Document:

Exhibit 4.4 

Policy of Political
Risk Insurance for Capital Market Transactions dated as of October 24, 2003. 

SOVEREIGN RISK
INSURANCE LTD., 

as Agent for the
Insurers 

Policy of Political
Risk Insurance 

for 

Capital Market
Transactions 

The Bank of New York
Trust Company (Cayman) Limited, as Trustee of the  
                                        U.S.
$500,000,000 8.75% Subordinated Notes due 2013 
                                                   issued
by Banco Bradesco S.A.,   
                                             acting through its
Grand Cayman branch 

SOVEREIGN RISK
INSURANCE LTD.,

                                                                                               as
Agent for the Insurers 

Policy of Insurance
No. 03-255  

Declarations: 

	Insured: 	The Bank of New York Trust Company (Cayman) Limited, as Trustee of the U.S. $500,000,000 8.75% Subordinated Notes due 2013 (the "Notes") issued by Banco Bradesco S.A., acting through its Grand Cayman branch
	 
	Insured's Country: 	United States of America. The Insured is a company organized and existing under the laws of the Cayman Islands. The accounts in which it will receive funds from the Issuer or the Foreign Enterprise to make Scheduled Payments is located in New York, New York, United States of America.
	 
	Insured Debt: 	U.S. $65,625,000 (being 18 months of interest at 8.75% per annum on U.S. $500,000,000), as reduced in accordance with Article A.9.1 hereof
	 
	Issuer: 	Banco Bradesco S.A., acting through its Grand Cayman branch
	 
	Foreign Enterprise: 	Banco Bradesco S.A., a financial institution duly organized and existing under the laws of the Federative Republic of Brazil, acting through its head office located at Cidade de Deus, Vila Yara, City of Osasco, State of Sao Paulo, Federative Republic of Brazil, of which the Issuer is a branch.
	 
	Host Country: 	Federative Republic of Brazil

	Policy Limit: 	The aggregate amount of claims paid hereunder shall not exceed U.S. $75,578,125 (the "Policy Limit") which is the sum of (i) the Insured Debt, and (ii) Premium Payments payable with respect to year 4 through the end of the Policy Period provided, however, that (x) the Policy Limit shall be reduced in accordance with Article A.9.1 hereof and (y) no single claim payment shall exceed the amount of one Scheduled Payment and/or Premium Payment. As of any date of determination, the Policy Limit shall be equal to the sum of (i) the Insured Debt less all claims paid under this Policy in respect of Scheduled Payments as of such date (it being understood that in accordance with Article A.9.1 hereof, Sovereign's payment to the Trustee on the date hereof of an amount constituting the Initial Refundable Premium shall be deemed, for purposes of this Policy, to be the payment of a claim in the amount of one Scheduled Payment

, reducing the Insured Debt and the Policy Limit by such amount) and (ii) the Premium Payments remaining payable as of such date through the end of the Policy Period.
	 
	Covered Risk: 	Currency Inconvertibility/Non-Transfer
	 
	Insured Percentage: 	100 percent
	 
	:Policy Period From
To: 	October 24, 2003

       October 24, 2013, unless the maturity of the Notes is extended (a "Note Maturity Extension") due to the occurrence of a Currency nconvertibility/Non-Transfer Event which has occurred and is continuing on October 24, 2013, in which event, the end of the Policy Period shall be the earlier to occur of (i) April 24, 2015 (a date which is 18 months after the original maturity date of the Notes) and (ii) the date that is (a) 30 days after the date on which such Currency Inconvertibility/Non-Transfer Event has ended, so long as any violation by the Issuer and the Foreign Enterprise of the Risk-Based Capital Requirements, if applicable, shall have ceased at least 14 calendar days prior to the end of such 30-day period, or (b) in all other cases, if the Issuer and the Foreign

2 

	  	Enterprise are in violation of the Risk-Based Capital Requirements, 14 calendar days after the date on which the Issuer and the Foreign Enterprise are no longer in violation of the Risk-Based Capital Requirements (such Note Maturity Extension period, the "Extension Period").
	  	 
	Policy Currency: 	U.S. Dollars
	 
	Premium Rate: 	3.25 percent per annum; provided that during the Extension Period, if any, the Premium Rate shall be 3.75 percent per annum.
	 
	Initial Non-Refundable Premium for the first three years of the Policy Period: 	U.S. $
	  	 
	Initial Refundable Premium: 	U.S. $21,875,000.00 (being one Scheduled Payment on U.S. $500,000,000)
	 
	Due Date for Initial Non-Refundable Premium and Initial Refundable Premium: 	October 24, 2003
	  	 
	Due Date for Premium Payments after the Initial Premium: 	The Due Date for Premium Payments after the Initial Non-Refundable Premium and Initial Refundable Premium covering the first three years, shall be each annual anniversary after the second anniversary of the inception of this Policy, commencing with October 24, 2006. The amount of premium due shall be calculated by applying the Premium Rate to the sum of (i) the amount of interest in the immediately succeeding two Scheduled Payments, plus (ii) the Premium Payments remaining payable as of such Due Date through the end of the Policy Period, excluding the Premium Payment due and payable on such Due Date. In the event there is no Note 

3 

	  	Maturity Extension and the Policy terminates on October 24, 2013, any Premium Payments paid in advance for periods subsequent to the termination of the Policy to cover a Note Maturity Extension shall be promptly returned to the Issuer.
	  	 
	Insured's Representative: 	The Bank of New York Trust Company
	  	(Cayman) Limited
	  	c/o The Bank of New York
	  	101 Barclay St., Fl. 21W
	  	New York, New York 10286
	  	Attn: Corporate Trust Admin - Global Finance Unit
	  	Ph.:    (212) 815-5619
	  	Fax:     (212) 815-5802
	 
	Insurers' Representative: 	Sovereign Risk Insurance Ltd.
	  	c/o Kitson Brokerage Services Ltd.
	  	5 Reid Street
	  	Hamilton, HM11
	  	Bermuda
	  	Ph.:    (441) 295-2525
	  	Fax:     (441) 295-7357
	 
	Interest Rate: 	Claims paid under this Policy are to be repaid with interest calculated from the date of payment of such claims at a per annum rate equal to the Note Rate, based on a 360-day year consisting of twelve 30-day months, and compounded quarterly.

This Policy is comprised
of the foregoing Declarations and the Wording, Schedules and any Endorsements attached
hereto, and constitutes the entire agreement between the parties, superceding any prior
agreements, whether written or oral. 

4 

IN WITNESS WHEREOF, this
Policy has been made, entered into, and executed by the undersigned, as agent on behalf
of the Insurers listed in Schedule I, in Hamilton, Bermuda this 24th day of October 2003.
 This Policy shall not be valid unless countersigned by a duly authorized representative
of the Insured. 

	By:	CHRISTINA WESTHOLM-SCHRODER 	Title: CHIEF UNDERWRITER 
	 	    Sovereign Risk Insurance Ltd.,	 
	 	    as Agent for the Insurers	 
	By:	PATRICIA M. PHILLIPS 	Title: ASSISTANT VICE PRESIDENT 
	 	    The Bank of New York Trust Company	 
	 	    (Cayman) Limited, as Trustee	 

5 

Schedule I 

Insurers 

	ACE Bermuda Insurance, Ltd.	--	50 Percent
	Ace Global Headquarters	 
	17 Woodbourne Avenue	 
	Hamilton HM 08, Bermuda	 
	 
	 
	XL Insurance (Bermuda) Ltd	--	50 Percent
	XL House	 
	1 Bermudiana Road	 
	Hamilton HM 11, Bermuda	 

6 

Schedule II 

Insured Agreement 

Indenture (the "Indenture
") dated as of October 24, 2003 between The Bank of New York Trust Company (Cayman)
Limited, as Trustee and Banco Bradesco S.A., acting through its Grand Cayman branch. 

7 

Schedule III 

Scheduled Payments 

On each Scheduled Payment
Date (April  24 and October 24 in each year, subject to the provisions of Section 2.8(a)
of the Indenture which provide for deferral of interest on such dates in the
circumstances described therein) during the Policy Period the Issuer or the Foreign
Enterprise will make the Scheduled Payments of interest in the amounts set forth in
Section 2 of the Indenture, subject as provided therein.  In the event of any deferral
under Section 2.8 of the Indenture, the amount of the Scheduled Payment shall be the
Amount in Arrears (as defined in the Indenture) and the Additional Interest Amount (as
defined in the Indenture) shall not be included in the Scheduled Payment and is not
covered under this Policy. 

8 

Schedule IV 

Premium
Calculations* 

	Principal Amount:	$500,000,000
	Coupon Rate:	8.75%
	Premium Rate:	3.25%

	Limit with 7 years premium:	$	2003
	Premium Due for years 1-3:	$
	 
	Limit with 6 years premium:	$	2006
	Premium Due for year 4	$
	 
	Limit with 5 years premium	$	2007
	Premium Due for year 5	$
	 
	Limit with 4 years premium	$	2008
	Premium Due for year 6	$
	 
	Limit with 3 years premium	$	2009
	Premium Due for year 7	$
	 
	Limit with 2 years premium	$	2010
	Premium Due for year 8	$
	 
	Limit with 1 year premium	$	2011
	Premium Due for year 9	$
	 
	Limit with no remaining premium coverage	$	2012
	Premium Due for year 10	$

*          Premium
payments shall be made on October 24 of each year, as                          provided
in the Declarations. 

9 

Schedule V  

Endorsements 

There is no Endorsement
to this Policy No. 03-255 as of its inception. 

10 

SOVEREIGN RISK
INSURANCE LTD.,

as
Agent for the Insurers  

Political Risk
Insurance Wording  

for 

Capital Market
Transactions 

(Which, together with
the duly-executed Declarations, Schedules and Endorsements, constitutes the Policy of
Insurance) 

11 

SOVEREIGN RISK
INSURANCE LTD.,

as
Agent for the Insurers  

Policy of Insurance  

Article 1.
Insuring
Clause  

1.1               In
consideration of the payment of premium and in reliance upon the information given and
statements made to Sovereign Risk Insurance Ltd. ("Sovereign") by the Insured, the
Issuer, and the Foreign   Enterprise, and subject to all of the limits, terms,
conditions, exclusions and representations set forth in this policy of insurance (the
"Policy"), including the Declarations, Schedules and any Endorsements made a   part
hereof, Sovereign hereby agrees as agent for and on behalf of the Insurers listed in
Schedule I (the "Insurers") to indemnify the Insured for Loss occurring during the Policy
Period. 

Article 2.
Policy
Limit  

2.1               The
maximum amount of compensation payable under this Policy for any or all Losses arising
from the Covered Risk over the Policy Period shall not exceed the Policy Limit set forth
in the Declarations. 

12

A. Currency
Inconvertibility/Non-Transfer  

Article A.1. The Covered
Risk  

A.1.1 The Insured will be indemnified
for the Insured Percentage of any Loss (without regard to whether the Issuer or the
Foreign Enterprise may be able to make any such payments in the Policy Currency from
offshore sources outside the Host Country) caused by (i) measures taken, directed,
authorized, ratified or approved by the Host Government that directly prevent the Issuer
and the Foreign Enterprise from converting Local Currency to Policy Currency and/or
remitting Policy Currency outside the Host Country, or (ii) the failure of the Host
Government (or by entities authorized under the laws of the Host Country to operate in the
foreign exchange markets) to effect such conversion and/or remittance (collectively,
“Currency Inconvertibility/Non-Transfer”). For the avoidance of doubt, Currency
Inconvertibility/Non-Transfer includes expropriation, confiscation, nationalization,
discriminatory legislative actions or other governmental measures taken by the Host
Government that have the effect of depriving the Issuer or the Foreign Enterprise of the
use or control of Local Currency or Policy Currency funds, but only to the extent that on
the Date of Loss such funds have been deposited into a bank account owned by the Issuer or
the Foreign Enterprise and such funds have been designated by the Issuer or the Foreign
Enterprise for the making of the Scheduled Payment or Premium Payment that is the subject
of the Loss. 

A.1.2 To constitute a claim under
this Policy, such measures, actions or failures to act must remain in effect, and the
Issuer and the Foreign Enterprise must have made all reasonable efforts to convert the
Local Currency and/or to remit the Policy Currency through all legal and regulatory
mechanisms available through the Waiting Period and through the date on which Sovereign is
obligated hereunder to pay a Loss. 

A.1.3 The coverage only applies to
Local Currency or Policy Currency funds that constitute a Scheduled Payment or a Premium
Payment. 

Article A.2. Amount of
Compensation  

A.2.1 Subject to the Policy Limit, in
the event of Currency Inconvertibility/Non-Transfer, the amount of compensation due
to the Insured under this Policy, computed as of the applicable Date of Loss, shall be the
Insured Percentage of (i) the Policy Currency equivalent (using the rate of exchange set
forth in Article A.3 below) of Local Currency constituting the covered monies which could
not be converted into Policy Currency for transfer to the Insured outside the Host Country
and/or (ii) the amount in Policy Currency constituting the covered monies that could not
be transferred to the Insured outside the Host Country. 

Article A.3. Reference
Rate of Exchange  

A.3.1 Conversions of Local Currency
into Policy Currency on the Date of Loss shall be made at the PTAX 800 Closing Sell Rate
for foreign private debt service or, if not published or otherwise unavailable, the
official exchange rate applied by the Central Bank or equivalent entity of the Host
Country for the category of remittance that is the subject of a claim. If, however, Policy

13 

Currency was not generally available at the applicable official exchange rate and
conversion of Local Currency into Policy Currency was effected through another legal and
normal channel for transactions of the type contemplated in the Indenture, then the
exchange rate shall be the effective rate obtained through that channel. If no exchange
rate can be determined pursuant to the above, the Reference Rate of Exchange shall mean
the last available official exchange rate applied by the Central Bank or equivalent entity
of the Host Country for foreign private debt service prior to the Date of Loss. In all
cases, the exchange rate shall be net of all deductions for governmentally imposed
charges, such as taxes and commissions. 

Article A.4. Filing of
Claims and Claims Adjudication  

A.4.1 Within 15 days after the Issuer
and the Foreign Enterprise have failed to make a Scheduled Payment and/or a Premium
Payment due to the Covered Risk (notwithstanding that the Scheduled Payment may actually
have been made by the Insured with funds from the Reserve Account), the Insured (or the
Insured’s Representative) shall file a preliminary claim application (the
“Preliminary Application”) substantially in the form of Appendix A hereto. Such
application for a claim shall be substantiated with all of the material evidence in the
form of copies of any legislation, decree, order, communication or other official means of
implementation and any other material evidence (for example, copies of certification by
the Central Bank, or other entity authorized to conduct foreign exchange transactions),
demonstrating the inability of the Issuer and the Foreign Enterprise to convert Local
Currency and/or transfer the Policy Currency in order to make such Scheduled Payment
and/or Premium Payment in Policy Currency. Sovereign shall review the Preliminary
Application and revert with any requests for additional information relevant to its claim
determination within 85 days. A final claim application (the “Final
Application”), including any such additional information as may be requested by
Sovereign, shall be filed within 148 days from the occurrence of a default in a Scheduled
Payment caused by the Covered Risk. Sovereign shall determine its liability to pay a claim
no later than 30 days from the date on which a complete and final claim application has
been received from the Insured, but not before the expiry of any applicable Waiting
Period, except as otherwise provided for herein. Failure of the Insured or the
Insured’s Representative to comply with the foregoing time periods will not release
Sovereign or the Insurers from liability, but the time period to pay shall be extended
day-for-day by the period of delay, provided, however, that in no event shall the Final
Application be submitted later than 365 days after the Issuer and the Foreign Enterprise
have failed to make a Scheduled Payment due to a Covered Risk (notwithstanding that the
Scheduled Payment may actually have been made by the Insured with funds from the Reserve
Account). 

A.4.2 If the Insured claims that it
is unable to make any Premium Payment due hereunder on a Due Date because a Covered Risk
has prevented it from making such payment when due, such Due Date shall be extended until
the first Scheduled Payment Date succeeding the date on which Sovereign or the Insurers
makes its determination of liability with respect to such claim. In the event Sovereign or
the Insurers determine that the claim is valid, subject to Article A.6.1 below,
compensation in respect of such Premium Payment shall not actually be remitted to the
Insured but shall instead be deemed to have been paid by Sovereign to the Insured and then
subsequently remitted by the Insured to Sovereign in respect of such Premium Payment due
to Sovereign. In the event Sovereign determines that the claim is not valid, Sovereign or
the Insurers may only

14 

 
cancel this Policy if the Premium Payment (plus accrued interest
thereon from the original Due Date at the Note Rate) due on such Scheduled Payment Date is
not paid within 30 days of notification to the Insured and the Issuer that Sovereign has
determined that the claim is not valid. 

Article A.5. Settlement
of Loss  

A.5.1 Sovereign shall pay to the
Insured in the Policy Currency the compensation due hereunder, in accordance with the
instructions of the Insured or the Insured’s Representative, within two (2) days
after the date of determination set forth in the second to last sentence of Article A.4.1
above; provided, however, that if the Insured or the Insured’s
Representative fails to comply with the time periods required pursuant to
Article A.4.1 above, Sovereign’s obligation to make payments hereunder shall be
extended day-for-day by the period of delay; provided, further,
however, that if a Deferral Period is in effect on the date that Sovereign is
otherwise obligated to pay compensation hereunder, Sovereign shall not pay such
compensation to the Insured until one (1) Business Day after receiving notice from the
Insured that the Deferral Period has ended. If, after compensation is paid to the Insured,
but before application of such compensation to the payment of the Scheduled Payment on the
Notes, a Deferral Period commences, the Insured shall promptly return such compensation
amount to Sovereign together with any and all interest accrued thereon pursuant to the
terms of the Indenture (the “Returned Compensation Amount”). If, prior to
receiving any Returned Compensation Amount from the Insured, Sovereign has received any
Local Currency or Policy Currency amounts from the Issuer or the Foreign Enterprise as a
required delivery under Article A.6.1, Sovereign shall, promptly after receiving such
Returned Compensation Amount, refund all such amounts, together with any and all interest
accrued thereon pursuant to Section 5.03 of the Issuer Consent Agreement, to the Issuer or
the Foreign Enterprise, as the case may be. Subject to the required delivery back to
Sovereign of such Local Currency or Policy Currency in accordance with Article A.6.1,
Sovereign shall pay such Returned Compensation Amount back to the Insured one (1) Business
Day after receiving a notice from the Insured that the Deferral Period has ended. 

Article A.6. Required
Deliveries  

A.6.1 Provided that all of the
requirements set out in Condition 8 of this Policy are met, Sovereign shall pay
compensation in Policy Currency against prior delivery of the inconvertible Local Currency
or the Policy Currency that could not be transferred, as the case may be, constituting the
Insured Percentage of the Scheduled Payment or Premium Payment which the Issuer and the
Foreign Enterprise failed to make (notwithstanding that the Scheduled Payment may actually
have been made by the Insured with funds from the Reserve Account), unless the Insured or
the Issuer or the Foreign Enterprise, as the case may be, is unable legally to deliver
such Local Currency or Policy Currency. For the avoidance of doubt, notwithstanding any
provision of the Indenture permitting the Insured to invest Local Currency or Policy
Currency pending delivery to Sovereign, claims shall be compensable only in the amount of
(i) the Policy Currency equivalent (as calculated by applying the Reference Rate of
Exchange as of the Date of Loss) of the actual Local Currency delivered to Sovereign
hereunder, or (ii) the actual Policy Currency delivered to Sovereign hereunder. In the
event that the Insured, the Issuer or the Foreign Enterprise, as the case may be, is
unable legally to deliver such currency, the right, title

15 

 
 and interest of the Insured, the
Issuer, and the Foreign Enterprise in such currency shall be assigned to Sovereign. Such
delivery and/or assignment shall be made to Sovereign or its representative in the Host
Country. For the avoidance of doubt, it is a condition to the payment of compensation by
Sovereign that such delivery or assignment be made to Sovereign, but such delivery or
assignment need not be made to Sovereign until after Sovereign has made its determination
of liability with respect to the claim, provided that such currency has been deposited
into a bank account owned by the Issuer or the Foreign Enterprise and such currency has
been designated by the Issuer or the Foreign Enterprise for the making of the Scheduled
Payment or Premium Payment that is the subject of the Loss. Without prejudice to the
rights of the Insured and Sovereign under the Policy or to Sovereign’s rights of
subrogation, Sovereign may decline to accept a delivery or assignment under this Article
A.6.1. 

Article A.7. Default  

A.7.1 Material breach of this Policy
by the Insured, or an Event of Default (as defined in the Issuer Consent Agreement) under
the Issuer Consent Agreement or a material misrepresentation by the Insured (whether under
this Policy, in any claim application hereunder, or in the Submission Materials) shall
constitute a default hereunder, and Sovereign may: 

     (i)    
          refuse to pay compensation to the Insured; or 

     (ii)    
          if such default was in existence at the time Sovereign paid compensation
          hereunder, recover such paid compensation from the Insured or from any
          subsequent compensation payable hereunder; or 

     (iii)    
          if such default constitutes an Event of Termination, terminate this Policy
          effective as of the date of the default by giving notice to the Insured. 

Sovereign shall provide notice to the
Insured of its determination of any default hereunder. 

A.7.2 Sovereign may permit the
Insured to cure a breach in a manner satisfactory to Sovereign but shall have no
obligation to allow breaches to be cured. 

16 

Article A.8. Foreign
Exchange Approval  

A.8.1 Notwithstanding anything to the
contrary set forth in this Policy or the Issuer Consent Agreement, a claim shall be
compensable under this Policy notwithstanding that (i) the Issuer and the Foreign
Enterprise have not obtained foreign exchange approval from the Central Bank to make
Scheduled Payments or Premium Payments in Policy Currency from onshore sources within the
Host Country and (ii) at the inception of this Policy, Central Bank approval is required
for issuers wishing to make payments on instruments such as the Notes from onshore sources
within the Host Country; provided, however, that it is a condition to the
issuance of this Policy that (x) the Issuer and the Foreign Enterprise must each have
obtained all licenses and approvals, if any, from the Host Government and from the
Government of the Cayman Islands necessary for it to make payments on the Notes from
offshore sources as contemplated at the inception of this Policy, (y) the Issuer’s
and Foreign Enterprise’s representations and warranties in Section 2.03 of the Issuer
Consent Agreement must be true and correct, and (z) the Issuer and the Foreign Enterprise
undertake, pursuant to Section 3.01 of the Issuer Consent Agreement, to use reasonable
efforts to obtain such approvals or licenses should they become applicable in connection
with a payment from onshore sources within the Host Country. All representations,
warranties and covenants of the Issuer and the Foreign Enterprise in this Policy, the
Issuer Consent Agreement and the Issuer’s application for this Policy shall be read
in a manner consistent with this Article A.8. 

Article A.9. Initial
Payment  

A.9.1 Notwithstanding anything to the
contrary set forth in this Policy, in consideration of the Initial Refundable Premium,
Sovereign has caused to be paid to the Insured on the date of this Policy an amount equal
to one Scheduled Payment for deposit in the Reserve Account. Notwithstanding anything to
the contrary set forth in this Policy, by such payment (i) Sovereign is deemed to have
satisfied its obligation hereunder to (x) cover a Loss in respect of the first of the
three Scheduled Payments covered by this Policy (by Sovereign’s payment to the
Trustee, such Loss is deemed paid by Sovereign for all purposes of this Policy) and (y)
refund all or any portion of the Initial Refundable Premium (it being understood that all
rights with respect to the Initial Refundable Premium shall be governed by the terms of
the Indenture after such payment to the Trustee), and (ii) the Policy Limit and the
Insured Debt shall be deemed reduced by such Scheduled Payment. 

17

Standard Terms and
Conditions  

EXCLUSIONS  

This Policy shall not cover, and the
Insurers shall have no liability to the Insured in respect of, a Loss or any portion
thereof arising out of the following exclusions (the “Exclusions”): 

     1.    
          Pre-Existing Conditions — subject to Article A.8.1, any laws,
          judicial precedents, regulations, practices, policies, procedures, restrictions
          or other acts or conditions which, at the inception of the Policy Period, were
          in effect, (including, without limitation, any restriction on convertibility or
          transfer that applied to transactions of a similar nature) and which, at the
          inception of the Policy Period, would have the effect of causing a Currency
          Inconvertibility/Non-Transfer Event to be in effect (if a Scheduled Payment were
          then due and payable) and that should reasonably have been known to the Insured
          and/or the Issuer and/or the Foreign Enterprise; 

     2.    
          Consequential Loss — business interruption, contingent business
          interruption, extra expense or other time element losses, delay, loss of market,
          or other consequential losses, whether before, during or after the
          Waiting Period; 

     3.    
          Non-Compliance — subject to Article A.8.1, failure of the Insured
          and/or the Issuer and/or the Foreign Enterprise to comply with the laws or
          regulations of the Host Country (including, but not limited to, obtaining and
          maintaining valid licenses, applications, and approvals) which failure
          materially and adversely affects either (i) the ability of the Insured
          and/or the Issuer and/or the Foreign Enterprise to convert Local Currency or to
          transfer Policy Currency outside the Host Country or (ii) Sovereign’s
          ability to recover any Loss; 

     4.    
          Insolvency or Commercial Failure — any debt, insolvency, commercial
          failure, failure to provide bond or security, or any other financial cause
          including, but not limited to, the insolvency or financial default of the Issuer
          or the Foreign Enterprise, and/or any legitimate action of the Host Government
          taken under the applicable bankruptcy laws thereof or taken to enforce any
          contractual agreement to which the Issuer or the Foreign Enterprise may be a
          party, or to enforce the right of any titleholder to repossess property; 

     5.    
          Currency Fluctuations — currency fluctuations and/or devaluations
          whether as a result of market forces or government action provided, however,
          that this Exclusion shall not prevent the application of Article A.3 in
          accordance with its terms; 

18 

     
6.    
          Taxes, etc. — duties, taxes, penalties or fines imposed on the
          Insured and/or the Issuer and/or the Foreign Enterprise; 

     7.    
          Misrepresentation — (i) the Insured’s material breach of the
          terms of this Policy, (ii) the Insured’s and/or the Issuer’s and/or
          the Foreign Enterprise’s failure to disclose to Sovereign any information
          that is material to this Policy, (iii) the Insured’s material
          misrepresentation under this Policy, under any Preliminary Application or Final
          Application, or in the Submission Materials, and/or (iv) the Issuer’s
          and/or the Foreign Enterprise’s material misrepresentation under the Issuer
          Consent Agreement or in the Submission Materials; and 

     8.    
          Violation of the Issuer Consent Agreement — an Event of Default (as
          defined in the Issuer Consent Agreement) under the Issuer Consent Agreement. 

19 

REPRESENTATIONS  

The Issuer and the Foreign Enterprise
are making certain representations to Sovereign and the Insurers as of the inception of
the Policy under the terms of the Issuer Consent Agreement. The Insured acknowledges that
Sovereign and the Insurers deem such representations to be material to the Covered Risk
and are relying upon such representations in the issuance of this Policy. In addition, the
Insured makes the following representations as of the inception of the Policy Period and
acknowledges that Sovereign and the Insurers deem such representations to be material to
the Covered Risk and are relying upon such representations in the issuance of this Policy: 

     1.    
          Prior Knowledge — the Insured has no knowledge of and/or no basis
          upon which to reasonably expect events to occur that will lead to the occurrence
          of a Covered Risk (it being understood that the Insured has made no independent
          investigation in this regard); 

     2.    
          Application — the Insured’s Submission Materials provided to
          Sovereign are true and complete as of the inception of the Policy Period, and no
          material information that might affect the decision of Sovereign to issue this
          Policy has been withheld. The Insured acknowledges that if the information
          provided by the Insured and/or the Issuer and/or the Foreign Enterprise,
          including without limitation information with respect to the Issuer and/or the
          Foreign Enterprise in the Submission Materials and the Issuer Consent Agreement,
          is untrue or incorrect in any material respect and could reasonably have
          affected the decision of Sovereign to issue this Policy, Sovereign may declare
          coverage under this Policy to be void ab initio, but Sovereign will be
          entitled to retain as an administration fee 100 percent of any premiums that
          have been paid in respect of this Policy, other than the Initial Refundable
          Premium (which shall not be returned to Sovereign after its deposit in the
          Reserve Account on the date of this Policy and the rights to which thereafter
          shall be determined solely by the terms of the Indenture); and 

     3.    
          Transaction Documents — The Insured acknowledges that if this Policy
          is issued prior to the execution of the Transaction Documents, then (i) true and
          complete copies of such documents must be provided to Sovereign within 30 days
          of their execution, but in no event later than 90 days from the effective date
          of this Policy, and (ii) they must be, in Sovereign’s sole determination,
          either (A) similar in all material respects to the draft copies earlier
          provided, or (B) satisfactory in form and substance to Sovereign. 

20 

CONDITIONS  

     1.    
          Notice of Loss — Upon discovery by a Responsible Officer of the
          Insured of an event which the Insured determines will give rise to a Loss, the
          Insured shall, within two (2) Business Days of such discovery, give written
          notice of such event to Sovereign, including reasonable details known to it with
          respect to such event. The Insured’s obligation to provide such notice is a
          material term of this Policy, and failure of the Insured to provide such notice
          shall entitle Sovereign to deny liability to the Insured with respect to any
          claim(s) arising from such event. 

     2.    
          Business Operations — The business and ownership of the Issuer and
          the Foreign Enterprise shall be substantially that set forth in the Submission
          Materials, and neither the Issuer nor the Foreign Enterprise shall permit any
          significant change to the type of that business without giving written notice to
          Sovereign. 

     3.    
          Onus of Proof — In any claim, and/or any arbitration to enforce a
          claim, for Loss hereunder, the burden of proving that the Loss is compensable
          under this Policy shall fall upon the Insured. 

     4.    
          Proof of Loss — The Insured shall submit a sworn proof of loss to
          Sovereign. If such proof of loss has not been submitted within two years of an
          event of Loss, the Insurers shall be discharged from all liability hereunder in
          respect of such Loss. 

     5.    
          Non-Cancellation — This Policy may be canceled by the Insured as of
          the third or any subsequent anniversary of the inception date of this Policy, by
          notice to Sovereign at least 90 days prior to such anniversary, provided that,
          the Notes have been repaid or the Insured otherwise no longer has an insurable
          interest in the Indenture. Sovereign may cancel this Policy if (i) any Premium
          Payment has not been received by the relevant due date, subject to Article A.4.2
          above, or (ii) a default under this Policy as specified in Clause A.7.1 occurs.
          In any such case, the Issuer and the Foreign Enterprise shall, in accordance
          with Section 5.02 of the Issuer Consent Agreement, pay to Sovereign one-half
          (50%) of the unearned premium hereunder in consideration of Sovereign’s
          underwriting expense and commitment to insure for the balance of the Policy
          Period. If the Policy is canceled prior to the third anniversary of its
          inception date, in no event shall Sovereign repay to the Insured premiums
          previously paid for the first three years of the Policy; provided,
          however, that it is understood that the Initial Refundable Premium which
          is deposited into the Reserve Account on the date of this Policy will not be
          returned to Sovereign after such deposit and the rights to the funds in the
          Reserve Account shall thereafter be determined solely by the terms of the
          Indenture. Other than as stated herein, this Policy may not be canceled by the
          Insured,

21 

 
Sovereign or the Insurers. In no event shall Sovereign be obligated to
          repay premiums if a Loss has occurred under the Policy. 

     6.    
          Due Diligence — The Insured shall, and shall use its reasonable
          efforts to cause the Issuer and the Foreign Enterprise to, exercise its rights
          and responsibilities under the Indenture as though the Insured were uninsured as
          to the Covered Risk, and furthermore shall at all times use due diligence and
          do, and concur in doing, and permit to be done, all things reasonably
          practicable to avoid or diminish any Loss. The Insured shall take no action to
          impair the Insured’s rights as a creditor of the Issuer and the Foreign
          Enterprise, or Sovereign’s rights as a creditor of the Issuer and the
          Foreign Enterprise after any claim payment by Sovereign. 

     7.    
          Confidentiality — Neither the Insured, nor the Issuer nor the
          Foreign Enterprise shall disclose the terms of this Policy at any time to any
          third party other than to such party’s own professional, financial and
          legal advisors, translators and rating agencies, and except as may be required
          by law, regulations, legal process, or bank regulators (including, without
          limitation, the Central Bank and its advisors, the United States Securities and
          Exchange Commission (the “SEC”) and its advisors, and notaries
          public required for the purpose of compliance with the rules and regulations of
          the Central Bank or the SEC), in each case on a confidential basis, without the
          prior written consent of Sovereign, which shall not be unreasonably withheld.
          The Issuer and the Foreign Enterprise shall request that such third parties keep
          such information confidential but it is understood that the Issuer and the
          Foreign Enterprise can give no assurance that they will do so. For the avoidance
          of doubt, nothing herein shall prevent (i) the Issuer and/or the Foreign
          Enterprise from including summaries of the material terms, conditions and
          exclusions of this Policy or the Issuer Consent Agreement in any disclosure
          document prepared or approved by them in connection with the issue, offering and
          listing of the Notes, and (ii) the rating agencies from including summaries of
          the material terms of this Policy in their research reports, provided, however,
          that in any such case such summaries do not contain information about the amount
          of premiums payable under this Policy or the Premium Rate. 

     8.    
          Subrogation; Assignment and Reimbursement Upon Loss Payment — On or
          prior to the date of Sovereign’s payment of a Loss hereunder and at the
          request of Sovereign, the Insured shall transfer, assign, convey, set over and
          deliver to Sovereign or its designee all of the Insured’s right, title and
          interest in the Scheduled Payments and/or Premium Payments under the Indenture
          and the Notes, which are the subject of the Loss and all claims against the Host
          Government or other parties associated with or arising out of the Loss. Without
          prejudice to the rights of the Insured and Sovereign under the Policy or to
          Sovereign’s rights of subrogation, Sovereign may decline to accept an
          assignment of all or any portion of the Insured’s rights or interests
          pursuant to this Condition 8. The Insured shall take all reasonable steps
          requested in writing by Sovereign to assist it, and cause the Issuer and the
          Foreign Enterprise to assist it, in 

22 

     
recovering any Loss paid hereunder
          including, without limitation, (i) initiation and prosecution in the
          Insured’s name (at Sovereign’s expense) of any such recovery efforts,
          and (ii) enlisting the cooperation of the government of the Insured’s
          Country to assist in recovery (at Sovereign’s expense) by diplomatic means
          and/or formal proceedings. Sovereign may, to the extent such rights have been
          transferred or obtained by Sovereign in the Indenture, direct the Insured to
          take any action, consistent with the terms of the Indenture, with regard to the
          Notes or the rights that relate to Sovereign as Sovereign may reasonably
          require. If at any time the Insured, Sovereign and/or the Insurers shall obtain
          recoveries in respect of a Loss paid hereunder, or the Insured receives any
          payments from the Issuer or the Foreign Enterprise under the Indenture or the
          Notes (including, without limitation and without limiting the generality of the
          foregoing, payments of interest, principal, fees, cost reimbursements or any
          other payment whatsoever) after the payment of a claim hereunder by Sovereign or
          the Insurers, the amounts of any such recoveries or payments will be applied,
          prior to any payment under the Indenture or on the Notes but, with respect to
          any payments received by the Insured, after any required payments to the Trustee
          in respect of fees and expenses, in the following order: 

     (a)    
          full repayment of compensation paid by Sovereign or the Insurers to the Insured; 

     (b)    
          undisputed documented loss adjustment expenses incurred by Sovereign or the
          Insurers and associated with the Loss (including, without limitation and by way
          of example, costs and expenses of legal counsel and other professional advisers
          assisting Sovereign in determining its liability to pay a claim, and costs and
          expenses incurred by Sovereign in connection with the recovery of any Loss); 

     (c)    
          interest on the foregoing amounts equal to the Note Rate; 

     (d)    
          all unpaid premiums (including accelerated unpaid premiums payable by the Issuer
          and/or the Foreign Enterprise pursuant to Section 5.02 of the Issuer Consent
          Agreement) due and owing; 

     (e)    
          to the extent that any loss adjustment expenses incurred by Sovereign are
          disputed by the Issuer and the Foreign Enterprise, then the amount of such
          disputed expenses (together with interest on such amounts equal to the Note
          Rate) shall be delivered to the Insured to be held in trust and invested in
          Permitted Investments (as defined in the Indenture) until such time as the
          dispute is resolved. Delivery of such amounts to the Insured will satisfy the
          requirement for payments pursuant to this paragraph (e). Upon notification to
          the Insured by Sovereign and the Issuer of resolution of any dispute, the
          Trustee shall then apply such amounts in accordance with the terms of such
          resolution and Section 5(g) of the Indenture and this Condition 8; and 

23 

     
(f)    
          payment to the Insured or the Insured’s Representative of uninsured loss
          suffered by the Insured. 

For the avoidance of doubt, (i) to
the extent Local Currency is delivered to Sovereign under Article A.6.1, a recovery shall
be deemed to have been obtained by Sovereign only to the extent Sovereign is able to
convert such Local Currency into Policy Currency and transfer such Policy Currency to
Sovereign outside the Host Country and the amount of the recovery shall be the amount of
such Policy Currency transferred, and (ii) to the extent non-transferable Policy Currency
is delivered to Sovereign under Article A.6.1, a recovery shall be deemed to have been
obtained by Sovereign only to the extent that Sovereign is able to transfer such Policy
Currency outside the Host Country. Nothing herein shall limit the discretion of Sovereign
or the Insurers in dealing with or making settlements with regard to the Notes or the
recovery efforts, and Sovereign and the Insurers shall have no liability to the Insured
for actions taken or not taken in respect thereof. For the further avoidance of doubt, no
rights of subrogation, assignment or reimbursement shall accrue to Sovereign in connection
with any payment to the Holders from funds constituting the Initial Refundable Premium
deposited into the Reserve Account on the date of this Policy and Sovereign acknowledges
that any such Scheduled Payment paid with such funds shall discharge the Issuer’s and
the Foreign Enterprise’s obligation to make such Scheduled Payment under the
Indenture and the Notes. 

     9.    
          Premiums — Premiums shall be paid in full in the amounts set forth
          in the Declarations, free of any deductions or withholdings for any and all
          present and future taxes, levies, imposts, stamps, duties, fees, assessments,
          deductions, withholdings, and other governmental charges, and all liabilities
          with respect thereto, and in the event that the Insured is prohibited by law
          from making Premium Payments free of such deductions or withholdings, then the
          Insured shall pay such additional amount as may be necessary in order that the
          actual amount received after such deduction or withholding shall equal the full
          Premium Payment amount. Premiums shall be paid (a) in accordance with
          Article A.4.2 of this Policy in the circumstances set forth in that
          Article and (b) in all other circumstances, on or prior to the dates
          set forth in the Declarations. 

     10.    
          Arbitration — Disputes, controversies or claims arising out of or
          relating to this Policy or to the breach, cancellation, termination or validity
          of this Policy shall be finally and fully determined at the London Court of
          International Arbitration (“LCIA”) in London according to the LCIA
          rules in effect at the date of submission. The laws of England and Wales
          applicable to arbitration procedure, including the provisions of the Arbitration
          Act of 1996 and/or any statutory modifications or amendments thereto, shall
          govern the procedural aspects of such arbitration proceedings. For the avoidance
          of doubt and as set forth in Condition 11, in any such arbitration this Policy
          shall be governed by and construed in accordance with the laws of the State of
          New 

24 

 
York. The arbitration panel shall consist of three arbitrators. Each party
          shall choose one arbitrator, and the two arbitrators so chosen shall select a
          third arbitrator who shall be chairman of the panel. The arbitral award shall be
          in writing, shall be final and binding upon all parties and may be enforced by
          any court having jurisdiction. In no event may the arbitrators award the Insured
          more than the sum of the applicable Policy Limit, the costs of the arbitration,
          and interest calculated from the date compensation was denied using the average
          one month LIBOR rate in effect during the period, compounded quarterly. Unless
          the Insured initiates arbitration, Sovereign’s liability with respect to
          any claim for compensation hereunder and any related claims or causes of action
          shall expire one year after Sovereign notifies the Insured of its final
          determination with respect to such claim. The liability of the Insured, if any,
          in connection with the selection of any arbitrator or in connection with any
          arbitral award shall be liability of the Insured in its capacity as Trustee
          under the Indenture and not in its individual or personal capacity. 

     11.    
          Governing Law — This Policy, and any dispute, controversy or claim
          arising out of or relating to this Policy, except as otherwise expressly
          provided, shall be governed by and construed in accordance with the laws of the
          State of New York, except insofar as such laws may pertain to regulation under
          New York law, or regulations issued by the Insurance Department of the State of
          New York pursuant thereto, applying to insurers doing insurance business, or
          issuance, delivery or procurement of policies of insurance, within the State of
          New York. Notwithstanding the above, the laws of England and Wales governing
          arbitration procedure shall govern the arbitration procedure applicable to any
          arbitration under Condition 10. 

     12.    
          Representation — The Insured or such other person as it shall
          designate in the Declarations (initially, the Insured’s Representative)
          shall represent and have authority to bind the Insured in all matters under this
          Policy, including without limitation, payment of premium and the adjustment,
          settlement and payment of claims. The Insured, by notice to Sovereign in
          writing, may designate a substitute representative, which representative shall,
          effective as of the date such notice is received, be deemed to be designated in
          the Declarations. 

     13.    
          Other Insurance — The Insured shall not obtain any other insurance,
          whether primary, excess, contingent or umbrella, for any Loss covered by this
          Policy, as an additional insured or otherwise. 

     14.    
          Changes — Notice to or knowledge possessed by any person shall not
          effect a waiver or change in any part of this Policy or estop Sovereign or the
          Insurers from asserting a right under the terms of this Policy. Neither the
          terms of this Policy nor the terms of the Indenture may be waived or changed,
          except by written endorsement issued and signed by Sovereign, unless such
          waivers or changes are minor or technical in nature and would not require the
          consent of the Holders. The Insured shall not consent, and 

25 

 
shall cause the
          Issuer not to consent, to any waiver of, or change in, the terms of the
          Transaction Documents that would adversely affect Sovereign’s obligations
          or rights hereunder or thereunder or its prospects for recovery upon payment of
          Loss, except by written endorsement and signed by Sovereign. The failure of
          Sovereign to exercise any right or remedy shall not be deemed to constitute a
          waiver of such right or remedy in the future. 

     15.    
          Assignment — Assignment of any interest under this Policy shall not
          bind Sovereign or the Insurers unless and until their consent is endorsed
          hereon. The Insurers shall not assign their obligations under this Policy
          without the prior written consent of the Insured, not to be unreasonably
          withheld. 

     16.    
          Inspection — The Insured shall furnish promptly all information
          available to it and reasonably requested in writing by Sovereign, both with
          respect to a Loss and pertaining in any way to coverage under this Policy. 

     17.    
          Notice — All notices under any provision of this Policy shall be in
          writing and given by hand, prepaid express courier, airmail or fax (with a copy
          by mail to follow, receipt of which copy shall not be required to effect notice)
          properly addressed to the appropriate party or its designated representative at
          the address so designated in the Declarations or to such other address or fax
          number as it may have notified to the other parties in accordance with this
          clause and will be deemed as having been effected only upon actual receipt. 

     18.    
          Headings — The descriptions in the headings and sub-headings of this
          Policy are inserted solely for convenience and do not constitute any part of the
          terms or conditions hereof. 

     19.    
          Several Liability — The Insured acknowledges and agrees that each
          Insurer’s interests and liabilities under this Policy shall be separate and
          apart from the interests and liabilities of the other Insurer under this Policy,
          that the interests and liabilities of the other Insurer are several and not
          joint, and that each Insurer’s interests and liabilities under this Policy
          shall be limited to the percentage shown in Schedule I and shall apply to Loss
          on a pro rata basis. In no event shall an Insurer participate in the
          interests and liabilities of the other Insurer, and the Insured further
          acknowledges and agrees that neither Sovereign nor any Insurer shall be
          responsible for the interests and liabilities of any Insurer which for any
          reason does not satisfy all or part of its obligations hereunder. 

     20.    
          Non-Waiver — Neither Sovereign’s nor the Insured’s failure
          to invoke its rights nor its acceptance or payment of premiums shall constitute
          waiver of any of its rights, even if Sovereign or the Insured knows of a
          material breach hereof by the Insured or Sovereign. 

26 

     
21.    
          Exercise of Rights by and Performance of Obligations of Insured —
          Only the Insured may exercise the rights and perform the obligations of the
          Insured under this Policy. No individual Holder shall have or exercise any
          rights or perform any obligation under this Policy in its own name or in lieu,
          in the name, or on behalf of the Insured. 

     22.    
          Early Termination of Waiting Period — Notwithstanding any other
          provision of this Policy to the contrary, if a Loss appears probable, Sovereign
          may terminate the Waiting Period at any time and, in exchange for payment of
          such Loss (up to the Policy Limit), demand, by notice to the Insured that the
          Insured comply with the delivery and assignment requirements of Article A.6 and
          Condition 8 within ten (10) days of such notice. 

     23.    
          Acceleration — Sovereign shall be liable for compensation for
          Scheduled Payments only on their respective due dates as set out in the
          Indenture and described in Schedule III. An acceleration of a payment, even
          though contemplated in the Indenture, shall not give rise to a corresponding
          acceleration of Sovereign’s obligation to pay compensation hereunder.
          Sovereign will have the option, however, in its sole discretion and at any time,
          to pay compensation with respect to such accelerated payment excluding unearned
          interest and subject always to the requirements of Article A.6 and Condition 8.
          Such compensation will be reduced by the amount of premium payable over the
          balance of the Policy Period based on the Scheduled Payments described in
          Schedule III. 

     24.    
          Prepayments — At the inception of the Policy, there is no mandatory
          prepayment right under the Notes. Should any mandatory prepayment nevertheless
          occur during the Policy Period, such mandatory prepayment shall be treated as
          acceleration, and any Loss incurred with regard to such prepaid amount shall be
          compensated in accordance with the original repayment schedule. Voluntary
          prepayment by the Issuer or the Foreign Enterprise, if any, shall be excluded
          from coverage under this Policy. Notwithstanding that voluntary prepayment is
          not covered hereunder, such attempt by the Issuer or the Foreign Enterprise to
          prepay shall not prejudice the Insured’s right to file a claim under this
          coverage with respect to a Scheduled Payment at the original due date. 

     25.    
          Interpretation — In the event of any inconsistency between the terms
          of any of the Transaction Documents or any description, summary or
          characterization of the terms of this Policy in any offering materials with
          respect to the Transaction Documents and the terms of this Policy, the terms of
          this Policy shall govern. 

     26.    
          Disclaimer — None of Sovereign, the Insurers, their respective
          officers, or any of their respective employees shall be responsible for any
          description, summary, or other characterization of Sovereign or the Insurers or
          the insurance coverage under this Policy contained in any prospectus, offering
          document, or other information provided

27 

 
 to Holders, rating agencies, or others,
          regardless of whether such person has knowledge thereof. 

     27.    
          Limitation of Liability — This Policy is executed and delivered by
          the Insured acting not individually or personally, but solely as Trustee under
          the Indenture in the exercise of the powers and the authority conferred on and
          vested in it under the Indenture. The undertakings and agreements herein made on
          the part of the Insured are made and intended not as personal undertakings and
          agreements by the Trustee in its individual or personal capacity, but are made
          and intended for the purpose of binding only the Insured in its capacity as
          Trustee under and the estate created pursuant to the Indenture. Nothing herein
          contained shall be construed as creating any liability on the Trustee,
          individually or personally, to perform any covenant either expressed or implied
          herein, all such liability, if any, being expressly waived by the parties who
          are signatories to this Policy and by any person claiming by, through, or under
          such parties. Under no circumstances shall the Trustee be or become personally
          liable for the payment of any indebtedness or expenses of the estate created
          pursuant to the Indenture or be personally liable for the breach or failure of
          any obligation or covenant made or undertaken by the Trustee under this Policy. 

     28.    
          Effectiveness. Notwithstanding anything to the contrary in this Policy,
          this Policy shall not become effective and Sovereign shall have no obligations
          hereunder until the Issuer Consent Agreement shall have been executed and
          delivered to Sovereign. 

     29.    
          Counterparts. This Policy may be executed in counterparts, each of which
          when so executed and delivered shall be deemed an original and all of which
          together shall constitute one and the same instrument. 

28 

DEFINITIONS  

     1.    
          Business Day — means any day except a Saturday, a Sunday or a legal
          holiday or a day on which banking institutions are authorized or required by
          law, regulation or executive order to close in The City of New York, or Bermuda. 

     2.    
          Central Bank — means the Central Bank of the Host Country. 

     3.    
          Covered Risk — means Currency Inconvertibility/Non-Transfer as set
          forth in Article A.1 hereof. 

     4.    
          Currency Inconvertibility/Non-Transfer — has the meaning provided in
          Article A.1.1 hereof. 

     5.    
          Currency Inconvertibility/Non-Transfer Event — means any event of
          Currency Inconvertibility/Non-Transfer. 

     6.    
          Date of Loss — means the Scheduled Payment Date on which the Issuer
          and the Foreign Enterprise have failed to make a Scheduled Payment as a direct
          result of a Covered Risk. For purpose of this Policy, a failure to make a
          Scheduled Payment shall be deemed to have occurred notwithstanding any payment
          thereof made by the Insured’s drawing upon the Reserve Account. 

     7.    
          Deferral Period — means any period during which interest payments
          are subject to deferral in accordance with Section 2.8(a) of the Indenture. 

     8.    
Event of Termination — means (i) a material breach of the Policy by the
Insured (including, without limitation, failure to make any Premium
Payment when due under the Policy, subject to Article A.4.2), (ii) a material
misrepresentation by the Insured (whether under this Policy, in any
claim application hereunder, or in the Submission Materials), (iii) an
Event of Default under Section 4.01(a) of the Issuer Consent Agreement, or (iv)
an Event of Default (as defined in the Issuer Consent Agreement) under
Section 4.01(b) of the Issuer Consent Agreement arising from a failure
to comply with Sections 3.03 (but only to the extent such Event of Default
causes a payment default on the Notes or would materially impair
Sovereign’s subrogation rights), 3.01, 3.06, or 3.07 thereof.  

     9.    
          Foreign Enterprise — means Banco Bradesco S.A., a financial
          institution duly organized and existing under the laws of the Federative
          Republic of Brazil, acting through its head office located at Cidade de Deus,
          Vila Yara, City of Osasco, State of Sao Paulo, Federative Republic of Brazil, of
          which the Issuer is a branch. The Issuer is

29 

    
a part of the Foreign Enterprise and
          has no separate legal status or existence and the Foreign Enterprise is
          ultimately responsible for all obligations of the Issuer. 

     10.    
          Holders — means the owners of the Notes. 

     11.    
          Host Country — means the country set forth in the Declarations. 

     12.    
          Host Government — means the present or any succeeding governing
          authority (without regard to its method of succession or to whether it is
          internationally recognized) in effective control of all or any part of the
          territory of the Host Country or any political or territorial subdivision
          thereof. 

     13.    
          Indenture — means the Indenture identified in Schedule II. 

     14.    
          Initial Refundable Premium – means the amount of the initial
          refundable premium as set forth in the Declarations. 

     15.    
          Insured  — has the meaning provided in the Declarations. 

     16.    
          Insured Debt — has the meaning set forth in the Declarations. 

     17.    
          Insured Percentage — means the percentage of the Scheduled Payments
          insured under this Policy as specified in the Declarations. 

     18.    
          Insured’s Country — means the country set forth in the
          Declarations in which the Insured maintains the accounts in which it will
          receive funds to make Scheduled Payments. 

     19.    
          Insurers — means the insurers listed in Schedule I of this Policy. 

     20.    
          Issuer — means the entity set forth in the Declarations as the
          issuer of the Notes. 

     21.    
          Issuer Consent Agreement — means the agreement among the Issuer, the
          Foreign Enterprise and Sovereign, setting out certain obligations and
          requirements on the Issuer and the Foreign Enterprise with regard to this
          Policy. 

     22.    
          Local Currency — means the lawful currency of the Host Country. 

     23.    
          Loss — means any loss that is sustained by the Insured due to the
          failure of the Issuer and the Foreign Enterprise to make a Scheduled Payment or
          the inability of the Issuer and the Foreign Enterprise to pay a Premium Payment
          that, in either case, is caused solely and directly by the Covered Risk, which
          meets the terms, conditions, and exclusions of this Policy, and for which the
          Insured seeks compensation under this

30 

 
Policy. It is understood that if a Covered
          Risk prevents the Issuer and the Foreign Enterprise from making a Scheduled
          Payment, the Insured may draw upon the Reserve Account to cover such payment
          then due to the Holders. Notwithstanding that the Insured has been able to draw
          on the Reserve Account and make the payment to the Holders, for purpose of this
          Policy, the Loss is deemed to have occurred and Sovereign shall pay compensation
          to the Insured for application to the next Scheduled Payment (to the extent such
          Scheduled Payment cannot be made due to the Covered Risk) in accordance with the
          terms of this Policy, subject to Article A.6. and to an assignment having been
          made in accordance with Condition 8 of this Policy. 

     24.    
          Note Rate  — means the interest rate on the Notes, excluding any
          penalty or default interest or any increase in the original interest rate
          applicable because of a deferral under Section 2.8 of the Indenture. 

     25.    
          Notes  — means the U.S. $500,000,000 8.75% Subordinated Notes due
          2013 issued by Issuer. 

     26.    
          Policy Currency — has the meaning set forth in the Declarations. 

     27.    
          Policy Limit — means the maximum amount of compensation that will be
          paid under this Policy for claims, as set forth in the Declarations. 

     28.    
Premium Payment — means any payment of premium required under
this Policy.  

     29.    
Premium Rate — has the meaning set forth in the Declarations.  

     30.    
          Reserve Account — means the reserve account established under the
          Indenture to ensure timely payments of interest on the Notes. 

     31.    
          Responsible Officer  — means, when used with respect to the Insured,
          any officer within the corporate trust department of the Insured, including any
          vice president, assistant vice president, assistant treasurer, trust officer or
          any other officer of the Insured who customarily performs functions similar to
          those performed by the persons who at the time shall be such officers,
          respectively, or to whom any corporate trust matter is referred because of such
          person’s knowledge of and familiarity with the particular subject and who
          shall have direct responsibility for the administration of the Indenture. 

     32.    
          Reference Rate of Exchange — has the meaning provided in Article A.3
          hereof. 

     33.    
          Risk-Based Capital Requirements – has the meaning set forth in the
          Indenture. 

31 

     
34.    
          Scheduled Payment — means one or more payments of accrued interest
          on the Notes according to the requirements contained within the Indenture.
          Penalty interest, additional interest, special interest or penalty fees for late
          or deferred payment, including without limitation Additional Interest Amounts
          (as defined in the Indenture) are not a part of the Scheduled Payment and are
          not included in the calculation of compensation. For the purpose of this Policy,
          a failure to make a Scheduled Payment shall be deemed to have occurred
          notwithstanding any payment thereof made by the Insured’s drawing upon the
          Reserve Account. 

     35.    
          Scheduled Payment Date — means each date on which a Scheduled
          Payment is required to be made under the terms of the Indenture, including any
          date to which a Scheduled Payment is deferred pursuant to Section 2.8 of the
          Indenture. 

     36.    
          Submission Materials — means the application for insurance, the
          supporting documents and any other written material information provided to
          Sovereign by the Insured, the Issuer and the Foreign Enterprise prior to the
          inception of the Policy Period. 

     37.    
          Transaction Documents — means the Indenture and the Notes. 

     38.    
Trustee — means The Bank of New York Trust Company (Cayman) Limited, in
its capacity as Trustee under the Indenture, or any successor trustee
appointed in accordance with the terms thereof.  

     39.    
          Waiting Period — means a continuous period of 148 days, commencing
          on the first day after the Date of Loss. A Loss shall not be indemnified
          hereunder until the expiration of the Waiting Period. Coverage hereunder shall
          not be prejudiced if the Waiting Period extends beyond the Policy Period. 

All other terms appearing in the
Declarations, Policy, and Standard Terms and Conditions have the meanings assigned to them
therein. 

32 

Appendix A 

Form of Insured’s
Claim Application 

[LETTERHEAD OF INSURED] 
[Date] 

Sovereign Risk Insurance
Ltd.
Wessex House, 5th Floor
45 Reid Street
Hamilton, HM 12, Bermuda 

Re: Policy of Political
Risk Insurance No.  

This [Preliminary Application] [Final
Application] is delivered to you pursuant to Article A.4 of the Policy of Political
Risk Insurance for Capital Market Transactions (together with the duly-executed
Declarations, Schedules and Endorsements, and as amended, supplemented and otherwise
modified from time to time, the “Policy”), dated October 24, 2003, among
(i) Sovereign Risk Insurance Ltd., as agent for the Insurers named therein (the
“Agent”), and (ii) The Bank of New York Trust Company (Cayman)
Limited (the “Insured”). All capitalized terms used and not otherwise
defined in this certificate shall have the meanings assigned thereto in the Policy. 

I, __________, a duly authorized
representative of the Insured, hereby certify, represent and warrant to Agent on behalf of
the Insured as follows: 

     I.    
          This Application relates to the ________, ____ Scheduled Payment Date (the
          “Date of Loss”). 

     II.    
          A Covered Risk set forth in Article A.1.1: 

___         clause (i)  

___         clause (ii)  

has occurred on
________, ____ and is continuing as of the date hereof. 

33 

     
III.    
          Attached hereto is evidence demonstrating the inability of the Insured and the
          Issuer and the Foreign Enterprise to convert the Local Currency that is the
          subject of this claim or to transfer the Policy Currency that is the subject of
          this claim outside the Host Country. 

     IV.    
          The Insured, the Issuer and the Foreign Enterprise have each made all reasonable
          efforts to convert the Local Currency that is the subject of the claim and/or
          remit the Policy Currency that is the subject of the claim through all legal and
          regulatory mechanisms available, commencing from the Date of Loss through the
          date hereof. 

     V.    
          The amount of this claim is U.S. $_________. [________ in Local Currency has
          been deposited into [specify relevant bank account details], which funds, as of
          the Date of Loss, have a value equal to U.S. $_______ according to the Reference
          Rate of Exchange as calculated pursuant to Article A.3 of the Policy and
          have been designated by the Issuer and the Foreign Enterprise for the making of
          the [Scheduled Payment] [Premium Payment] that is the subject of the claim. The
          calculation and evidence of appropriate exchange rate are attached hereto.]
          [U.S. $ ________ has been deposited into [specify relevant bank account
          details.] and have been designated by the Issuer and the Foreign Enterprise for
          the making of the [Scheduled Payment] [Premium Payment] that is the subject of
          the claim.] The [Local Currency] [Policy Currency] has been deposited into the
          Issuer’s bank account as specified above and will be delivered to Sovereign
          as a condition to claim payment and after Sovereign’s determination of
          liability under the Policy. 

     VI.    
          No exclusion applies, and all representations and warranties set forth in the
          Policy are true, correct and complete as of this date, and the Insured has
          complied with all of its requirements under the Policy in all material respects. 

     VII.    
          The aggregate amount of claims paid to date under the Policy (U.S. $_______)
          when added to the amount of this claim (U.S. $_______) does not exceed the
          Policy Limit (U.S. $________). 

As a result of the Covered Risk
stated in clause II above, the Insured hereby requests that the Agent make payment to the
Insured in the amount of U.S.$_______, for coverage pursuant to the Policy, which amount
constitutes the Loss incurred by the Insured. 

IN WITNESS WHEREOF,
the undersigned has executed this certificate as of the __ day of _______, __. 

	 	[_______]
	 
	 
	 
	 	By:	

	 	 	Name:
	 	 	Title:

34 

Appendix B 

Issuer Consent Agreement 

[To be Attached] 

35Exhibit 4.5

Issuer Consent
 Agreement,  dated as of October 24, 2003, by and among Sovereign Risk Insurance Ltd., as
Agent for the Insurers,  Banco Bradesco S.A., acting through its Grand Cayman branch, and
Banco Bradesco S.A., acting through its principal office in Brazil. 

CONFORMED COPY 

ISSUER CONSENT
AGREEMENT

among

SOVEREIGN RISK
INSURANCE LTD., 
as Agent for the
Insurers

BANCO BRADESCO S.A.,
                                   acting
through its Grand Cayman branch

and

BANCO BRADESCO S.A.,
                               acting
through its principal office in Brazil

dated as of October
24, 2003

TABLE OF CONTENTS

Page 

	ARTICLE ONE DEFINITIONS	2 
	 
	Section 1.01	Defined Terms	2 
	Section 1.02	Interpretation	2 
	 
	ARTICLE TWO REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE FOREIGN ENTERPRISE	3 
	 
	Section 2.01	Existence, Power and Authority of the Issuer and the Foreign Enterprise	4 
	Section 2.02	Disclosure	4 
	Section 2.03	Prior Knowledge	4 
	Section 2.04	Corrupt Practices	5 
	Section 2.05	Submission Materials	5 
	Section 2.06	Transaction Documents	5 
	 
	ARTICLE THREE COVENANTS OF THE ISSUER AND THE FOREIGN ENTERPRISE	6 
	 
	Section 3.01	Due Diligence	6 
	Section 3.02	Confidentiality	6 
	Section 3.03	Compliance with Law	7 
	Section 3.04	Access to Records; Inspection	7 
	Section 3.05	Notice of Default and of Deferral Period	7 
	Section 3.06	No Alteration of Agreements	7 
	Section 3.07	Subrogation	8 
	 
	ARTICLE FOUR DEFAULTS AND REMEDIES	8 
	 
	Section 4.01	Event of Default	8 
	Section 4.02	Remedies Upon Event of Default	9 
	 
	ARTICLE FIVE REIMBURSEMENT AND PREMIUM PAYMENT OBLIGATIONS	9 
	 
	Section 5.01	Reimbursement Obligation	9 
	Section 5.02	Premium Payment Obligation	10 
	Section 5.03	Currency Delivery Requirement	10 
	 
	ARTICLE SIX MISCELLANEOUS	11 
	 
	Section 6.01	Notices	11 
	Section 6.02	Benefit of Agreements	11 
	Section 6.03	Termination	11 
	Section 6.04	Arbitration	12 
	Section 6.05	Governing Law	12 
	Section 6.06	Succession	12 
	Section 6.07	Integration; Amendments	12 
	Section 6.08	Severability	12 
	Section 6.09	No Waiver	13 
	Section 6.10	Further Assurances	13 
	Section 6.11	Taxes	13 
	Section 6.12	Counterparts	13 
	Section 6.13	Issuer and Foreign Enterprise Obligations	13 

2

ISSUER CONSENT
AGREEMENT

This Issuer Consent
Agreement ("Agreement") is dated as of October 24, 2003 and is made by and among
Sovereign Risk Insurance Ltd., as agent for the Insurers ("Sovereign"),  Banco Bradesco
S.A., a financial institution duly organized and existing under the laws of the
Federative Republic of Brazil, acting through its Grand Cayman branch (the "Issuer"), and
Banco Bradesco S.A., a financial institution duly organized and existing under the laws
of the Federative Republic of Brazil, acting through its head office located at Cidade de
Deus, Vila Yara, City of  Osasco, State of Sao Paulo, Federative Republic of Brazil, of
which the Issuer is a branch (the "Foreign Enterprise"). 

WHEREAS, the Issuer has
entered into an Indenture dated as of October 24, 2003 (the "Indenture") with The Bank of
New York Trust Company (Cayman) Limited, as Trustee (the "Insured") authorizing the
issuance of U.S. $500,000,000 8.75% Subordinated Notes due 2013 (the "Notes");  

WHEREAS, it is a
condition precedent to Sovereign entering into the Policy (as defined below) that the
Issuer and the Foreign Enterprise, on the terms and conditions set forth herein, enter
into this Agreement in order to provide certain indemnities, and to provide certain other
agreements of the Issuer and the Foreign Enterprise as set forth herein;  

WHEREAS, the Issuer and
the Foreign Enterprise desire to induce Sovereign to enter into the Policy, and are
therefore willing, on the terms and conditions set forth herein, to enter into this
Agreement;  

WHEREAS, the Issuer and
the Foreign Enterprise understand that Sovereign has issued, or will issue, the Policy
based on the execution of this Agreement by the Issuer and the Foreign Enterprise as well
as other underwriting considerations;  

WHEREAS, it is a
condition of the ongoing effectiveness of the Policy that the Issuer and the Foreign
Enterprise enter into this Agreement and that this Agreement remains in full force and
effect without default, subject to the terms hereof, for the term of the Policy; and  

NOW, THEREFORE, in
consideration of the premises and of the other agreements contained herein, it is hereby
agreed as follows:  

ARTICLE ONE

DEFINITIONS

Section 1.01 Defined
Terms.  

Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in the Policy.  The
following capitalized terms used herein shall have the definitions specified below: 

"Agreement" has the
meaning set forth in the recitals. 

"Event of Default" has
the meaning set forth in Section 4.01. 

"Foreign Enterprise" has
the meaning set forth in the recitals. 

"Indenture" has the
meaning set forth in the recitals. 

"Issuer" has the meaning
set forth in the recitals. 

"Insured" has the meaning
set forth in the recitals. 

"Notes" has the meaning
set forth in the recitals. 

"Permitted Brazilian
Investments" means liquid investments which accrue interest at least equal to CDI
(Certificado de Deposito Interbancario) or any other benchmark interest rate that
replaces CDI, if available. 

"Policy" means the Policy
of Insurance No. 03-255, dated October 24, 2003       issued by Sovereign Risk Insurance
Ltd., as agent for the Insurers, to The Bank of New York Trust Company (Cayman) Limited,
as Trustee. 

"Purchase Agreement"
means the Purchase Agreement, dated October 20, 2003, between the Issuer and Merrill
Lynch, Pierce, Fenner & Smith Incorporated. 

"Project" means the
issuance and sale of the Notes.  The Issuer will use the proceeds of the Notes for
general corporate purposes. 

"Sovereign" has the
meaning set forth in the recitals. 

Section 1.02
Interpretation.  

In this Agreement, unless
otherwise indicated or required by the context: 

2

(a)      Reference to and
the definition of any document (including this Agreement) shall be deemed a
                           reference to such document as it may be amended, supplemented,
revised, or                            modified from time to time; 

(b)      All references
to an "Article," "Section," "Schedule," or "Exhibit" are to an Article or
                           Section hereof or to a Schedule or an Exhibit attached hereto; 

(c)      The table of
contents, and Article and Section headings, and other captions are for the purpose of
                           reference only and do not expand, limit, or affect the meaning
of the terms and                            provisions hereof or the interpretation
thereof; 

(d)      Defined terms in
the singular include the plural and vice versa, and the masculine, feminine, and
                           neuter gender include all genders; 

(e)      The words
"hereof," "herein," and "hereunder," and words of similar import refer to this Agreement
                           as a whole and not to any particular provision of this
Agreement.  The words                            "include," "includes," and "including"
mean include, includes, and including                            "without limitation" and
"without limitation by specification"; 

(f)      Any reference to
a time of day means the time of day in New York, New York; 

(g)      Terms
capitalized for other than grammatical purposes which are defined in (i) the introductory
                           paragraph hereof, and (ii) the recitals hereof have the
meanings assigned to                            them therein; and 

(h)      Phrases such as
"satisfactory to Sovereign," "in such manner as Sovereign may determine," "to
                           Sovereign's satisfaction," "at Sovereign's election," and
phrases of similar                            import authorize and permit Sovereign to
approve, disapprove, act, or decline to                            act in its sole
discretion. 

ARTICLE TWO

REPRESENTATIONS AND
WARRANTIES OF THE ISSUER AND THE FOREIGN ENTERPRISE

The Issuer and the
Foreign Enterprise represent and warrant to Sovereign at the date hereof that: 

3

Section 2.01
Existence, Power and Authority of the Issuer and the Foreign Enterprise.  

The Foreign Enterprise is
a company duly organized as a sociedad anônima, validly existing and in good standing
under the laws of the Federative Republic of Brazil. The Issuer is a branch of the
Foreign Enterprise duly registered to conduct banking business in the Cayman Islands.
The Issuer is a part of the Foreign Enterprise and has no separate legal status or
existence. The Foreign Enterprise is responsible under Brazilian law for all obligations
of the Issuer. Each of the Issuer and the Foreign Enterprise are duly authorized to do
business in each jurisdiction in which its business makes such authorization necessary,
has the requisite power to own and operate its properties, to carry on its business and
to issue the Notes, to borrow money and to execute, deliver and perform this Agreement
and the Transaction Documents to which it is a party. Each of the Issuer's and the
Foreign Enterprise's execution, delivery and performance of this Agreement and the
Transaction Documents to which it is a party: (i) have been duly authorized by all
necessary corporate action, and (ii) do not violate any applicable regulation or ruling
of any governmental authority. The execution and delivery by the Foreign Enterprise of
this Agreement will cause it to constitute the legal, valid and binding obligation of the
Foreign Enterprise enforceable against it in accordance with its terms. The execution
and delivery by the Issuer of this Agreement will cause it to constitute the legal, valid
and binding obligation of the Issuer enforceable against it in accordance with its terms.
All consents and approvals of any person or any governmental authority, including
shareholders of the Issuer and the Foreign Enterprise, required in connection with the
execution, delivery, and performance of this Agreement, or the validity or enforceability
of this Agreement have been obtained.  

Section 2.02
Disclosure.  

All documents, reports or
other written information pertaining to the Issuer, the Foreign Enterprise and the
Project (including, without limitation, the Submission Materials, the Purchase Agreement,
this Agreement and the Transaction Documents) that have been furnished to Sovereign are
true and correct as at the date on which they were delivered to Sovereign, and do not
contain any material misstatement of fact or omit to state a material fact or any fact
necessary to make the statements contained herein or therein not materially misleading. 

Section 2.03 Prior
Knowledge.  

Neither the Issuer nor
the Foreign Enterprise has knowledge of any existing restrictions in the Host Country on
convertibility or transfer of Policy Currency that would restrict the Issuer or the
Foreign Enterprise from making Scheduled Payments, Premium Payments or amounts payable
under this Agreement in Policy Currency from onshore sources within the Host Country
other than laws of general application requiring prior approval of the Central Bank in
order to make such payments, which neither the Issuer nor the Foreign Enterprise has
obtained, as the present intention as contemplated by the Transaction Documents is to
make such payments from offshore sources outside the Host Country.  

4

Neither the Issuer nor
the Foreign Enterprise has specific knowledge, nor does such party have any reason to
believe, that it would not have been able to obtain the approval of the Central Bank at
the inception of the Policy had it applied to make payments on the Notes or payments
hereunder from onshore sources within the Host Country at the inception of the Policy.
 Neither the Issuer nor the Foreign Enterprise has specific knowledge, nor does such
party have any reason to believe, except as set forth below, that it will not be able to
obtain the approval of the Central Bank if required during the Policy Period in
connection with Scheduled Payments, Premium Payments, or amounts payable under this
Agreement to be made from onshore sources within the Host Country; provided, that, any
such approval of the Central Bank is discretionary on the part of the Central Bank and
neither the Issuer nor the Foreign Enterprise can provide assurance that it will be able
to obtain such approval if and when such party seeks such approval in accordance with the
terms of this Agreement. 

Section 2.04 Corrupt
Practices.  

Neither the Issuer nor
the Foreign Enterprise has knowledge that it or any of its officers, directors, employees
or agents have been held by any court of competent jurisdiction to be in violation of the
Foreign Corrupt Practices Act of 1977, as amended, which could affect any material aspect
of the Notes. 

Section 2.05
Submission Materials.  

The Submission Materials
are true and complete as of the inception of the Policy, and no material information that
might affect the decision of Sovereign to issue the Policy has been withheld. If the
information provided by the Issuer or the Foreign Enterprise in the Submission Materials,
or any representation or warranty of the Issuer or the Foreign Enterprise in this
Agreement is untrue or incorrect in any material respect, Sovereign may declare coverage
under the Policy to be void ab initio, but Sovereign will be entitled to retain as an
administration fee 100 percent of any earned premiums that have been paid in respect of
the Policy, other than the Initial Refundable Premium (which shall not be returned to
Sovereign after its deposit in the Reserve Account on the date of the Policy).  

Section 2.06
Transaction Documents.  

The copies of the
Transaction Documents provided by the Issuer to Sovereign are true and complete;
provided, however, that if the Policy is issued prior to the execution of the Transaction
Documents, then (i) true and complete copies of the Transaction Documents must be
provided to Sovereign within 30 days of their execution, but in no event later than 90
days from the effective date of the Policy, and (ii) such Transaction Documents must be,
in Sovereign's sole determination, either (A) similar in all material respects to the
draft copies earlier provided, or (B) satisfactory in form and substance to Sovereign. 

5

ARTICLE THREE

COVENANTS OF THE
ISSUER and the Foreign Enterprise

Section 3.01 Due
Diligence.  

Each of the Issuer and
the Foreign Enterprise shall at all times use due diligence and do, and concur in doing,
and permit to be done, all things reasonably practicable at its own expense to avoid or
diminish a loss under the Policy.  Each of the Issuer and the Foreign Enterprise shall
obtain and maintain all licenses, applications and approvals necessary from the Host
Government and the Government of the Cayman Islands in order to make the Scheduled
Payments, the Premium Payments, and any amounts payable hereunder from the Grand Cayman
branch as contemplated by this Agreement, the Policy and the Indenture. If at any time
during the Policy Period it becomes necessary for the Issuer or the Foreign Enterprise to
make Scheduled Payments, Premium Payments, and/or amounts payable hereunder from onshore
sources within the Host Country, the Issuer and the Foreign Enterprise agree to use
reasonable efforts to obtain and maintain all licenses, applications and approvals
necessary from the Host Government in order to make such payment from onshore sources
within the Host Country.  In connection with any application for compensation of a Loss,
the Issuer and the Foreign Enterprise shall make all reasonable efforts within the Host
Country to convert Local Currency into Policy Currency or to transfer or cause the
Insured to transfer such Policy Currency through all customary legal channels for
transactions of the type contemplated in the Transaction Documents until compensation
reimbursing Sovereign for payment of such Loss is paid to Sovereign. 

Section 3.02
Confidentiality.  

Neither the Issuer nor
the Foreign Enterprise shall disclose the terms of this Agreement or the Policy at any
time to any third party other than to such party's own professional, financial and legal
advisors, translators and rating agencies, and except as may be required by law,
regulations, legal process, or bank regulators (including, without limitation, the
Central Bank and its advisors, the United States Securities and Exchange Commission
("SEC") and its advisors, and notaries public required for the purpose of compliance with
the rules and regulations of the Central Bank or the SEC), in each case on a confidential
basis, without the prior written consent of Sovereign, which shall not be unreasonably
withheld.  The Issuer and the Foreign Enterprise shall request that such third parties
keep such information confidential but it is understood that the Issuer and the Foreign
Enterprise can give no assurance that they will do so.  For the avoidance of doubt,
nothing herein shall prevent (i) the Issuer and/or the Foreign Enterprise from including
summaries of the material terms, conditions and exclusions of the Policy or this
Agreement in any disclosure document prepared or approved by them in connection with the
issue, offering and listing of the Notes, and (ii) the rating agencies from including
summaries of the material terms of the Policy in their research reports, provided,
however, that in any such case such summaries do not contain information about the amount
of premiums payable under the Policy or the Premium Rate. 

6

Section 3.03
Compliance with Law.  

The Issuer and the
Foreign Enterprise and each of their officers, directors, and employees have complied
with and shall continue to comply with all applicable laws and regulations (including,
without limitation, Central Bank regulations) of the Federative Republic of Brazil, the
Cayman Islands, and the applicable securities laws and regulations of the United States
of America and the United Kingdom, in connection with this Agreement, the Notes and the
Policy. 

Section 3.04 Access
to Records; Inspection.  

Upon request from
Sovereign, the Issuer and the Foreign Enterprise shall furnish to Sovereign all
information and data reasonably requested by Sovereign with respect to their operations
relating to the Notes, the Policy or this Agreement which the Issuer and the Foreign
Enterprise may disclose in accordance with all applicable law.  Sovereign shall not
disclose such information to any third party other than the Insurers and to its
professional, financial and legal advisers and except as may be required by law,
regulations, legal process or insurance regulators, without the consent of the Issuer,
which  shall not be unreasonably withheld.  The Issuer and the Foreign Enterprise shall
also give access, upon reasonable notice, to Sovereign or its representatives during
normal business hours to personnel of the Issuer and the Foreign Enterprise and to permit
them to inspect such information and data. 

Section 3.05 Notice
of Default and of Deferral Period.  

The Issuer and the
Foreign Enterprise shall immediately notify Sovereign of (i) the occurrence of any Event
of Default and of any event or condition known to any of its officers that with the
passage of time or the giving of notice, or both, would constitute an Event of Default,
and (ii) any circumstance known to the Issuer or the Foreign Enterprise that may render
Sovereign liable under the Policy, including if the Issuer or the Foreign Enterprise has
reason to believe it will not be able to convert Local Currency and/or transfer Policy
Currency during the Waiting Period.  The Issuer or the Foreign Enterprise shall promptly
notify Sovereign of the commencement of any Deferral Period and of the termination of any
Deferral Period. 

Section 3.06 No
Alteration of Agreements.  

Notice to or knowledge
possessed by either the Issuer, the Foreign Enterprise, or Sovereign shall not effect a
waiver or change in any part of this Agreement. Neither the Issuer nor the Foreign
Enterprise shall consent to any modification, waiver, or amendment of any Transaction
Document without Sovereign's prior written consent, which consent shall not be
unreasonably withheld; provided, however, that consent of Sovereign shall not be required
if such modification, waiver, or amendment (i) does not relate to a Scheduled Payment,
(ii) with respect to the Notes, does not require the consent of each of the Holders under
the terms of the Indenture, (iii) does not present a material possibility of adversely
affecting the rights, benefits, or obligations of Sovereign under the Policy, and (iv) does
not present a  

7

material possibility of adversely affecting the enforcement of any rights
under the Transaction Documents that are material to the rights, benefits or obligations
of Sovereign, as subrogee or otherwise; provided, further, that in no event shall the
Issuer or the Foreign Enterprise consent to any rescheduling or restructuring of the
Scheduled Payments without Sovereign's prior written consent, which consent shall not be
unreasonably withheld. The failure of Sovereign to exercise any right or remedy shall
not be deemed to constitute a waiver of such right or remedy in the future.  

Section 3.07
Subrogation.  

(a)      The Issuer and
the Foreign Enterprise acknowledge that the Notes shall not be discharged, satisfied, or
otherwise terminated by reason of Sovereign's payment of compensation to the Insured
under the Policy in respect of any Scheduled Payment. 

(b)      The Issuer and
the Foreign Enterprise acknowledge that Sovereign shall be subrogated to the rights of
the Holders under the Notes to the extent of payment by Sovereign to the Insured.
 Neither the Issuer nor the Foreign Enterprise shall assert, with respect to Sovereign,
as subrogee and assignee in respect of the Notes, any claims, defenses, counterclaims,
rights of set-off, or other excuses for non-payment that it may have with respect to the
Notes, any Holder, or any Scheduled Payments due to any Holder. 

(c)      Prior to an
assignment of rights or interests pursuant to Article A.6 and Condition 8 of the Policy,
to the extent so requested by Sovereign and in consultation with Sovereign, the Issuer
and the Foreign Enterprise shall cooperate with Sovereign and take all reasonable
measures requested by Sovereign in connection with the pursuit of available
administrative and judicial remedies and negotiation with the Host Government and other
potential sources of payment of amounts due to it  pursuant to such rights or interests.
 After a transfer of rights or beneficial interest to Sovereign, the Issuer and the
Foreign Enterprise shall take all actions reasonably requested by Sovereign to assist
Sovereign or the Insured in preserving the property, interests, and rights transferred to
Sovereign pursuant to the Policy and in prosecuting related claims consistent with the
terms of the Indenture. 

(d)      With respect
solely to any subrogation rights of Sovereign or assignment to Sovereign of the Insured's
right, title and interest in the Scheduled Payments, Sovereign, the Issuer and the
Foreign Enterprise acknowledge that any such subrogation or assignment right will be
subject to the subordination provisions set forth in the Indenture. 

ARTICLE FOUR

DEFAULTS AND REMEDIES

Section 4.01 Event
of Default.  

The occurrence and
continuation of any of the following events or circumstances shall constitute an event of
default hereunder (an "Event of Default"): 

8

(a)      Any
representation or warranty made by or on behalf of the Issuer or the Foreign Enterprise
in or                            pursuant to this Agreement or in connection with any
claim application under the                            Policy proves to have been
incorrect in any material respect when made; or 

(b)      The Issuer or
the Foreign Enterprise fails to comply with any covenant or provision set forth in
                           Article Three and such failure continues for thirty (30) days
after the                            occurrence thereof. 

Section 4.02
Remedies Upon Event of Default.  

If any Event of Default
hereunder has occurred and is continuing, Sovereign may at any time do one or more of the
following: (a) refuse to pay compensation under the Policy with respect to any
application for compensation arising out of events occurring after the date of the
occurrence of such Event of Default; (b) provided such Event of Default is also an Event
of Termination, terminate the Policy; or (c) take action to enforce its rights under this
Agreement. 

ARTICLE FIVE

REIMBURSEMENT AND
PREMIUM PAYMENT OBLIGATIONS

Section 5.01
Reimbursement Obligation.  

To the extent that
Sovereign has not otherwise received payment in accordance with Article A.6 or Condition
8 of the Policy, the Issuer and the Foreign Enterprise hereby unconditionally and
irrevocably promise to pay to Sovereign and reimburse Sovereign, at any time and from
time to time, no later than ten (10) business days following the date of a written demand
from Sovereign, for the full and prompt payment in Policy Currency of all amounts due and
unpaid to Sovereign under the Policy, including, but not limited to, (i) amounts owed or
unreimbursed to Sovereign pursuant to Article A.6 or Condition 8 of the Policy, (ii) any
and all expenses or fees Sovereign may incur in connection with collecting any or all of
such amounts or in enforcing any rights or interests under the Policy, and (iii) any fees
or expenses arising out of any claims, actions or suits brought against Sovereign or the
Insurers by any third party  in connection with the issuance of the Policy, provided that
such claims, actions or suits have not been caused by negligence or willful misconduct on
the part of Sovereign.  Notwithstanding anything to the contrary herein, the Issuer and
the Foreign Enterprise acknowledge that Sovereign's right of reimbursement and rights to
payment of other amounts under this Section 5.01 are general unsecured obligations of the
Issuer and the Foreign Enterprise ranking senior to all of their subordinated debt
obligations.  For the avoidance of doubt, failure by the Issuer or the Foreign Enterprise
to comply with its obligations under this Section 5.01 shall not constitute an Event of
Default under Section 4.01 hereof and Sovereign shall therefore not have the remedies set
forth in Section 4.02(a) or 4.02(b) as a consequence 

9

of such failure, but
shall have the right to take all action to enforce its rights to payment under this
Agreement.  

Section 5.02 Premium
Payment Obligation  

In consideration of
Sovereign's underwriting expense and commitment to insure for the Policy Period, the
Issuer and the Foreign Enterprise shall pay to Sovereign: (i) if the Policy is cancelled
pursuant to Condition 5 of the Policy, an amount equal to one-half (50%) of the premium
that would have otherwise been payable to Sovereign under the Policy for the remainder of
the Policy Period; and (ii) if Sovereign pays any claim under the Policy, an amount equal
to the premium that would have otherwise been payable to Sovereign on such claim amount
under the Policy for the remainder of the Policy Period.  Such amounts shall be paid to
Sovereign in Policy Currency no later than ten (10) business days following the date of a
written demand from Sovereign. 

Section 5.03
Currency Delivery Requirement.  

In furtherance of Article
A.6.1 of the Policy, the Issuer and the Foreign Enterprise agree, in connection with any
claim payment under the Policy, to deliver the inconvertible Local Currency or
non-transferable Policy Currency that is the basis of any such claim to Sovereign or its
designated representative in the Host Country in accordance with Article A.6.1 of the
Policy.  Until such time as all amounts due and payable to Sovereign in Policy Currency
outside the Host Country in accordance with Condition 8 of the Policy and Article 5 of
this Agreement shall have been paid to Sovereign in full, and to the extent that
Sovereign is unable to convert such Local Currency into Policy Currency and transfer it
out of the Host Country for application to such amounts due to Sovereign, Sovereign shall
invest any such inconvertible Local Currency in Permitted Brazilian Investments selected
by it in its sole discretion.  To the extent that Sovereign receives all amounts due and
payable to it in Policy Currency outside the Host Country in accordance with Condition 8
of the Policy and Article 5 of this Agreement, any Local Currency amounts that had been
delivered to Sovereign pursuant to this Section 5.03, together with all interest earned
thereon, and which have not been converted into Policy Currency, transferred out of the
Host Country and applied to offset amounts payable under Condition 8 of the Policy and
Article 5 of this Agreement, shall be promptly repaid to the Issuer or the Foreign
Enterprise.  To the extent that Sovereign receives all amounts due and payable to it in
Policy Currency outside the  Host Country in accordance with Condition 8 of the Policy
and Article 5 of this Agreement, any Policy Currency amounts that had been delivered to
Sovereign pursuant to this Section 5.03, together with all interest earned thereon, if
any, and which has not been transferred out of the Host Country and applied to offset
amounts payable under Condition 8 of the Policy and Article 5 this Agreement, shall be
promptly repaid to the Issuer or the Foreign Enterprise. 

10

ARTICLE SIX

MISCELLANEOUS

Section 6.01 Notices.  

Each notice, demand,
report, request, and communication relating to this Agreement shall be in writing in the
English language, shall be hand delivered or sent by mail (postage prepaid) or facsimile
transmission (with a copy by mail to follow, receipt of which copy shall not be required
to effect notice) and shall be deemed duly given when sent to the following addresses, or
fax numbers, or to such other address or fax number as each party shall have last
specified by notice to the other party: 

To the Issuer and/or the
Foreign Enterprise: 

Avenida Ipiranga, 282 10° Andar
01046-920
São Paulo - SP
Brazil

Fax No.:  55 11 3235 9161
Attn:  Marlene Moran Millan

 

To Sovereign: 

Sovereign Risk Insurance
Ltd.
Attn:  Chief Underwriter
c/o Kitson Brokerage Services Ltd.
5 Reid Street
Hamilton,
HM11
Bermuda
Fax:     (1) (441) 295-7357 

Section 6.02 Benefit
of Agreements.  

(a)      Nothing in this
Agreement shall give to any person, other than the parties hereto, their successors and
permitted assigns hereunder, any benefit or any legal or equitable right or remedy under
this Agreement. 

(b)      The Issuer and
the Foreign Enterprise hereby agree that nothing in the Policy or this Agreement shall
give to the Issuer or the Foreign Enterprise or any other person, other than the Insured,
any benefit or any legal or equitable right or remedy under the Policy. 

Section 6.03
Termination.  

Except for Section 5.01
and otherwise as expressly set forth herein, the Issuer's and the Foreign Enterprise's
obligations hereunder shall terminate on the date on which the 

11

Policy and all of
Sovereign's obligations with respect thereto have terminated or been fulfilled and
Sovereign has no further obligation thereunder.  

Section 6.04
Arbitration.  

Disputes, controversies,
or claims arising out of or relating to this Agreement shall be finally and fully
determined at the London Court of International Arbitration ("LCIA") in London according
to the LCIA rules in effect at the date of submission.  The laws of England and Wales
applicable to arbitration procedure, including the provisions of the Arbitration Act of
1996 and/or any statutory modifications or amendments thereto, shall govern the
procedural aspects of such arbitration proceedings. For the avoidance of doubt and as set
forth in Section 6.05, in any such arbitration, this Agreement shall be governed by and
construed in accordance with the laws of the State of New York.  The arbitration panel
shall consist of three arbitrators.  Each party shall choose one arbitrator, and the two
arbitrators so chosen shall select a third arbitrator who shall be chairman of the panel.
 The arbitral award shall be in writing, shall be final and binding upon all parties and
may be enforced by any court having jurisdiction. 

Section 6.05
Governing Law.  

This Agreement, and any
dispute, controversy or claim arising out of or relating to this Agreement, except as
otherwise expressly provided, shall be governed by and construed in accordance with the
laws of the State of New York.  Notwithstanding the above, the laws of England and Wales
governing arbitration procedure shall govern the arbitration procedure applicable to any
arbitration under Section 6.04. 

Section 6.06
Succession.  

This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the parties
hereto, provided, however, that neither the Issuer nor the Foreign Enterprise shall,
without the prior written consent of Sovereign, assign or delegate all or any part of
their interests herein or obligations hereunder. 

Section 6.07
Integration; Amendments.  

This Agreement embodies
the entire agreement and understanding of the parties hereto and supersedes all prior
negotiations, understandings and agreements between them with respect to the subject
matter hereof.  The provisions of this Agreement may be waived, supplemented or amended
only by an instrument in writing signed by authorized officers of each party. 

Section 6.08
Severability.  

If any provision of this
Agreement is prohibited or held to be invalid, illegal or unenforceable in any
jurisdiction, the parties hereto agree to the fullest extent permitted by law that (i)
the validity, legality and enforceability of the other provisions in such jurisdiction

12

shall not be affected or
impaired thereby, and (ii) any such prohibition, invalidity, illegality or
unenforceability shall not render such provision prohibited, invalid, illegal, or
unenforceable in any other jurisdiction.  

Section 6.09 No
Waiver.  

(a)      No failure or
delay by Sovereign in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise impair any of its rights, powers or remedies.  No single or partial
exercise of any such right, power, or remedy shall preclude any other or further exercise
thereof or the exercise of any other legal right, power, or remedy.  No waiver of any
right, power, or remedy shall be effective unless given in writing. 

(b)      The remedies
provided for herein are cumulative and are not exclusive of any other remedies provided
by law.  The employment of any remedy hereunder, or otherwise, shall not prevent the
concurrent assertion of any other appropriate remedy. 

Section 6.10 Further
Assurances.  

The Issuer and the
Foreign Enterprise shall execute and deliver to Sovereign such additional documents as
Sovereign may reasonably require to carry out the purposes of this Agreement or to
preserve and protect Sovereign's rights, powers, and remedies provided for or as
contemplated herein. 

Section 6.11 Taxes.  

All amounts payable by
the Issuer and/or the Foreign Enterprise hereunder shall be paid in full, free of any
deductions or withholdings for any and all taxes, levies, imposts, duties, fees,
assessments, deductions and other governmental charges, and all liabilities with respect
thereto, present or future.  In the event that either the Issuer or the Foreign
Enterprise is prohibited by law, administrative policy, decree or other governmental act
from making payments hereunder free of such withholdings or deductions, then the Issuer
or the Foreign Enterprise, as the case may be, shall pay such additional amount as may be
necessary in order that the actual amount received after such withholding or deduction
shall equal the full amount that would have been incurred hereunder had no such
withholdings or deductions been made. 

Section 6.12
Counterparts.  

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

Section 6.13 Issuer
and Foreign Enterprise Obligations.  

For the avoidance of
doubt, the parties (i) acknowledge that the Issuer is a branch of the Foreign Enterprise
with no separate legal status or existence and that the

13

Foreign Enterprise is
responsible for all obligations of the Issuer, and (ii) agree that Sovereign shall be
entitled to bring proceedings against either the Issuer or the Foreign Enterprise in
respect of the full amounts owing by the Issuer and the Foreign Enterprise hereunder and
that Sovereign shall not be required to first proceed against the Issuer before
proceeding against the Foreign Enterprise.  Sovereign acknowledges that any Policy
Currency payments from the Foreign Enterprise are currently, and may in the future be,
subject to the Brazilian legal requirement of prior approval of the Central Bank.  

14

IN WITNESS WHEREOF, each
of the parties hereto has caused this Agreement to be executed and delivered on its
behalf by an authorized officer as of the date first above written. 

	BANCO BRADESCO S.A.,	SOVEREIGN RISK INSURANCE LTD.,
	acting through its Grand Cayman branch	as Agent for the Insurers

	By: JOSE GUILHERME LEMBI DE FARIA 	By: CHRISTINA WESTHOLM-SCHRODER 

	Title: DIRETOR GERENTE 	Title: CHIEF UNDERWRITER 

BANCO BRADESCO S.A.,
acting
through its principal office in Brazil 

By: NORBERTO PINTO
BARBEDO  

Title: DIRETOR
VICE-PRESIDENTE  

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]