenses relating to the Political Risk Event.  Notwithstanding any payments made
to the Noteholders from the Reserve Account in connection with an Unfunded Insured
Payment, the Issuer shall not be released from its obligation to make Insured Payments
(or any part thereof) that are the subject of a Claim, provided, however that if (i) the
Insured shall have received inconvertible Local Currency or non-transferable Policy
Currency; and (ii) at the Underwriter’s request shall have delivered such inconvertible
Local Currency or non-transferable Policy Currency to the Underwriter; and (iii) the
Underwriter, using best efforts, subsequently converts such inconvertible Local Currency
and/or transfers such non-transferable Policy Currency, as the case may be, to the
Underwriter’s account located in the United States, then the Insured shall release the
Issuer from its obligations to pay the amount of dollars so received by the Underwriter
in the United States.  The Issuer shall execute and deliver all instruments and documents
and do whatever is necessary to secure such rights for the Underwriter. The Issuer shall
do nothing to materially prejudice the Underwriter’s rights. 



                  (b)    In connection
with a Claim under Currency Inconvertibility, as a condition for any Compensation
payment, in addition to the assignments required in 5(a) above, but only to the extent
that the Insurer has not otherwise taken assignments of the right to receive funds in
accordance with the terms of Section 5(a) or has otherwise received funds in respect of
any Compensation paid, the Issuer shall, if required by the Underwriter, assign and
deliver to the Underwriter, by draft, subject to collection, or, at the Underwriter’s
option, in cash, the inconvertible Local Currency (the amount of which shall be
determined by reference to the Reference Rate of Exchange on the Date of Loss) or
nontransferable Policy Currency that is the subject of the Claim.  If the Issuer is
unable legally to deliver such currency to the Underwriter, then, in addition to the
assignment requirements of Section 5(a) above, the Issuer shall assign to the Underwriter
right, title and interest in such currency.  The Insured or Issuer shall not be required
to assign to the Underwriter an amount of Local Currency or Policy Currency greater than
the amount of Compensation payable by the Underwriter. 





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6.    Indemnifications.  



         The Issuer agrees to
indemnify and hold harmless the Noteholders and the Insured and any of its directors,
officers, agents or employees (each such indemnified person, an “Indemnified Party”) from
and against any and all liabilities, obligations, losses, damages, penalties, judgments,
costs, expenses or disbursements of any kind whatsoever that may be imposed on or
incurred by, or asserted against, such Indemnified Party in any way relating to or
arising out of (i) any action taken or omitted to be taken by such Indemnified Party
under this Agreement or the Insurance Policy (including, without limitation, any action
taken or omitted to be taken before the date hereof by such Indemnified Party in
preparation for acting thereunder), or (ii) any action taken or omitted to be taken by
the Issuer under this Agreement or the Insurance Policy, provided that the Issuer shall
not be liable for any portion of any such amount resulting from (i) the gross negligence
or willful misconduct of such Indemnified Party, or (ii) an exclusion by the Underwriter
under Article V of the Insurance Policy which is caused by the Indemnified Party. This
section shall survive the termination of the Insurance Policy and this Agreement or the
resignation or removal of the Insured. 



7.    Entire
Agreement; Amendment.  



         This Agreement
constitutes the entire agreement among the Parties with respect to the matters
contemplated herein and supersedes all prior oral and written agreements, memoranda,
understandings and undertakings between the Parties relating to the subject matter of
this Agreement.  This Agreement shall not alter the terms of the Insurance Policy, and to
the extent that provisions of this Agreement are in conflict or inconsistent with the
provisions of the Insurance Policy, the provisions of the Insurance Policy shall govern.
 This Agreement or any provision hereof may not be modified, amended, altered or
supplemented except by a written instrument executed and delivered by each of the Parties. 



8.    Severability.  



         If any provision of this
Agreement shall be declared illegal, invalid or unenforceable in any jurisdiction, then
such provision shall be deemed to be severable from this Agreement (to the extent
permitted by law), and in any event such illegality, invalidity or unenforceability shall
not affect the remainder hereof. 



9.    Notices.  



         All communications and
notices to be given hereunder shall be in English and shall be made in writing sent by
courier or delivered by hand or facsimile with receipt acknowledged.  Such communications
and notices shall be sent to the addresses and to the attention of the persons specified
below, or to such other address or to the attention of such other person as any of the
Parties shall notify to the other Party or Parties, as the case may be. 



         If to the Insured: 



                  The Bank of New York

                                101 Barclay Street, 21W

                  New York, New York  10286
              
                  Attention:  Global Finance Unit

                  Telephone:  (212) 328-7529
              
                  Facsimile:  (212) 328-7318 



         If to the Issuer: 








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                  Unibanco – União de
Bancos Brasileiros S.A. 



                  Avenida Eusebio Matoso,
891               São Paulo, SP 05423-901

                  Brazil
              
                  Telephone:
 (55-11) 3097-4416-1617

                  Facsimile: (55-11) 3097-4416-4694
              
                  Attention: Luiz Mauricio Jardim and/or Marcelo Fanganiello 



         If to the Underwriter: 



                  Steadfast Insurance
Company

                  c/o Zurich
 Emerging Markets Solutions

                  1201 F Street,
N.W., Suite 250

                  Washington, D.C.
20004

                  Telephone:  (202)
585-3100

                  Facsimile:
(202) 628-2216

                  Attention:  Daniel Riordan 



         Copies of all notices
given hereunder shall be delivered by the Issuer, immediately following such delivery or
receipt by the Issuer, to Moody’s Investor Services at the address below: 



                  Moody's Investors Service
              
                  99 Church Street

                  New York, New York 10007
              
                  Attention:  Latin America ABS Monitoring 



         All notices or other
communications given hereunder shall be deemed to be effective when actually received.
 All communications and notices relating to the Issuer’s rights and obligations under the
Insurance Policy, including but not limited to the Delegated Obligations, shall be given
to the Issuer as specified in this Section 9.  In addition, the Underwriter shall provide
copies to the Issuer of all communications and notices sent to the Insured under the
Insurance Policy, when such communications and notices are made. 



10.    Counterparts.  



         This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. 



11.    Survival
Rights.  



         This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective legal
representatives, successors, transferees and assigns. 



12.    Choice of Law.  



         Any issue relating to the
construction, validity or performance of this Agreement shall be governed by, read and
construed in accordance with the laws of the State of New York, in the United States of
America. 







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13.    Disputes and
Arbitration.  



	  	  	         (a)    Any
dispute, controversy or claim arising out of, relating to, or in connection with this
Agreement shall be finally settled          by arbitration.  The arbitration shall be
conducted in accordance with the International Rules of the American Arbitration
         Association in effect at the time of the arbitration.  The seat of the
arbitration shall be New York, New York, United          States of America, and shall be
conducted in English. 






	  	  	         (b)    The
arbitration shall be conducted by three arbitrators.  The claimant initiating the
arbitration shall appoint an arbitrator          in its initial request for arbitration.
The respondent shall appoint an arbitrator and so notify the claimant in writing
         within 45 days of its receipt of the request for arbitration.  The first two
arbitrators appointed in accordance with this          provision shall appoint a third
arbitrator within 45 days after the respondent has notified the claimant of the
appointment          of its arbitrator.  The third arbitrator shall serve as chairperson
of the arbitration. 






	  	  	         (c)    The
arbitral award shall be in writing, state the reasons for the award, and be final and
binding on the Parties.  Judgment          upon the award may be entered by any court
having jurisdiction over the relevant party or asset. 





14.    Modifications
to Transaction Documents  



         The Insured and the
Issuer shall not materially modify the Transaction Documents (including, but not limited
to, modifying the repayment terms of the Insured Notes), without the prior written
consent of the Underwriter (which consent shall not be withheld unreasonably), except
such modifications and amendments which (i) do not change materially the Underwriter’s
rights and obligations, (ii) do not change materially any rights and obligations to which
the Underwriter may be subrogated to in the event of a Claim, or (iii) do not change
materially the risk to which the Insured is exposed and that are covered under the
Insurance Policy. 



15.    Concerning
the Insured  



	                    	  	         (a)    This
Agreement is entered into by the Insured, acting not individually or personally, but
solely as Trustee          under the Indenture, in the exercise of the powers and
authority conferred on and vested in the Trustee under the Indenture. 






	                    	  	         (b)    The
undertakings and agreements herein made on the part of the Insured are made and intended
not as          personal undertakings and agreements by the Insured, but are made and
intended for the purpose of binding only the property          held in trust pursuant to
the Indenture. 






	                    	  	         (c)    Nothing
herein contained shall be construed as creating any liability on the Insured,
individually or          personally, to perform any covenant either expressed or implied
herein, all such liability, if any, being expressly waived          by the Parties and by
any person claiming by, or through, or under such Party. 






	                    	  	         (d)    Under
no circumstances shall the Insured be personally liable to the Underwriter for the
payment of any          indebtedness or expenses of the Issuer or be liable to the
Underwriter for the breach or failure of any obligation or          covenant made or
undertaken by the Insured hereunder. 






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16.    Execution in
Counterparts  



         This Agreement and each
amendment, waiver and consent with respect hereto may be executed in any number of
counterparts and by different Parties thereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Agreement by telefax shall be effective as delivery of an original
executed counterpart of this Agreement. 





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         IN WITNESS WHEREOF, this
Agreement has been duly executed and delivered by the duly authorized officers of the
Parties as of the date first above written. 





	 	The Bank of New York, not in its individual capacity, but solely as indenture 
	 	trustee
	 	By: /s/ Patricia M. Phillips 
	 	Name: Patricia M. Phillips 
	 	Title: Assistant Vice President 
	 
	 
	 	UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A., 
acting through its Grand Cayman Branch
	 
	 	By: /s/ Luis Mauricio Jardins 
	 	Name: Luis Mauricio Jardins  
	 	Title: Director  
	 
	 
	 	By: /s/ Marcelo Fanganiello  
	 	Name: Marcelo Fanganiello  
	 	Title:_________________________________
	 
	 
	 	UNIBANCO - UNIÃO DE BANCOS BRASILEIROS S.A. 
	 
	 	By: /s/ Luis Mauricio Jardins  
	 	Name: Luis Mauricio Jardins  
	 	Title: Director  
	 
	 	By: /s/ Marcelo Fanganiello  
	 	Name: Marcelo Fanganiello  
	 	Title:_________________________________
	 
	 
	 	STEADFAST INSURANCE COMPANY 
	 	By: /s/ Daniel W. Riordan  
	 	Name: Daniel W. Riordan  
	 	Title: Vice President  









WITNESSES: 


	1. /s/ Helga M. Camacho 	/s/ Thomas P. McNulty
	Name: Helga M. Camacho	Thomas P. McNulty
	 	Notary Public, State of New York
	 	No. 01MC6082898
	2. /s/ Claudia C.R. ViPiotti 	Qualified in New York County
	Name: Claudia C.R. ViPiotti	Commission Expires November 4, 2006





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	STATE OF __________________	)	 
	 	)	ss:
	COUNTY OF ________________	)





         On this ____ day of
December 2003 before me, a notary public within and for said county, personally appeared
Daniel W. Riordan, to me personally known who being duly sworn, did say that he is a
Vice-President, of Steadfast Insurance Company, one of the persons described in and which
executed the foregoing instrument, and acknowledges said instrument to be the free act
and deed of said corporation. 





         On this ____ day of
December 2003, before me personally came ___________________ and _____________________to
me personally known, who being by me sworn, did depose and say that they signed their
names to the foregoing instrument as witnesses. 






	 	/s/ ___________________________
	 	Notary Public
	 	COMMISSION EXPIRES




[Notarial Seal] 






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