S-3

As filed with the Securities and Exchange Commission on September 5, 2003

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

	POPULAR CAPITAL TRUST I
	POPULAR CAPITAL TRUST II
	POPULAR CAPITAL TRUST III
POPULAR, INC.	POPULAR CAPITAL TRUST IV
(Exact name of Co-Registrants as specified in their charters)

Puerto Rico	Delaware
(State or Other Jurisdiction of	(State or Other Jurisdiction of
Incorporation or Organization of Popular, Inc.)	Incorporation or Organization of each Trust)
66-0416582	To Be Applied For
(IRS Employer Identification Number)	(IRS Employer Identification Numbers)

Popular Center Building

209 Muñoz Rivera Avenue

San Juan, Puerto Rico 00918

(787) 765-9800

(Address, Including Zip Code, and Telephone Number, Including

Area Code, of Co-Registrants’ Principal Executive Offices)

JORGE A. JUNQUERA

209 MUNOZ RIVERA AVENUE

HATO REY, PUERTO RICO 00918

(787) 754-1685

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,

of Agent for Service for each Registrant)

Copies to:

Eduardo J. Arias, Esq.	Julio Pietrantoni, Esq.
Pietrantoni Méndez & Alvarez LLP	O’Neill & Borges
Banco Popular Center – Suite 1901	American International Plaza
209 Muñoz Rivera Avenue	250 Muñoz Rivera Avenue
San Juan, Puerto Rico 00918	San Juan, Puerto Rico 00918
(787) 274-4910	(787) 282-5752

   Approximate Date of Commencement of Proposed Sale to the Public: From time to time after the effective date of this Registration Statement as determined by the Registrants on the basis of market conditions and other factors.

   If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.   o

   If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.   þ

   If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   o

   If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.   o

   If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.   o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering Price	Aggregate	Amount of
Securities to be Registered	Registered(1)	Per Security(2)	Offering Price(3)(4)	Registration Fee(4)
Popular, Inc. Junior Subordinated Debt Securities
Popular Capital Trust I Trust Preferred Securities
Popular Capital Trust II Trust Preferred Securities
Popular Capital Trust III Trust Preferred Securities
Popular Capital Trust IV Trust Preferred Securities
Guarantees of Trust Preferred Securities of Popular Capital Trust 1, Popular Capital Trust II, Popular Capital Trust III and Popular Capital Trust IV by Popular, Inc. and certain back-up undertakings(5)	$300,000,000		$300,000,000	$24,270

(1)	Includes an indeterminate number of Trust Preferred Securities of Popular Capital Trust I, Popular Capital Trust II, Popular Capital Trust III and Popular Capital Trust IV (the “Trusts”) as may be issued at indeterminate prices and Junior Subordinated Debt Securities that may be issued by Popular, Inc. to evidence a loan by a Trust to Popular, Inc. of the proceeds from the sale of the Preferred Securities of such Trust. Junior Subordinated Debt Securities evidencing the loan to Popular, Inc. may later be distributed to the holders of a Trust’s Preferred Securities upon dissolution of a Trust.
(2)	Omitted pursuant to General Instruction II.D of Form S-3. The proposed maximum offering price per security will be determined from time to time by the relevant Registrant in connection with the issuance by such Registrant of securities registered hereunder.
(3)	In no event will the aggregate initial offering price of the securities issued under this registration statement exceed the amount registered above or the equivalent thereof in one or more foreign currencies or currency units. No separate consideration will be received for the Junior Subordinated Debt Securities of Popular, Inc.
(4)	The proposed maximum aggregate offering price has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933. Rule 457(o) permits the registration fee to be calculated on the basis of the maximum offering price of all of the securities listed and, therefore, the table does not specify by each class information as to the amount to be registered, the maximum offering price per unit or the proposed maximum aggregate offering price.
(5)	Includes the obligations of Popular, Inc. under a declaration of trust, a preferred securities guarantee issued with respect to Preferred Securities issued by a Trust, the Junior Subordinated Debt Securities purchased by a Trust, and the Junior Subordinated Indenture, including Popular, Inc.’s agreement to pay all trust obligations other than the Common and Preferred Securities, which taken together, fully, irrevocably and unconditionally guarantee all of the respective obligations of Popular Capital Trust I, Popular Capital Trust II, Popular Capital Trust III, and Popular Capital Trust IV. No separate consideration will be received for such obligations.

    The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the Securities and Exchange Commission declares our registration statement effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER 5, 2003

PRELIMINARY PROSPECTUS

$300,000,000

POPULAR, INC.

Junior Subordinated Debt Securities

Popular Center Building

209 Muñoz Rivera Avenue

San Juan, Puerto Rico 00918

(787) 765-9800

               POPULAR CAPITAL TRUST I

               POPULAR CAPITAL TRUST II

               POPULAR CAPITAL TRUST III

               POPULAR CAPITAL TRUST IV

Trust Preferred Securities

Fully and Unconditionally

Guaranteed by Popular, Inc.

Popular Center Building

209 Muñoz Rivera Avenue

San Juan, Puerto Rico 00918

(787) 765-9800

      When we offer securities, we will provide you with a prospectus supplement describing the terms of the securities offered. You should read this prospectus and the applicable prospectus supplement carefully before you invest.

      Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

      These securities are our unsecured obligations and are not savings accounts, deposits or other obligations of any bank or nonbank subsidiary of Popular, Inc. These securities are not insured by the Federal Deposit Insurance Corporation, the Bank Insurance Fund or any other governmental agency.

This prospectus is dated                               , 2003.

TABLE OF CONTENTS

	Page
ABOUT THIS PROSPECTUS		1
WHERE YOU CAN FIND MORE INFORMATION		1
POPULAR, INC		2
THE TRUSTS		2
REASON FOR THE OFFERING		3
USE OF PROCEEDS		4
RATIOS OF EARNINGS TO FIXED CHARGES AND TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS		4
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES		4
DESCRIPTION OF TRUST PREFERRED SECURITIES		17
COMMON SECURITIES		28
DESCRIPTION OF GUARANTEES		28
RELATIONSHIP AMONG TRUST PREFERRED SECURITIES, JUNIOR SUBORDINATED DEBT SECURITIES AND GUARANTEES		30
PLAN OF DISTRIBUTION		32
LEGAL OPINIONS		34
EXPERTS		34

ABOUT THIS PROSPECTUS

      This prospectus is part of a registration statement that Popular, Inc., or “Popular,” and Popular Capital Trust I, Popular Capital Trust II, Popular Capital Trust III and Popular Capital Trust IV, or the “trusts,” filed with the Securities and Exchange Commission using a “shelf” registration process. Under this shelf process, the trusts may sell trust preferred securities representing undivided beneficial interests in the trusts to the public and common securities representing undivided beneficial interests in the trusts to us in one or more offerings.

      This prospectus provides you with a general description of the trust preferred securities that a trust may issue and the junior subordinated debt securities and trust preferred securities guarantees that we may issue. Each time we or a trust sell securities, we and the trust will provide a prospectus supplement that will contain specific information about the terms of that offering. Such prospectus supplement may also add, update or change information contained in this prospectus. You should read this prospectus and the applicable prospectus supplement together with the additional information described under the heading “Where You Can Find More Information.”

      The registration statement that contains this prospectus, including the exhibits to the registration statement, contains additional information about us and the trusts and the securities offered under this prospectus. That registration statement can be read at the Securities and Exchange Commission, or “SEC,” web site or at the SEC offices mentioned under the heading “Where You Can Find More Information.”

WHERE YOU CAN FIND MORE INFORMATION

      We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities.

      We “incorporate by reference” into this prospectus the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Some information contained in this prospectus updates the information incorporated by reference, and information that we file subsequently with the SEC will automatically update this prospectus. In other words, in the case of a conflict or inconsistency between information set forth in this prospectus and information incorporated by reference into this prospectus, you should rely on the information contained in the document that was filed later. We incorporate by reference the documents listed below and any filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 after the initial filing of the registration statement that contains this prospectus and prior to the later of (1) the time that we and/or a trust sell all the securities offered by this prospectus and (2) the date that our broker-dealer subsidiaries cease offering securities in market-making transactions pursuant to this prospectus:

•  Annual Report on Form 10-K for the year ended December 31, 2002, including information specifically incorporated by reference into our Form 10-K from our 2002 Annual Report to Stockholders and our definitive Proxy Statement for our 2003 Annual Meeting of Stockholders;

•  Quarterly Reports on Form 10-Q for the quarters ended March 31, 2003 (as amended by Form 10-Q/A dated May 21, 2003) and June 30, 2003; and

•  Current Reports on Form 8-K filed with the SEC on January 17, 2003, February 6, 2003, February 26, 2003, March 19, 2003, March 26, 2003, April 11, 2003 (as amended by Form 8-K/A filed April 17, 2003), April 30, 2003, July 18, 2003 and August 7, 2003.

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      You may request a copy of these filings, other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing, at no cost, by writing to or telephoning us at the following address: Amilcar Jordán, Senior Vice President, Popular, Inc., P.O. Box 362708, San Juan, Puerto Rico 009396-2708. Telephone requests may also be directed to (787) 765-9800. You may also access this information at our website at http://www.popularinc.com.

      You should rely only on the information incorporated by reference or presented in this prospectus or the applicable prospectus supplement. Neither we nor the trusts, nor any underwriters or agents, have authorized anyone else to provide you with different information. Popular and the trusts may only use this prospectus to sell securities if it is accompanied by a prospectus supplement. Popular and the trusts are only offering these securities in states where the offer is permitted. You should not assume that the information in this prospectus or the applicable prospectus supplement is accurate as of any date other than the dates on the front of those documents.

POPULAR, INC.

      Popular is a diversified, financial services company and the largest locally based financial institution in Puerto Rico. We were incorporated in 1984 under the laws of the Commonwealth of Puerto Rico. We are registered as a financial holding company and bank holding company under the Bank Holding Company Act, as amended by the Gramm-Leach-Bliley Act and are subject to supervision and regulation by the Board of Governors of the Federal Reserve System. As a diversified financial services institution, we own subsidiaries engaged in banking and a variety of financial services. Our subsidiaries provide banking, insurance, mortgage, auto, consumer finance, investment and electronic payment processing services through retail branches, the internet and other distribution channels throughout Puerto Rico, the mainland United States and to a lesser extent the Caribbean and Central America. Our principal subsidiary, Banco Popular de Puerto Rico, was incorporated in 1893 and is Puerto Rico’s largest bank.

      We are a separate and distinct legal entity from our banking and other subsidiaries. Our principal source of funds to pay our obligations including service on our debt is dividends from our subsidiaries. Various federal and state statutes and regulations limit the amount of dividends that our banking and other subsidiaries may pay to us without regulatory approval.

      Our principal executive offices are located at 209 Muñoz Rivera Avenue, Hato Rey, Puerto Rico 00918, and our telephone number is (787) 765-9800.

      When we refer to “Popular,” “we,” “our” and “us” in this prospectus under the headings “Popular, Inc.” and “Ratios of Earnings to Fixed Charges and to Fixed Charges and Preferred Stock Dividends,” we mean Popular, Inc. and its subsidiaries unless the context indicates otherwise. When such terms are used elsewhere in this prospectus, we refer only to Popular, Inc. unless the context indicates otherwise.

THE TRUSTS

      Each trust is a statutory trust formed under Delaware law pursuant to a declaration of trust and trust agreement, signed by Popular, as depositor of the trust, and the property trustee, the Delaware trustee and the administrative trustees, each as defined below, and a certificate of trust filed with the Delaware Secretary of State. The declaration of trust and trust agreement of the applicable trust will be amended and restated in its entirety before the issuance of trust preferred securities by such trust. We will refer to such declaration of trust and trust agreement, as so amended and restated, as the “trust agreement.” Each trust agreement will be qualified as an indenture under the Trust Indenture Act of 1939.

      Each trust exists for the exclusive purposes of:

•  issuing the trust preferred securities and common securities, or the “trust securities,” representing undivided beneficial interests in the assets of such trust;

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•  investing the gross proceeds of the trust preferred securities and the common securities in an equivalent amount of junior subordinated debt securities; and

•  engaging in only those activities convenient, necessary or incidental thereto.

      All of the common securities of the trusts will be directly or indirectly owned by us. The common securities of a trust rank equally with the trust preferred securities of such trust and a trust will make payment on its trust securities pro rata, except that upon certain events of default under the applicable trust agreement relating to payment defaults on the junior subordinated debt securities, the rights of the holders of the common securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the trust preferred securities. We will acquire common securities of a trust in an aggregate liquidation amount equal to at least three percent of the total capital of such trust.

      Each trust’s business and affairs will be conducted by its trustees, each appointed by Popular as depositor of such trust. The trustees will be Bank One Delaware, Inc. , which is referred to as the “Delaware trustee,” two individual trustees, who are referred to as the “administrative trustees” and who are employees or officers of or affiliated with Popular, and Bank One Trust Company, N.A., which is referred to as the “property trustee.” The property trustee will act as sole trustee under each trust agreement for purposes of compliance with the Trust Indenture Act and will also act as trustee under the guarantees. See “Description of Guarantees.”

      Unless an event of default under the junior subordinated indenture has occurred and is continuing, the holders of the common securities will be entitled to appoint, remove or replace the property trustee and the Delaware trustee. The holders of a majority in liquidation amount of trust preferred securities of such trust will be entitled to appoint, remove or replace the property trustee and the Delaware trustee for cause or if an event of default under the junior subordinated indenture has occurred and is continuing. The right to vote to appoint, remove or replace the administrative trustees is vested exclusively in the holders of the common securities, and in no event will the holders of trust preferred securities have such right.

      No separate financial statements of the trusts are included in this prospectus. Popular and the trusts do not consider that such financial statements would be material to holders of trust preferred securities because the trusts are special purpose entities, have no operating histories or independent operations and are not engaged in and do not propose to engage in any activity other than holding as trust assets the junior subordinated debt securities of Popular and issuing the trust securities. Furthermore, taken together, Popular’s obligations under the junior subordinated debt securities, the junior subordinated indenture pursuant to which the junior subordinated debt securities will be issued, the related trust agreement and the guarantee provide, in the aggregate, a full, irrevocable and unconditional guarantee of payments of distributions and other amounts due on the trust preferred securities of each trust. For a more detailed discussion see “Description of Trust Preferred Securities,” “Description of Junior Subordinated Debt Securities — Correspondence Between Junior Subordinated Debt Securities and Trust Preferred Securities” and “Description of Guarantees.” In addition, we do not expect that the trusts will be filing reports with the SEC under the Securities Exchange Act of 1934.

      Unless otherwise specified in the applicable prospectus supplement, each trust has a term of approximately 30 years, but may be terminated earlier as provided in the applicable trust agreement.

      Popular will pay all fees and expenses related to the trusts and the offering of trust securities.

      The principal executive office of each trust is c/o Popular, Inc., Popular Center Building, 209 Muñoz Rivera Avenue, San Juan, Puerto Rico 00918, telephone number (787) 765-9800.

REASON FOR THE OFFERING

      On October 21, 1996, the Board of Governors of the Federal Reserve System, or the “Federal Reserve,” announced that it had approved the use of certain cumulative preferred stock instruments, such as the trust preferred securities, as Tier 1 capital for purposes of the Federal Reserve’s capital guidelines

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for bank holding companies. Because Popular intends to treat the trust preferred securities as Tier 1 capital and, under current Puerto Rico tax law and administrative rulings issued by the Puerto Rico Treasury Department, will receive a tax deduction for interest in respect of the junior subordinated debt securities, the issuance of the trust preferred securities is a cost-effective method of raising capital on an after-tax basis.

USE OF PROCEEDS

      Each trust will use the proceeds from the sale of its trust preferred securities and its common securities to acquire junior subordinated debt securities from Popular. Unless the applicable prospectus supplement states otherwise, the net proceeds from the sale of the junior subordinated debt securities will be added to our general funds and will be available for general corporate purposes, including:

•  investments in, or extensions of credit to, existing and future subsidiaries;

•  the acquisition of other banking and financial institutions; and

•  repayment of outstanding borrowings.

We do not at present have any plans to use proceeds from any offering for a material acquisition or to repay outstanding borrowings. Until the net proceeds have been used, they will be invested in short-term securities.

RATIOS OF EARNINGS TO FIXED CHARGES AND TO FIXED CHARGES

AND PREFERRED STOCK DIVIDENDS

      The ratios shown below measure Popular’s ability to generate sufficient earnings to pay the fixed charges or expenses of its debt and dividends on its preferred stock.

Six Months Ended

June 30

Fiscal Year Ended December 31,

2003

1998

1999

2000

2001

2002

Ratio of Earnings to Fixed Charges:

Excluding interest on deposits

2.5x

1.8x

1.7x

1.6x

1.8x

2.1x

Including interest on deposits

1.8x

1.4x

1.4x

1.3x

1.4x

1.5x

Ratio of Earnings to Fixed Charges and Preferred Stock Dividends:

Excluding interest on deposits

2.4x

1.8x

1.7x

1.6x

1.8x

2.1x

Including interest on deposits

1.8x

1.4x

1.4x

1.3x

1.4x

1.5x

      For purposes of these consolidated ratios, earnings consist of pre-tax income plus fixed charges. Fixed charges represent all interest expense (ratios are presented both excluding and including interest on deposits), the portion of net rental expense which is deemed representative of the interest factor and the amortization of debt issuance expense and capitalized interest.

      The term “preferred stock dividends” is the amount of pre-tax earnings that is required to pay dividends on Popular’s outstanding preferred stock.

DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES

      This section describes the general terms and provisions of our junior subordinated debt securities. The applicable prospectus supplement will describe the terms of the series of junior subordinated debt securities, which are sometimes referred to in this prospectus as “debt securities,” offered through that prospectus supplement and any general terms outlined in this section that will not apply to those debt securities. The junior subordinated debt securities will be issued under a junior subordinated indenture,

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which is sometimes referred to in this prospectus as an “indenture,” between us and the junior subordinated trustee named in the applicable prospectus supplement.

      We have summarized the material terms and provisions of the junior subordinated indenture in this section. We have also filed the form of the junior subordinated indenture as an exhibit to the registration statement. You should read the junior subordinated indenture for additional information before you purchase any trust preferred securities. The summary that follows includes references to section numbers of the junior subordinated indenture so that you can more easily locate these provisions.

General

      The junior subordinated debt securities will be our direct unsecured obligations. The junior subordinated indenture does not limit the principal amount of junior subordinated debt securities that we may issue. The junior subordinated indenture permits us to issue junior subordinated debt securities from time to time and junior subordinated debt securities issued under such indenture will be issued as part of a series that has been established by us under such indenture. (Section 301)

      The junior subordinated debt securities will be unsecured and will rank equally with all of our other junior subordinated debt securities and, together with such other junior subordinated debt securities, will be subordinated to all of our existing and future Senior Debt. See “— Subordination” below.

      The junior subordinated debt securities are our unsecured junior subordinated debt securities, but our assets consist primarily of equity in our subsidiaries. As a result, our ability to make payments on our junior subordinated debt securities depends on our receipt of dividends, loan payments and other funds from our subsidiaries. In addition, if any of our subsidiaries becomes insolvent, the direct creditors of that subsidiary will have a prior claim on its assets. Our rights and the rights of our creditors will be subject to that prior claim, unless we are also a direct creditor of that subsidiary. This subordination of creditors of a parent company to prior claims of creditors of its subsidiaries is commonly referred to as structural subordination.

      A prospectus supplement relating to a series of junior subordinated debt securities being offered will include specific terms relating to the offering. (Section 301) These terms will include some or all of the following:

•  the title and type of the debt securities;

•  any limit on the total principal amount of the debt securities of that series;

•  the price at which the debt securities will be issued;

•  the date or dates on which the principal of and any premium on the debt securities will be payable;

•  the maturity date or dates of the debt securities or the method by which those dates can be determined;

•  if the debt securities will bear interest:

•  the interest rate on the debt securities or the method by which the interest rate may be determined;

•  the date from which interest will accrue;

•  the record and interest payment dates for the debt securities;

•  the first interest payment date; and

•  any circumstances under which we may defer interest payments;

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•  the place or places where:

•  we can make payments on the debt securities;

•  the debt securities can be surrendered for registration of transfer or exchange; and

•  notices and demands can be given to us relating to the debt securities and under the indenture;

•  any optional redemption provisions that would permit us or the holders of debt securities to elect redemption of the debt securities before their final maturity;

•  any sinking fund provisions that would obligate us to redeem the debt securities before their final maturity;

•  whether the debt securities will be convertible into shares of common stock, shares of preferred stock or depositary shares and, if so, the terms and conditions of any such conversion, and, if convertible into shares of preferred stock or depositary shares, the terms of such preferred stock or depositary shares;

•  if the debt securities will be issued in bearer form, the terms and provisions contained in the bearer securities and in the indenture specifically relating to the bearer securities;

•  the currency or currencies in which the debt securities will be denominated and payable, if other than U.S. dollars and, if a composite currency, any special provisions relating thereto;

•  any circumstances under which the debt securities may be paid in a currency other than the currency in which the debt securities are denominated and any provisions relating thereto;

•  whether the provisions described below under the heading “— Defeasance” apply to the debt securities;

•  any events of default which will apply to the debt securities in addition to those contained in the indenture and any events of default contained in the indenture which will not apply to the debt securities;

•  any additions or changes to or deletions of the covenants contained in the indenture and the ability, if any, of the holders to waive our compliance with those additional or changed covenants;

•  whether all or part of the debt securities will be issued in whole or in part as temporary or permanent global securities and, if so, the depositary for those global securities and a description of any book-entry procedures relating to the global securities — a “global security” is a debt security that we issue in accordance with the junior subordinated indenture to represent all or part of a series of debt securities;

•  if we issue temporary global securities, any special provisions dealing with the payment of interest and any terms relating to the ability to exchange interests in a temporary global security for interests in a permanent global security or for definitive debt securities;

•  the identity of the security registrar and paying agent for the debt securities if other than the junior subordinated trustee;

•  any special tax implications of the debt securities;

•  any special provisions relating to the payment of any additional amounts on the debt securities;

•  the terms of any securities being offered together with or separately from the debt securities;

•  the terms and conditions of any obligation or right of Popular or a holder to convert or exchange the debt securities into trust preferred securities or other securities; and

•  any other terms of the debt securities.

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      When we use the term “holder” in this prospectus with respect to a registered debt security, we mean the person in whose name such debt security is registered in the security register. (Section 101)

Additional Sums

      If a trust is required to pay any taxes, duties, assessments or governmental charges of whatever nature, other than withholding taxes, imposed by the United States, any political subdivision thereof or Puerto Rico or any other taxing authority of the United States or Puerto Rico, then we will be required to pay additional sums on the related junior subordinated debt securities. The amount of any additional sum will be an amount sufficient so that the net amounts received and retained by such trust after paying any such taxes, duties, assessments or other governmental charges will be not less than the amounts that such trust would have received had no such taxes, duties, assessments or other governmental charges been imposed. This means that the trust will be in the same position it would have been in if it did not have to pay such taxes, duties, assessments or other charges. (Section 1007)

Payment; Exchange; Transfer

      We will designate a place of payment where holders can receive payment of the principal of and any premium and interest on the junior subordinated debt securities. Even though we will designate a place of payment, we may elect to pay any interest on the junior subordinated debt securities by mailing a check to the person listed as the owner of the junior subordinated debt securities in the security register or by wire transfer to an account designated by that person in writing not less than ten days before the date of the interest payment. Unless we state otherwise in the applicable prospectus supplement, we will pay interest on a junior subordinated debt security:

•  on an interest payment date, to the person in whose name that junior subordinated debt security is registered at the close of business on the record date relating to that interest payment date; and

•  on the date of maturity or earlier redemption or repayment, to the person who surrenders such debt security at the office of our appointed paying agent. (Sections 307, 1002)

      Any money that we pay to a paying agent for the purpose of making payments on the junior subordinated debt securities and that remains unclaimed two years after the payments were due will, at our request, be returned to us and after that time any holder of such debt security can only look to us for the payments on such debt security. (Section 1003)

      Any junior subordinated debt securities of a series can be exchanged for other junior subordinated debt securities of that series so long as such other debt securities are denominated in authorized denominations and have the same aggregate principal amount and same terms as the junior subordinated debt securities that were surrendered for exchange. The junior subordinated debt securities may be presented for registration of transfer, duly endorsed or accompanied by a satisfactory written instrument of transfer, at the office or agency maintained by us for that purpose in a place of payment. There will be no service charge for any registration of transfer or exchange of the junior subordinated debt securities, but we may require holders to pay any tax or other governmental charge payable in connection with a transfer or exchange of the junior subordinated debt securities. (Sections 305, 1002) If the applicable prospectus supplement refers to any office or agency, in addition to the security registrar, initially designated by us where holders can surrender the junior subordinated debt securities for registration of transfer or exchange, we may at any time rescind the designation of any such office or agency or approve a change in the location. However, we will be required to maintain an office or agency in each place of payment for that series. (Section 1002)

      In the event of any redemption, neither we nor the junior subordinated trustee will be required to:

•  issue, register the transfer of, or exchange, junior subordinated debt securities of any series during a period beginning at the opening of business 15 days before the day of publication or mailing of the notice of redemption and ending at the close of business on the day of such publication or the mailing of such notice; or

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•  transfer or exchange any junior subordinated debt securities so selected for redemption, except, in the case of any junior subordinated debt securities being redeemed in part, any portion thereof not to be redeemed. (Section 305)

Denominations

      Unless we state otherwise in the applicable prospectus supplement, the junior subordinated debt securities will be issued only in registered form, without coupons, in denominations of $1,000 each or multiples of $1,000.

Bearer Debt Securities

      If we ever issue bearer debt securities, the applicable prospectus supplement will describe all of the special terms and provisions of junior subordinated debt securities in bearer form, and the extent to which those special terms and provisions are different from the terms and provisions which are described in this prospectus, which generally apply to junior subordinated debt securities in registered form, and will summarize provisions of the junior subordinated indenture that relate specifically to bearer debt securities.

Original Issue Discount

      Junior subordinated debt securities may be issued under the junior subordinated indenture as original issue discount securities and sold at a substantial discount below their stated principal amount. If a junior subordinated debt security is an original issue discount security, that means that an amount less than the principal amount of such debt security will be due and payable upon a declaration of acceleration of the maturity of such debt security under the junior subordinated indenture. (Section 101) The applicable prospectus supplement will describe the Puerto Rico income tax consequences and other special factors you should consider before purchasing any original issue discount securities.

Option to Defer Interest Payments

      If provided in the applicable prospectus supplement, we will have the right from time to time to defer payment of interest on a series of junior subordinated debt securities for up to such number of consecutive interest payment periods as may be specified in the applicable prospectus supplement, subject to the terms, conditions and covenants, if any, specified in such prospectus supplement. Such deferral, however, may not extend beyond the stated maturity of such junior subordinated debt securities. (Section 313) Certain Puerto Rico and United States federal income tax consequences and special considerations applicable to any such debt securities will be described in the applicable prospectus supplement.

Redemption

      Unless otherwise specified in the applicable prospectus supplement, the junior subordinated debt securities will not be subject to any sinking fund and will not be redeemable at the option of the holder.

      Unless otherwise specified in the applicable prospectus supplement, we may, at our option and subject to receipt of prior approval by the Federal Reserve, if required, redeem the junior subordinated debt securities of any series in whole at any time or in part from time to time. If the junior subordinated debt securities of any series are redeemable only on or after a specified date or upon the satisfaction of additional conditions, the applicable prospectus supplement will specify such date or describe such conditions. Except as otherwise specified in the applicable prospectus supplement, the redemption price for any junior subordinated debt security so redeemed will equal 100% of the principal amount of such junior subordinated debt security plus accrued and unpaid interest to the redemption date.

      Except as otherwise specified in the applicable prospectus supplement, we may, at our option and subject to receipt of prior approval by the Federal Reserve, if required, redeem a series of junior subordinated debt securities in whole, but not in part, at any time within 90 days after the occurrence of a tax event, investment company event or capital treatment event, each as defined below, at a redemption

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price equal to 100% of the principal amount of such junior subordinated debt securities then outstanding plus accrued and unpaid interest to the redemption date. (Section 1108)

      “Tax Event” means the receipt by a trust of an opinion of counsel experienced in such matters to the effect that, as a result of any amendment to, or change in, including any announced proposed change in, the laws or regulations of the United States, any political subdivision thereof or Puerto Rico, or any taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which proposed change, pronouncement or decision is announced on or after the date of the prospectus supplement relating to the issuance of trust preferred securities by such trust, there is more than an insubstantial risk that:

•  such trust is, or will be within 90 days of the date of such opinion, subject to United States federal or Puerto Rico income tax with respect to income received or accrued on the junior subordinated debt securities;

•  interest payable by Popular on the junior subordinated debt securities is not, or within 90 days of the date of such opinion, will not be, deductible by Popular, in whole or in part, for Puerto Rico income tax purposes; or

•  such trust is, or will be within 90 days of the date of such opinion, subject to more than an immaterial amount of other taxes, duties or other governmental charges. (Section 101)

      “Investment Company Event” means the receipt by a trust of an opinion of counsel experienced in such matters to the effect that, as a result of the occurrence of a change in law or regulation or a written change, including any announced prospective change, in interpretation or application of law or regulation by any legislative body, court, governmental agency or regulatory authority, there is more than an insubstantial risk that such trust is or will be considered an “investment company” that is required to be registered under the Investment Company Act of 1940, which change or prospective change becomes effective or would become effective, as the case may be, on or after the date of the prospectus supplement relating to the issuance of the trust preferred securities. (Section 101)

      “Capital Treatment Event” means our reasonable determination that, as a result of any amendment to, or change in, including any announced proposed change in, the laws or regulations of the United States or any political subdivision thereof or Puerto Rico, or as a result of any official or administrative pronouncement or action or judicial decision interpreting or applying such laws or regulations, which amendment or change is effective or which proposed change, pronouncement, action or decision is announced on or after the date of the prospectus supplement relating to issuance of trust preferred securities by such trust, there is more than an insubstantial risk that Popular will not be entitled to treat an amount equal to the liquidation amount of such trust preferred securities as Tier I capital, or the then-equivalent thereof, for purposes of the capital adequacy guidelines of the Federal Reserve, as then in effect and applicable to Popular. (Section 101)

      Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each holder of junior subordinated debt securities to be redeemed at its registered address. However, if the debt securities are held by a trust, notice shall be mailed at least 45 days but not more than 75 days before the redemption date. Unless we default in payment of the redemption price, on and after the redemption date, interest will cease to accrue on such junior subordinated debt securities or portions thereof called for redemption.

Restrictions on Certain Payments

      Unless otherwise specified in the applicable prospectus supplement, if:

•  there shall have occurred and be continuing an event of default with respect to a series of junior subordinated debt securities of which we have actual knowledge and which we have not taken reasonable steps to cure;

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•  the junior subordinated debt securities of a series are held by a trust and we shall be in default relating to our payment of any obligations under our guarantee of the trust preferred securities issued by such trust; or

•  we shall have given notice of our election to defer payments of interest on a series of junior subordinated debt securities by extending the interest payment period and such period, or any extension of such period, shall be continuing;

then:

•  we shall not declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of our capital stock, including our preferred stock; and

•  we shall not make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities issued by us that rank equally with or junior to the junior subordinated debt securities (except for partial payments of interest with respect to the junior subordinated debt securities).

      The restrictions listed above do not apply to:

•  any repurchase, redemption or other acquisition of shares of our capital stock in connection with (1) any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, consultants or independent contractors, (2) a dividend reinvestment or stockholder purchase plan, or (3) the issuance of our capital stock, or securities convertible into or exercisable for such capital stock, as consideration in an acquisition transaction entered into prior to the applicable extension period;

•  any exchange, redemption or conversion of any class or series of our capital stock, or the capital stock of one of our subsidiaries, for any other class or series of our capital stock, or of any class or series of our indebtedness for any class or series of our capital stock;

•  any purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of such capital stock or the securities being converted or exchanged;

•  any declaration of a dividend in connection with any rights plan, or the issuance of rights, stock or other property under any rights plan, or the redemption or repurchase of rights pursuant thereto;

•  payments by us under any guarantee agreement executed for the benefit of the trust preferred securities; or

•  any dividend in the form of stock, warrants, options or other rights where the dividend stock or stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equally with or junior to such stock. (Section 1008)

Limitation on Mergers and Sales of Assets

      The junior subordinated indenture generally permits a consolidation or merger between us and another entity. It also permits the sale or transfer by us of all or substantially all of our property and assets. These transactions are permitted if:

•  the resulting or acquiring entity, if other than us, is organized and existing under the laws of the United States or any state, the District of Columbia or the Commonwealth of Puerto Rico and assumes all of our responsibilities and liabilities under the junior subordinated indenture, including the payment of all amounts due on the debt securities and performance of the covenants in the junior subordinated indenture; and

•  immediately after the transaction, and giving effect to the transaction, no event of default under the junior subordinated indenture exists. (Section 801)

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      If we consolidate or merge with or into any other entity or sell or lease all or substantially all of our assets according to the terms and conditions of the junior subordinated indenture, the resulting or acquiring entity will be substituted for us in such indenture with the same effect as if it had been an original party to the indenture. As a result, such successor entity may exercise our rights and powers under the junior subordinated indenture, in our name and, except in the case of a lease of all or substantially all of our properties, we will be released from all our liabilities and obligations under such indenture and under the junior subordinated debt securities. (Section 802)

Events of Default, Waiver and Notice

      Unless otherwise specified in the applicable prospectus supplement, an “event of default,” when used in the junior subordinated indenture with respect to any series of junior subordinated debt securities, means any of the following:

•  failure to pay interest on a junior subordinated debt security of that series for 30 days after the payment is due (subject to the deferral of any due date in the case of an extension period);

•  failure to pay the principal of or any premium on any junior subordinated debt security of that series when due;

•  failure to deposit any sinking fund payment on junior subordinated debt securities of that series when due;

•  failure to perform any other covenant in the junior subordinated indenture that applies to junior subordinated debt securities of that series for 90 days after we have received written notice of the failure to perform in the manner specified in the junior subordinated indenture;

•  certain events relating to a bankruptcy, insolvency or reorganization of Popular; or

•  any other event of default that may be specified for the junior subordinated debt securities of that series when that series is created. (Section 501)

      If an event of default under the junior subordinated indenture occurs and continues, the junior subordinated trustee or the holders of at least 25% in aggregate principal amount of the outstanding junior subordinated debt securities of that series may declare the entire principal and all accrued but unpaid interest of all debt securities of that series to be due and payable immediately. If the trustee or the holders of junior subordinated debt securities do not make such declaration and the junior subordinated debt securities of that series are held by a trust or trustee of such trust, the property trustee or the holders of at least 25% in aggregate liquidation amount of the related trust preferred securities shall have the right to make such declaration. If an event of default under the junior subordinated indenture occurs and continues and the junior subordinated debt securities of that series are held by a trust or trustee of such trust, the property trustee may also declare the principal of and the interest on the junior subordinated debt securities to be due and payable and may enforce its other rights as a creditor with respect to the junior subordinated debt securities. (Section 502)

      If such a declaration occurs, the holders of a majority of the aggregate principal amount of the outstanding junior subordinated debt securities of that series can, subject to conditions (including, if the junior subordinated debt securities of that series are held by a trust or a trustee of such trust, the consent of the holders of at least a majority in aggregate liquidation amount of the related trust preferred securities), rescind the declaration. If the holders of such junior subordinated debt securities do not rescind such declaration and such junior subordinated debt securities are held by a trust or trustee of such trust, the holders of at least a majority in aggregate liquidation amount of the related trust preferred securities shall have the right to rescind the declaration. (Section 502)

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      The holders of a majority in aggregate principal amount of the outstanding junior subordinated debt securities of any series may, on behalf of all holders of that series, waive any past default, except:

•  a default in payment of principal of or any premium or interest; or

•  a default under any provision of the junior subordinated indenture which itself cannot be modified or amended without the consent of the holder of each outstanding junior subordinated debt security of that series.

      If the junior subordinated debt securities of that series are held by a trust or a trustee of such trust, any such waiver shall require the consent of the holders of at least a majority in aggregate liquidation amount of the related trust preferred securities. If the holders of junior subordinated debt securities do not waive such default, the holders of a majority in aggregate liquidation amount of the related trust preferred securities shall have the right to waive such default. (Section 513)

      The holders of a majority in principal amount of the junior subordinated debt securities of any series affected shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the junior subordinated trustee under the junior subordinated indenture.

      We are required to file an officers’ certificate with the junior subordinated trustee each year that states, to the knowledge of the certifying officer, whether or not any defaults exist under the terms of the junior subordinated indenture. (Section 1004)

      If the junior subordinated debt securities of any series are held by a trust or a trustee of such trust, a holder of the related trust preferred securities may institute a direct action if we fail to make interest or other payments on the junior subordinated debt securities when due, taking account of any extension period. (Section 508) A direct action may be brought without first:

•  directing the property trustee to enforce the terms of the junior subordinated debt securities, or

•  suing us to enforce the property trustee’s rights under such junior subordinated debt securities.

      This right of direct action cannot be amended in a manner that would impair the rights of the holders of trust preferred securities thereunder without the consent of all holders of affected trust preferred securities. (Section 902)

Junior Subordinated Indenture; Does Not Restrict Our Ability to Take Certain Actions That May Affect the Junior Subordinated Debt Securities

      The junior subordinated indenture does not contain restrictions on our ability to:

•  incur, assume or become liable for any type of debt or other obligation;

•  create liens on our property for any purpose; or

•  pay dividends or make distributions on our capital stock or repurchase or redeem our capital stock, except as set forth under “— Restrictions on Certain Payments” above.

The junior subordinated indenture does not require the maintenance of any financial ratios or specified levels of net worth or liquidity. In addition, the junior subordinated indenture does not contain any provisions which would require us to repurchase or redeem or modify the terms of any of the junior subordinated debt securities upon a change of control or other event involving us which may adversely affect the creditworthiness of such debt securities.

Distribution of the Junior Subordinated Debt Securities

      Under circumstances involving the dissolution of a trust, which will be discussed more fully in the applicable prospectus supplement, the junior subordinated debt securities may be distributed to the holders of the trust securities in liquidation of that trust, provided that any required regulatory approval is obtained. See “Description of Trust Preferred Securities — Liquidation Distribution upon Dissolution.”

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Modification of Junior Subordinated Indenture

      Under the junior subordinated indenture, certain of our rights and obligations and certain of the rights of holders of the junior subordinated debt securities may be modified or amended with the consent of the holders of at least a majority of the aggregate principal amount of the outstanding junior subordinated debt securities of all series affected by the modification or amendment, acting as one class. However, the following modifications and amendments will not be effective against any holder without its consent:

•  a change in the stated maturity date of any payment of principal or interest, including any additional interest (other than to the extent set forth in the applicable junior subordinated debt security);

•  a reduction in payments due on the junior subordinated debt securities;

•  a change in the place of payment or currency in which any payment on the junior subordinated debt securities is payable;

•  a limitation of a holder’s right to sue us for the enforcement of payments due on the junior subordinated debt securities;

•  a reduction in the percentage of outstanding junior subordinated debt securities required to consent to a modification or amendment of the junior subordinated indenture or required to consent to a waiver of compliance with certain provisions of such indenture or certain defaults under such indenture;

•  a reduction in the requirements contained in the junior subordinated indenture for quorum or voting;

•  a limitation of a holder’s right, if any, to repayment of junior subordinated debt securities at the holder’s option;

•  in the case of junior subordinated debt securities convertible into common stock, a limitation of any right to convert such debt securities; and

•  a modification of any of the foregoing requirements contained in the junior subordinated indenture. (Section 902)

      Under the junior subordinated indenture, the holders of at least a majority of the aggregate principal amount of the outstanding junior subordinated debt securities of all series affected by a particular covenant or condition, acting as one class, may, on behalf of all holders of such series of debt securities, waive compliance by us with any covenant or condition contained in the junior subordinated indenture unless we specify that such covenant or condition cannot be so waived at the time we establish the series. (Section 1005)

      If the junior subordinated debt securities are held by a trust or the trustee of such trust, no modification may be made that adversely affects the holders of the related trust preferred securities, and no termination of the junior subordinated indenture may occur, and no waiver of any compliance with any covenant will be effective without the prior consent of a majority in liquidation amount of the trust preferred securities of such trust. If the consent of the holder of each outstanding junior subordinated debt security is required for such modification or waiver, no such modification or waiver shall be effective without the prior consent of each holder of trust preferred securities of such trust. (Section 902)

      We and the junior subordinated trustee may execute, without the consent of any holder of junior subordinated debt securities, any supplemental junior subordinated indenture for the purpose of creating any new series of junior subordinated debt securities.

Defeasance and Discharge

      Defeasance and Discharge. At the time that we establish a series of junior subordinated debt securities under the junior subordinated indenture, we can provide that the debt securities of that series are

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subject to the defeasance and discharge provisions of that indenture. If we so provide, we will be discharged from our obligations on the debt securities of that series if:

•  we deposit with the junior subordinated trustee, in trust, sufficient money or, if the junior subordinated debt securities of that series are denominated and payable in U.S. dollars only, Eligible Instruments, to pay the principal, any interest, any premium and any other sums due on the debt securities of that series, such as sinking fund payments, on the dates the payments are due under the junior subordinated indenture and the terms of such debt securities;

•  we deliver to the junior subordinated trustee an opinion of counsel that states that the holders of the junior subordinated debt securities of that series will not recognize income, gain or loss for Puerto Rico or United States federal income tax purposes as a result of the deposit and will be subject to Puerto Rico or United States federal income tax on the same amounts and in the same manner and at the same times as would have been the case if no deposit had been made; and

•  if the junior subordinated debt securities of that series are listed on any domestic or foreign securities exchange, such debt securities will not be delisted as a result of the deposit. (Section 403)

      When we use the term “Eligible Instruments” in this section, we mean monetary assets, money market instruments and securities that are payable in dollars only and are essentially risk free as to collection of principal and interest, including:

•  direct obligations of the United States backed by the full faith and credit of the United States; or

•  any obligation of a person controlled or supervised by and acting as an agency or instrumentality of the United States if the timely payment of the obligation is unconditionally guaranteed as a full faith and credit obligation by the United States. (Section 101)

      In the event that we deposit money or Eligible Instruments, or a combination of both, in trust and discharge our obligations under a series of junior subordinated debt securities as described above, then:

•  the junior subordinated indenture, including the subordination provisions contained in the junior subordinated indenture, will no longer apply to the junior subordinated debt securities of that series; however, certain obligations to compensate, reimburse and indemnify the junior subordinated trustee, to register the transfer and exchange of junior subordinated debt securities, to replace lost, stolen or mutilated junior subordinated debt securities, to maintain paying agencies and the trust funds and to pay additional amounts, if any, required as a result of withholding taxes imposed on payments to non-U.S. persons will continue to apply; and

•  holders of junior subordinated debt securities of that series can only look to the trust fund for payment of principal, any premium and any interest on such debt securities of that series. (Section 403)

      Defeasance of Certain Covenants and Certain Events of Default. At the time that we establish a series of junior subordinated debt securities under the junior subordinated indenture, we can provide that the debt securities of that series are subject to the covenant defeasance provisions of such indenture. If we so provide and we make the deposit and deliver the opinion of counsel described above in this section under the heading “— Defeasance and Discharge” we will not have to comply with any covenant we designate when we establish the series of debt securities. In the event of a covenant defeasance, our obligations under the junior subordinated indenture and the junior subordinated debt securities, other than with respect to the covenants specifically referred to above, will remain in effect. (Section 1701)

      If we exercise our option not to comply with the covenants listed above and the junior subordinated debt securities of that series become immediately due and payable because an event of default under the junior subordinated indenture has occurred, other than as a result of an event of default specifically referred to above, the amount of money and Eligible Instruments on deposit with the junior subordinated trustee will be sufficient to pay the principal, any interest, any premium and any other sums due on the

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debt securities of that series, such as sinking fund payments, on the date the payments are due under the junior subordinated indenture and the terms of the junior subordinated debt securities, but may not be sufficient to pay amounts due at the time of acceleration. However, we would remain liable for the balance of the payments. (Section 1701)

Conversion or Exchange

      The junior subordinated debt securities may be convertible or exchangeable into junior subordinated debt securities of another series or into trust preferred securities of any of our trusts, on the terms provided in the applicable prospectus supplement. Such terms may include provisions for conversion or exchange, either mandatory, at the option of the holder, or at our option, in which case the number of shares of trust preferred securities or other securities to be received by the holders of junior subordinated debt securities would be calculated as of a time and in the manner stated in the applicable prospectus supplement.

Subordination

      The junior subordinated debt securities will be subordinated to all of our existing and future Senior Debt, as defined below. Our “Senior Debt” includes our senior debt securities and our subordinated debt securities and means

•  any of our indebtedness for borrowed or purchased money, whether or not evidenced by bonds, debt securities, notes or other written instruments,

•  our obligations under letters of credit,

•  any of our indebtedness or other obligations with respect to commodity contracts, interest rate and currency swap agreements, cap, floor and collar agreements, currency spot and forward contracts, and other similar agreements or arrangements designed to protect against fluctuations in currency exchange or interest rates, and

•  any guarantees, endorsements (other than by endorsement of negotiable instruments for collection in the ordinary course of business) or other similar contingent obligations in respect of obligations of others of a type described above, whether or not such obligation is classified as a liability on a balance sheet prepared in accordance with generally accepted accounting principles,

whether outstanding on the date of execution of the junior subordinated indenture or thereafter incurred, other than obligations expressly on a parity with or junior to the junior subordinated debt securities. The junior subordinated debt securities will rank on a parity with obligations evidenced by any debt securities, and guarantees in respect of those debt securities, initially issued to any trust, partnership or other entity affiliated with us, that is, directly or indirectly, our financing vehicle in connection with the issuance by such entity of capital securities or other similar securities.

      If certain events relating to a bankruptcy, insolvency or reorganization of Popular occur, we will first pay all Senior Debt, including any interest accrued after the events occur, in full before we make any payment or distribution, whether in cash, securities or other property, on account of the principal of or interest on the junior subordinated debt securities. In such an event, we will pay or deliver directly to the holders of Senior Debt any payment or distribution otherwise payable or deliverable to holders of the junior subordinated debt securities. We will make the payments to the holders of Senior Debt according to priorities existing among those holders until we have paid all Senior Debt, including accrued interest, in full. Notwithstanding the subordination provisions discussed in this paragraph, we may make payments or distributions on the junior subordinated debt securities so long as:

•  the payments or distributions consist of securities issued by us or another company in connection with a plan of reorganization or readjustment; and

•  payment on those securities is subordinate to outstanding Senior Debt and any securities issued with respect to Senior Debt under such plan of reorganization or readjustment at least to the same

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extent provided in the subordination provisions of the junior subordinated debt securities. (Section 1801)

      If such events relating to a bankruptcy, insolvency or reorganization of Popular occur, after we have paid in full all amounts owed on Senior Debt:

•  the holders of junior subordinated debt securities,

•  together with the holders of any of our other obligations ranking equal with those junior subordinated debt securities,

will be entitled to receive from our remaining assets any principal, premium or interest due at that time on the junior subordinated debt securities and such other obligations before we make any payment or other distribution on account of any of our capital stock or obligations ranking junior to those junior subordinated debt securities.

      If we violate the junior subordinated indenture by making a payment or distribution to holders of the junior subordinated debt securities before we have paid all the Senior Debt in full, then such holders of the junior subordinated debt securities will be deemed to have received the payments or distributions in trust for the benefit of, and will have to pay or transfer the payments or distributions to, the holders of the Senior Debt outstanding at the time. The payment or transfer to the holders of the Senior Debt will be made according to the priorities existing among those holders. Notwithstanding the subordination provisions discussed in this paragraph, holders of junior subordinated debt securities will not be required to pay, or transfer payments or distributions to, holders of Senior Debt so long as:

•  the payments or distributions consist of securities issued by us or another company in connection with a plan of reorganization or readjustment; and

•  payment on those securities is subordinate to outstanding Senior Debt and any securities issued with respect to Senior Debt under such plan of reorganization or readjustment at least to the same extent provided in the subordination provisions of those junior subordinated debt securities. (Section 1801)

      Because of the subordination, if we become insolvent, holders of Senior Debt may receive more, ratably, and holders of the junior subordinated debt securities may receive less, ratably, than our other creditors. This type of subordination will not prevent an event of default from occurring under the junior subordinated indenture in connection with the junior subordinated debt securities.

      We may modify or amend the junior subordinated indenture as provided under “— Modification of Junior Subordinated Indenture” above. However, the modification or amendment may not, without the consent of the holders of all Senior Debt outstanding, modify any of the provisions of the junior subordinated indenture relating to the subordination of the junior subordinated debt securities in a manner that would adversely affect the holders of Senior Debt. (Section 902)

      The junior subordinated indenture places no limitation on the amount of Senior Debt that we may incur. We expect from time to time to incur additional indebtedness and other obligations constituting Senior Debt.

Governing Law

      The junior subordinated indenture and the junior subordinated debt securities will be governed by, and construed in accordance with, the internal laws of the Commonwealth of Puerto Rico.

The Trustee

      The junior subordinated trustee will have all of the duties and responsibilities specified under the Trust Indenture Act. Other than its duties in case of a default, the trustee is under no obligation to exercise any of the powers under the junior subordinated indenture at the request, order or direction of any

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holders of junior subordinated debt securities unless offered reasonable indemnification. (Sections 603, 601)

Correspondence Between Junior Subordinated Debt Securities and Trust Preferred Securities

      Popular may issue one or more series of junior subordinated debt securities under the junior subordinated indenture with terms corresponding to the terms of a series of trust preferred securities. In each such instance, concurrently with the issuance of a trust’s preferred securities, such trust will invest the proceeds from that issuance, together with the consideration paid by Popular for the common securities of such trust, in that series of junior subordinated debt securities. Each series of junior subordinated debt securities will be in a principal amount equal to the aggregate stated liquidation amount of the related trust preferred securities and the common securities of such trust and will rank equally with all other series of junior subordinated debt securities. Holders of the trust preferred securities will have the rights, in connection with modifications to the junior subordinated indenture or upon occurrence of an event of default, as described under “— Modification of Junior Subordinated Indenture” and “— Events of Default, Waiver and Notice.”

      Unless otherwise specified in the applicable prospectus supplement, if a tax event, investment company event or capital treatment event relating to a trust occurs and continues, we may, at our option and subject to any required prior approval of the Federal Reserve, redeem the junior subordinated debt securities at any time within 90 days of the occurrence of such event, in whole but not in part, subject to the provisions of the junior subordinated indenture and whether or not such junior subordinated debt securities are then redeemable at our option.

      The redemption price for any junior subordinated debt security shall be equal to 100% of the principal amount of such junior subordinated debt security then outstanding plus accrued and unpaid interest to the redemption date. As long as a trust is the holder of all the outstanding junior subordinated debt securities of a series, the proceeds of any redemption will be used by such trust to redeem the related trust securities in accordance with their terms.

      We will covenant, as to each series of junior subordinated debt securities:

•  to directly or indirectly maintain 100% ownership of the common securities of the applicable trust unless a permitted successor succeeds to ownership of the common securities;

•  not to voluntarily terminate, wind up or liquidate any trust, except,

•  in connection with a distribution of junior subordinated debt securities to the holders of trust preferred securities in exchange therefor upon liquidation of such trust, or

•  in connection with certain mergers, consolidations or amalgamations permitted by the applicable trust agreement, in either such case, if so specified in the applicable prospectus supplement and upon any required prior approval of the Federal Reserve; and

•  to use our reasonable efforts, consistent with the terms and provisions of the applicable trust agreement, to cause such trust to remain classified as a grantor trust and not as an association taxable as a corporation for United States federal or Puerto Rico income tax purposes.

DESCRIPTION OF TRUST PREFERRED SECURITIES

      The trust preferred securities will be issued by a trust under the terms of a trust agreement. Each trust agreement will be qualified as an indenture under the Trust Indenture Act. Each trust may issue only one series of trust preferred securities. The property trustee will act as trustee for each series of trust preferred securities under the applicable trust agreement for purposes of compliance with the provisions of the Trust Indenture Act. The terms of each series of trust preferred securities will include those stated in the applicable trust agreement and those made part of such trust agreement by the Trust Indenture Act.

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      We have summarized material terms and provisions of the trust preferred securities in this section. This summary is not intended to be complete and is qualified by the trust agreement, the form of which we filed as an exhibit to the registration statement, the Delaware Statutory Trust Act and the Trust Indenture Act.

      Each trust agreement authorizes the trustees of the applicable trust to issue trust securities on behalf of such trust. The trust securities represent undivided beneficial interests in the assets of such trust. We will own, directly or indirectly, all of a trust’s common securities. The common securities rank equally, and payments will be made on a pro rata basis, with the trust preferred securities except as set forth under “— Ranking of Common Securities.”

      Each trust agreement does not permit a trust to issue any securities other than the trust securities or to incur any indebtedness. Under each trust agreement, the property trustee will own the junior subordinated debt securities purchased by such trust for the benefit of the holders of the trust securities.

      The guarantee agreement we execute for the benefit of the holders of trust preferred securities will be a guarantee on a subordinated basis with respect to the related trust securities. However, such guarantee will not guarantee payment of distributions or amounts payable on redemption or liquidation of such trust securities when a trust does not have funds on hand available to make such payments. See “Description of Guarantees.”

Distributions

      Distributions on each series of trust preferred securities:

•  will be cumulative;

•  will accumulate from the date of original issuance; and

•  will be payable on such dates as specified in the applicable prospectus supplement.

      In the event that any date on which distributions are payable on the trust preferred securities is not a business day, then payment of the distribution will be made on the next succeeding business day, and without any interest or other payment in respect to any such delay. Each date on which distributions are payable in accordance with the foregoing is referred to as a “distribution date.” The term “distribution” includes any interest payable on unpaid distributions unless otherwise stated. Unless otherwise specified in the applicable prospectus supplement, a “business day” is a day other than a Saturday, a Sunday, or any other day on which banking institutions in Puerto Rico, Wilmington, Delaware and New York, New York are authorized or required by law, regulation or executive order to remain closed or are customarily closed.

      The amount of distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. The amount of distributions payable for any period shorter than a full distribution period will be computed on the basis of the actual number of days elapsed in a partial month in that period. Distributions to which holders of trust preferred securities are entitled but are not paid will accumulate additional distributions at the annual rate if and as specified in the applicable prospectus supplement.

      If provided in the applicable prospectus supplement, we have the right under the junior subordinated indenture and the junior subordinated debt securities to which the prospectus supplement relates to defer the payment of interest on the junior subordinated debt securities for up to a number of consecutive interest payment periods that will be specified in the applicable prospectus supplement. We refer to this period as an “extension period.” No extension period may extend beyond the stated maturity of the junior subordinated debt securities to which the extension period relates.

      As a consequence of any such deferral, distributions on the trust preferred securities would be deferred by the related trust during any extension period, but would continue to accumulate additional distributions at the annual rate set forth in the prospectus supplement for such trust preferred securities.

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      Unless otherwise specified in the applicable prospectus supplement, if we exercise our deferral right, then during any extension period, we may not:

•  make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities issued by us that rank equally with or junior to the junior subordinated debt securities (except for partial payments of interest with respect to the junior subordinated debt securities); or

•  declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of our capital stock, other than:

•  any repurchase, redemption or other acquisition of shares of our capital stock (1) in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of any one or more employees, officers, directors, consultants or independent contractors, (2) in connection with a dividend reinvestment or stockholder stock purchase plan or (3) in connection with the issuance of our capital stock, or securities convertible into or exercisable for such capital stock, as consideration in an acquisition transaction entered into before the applicable extension period;

•  any exchange, redemption or conversion of any class or series of our capital stock, or any capital stock of one of our subsidiaries, for any other class or series of our capital stock, or of any class or series of our indebtedness for any class or series of our capital stock;

•  any purchase of fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of such capital stock or the securities being converted or exchanged;

•  any declaration of a dividend in connection with any rights plan, or the issuance of rights, stock or other property under any rights plan, or the redemption or repurchase of rights pursuant thereto;

•  payments by us under any guarantee agreement executed for the benefit of the trust preferred securities; or

•  any dividend in the form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks equally with or junior to such stock.

      The funds available to each trust for distribution to holders of its trust preferred securities will be limited to payments under the junior subordinated debt securities in which such trust invests the proceeds from the issuance and sale of its trust securities. See “Description of Junior Subordinated Debt Securities — Correspondence Between Junior Subordinated Debt Securities and Trust Preferred Securities.” If we do not make interest payments on such junior subordinated debt securities, the property trustee will not have funds available to pay distributions on the related trust preferred securities. To the extent a trust has funds legally available for the payment of such distributions and cash sufficient to make such payments, the payment of distributions is guaranteed by us on the basis set forth under “Description of Guarantees.”

      Distributions on the trust preferred securities will be payable to the holders of such securities as they appear on the register of the applicable trust on the relevant record dates, which shall be the 15th calendar day, whether or not a business day, before the distribution date.

Redemption or Exchange

Mandatory Redemption

      Upon the repayment or redemption, in whole or in part, of any junior subordinated debt securities, whether at stated maturity or upon earlier redemption as provided in the junior subordinated indenture, the property trustee will apply the proceeds from such repayment or redemption to redeem a like amount, as defined below, of the related trust securities, upon not less than 30 nor more than 60 days’ notice. The

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redemption price will equal the aggregate liquidation amount of such trust securities, as defined below, plus accumulated but unpaid distributions to the date of redemption and the amount of the premium, if any, paid by us upon the concurrent redemption of such junior subordinated debt securities. See “Description of Junior Subordinated Debt Securities — Redemption.” If less than all of any series of junior subordinated debt securities are to be repaid or redeemed on a redemption date, then the proceeds from such repayment or redemption will be allocated pro rata to the redemption of the related trust preferred securities and the common securities, except as set forth under “— Ranking of Common Securities.” The amount of premium, if any, paid by us upon the redemption or repayment of all or any part of any series of junior subordinated debt securities will be allocated pro rata to the redemption of the related trust preferred securities and common securities, except as set forth under “— Ranking of Common Securities.”

      We will have the right to redeem any series of junior subordinated debt securities:

•  on or after such date as may be specified in the applicable prospectus supplement, in whole at any time or in part from time to time; or

•  at any time, in whole but not in part, upon the occurrence of a tax event, investment company event or capital treatment event, in any case subject to receipt of any required prior approval by the Federal Reserve. See “Description of Junior Subordinated Debt Securities — Redemption.”

      Within 90 days after any tax event, investment company event or capital treatment event occurs and continues, we will have the right to redeem the junior subordinated debt securities in whole, but not in part, and thereby cause a mandatory redemption of the related trust preferred securities and common securities in whole, but not in part, at the redemption price described above. In the event:

•  a tax event, investment company event or capital treatment event occurs and continues, and

•  we do not elect to redeem the junior subordinated debt securities and thereby cause a mandatory redemption of the related trust preferred securities and common securities or to dissolve the related trust and cause the junior subordinated debt securities to be distributed to holders of such trust preferred securities and common securities in exchange therefor upon liquidation of the trust as described below,

the related trust preferred securities will remain outstanding.

      “Like Amount” means:

•  with respect to a redemption of any series of trust securities, trust securities of such series having a liquidation amount equal to that portion of the principal amount of junior subordinated debt securities to be contemporaneously redeemed in accordance with the junior subordinated indenture, the proceeds of which will be used to pay the redemption price of such trust securities; and

•  with respect to a distribution of junior subordinated debt securities to holders of any series of trust securities in exchange therefor in connection with a dissolution or liquidation of a trust, junior subordinated debt securities having a principal amount equal to the liquidation amount of the trust securities of the holder to whom such junior subordinated debt securities would be distributed.

      “Liquidation Amount” means the stated amount per trust security as set forth in the applicable prospectus supplement.

Distribution of Junior Subordinated Debt Securities

      We will have the right at any time to liquidate a trust and cause the junior subordinated debt securities to be distributed to the holders of the related trust securities. This may require the prior approval of the Federal Reserve. Upon liquidation of the trust and after satisfaction of the liabilities of creditors of such trust as provided by applicable law, the junior subordinated debt securities held by such trust will be distributed to the holders of the trust securities of such trust in exchange therefor.

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      After the liquidation date fixed for any distribution of junior subordinated debt securities for any series of trust preferred securities:

•  such series of trust preferred securities will no longer be deemed to be outstanding;

•  the depositary or its nominee, as the record holder of such series of trust preferred securities, will receive a registered global certificate or certificates representing the junior subordinated debt securities to be delivered upon such distribution;

•  any certificates representing such series of trust preferred securities not held by The Depository Trust Company, or “DTC,” or its nominee or surrendered to the exchange agent will be deemed to represent the junior subordinated debt securities to be delivered in the exchange, having a principal amount equal to the stated liquidation amount of such series of trust preferred securities, and bearing accrued and unpaid interest in an amount equal to the accrued and unpaid distributions on such series of trust preferred securities until such certificates are so surrendered for transfer or reissuance; and

•  all rights of the holders of such trust preferred securities will cease, except the right to receive junior subordinated debt securities, in the principal amount set forth above, upon such surrender.

Redemption Procedures

      Trust preferred securities redeemed on any redemption date will be redeemed at the redemption price, as described in the applicable prospectus supplement, with the proceeds from the contemporaneous redemption of the junior subordinated debt securities. Redemptions of trust preferred securities shall be made and the redemption price shall be payable on each redemption date only to the extent that the applicable trust has funds on hand available for the payment of such redemption price. See also “— Ranking of Common Securities.” Redemptions of trust preferred securities may require prior approval of the Federal Reserve.

      If a trust gives a notice of redemption of its trust preferred securities, then, by 12:00 noon, New York time, on the redemption date, to the extent funds are available, the property trustee will deposit irrevocably with DTC funds sufficient to pay the redemption price and will give DTC irrevocable instructions and authority to pay the redemption price to the holders of such trust preferred securities. If such trust preferred securities are no longer in book-entry form, the property trustee, to the extent funds are available, will irrevocably deposit with the paying agent for such trust preferred securities funds sufficient to pay the redemption price and will give such paying agent irrevocable instructions and authority to pay the redemption price to the holders thereof upon surrender of their certificates evidencing such trust preferred securities.

      Notwithstanding the foregoing, distributions payable on or before the redemption date for any trust preferred securities called for redemption will be payable to the holders of such trust preferred securities on the relevant record dates for the related distribution dates. If notice of redemption shall have been given and funds deposited as required, then upon the date of such deposit:

•  all rights of the holders of such trust preferred securities will cease, except the right to receive the redemption price on the redemption date, but without interest on such redemption price after the date of redemption; and

•  such trust preferred securities will cease to be outstanding.

      In the event that any date fixed for redemption of trust preferred securities is not a business day, then payment of the redemption price will be made on the next succeeding business day, without any interest or any other payment in respect of any such delay. In the event that payment of the redemption price in respect of trust preferred securities called for redemption is improperly withheld or refused and not paid either by the applicable trust or by us pursuant to the guarantee as described under “Description of Guarantees,” distributions on such trust preferred securities will continue to accrue at the then-applicable rate, from the redemption date originally established by such trust for such trust preferred securities to the

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date such redemption price is actually paid, in which case the actual payment date will be the date fixed for redemption for purposes of calculating the redemption price.

      If less than all of the trust securities issued by a trust are to be redeemed on a redemption date, then the aggregate liquidation amount of such trust securities to be redeemed shall be allocated pro rata to the trust preferred securities and the common securities based upon the relative liquidation amounts of such classes, except as set forth under “— Ranking of Common Securities.” The property trustee will select the particular trust preferred securities to be redeemed not more than 60 days before the redemption date from the outstanding trust preferred securities not previously called for redemption by any method the property trustee deems fair and appropriate, or, if the trust preferred securities are in book-entry only form, in accordance with the procedures of the depositary. The property trustee shall promptly notify the securities registrar in writing of the trust preferred securities selected for redemption and the liquidation amount to be redeemed. For all purposes of the applicable trust agreement, unless the context otherwise requires, all provisions relating to the redemption of trust preferred securities shall relate, in the case of any trust preferred securities redeemed or to be redeemed only in part, to the portion of the aggregate liquidation amount of trust preferred securities which has been or is to be redeemed.

      Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to the registered address of each holder of trust securities to be redeemed.

      Subject to applicable law, including, without limitation, United States federal securities laws, we or our subsidiaries may at any time and from time to time purchase outstanding trust preferred securities by tender, in the open market or by private agreement.

Ranking of Trust Securities

      Payment of distributions on, and the redemption price of and the liquidation distribution in respect of, trust preferred securities and common securities, as applicable, shall be made pro rata based on the relative liquidation amount of such trust preferred securities and common securities, except that upon certain events of default under the applicable trust agreement relating to payment defaults on the junior subordinated debt securities, the rights of the holders of the common securities to payment in respect of distributions and payments upon liquidation, redemption and otherwise will be subordinated to the rights of the holders of the trust preferred securities.

      In the case of any event of default under a trust agreement resulting from an event of default under the junior subordinated indenture, we, as holder of a trust’s common securities, will be deemed to have waived any right to act with respect to any such event of default under such trust agreement until all such events of default have been cured, waived or otherwise eliminated. Until all events of default under such trust agreement have been so cured, waived or otherwise eliminated, the property trustee shall act solely on behalf of the holders of such trust preferred securities and not on our behalf, and only the holders of such trust preferred securities will have the right to direct the property trustee to act on their behalf.

Liquidation Distribution Upon Dissolution

      Pursuant to a trust agreement, a trust shall automatically dissolve upon expiration of its term and shall dissolve on the first to occur of:

•  certain events of bankruptcy, dissolution or liquidation of Popular;

•  the written direction from us, as holder of the trust’s common securities, to the property trustee to dissolve the trust and distribute a like amount of junior subordinated debt securities to the holders of its trust securities, subject to our having received any required prior approval of the Federal Reserve;

•  redemption of all of its trust preferred securities as described under “— Redemption or Exchange — Mandatory Redemption;” and

•  the entry of an order for the dissolution of the trust by a court of competent jurisdiction.

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      Except as set forth in the next sentence, if an early dissolution occurs as described above, the property trustee will liquidate the trust as expeditiously as possible by distributing, after satisfaction of liabilities to creditors of such trust as provided by applicable law, to the holders of such trust securities a like amount of junior subordinated debt securities. If the property trustee determines that such distribution is not practical or if the early dissolution occurs as a result of the redemption of trust preferred securities, then the holders will be entitled to receive out of the assets of such trust available for distribution to holders and after satisfaction of liabilities to creditors of such trust as provided by applicable law, an amount equal to the aggregate liquidation amount plus accrued and unpaid distributions to the date of payment. If such trust has insufficient assets available to pay in full such aggregate liquidation distribution, then the amounts payable directly by such trust on its trust securities shall be paid on a pro rata basis, except as set forth under “— Ranking of Common Securities.”

Events of Default; Notice

      Any one of the following events constitutes an event of default under the applicable trust agreement, or a “trust event of default,” regardless of the reason for such event of default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body:

•  the occurrence of an event of default under the junior subordinated indenture with respect to the junior subordinated debt securities held by such trust (see “Description of Junior Subordinated Debt Securities — Events of Default, Waiver and Notice”); or

•  the default by the property trustee in the payment of any distribution on any trust security of such trust when such distribution becomes due and payable, and continuation of such default for a period of 30 days; or

•  the default by the property trustee in the payment of any redemption price of any trust security of such trust when such redemption price becomes due and payable; or

•  the failure to perform or the breach, in any material respect, of any other covenant or warranty of the trustees in the applicable trust agreement for 90 days after the defaulting trustee or trustees have received written notice of the failure to perform or breach of warranty in the manner specified in such trust agreement; or

•  the occurrence of certain events of bankruptcy or insolvency with respect to the property trustee and our failure to appoint a successor property trustee within 90 days.

      Within 90 days after any event of default actually known to the property trustee occurs, the property trustee will transmit notice of such event of default to the holders of the trust securities and to the administrative trustees, unless such event of default shall have been cured or waived. We, as depositor, and the administrative trustees are required to file annually with the property trustee a certificate as to whether or not we or they are in compliance with all the conditions and covenants applicable to us and to them under the trust agreement.

      The existence of an event of default under the trust agreement, in and of itself, with respect to the junior subordinated debt securities does not entitle the holders of the related trust preferred securities to accelerate the maturity of such debt securities.

Removal of Trustees

      Unless an event of default under the junior subordinated indenture has occurred and is continuing, the property trustee and the Delaware trustee of a trust may be removed at any time by the holder of the common securities of such trust. The property trustee and the Delaware trustee may be removed by the holders of a majority in liquidation amount of the outstanding trust preferred securities of such trust for cause or if an event of default under the junior subordinated indenture has occurred and is continuing. In no event will the holders of such trust preferred securities have the right to vote to appoint, remove or

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replace the administrative trustees, which voting rights are vested exclusively in us, as the holder of the common securities. No resignation or removal of a trustee and no appointment of a successor trustee shall be effective until the acceptance of appointment by the successor trustee in accordance with the provisions of the trust agreement.

Co-Trustees and Separate Property Trustee

      Unless an event of default under the junior subordinated indenture shall have occurred and be continuing, at any time or from time to time, for the purpose of meeting the legal requirements of the Trust Indenture Act or of any jurisdiction in which any part of the trust property may at the time be located, we, as the holder of the common securities, and the administrative trustees shall have the power to appoint one or more persons either to act as a co-trustee, jointly with the property trustee, of all or any part of such trust property, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such person or persons in such capacity any property, title, right or power deemed necessary or desirable, subject to the provisions of such trust agreement. If an event of default under the junior subordinated indenture has occurred and is continuing, the property trustee alone shall have power to make such appointment.

Merger or Consolidation of Trustees

      Any person into which the property trustee or the Delaware trustee, if not a natural person, may be merged or converted or with which it may be consolidated, or any person resulting from any merger, conversion or consolidation to which such trustee shall be a party, or any person succeeding to all or substantially all the corporate trust business of such trustee, shall be the successor of such trustee under the trust agreement, provided such person shall be otherwise qualified and eligible.

Mergers, Consolidations, Amalgamations or Replacements of the Trusts

      A trust may not merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to us or any other person, except as described below or as otherwise described in the applicable trust agreement. Such trust may, at our request, with the consent of the administrative trustees but without the consent of the holders of the trust preferred securities, the property trustee or the Delaware trustee, merge with or into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease its properties and assets substantially as an entirety to, a trust organized as such under the laws of any state, the District of Columbia or the Commonwealth of Puerto Rico if:

•  such successor entity either:

•  expressly assumes all of the obligations of such trust with respect to the trust preferred securities, or

•  substitutes for the trust preferred securities other securities having substantially the same terms as the trust preferred securities, or the “successor securities,” so long as the successor securities rank the same as the trust preferred securities in priority with respect to distributions and payments upon liquidation, redemption and otherwise;

•  we expressly appoint a trustee of such successor entity possessing the same powers and duties as the property trustee as the holder of the junior subordinated debt securities;

•  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not cause the trust preferred securities, including any successor securities, to be downgraded by any nationally recognized statistical rating organization;

•  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the trust preferred securities, including any successor securities, in any material respect;

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•  such successor entity has a purpose substantially identical to that of such trust;

•  prior to such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, we have received an opinion from independent counsel to such trust experienced in such matters to the effect that:

•  such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease does not adversely affect the rights, preferences and privileges of the holders of the trust preferred securities, including any successor securities, in any material respect, and

•  following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, neither such trust nor such successor entity will be required to register as an investment company under the Investment Company Act; and

•  we or any permitted successor or assignee owns all of the common securities of such successor entity and guarantees the obligations of such successor entity under the successor securities at least to the extent provided by the applicable guarantee.

      Notwithstanding the foregoing, a trust may not, except with the consent of holders of 100% in liquidation amount of its trust preferred securities, consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or lease its properties and assets substantially as an entirety to any other entity or permit any other entity to consolidate, amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger, replacement, conveyance, transfer or lease would cause the trust or the successor entity to be classified as other than a grantor trust for United States federal or Puerto Rico income tax purposes.

Voting Rights; Amendment of the Trust Agreement

      Except as provided below and under “Description of Guarantees — Amendments and Assignment” and as otherwise required by law and the applicable trust agreement, the holders of trust preferred securities will have no voting rights.

      We and the administrative trustees may amend a trust agreement without the consent of the holders of its trust preferred securities, unless such amendment will materially and adversely affect the interests of any holder of trust preferred securities, to:

•  cure any ambiguity, correct or supplement any provisions in such trust agreement that may be inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under such trust agreement, which may not be inconsistent with the other provisions of such trust agreement; or

•  modify, eliminate or add to any provisions of such trust agreement to such extent as shall be necessary to ensure that such trust will be classified for United States federal or Puerto Rico income tax purposes as a grantor trust at all times that any trust securities are outstanding or to ensure that such trust will not be required to register as an “investment company” under the Investment Company Act.

      We, the administrative trustees and the property trustee may generally amend a trust agreement with:

•  the consent of holders representing not less than a majority, based upon liquidation amounts, of the outstanding trust preferred securities; and

•  receipt by the trustees of an opinion of counsel to the effect that such amendment or the exercise of any power granted to the trustees in accordance with such amendment will not affect such trust’s status as a grantor trust for United States federal or Puerto Rico income tax purposes or the trust’s exemption from status as an “investment company” under the Investment Company Act.

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      However, without the consent of each holder of trust securities, a trust agreement may not be amended to:

•  change the amount or timing of any distribution required to be made in respect of such trust securities as of a specified date; or

•  restrict the right of a holder of such trust securities to institute a suit for the enforcement of any such payment on or after such date.

      So long as the property trustee of a trust holds any junior subordinated debt securities, the trustees may not, without obtaining the prior approval of the holders of a majority in aggregate liquidation amount of all outstanding trust preferred securities of such trust:

•  direct the time, method and place of conducting any proceeding for any remedy available to the junior subordinated trustee, or executing any trust or power conferred on the junior subordinated trustee with respect to such junior subordinated debt securities;

•  waive any past default that is waivable under the junior subordinated indenture;

•  exercise any right to rescind or annul a declaration that the principal of all the junior subordinated debt securities is due and payable; or

•  consent to any amendment, modification or termination of the junior subordinated indenture or such junior subordinated debt securities, where such consent shall be required.

      If a consent under the junior subordinated indenture would require the consent of each holder of junior subordinated debt securities affected thereby, no such consent may be given by the property trustee of any trust without the prior consent of each holder of the trust preferred securities of such trust. The property trustee may not revoke any action previously authorized or approved by a vote of the holders of the trust preferred securities except by subsequent vote of the holders of the trust preferred securities. The property trustee will notify each holder of the trust preferred securities of any notice of default with respect to the junior subordinated debt securities. In addition to obtaining the foregoing approvals of the holders of the trust preferred securities, before taking any of the foregoing actions, the trustees will obtain an opinion of counsel experienced in such matters to the effect that such action would not cause such trust to be classified as other than a grantor trust for United States federal or Puerto Rico income tax purposes.

      Any required approval of holders of trust preferred securities may be given at a meeting of holders of trust preferred securities convened for such purpose or pursuant to written consent. The property trustee will cause a notice of any meeting at which holders of trust preferred securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be given to each holder of record of trust preferred securities in the manner set forth in the applicable trust agreement.

      No vote or consent of the holders of trust preferred securities will be required for a trust to redeem and cancel its trust preferred securities in accordance with the applicable trust agreement.

      Notwithstanding that holders of trust preferred securities are entitled to vote or consent under any of the circumstances described above, any of the trust preferred securities that are owned by us or our affiliates or the trustees or any of their affiliates, shall, for purposes of such vote or consent, be treated as if they were not outstanding.

Payment and Paying Agent

      Payments on the trust preferred securities shall be made to the depositary, which shall credit the relevant accounts at the depositary on the applicable distribution dates. If any trust preferred securities are not held by the depositary, such payments shall be made by check mailed to the address of the holder as such address shall appear on the register.

      Unless otherwise specified in the applicable prospectus supplement, the paying agent shall initially be Banco Popular de Puerto Rico and any co-paying agent chosen by the property trustee and acceptable to

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us and to the administrative trustees. The paying agent shall be permitted to resign as paying agent upon 30 days’ written notice to the administrative trustees and to the property trustee. In the event that Banco Popular de Puerto Rico shall no longer be the paying agent, the property trustee will appoint a successor to act as paying agent, which will be a bank or trust company acceptable to the administrative trustees and to us.

Registrar and Transfer Agent

      Unless otherwise specified in the applicable prospectus supplement, Banco Popular de Puerto Rico Trust Division will act as registrar and transfer agent for the trust preferred securities.

      Registration of transfers of trust preferred securities will be effected without charge by or on behalf of a trust, but upon payment of any tax or other governmental charges that may be imposed in connection with any transfer or exchange. A trust will not be required to register or cause to be registered the transfer of its trust preferred securities after such trust preferred securities have been called for redemption.

Information Concerning the Property Trustee

      Other than during the occurrence and continuance of an event of default under the trust agreement, the property trustee undertakes to perform only the duties that are specifically set forth in the applicable trust agreement. After an event of default under the trust agreement, the property trustee must exercise the same degree of care and skill as a prudent individual would exercise or use in the conduct of his or her own affairs. Subject to this provision, the property trustee is under no obligation to exercise any of the powers vested in it by the applicable trust agreement at the request of any holder of trust preferred securities unless it is offered indemnity satisfactory to it by such holder against the costs, expenses and liabilities that might be incurred. If no event of default under the trust agreement has occurred and is continuing and the property trustee is required to decide between alternative courses of action, construe ambiguous provisions in such trust agreement or is unsure of the application of any provision of such trust agreement, and the matter is not one upon which holders of trust preferred securities are entitled under the applicable trust agreement to vote, then the property trustee will take any action that we direct. If we do not provide direction, the property trustee may take any action that it deems advisable and in the best interests of the holders of the trust securities and will have no liability except for its own bad faith, negligence or willful misconduct.

      We and our affiliates maintain certain accounts and other banking relationships with the property trustee and its affiliates in the ordinary course of business.

Trust Expenses

      Pursuant to the applicable trust agreement, we, as depositor, agree to pay:

•  all debts and other obligations of the trust (other than with respect to the trust preferred securities);

•  all costs and expenses of the trust, including costs and expenses relating to the organization of the trust, the fees and expenses of the trustees and the cost and expenses relating to the operation of the trust; and

•  any and all taxes and costs and expenses with respect thereto, other than United States withholding taxes, to which the trust might become subject.

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Governing Law

      The trust agreements will be governed by and construed in accordance with the laws of Delaware.

Miscellaneous

      The administrative trustees are authorized and directed to conduct the affairs of and to operate the applicable trust in such a way that it will not be required to register as an “investment company” under the Investment Company Act or characterized as other than a grantor trust for United States federal or Puerto Rico income tax purposes. The administrative trustees are authorized and directed to conduct their affairs so that the junior subordinated debt securities will be treated as indebtedness of Popular for Puerto Rico income tax purposes.

      In this regard, we and the administrative trustees are authorized to take any action, not inconsistent with applicable law, the certificate of trust of the applicable trust or the applicable trust agreement, that we and the administrative trustees determine to be necessary or desirable to achieve such end, as long as such action does not materially and adversely affect the interests of the holders of the applicable trust preferred securities.

      Holders of the trust preferred securities have no preemptive or similar rights.

      No trust may borrow money or issue debt or mortgage or pledge any of its assets.

COMMON SECURITIES

      In connection with the issuance of trust preferred securities, the applicable trust will issue one series of common securities. The prospectus supplement relating to such issuance will specify the terms of such common securities, including distributions, redemption, voting and liquidation rights. Except for voting rights, the terms of the common securities will be substantially identical to the terms of the trust preferred securities. The common securities will rank equally, and payments will be made on the common securities pro rata, with the trust preferred securities, except as set forth under “Description of Trust Preferred Securities — Ranking of Common Securities.” Except in limited circumstances, the common securities of a trust carry the right to vote to appoint, remove or replace any of the trustees of that trust. We will own, directly or indirectly, all of the common securities of the trusts.

DESCRIPTION OF GUARANTEES

      Set forth below is a summary of information concerning the guarantee that we will execute and deliver for the benefit of the holders of trust preferred securities when a trust issues trust securities. Each trust preferred securities guarantee will be qualified as an indenture under the Trust Indenture Act. The guarantee trustee for purposes of the Trust Indenture Act will be named in the applicable prospectus supplement. The guarantee trustee will hold the trust preferred securities guarantee for the benefit of the holders of the trust preferred securities.

General

      Under a trust preferred securities guarantee, we will irrevocably and unconditionally agree to pay in full to the holders of the trust securities, except to the extent paid by the applicable trust, as and when due, regardless of any defense, right of set-off or counterclaim which such trust may have or assert, the following payments, which are referred to as “guarantee payments,” without duplication:

•  any accrued and unpaid distributions that are required to be paid on the trust preferred securities, to the extent such trust has funds available for distributions;

•  the redemption price, plus all accrued and unpaid distributions relating to any trust preferred securities called for redemption by such trust, to the extent such trust has funds available for redemptions; and

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•  upon a voluntary or involuntary dissolution, winding-up or termination of such trust, other than in connection with the distribution of junior subordinated debt securities to the holders of trust preferred securities or the redemption of all of the trust preferred securities, the lesser of:

•  the aggregate of the liquidation amount and all accrued and unpaid distributions on the trust preferred securities to the date of payment to the extent such trust has funds available; and

•  the amount of assets of such trust remaining for distribution to holders of the trust preferred securities in liquidation of such trust.

The redemption price and liquidation amount will be fixed at the time the trust preferred securities are issued.

      Our obligation to make a guarantee payment may be satisfied by direct payment of the required amounts to the holders of trust preferred securities or by causing the applicable trust to pay such amounts to such holders.

      A trust preferred securities guarantee will not apply to any payment of distributions except to the extent a trust shall have funds available for such payments. If we do not make interest payments on the junior subordinated debt securities purchased by a trust, such trust will not pay distributions on the trust preferred securities and will not have funds available for such payments. See “— Status of the Guarantees.” Because we are a holding company, our rights to participate in the assets of any of our subsidiaries upon the subsidiary’s liquidation or reorganization will be subject to the prior claims of the subsidiary’s creditors except to the extent that we may ourselves be a creditor with recognized claims against the subsidiary. Except as otherwise described in the applicable prospectus supplement, the trust preferred securities guarantees do not limit the incurrence or issuance by us of other secured or unsecured debt.

      A trust preferred securities guarantee, when taken together with our obligations under the junior subordinated debt securities, the junior subordinated indenture and the applicable trust agreement, including our obligations to pay costs, expenses, debts and liabilities of the applicable trust, other than those relating to trust securities, will provide a full and unconditional guarantee on a subordinated basis of payments due on the trust preferred securities.

      Unless otherwise specified in the applicable prospectus supplement, we will also agree separately to irrevocably and unconditionally guarantee the obligations of each trust with respect to the common securities to the same extent as the trust preferred securities guarantees.

Status of the Guarantees

      A guarantee will be unsecured and will rank:

•  subordinate and junior in right of payment to all our other liabilities in the same manner as the junior subordinated debt securities as set forth in the junior subordinated indenture; and

•  equally with all other trust preferred security guarantees that we issue.

      A guarantee will constitute a guarantee of payment and not of collection, which means that the guaranteed party may sue the guarantor to enforce its rights under the guarantee without suing any other person or entity. A guarantee will be held by the guarantee trustee for the benefit of the holders of the related trust securities. A guarantee will be discharged only by payment of the guarantee payments in full to the extent not paid by the trust or upon the distribution of the junior subordinated debt securities.

Amendments and Assignment

      A trust preferred securities guarantee may be amended only with the prior approval of the holders of not less than a majority in aggregate liquidation amount of the outstanding relevant trust preferred securities. No vote will be required, however, for any changes that do not adversely affect the rights of holders of such trust preferred securities in any material respect. All guarantees and agreements contained

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in a trust preferred securities guarantee will bind our successors, assignees, receivers, trustees and representatives and will be for the benefit of the holders of the trust preferred securities then outstanding.

Termination of the Guarantees

      A trust preferred securities guarantee will terminate (1) upon full payment of the redemption price of all related trust preferred securities, (2) upon distribution of the junior subordinated debt securities to the holders of the related trust securities or (3) upon full payment of the amounts payable in accordance with the applicable trust agreement upon liquidation of the trust. A trust preferred securities guarantee will continue to be effective or will be reinstated, as the case may be, if at any time any holder of trust preferred securities must restore payment of any sums paid under the trust preferred securities or the trust preferred securities guarantee.

Events of Default

      An event of default under a trust preferred securities guarantee will occur if we fail to perform any payment obligation or other obligation under such guarantee.

      The holders of a majority in liquidation amount of the trust preferred securities of a trust have the right to direct the time, method and place of conducting any proceeding for any remedy available to the guarantee trustee of such trust in respect of the applicable trust preferred securities guarantee or to direct the exercise of any trust or power conferred upon the guarantee trustee under the guarantee. Any holder of trust preferred securities may institute a legal proceeding directly against us to enforce the guarantee trustee’s rights and our obligations under the applicable trust preferred securities guarantee, without first instituting a legal proceeding against such trust, the guarantee trustee or any other person or entity.

      As guarantor, we are required to file annually with the guarantee trustee a certificate as to whether or not we are in compliance with all applicable conditions and covenants under the trust preferred securities guarantee.

Information Concerning the Guarantee Trustee

      Prior to the occurrence of an event of default relating to a trust preferred securities guarantee, the guarantee trustee is required to perform only the duties that are specifically set forth in such trust preferred securities guarantee. Following the occurrence of an event of default, the guarantee trustee will exercise the same degree of care as a prudent individual would exercise in the conduct of his or her own affairs. Provided that the foregoing requirements have been met, the guarantee trustee is under no obligation to exercise any of the powers vested in it by the trust preferred securities guarantee at the request of any holder of trust preferred securities unless offered indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred thereby.

      We and our affiliates maintain certain accounts and other banking relationships with the guarantee trustee and its affiliates in the ordinary course of business.

Governing Law

      The trust preferred securities guarantees will be governed by and construed in accordance with the internal laws of the Commonwealth of Puerto Rico.

RELATIONSHIP AMONG TRUST PREFERRED SECURITIES,

JUNIOR SUBORDINATED DEBT SECURITIES AND GUARANTEES

      As set forth in the applicable trust agreement, the sole purpose of a trust is to issue the trust securities and to invest the proceeds in junior subordinated debt securities.

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      As long as payments of interest and other payments are made when due on a series of junior subordinated debt securities, those payments will be sufficient to cover the distributions and payments due on the related trust securities. This is due to the following factors:

•  the aggregate principal amount of such junior subordinated debt securities will be equal to the sum of the aggregate stated liquidation amount of such trust securities;

•  the interest rate and the interest and other payment dates on such junior subordinated debt securities will match the distribution rate and distribution and other payment dates for such trust securities;

•  under the junior subordinated indenture, we will pay, and the applicable trust will not be obligated to pay, directly or indirectly, all costs, expenses, debts and obligations of such trust, other than those relating to such trust securities; and

•  the applicable trust agreement further provides that the trustees may not cause or permit the trust to engage in any activity that is not consistent with the purposes of the trust.

      To the extent that funds are available, we guarantee payments of distributions and other payments due on trust preferred securities to the extent described in this prospectus. If we do not make interest payments on a series of junior subordinated debt securities, the related trust will not have sufficient funds to pay distributions on the trust preferred securities. A trust preferred securities guarantee is a subordinated guarantee in relation to the trust preferred securities. A trust preferred securities guarantee does not apply to any payment of distributions unless and until such trust has sufficient funds for the payment of such distributions. See “Description of Guarantees.”

      We have the right to set off any payment that we are otherwise required to make under the junior subordinated indenture with any payment that we have previously made or are concurrently on the date of such payment making under a related guarantee.

      A trust preferred securities guarantee covers the payment of distributions and other payments on the trust preferred securities of a trust only if and to the extent that we have made a payment of interest or principal or other payments on the junior subordinated debt securities. A trust preferred securities guarantee, when taken together with our obligations under the junior subordinated debt securities and the junior subordinated indenture and our obligations under the applicable trust agreement, will provide a full and unconditional guarantee of distributions, redemption payments and liquidation payments on the related trust preferred securities.

      If we fail to make interest or other payments on the junior subordinated debt securities when due, taking account of any extension period, the applicable trust agreement allows the holders of the related trust preferred securities to direct the property trustee to enforce its rights under the junior subordinated debt securities. If the property trustee fails to enforce these rights, any holder of such trust preferred securities may directly sue us to enforce such rights without first suing the property trustee or any other person or entity. See “Description of Trust Preferred Securities — Voting Rights; Amendment of the Trust Agreement.”

      A holder of trust preferred securities may institute a direct action if we fail to make interest or other payments on the junior subordinated debt securities when due, taking account of any extension period. A direct action may be brought without first:

•  directing the property trustee to enforce the terms of the junior subordinated debt securities, or

•  suing us to enforce the property trustee’s rights under the junior subordinated debt securities. (Section 508)

In connection with such direct action, we will be subrogated to the rights of such holder of trust preferred securities under the applicable trust agreement to the extent of any payment made by us to such holder of trust preferred securities. Consequently, we will be entitled to payment of amounts that a holder of trust

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preferred securities receives in respect of an unpaid distribution to the extent that such holder receives or has already received full payment relating to such unpaid distribution from such trust.

      We acknowledge that the guarantee trustee will enforce the trust preferred securities guarantees on behalf of the holders of the trust preferred securities. If we fail to make payments under the trust preferred securities guarantee, the holders of the related trust preferred securities may direct the guarantee trustee to enforce its rights under such guarantee. If the guarantee trustee fails to enforce the trust preferred securities guarantee, any holder of trust preferred securities may directly sue us to enforce the guarantee trustee’s rights under the trust preferred securities guarantee. Such holder need not first sue the trust, the guarantee trustee, or any other person or entity. A holder of trust preferred securities may also directly sue us to enforce such holder’s right to receive payment under the trust preferred securities guarantees. Such holder need not first direct the guarantee trustee to enforce the terms of the trust preferred securities guarantee or sue such trust or any other person or entity.

      We and each trust believe that the above mechanisms and obligations, taken together, are equivalent to a full and unconditional guarantee by us of payments due on the trust preferred securities. See “Description of Guarantees — General.”

Limited Purpose of Trust

      Each trust’s preferred securities evidence a beneficial interest in such trust, and such trust exists for the sole purpose of issuing its trust preferred securities and common securities and investing the proceeds in junior subordinated debt securities issued by Popular. A principal difference between the rights of a holder of a trust preferred security and a holder of a junior subordinated debt security is that a holder of a junior subordinated debt security is entitled to receive from us the principal amount of and interest accrued on such junior subordinated debt securities, while a holder of trust preferred securities is entitled to receive distributions from such trust, or from us under the related guarantee, if and to the extent such trust has funds available for the payment of such distributions.

Rights Upon Dissolution

      Upon any voluntary or involuntary dissolution, winding up or liquidation of a trust involving the liquidation of the junior subordinated debt securities, after satisfaction of liabilities to creditors of such trust, the holders of the trust preferred securities of such trust will be entitled to receive, out of the assets held by such trust, the liquidation distribution in cash. See “Description of Trust Preferred Securities — Liquidation Distribution Upon Termination.” Upon any voluntary or involuntary liquidation or bankruptcy of Popular, the property trustee, as holder of the junior subordinated debt securities, would be a subordinated creditor of Popular, subordinated in right of payment to all Senior Debt as set forth in the junior subordinated indenture, but entitled to receive payment in full of principal and interest before any of our stockholders receive distributions. Since we are the guarantor under the guarantee and have agreed to pay for all costs, expenses and liabilities of each trust, other than such trust’s obligations to the holders of its trust preferred securities, the positions of a holder of such trust preferred securities and a holder of such junior subordinated debt securities relative to other creditors and to our stockholders in the event of liquidation or bankruptcy are expected to be substantially the same.

PLAN OF DISTRIBUTION

      We and the trusts may sell the securities offered under this prospectus through agents, through underwriters or dealers or directly to one or more purchasers. We may also offer the securities in exchange for our outstanding indebtedness.

      Underwriters, dealers and agents that participate in the distribution of the securities offered under this prospectus may be underwriters as defined in the Securities Act of 1933, and any discounts or commissions received by them from us and any profit on the resale of the offered securities by them may be treated as underwriting discounts and commissions under the Securities Act. Any underwriters or agents will be

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identified and their compensation, including any underwriting discount or commission, will be described in the applicable prospectus supplement. The prospectus supplement will also describe other terms of the offering, including the initial public offering price, any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which the offered securities may be listed. The maximum discount or commission that may be received by any member of the National Association of Securities Dealers, Inc. for sales of securities pursuant to this prospectus will not exceed 8.00%.

      The distribution of the securities offered under this prospectus may occur from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to the prevailing market prices or at negotiated prices.

      We may determine the price or other terms of the securities offered under this prospectus by use of an electronic auction. We will describe in the applicable prospectus supplement how any auction will be conducted to determine the price or any other terms of the securities, how potential investors may participate in the auction and, where applicable, the nature of the underwriters’ obligations with respect to the auction.

      If the securities offered under this prospectus are issued in exchange for our outstanding securities, the applicable prospectus supplement will set forth the terms of the exchange, the identity of and the terms of sale of the securities offered under this prospectus by the selling security holders.

      If the applicable prospectus supplement indicates, we or a trust will authorize dealers or agents to solicit offers by institutions to purchase offered securities under contracts that provide for payment and delivery on a future date. We or a trust must approve all institutions, but they may include, among others:

•  commercial and savings banks;

•  insurance companies;

•  pension funds;

•  investment companies; and

•  educational and charitable institutions.

The institutional purchaser’s obligations under the contract are only subject to the condition that the purchase of the offered securities at the time of delivery is allowed by the laws that govern the purchaser. The dealers and agents will not be responsible for the validity or performance of the contracts.

      One of our wholly-owned subsidiaries, Popular Securities, Inc., may participate as an underwriter in offerings of the securities offered under this prospectus. If this occurs, the offering will comply with Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. The underwriters, agents and dealers participating in the sale of the securities offered by this prospectus will not confirm sales to accounts over which they exercise discretionary authority without the prior specific written approval of the customer in accordance with Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc.

      Because the National Association of Securities Dealers, Inc. may view the trust preferred securities as interests in a direct participation program, this offering will be made in compliance with the applicable provisions of Rule 2810 of the Conduct Rules of the National Association of Securities Dealers, Inc.

      This prospectus, together with any applicable prospectus supplement, may also be used by our affiliates, including Popular Securities, Inc., in connection with offers and sales of the offered securities in market-making transactions at negotiated prices related to prevailing market prices at the time of sale. Such affiliates may act as principals or agents in such transactions. None of our affiliates have any obligation to make a market in any of the offered securities and each may discontinue any market-making activities at any time without notice, at its sole discretion.

      We and the trusts may have agreements with the underwriters, dealers and agents, including our subsidiaries mentioned above, to indemnify them against certain civil liabilities, including liabilities under

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the Securities Act, or to contribute with respect to payments which the underwriters, dealers or agents may be required to make as a result of those certain civil liabilities.

      If we offer bearer debt securities under this prospectus, each underwriter, dealer and agent that participates in the distribution of any original issuance of bearer debt securities will agree not to offer, sell or deliver bearer debt securities to a United States citizen or to any person within the United States or Puerto Rico, unless federal and Puerto Rico law permits otherwise.

      When we or a trust issue securities, they may be new securities with no established trading market. If we or a trust sell a security offered by this prospectus to an underwriter for public offering and sale, the underwriter may make a market for that security, but the underwriter will not be obligated to do so and could discontinue any market making without notice at any time. Therefore, we cannot give any assurances to you concerning the liquidity of any security offered by this prospectus.

      Underwriters and agents and their affiliates may be customers of, engage in transactions with, or perform services for us or our subsidiaries in the ordinary course of their businesses. In connection with the distribution of securities offered under this prospectus, we may enter into swap or other hedging transactions with, or arranged by, underwriters or agents or their affiliates. These underwriters or agents or their affiliates may receive compensation, trading gain or other benefits from these transactions.

LEGAL OPINIONS

      The validity of the securities offered by this prospectus will be passed upon for Popular by Brunilda Santos de Alvarez, Esq., Executive Vice President and General Counsel, or another of our lawyers, or by any other of our counsel named in the applicable prospectus supplement. Richards, Layton & Finger, P.A., Wilmington, Delaware, special Delaware counsel for the trusts, will pass upon certain legal matters for the trusts. Certain legal matters will be passed upon for any underwriters or agents by counsel named in the applicable prospectus supplement. As of the date of this prospectus, Brunilda Santos de Alvarez, Esq. owns, directly or indirectly, 7,870 shares of common stock of Popular pursuant to Popular’s employee stock ownership plan or otherwise. She also held stock options to acquire 28,980 shares of common stock of Popular pursuant to Popular’s stock option plan.

EXPERTS

      The financial statements incorporated in this Prospectus by reference to Popular, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2002 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

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PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 14. Other Expenses of Issuance and Distribution

SEC registration fee	$	24,270
NASD fee		30,500
Legal fees and expenses		200,000	*
Trustees’ fees and expenses		19,000	*
Accounting fees and expenses		45,000	*
Rating agency fees		150,000	*
Printing expenses		37,500	*
Miscellaneous expenses		18,730	*
Total	$	525,000	*

*  Estimate.

Item 15. Indemnification of Directors and Officers

      (a) Article ELEVENTH of the Restated Certificate of Incorporation of Popular, Inc. provides the following:

      (1) Popular shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of Popular) by reason of the fact that he is or was a director, officer, employee or agent of Popular, or is or was serving at the written request of Popular as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Popular, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of Popular and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

      (2) Popular shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of Popular to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of Popular, or is or was serving at the written request of Popular as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of Popular, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to Popular unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.

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      (3) To the extent that a director, officer, employee or agent of Popular has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in paragraph 1 or 2 of this Article ELEVENTH, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection therewith.

      (4) Any indemnification under paragraph 1 or 2 of this Article ELEVENTH (unless ordered by a court) shall be made by Popular only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth therein. Such determination shall be made (a) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (c) by the stockholders.

      (5) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by Popular in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by Popular as authorized in this Article ELEVENTH.

      (6) The indemnification provided by this Article ELEVENTH shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any statute, by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

      (7) By action of its Board of Directors, notwithstanding any interest of the directors in the action, Popular may purchase and maintain insurance, in such amounts as the Board of Directors deems appropriate, on behalf of any person who is or was a director, officer, employee or agent of Popular, or is or was serving at the written request of Popular as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not Popular would have the power or would be required to indemnify him against such liability under the provisions of this Article ELEVENTH or of the General Corporation Law of the Commonwealth of Puerto Rico or of any other state of the United States or foreign country as may be applicable.

      (b) Article 1.02(B)(6) of the Puerto Rico General Corporation Act (the “PR-GCA”) provides that a corporation may include in its certificate of incorporation a provision eliminating or limiting the personal liability of members of its board of directors or governing body for breach of a director’s fiduciary duty of care. However, no such provision may eliminate or limit the liability of a director for breaching his duty of loyalty, failing to act in good faith, engaging in intentional misconduct or knowingly violating a law, paying an unlawful dividend or approving an unlawful stock repurchase or obtaining an improper personal benefit.

      (c) Article 4.08 of the PR-GCA authorizes a Puerto Rico Corporation authorizes a Puerto Rico corporation to indemnify its officers and directors against liabilities arising out of pending or threatened actions, suits or proceedings to which such officers and directors may be made parties by reason of being officers or directors. Such rights of indemnification are not exclusive of any other rights to which such officers or directors may be entitled under any by-law, agreement, vote of stockholders or otherwise.

      (d) Popular, Inc. maintains directors’ and officers’ liability insurance.

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Item 16.     Exhibits

Exhibit
No.		Description
	1	Form of Underwriting Agreement
	4.1	Form of Junior Subordinated Indenture between Popular, Inc. and Bank One Trust Company, N.A.
	4.2	Form of Certificate of Junior Subordinated Debenture
	4.3	Certificate of Trust of each of Popular Capital Trust I, Popular Capital Trust II, Popular Capital Trust III, and Popular Capital Trust IV (the “Trusts”)
	4.4	Declaration of Trust and Trust Agreement of each of the Trusts
	4.5	Form of Amended and Restated Declaration of Trust and Trust Agreement for each of the Trusts
	4.6	Form of Preferred Security Certificate for each of the Trusts (included as part of Exhibit 4.5)
	4.7	Form of Preferred Securities Guarantee Agreement for each of the Trusts
	5.1	Opinion of Brunilda Santos de Alvarez, General Counsel to Popular, Inc.
	5.2	Opinion of Richards, Layton & Finger, P.A. special Delaware counsel to the Trusts, as to the validity of the Trust Preferred Securities to be issued by the Trusts.
	12	Computations of ratio of earnings to fixed charges and ratio of earnings to fixed charges and Preferred Stock dividends (incorporated by reference to Exhibit 12.1 to Popular, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003)
	23.1	Consent of PricewaterhouseCoopers LLP
	23.2	Consent of Brunilda Santos de Alvarez, General Counsel to Popular, Inc. (included in Exhibit 5.1)
	23.3	Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
	24	Power of Attorney of certain officers, directors and trustees of Popular, Inc. and the Trusts, respectively (included in page II-5 hereof)
	25.1	Form T-1 Statement of Eligibility of Bank One Trust Company, N.A. to act as trustee under the Junior Subordinated Indenture
	25.2	Form T-1 Statement of Eligibility of Bank One Trust Company, N.A. to act as trustee under the Declaration of Trust and Trust Agreement of the Trusts
	25.3	Form T-1 Statement of Eligibility of Bank One Trust Company, N.A. under the Guarantee Agreement for the benefit of the holders of the Preferred Securities

Item 17.     Undertakings

      Each of the undersigned Registrants hereby undertakes:

      (a) (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

      (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

      (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;

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      (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrants pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement.

      (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

      (b) For purposes of determining any liability under the Securities Act of 1933, as amended, each filing of a Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of each undersigned Registrant pursuant to the provisions, or otherwise, each Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by each undersigned Registrant of expenses incurred or paid by a director, officer of controlling person of each Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each Registrant will, unless in the opinion of its counsel the matter has been settled by the controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

      (d) (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

      (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (e) To file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.

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SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Juan, Commonwealth of Puerto Rico on the 3rd day of September, 2003.

POPULAR, INC.

By:  /s/ JORGE A. JUNQUERA

Jorge A. Junquera

Senior Executive Vice President

and Director

(Principal Financial Officer)

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Each of the directors and/or officers of the Registrant whose signature appears below hereby appoints Jorge A. Junquera, as his or her attorney-in-fact to sign in his or her name and behalf, in any and all capacities stated below and to file with the Securities and Exchange Commission any and all amendments, including post-effective amendments, to this Registration Statement on Form S-3, and any Registration Statement relating to the same Offering as this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, making such changes in the Registration Statement as appropriate, and generally to do all such things in their behalf in their capacities as directors and/or officers to enable the Registrant to comply with the provisions of the Securities Act of 1933 and all requirements of the Securities and Exchange Commission.

Signature	Title	Date
/s/ RICHARD L. CARRIÓN Richard L. Carrión	Chairman, President and Chief Executive Officer (Principal Executive Officer)	September 3, 2003
/s/ JUAN J. BERMÚDEZ Juan J. Bermúdez	Director	September 4, 2003
/s/ JOSE B. CARRIÓN, JR. Jose B. Carrión, Jr.	Director	September 3, 2003
/s/ DAVID H. CHAFEY, JR. David H. Chafey, Jr.	Director	September 3, 2003
/s/ ANTONIO LUIS FERRÉ Antonio Luis Ferré	Director	September 2, 2003
/s/ HÉCTOR R. GONZÁLEZ Héctor R. González	Director	September 3, 2003

II-5

Signature	Title	Date
/s/ JORGE A. JUNQUERA Jorge A. Junquera	Senior Executive Vice President and Director (Principal Financial Officer)	September 3, 2003
/s/ MANUEL MORALES, JR. Manuel Morales, Jr.	Director	September 3, 2003
/s/ FRANCISCO M. REXACH, JR. Francisco M. Rexach, Jr.	Director	September 3, 2003
Frederic J. Salerno	Director	September   , 2003
/s/ FÉLIX J. SERRALLES, JR. Félix J. Serralles, Jr.	Director	September 3, 2003
/s/ JULIO E. VIZCARRONDO, JR. Julio E. Vizcarrondo, Jr.	Director	September 3, 2003
/s/ AMILCAR JORDÁN Amilcar Jordán	Senior Vice President (Principal Accounting Officer)	September 3, 2003

      Pursuant to the requirements of the Securities Act of 1933, Popular Capital Trust I, Popular Capital Trust II, Popular Capital Trust III, and Popular Capital Trust IV, certify that they have reasonable grounds to believe that they meet all the requirements for filing on Form S-3 and have duly caused this Registration Statement to be signed on their behalf by the undersigned, thereunto duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on the 3rd day of September, 2003.

POPULAR CAPITAL TRUST I

POPULAR CAPITAL TRUST II

POPULAR CAPITAL TRUST III

POPULAR CAPITAL TRUST IV

By:  Popular, Inc., as Depositor

By:  /s/ JORGE A. JUNQUERA

Jorge A. Junquera

Senior Executive Vice President

II-6

EXHIBIT INDEX

Exhibit No.			Description
	1		Form of Underwriting Agreement
	4	.1	Form of Junior Subordinated Indenture between Popular, Inc. and Bank One Trust Company, N.A.
	4	.2	Form of Certificate of Junior Subordinated Debenture
	4	.3	Certificate of Trust of each of Popular Capital Trust I, Popular Capital Trust II, Popular Capital Trust III, and Popular Capital Trust IV (the “Trusts”)
	4	.4	Declaration of Trust and Trust Agreement of each of the Trusts
	4	.5	Form of Amended and Restated Declaration of Trust and Trust Agreement for each of the Trusts
	4	.6	Form of Preferred Security Certificate for each of the Trusts (included as part of Exhibit 4.5)
	4	.7	Form of Preferred Securities Guarantee Agreement for each of the Trusts
	5	.1	Opinion of Brunilda Santos de Alvarez, General Counsel to Popular, Inc.
	5	.2	Opinion of Richards, Layton & Finger, P.A. special Delaware counsel to the Trusts, as to the validity of the Trust Preferred Securities to be issued by the Trusts.
	12		Computations of ratio of earnings to fixed charges and ratio of earnings to fixed charges and Preferred Stock dividends (incorporated by reference to Exhibit 12.1 to Popular, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2003)
	23	.1	Consent of PricewaterhouseCoopers LLP
	23	.2	Consent of Brunilda Santos de Alvarez, General Counsel to Popular, Inc. (included in Exhibit 5.1)
	23	.3	Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2)
	24		Power of Attorney of certain officers, directors and trustees of Popular, Inc. and the Trusts, respectively (included in page II-5 hereof)
	25	.1	Form T-1 Statement of Eligibility of Bank One Trust Company, N.A. to act as trustee under the Junior Subordinated Indenture
	25	.2	Form T-1 Statement of Eligibility of Bank One Trust Company, N.A. to act as trustee under the Declaration of Trust and Trust Agreement of the Trusts
	25	.3	Form T-1 Statement of Eligibility of Bank One Trust Company, N.A. under the Guarantee Agreement for the benefit of the holders of the Preferred Securities

EX-1

                                                                       EXHIBIT 1

                            POPULAR CAPITAL TRUST [ ]

          _____% Cumulative Monthly Income Trust Preferred Securities,
        Guaranteed to the extent set forth in the Guarantee Agreement by

                                  POPULAR, INC.

                             UNDERWRITING AGREEMENT

                                ___________, 2003

[Name of Representative]
As representative
of the several Underwriters named in Schedule 1
Hato Rey, Puerto Rico 00918

Ladies and Gentlemen:

         POPULAR CAPITAL TRUST [ ], a statutory business trust created under the
Business Trust Act (the "Delaware Act") of the state of Delaware (the "Trust"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to you and the other underwriters named in Schedule 1 hereto (collectively, the
"Underwriters"), for whom you are acting as the representative (the
"Representative") ____ of its ____% Cumulative Monthly Income Trust Preferred
Securities (the "Trust Preferred Securities"). The Trust Preferred Securities
shall have the terms described in the Prospectus (as defined below).

         The Trust Preferred Securities shall be guaranteed by Popular, Inc.
(the "Company") to the extent set forth in the Prospectus, with respect to the
distributions and amounts payable upon liquidation and redemption, pursuant to
the Guarantee Agreement, to be dated as of the Closing Date (as defined below)
(the "Guarantee Agreement"), and to be executed and delivered by the Company and
Bank One Delaware, Inc., a Delaware corporation (the "Delaware Trustee"),
_______________, _____________, both of whom are employees or officers of or
affiliated with the Company (the "Administrative Trustees"), and Bank One Trust
Company, N.A. ("Bank One"), as "Property Trustee" and "Guarantee Trustee" for
the benefit of the holders of the Trust Preferred Securities. The proceeds from
the sale of the Trust Preferred Securities will be aggregated with the proceeds
from the sale by the Trust to the Company of the Common Securities of the Trust
(the "Common Securities") and will be used by the Trust to purchase ___% junior
subordinated debt securities (the "Debentures") issued by the Company. The Trust
Preferred Securities and the Common Securities will be issued pursuant to an
Amended and Restated Declaration of Trust and Trust Agreement (the "Trust
Agreement") among the Company and the trustees named therein (the

                                       1



"Trustees"). The Debentures will be issued pursuant to a Junior Subordinated
Indenture (the "Indenture") among the Company and Bank One, as trustee (the
"Indenture Trustee"). You have agreed to act as representative of the
underwriters (the "Underwriters") in connection with the sale of the Trust
Preferred Securities.

         The Company and the Trust jointly and severally hereby confirm as
follows its agreements with the Representative and the several other
Underwriters.

         1.       Agreement to Sell and Purchase.

                  (a)      On the basis of the representations, warranties and
agreements of the Company and the Trust herein contained and subject to all the
terms and conditions of this Agreement, the Trust agrees to sell to each
Underwriter and each Underwriter, severally and not jointly, agrees to purchase
from the Trust at a purchase price of $_____ per Trust Preferred Security, the
number of Trust Preferred Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto, plus such additional number of Trust Preferred
Securities which such Underwriter may become obligated to purchase pursuant to
Section 9 hereof.

                  (b)      Because the proceeds from the sale of the Trust
Preferred Securities shall be used to purchase the Debentures from the Company,
as compensation for its services hereunder, the Company will pay to the
Underwriters a nonrefundable fee in immediately available funds equal to $_____,
which shall be fully earned upon the delivery of the Trust Preferred Securities
on the Closing Date (as such term is defined below).

         2.       Delivery and Payment. Delivery of the Trust Preferred
Securities shall be made to the Representative for the accounts of the
Underwriters at the office of Pietrantoni Mendez & Alvarez LLP, counsel to the
Company, Banco Popular Center, Suite 1900, Hato Rey, Puerto Rico, against
payment of the purchase price by wire transfer of immediately available funds to
the bank account designated by the Company. Such payment shall be made at 10:00
a.m., New York City time, on the third full business day following the date of
this Agreement, or such other time on such other date, not later than seven
business days after the date of this Agreement, as may be agreed upon by the
Company and the Representative (such date is hereinafter referred to as the
"Closing Date"). Time shall be of the essence and delivery at the time and place
specified pursuant to this Agreement is a further condition of the obligation of
each Underwriter hereunder.

         Certificates evidencing the Trust Preferred Securities shall be in
definitive form and shall be registered in such names and in such denominations
as the Representative shall request at least two business days prior to the
Closing Date by written notice to the Trust. For the purpose of expediting the
checking and packaging of certificates for the Trust Preferred Securities, the
Trust agrees to make such certificates available for inspection at least 24
hours prior to the Closing Date.

         Notwithstanding the other provisions of this Section 2, if transactions
in the Trust Preferred Securities can be settled through the facilities of The
Depository Trust Company ("DTC"), payment for and delivery of the Trust
Preferred Securities on the Closing Date will be made through the

                                      2



facilities of DTC if you are a member, unless you have otherwise notified us
prior to the date specified by you, or, if you are not a member, settlement may
be made through a correspondent who is a member pursuant to instruction you may
send to us prior to such specified date.The cost of original issue tax stamps,
if any, in connection with the issuance, sale and delivery of the Trust
Preferred Securities by the Trust to the respective Underwriters shall be borne
by the Company. The Company will pay and save each Underwriter and any
subsequent holder of the Trust Preferred Securities harmless from any and all
liabilities with respect to or resulting from any failure or delay in paying
Federal, state or Commonwealth of Puerto Rico stamp and other transfer taxes, if
any, which may be payable or determined to be payable in connection with the
original issuance, sale or delivery to such Underwriter of the Trust Preferred
Securities.

         3.       Representations and Warranties. Each of the Trust and the
Company jointly and severally represents, warrants and covenants to, and agrees
with, each Underwriter that:

                  (a)      The Company and the Trust, as co-registrant with the
Company, meet the requirements for use of Form S-3, and a registration statement
(Registration No. 333-________) on Form S-3 with respect to the Trust Preferred
Securities, including such amendments to such registration statement as may have
been required to the date of this Agreement, has been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as amended (the
"Act"), and the rules and regulations (the "Rules and Regulations") of the
Securities and Exchange Commission (the "Commission") thereunder, and has been
filed with the Commission and has become effective. No stop order suspending the
effectiveness of the registration statement or preventing or suspending the use
of the Prospectus or any Preliminary Prospectus (as defined below) has been
issued and, to the Company's knowledge, no proceeding for that purpose has been
instituted or threatened by the Commission. The term "Preliminary Prospectus" as
used herein means a preliminary prospectus relating to the Trust Preferred
Securities included at any time as part of the foregoing registration statement
or any amendment thereto before it became effective under the Act and any
prospectus filed with the Commission by the Company pursuant to Rule 424(a) of
the Rules and Regulations. Copies of such registration statement, any such
amendment and each related Preliminary Prospectus and all documents incorporated
by reference therein that were filed with the Commission on or prior to the date
of this Underwriting Agreement have been delivered to the Representative and its
counsel. A final prospectus relating to the Trust Preferred Securities
containing information permitted to be omitted at the time of effectiveness by
Rule 430A of the Rules and Regulations has been or will be prepared and filed
with the Commission pursuant to Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier time as
may be required by the Rules and Regulations). The term "Registration Statement"
means such registration statement as amended at the time it became effective
(the "Effective Date"), including financial statements and all exhibits and any
information deemed by virtue of Rule 430A of the Rules and Regulations to be
included in such Registration Statement at the Effective Date and any prospectus
supplement filed thereafter with the Commission, and shall include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The term "Prospectus" means, collectively, the base prospectus together
with any prospectus supplement, in the respective forms they are filed with the
Commission pursuant to Rule 424(b) of the Rules and

                                       3



Regulations. Any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Prospectus or any
Preliminary Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Effective Date, or the date of any
Preliminary Prospectus or the Prospectus, as the case may be, that is
incorporated therein by reference. For purposes of this Underwriting Agreement,
all references to the Registration Statement, the Prospectus, any Preliminary
Prospectus or any amendment or supplement thereto shall be deemed to include any
copy filed with the Commission pursuant to its Electronic Data Gathering
Analysis and Retrieval System (EDGAR), and such copy shall be identical (except
to the extent permitted by Regulation S-T) to any Prospectus delivered to the
Representative for use in connection with the offering of the Trust Preferred
Securities by the Trust.

                  (b)      Each part of the Registration Statement, when such
part became or becomes effective, each Preliminary Prospectus, on the date of
filing thereof with the Commission, and the Prospectus and any amendments or
supplement thereto, on the date of filing thereof with the Commission and at the
Closing Date, conformed or will conform in all material respects with the
requirements of the Act, the Trust Indenture Act of 1939 (the "Trust Indenture
Act") and the Rules and Regulations; each part of the Registration Statement
(excluding any prospectus supplement with respect to an offering of securities
other than the offering of the Trust Preferred Securities contemplated hereby),
when such part became or becomes effective, did not or will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
each Preliminary Prospectus, on the date of filing thereof with the Commission,
and the Prospectus and any amendment or supplement thereto, on the date of
filing thereof with the Commission and at the Closing Date, did not or will not
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; the foregoing shall not apply to the
statements in or omissions from any such document relating to any Underwriter in
reliance upon, and in conformity with, written information relating to such
Underwriter furnished to the Company by the Representative, or by any
Underwriter through the Representative, specifically for use in the preparation
thereof. The Company has not distributed any offering material in connection
with the offering or sale of the Trust Preferred Securities other than the
Registration Statement, any Preliminary Prospectus, the Prospectus or any other
materials, if any, permitted by the Act.

                  (c)      The documents incorporated by reference in the
Registration Statement, the Prospectus and any amendment or supplement to such
Registration Statement or such Prospectus, when they became or become effective
under the Act or were or are filed with the Commission under the Exchange Act,
as the case may be, conformed or will conform in all material respects with the
requirements of the Act, the Trust Indenture Act, the Rules and Regulations, the
Exchange Act and the rules and regulations of the Commission thereunder (the
"Exchange Act Rules and Regulations"), as applicable.

                  (d)      The Trust has been duly formed and is validly
existing and in good standing as a statutory trust under Delaware law with power
and authority to own its property and conduct its business as described in the
Prospectus. All of the outstanding beneficial interests of the Trust have

                                       4



been duly authorized and validly issued and are fully paid and nonassessable
undivided beneficial interests in the assets of the Trust; the holders of such
beneficial interests of the Trusts have no preemptive or other rights to acquire
Trust Preferred Securities or Common Securities.

                  (e)      The Trust Agreement has been duly authorized; and
when the Trust Preferred Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, the Trust Agreement will have been duly executed
and delivered and will constitute a valid and legally binding instrument,
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.

                  (f)      The Guarantee Agreement has been duly authorized; and
when the Trust Preferred Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, the Guarantee Agreement will have been duly
executed and delivered and will constitute a valid and legally binding
instrument enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.

                  (g)      The Trust Preferred Securities have been duly
authorized; when the Trust Preferred Securities are delivered and paid for
pursuant to this Agreement on the Closing Date, such Trust Preferred Securities
will (i) have been validly issued and fully paid, (ii) represent nonassessable
undivided beneficial interest in the assets of the Trust, (iii) be entitled to
the benefits set forth in the Trust Agreement and (iv) conform to the
description thereof contained in the Registration Statement, the Prospectus and
any amendment or supplement to such Registration Statement or such Prospectus;
the issuance of the Trust Preferred Securities is not subject to preemptive or
other similar rights; and the holders of the Trust Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit incorporated under the General Corporation
Law of the State of Delaware.

                  (h)      The Common Securities have been duly authorized; when
the Common Securities are delivered and paid for pursuant to this Agreement on
the Closing Date, such Common Securities will (i) have been validly issued and
fully paid, (ii) represent nonassessable undivided beneficial interest in the
assets of the Trust, (iii) be entitled to the benefits set forth in the Trust
Agreement and (iv) conform to the description thereof contained in the
Registration Statement, the Prospectus and any amendment or supplement to such
Registration Statement or such Prospectus; the issuance of the Common Securities
is not subject to preemptive or other similar rights; and the holders of the
Common Securities will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit incorporated under
the General Corporation Law of the State of Delaware; and at the Closing Date,
all of the issued and outstanding Common Securities of the Trust will be
directly owned by the Company free and clear of any security interest, mortgage,
pledge, lien encumbrance, claim or equity.

                  (i)      The only direct or indirect subsidiaries of the
Company ("Subsidiaries") that are "significant subsidiaries" as defined in Rule
405 of Regulation C of the Rules and Regulations

                                       5



under the Act (each, a "Significant Subsidiary") are Banco Popular de Puerto
Rico, a Puerto Rico corporation ("Banco Popular"), Popular International Bank,
Inc., a Puerto Rico corporation, Popular North America, Inc., a Delaware
corporation, Banco Popular North America, Inc., a New York corporation, and
Equity One, Inc., a Delaware corporation. The Company has been and, at the
Closing Date, will be duly organized and validly existing as a corporation under
the laws of the Commonwealth of Puerto Rico and is and, at the Closing Date,
will be in good standing in the Commonwealth of Puerto Rico. The Company is and
will be as of the Closing Date registered with the Board of Governors of the
Federal Reserve System (the "Federal Reserve") as a bank holding company under
the Bank Holding Company Act of 1956 (the "BHCA") and its election to be treated
as a financial holding company under the BHCA, as amended by the
Gramm-Leach-Bliley Act, is and will remain in full force and effect. Each of the
Significant Subsidiaries is and, at the Closing Date, will be a corporation duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation. Each of the Company and its
Significant Subsidiaries is and, at the Closing Date, will be duly qualified and
in good standing as a foreign corporation in each jurisdiction in which the
character or location of its properties (owned, leased or licensed) or the
nature or conduct of its business or use of its property and assets makes such
qualification necessary, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings, prospects or business affairs of the Company and its Subsidiaries
considered as a single enterprise (a "Material Adverse Effect").

                  (j)      The outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and are not subject to any preemptive or similar rights. The
Debentures to be issued and sold by the Company will be, upon such issuance and
payment therefore, duly authorized, valid, binding and enforceable obligations
of the Company. The Company has, and, upon completion of the sale of the
Debentures, will have, an authorized, issued and outstanding capitalization as
set forth in the Registration Statement and the Prospectus. The description of
the securities of the Company in the Registration Statement, the Preliminary
Prospectus and the Prospectus is, and at the Closing Date, will be, complete and
accurate in all respects. No holders of securities of the Company are entitled
to have such securities registered under the Registration Statement, except
where such rights have been waived.

                  (k)      The consolidated financial statements and the related
notes of the Company included in the Registration Statement or incorporated by
reference therein and in the Prospectus present fairly the financial condition
of the Company and its Subsidiaries as of the dates indicated and the
consolidated results of operations and cash flows of the Company and its
Subsidiaries for the periods covered thereby, all in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the entire periods involved. PricewaterhouseCoopers LLP (the "Accountants"), who
have reported on those of such financial statements and related notes which are
audited, are independent accountants with respect to the Company and its
Subsidiaries within the meaning of the Act and the applicable and published
rules and regulations.

                  (l)      The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of

                                       6



financial statements in conformity with GAAP and to maintain accountability for
assets, (iii) access to assets is permitted only in accordance with management's
general or specific authorization, and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.

                  (m)      Except as set forth in the Registration Statement and
Prospectus, subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing Date,
(i) there has not been, and will not have been, any material adverse change in
the business, properties, financial condition, net worth or results of
operations of the Company and its Subsidiaries considered as a single
enterprise, (ii) neither the Company nor any of its Significant Subsidiaries has
entered into, or will have entered into any transactions that would be
considered material to the Company and its Subsidiaries considered as a single
enterprise, other than pursuant to this Agreement, and (iii) the Company has
not, and will not have, paid or declared any dividends or other distributions of
any kind on any class of its capital stock, except for the payment or
declaration of quarterly dividends on the Company's common stock (the "Common
Stock"), and the payment of monthly dividends on the Company's preferred stock,
in each case in the ordinary course of its business.

                  (n)      The Company and each of its Significant Subsidiaries
have good and marketable title to all properties and assets described as owned
by it in the Registration Statement, including the documents incorporated by
reference therein, free and clear of all liens, security interests,
restrictions, pledges, encumbrances, charges, equities, claims, easements,
leases and tenancies (collectively, "Encumbrances") other than those described
in the Registration Statement or in the documents incorporated by reference
therein and in the Prospectus, or those that will not materially affect the
value of such properties and assets or will not interfere with the use made and
proposed to be made of such properties and assets. The Company and each of its
Significant Subsidiaries have valid, subsisting and enforceable leases for the
properties and assets described as leased by them in the Registration Statement,
including the documents incorporated by reference therein, free and clear of all
Encumbrances, other than those described in the Registration Statement or in the
documents incorporated by reference therein and in the Prospectus, or those that
will not interfere with the use made and proposed to be made of such properties
and assets.

                  (o)      Neither the Trust nor the Company is and, after
giving effect to the offering and sale of the Trust Preferred Securities and the
Debentures and the application of the proceeds thereof as described in the
Prospectus, neither of them will be, required to be registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act").

                  (p)      Except as set forth or incorporated by reference in
the Registration Statement and the Prospectus, there are no actions, suits,
arbitrations, claims, governmental or other proceedings (formal or informal), or
investigations pending or threatened against or affecting the Company or any of
its Significant Subsidiaries, or any directors, officers or shareholders of the
Company or any of its Significant Subsidiaries in their respective capacities as
such, or any of the properties or assets owned or leased by the Company or any
of its Significant Subsidiaries, before or by any Federal, state or Commonwealth
of Puerto Rico court, commission, regulatory board,

                                       7



administrative agency or other governmental body, domestic or foreign
(collectively, a "Governmental Body"), wherein an unfavorable ruling, decision
or finding would adversely affect the business, prospects, financial condition,
net worth or results of operations of the Company and its Subsidiaries
considered as a single enterprise and would be required to be disclosed in the
Registration Statement and Prospectus. Neither the Company nor any Significant
Subsidiary is in violation of, or in default with respect to, any law, rule, or
regulation, or any order, judgment, or decree, except as described in the
Prospectus or such as in the aggregate do not now have and can reasonably be
expected in the future not to have a material adverse effect upon the
operations, business, properties, or assets of the Company and its Subsidiaries
considered as a single enterprise; nor is the Company or any Significant
Subsidiary presently required under any order, judgment or decree to take any
action in order to avoid any such violation or default, except as described in
the Prospectus.

                  (q)      The Company and each of its Significant Subsidiaries
possess and, at the Closing Date, will possess adequate governmental permits,
consents, orders, approvals, franchises, certificates and other authorizations
(collectively, "Licenses") necessary to carry on their respective businesses and
own or lease their respective properties as contemplated in the Registration
Statement and Prospectus. The Company and each of its Significant Subsidiaries
have and, at the Closing Date, will have complied in all material respects with
all laws, regulations and orders applicable to it or its business, assets and
properties, except for such violations, individually or in the aggregate, which
are not reasonably expected to have a material adverse effect upon the
operations, business, properties or assets of the Company and its Significant
Subsidiaries considered as a single enterprise. Neither the Company nor any of
its Significant Subsidiaries is, nor, at the Closing Date, will be in default
(nor has any event occurred which, with notice or lapse of time or both, would
constitute a default) in the due performance and observation of any term,
covenant or condition of any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement or other evidence of
indebtedness, lease, contract or other agreement or instrument (collectively, a
"contract or other agreement") to which they are a party or by which their
respective properties are bound or affected, the violation of which would
individually or in the aggregate have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects or business
affairs of the Company and its Subsidiaries considered as a single enterprise.
There are no governmental proceedings or actions pending or threatened for the
purpose of suspending, modifying or revoking any License held by the Company or
any of its Significant Subsidiaries, except where such suspension, modification
or revocation would not individually or in the aggregate have a material adverse
effect on the condition, financial or otherwise, or the earnings, prospects or
business affairs of the Company and its Subsidiaries considered as a single
enterprise.

                  (r)      No consent, approval, authorization or order of, or
any filing or declaration with, any Governmental Body is required for the
consummation of the transactions contemplated by this Agreement or in connection
with the issuance and sale of the Trust Preferred Securities by the Trust or in
connection with the issuance and sale of the Debentures by the Company, except
such as have been obtained and such as may be required under state or
Commonwealth of Puerto Rico securities or blue sky laws or the bylaws and rules
of the National Association of Securities Dealers, Inc. (the "NASD") in
connection with the purchase and distribution by the Underwriters of the Trust

                                       8



Preferred Securities to be sold hereby.

                  (s)      Both the Trust and the Company have full power
(corporate and other) and authority to enter into this Agreement and to carry
out all the terms and provisions hereof to be carried out by it. This Agreement
has been duly authorized, executed and delivered by the Trust and the Company
and constitutes a valid and binding agreement of each of them and is enforceable
against each of them in accordance with the terms hereof, except as rights to
indemnity and contribution may be limited by federal, state or Commonwealth of
Puerto Rico securities laws or the public policy underlying such laws. Except as
disclosed in the Registration Statement and the Prospectus, the execution,
delivery and the performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any Encumbrance upon any of the properties or assets of the Trust, the
Company or any of the Significant Subsidiaries pursuant to the terms or
provisions of, or result in a breach or violation of or conflict with any of the
terms or provisions of, or constitute a default under, or give any other party a
right to terminate any of its obligations under, or result in the acceleration
of any obligation under, (i) the Trust Agreement or the Certificate of
Incorporation or By-laws of the Company or any Significant Subsidiary, in each
case as amended, or (ii) any contract or other agreement to which the Trust or
the Company or any of the Significant Subsidiaries is a party or by which it or
any of their respective assets or properties are bound or affected, the
violation of which, in the case of the Company and the Significant Subsidiaries,
would individually or in the aggregate have a material adverse effect on the
condition, financial or otherwise, or the earnings, prospects or business
affairs of the Company and its Subsidiaries considered as a single enterprise,
or (iii) any judgment, ruling, decree, order, law, statute, rule or regulation
of any Governmental Body applicable to the Trust, the Company or any of the
Significant Subsidiaries or their respective businesses or properties, the
violation of which, in the case of the Company and the Significant Subsidiaries,
would individually or in the aggregate have a material adverse effect on the
financial condition or the earnings, prospects or business affairs of the
Company and its Subsidiaries considered as a single enterprise.

                  (t)      No statement, representation, or warranty made by the
Trust or by the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Representative was or will be,
when made, inaccurate, untrue or incorrect in any material respect. Each
certificate signed by an officer of the Company and delivered to the
Representative or counsel for the Underwriters shall be deemed to be a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.

                  (u)      Neither the Trust, the Company nor any of their
directors, officers or affiliates has taken, nor will he, she or it take,
directly or indirectly, any action designed, or which might reasonably be
expected in the future, to cause or result in, under the Act or otherwise, or
which has constituted, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Trust Preferred
Securities or otherwise.

                  (v)      Neither the Company nor any of its Significant
Subsidiaries is involved in any collective labor dispute with its employees nor
is any such dispute threatened or imminent.

                                       9



                  (w)      Neither the Trust, the Company nor any of its
Significant Subsidiaries nor, to their best knowledge, any employee or agent of
the Trust, the Company or any Significant Subsidiary has made any payment of
funds of the Trust, the Company or any Significant Subsidiary or received or
retained any payment of funds of the Trust, the Company or any Significant
Subsidiary in violation of any law, rule or regulation, which payment, receipt
or retention of funds is of a character required to be disclosed in the
Prospectus.

                                       10



                  (x)      The business, operations and facilities of the Trust,
the Company and its Significant Subsidiaries have been and are being conducted
in compliance with all applicable laws, ordinances, rules, regulations,
licenses, permits, approvals, plans, authorizations or requirements relating to
occupational safety and health, or pollution, or protection of health or the
environment (including, without limitation, those relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants or
hazardous or toxic substances, materials or wastes into ambient air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment storage, disposal, transport or handling of
chemical substances, pollutants, contaminants or hazardous or toxic substances,
materials or wastes, whether solid, gaseous or liquid in nature) of any
governmental department, commission, board, bureau, agency or instrumentality of
the United States, any state, or the Commonwealth of Puerto Rico or any
political subdivision thereof, and all applicable judicial or administrative
agency or regulatory decrees, awards, judgments and orders relating thereto; and
neither the Company nor any of its Significant Subsidiaries has received any
notice from any governmental instrumentality or any third party alleging any
violation thereof or liability thereunder (including, without limitation,
liability for costs of investigating or remediating sites containing hazardous
substances or damages to natural resources), except where failure to so comply
would not have a material adverse effect on the financial condition, or the
earnings or business affairs of the Company and its Subsidiaries considered as a
single enterprise.

                  (y)      The Trust, the Company and each of its Significant
Subsidiaries has filed all foreign, federal, state and local tax returns that
are required to be filed or has requested extensions thereof and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except,
in the case of the Company and each of its Significant Subsidiaries, for any
failure to file that would not have a material adverse effect on the financial
condition, or the earnings or business affairs of the Company and its
Subsidiaries considered as a single enterprise.

                  (z)      The Company and the Trust meet the requirements for
use of Form S-3 under the Rules and Regulations and the use of Rule 415 under
the Rules and Regulations.

                  (aa)     The deposit accounts of Banco Popular, and of each of
the other Significant Subsidiaries of the Company that are depository
institutions, are insured by the Bank Insurance Fund (the "BIF") of the Federal
Deposit Insurance Corporation ("FDIC") to the legal maximum, and no proceeding
for the termination or revocation of such insurance is pending or threatened.
Banco Popular is a member in good standing of the Federal Reserve Bank of New
York and of the Federal Home Loan Bank of New York.

                  (bb)     Neither of the Trust, the Company nor any of its
Significant Subsidiaries or any of their respective directors or officers is
subject to any order or directive of, or party to any agreement with, any
regulatory agency having jurisdiction with respect to its business or
operations, except as disclosed in the Prospectus and except, in the case of the
Company and its Significant Subsidiaries, for any such order, directive or
agreement that is not material to the Company and its Subsidiaries considered as
a single enterprise.

                                       11



                  (cc)     The Company has derived more than 20% of its gross
income from Puerto Rico sources on an annual basis since its incorporation in
accordance with the applicable sourcing rules under the Puerto Rico Internal
Revenue Code of 1994, as amended.

                  (dd)     The Company and each Subsidiary has fulfilled its
respective obligations, if any, under the minimum funding standards of Section
302 of the United States Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder with
respect to each "plan"(as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company or any
Subsidiary are eligible to participate and each such plan is in compliance with
presently applicable provisions of ERISA and such regulations and published
interpretations, except for any failure to fulfill any such obligations, or
failure to comply, that singly or in the aggregate would not have a material
adverse effect upon the operations, business, properties, or assets of the
Company and its Subsidiaries considered as a single enterprise. None of the
Company or any Subsidiaries has incurred any unpaid liability to the Pension
Benefit Guaranty Corporation (other than for payment of premiums in the ordinary
course) or to any plan under Title IV of ERISA, except for any such liability
that would not have a material adverse effect upon the operations, business,
properties, or assets of the Company and its Subsidiaries considered as a single
enterprise.

                  (ee)     The Company is not a "passive foreign investment
company" ("PFIC") within the meaning of Section 1296 of the United States
Internal Revenue Code of 1986, as amended, and does not anticipate that it will
become a PFIC in the foreseeable future.

                  (ff)     The Company is not a party to any agreement or order
of any governmental entity or court that, as of the date hereof, and assuming no
material adverse change to the Company's financial condition, restricts its
ability to pay interest on a monthly basis on the Debentures or restricts the
ability of the Trust to make monthly distributions on the Trust Preferred
Securities.

                  (gg)     The Trust is not a party to any agreement and has not
conducted any activities other than those incidental to its organization and to
the issuance of the Trust Preferred Securities and the Common Securities, and is
not subject to any order of any court or other governmental entity.

         4.       Agreements of the Company and the Trust. Each of the Trust and
the Company, jointly and severally covenants and agrees with each of the several
Underwriters as follows:

                  (a)      If a Prospectus Supplement has not been filed as
contemplated by Section 3(a) hereof, the Company and the Trust will cause the
Prospectus Supplement to be filed as contemplated by Section 3(a) hereof (but
only if the Representative has not reasonably objected thereto by notice to the
Company and the Trust after having been furnished a copy within a reasonable
time prior to filing) and will notify the Representative promptly of such
filing. The Company and the Trust will not during such period as the Prospectus
is required by law to be delivered in connection with sales of the Trust
Preferred Securities by any Underwriter or dealer (the "Prospectus Delivery
Period"), file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representative within a reasonable period of time prior

                                       12



to the filing thereof and the Representative shall not have objected thereto in
good faith.

                  (b)      Each of the Company and the Trust will use its best
efforts to cause the Registration Statement to remain effective through the
completion of the Underwriters' distribution of the Trust Preferred Securities,
and will notify the Representative promptly, and will confirm such advice in
writing, (i) of the preparation and filing (subject to Section 4(a)) of any
post-effective amendment to the Registration Statement and when any such
post-effective amendment becomes effective, (ii) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof, (iv) of the suspension of the qualification or registration of the
Trust Preferred Securities for offering or sale in any jurisdiction, or of the
initiation or threat of any proceeding for any such purpose; (v) of the
happening of any event during the Prospectus Delivery Period that in the
judgment of the Company makes any statement made in the Registration Statement
or the Prospectus untrue or that requires the making of any changes in the
Registration Statement or the Prospectus in order to make the statements
therein, in light of the circumstances in which they are made, not misleading
and (vi) of the receipt by the Company or any representative or attorney of the
Company of any other communication from the Commission relating to the Company,
the Registration Statement, any Preliminary Prospectus or the Prospectus. If at
any time the Commission or any jurisdiction shall threaten to issue, or shall
issue, any order suspending the effectiveness of the Registration Statement or
suspending the qualification or registration of the Trust Preferred Securities
for sale in any jurisdiction, the Company and the Trust will make every
reasonable effort to prevent the issuance of such order and, if such an order
should be issued, to obtain the withdrawal of such order at the earliest
possible moment. Each of the Company and the Trust will use its best efforts to
comply with the provisions of and make all requisite filings with the Commission
pursuant to Rule 430A and to notify the Representative promptly of all such
filings.

                  (c)      If, at any time when a Prospectus relating to the
Trust Preferred Securities is required to be delivered under the Act, any event
occurs as a result of which, in the judgment of the Company or the Underwriters,
the Prospectus, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, or the Registration Statement, as then amended
or supplemented, would include any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein not
misleading, or if for any other reason it is necessary at any time to amend or
supplement the Prospectus or the Registration Statement to comply with the Act
or the Rules and Regulations, the Trust and the Company will promptly notify the
Representative thereof and, subject to Section 4(b) hereof, will prepare and
file with the Commission, at the Company's expense, an amendment to the
Registration Statement or an amendment or supplement to the Prospectus that
corrects such statement or omission or effects such compliance.

                  (d)      The Company will furnish to the Representative,
without charge, two signed copies of the Registration Statement and of any
post-effective amendment thereto, including

                                       13



financial statements and schedules, and all exhibits thereto and will furnish to
the Representative, without charge, for transmittal to each of the other
Underwriters, copies of the Registration Statement and any post-effective
amendment thereto, including financial statements and schedules but without
exhibits.

                  (e)      The Company will comply with all the provisions of
all undertakings contained in the Registration Statement.

                  (f)      During the Prospectus Delivery Period, the Company
will promptly furnish to the Underwriters, without charge, as many copies of the
Prospectus (containing the Prospectus Supplement) and any amendment or
supplement thereto as the Underwriters may from time to time reasonably request.
The Company consents to the use of the Prospectus, as amended or supplemented
from time to time, by the Underwriters and by all dealers to whom the Trust
Preferred Securities may be sold, both in connection with the offering or sale
of the Trust Preferred Securities and, thereafter, during the Prospectus
Delivery Period. If during the Prospectus Delivery Period any event shall occur
which in the judgment of the Company or the Underwriters should be set forth in
the Prospectus in order to make any statement therein, in the light of the
circumstances under which it was made, not misleading, or if, in the judgment of
the Company or the Underwriters, it is necessary to supplement or amend the
Prospectus to comply with law, the Company will forthwith prepare and duly file
with the Commission an appropriate supplement or amendment thereto. Except as
required by the Exchange Act or the Exchange Act Rules and Regulations, the
Company shall not file any document under the Exchange Act to which the
Representative reasonably objects before the termination of the Prospectus
Delivery Period if such document would be deemed to be incorporated by reference
into the Prospectus.

                  (g)      Prior to any public offering of the Trust Preferred
Securities by the Underwriters, the Trust and the Company will cooperate with
the Representative and its counsel in connection with the registration or
qualification of the Trust Preferred Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as the Representative may
reasonably request; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general service of process in any
jurisdiction where it is not now so subject.

                  (h)      The Company will furnish to the Representative and
each other Underwriter who may so request copies of such financial statements
and other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock, and will
furnish to the Representative and each other Underwriter who may so request a
copy of each annual or other report it shall be required to file with the
Commission.

                  (i)      The Company will make generally available to its
security holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations) covering a twelve-month period beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in said Rule 158) of the

                                       14



Registration Statement.

                  (j)      The Trust and the Company will apply the net proceeds
from the offering and sale of the Trust Preferred Securities in the manner set
forth in the Prospectus under "Use of Proceeds".

                  (k)      The Trust and the Company will not at any time,
directly or indirectly, take any action intended, or which might reasonably be
expected, to cause or result in, or which will constitute, stabilization of the
price of the shares of Trust Preferred Securities to facilitate the sale or
resale of any of the Trust Preferred Securities.

                  (l)      Until the 30th business day following the Closing
Date or such earlier time as you may notify the Trust or the Company, neither
the Company nor any entity controlled by it will, without the consent of the
Representative, publicly offer or sell, or announce the public offering of, any
debt securities within the Commonwealth of Puerto Rico.

         5.       Expenses.

                  (a)      Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Representative, all costs and expenses incidental to
the performance by the Trust of its obligations under this Agreement, including,
but not limited to, costs and expenses of or relating to (i) the preparation,
printing and filing by the Company of the Registration Statement and exhibits
thereto, each Preliminary Prospectus prior to or during the period specified in
the first sentence of Section 4(f) but not exceeding nine months after the
Effective Date, the Prospectus and any amendment or supplement to the
Registration Statement or the Prospectus, (ii) the preparation and delivery of
certificates representing the Trust Preferred Securities, (iii) furnishing
(including costs of shipping and mailing) such copies of the Registration
Statement, the Prospectus and any Preliminary Prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the offering
and sale of the Trust Preferred Securities by the Underwriters or by dealers to
whom Trust Preferred Securities may be sold, (iv) the filing fees and
out-of-pocket expenses relating to such filings for any filings required to be
made by the Underwriters with the NASD, (v) the registration or qualification of
the Trust Preferred Securities for offer and sale under the securities or blue
sky laws of such jurisdictions designated pursuant to Section 4(g) and the
preparation and printing of preliminary, supplemental and final blue sky
memoranda, (vi) counsel and accountants to the Company and counsel to the
Representative, and (vii) the transfer agent for the Trust Preferred Securities.
The Company will also pay all fees and expenses of the Debenture Trustee,
including the fees and disbursements of counsel for the Debenture Trustee in
connection with the Indenture and the Debentures; the fees and expenses of the
Property Trustee and the Delaware Trustee, including the fees and disbursements
of counsel for the Property Trustee and the Delaware Trustee in connection with
the Certificate of Trust filed with the Delaware Secretary of State with respect
to the Trust (the "Certificate of Trust") and the Trust Agreement; and the fees
and expenses of the Guarantee Trustee, including the fees and disbursements of
counsel for the Guarantee Trustee in connection with the Guarantee and the
Guarantee Agreement.

                                       15



                  (b)      If the transactions contemplated by this Agreement
are not consummated or if this Agreement is terminated by the Company or the
Trust pursuant to any of the provisions hereof, the Company will reimburse the
Representative for all of their accountable out-of-pocket fees and expenses
(including the fees, disbursements and other charges of their counsel) incurred
by them in connection herewith.

         6.       Conditions of the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Trust Preferred Securities shall
be subject to the accuracy of the representations and warranties on the part of
the Trust and the Company contained herein as of the date hereof, as of the date
of the effectiveness of any amendment to the Registration Statement filed after
the date hereof and prior to the Closing Date (including the filing of any
document incorporated by reference therein) and as of the Closing Date, to the
accuracy of the statements of the Trust and the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Trust and the
Company of their obligations hereunder and to the following additional
conditions:

                  (a)      All filings required under Rule 424 and 430A of the
Rules and Regulations to be made by the Company or the Trust prior to the
Closing shall have been made by the Company or the Trust, as the case may be.

                  (b)      (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Trust Preferred Securities under the securities or blue
sky laws of any jurisdiction shall be in effect, and no proceeding for such
purpose shall be pending before or threatened or contemplated by the Commission
or the authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities, and (iv) after the date hereof no amendment or supplement
to the Registration Statement or the Prospectus shall have been filed unless a
copy thereof was first submitted to the Representative and the Representative
did not object thereto in good faith, and the Representative shall have received
certificates, dated the Closing Date and signed by the Chief Executive Officer,
the President or any Senior Executive Vice President of the Company and the
Chief Financial Officer, the Treasurer or the Chief Accounting Officer of the
Company (who may, as to proceedings threatened, rely upon the best of their
information and belief), to the effect of the foregoing clauses (i), (ii) and
(iii).

                  (c)      Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, properties,
management, financial condition or results of operations of the Trust, or of the
Company and its Subsidiaries considered as a single enterprise, whether or not
arising from transactions in the ordinary course of business, and (ii) the
Trust, or the Company and its Subsidiaries considered as a single enterprise,
shall not have sustained any material loss or interference with its business,
assets or properties from fire, explosion, flood or other casualty, or from any
labor dispute or any court or legislative or other governmental action, order or
decree.

                                       16



                  (d)      Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Trust, the Company or any
Significant Subsidiary, or any of their officers, directors or shareholders in
their capacities as such, or any of their assets or properties, before or by any
Governmental Body in which litigation or proceeding, in the case of the Company
and its Significant Subsidiaries, an unfavorable ruling, decision or finding
would materially and adversely affect the business, properties, financial
condition, net worth or results of operations of the Company and its
Subsidiaries considered as a single enterprise.

                  (e)      Each of the representations and warranties of the
Trust and the Company contained herein shall be true and correct at the Closing
Date as if made on such date, and all covenants and agreements herein contained
to be performed on the part of the Trust or the Company and all conditions
herein contained to be fulfilled or complied with by the Trust or the Company at
or prior to the Closing Date shall have been fully performed, fulfilled or
complied with.

                  (f)      The Representative shall have received opinions,
dated the Closing Date from Pietrantoni Mendez & Alvarez, LLP, counsel for the
Company, and Brunilda Santos de Alvarez, General Counsel of the Company, to the
following effect:

                           (A) in the case of the opinion from Pietrantoni
Mendez & Alvarez, LLP:

                                    (i)      The Company has been duly organized
and is validly existing as a corporation under the laws of the Commonwealth of
Puerto Rico and is in good standing with the Commonwealth of Puerto Rico; Banco
Popular is a corporation duly organized, validly existing and in good standing
under the laws of the Commonwealth of Puerto Rico and is in good standing with
the Commonwealth of Puerto Rico;

                                    (ii)     The Registration Statement is
effective under the Act; any required filing of the Prospectus Supplement
pursuant to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); and to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement or any
amendment thereto and no order directed at any document incorporated by
reference in the Registration Statement or any amendment thereto has been
issued, and no proceedings for that purpose have been instituted or are pending
or are threatened or contemplated under the Act;

                                    (iii)    The Registration Statement and the
Prospectus, as of their respective dates, appeared on their face to be
appropriately responsive, in all material respects (other than the documents
incorporated therein by reference and not including the financial statements,
schedules and other financial data contained therein, as to which such counsel
need not express any opinion), with the requirements of the Act and the related
Rules and Regulations thereunder;

                                    (iv)     The descriptions contained and
summarized in the Registration Statement or the Prospectus, or incorporated
therein by reference, are accurate and fairly represent in

                                       17



all material respects the information required to be shown in the Registration
Statement and Prospectus by the Act and the Rules and Regulations; and the
statements set forth under the headings "Description of Junior Subordinated Debt
Securities", "Description of Trust Preferred Securities", "Description of
Guarantees", "Relationship Among the Trust Preferred Securities, the Junior
Subordinated Debt Securities and the Guarantees," and "Plan of Distribution",
insofar as such statements constitute a summary of the legal matters, documents
or proceedings referred to therein, provide an accurate summary of such legal
matters, documents and proceedings;

                                    (v)      The Company has full legal right,
power, and authority to enter into this Agreement and to consummate the
transactions provided for herein; and this Agreement has been duly authorized,
executed and delivered by the Company;

                                    (vi)     The Indenture has been duly
authorized, executed and delivered by the Company, has been duly qualified under
the Trust Indenture Act, as amended, and (assuming the Indenture has been duly
authorized, executed and delivered by the Debenture Trustee) constitutes a valid
and legally binding instrument enforceable against the Company in accordance
with its terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and subject to general
equity principles; and the Debentures have been duly authorized and executed by
the Company and, when authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Trust, the Debentures will
constitute valid and legally binding obligations of the Company enforceable
against the Company in accordance with their terms and entitled to the benefits
of the Indenture, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and subject to general
equity principles;

                                    (vii)    The Guarantee Agreement has been
duly authorized, executed and delivered by the Company, and (assuming the
Guarantee Agreement has been duly authorized, executed and delivered by the
Guarantee Trustee) constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and subject to general equity principles; and the Trust Agreement has
been duly authorized, executed and delivered by the Company and each of the
Administrative Trustees.

                                    (viii)   None of the Company's execution or
delivery of this Agreement, its performance hereof, its consummation of the
transactions contemplated herein or its application of the net proceeds of the
offering in the manner set forth under the caption "Use of Proceeds" conflicts
or will conflict with or results or will result in any breach or violation of
any of the terms or provisions of, or constitutes or will constitute a default
under, or results or will result in the creation or imposition of any
Encumbrance upon, any property or assets of the Company pursuant to (A) the
terms of the Certificate of Incorporation or By-laws of the Company, in each
case as amended; or (B) any statute, rule or regulation of any Governmental Body
having jurisdiction over

                                       18



the Company or any of its activities or properties; and no consent, approval,
authorization or order of any Governmental Body has been or is required for the
Company's performance of this Agreement, the Guarantee Agreement, the Indenture,
the Debentures, or the Trust Agreement, or the consummation of the transactions
contemplated hereby, except such as have been obtained under the Act or may be
required under state or Commonwealth of Puerto Rico securities or blue sky laws
in connection with the purchase and distribution by the Underwriters of the
Trust Preferred Securities;

                                    (ix)     Neither the Company nor the Trust
are required to be registered as an investment company under the Investment
Company Act; and

                                    (x)      The deposit accounts of Banco
Popular are insured by the BIF of the FDIC to the legal maximum, and to such
counsel's knowledge no proceeding for the termination or revocation of such
insurance is pending or threatened. Banco Popular is a member of the Federal
Reserve Bank of New York and of the Federal Home Loan Bank of New York.

         In addition, such counsel shall state that in the course of the
preparation of the Prospectus, such counsel has participated in conferences with
officers and representatives of the Company and with the Accountants, at which
conferences such counsel made inquiries of such officers, representatives and
Accountants and discussed the contents of the Prospectus and, on the basis of
the foregoing and of the experience such counsel has gained through its practice
under the Act, nothing has come to such counsel's attention that causes such
counsel to believe that the Registration Statement as of the date it became
effective or the Prospectus as of its date and as of the Closing Date contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectus as of the date hereof and as of the Closing
Date, contained any untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (it being understood that such counsel need not express any
opinion with respect to the financial statements, schedules and other financial
data included in the Prospectus). Such counsel may state that they make no
representation that they have independently verified the accuracy or
completeness of the statements contained in the Registration Statement and
Prospectus.

                           (B) in the case of the opinion from Brunilda Santos
de Alvarez:

                                    (i)      The Company has been duly organized
and is validly existing as a corporation under the laws of the Commonwealth of
Puerto Rico and is in good standing with the Commonwealth of Puerto Rico. Each
of Banco Popular and each of the other Significant Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation. Each of the Company, Banco Popular,
and each of the other Significant Subsidiaries is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the nature or conduct
of its business or use of its property and assets makes such qualification
necessary, except where the failure to so qualify would not have a material
adverse effect on the financial condition, or the earnings or business affairs
of the Company and its Subsidiaries considered as a

                                       19



single enterprise;

                                    (ii)     All of the outstanding shares of
capital stock of each Significant Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and are owned
directly or indirectly by the Company free and clear of any perfected security
interest and, to the knowledge of such counsel, any other security interests,
claims, liens or encumbrances;

                                    (iii)    The Company has an authorized
capitalization as set forth in the Prospectus; the Company has duly authorized
the issuance and sale of the Debentures to be sold by it to the Trust and has
duly authorized the creation of the Trust and the issuance and sale by the Trust
of the Trust Preferred Securities to be sold by it hereunder; such Debentures
and Trust Preferred Securities, when issued by the Company and the Trust,
respectively, will be validly issued, fully paid and nonassessable legal, valid
and binding obligators of the Company and the Trust, respectively, enforceable
in accordance with their terms, will conform in all material respects to the
descriptions thereof contained in the Prospectus, and will not be subject to any
preemptive, subscription or other similar rights; and no holders of securities
of the Company are entitled to have such securities registered under the
Registration Statement, except for holders who have waived any such registration
rights;

                                    (iv)     The Guarantee Agreement has been
duly authorized, executed and delivered by the Company, and (assuming the
Guarantee Agreement has been duly authorized, executed and delivered by the
Guarantee Trustee) constitutes a valid and legally binding instrument,
enforceable against the Company in accordance with its terms, subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from time to time
in effect and subject to general equity principles; and the Trust Agreement has
been duly authorized, executed and delivered by the Company and each of the
Administrative Trustees;

                                    (v)      To the knowledge of such counsel,
there are no contracts or documents which are required by the Act to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement which are not filed or incorporated
therein by reference as required by the Act and the Rules and Regulations;

                                    (vi)     To the knowledge of such counsel,
there is not pending or threatened against the Trust, the Company or any of its
Significant Subsidiaries, any legal action or proceeding, suit, arbitration,
claim, or governmental or other proceeding (informal or formal) or investigation
before or by any Governmental Body, of a character required to be disclosed in
the Registration Statement or the Prospectus which is not so disclosed therein
or in the materials incorporated by reference therein, and to the knowledge of
such counsel, no such proceedings have been threatened against the Trust, the
Company or any of its Significant Subsidiaries, or any of their respective
assets or properties. To the knowledge of such counsel, neither the Trust, the
Company, nor any Significant Subsidiary is in violation of, or in default with
respect to, any law, rule, or regulation, or any order, judgment or decree,
except as described in the Registration Statement or

                                       20



Prospectus or in the materials incorporated by reference therein, or, in the
case of the Company and its Significant Subsidiaries, such as in the aggregate
do not now have and can reasonably be expected in the future not to have a
material adverse effect upon the operations, business, properties, or assets of
the Company and its Subsidiaries considered as a single enterprise; nor is the
Trust, the Company, or any Significant Subsidiary presently required under any
order, judgment or decree to take any action in order to avoid any such
violation or default;

                                    (vii)    Each of the Company and the Trust
has full legal right, power, and authority to enter into this Agreement and to
consummate the transactions provided for herein; and this Agreement has been
duly authorized, executed and delivered by the Company and the Trust;

                                    (viii)   None of the Company's or the
Trust's execution or delivery of this Agreement, its performance hereof, its
consummation of the transactions contemplated herein or its application of the
net proceeds of the offering in the manner set forth under the caption "Use of
Proceeds" conflicts or will conflict with or results or will result in any
breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any Encumbrance upon,
any property or assets of the Trust, the Company, or any of its Significant
Subsidiaries, pursuant to (A) the terms of Trust Agreement or the Certificate of
Incorporation or By-laws of the Company or any Significant Subsidiary, in each
case as amended; (B) the terms of any contract or other agreement to which the
Trust, the Company or any Significant Subsidiary is a party or by which any of
them is or may be bound or to which any of their properties is or may be subject
and of which such counsel has knowledge; (C) any statute, rule or regulation of
any Governmental Body having jurisdiction over the Trust, the Company or any
Significant Subsidiary or any of their activities or properties; or (D) the
terms of any judgment, decree or order of any court, arbitrator or Governmental
Body having such jurisdiction and of which such counsel has knowledge, the
breach of which, in the case of the Company and the Significant Subsidiaries,
would result in a material adverse effect on the financial condition of the
Company and its Subsidiaries, considered as a single enterprise; and no consent,
approval, authorization or order of any Governmental Body has been or is
required for the Company's or the Trust's performance of this Agreement, the
Guarantee Agreement, the Indenture, the Debentures or the Trust Agreement, or
the consummation of the transactions contemplated thereby, except such as have
been obtained under the Act or may be required under state or Commonwealth of
Puerto Rico securities or blue sky laws in connection with the purchase and
distribution by the Underwriters of the Trust Preferred Securities;

                                    (ix)     To such counsel's knowledge, the
conduct of the respective businesses of the Trust, the Company and its
Significant Subsidiaries are not in violation of any federal, state or local
statute, administrative regulation or other law, which violation, in the case of
the Company and the Significant Subsidiaries, is likely to have a material
adverse effect on the Company and its Subsidiaries considered as a single
enterprise; and the Trust, the Company and its Significant Subsidiaries have
obtained all material licenses as are necessary or required for the conduct of
their businesses as presently conducted;

                                    (x)      Neither the Company nor the Trust
are required to be registered as an investment company under the Investment
Company Act;

                                       21



                                    (xi)     To the knowledge of such counsel,
none of the Trust, the Company or any of the Significant Subsidiaries is in
breach or violation of any of the terms or provisions of, or in default under
(nor has an event occurred which with notice or lapse of time or both would
constitute a default or acceleration under), (A) the terms of the Trust
Agreement or its Certificate of Incorporation or By-laws, in each case as
amended; (B) the terms of any contract or other agreement known to such counsel
to which the Trust, the Company or any Significant Subsidiary is a party or by
which any of them is or may be bound or to which any of their properties or
assets is or may be subject, which breach, violation or default, in the case of
the Company and the Significant Subsidiaries, could have a material adverse
effect on the Company and its Subsidiaries considered as a single enterprise;
(C) any statute, rule or regulation of any Government Body having jurisdiction
over the Trust, the Company or any Significant Subsidiary, or any of their
activities, assets or properties, which breach, violation or default, in the
case of the Company and the Significant Subsidiaries, could have a material
adverse effect on the Company and its Subsidiaries considered as a single
enterprise; or (D) the terms of any judgment, decree or order known to such
counsel, of any arbitrator or Governmental Body having such jurisdiction, which
breach, violation or default, in the case of the Company and the Significant
Subsidiaries, could have a material adverse effect on the Company and its
Subsidiaries considered as a single enterprise;

                                    (xii)    The deposit accounts of Banco
Popular and of each other Significant Subsidiary of the Company that is a
depository institution are insured by the BIF of the FDIC to the legal maximum,
and to such counsel's knowledge no proceeding for the termination or revocation
of such insurance is pending or threatened. Banco Popular is a member of the
Federal Reserve Bank of New York and of the Federal Home Loan Bank of New York;
and

                                    (xiii)   To the knowledge of such counsel,
none of the Trust, the Company or any of its Significant Subsidiaries, or any of
their respective directors or officers, is subject to any order or directive of,
or party to any agreement with, any regulatory agency having jurisdiction with
respect to the business or operations of the Trust, the Company or any of its
Significant Subsidiaries, except as disclosed in the Registration Statement or
the Prospectus or in the materials incorporated by reference therein, and
except, in the case of the Company and the Significant Subsidiaries, for any
such order, directive or agreement that is not material to the Company and its
Subsidiaries considered as a single enterprise.

         In rendering any such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Company and the Trust and public officials and, as to matters
involving the application of laws of any jurisdiction other than the
Commonwealth of Puerto Rico and the United States (to the extent satisfactory in
form and scope to counsel for the Underwriters) such counsel may rely upon the
opinion of local (including in-house) counsel to the Company. The foregoing
opinion shall also state that such counsel has no reason to believe that the
Underwriters are not justified in relying upon such opinion of local counsel,
and copies of such opinion shall be delivered to the Representative and its
counsel.

         In addition, such counsel shall state that in the course of the
preparation of the Prospectus,

                                       22



such counsel has participated in conferences with officers and representatives
of the Company and with the Accountants, at which conferences such counsel made
inquiries of such officers, representatives and Accountants and discussed the
contents of the Prospectus and, on the basis of the foregoing and of the
experience such counsel has gained through its practice under the Act, nothing
has come to such counsel's attention that causes such counsel to believe that
the Registration Statement as of the date it became effective or the Prospectus
as of its date and as of the Closing Date contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectus as of the date hereof and as of the Closing Date, contained any
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading (it
being understood that such counsel need not express any opinion with respect to
the financial statements, schedules and other financial data included in the
Prospectus). Such counsel may state that she makes no representation that she
has independently verified the accuracy or completeness of the statements
contained in the Registration Statement and Prospectus.

         References to the Registration Statement and the Prospectus in this
paragraph (f) shall include any amendment or supplement thereto at the date of
such opinion.

                  (g)      The Representative shall have received the opinion of
counsel to Bank One, as Property Trustee under the Trust Agreement, Indenture
Trustee under the Indenture, and Guarantee Trustee under the Guarantee
Agreement, dated the Closing Date, to the effect that:

                           (i)      Bank One is duly incorporated and is validly
existing in good standing as a banking corporation under the law of the United
States.

                           (ii)     Bank One has the power and authority to
execute, deliver and perform its obligations under the Trust Agreement, the
Indenture and the Guarantee Agreement.

                           (iii)    Each of the Trust Agreement, the Indenture
and the Guarantee Agreement has been duly authorized, executed and delivered by
Bank One and constitutes a legal, valid and binding obligation of Bank One,
enforceable against Bank One in accordance with its terms.

                           (iv)     The execution, delivery and performance by
Bank One of the Trust Agreement, the Indenture and the Guarantee Agreement do
not conflict with or constitute a breach of the charter or by-laws of Bank One.

                           (v)      No consent, approval or authorization of, or
registration with or notice to, any governmental authority or agency of the
United States of America governing the banking or trust powers of Bank One is
required for the execution, delivery or performance by Bank One of the Trust
Agreement, the Indenture and the Guarantee Agreement.

                  (h)      The Representative shall have received an opinion,
dated the Closing Date,

                                       23



from Richards, Layton & Finger, P.A., special Delaware counsel to the Company,
to the effect that:

                           (i)      The Trust has been duly created and is
validly existing in good standing as a business trust under the Delaware
Statutory Trust Act (the "Delaware Act"), and all filings required as of the
date hereof under the Delaware Act with respect to the creation and valid
existence of the Trust as a business trust have been made.

                           (ii)     Under the Trust Agreement and the Delaware
Act, the Trust has the trust power and authority to own property and to conduct
its business, all as described in the Prospectus.

                           (iii)    The Trust Agreement constitutes a valid and
legally binding instrument enforceable against the Company and each of the
Administrative Trustees in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally from time to time in effect and
subject to general equity principles and except further as enforcement thereof
may be limited by any governmental authority that limits, delays or prohibits
the making of payments outside the United States).

                           (iv)     Under the Trust Agreement and the Delaware
Act, the Trust has the trust power and authority (i) to execute and deliver, and
to perform its obligations under, this Agreement, and (ii) to issue, and to
perform its obligations under, the Trust Preferred Securities and the Trust
Common Securities.

                           (v)      Under the Trust Agreement and the Delaware
Act, the execution and delivery by the Trust of this Agreement, and the
performance by the Trust of its obligations under this Agreement, have been duly
authorized by all necessary trust action on the part of the Trust.

                           (vi)     Under the Delaware Act, the certificate
attached to the Trust Agreement as Exhibit [A] is an appropriate form of
certificate to evidence ownership of the Trust Preferred Securities. The Trust
Preferred Securities have been duly authorized by the Trust pursuant to the
Trust Agreement and, when issued and delivered in accordance with this
Agreement, will be duly and validly issued, and, subject to the qualifications
hereinafter expressed in this paragraph (vi), fully paid and non-assessable
undivided beneficial interests in the assets of the Trust and are entitled to
the benefits of the Trust Agreement. The Trust Common Securities have been duly
authorized by the Trust Agreement and are duly and validly issued undivided
beneficial interests in the assets of the Trust and are entitled to the benefits
of the Trust Agreement. The holders of the Trust Preferred Securities, as
beneficial owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.

                           (vii)    Under the Trust Agreement and the Delaware
Act, the issuance of the Trust Preferred Securities and the Trust Common
Securities is not subject to preemptive or similar rights.

                                       24



                           (viii)   The issuance and sale by the Trust of the
Trust Preferred Securities and the Trust Common Securities, the purchase by the
Trust of the Debentures, the execution, delivery and performance by the Trust of
this Agreement, the consummation by the Trust of the transactions contemplated
by this Agreement and compliance by the Trust with its obligations under this
Agreement do not violate (a) any of the provisions of the Certificate of Trust
or the Trust Agreement, (b) any applicable Delaware law or Delaware
administrative regulation.

                  (i)      The Representative shall have received an opinion,
dated the Closing Date, from O'Neill & Borges, counsel to the Underwriters,
which opinion shall be satisfactory in all respects to the Representative.

                  (j)      Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Representative a letter,
dated the date of its delivery (the "Accountants Letter"), addressed to the
Representative and in form and substance satisfactory to the Representative, to
the effect that:

                           (i)      they are independent accountants within the
meaning of the Act and the applicable published rules and regulations
thereunder;

                           (ii)     in their opinion, the consolidated financial
statements of the Company and its Subsidiaries audited by them and incorporated
by reference in the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act, the Exchange Act and the
published rules and regulations thereunder with respect to registration
statements on Form S-3;

                           (iii)    on the basis of procedures (but not an audit
in accordance with generally accepted auditing standards) consisting of (a)
reading the minutes of meetings of the stockholders and the Board of Directors
of the Company and its Subsidiaries since December 31, 2002, as set forth in the
minute books through a date five business days before the date hereof; (b)
performing the procedures specified by the American Institute of Certified
Public Accountants for a review of interim financial information as described in
SAS No. 71, "Interim Financial Information" on the unaudited consolidated
interim financial statements of the Company and its Subsidiaries included in the
Prospectus and reading the unaudited interim financial data for the period from
the date of the latest audited balance sheet incorporated by reference in the
Prospectus to the date of the latest available interim financial data; and (c)
making inquiries of certain officials of the Company who have responsibility for
financial and accounting matters regarding the specific items for which
representations are requested below, nothing has come to their attention (as of
a date not earlier than five business days before the date hereof) as a result
of the foregoing procedures that caused them to believe that: (1) the unaudited
consolidated interim financial statements incorporated by reference in the
Registration Statement or in the Prospectus, do not comply as to form in all
material respects with the applicable accounting requirements of the Exchange
Act and the published rules and regulations thereunder; (2) any material
modifications should be made to the unaudited consolidated interim financial
statements, if any, incorporated by reference in the Registration Statement or
in the

                                       25



Prospectus, for them to be in conformity with generally accepted accounting
principles; (3)(i) at the date of the latest available interim financial data
and at a specified date not earlier than five business days before the date
hereof, there was any decrease in the total assets or consolidated stockholders'
equity, any increase in long term debt, or any change in capital stock of the
Company and its Subsidiaries as compared with amounts shown in the most recent
balance sheet incorporated by reference in the Prospectus and (ii) for the
period from the date of the most recent balance sheet incorporated by reference
in the Prospectus to the date of the latest interim financial data available,
and to a date not earlier than five business days before the date hereof, there
were any decreases, as compared with the corresponding period in the preceding
year, in consolidated net interest income, non-interest income, or in the total
or per share amounts of net income, except in all instances for changes or
decreases which the Registration Statement discloses have occurred or may occur,
or they shall state any specific changes or decreases; and

                           (iv)     the information set forth under the captions
"Ratios of Earnings to Fixed Charges and Preferred Stock Dividends", ["Recent
Development"], "Capitalization", and "Selected Consolidated Financial and Other
Data" in the Prospectus and Prospectus Supplement, and under the headings
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Statistical Summaries" in the Company's Annual Report,
incorporated by reference in the Prospectus, which is expressed in dollars (or
percentages derived from such dollar amounts) and has been obtained from
accounting records which are subject to the internal controls of the Company's
accounting system or which has been derived directly from such accounting
records and analysis or computations, is in agreement with such records or
computations made therefrom.

         At the Closing Date, the Accountants shall have furnished to the
Representative a letter, dated the date of its delivery, which shall confirm, on
the basis of a review in accordance with the procedures set forth in the
Accountants Letter, that nothing has come to their attention during the period
from the date of the Accountants Letter referred to in the prior sentence to a
date (specified in the letter) not more than five business days prior to the
Closing Date, which would require any change in the original letter if it were
required to be dated and delivered at the Closing Date.

         In the event that the Accountants Letter sets forth any such changes,
decreases or increases, it shall be a further condition to the obligations of
the Underwriters that (A) such letter shall be accompanied by a written
explanation of the Company as to the significance thereof, unless the
Representative deems such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representative, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Trust Preferred Securities as contemplated by the Registration Statement and the
Prospectus, as amended as of the date hereof.

                  (k)      At the Closing Date, there shall be furnished to the
Representative an accurate certificate, dated the date of its delivery, signed
by each of the Chief Executive Officer, or any Senior Executive Vice President
and the Chief Financial Officer, the Treasurer or the Chief Accounting Officer
of the Company and with respect to the Trust, by an Administrative Trustee of
the Trust, in form and substance satisfactory to the Representative, to the
effect that to the best of their knowledge:

                                       26



                           (i)      Each signer of such certificate has
carefully examined the Registration Statement and the Prospectus and (A) as of
the date of such certificate, (x) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading and (y) the Prospectus does not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading and (B) since the
Effective Date no event has occurred as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect;

                           (ii)     Each of the representations and warranties
of the Trust and the Company contained in this Agreement were, when originally
made, and are, at the time such certificate is delivered, true and correct in
all respects; each of the covenants required herein to be performed by any of
them on or prior to the date of such certificate has been duly, timely and fully
performed and each condition herein required to be complied with on or prior to
the delivery of such certificate has been duly, timely and fully complied with;
and

                           (iii)    No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto and no
order directed at any document incorporated by reference in the Registration
Statement or any amendment thereto or the Prospectus has been issued, and no
proceedings for that purpose have been instituted or threatened by the
Commission.

                  (l)      The Trust Preferred Securities shall be qualified for
sale in such states and possessions as the Representative may reasonably
request, and each such qualification shall be in effect and not subject to any
stop order or other proceeding on the Closing Date.

                  (m)      The Company and the Trust shall have furnished to the
Representative such officers' certificates, certificates of government
officials, letters and other documents, in addition to those specifically
mentioned herein, as the Representative may have reasonably requested as to the
accuracy and completeness at the Closing Date of any statement in the
Registration Statement or the Prospectus, as to the accuracy at the Closing Date
of the representations and warranties of the Company, as to the performance by
the Company of its obligations hereunder, and as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Underwriters.

                  (n)      The Representative shall have received a copy of the
ruling from the Puerto Rico Department of the Treasury to the effect that the
Trust will be considered a grantor trust for purposes of Puerto Rico income tax
purposes, and a copy of a confirmation letter from the Puerto Rico Department of
the Treasury to the effect that said ruling is applicable to the Trust.

                  (o)      The Representative shall have received copies, duly
certified by the Secretary or an Assistant Secretary of the Company, of the
resolutions or other corporate actions adopted or

                                       27



taken by the Company in connection with the transactions contemplated herein.

                  (p)      The Representative shall have received a copy of the
certificate of incorporation of the Company, as amended, certified as of a
recent date by the appropriate officer of the Commonwealth, together with
certificates dated as of a recent date from the Secretary of the Sate of the
Commonwealth as to the existence and good standing of the Company under the laws
of the Commonwealth and copies of the by-laws of the Company certified by the
Secretary or an Assistant Secretary of the Company. The Representative shall
further have received a copy, certified by the Secretary or an Assistant
Secretary of the Company, of the Trust Agreement, the Indenture and the
Guarantee Agreement.

         All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you. The Company will furnish you with such conformed copies of
such opinions, certificates, letters and other documents as you shall reasonably
request.

         If (i) any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or (ii) any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Representatives and
their counsel, this Agreement and all obligations of the Underwriters hereunder
may be cancelled on, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Trust and the
Company in writing or by telephone or facsimile confirmed in writing.

         7.       Indemnification and Contribution.

                  (a)      Each of the Trust and the Company, jointly and
severally, agrees to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, damages or liabilities, joint or several (and actions in respect
thereof), to which they, or any of them, may become subject under the Act or
other Federal, state or Commonwealth of Puerto Rico statutory law or regulation,
at common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement made by the Company in Section
3 of this Agreement, (ii) any untrue statement or alleged untrue statement of
any material fact contained in (A) any Preliminary Prospectus, the Registration
Statement or the Prospectus or any amendment or supplement to the Registration
Statement or the Prospectus or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based upon written
information furnished by or on behalf of the Company filed in any jurisdiction
in order to qualify the Trust Preferred Securities under the securities or blue
sky laws thereof or filed with the Commission or any securities association or
securities exchange (each, an "Application"), or (iii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus or any amendment or supplement to the Registration Statement or
the Prospectus or any Application a material fact

                                       28



required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse, as incurred, each Underwriter and each such
other person for any legal or other expenses reasonably incurred by such
Underwriter or such other person in connection with investigating, defending or
appearing as a third-party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that the Company and the Trust
will not be liable in any such case to the extent that any such loss, claim,
damage or liability is based solely upon an untrue statement or omission or
alleged untrue statement or omission in any of such documents made in reliance
upon and in conformity with information relating to any Underwriter furnished in
writing to the Company by the Representative on behalf of any Underwriter
expressly for inclusion therein; provided, further that such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or any such other person) from whom the person asserting any such
loss, claim, damage, liability or action purchased Trust Preferred Securities
which are the subject thereof to the extent that any such loss, claim, damage or
liability (i) results from the fact that such Underwriter failed to send or give
a copy of the Prospectus (as amended or supplemented) to such person at or prior
to the confirmation of the sale of such Trust Preferred Securities to such
person, in any case where such delivery is required by the Act and (ii) arises
out of or is based upon an untrue statement or omission of a material fact
contained in such Preliminary Prospectus that was corrected in the Prospectus
(or any amendment or supplement thereto), unless such failure to deliver the
Prospectus (as amended or supplemented) was the result of noncompliance by the
Company with Section 4(f). This indemnity agreement will be in addition to any
liability that the Company might otherwise have. The Company will not, without
the prior written consent of each Underwriter, settle or compromise or consent
to the entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not such Underwriter or any person who controls such Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
each claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of each Underwriter and each such
other person from all liability arising out of such claim, action, suit or
proceeding.

                  (b)      Each Underwriter will severally and not jointly
indemnify and hold harmless each of the Company and the Trust, its employees,
officers and directors and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against
all losses, claims, damages or liabilities (or actions in respect thereof) to
which any of them may become subject under the Act or other federal, state or
Commonwealth of Puerto Rico statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus or any Application,
or (ii) the omission or the alleged omission to state in the Registration
Statement, any Preliminary Prospectus or the Prospectus or any amendment or
supplement to the Registration Statement or the Prospectus, or any Application,
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the
Representative expressly for use therein;

                                       29



and, subject to the limitation set forth immediately preceding this clause, will
reimburse, as incurred, any legal or other expenses reasonably incurred by the
Company and any such director, officer or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or any action
in respect thereof. The Company acknowledges that, for all purposes under this
Agreement, the statements relating to the Underwriters set forth under the
heading "Underwriting" (which do not include information on the Company's
expenses [and the listing of the Trust Preferred Securities]) constitute the
only information furnished in writing to the Company by the Representative on
behalf of the Underwriters expressly for inclusion in the Registration
Statement, any Preliminary Prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that each Underwriter might
otherwise have.

                  (c)      Promptly after receipt by an indemnified party under
this Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party or parties under this Section 7, notify the indemnifying party or parties
of the commencement thereof, but the omission so to notify the indemnifying
party or parties will not relieve it or them from any liability which it or they
may have to any indemnified party under the foregoing provisions of this Section
7 or otherwise unless, and only to the extent that, such omission results in the
forfeiture of substantive rights or defenses by the indemnifying party. If any
such action is brought against an indemnified party and it notifies an
indemnifying party or parties of its commencement, the indemnifying party or
parties against which a claim is made will be entitled to participate therein
and, to the extent that it or they may wish, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses other than reasonable costs of investigation subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood that, in connection
with such action, the indemnifying party shall not be liable for the reasonable
fees and expenses of more than one separate counsel (in addition to the fees and
expenses of local counsel necessary in connection with any such proceedings) in
any one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the Representative in the case of paragraph (a) of this Section 7,
representing the indemnified parties under paragraph (a) who are parties to such
action or actions), or (ii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party. After such notice from the indemnifying party to such
indemnified party, the indemnifying party will not be liable for the costs and
expenses of any settlement of such action effected by such indemnified party
without the written consent of the

                                       30



indemnifying party, unless such indemnified party waived its right under this
Section 7, in which case the indemnified party may effect such a settlement
without such consent.

                  (d)      If the indemnification provided for in the foregoing
paragraphs of this Section 7 is unavailable or insufficient to hold harmless an
indemnified party under paragraph (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties, on the one hand, and the indemnified party, on the other, from the
offering of the Trust Preferred Securities or (ii) if, but only if, the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
indemnifying party or parties on the one hand, and the indemnified party, on the
other, in connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the Company, on
the one hand, and the Underwriters, on the other, shall be deemed to be in the
same proportion as the total proceeds from the offering of the Trust Preferred
Securities (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. Relative
fault shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Representative on behalf of the Underwriters, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Trust and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 7(d)
were to be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities (or actions in respect thereof) referred to
above in this Section 7(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(d), no Underwriter shall be required to contribute
any amount in excess of the total underwriting discounts and commissions
received by it with respect to the Trust Preferred Securities purchased by such
Underwriter under this Agreement, less the aggregate amount of any damages that
such Underwriter has otherwise been required to pay in respect of the same or
any substantially similar claim. No person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided in
this Section 7(d) are several in proportion to their respective underwriting
obligations and not joint. For purposes of this Section 7(d), each person, if
any, who controls an Underwriter within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act will have the same rights to contribution as such
Underwriter, and each director or officer of the Company and each person, if
any, who controls the

                                       31



Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, will have the same rights to contribution as the Company, subject
in each case to the provisions of this paragraph (d). The provisions of section
7(c) shall be applicable to any claim for contribution under this Section 7(d).
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made under this Section 7(d), notify any
such party or parties from whom contribution may be sought, but the omission so
to notify will not relieve the party or parties from whom contribution may be
sought from any other obligations it or they may have hereunder or otherwise
than under this paragraph (d) or to the extent that such party or parties were
not adversely affected by such omission. The contribution agreement set forth
above shall be in addition to any liabilities which any indemnifying party may
otherwise have. No party will be liable for contribution with respect to any
action or claim settled without its written consent (which consent will not be
unreasonably withheld).

                  (e)      The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any investigation made by or on behalf of the Underwriters,
(ii) acceptance of any of the Trust Preferred Securities and payment therefor or
(iii) any termination of this Agreement.

         8.       Termination. The obligations of the several Underwriters under
this Agreement may be terminated at any time prior to the Closing Date by notice
to the Company and the Trust from the Representative, without liability on the
part of any Underwriter to the Company and the Trust if, prior to delivery and
payment for the Securities, in the sole judgment of the Representative, (i)
trading in the Common Stock, the Preferred Stock or any trust preferred
securities of the Company or any affiliate of the Company or in securities
generally shall have been suspended by the Commission or by the Nasdaq, (ii)
minimum or maximum prices shall have been established for the Common Stock, the
Preferred Stock or any trust preferred securities of the Company or any
affiliate of the Company or for securities generally on either the Nasdaq or the
NYSE, or additional material governmental restrictions, not in force on the date
of this Agreement, shall have been imposed upon trading in securities generally
by any of such market or exchange or by order of the Commission or any court or
other Governmental Authority, (iii) a general banking moratorium shall have been
declared by United States, New York State, or Commonwealth of Puerto Rico
authorities, or (iv) any material adverse change in the financial or securities
markets in the United States or any outbreak or material escalation of
hostilities or declaration by the United States of war or other calamity or
crisis shall have occurred, the effect of any of which is such as to make it, in
the sole judgment of the Representative, impracticable or inadvisable to market
the Trust Preferred Securities on the terms and in the manner contemplated by
the Prospectus. Any termination pursuant to Section 8 shall be without liability
of any party to any other party except as provided in Sections 5(a) and 7.

         9.       Default of Underwriters. If one or more Underwriters default
in their obligations to purchase Trust Preferred Securities hereunder and the
aggregate number of such Trust Preferred Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase is ten percent or less
of the aggregate number of Trust Preferred Securities to be purchased by all of
the

                                       32



Underwriters at such time hereunder, the other Underwriters may make
arrangements satisfactory to the Representative for the purchase of such Trust
Preferred Securities by other persons (who may include one or more of the
nondefaulting Underwriters, including the Representative), but if no such
arrangements are made by the Closing Date, the other Underwriters shall be
obligated severally in proportion to their respective commitments hereunder to
purchase the Trust Preferred Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase. If one or more Underwriters so
default with respect to an aggregate number of Trust Preferred Securities that
is more than ten percent of the aggregate number of Trust Preferred Securities,
as the case may be, to be purchased by all of the Underwriters at such time
hereunder, and if arrangements satisfactory to the Representative are not made
within 36 hours after such default for the purchase by other persons (who may
include one or more of the nondefaulting Underwriters, including the
Representative) of the Trust Preferred Securities with respect to which such
default occurs, this Agreement will terminate without liability on the part of
any nondefaulting Underwriter, the Trust and the Company other than as provided
in Section 10 hereof. In the event of any default by one or more Underwriters as
described in this Section 9, the Representative shall have the right to postpone
the Closing Date, established as provided in Section 9 hereof for not more than
seven business days in order that any necessary changes may be made in the
arrangements or documents for the purchase and delivery of the Trust Preferred
Securities. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 9. Nothing herein shall
relieve any defaulting Underwriter from liability for its default.

         10.      Survival. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Trust, the
Company, its officers, and the several Underwriters set forth in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Trust, the Company, any of its officers or directors, any
Underwriter or any controlling person referred to in Section 7 hereof and (ii)
delivery of and payment for the Trust Preferred Securities. The respective
agreements, covenants, indemnities and other statements set forth in Sections 5
and 7 hereof shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement.

         11.      Notices. Notice given pursuant to any of the provisions of
this Agreement shall be in writing and, unless otherwise specified, shall be
mailed or delivered (a) if to the Company, at the office of the Company, Banco
Popular Center, 268 Munoz Rivera Avenue, Hato Rey, PR 00918, Attention: Jorge
Junquera, (b) if to the Trust, to the office of ____________________,
__________________, or (c) if to the Underwriters, to the office of the
Representative, Banco Popular Center, Suite 1020, 268 Munoz Rivera Avenue, Hato
Rey, PR 00918, Attention: Kenneth McGrath, President. Any such notice shall be
effective only upon receipt. Any notice under Section 7 or 8 may be made by
telex or telephone, but if so made shall be subsequently confirmed in writing.

         12.      Successors. This Agreement shall inure to the benefit of and
shall be binding upon the several Underwriters, the Trust, the Company, and
their respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of

                                       33



this Agreement, or any provisions herein contained, this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that (i) the indemnities of the Trust and the Company contained in Section 7 of
this Agreement shall also be for the benefit of any person or persons who
control any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act and (ii) the indemnities of the Underwriters, contained
in Section 7 of this Agreement shall also be for the benefit of the directors,
employees and officers of the Company and any person or persons who control the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act. No purchaser of Trust Preferred Securities from any Underwriter
shall be deemed a successor because of such purchase. This Agreement shall not
be assignable by any party hereto without the prior written consent of the other
party.

         13.      APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO,
WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.

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

         Please confirm that the foregoing correctly sets forth the agreement
among the Company and the several Underwriters.

                                             Very truly yours,

                                             POPULAR CAPITAL TRUST [ ]

                                             By:________________________________
                                             Name:
                                             Title

                                             POPULAR, INC.

                                             By:________________________________
                                             Name:
                                             Title:

                                       34



Confirmed as of the date first above mentioned:

[Name of Representative]
Acting on its behalf and as representative
of the several Underwriters named in Schedule 1 hereof

By:___________________________________
Name:
Title:

                                       35



                                                                      SCHEDULE 1
                                  UNDERWRITERS

                                                      Aggregate Number of Trust
                                                      Preferred Securities to be
                                                      Purchased

Total:

                                       36

EX-4.1

                                                                     EXHIBIT 4.1

                                  POPULAR, INC.

                                       TO

                          BANK ONE TRUST COMPANY, N.A.

                                     Trustee

                              ____________________

                                    INDENTURE

                        Dated as of _______________, 2003

                              ____________________

                       Junior Subordinated Debt Securities



                                  POPULAR, INC.

         Reconciliation and tie between Trust Indenture Act of 1939 and
                  Indenture, dated as of _______________, 2003



TRUST INDENTURE ACT SECTION                                                                  INDENTURE SECTION
- ---------------------------                                                                  -----------------
                                                                                          
ss. 310(a)(1)...........................................................................            609
       (a)(2)...........................................................................            609
       (a)(3)...........................................................................      Not Applicable
       (a)(4)...........................................................................      Not Applicable
       (a)(5)...........................................................................            609
       (b)..............................................................................         608, 610
       (c)..............................................................................      Not Applicable
ss. 311(a)..............................................................................            613
       (b)..............................................................................            613
ss. 312(a)..............................................................................        701, 702(a)
       (b)..............................................................................          702(b)
       (c)..............................................................................          702(c)
ss. 313(a)..............................................................................          703(a)
       (b)..............................................................................          703(a)
       (c)..............................................................................          703(a)
       (d)..............................................................................          703(b)
ss. 314(a)..............................................................................         704, 1004
       (b)..............................................................................      Not Applicable
       (c)(1)...........................................................................            102
       (c)(2)...........................................................................            102
       (c)(3)...........................................................................      Not Applicable
       (d)..............................................................................      Not Applicable
       (e)..............................................................................            102
ss. 315(a)..............................................................................            601
       (b)..............................................................................            602
       (c)..............................................................................            601
       (d)..............................................................................            601
       (e)..............................................................................            514
ss. 316(a)..............................................................................            101
       (a)(1)(A)........................................................................     104(h), 502, 512
       (a)(1)(B)........................................................................        104(h), 513
       (a)(2)...........................................................................      Not Applicable
       (b)..............................................................................            508
       (c)..............................................................................          104(h)
ss. 317(a)(1)...........................................................................            503
       (a)(2)...........................................................................            504
       (b)..............................................................................           1003
ss. 318(a)..............................................................................            107
       (c)..............................................................................            107


- ---------------------------
         NOTE: This reconciliation and tie shall not, for any purpose, be deemed
to be part of the Indenture.



                               TABLE OF CONTENTS



                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
         Parties............................................................................................      1
         Recitals...........................................................................................      1

ARTICLE I        -  Definitions and Other Provisions of General Application.................................      1
         Section 101.    Definitions........................................................................      1
         Section 102.    Compliance Certificates and Opinions...............................................     13
         Section 103.    Form of Documents Delivered to Trustee.............................................     13
         Section 104.    Acts of Holders....................................................................     14
         Section 105.    Notices, etc., to Trustee and Company..............................................     16
         Section 106.    Notice to Holders; Waiver..........................................................     16
         Section 107.    Conflict with Trust Indenture Act..................................................     17
         Section 108.    Effect of Headings and Table of Contents...........................................     17
         Section 109.    Successors and Assigns.............................................................     17
         Section 110.    Separability Clause................................................................     18
         Section 111.    Benefits of Indenture..............................................................     18
         Section 112.    Governing Law......................................................................     18
         Section 113.    Legal Holidays.....................................................................     18
         Section 114.    Counterparts.......................................................................     18

ARTICLE II       - Debt Security Forms......................................................................     18
         Section 201.    Forms Generally....................................................................     18
         Section 202.    Form of Trustee's Certificate of Authentication....................................     19
         Section 203.    Debt Securities in Global Form.....................................................     19

ARTICLE III      - The Debt Securities......................................................................     20
         Section 301.    Amount Unlimited; Issuance in Series...............................................     20
         Section 302.    Denominations......................................................................     24
         Section 303.    Execution, Authentication, Delivery and Dating.....................................     24
         Section 304.    Temporary Debt Securities..........................................................     27
         Section 305.    Registration; Registration of Transfer and Exchange................................     30
         Section 306.    Mutilated, Destroyed, Lost and Stolen Debt Securities..............................     33
         Section 307.    Payment of Interest and Additional Interest; Interest Rights Preserved.............     35
         Section 308.    Persons Deemed Owners..............................................................     37
         Section 309.    Cancellation.......................................................................     37
         Section 310.    Computation of Interest............................................................     38
         Section 311.    Certification by a Person Entitled to Delivery of a Bearer Security................     38
         Section 312.    Judgements.........................................................................     38
         Section 313.    Deferrals of Interest Payment Dates................................................     39
         Section 314.    Right of Set-Off...................................................................     40
         Section 315.    Agreed Tax Treatment...............................................................     40

ARTICLE IV       - Satisfaction and Discharge...............................................................     40
         Section 401.    Satisfaction and Discharge of Indenture............................................     40
         Section 402.    Application of Trust Money and Eligible Instruments................................     42






                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
         Section 403.    Satisfaction, Discharge and Defeasance of Debt Securities of any Series............     43

ARTICLE V        -  Remedies................................................................................     45
         Section 501.    Events of Default..................................................................     45
         Section 502.    Acceleration of Maturity; Rescission and Annulment.................................     46
         Section 503.    Collection of Indebtedness and Suits for Enforcement by Trustee....................     48
         Section 504.    Trustee May File Proofs of Claim...................................................     49
         Section 505.    Trustee May Enforce Claims without Possession of Debt Securities or Coupons........     50
         Section 506.    Application of Money Collected.....................................................     50
         Section 507.    Limitation on Suits................................................................     51
         Section 508.    Unconditional Right of Holders to Receive Principal, Premium and
                         Interest and to Exchange Debt Securities for Capital Securities;
                         Direct Action by Holders of Capital Trust Securities...............................     51
         Section 509.    Restoration of Rights and Remedies.................................................     52
         Section 510.    Rights and Remedies Cumulative.....................................................     52
         Section 511.    Delay or Omission Not Waiver.......................................................     52
         Section 512.    Control by Holders of Debt Securities..............................................     53
         Section 513.    Waiver of Past Defaults............................................................     53
         Section 514.    Undertaking for Costs..............................................................     54
         Section 515.    Waiver of Stay or Extension Laws...................................................     54

ARTICLE VI       -  The Trustee.............................................................................     54
         Section 601.    Certain Duties and Responsibilities................................................     54
         Section 602.    Notice of Default..................................................................     55
         Section 603.    Certain Rights of Trustee..........................................................     55
         Section 604.    Not Responsible for Recitals or Issuance of Debt Securities........................     56
         Section 605.    May Hold Debt Securities or Coupons................................................     56
         Section 606.    Money Held in Trust................................................................     57
         Section 607.    Compensation and Reimbursement.....................................................     57
         Section 608.    Disqualification; Conflicting Interests............................................     57
         Section 609.    Corporate Trustee Required; Eligibility............................................     58
         Section 610.    Resignation and Removal; Appointment of Successor..................................     58
         Section 611.    Acceptance of Appointment by Successor.............................................     60
         Section 612.    Merger, Conversion, Consolidation or Succession to Business........................     61
         Section 613.    Preferential Collection of Claims Against Company..................................     62
         Section 614.    Authenticating Agent...............................................................     62

ARTICLE VII      -  Holders' Lists and Reports By Trustee and Company.......................................     63
         Section 701.    Company to Furnish Trustee Names and Addresses of Holders..........................     63
         Section 702.    Preservation of Information; Communications to Holders.............................     64
         Section 703.    Reports by Trustee.................................................................     64


                                      -ii-




                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
         Section 704.    Reports by Company..................................................................    65

ARTICLE VIII     -    Consolidation, Merger, Conveyance, Transfer or Lease...................................    65
         Section 801.    Company May Consolidate, etc. only on Certain Terms.................................    65
         Section 802.    Successor Corporation Substituted...................................................    65

ARTICLE IX       -    Supplemental Indentures................................................................    66
         Section 901.    Supplemental Indentures without Consent of Holders..................................    66
         Section 902.    Supplemental Indentures with Consent of Holders.....................................    67
         Section 903.    Execution of Supplemental Indentures................................................    69
         Section 904.    Effect of Supplemental Indentures...................................................    70
         Section 905.    Conformity with Trust Indenture Act.................................................    70
         Section 906.    Reference in Debt Securities to Supplemental Indentures.............................    70

ARTICLE X        -    Covenants..............................................................................    70
         Section 1001.   Payment of Principal, Premium and Interest..........................................    70
         Section 1002.   Maintenance of Office or Agency.....................................................    70
         Section 1003.   Money for Debt Securities Payments to Be Held in Trust..............................    72
         Section 1004.   Officers' Certificate as to Default.................................................    73
         Section 1005.   Waiver of Certain Covenants.........................................................    73
         Section 1006.   Payment of Additional Amounts.......................................................    74
         Section 1007.   Additional Sums.....................................................................    75
         Section 1008.   Additional Covenants................................................................    75

ARTICLE XI       -    Redemption of Debt Securities..........................................................    76
         Section 1101.   Applicability of Article............................................................    76
         Section 1102.   Election to Redeem; Notice to Trustee...............................................    77
         Section 1103.   Selection by Trustee of Debt Securities to be Redeemed..............................    77
         Section 1104.   Notice of Redemption................................................................    77
         Section 1105.   Deposit of Redemption Price.........................................................    78
         Section 1106.   Debt Securities Payable on Redemption Date..........................................    79
         Section 1107.   Debt Securities Redeemed in Part....................................................    80
         Section 1108.   Right of Redemption of Debt Securities Initially Issued to an Issuer Trust..........    80

ARTICLE XII      -    Sinking Funds..........................................................................    80
         Section 1201.   Applicability of Article............................................................    80
         Section 1202.   Satisfaction of Sinking Fund Payments with Debt Securities..........................    81
         Section 1203.   Redemption of Debt Securities for Sinking Fund......................................    81

ARTICLE XIII     -    Repayment at the Option of Holders.....................................................    82
         Section 1301.   Applicability of Article............................................................    82
         Section 1302.   Repayment of Debt Securities........................................................    82
         Section 1303.   Exercise of Option; Notice..........................................................    82
         Section 1304.   Election of Repayment by Remarketing Entities.......................................    83


                                      -iii-




                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
         Section 1305.   Securities Payable on the Repayment Date...........................................     83

ARTICLE XIV      -   Exchange of Capital Securities for Debt Securities.....................................     84
         Section 1401.   Applicability of Article...........................................................     84
         Section 1402.   Exchange of Capital Securities for Debt Securities at Stated Maturity..............     84
         Section 1403.   Right of Early Exchange of Capital Securities for Debt Securities..................     85
         Section 1404.   Notices of Exchange................................................................     85
         Section 1405.   Rights and Duties of Holders of Debt Securities to be Exchanged for
                         Capital Securities.................................................................     87
         Section 1406.   Election to Exchange...............................................................     89
         Section 1407.   Deposit of Capital Exchange Price..................................................     89
         Section 1408.   Debt Securities Due on Capital Exchange Date; Debt
                         Securities Exchanged in Part.......................................................     89
         Section 1409.   Form of Capital Security Election Form.............................................     91
         Section 1410.   Fractional Capital Securities......................................................     91
         Section 1411.   Company to Obtain Governmental and Regulatory Approvals............................     92
         Section 1412.   Taxes on Exchange..................................................................     92
         Section 1413.   Covenants as to Capital Securities and Secondary Offering..........................     92
         Section 1414.   Provision in Case of Consolidation, Merger or Transfer of Assets...................     93
         Section 1415.   Trustee Not Responsible............................................................     93
         Section 1416.   Revocation of Obligation to Exchange Capital Securities for Debt Securities........     94
         Section 1417.   Optional Securities Funds..........................................................     94

ARTICLE XV       -   Securities Funds.......................................................................     95
         Section 1501.   Creation of Securities Funds.......................................................     95
         Section 1502.   Designations of Securities Funds...................................................     96
         Section 1503.   Covenant of the Company to Obtain Securities Funds.................................     96

ARTICLE XVI       -  Meetings of Holders of Debt Securities.................................................     97
         Section 1601.   Purposes for Which Meetings May Be Called..........................................     97
         Section 1602.   Call, Notice and Place of Meetings.................................................     97
         Section 1603.   Persons Entitled to Vote at Meeting................................................     98
         Section 1604.   Quorum; Action.....................................................................     98
         Section 1605.   Determination of Voting Rights; Conduct and Adjournment of Meetings................     99
         Section 1606.   Counting Votes and Recording Action of Meetings....................................    100

ARTICLE XVII     -   Defeasance.............................................................................    100
         Section 1701.   Termination of Company's Obligations...............................................    100
         Section 1702.   Repayment to Company...............................................................    101
         Section 1703.   Indemnity for Eligible Instruments.................................................    102

ARTICLE XVIII    -   Subordination of Debt Securities.......................................................    102
         Section 1801.   Debt Securities Subordinate to Senior Debt.........................................    102
         Section 1802.   Trustee and Holders of Debt Securities May Rely on Certificate of
                         Liquidating Agent; Trustee May Require Further Evidence as to Ownership
                         of Senior


                                      -iv-




                                                                                                               PAGE
                                                                                                               ----
                                                                                                           
                         Debt; Trustee Not Fiduciary to Holders of Senior Debt.............................     104
         Section 1803.   Payment Permitted If No Default...................................................     105
         Section 1804.   Trustee Not Charged with Knowledge of Prohibition.................................     105
         Section 1805.   Trustee to Effectuate Subordination...............................................     105
         Section 1806.   Rights of Trustee as Holder of Senior Debt........................................     106
         Section 1807.   Article Applicable to Paying Agents...............................................     106
         Section 1808.   Subordination Rights Not Impaired by Acts or
                         Omissions of the Company or Holders of Senior Debt................................     106

ARTICLE XIX      -   Conversion of Convertible Securities..................................................     106
         Section 1901.   Applicability of Article..........................................................     106
         Section 1902.   Right to Convert..................................................................     107
         Section 1903.   Exercise of Conversion Privilege; Delivery of Common Stock on Conversion;
                         No Adjustment for Interest or Dividends...........................................     107
         Section 1904.   Cash Payments in Lieu of Fractional Shares........................................     108
         Section 1905.   Conversion Price..................................................................     109
         Section 1906.   Adjustment to Conversion Price....................................................     109
         Section 1907.   Effect of Reclassification, Consolidation, Merger or
                         Sale..............................................................................     113
         Section 1908.   Taxes on Shares Issued............................................................     113
         Section 1909.   Shares to be Fully Paid; Compliance with
                         Governmental Requirements; Listing of Common Stock................................     113
         Section 1910.   Trustee Not Responsible...........................................................     114
         Section 1911.   Notice to Holders Prior to Certain Actions........................................     114
         Section 1912.   Covenant to Reserve Shares........................................................     115

EXHIBIT A-1      -   [Form of Certificate of Beneficial Ownership by a Non-United States Person
                     or by Certain Other Persons]..........................................................   A-1-1

EXHIBIT A-2      -   [Form of Certificate of Status as a Foreign Branch of a United States
                     Financial Institution]................................................................   A-2-1

EXHIBIT B        -   [Form of Certificate to be Given by Euroclear and Cedel S.A. in
                     Connection with the Exchange of All or a Portion of a Temporary Global
                     Security or to Obtain Interest Prior to Exchange].....................................     B-1


                                       -v-



         INDENTURE (the "Indenture") dated as of _______________, 2003 between
POPULAR, INC., a Commonwealth of Puerto Rico corporation (hereinafter called the
"Company"), having its principal place of business at 209 Munoz Rivera Avenue,
San Juan, Puerto Rico 00918, and BANK ONE TRUST COMPANY, N.A., not in its
individual capacity but solely as trustee under this Indenture, a national
banking association (hereinafter called the "Trustee"), having its Corporate
Trust Office at One Bank One Plaza, Mail Code IL-0823, Chicago, Illinois 60670.

                             RECITALS OF THE COMPANY

         The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debentures (herein called the "Debt Securities"), including Debt
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more statutory business trusts (each an
"Issuer Trust") of undivided preferred beneficial interests in the assets of
such Issuer Trusts (the "Capital Trust Securities") and undivided common
beneficial interests in the assets of such Issuer Trusts (the "Common Trust
Securities" and, together with the Capital Trust Securities, the "Trust
Securities").

         All things necessary have been done to make this Indenture a valid
agreement of the Company, in accordance with its terms.

         NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         For and in consideration of the premises and the purchase of the Debt
Securities of any series created and issued on or after the date hereof by the
Holders thereof, it is mutually covenanted and agreed for the equal and
proportionate benefit of all Holders of such Debt Securities or of any such
series, as follows:

                                    ARTICLE I

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

         Section 101. Definitions.

         For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

                  (1)      the terms defined in this Article have the meanings
         assigned to them in this Article, and include the plural as well as the
         singular;

                  (2)      all other terms used herein which are defined in the
         Trust Indenture Act or by Commission rule or regulation under the Trust
         Indenture Act, either directly or by reference therein, as in force at
         the date as of which this instrument was executed, except as provided
         in Section 905, have the meanings assigned to them therein;

                  (3)      all accounting terms not otherwise defined herein
         have the meanings assigned to them in accordance with generally
         accepted accounting principles, and, except as otherwise herein
         expressly provided, the term



         "generally accepted accounting principles" with respect to any
         computation required or permitted hereunder shall mean such accounting
         principles as are generally accepted in the United States and the
         Commonwealth of Puerto Rico at the date of such computation; and

                  (4)      the words "herein", "hereof" and "hereunder" and
         other words of similar import refer to this Indenture as a whole and
         not to any particular Article, Section or other subdivision.

         "Act" when used with respect to any Holder has the meaning specified in
Section 104.

         "Additional Interest" means the interest, if any, that shall accrue on
any interest on the Debt Securities of any series the payment of which has not
been made on the applicable Interest Payment Date and which shall accrue at the
rate per annum specified or determined as specified in such Debt Security.

         "Additional Sums" has the meaning specified in Section 1007.

         "Additional Taxes" means any additional taxes, duties and other
governmental charges to which an Issuer Trust has become subject from time to
time as a result of a Tax Event.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities by, contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Authorized Newspaper" means a newspaper in an official language of the
country of publication or in the English language customarily published on each
Business Day, whether or not published on Saturdays, Sundays or holidays, and of
general circulation in the place in connection with which the term is used or in
the financial community of such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

         "Bearer Security" means any Debt Security established pursuant to
Section 201 which is payable to bearer including, without limitation, unless the
context otherwise indicates, a Debt Security in global bearer form.

         "Board of Directors" means either the board of directors of the
Company, or the executive or any other committee of that board duly authorized
to act in respect hereof.

         "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such

                                       2


certification, and delivered to the Trustee. Where any provision of this
Indenture refers to action to be taken pursuant to a Board Resolution (including
the establishment of any series of the Debt Securities and the forms and terms
thereof), such action may be taken by any committee of the Board of Directors
or any officer or employee of the Company authorized to take such action by a
Board Resolution.

         "Business Day", when used with respect to any Place of Payment or Place
of Capital Exchange, means any day which is not a Saturday or Sunday and which
is not a legal holiday or a day on which banking institutions or trust companies
in that Place of Payment or Place of Capital Exchange are authorized or
obligated by law, regulation or executive order to close or are customarily
closed.

         "Capital Exchange Agent" means the Person or Persons appointed by the
Company to give notices and to exchange Debt Securities of any series for
Capital Securities as specified in Article XIV.

         "Capital Exchange Date", when used with respect to the Debt Securities
of any series, means any date on which such Debt Securities are to be exchanged
for Capital Securities pursuant to this Indenture.

         "Capital Exchange Price", when used with respect to any Debt Security
of any series to be exchanged for Capital Securities, means the amount of
Capital Securities for which such Debt Security is to be exchanged pursuant to
this Indenture or the aggregate sale price of such Capital Securities in the
Secondary Offering for such Debt Security, as the case may be.

         "Capital Securities" means any securities issued by the Company which
consist of any of the following: (i) Common Stock, (ii) Perpetual Preferred
Stock or (iii) securities which at the date of issuance may be issued in
exchange for, or the proceeds from the sale of which may be designated as
Securities Funds or Optional Securities Funds for the payment of the principal
of, "mandatory convertible securities" under applicable regulations of the
Primary Federal Regulator. Capital Securities may have such terms, rights and
preferences as may be determined by the Company.

         "Capital Security Election Form" means a form substantially in the form
included in Section 1409.

         "Capital Trust Securities" has the meaning specified in the first
recital of this Indenture.

         "Capital Treatment Event" means, in respect of any Issuer Trust, the
reasonable determination by the Company (as evidenced by an Officers'
Certificate delivered to the Trustee) that, as a result of the occurrence of any
amendment to, or change (including any announced prospective change) in, the
laws (or any rules or regulations thereunder) of the United States or any
political subdivision thereof or therein or the Commonwealth of Puerto Rico, or
as a result of any official or administrative pronouncement or action or
judicial decision interpreting or applying such laws, rules or regulations,
which amendment or change is effective or such pronouncement, action or decision
is announced on or after the date of the issuance of the Capital Trust
Securities of such Issuer

                                       3


Trust, there is more than an insubstantial risk that the Company will not be
entitled to treat an amount equal to the aggregate Liquidation Amount (as such
term is defined in the related Trust Agreement) of such Capital Trust Securities
as "Tier 1 Capital" (or the then equivalent thereof) for purposes of the capital
adequacy guidelines of the Board of Governors of the Federal Reserve System, as
then in effect and applicable to the Company.

         "Clearstream" means Clearstream Banking S.A.

         "Closing Price" has the meaning specified in Section 1906(d).

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.

         "Common Trust Securities" has the meaning specified in the first
recital of this Indenture.

         "Common Stock" means, when used with reference to the capital stock of
the Company, the class of stock which, at the date of execution of this
Indenture, is designated as common stock of the Company and stock of any class
or classes into which such common stock or any such other class may thereafter
be changed or reclassified. In case by reason of the operation of Article XIX,
the Convertible Securities shall be convertible into any other shares or other
securities or property of the Company or any other corporation, any reference in
this Indenture to the conversion of Convertible Securities pursuant to Article
XIX shall be deemed to refer to and include conversion of Convertible Securities
into such other shares or other securities or property.

         "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

         "Company Request" and "Company Order" mean, respectively, except as
otherwise provided in this Indenture, a written request or order signed in the
name of the Company by the Chairman of the Board, a Vice Chairman of the Board,
the President or a Vice President (any references to a Vice President of the
Company herein shall be deemed to include any Vice President of the Company
whether or not designated by a number or word or words added before or after the
title "Vice President"), the Treasurer, an Assistant Treasurer, the Controller,
an Assistant Controller, Secretary or an Assistant Secretary of the Company, or
by another officer of the Company duly authorized to sign by a Board Resolution,
and delivered to the Trustee.

         "Conversion Price" has the meaning specified in Section 1905.

         "Convertible Securities" means any series of Debt Securities that are
designated as such pursuant to Section 301.

                                       4


         "Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall
be administered.

         The term "corporation" includes corporations, associations, companies
and business trusts.

         The term "coupon" means any interest coupon appertaining to a Bearer
Security.

         "Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities authenticated and
delivered under this Indenture.

         "Defaulted Interest" has the meaning specified in Section 307.

         "Delaware Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware Trustee" in the related Trust Agreement, solely in
its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware trustee appointed as therein provided.

         "Depositary" means, with respect to the Debt Securities of any series
issuable or issued in the form of a Global Security, the Person designated as
Depositary by the Company pursuant to Section 301 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each person who is then a

         Depositary hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Debt Securities of any such
series shall mean the Depositary with respect to the Debt Securities of that
series.

         "Designated Currency" has the meaning specified in Section 312.

         "Distributions," with respect to the Trust Securities issued by an
Issuer Trust, means the amounts payable in respect of such Trust Securities as
provided in the related Trust Agreement and referred to therein as
"Distributions."

         "Dollar" or "$" means the coin or currency of the United States of
America as at the time of payment is legal tender for the payment of public and
private debts.

         "Eligible Instruments" means monetary assets, money market instruments
and securities that are payable in Dollars only and essentially risk free as to
collection of principal and interest, including U.S. Government Obligations.

         "Euro" means the single currency of the European Monetary Union as
defined under EC Regulation 1103/97 adopted under Article 235 of the EU Treaty
and under EC Regulation 974/98 adopted under Article 1091(4) of the EU Treaty or
under any successor European legislation from time to time.

         "Euroclear" means Morgan Guarantee Trust Company of New York, Brussels
Office, as operator of the Euroclear System.

                                       5


         "European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.

         "Event of Default" has the meaning specified in Section 501.

         "Exchange Rate" shall have the meaning specified as contemplated in
Section 301.

         "Exchange Rate Agent" shall have the meaning specified as contemplated
in Section 301.

         "Exchange Rate Officer's Certificate", with respect to any date for the
payment of principal of (and premium, if any) and interest on any series of Debt
Securities, means a certificate setting forth the applicable Exchange Rate and
the amounts payable in Dollars and Foreign Currencies in respect of the
principal of (and premium, if any) and interest on Debt Securities denominated
in Euro, any other composite currency or Foreign Currency, and signed by the
Chairman of the Board, a Vice Chairman of the Board, the President, the
Treasurer or any Assistant Treasurer of the Company or the Exchange Rate Agent
appointed pursuant to Section 301, and delivered to the Trustee.

         "Extension Period" has the meaning specified in Section 313.

         "Foreign Currency" means a currency issued by the government of any
country other than the United States of America.

         "Global Exchange Agent" has the meaning specified in Section 304.

         "Global Exchange Date" has the meaning specified in Section 304.

         "Global Security" means a Debt Security issued to evidence all or part
of a series of Debt Securities in accordance with Section 303.

         "Guarantee Agreement" means, with respect to any Issuer Trust, the
Guarantee Agreement executed by the Company for the benefit of the holders of
the Capital Trust Securities issued by such Issuer Trust, as modified, amended
or supplemented from time to time.

         "Holder", with respect to a Registered Security, means a Person in
whose name such Registered Security is registered in the Security Register and,
with respect to a Bearer Security or a coupon, means the bearer thereof.

         "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented, amended or restated by or pursuant to one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and, unless the context otherwise requires, shall include the
terms of a particular series of Debt Securities established as contemplated by
Section 301.

         The term "interest", when used with respect to an Original Issue
Discount Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.

                                       6


         "Interest Payment Date", with respect to any Debt Security, means the
Stated Maturity of an installment of interest on such Debt Security.

         "Investment Company Event" means the receipt by an Issuer Trust of an
Opinion of Counsel (as defined in the relevant Trust Agreement) experienced in
such matters to the effect that, as a result of the occurrence of a change in
law or regulation or a written change (including any announced prospective
change) in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that such Issuer Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act, which change or prospective change becomes effective or would
become effective, as the case may be, on or after the date of the issuance of
the Capital Trust Securities of such Issuer Trust.

         "Issuer Trust" has the meaning specified in the first recital of this
Indenture.

         "Market Value" of any Capital Securities issued on any Capital Exchange
Date for Debt Securities of any series shall be the sale price of such Capital
Securities which are sold in the Secondary Offering for the Debt Securities of
such series. In the event no such Secondary Offering takes place, the Market
Value of such Capital Securities shall be the fair value of such Capital
Securities on such Capital Exchange Date for Debt Securities of such series as
determined by three independent nationally recognized investment banking firms
selected by the Company.

         "Maturity", when used with respect to any Debt Security, means the date
on which the principal of such Debt Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, repayment at the option of the Holder or
otherwise.

         "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant Treasurer, the Controller, an Assistant
Controller, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.

         "Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
counsel for the Company, or who may be other counsel acceptable to the Trustee,
which is delivered to the Trustee.

         "Optional Securities Fund" means a fund pursuant to which the proceeds
of sales of Capital Securities may be designated on the books of the Company for
the payment of any of the principal of any Debt Security pursuant to Section
1417 of this Indenture.

         "Original Issue Discount Security" means any Debt Security which
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502.

                                       7


         "Outstanding", when used with respect to Debt Securities means, as of
the date of determination, all Debt Securities theretofore authenticated and
delivered under this Indenture, except:

                  (i)      Debt Securities theretofore cancelled by the Trustee
         or delivered to the Trustee for cancellation;

                  (ii)     Debt Securities or portions thereof for whose payment
         or redemption money or Eligible Instruments in the necessary amount has
         been theretofore deposited with the Trustee or any Paying Agent (other
         than the Company) in trust or set aside and segregated in trust by the
         Company (if the Company shall act as its own Paying Agent) for the
         Holders of such Debt Securities and any coupons appertaining thereto;
         provided, however, that if such Debt Securities are to be redeemed,
         notice of such redemption has been duly given pursuant to this
         Indenture or provision therefor satisfactory to the Trustee has been
         made; and

                  (iii)    Debt Securities in exchange for or in lieu of which
         other Debt Securities have been authenticated and delivered, or which
         have been paid, pursuant to this Indenture;

provided, however, that in determining whether the Holders of the requisite
principal amount of Debt Securities Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debt Securities
owned by the Company or any other obligor upon the Debt Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon such request, demand, authorization,
direction, notice, consent or waiver, only Debt Securities which the Trustee
knows to be so owned shall be so disregarded. Debt Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debt Securities and that the pledgee is not the Company or
any other obligor upon the Debt Securities or any Affiliate of the Company or of
such other obligor. Notwithstanding anything herein to the contrary, Debt
Securities of any series initially issued to an Issuer Trust that are owned by
such Issuer Trust shall be deemed to be Outstanding notwithstanding the
ownership by the Company or an Affiliate of any beneficial interest in such
Issuer Trust.

         "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on behalf
of the Company.

         "Perpetual Preferred Stock" means any stock of any class of the Company
which has a preference over Common Stock in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not mandatorily redeemable or repayable,
or redeemable or repayable at the option of the Holder, otherwise than in shares
of Common Stock or Perpetual Preferred Stock of another class or series or with
the proceeds of the sale of Common Stock or Perpetual Preferred Stock.

                                       8


         "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

         "Place of Capital Exchange", when used with respect to Debt Securities
of any series, means any place where the Debt Securities of such series are
exchangeable for Capital Securities as specified pursuant to Section 301.

         "Place of Payment", when used with respect to the Debt Securities of
any series means any place where the principal of (and premium, if any) and
interest on the Debt Securities of that series are payable as specified as
contemplated by Section 301.

         "Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 306 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.

         "Primary Federal Regulator" means the primary United States federal
regulator of the Company (which at the date of this Indenture is the Board of
Governors of the Federal Reserve System), or any successor body or institution.

         "Property Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property Trustee" in the related Trust Agreement, solely in
its capacity as Property Trustee of such Issuer Trust and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as therein provided.

         "ranking junior to the Debt Securities," when used with respect to any
obligation of the Company shall mean any obligation of the Company which (a)
ranks junior to and not equally with or prior to the Debt Securities (or any
other obligations of the Company ranking on a parity with the Debt Securities)
in right of payment upon the happening of any event of the kind specified in the
first sentence of the second paragraph in Section 1801 or (b) is specifically
designated as ranking junior to the Debt Securities by express provision in the
instrument creating or evidencing such obligation. The securing of any
obligations of the Company, otherwise ranking junior to the Debt Securities,
shall not be deemed to prevent such obligations from constituting obligations
ranking junior to the Debt Securities.

         "ranking on a parity with the Debt Securities," when used with respect
to any obligation of the Company shall mean any obligation of the Company which
(a) ranks equally with and not prior to the Debt Securities in right of payment
upon the happening of any event of the kind specified in the first sentence of
the second paragraph in Section 1801 or (b) is specifically designated as
ranking on a parity with the Debt Securities by express provision in the
instrument creating or evidencing such obligation. The securing of any
obligations of the Company, otherwise ranking on a parity with the Debt
Securities, shall not be deemed to prevent such obligations from constituting
obligations ranking on a parity with the Debt Securities.

                                       9


         "Redemption Date", when used with respect to any Debt Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

         "Redemption Price", when used with respect to any Debt Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

         "Registered Security" means any Debt Security in the form of Registered
Securities established pursuant to Section 201 which is registered in the
Security Register.

         "Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 301.

         "Remarketing Entity", when used with respect to Debt Securities of any
series which are repayable at the option of the Holders thereof before their
Stated Maturity, means any person designated by the Company to purchase any such
Debt Securities.

         "Repayment Date", when used with respect to any Debt Security to be
repaid upon exercise of an option for repayment by the Holder, means the date
fixed for such repayment pursuant to this Indenture.

         "Repayment Price", when used with respect to any Debt Security to be
repaid upon exercise of an option for repayment by the Holder, means the price
at which it is to be repaid pursuant to this Indenture.

         "Responsible Officer" when used with respect to the Trustee, means any
officer of the Trustee assigned by it to administer its corporate trust matters.

         "Rights" has the meaning specified in Section 1906(c).

         "Rights Plan" means a plan of the Company providing for the issuance by
the Company to all holders of its Common Stock of rights entitling the holders
thereof to subscribe for or purchase shares of any class or series of capital
stock of the Company which rights (i) are deemed to be transferred with such
shares of such Common Stock, and (ii) are also issued in respect of future
issuances of such Common Stock, in each case until the occurrence of a specified
events or events.

         "Secondary Offering", when used with respect to the Debt Securities of
any series, means the offering and sale by the Company of Capital Securities for
the account of Holders of Debt Securities of such series who elect to receive
cash and not Capital Securities on the Capital Exchange Date for such series.

         "Securities Fund" means a fund pursuant to which the proceeds of sales
of Capital Securities are designated on the books of the Company for the payment
of any principal of any Debt Security pursuant to the provisions of Section
1501.

                                       10


         "Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.

         "Senior Debt" means

                  (i)      any of the Company's indebtedness for borrowed or
         purchased money, whether or not evidenced by bonds, debentures, notes
         or other written instruments,

                  (ii)     the Company's obligations under letters of credit,

                  (iii)    any of the Company's indebtedness or other
         obligations with respect to commodity contracts, interest rate and
         currency swap agreements, cap, floor and collar agreements, currency
         spot and forward contracts, and other similar agreements or
         arrangements designed to protect against fluctuations in currency
         exchange or interest rates, and

                  (iv)     any guarantees, endorsements (other than by
         endorsement of negotiable instruments for collection in the ordinary
         course of business) or other similar contingent obligations in respect
         of obligations of others of a type described in clauses (i), (ii) and
         (iii) above, whether or not such obligation is classified as a
         liability on a balance sheet prepared in accordance with generally
         accepted accounting principles, in each case whether outstanding on the
         date of execution of this Indenture or thereafter incurred, other than
         obligations ranking on a parity with the Debt Securities (including
         without limitation the Trust Related Securities) or ranking junior to
         the Debt Securities.

         "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

         "Stated Maturity", when used with respect to any Debt Security or any
installment of interest (including any Additional Interest) thereon, means the
date specified in such Debt Security or a coupon representing such installment
of interest (including any Additional Interest) as the fixed date on which the
principal of such Debt Security or such installment is due and payable, subject,
in the case of any installment of interest, to the deferral of any such date in
the case of an Extension Period.

         "Tax Event" means the receipt by an Issuer Trust of an Opinion of
Counsel (as defined in the relevant Trust Agreement) experienced in such matters
to the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or thereof any regulations
thereunder) of the United States or any political subdivision thereof or the
Commonwealth of Puerto Rico or taxing authority thereof or therein, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the Capital Trust Securities of such Issuer Trust, there is more
than an insubstantial risk that (i) such Issuer Trust is, or will be within 90
days of the delivery of such Opinion of Counsel, subject to United States
Federal or Commonwealth of Puerto Rico income tax with respect to income
received or accrued on the

                                       11

series of Debt Securities issued by the Company to such Issuer Trust, (ii)
interest payable by the Company on such series of Debt Securities is not, or
within 90 days of the delivery of such Opinion of Counsel will not be,
deductible by the Company, in whole or in part, for Commonwealth of Puerto Rico
tax purposes, or (iii) such Issuer Trust is, or will be within 90 days of the
delivery of such Opinion of Counsel, subject to more than an immaterial amount
of other taxes, duties or other governmental charges.

         "Trust Agreement" means, with respect to any Issuer Trust, the
declaration of trust, trust agreement or other governing instrument of such
Issuer Trust.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, except as provided in
Section 905.

         "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to the Debt Securities of any series shall mean the Trustee with respect
to Debt Securities of that series.

         "Trust Related Securities" means any obligations evidenced by debt
securities (and guarantees in respect of those debt securities) initially issued
to any trust, partnership or other entity affiliated with the Company that is,
directly or indirectly, a financing vehicle of the Company in connection with
the issuance by such entity of capital securities or other similar securities.

         "Trust Securities" has the meaning specified in the first recital of
this Indenture.

         "United States" means the United States of America, (including the
District of Columbia and the Commonwealth of Puerto Rico) and its possessions.

         "United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

         "U.S. Government Obligations" means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States, and shall also include a depository receipt issued by a bank (as defined
in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such U.S. Government Obligation or a specific payment of
principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such

                                       12


custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of principal
of or interest on the U.S. Government Obligation evidenced by such depository
receipt.

         Section 102. Compliance Certificates and Opinions.

         Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture (other than the delivery of any
Debt Security to the Trustee for authentication pursuant to Section 303), the
Company shall furnish to the Trustee, if so requested by the Trustee, an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.

         Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

                  (1)      a statement that each individual signing such
         certificate or opinion has read such covenant or condition and the
         definitions herein relating thereto;

                  (2)      a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                  (3)      a statement that, in the opinion of each such
         individual, he or she has made such examination or investigation as is
         necessary to enable him or her to express an informed opinion as to
         whether or not such covenant or condition has been complied with; and

                  (4)      a statement as to whether, in the opinion of each
         such individual, such condition or covenant has been complied with.

         Section 103. Form of Documents Delivered to Trustee.

         In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

         Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or

                                       13


representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based is erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinions or representations with respect to such
matters is erroneous.

         Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

         Section 104. Acts of Holders.

                  (a)      Any request, demand, authorization, direction,
         notice, consent, waiver or other action provided by this Indenture to
         be given or taken by Holders may be embodied in and evidenced by one or
         more instruments of substantially similar tenor signed by such Holders
         in person or by an agent duly appointed in writing. If Debt Securities
         of a series are issuable in whole or in part as Bearer Securities, any
         request, demand, authorization, direction, notice, consent, waiver or
         other action provided by this Indenture to be given or taken by Holders
         may, alternatively, be embodied in and evidenced by the record of
         Holders of Debt Securities voting in favor thereof, either in person or
         by proxies duly appointed in writing, at any meeting of Holders of Debt
         Securities duly called and held in accordance with the provisions of
         Article XVI, or a combination of such instruments and any such record.
         Except as herein otherwise expressly provided, such action shall become
         effective when such instrument or instruments or record or both are
         delivered to the Trustee, and, where it is hereby expressly required,
         to the Company. Such instrument or instruments and any such record (and
         the action embodied therein and evidenced thereby) are herein sometimes
         referred to as the "Act" of the Holders signing such instrument or
         instruments and so voting at any such meeting. Proof of execution of
         any such instrument or of a writing appointing any such agent, or the
         holding by any Person of a Debt Security, shall be sufficient for any
         purpose of this Indenture and (subject to Section 601) conclusive in
         favor of the Trustee and the Company, if made in the manner provided in
         this Section. The record of any meeting of Holders of Debt Securities
         shall be proved in the manner provided in Section 1606.

                  (b)      The fact and date of the execution by any Person of
         any such instrument or writing may be proved in any manner which the
         Trustee deems sufficient.

                  (c)      The ownership of Registered Securities shall be
         proved by the Security Register.

                                       14


                  (d)      The principal amount and serial numbers of Bearer
         Securities held by any Person, and the date of holding the same, may be
         proved by the production of such Bearer Securities or by a certificate
         executed, as depositary, by any trust company, bank, banker or other
         depositary, wherever situated, if such certificate shall be deemed by
         the Trustee to be satisfactory, showing that at the date therein
         mentioned such Person had on deposit with such depositary, or exhibited
         to it, the Bearer Securities in the amount and with the serial numbers
         therein described; or such facts may be proved by the certificate or
         affidavit of the Person holding such Bearer Securities, if such
         certificate or affidavit is deemed by the Trustee to be satisfactory.
         The Trustee and the Company may assume that such ownership of any
         Bearer Security continues until (1) another certificate or affidavit
         bearing a later date issued in respect of the same Bearer Security is
         produced, or (2) such Bearer Security is produced to the Trustee by
         some other person, or (3) such Bearer Security is surrendered in
         exchange for a Registered Security, or (4) such Bearer Security is no
         longer Outstanding.

                  (e)      The fact and date of execution of any such instrument
         or writing, the authority of the Person executing the same and the
         principal amount and serial numbers of Bearer Securities held by the
         Person so executing such instrument or writing and the date of holding
         the same may also be proved in any other manner which the Trustee deems
         sufficient; and the Trustee may in any instance require further proof
         with respect to any of the matters referred to in this Section.

                  (f)      Any request, demand, authorization, direction,
         notice, consent, waiver or other Act of the Holder of any Debt Security
         shall bind every future holder of the same Debt Security and the Holder
         of every Debt Security issued upon the registration of transfer thereof
         or in exchange therefor or in lieu thereof in respect of anything done,
         suffered or omitted by the Trustee or the Company in reliance thereon,
         whether or not notation of such action is made upon such Debt Security.

                  (g)      For purposes of determining the principal amount of
         Outstanding Debt Securities of any series of Holders of which are
         required, requested or permitted to give any request, demand,
         authorization, direction, notice, consent, waiver or take any other Act
         under this Indenture, (i) each Original Issue Discount Security shall
         be deemed to have the principal amount determined by the Trustee that
         could be declared to be due and payable pursuant to the terms of such
         Original Issue Discount Security as of the date there is delivered to
         the Trustee and, where it is hereby expressly required, to the Company,
         such Act by Holders of the required aggregate principal amount of the
         Outstanding Debt Securities of such series and (ii) each Debt Security
         denominated in a Foreign Currency or composite currency shall be deemed
         to have the principal amount determined by the Exchange Rate Agent by
         converting the principal amount of such Debt Security in the currency
         in which such Debt Security is denominated into Dollars at the Exchange
         Rate as of the date such Act is delivered to the Trustee and, where it
         is hereby expressly required, to the Company, by Holders of the
         required aggregate principal amount of the Outstanding Debt Securities
         of such series (or, if there is

                                       15


         no such rate on such date, such rate on the date determined as
         specified as contemplated in Section 301).

                  (h)      The Company may set a record date for purposes of
         determining the identity of Holders of Debt Securities of any series
         entitled to vote or consent to any action by vote or consent authorized
         or permitted by Section 512 or Section 513. Such record date shall be
         the later of 30 days prior to the first solicitation of such consent or
         the date of the most recent list of Holders of such Debt Securities
         furnished to the Trustee pursuant to Section 701 prior to such
         solicitation.

         Section 105. Notices, etc., to Trustee and Company.

         Any request, demand, authorization, direction, notice, consent, waiver
or other Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,

                  (1)      the Trustee by any Holder, any holder of Capital
         Trust Securities or the Company shall be sufficient for every purpose
         hereunder (unless otherwise herein expressly provided), if made, given,
         furnished or filed in writing to or with the Trustee at its Corporate
         Trust Office, Attention: Corporate Trust Division, or

                  (2)      the Company by the Trustee, any Holder or any holder
         of Capital Trust Securities shall be sufficient for every purpose
         hereunder (unless otherwise herein expressly provided) if in writing
         and mailed, first-class postage prepaid, to the Company addressed to
         the attention of its Secretary at the address of its principal office
         specified in the first paragraph of this instrument or at any other
         address previously furnished in writing to the Trustee by the Company.

         Section 106. Notice to Holders; Waiver.

         Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, (1) such notice shall be
sufficiently given to Holders of Registered Securities if in writing and mailed,
first-class postage prepaid, to each Holder of a Registered Security affected by
such event, at such Holder's address as it appears in the Security Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice; and (2) such notice shall be sufficiently given
to Holders of Bearer Securities by publication thereof in an Authorized
Newspaper in The City of New York and, if the Debt Securities of such series are
then listed on The International Stock Exchange of the United Kingdom and the
Republic of Ireland and such stock exchange shall so require, in London, and, if
the Debt Securities of such series are then listed on the Luxembourg Stock
Exchange and such stock exchange shall so require, in Luxembourg and, if the
Debt Securities of such series are then listed on any other stock exchange
outside the United States and such stock exchange shall so require, in any other
required city outside the United States or, if not practicable, in Europe on a
Business Day at least twice, the first such publication to be not later than the
latest date and not earlier than the earliest date prescribed for the giving of
such notice. In case, by reason of the suspension of or irregularities in
regular mail service

                                       16


or for any other reason, it shall be impossible or impracticable to mail notice
of any event to Holders when said notice is required to be given pursuant to any
provision of this Indenture or of the Debt Securities, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.

         In any case where notice to Holders of Registered Securities is to be
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Security shall affect
the sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice by publication to Holders of Bearer
Securities given as provided above.

         In case, by reason of the suspension of publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible or
impracticable to make publication of any notice to Holders of Bearer Securities
as provided above, then such method of publication or notification as shall be
made with the approval of the Trustee shall constitute a sufficient publication
of such notice. Neither failure to give notice by publication to Holders of
Bearer Securities as provided above, nor any defect in any notice so published,
shall affect the sufficiency of any notice mailed to Holders of Registered
Securities as provided above.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

         Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act required or permitted under this Indenture shall
be in the English language, except that any published notice may be in an
official language of the country of publication.

         Section 107. Conflict with Trust Indenture Act.

         If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.

         Section 108. Effect of Headings and Table of Contents.

         The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

         Section 109. Successors and Assigns.

         All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether expressed or not.

                                       17


         Section 110. Separability Clause.

         In case any provision in this Indenture or in the Debt Securities or
coupons shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

         Section 111. Benefits of Indenture.

         Nothing in this Indenture or in the Debt Securities or coupons, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any Paying Agent, the Holders and, to the extent expressly
provided in Sections 502, 508, 509, 511, 513, 901 and 902, the holders of
Capital Trust Securities, any benefit or any legal or equitable right, remedy or
claim under this Indenture.

         Section 112. Governing Law.

         This Indenture and the Debt Securities and coupons shall be governed by
and construed in accordance with the laws of the Commonwealth of Puerto Rico.

         Section 113. Legal Holidays.

         In any case where any Interest Payment Date, Redemption Date, Capital
Exchange Date, Repayment Date or Stated Maturity of any Debt Security shall not
be a Business Day at any Place of Payment or Place of Capital Exchange, then
(notwithstanding any other provision of this Indenture or of the Debt Securities
or coupons) payment of interest or principal (and premium, if any) or exchange
of Debt Securities for Capital Securities or cash need not be made at such Place
of Payment or Place of Capital Exchange on such date, but may be made on the
next succeeding Business Day at such Place of Payment or Place of Capital
Exchange with the same force and effect as if made on the Interest Payment Date,
Capital Exchange Date, Redemption Date, Repayment Date or at the Stated
Maturity, and no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date, Repayment Date, Capital Exchange Date or
Stated Maturity, as the case may be.

         Section 114. Counterparts.

         This Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.

                                   ARTICLE II

                               DEBT SECURITY FORMS

         Section 201. Forms Generally.

         The Registered Securities, if any, and the Bearer Securities and
related coupons, if any, of each series shall be in substantially the form
(including temporary or permanent global form) as shall be established in or
pursuant to a

                                       18


Board Resolution or in one or more indentures supplemental hereto, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon, as may be required to comply with the rules of any securities exchange,
or as may, consistently herewith, be determined by the officers executing such
Debt Securities or coupons, as evidenced by their signatures on the Debt
Securities or coupons. If the form of Debt Securities of any series or coupons
(including any such Global Security) is established by action taken pursuant to
a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such Debt
Securities or coupons. Unless otherwise specified as contemplated by Section
301, Debt Securities in bearer form other than Debt Securities in temporary or
permanent global form shall have coupons attached. The definitive Debt
Securities and coupons, if any, shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Debt Securities, as evidenced by the execution of
such Debt Securities and coupons.

         Section 202. Form of Trustee's Certificate of Authentication.

         This is one of the Debt Securities, of the series designated herein,
described in the within-mentioned Indenture.

                                            ___________________________________,
                                            not in its individual capacity
                                            but solely as Trustee


                                            By__________________________________
                                                      Authorized Officer

         Section 203. Debt Securities in Global Form.

         If Debt Securities of a series are issuable in whole or in part in
global form, as specified as contemplated by Section 301, then, notwithstanding
clause (12) of Section 301 and the provisions of Section 302, such Global
Security shall represent such of the outstanding Debt Securities of such series
as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Debt Securities from time to time endorsed
thereon and that the aggregate amount of Outstanding Debt Securities represented
thereby may from time to time be reduced to reflect exchanges. Any endorsement
of a Global Security to reflect the amount, or any increase or decrease in the
amounts, of Outstanding Debt Securities represented thereby shall be made in
such manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 303 or Section 304.

         The provisions of the last sentence of Section 303(g) shall apply to
any Debt Securities represented by a Debt Security in global form if such Debt

                                       19


Security was never issued and sold by the Company and the Company delivers to
the Trustee the Debt Security in global form together with written instructions
(which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel) with respect to the reduction in the principal amount of
Debt Securities represented thereby, together with the written statement
contemplated by the last sentence of Section 303(g).

         Global Securities may be issued in either registered or bearer form and
in either temporary or permanent form.

                                   ARTICLE III

                               THE DEBT SECURITIES

         Section 301. Amount Unlimited; Issuance in Series.

         The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.

         The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Debt Securities of any series:

                  (1)      the title of the Debt Securities of the series (which
         shall distinguish the Debt Securities of the series from all other Debt
         Securities);

                  (2)      the limit, if any, upon the aggregate principal
         amount of the Debt Securities of the series which may be authenticated
         and delivered under this Indenture (except for Debt Securities
         authenticated and delivered upon registration of transfer of, or in
         exchange for, or in lieu of, other Debt Securities of the series
         pursuant to Section 304, 305, 306, 906, 1107, 1303, 1408 or 1903 and
         except for any Debt Securities which, pursuant to Section 303, are
         deemed never to have been authenticated and delivered hereunder);

                  (3)      the date or dates on which the principal and premium,
         if any, of the Debt Securities of the series are payable;

                  (4)      the rate or rates, if any, at which the Debt
         Securities of the series shall bear interest, the rate or rates of and
         extent to which Additional Interest, if any, shall be payable in
         respect of any Debt Securities of the series, or the method or methods
         by which such rate or rates may be determined, the date or dates from
         which such interest or Additional Interest shall accrue, the Interest
         Payment Dates on which such interest shall be payable, the right,
         pursuant to Section 313 or as otherwise set forth therein, of the
         Company to defer or extend an Interest Payment Date, the Regular Record
         Date for the interest payable on any Registered Security on any
         Interest Payment Date and the other circumstances, if any, in which the
         Company may defer interest payments;

                                       20


                  (5)      the place or places where, subject to the provisions
         of Section 1002, the principal of (and premium, if any) and interest
         (including Additional Interest) on Debt Securities of the series shall
         be payable, any Registered Securities of the series may be surrendered
         for registration of transfer, Debt Securities of the series may be
         surrendered for exchange and notices and demands to or upon the Company
         in respect of the Debt Securities of the series and this Indenture may
         be served and where notices to Holders pursuant to Section 106 will be
         published;

                  (6)      if applicable, the period or periods within which or
         the date or dates on which, the price or prices at which and the terms
         and conditions upon which Debt Securities of the series may be
         redeemed, in whole or in part, at the option of the Company;

                  (7)      if applicable, the place or places at which, the
         period or periods within which, the price or prices at which and the
         terms and conditions upon which Debt Securities shall be exchangeable
         for Capital Securities of the Company, which terms and conditions shall
         not be inconsistent with Article XIV;

                  (8)      any covenant or option of the Company to create a
         Securities Fund for the repayment of the Debt Securities and the terms
         and conditions of such Securities Fund, which terms and conditions
         shall not be inconsistent with Article XV;

                  (9)      the obligation, if any, of the Company to redeem,
         repay or purchase Debt Securities of the series pursuant to any sinking
         fund or analogous provisions or at the option of a Holder thereof and
         the period or periods within which, the price or prices at which and
         the terms and conditions upon which Debt Securities of the series shall
         be redeemed, repaid or purchased, in whole or in part, pursuant to such
         obligation;

                  (10)     whether Debt Securities of the series are to be
         issuable as Registered Securities, Bearer Securities or both, whether
         Debt Securities of the series are to be issuable with or without
         coupons or both and, in the case of Bearer Securities, the date as of
         which such Bearer Securities shall be dated if other than the date of
         original issuance of the first Debt Security of such series of like
         tenor and term to be issued;

                  (11)     whether the Debt Securities of the series shall be
         issued in whole or in part in the form of a Global Security or
         Securities and, in such case, the Depositary and Global Exchange Agent
         for such Global Security or Securities, whether such global form shall
         be permanent or temporary and, if applicable, the Global Exchange Date;

                  (12)     if Debt Securities of the series are to be issuable
         initially in the form of a temporary Global Security, the circumstances
         under which the temporary Global Security can be exchanged for
         definitive Debt Securities and whether the definitive Debt Securities
         will be Registered and/or Bearer Securities and will be in global form
         and whether interest (including any Additional Interest) in respect of
         any portion of such Global Security payable in respect of an Interest
         Payment Date prior

                                       21


         to the Global Exchange Date shall be paid to any clearing organization
         with respect to a portion of such Global Security held for its account
         and, in such event, the terms and conditions (including any
         certification requirements) upon which any such interest payment
         received by a clearing organization will be credited to the Persons
         entitled to interest payable on such Interest Payment Date if other
         than as provided in this Article III;

                  (13)     whether, and under what conditions, additional
         amounts will be payable to Holders of Debt Securities of the series
         pursuant to Section 1006;

                  (14)     the denominations in which any Registered Securities
         of the series shall be issuable, if other than denominations of $1,000
         and any integral multiple thereof, and the denominations in which any
         Bearer Securities of such series shall be issuable, if other than the
         denomination of $5,000;

                  (15)     if other than the principal amount thereof, the
         portion of the principal amount of Debt Securities of the series which
         shall be payable upon declaration of acceleration of the Maturity
         thereof pursuant to Section 502;

                  (16)     the currency or currencies of denomination of the
         Debt Securities of any series, which may be in Dollars, any Foreign
         Currency or any composite currency, including but not limited to the
         Euro, and, if any such currency of denomination is a composite currency
         other than the Euro, the agency or organization, if any, responsible
         for overseeing such composite currency;

                  (17)     the currency or currencies in which payment of the
         principal of (and premium, if any) and interest (including any
         Additional Interest) on the Debt Securities will be made, the currency
         or currencies, if any, in which payment of the principal of (and
         premium, if any) or the interest (including any Additional Interest) on
         Registered Securities, at the election of each of the Holders thereof,
         may also be payable and the periods within which and the terms and
         conditions upon which such election is to be made and the Exchange Rate
         and Exchange Rate Agent;

                  (18)     if the amount of payments of principal of (and
         premium, if any) or interest (including any Additional Interest) on the
         Debt Securities of the series may be determined with reference to an
         index based on a currency or currencies other than that in which the
         Debt Securities are denominated or designated to be payable, the manner
         in which such amounts shall be determined;

                  (19)     if payments of principal of (and premium, if any) or
         interest (including any Additional Interest) on the Debt Securities of
         the series are to be made in a Foreign Currency other than the currency
         in which such Debt Securities are denominated, the manner in which the
         Exchange Rate with respect to such payments shall be determined or if
         the

                                       22


         Exchange Rate is to be determined otherwise than as provided in Section
         101;

                  (20)     any Events of Default with respect to Debt Securities
         of such series, if not set forth herein, and any Events of Default set
         forth herein that shall not apply to Debt Securities of the series;

                  (21)     any other covenant or warranty included for the
         benefit of the Debt Securities of the series in addition to (and not
         inconsistent with) those set forth herein for the benefit of Debt
         Securities of all series, or any other covenant or warranty included
         for the benefit of Debt Securities of the series in lieu of any
         covenant or warranty set forth herein for the benefit of Debt
         Securities of all series, or any provision that any covenant or
         warranty set forth herein for the benefit of Debt Securities of all
         series shall not be for the benefit of Debt Securities of such series,
         or any combination of such covenants, warranties or provisions and
         whether the provisions of Section 1005 will not apply such covenants
         and warranties;

                  (22)     the terms and conditions, if any, pursuant to which
         the Company's obligations under this Indenture may be terminated
         through the deposit of money or Eligible Instruments as provided in
         Articles IV and XVII;

                  (23)     the Person or Persons who shall be Security Registrar
         for the Debt Securities of such series if other than the Trustee, and
         the place or places where the Security Register for such series shall
         be maintained and the Person or Persons who will be the initial Paying
         Agent or Agents, if other than the Trustee;

                  (24)     whether the Debt Securities of the series are
         Convertible Securities and the terms related thereto including the
         Conversion Price and the date on which the right to convert expires;

                  (25)     if such Debt Securities are to be issued to an Issuer
         Trust, the form or forms of the Trust Agreement and Guarantee Agreement
         relating thereto;

                  (26)     if other than as set forth herein, the relative
         degree, if any, to which the Debt Securities of the series shall be
         senior to or be subordinated to other series of Debt Securities in
         right of payment, whether such other series of Debt Securities are
         Outstanding or not; and

                  (27)     any other terms of the series (which terms shall not
         be inconsistent with the provisions of this Indenture).

         All Debt Securities of any one series and the coupons appertaining to
Bearer Securities of such series, if any, shall be substantially identical
except, in the case of Registered Securities, as to denomination and except as
may otherwise be provided in or pursuant to such Board Resolution and set forth
in such Officers' Certificate or in any such indenture supplemental hereto.

                                       23


         Debt Securities of any particular series may be issued at various
times, with different dates on which the principal or any installment of
principal is payable, with different rates of interest, if any, or different
methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different Redemption or Repayment
Dates and may be denominated in different currencies or payable in different
currencies.

         If any of the terms of a series of Debt Securities are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.

         Section 302. Denominations.

         Debt Securities of each series shall be issuable in such form and
denominations as shall be specified in the form of Debt Security for such series
approved or established pursuant to Section 201 or in the Officers' Certificate
delivered pursuant to Section 301. In the absence of any specification with
respect to the Debt Securities of any series, the Registered Securities of such
series, if any, shall be issuable in denominations of $1,000 and any integral
multiple thereof and the Bearer Securities of such series, if any, shall be
issuable in the denominations of $5,000.

         Section 303. Execution, Authentication, Delivery and Dating.

                  (a)      The Debt Securities shall be executed on behalf of
         the Company by its Chairman of the Board, a Vice Chairman of the Board,
         the President or a Vice President, and by its Treasurer or one of its
         Assistant Treasurers or its Secretary or one of its Assistant
         Secretaries under its corporate seal reproduced thereon. The signature
         of any of these officers on the Debt Securities may be manual or
         facsimile. Coupons shall bear the facsimile signature of an authorized
         officer of the Company.

                  Debt Securities and coupons bearing the manual or facsimile
         signatures of individuals who were at any time the proper officers of
         the Company shall bind the Company, notwithstanding that such
         individuals or any of them have ceased to hold such offices prior to
         the authentication and delivery of such Debt Securities or coupons of
         any series or did not hold such offices at the date of such Debt
         Securities or coupons.

                  (b)      At any time and from time to time after the execution
         and delivery of this Indenture, Debt Securities of any series may be
         executed by the Company and delivered to the Trustee for
         authentication, and, except as otherwise provided in this Article III,
         shall thereupon be authenticated and delivered by the Trustee upon
         Company Order, without any further action by the Company; provided,
         however, that, in connection with its original issuance, a Bearer
         Security may be delivered only outside the United States and, except in
         the case of a temporary Global Security, only if the Company or its
         agent shall have received the certification required pursuant to
         Sections 304(b)(iii) and (iv), unless such certification shall

                                       24



         have been provided earlier pursuant to Section 304(b)(v) hereof, and
         only if the Company has no reason to know that such certification is
         false.

         To the extent authorized in or pursuant to a Board Resolution and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, such written Company Order may be given by any one officer
or employee of the Company, may be electronically transmitted, and may provide
instructions as to registration of holders, principal amounts, rates of
interest, maturity dates and other matters contemplated by such Board Resolution
and Officers' Certificate or supplemental indenture to be so instructed in
respect thereof. Before authorizing and delivering the first Debt Securities of
any series (and upon request of the Trustee thereafter), the Company shall
deliver to the Trustee (i) the certificates called for under Sections 201 and
301 hereof and (ii) an Opinion of Counsel described in the next sentence.

         In authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to any Debt Securities, the
Trustee shall be entitled to receive, prior to the initial authentication of
such Debt Securities, and (subject to Section 601) shall be fully protected in
relying upon:

                  (i) a Board Resolution relating thereto and, if applicable, an
         appropriate record of any action taken pursuant to such resolution
         certified by the Secretary or an Assistant Secretary of the Company;

                  (ii) an executed supplemental indenture, if any, relating
         thereto;

                  (iii) an Officers' Certificate setting forth the form and
         terms of the Debt Securities of such series and coupons, if any,
         pursuant to Sections 201 and 301 and stating that all conditions
         precedent provided for in this Indenture relating to the issuance of
         such Debt Securities have been complied with; and

                  (iv) an Opinion of Counsel stating

                           (A)      that the form of such Debt Securities and
                  coupons, if any, has been established in or pursuant to a
                  Board Resolution or by a supplemental indenture as permitted
                  by Section 201 in conformity with the provisions of this
                  Indenture;

                           (B)      that the terms of such Debt Securities and
                  coupons, if any, have been established in or pursuant to a
                  Board Resolution or by a supplemental indenture as permitted
                  by Section 301 in conformity with the provisions of this
                  Indenture; and

                           (C)      that such Debt Securities and coupons, if
                  any, when authenticated and delivered by the Trustee and
                  issued by the Company in the manner and subject to any
                  conditions specified in such Opinion of Counsel, will
                  constitute valid and binding obligations of the Company,
                  enforceable in accordance with their

                                       25



                  terms, except that where Debt Securities of any series are to
                  be exchanged for Capital Securities or paid from the
                  Securities Fund, the issuance of Capital Securities will
                  require further action by the Board of Directors, and subject,
                  as to enforcement of remedies, to applicable bankruptcy,
                  reorganization, insolvency, moratorium or other laws affecting
                  creditors' rights generally and the application of general
                  principles of equity and except further as enforcement thereof
                  may be limited by (i) requirements that a claim with respect
                  to any Debt Securities denominated other than in Dollars (or a
                  Foreign Currency or currency unit judgment in respect of such
                  claim) be converted into Dollars at a rate of exchange
                  prevailing on a date determined pursuant to applicable law or
                  (ii) governmental authority to limit, delay or prohibit the
                  making of payments in Foreign Currencies or currency units or
                  payments outside the United States.

                  (c)      If the Company shall establish pursuant to Section
         301 that the Debt Securities of a series are to be issued in whole or
         in part in the form of one or more Global Securities, then the Company
         shall execute and the Trustee shall, in accordance with this Section
         and the Company Order with respect to such series, authenticate and
         deliver one or more Global Securities in permanent or temporary form
         that (i) shall represent and shall be denominated in an aggregate
         amount equal to the aggregate principal amount of the Outstanding Debt
         Securities of such series to be represented by one or more Global
         Securities, (ii) shall be registered in the name of the Depositary for
         such Global Security or Securities or the nominee of such Depositary
         and (iii) shall be delivered by the Trustee to such Depositary or
         pursuant to such Depositary's instructions.

                  (d)      The Trustee shall have the right to decline to
         authenticate and deliver any Debt Securities under this Section 303 if
         the issuance of such Debt Securities will adversely affect the
         Trustee's own rights, duties or immunities under the Debt Securities
         and this Indenture or otherwise in a manner which is not reasonably
         acceptable to the Trustee.

                  (e)      If all the Debt Securities of any series are not to
         be issued at one time, it shall not be necessary to deliver an Opinion
         of Counsel at the time of issuance of each Debt Security, but such
         Opinion of Counsel, with appropriate modifications, may instead be
         delivered at or prior to the time of the first issuance of Debt
         Securities of such series.

                  (f)      Each Registered Security shall be dated the date of
         its authentication. Each Bearer Security shall be dated as of the date
         specified as contemplated by Section 301.

                  (g)      No Debt Security or coupon attached thereto shall be
         entitled to any benefit under this Indenture or be valid or obligatory
         for any purpose, unless there appears on such Debt Security a
         certificate of authentication substantially in the form provided for
         herein executed by the Trustee, and such certificate upon any Debt
         Security shall be conclusive evidence, and the only evidence, that such
         Debt Security has been duly authenticated and delivered hereunder.
         Except as permitted by

                                       26



         Section 306, the Trustee shall not authenticate and deliver any Bearer
         Security unless all appurtenant coupons for interest then matured have
         been detached and cancelled. Notwithstanding the foregoing, if any Debt
         Security or portion thereof shall have been duly authenticated and
         delivered hereunder but never issued and sold by the Company, and the
         Company shall deliver such Debt Security to the Trustee for
         cancellation as provided in Section 309 together with a written
         statement (which need not comply with Section 102 and need not be
         accompanied by an Opinion of Counsel) stating that such Debt Security
         or portion thereof has never been issued and sold by the Company, for
         all purposes of this Indenture such Debt Security shall be deemed never
         to have been authenticated and delivered hereunder and shall never be
         entitled to the benefits of this Indenture.

                  (h)      Each Depositary designated pursuant to Section 301
         for a Global Security in registered form must, at the time of its
         designation and at all times while it serves as Depositary, be a
         clearing agency registered under the Securities Exchange Act of 1934
         and any other applicable statute or regulation.

                  (i)      Debt Securities distributed to holders of Book-Entry
         Capital Securities (as defined in the applicable Trust Agreement) upon
         the dissolution of an Issuer Trust shall be distributed in the form of
         one or more Global Securities registered in the name of a Depositary or
         its nominee, and deposited with the Security Registrar, as custodian
         for such Depositary, or with such Depositary, for credit by the
         Depositary to the respective accounts of the beneficial owners of the
         Debt Securities represented thereby (or such other accounts as they may
         direct). Debt Securities distributed to holders of Capital Trust
         Securities other than Book-Entry Capital Securities upon the
         dissolution of an Issuer Trust shall not be issued in the form of a
         Global Security or any other form intended to facilitate book-entry
         trading in beneficial interests in such Debt Securities.

         Section 304. Temporary Debt Securities.

                  (a)      Pending the preparation of definitive Debt Securities
         of any series, the Company may execute, and upon receipt of documents
         required by Sections 301 and 303, together with a Company Order, the
         Trustee shall authenticate and deliver, temporary Debt Securities which
         are printed, lithographed, typewritten, mimeographed or otherwise
         produced, in any denomination, substantially of the tenor and terms of
         the definitive Debt Securities in lieu of which they are issued in
         registered form or, if authorized, in bearer form with one or more
         coupons or without coupons, and with such appropriate insertions,
         omissions, substitutions and other variations as the officers executing
         such Debt Securities may determine, as evidenced by their signatures on
         such Debt Securities. In the case of Debt Securities of any series
         issuable as Bearer Securities, such temporary Debt Securities may be in
         global form, representing all or any part of the Outstanding Debt
         Securities of such series.

                  (b)      Unless otherwise provided pursuant to Section 301:

                                       27



                  (i) Except in the case of temporary Debt Securities in global
         form, if temporary Debt Securities of any series are issued, the
         Company will cause definitive Debt Securities of such series to be
         prepared without unreasonable delay. After the preparation of
         definitive Debt Securities of such series, the related temporary Debt
         Securities shall be exchangeable for such definitive Debt Securities
         upon surrender of the temporary Debt Securities of such series at the
         office or agency of the Company in the Place of Payment for such
         series, without charge to the Holder. Upon surrender for cancellation
         of any one or more temporary Debt Securities of any series
         (accompanied, if applicable, by all unmatured coupons and all matured
         coupons in default appertaining thereto), the Company shall execute and
         the Trustee shall authenticate and deliver in exchange therefor a like
         principal amount of definitive Debt Securities of the same series of
         like tenor and terms and of authorized denominations; provided,
         however, that no Bearer Security shall be delivered in exchange for a
         Registered Security; and provided, further, that a Bearer Security
         shall be delivered in exchange for a Bearer Security only in compliance
         with the conditions set forth in Section 305.

                  (ii) If Debt Securities of any series are issued in temporary
         global form, any such temporary Global Security shall, unless otherwise
         provided pursuant to Section 301, be delivered to the Depositary for
         the benefit of Euroclear and Clearstream, for credit to the respective
         accounts of the beneficial owners of such Debt Securities (or to such
         other accounts as they may direct).

                  (iii) Without unnecessary delay but in any event not later
         than the date specified in, or determined pursuant to the terms of, any
         such temporary Global Security (the "Global Exchange Date"), the
         Company shall deliver definitive Debt Securities to the Trustee or the
         agent appointed by the Company pursuant to Section 301 to effect the
         exchange of the temporary Global Security for definitive Debt
         Securities (the "Global Exchange Agent"), in an aggregate principal
         amount equal to the principal amount of such temporary Global Security,
         executed by the Company. On or after the Global Exchange Date, such
         temporary Global Security shall be surrendered by the Depositary to the
         Global Exchange Agent, to be exchanged, in whole or from time to time
         in part, for definitive Debt Securities without charge and the Trustee
         or the Global Exchange Agent, if authorized by the Trustee pursuant to
         Section 614, shall authenticate and deliver, in exchange for each
         portion of such temporary Global Security, an equal aggregate principal
         amount of definitive Debt Securities of the same series of authorized
         denominations and of like tenor and terms as the portion of such
         temporary Global Security to be exchanged. Upon any exchange of a part
         of such temporary Global Security for definitive Debt Securities, the
         portion of the principal amount and any interest (including any
         Additional Interest) thereon so exchanged shall be endorsed by the
         Global Exchange Agent on a schedule to such temporary Global Security,
         whereupon the principal amount and interest payable with respect to
         such temporary Global Security shall be reduced for all purposes by the
         amount so exchanged and endorsed. The definitive Debt Securities to be
         delivered in exchange for any such temporary Global Security shall be
         in

                                       28



         bearer form, registered form, global registered form or global bearer
         form, or any combination thereof, as specified and contemplated by
         Section 301, and, if any combination thereof is so specified, as
         requested by the beneficial owner thereof; provided, however, that, in
         the case of the exchange of the temporary Global Security for
         definitive Bearer Securities (including a definitive Global Bearer
         Security), upon such presentation by the Depositary, such temporary
         Global Security shall be accompanied by a certificate signed by
         Euroclear as to the portion of such temporary Global Security held for
         its account then to be exchanged and a certificate signed by
         Clearstream as to the portion of such temporary Global Security held
         for its account then to be exchanged, each in the form set forth in
         Exhibit B to this Indenture, unless such certificate(s) shall have been
         provided earlier pursuant to Section 304(b)(v) hereof; and provided,
         further, that definitive Bearer Securities (including a definitive
         Global Bearer Security) shall be delivered in exchange for a portion of
         a temporary Global Security only in compliance with the requirements of
         Section 303.

                  (iv) The interest of a beneficial owner of Debt Securities of
         a series in a temporary Global Security shall be exchanged for
         definitive Debt Securities of the same series and of like tenor and
         terms following the Global Exchange Date when the account holder
         instructs Euroclear or Clearstream, as the case may be, to request such
         exchange on such account holder's behalf and, in the case of the
         exchange of the temporary Global Security for definitive Bearer
         Securities (including a definitive Global Bearer Security), unless such
         certificate(s) shall have been provided earlier pursuant to Section
         304(b)(v) hereof, the account holder delivers to Euroclear or
         Clearstream, as the case may be, a certificate in the form set forth in
         Exhibit A-1 and, if applicable, A-2 to this Indenture, dated no earlier
         than 15 days prior to the Global Exchange Date, copies of which
         certificate shall be available from the offices of Euroclear and
         Clearstream, the Global Exchange Agent, any authenticating agent
         appointed for such series of Debt Securities and each Paying Agent.
         Unless otherwise specified in such temporary Global Security, any such
         exchange shall be made free of charge to the beneficial owners of such
         temporary Global Security, except that a Person receiving definitive
         Debt Securities must bear the cost of insurance, postage,
         transportation and the like in the event that such Person does not take
         delivery of such definitive Debt Securities in person at the offices of
         Euroclear and Clearstream. Definitive Debt Securities in bearer form to
         be delivered in exchange for any portion of a temporary Global Security
         shall be delivered only outside the United States.

                  (v) Until exchanged in full as hereinabove provided, the
         temporary Debt Securities of any series shall in all respects be
         entitled to the same benefits under this Indenture as definitive Debt
         Securities of the same series and of like tenor and terms authenticated
         and delivered hereunder, except that interest (including any Additional
         Interest) payable on a temporary Global Security on an Interest Payment
         Date shall be payable to Euroclear and Clearstream on such Interest
         Payment Date only if there has been delivery by Euroclear and
         Clearstream to the Global Exchange Agent of a certificate or
         certificates in the form set forth in

                                       29



         Exhibit B to this Indenture dated no earlier than the first Interest
         Payment Date, for credit without further interest on or after such
         Interest Payment Date to the respective accounts of the Persons who are
         the beneficial owners of such temporary Global Security on such
         Interest Payment Date and who have each delivered to Euroclear or
         Clearstream, as the case may be, a certificate in the form set forth in
         Exhibit A-1 and, if applicable, A-2 to this Indenture dated no earlier
         than the first Interest Payment Date. Any interest so received by
         Euroclear and Clearstream and not paid as herein provided prior to the
         Global Exchange Date shall be returned to the Global Exchange Agent
         which, upon expiration of two years after such Interest Payment Date,
         shall repay such interest to the Company in accordance with Section
         1003.

         Section 305. Registration; Registration of Transfer and Exchange.

         The Company shall cause to be kept at one of the offices or agencies to
be maintained by the Company in accordance with the provisions of this Section
305 and Section 1002, with respect to the Debt Securities of each series which
are Registered Securities, a register (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Securities and of transfers of Registered Securities. Pursuant to Section 301,
the Company shall appoint, with respect to Debt Securities of each series which
are Registered Securities, a "Security Registrar" for the purpose of registering
such Debt Securities and transfers and exchanges of such Debt Securities as
herein provided.

         Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series of any authorized denomination or
denominations, of like tenor and terms and aggregate principal amount.

         At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any authorized
form and denomination, of like tenor and terms and aggregate principal amount,
upon surrender of the Registered Securities to be exchanged at such office or
agency. Bearer Securities may not be delivered in exchange for Registered
Securities.

         At the option of the Holder, Registered Securities or Bearer Securities
of any series may be issued in exchange for Bearer Securities (except as
otherwise specified as contemplated by Section 301 with respect to a Bearer
Security in global form) of the same series, of any authorized denominations and
of like tenor and terms and aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company and the Trustee in an amount equal to the face amount of such
missing coupon or

                                       30



coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 1002, interest
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in exchange for a Registered Security
of the same series and like tenor and terms after the close of business at such
office or agency of (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be.

         Whenever any Debt Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the Debt
Securities which the Holder making the exchange is entitled to receive.

         If at any time the Depositary for the Debt Securities of a series
notifies the Company that it is unwilling or unable to continue as Depositary
for the Debt Securities of such series or if at any time the Depositary for the
Debt Securities of such series shall no longer be eligible under Section 303(h),
the Company shall appoint a successor Depositary with respect to the Debt
Securities of such series. If a successor Depositary for the Debt Securities of
such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company's
election pursuant to Section 301(11) shall no longer be effective with respect
to the Debt Securities of such series and the Company will execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Debt Securities of such series, will authenticate and deliver, Debt
Securities of such series in definitive form in an aggregate principal amount
equal to the principal amount of the Global Security or Securities representing
such series in exchange for such Global Security or Securities.

         The Company may at any time and in its sole discretion determine that
the Debt Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by such Global Security or Securities.
In such event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Debt Securities
of such series, will authenticate and deliver, Debt Securities of such series in
definitive form and in an aggregate principal amount equal to the principal
amount of the Global Security or Securities representing such series in exchange
for such Global Security or Securities.

         If specified by the Company pursuant to Section 301 with respect to a
series of Debt Securities, the Depositary for such series of Debt Securities may
surrender a Global Security for such series of Debt Securities in exchange in

                                       31



whole or in part for Debt Securities of such series of like tenor and terms and
in definitive form on such terms as are acceptable to the Company and such
Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge,

                  (a)      to each Person specified by such Depositary a new
         Debt Security or Securities of the same series, of like tenor and terms
         and of any authorized denominations as requested by such person in
         aggregate principal amount equal to and in exchange for such Person's
         beneficial interest in the Global Security; and

                  (b)      to such Depositary a new Global Security of like
         tenor and terms and in a denomination equal to the difference, if any,
         between the principal amount of the surrendered Global Security and the
         aggregate principal amount of Debt Securities delivered to Holders
         thereof.

         In any exchange provided for in any of the preceding three paragraphs,
the Company will execute and the Trustee will authenticate and deliver Debt
Securities (a) in definitive registered form in authorized denominations, if the
Debt Securities of such series are issuable as Registered Securities, (b) in
definitive bearer form in authorized denominations, with coupons attached, if
the Debt Securities of such series are issuable as Bearer Securities or (c) as
either Registered or Bearer Securities, as shall be specified by the beneficial
owner thereof, if the Debt Securities of such series are issuable in either
form; provided, however, that no definitive Bearer Security shall be delivered
in exchange for a temporary Global Security unless the Company or its agent
shall have received from the person entitled to receive the definitive Bearer
Security a certificate substantially in the form set forth in Exhibit A-1 and,
if applicable, A-2 hereto; and provided further that delivery of a Bearer
Security shall occur only outside the United States; and provided further that
no definitive Bearer Security will be issued if the Company has reason to know
that any such certificate is false.

         Upon the exchange of a Global Security for Debt Securities in
definitive form, such Global Security shall be cancelled by the Trustee.
Registered Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized denominations
as the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Registered Securities to the persons in whose names
such Debt Securities are so registered. The Trustee shall deliver Bearer
Securities issued in exchange for a Global Security pursuant to this Section to
the persons, and in such authorized denominations, as the Depositary for such
Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee; provided, however, that
no definitive Bearer Security shall be delivered in exchange for a temporary
Global Security unless the Company or its agent shall have received from the
person entitled to receive the definitive Bearer Security a certificate
substantially in the form set forth in Exhibit A-1 and, if applicable, A-2
hereto; and provided further that delivery of a Bearer Security shall occur only
outside the United States; and provided further that no definitive Bearer
Security will be issued if the Company has reason to know that any such
certificate is false.

                                       32



         All Debt Securities issued upon any registration of transfer or
exchange of Debt Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debt Securities surrendered upon such registration of transfer
or exchange.

         Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Security
Registrar or the Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar and the Trustee duly executed, by the Holder thereof or such Holder's
attorney duly authorized in writing.

         No service charge shall be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer, registration of transfer or exchange of Debt
Securities, other than exchanges expressly provided in this Indenture to be made
at the Company's own expense or without expense or without charge to the
Holders.

         The Company shall not be required (i) to issue, register the transfer
of or exchange Debt Securities of any particular series to be redeemed or
exchanged for Capital Securities for a period of fifteen days preceding the
first publication of the relevant notice of redemption or exchange or, if
Registered Securities are outstanding and there is no publication, the mailing
of the relevant notice of redemption or exchange, or (ii) to register the
transfer of or exchange any Registered Security so selected for redemption or
exchange in whole or in part, except the unredeemed or unexchanged portion of
such Registered Security being redeemed or exchanged in part, or (iii) to
exchange any Bearer Security so selected for redemption or exchange except that
such a Bearer Security may be exchanged for a Registered Security of like tenor
and terms of that series, provided that such Registered Security shall be
simultaneously surrendered for redemption or exchange.

         Notwithstanding anything herein to the contrary, the exchange of Bearer
Securities into Registered Securities shall be subject to applicable laws and
regulations in effect at the time of exchange; neither the Company, the Trustee
nor the Security Registrar shall exchange any Bearer Securities into Registered
Securities if it has received an Opinion of Counsel that as a result of such
exchanges the Company would suffer adverse consequences under the United States
Federal income tax laws and regulations then in effect and the Company has
delivered to the Trustee a Company Order directing the Trustee not to make such
exchanges thereafter unless and until the Trustee receives a subsequent Company
Order to the contrary. The Company shall deliver copies of such Company Orders
to the Security Registrar.

         Section 306. Mutilated, Destroyed, Lost and Stolen Debt Securities.

         If (i) any mutilated Debt Security or a Bearer Security with a
mutilated coupon appertaining to it is surrendered to a Paying Agent outside the
United States designated by the Company, or, in the case of any Registered
Security, to the Trustee, or (ii) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Debt Security or
coupon,

                                       33



and there is delivered to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, then, in the absence
of notice to the Company and the Trustee that such Debt Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Debt Security or Bearer Security with a mutilated coupon
appertaining to it or to which a destroyed, lost or stolen coupon appertains
(with all appurtenant coupons not destroyed, lost or stolen) or in lieu of any
such destroyed, lost or stolen Debt Security, a new Debt Security of like tenor
and terms and principal amount, bearing a number not contemporaneously
outstanding, with coupons corresponding to the coupon, if any, appertaining to
such destroyed, lost or stolen Debt Security or to the Debt Security to which
such destroyed, lost or stolen coupon appertains; provided, however, that any
such new Bearer Security will be delivered only in compliance with the
conditions set forth in Section 305.

         In case any such mutilated, destroyed, lost or stolen Debt Security or
coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debt Security, pay such Debt Security
or coupon; provided, however, that payment of principal of (and premium, if any)
and any interest on Bearer Securities shall, except as otherwise provided in
Section 1002, be payable only at an office or agency located outside the United
States; and provided, further, that, with respect to any such coupons, interest
represented thereby (but not any additional amounts payable as provided in
Section 1006), shall be payable only upon presentation and surrender of the
coupons appertaining thereto.

         Upon the issuance of any new Debt Security or coupons under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and printing
expenses) connected therewith.

         Every new Debt Security of any series, with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Debt Security,
or in exchange for a Bearer Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Debt Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and any such new Debt Security and coupons, if any, shall
be entitled to all the benefits of this Indenture equally and proportionately
with any and all other Debt Securities of that series and their coupons, if any,
duly issued hereunder.

         The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities or coupons.

                                       34



         Section 307. Payment of Interest and Additional Interest; Interest
Rights Preserved.

         Interest and any Additional Interest on any Registered Security which
is payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Registered Security (or one
or more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest. In case a Bearer Security of any series
is surrendered in exchange for a Registered Security of such series after the
close of business (at an office or agency in a Place of Payment for such series)
on any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such Interest Payment Date and
interest and any Additional Interest will not be payable on such Interest
Payment Date in respect of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of such coupon when due
in accordance with the provisions of this Indenture. At the option of the
Company, payment of interest and any Additional Interest on any Registered
Security may be made by check in the currency designated for such payment
pursuant to the terms of such Registered Security mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register or
by wire transfer to an account in such currency designated by such Person in
writing not later than ten days prior to the date of such payment.

         Any interest (including any Additional Interest) on any Registered
Security of any series which is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder on the relevant
Regular Record Date by virtue of his having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in Clause (1) or (2) below:

                  (1)      The Company may elect to make payment of any
         Defaulted Interest to the Persons in whose names the Registered
         Securities of such series (or their respective Predecessor Securities)
         are registered at the close of business on a Special Record Date for
         the payment of such Defaulted Interest, which shall be fixed in the
         following manner. The Company shall notify the Trustee in writing of
         the amount of Defaulted Interest proposed to be paid on each Registered
         Security of such series and the date of the proposed payment, and at
         the same time the Company shall deposit with the Trustee an amount of
         money and/or, to the extent such Debt Securities are denominated and
         payable in Dollars only, Eligible Instruments the payments of principal
         and interest on which when due (and without reinvestment and providing
         no tax liability will be imposed upon the Trustee or the Holder of such
         Registered Securities) will provide money in such amounts as will
         (together with any money irrevocably deposited in trust with the
         Trustee, without investment) be equal to the aggregate amount proposed
         to be paid in respect of such Defaulted Interest or shall make
         arrangements satisfactory to the Trustee for such deposit prior to the
         date of the proposed payment, such money and/or Eligible Instruments
         when deposited to be held in trust for the benefit of the Persons
         entitled to such Defaulted Interest as in this clause provided.

                                       35



         Thereupon the Trustee shall fix a Special Record Date for the payment
         of such Defaulted Interest which shall be not more than 15 days and not
         less than 10 days prior to the date of the proposed payment and not
         less than 10 days after the receipt by the Trustee of the notice of the
         proposed payment. The Trustee shall promptly notify the Company of such
         Special Record Date. Unless the Trustee is acting as the Security
         Registrar, promptly after such Special Record Date, the Company shall
         furnish the Trustee with a list, or shall make arrangements
         satisfactory to the Trustee with respect thereto, of the names and
         addresses of, and principal amounts of Registered Securities of such
         series held by, the Holders appearing on the Security Register at the
         close of business on such Special Record Date. In the name and at the
         expense of the Company, the Trustee shall cause notice of the proposed
         payment of such Defaulted Interest and the Special Record Date therefor
         to be mailed, first-class postage prepaid, to each Holder of Registered
         Securities of such series at his address as it appears in the Security
         Register, not less than 10 days prior to such Special Record Date.
         Notice of the proposed payment of such Defaulted Interest and the
         Special Record Date therefor having been mailed as aforesaid, such
         Defaulted Interest shall be paid to the Persons in whose names the
         Registered Securities of such series (or their respective Predecessor
         Securities) are registered at the close of business on such Special
         Record Date and shall no longer be payable pursuant to the following
         Clause (2). In case a Bearer Security of any series is surrendered at
         the office or agency in a Place of Payment for such series in exchange
         for a Registered Security of such series after the close of business at
         such office or agency on any Special Record Date and before the opening
         of business at such office or agency on the related proposed date for
         payment of Defaulted Interest, such Bearer Security shall be
         surrendered without the coupon relating to such proposed date of
         payment and Defaulted Interest will not be payable on such proposed
         date of payment in respect of the Registered Security issued in
         exchange for such Bearer Security, but will be payable only to the
         Holder of such coupon when due in accordance with the provisions of
         this Indenture.

                  (2)      The Company may make payment of any Defaulted
         Interest on the Registered Securities of any series in any other lawful
         manner not inconsistent with the requirements of any securities
         exchange on which the Registered Securities may be listed, and upon
         such notice as may be required by such exchange, if, after notice given
         by the Company to the Trustee of the proposed payment pursuant to this
         Clause, such manner of payment shall be deemed practicable by the
         Trustee.

         Subject to the foregoing provisions of this Section, each Debt Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Debt Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Debt
Security.

         Subject to the limitations set forth in Section 1002, the Holder of any
coupon appertaining to a Bearer Security shall be entitled to receive the
interest payable on such coupon upon presentation and surrender of such coupon

                                       36



on or after the Interest Payment Date of such coupon at an office or agency
maintained for such purpose pursuant to Section 1002.

         If any Registered Security is exchanged for Capital Securities after
any record date and on or prior to the next succeeding Interest Payment Date
(other than any Debt Security whose Maturity is prior to such Interest Payment
Date), interest whose Stated Maturity is on such Interest Payment Date shall be
paid by the Company on such Interest Payment Date notwithstanding such exchange,
and such interest (whether or not punctually paid or duly provided for) shall be
paid to the Person in whose name that Debt Security is registered at the close
of business on such record date.

         If any Bearer Security is exchanged for Capital Securities after any
record date and on or prior to the next succeeding Interest Payment Date (other
than any Debt Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such exchange, and such interest
(whether or not punctually paid or duly provided for) shall be paid by the
Company pursuant to such procedures as may be satisfactory to the Trustee.

         Section 308. Persons Deemed Owners.

         Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or of the
Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Registered Security for the purpose of receiving
payment of principal of (and premium, if any) and (subject to Section 307)
interest (including any Additional Interest) on such Registered Security and for
all other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.

         The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Bearer Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Bearer Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

         None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.

         Section 309. Cancellation.

         Unless otherwise provided with respect to a series of Debt Securities,
all Debt Securities and coupons surrendered for payment, redemption, repayment,
transfer, exchange or credit against any sinking fund payment pursuant to this
Indenture, shall, if surrendered to the Company or any agent of the Company, be

                                       37



delivered to the Trustee and shall be promptly cancelled by it. The Company may
at any time deliver to the Trustee for cancellation any Debt Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Debt Securities so delivered shall be
promptly cancelled by the Trustee. No Debt Securities shall be authenticated in
lieu of or in exchange for any Debt Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled Debt
Securities and coupons held by the Trustee shall be destroyed and certification
of their destruction delivered to the Company, upon request, unless by a Company
Order the Company shall direct that the cancelled Debt Securities or coupons be
returned to it.

         Section 310. Computation of Interest.

         Except as otherwise specified as contemplated by Section 301 for Debt
Securities of any series, interest (including any Additional Interest) on the
Debt Securities of each series shall be computed on the basis of a 360-day year
of twelve 30-day months.

         Section 311. Certification by a Person Entitled to Delivery of a Bearer
Security.

         Whenever any provision of this Indenture or a Debt Security
contemplates that certification be given by a Person entitled to delivery of a
Bearer Security, such certification shall be provided substantially in the form
of Exhibit A-1 and, if applicable, A-2 hereto, with only such changes as shall
be approved by the Company and consented to by the Trustee whose consent shall
not unreasonably be withheld.

         Section 312. Judgments.

         The Company may provide, pursuant to Section 301, for the Debt
Securities of any series that, to the fullest extent possible under applicable
law and except as may otherwise be specified as contemplated in Section 301, (a)
the obligation, if any, of the Company to pay the principal of (and premium, if
any) and interest (including any Additional Interest) on the Debt Securities of
any series and any appurtenant coupons in a Foreign Currency, composite currency
or Dollars (the "Designated Currency") as may be specified pursuant to Section
301 is of the essence and agrees that judgments in respect of such Debt
Securities shall be given in the Designated Currency; (b) the obligation of the
Company to make payments in the Designated Currency of the principal of (and
premium, if any) and interest (including any Additional Interest) on such Debt
Securities and any appurtenant coupons shall, notwithstanding any payment in any
other currency (whether pursuant to a judgment or otherwise), be discharged only
to the extent of the amount in the Designated Currency that the Holder receiving
such payment may, in accordance with normal banking procedures, purchase with
the sum paid in such other currency (after any premium and cost of exchange) in
the country of issue of the Designated Currency in the case of Foreign Currency
or Dollars or in the international banking community in the case of a composite
currency on the Business Day immediately following the day on which such Holder
receives such payment; (c) if the amount in the Designated Currency that may be
so purchased for any reason falls short of the amount originally due, the
Company shall pay

                                       38



such additional amounts as may be necessary to compensate for such shortfall;
and (d) any obligation of the Company not discharged by such payment shall be
due as a separate and independent obligation and, until discharged as provided
herein, shall continue in full force and effect.

         Section 313. Deferrals of Interest Payment Dates.

         If specified as contemplated by Section 301 with respect to the Debt
Securities of a particular series, so long as no Event of Default has occurred
and is continuing, the Company shall have the right, at any time during the term
of such series, from time to time to defer the payment of interest on such Debt
Securities for such period or periods as may be specified as contemplated by
Section 301 (each, an "Extension Period"), during which Extension Periods the
Company shall, if so specified as contemplated by Section 301, have the right to
make partial payments of interest on any Interest Payment Date. No Extension
Period shall end on a date other than an Interest Payment Date. At the end of
any such Extension Period the Company shall pay all interest then accrued and
unpaid on the Debt Securities (together with Additional Interest thereon, if
any, at the rate specified for the Debt Securities of such series to the extent
permitted by applicable law); provided, however, that no Extension Period shall
extend beyond the Stated Maturity of the principal of the Debt Securities of
such series; and provided further, however that, unless otherwise specified as
contemplated by Section 301, during any such Extension Period, the Company shall
not (i) make any payment of principal of or interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company that rank pari
passu in all respects with or junior in interest to the Debt Securities of such
series, or (ii) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors or consultants, in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of capital stock of the Company (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of an exchange, redemption or conversion of any class or series
of the Company's capital stock (or any capital stock of a subsidiary of the
Company) for any other class or series of the Company's capital stock, or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the securities being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto, (e) any payment by the Company under any
Guarantee Agreement, or (f) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Event of Default has occurred and is
continuing, and provided,

                                       39



further that no Extension Period shall exceed the period or periods specified in
such Debt Securities, extend beyond the Stated Maturity of the principal of such
Debt Securities or end on a date other than an Interest Payment Date. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above conditions. No interest or Additional Interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension
Period shall bear Additional Interest as and to the extent as may be specified
as contemplated by Section 301. The Company shall give the Holders of the Debt
Securities of such series and the Trustee notice of its election to begin any
such Extension Period at least one Business Day prior to the next succeeding
Interest Payment Date on which interest on Debt Securities of such series would
be payable but for such deferral or, with respect to any Debt Securities of a
series issued to an Issuer Trust, so long as any such Debt Securities are held
by such Issuer Trust, at least one Business Day prior to the earlier of (i) the
next succeeding date on which Distributions on the Capital Trust Securities of
such Issuer Trust would be payable but for such deferral, and (ii) the date on
which the Property Trustee of such Issuer Trust is required to give notice to
holders of such Capital Trust Securities of the record date or the date such
Distributions are payable. The Trustee shall promptly give notice of the
Company's election to begin any such Extension Period to the Holders of the
Outstanding Debt Securities of such series.

         Section 314. Right of Set-Off.

         With respect to the Debt Securities of a series initially issued to an
Issuer Trust, notwithstanding anything to the contrary herein, the Company shall
have the right to set off any payment it is otherwise required to make in
respect of any such Debt Security to the extent the Company has theretofore
made, or is concurrently on the date of such payment making, a payment under the
Guarantee Agreement relating to such payment in respect of such Debt Security or
a payment to a holder of Capital Trust Securities relating to such Debt Security
pursuant to an action undertaken under Section 508 of this Indenture.

         Section 315. Agreed Tax Treatment.

         Each Debt Security issued hereunder shall provide that the Company and,
by its acceptance of a Debt Security or a beneficial interest therein, the
Holder of, and any Person that acquires a beneficial interest in, such Debt
Security agree that for United States Federal, Commonwealth of Puerto Rico,
state and local tax purposes it is intended that such Debt Security constitutes
indebtedness.

                                   ARTICLE IV

                           SATISFACTION AND DISCHARGE

         Section 401. Satisfaction and Discharge of Indenture.

         This Indenture shall upon Company Request cease to be of further
effect, including the provisions of Article XVIII hereof (except as to any
surviving rights of registration of transfer or exchange of Debt Securities
herein

                                       40



expressly provided for and rights to receive payments of principal and interest
thereon (including any Additional Interest) and any right to receive additional
amounts, as provided in Section 1006) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture when

                  (1)      either

                       (A)   all Debt Securities theretofore authenticated and
                  delivered and all coupons appertaining thereto (other than (i)
                  coupons appertaining to Bearer Securities surrendered in
                  exchange for Registered Securities and maturing after such
                  exchange, surrender of which is not required or has been
                  waived as provided in Section 305, (ii) Debt Securities and
                  coupons which have been destroyed, lost or stolen and which
                  have been replaced or paid as provided in Section 306, (iii)
                  coupons appertaining to Bearer Securities called for
                  redemption or surrendered for repayment and maturing after the
                  relevant Redemption Date or Repayment Date, as appropriate,
                  surrender of which has been waived as provided in Section 1106
                  or 1303 and (iv) Debt Securities and coupons for whose payment
                  money and/or Eligible Instruments have theretofore been
                  deposited in trust or segregated and held in trust by the
                  Company and thereafter repaid to the Company or discharged
                  from such trust, as provided in Section 1003) have been
                  delivered to the Trustee cancelled or for cancellation; or

                       (B)   all such Debt Securities not theretofore
                  delivered to the Trustee for cancellation

                                (i)    have become due and payable, or

                                (ii)   will become due and payable at their
                             Stated Maturity within one year, or

                                (iii)  are to be called for redemption within
                             one year under arrangements satisfactory to the
                             Trustee for the giving of notice of redemption by
                             the Trustee in the name, and at the expense, of the
                             Company,

                  and the Company, in the case of (B)(i), (B)(ii) or (B)(iii)
                  above, has irrevocably deposited or caused to be deposited
                  with the Trustee as trust funds in trust for the purpose money
                  and/or, to the extent such Debt Securities are denominated and
                  payable in Dollars only, Eligible Instruments the payments of
                  principal and interest on which when due (and without
                  reinvestment and providing no tax liability will be imposed
                  upon the Trustee or the Holders of Debt Securities) will
                  provide money in such amounts as will (together with any money
                  irrevocably deposited in trust with the Trustee, without
                  investment) be sufficient to pay and discharge the entire
                  indebtedness on such Debt Securities and coupons of such
                  series for principal (and premium, if any) and interest
                  (including

                                       41



                  any Additional Interest), and any mandatory sinking fund,
                  repayment or analogous payments thereon, on the scheduled due
                  dates therefor to the date of such deposit (in the case of
                  Debt Securities and coupons which have become due and payable)
                  or to the Stated Maturity or Redemption Date, if any, and all
                  Repayment Dates (in the case of Debt Securities repayable at
                  the option of the Holders thereof); provided, however, that in
                  the event a petition for relief under the Bankruptcy Reform
                  Act of 1978 or a successor statute is filed with respect to
                  the Company within 91 days after the deposit, the obligations
                  of the Company under the Indenture with respect to the Debt
                  Securities of such series shall not be deemed terminated or
                  discharged, and in such event the Trustee shall be required to
                  return the deposited money and Eligible Instruments to the
                  Company;

                  (2)      the Company has paid or caused to be paid all other
         sums payable hereunder by the Company; and

                  (3)      the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel each stating that all conditions
         precedent herein provided for relating to the satisfaction and
         discharge of this Indenture have been complied with.

Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money or
Eligible Instruments shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.

         Section 402. Application of Trust Money and Eligible Instruments.

                  (a)      Subject to the provisions of the last paragraph of
         Section 1003, all money and Eligible Instruments deposited with the
         Trustee pursuant to Section 401, 403 or 1701 shall be held in trust and
         such money and the principal and interest received on such Eligible
         Instruments shall be applied by it, in accordance with the provisions
         of the Debt Securities, the coupons and this Indenture, to the payment,
         either directly or through any Paying Agent (including the Company
         acting as its own Paying Agent) as the Trustee may determine, to the
         Persons entitled thereto, of the principal (and premium, if any) and
         interest (including any Additional Interest) for whose payment such
         money or Eligible Instruments have been deposited with the Trustee.

                  (b)      The Trustee shall deliver or pay to the Company from
         time to time upon Company Request any Eligible Instruments or money
         held by it as provided in Section 403 or 1701 which, in the opinion of
         a nationally recognized firm of independent public accountants
         expressed in a written certification thereof delivered to the Trustee,
         are then in excess of the amount thereof which then would have been
         required to be deposited for the purpose for which such Eligible
         Instruments or money were deposited or received.

                                       42



                  (c)      If this Section 402(c) is specified, as contemplated
         by Section 301, to be applicable to the Debt Securities of any series,
         the Trustee shall deliver to the Company from time to time upon Company
         Request any Eligible Instruments held by it as provided in Section 403
         or 1701, provided that the Company in substitution therefor
         simultaneously delivers to the Trustee, money or other Eligible
         Instruments which, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written certification
         thereof delivered to the Trustee, would then be sufficient to satisfy
         the Company's payment obligations in respect of the Debt Securities in
         the manner contemplated by Section 403 or 1701.

         Section 403. Satisfaction, Discharge and Defeasance of Debt Securities
of any Series.

         If this Section 403 is specified, as contemplated by Section 301, to be
applicable to Debt Securities of any series, then, notwithstanding Section 401,
(i) the Company shall be deemed to have paid and discharged the entire
indebtedness on all the Outstanding Debt Securities of any such series and
related coupons; (ii) the provisions of this Indenture as it relates to such
Outstanding Debt Securities and related coupons shall no longer be in effect,
including the provisions of Article XVIII hereof (except as to the rights of
Holders of Debt Securities to receive, from the trust fund described in
subparagraph (1) below, payment of (x) the principal of (and premium, if any)
and any installment of principal of (and premium, if any) or interest (including
any Additional Interest) on such Debt Securities and related coupons on the
Stated Maturity of such principal (and premium, if any) or installment of
principal (and premium, if any) or interest (including any Additional Interest)
or (y) any mandatory sinking fund, repayment or analogous payments applicable to
the Debt Securities of that series on that day on which such payments are due
and payable in accordance with the terms of this Indenture and of such Debt
Securities, the Company's obligations with respect to such Debt Securities under
Sections 304, 305, 306, 1002, 1003 and 1006 and the rights, powers, trusts,
duties and immunities of the Trustee hereunder, including those under Section
607 hereof); and (iii) the Trustee, at the expense of the Company, shall, upon
Company Order, execute proper instruments acknowledging satisfaction and
discharge of such indebtedness, when

                  (1)      either

                           (A)      with respect to all Outstanding Debt
                  Securities of such series and related coupons, with reference
                  to this Section 403, the Company has deposited or caused to be
                  deposited with the Trustee (or another trustee satisfying the
                  requirements of Section 609 who shall agree to comply with the
                  provisions of this Section 403 applicable to it) irrevocably,
                  as trust funds in trust, money and/or, to the extent such Debt
                  Securities are denominated and payable in Dollars only,
                  Eligible Instruments the payments of principal and interest on
                  which when due (and without reinvestment and providing no tax
                  liability will be imposed upon the Trustee or the Holders of
                  such Debt Securities) will provide money in such amounts as
                  will (together with any money irrevocably deposited in

                                       43



                  trust with the Trustee, without investment) be sufficient to
                  pay and discharge (i) the principal of (and premium, if any)
                  and interest (including any Additional Interest) on the
                  Outstanding Debt Securities of that series and related coupons
                  on the Stated Maturity of such principal or interest
                  (including any Additional Interest) or, if such series may be
                  redeemed by the Company prior to the Stated Maturity thereof,
                  and the Company shall have given irrevocable instructions to
                  the Trustee to effect such redemption, at the date fixed for
                  such redemption pursuant to Article XI, and (ii) any mandatory
                  sinking fund payments or analogous payments applicable to Debt
                  Securities of such series on the date on which such payments
                  are due and payable in accordance with the terms of this
                  Indenture and of such Debt Securities; or

                           (B)      the Company has properly fulfilled such
                  other means of satisfaction and discharge as is specified, as
                  contemplated by Section 301, to be applicable to the Debt
                  Securities of such series;

                  (2)      the Company has paid or caused to be paid all sums
         payable with respect to the Outstanding Debt Securities of such series
         and related coupons;

                  (3)      such deposit will not result in a breach of, or
         constitute a default under, this Indenture or any other agreement or
         instrument to which the Company is a party or by which it is bound;

                  (4)      no Event of Default or event which, with the giving
         of notice or lapse of time, or both, would become an Event of Default
         with respect to the Debt Securities of such series shall have occurred
         and be continuing on the date of such deposit and no Event of Default
         under Section 501(5) or Section 501(6) or event which, with the giving
         of notice or lapse of time, or both, would become an Event of Default
         under Section 501(5) or Section 501(6) shall have occurred and be
         continuing on the 91st day after such date; provided, however, that
         should that condition fail to be satisfied on or before such 91st day,
         the Trustee shall promptly, upon satisfactory receipt of evidence of
         such failure, return such deposit to the Company;

                  (5)      the Company has delivered to the Trustee an Opinion
         of Counsel to the effect that (a) the Company has received from, or
         there has been published by, the Internal Revenue Service a ruling, or
         (b) since the date of this Indenture there has been a change in
         applicable Federal income tax law, in either case to the effect that,
         and based thereon such Opinion of Counsel shall confirm that, the
         Holders of Debt Securities and related coupons of such series will not
         recognize income, gain or loss for United States Federal or Puerto Rico
         income tax purposes as a result of such deposit, defeasance and
         discharge and will be subject to United States Federal and Puerto Rico
         income tax on the same amount and in the same manner and at the same
         times as would have been the case if such deposit, defeasance and
         discharge had not occurred;

                                       44



                  (6)      if the Debt Securities of that series are then listed
         on any domestic or foreign securities exchange, the Company shall have
         delivered to the Trustee an Opinion of Counsel to the effect that such
         deposit, defeasance and discharge will not cause such Debt Securities
         to be delisted;

                  (7)      such deposit shall have been effected in compliance
         with any additional terms, conditions or limitations which may be
         imposed on the Company in connection therewith pursuant to Section 301;
         and

                  (8)      the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, each stating that all conditions
         precedent herein provided for relating to the satisfaction and
         discharge of the entire indebtedness of all Outstanding Debt Securities
         and related coupons have been complied with.

         Any deposits with the Trustee referred to in Section 403(1)(A) above
shall be irrevocable and shall be made under the terms of an escrow trust
agreement in form and substance satisfactory to the Trustee. If any Outstanding
Debt Securities of such series are to be redeemed prior to their Stated
Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable escrow
trust agreement shall provide therefor and the Company shall make such
arrangements as are satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.

         Upon the satisfaction of the conditions set forth in this Section 403
with respect to all the Outstanding Debt Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided that the Company shall not be discharged
from any payment obligations in respect of Debt Securities of such series which
are deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law.

         Notwithstanding the cessation, termination and discharge of all
obligations, covenants and agreements (except as provided above in this Section
403) of the Company under this Indenture with respect to any series of Debt
Securities, the obligations of the Company to the Trustee under Section 607, and
the obligations of the Trustee under Section 402 and the last paragraph of
Section 1003, shall survive with respect to such series of Debt Securities.

                                    ARTICLE V

                                    REMEDIES

         Section 501. Events of Default.

         "Event of Default", wherever used herein with respect to Debt
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be

                                       45



effected by operation of law, pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):

                  (1)      default in the payment of any interest upon any Debt
         Security of such series or a related coupon, if any, when it becomes
         due and payable, and continuance of such default for a period of 30
         days (subject to the deferral of any due date in the case of an
         Extension Period); or

                  (2)      default in the payment of the principal of (or
         premium, if any, on) any Debt Security of such series at its Maturity;
         or

                  (3)      default in the deposit of any sinking fund payment,
         when and as due by the terms of a Debt Security of such series; or

                  (4)      default in the performance, or breach, of any
         covenant or warranty of the Company in this Indenture (other than a
         covenant or warranty a default in whose performance or whose breach is
         elsewhere in this Section specifically dealt with or which has
         expressly been included in this Indenture solely for the benefit of
         Debt Securities of a series other than such series), and continuance of
         such default or breach for a period of 90 days after there has been
         given by registered or certified mail, to the Company by the Trustee,
         or to the Company and the Trustee by the Holders of at least 25% in
         principal amount of the Outstanding Debt Securities of such series, a
         written notice specifying such default or breach and requiring it to be
         remedied and stating that such notice is a "Notice of Default"
         hereunder; or

                  (5)      the entry of a decree or order for relief in respect
         of the Company by a court having jurisdiction in the premises in an
         involuntary case under the Federal bankruptcy laws, as now or hereafter
         constituted, and the continuance of any such decree or order unstayed
         and in effect for a period of 60 consecutive days; or

                  (6)      the commencement by the Company of a voluntary case
         under the Federal bankruptcy laws, as now or hereafter constituted, or
         the consent by the Company to the entry of a decree or order for relief
         in an involuntary case under any such law; or

                  (7)      any other Event of Default, if any, provided with
         respect to Debt Securities of such series specified as contemplated by
         Section 301.

         Section 502. Acceleration of Maturity; Rescission and Annulment.

         If an Event of Default with respect to Debt Securities of any series at
the time Outstanding occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of Outstanding
Debt Securities of such series may declare the principal amount (or, if the Debt
Securities of such series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of such series) of and

                                       46



all accrued but unpaid interest (including any Additional Interest) on all the
Debt Securities of such series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by such Holders), provided
that, in the case of the Debt Securities of a series issued to an Issuer Trust,
if, upon an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Debt Securities of such series fail to
declare the principal of all the Outstanding Debt Securities of such series to
be immediately due and payable, either the Property Trustee or the holders of at
least 25% in aggregate Liquidation Amount (as defined in the related Trust
Agreement) of the related series of Capital Trust Securities issued by such
Issuer Trust then outstanding shall have the right to make such declaration by a
notice in writing to the Company and the Trustee; and upon any such declaration
such principal amount (or specified amount) shall become immediately due and
payable. Upon payment of such amount, all obligations of the Company in respect
of the payment of principal of the Debt Securities of such series shall
terminate.

         At any time after such a declaration of acceleration with respect to
Debt Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if

                  (1)      the Company has paid or deposited with the Trustee a
         sum sufficient to pay

                           (A)      all overdue installments of interest on all
                  Debt Securities of such series and any related coupons and any
                  accrued Additional Interest on all Debt Securities of such
                  series,

                           (B)      the principal of (and premium, if any, on)
                  any Debt Securities of such series which have become due
                  otherwise than by such declaration of acceleration and
                  interest and Additional Interest thereon at the rate or rates
                  prescribed therefor in such Debt Securities,

                           (C)      to the extent that payment of such interest
                  is lawful, interest upon overdue installments of interest on
                  each Debt Security and any related coupons at the rate or
                  rates prescribed therefor in such Debt Securities, and

                           (D)      all sums paid or advanced by the Trustee
                  hereunder and the reasonable compensation, expenses,
                  disbursements and advances of the Trustee, its agents and
                  counsel;

         and

                  (2)      all Events of Default with respect to Debt Securities
         of such series, other than the non-payment of the principal of such
         series which have become due solely by such declaration of
         acceleration, have been cured or waived as provided in Section 513;

                                       47



provided, however, that in the case of Debt Securities of a series initially
issued to an Issuer Trust, any such recision and annulment shall require the
consent of the holders of a majority in aggregate Liquidation Amount (as defined
in the related Trust Agreement) of the related series of Capital Trust
Securities then outstanding.

         In the case of Debt Securities of a series initially issued to an
Issuer Trust, if the Holders of such Debt Securities fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount (as defined in the related Trust Agreement) of the related
series of Capital Trust Securities issued by such Issuer Trust then outstanding
shall also have the right to rescind and annul such declaration and its
consequences by written notice to the Company and the Trustee, subject to the
satisfaction of the conditions set forth in Clauses (1) and (2) above of this
Section 502.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

         Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.

         The Company covenants that if:

                  (1)      default is made in the payment of any installment of
         interest (including any Additional Interest) on any Debt Security or
         any related coupon when such interest becomes due and payable and such
         default continues for a period of 30 days, or

                  (2)      default is made in the payment of the principal of
         (or premium, if any, on) any Debt Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities and coupons, the amount then due and payable on
such Debt Securities and coupons for principal (and premium, if any) and
interest (including any Additional Interest), including the delivery of any
Capital Securities then required to be delivered, and, to the extent that
payment of such interest shall be legally enforceable, interest upon the overdue
principal (and premium, if any) and, upon overdue installments of interest, at
the rate or rates prescribed therefor in such Debt Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.

         If the Company fails to pay such amounts (including the delivery of any
Capital Securities then required to be delivered) forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid and the
delivery of any Capital Securities required to be delivered and not so
delivered, or, in the case of the failure to deliver Capital Securities, money
equal to the principal amount of the Debt Securities for which the Capital
Securities were to be exchanged, and may prosecute such proceeding to judgment
or final decree, and

                                       48



may enforce the same against the Company or any other obligor upon such Debt
Securities and coupons and collect the moneys (or money equal to the principal
amount of any Debt Securities for which Capital Securities were to be exchanged)
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Debt Securities and
coupons, wherever situated.

         If an Event of Default with respect to Debt Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Debt Securities of such
series and any related coupons by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.

         Section 504. Trustee May File Proofs of Claim.

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities of a particular series or any related
coupons or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of such Debt
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest (including any
Additional Interest)) shall be entitled and empowered, by intervention in such
proceedings or otherwise,

                  (1)      to file and prove a claim for the whole amount of
         principal (and premium, if any) and interest (including any Additional
         Interest) owing and unpaid in respect of the Debt Securities of such
         series and any appurtenant coupons and to file such other papers or
         documents as may be necessary or advisable in order to have the claims
         of the Trustee (including any claim for the reasonable compensation,
         expenses, disbursements and advances of the Trustee, its agents and
         counsel) and of the Holders allowed in such judicial proceeding, and

                  (2)      to collect and receive any moneys or other property
         payable or deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, custodian, liquidator, sequestrator or
other similar official in any such proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

                                       49



         Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities or coupons or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

         Section 505. Trustee May Enforce Claims without Possession of Debt
Securities or Coupons.

         All rights of action and claims under this Indenture or the Debt
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Debt Securities or coupons or the production thereof in
any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name, as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the Debt
Securities and coupons in respect of which such judgment has been recovered.

         Section 506. Application of Money Collected.

         Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (and premium,
if any) or interest (including any Additional Interest), upon presentation of
the Debt Securities or coupons, or both, as the case may be, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:

                  FIRST: To the payment of all amounts due the Trustee under
         Section 607;

                  SECOND: To the payment of amounts then due and unpaid to the
         holders of Senior Debt, to the extent required by Article XVIII;

                  THIRD: To the payment of the amounts then due and unpaid for
         principal of (and premium, if any) and interest (including any
         Additional Interest) on the Debt Securities and any coupons, in respect
         of which or for the benefit of which such money has been collected
         ratably, without preference or priority of any kind, according to the
         amounts due and payable on such Debt Securities and any coupons for
         principal (and premium, if any) and interest (including any Additional
         Interest), respectively. The Holders of each series of Debt Securities
         denominated in Euro, any other composite currency or a Foreign Currency
         and any matured coupons relating thereto shall be entitled to receive a
         ratable portion of the amount determined by the Exchange Rate Agent by
         converting the principal amount Outstanding of such series of Debt
         Securities and matured but unpaid interest (including any Additional
         Interest) on such series of Debt Securities in the currency in which
         such series of Debt Securities is denominated into Dollars at the
         Exchange Rate as of the date of declaration of acceleration of the
         Maturity of the Debt Securities; and

                                       50



                  FOURTH: The balance, if any, to the Person or Persons entitled
         thereto.

         Section 507. Limitation on Suits.

         No Holder of any Debt Securities of any series or any related coupons
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless

                  (1)      such Holder has previously given written notice to
         the Trustee of a continuing Event of Default with respect to the Debt
         Securities of such series;

                  (2)      the Holders of not less than 25% in principal amount
         of the Outstanding Debt Securities of such series shall have made
         written request to the Trustee to institute proceedings in respect of
         such Event of Default in its own name as Trustee hereunder;

                  (3)      such Holder or Holders have offered to the Trustee
         reasonable indemnity against the costs, expenses and liabilities to be
         incurred in compliance with such request;

                  (4)      the Trustee for 60 days after its receipt of such
         notice, request and offer of indemnity has failed to institute any such
         proceeding; and

                  (5)      no direction inconsistent with such written request
         has been given to the Trustee during such 60-day period by the Holders
         of a majority in principal amount of the Outstanding Debt Securities of
         such series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all of such
Holders.

         Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Exchange Debt Securities for Capital Securities;
Direct Action by Holders of Capital Trust Securities.

         Notwithstanding any other provision in this Indenture, the Holder of
any Debt Security or coupon shall have the right which is absolute and
unconditional to receive payment of the principal of (and premium, if any) and
(subject to Section 307) interest (including any Additional Interest) on such
Debt Security or payment of such coupon on the respective Stated Maturity or
Maturities expressed in such Debt Security or coupon (or, in the case of
redemption or repayment, on the Redemption Date or the Repayment Date, as the
case may be), to have the Debt Securities exchanged for Capital Securities
pursuant to

                                       51



Article XIV, if applicable, and to institute suit for the enforcement of any
such payment or exchange, and such right shall not be impaired without the
consent of such Holder, subject, however, to the provisions of Article XVIII. In
the case of Debt Securities of a series issued to an Issuer Trust, any
registered holder of the series of Capital Trust Securities issued by such
Issuer Trust shall have the right, upon the occurrence of an Event of Default
described in Section 501(1) or (2), to institute a suit directly against the
Company for enforcement of payment to such holder of principal of (premium, if
any) and (subject to Sections 307 and 313) interest (including any Additional
Interest) on the Debt Securities having a principal amount equal to the
aggregate Liquidation Amount (as defined in the related Trust Agreement) of such
Capital Trust Securities held by such holder.

         Section 509. Restoration of Rights and Remedies.

         If the Trustee, any Holder or any holder of Capital Trust Securities
issued by an Issuer Trust has instituted any proceedings to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee, such
Holder or such holder of Capital Trust Securities, then and in every such case
the Company, the Trustee, the Holders and the holders of Capital Trust
Securities shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee, the Holders and the holders of the
Capital Trust Securities shall continue as though no such proceeding had been
instituted.

         Section 510. Rights and Remedies Cumulative.

         Except as otherwise provided in Section 306, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

         Section 511. Delay or Omission Not Waiver.

         No delay or omission of the Trustee or of any Holder of any Debt
Security or coupon to exercise any right or remedy accruing upon any Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders and the right and remedy
given to the holders of Capital Trust Securities by Section 508 may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee, the
Holders or the holders of Capital Trust Securities, as the case may be.

                                       52



         Section 512. Control by Holders of Debt Securities.

         The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the Debt
Securities of such series, provided, that

                  (1)      such direction shall not be in conflict with any rule
         of law or with this Indenture;

                  (2)      subject to the provisions of Section 601, the Trustee
         shall have the right to decline to follow any such direction if the
         Trustee in good faith shall, by a Responsible Officer or Responsible
         Officers of the Trustee, determine that the proceedings so directed
         would be unjustly prejudicial to the Holders of Debt Securities of such
         series not joining in any such direction; and

                  (3)      the Trustee may take any other action deemed proper
         by the Trustee which is not inconsistent with such direction.

         Section 513. Waiver of Past Defaults.

         The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series on behalf of the Holders of all the
Debt Securities of any such series and any related coupons and, in the case of
any Debt Securities of a series initially issued to an Issuer Trust, the holders
of a majority in aggregate Liquidation Amount (as defined in the related Trust
Agreement) of Capital Trust Securities issued by such Issuer Trust may waive any
past default hereunder with respect to such series and its consequences, except
a default

                  (1)      in the payment of the principal of (or premium, if
         any) or interest (including any Additional Interest) on any Debt
         Security of such series, or

                  (2)      in respect of a covenant or provision hereof which
         under Article IX cannot be modified or amended without the consent of
         the Holder of each Outstanding Debt Security of such series or coupons
         affected;

provided, however, that in the case of any Debt Securities of a series initially
issued by an Issuer Trust, such waiver shall not be effective as to such Debt
Securities unless the holders of at least a majority in aggregate Liquidation
Amount (as defined in the related Trust Agreement) of Capital Trust Securities
issued by such Issuer Trust shall have consented to such waiver; provided
further, that if the consent of the Holder of each Outstanding Debt Security is
required, such waiver shall not be effective unless each holder of Capital Trust
Securities issued by such Issuer Trust shall have consented to such waiver.

         Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose

                                       53


of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

         Section 514. Undertaking for Costs.

         All parties to this Indenture agree, and each Holder of any Debt
Security or coupon by his acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having a due regard to
the merits and good faith of the claims or defenses made by such party litigant,
but the provisions of this Section shall not apply to any suit instituted by the
Company or the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of (or premium, if
any) or interest (including any Additional Interest) on any Debt Security or the
payment of any coupons on or after the respective Stated Maturity or Maturities
expressed in such Debt Security or coupon (or, in the case of redemption or
repayment, on or after the Redemption Date or Repayment Date, as the case may
be) or for the enforcement of the right to exchange any Debt Securities for
Capital Securities as provided in Article XIV.

         Section 515. Waiver of Stay or Extension Laws.

         The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law whenever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefits or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

                                   ARTICLE VI

                                   THE TRUSTEE

         Section 601. Certain Duties and Responsibilities.

         The duties and responsibilities of the Trustee shall be as provided in
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct

                                       54



or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

         Section 602. Notice of Default.

         If a default occurs hereunder with respect to Debt Securities of any
series the Trustee shall transmit by mail to all Holders of Debt Securities of
such series notice of such default as and to the extent provided by the Trust
Indenture Act; provided, however, that in the case of any default of the
character specified in Section 501(4) with respect to Debt Securities of such
series no such notice to Holders shall be given until at least 30 days after the
occurrence thereof; and provided further, that, except in the case of a default
in the payment of the principal of (or premium, if any) or interest (including
any Additional Interest) on any Debt Security of such series or any related
coupons or in the payment of any sinking fund installment with respect to Debt
Securities of such series or in the exchange of Capital Securities for Debt
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of the
Holders of Debt Securities of such series. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Debt Securities of such
series.

         Section 603. Certain Rights of Trustee.

         Except as otherwise provided in Section 601:

                  (a)      the Trustee may rely and shall be protected in acting
         or refraining from acting upon any signature, resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, coupon or other paper or
         document believed by it to be genuine and to have been signed or
         presented by the proper party or parties;

                  (b)      any request or direction of the Company mentioned
         herein shall be sufficiently evidenced by a Company Request or Company
         Order and any resolution of the Board of Directors shall be
         sufficiently evidenced by a Board Resolution;

                  (c)      whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a matter be proved or established
         prior to taking, suffering or omitting any action hereunder, the
         Trustee (unless other evidence be herein specifically prescribed) may,
         in the absence of bad faith on its part, rely upon an Officers'
         Certificate;

                  (d)      the Trustee may consult with counsel and the advice
         of such counsel or any Opinion of Counsel shall be full and complete
         authorization and protection in respect of any action taken, suffered
         or omitted by it hereunder in good faith and in reliance thereon;

                                       55



                  (e)      the Trustee shall be under no obligation to exercise
         any of the rights or powers vested in it by this Indenture at the
         request or direction of any of the Holders of Debt Securities of such
         series or any related coupons pursuant to this Indenture, unless such
         Holders shall have offered to the Trustee reasonable security or
         indemnity against the costs, expenses and liabilities which might be
         incurred by it in compliance with such request or direction;

                  (f)      the Trustee shall not be bound to make any
         investigation into the facts or matters stated in any resolution,
         certificate, statement, instrument, opinion, report, notice, request,
         direction, consent, order, bond, debenture, note, coupon, other
         evidence of indebtedness or other paper or document, but the Trustee,
         in its discretion, may make such further inquiry or investigation into
         such facts or matters as it may see fit, and, if the Trustee shall
         determine to make such further inquiry or investigation, it shall be
         entitled to examine the books, records and premises of the Company,
         personally or by agent or attorney, other than any such books or
         records containing information as to the affairs of the customers of
         the Company or any of its subsidiaries; provided that the Trustee may
         examine such books and records relating to customers to the extent that
         such books and records contain information as to any payments made to
         such customers in their capacity as Holders of Debt Securities; and

                  (g)      the Trustee may execute any of the trusts or powers
         hereunder or perform any duties hereunder either directly or by or
         through agents or attorneys and the Trustee shall not be responsible
         for any misconduct or negligence on the part of any agent or attorney
         appointed with due care by it hereunder; no Exchange Rate Agent,
         Capital Exchange Agent, Global Exchange Agent, Depositary or Paying
         Agent shall be deemed an agent of the Trustee and the Trustee shall not
         be responsible for any act or omission by any of them.

         Section 604. Not Responsible for Recitals or Issuance of Debt
Securities.

         The recitals contained herein and in the Debt Securities, except the
Trustee's certificates of authentication, and in any coupons, and the
information in any registration statement, including all attachments thereto,
except information provided by the Trustee therein, shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Debt Securities of any series or any
coupons or any Capital Securities. The Trustee shall not be accountable for the
use or application by the Company of any Debt Securities or the proceeds
thereof. The Trustee shall not be responsible for and makes no representations
to the Company's ability or authority to issue Bearer Securities or the
lawfulness thereof.

         Section 605. May Hold Debt Securities or Coupons.

         The Trustee, any Paying Agent, the Security Registrar or any other
agent of the Company or the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Debt Securities and coupons, and, subject to

                                       56



Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Security Registrar or such
agent.

         Section 606. Money Held in Trust.

         Money held by the Trustee or any Paying Agent in trust hereunder need
not be segregated from other funds except to the extent required by law. Neither
the Trustee nor any Paying Agent shall be under any liability for interest on
any money received by it hereunder except as otherwise agreed with the Company.

         Section 607. Compensation and Reimbursement.

         The Company agrees

                  (1)      to pay to the Trustee from time to time reasonable
         compensation for all services rendered by it hereunder which shall have
         been separately agreed to by the Company and the Trustee (which
         compensation shall not be limited by any provision of law in regard to
         the compensation of a trustee of an express trust);

                  (2)      except as otherwise expressly provided herein, to
         reimburse the Trustee upon its request for all reasonable expenses,
         disbursements and advances incurred or made by the Trustee in
         accordance with any provision of this Indenture (including the
         reasonable compensation and the expenses and disbursements of its
         agents and counsel), except any such expense, disbursement or advance
         as may be attributable to its negligence or bad faith; and

                  (3)      to indemnify the Trustee for, and to hold it harmless
         against, any claim, loss, liability or expense incurred without
         negligence or bad faith on its part, arising out of or in connection
         with the acceptance or administration of this trust or performance of
         its duties hereunder, including the costs and expenses of defending
         itself against any claim or liability in connection with the exercise
         or performance of any of its powers or duties hereunder.

         As security for the performance of the obligations of the Company under
this Section the Trustee shall have a claim prior to the Debt Securities and any
coupons upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premium, if any)
or interest on particular Debt Securities or any coupons. The claims of the
Trustee under this Section shall not be subject to the provisions of Article
XVIII. The provisions of this Section 607 shall survive the termination of this
Indenture and the resignation or removal of the Trustee.

         Section 608. Disqualification; Conflicting Interests.

         If the Trustee has or shall acquire any conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent

                                       57



permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest with respect to Debt Securities of any series by virtue of being a
trustee under this Indenture with respect to Debt Securities of any particular
series of Debt Securities other than that series. The Trust Agreement and the
Guarantee Agreement with respect to each Issuer Trust shall be deemed to be
specifically described in this Indenture for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

         Section 609. Corporate Trustee Required; Eligibility.

         There shall at all times be a Trustee hereunder which shall be a
corporation that is eligible pursuant to the Trust Indenture Act to act as such
and organized and doing business under the laws of the United States, any State
thereof, the District of Columbia or the Commonwealth of Puerto Rico, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, and subject to supervision or examination
by Federal or State authority; provided, however, that if Section 310(a) of the
Trust Indenture Act or the rules and regulations of the Commission under the
Trust Indenture Act at any time permit a corporation organized and doing
business under the laws of any other jurisdiction to serve as trustee of an
indenture qualified under the Trust Indenture Act, this Section 609 shall be
automatically amended to permit a corporation organized and doing business under
the laws of any such other jurisdiction to serve as Trustee hereunder. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.

         Section 610. Resignation and Removal; Appointment of Successor.

                  (a)      No resignation or removal of the Trustee and no
         appointment of a successor Trustee pursuant to this Article shall
         become effective until the acceptance of appointment by the successor
         Trustee under Section 611.

                  (b)      The Trustee may resign at any time with respect to
         the Debt Securities of one or more series by giving written notice
         thereof to the Company. If an instrument of acceptance by a successor
         Trustee shall not have been delivered to the Trustee within 30 days
         after the giving of such notice of resignation, the resigning Trustee
         may petition any court of competent jurisdiction for the appointment of
         a successor Trustee with respect to the Debt Securities of such series.

                  (c)      The Trustee may be removed at any time with respect
         to the Debt Securities of any series by Act of the Holders of a
         majority in principal amount of the Outstanding Debt Securities of such
         series, delivered to the Trustee and to the Company.

                                       58



                  (d)      If at any time:

                           (1)      the Trustee shall fail to comply with
         Section 608 with respect to the Debt Securities of any series after
         written request therefor by the Company or by any Holder who has been a
         bona fide Holder of a Debt Security of such series for at least six
         months, or

                           (2)      the Trustee shall cease to be eligible under
         Section 609 with respect to any series of Debt Securities and shall
         fail to resign after written request therefor by the Company or by any
         such Holder, or

                           (3)      the Trustee shall become incapable of acting
         with respect to any series of Debt Securities or a decree or order for
         relief by a court having jurisdiction in the premises shall have been
         entered in respect of the Trustee in an involuntary case under the
         Federal bankruptcy laws, as now or hereafter constituted, or any other
         applicable Federal or State bankruptcy, insolvency or similar law; or a
         decree or order by a court having jurisdiction in the premises shall
         have been entered for the appointment of a receiver, custodian,
         liquidator, assignee, trustee, sequestrator or other similar official
         of the Trustee or of its property or affairs, or any public officer
         shall take charge or control of the Trustee or of its property or
         affairs for the purpose of rehabilitation, conservation, winding up or
         liquidation, or

                           (4)      the Trustee shall commence a voluntary case
         under the Federal bankruptcy laws, as now or hereafter constituted, or
         any other applicable Federal or State bankruptcy, insolvency or similar
         law or shall consent to the appointment of or taking possession by a
         receiver, custodian, liquidator, assignee, trustee, sequestrator or
         other similar official of the Trustee or its property or affairs, or
         shall make an assignment for the benefit of creditors, or shall admit
         in writing its inability to pay its debts generally as they become due,
         or shall take corporate action in furtherance of any such action,

         then, in any such case, (i) the Company by a Board Resolution may
         remove the Trustee with respect to such series or (ii) subject to
         Section 514, any Holder who has been a bona fide Holder of a Debt
         Security of any series for at least six months may, on behalf of
         himself and all others similarly situated, petition any court of
         competent jurisdiction for the removal of the Trustee for the Debt
         Securities of such series and the appointment of a successor Trustee.
         In addition, the Company may remove the Trustee if the Company shall
         determine by a Board Resolution that the services provided by the
         Trustee may be obtained at a substantially lower cost to the Company.

                  (e)      If the Trustee shall resign, be removed or become
         incapable of acting with respect to any series of Debt Securities, or
         if a vacancy shall occur in the office of Trustee for any cause, with
         respect to the Debt Securities of one or more series, the Company, by a
         Board Resolution, shall promptly appoint a successor Trustee or
         Trustees with respect to the Debt Securities of that or those series
         (it being understood that any such successor Trustee may be appointed
         with respect to the Debt Securities of

                                       59



         one or more or all of such series and that at any time there shall be
         only one Trustee with respect to the Debt Securities of any particular
         series) and shall comply with the applicable requirements of Section
         611. If, within one year after such resignation, removal or
         incapability, or the occurrence of such vacancy, a successor Trustee
         with respect to the Debt Securities of any series shall be appointed by
         Act of the Holders of a majority in principal amount of the Outstanding
         Debt Securities of such series delivered to the Company and the
         retiring Trustee, the successor Trustee so appointed shall, forthwith
         upon its acceptance of such appointment, become the successor Trustee
         with respect to the Debt Securities of such series and to that extent
         supersede the successor Trustee appointed by the Company. If no
         successor Trustee with respect to the Debt Securities of any series
         shall have been so appointed by the Company or the Holders and accepted
         appointment in the manner hereinafter provided, any Holder who has been
         a bona fide Holder of a Debt Security of such series for at least six
         months may, subject to Section 514, on behalf of himself and all others
         similarly situated, petition any court of competent jurisdiction for
         the appointment of a successor Trustee with respect to the Debt
         Securities of such series.

                  (f)      The Company shall give notice of each resignation and
         each removal of the Trustee with respect to the Debt Securities of any
         series and each appointment of a successor Trustee with respect to the
         Debt Securities of any series by mailing written notice of such event
         by first-class mail, postage prepaid, to the Holders of Registered
         Securities, if any, of such series as their names and addresses appear
         in the Security Register and, if Debt Securities of such series are
         issuable as Bearer Securities, by publishing notice of such event once
         in an Authorized Newspaper in each Place of Payment located outside the
         United States. Each notice shall include the name of the successor
         Trustee with respect to the Debt Securities of such series and the
         address of its Corporate Trust Office.

         Section 611. Acceptance of Appointment by Successor.

                  (a)      In the case of an appointment hereunder of a
         successor Trustee with respect to all Debt Securities, every such
         successor Trustee so appointed shall execute, acknowledge and deliver
         to the Company and to the retiring Trustee an instrument accepting such
         appointment, and thereupon the resignation or removal of the retiring
         Trustee shall become effective and such successor Trustee, without any
         further act, deed or conveyance, shall become vested with all the
         rights, powers, trusts and duties of the retiring Trustee; but, on
         request of the Company or the successor Trustee, such retiring Trustee
         shall, upon payment of its charges, execute and deliver an instrument
         transferring to such successor Trustee all the rights, powers and
         trusts of the retiring Trustee, and shall duly assign, transfer and
         deliver to such successor Trustee all property and money held by such
         retiring Trustee hereunder.

                  (b)      In the case of the appointment hereunder of a
         successor Trustee with respect to the Debt Securities of one or more
         (but not all) series, the Company, the retiring Trustee upon payment of
         its charges and

                                       60



         each successor Trustee with respect to the Debt Securities of one or
         more series shall execute and deliver an indenture supplemental hereto
         wherein each successor Trustee shall accept such appointment and which
         (1) shall contain such provisions as shall be necessary or desirable to
         transfer and confirm to, and to vest in, each successor Trustee all the
         rights, powers, trusts and duties of the retiring Trustee with respect
         to the Debt Securities of that or those series to which the appointment
         of such successor Trustee relates, (2) if the retiring Trustee is not
         retiring with respect to all Debt Securities, shall contain such
         provisions as shall be deemed necessary or desirable to confirm that
         all the rights, powers, trusts and duties of the retiring Trustee with
         respect to the Debt Securities of that or those series as to which the
         retiring Trustee is not retiring shall continue to be vested in the
         retiring Trustee, and (3) shall add to or change any of the provisions
         of this Indenture as shall be necessary to provide for or facilitate
         the administration of the trusts hereunder by more than one Trustee, it
         being understood that nothing herein or in such supplemental indenture
         shall constitute such Trustees co-trustees of the same trust and that
         each such Trustee shall be trustee of a trust or trusts hereunder
         separate and apart from any trust or trusts hereunder administered by
         any other such Trustee; and upon the execution and delivery of such
         supplemental indenture, the resignation or removal of the retiring
         Trustee shall become effective to the extent provided therein and each
         such successor Trustee, without any further act, deed or conveyance,
         shall become vested with all the rights, powers, trusts and duties of
         the retiring Trustee with respect to the Debt Securities of that or
         those series to which the appointment of such successor Trustee
         relates; but, on the request of the Company or any successor Trustee,
         such retiring Trustee shall duly assign, transfer and deliver to such
         successor Trustee all property and money held by such retiring Trustee
         hereunder with respect to the Debt Securities of that or those series
         to which the appointment of such successor Trustee relates.

                  (c)      Upon request of any such successor Trustee, the
         Company shall execute any and all instruments for more fully and
         certainly vesting in and confirming to such successor Trustee all such
         rights, powers and trusts referred to in paragraph (a) or (b) of this
         Section, as the case may be.

                  (d)      No successor Trustee shall accept its appointment
         unless at the time of such acceptance such successor Trustee shall be
         qualified and eligible under this Article.

         Section 612. Merger, Conversion, Consolidation or Succession to
Business.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the executing or filing of any paper or any further act on the
part of any of the parties hereto. In case any Debt Securities shall have been

                                       61



authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Debt Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such Debt
Securities. In case any Debt Securities shall not have been authenticated by
such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.

         Section 613. Preferential Collection of Claims Against Company.

         If and when the Trustee shall be or shall become a creditor, directly
or indirectly, secured or unsecured, of the Company (or any other obligor upon
the Debt Securities), the Trustee shall be subject to the provisions of the
Trust Indenture Act regarding collection of claims against the Company (or any
such other obligor).

         Section 614. Authenticating Agent.

         The Trustee shall upon Company request appoint one or more
authenticating agents (including, without limitation, the Company or any
Affiliate thereof) with respect to one or more series of Debt Securities which
shall be authorized on behalf of the Trustee in authenticating Debt Securities
of such series in connection with the issue, delivery, registration of transfer,
exchange, partial redemption or repayment of such Debt Securities. Wherever
reference is made in this Indenture to the authentication of Debt Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication on behalf of the Trustee by an
authenticating agent and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent. Each authenticating agent must be
acceptable to the Company and must be a corporation organized and doing business
under the laws of the United States or of any State or the District of Columbia
or the Commonwealth of Puerto Rico, having a combined capital and surplus of at
least $1,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by Federal or State authorities or the equivalent
foreign authority, in the case of an authenticating agent who is not organized
and doing business under the laws of the United States or of any State thereof
or the District of Columbia or the Commonwealth of Puerto Rico.

         The Trustee hereby initially appoints ______________________________ as
its authenticating agent.

         Any corporation succeeding to the corporate agency business of an
authenticating agent shall continue to be an authenticating agent without the
execution or filing of any paper or any further act on the part of the Trustee
or such authenticating agent.

         An authenticating agent may at any time resign with respect to one or
more series of Debt Securities by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time terminate the agency of
any authenticating agent with respect to one or more series of Debt Securities
by

                                       62



giving written notice of termination to such authenticating agent and to the
Company. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time an authenticating agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee promptly may appoint
a successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an authenticating agent herein. No successor authenticating
agent shall be appointed unless eligible under the provisions of this Section.

         The Company agrees to pay to each authenticating agent from time to
time reasonable compensation for its services under this Section.

         The provisions of Sections 104, 111, 306, 309, 603, 604 and 605 shall
be applicable to any authenticating agent.

         Pursuant to each appointment made under this Section, the Debt
Securities of each series covered by such appointment may have endorsed thereon,
in lieu of the Trustee's certificate of authentication, an alternate certificate
of authentication in substantially the following form:

         This is one of the Debt Securities, of the series designated herein,
described in the within-mentioned Indenture.

                                    _________________________________________

                                    By_______________________________________
                                      As Authenticating Agent for the Trustee

                                    By_______________________________________
                                      Authorized Officer

                                   ARTICLE VII

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

         Section 701. Company to Furnish Trustee Names and Addresses of Holders.

         The Company will furnish or cause to be furnished to the Trustee with
respect to Debt Securities of each series for which it acts as Trustee:

                  (1)      monthly, not more than 15 days after the Regular
         Record Date in respect of the Debt Securities of such series of Debt
         Securities for which there are no Regular Record Dates, a list, in such
         form as the Trustee may reasonably require, of the names and addresses
         of the Holders of Registered Securities as of such Regular Record Date
         or __________ or __________, as the case may be, and

                                       63



                  (2)      at such other times as the Trustee may request in
         writing, within 30 days after the receipt by the Company of any such
         request, a list of similar form and content as of a date not more than
         15 days prior to the time such list is furnished;

provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.

         Section 702. Preservation of Information; Communications to Holders.

                  (a)      The Trustee shall preserve, in as current a form as
         is reasonably practicable, the names and addresses of Holders of
         Registered Securities contained in the most recent list furnished to
         the Trustee as provided in Section 701 and the names and addresses of
         Holders of Registered Securities received by the Trustee in its
         capacity as Paying Agent or Security Registrar, if so acting. The
         Trustee may destroy any list furnished to it as provided in Section 701
         upon receipt of a new list so furnished. The Trustee shall preserve for
         at least two years the names and addresses of Holders of Bearer
         Securities filed with the Trustee by such Holders.

                  (b)      The rights of Holders to communicate with other
         Holders with respect to their rights under this Indenture or under the
         Debt Securities, and the corresponding rights and privileges of the
         Trustee, shall be as provided by the Trust Indenture Act.

                  (c)      Every Holder of Debt Securities or coupons, by
         receiving and holding the same, agrees with the Company and the Trustee
         that neither the Company nor the Trustee shall be held accountable by
         reason of any disclosure of information as to the names and addresses
         of the Holders made pursuant to the Trust Indenture Act.

         Section 703.  Reports by Trustee.

                  (a)      Within 60 days after __________ of each year
         commencing with the first __________ after the first issuance of Debt
         Securities pursuant to this Indenture and at any other time required by
         the Trust Indenture Act, the Trustee shall transmit to Holders such
         reports concerning the Trustee and its actions under this Indenture and
         such other matters as may be required pursuant to the Trust Indenture
         Act in the manner required by the Trust Indenture Act.

                  (b)      A copy of each such report shall, at the time of such
         transmission to Holders, be filed by the Trustee with each stock
         exchange upon which any Debt Securities of such series are listed, with
         the Commission and also with the Company. The Company will notify the
         Trustee when any series of Debt Securities are listed on any stock
         exchange.

                                       64



         Section 704. Reports by Company.

         The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
time and in the manner pursuant to such Act; provided that such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same are so required to be filed
with the Commission.

                                  ARTICLE VIII

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

         Section 801. Company May Consolidate, etc. only on Certain Terms.

         The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, unless:

                  (1)      the corporation formed by such consolidation or into
         which the Company is merged or the Person which acquires by conveyance
         or transfer, or which leases, the properties and assets of the Company
         substantially as an entirety shall be a corporation organized and
         existing under the laws of the United States of America, any political
         subdivision thereof, any State thereof or the Commonwealth of Puerto
         Rico and shall expressly assume, by an indenture supplemental hereto,
         executed and delivered to the Trustee, in form satisfactory to the
         Trustee, the due and punctual payment of the principal of (and premium,
         if any) and interest (including any Additional Interest and all
         additional amounts, if any, payable pursuant to Section 1006) on all
         the Debt Securities and any related coupons and the performance of
         every covenant of this Indenture on the part of the Company to be
         performed or observed;

                  (2)      immediately after giving effect to such transaction,
         no Event of Default, and no event which, after notice or lapse of time,
         or both, would become an Event of Default, shall have happened and be
         continuing; and

                  (3)      the Company has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel each stating that such
         consolidation, merger, conveyance, transfer or lease and such
         supplemental indenture comply with this Article and that all conditions
         precedent herein provided for relating to such transaction have been
         met.

         Section 802. Successor Corporation Substituted.

         Upon any consolidation with or merger into any other corporation, or
any conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 801, the successor
corporation formed by such consolidation or into which the Company is merged or

                                       65



to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein, and thereafter, except in the case of a lease, the Company
(which term for this purpose shall mean the Person named as the "Company" in the
first paragraph of this instrument or any successor corporation which shall
theretofore have become such in the manner presented in this Article) shall be
relieved of all obligations and covenants under this Indenture and the Debt
Securities and coupons.

                                   ARTICLE IX

                             SUPPLEMENTAL INDENTURES

         Section 901. Supplemental Indentures without Consent of Holders.

         Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

                  (1)      to evidence the succession of another corporation to
         the Company, and the assumption by such successor of the covenants of
         the Company herein and in the Debt Securities contained; or

                  (2)      to add to the covenants of the Company, for the
         benefit of the Holders of all or any series of Debt Securities or
         coupons (and if such covenants are to be for the benefit of less than
         all series of Debt Securities or coupons, stating that such covenants
         are expressly being included solely for the benefit of such series), to
         convey, transfer, assign, mortgage or pledge any property to or with
         the Trustee, or to surrender any right or power herein conferred upon
         the Company; or

                  (3)      to add any additional Events of Default (and if such
         Events of Default are to be applicable to less than all series of Debt
         Securities, stating that such Events of Default are expressly being
         included solely to be applicable to such series); or

                  (4)      to add to, change or eliminate any of the provisions
         of this Indenture to provide that Bearer Securities may be registrable
         as to principal, to change or eliminate any restrictions on the payment
         of principal (or premium, if any) on Registered Securities or of
         principal (or premium, if any) or any interest on Bearer Securities, to
         permit Bearer Securities to be issued in exchange for Registered
         Securities of other authorized denominations or to permit or facilitate
         the issuance of Debt Securities in uncertificated form, provided any
         such action shall not adversely affect the interests of the Holders of
         Debt Securities of any series or any related coupons in any material
         respect; or

                  (5)      to change or eliminate any of the provisions of this
         Indenture, provided that any such change or elimination (a) shall
         become effective only when there is no Debt Security Outstanding of any
         series

                                       66



         created prior to the execution of such supplemental indenture which is
         entitled to the benefit of such provisions or (b) shall not apply to
         any Debt Security Outstanding; or

                  (6)      to establish the form or terms of Debt Securities of
         any series as permitted by Sections 201 and 301; or

                  (7)      to evidence and provide for the acceptance of
         appointment hereunder by a successor Trustee with respect to the Debt
         Securities of one or more series and to add to or change any of the
         provisions of this Indenture as shall be necessary to provide for or
         facilitate the administration of the trusts hereunder by more than one
         Trustee, pursuant to the requirements of Section 611(b); or

                  (8)      to cure any ambiguity, to correct or supplement any
         provision herein which may be defective or inconsistent with any other
         provision herein, or to make any other provisions with respect to
         matters or questions arising under this Indenture which shall not be
         inconsistent with any provision of this Indenture, provided such other
         provisions shall not adversely affect the interests of the Holders of
         Debt Securities of any series or any related coupons in any material
         respect or, in the case of the Debt Securities of a series issued to an
         Issuer Trust and for so long as any of the corresponding series of
         Capital Trust Securities issued by such Issuer Trust shall remain
         outstanding, the holders of such Capital Trust Securities; or

                  (9)      to add to or change or eliminate any provision of
         this Indenture as shall be necessary or desirable in accordance with
         any amendments to the Trust Indenture Act, provided such action shall
         not adversely affect the interest of Holders of Debt Securities of any
         series or any appurtenant coupons in any material respect.

         Section 902. Supplemental Indentures with Consent of Holders.

         With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of all series affected by
such supplemental indenture, acting together as a class, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture of such
Debt Securities of such series and any related coupons; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Debt Security or coupon affected thereby,

                  (1)      change the Stated Maturity of the principal or any
         installment of principal of, or any installment of interest (including
         any Additional Interest) on, any Debt Security (other than to the
         extent set forth in any such Debt Security), or reduce the principal
         amount thereof or the interest thereon or any premium payable upon
         redemption or repayment thereof, or change any obligation of the
         Company to pay

                                       67



         additional amounts pursuant to Section 1006 (except as contemplated by
         Section 801(1) and permitted by Section 901(1)), or reduce the amount
         of the principal of an Original Issue Discount Security that would be
         due and payable upon a declaration of acceleration of the Maturity
         thereof pursuant to Section 502, or change any Place of Payment, or the
         coin or currency in which any Debt Security or the interest thereon or
         any coupon is payable, or impair any right to the delivery of Capital
         Securities in exchange for Debt Securities provided for in this
         Indenture or the right to institute suit for the enforcement of any
         such payment on or after the Stated Maturity thereof (or, in the case
         of redemption or repayment, on or after the Redemption Date or
         Repayment Date or Capital Exchange Date, as the case may be), or

                  (2)      reduce the percentage in principal amount of the
         Outstanding Debt Securities of any series, the consent of whose Holders
         is required for any such supplemental indenture, or the consent of
         whose Holders is required for any waiver (of compliance with certain
         provisions of this Indenture or certain defaults hereunder and their
         consequences) provided for in this Indenture, or reduce the
         requirements of Section 1604 for quorum or voting, or

                  (3)      modify any of the provisions of this Section, Section
         513 or Section 1005, except to increase any such percentage or to
         provide that certain other provisions of this Indenture cannot be
         modified or waived without the consent of the Holder of each
         Outstanding Debt Security affected thereby; provided, however, that
         this clause shall not be deemed to require the consent of any Holder
         with respect to changes in the references to "the Trustee" and
         concomitant changes in this Section and Section 1005, or the deletion
         of this proviso, in accordance with the requirements of Section 611(b)
         and 901(7); or

                  (4)      adversely affect the right to repayment, if any, of
         Debt Securities of any series at the option of the Holders thereof; or

                  (5)      impair the right of any Holder of Debt Securities of
         any series to receive Capital Securities on any Capital Exchange Date
         for Debt Securities of such series with a Market Value equal to the
         principal amount of such Holder's Debt Securities of such series or in
         an amount sufficient to provide proceeds upon sale by the Company in
         the Secondary Offering equal to the principal amount of such Holder's
         Debt Securities of such series; or

                  (6)      impair the right of any Holder of Convertible
         Securities of any series to convert such Debt Securities pursuant to
         Article XIX;

and provided, further, that no change shall be made in the provisions of Article
XVIII that will affect adversely the holders of Senior Debt without the consent
of the holders of all Senior Debt Outstanding; and provided, further, that, in
the case of the Debt Securities of a series issued to an Issuer Trust, so long
as any of the corresponding series of Capital Trust Securities issued by such
Issuer Trust remains outstanding, (i) no such amendment shall be made that
adversely affects the holders of such related Capital Trust Securities in any

                                       68



material respect, and no termination of this Indenture shall occur, and no
waiver of compliance with any covenant under this Indenture shall be effective,
without the prior consent of the holders of at least a majority of the aggregate
Liquidation Amount (as defined in the related Trust Agreement) of such Capital
Trust Securities then outstanding unless and until the principal of (and
premium, if any, on) the Debt Securities of such series and all accrued and
(subject to Section 307) unpaid interest (including any Additional Interest)
thereon have been paid in full, (ii) no such amendment or waiver that requires
the consent of the Holder of each Outstanding Debt Security affected thereby
shall be made without the prior consent of all the holders of the related
Capital Trust Securities then outstanding unless and until the principal of (and
premium, if any, on) the Debt Securities of such series and all accrued interest
and (subject to Section 307) unpaid interest (including any Additional Interest)
therein have been paid in full, and (iii) no amendment shall be made to Section
508 of this Indenture that would impair the rights of the holders of Capital
Trust Securities issued by any Issuer Trust provided therein without the prior
consent of the holders of each such Capital Trust Security then outstanding
unless and until the principal of (and premium, if any, on) the Debt Securities
of such series and all accrued and (subject to Section 307) unpaid interest
(including any Additional Interest) thereon have been paid in full.

         A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Debt Securities or any
corresponding series of Capital Trust Securities of an Issuer Trust that holds
the Debt Securities of any series, or which modifies the rights of the Holders
of Debt Securities of such series or holders of such Capital Trust Securities of
such corresponding series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Indenture of the Holders of
Debt Securities of any other series or holders of Capital Trust Securities of
any other such corresponding series.

         It shall not be necessary for any Act of Holders of the Debt Securities
under this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

         Section 903. Execution of Supplemental Indentures.

         In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.

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         Section 904. Effect of Supplemental Indentures.

         Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Debt Securities theretofore or thereafter authenticated and delivered
hereunder and of any coupons appertaining thereto shall be bound thereby.

         Section 905. Conformity with Trust Indenture Act.

         Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.

         Section 906. Reference in Debt Securities to Supplemental Indentures.

         Debt Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Debt Securities of any series and any appurtenant coupons so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Debt Securities of such series and any appurtenant coupons.

                                    ARTICLE X

                                    COVENANTS

         Section 1001. Payment of Principal, Premium and Interest.

         The Company covenants and agrees for the benefit of each series of Debt
Securities and any appurtenant coupons that it will duly and punctually pay the
principal of (and premium, if any) and interest (including any Additional
Interest) on the Debt Securities and any appurtenant coupons in accordance with
the terms of the Debt Securities, any appurtenant coupons and this Indenture.
Any interest due on Bearer Securities on or before Maturity, other than
additional amounts, if any, payable as provided in Section 1006 in respect of
principal of (or premium, if any, on) such a Debt Security, shall be payable
only upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. For all purposes
of this Indenture, the exchange of Capital Securities for Debt Securities of any
series pursuant to the Indenture shall constitute full payment of principal of
the Debt Securities of such series being exchanged on any Capital Exchange Date
for Debt Securities of such series, without prejudice to any Holder's rights
pursuant to Section 1413.

         Section 1002. Maintenance of Office or Agency.

         The Company will maintain in each Place of Payment for any series of
Debt Securities an office or agency where Debt Securities (but, except as
otherwise provided below, unless such Place of Payment is located outside the
United

                                       70



States, not Bearer Securities) may be presented or surrendered for payment,
where Debt Securities may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Debt Securities and this Indenture may be served. If Debt Securities of a series
are issuable as Bearer Securities, the Company will maintain, subject to any
laws or regulations applicable thereto, an office or agency in a Place of
Payment for such series which is located outside the United States where Debt
Securities of such series and the related coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Debt Securities of such series pursuant to Section 1006); provided, however,
that if the Debt Securities of such series are listed on The Stock Exchange of
the United Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange
or any other stock exchange located outside the United States and such stock
exchange shall so require, the Company will maintain a Paying Agent in London or
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Debt Securities of such series are listed on such
exchange. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices or demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee its agent to receive all presentations, surrenders, notices and demands,
except that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Bearer Securities of that series pursuant to Section 1006) at
the place specified for the purpose pursuant to Section 301(5).

         No payment of principal of, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, payment
of principal of and any premium and interest denominated in Dollars (including
additional amounts payable in respect thereof) on any Bearer Security may be
made at an office or agency of, and designated by, the Company located in the
United States if (but only if) payment of the full amount of such principal,
premium, interest or additional amounts in Dollars at all offices outside the
United States maintained for the purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions and the Trustee receives an Opinion of Counsel that such
payment within the United States is legal. Unless otherwise provided as
contemplated by Section 301 with respect to any series of Debt Securities, at
the option of the Holder of any Bearer Security or related coupon, payment may
be made by check in the currency designated for such payment pursuant to the
terms of such Bearer Security presented or mailed to an address outside the
United States or by transfer to an account in such currency maintained by the
payee with a bank located outside the United States.

         The Company may also from time to time designate one or more other
offices or agencies (in or outside of such Place of Payment) where the Debt
Securities of one or more series and any appurtenant coupons (subject to the
preceding paragraph) may be presented or surrendered for any or all such
purposes, and may from time to time rescind such designations; provided,
however, that no such

                                       71



designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for any
series of Debt Securities for such purposes. The Company will give prompt
written notice to the Trustee of any such designation and any change in the
location of any such other office or agency.

         Section 1003. Money for Debt Securities Payments to Be Held in Trust.

         If the Company shall at any time act as its own Paying Agent with
respect to any series of Debt Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Debt Securities
of such series and any appurtenant coupons, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal
(and premium, if any) or interest (including any Additional Interest) so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided, and will promptly notify the Trustee of its action or
failure so to act.

         Whenever the Company shall have one or more Paying Agents with respect
to any series of Debt Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest (including any Additional
Interest) on any of the Debt Securities of such series and any appurtenant
coupons, deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest (including any Additional Interest) so becoming
due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest (including any Additional Interest), and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.

         The Company will cause each Paying Agent with respect to any series of
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will

                  (1)      hold all sums held by it for the payment of the
         principal of (and premium, if any) or interest (including any
         Additional Interest) on Debt Securities of such series and any
         appurtenant coupons in trust for the benefit of the Persons entitled
         thereto until such sums shall be paid to such Persons or otherwise
         disposed of as herein provided;

                  (2)      give the Trustee notice of any default by the Company
         (or any other obligor upon the Debt Securities of such series or any
         appurtenant coupons) in the making of any payment of principal of (and
         premium, if any) or interest (including any Additional Interest) on the
         Debt Securities of such series or any appurtenant coupons; and

                  (3)      at any time during the continuance of any such
         default, upon the written request of the Trustee, forthwith pay to the
         Trustee all sums so held in trust by such Paying Agent.

         The Company may at any time, for the purpose of terminating its
obligations under this Indenture with respect to Debt Securities of any series
or for any

                                       72



other purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.

         Any principal and interest received on the Eligible Instruments
deposited with the Trustee or any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the principal of
(and premium, if any) or interest (including any Additional Interest) on any
Debt Security of any series or any appurtenant coupons or any money on deposit
with the Trustee or any Paying Agent representing amounts deducted from the
Redemption Price or Repayment Price with respect to unmatured coupons not
presented upon redemption or exercise of the Holder's option for repayment
pursuant to Section 1106 or 1303 and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Debt
Security or any coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
(including the principal and interest received on Eligible Instruments deposited
with the Trustee), and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper of general
circulation in the Borough of Manhattan, The City of New York, and each Place of
Payment or mailed to each such Holder, or both, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication or mailing, any unclaimed balance of
such money then remaining will be repaid to the Company.

         Section 1004. Officers' Certificate as to Default.

         The Company will deliver to the Trustee, on or before a date not more
than four months after the end of each fiscal year of the Company ending after
the date hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of this Indenture,
and, if the Company shall be in default, specifying all such defaults and the
nature thereof of which they may have knowledge.

         Section 1005. Waiver of Certain Covenants.

         Subject to the rights of holders of Capital Trust Securities specified
in Section 902, if any, the Company may omit in any particular instance to
comply with any covenant or condition applicable to the Debt Securities of any
series pursuant to Section 301 unless such covenant or condition is determined
pursuant to Section 301 not to be subject to this provision if, before the time
for such compliance the Holders of at least a majority in principal amount of
all series of the Debt Securities at the time Outstanding to which such covenant
or

                                       73



condition applies shall, acting together as a class, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.

         Section 1006. Payment of Additional Amounts.

         If the Debt Securities of a series provide for the payment of
additional amounts, the Company will pay to the Holder of any Debt Security of
any series or any coupon appertaining thereto additional amounts upon the terms
and subject to the conditions provided therein. Whenever in this Indenture there
is mentioned, in any context, the payment of the principal of (or premium, if
any) or interest on, or in respect of, any Debt Security of any series or any
related coupon or the net proceeds received on the sale or exchange of any Debt
Security of any series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in the terms of such Debt Securities
and this Section to the extent that, in such context, additional amounts are,
were or would be payable in respect thereof pursuant to the provisions of this
Section and express mention of the payment of additional amounts (if applicable)
in any provisions hereof shall not be construed as excluding additional amounts
in those provisions hereof where such express mention is not made.

         If the Debt Securities of a series provide for the payment of
additional amounts, at least 10 days prior to the first Interest Payment Date
with respect to that series of Debt Securities (or if the Debt Securities of
that series will not bear interest prior to Maturity, the first day on which a
payment of principal (and premium, if any) is made), and at least 10 days prior
to each date of payment of principal (and premium, if any) or interest if there
has been any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company will furnish the Trustee and the Company's
principal Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or Paying
Agents whether such payment of principal of (and premium, if any) or interest on
the Debt Securities of that series shall be made to Holders of Debt Securities
of that series or the related coupons who are United States Aliens without
withholding for or on account of any tax, assessment or other governmental
charge described in the Debt Securities of that series. If any such withholding
shall be required, then such Officers' Certificate shall specify by country the
amount, if any, required to be withheld on such payments to such Holders of Debt
Securities or coupons and the Company will pay to the Trustee or such Paying
Agent the additional amounts, if any, required by the terms of such Debt
Securities and the first paragraph of this Section. The Company covenants to
indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section.


                                       74



         Section 1007. Additional Sums.

         In the case of the Debt Securities of a series initially issued to an
Issuer Trust, so long as no Event of Default has occurred and is continuing and
except as otherwise specified as contemplated by Section 301, if (i) an Issuer
Trust is the Holder of all of the Outstanding Debt Securities of such series,
and (ii) a Tax Event has occurred and is continuing in respect of such Issuer
Trust, the Company shall pay to such Issuer Trust (and its permitted successors
or assigns under the related Trust Agreement) for so long as such Issuer Trust
(or its permitted successor or assignee) is the registered holder of the
Outstanding Debt Securities of such series, such additional sums as may be
necessary in order that the amount of Distributions (including any Additional
Amounts (as defined in such Trust Agreement)) then due and payable by such
Issuer Trust on the related Capital Trust Securities and Common Trust Securities
that at any time remain outstanding in accordance with the terms thereof shall
not be reduced as a result of any Additional Taxes arising from such Tax Event;
provided, however, that Additional Sums shall not include any withholding taxes
arising after the occurrence of a Tax Event and which have been withheld from
payments to Holders of Trust Securities and for which Holders are liable (the
"Additional Sums"). Whenever in this Indenture or the Debt Securities there is a
reference in any context to the payment of principal of or interest on the Debt
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of interest pursuant to Section 313 or the Debt Securities shall not defer the
payment of any Additional Sums that may be due and payable.

         Section 1008. Additional Covenants.

         The Company covenants and agrees with each Holder of Debt Securities of
each series that it shall not (x) make any payment of principal of or interest
or premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu in all respects with or junior in interest to the
Debt Securities of such series, or (y) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a liquidation payment
with respect to, any shares of the Company's capital stock (other than (a)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange, redemption
or conversion of any other class or series of the Company's capital stock (or
any capital stock of a subsidiary of the Company) for any class or series of the
Company's capital stock, or of any class or series of the Company's indebtedness
for any class or series of the Company's capital stock, (c) the purchase of

                                       75



fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the securities being
converted or exchanged, (d) any declaration of a dividend in connection with any
Rights Plan, or the issuance of rights, stock or other property under any Rights
Plan, or the redemption or repurchase of rights pursuant thereto, (e) any
payment by the Company under any Guarantee Agreement, or (f) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with
or junior to such stock) if at such time (i) there shall have occurred any event
(A) of which the Company has actual knowledge that with the giving of notice or
the lapse of time, or both, would constitute an Event of Default with respect to
the Debt Securities of such series under Sections 501(1), (2), (5) or (6), and
(B) which the Company shall not have taken reasonable steps to cure, (ii) if the
Debt Securities of such series are held by an Issuer Trust, the Company shall be
in default with respect to its payment of any obligations under the Guarantee
Agreement relating to the Capital Trust Securities issued by such Issuer Trust,
or (iii) the Company shall have given notice of its election to begin an
Extension Period with respect to the Debt Securities of such series as provided
herein and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing.

         The Company also covenants with each Holder of Debt Securities of a
series issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of
the Common Trust Securities of such Issuer Trust, provided that any permitted
successor of the Company hereunder may succeed to the Company's ownership of
such Common Trust Securities, (ii) as holder of such Common Trust Securities,
not to voluntarily terminate, wind-up or liquidate such Issuer Trust, other than
(a) in connection with a distribution of the Debt Securities of such series to
the holders of the related Capital Trust Securities in liquidation of such
Issuer Trust, or (b) in connection with certain mergers, consolidations or
amalgamations permitted by the related Trust Agreement, and (iii) to use its
reasonable efforts, consistent with the terms and provisions of such Trust
Agreement, to cause such Issuer Trust to continue not to be taxable as a
corporation for United States Federal or Puerto Rico income tax purposes.

                                   ARTICLE XI

                          REDEMPTION OF DEBT SECURITIES

         Section 1101. Applicability of Article.

         Subject to the Company having received the prior approval of the
Primary Federal Regulator, if then required under the applicable capital
guidelines or policies of the Primary Federal Regulator, Debt Securities of any
series which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Debt Securities of any series) in accordance with this
Article.

                                       76



         Section 1102. Election to Redeem; Notice to Trustee.

         The election of the Company to redeem any Debt Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Debt Securities of any series, the Company
shall, at least 45 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee and, in the case of Debt Securities of a series held by an Issuer Trust,
the Property Trustee under the related Trust Agreement, of such Redemption Date
and of the principal amount and the tenor and terms of the Debt Securities of
any series to be redeemed; provided that in the case of any series of Debt
Securities initially issued to an Issuer Trust, for so long as such Debt
Securities are held by such Issuer Trust, such notice shall be given not less
than 45 nor more than 75 days prior to such Redemption Date (unless a shorter
notice shall be satisfactory to the Property Trustee under the related Trust
Agreement). In the case of any redemption of Debt Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Debt Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.

         Section 1103. Selection by Trustee of Debt Securities to be Redeemed.

         Except as otherwise specified and contemplated by Section 301 for Debt
Securities of any series, if less than all the Debt Securities of any series
with like tenor and terms are to be redeemed, the particular Debt Securities to
be redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Debt Securities of such series with like
tenor and terms not previously called for redemption, by such method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to the minimum authorized denomination for
Debt Securities of such series or any integral multiple thereof which is also an
authorized denomination) of the principal amount of Registered Securities or
Bearer Securities (if issued in more than one authorized denomination) of such
series of a denomination larger than the minimum authorized denomination for
Debt Securities of such series.

         The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt Securities
selected for partial redemption, the principal amount thereof to be redeemed.

         For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debt Securities shall
relate, in the case of any Debt Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debt Security which has
been or is to be redeemed.

         Section 1104. Notice of Redemption.

         Notice of redemption shall be given in the manner provided in Section
106 not less than 30 nor more than 60 days prior to the Redemption Date, to each
Holder of Debt Securities to be redeemed, provided that in the case of any
series of Debt Securities initially issued to an Issuer Trust, for so long as
such Debt

                                       77



Securities are held by such Issuer Trust, such notice shall be given not less
than 45 nor more than 75 days prior to such Redemption Date (unless a shorter
notice shall be satisfactory to the Property Trustee under the related Trust
Agreement).

         All notices of redemption shall state:

                  (1)      the Redemption Date,

                  (2)      the Redemption Price,

                  (3)      if less than all Outstanding Debt Securities of any
         series are to be redeemed, the identification (and, in the case of
         partial redemption, the principal amounts) of the particular Debt
         Securities to be redeemed,

                  (4)      that on the Redemption Date the Redemption Price will
         become due and payable upon each such Debt Security to be redeemed, and
         that interest (including any Additional Interest) thereon shall cease
         to accrue on and after said date,

                  (5)      the Place or Places of Payment where such Debt
         Securities, together in the case of Bearer Securities with all coupons,
         if any, appertaining thereto maturing after the Redemption Date, are to
         be surrendered for payment of the Redemption Price,

                  (6)      that Bearer Securities may be surrendered for payment
         only at such place or places which are outside the United States,
         except as otherwise provided in Section 1002,

                  (7)      that the redemption is for a sinking fund, if such is
         the case, and

                  (8)      the CUSIP number, if any.

         A notice of redemption published as contemplated by Section 106 need
not identify particular Registered Securities to be redeemed.

         Notice of redemption of Debt Securities to be redeemed at the election
of the Company shall be given by the Company, or, at the Company's request, by
the Trustee in the name and at the expense of the Company.

         Section 1105. Deposit of Redemption Price.

         On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money and/or, to the extent the Debt Securities to be redeemed are denominated
and payable in Dollars only, Eligible Instruments the payments of principal and
interest on which when due (and without reinvestment and providing no tax
liability will be imposed upon the Trustee or the Holders of the Debt Securities
to be redeemed) will provide money on or prior to the Redemption Date in such

                                       78



amounts as will (together with any money irrevocably deposited in trust with the
Trustee, without investment) be sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest (including any Additional Interest) on, all the Debt Securities or
portions thereof which are to be redeemed on that date; provided, however, that
deposits with respect to Bearer Securities shall be made with a Paying Agent or
Paying Agents located outside the United States except as otherwise provided in
Section 1002, unless otherwise specified as contemplated by Section 301.

         Section 1106. Debt Securities Payable on Redemption Date.

         Notice of redemption having been given as aforesaid, the Debt
Securities to be redeemed shall, on the Redemption Date, become due and payable
at the Redemption Price therein specified and from and after such date (unless
the Company shall default in the payment of the Redemption Price and accrued
interest) such Debt Securities shall cease to bear interest and the coupons for
such interest appertaining to any Bearer Securities so to be redeemed, except to
the extent provided below, shall be void. Upon surrender of any such Debt
Security for redemption in accordance with said notice, such Debt Security shall
be paid by the Company at the Redemption Price, together with accrued interest
(including any Additional Interest) to the Redemption Date; provided, however,
that installments of interest (including any Additional Interest) on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only upon presentation and surrender of coupons for such interest (at an
office or agency located outside the United States except as otherwise provided
in Section 1002), and provided further, that installments of interest (including
any Additional Interest) on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Debt
Securities, or one or more Predecessor Securities, registered as such on the
relevant Record Dates according to their terms and the provisions of Section
307.

         If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Bearer Security may be paid after deducting from the Redemption Price an amount
equal to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted without
interest thereon; provided, however, that interest represented by coupons shall
be payable only upon presentation and surrender of those coupons at an office or
agency located outside of the United States except as otherwise provided in
Section 1002.

         If any Debt Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.

                                       79



         Section 1107. Debt Securities Redeemed in Part.

         Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Debt Security without
service charge, a new Registered Security or Registered Securities of the same
series and of like tenor and terms, of any authorized denominations as requested
by such Holder in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Debt Security so surrendered.

         Section 1108. Right of Redemption of Debt Securities Initially Issued
to an Issuer Trust.

         In the case of the Debt Securities of a series initially issued to an
Issuer Trust, except as otherwise specified as contemplated by Section 301, the
Company, at its option, may redeem such Debt Securities (i) on or after the date
specified in such Debt Security, in whole at any time or in part from time to
time, or (ii) upon the occurrence and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, at any time within 90
days following the occurrence and during the continuation of such Tax Event,
Investment Company Event or Capital Treatment Event, in whole (but not in part),
in each case at a Redemption Price specified in such Debt Security, together
with accrued interest (including any Additional Interest) to, but excluding, the
Redemption Date.

         If less than all the Debt Securities of any such series are to be
redeemed, the aggregate principal amount of such Debt Securities remaining
Outstanding after giving effect to such redemption shall be sufficient to
satisfy any provisions of the Trust Agreement related to the Issuer Trust to
which such Debt Securities were issued, including any requirement in such Trust
Agreement as to the minimum Liquidation Amount (as defined in such Trust
Agreement) of Capital Trust Securities that may be held by a holder of Capital
Trust Securities thereunder.

                                   ARTICLE XII

                                  SINKING FUNDS

         Section 1201. Applicability of Article.

         The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debt Securities of a series except as otherwise specified
as contemplated by Section 301 for Debt Securities of such series.

         The minimum amount of any sinking fund payment provided for by the
terms of Debt Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the term of Debt Securities of any series is herein referred to an
"optional

                                       80



sinking fund payment". If provided for by the terms of Debt Securities of any
series, the amount of any sinking fund payment may be subject to reduction as
provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Debt Securities of any series as provided for by the terms of Debt
Securities of such series.

         Section 1202. Satisfaction of Sinking Fund Payments with Debt
Securities.

         The Company (1) may deliver Outstanding Debt Securities of a series
(other than any previously called for redemption), together in the case of any
Bearer Securities of such series with all unmatured coupons appertaining
thereto, and (2) may apply as a credit Debt Securities of a series which have
been redeemed either at the election of the Company pursuant to the terms of
such Debt Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Debt Securities, in each case in
satisfaction of all or any part of any sinking fund payment with respect to the
Debt Securities of such series required to be made pursuant to the terms of such
Debt Securities as provided for by the terms of such series; provided that such
Debt Securities have not been previously so credited. Such Debt Securities shall
be received and credited for such purpose by the Trustee at the Redemption Price
specified in such Debt Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly. If as a result of the delivery or credit of Debt Securities in lieu
of cash payments pursuant to this Section 1202, the principal amount of Debt
Securities to be redeemed in order to exhaust the aforesaid cash payment shall
be less than $100,000, the Trustee need not call Debt Securities for redemption,
except upon Company Request, and such cash payment shall be held by the Trustee
or a Paying Agent and applied to the next succeeding sinking fund payment,
provided, however, that the Trustee or such Paying Agent shall at the request of
the Company from time to time pay over and deliver to the Company any cash
payment so being held by the Trustee or such Paying Agent upon delivery by the
Company to the Trustee of Debt Securities purchased by the Company having an
unpaid principal amount equal to the cash payment requested to be released to
the Company.

         Section 1203. Redemption of Debt Securities for Sinking Fund.

         Not less than 60 days prior to each sinking fund payment date for any
series of Debt Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash, the portion thereof, if any, which is to be
satisfied by crediting Debt Securities of that series pursuant to Section 1202
and the basis for any such credit and, prior to or concurrently with the
delivery of such Officers' Certificate, will also deliver to the Trustee any
Debt Securities to be so credited and not theretofore delivered to the Trustee.
Not less than 30 days (unless a shorter period shall be satisfactory to the
Trustee) before each such sinking fund payment date the Trustee shall select the
Debt Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such Debt

                                       81



Securities shall be made upon the terms and in the manner stated in Sections
1105, 1106 and 1107.

                                  ARTICLE XIII

                       REPAYMENT AT THE OPTION OF HOLDERS

         Section 1301. Applicability of Article.

         Debt Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity shall be repaid in accordance with
their terms and (except as otherwise specified pursuant to Section 301 for Debt
Securities of such series) in accordance with this Article.

         Section 1302. Repayment of Debt Securities.

         Each Debt Security which is subject to repayment in whole or in part at
the option of the Holder thereof on a Repayment Date shall be repaid at the
applicable Repayment Price together with interest accrued to such Repayment Date
as specified pursuant to Section 301.

         Section 1303. Exercise of Option; Notice.

         Each Holder desiring to exercise such Holder's option for repayment
shall, as conditions to such repayment, surrender the Debt Security to be repaid
in whole or in part together with written notice of the exercise of such option
at any office or agency of the Company in a Place of Payment, not less than 30
nor more than 45 days prior to the Repayment Date; provided, however, that
surrender of Bearer Securities together with written notice of exercise of such
option shall be made at an office or agency located outside the United States
except as otherwise provided in Section 1002. Such notice, which shall be
irrevocable, shall specify the principal amount of such Debt Security to be
repaid, which shall be equal to the minimum authorized denomination for such
Debt Security or an integral multiple thereof, and shall identify the Debt
Security to be repaid and, in the case of a partial repayment of the Debt
Security, shall specify the denomination or denominations of the Debt Security
or Debt Securities of the same series to be issued to the Holder for the portion
of the principal of the Debt Security surrendered which is not to be repaid.

         If any Bearer Security surrendered for repayment shall not be
accompanied by all unmatured coupons and all matured coupons in default, such
Bearer Security may be paid after deducting from the Repayment Price an amount
equal to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Repayment
Price, such Holder shall be entitled to receive the amount so deducted without
interest thereon; provided, however, that interest represented by coupons shall
be payable only at an office or agency located outside the United States except
as otherwise provided in Section 1002.

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         The Company shall execute and the Trustee shall authenticate and
deliver without service charge to the Holder of any Registered Security so
surrendered a new Registered Security or Securities of the same series, of any
authorized denomination specified in the foregoing notice, in an aggregate
principal amount equal to any portion of the principal of the Registered
Security so surrendered which is not to be repaid.

         The Company shall execute and the Trustee shall authenticate and
deliver without service charge to the Holder of any Bearer Security so
surrendered a new Registered Security or Securities or new Bearer Security or
Securities (and all appurtenant unmatured coupons and matured coupons in
default) or any combination thereof of the same series of any authorized
denomination or denominations specified in the foregoing notice, in an aggregate
principal amount equal to any portion of the principal of the Debt Security so
surrendered which is not to be paid; provided, however, that the issuance of a
Registered Security therefor shall be subject to applicable laws and
regulations, including provisions of the United States Federal income tax laws
and regulations in effect at the time of the exchange; neither the Company, the
Trustee nor the Security Registrar shall issue Registered Securities for Bearer
Securities if it has received an Opinion of Counsel that as a result of such
issuance the Company would suffer adverse consequences under the United States
Federal income tax laws then in effect and the Company has delivered to the
Trustee a Company Order directing the Trustee not to make such issuances
thereafter unless and until the Trustee receives a subsequent Company Order to
the contrary. The Company shall deliver copies of such Company Order to the
Security Registrar.

         For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the repayment of Debt Securities shall
relate, in the case of any Debt Security repaid or to be repaid only in part, to
the portion of the principal of such Debt Security which has been or is to be
repaid.

         Section 1304. Election of Repayment by Remarketing Entities.

         The Company may elect, with respect to Debt Securities of any series
which are repayable at the option of the Holders thereof before their Stated
Maturity, at any time prior to any Repayment Date to designate one or more
Remarketing Entities to purchase, at a price equal to the Repayment Price, Debt
Securities of such series from the Holders thereof who give notice and surrender
their Debt Securities in accordance with Section 1303.

         Section 1305. Securities Payable on the Repayment Date.

         Notice of exercise of the option of repayment having been given and the
Debt Securities so to be repaid having been surrendered as aforesaid, such Debt
Securities shall, unless purchased in accordance with Section 1304, on the
Repayment Date become due and payable at the price therein specified and from
and after the Repayment Date such Debt Securities shall cease to bear interest
and shall be paid on the Repayment Date, and the coupons for such interest
appertaining to Bearer Securities so to be repaid, except to the extent provided
above, shall be void, unless the Company shall default in the payment of such
price in which case the Company shall continue to be obligated for the principal
amount of such Debt Securities and shall be obligated to pay interest on such

                                       83


principal amount at the rate borne by such Debt Securities from time to time
until payment in full of such principal amount.

                                   ARTICLE XIV

               EXCHANGE OF CAPITAL SECURITIES FOR DEBT SECURITIES

         Section 1401. Applicability of Article.

         If an Officers' Certificate or supplemental indenture pursuant to
Section 301 provides for the exchange of Capital Securities for Debt Securities
of any series at the election of the Company or otherwise, Debt Securities of
such series shall be exchanged for Capital Securities in accordance with their
terms and (except as otherwise specified in such Officers' Certificate or
supplemental indenture) in accordance with this Article.

         Section 1402. Exchange of Capital Securities for Debt Securities at
Stated Maturity.

         At the Stated Maturity of Debt Securities of any series which may be
exchanged, subject to prepayment prior to such Stated Maturity on the Capital
Exchange Date selected by the Company for Debt Securities of such series, as
described below, early exchange pursuant to Section 1403 or payment in cash
pursuant to Section 502, 1416 or 1417, the Company shall exchange Capital
Securities with a Market Value equal to the principal amount of the Outstanding
Debt Securities of such series for the Debt Securities of such series in whole.

         The Company shall give notice in the manner provided in Section 106 to
Holders of the Debt Securities of any series to be exchanged, the Trustee and
the Capital Exchange Agent as to the type of Capital Securities to be exchanged
for the Debt Securities of such series on the Capital Exchange Date for Debt
Securities of such series. Such notice shall include a form of Capital Security
Election Form substantially as set forth in Section 1409, shall make the
statements and contain the information included in Section 1404(a), and shall be
given no less than 90 days prior to the Stated Maturity of such Debt Securities.
Notice of such Capital Exchange Date, together with the amount of Capital
Securities being exchanged for each $1,000 principal amount of Debt Securities
of such series, or the minimum denomination of the Debt Securities of such
series, if larger, shall also be given by the Company in the manner required by
Section 1404(b) not less than three Business Days prior to such Capital Exchange
Date.

         The Capital Exchange Date for any prepayment of Debt Securities of each
series may be selected by the Company to be any date between a date 60 days
prior to the Stated Maturity of such Debt Securities and such Stated Maturity,
inclusive, and to be the date of the closing of the Secondary Offering for Debt
Securities of such series. In the event the Company fails to effect such
Secondary Offering, the Capital Exchange Date will be the Stated Maturity of the
Debt Securities of such series. Notice of each such Capital Exchange Date,
together with the amount of Capital Securities being exchanged for each $1,000
principal amount of Debt Securities of such series, or the minimum denomination
of the Debt Securities of such series, if larger, shall also be given by the

                                       84



Company in the manner required by Section 1404(b) not less than three Business
Days prior to such Capital Exchange Date.

         The Company will effect each Secondary Offering such that the closing
of the Secondary Offering will occur on the Capital Exchange Date.

         Section 1403. Right of Early Exchange of Capital Securities for Debt
Securities.

         The Debt Securities of any series to be exchanged may be exchanged at
the election of the Company, as a whole or from time to time in part, prior to
the Stated Maturity thereof for Capital Securities with a Market Value equal to
the principal amount of such Debt Securities on any early Capital Exchange Date,
together with accrued interest to such Capital Exchange Date.

         The Company shall give notice in the manner provided in Section 106 to
Holders of the Debt Securities of any series to be exchanged, the Trustee and
the Capital Exchange Agent not less than 90 days nor more than 120 days prior to
any early Capital Exchange Date for Debt Securities of such series, which notice
shall include a form of Capital Security Election Form substantially as set
forth in Section 1409 and make the statements and contain the information
included in Section 1404(a). Notice of each such early Capital Exchange Date,
together with the amount of Capital Securities being exchanged for each $1,000
principal amount of Debt Securities of such series, or the minimum denomination
of such series, if larger, shall also be given by the Company in the manner
required by Section 1404(b) not less than three Business Days prior to such
early Capital Exchange Date.

         The Company may at its option accelerate any such Capital Exchange Date
within the 60-day period prior to such Capital Exchange Date by giving notice of
such accelerated Capital Exchange Date, together with the amount of Capital
Securities being exchanged for each $1,000 principal amount of Debt Securities
of such series, or the minimum denomination of such series, if larger, in the
manner required by Section 1404(b) not less than three Business Days prior to
such accelerated Capital Exchange Date.

         The Company will effect each Secondary Offering such that the closing
of such Secondary Offering will occur on the Capital Exchange Date.

         Section 1404. Notices of Exchange.

                  (a)      All notices of exchange subject to this paragraph
         shall state:

                       (1) the type of Capital Securities to be exchanged for
         the Debt Securities of such series on the Capital Exchange Date for
         Debt Securities of such series;

                       (2) the proposed Capital Exchange Date;

                       (3) that each Holder of Debt Securities of such series
         being exchanged will receive on such Capital Exchange Date accrued and
         unpaid

                                       85



         interest in cash and may elect to receive on such Capital Exchange Date
         Capital Securities with a Market Value equal to the principal amount of
         the Debt Securities of such series owned by such Holder and that, in
         the absence of any such election by the Holder, such Holder will be
         deemed to have received on such Capital Exchange Date Capital
         Securities having such Market Value and to have elected to have such
         Capital Securities sold for such Holder by the Company in the related
         Secondary Offering for cash proceeds to such Holder on such Capital
         Exchange Date equal to the aggregate principal amount of all Debt
         Securities of such series being exchanged owned by such Holder;

                       (4) that on such Capital Exchange Date the Capital
         Exchange Price will become due and payable upon each such Debt Security
         to be exchanged and that interest thereon will cease to accrue on and
         after said date;

                       (5) if less than all the Outstanding Debt Securities of
         any series are to be exchanged, the identification and principal amount
         of the particular Debt Securities to be exchanged;

                       (6) that each Holder for whom Capital Securities are
         being offered in the Secondary Offering shall be deemed to have
         appointed the Company its attorney-in-fact to execute any and all
         documents and agreements the Company deems necessary or appropriate to
         effect such Secondary Offering;

                       (7) (A) that the Company will assume, unless advised to
         the contrary in writing within 30 days after the date of notice of
         exchange, that the Capital Securities are to be offered for the account
         of the Holder, that such Holder has not held any position, office or
         other material relationship with the Company within three years
         preceding the Secondary Offering, that the Holder owns no other Capital
         Securities, and that after completion of the Secondary Offering the
         Holder will own less than one percent of the class of such Capital
         Securities, and (B) that if any of these assumptions is not correct,
         the Holder shall promptly so advise the Company;

                       (8) the Place or Places of Capital Exchange;

                       (9) that Bearer Securities may be surrendered for payment
         or exchange only at a Place or Places of Capital Exchange which are
         outside the United States, except as otherwise provided in Section
         1002; and

                       (10) the CUSIP number, if any.

                  (b)      Each notice of exchange subject to this paragraph
         shall be given in the manner provided in Section 106 to each Holder of
         Debt Securities to be exchanged, and the Company shall forthwith give
         such notice by telephone to the Trustee and the Capital Exchange Agent,
         promptly confirmed in writing.

                                       86



                  (c)      (1) Except as may otherwise be specified pursuant to
         Section 301 for Debt Securities of any series, if less than all the
         Debt Securities of any series are to be exchanged, the Company shall at
         least 135 days prior to the related Capital Exchange Date (unless a
         shorter period shall be satisfactory to the Trustee) notify the Trustee
         of such Capital Exchange Date and of the principal amount of Debt
         Securities of such series to be exchanged and the particular Debt
         Securities to be exchanged shall be selected not more than 135 days
         prior to the related Capital Exchange Date by the Trustee, from the
         Outstanding Debt Securities of such series not previously exchanged, by
         such method as the Trustee shall deem fair and appropriate and which
         may provide for the selection for exchange of portions (equal to the
         minimum authorized denomination for Debt Securities of such series or
         any integral multiple thereof) of the principal amount of Registered or
         Bearer Securities of such series of a denomination larger than the
         minimum authorized denomination for Debt Securities of such series.

                           In any case where Debt Securities of such series are
         registered in the same name, the Trustee in its discretion may treat
         the aggregate principal amount so registered as if it were represented
         by one Debt Security of such series.

                       (2) The Trustee shall promptly notify the Company in
         writing of the Debt Securities selected for exchange and, in the case
         of any Debt Securities selected for partial exchange, the principal
         amount thereof to be exchanged.

                       (3) For all purposes of this Indenture, unless the
         context otherwise requires, all provisions relating to the exchange of
         Debt Securities shall relate, in the case of any Debt Securities
         exchanged or to be exchanged only in part, to the portion of the
         principal amount of such Debt Security which has been or is to be
         exchanged.

         Section 1405. Rights and Duties of Holders of Debt Securities to be
Exchanged for Capital Securities.

                  (a)      Subject to Section 503, and without prejudice to the
         rights pursuant to Section 1413 of Holders of Debt Securities of any
         series to be exchanged, no Holder of Debt Securities of such series
         shall be entitled to receive any cash from the Company on any Capital
         Exchange Date or at the Stated Maturity of any Debt Security of such
         series except from the proceeds of the sale of such Holder's Capital
         Securities in the related Secondary Offering and except as provided
         herein with respect to fractional Capital Securities, amounts equal to
         expenses of the sale in the related Secondary Offering of such Capital
         Securities, accrued and unpaid interest and acceleration upon an Event
         of Default. In the event that the Company does not effect such
         Secondary Offering, such Holder will receive Capital Securities with a
         Market Value equal to the principal amount of Debt Securities of such
         series owned by such Holder which are subject to such exchange and not
         cash other than in lieu of any fractional Capital Securities and for
         accrued and unpaid interest, without prejudice to such Holder's rights
         pursuant to Section 1413.

                                       87



                  (b)      Each Holder for whom Capital Securities are being
         offered in the Secondary Offering shall be deemed to have appointed the
         Company its attorney-in-fact to execute any and all documents and
         agreements the Company deems necessary or appropriate to effect such
         Secondary Offering.

                  (c)      Unless advised to the contrary in writing within 30
         days following the date of the notice described in Section 1404(a) by
         any Holder for whom Capital Securities are being offered in the
         Secondary Offering, the Company shall assume for the purposes of any
         Secondary Offering that the Capital Securities are to be offered for
         the account of such Holder, that such Holder has not held any position,
         office or other material relationship with the Company within three
         years preceding the Secondary Offering, that such Holder owns no other
         Capital Securities, and that after completion of the Secondary Offering
         such Holder will own less than one percent of the class of such Capital
         Securities.

                  (d)      Each Holder for whom Capital Securities are being
         offered in the Secondary Offering agrees to indemnify and hold harmless
         the Company, any other Holder, and any underwriter, agent or other
         similar person from and against any and all losses, claims, damages and
         liabilities resulting from or based upon any untrue statement or
         alleged untrue statement of any material fact contained in any notice
         of exchange, any offering memorandum or selling document or
         registration statement relating to the Secondary Offering, any
         preliminary prospectus or prospectus contained therein, or any
         amendment thereof or supplement thereto, or resulting from or based
         upon the omission or alleged omission to state therein a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, which untrue statement, alleged untrue
         statement, omission or alleged omission is made therein (i) in reliance
         upon and in conformity with any written information furnished to the
         Company by or on behalf of any such Holder specifically for use in
         connection with the preparation thereof or (ii) because of such
         Holder's failure to advise the Company in writing that any of the
         assumptions described in Section 1404(a)(7)(A) and Subsection (c) of
         this Section is incorrect.

                  (e)      In order for any Holder who has duly returned a
         Capital Security Election Form to receive Capital Securities on any
         Capital Exchange Date for any Debt Security of any series, (1) the
         Holder of any Registered Security to be exchanged shall surrender such
         Debt Security (with, if the Company or the Trustee so requires, due
         endorsement by, or a written instrument of transfer in form
         satisfactory to the Company and the Trustee duly executed by, the
         Holder of any Registered Security or his attorney duly authorized in
         writing) to the Capital Exchange Agent on the Capital Exchange Date,
         and (2) the Holder of any Bearer Security to be exchanged shall
         surrender such Debt Security and all unmatured coupons and all matured
         coupons in default with the Capital Security Election Form at a Place
         of Capital Exchange outside the United States designated pursuant to
         Section 1404(a)(8) except as otherwise provided in Section 1002. If the
         Holder of a Bearer Security is unable to produce any such Debt Security
         or coupons, the surrender of such Debt Security or coupons may be
         waived by

                                       88



         the Company and the Trustee, if there be furnished to them such
         security or indemnity as they may require to save each of them and any
         Capital Exchange Agent harmless in respect of such Debt Security or
         coupons. Except as provided in Section 307, no payment or adjustment
         shall be made upon any exchange on account of any interest accrued on
         any Debt Securities surrendered for exchange or on account of any
         dividends or interest on the Capital Securities issued upon exchange.

                  (f)      Debt Securities of any series to be exchanged shall
         be deemed to have been exchanged on the Capital Exchange Date therefor
         in accordance with the foregoing provisions, and at such time the
         rights of the Holders of such Debt Securities as Holders shall cease
         (subject to the provisions of Section 307 and without prejudice to the
         rights of Holders of Debt Securities of such series pursuant to Section
         1413), and the Person or Persons entitled to receive the Capital
         Securities issuable upon such exchange shall be treated for all
         purposes as the record holder or holders of such Capital Securities at
         such time.

         Section 1406. Election to Exchange.

         The election of the Company to exchange Capital Securities for Debt
Securities pursuant to Section 1403 shall be evidenced by a Board Resolution.

         Section 1407. Deposit of Capital Exchange Price.

         On any Capital Exchange Date for Debt Securities of any series which
may be exchanged, the Company shall deposit with the Trustee or with a Capital
Exchange Agent in the Borough of Manhattan, The City of New York (or, if the
Company is acting as Capital Exchange Agent, segregate and hold in trust as
provided in Section 1003) Capital Securities and an amount of money which
together are sufficient to pay the Capital Exchange Price of, and (except if
such Capital Exchange Date shall be an Interest Payment Date) accrued interest
on, all the Debt Securities of such series or portions thereof which are to be
exchanged on that date; provided, however, that deposits with respect to Bearer
Securities shall be made with a Capital Exchange Agent or Capital Exchange
Agents located outside the United States except as otherwise provided in Section
1002, unless otherwise specified as contemplated by Section 301.

         Section 1408. Debt Securities Due on Capital Exchange Date; Debt
Securities Exchanged in Part.

         Notice of exchange having been given as aforesaid, the Debt Securities
of any series so to be exchanged shall, on the Capital Exchange Date for such
Debt Securities, become due and payable at the Capital Exchange Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Capital Exchange Price and accrued interest) Debt Securities of
such series to be exchanged shall cease to bear interest and the coupons for
such interest appertaining to any Bearer Securities to be exchanged, except to
the extent provided below, shall be void. Upon surrender of any Debt Security of
such series for exchange in accordance with said notice, such Debt Security
shall be paid by the Company at the Capital Exchange Price, together with
accrued interest to the Capital Exchange Date; provided, however, that if such
Capital Exchange

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Date is an Interest Payment Date, the interest payable on such date shall be
paid to the Holder of Debt Securities of such series according to the terms of
the Debt Securities of such series and the provisions of Section 307; and
provided further, that exchanges of Bearer Securities shall be made only and
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Capital Exchange Date shall be payable only at an office or agency
located outside the United States except as otherwise provided in Section 1002
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those Bearer Securities and coupons.

         If any Bearer Security surrendered for exchange shall not be
accompanied by all unmatured coupons and all matured coupons in default, such
Bearer Security may be paid after deducting from the Capital Exchange Price an
amount equal to the face amount of all missing coupons, or the surrender of such
missing coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Capital Exchange Agent harmless. If thereafter the Holder of such
Bearer Security shall surrender to the Trustee or Capital Exchange Agent any
such missing coupon in respect of which a deduction shall have been made from
the Capital Exchange Price, such Holder shall be entitled to receive the amount
so deducted without interest thereon; provided, however, that interest on Bearer
Securities shall be payable only at an office or agency located outside of the
United States except as otherwise provided in Section 1002.

         If any Debt Security of any series called for exchange shall not be so
paid or exchanged upon surrender thereof for exchange, the principal shall,
until paid, bear interest from such Capital Exchange Date at the rate or rates
prescribed therefor in such Debt Security; provided, however, that in the case
of Bearer Securities, any such principal and interest thereon shall be paid at
an office or agency located outside the United States except as otherwise
provided in Section 1002.

         Any Registered Security which is to be exchanged only in part shall be
surrendered as provided herein (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing) and the Company shall execute, the Trustee shall
authenticate and there shall be delivered to the Holder of such Debt Security
without service charge a new Registered Security or Securities of the same
series, of any authorized denomination or denominations as requested by such
Holder in aggregate principal amount equal to and in exchange for the
unexchanged portion of principal of the Debt Security so surrendered.

         Any Bearer Security which is to be exchanged only in part shall be
surrendered as provided herein and the Company shall execute, the Trustee shall
authenticate and there shall be delivered to the Holder of such Debt Security
without service charge a new Registered Security or Securities or new Bearer
Security or Securities (and all appurtenant unmatured coupons and coupons in
default) or any combination thereof of the same series, of any surrendered
denomination or denominations as requested by such Holder in aggregate principal
amount equal to and in exchange for the unexchanged portion of principal of the
Debt Security so surrendered; provided, however, the issuance of a Registered

                                       90



Security therefor shall be subject to applicable laws and regulations, including
provisions of the United States federal income tax laws and regulations in
effect at the time of the exchange; neither the Company, the Trustee nor the
Security Registrar shall issue Registered Securities in exchange for Bearer
Securities if it has received an Opinion of Counsel that as a result of such
exchanges the Company would suffer adverse consequences under the United States
Federal income tax laws then in effect and the Company has delivered to the
Trustee a Company Order directing the Trustee not to make such exchanges
thereafter unless and until the Company delivers to the Trustee a subsequent
Company Order to the contrary. The Company shall deliver copies of such Company
Orders to the Security Registrar.

         Section 1409. Form of Capital Security Election Form.

         The form of Capital Security Election Form shall be substantially as
follows with such additions, deletions or changes thereto as may be approved by
the Company:

                         CAPITAL SECURITY ELECTION FORM

To:      [Insert Names and Addresses
         of Capital Exchange Agents]

         The undersigned Holder of [insert title of Debt Security] ("Debt
Securities") of Popular, Inc. hereby elects to receive on the Capital Exchange
Date determined pursuant to the Indenture dated as of ______________, 2003,
("Indenture"), between Popular, Inc. and Bank One Trust Company, N.A., as
Trustee, and referred to in the notice of exchange published or delivered to the
undersigned with this Capital Security Election Form, Capital Securities of
Popular, Inc. with a Market Value equal to the principal amount of the Debt
Securities being exchanged owned by the undersigned Holder and, in the case of
Bearer Securities, delivered herewith together with all coupons appertaining
thereto. Unless this Capital Security Election Form together with, in the case
of Bearer Securities, such Bearer Securities and coupons, is received by any
Capital Exchange Agent named above at an address shown above on or prior to
______________________________, the Holder will be deemed to have elected to
participate in the sale of the Holder's Capital Securities in the Secondary
Offering and will receive cash on the Capital Exchange Date in an amount equal
to the principal amount of all Debt Securities being exchanged owned by the
Holder. All terms used herein and not otherwise defined herein shall have the
meanings specified in the Indenture.

Dated ______________________

                                            ____________________________________
                                                        Name of Holder

         Section 1410. Fractional Capital Securities.

         No fractional Capital Securities shall be issued upon exchange for any
Debt Securities. If more than one Debt Security of any series shall be
surrendered for exchange at one time by the same Holder, the amount of all
Capital Securities

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which shall be issuable upon exchange thereof shall be computed on the basis of
the aggregate principal amount of Debt Securities of such series so surrendered.
In lieu of issuing any fractional Capital Security, the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
of the Market Value of the Capital Security.

         Section 1411. Company to Obtain Governmental and Regulatory Approvals.

         The Company covenants that if any Capital Securities required to be
exchanged for Debt Securities hereunder require registration with or approval of
any governmental authority under any federal or state law, or any national
securities exchange, before such Capital Securities may be issued, the Company
will in good faith and as expeditiously as possible endeavor to cause such
Capital Securities to be duly registered or approved, as the case may be;
provided, however, that nothing in this Section shall be deemed to affect in any
way the obligation of the Company to exchange Capital Securities for Debt
Securities as provided in this Article.

         Section 1412. Taxes on Exchange.

         The Company will pay any and all transfer, stamp or similar taxes that
may be payable in respect of the issue or delivery of Capital Securities in
exchange for Debt Securities pursuant hereto.

         Section 1413. Covenants as to Capital Securities and Secondary
Offering.

                  (a)      The Company covenants that it will issue, or cause to
         be issued, Capital Securities of the type, in the amounts and at the
         times required by this Indenture.

                  (b)      The Company covenants that all Capital Securities
         which may be issued in exchange for Debt Securities will upon issuance
         be duly and validly issued and, if applicable, fully paid and
         nonassessable.

                  (c)      The Company unconditionally undertakes to sell
         Capital Securities in each Secondary Offering (and to bear all expenses
         of each Secondary Offering, including underwriting discounts and
         commissions) at the times and in the manner required by this Indenture
         unless all Holders have duly elected to receive Capital Securities on
         the related Capital Exchange Date.

                  (d)      The Company agrees to indemnify and hold harmless in
         connection with any Secondary Offering any Holder for the account of
         whom Capital Securities are being offered and sold from and against any
         and all losses, claims, damages and liabilities resulting from or based
         upon any untrue statement or alleged untrue statement of any material
         fact contained in any notice of exchange, any offering memorandum or
         selling document or registration statement relating to the Secondary
         Offering, any preliminary prospectus or prospectus contained therein,
         or any amendment thereof or supplement thereto, or resulting from or
         based upon the omission or alleged omission to state therein a material
         fact required to be stated therein or necessary to make the statements
         therein not

                                       92



         misleading, or resulting from the Company's failure to comply with
         Section 1411; provided, however, the Company will not be liable in any
         such case to the extent that any such loss, claim, damage or liability
         arises out of or is based upon any such untrue statement, alleged
         untrue statement, omission or alleged omission made therein (i) in
         reliance upon and in conformity with written information furnished to
         the Company by or on behalf of any such Holder specifically for use in
         connection with the preparation thereof or (ii) because of such
         Holder's failure to advise the Company in writing that any of the
         assumptions described in Section 1404(a)(7)(A) is incorrect. In
         connection with any Secondary Offering, the Company agrees to obtain
         appropriate indemnification of any Holder for the account of whom
         Capital Securities are being offered and sold in any Secondary Offering
         from any underwriter, agent or other similar person.

         Section 1414. Provision in Case of Consolidation, Merger or Transfer of
Assets.

         In case of any consolidation of the Company with, or merger of the
Company into, any other corporation (other than a consolidation or merger in
which the Company is the continuing corporation), or in case of any conveyance
or transfer of the properties and assets of the Company substantially as an
entirety, the corporation formed by such consideration or the corporation into
which the Company shall have been merged or the corporation which shall have
acquired such assets of the Company, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Debt Security then Outstanding shall have the right thereafter to receive
securities of such successor on the Capital Exchange Date for such Debt Security
with a Market Value equal to the principal amount of such Debt Security. The
above provisions of this Section shall similarly apply to successive
consolidations, mergers, conveyances or transfers.

         Section 1415. Trustee Not Responsible.

         The Trustee shall not at any time be under any duty or responsibility
to any Holder of Debt Securities of any series to be exchanged to determine the
Market Value of any Capital Securities delivered in exchange for Debt Securities
of such series and may rely on and shall be entitled to receive prior to any
Capital Exchange Date for Debt Securities of such series an Officers'
Certificate of the Company as to the Market Value of the Capital Securities
being exchanged for the Debt Securities of such series and the amount of Capital
Securities being exchanged for each $1,000 principal amount of Debt Securities
of such series or the minimum denomination of such series, if larger, and that
such Capital Securities qualify as Capital Securities under the definition
thereof contained herein. The Trustee shall not be accountable with respect to
the validity or value (or the kind or amount) of any Capital Securities which
may at any time be issued or delivered in exchange for any Debt Security; and
the Trustee does not make any representation with respect thereto. The Trustee
shall not be responsible for any failure of the Company to issue, transfer or
deliver any Capital Securities or Capital Security certificates or other
securities or property upon the surrender of any Debt Security for the purpose
of exchange or to comply with any of the covenants of the Company contained in
this Article.

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         Section 1416. Revocation of Obligation to Exchange Capital Securities
for Debt Securities.

         The Company's obligations to exchange Capital Securities for Debt
Securities of any series as provided in Section 1402 is absolute and
unconditional; provided, however, that such obligation may be revoked at the
option of the Company at any time on not less than 60 days' prior notice given
in the manner provided in Section 106 to the Holders of Debt Securities of such
series, the Trustee and the Capital Exchange Agent, if the Company shall
determine that under regulations then in effect of the Company's Primary Federal
Regulator either the Debt Securities are no longer includable as capital or it
is no longer necessary for the Company to be obligated to exchange Capital
Securities for Debt Securities in order for the Debt Securities to maintain the
same capital treatment as they are then receiving under the regulations or if
approval of the Primary Federal Regulator is obtained for such revocation.

         In the event such obligation is revoked

                  (a)      the Company will pay the Debt Securities of such
         series in cash at 100% of the principal amount thereof on the Stated
         Maturity thereof, and

                  (b)      the Company may, at any time on or after a date
         selected by the Company, on not less than 60 days' prior notice given
         in the manner provided in Section 106 to the Holders of Debt Securities
         of such series and the Trustee, redeem the Debt Securities of such
         series, in whole or in part, for cash at 100% of the principal amount
         thereof, plus accrued interest to the Redemption Date.

         Section 1417. Optional Securities Funds.

                  (a)      (1) With respect to Debt Securities of any series for
         which an Officers' Certificate or supplemental indenture pursuant to
         Section 301 provides that the Debt Securities of such series are
         exchangeable for Capital Securities, the Company may elect to establish
         a fund (referred to herein as the "Optional Securities Funds") to which
         funds may at any time be designated by the Company as provided in
         Section 1502 as if such Optional Securities Funds were Securities Funds
         (as defined in Article XV) to be used to pay the principal of the Debt
         Securities of such series.

                       (2) Notwithstanding any provisions to the contrary
         contained in this Indenture or in the Debt Securities of any series,
         neither funds designated as Optional Securities Funds nor any other
         property from time to time held as Optional Securities Funds shall be
         deemed to be for any purpose property of the Holders or trust funds for
         the benefit of the Holders, and the Optional Securities Funds shall not
         constitute security for the payment of the Debt Securities.

                  (b)      In lieu of, or in addition to, any exchange of
         Capital Securities for Debt Securities of any series which may be made
         in accordance with the provisions of Sections 1402 and 1403, the
         Company may

                                       94



         elect to redeem the Debt Securities of such series in accordance with
         the provisions of Section 1106 and the terms of the Debt Securities of
         each series, in whole or in part, by paying the principal of such Debt
         Securities with funds designated as Optional Securities Funds at a
         price equal to the percentage of the principal amount established in
         the terms of the Debt Securities of such series on the Redemption Date
         of the Debt Securities to be so redeemed, and (except if such
         Redemption Date shall be an Interest Payment Date) by paying accrued
         interest on such Debt Securities. If such Redemption Date is an
         Interest Payment Date, the interest payable on such date shall be paid
         to the Holder of Debt Securities of such series according to the terms
         of the Debt Securities of such series and the provisions of Section
         307.

                  (c)      The Company shall give notice of such proposed
         redemption in the manner provided in Section 106 to the Holders of the
         Debt Securities of such series within the time prescribed for the
         giving of the initial notice in Section 1402 or 1403, depending upon
         the Redemption Date selected by the Company. Such notice shall state
         the Redemption Date and the place or places where the Debt Securities
         of the series to be paid are to be surrendered for payment; provided,
         however, if such redemption is of less than all of the Debt Securities
         of such series and is to be made on a Capital Exchange Date specified
         in accordance with Section 1402 or 1403, then such notice may be
         incorporated into any initial notice of such Capital Exchange Date and
         provided that no notice of any redemption may be given unless there are
         sufficient Optional Securities Funds to pay the principal amount of the
         Debt Securities to be redeemed.

                  (d)      If less than all the Debt Securities of any series
         are to be so redeemed, then Sections 1404(c) and 1408 shall apply to
         the redemption in the same manner as if such Debt Securities were to be
         exchanged for Capital Securities.

                  (e)      Funds designated as Optional Securities Funds shall
         be released from such designation under the circumstances described in
         Section 1503.

                                   ARTICLE XV

                                SECURITIES FUNDS

         Section 1501. Creation of Securities Funds.

         A fund (the "Securities Funds") will be established when specified in
an Officers' Certificate or supplemental indenture pursuant to Section 301 for
the Debt Securities of any series pursuant to which funds may be designated by
the Company as provided in Section 1502, to be used to pay the principal of the
Debt Securities of that series.

         Notwithstanding any provision to the contrary contained in this
Indenture or in the Debt Securities of any series, neither funds designated as
Securities Funds nor any other property from time to time held as Securities
Funds shall be deemed to be for any purpose property of the Holders or trust
funds for the

                                       95



benefit of the Holders, and the Securities Funds shall not constitute security
for the payment of the Debt Securities.

         Section 1502. Designations of Securities Funds.

         The Securities Funds will consist of amounts equal to (i) the net
proceeds of the sale of Capital Securities for cash from time to time after the
date of initial issuance of the Debt Securities of any series for which funds
may be designated by the Company as provided in this Section, and (ii) the
market value, as determined by the Company, of Capital Securities sold from time
to time after the date of initial issuance of the Debt Securities of such series
in exchange for other property, less the expenses to effect any such exchanges,
and (iii) other funds which the regulations of the Primary Federal Regulator
then permit for the payment of principal of "mandatory convertible securities
(equity commitment notes)" as defined in such regulations; provided that (x) the
Company has designated such amounts as Securities Funds on its books and records
in the manner required by the Primary Federal Regulator, and (y) there shall be
deducted from the Securities Funds an amount equal to the amount of any funds
used to redeem or repay the Debt Securities of such series for which Securities
Funds are required to be designated or any similar securities.

         Section 1503. Covenant of the Company to Obtain Securities Funds.

         Notwithstanding anything else contained herein, the Company hereby
covenants and agrees that with regard to the Debt Securities of any series which
by its terms requires the designation of Securities Funds (i) by the Interest
Payment Date which occurs on or next preceding the date when one-third of the
period from the date of issuance of the Debt Securities of such series to their
Stated Maturity has elapsed, it will have obtained Securities Funds in an amount
that will equal at least one-third of the original aggregate principal amount of
the Debt Securities of such series (or such lesser amount as the Primary Federal
Regulator may permit from time to time) and will have prepared and delivered to
the Trustee an Officers' Certificate to the foregoing effect, (ii) by the
Interest Payment Date which occurs on or next preceding the date when two-thirds
of the period from the date of issuance of the Debt Securities of such series to
their Stated Maturity has elapsed, it will have obtained Securities Funds in an
amount that will equal at least two-thirds of the original aggregate principal
amount of the Debt Securities of such series (or such lesser amount as the
Primary Federal Regulator may permit from time to time) and will have prepared
and delivered to the Trustee an Officers' Certificate to the foregoing effect,
and (iii) by 60 days prior to the Stated Maturity of the Debt Securities of such
series, it will have obtained Securities Funds in an amount that will equal not
less than the original aggregate principal amount of the Debt Securities of such
series (or such lesser amount as the Primary Federal Regulator may permit from
time to time) and will have prepared and delivered to the Trustee an Officers'
Certificate to the foregoing effect; provided, however, that such covenant and
agreement of the Company shall be cancelled and amounts theretofore designated
as Securities Funds will be released from such designation in the event and to
the extent that the Company shall determine that under the regulations of the
Company's Primary Federal Regulator either the Debt Securities are no longer
includable as capital or it is no longer necessary for the Company to be
obligated to pay the principal of the Debt Securities out of Securities Funds in

                                       96



order for the Debt Securities to maintain the same capital treatment as they are
then receiving under such regulations, in the event and to the extent that
approval of the Primary Federal Regulator is obtained for such cancellation and
release or in the event and to the extent that the Company shall have exchanged
or redeemed such Debt Securities pursuant to the terms of such Debt Securities
of such series from a source other than amounts designated as Securities Funds.

                                   ARTICLE XVI

                     MEETINGS OF HOLDERS OF DEBT SECURITIES

         Section 1601. Purposes for Which Meetings May Be Called.

         If Debt Securities of a series are issuable in whole or in part as
Bearer Securities, a meeting of Holders of Debt Securities of such series may be
called at any time and from time to time pursuant to this Article to make, give
or take any request, demand, authorization, direction, notice, consent, waiver
or other Act provided by this Indenture to be made, given or taken by Holders of
Debt Securities of such series.

         Section 1602. Call, Notice and Place of Meetings.

                  (a)      The Trustee may at any time call a meeting of Holders
         of Debt Securities of any series issuable as Bearer Securities for any
         purpose specified in Section 1601, to be held at such time and at such
         place in the Borough of Manhattan, The City of New York, or in San
         Juan, Puerto Rico, as the Trustee shall determine. Notice of every
         meeting of Holders of Debt Securities of any series, setting forth the
         time and the place of such meeting and in general terms the action
         proposed to be taken at such meeting, shall be given, in the manner
         provided in Section 106, not less than 21 nor more than 180 days prior
         to the date fixed for the meeting.

                  (b)      In case at any time the Company, pursuant to a Board
         Resolution, or the Holders of at least 10% in principal amount of the
         Outstanding Debt Securities of any series shall have requested the
         Trustee to call a meeting of the Holders of Debt Securities of such
         series for any purpose specified in Section 1601, by written request
         setting forth in reasonable detail the action proposed to be taken at
         the meeting, and the Trustee shall not have made the first publication
         of the notice of such meeting within 21 days after receipt of such
         request or shall not thereafter proceed to cause the meeting to be held
         as provided herein, then the Company or the Holders of Debt Securities
         of such series in the amount above specified, as the case may be, may
         determine the time and the place in the Borough of Manhattan, The City
         of New York, or in San Juan, Puerto Rico, for such meeting and may call
         such meeting for such purposes by giving notice thereof as provided in
         subsection (a) of this Section.

                                       97



         Section 1603. Persons Entitled to Vote at Meetings.

         To be entitled to vote at any meeting of Holders of Debt Securities of
any series, a Person shall be (1) a Holder of one or more Outstanding Debt
Securities of such series, or (2) a Person appointed by an instrument in writing
as proxy for a Holder or Holders of one or more Outstanding Debt Securities of
such series by such Holder or Holders. The only Persons who shall be entitled to
be present or to speak at any meeting of Holders of Debt Securities of any
series shall be the Persons entitled to vote at such meeting and their counsel,
any representatives of the Trustee and its counsel and any representatives of
the Company and its counsel.

         Section 1604. Quorum; Action.

         The Persons entitled to vote a majority in principal amount of the
Outstanding Debt Securities of a series shall constitute a quorum for a meeting
of Holders of Debt Securities of such series. In the absence of a quorum within
30 minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Debt Securities of such series, be
dissolved. In the absence of a quorum in any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairperson
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at any such adjourned meeting, such adjourned meeting may be further
adjourned for a period of not less than 10 days as determined by the chairperson
of the meeting prior to the adjournment of such adjourned meeting. Notice of
this reconvening of any adjourned meeting shall be given as provided in Section
1602(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Debt Securities of
such series which shall constitute a quorum.

         Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the Holders
of majority in principal amount of the Outstanding Debt Securities of that
series, provided however, that, except as limited by the proviso to Section 902,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other Act which this Indenture expressly provides may
be made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of the Outstanding Debt Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened and
at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Debt
Securities of that series.

         Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Debt Securities of such series and the related
coupons, whether or not present or represented at the meeting.

                                       98



         Section 1605. Determination of Voting Rights; Conduct and Adjournment
of Meetings.

                  (a)      Notwithstanding any other provisions of this
         Indenture, the Trustee may make such reasonable regulations as it may
         deem advisable for any meeting of Holders of Debt Securities of such
         series in regard to proof of the holding of Debt Securities of such
         series and of the appointment of proxies and in regard to the
         appointment and duties of inspectors of votes, the submission and
         examination of proxies, certificates and other evidence of the right to
         vote, and such other matters concerning the conduct of the meeting as
         it shall deem appropriate. Except as otherwise permitted or required by
         any such regulations, the holding of Debt Securities shall be proved in
         the manner specified in Section 104 and the appointment of any proxy
         shall be proved in the manner specified in Section 104 or, in the case
         of Bearer Securities, by having the signature of the person executing
         the proxy witnessed or guaranteed by any trust company, bank or banker
         authorized by Section 104 to certify to the holding of Bearer
         Securities. Such regulations may provide that written instruments
         appointing proxies, regular on their face, may be presumed valid and
         genuine without the proof specified in Section 104 or other proof.

                  (b)      The Trustee shall, by an instrument in writing,
         appoint a temporary chairperson of the meeting, unless the meeting
         shall have been called by the Company or by Holders of Debt Securities
         as provided in Section 1602(b), in which case the Company or the
         Holders of Debt Securities of the series calling the meeting, as the
         case may be, shall in like manner appoint a temporary chairperson. A
         permanent chairperson and a permanent secretary of the meeting shall be
         elected by vote of the Persons entitled to vote a majority in principal
         amount of the Outstanding Debt Securities of such series represented at
         the meeting.

                  (c)      At any meeting each Holder of a Debt Security of such
         series or proxy shall be entitled to one vote for each $1,000 principal
         amount (or the equivalent in Euro, any other composite currency or a
         Foreign Currency) of Debt Securities of such series held or represented
         by him; provided, however, that no vote shall be cast or counted at any
         meeting in respect of any Debt Security challenged as not Outstanding
         and ruled by the chairperson of the meeting not to be Outstanding. The
         chairperson of the meeting shall have no right to vote, except as a
         Holder of a Debt Security of such series or proxy.

                  (d)      Any meeting of Holders of Debt Securities of any
         series duly called pursuant to Section 1602 at which a quorum is
         present may be adjourned from time to time by Persons entitled to vote
         a majority in principal amount of the Outstanding Debt Securities of
         such series represented at the meeting; and the meeting may be held as
         so adjourned without further notice.

                                       99



         Section 1606. Counting Votes and Recording Action of Meetings.

         The vote upon any resolution submitted to any meeting of Holders of
Debt Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Debt Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Debt Securities of such series held or represented by them. The
permanent chairperson of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Debt Securities of
any series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1602 and, if
applicable, Section 1601. Each copy shall be signed and verified by the
affidavits of the permanent chairperson and secretary of the meeting and one
such copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

                                  ARTICLE XVII

                                   DEFEASANCE

         Section 1701. Termination of Company's Obligations.

         If this Section 1701 is specified, as contemplated by Section 301, to
be applicable to any series of Debt Securities and if the Company deposits
irrevocably in trust with the Trustee money and/or, to the extent such Debt
Securities are denominated and payable in Dollars only, Eligible Instruments the
payments of principal and interest on which when due (and without reinvestment
and providing no tax liability will be imposed upon the Trustee or the Holders
of such Debt Securities) will provide money in such amounts as will (together
with any money irrevocably deposited in trust with the Trustee, without
investment) be sufficient to pay the principal of (and premium, if any) and any
installment of principal of (and premium, if any) or interest (including any
Additional Interest) when due on the Debt Securities of such series and any
coupons appertaining thereto and any mandatory sinking fund, repayment or
analogous payments thereon on the scheduled due dates therefor at the Stated
Maturity thereof, the Company's obligations under any covenant determined
pursuant to Section 301 to be subject to this Section shall terminate with
respect to the Debt Securities of the series for which such deposit was made;
provided, however, that (i) no Event of Default with respect to the Debt
Securities of such series under Section 501(6) or Section 501(7) or event that
with notice or lapse of time or both would constitute such an Event of Default
shall have occurred and be continuing on such date, (ii) such deposit will not
result in a breach of, or constitute a default under, this Indenture or any
other agreement or instrument to which the Company is a party or by which it is
bound,

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and (iii) such termination shall not relieve the Company of its obligations
under the Debt Securities of such series and this Indenture to pay when due the
principal of (and premium, if any) and interest (including any Additional
Interest) and additional amounts on such Debt Securities and any coupons
appertaining thereto if such Debt Securities or coupons are not paid (or payment
is not provided for) when due from the money and Eligible Instruments (and the
proceeds thereof) so deposited.

         It shall be a condition to the deposit of cash and/or Eligible
Instruments and the termination of the Company's obligations pursuant to the
provisions of this Section with respect to the Debt Securities of any series
under any covenant determined pursuant to Section 301 to be subject to this
Section that the Company deliver to the Trustee (i) an Opinion of Counsel to the
effect that: (a) Holders of Debt Securities of such series and any coupons
appertaining thereto will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit and termination and (b) such Holders
(and future Holders) will be subject to tax in the same amount, manner and
timing as if such deposit and termination had not occurred, (ii) an Officers'
Certificate to the effect that under the laws in effect on the date such money
and/or Eligible Instruments are deposited with the Trustee, the amount thereof
will be sufficient, after payment of all Federal, state and local taxes in
respect thereof payable by the Trustee, to pay principal (and premium, if any)
and interest (including any Additional Interest) when due on the Debt Securities
of such series and any coupons appertaining thereto; and (iii) an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the defeasance contemplated in this
Section have been complied with.

         It shall be an additional condition to the deposit of cash and/or
Eligible Instruments and the termination of the Company's obligations pursuant
to the provisions of this Section under any covenant determined pursuant to
Section 301 to be subject to this Section, with respect to the Debt Securities
of any series then listed on the New York Stock Exchange, that the Company
deliver an Opinion of Counsel that the Debt Securities of such series will not
be delisted from the New York Stock Exchange as a result of such deposit and
termination.

         After a deposit as provided herein, the Trustee shall, upon Company
Request, acknowledge in writing the discharge of the Company's obligations
pursuant to the provisions of this Section with respect to the Debt Securities
of such series under any covenant determined pursuant to Section 301 to be
subject to this Section.

         Section 1702. Repayment to Company.

         The Trustee and any Paying Agent shall promptly pay to the Company upon
Company Request any money or Eligible Instruments not required for the payment
of the principal of (and premium, if any) and interest (including any Additional
Interest) on the Debt Securities of any series and any related coupons for which
money or Eligible Instruments have been deposited pursuant to Section 1701 held
by them at any time.

         The Trustee and any Paying Agent shall promptly pay to the Company upon
Company Request any money held by them for the payment of principal (and
premium,

                                       101



if any) and interest (including any Additional Interest) that remains unclaimed
for two years after the Maturity of the Debt Securities for which a deposit has
been made pursuant to Section 1701. After such payment to the Company, the
Holders of the Debt Securities of such series and any related coupons shall
thereafter, as unsecured general creditors, look only to the Company for the
payment thereof.

         Section 1703. Indemnity for Eligible Instruments.

         The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the deposited Eligible
Instruments or the principal or interest received on such Eligible Instruments.

                                  ARTICLE XVIII

                        SUBORDINATION OF DEBT SECURITIES

         Section 1801. Debt Securities Subordinate to Senior Debt.

         The Company covenants and agrees that anything in this Indenture or the
Debt Securities of any series to the contrary notwithstanding, the indebtedness
evidenced by the Debt Securities of each series and any coupons appurtenant
thereto is subordinate and junior in right of payment to all Senior Debt to the
extent provided herein and shall be pari passu with all Trust Related
Securities, and each Holder of Debt Securities of each series and coupons
appurtenant thereto, by such Holder's acceptance thereof, likewise covenants and
agrees to the subordination herein provided and shall be bound by the provisions
hereof. Senior Debt shall continue to be Senior Debt and entitled to the
benefits of these subordination provisions irrespective of any amendment,
modification or waiver of any term of the Senior Debt or extension or renewal of
the Senior Debt.

         In the event of

                  (a)      any insolvency, bankruptcy, receivership,
         liquidation, reorganization, readjustment, composition or other similar
         proceeding relating to the Company, its creditors or its property,

                  (b)      any proceeding for the liquidation, dissolution or
         other winding up of the Company, voluntary or involuntary, whether or
         not involving insolvency or bankruptcy proceedings,

                  (c)      any assignment by the Company for the benefit of
         creditors, or

                  (d)      any other marshalling of the assets of the Company,

all Senior Debt (including any interest thereon accruing after the commencement
of any such proceedings) shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made to
any Holder of any of the Debt Securities or coupons appurtenant thereto on
account thereof. Any payment or distribution, whether in cash, securities or
other property (other than securities of the Company or any other corporation
provided

                                       102



for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Debt Securities, to the
payment of all Senior Debt at the time outstanding and to any securities issued
in respect thereof under any such plan of reorganization or readjustment), which
would otherwise (but for these subordination provisions) be payable or
deliverable in respect of the Debt Securities of any series or coupons
appurtenant thereto shall be paid or delivered directly to the holders of Senior
Debt in accordance with the priorities then existing among such holders until
all Senior Debt (including any interest thereon accruing after the commencement
of any such proceedings) shall have been paid in full. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior Debt,
the Holders of the Debt Securities and coupons appurtenant thereto, together
with the holders of any obligations of the Company ranking on a parity with the
Debt Securities, shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of unpaid principal of
(and premium, if any) and interest on the Debt Securities and such other
obligations before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any capital stock or any obligations
of the Company ranking junior to the Debt Securities and such other obligations.

         In the event that, notwithstanding the foregoing, any payment or
distribution of any character or any security, whether in cash, securities or
other property (other than securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Debt Securities, to the
payment of all Senior Debt at the time outstanding and to any securities issued
in respect thereof under any such plan or reorganization or readjustment), shall
be received by the Trustee or any Holder in contravention of any of the terms
hereof such payment or distribution or security shall be received in trust for
the benefit of, and shall be paid over or delivered and transferred to, the
holders of the Senior Debt at the time outstanding in accordance with the
priorities then existing among such holders for application to the payment of
all Senior Debt remaining unpaid, to the extent necessary to pay all such Senior
Debt in full. In the event of the failure of the Trustee or any Holder to
endorse or assign any such payment, distribution or security, each holder of
Senior Debt is hereby irrevocably authorized to endorse or assign the same.

         No present or future holder of any Senior Debt shall be prejudiced in
the right to enforce subordination of the indebtedness evidenced by the Debt
Securities by any act or failure to act on the part of the Company. Nothing
contained herein shall impair, as between the Company and the Holders of Debt
Securities of each series, the obligation of the Company to pay to such Holders
the principal of (and premium, if any) and interest (including any Additional
Interest) on such Debt Securities and coupons appurtenant thereto or prevent the
Trustee or the Holder (or to the extent expressly provided herein, the holder of
any Capital Trust Securities) from exercising all rights, powers and remedies
otherwise permitted by applicable law or hereunder upon a default or Event of
Default hereunder, all subject to the rights of the holders of the Senior Debt
to receive cash, securities or other property otherwise payable or deliverable
to the Holders.

                                       103



         Senior Debt shall not be deemed to have been paid in full unless the
holders thereof shall have received cash, securities or other property equal to
the amount of such Senior Debt then outstanding. Upon the payment in full of all
Senior Debt, the Holders of Debt Securities of each series and coupons
appurtenant thereto, if any, shall be subrogated to all rights of any holders of
Senior Debt to receive any further payments or distributions applicable to the
Senior Debt until the indebtedness evidenced by the Debt Securities of such
series and coupons appertaining thereto, if any, shall have been paid in full,
and such payments or distributions received by such Holders, by reason of such
subrogation, of cash, securities or other property which otherwise would be paid
or distributed to the holders of Senior Debt shall, as between the Company and
its creditors other than the holders of Senior Debt, on the one hand, and such
Holders, on the other hand, be deemed to be a payment by the Company on account
of Senior Debt, and not on account of the Debt Securities of such series.

         The Trustee and Holders will take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Debt or consent to the filing of a financing statement with respect hereto) as
may, in the opinion of counsel designated by the holders of a majority in
principal amount of the Senior Debt at the time outstanding, be necessary or
appropriate to assure the effectiveness of the subordination effected by these
provisions.

         The provisions of this Section 1801 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Company in respect
of any security interest the creation of which is not prohibited by the
provisions of this Indenture.

         Section 1802. Trustee and Holders of Debt Securities May Rely on
Certificate of Liquidating Agent; Trustee May Require Further Evidence as to
Ownership of Senior Debt; Trustee Not Fiduciary to Holders of Senior Debt.

         Upon any payment or distribution of assets of the Company referred to
in this Article XVIII, the Trustee and the Holders shall be entitled to rely
upon an order or decree made by any court of competent jurisdiction in which
such dissolution or winding up or liquidation or reorganization or arrangement
proceedings are pending or upon a certificate of the trustee in bankruptcy,
receiver, assignee for the benefit of creditors or other Person making such
payment or distribution, delivered to the Trustee or to the Holders, for the
purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XVIII. In the absence of any such bankruptcy trustee, receiver, assignee or
other Person, the Trustee shall be entitled to rely upon a written notice by a
Person representing himself or herself to be a holder of Senior Debt (or a
trustee or representative on behalf of such holder) as evidence that such Person
is a holder of such Senior Debt (or is such a trustee or representative). In the
event that the Trustee determines, in good faith, that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payments or distributions pursuant to this Article XVIII, the
Trustee may request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior

                                       104



Debt held by such Person, as to the extent to which such Person is entitled to
participate in such payment or distribution, and as to other facts pertinent to
the rights of such Person under this Article XVIII, and if such evidence is not
furnished, the Trustee may offer any payment to such Person pending judicial
determination as to the right of such Person to receive payment. The Trustee,
however, shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt.

         Section 1803. Payment Permitted If No Default.

         Nothing contained in this Article XVIII or elsewhere in this Indenture,
or in any of the Debt Securities, shall prevent (a) the Company at any time,
except during the pendency of any dissolution, winding up, liquidation or
reorganization proceedings referred to in Section 1801, from making payments of
the principal of (or premium, if any) or interest (including any Additional
Interest) on the Debt Securities or (b) the application by the Trustee or any
Paying Agent of any moneys deposited with it hereunder to payments of the
principal of or interest (including any Additional Interest) on the Debt
Securities, if, at the time of such deposit, the Trustee or such Paying Agent,
as the case may be, did not have the written notice provided for in Section 1804
of any event prohibiting the making of such deposit, or if, at the time of such
deposit (whether or not in trust) by the Company with the Trustee or any Paying
Agent (other than the Company) such payment would not have been prohibited by
the provisions of this Article, and the Trustee or any Paying Agent shall not be
affected by any notice to the contrary received by it on or after such date.

         Section 1804. Trustee Not Charged with Knowledge of Prohibition.

         Anything in this Article XVIII or elsewhere in this Indenture contained
to the contrary notwithstanding, the Trustee shall not at any time be charged
with knowledge of the existence of any facts which would prohibit the making of
any payment of money to or by the Trustee and shall be entitled conclusively to
assume that no such facts exist and that no event specified in Section 1801 has
happened, until the Trustee shall have received an Officers' Certificate to that
effect or notice in writing to that effect signed by or on behalf of the holder
or holders, or their representatives, of Senior Debt who shall have been
certified by the Company or otherwise established to the reasonable satisfaction
of the Trustee to be such holder or holders or representatives or from any
trustee under any indenture pursuant to which such Senior Debt shall be
outstanding. The Company shall give prompt written notice to the Trustee and to
the Paying Agent of any facts which would prohibit the payment of money to or by
the Trustee or any Paying Agent.

         Section 1805. Trustee to Effectuate Subordination.

         Each Holder of Debt Securities or coupons by such Holder's acceptance
thereof authorizes and directs the Trustee in such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination as
between such Holder and holders of Senior Debt as provided in this Article and
appoints the Trustee its attorney-in-fact for any and all such purposes.

                                       105



         Section 1806. Rights of Trustee as Holder of Senior Debt.

         The Trustee shall be entitled to all the rights set forth in this
Article with respect to any Senior Debt which may at the time be held by it, to
the same extent as any other holder of Senior Debt; provided that nothing in
this Article shall deprive the Trustee of any rights as such holder and provided
further that nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607.

         Section 1807. Article Applicable to Paying Agents.

         In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully for all intents and purposes as if the Paying Agent were named
in this Article in addition to or in place of the Trustee, provided, however,
that Sections 1804 and 1806 shall not apply to the Company or any Affiliate of
the Company if the Company or such Affiliate acts as Paying Agent.

         Section 1808. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of Senior Debt.

         No right of any present or future holders of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof which any such holder may have or be
otherwise charged with. The holders of Senior Debt may, at any time or from time
to time and in their absolute discretion, change the manner, place or terms of
payment, change or extend the time of payment of, or renew or alter, any such
Senior Debt, or amend or supplement any instrument pursuant to which any such
Senior Debt is issued or by which it may be secured, or release any security
therefor, or exercise or refrain from exercising any other of their rights under
the Senior Debt including, without limitation, the waiver of default thereunder,
all without notice to or assent from the Holders of the Debt Securities or the
Trustee and without affecting the obligations of the Company, the Trustee or the
Holders of the Debt Securities under this Article.

                                   ARTICLE XIX

                      CONVERSION OF CONVERTIBLE SECURITIES

         Section 1901. Applicability of Article.

         If an Officers' Certificate or supplemental indenture pursuant to
Section 301 provides that the Debt Securities of a series shall be Convertible
Securities, Debt Securities of such series shall be convertible in accordance
with their terms and (except as otherwise specified in such Officers'
Certificate or supplemental indenture) in accordance with this Article.

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         Section 1902. Right to Convert.

         Subject to and upon compliance with the provisions of this Article, the
Holder of any Convertible Security shall have the right, at such Holder's
option, at any time prior to the close of business on the date set forth in the
Officers' Certificate delivered pursuant to Section 301 hereof (or if such
Convertible Security is called for redemption or submitted for repayment, then
in respect of such Convertible Security to and including but not after the close
of business on the Redemption or Repayment Date, as the case may be, unless the
Company shall default in the payment due) to convert the principal amount of any
such Convertible Security, or, in the case of any Convertible Security of a
denomination greater than $1,000, any portion of such principal which is $1,000
or an integral multiple thereof, into that number of fully paid and
nonassessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Convertible Security or portion
thereof surrendered for conversion by the Conversion Price, by surrender of the
Convertible Security so to be converted in whole or in part in the manner
provided in Section 1903. Such conversion shall be effected by the Company.

         Section 1903. Exercise of Conversion Privilege; Delivery of Common
Stock on Conversion; No Adjustment for Interest or Dividends.

         In order to exercise the conversion privilege, the Holder of any
Convertible Security to be converted in whole or in part shall surrender such
Convertible Security at an office or agency maintained by the Company pursuant
to Section 1002, accompanied by the funds, if any, required by the last
paragraph of this Section, together with written notice of conversion, in the
form provided on the Convertible Securities, that the Holder elects to convert
such Convertible Security or the portion thereof specified in said notice. Such
notice shall also state the name or names (with address) in which the
certificate or certificates for shares of Common Stock which shall be
deliverable on such conversion shall be registered, and shall be accompanied by
transfer taxes, if required pursuant to Section 1908. Each Convertible Security
surrendered for conversion shall, unless the shares deliverable on conversion
are to be registered in the same name as the registration of such Convertible
Security, be duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the Holder or such Holder's duly
authorized attorney.

         As promptly as practicable after the surrender of such Convertible
Security and the receipt of such notice and funds, if any, as aforesaid, the
Company shall deliver at such office or agency to such Holder, or on such
Holder's written order, a certificate or certificates for the number of full
shares deliverable upon the conversion of such Convertible Security or portion
thereof in accordance with the provisions of this Article and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion as provided in Section 1904. In case any Convertible
Security of a denomination greater than $1,000 shall be surrendered for partial
conversion and subject to Section 302, the Company shall execute and the Trustee
shall authenticate and deliver to or upon the written order of the Holder of the
Convertible Security so surrendered, without charge to such Holder, a new
Convertible Security or Convertible Securities in authorized denominations in an

                                       107



aggregate principal amount equal to the unconverted portion of the surrendered
Convertible Security.

         Each conversion shall be deemed to have been effected on the date on
which such Convertible Security shall have been surrendered (accompanied by the
funds, if any, required by the last paragraph of this Section) and such notice
shall have been received by the Company, as aforesaid, and the person in whose
name any certificate or certificates for shares of Common Stock shall be
registrable upon such conversion shall be deemed to have become on said date the
holder of record of the shares represented thereby; provided however, that any
such surrender on any date when the stock transfer books of the Company shall be
closed shall constitute the person in whose name the certificates are to be
registered as the record holder thereof for all purposes on the next succeeding
day on which stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date upon which such Convertible Security
shall have been surrendered.

         Any Convertible Security or portion thereof surrendered for conversion
during the period from the close of business on the Regular Record Date for any
Interest Payment Date to the opening of business on such Interest Payment Date
shall (unless such Convertible Security or portion thereof being converted shall
have been called for redemption or submitted for repayment on a date in such
period) be accompanied by payment, in legal tender or other funds acceptable to
the Company, of an amount equal to the interest otherwise payable on such
Interest Payment Date on the principal amount being converted; provided,
however, that no such payment need be made if there shall exist at the time of
conversion a default in the payment of interest on the Convertible Securities.
An amount equal to such payment shall be paid by the Company on such Interest
Payment Date to the Holder of such Convertible Security on such Regular Record
Date, provided, however, that if the Company shall default in the payment of
interest on such Interest Payment Date, such amount shall be paid to the person
who made such required payment. Except as provided above in this Section, no
adjustment shall be made for interest accrued on any Convertible Security
converted or for dividends on any shares issued upon the conversion of such
Convertible Security as provided in this Article.

         Section 1904. Cash Payments in Lieu of Fractional Shares.

         No fractional shares of Common Stock or scrip representing fractional
shares shall be delivered upon conversion of Convertible Securities. If more
than one Convertible Security shall be surrendered for conversion at one time by
the same Holder, the number of full shares which shall be deliverable upon
conversion shall be computed on the basis of the aggregate principal amount of
the Convertible Securities (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
deliverable upon the conversion of any Convertible Security or Convertible
Securities, the Company shall make an adjustment therefor in cash at the current
market value of such fractional share of stock. The market value of a share of
Common Stock shall be the Closing Price on the Business Day immediately
preceding the day on which the Convertible Securities (or specified portions
thereof) are deemed to have been converted.

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         Section 1905. Conversion Price.

         The Conversion Price shall be as specified in the form of Convertible
Security hereinabove set forth, subject to adjustment as provided in this
Article.

         Section 1906. Adjustment to Conversion Price.

         The Conversion Price shall be adjusted from time to time as follows:

                       (a)      In case the Company shall (i) pay a dividend or
         make a distribution on the Common Stock in shares of its capital stock
         (whether shares of Common Stock or of capital stock of any other
         class), (ii) subdivide or reclassify its outstanding Common Stock into
         a greater number of securities (including Common Stock), or (iii)
         combine or reclassify its outstanding Common Stock into a smaller
         number of securities (including Common Stock), the Conversion Price in
         effect immediately prior thereto shall be adjusted so that the Holder
         of any Convertible Security thereafter surrendered for conversion shall
         be entitled to receive the number of shares of capital stock of the
         Company which such Holder would have owned or have been entitled to
         receive after the happening of any of the events described above had
         such Convertible Security been converted immediately prior to the
         happening of such event. An adjustment made pursuant to this subsection
         (a) shall become effective immediately after the record date in the
         case of a dividend and shall become effective immediately after the
         effective date in the case of a subdivision or combination. If, as a
         result of an adjustment made pursuant to this subsection (a), the
         Holder of any Convertible Security thereafter surrendered for
         conversion shall become entitled to receive shares of two or more
         classes of capital stock of the Company, the Board of Directors of the
         Company (whose determination shall be conclusive and shall be described
         in a written statement filed with the Trustee and any conversion agent)
         shall determine the allocation of the adjusted Conversion Price between
         or among shares of such classes of capital stock.

                       In the event that at any time, as a result of an
         adjustment made pursuant to this subsection (a) of this Section 1906,
         the Holder of any Convertible Security thereafter converted shall
         become entitled to receive any shares or other securities of the
         Company other than shares of Common Stock, thereafter the number of
         such other shares so received upon conversion of any Convertible
         Security shall be subject to adjustment from time to time in a manner
         and on terms as nearly equivalent as practicable to the provisions with
         respect to the shares of Common Stock contained in this Section 1906,
         and other provisions of this Article XIX with respect to the shares of
         Common Stock shall apply on like terms to any such other shares or
         other securities.

                  (b)      In case the Company shall fix a record date for the
         issuance of rights or warrants to all holders of its Common Stock (or
         securities convertible into Common Stock) entitling them (for a period
         expiring within 45 days after such record date) to subscribe for or
         purchase Common Stock at a price per share (or a conversion price per
         share) less than the

                                      109



         current market price per share of Common Stock (as defined in
         subsection (d) below) at such record date, the Conversion Price in
         effect immediately prior thereto shall be adjusted so that the same
         shall equal the price determined by multiplying the Conversion Price in
         effect immediately prior to such record date by a fraction of which the
         numerator shall be the number of shares of Common Stock outstanding on
         such record date plus the number of shares which the aggregate offering
         price of the total number of shares so offered (or the aggregate
         initial conversion price of the convertible securities so offered)
         would purchase at such current market price, and of which the
         denominator shall be the number of shares of Common Stock outstanding
         on such record date plus the number of additional shares of Common
         Stock offered for subscription or purchase (or into which the
         convertible securities so offered are initially convertible). Such
         adjustment shall be made successively whenever such a record date is
         fixed, and shall become effective immediately after such record date.
         In determining whether any rights or warrants entitle the holders to
         subscribe for or purchase shares of Common Stock at less than such
         current market price, and in determining the aggregate offering price
         of such shares, there shall be taken into account any consideration
         received by the Company for such rights or warrants, the value of such
         consideration, if other than cash, to be determined by the Board of
         Directors of the Company. Common Stock owned by or held for the account
         of the Company or any majority owned subsidiary shall not be deemed
         outstanding for the purpose of any adjustment required under this
         subsection (b).

                  (c)      In case the Company shall fix a record date for
         making a distribution to all holders of its Common Stock evidences of
         its indebtedness or assets (excluding regular quarterly or other
         periodic or recurring cash dividends or distributions and cash
         dividends or distributions paid from retained earnings of the Company
         or dividends or distributions referred to in subsection (a) above) or
         rights or warrants to subscribe or purchase (excluding those referred
         to in subsection (b) above), then in each such case the Conversion
         Price shall be adjusted so that the same shall equal the price
         determined by multiplying the Conversion Price in effect immediately
         prior to such record date by a fraction of which the numerator shall be
         the current market price per share (as defined in subsection (d) below)
         of the Common Stock on such record date less the then fair market value
         (as determined by the Board of Directors of the Company whose
         determination shall be conclusive, and described in a certificate filed
         with the Trustee) of the portion of the assets or evidences of
         indebtedness so distributed or of such rights or warrants applicable to
         one share of Common Stock, and the denominator shall be the current
         market price per share (as defined in subsection (d) below) of the
         Common Stock. Such adjustment shall be made successively whenever such
         a record date is fixed and shall become effective immediately after
         such record date. Notwithstanding the foregoing, in the event that the
         Company shall distribute any rights or warrants to acquire capital
         stock ("Rights") pursuant to this subsection (c), the distribution of
         separate certificates representing such Rights subsequent to their
         initial distribution (whether or not such distribution shall have
         occurred prior to the date of the issuance of such Convertible
         Securities) shall be

                                       110



         deemed to be the distribution of such Rights for purposes of this
         subsection (c); provided that the Company may, in lieu of making any
         adjustment pursuant to this subsection (c) upon a distribution of
         separate certificates representing such Rights, make proper provision
         so that each Holder of such Convertible Security who converts such
         Convertible Security (or any portion thereof) (i) before the record
         date for such distribution of separate certificates shall be entitled
         to receive upon such conversion shares of Common Stock issued with
         Rights and (ii) after such record date and prior to the expiration,
         redemption or termination of such Rights shall be entitled to receive
         upon such conversion, in addition to the shares of Common Stock
         issuable upon such conversion, the same number of such Rights as would
         a holder of the number of shares of Common Stock that such Convertible
         Security so converted would have entitled the holder thereof to
         purchase in accordance with the terms and provisions of and applicable
         to the Rights if such Convertible Security were converted immediately
         prior to the record date for such distribution. Common Stock owned by
         or held for the account of the Company or any majority owned subsidiary
         shall not be deemed outstanding for the purpose of any adjustment
         required under this subsection (c).

                  (d)      For the purpose of any computation under subsection
         (b) and (c) above, the current market price per share of Common Stock
         at any date shall be deemed to be the average of the daily Closing
         Prices for the thirty consecutive days (which are not legal holidays as
         defined in Section 113) commencing forty-five days (which are not legal
         holidays as defined in Section 113) before the day in question. The
         Closing Price for any day shall be (i) if the Common Stock is listed or
         admitted for trading on any national securities exchange, the last sale
         price (regular way), or the average of the closing bid and ask prices
         if no sale occurred, of Common Stock on the principal securities
         exchange on which the Common Stock is listed, or, if not listed or
         admitted to trading on any national securities exchange, on the
         National Market System of the National Association of Securities
         Dealers, Inc. Automated Quotations System ("NASDAQ"), (ii) if not
         listed or quoted as described in (i), the mean between the closing high
         bid and low asked quotations of Common Stock reported by NASDAQ, or any
         similar system or automated dissemination of quotations of securities
         prices then in common use, if so quoted, or (iii) if not quoted as
         described in clause (ii), the mean between the high bid and low asked
         quotations for Common Stock as reported by the National Quotation
         Bureau Incorporated if at least two securities dealers have inserted
         both bid and asked quotations for Common Stock on at least 5 of the 10
         preceding days. If none of the conditions set forth above is met, the
         Closing Price of Common Stock on any day or the average of such Closing
         Prices for any period shall be the fair market value of Common Stock as
         determined by a member firm of the New York Stock Exchange, Inc.
         selected by the Company.

                  (e)      (i) Nothing contained herein shall be construed to
         require an adjustment in the Conversion Price as a result of the
         issuance of Common Stock pursuant to, or the granting or exercise of
         any rights under, the Popular, Inc. Dividend Reinvestment Plan.

                                       111



                       (ii) In addition, no adjustment in the Conversion Price
         shall be required unless such adjustment would require an increase or
         decrease of at least 1% in such price; provided, however, that any
         adjustments which by reason of this subsection (e)(ii) are not required
         to be made shall be carried forward and taken into account in any
         subsequent adjustment, further provided, however, that any adjustments
         which by reason of this subsection (e)(ii) are not otherwise required
         to be made shall be made no later than 3 years after the date on which
         occurs an event that requires an adjustment to be made or carried
         forward.

                       (iii) All calculations under this Article XIX shall be
         made to the nearest cent or to the nearest one-hundredth of a share, as
         the case may be. Anything in this Section 1906 to the contrary
         notwithstanding, the Company shall be entitled to make such reductions
         in the Conversion Price, in addition to those required by this Section
         1906, as it in its discretion shall determine to be advisable in order
         that any stock dividends, subdivision of shares, distribution of rights
         to purchase stock or securities, or distribution of securities
         convertible into or exchangeable for stock hereafter made by the
         Company to its shareholders shall not be taxable.

                  (f)      Whenever the Conversion Price is adjusted, as herein
         provided, the Company shall promptly file with the Trustee and any
         conversion agent other than the Trustee an Officers' Certificate
         setting forth the Conversion Price after such adjustment and setting
         forth a brief statement of the facts requiring such adjustment.
         Promptly after delivery of such certificate, the Company shall prepare
         a notice of such adjustment of the Conversion Price setting forth the
         adjusted Conversion Price and the date on which such adjustment becomes
         effective and shall mail such notice of such adjustment of the
         Conversion Price to the Holder of each Convertible Security at such
         Holder's last address appearing on the Security Register provided for
         in Section 305 of this Indenture.

                  (g)      In any case in which this Section 1906 provides that
         an adjustment shall become effective immediately after a record date
         for an event, the Company may defer until the occurrence of such event
         (i) delivering to the Holder of any Convertible Security converted
         after such record date and before the occurrence of such event the
         additional shares of Common Stock deliverable upon such conversion by
         reason of the adjustment required by such event over and above the
         Common Stock deliverable upon such conversion before giving effect to
         such adjustment and (ii) paying to such Holder any amount in cash in
         lieu of any fraction pursuant to Section 1904, provided, however, that
         the Company shall deliver to such Holder a due bill or other
         appropriate instrument evidencing such Holder's rights to receive such
         additional shares, and such cash, upon the occurrence of the event
         requiring such adjustment. If such event does not occur, no adjustments
         shall be made pursuant to this Section 1906.

                                       112



         Section 1907. Effect of Reclassification, Consolidation, Merger or
Sale.

         If any of the following events occur, namely (i) any reclassification
or change of outstanding shares of Common Stock deliverable upon conversion of
the Convertible Securities (other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination, but including any change in the shares of Common
Stock into two or more classes or series of securities), (ii) any consolidation
or merger to which the Company is a party (other than a consolidation or merger
in which the Company is the continuing corporation and which does not result in
any reclassification of, or change (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination) in, outstanding shares of its Common Stock) or
(iii) any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation; then the Company, or
such successor or purchasing corporation, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall conform to the Trust Indenture
Act as in force at the date of execution of such supplemental indenture and
comply with the provisions of Article IX) providing that each Convertible
Security shall be convertible into the kind and amount of shares of stock and
other securities or property, including cash, receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of a number of shares of Common Stock deliverable upon conversion of such
Convertible Securities immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The Company shall
cause notice of the execution of such supplemental indenture to be mailed to
each holder of Convertible Securities, at his address appearing on the Security
Register provided for in Section 305 of this Indenture.

         The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers and sales.

         Section 1908. Taxes on Shares Issued.

         The delivery of stock certificates on conversions of Convertible
Securities shall be made without charge to the Holder converting a Convertible
Security for any tax in respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the delivery of stock registered in any name other than of
the Holder of any Convertible Security converted, and the Company shall not be
required to deliver any such stock certificate unless and until the person or
persons requesting the delivery thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.

         Section 1909. Shares to be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock.

         The Company covenants that all shares of Common Stock which may be
delivered upon conversion of Convertible Securities will upon delivery be fully

                                       113



paid and nonassessable by the Company and free from all taxes, liens and charges
with respect to the issue thereof.

         The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Convertible Securities hereunder require
registration with or approval of any governmental authority under any Federal or
state law before such shares may be validly delivered upon conversion, the
Company will in good faith and as expeditiously as possible endeavor to secure
such registration or approval, as the case may be.

         The Company further covenants that it will, if permitted by the rules
of the New York Stock Exchange, list and keep listed for so long as the Common
Stock shall be so listed on such exchange, upon official notice of issuance, all
Common Stock deliverable upon conversion of the Convertible Securities.

         Section 1910. Trustee Not Responsible.

         Neither the Trustee nor any authenticating agent nor any conversion
agent shall at any time be under any duty or responsibility to any Holder of
Convertible Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same. Neither the Trustee nor any authenticating agent nor any conversion agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at any time be delivered upon the conversion of any Convertible Security,
and neither the Trustee nor any authenticating agent nor any conversion agent
makes any representation with respect thereto. Subject to the provisions of
Section 601, neither the Trustee nor any authenticating agent nor any conversion
agent shall be responsible for any failure of the Company to deliver any shares
of Common Stock or stock certificates or other securities or property or cash
upon the surrender of any Convertible Security for the purpose of conversion or
for any failure of the Company to comply with any of the covenants of the
Company contained in this Article.

         Section 1911. Notice to Holders Prior to Certain Actions.

         In case:

                  (a)      the Company shall declare a dividend (or any other
         distribution) on the Common Stock (other than in cash out of its
         current or retained earnings); or

                  (b)      the Company shall authorize the granting to the
         holders of the Common Stock of rights or warrants to subscribe for or
         purchase any share of any class or any other rights or warrants; or

                  (c)      of any reclassification or change of the Common Stock
         (other than a subdivision or combination of its outstanding Common
         Stock, or a change in par value, or from par value to no par value, or
         from no par value to par value) or of any consolidation or merger to
         which the Company

                                       114



         is a party and for which approval of any stockholders of the Company is
         required or of the sale or transfer of all or substantially all of the
         assets of the Company; or

                  (d)      of the voluntary or involuntary dissolution,
         liquidation or winding up of the Company;

the Company shall cause to be filed with the Trustee and the Company shall cause
to be mailed to each holder of Convertible Securities at his address appearing
on the Security Register, provided for in Section 305 of this Indenture, as
promptly as possible but in any event no less than fifteen days prior to the
applicable date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined, or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up or any adjustment in the Conversion Price required by
this Article XIX.

         Section 1912. Covenant to Reserve Shares.

         The Company covenants that it will at all times reserve and keep
available, free from pre-emptive rights, out of its authorized but unissued
Common Stock, such number of shares of Common Stock as shall then be deliverable
upon the conversion of all outstanding Convertible Securities.

                                       115



         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                          POPULAR, INC.

                                          By __________________________________

[CORPORATE SEAL]

Attest:

________________________________
Secretary

                                          _____________________________________,
                                          not in its individual capacity but
                                          solely as Trustee

                                          By ___________________________________
                                             Its _______________________________

[CORPORATE SEAL]

Attest:

________________________________

Affidavit No.: ______

         Sworn and subscribed to before me by ______________, of legal age,
married, executive, and a resident of __________, Puerto Rico, in his capacity
as ___________________________, personally known to me, in San Juan, Puerto
Rico, this ____ day of ___________, 2003.

                                          ______________________________________
                                                       Notary Public

                                       116



STATE OF __________________   )
                          )SS.
COUNTY OF _________________   )

         On the _____ day of _____________, 2003, before me personally came
_____________________________, to me known, who, being duly sworn, did depose
_____________________________ and say that he resides at ________________
___________________; that he is __________________ of _________________________,
a national banking association described in and which executed the above
instrument; that he knows the seal of said corporation; that it was so affixed
pursuant to the authority of the Board of Directors of said corporation; and
that he signed his name thereto pursuant to like authority.

                                          ______________________________________
                                                       Notary Public

                                       117



                                                                     EXHIBIT A-1

                [FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP BY A
              NON-UNITED STATES PERSON OR BY CERTAIN OTHER PERSONS]

                                   CERTIFICATE

                                  POPULAR, INC.

                     [INSERT TITLE OR SUFFICIENT DESCRIPTION
                       OF DEBT SECURITIES TO BE DELIVERED]


         Reference is hereby made to the Indenture dated as of _______________,
2003 (the "Indenture") between Popular, Inc. and Bank One Trust Company, N.A.,
as trustee (the "Trustee"), covering the above-captioned Debt Securities. This
is to certify that as of the date hereof, __________ principal amount of Debt
Securities credited to you for our account (i) is owned by persons that are not
United States Persons, as defined below; (ii) is owned by United States Persons
that are (a) foreign branches of United States financial institutions (as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial
institutions") purchasing for their own account or for resale, or (b) United
States Persons who acquired the Debt Securities through foreign branches of
United States financial institutions and who hold the Debt Securities through
such United States financial institutions on the date hereof (and in either case
(a) or (b), each such United States financial institution encloses herewith a
certificate in the form of Exhibit A-2 to the Indenture); or (iii) is owned by
United States or foreign financial institutions for purposes of resale during
the restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), which United States or foreign financial institutions
described in clause (iii) above (whether or not also described in clause (i) or
(ii)) certify that they have not acquired the Debt Securities for purposes of
resale directly or indirectly to a United States Person or to a person within
the United States or its possessions.

         [Insert if certificate does not relate to an interest payment--We
undertake to advise you by tested telex followed by written confirmation if the
above statement as to beneficial ownership is not correct on the date of
delivery of the above-captioned Debt Securities in bearer form as to all of such
Debt Securities with respect to such of said Debt Securities as then appear in
your books as being held for our account.] We understand that this certificate
is required in connection with United States tax laws. We irrevocably authorize
you to produce this certificate or a copy hereof to any interested party in any
administrative or legal proceedings with respect to the matters covered by this
certificate. "United States Person" shall mean a citizen or resident of the
United States of America (including the District of Columbia), a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof or an estate or trust that is
subject to United States Federal income taxation regardless of the source of its
income.



         [This certificate excepts and does not relate to principal amount of
Debt Securities credited to you for our account and to which we are not now able
to make the certification set forth above. We understand that definitive Debt
Securities cannot be delivered and interest cannot be paid until we are able to
so certify with respect to such principal amount of Debt Securities.]*

Dated:___________________________

[To be dated on or after
_____________________________
(the date determined as
provided in the Indenture)]

                                          [Name of Person Entitled to Receive
                                          Bearer Security]

                                          ______________________________________
                                                  (Authorized Signatory)

                                          Name: ________________________________
                                          Title: _______________________________

______________________________

*  Delete if inappropriate.

                                      A-1-2



                                                                     EXHIBIT A-2

                       [FORM OF CERTIFICATE OF STATUS AS A
            FOREIGN BRANCH OF A UNITED STATES FINANCIAL INSTITUTION]

                                   CERTIFICATE

                                  POPULAR, INC.

                     [INSERT TITLE OR SUFFICIENT DESCRIPTION
                       OF DEBT SECURITIES TO BE DELIVERED]

         Reference is hereby made to the Indenture dated as of _______________,
2003 (the "Indenture"), between Popular, Inc. and Bank One Trust Company, N.A.,
as trustee, relating to the offering of the above-captioned Debt Securities (the
"Debt Securities"). Unless herein defined, terms used herein have the same
meaning as given to them in the Indenture.

         The undersigned represents that it is a branch located outside the
United States of a United States securities clearing organization, bank or other
financial institution (as defined in U.S. Treasury Regulation Section
1.165-12(c)(1)(v)) that holds customers' securities in the ordinary course of
its trade or business and agrees, and authorizes you to advise the issuer or the
issuer's agent, that it will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986 and the
regulations thereunder and is not purchasing for resale directly or indirectly
to a United States Person or to a person within the United States or its
possessions. We undertake to advise you by tested telex followed by written
confirmation if the statement in the immediately preceding sentence is not
correct on the date of delivery of the above-captioned Debt Securities in bearer
form.

         We understand that this certificate is required in connection with the
United States tax laws. We irrevocably authorize you to produce this certificate
or a copy hereof to any interested party in any administrative or legal
proceedings with respect to the matters covered by this certificate.

Dated:___________________________

[To be dated on or after
_____________________________
(the date determined as
provided in the Indenture)]

                                          [Name of Person Entitled to Receive
                                          Security]

                                          ______________________________________
                                                  (Authorized Signatory)


                                          Name: ________________________________
                                          Title: _______________________________

                                      A-2-2



                                                                       EXHIBIT B

          [FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND CEDEL S.A.
            IN CONNECTION WITH THE EXCHANGE OF ALL OR A PORTION OF A
                         TEMPORARY GLOBAL SECURITY OR TO
                       OBTAIN INTEREST PRIOR TO EXCHANGE]

                                   CERTIFICATE

                                  POPULAR, INC.

                     [INSERT TITLE OR SUFFICIENT DESCRIPTION
                       OF DEBT SECURITIES TO BE DELIVERED]

         We refer to that portion, _______________________________, of the
Global Security representing the above-captioned issue [which is herewith
submitted to be exchanged for definitive Debt Securities]* [for which we are
seeking to obtain payment of interest]* (the "Submitted Portion"). This is to
certify, pursuant to the Indenture dated as of ______________, 2003 (the
"Indenture") between Popular, Inc. and Bank One Trust Company, N.A., as trustee
(the "Trustee"), that we have received in writing, by tested telex or by
electronic transmission from member organizations with respect to each of the
persons appearing in our records as being entitled to a beneficial interest in
the Submitted Portion a Certificate of Beneficial Ownership by a Non-United
States Person or by Certain Other Persons [and, in some cases, a Certificate of
Status as a Foreign Branch of a United States Financial Institution, authorizing
us to inform the issuer or the issuer's agent that it will comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986 and the regulations thereunder]* substantially in the form of Exhibit A-1
[and A-2]* to the Indenture.

         We hereby request that you deliver to the office of ___________________
__________________ in _________________ definitive Bearer Securities in the
denominations on the attached Schedule A.

         We further certify that as of the date hereof we have not received any
notification from any of the persons giving such certificates to the effect that
the statements made by them with respect to any part of the Submitted Portion
are no longer true and cannot be relied on as of the date hereof.

Dated:___________________________

                                          [MORGAN GUARANTY TRUST COMPANY
                                          OF NEW YORK, BRUSSELS OFFICE,
                                          as Operator of the Euroclear System]
                                          [CEDEL S.A.]
______________________________

*  Delete if inappropriate.

                                          By ___________________________________

                                       B-2

EX-4.2

                                                                     EXHIBIT 4.2

                               [FACE OF DEBENTURE]


         The following legend applies if this Security is a Global Security:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or such other entity as is requested by an authorized representative
of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.

         This Security is not a deposit or other obligation of a depository
institution and is not insured by the Federal Deposit Insurance Corporation, the
Bank Insurance Fund or any other governmental agency.

CUSIP NO. __________                             PRINCIPAL AMOUNT: $___________
REGISTERED NO. _____

                                  POPULAR, INC.

                _____% JUNIOR SUBORDINATED DEBENTURES, SERIES ___
                             DUE _____________, 20__

         POPULAR, INC., a corporation duly organized and existing under the laws
of the Commonwealth of Puerto Rico (hereinafter called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ______________________________, or
registered assigns, the principal sum of _______________________________________
($____________) on _____________, 20__. The Company further promises to pay
interest on the principal sum from _____________, 2003 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for
monthly (subject to deferral as set forth herein) on the first day of each month
of each year commencing _____________, 2003 at the rate of _____% per annum,
together with Additional Sums, if any, as provided in Section 1007 of the
Indenture, until the principal hereof is paid or made available for payment;
provided, however, that any overdue installment of interest (after giving effect
to any Extension Period permitted by this Security) shall bear Additional
Interest at the rate of _____% per annum (to the extent that the payment of such
interest shall be legally enforceable), compounded monthly, from the date such
installment was due until it is paid or made available for payment. The amount
of interest payable for any period less than a full monthly interest period
shall be computed on the basis of a 360-day year of twelve 30-day months and the
actual days elapsed in a partial month in such period. The amount of interest
payable for any full monthly interest period shall be computed by dividing the
applicable rate per annum by twelve. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the 15th calendar day (whether or
not a Business





Day, as defined below) next preceding such Interest Payment Date. If an Interest
Payment Date is not a Business Day, interest on this Security shall be payable
on the next day that is a Business Day, with the same force and effect as if
made on such Interest Payment Date, and without any interest or other payment
with respect to the delay. "Business Day" as used hereinabove is a day other
than a Saturday, a Sunday or any other day on which banking institutions in San
Juan, Puerto Rico, Wilmington, Delaware or New York, New York are authorized or
required by law, regulation or executive order to remain closed or and
customarily closed.

         Any interest not punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.

         So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time during the term of this Security, from
time to time to defer the payment of interest on this Security for up to 60
consecutive monthly interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Period the Company
shall have the right to make a partial payment of interest on any Interest
Payment Date, at the end of which the Company shall pay all interest then
accrued and unpaid including any Additional Interest, as provided below;
provided, however, that no Extension Period shall extend beyond the Maturity of
the principal of this Security and no such Extension Period may end other than
at the end of a full monthly interest period; and provided, further, however,
that during any such Extension Period, the Company shall not (i) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company that rank pari passu in all
respects with or junior in interest to this Security (except for any partial
payments of interest with respect to and permitted under the Securities of this
series), or (ii) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors, consultants or
independent contractors, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange, redemption
or conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the Company) for any other class or series of
the Company's capital stock or of any class or series of the Company's
indebtedness for any class or series of the Company's capital stock, (c) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such



                                       2


capital stock or the security being converted or exchanged, (d) any declaration
of a dividend in connection with any Rights Plan, or the issuance of rights,
stock or other property under any Rights Plan, or the redemption or repurchase
of rights pursuant thereto, (e) payments by the Company under the Guarantee
Agreement, or (f) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Company may extend such
Extension Period and further defer the payment of interest, provided that no
Extension Period shall exceed 60 consecutive monthly interest payment periods,
extend beyond the Maturity of the principal of this Security or end other than
at the end of a full monthly interest period. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Company may elect
to begin a new Extension Period, subject to the above conditions. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional Interest
(to the extent that the payment of such interest shall be legally enforceable)
at the rate of _____% per annum, compounded monthly and calculated as set forth
in the first paragraph of this Security, from the dates on which amounts would
otherwise have been due and payable until paid or made available for payment.
The Company shall give the Holder of this Security and the Trustee notice of its
election to begin any Extension Period at least one Business Day prior to the
next succeeding Interest Payment Date on which interest on this Security would
be payable but for such deferral or, so long as such Securities are held by or
on behalf of Popular Capital Trust __, at least one Business Day prior to the
earlier of (i) the next succeeding date on which Distributions on the Capital
Trust Securities of such Issuer Trust would be payable but for such deferral,
and (ii) the date on which the Property Trustee of such Issuer Trust is required
to give notice to holders of such Capital Trust Securities of the record date or
the date such Distributions are payable.

         Payment of interest, including Additional Interest, on this Security
will be made in immediately available funds at the office or agency of the
Company maintained for that purpose in the City of San Juan, Puerto Rico, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however,
that, at the option of the Company, payment of interest may be paid by check
mailed to the Person entitled thereto at such Person's last address as it
appears in the Security Register or, upon written request of a Holder of
$1,000,000 or more in aggregate principal amount of Securities of this series
not less than 15 calendar days prior to the applicable Interest Payment Date, by
wire transfer to such account as may have been designated by such Person.
Payment of principal of and interest, including Additional Interest, on this
Security at Maturity will be made against presentation of this Security at the
office or agency of the Company maintained for that purpose in the City of San
Juan, Puerto Rico.

         Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.


                                       3


         Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature or its duly
authorized agent under the Indenture referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

DATED:
      -------------------------
                                             POPULAR, INC.



                                             By:
                                                --------------------------------

[SEAL]

                                             Attest:
                                                    ----------------------------
                                                            Secretary

TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities
of the series designated
therein referred to in the
within-mentioned Indenture.

Bank One Trust Company, N.A.,
as Trustee


By:
   -----------------------------------
          Authorized Signature

OR

________________________________, as
Authenticating Agent for the Trustee



By:
   -----------------------------------
          Authorized Signature



                                       4


                             [REVERSE OF DEBENTURE]


                                  POPULAR, INC.

                _____% JUNIOR SUBORDINATED DEBENTURES, SERIES ___
                             DUE _____________, 20__


         This Security is one of a duly authorized issue of junior subordinated
securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an indenture dated as of _____________, 2003,
as amended or supplemented from time to time (herein called the "Indenture"),
between the Company and Bank One Trust Company, N.A., as Trustee (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $_______________. All
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture unless otherwise defined in this
Security.

         Subject to any required prior approval of the Primary Federal
Regulator, the Company may at any time, at its option, on or after
_____________, 20__, and subject to the terms and conditions of Article Eleven
of the Indenture, redeem the Securities of this series in whole at any time or
in part from time to time, at a Redemption Price equal to 100% of the principal
amount thereof, together, in the case of any such redemption, with accrued but
unpaid interest, including any Additional Interest, to but excluding the
Redemption Date.

         In addition, upon the occurrence and during the continuation of a Tax
Event, an Investment Company Event or a Capital Treatment Event in respect of
Popular Capital Trust __, the Company may, at its option, at any time within 90
days of the occurrence and during the continuation of such Tax Event, Investment
Company Event or Capital Treatment Event, as the case may be, subject to any
required prior approval of the Primary Federal Regulator, redeem the Securities
of this series, in whole but not in part, subject to the terms and conditions of
Article Eleven of the Indenture, at a Redemption Price equal to 100% of the
principal amount thereof, together, in the case of any such redemption, with
accrued but unpaid interest, including any Additional Interest, to but excluding
the Redemption Date.

         The Securities of this series are not subject to repayment at the
option of the Holder hereof. The Securities of this series will not be entitled
to any sinking fund.

         The indebtedness evidenced by the Securities of this series is, to the
extent and in the manner set forth in the Indenture, subordinate and subject in
right of payment to the prior payment in full of the principal of and premium,
if any, and interest on all Senior Debt of the Company, and each Holder of the


                                       5


Securities of this series, by accepting the same, agrees to and shall be bound
by the provisions of the Indenture with respect hereto. The Securities of this
series shall rank on a parity with all Trust Related Securities, including
without limitation, the Guarantee Agreement related to the _____% Capital
Securities of Popular Capital Trust __.

         If an Event of Default, as defined in the Indenture, with respect to
Securities of this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected, acting together. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of all series at the time Outstanding
affected by certain provisions of the Indenture, acting together, on behalf of
the Holders of all Securities of such series, to waive compliance by the Company
with those provisions of the Indenture. Certain past defaults under the
Indenture and their consequences may be waived under the Indenture by the
Holders of a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series.
All of the rights of the Holders set forth in this paragraph are subject to the
rights of the holders of Capital Trust Securities as set forth in the Indenture.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

         The provisions contained in Section 403 and Article Seventeen of the
Indenture for defeasance of the entire indebtedness on this Security and certain
restrictive covenants and certain Events of Default do not apply to this
Security. The provisions contained in Section 401 of the Indenture for
defeasance of the entire indebtedness on this Security in certain circumstances
shall apply to this Security.

         Upon due presentment for registration of transfer of this Security at
the office or agency of the Company in the City of San Juan, Puerto Rico, a new
Security or Securities of this series in authorized denominations of $___ or
integral multiples thereof for an equal aggregate principal amount will be
issued to the transferee in exchange herefor, as provided in the Indenture and
subject to the limitations provided therein and to the limitations described
below, without charge except for any tax or other governmental charge imposed in
connection therewith.

         If this Security is a Global Security, this Security is exchangeable
for definitive Securities in registered form only if (x) the Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for this


                                       6


Security or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, and a
successor depositary is not appointed within 90 days, (y) the Company in its
sole discretion determines that this Security shall be exchangeable for
definitive Securities in registered form and notifies the Trustee thereof, or
(z) an Event of Default with respect to the Securities represented hereby has
occurred and is continuing. If this Security is exchangeable pursuant to the
preceding sentence, it shall be exchangeable for definitive Securities in
registered form, bearing interest, including Additional Interest, at the same
rate, having the same date of issuance, redemption provisions, Stated Maturity
and other terms and of authorized denominations aggregating a like amount.

         If this Security is a Global Security, this Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor of the
Depositary or a nominee of such successor. Except as provided above, owners of
beneficial interests in this global Security will not be entitled to receive
physical delivery of Securities in definitive form and will not be considered
the Holders hereof for any purpose under the Indenture.

         Subject to the rights of holders of Senior Debt of the Company set
forth in this Security and the indenture referred to above, no reference herein
to the Indenture and no provision of this Security or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest, including any Additional
Interest, on this Security at the times, place and rate, and in the coin or
currency, herein prescribed, except as otherwise provided in this Security and
except that in the event the Company deposits money or Eligible Instruments as
provided in Section 401 of the Indenture, such payments will be made only from
proceeds of such money or Eligible Instruments.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         No recourse shall be had for the payment of the principal of or the
interest, including Additional Interest, on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.

         The Company and, by its acceptance of this Security or a beneficial
interest herein, the Holder of, and any Person that acquires a beneficial
interest in, this Security, agree that for United States Federal, Puerto Rico,
state and local tax purposes it is intended that this Security constitute
indebtedness.


                                       7


                                  ABBREVIATIONS


         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  --  as tenants in common

TEN ENT  --  as tenants by the entireties

JT TEN   --  as joint tenants with right of survivorship and not as tenants in
             common

UNIF GIFT MIN ACT --  _______________________ Custodian _______________________
                             (Cust)                             (Minor)


Under Uniform Gifts to Minors Act


- ---------------------------------
           (State)

         Additional abbreviations may also be used though not in the above list.

         FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

Please Insert Social Security or
Other Identifying Number of Assignee


- ------------------------------------


- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------

- ------------------------------------------------------------------------------
 (Please print or type name and address including postal zip code of Assignee)

the within Security of POPULAR, INC. and does hereby irrevocably constitute and
appoint __________________ attorney to transfer the said Security on the books
of the Company, with full power of substitution in the premises.

Dated:
      ----------------------------


                                           ------------------------------------

                                           ------------------------------------


                                       8


NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.




                                       9

EX-4.3

                                                                    EXHIBIT 4.3


                              CERTIFICATE OF TRUST
                                       OF
                            POPULAR CAPITAL TRUST I


         THIS CERTIFICATE OF TRUST OF POPULAR CAPITAL TRUST I (the "Trust") is
being duly executed and filed by Bank One Delaware, Inc., a Delaware
corporation, as Delaware Trustee, Bank One Trust Company, N.A., as Property
Trustee, and Jorge A. Junquera and Richard Barrios, each an individual, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act (12
Del. C. Section 3801 et seq.) (the "Act").

         1.       NAME. The name of the statutory trust formed hereby is
                  Popular Capital Trust I.

         2.       DELAWARE TRUSTEE. The name and business address of the
                  trustee of the Trust in the State of Delaware is Bank One
                  Delaware, Inc., Three Christiana Centre, 201 North Walnut
                  Street, Wilmington, Delaware 19801.

         3.       EFFECTIVE DATE. This Certificate of Trust shall be effective
                  upon filing with the Secretary of State of Delaware.

         IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust in accordance with Section 3811(a)(1) of the Act.


                                BANK ONE DELAWARE, INC.,
                                not in its individual capacity but solely
                                as Delaware Trustee


                                By: /s/ Christopher C. Holly
                                   --------------------------------------------
                                Name:  Christopher C. Holly
                                Title: Vice President


                                BANK ONE TRUST COMPANY, N.A.,
                                not in its individual capacity but solely
                                as Property Trustee


                                By: /s/ Christopher C. Holly
                                   --------------------------------------------
                                Name:  Christopher C. Holly
                                Title: Vice President


                                /s/ Jorge A. Junquera
                                -----------------------------------------------
                                Jorge A. Junquera, as Trustee


                                /s/ Richard Barrios
                                -----------------------------------------------
                                Richard Barrios, as Trustee



                              CERTIFICATE OF TRUST
                                       OF
                            POPULAR CAPITAL TRUST II


         THIS CERTIFICATE OF TRUST OF POPULAR CAPITAL TRUST II (the "Trust") is
being duly executed and filed by Bank One Delaware, Inc., a Delaware
corporation, as Delaware Trustee, Bank One Trust Company, N.A., as Property
Trustee, and Jorge A. Junquera and Richard Barrios, each an individual, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act (12
Del. C. Section 3801 et seq.) (the "Act").

         1.       NAME. The name of the statutory trust formed hereby is
                  Popular Capital Trust II.

         2.       DELAWARE TRUSTEE. The name and business address of the
                  trustee of the Trust in the State of Delaware is Bank One
                  Delaware, Inc., Three Christiana Centre, 201 North Walnut
                  Street, Wilmington, Delaware 19801.

         3.       EFFECTIVE DATE. This Certificate of Trust shall be effective
                  upon filing with the Secretary of State of Delaware.

         IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust in accordance with Section 3811(a)(1) of the Act.


                                BANK ONE DELAWARE, INC.,
                                not in its individual capacity but solely
                                as Delaware Trustee


                                By: /s/ Christopher C. Holly
                                   --------------------------------------------
                                Name:  Christopher C. Holly
                                Title: Vice President


                                BANK ONE TRUST COMPANY, N.A.,
                                not in its individual capacity but solely
                                as Property Trustee


                                By: /s/Christopher C. Holly
                                   --------------------------------------------
                                Name:  Christopher C. Holly
                                Title: Vice President


                                /s/ Jorge A. Junquera
                                -----------------------------------------------
                                Jorge A. Junquera, as Trustee


                                /s/ Richard Barrios
                                -----------------------------------------------
                                Richard Barrios, as Trustee



                              CERTIFICATE OF TRUST
                                       OF
                           POPULAR CAPITAL TRUST III


         THIS CERTIFICATE OF TRUST OF POPULAR CAPITAL TRUST III (the "Trust")
is being duly executed and filed by Bank One Delaware, Inc., a Delaware
corporation, as Delaware Trustee, Bank One Trust Company, N.A., as Property
Trustee, and Jorge A. Junquera and Richard Barrios, each an individual, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act (12
Del. C. Section 3801 et seq.) (the "Act").

         1.       NAME. The name of the statutory trust formed hereby is
                  Popular Capital Trust III.

         2.       DELAWARE TRUSTEE. The name and business address of the
                  trustee of the Trust in the State of Delaware is Bank One
                  Delaware, Inc., Three Christiana Centre, 201 North Walnut
                  Street, Wilmington, Delaware 19801.

         3.       EFFECTIVE DATE. This Certificate of Trust shall be effective
                  upon filing with the Secretary of State of Delaware.

         IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust in accordance with Section 3811(a)(1) of the Act.


                                BANK ONE DELAWARE, INC.,
                                not in its individual capacity but solely
                                as Delaware Trustee


                                By: /s/ Christopher C. Holly
                                   --------------------------------------------
                                Name: Christopher C. Holly
                                Title: Vice President


                                BANK ONE TRUST COMPANY, N.A.,
                                not in its individual capacity but solely
                                as Property Trustee


                                By: /s/ Christopher C. Holly
                                   --------------------------------------------
                                Name:  Christopher C. Holly
                                Title: Vice President


                                /s/ Jorge A. Junquera
                                -----------------------------------------------
                                Jorge A. Junquera, as Trustee


                                /s/ Richard Barrios
                                -----------------------------------------------
                                Richard Barrios, as Trustee



                              CERTIFICATE OF TRUST
                                       OF
                            POPULAR CAPITAL TRUST IV


         THIS CERTIFICATE OF TRUST OF POPULAR CAPITAL TRUST IV (the "Trust") is
being duly executed and filed by Bank One Delaware, Inc., a Delaware
corporation, as Delaware Trustee, Bank One Trust Company, N.A., as Property
Trustee, and Jorge A. Junquera and Richard Barrios, each an individual, as
trustees, to form a statutory trust under the Delaware Statutory Trust Act (12
Del. C. Section 3801 et seq.) (the "Act").


         1.       NAME. The name of the statutory trust formed hereby is
                  Popular Capital Trust IV.

         2.       DELAWARE TRUSTEE. The name and business address of the
                  trustee of the Trust in the State of Delaware is Bank One
                  Delaware, Inc., Three Christiana Centre, 201 North Walnut
                  Street, Wilmington, Delaware 19801.

         3.       EFFECTIVE DATE. This Certificate of Trust shall be effective
                  upon filing with the Secretary of State of Delaware.

         IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust in accordance with Section 3811(a)(1) of the Act.


                                BANK ONE DELAWARE, INC.,
                                not in its individual capacity but solely
                                as Delaware Trustee


                                By: /s/ Christopher C. Holly
                                   --------------------------------------------
                                Name: Christopher C. Holly
                                Title: Vice President


                                BANK ONE TRUST COMPANY, N.A.,
                                not in its individual capacity but solely
                                as Property Trustee


                                By: /s/ Christopher C. Holly
                                   --------------------------------------------
                                Name: Christopher C. Holly
                                Title: Vice President


                                /s/ Jorge A. Junquera
                                -----------------------------------------------
                                Jorge A. Junquera, as Trustee


                                /s/ Richard Barrios
                                -----------------------------------------------
                                Richard Barrios, as Trustee

EX-4.4

                                                                    EXHIBIT 4.4


                              DECLARATION OF TRUST
                                      AND
                                TRUST AGREEMENT


         This DECLARATION OF TRUST AND TRUST AGREEMENT, dated as of September
3, 2003 (this "Trust Agreement"), among (i) Popular, Inc., a Puerto Rico
corporation (the "Depositor"); (ii) Bank One Delaware, Inc., as Delaware
Tustee; (iii) Bank One Trust Company, N.A., as Poperty Tustee; and (iv) Jorge
A. Junquera and Richard Barrios, each an individual, as trustees (each of such
trustees in (ii), (iii) and (iv) a "Trustee" and collectively, the "Trustees").
The Depositor and the Trustees hereby agree as follows:

         1.       The trust created hereby (the "Trust") shall be known as
"Popular Capital Trust I" in which name the Trustees, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby,
make and execute contracts, and sue and be sued.

         2.       The Depositor hereby assigns, transfers, conveys and sets
over to the Trust the sum of Ten Dollars ($10.00). The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustees hereby declare that
they will hold the trust estate in trust for the Depositor. It is the intention
of the parties hereto that the Trust created hereby constitute a statutory
trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section
3801, et seq. (the "Statutory Trust Act"), and that this document constitute
the governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Statutory Trust Act.

         3.       The Depositor and the Trustees will enter into an Amended and
Restated Declaration of Trust and Trust Agreement (herein, the "Amended and
Restated Trust Agreement"), satisfactory to each such party and substantially
in the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities (as defined below) and
common securities of the Trust referred to therein. Prior to the execution and
delivery of such Amended and Restated Trust Agreement, the Trustees shall not
have any duty or obligation hereunder or with respect to the trust estate,
except as otherwise required by this Trust Agreement, applicable law or as may
be necessary to obtain prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise. Notwithstanding
the foregoing, the Trustees may take all actions deemed proper and necessary to
effect the transactions contemplated herein.

         4.       The Depositor and the Trustees hereby authorize and direct
the Depositor, as the agent of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement") (including any pre-effective or post- effective
amendments to the 1933 Act Registration Statement) relating to the registration
under the Securities Act of 1933, as amended (the "1933 Act"), of the preferred
securities of the Trust (the "Preferred Securities") and certain other
securities of the Depositor; (b) any preliminary prospectus or prospectus or
supplement thereto relating to the Preferred Securities required to be filed
pursuant to Rule 424 under the 1933 Act; and (c) to the extent deemed advisable
by the Depositor, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under the Securities Exchange Act of 1934, as amended; (ii) to the
extent deemed advisable by the Depositor, to file with one or more national
securities exchanges (each, an "Exchange") or the National Association of
Securities Dealers ("NASD") and execute on behalf of the Trust a listing
application or applications and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("NASDAQ"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; and (iv) to
execute on behalf of the Trust one or more underwriting agreements relating to
the Preferred Securities, among the Trust, the Depositor and the underwriter(s)
named therein, substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In the event that any filing referred to in clauses
(i), (ii) and (iii) above is required by the rules and regulations of the
Commission, any Exchange, the NASD or state securities or blue sky laws to be
executed on behalf of the Trust by one or more of the Trustees, each of the
Trustees, in its or his capacity as a Trustee of the Trust, is hereby
authorized and, to the extent so required, directed to join in any such filing
and to execute on behalf of the Trust any and


                                       1

all of the foregoing, it being understood that Bank One Delaware, Inc. in its
capacity as a Trustee of the Trust shall not be required to join in any such
filing or execute on behalf of the Trust any such document unless required by
the rules and regulations of the Commission, the Exchange or state securities
or blue sky laws. In connection with the filings referred to above, the
Depositor and Jorge A. Junquera and Richard Barrios, each as Trustees and not
in their individual capacities, hereby constitute and appoint Richard L.
Carrion, Jorge A. Junquera and Richard Barrios and each of them, as its and
their true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or such Trustee or in the
Depositor's or such Trustees' name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective amendments) to the
1933 Act Registration Statement and the 1934 Act Registration Statement and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, any Exchange, the NASD and administrators of
the state securities or blue sky laws, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as the Depositor or such Trustee might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their respective substitute or substitutes, shall do
or cause to be done by virtue hereof.

         5.       This Trust Agreement may be executed in one or more
counterparts.

         6.       The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Statutory Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware
and otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee upon thirty (30) days' prior written notice. The Trustees may resign
upon thirty (30) days' prior notice to the Depositor.

         7.       This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to "conflict
of laws" principles).

         8.       (a) The Trustees and their officers, directors, agents and
servants (collectively, the "Fiduciary Indemnified Persons") shall not be
liable, responsible or accountable in damages or otherwise to the Trust, the
Depositor, the Trustees or any holder of the Preferred Securities (the Trust,
the Depositor and any holder of the Preferred Securities being a "Covered
Person") for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by the Fiduciary Indemnified Persons in good
faith on behalf of the Trust and in a manner the Fiduciary Indemnified Persons
reasonably believed to be within the scope of authority conferred on the
Fiduciary Indemnified Persons by this Trust Agreement or by law, except that
the Fiduciary Indemnified Persons shall be liable for any such loss, damage or
claim incurred by reason of the Fiduciary Indemnified Person's gross negligence
or willful misconduct with respect to such acts or omissions.

                  (b)      The Fiduciary Indemnified Persons shall be fully
protected in relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
person as to matters the Fiduciary Indemnified Persons reasonably believe are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which distributions to holders of Preferred
Securities might properly be paid.

                  (c)      The Depositor agrees, to the fullest extent
permitted by applicable law, (i) to indemnify and hold harmless each Fiduciary
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by the Fiduciary
Indemnified Persons by reason of the creation, operation or termination of the
Trust in a manner the Fiduciary Indemnified Persons reasonably believed to be
within the scope of authority conferred on the Fiduciary Indemnified Persons by
this Trust Agreement, except that no Fiduciary Indemnified Persons shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
the Fiduciary Indemnified Persons by reason of gross negligence or willful
misconduct with respect to such acts or omissions,(ii) to advance expenses
(including legal fees) incurred by a Fiduciary Indemnified Person in defending
any claim, demand, action, suit or proceeding, from time to time, prior to the
final disposition of such claim, demand, action, suit or proceeding, upon


                                       2

receipt by the Trust of an undertaking by or on behalf of such Fiduciary
Indemnified Persons to repay such amount if it shall be determined that such
Fiduciary Indemnified Person is not entitled to be indemnified as authorized in
the preceding subsection, and (iii) to reimburse the Trustees for all other
reasonable expenses (including reasonable fees and expenses of counsel and
other experts) incurred in connection with this Trust Agreement and the Trust.

                  (d)      The provisions of Section 8 shall survive the
termination of this Trust Agreement or the earlier resignation or removal of
the Fiduciary Indemnified Persons.

         9.       This Trust Agreement may be dissolved and terminated before
the issuance of the securities of the Trust at the election of the Depositor.

         IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.


                                    POPULAR, INC.,
                                    as Depositor


                                    By: /s/ Jorge A. Junquera
                                       ------------------------------------
                                    Name: Jorge A. Junquera
                                    Title: Senior Executive Vice President


                                    BANK ONE DELAWARE, INC.,
                                    not in its individual capacity but solely
                                    as Delaware Trustee


                                    By: /s/ Christopher C. Holly
                                       ------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    BANK ONE TRUST COMPANY, N.A.,
                                    not in its individual capacity but solely
                                    as Property Trustee


                                    By: /s/ Christopher C. Holly
                                       ------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    /s/ Jorge A. Junquera
                                    ---------------------------------------
                                    Jorge A. Junquera, as Trustee


                                    /s/ Richard Barrios
                                    ---------------------------------------
                                    Richard Barrios, as Trustee


                                       3

                              DECLARATION OF TRUST
                                      AND
                                TRUST AGREEMENT


         This DECLARATION OF TRUST AND TRUST AGREEMENT, dated as of September
3, 2003 (this "Trust Agreement"), among (i) Popular, Inc., a Puerto Rico
corporation (the "Depositor"); (ii) Bank One Delaware, Inc., as Delaware
Tustee; (iii) Bank One Trust Company, N.A., as Poperty Tustee; and (iv) Jorge
A. Junquera and Richard Barrios, each an individual, as trustees (each of such
trustees in (ii), (iii) and (iv) a "Trustee" and collectively, the "Trustees").
The Depositor and the Trustees hereby agree as follows:

         1.       The trust created hereby (the "Trust") shall be known as
"Popular Capital Trust II" in which name the Trustees, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby,
make and execute contracts, and sue and be sued.

         2.       The Depositor hereby assigns, transfers, conveys and sets
over to the Trust the sum of Ten Dollars ($10.00). The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustees hereby declare that
they will hold the trust estate in trust for the Depositor. It is the intention
of the parties hereto that the Trust created hereby constitute a statutory
trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section
3801, et seq. (the "Statutory Trust Act"), and that this document constitute
the governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Statutory Trust Act.

         3.       The Depositor and the Trustees will enter into an Amended and
Restated Declaration of Trust and Trust Agreement (herein, the "Amended and
Restated Trust Agreement"), satisfactory to each such party and substantially
in the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities (as defined below) and
common securities of the Trust referred to therein. Prior to the execution and
delivery of such Amended and Restated Trust Agreement, the Trustees shall not
have any duty or obligation hereunder or with respect to the trust estate,
except as otherwise required by this Trust Agreement, applicable law or as may
be necessary to obtain prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise. Notwithstanding
the foregoing, the Trustees may take all actions deemed proper and necessary to
effect the transactions contemplated herein.

         4.       The Depositor and the Trustees hereby authorize and direct
the Depositor, as the agent of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement") (including any pre-effective or post- effective
amendments to the 1933 Act Registration Statement) relating to the registration
under the Securities Act of 1933, as amended (the "1933 Act"), of the preferred
securities of the Trust (the "Preferred Securities") and certain other
securities of the Depositor; (b) any preliminary prospectus or prospectus or
supplement thereto relating to the Preferred Securities required to be filed
pursuant to Rule 424 under the 1933 Act; and (c) to the extent deemed advisable
by the Depositor, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under the Securities Exchange Act of 1934, as amended; (ii) to the
extent deemed advisable by the Depositor, to file with one or more national
securities exchanges (each, an "Exchange") or the National Association of
Securities Dealers ("NASD") and execute on behalf of the Trust a listing
application or applications and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("NASDAQ"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; and (iv) to
execute on behalf of the Trust one or more underwriting agreements relating to
the Preferred Securities, among the Trust, the Depositor and the underwriter(s)
named therein, substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In the event that any filing referred to in clauses
(i), (ii) and (iii) above is required by the rules and regulations of the
Commission, any Exchange, the NASD or state securities or blue sky laws to be
executed on behalf of the Trust by one or more of the Trustees, each of the
Trustees, in its or his capacity as a Trustee of the Trust, is hereby


                                       1

authorized and, to the extent so required, directed to join in any such filing
and to execute on behalf of the Trust any and all of the foregoing, it being
understood that Bank One Delaware, Inc. in its capacity as a Trustee of the
Trust shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the Exchange or state securities or blue sky laws. In connection
with the filings referred to above, the Depositor and Jorge A. Junquera and
Richard Barrios, each as Trustees and not in their individual capacities,
hereby constitute and appoint Richard L. Carrion, Jorge A. Junquera and Richard
Barrios and each of them, as its and their true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for the
Depositor or such Trustee or in the Depositor's or such Trustees' name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, any Exchange, the
NASD and administrators of the state securities or blue sky laws, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Depositor or such
Trustee might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective
substitute or substitutes, shall do or cause to be done by virtue hereof.

         5.       This Trust Agreement may be executed in one or more
counterparts.

         6.       The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Statutory Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware
and otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee upon thirty (30) days' prior written notice. The Trustees may resign
upon thirty (30) days' prior notice to the Depositor.

         7.       This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to "conflict
of laws" principles).

         8.       (a) The Trustees and their officers, directors, agents and
servants (collectively, the "Fiduciary Indemnified Persons") shall not be
liable, responsible or accountable in damages or otherwise to the Trust, the
Depositor, the Trustees or any holder of the Preferred Securities (the Trust,
the Depositor and any holder of the Preferred Securities being a "Covered
Person") for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by the Fiduciary Indemnified Persons in good
faith on behalf of the Trust and in a manner the Fiduciary Indemnified Persons
reasonably believed to be within the scope of authority conferred on the
Fiduciary Indemnified Persons by this Trust Agreement or by law, except that
the Fiduciary Indemnified Persons shall be liable for any such loss, damage or
claim incurred by reason of the Fiduciary Indemnified Person's gross negligence
or willful misconduct with respect to such acts or omissions.

                  (b)      The Fiduciary Indemnified Persons shall be fully
protected in relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
person as to matters the Fiduciary Indemnified Persons reasonably believe are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which distributions to holders of Preferred
Securities might properly be paid.

                  (c)      The Depositor agrees, to the fullest extent
permitted by applicable law, (i) to indemnify and hold harmless each Fiduciary
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by the Fiduciary
Indemnified Persons by reason of the creation, operation or termination of the
Trust in a manner the Fiduciary Indemnified Persons reasonably believed to be
within the scope of authority conferred on the Fiduciary Indemnified Persons by
this Trust Agreement, except that no Fiduciary Indemnified Persons shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
the Fiduciary Indemnified Persons by reason of gross negligence or willful
misconduct with respect to such acts or omissions,(ii) to advance


                                       2

expenses (including legal fees) incurred by a Fiduciary Indemnified Person in
defending any claim, demand, action, suit or proceeding, from time to time,
prior to the final disposition of such claim, demand, action, suit or
proceeding, upon receipt by the Trust of an undertaking by or on behalf of such
Fiduciary Indemnified Persons to repay such amount if it shall be determined
that such Fiduciary Indemnified Person is not entitled to be indemnified as
authorized in the preceding subsection, and (iii) to reimburse the Trustees for
all other reasonable expenses (including reasonable fees and expenses of
counsel and other experts) incurred in connection with this Trust Agreement and
the Trust.

                  (d)      The provisions of Section 8 shall survive the
termination of this Trust Agreement or the earlier resignation or removal of
the Fiduciary Indemnified Persons.

         9.       This Trust Agreement may be dissolved and terminated before
the issuance of the securities of the Trust at the election of the Depositor.

         IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.


                                    POPULAR, INC.,
                                    as Depositor


                                    By: /s/ Jorge A. Junquera
                                       ----------------------------------------
                                    Name: Jorge A. Junquera
                                    Title: Senior Executive Vice President


                                    BANK ONE DELAWARE, INC.,
                                    not in its individual capacity but solely
                                    as Delaware Trustee


                                    By: /s/ Christopher C. Holly
                                       ----------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    BANK ONE TRUST COMPANY, N.A.,
                                    not in its individual capacity but solely
                                    as Property Trustee


                                    By: /s/ Christopher C. Holly
                                       ----------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    /s/ Jorge A. Junquera
                                    -------------------------------------------
                                    Jorge A. Junquera, as Trustee


                                    /s/ Richard Barrios
                                    -------------------------------------------
                                    Richard Barrios, as Trustee


                                       3

                              DECLARATION OF TRUST
                                      AND
                                TRUST AGREEMENT


         This DECLARATION OF TRUST AND TRUST AGREEMENT, dated as of September
3, 2003 (this "Trust Agreement"), among (i) Popular, Inc., a Puerto Rico
corporation (the "Depositor"); (ii) Bank One Delaware, Inc., as Delaware
Tustee; (iii) Bank One Trust Company, N.A., as Poperty Tustee; and (iv) Jorge
A. Junquera and Richard Barrios, each an individual, as trustees (each of such
trustees in (ii), (iii) and (iv) a "Trustee" and collectively, the "Trustees").
The Depositor and the Trustees hereby agree as follows:

         1.       The trust created hereby (the "Trust") shall be known as
"Popular Capital Trust III" in which name the Trustees, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby,
make and execute contracts, and sue and be sued.

         2.       The Depositor hereby assigns, transfers, conveys and sets
over to the Trust the sum of Ten Dollars ($10.00). The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustees hereby declare that
they will hold the trust estate in trust for the Depositor. It is the intention
of the parties hereto that the Trust created hereby constitute a statutory
trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section
3801, et seq. (the "Statutory Trust Act"), and that this document constitute
the governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Statutory Trust Act.

         3.       The Depositor and the Trustees will enter into an Amended and
Restated Declaration of Trust and Trust Agreement (herein, the "Amended and
Restated Trust Agreement"), satisfactory to each such party and substantially
in the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities (as defined below) and
common securities of the Trust referred to therein. Prior to the execution and
delivery of such Amended and Restated Trust Agreement, the Trustees shall not
have any duty or obligation hereunder or with respect to the trust estate,
except as otherwise required by this Trust Agreement, applicable law or as may
be necessary to obtain prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise. Notwithstanding
the foregoing, the Trustees may take all actions deemed proper and necessary to
effect the transactions contemplated herein.

         4.       The Depositor and the Trustees hereby authorize and direct
the Depositor, as the agent of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement") (including any pre-effective or post- effective
amendments to the 1933 Act Registration Statement) relating to the registration
under the Securities Act of 1933, as amended (the "1933 Act"), of the preferred
securities of the Trust (the "Preferred Securities") and certain other
securities of the Depositor; (b) any preliminary prospectus or prospectus or
supplement thereto relating to the Preferred Securities required to be filed
pursuant to Rule 424 under the 1933 Act; and (c) to the extent deemed advisable
by the Depositor, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under the Securities Exchange Act of 1934, as amended; (ii) to the
extent deemed advisable by the Depositor, to file with one or more national
securities exchanges (each, an "Exchange") or the National Association of
Securities Dealers ("NASD") and execute on behalf of the Trust a listing
application or applications and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("NASDAQ"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; and (iv) to
execute on behalf of the Trust one or more underwriting agreements relating to
the Preferred Securities, among the Trust, the Depositor and the underwriter(s)
named therein, substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In the event that any filing referred to in clauses
(i), (ii) and (iii) above is required by the rules and regulations of the
Commission, any Exchange, the NASD or state securities or blue sky laws to be
executed on behalf of the Trust by one or more of the Trustees, each of the
Trustees, in its or his capacity as a Trustee of the Trust, is hereby


                                       1

authorized and, to the extent so required, directed to join in any such filing
and to execute on behalf of the Trust any and all of the foregoing, it being
understood that Bank One Delaware, Inc. in its capacity as a Trustee of the
Trust shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the Exchange or state securities or blue sky laws. In connection
with the filings referred to above, the Depositor and Jorge A. Junquera and
Richard Barrios, each as Trustees and not in their individual capacities,
hereby constitute and appoint Richard L. Carrion, Jorge A. Junquera and Richard
Barrios and each of them, as its and their true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for the
Depositor or such Trustee or in the Depositor's or such Trustees' name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, any Exchange, the
NASD and administrators of the state securities or blue sky laws, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Depositor or such
Trustee might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective
substitute or substitutes, shall do or cause to be done by virtue hereof.

         5.       This Trust Agreement may be executed in one or more
counterparts.

         6.       The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Statutory Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware
and otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee upon thirty (30) days' prior written notice. The Trustees may resign
upon thirty (30) days' prior notice to the Depositor.

         7.       This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to "conflict
of laws" principles).

         8.       (a) The Trustees and their officers, directors, agents and
servants (collectively, the "Fiduciary Indemnified Persons") shall not be
liable, responsible or accountable in damages or otherwise to the Trust, the
Depositor, the Trustees or any holder of the Preferred Securities (the Trust,
the Depositor and any holder of the Preferred Securities being a "Covered
Person") for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by the Fiduciary Indemnified Persons in good
faith on behalf of the Trust and in a manner the Fiduciary Indemnified Persons
reasonably believed to be within the scope of authority conferred on the
Fiduciary Indemnified Persons by this Trust Agreement or by law, except that
the Fiduciary Indemnified Persons shall be liable for any such loss, damage or
claim incurred by reason of the Fiduciary Indemnified Person's gross negligence
or willful misconduct with respect to such acts or omissions.

                  (b)      The Fiduciary Indemnified Persons shall be fully
protected in relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
person as to matters the Fiduciary Indemnified Persons reasonably believe are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which distributions to holders of Preferred
Securities might properly be paid.

                  (c)      The Depositor agrees, to the fullest extent
permitted by applicable law, (i) to indemnify and hold harmless each Fiduciary
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by the Fiduciary
Indemnified Persons by reason of the creation, operation or termination of the
Trust in a manner the Fiduciary Indemnified Persons reasonably believed to be
within the scope of authority conferred on the Fiduciary Indemnified Persons by
this Trust Agreement, except that no Fiduciary Indemnified Persons shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
the Fiduciary Indemnified Persons by reason of gross negligence or willful
misconduct with respect to such acts or omissions,(ii) to advance


                                       2

expenses (including legal fees) incurred by a Fiduciary Indemnified Person in
defending any claim, demand, action, suit or proceeding, from time to time,
prior to the final disposition of such claim, demand, action, suit or
proceeding, upon receipt by the Trust of an undertaking by or on behalf of such
Fiduciary Indemnified Persons to repay such amount if it shall be determined
that such Fiduciary Indemnified Person is not entitled to be indemnified as
authorized in the preceding subsection, and (iii) to reimburse the Trustees for
all other reasonable expenses (including reasonable fees and expenses of
counsel and other experts) incurred in connection with this Trust Agreement and
the Trust.

                  (d)      The provisions of Section 8 shall survive the
termination of this Trust Agreement or the earlier resignation or removal of
the Fiduciary Indemnified Persons.

         9.       This Trust Agreement may be dissolved and terminated before
the issuance of the securities of the Trust at the election of the Depositor.

         IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.


                                    POPULAR, INC.,
                                    as Depositor


                                    By: /s/ Jorge A. Junquera
                                       ----------------------------------------
                                    Name: Jorge A. Junquera
                                    Title: Senior Executive Vice President


                                    BANK ONE DELAWARE, INC.,
                                    not in its individual capacity but solely
                                    as Delaware Trustee


                                    By: /s/ Christopher C. Holly
                                       ----------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    BANK ONE TRUST COMPANY, N.A.,
                                    not in its individual capacity but solely
                                    as Property Trustee


                                    By: /s/ Christopher C. Holly
                                       ----------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    /s/ Jorge A. Junquera
                                    -------------------------------------------
                                    Jorge A. Junquera, as Trustee


                                    /s/ Richard Barrios
                                    -------------------------------------------
                                    Richard Barrios, as Trustee


                                       3

                              DECLARATION OF TRUST
                                      AND
                                TRUST AGREEMENT


         This DECLARATION OF TRUST AND TRUST AGREEMENT, dated as of September
3, 2003 (this "Trust Agreement"), among (i) Popular, Inc., a Puerto Rico
corporation (the "Depositor"); (ii) Bank One Delaware, Inc., as Delaware
Tustee; (iii) Bank One Trust Company, N.A., as Poperty Tustee; and (iv) Jorge
A. Junquera and Richard Barrios, each an individual, as trustees (each of such
trustees in (ii), (iii) and (iv) a "Trustee" and collectively, the "Trustees").
The Depositor and the Trustees hereby agree as follows:

         1.       The trust created hereby (the "Trust") shall be known as
"Popular Capital Trust IV" in which name the Trustees, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby,
make and execute contracts, and sue and be sued.

         2.       The Depositor hereby assigns, transfers, conveys and sets
over to the Trust the sum of Ten Dollars ($10.00). The Trustees hereby
acknowledge receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustees hereby declare that
they will hold the trust estate in trust for the Depositor. It is the intention
of the parties hereto that the Trust created hereby constitute a statutory
trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section
3801, et seq. (the "Statutory Trust Act"), and that this document constitute
the governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware Secretary
of State in accordance with the provisions of the Statutory Trust Act.

         3.       The Depositor and the Trustees will enter into an Amended and
Restated Declaration of Trust and Trust Agreement (herein, the "Amended and
Restated Trust Agreement"), satisfactory to each such party and substantially
in the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Preferred Securities (as defined below) and
common securities of the Trust referred to therein. Prior to the execution and
delivery of such Amended and Restated Trust Agreement, the Trustees shall not
have any duty or obligation hereunder or with respect to the trust estate,
except as otherwise required by this Trust Agreement, applicable law or as may
be necessary to obtain prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise. Notwithstanding
the foregoing, the Trustees may take all actions deemed proper and necessary to
effect the transactions contemplated herein.

         4.       The Depositor and the Trustees hereby authorize and direct
the Depositor, as the agent of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement") (including any pre-effective or post- effective
amendments to the 1933 Act Registration Statement) relating to the registration
under the Securities Act of 1933, as amended (the "1933 Act"), of the preferred
securities of the Trust (the "Preferred Securities") and certain other
securities of the Depositor; (b) any preliminary prospectus or prospectus or
supplement thereto relating to the Preferred Securities required to be filed
pursuant to Rule 424 under the 1933 Act; and (c) to the extent deemed advisable
by the Depositor, a Registration Statement on Form 8-A (the "1934 Act
Registration Statement") (including all pre-effective and post-effective
amendments thereto) relating to the registration of the Preferred Securities of
the Trust under the Securities Exchange Act of 1934, as amended; (ii) to the
extent deemed advisable by the Depositor, to file with one or more national
securities exchanges (each, an "Exchange") or the National Association of
Securities Dealers ("NASD") and execute on behalf of the Trust a listing
application or applications and all other applications, statements,
certificates, agreements and other instruments as shall be necessary or
desirable to cause the Preferred Securities to be listed on any such Exchange
or the NASD's Nasdaq National Market ("NASDAQ"); (iii) to file and execute on
behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Preferred
Securities under the securities or blue sky laws of such jurisdictions as the
Depositor, on behalf of the Trust, may deem necessary or desirable; and (iv) to
execute on behalf of the Trust one or more underwriting agreements relating to
the Preferred Securities, among the Trust, the Depositor and the underwriter(s)
named therein, substantially in the form included as an exhibit to the 1933 Act
Registration Statement. In the event that any filing referred to in clauses
(i), (ii) and (iii) above is required by the rules and regulations of the
Commission, any Exchange, the NASD or state securities or blue sky laws to be
executed on behalf of the Trust by one or more of the Trustees, each of the
Trustees, in its or his capacity as a Trustee of the Trust, is hereby


                                       1

authorized and, to the extent so required, directed to join in any such filing
and to execute on behalf of the Trust any and all of the foregoing, it being
understood that Bank One Delaware, Inc. in its capacity as a Trustee of the
Trust shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of the
Commission, the Exchange or state securities or blue sky laws. In connection
with the filings referred to above, the Depositor and Jorge A. Junquera and
Richard Barrios, each as Trustees and not in their individual capacities,
hereby constitute and appoint Richard L. Carrion, Jorge A. Junquera and Richard
Barrios and each of them, as its and their true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for the
Depositor or such Trustee or in the Depositor's or such Trustees' name, place
and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to the 1933 Act Registration Statement and the 1934
Act Registration Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Commission, any Exchange, the
NASD and administrators of the state securities or blue sky laws, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done in connection
therewith, as fully to all intents and purposes as the Depositor or such
Trustee might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective
substitute or substitutes, shall do or cause to be done by virtue hereof.

         5.       This Trust Agreement may be executed in one or more
counterparts.

         6.       The number of Trustees initially shall be three (3) and
thereafter the number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by the Depositor which may increase
or decrease the number of Trustees; provided, however, that to the extent
required by the Statutory Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural person,
an entity which has its principal place of business in the State of Delaware
and otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee upon thirty (30) days' prior written notice. The Trustees may resign
upon thirty (30) days' prior notice to the Depositor.

         7.       This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to "conflict
of laws" principles).

         8.       (a) The Trustees and their officers, directors, agents and
servants (collectively, the "Fiduciary Indemnified Persons") shall not be
liable, responsible or accountable in damages or otherwise to the Trust, the
Depositor, the Trustees or any holder of the Preferred Securities (the Trust,
the Depositor and any holder of the Preferred Securities being a "Covered
Person") for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by the Fiduciary Indemnified Persons in good
faith on behalf of the Trust and in a manner the Fiduciary Indemnified Persons
reasonably believed to be within the scope of authority conferred on the
Fiduciary Indemnified Persons by this Trust Agreement or by law, except that
the Fiduciary Indemnified Persons shall be liable for any such loss, damage or
claim incurred by reason of the Fiduciary Indemnified Person's gross negligence
or willful misconduct with respect to such acts or omissions.

                  (b)      The Fiduciary Indemnified Persons shall be fully
protected in relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
person as to matters the Fiduciary Indemnified Persons reasonably believe are
within such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Trust, including
information, opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which distributions to holders of Preferred
Securities might properly be paid.

                  (c)      The Depositor agrees, to the fullest extent
permitted by applicable law, (i) to indemnify and hold harmless each Fiduciary
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by the Fiduciary
Indemnified Persons by reason of the creation, operation or termination of the
Trust in a manner the Fiduciary Indemnified Persons reasonably believed to be
within the scope of authority conferred on the Fiduciary Indemnified Persons by
this Trust Agreement, except that no Fiduciary Indemnified Persons shall be
entitled to be indemnified in respect of any loss, damage or claim incurred by
the Fiduciary Indemnified Persons by reason of gross negligence or willful
misconduct with respect to such acts or omissions,(ii) to advance


                                       2




expenses (including legal fees) incurred by a Fiduciary Indemnified Person in
defending any claim, demand, action, suit or proceeding, from time to time,
prior to the final disposition of such claim, demand, action, suit or
proceeding, upon receipt by the Trust of an undertaking by or on behalf of such
Fiduciary Indemnified Persons to repay such amount if it shall be determined
that such Fiduciary Indemnified Person is not entitled to be indemnified as
authorized in the preceding subsection, and (iii) to reimburse the Trustees for
all other reasonable expenses (including reasonable fees and expenses of
counsel and other experts) incurred in connection with this Trust Agreement and
the Trust.

                  (d)      The provisions of Section 8 shall survive the
termination of this Trust Agreement or the earlier resignation or removal of
the Fiduciary Indemnified Persons.

         9.       This Trust Agreement may be dissolved and terminated before
the issuance of the securities of the Trust at the election of the Depositor.

         IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed as of the day and year first above written.


                                    POPULAR, INC.,
                                    as Depositor


                                    By: /s/ Jorge A. Junquera
                                       ----------------------------------------
                                    Name: Jorge A. Junquera
                                    Title: Senior Executive Vice President


                                    BANK ONE DELAWARE, INC.,
                                    not in its individual capacity but solely
                                    as Delaware Trustee


                                    By: /s/ Christopher C. Holly
                                       ----------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    BANK ONE TRUST COMPANY, N.A.,
                                    not in its individual capacity but solely
                                    as Property Trustee


                                    By: /s/ Christopher C. Holly
                                       ----------------------------------------
                                    Name: Christopher C. Holly
                                    Title: Vice President


                                    /s/ Jorge A. Junquera
                                    -------------------------------------------
                                    Jorge A. Junquera, as Trustee


                                    /s/ Richard Barrios
                                    -------------------------------------------
                                    Richard Barrios, as Trustee


                                       3

EX-4.5

                                                                     EXHIBIT 4.5





                    AMENDED AND RESTATED DECLARATION OF TRUST
                               AND TRUST AGREEMENT



                                      AMONG



                                 POPULAR, INC.,
                                  AS DEPOSITOR



                          BANK ONE TRUST COMPANY, N.A.,
                               AS PROPERTY TRUSTEE


                            BANK ONE DELAWARE, INC.,
                              AS DELAWARE TRUSTEE



                 AND THE SEVERAL HOLDERS OF THE TRUST SECURITIES



                         DATED AS OF _____________, 2003



                            POPULAR CAPITAL TRUST __







                                TABLE OF CONTENTS




                                                                                                                 PAGE
                                                                                                                 ----

                                                                                                              
ARTICLE I - DEFINED TERMS........................................................................................  1
                  SECTION 1.1.      Definitions..................................................................  1

ARTICLE II - CONTINUATION OF THE ISSUER TRUST.................................................................... 10
                  SECTION 2.1.      Name......................................................................... 10
                  SECTION 2.2.      Office of the Delaware Trustee; Principal
                                    Place of Business............................................................ 10
                  SECTION 2.3.      Initial Contribution of Trust Property;
                                    Organizational Expenses...................................................... 11
                  SECTION 2.4.      Issuance of the Capital Securities........................................... 11
                  SECTION 2.5.      Issuance of the Common Securities;
                                    Subscription and Purchase Debentures......................................... 11
                  SECTION 2.6.      Declaration of Trust......................................................... 11
                  SECTION 2.7.      Authorization to Enter into Certain
                                    Transactions................................................................. 12
                  SECTION 2.8.      Assets of Trust.............................................................. 16
                  SECTION 2.9.      Title to Trust Property...................................................... 16

ARTICLE III - PAYMENT ACCOUNT.................................................................................... 16
                  SECTION 3.1.      Payment Account.............................................................. 16

ARTICLE IV - DISTRIBUTIONS; REDEMPTION........................................................................... 16
                  SECTION 4.1.      Distributions................................................................ 16
                  SECTION 4.2.      Redemption................................................................... 17
                  SECTION 4.3.      Ranking of Trust Securities.................................................. 19
                  SECTION 4.4.      Payment Procedures........................................................... 20
                  SECTION 4.5.      Tax Returns and Reports...................................................... 20
                  SECTION 4.6.      Payment of Expenses of the Issuer Trust...................................... 21
                  SECTION 4.7.      Payments under Indenture or Pursuant
                                    to Direct Actions............................................................ 21

ARTICLE V - TRUST SECURITIES CERTIFICATES........................................................................ 21
                  SECTION 5.1.      Initial Ownership............................................................ 21
                  SECTION 5.2.      The Trust Securities Certificates............................................ 21
                  SECTION 5.3.      Execution and Delivery of Trust
                                    Securities Certificates...................................................... 22
                  SECTION 5.4.      Registration of Transfer and Exchange of
                                    Capital Securities Certificates.............................................. 22
                  SECTION 5.5.      Mutilated, Destroyed, Lost or Stolen
                                    Trust Securities Certificates................................................ 23
                  SECTION 5.6.      Persons Deemed Holders....................................................... 23
                  SECTION 5.7.      Access to List of Holders' Names
                                    and Addresses................................................................ 24
                  SECTION 5.8.      Maintenance of Office Agency................................................. 24
                  SECTION 5.9.      Appointment of Paying Agent.................................................. 24
                  SECTION 5.10.     Ownership of Common Securities by Depositor.................................. 25
                  SECTION 5.11.     Book-Entry Capital Securities Certificates;
                                    Common Securities Certificate................................................ 25
                  SECTION 5.12.     Notices to Clearing Agency................................................... 26








                                                                                                                 PAGE
                                                                                                                 ----
                                                                                                              
                  SECTION 5.13.     Definitive Capital Securities Certificates...................................26
                  SECTION 5.14.     Rights of Holders; Waivers of Past Defaults..................................27
                  SECTION 5.15.     CUSIP Numbers................................................................29

ARTICLE VI - ACTS OF HOLDERS; MEETINGS; VOTING...................................................................29
                  SECTION 6.1.      Limitations on Voting Rights.................................................29
                  SECTION 6.2.      Notice of Meetings...........................................................30
                  SECTION 6.3.      Meetings of Holders of the Capital
                                    Securities...................................................................30
                  SECTION 6.4.      Voting Rights................................................................31
                  SECTION 6.5.      Proxies, etc.................................................................31
                  SECTION 6.6.      Holder Action by Written Consent.............................................31
                  SECTION 6.7.      Record Date for Voting and Other Purposes....................................31
                  SECTION 6.8.      Acts of Holders..............................................................32
                  SECTION 6.9.      Inspection of Records........................................................33

ARTICLE VII - REPRESENTATIONS AND WARRANTIES.....................................................................33
                  SECTION 7.1.      Representations and Warranties of the
                                    Property Trustee and the Delaware Trustee....................................33
                  SECTION 7.2.      Representations and Warranties of Depositor..................................34

ARTICLE VIII - THE ISSUER TRUSTEES...............................................................................35
                  SECTION 8.1.      Certain Duties and Responsibilities..........................................35
                  SECTION 8.2.      Certain Notices..............................................................37
                  SECTION 8.3.      Certain Rights of Property Trustee...........................................37
                  SECTION 8.4.      Not Responsible for Recitals or Issuance
                                    of Securities................................................................39
                  SECTION 8.5.      May Hold Securities..........................................................40
                  SECTION 8.6.      Compensation; Indemnity; Fees................................................40
                  SECTION 8.7.      Corporate Property Trustee Required;
                                    Eligibility of Issuer Trustees and
                                    Administrative Trustees......................................................41
                  SECTION 8.8.      Conflicting Interests........................................................41
                  SECTION 8.9.      Co-Trustees and Separate Trustee.............................................42
                  SECTION 8.10.     Resignation and Removal; Appointment
                                    of Successor.................................................................43
                  SECTION 8.11.     Acceptance of Appointment by Successor.......................................44
                  SECTION 8.12.     Merger, Conversion, Consolidation or
                                    Succession to Business.......................................................45
                  SECTION 8.13.     Preferential Collection of Claims
                                    Against Depositor or Issuer Trust............................................45
                  SECTION 8.14.     Trustee May File Proofs of Claim.............................................46
                  SECTION 8.15.     Reports by Property Trustee..................................................46
                  SECTION 8.16.     Reports to the Property Trustee..............................................47
                  SECTION 8.17.     Evidence of Compliance with Conditions
                                    Precedent....................................................................47
                  SECTION 8.18.     Number of Issuer Trustees....................................................47
                  SECTION 8.19.     Delegation of Power..........................................................48

ARTICLE IX - DISSOLUTION, LIQUIDATION AND MERGER.................................................................48
                  SECTION 9.1.      Dissolution Upon Expiration Date.............................................48


                                       ii







                                                                                                               PAGE
                                                                                                               ----

                                                                                                              
                  SECTION 9.2.      Early Dissolution........................................................... 48
                  SECTION 9.3.      Dissolution................................................................. 48
                  SECTION 9.4.      Liquidation................................................................. 49
                  SECTION 9.5.      Mergers, Consolidations, Amalgamations
                                    or Replacements of Issuer Trust............................................. 50

ARTICLE X - MISCELLANEOUS PROVISIONS............................................................................ 51
                  SECTION 10.1.     Limitation of Rights of Holders............................................. 51
                  SECTION 10.2.     Amendment................................................................... 51
                  SECTION 10.3.     Separability................................................................ 53
                  SECTION 10.4.     Governing Law............................................................... 53
                  SECTION 10.5.     Payments Due on Non-Business Day............................................ 53
                  SECTION 10.6.     Successors.................................................................. 53
                  SECTION 10.7.     Headings.................................................................... 54
                  SECTION 10.8.     Reports, Notices and Demands................................................ 54
                  SECTION 10.9.     Agreement Not to Petition................................................... 54
                  SECTION 10.10.    Trust Indenture Act; Conflict with Trust
                                    Indenture Act............................................................... 56
                  SECTION 10.11.    Acceptance of Terms of Trust Agreement,
                                    Guarantee Agreement and Indenture........................................... 56
                  SECTION 10.12.    Counterparts................................................................ 56


EXHIBIT A         -   CERTIFICATE OF TRUST.................................................................Exh. A-1
EXHIBIT B         -   FORM OF COMMON SECURITIES CERTIFICATE................................................Exh. B-1
EXHIBIT C         -   FORM OF GLOBAL CAPITAL SECURITIES CERTIFICATE........................................Exh. C-1




                                       iii






         AMENDED AND RESTATED DECLARATION OF TRUST AND TRUST AGREEMENT, dated as
of _____________, 2003 among (i) Popular, Inc., a Commonwealth of Puerto Rico
corporation (including any successors or assigns, the "Depositor"), (ii) Bank
One Trust Company, N.A., a national banking association, as property trustee (in
such capacity, the "Property Trustee"), (iii) Bank One Delaware, Inc., a
Delaware corporation, as Delaware trustee (in such capacity, the "Delaware
Trustee"), (iv) __________________, an individual, and ____________, an
individual, each of whose address is c/o __________ ____________________________
(each, an "Administrative Trustee," and collectively, the "Administrative
Trustees") (the Property Trustee, the Delaware Trustee, and the Administrative
Trustees being referred to collectively as the "Issuer Trustees"), and (v) the
several Holders, as hereinafter defined.

                                   WITNESSETH

         WHEREAS, the Depositor and certain of the Issuer Trustees have
heretofore duly declared and established a statutory trust (the "Issuer Trust")
pursuant to the Delaware Statutory Trust Act (as hereinafter defined) by
entering into that certain Declaration of Trust and Trust Agreement, dated as of
_____________, 2003 (the "Original Trust Agreement"), and by the execution and
filing with the Secretary of State of the State of Delaware the Certificate of
Trust, filed on _____________, 2003, attached as Exhibit A (the "Certificate of
Trust"); and

         WHEREAS, the Depositor and the Issuer Trustees desire to amend and
restate the Original Trust Agreement in its entirety as set forth herein to
provide for, among other things, (i) the issuance of the Common Securities by
the Issuer Trust to the Depositor, (ii) the issuance and sale of the Capital
Securities by the Issuer Trust pursuant to the Underwriting Agreement, and (iii)
the acquisition by the Issuer Trust from the Depositor of all of the right,
title and interest in the Debentures;

         NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:

                                    ARTICLE I
                                  DEFINED TERMS

         SECTION 1.1.      Definitions.

                  For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:

                  The terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the singular;

                  All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;







                  The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation;"

                  All accounting terms used but not defined herein have the
meanings assigned to them in accordance with United States generally accepted
accounting principles;

                  Unless the context otherwise requires, any reference to an
"Article," a "Section" or an "Exhibit" refers to an Article, a Section or an
Exhibit, as the case may be, of or to this Trust Agreement; and

                  The words "hereby," "herein," "hereof" and "hereunder" and
other words of similar import refer to this Trust Agreement as a whole and not
to any particular Article, Section or other subdivision.

                  "Act" has the meaning specified in Section 6.8.

                  "Additional Amount" means, with respect to Trust Securities of
a given Liquidation Amount and/or a given period, the amount of Additional
Interest (as defined in the Indenture) paid by the Depositor on a Like Amount of
Debentures for such period.

                  "Administrative Trustee" means each of the individuals
identified as an "Administrative Trustee" in the preamble to this Trust
Agreement solely in such individual's capacity as Administrative Trustee of the
Trust formed and continued hereunder and not in such individual's individual
capacity, or such Administrative Trustee's successor in interest in such
capacity, or any successor trustee appointed as herein provided.

                  "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

                  "Bankruptcy Event" means, with respect to any Person:

                           (a) the entry of a decree or order by a court having
                  jurisdiction in the premises judging such Person bankrupt or
                  insolvent, or approving as properly filed a petition seeking
                  reorganization, arrangement, adjudication or composition of or
                  in respect of such Person under any applicable Federal or
                  State bankruptcy, insolvency, reorganization or other similar
                  law, or appointing a receiver, liquidator, assignee, trustee,
                  sequestrator (or other similar official) of such Person or of
                  any substantial part of its property or ordering the winding
                  up or liquidation of its affairs, and the continuance of any
                  such decree or order unstayed and in effect for a period of 60
                  consecutive days; or



                                       2


                           (b) the institution by such Person of proceedings to
                  be adjudicated bankrupt or insolvent, or the consent by it to
                  the institution of bankruptcy or insolvency proceedings
                  against it, or the filing by it of a petition or answer or
                  consent seeking reorganization or relief under any applicable
                  Federal or State bankruptcy, insolvency, reorganization or
                  other similar law, or the consent by it to the filing of any
                  such petition or to the appointment of a receiver, liquidator,
                  assignee, trustee, sequestrator (or similar official) of such
                  Person or of any substantial part of its property, or the
                  making by it of an assignment for the benefit of creditors, or
                  the admission by it in writing of its inability to pay its
                  debts generally as they become due and its willingness to be
                  adjudicated bankrupt, or the taking of corporate action by
                  such Person in furtherance of any such action.

                  "Bankruptcy Laws" has the meaning specified in Section 10.9.

                  "Board of Directors" means the board of directors of the
Depositor or a committee designated by the board of directors of the Depositor
(or any such committee), comprised of one or more members of the board of
directors of the Depositor or officers of the Depositor, or both.

                  "Book-Entry Capital Securities Certificate" means a Capital
Securities Certificate evidencing ownership of Book-Entry Capital Securities.

                  "Book-Entry Capital Security" means a Capital Security, the
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 5.11.

                  "Business Day" means a day other than a Saturday, a Sunday, or
any other day on which banking institutions in New York, New York, San Juan,
Puerto Rico, or Wilmington, Delaware are authorized or required by law or
executive order to remain closed.

                  "Capital Securities Certificate" means a certificate
evidencing ownership of Capital Securities, substantially in the form attached
as Exhibit C.

                  "Capital Security" means an undivided beneficial interest in
the assets of the Issuer Trust, having a Liquidation Amount of $__ and having
the rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.

                  "Certificate Depository Agreement" means the agreement among
the Issuer Trust, the Paying Agent and DTC, as the initial Clearing Agency,
dated as of the Closing Date.

                  "Certificate of Trust" has the meaning specified in the
recitals hereof, as amended from time to time.

                  "Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act. DTC will be the
initial Clearing Agency.



                                       3


                  "Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.

                  "Closing Date" means the Time of Delivery, which date is also
the date of execution and delivery of this Trust Agreement.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  "Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.

                  "Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.

                  "Common Security" means an undivided beneficial interest in
the assets of the Issuer Trust, having a Liquidation Amount of $__ and having
the rights provided therefor in this Trust Agreement, including the right to
receive Distributions and a Liquidation Distribution as provided herein.

                  "Corporate Trust Office" means (i) when used with respect to
the Property Trustee, the principal office of the Property Trustee located at 1
Bank One Plaza, Mail Code IL1-0823, Chicago, Illinois 60670-0823, Attention:
Global Corporate Trust Services Division, and (ii) when used with respect to the
Debenture Trustee, the principal office of the Debenture Trustee located at 1
Bank One Plaza, Mail Code IL1-0823, Chicago, Illinois 60670-0823, Attention:
Global Corporate Trust Services Division.

                  "Debenture Event of Default" means any "Event of Default"
specified in Section 501 of the Indenture.

                  "Debenture Redemption Date" means, with respect to any
Debentures to be redeemed under the Indenture, the date fixed for redemption of
such Debentures under the Indenture.

                  "Debenture Trustee" means Bank One Trust Company, N.A., a
national banking association, solely in its capacity as trustee pursuant to the
Indenture and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as provided in the Indenture.

                  "Debentures" means the Depositor's ____% Junior Subordinated
Debentures, Series ___ due _____________, 20__, issued pursuant to the
Indenture.

                  "Definitive Capital Securities Certificates" means either or
both (as the context requires) of (i) Capital Securities Certificates issued as
Book-Entry Capital Securities Certificates as provided in Section 5.11, and (ii)
Capital Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.




                                       4


                  "Delaware Statutory Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Section 3801 et seq., as it may be amended from
time to time.

                  "Delaware Trustee" means the Person identified as the
"Delaware Trustee" in the preamble to this Trust Agreement, solely in its
capacity as Delaware Trustee of the trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor Delaware trustee appointed as herein provided.

                  "Depositor" has the meaning specified in the preamble to this
Trust Agreement.

                  "Depositor Bankruptcy Event" means (i) the entry of a decree
or order for relief in respect of the Depositor by a court having jurisdiction
in the premises in an involuntary case under the Federal bankruptcy laws, as now
or hereafter constituted, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days or (ii) the
commencement by the Depositor of a voluntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or the consent by the Depositor to the
entry of a decree or order for relief in an involuntary case under any such law.

                  "Distribution Date" has the meaning specified in Section
4.1(a)(i).

                  "Distribution Period" means the period of time beginning on
any Distribution Date and ending on the day immediately preceding the next
succeeding Distribution Date.

                  "Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.

                  "DTC" means The Depository Trust Company.

                  "Early Dissolution Event" has the meaning specified in Section
9.2.

                  "Event of Default" means any one of the following events
(whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                  (a)      the occurrence of a Debenture Event of Default; or

                  (b)      default by the Issuer Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such default
for a period of 30 days; or

                  (c)      default by the Issuer Trust in the payment of any
Redemption Price of any Trust Security when it becomes due and payable; or

                  (d)      default in the performance, or breach, in any
material respect, of any covenant or warranty of the Issuer Trustees in this
Trust Agreement (other





                                       5


than those specified in clause (b) or (c) above) and continuation of such
default or breach for a period of 90 days after there has been given, by
registered or certified mail, to the Issuer Trustees and to the Depositor by the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Capital Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or

                  (e)      the occurrence of a Bankruptcy Event with respect to
the Property Trustee if a successor Property Trustee has not been appointed
within 90 days thereof.

                  "Exchange Act" means the Securities Exchange Act of 1934, and
any successor statute thereto, in each case as amended from time to time.

                  "Expiration Date" has the meaning specified in Section 9.1.

                  "Federal Reserve" means the Board of Governors of the Federal
Reserve System, as from time to time constituted, or if at any time after the
execution of this Trust Agreement the Federal Reserve is not existing and
performing the duties now assigned to it, then the body performing such duties
at such time.

                  "Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and Bank One Trust Company, N.A., as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Capital Securities, as amended from time to
time.

                  "Holder" means a Person in whose name a Trust Security or
Trust Securities are registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Statutory Trust Act.

                  "Indenture" means the Junior Subordinated Indenture, dated as
of _____________, 2003, between the Depositor and the Debenture Trustee, as
trustee, as amended or supplemented from time to time.

                  "Investment Company Act" means the Investment Company Act of
1940, or any successor statute thereto, in each case as amended from time to
time.

                  "Issuer Trust" means the Delaware statutory trust known as
"Popular Capital Trust __" which was created on _____________, 2003 under the
Delaware Statutory Trust Act pursuant to the Original Trust Agreement and the
filing of the Certificate of Trust, and continued pursuant to this Trust
Agreement.

                  "Issuer Trustees" means, collectively, the Property Trustee,
the Delaware Trustee, and the Administrative Trustees.

                  "Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.



                                       6


                  "Like Amount" means (a) with respect to a redemption of any
Trust Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Debentures to be contemporaneously redeemed in accordance
with the Indenture, the proceeds of which will be used to pay the Redemption
Price of such Trust Securities, (b) with respect to a distribution of Debentures
to Holders of Trust Securities in connection with a dissolution or liquidation
of the Issuer Trust, Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the Holder to whom such Debentures
are distributed, and (c) with respect to any distribution of Additional Amounts
to Holders of Trust Securities, Debentures having a principal amount equal to
the Liquidation Amount of the Trust Securities in respect of which such
distribution is made.

                  "Liquidation Amount" means the stated amount of $__ per Trust
Security.

                  "Liquidation Date" means the date of the dissolution,
winding-up or dissolution of the Issuer Trust pursuant to Section 9.4.

                  "Liquidation Distribution" has the meaning specified in
Section 9.4(d).

                  "Majority in Liquidation Amount of the Capital Securities" or
"Majority in Liquidation Amount of the Common Securities" means, except as
provided by the Trust Indenture Act, Capital Securities or Common Securities, as
the case may be, representing more than 50% of the aggregate Liquidation Amount
of all then Outstanding Capital Securities or Common Securities, as the case may
be.

                  "Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board of Directors of such Person, a
Vice Chairman of the Board of Directors of such Person, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:

                           (a)   a statement by each officer signing the
                  Officers' Certificate that such officer has read the covenant
                  or condition and the definitions relating thereto;

                           (b)   a brief statement of the nature and scope of
                  the examination or investigation undertaken by such officer in
                  rendering the Officers' Certificate;

                           (c)   a statement that such officer has made such
                  examination or investigation as, in such officer's opinion, is
                  necessary to enable such officer to express an informed
                  opinion as to whether or not such covenant or condition has
                  been complied with; and

                           (d)   a statement as to whether, in the opinion of
                  such officer, such condition or covenant has been complied
                  with.



                                       7


                  "Opinion of Counsel" means a written opinion of counsel, who
may be counsel for or an employee of the Depositor or any Affiliate of the
Depositor.

                  "Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.

                  "Outstanding," when used with respect to Trust Securities,
means, as of the date of determination, all Trust Securities theretofore
executed and delivered under this Trust Agreement, except:

                           (a)   Trust Securities theretofore canceled by the
                  Property Trustee or delivered to the Property Trustee for
                  cancellation;

                           (b)   Trust Securities for whose payment or
                  redemption money in the necessary amount has been theretofore
                  deposited with the Property Trustee or any Paying Agent;
                  provided that, if such Trust Securities are to be redeemed,
                  notice of such redemption has been duly given pursuant to this
                  Trust Agreement; and

                           (c)   Trust Securities that have been paid or in
                  exchange for or in lieu of which other Capital Securities have
                  been executed and delivered pursuant to Sections 5.4, 5.5 and
                  5.11; provided, however, that in determining whether the
                  Holders of the requisite Liquidation Amount of the Outstanding
                  Capital Securities have given any request, demand,
                  authorization, direction, notice, consent or waiver hereunder,
                  Capital Securities owned by the Depositor, any Issuer Trustee,
                  or any Affiliate of the Depositor or any Issuer Trustee shall
                  be disregarded and deemed not to be Outstanding, except that
                  (a) in determining whether any Issuer Trustee shall be
                  protected in relying upon any such request, demand,
                  authorization, direction, notice, consent or waiver, only
                  Capital Securities that such Issuer Trustee knows to be so
                  owned shall be so disregarded, and (b) the foregoing shall not
                  apply at any time when all of the outstanding Capital
                  Securities are owned by the Depositor, one or more of the
                  Issuer Trustees, and/or any such Affiliate. Capital Securities
                  so owned that have been pledged in good faith may be regarded
                  as Outstanding if the pledgee establishes to the satisfaction
                  of the Administrative Trustees the pledgee's right so to act
                  with respect to such Capital Securities and that the pledgee
                  is not the Depositor or any Affiliate of the Depositor.
                  "Owner" means each Person who is the beneficial owner of
                  Book-Entry Capital Securities as reflected in the records of
                  the Clearing Agency or, if a Clearing Agency Participant is
                  not the Owner, then as reflected in the records of a Person
                  maintaining an account with such Clearing Agency (directly or
                  indirectly, in accordance with the rules of such Clearing
                  Agency).

                  "Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.9 and shall initially be [Banco Popular de
Puerto Rico].

                  "Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with [Banco Popular
de Puerto Rico] in its trust department for the benefit of the Holders in which
all amounts


                                       8


paid in respect of the Debentures will be held and from which the Property
Trustee, through the Paying Agent, shall make payments to the Holders in
accordance with Sections 4.1 and 4.2.

                  "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, company, limited liability company, trust, unincorporated association,
or government or any agency or political subdivision thereof, or any other
entity of whatever nature.

                  "Property Trustee" means the Person identified as the
"Property Trustee" in the preamble to this Trust Agreement, solely in its
capacity as Property Trustee of the trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein provided.

                  "Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.

                  "Redemption Price" means, with respect to any Trust Security,
the Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures.

                  "Relevant Trustee" shall have the meaning specified in Section
8.10.

                  "Responsible Officer" means, with respect to any Issuer
Trustee, the President, any Senior Vice President, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, the Treasurer,
any Assistant Treasurer, any Trust Officer or Assistant Trust Officer of such
Issuer Trustee.

                  "Securities Act" means the Securities Act of 1933, and any
successor statute thereto, in each case as amended from time to time.

                  "Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.4.

                  "Time of Delivery" means _____________, 2003.

                  "Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including (i) all exhibits, and (ii) for
all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.




                                       9


                  "Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.

                  "Trust Property" means (a) the Debentures, (b) any cash on
deposit in, or owing to, the Payment Account, and (c) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant of this Trust
Agreement.

                  "Trust Security" means any one of the Common Securities or the
Capital Securities.

                  "Trust Securities Certificate" means any one of the Common
Securities Certificates or the Capital Securities Certificates.

                  "Underwriting Agreement" means the Underwriting Agreement,
dated as of _____________, 2003, among the Trust, the Depositor and Popular
Securities, Inc., as representative of the underwriters named therein.

                  "Vice President," when used with respect to the Depositor,
means any duly appointed vice president, whether or not designated by a number
or a word or words added before or after the title "vice president."

                                   ARTICLE II
                        CONTINUATION OF THE ISSUER TRUST

         SECTION 2.1.      Name.

                  The trust continued hereby shall be known as "Popular Capital
Trust __," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders and the other Issuer Trustees,
in which name the Administrative Trustees and the other Issuer Trustees may
conduct the business of the Issuer Trust, make and execute contracts and other
instruments on behalf of the Issuer Trust and sue and be sued on behalf of the
Trust.

         SECTION 2.2.      Office of the Delaware Trustee; Principal Place of
Business.

                  The address of the Delaware Trustee in the State of Delaware
is _____________________________________________________, or such other address
in the State of Delaware as the Delaware Trustee may designate by written notice
to the Depositor, the Property Trustee and the Administrative Trustees. The
principal executive office of the Issuer Trust is ___________________________.



                                       10


         SECTION 2.3.      Initial Contribution of Trust Property;
Organizational Expenses.

                  The Issuer Trustees acknowledge receipt from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Issuer Trust as they arise or shall, upon request of any Issuer
Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by
such Issuer Trustee. The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.

         SECTION 2.4.      Issuance of the Capital Securities.

                  On _____________, 2003, the Depositor, both on its own behalf
and on behalf of the Issuer Trust pursuant to the Original Trust Agreement,
executed and delivered the Underwriting Agreement. Contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.3 and deliver to
the Underwriters named in the Underwriting Agreement a Capital Securities
Certificate, registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of _________ Capital Securities having an
aggregate Liquidation Amount of $___________, against payment of the purchase
price therefor in immediately available funds, which funds such Administrative
Trustee shall promptly deliver to the Property Trustee.

         SECTION 2.5.      Issuance of the Common Securities; Subscription and
Purchase of Debentures.

                  Contemporaneously with the execution and delivery of this
Trust Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall
execute in accordance with Section 5.3 and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount of _______ Common Securities having an aggregate Liquidation
Amount of $_________ against payment by the Depositor of the purchase price
therefor in immediately available funds, which amount such Administrative
Trustee shall promptly deliver to the Property Trustee. Contemporaneously
therewith, an Administrative Trustee, on behalf the Issuer Trust, shall
subscribe to and purchase from the Depositor Debentures registered in the name
of the Issuer Trust and having an aggregate principal amount equal to
$___________ and shall deliver to the Depositor the purchase price therefor
(being the sum of the amounts delivered to the Property Trustee pursuant to (i)
the second sentence of Section 2.4 and (ii) the first sentence of this Section
2.5).

         SECTION 2.6.      Declaration of Trust.

                  The exclusive purposes and functions of the Issuer Trust are
(a) to issue and sell Trust Securities, (b) to use the proceeds from such sale
to acquire the Debentures, and (c) to engage in those activities necessary,
convenient or incidental thereto. The Depositor hereby appoints the Issuer
Trustees as trustees of the Issuer Trust, to have all the rights, powers and
duties to the extent set forth herein, and the Issuer Trustees hereby accept
such appointment. The Property Trustee hereby declares that it will hold the
Trust





                                       11


Property upon and subject to the conditions set forth herein for the
benefit of the Issuer Trust and the Holders. The Administrative Trustees shall
have all rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the Issuer Trust.
The Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Property
Trustee or the Administrative Trustees, or any of the duties and
responsibilities of the Issuer Trustees generally, set forth herein. The
Delaware Trustee shall be one of the trustees of the Issuer Trust for the sole
and limited purpose of fulfilling the requirements of Section 3807(a) of the
Delaware Statutory Trust Act and for taking such actions as are required to be
taken by a Delaware trustee under the Delaware Statutory Trust Act.

         SECTION 2.7.      Authorization to Enter into Certain Transactions.

               (a)     The Issuer Trustees shall conduct the affairs of the
Issuer Trust in accordance with the terms of this Trust Agreement. Subject to
the limitations set forth in paragraph (b) of this Section, and in accordance
with the following provisions (i) and (ii), the Issuer Trustees shall have the
authority to enter into all transactions and agreements determined by the Issuer
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Issuer Trustees under this Trust Agreement, and to
perform all acts in furtherance thereof, including the following:

                           (i)   As among the Issuer Trustees, the
         Administrative Trustees, and each of them, shall have the power and
         authority to act on behalf of the Issuer Trust with respect to the
         following matters:

                                 (A)   the issuance and sale of the Trust
               Securities;

                                 (B)   to cause the Issuer Trust to perform on
               behalf of the Issuer Trust the Underwriting Agreement and to
               cause the Issuer Trust to enter into, and to execute, deliver and
               perform on behalf of the Issuer Trust the Certificate Depository
               Agreement and such other agreements as may be necessary or
               desirable in connection with the purposes and function of the
               Issuer Trust;

                                 (C)   assisting in the registration of the
               Capital Securities under the Securities Act and under state
               securities or blue sky laws, and the qualification of this
               Trust Agreement under the Trust Indenture Act;

                                 (D)   assisting in the listing of the Capital
               Securities upon such securities exchange or exchanges as shall be
               determined by the Depositor, with the registration of the Capital
               Securities under the Exchange Act, if required, and with the
               preparation and filing of all periodic and other reports and
               other documents pursuant to the foregoing;

                                 (E)   assisting in the sending of notices
               (other than notices of default) and other information regarding
               the Trust





                                       12


               Securities and the Debentures to the Holders in accordance with
               this Trust Agreement;

                                 (F)   the appointment of a Paying Agent and
               Securities Registrar in accordance with this Trust Agreement;

                                 (G)   to the extent provided in this Trust
               Agreement, the winding up of the affairs of and liquidation of
               the Issuer Trust and the execution and filing of the certificate
               of cancellation with the Secretary of State of the State of
               Delaware;

                                 (H)   execution of the Trust Securities on
               behalf of the Trust in accordance with this Trust Agreement;

                                 (I)   execution and delivery of closing
               certificates, if any, pursuant to the Underwriting Agreement and
               application for a taxpayer identification number for the Issuer
               Trust;

                                 (J)   unless otherwise determined by the
               Depositor, the Property Trustee, or the Administrative Trustees
               or as otherwise required by the Delaware Statutory Trust Act or
               the Trust Indenture Act, to execute on behalf of the Issuer Trust
               (either acting alone or together with any or all of the
               Administrative Trustees) any documents that the Administrative
               Trustees have the power to execute pursuant to this Trust
               Agreement; and

                                 (K)   the taking of any action incidental to
               the foregoing as the Issuer Trustees may from time to time
               determine is necessary or advisable to give effect to the terms
               of this Trust Agreement.

                           (ii)  As among the Issuer Trustees, the Property
         Trustee shall have the power, duty and authority to act on behalf of
         the Issuer Trust with respect to the following matters:

                                 (A)   the establishment of the Payment Account;

                                 (B)   the receipt of the Debentures;

                                 (C)   the collection of interest, principal
               and any other payments made in respect of the Debentures and the
               holding of such amounts in the Payment Account;

                                 (D)   the distribution through the Paying Agent
               of amounts distributable to the Holders in respect of the Trust
               Securities;

                                 (E)   the exercise of all of the rights, powers
               and privileges of a holder of the Debentures;



                                       13


                                 (F)   the sending of notices of default and
               other information regarding the Trust Securities and the
               Debentures to the Holders in accordance with this Trust
               Agreement;

                                 (G)   the distribution of the Trust Property in
               accordance with the terms of this Trust Agreement;

                                 (H)   to the extent provided in this Trust
               Agreement, the winding up of the affairs of and liquidation of
               the Issuer Trust and the preparation, execution and filing of the
               certificate of cancellation with the Secretary of State of the
               State of Delaware;

                                 (I)   after an Event of Default (other than
               under paragraph (b),(c), (d) or (e) of the definition of such
               term if such Event of Default is by or with respect to the
               Property Trustee) the taking of any action incidental to the
               foregoing as the Property Trustee may from time to time determine
               is necessary or advisable to give effect to the terms of this
               Trust Agreement and protect and conserve the Trust Property for
               the benefit of the Holders (without consideration of the effect
               of any such action on any particular Holder); and

                                 (J)   except as otherwise provided in this
               Section 2.7(a)(ii), the Property Trustee shall have none of the
               duties, liabilities, powers or the authority of the
               Administrative Trustees set forth in Section 2.7(a)(i).

               (b)     So long as this Trust Agreement remains in effect, the
Issuer Trust (or the Issuer Trustees acting on behalf of the Issuer Trust) shall
not undertake any business, activities or transactions except as expressly
provided herein or contemplated hereby. In particular, the Issuer Trustees
(acting on behalf of the Issuer Trust) shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Holders, except as
expressly provided herein, (iii) take any action that would reasonably be
expected to cause the Issuer Trust to become taxable as a corporation or
classified as other than a grantor trust for United States Federal or Puerto
Rico income tax purposes, (iv) incur any indebtedness for borrowed money or
issue any other debt, (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property, (vi) invest any proceeds
received by the Issuer Trust from holding the Debentures, but shall distribute
all such proceeds to Holders of Trust Securities pursuant to the terms of this
Trust Agreement and of the Trust Securities, (vii) acquire any assets other than
the Trust Property, (viii) possess any power or otherwise act in such a way as
to vary the Trust Property, (ix) possess any power or otherwise act in such a
way as to vary the terms of the Trust Securities in any way whatsoever (except
to the extent expressly authorized in this Trust Agreement or by the terms of
the Trust Securities) or (x) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Issuer Trust other than
the Trust Securities. The Property Trustee shall defend all claims and demands
of all





                                       14


Persons at any time claiming any Lien on any of the Trust Property adverse to
the interest of the Issuer Trust or the Holders in their capacity as Holders.

               (c)     In connection with the issuance and sale of the Capital
Securities, the Depositor shall have the right and responsibility to assist the
Issuer Trust with respect to, or effect on behalf of the Issuer Trust, the
following (and any actions taken by the Depositor in furtherance of the
following prior to the date of this Trust Agreement are hereby ratified and
confirmed in all respects):

                           (i)   the preparation and filing by the Issuer Trust
         with the Commission of and the execution on behalf of the Issuer Trust
         of a registration statement on the appropriate form in relation to the
         Capital Securities, including any amendments thereto;

                           (ii)  the determination of the states in which to
         take appropriate action to qualify or register for sale all or part of
         the Capital Securities and the determination of any and all such acts,
         other than actions that must be taken by or on behalf of the Issuer
         Trust, and the advice to the Issuer Trust of actions they must take on
         behalf of the Issuer Trust, and the preparation for execution and
         filing of any documents to be executed and filed by the Issuer Trust or
         on behalf of the Issuer Trust, as the Depositor deems necessary or
         advisable in order to comply with the applicable laws of any such
         states;

                           (iii) the preparation for filing by the Issuer Trust
         and execution on behalf of the Issuer Trust of an application to the
         New York Stock Exchange or any other national stock exchange or the
         Nasdaq National Market or any other automated quotation system for
         listing upon notice of issuance of any Capital Securities and filing
         with such exchange or self-regulatory organization such notification
         and documents as may be necessary from time to time to maintain such
         listing;

                           (iv)  the negotiation of the terms of, and the
         execution and delivery of, the Underwriting Agreement providing for the
         sale of the Capital Securities; and

                           (v)   the taking of any other actions necessary or
         desirable to carryout any of the foregoing activities.

               (d)     Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Issuer Trust and to operate the Issuer Trust so that the Issuer Trust will
not be deemed to be an "investment company" required to be registered under the
Investment Company Act, and will not be taxable as a corporation or classified
as other than a grantor trust for United States Federal or Puerto Rico income
tax purposes and so that the Debentures will be treated as indebtedness of the
Depositor for Puerto Rico tax purposes. In this connection, the Depositor and
the Administrative Trustees are authorized to take any action, not inconsistent
with applicable law, the Certificate of Trust or this Trust Agreement, that they
determine in their discretion to be necessary or desirable for such purposes, as
long as such action does not adversely affect in any material respect the



                                       15


interests of the Holders of the Outstanding Capital Securities. In no event
shall the Depositor or the Issuer Trustees be liable to the Issuer Trust or the
Holders for any failure to comply with this section that results from a change
in law or regulation or in the interpretation thereof.

         SECTION 2.8.      Assets of Trust.

                  The assets of the Issuer Trust shall consist solely of the
Trust Property.

         SECTION 2.9.      Title to Trust Property.

                  Legal title to all Trust Property shall be vested at all times
in the Property Trustee (in its capacity as such) and shall be held and
administered by the Property Trustee in trust for the benefit of the Issuer
Trust and the Holders in accordance with this Trust Agreement.

                                   ARTICLE III
                                 PAYMENT ACCOUNT

         SECTION 3.1.      Payment Account.

               (a)     On or prior to the Closing Date, the Property Trustee
shall establish the Payment Account. The Property Trustee and its agents shall
have exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of the Holders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.

               (b)     The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal of or interest on, and
any other payments or proceeds with respect to, the Debentures. Amounts held in
the Payment Account shall not be invested by the Property Trustee pending
distribution thereof.

                                   ARTICLE IV
                            DISTRIBUTIONS; REDEMPTION

         SECTION 4.1.      Distributions.

               (a)     The Trust Securities represent undivided beneficial
interests in the Trust Property, and Distributions (including of Additional
Amounts) will be made on the Trust Securities at the rate and on the dates that
payments of interest (including Additional Interest, as defined in the
Indenture) are made on the Debentures. Accordingly:

                           (i)   Distributions on the Trust Securities shall be
         cumulative, and will accumulate whether or not there are funds of the
         Trust available for the payment of Distributions. Distributions shall



                                       16


         accumulate from _____________, 2003 and, except in the event (and to
         the extent) that the Depositor exercises its right to defer the payment
         of interest on the Debentures pursuant to the Indenture, shall be
         payable monthly in arrears on the first day of each month, commencing
         on __________, 2003. If any date on which a Distribution is otherwise
         payable on the Trust Securities is not a Business Day, then the payment
         of such Distribution shall be made on the next succeeding day that is a
         Business Day (and without any interest or other payment in respect of
         any such delay), with the same force and effect as if made on the date
         on which such payment was originally payable (each date on which
         distributions are payable in accordance with this Section 4.1(a), a
         "Distribution Date").

                           (ii)  In the event (and to the extent) that the
         Depositor exercises its right under the Indenture to defer the payment
         of interest on the Debentures, Distributions on the Trust Securities
         shall be deferred but shall continue to accumulate. Distributions on
         the Trust Securities shall be payable at a rate of _____% per annum of
         the Liquidation Amount of the Trust Securities. The amount of
         Distributions payable for any full monthly period shall be computed on
         the basis of a 360-day year of twelve 30-day months. The amount of
         Distributions for any partial period shall be computed on the basis of
         a 360-day year of twelve 30-day months and the actual number of days
         elapsed in a partial month in that period. The amount of Distributions
         payable for any period shall include the Additional Amounts, if any.

                           (iii) Distributions on the Trust Securities shall be
         made by the Property Trustee from the Payment Account and shall be
         payable on each Distribution Date only to the extent that the Issuer
         Trust has funds then on hand and available in the Payment Account for
         the payment of such Distributions.

               (b)     Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date for such Distribution Date, which shall be the 15th
calendar day, whether or not a Business Day, before the relevant Distribution
Date. Distributions payable on any Trust Securities that are not punctually paid
on any Distribution Date will cease to be payable to the Person in whose name
such Trust Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Trust Securities are registered on the special record date or other specified
date for determining Holders entitled to such defaulted interest established in
accordance with the Indenture.

         SECTION 4.2.      Redemption.

               (a)     On each Debenture Redemption Date and on the stated
maturity of the Debentures, the Issuer Trust will be required to redeem a Like
Amount of Trust Securities at the Redemption Price.

               (b)     Notice of redemption shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not less than 30 nor more
than 60 days





                                       17


prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall state:

                           (i)   the Redemption Date;

                           (ii)  the Redemption Price or if the Redemption Price
         cannot be calculated prior to the time the notice is required to be
         sent, the estimate of the Redemption Price together with a statement
         that it is an estimate and that the actual Redemption Price will be
         calculated on the third Business Day prior to the Redemption Date (and
         if an estimate is provided, a further notice shall be sent of the
         actual Redemption Price on the date that such Redemption Price is
         calculated);

                           (iii) the CUSIP number or CUSIP numbers of the
         Capital Securities affected;

                           (iv)  if less than all the Outstanding Trust
         Securities are to be redeemed, the identification and the aggregate
         Liquidation Amount of the particular Trust Securities to be redeemed;

                           (v)   that on the Redemption Date the Redemption
         Price will become due and payable upon each such Trust Security to be
         redeemed and that Distributions thereon will cease to accumulate on and
         after said date, except as provided in Section 4.2(d) below; and

                           (vi)  if the Capital Securities are no longer in
         book-entry-only form, the place or places where the Capital Securities
         Certificates are to be surrendered for the payment of the Redemption
         Price.

               (c)     The Trust Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the proceeds from the
contemporaneous redemption or payment at stated maturity of the Debentures.
Redemptions of the Trust Securities shall be made and the Redemption Price shall
be payable on each Redemption Date only to the extent that the Issuer Trust has
funds then on hand and available in the Payment Account for the payment of such
Redemption Price.

               (d)     If the Property Trustee gives a notice of redemption in
respect of any Capital Securities, then, by 12:00 noon, New York City time, on
the Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Book-Entry Capital Securities, irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities, to the extent available therefor,
funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Capital Securities. With respect to Capital
Securities that are not Book-Entry Capital Securities, the Property Trustee,
subject to Section 4.2(c), will irrevocably deposit with the Paying Agent, to
the extent available therefor, funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable instructions and authority to
pay the Redemption Price to the Holders of the Capital Securities upon surrender
of their Capital Securities Certificates. Notwithstanding the foregoing,



                                       18


Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such Trust
Securities as they appear on the Securities Register for the Trust Securities on
the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of Holders holding Trust Securities so called
for redemption will cease, except the right of such Holders to receive the
Redemption Price and any Distribution payable in respect of the Trust Securities
on or prior to the Redemption Date, but without interest, and such Trust
Securities will cease to be outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (without any interest or other payment in respect of any
such delay), with the same force and effect as if made on such date. In the
event that payment of the Redemption Price in respect of any Trust Securities
called for redemption is improperly withheld or refused and not paid either by
the Issuer Trust or by the Depositor pursuant to the Guarantee, Distributions on
such Trust Securities will continue to accumulate, as set forth in Section 4.1,
from the Redemption Date originally established by the Issuer Trust for such
Trust Securities to the date such Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.

               (e)     Subject to Section 4.3(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of Trust Securities to be redeemed shall be
allocated pro rata to the Common Securities and the Capital Securities based
upon the relative Liquidation Amounts of such classes. The particular Capital
Securities to be redeemed shall be selected on a pro rata basis based upon their
respective Liquidation Amounts not more than 60 days prior to the Redemption
Date by the Property Trustee from the Outstanding Capital Securities not
previously called for redemption by any method the Property Trustee deems fair
and appropriate, provided that so long as the Capital Securities are in
book-entry-only form, such selection shall be made in accordance with the
customary procedures for the Clearing Agency for the Capital Securities. The
Property Trustee shall promptly notify the Securities Registrar in writing of
the Capital Securities selected for redemption and, in the case of any Capital
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of this Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Capital Securities shall
relate, in the case of any Capital Securities redeemed or to be redeemed only in
part, to the portion of the aggregate Liquidation Amount of Capital Securities
that has been or is to be redeemed.

         SECTION 4.3.      Ranking of Trust Securities.

               (a)     Payment of Distributions (including any Additional
Amounts) on, the Redemption Price of, and the Liquidation Distribution in
respect of, the Trust Securities, as applicable, shall be made, subject to
Section 4.2(e), pro rata among the Common Securities and the Capital Securities
based on the Liquidation Amount of the Trust Securities; provided, however, that
if on any Distribution Date, Redemption Date or Liquidation Date any Event of
Default resulting from a Debenture Event of Default specified in Section 501(1)
or 501(2)





                                       19


of the Indenture shall have occurred and be continuing, no payment of any
Distribution (including any Additional Amounts) on, Redemption Price of, or
Liquidation Distribution in respect of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including any Additional Amounts) on all Outstanding
Capital Securities for all Distribution Periods terminating on or prior thereto,
or in the case of payment of the Redemption Price the full amount of such
Redemption Price on all Outstanding Capital Securities then called for
redemption, or in the case of payment of the Liquidation Distribution the full
amount of such Liquidation Distribution on all Outstanding Capital Securities,
shall have been made or provided for, and all funds immediately available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Amounts) on, or the Redemption Price of,
the Capital Securities then due and payable.

               (b)     In the case of the occurrence of any Event of Default
resulting from any Debenture Event of Default, the Holders of the Common
Securities shall have no right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
respect to the Capital Securities have been cured, waived or otherwise
eliminated. Until all such Events of Default under this Trust Agreement with
respect to the Capital Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Capital Securities and not on behalf of the Holders of the Common
Securities, and only the Holders of the Capital Securities will have the right
to direct the Property Trustee to act on their behalf.

         SECTION 4.4.      Payment Procedures.

               Payments of Distributions (including any Additional Amounts) in
respect of the Capital Securities shall, subject to the next succeeding
sentence, be made by check mailed to the address of the Person entitled thereto
as such address shall appear on the Securities Register or, if the Capital
Securities are held by a Clearing Agency, such Distributions shall be made to
the Clearing Agency in immediately available funds. A Holder of $1,000,000 or
more in aggregate Liquidation Amount of Capital Securities may receive payments
of Distributions (including any Additional Amounts) by wire transfer of
immediately available funds upon written request to the Property Trustee not
later than the 15th calendar day, whether or not a Business Day, before the
relevant Distribution Date. Payments in respect of the Common Securities shall
be made in such manner as shall be mutually agreed between the Property Trustee
and the Holders of the Common Securities.

         SECTION 4.5.      Tax Returns and Reports.

               The Administrative Trustees shall prepare (or cause to be
prepared), at the Depositor's expense, and file all United States Federal,
Puerto Rico and any other state and local tax and information returns and
reports required to be filed by or in respect of the Issuer Trust. In this
regard, the Administrative Trustees shall (a) prepare and file (or cause to be
prepared and filed) all Internal Revenue Service and Puerto Rico Treasury forms
required to be filed in



                                       20


respect of the Issuer Trust in each taxable year of the Issuer Trust, and (b)
prepare and furnish (or cause to be prepared and furnished) to each Holder all
Internal Revenue Service forms required to be provided by the Issuer Trust. The
Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Issuer Trustees shall comply with United States Federal and
Puerto Rico withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to Holders under the Trust
Securities.

         SECTION 4.6.      Payment of Expenses of the Issuer Trust.

               The Depositor shall pay to the Issuer Trust, and reimburse the
Issuer Trust for, the full amount of any costs, expenses or liabilities of the
Issuer Trust (other than obligations of the Issuer Trust to pay the Holders of
any Capital Securities or other similar interests in the Issuer Trust the
amounts due such Holders pursuant to the terms of the Capital Securities or such
other similar interests, as the case may be), including, without limitation, any
taxes, duties or other governmental charges of whatever nature (other than
withholding taxes) imposed on the Issuer Trust by the United States or any other
taxing authority. Such payment obligation includes any such costs, expenses or
liabilities of the Issuer Trust that are required by applicable law to be
satisfied in connection with a dissolution of the Issuer Trust.

         SECTION 4.7.      Payments under Indenture or Pursuant to Direct
Actions.

               Any amount payable hereunder to any Holder of Capital Securities
(or any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (or Owner) has directly received pursuant to
Section 508 of the Indenture or Section 5.14 of this Trust Agreement.

                                    ARTICLE V
                          TRUST SECURITIES CERTIFICATES

         SECTION 5.1.      Initial Ownership.

               Upon the formation of the Issuer Trust and the contribution by
the Depositor pursuant to Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Issuer Trust.

         SECTION 5.2.      The Trust Securities Certificates.

               The Capital Securities Certificates shall be issued in minimum
denominations of $__ Liquidation Amount and integral multiples of $__ in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $__ Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be (i) executed on behalf of the Issuer Trust by manual or
facsimile signature of at least one Administrative Trustee and, if executed on
behalf of the Issuer Trust by facsimile, countersigned by the Securities
Registrar or its agent and (ii) authenticated by the Property Trustee by manual
or facsimile signature of an authorized signatory thereof and, if executed by
such authorized signatory of the Property Trustee by facsimile, countersigned by




                                       21

the Securities Registrar or its agent. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Issuer Trust or the
Property Trustee or, if executed on behalf of the Issuer Trust or the Property
Trustee by facsimile, countersigned by the Securities Registrar or its agent,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Holder, and shall be entitled to the rights and subject to the obligations of a
Holder hereunder, upon due registration of such Trust Securities Certificate in
such transferee's name pursuant to Sections 5.4, 5.11 and 5.13.

         SECTION 5.3.      Execution and Delivery of Trust Securities
Certificates.

               At the Time of Delivery, the Administrative Trustees shall cause
Trust Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and delivered
to or upon the written order of the Depositor, such written order executed by
one authorized officer thereof, without further corporate action by the
Depositor, in authorized denominations.

         SECTION 5.4.      Registration of Transfer and Exchange of Capital
Securities Certificates.

               The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 5.8, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Capital Securities Certificates (the "Securities Register") in which the
transfer agent and registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Capital Securities Certificates and Common
Securities Certificates (subject to Section 5.10 in the case of the Common
Securities Certificates) and registration of transfers and exchanges of Capital
Securities Certificates as herein provided. __________________________ shall be
the initial Securities Registrar. The provisions of Sections 8.1, 8.3 and 8.6
herein shall apply to ________________________ also in its role as Securities
Registrar, for so long as __________________________ shall act as Securities
Registrar.

               Upon surrender for registration of transfer of any Capital
Securities Certificate at the office or agency maintained pursuant to Section
5.8, the Administrative Trustees or any one of them shall execute on behalf of
the Issuer Trust (and if executed on behalf of the Issuer Trust by a facsimile
signature, such certificate shall be countersigned by the Securities Registrar
or its agent) and deliver, in the name of the designated transferee or
transferees, one or more new Capital Securities Certificates in authorized
denominations of a like aggregate Liquidation Amount dated the date of execution
by such Administrative Trustee or Trustees. The Securities Registrar shall not
be required to register the transfer of any Capital Securities that have been
called for redemption during a period beginning at the opening of business 15
days before the day of selection for such redemption.



                                       22


               At the option of a Holder, Capital Securities Certificates may be
exchanged for other Capital Securities Certificates in authorized denominations
of the same class and of a like aggregate Liquidation Amount upon surrender of
the Capital Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.8.

               Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Capital Securities Certificate surrendered for registration of
transfer or exchange shall be canceled and subsequently disposed of by an
Administrative Trustee or the Securities Registrar in accordance with such
Person's customary practice.

               No service charge shall be made for any registration of transfer
or exchange of Capital Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Capital Securities
Certificates.

         SECTION 5.5.      Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.

               If  (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar, or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Issuer Trust shall execute and make available for delivery, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section 5.5, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an undivided beneficial interest in the assets
of the Issuer Trust corresponding to that evidenced by the lost, stolen or
destroyed Trust Securities Certificate, as if originally issued, whether or not
the lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.

         SECTION 5.6.      Persons Deemed Holders.

               The Issuer Trustees and the Securities Registrar shall each treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving Distributions and for all other purposes whatsoever,
and



                                       23


none of the Issuer Trustees, the Administrative Trustees and the Securities
Registrar shall be bound by any notice to the contrary.

         SECTION 5.7.      Access to List of Holders' Names and Addresses.

               Each Holder and each Owner shall be deemed to have agreed not to
hold the Depositor, the Property Trustee, the Delaware Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.

         SECTION 5.8.      Maintenance of Office or Agency.

               The Administrative Trustees shall designate an office or offices
or agency or agencies where Capital Securities Certificates may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Issuer Trustees in respect of the Trust Securities Certificates may be
served. The Administrative Trustees initially designate _______________________,
as its office and agency for such purposes. The Administrative Trustee shall
give prompt written notice to the Depositor, the Property Trustees and to the
Holders of any change in the location of the Securities Register or any such
office or agency.

         SECTION 5.9.      Appointment of Paying Agent.

               The Paying Agent shall make Distributions to Holders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Property Trustee may
revoke such power and remove the Paying Agent in its sole discretion. The Paying
Agent shall initially be [Banco Popular de Puerto Rico]. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Administrative Trustees and the Property Trustee. If [Banco
Popular de Puerto Rico] shall no longer be the Paying Agent or a successor
Paying Agent shall resign or its authority to act be revoked, the Property
Trustee shall appoint a successor (which shall be a bank or trust company) that
is reasonably acceptable to the Administrative Trustees and the Depositor to act
as Paying Agent. Such successor Paying Agent or any additional Paying Agent
shall execute and deliver to the Issuer Trustees an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with the Issuer
Trustees that as Paying Agent, such successor Paying Agent or additional Paying
Agent will hold all sums, if any, held by it for payment to the Holders in trust
for the benefit of the Holders entitled thereto until such sums shall be paid to
such Holders. The Paying Agent shall return all unclaimed funds to the Property
Trustee and upon removal of a Paying Agent such Paying Agent shall also return
all funds in its possession to the Property Trustee. The provisions of Sections
8.1, 8.3 and 8.6 herein shall apply to [Banco Popular de Puerto Rico] also in
its role as Paying Agent, for so long as [Banco Popular de Puerto Rico] shall
act as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.



                                       24


         SECTION 5.10.     Ownership of Common Securities by Depositor.

               At the Time of Delivery, the Depositor shall acquire, and
thereafter shall retain, beneficial and record ownership of the Common
Securities. To the fullest extent permitted by law, other than a transfer in
connection with a consolidation or merger of the Depositor into another Person,
or any conveyance, transfer or lease by the Depositor of its properties and
assets substantially as an entirety to any Person, pursuant to Section 801 of
the Indenture, any attempted transfer of the Common Securities shall be void.
The Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend consistent with this Section 5.10.

         SECTION 5.11.     Book-Entry Capital Securities Certificates; Common
Securities Certificate.

               (a)     The Capital Securities Certificates, upon original
issuance, will be issued in the form of a typewritten Capital Securities
Certificate or Certificates representing Book-Entry Capital Securities
Certificates, to be delivered to, or on behalf of, DTC, the initial Clearing
Agency, by, or on behalf of, the Issuer Trust. Such Capital Securities
Certificate or Certificates shall initially be registered on the Securities
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Owner will receive a Definitive Capital Securities Certificate
representing such Owner's interest in such Capital Securities, except as
provided in Section 5.13. Unless and until Definitive Capital Securities
Certificates have been issued to Owners pursuant to Section 5.13:

                           (i)   the provisions of this Section 5.11(a) shall be
         in full force and effect;

                           (ii)  the Securities Registrar and the Trustees shall
         be entitled to deal with the Clearing Agency for all purposes of this
         Trust Agreement relating to the Book-Entry Capital Securities
         Certificates (including the payment of the Liquidation Amount of and
         Distributions on the Capital Securities evidenced by Book-Entry Capital
         Securities Certificates and the giving of instructions or directions to
         Owners of Capital Securities evidenced by Book-Entry Capital Securities
         Certificates) as the sole Holder of Capital Securities evidenced by
         Book-Entry Capital Securities Certificates and shall have no
         obligations to the Owners thereof;

                           (iii) to the extent that the provisions of this
         Section 5.11 conflict with any other provisions of this Trust
         Agreement, the provisions of this Section 5.11 shall control; and

                           (iv)  the rights of the Owners of the Book-Entry
         Capital Securities Certificate shall be exercised only through the
         Clearing Agency and shall be limited to those established by law and
         agreements between such Owners and the Clearing Agency and/or the
         Clearing Agency Participants. Pursuant to the Certificate Depository
         Agreement, unless and until Definitive Capital Securities Certificates
         are issued pursuant to Section 5.13, the initial Clearing Agency will
         make book-entry transfers





                                       25


         among the Clearing Agency Participants and receive and transmit
         payments on the Capital Securities to such Clearing Agency
         Participants.

               (b)     A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.

         SECTION 5.12.     Notices to Clearing Agency.

               To the extent that a notice or other communication to the
Holders is required under this Trust Agreement, for so long as Capital
Securities are represented by a Book-Entry Capital Securities Certificates, the
Administrative Trustees and the Issuer Trustee shall give all such notices and
communications specified herein to be given to the Clearing Agency, and shall
have no obligations to the Owners.

         SECTION 5.13.     Definitive Capital Securities Certificates.

               If (a) the Depositor advises the Issuer Trustees in writing
that the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Capital Securities Certificates, and the
Depositor is unable to locate a qualified successor, (b) the Depositor at its
option advises the Issuer Trustees in writing that it elects to terminate the
book-entry system through the Clearing Agency or (c) after the occurrence of a
Debenture Event of Default, Owners of Capital Securities Certificates
representing beneficial interests aggregating at least a majority of the
Liquidation Amount advise the Administrative Trustees in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interest of the Owners of Capital Securities Certificates, then the
Administrative Trustees shall notify the other Issuer Trustees and the Clearing
Agency, and the Clearing Agency, in accordance with its customary rules and
procedures, shall notify all Clearing Agency Participants for whom it holds
Capital Securities of the occurrence of any such event and of the availability
of the Definitive Capital Securities Certificates to Owners of such class or
classes, as applicable, requesting the same. Upon surrender to the
Administrative Trustees of the typewritten Capital Securities Certificate or
Certificates representing the Book-Entry Capital Securities Certificates by the
Clearing Agency, accompanied by registration instructions, the Administrative
Trustees, or any one of them, shall execute the Definitive Capital Securities
Certificates in accordance with the instructions of the Clearing Agency, if
executed on behalf of the Issuer Trust by facsimile, countersigned by the
Securities Registrar or its agent. Neither the Securities Registrar nor the
Trustees shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Capital Securities Certificates, the Issuer
Trustees shall recognize the Holders of the Definitive Capital Securities
Certificates as holders of Trust Securities. The Definitive Capital Securities
Certificates shall be typewritten, printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees that meets the requirements of any stock exchange or automated
quotation system on which the Capital Securities are then listed or approved for
trading, as evidenced by the execution thereof by the Administrative Trustees or
any one of them.



                                       26


         SECTION 5.14.     Rights of Holders; Waivers of Past Defaults.

               (a)     The legal title to the Trust Property is vested
exclusively in the Property Trustee (in its capacity as such) in accordance with
Section 2.9, and the Holders shall not have any right or title therein other
than the undivided beneficial interest in the assets of the Issuer Trust
conferred by their Trust Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Issuer Trust except
as described below. The Trust Securities shall be personal property giving only
the rights specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Holders against payment of the purchase price therefor will be
fully paid and, to the fullest extent permitted by applicable law, nonassessable
by the Issuer Trust. The Holders of the Trust Securities, in their capacities as
such, shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.

               (b)     For so long as any Capital Securities remain Outstanding,
if, upon a Debenture Event of Default, the Debenture Trustee fails or the
holders of not less than 25% in principal amount of the outstanding Debentures
fail to declare the principal of all of the Debentures to be immediately due and
payable, the Property Trustee or the Holders of at least 25% in Liquidation
Amount of the Capital Securities then Outstanding shall have the right to make
such declaration by a notice in writing to the Depositor, the Debenture Trustee
and the Property Trustee, in the case of notice by the Holders of the Capital
Securities, or to the Depositor, the Debenture Trustee and the Holders of the
Capital Securities, in the case of notice by the Property Trustee.

               At any time after a declaration of acceleration with respect to
the Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, by written notice to the Property Trustee, the Depositor and
the Debenture Trustee, may rescind and annul such declaration and its
consequences if:

                           (i)   the Depositor has paid or deposited with the
         Debenture Trustee a sum sufficient to pay

                                 (A)   all overdue installments of interest on
               all of the Debentures,

                                 (B)   any accrued Additional Interest (as
                  defined in the Indenture) on all of the Debentures,

                                 (C)   the principal of (and premium, if any,
                  on) any Debentures that have become due otherwise than by such
                  declaration of acceleration and interest and Additional
                  Interest (as defined in the Indenture) thereon at the rate
                  borne by the Debentures, and

                                 (D)   all sums paid or advanced by the
                  Debenture Trustee under the Indenture and the reasonable
                  compensation, expenses,




                                       27


                  disbursements and advances of the Debenture Trustee and the
                  Property Trustee, their agents and counsel; and

                           (ii)  all Events of Default with respect to the
         Debentures, other than the non-payment of the principal of the
         Debentures that has become due solely by such acceleration, have been
         cured or waived as provided in Section 513 of the Indenture.

               The Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Capital Securities,
waive any past default under the Indenture, except a default in the payment of
principal or interest (unless such default has been cured and a sum sufficient
to pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee) or a default in
respect of a covenant or provision that under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.

               Upon receipt by the Property Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of any
part of the Capital Securities a record date shall be established for
determining Holders of Outstanding Capital Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Property Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record date;
provided that, unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.14(b).

               (c)     For so long as any Capital Securities remain Outstanding,
to the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, upon a Debenture Event of Default specified in
Section 501(1) or 501(2) of the Indenture, any Holder of Capital Securities
shall have the right to institute a proceeding directly against the Depositor,
pursuant to Section 508 of the Indenture, for enforcement of payment to such
Holder of any amounts payable in respect of Debentures having an aggregate
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of such Holder (a "Direct Action"). Except as set forth in Section
5.14(b) and this Section 5.14(c), the Holders of Capital Securities shall have
no right to exercise directly any right or remedy available to the holders of,
or in respect of, the Debentures.



                                       28


               (d)     Except as otherwise provided in paragraphs (a), (b) and
(c) of this Section 5.14, the Holders of at least a Majority in Liquidation
Amount of the Capital Securities may, on behalf of the Holders of all the
Capital Securities, waive any past default or Event of Default and its
consequences. Upon such waiver, any such default or Event of Default shall cease
to exist, and any default or Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Trust Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.

         SECTION 5.15.     CUSIP Numbers.

               The Administrative Trustees in issuing the Capital Securities
may use "CUSIP" numbers (if then generally in use), and, if so, the Property
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Administrative Trustees will promptly notify the
Property Trustee of any change in the CUSIP numbers.

                                   ARTICLE VI
                        ACTS OF HOLDERS; MEETINGS; VOTING

         SECTION 6.1.      Limitations on Voting Rights.

               (a)     Except as expressly provided in this Trust Agreement and
in the Indenture and as otherwise required by law, no Holder of Capital
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer Trust or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Trust Securities Certificates, be construed so as to constitute the
Holders from time to time as partners or members of an association.

               (b)     So long as any Debentures are held by the Property
Trustee on behalf of the Issuer Trust, the Issuer Trustees shall not (i) direct
the time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or execute any trust or power conferred on the
Debenture Trustee with respect to the Debentures, (ii) waive any past default
that may be waived under Section 513 of the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Debentures shall
be due and payable, or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the Holders of
at least a Majority in Liquidation Amount of the Capital Securities, provided,
however, that where a consent under the Indenture would require the consent of
each holder of Debentures affected thereby, no such consent shall be given by
the Property Trustee without the prior written consent of each Holder of Capital
Securities. The Property Trustee shall not revoke any action previously
authorized or





                                       29


approved by a vote of the Holders of the Capital Securities, except by a
subsequent vote of the Holders of the Capital Securities. The Property Trustee
shall notify all Holders of the Capital Securities of any notice of default
received with respect to the Debentures. In addition to obtaining the foregoing
approvals of the Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Issuer Trustees shall, at the expense of the Depositor,
obtain an Opinion of Counsel experienced in such matters to the effect that such
action shall not cause the Issuer Trust to be taxable as a corporation or
classified as other than a grantor trust for United States Federal or Puerto
Rico income tax purposes.

               (c)     If any proposed amendment to the Trust Agreement provides
for, or the Issuer Trustees otherwise propose to effect, (i) any action that
would adversely affect in any material respect the powers, preferences or
special rights of the Capital Securities, whether by way of amendment to the
Trust Agreement or otherwise, or (ii) the dissolution and winding-up of the
Issuer Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Capital Securities as a class will be entitled to vote on
such amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a Majority in Liquidation
Amount of the Capital Securities. Notwithstanding any other provision of this
Trust Agreement, no amendment to this Trust Agreement may be made if, as a
result of such amendment, it would cause the Issuer Trust to be taxable as a
corporation or classified as other than a grantor trust for United States
Federal or Puerto Rico income tax purposes.

         SECTION 6.2.      Notice of Meetings.

               Notice of all meetings of the Holders of the Capital Securities,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.8 to each Holder of Capital Securities,
at such Holder's registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.

         SECTION 6.3.      Meetings of Holders of the Capital Securities.

               No annual meeting of Holders is required to be held. The Property
Trustee, however, shall call a meeting of the Holders of the Capital Securities
to vote on any matter upon the written request of the Holders of at least 25% in
aggregate Liquidation Amount of the Outstanding Capital Securities and the
Administrative Trustees or the Property Trustee may, at any time in their
discretion, call a meeting of the Holders of the Capital Securities to vote on
any matters as to which such Holders are entitled to vote.

               The Holders of at least a Majority in Liquidation Amount of the
Capital Securities, present in person or by proxy, shall constitute a quorum at
any meeting of the Holders of the Capital Securities.

               If a quorum is present at a meeting, an affirmative vote by the
Holders present, in person or by proxy, holding Capital Securities representing






                                       30


at least a Majority in Liquidation Amount of the Capital Securities held by the
Holders present, either in person or by proxy, at such meeting shall constitute
the action of the Holders of the Capital Securities, unless this Trust Agreement
requires a greater number of affirmative votes.

         SECTION 6.4.      Voting Rights.

               Holders shall be entitled to one vote for each $__ of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.

         SECTION 6.5.      Proxies, etc.

               At any meeting of Holders, any Holder entitled to vote thereat
may vote by proxy, provided that no proxy shall be voted at any meeting unless
it shall have been placed on file with the Property Trustee, or with such other
officer or agent of the Issuer Trust as the Property Trustee may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of the Property Trustee, proxies may be solicited in the name of the
Property Trustee or one or more officers of the Property Trustee. Only Holders
of record shall be entitled to vote. When Trust Securities are held jointly by
several persons, any one of them may vote at any meeting in person or by proxy
in respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.

         SECTION 6.6.      Holder Action by Written Consent.

               Any action that may be taken by Holders at a meeting may be taken
without a meeting if Holders holding at least a Majority in Liquidation Amount
of all Capital Securities entitled to vote in respect of such action (or such
larger proportion thereof as shall be required by any other provision of this
Trust Agreement) shall consent to the action in writing.

         SECTION 6.7.      Record Date for Voting and Other Purposes.

               For the purposes of determining the Holders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Holders or the payment of
a Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Holders of record for such purposes.



                                       31


         SECTION 6.8.      Acts of Holders.

               Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust Agreement to be
given, made or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as otherwise expressly
provided herein, such action shall become effective when such instrument or
instruments are delivered to the Property Trustee. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Trust
Agreement and (subject to Section 8.1) conclusive in favor of the Issuer
Trustees, if made in the manner provided in this Section.

               The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that any Issuer Trustee receiving the same deems sufficient.

               The ownership of Trust Securities shall be proved by the
Securities Register.

               Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Trust Security shall bind every future
Holder of the same Trust Security and the Holder of every Trust Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Issuer Trustees, or the Issuer Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.

               Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.

               If any dispute shall arise between the Holders and the Issuer
Trustees or among the Holders or the Issuer Trustees with respect to the
authenticity, validity or binding nature of any request, demand, authorization,
direction, consent, waiver or other Act of such Holder or Issuer Trustee under
this Article VI, then the determination of such matter by the Property Trustee
shall be conclusive with respect to such matter.



                                       32


               A Holder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Issuer Trust, any Issuer Trustee, or any person or
entity.

         SECTION 6.9.      Inspection of Records.

               Upon reasonable notice to the Administrative Trustees and the
Property Trustee, the records of the Issuer Trust shall be open to inspection by
Holders during normal business hours for any purpose reasonably related to such
Holder's interest as a Holder.

                                   ARTICLE VII
                         REPRESENTATIONS AND WARRANTIES

         SECTION 7.1.      Representations and Warranties of the Property
Trustee and the Delaware Trustee.

               The Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Holders that:

               (a)     the Property Trustee is a national banking association,
duly organized, validly existing and in good standing under the laws of the
United States;

               (b)     the Property Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;

               (c)     the Delaware Trustee is a Delaware corporation;

               (d)     the Delaware Trustee has full corporate power, authority
and legal right to execute, deliver and perform its obligations under this Trust
Agreement and has taken all necessary action to authorize the execution,
delivery and performance by it of this Trust Agreement;

               (e)     this Trust Agreement has been duly authorized, executed
and delivered by the Property Trustee and the Delaware Trustee and constitutes
the valid and legally binding agreement of each of the Property Trustee and the
Delaware Trustee enforceable against each of them in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;

               (f)     the execution, delivery and performance of this Trust
Agreement have been duly authorized by all necessary corporate or other action
on the part of the Property Trustee and the Delaware Trustee and do not require
any approval of stockholders of the Property Trustee and the Delaware Trustee
and such execution, delivery and performance will not (i) violate the charter or
by-laws of the Property Trustee or the Delaware Trustee, (ii) violate any
provision of,





                                       33


or constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any law, governmental rule or regulation of the United States or the
State of Delaware, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property Trustee or
the Delaware Trustee;

               (g)     neither the authorization, execution or delivery by the
Property Trustee or the Delaware Trustee of this Trust Agreement nor the
consummation of any of the transactions by the Property Trustee or the Delaware
Trustee (as the case may be) contemplated herein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing law of the United States or the State of Delaware governing the
banking, trust or general powers of the Property Trustee or the Delaware Trustee
(as appropriate in context), other than the filing of the Certificate of Trust
with the Delaware Secretary of State; and

               (h)     there are no proceedings pending or, to the best of each
of the Property Trustee's and the Delaware Trustee's knowledge, threatened
against or affecting the Property Trustee or the Delaware Trustee in any court
or before any governmental authority, agency or arbitration board or tribunal
that, individually or in the aggregate, would materially and adversely affect
the Issuer Trust or would question the right, power and authority of the
Property Trustee or the Delaware Trustee, as the case may be, to enter into or
perform its obligations as one of the Trustees under this Trust Agreement.

         SECTION 7.2.      Representations and Warranties of Depositor.

               The Depositor hereby represents and warrants for the benefit of
the Holders that:

               (a)     the Trust Securities Certificates issued at the Time of
Delivery on behalf of the Issuer Trust have been duly authorized and will have
been duly and validly executed, issued and delivered by the Issuer Trustees
pursuant to the terms and provisions of, and in accordance with the requirements
of, this Trust Agreement, and the Holders will be, as of such date, entitled to
the benefits of this Trust Agreement; and

               (b)     there are no taxes, fees or other governmental charges
payable by the Issuer Trust (or the Issuer Trustees on behalf of the Issuer
Trust) under the laws of the State of Delaware or any political subdivision
thereof in connection with the execution, delivery and performance by any Issuer
Trustee of this Trust Agreement.



                                       34


                                  ARTICLE VIII
                               THE ISSUER TRUSTEES

         SECTION 8.1.      Certain Duties and Responsibilities.

               (a)     The duties and responsibilities of the Issuer Trustees
shall be as provided by this Trust Agreement, subject to Section 10.10 hereof.
Notwithstanding the foregoing, but subject to Section 8.1(c), no provision of
this Trust Agreement shall require any of the Issuer Trustees to expend or risk
its or their own funds or otherwise incur any financial liability in the
performance of any of its or their duties hereunder, or in the exercise of any
of its or their rights or powers, if it or they shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to the Issuer
Trustees shall be subject to the provisions of this Section 8.1. To the extent
that, at law or in equity, an Administrative Trustee has duties and liabilities
relating to the Issuer Trust or to the Holders, such Administrative Trustee
shall not be liable to the Issuer Trust or to any Holder for such Administrative
Trustee's good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of the Administrative Trustees otherwise existing at law or in
equity, are agreed by the Depositor and the Holders to replace such other duties
and liabilities of the Administrative Trustees.

               (b)     All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Holder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Issuer Trustees
are not personally liable to such Holder for any amount distributable in respect
of any Trust Security or for any other liability in respect of any Trust
Security. This Section 8.1(b) does not limit the liability of the Issuer
Trustees expressly set forth elsewhere in this Trust Agreement or, in the case
of the Property Trustee, in the Trust Indenture Act.

               (c)     If an Event of Default has occurred and is continuing,
the Property Trustee shall enforce this Trust Agreement for the benefit of the
Holders.

               (d)     The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Trust Agreement (including pursuant to Section 10.10), and no implied
covenants shall be read into this Trust Agreement against the Property Trustee.
If an Event of Default has occurred (that has not been cured or waived pursuant
to Section 5.14), the Property Trustee shall exercise such of the rights and
powers vested in it by this Trust Agreement, and use the same degree of care and
skill





                                       35


in its exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

               (e)     No provision of this Trust Agreement shall be construed
to relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

                           (i)   prior to the occurrence of any Event of Default
         and after the curing or waiving of all such Events of Default that may
         have occurred:

                                 (A)   the duties and obligations of the
               Property Trustee shall be determined solely by the express
               provisions of this Trust Agreement (including pursuant to Section
               10.10), and the Property Trustee shall not be liable except for
               the performance of such duties and obligations as are
               specifically set forth in this Trust Agreement (including
               pursuant to Section 10.10); and

                                 (B)   in the absence of bad faith on the part
               of the Property Trustee, the Property Trustee may conclusively
               rely, as to the truth of the statements and the correctness of
               the opinions expressed therein, upon any certificates or opinions
               furnished to the Property Trustee and conforming to the
               requirements of this Trust Agreement; but in the case of any such
               certificates or opinions that by any provision hereof or of the
               Trust Indenture Act are specifically required to be furnished to
               the Property Trustee, the Property Trustee shall be under a duty
               to examine the same to determine whether or not they conform to
               the requirements of this Trust Agreement;

                           (ii)  the Property Trustee shall not be liable for
         any error of judgment made in good faith by an authorized officer of
         the Property Trustee, unless it shall be proved that the Property
         Trustee was negligent in ascertaining the pertinent facts;

                           (iii) the Property Trustee shall not be liable with
         respect to any action taken or omitted to be taken by it in good faith
         in accordance with the direction of the Holders of at least a Majority
         in Liquidation Amount of the Capital Securities relating to the time,
         method and place of conducting any proceeding for any remedy available
         to the Property Trustee, or exercising any trust or power conferred
         upon the Property Trustee under this Trust Agreement;

                           (iv)  the Property Trustee's sole duty with respect
         to the custody, safe keeping and physical preservation of the
         Debentures and the Payment Account shall be to deal with such property
         in a similar manner as the Property Trustee deals with similar property
         for its own account, subject to the protections and limitations on
         liability afforded to the Property Trustee under this Trust Agreement
         and the Trust Indenture Act;

                           (v)   the Property Trustee shall not be liable for
         any interest on any money received by it except as it may otherwise
         agree with





                                       36


         the Depositor; and money held by the Property Trustee need not be
         segregated from other funds held by it except in relation to the
         Payment Account maintained by the Property Trustee pursuant to Section
         3.1 and except to the extent otherwise required by law;

                           (vi)  the Property Trustee shall not be responsible
         for monitoring the compliance by the Administrative Trustees or the
         Depositor with their respective duties under this Trust Agreement, nor
         shall the Property Trustee be liable for the default or misconduct of
         any other Issuer Trustee, the Administrative Trustees or the Depositor;
         and

                           (vii) subject to Section 8.1(c), no provision of this
         Trust Agreement shall require the Property Trustee to expend or risk
         its own funds or otherwise incur personal financial liability in the
         performance of any of its duties or in the exercise of any of its
         rights or powers, if the Property Trustee shall have reasonable grounds
         for believing that the repayment of such funds or liability is not
         reasonably assured to it under the terms of this Trust Agreement or
         adequate indemnity against such risk or liability is not reasonably
         assured to it.

               (f)     The Administrative Trustees shall not be responsible for
monitoring the compliance by the other Issuer Trustees or the Depositor with
their respective duties under this Trust Agreement, nor shall either
Administrative Trustee be liable for the default or misconduct of any other
Issuer Trustee or the Depositor.

         SECTION 8.2.      Certain Notices.

               Within ninety days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Holders and the Administrative Trustees, unless such Event of
Default shall have been cured or waived.

               Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such exercise
to the Holders and the Administrative Trustees, unless such exercise shall have
been revoked.

               The Property Trustee shall not be deemed to have knowledge of any
Event of Default unless the Property Trustee shall have received written notice
or a Responsible Officer of the Property Trustee charged with the administration
of this Trust Agreement shall have obtained actual knowledge of such Event of
Default.

         SECTION 8.3.      Certain Rights of Property Trustee.

               Subject to the provisions of Section 8.1:



                                       37


               (a)     the Property Trustee may rely and shall be protected in
acting or refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;

               (b)     if (i) in performing its duties under this Trust
Agreement the Property Trustee is required to decide between alternative courses
of action, (ii) in construing any of the provisions of this Trust Agreement the
Property Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Property Trustee is unsure of the
application of any provision of this Trust Agreement, then, except as to any
matter as to which the Holders of the Capital Securities are entitled to vote
under the terms of this Trust Agreement, the Property Trustee shall deliver a
notice to the Depositor requesting the Depositor's opinion as to the course of
action to be taken; provided, however, that if the Depositor fails to deliver
such opinion, the Property Trustee shall take such action, or refrain from
taking such action, as the Property Trustee shall deem advisable and in the best
interests of the Holders, in which event the Property Trustee shall have no
liability except for its own bad faith, negligence or willful misconduct;

               (c)     any direction or act of the Depositor contemplated by
this Trust Agreement shall be sufficiently evidenced by an Officers'
Certificate;

               (d)     any direction or act of an Administrative Trustee
contemplated by this Trust Agreement shall be sufficiently evidenced by a
certificate executed by such Administrative Trustee and setting forth such
direction or act;

               (e)     the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or re-registration thereof;

               (f)     the Property Trustee may consult with counsel (which
counsel may be counsel to the Depositor or any of its Affiliates, and may
include any of its employees) and the advice of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust Agreement
from any court of competent jurisdiction;

               (g)     the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any of the Holders pursuant to this Trust Agreement,
unless such Holders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction; provided that
nothing contained in this Section 8.3(g) shall be taken to relieve the Property
Trustee, upon the


                                       38


occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Trust Agreement;

               (h)     the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless requested in writing to do so by one or more Holders, but
the Property Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;

               (i)     the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or misconduct with respect to selection of
any agent or attorney appointed by it hereunder;

               (j)     whenever in the administration of this Trust Agreement
the Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Property Trustee (i) may request instructions from the Holders (which
instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action), (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and (iii)
shall be protected in acting in accordance with such instructions; and

               (k)     except as otherwise expressly provided by this Trust
Agreement, the Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Trust Agreement.

               No provision of this Trust Agreement shall be deemed to impose
any duty or obligation on any Issuer Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which such Person shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to any Issuer Trustee shall be construed
to be a duty.

         SECTION 8.4.      Issuer Trustees Not Responsible for Recitals or
Issuance of Securities.

               The recitals contained herein and in the Trust Securities
Certificates shall be taken as the statements of the Issuer Trust and the
Depositor, and the Issuer Trustees do not assume any responsibility for their
correctness. The Issuer Trustees shall not be accountable for the use or
application by the Depositor of the proceeds of the Debentures.




                                       39


         SECTION 8.5.      Issuer Trustees May Hold Securities.

               Any Issuer Trustee or any other agent of any Issuer Trustee or
the Issuer Trust, in its individual or any other capacity, may become the owner
or pledgee of Trust Securities and, subject to Sections 8.8 and 8.13, and except
as provided in the definition of the term "Outstanding" in Article I, may
otherwise deal with the Issuer Trust with the same rights it would have if it
were not Issuer Trustee or such other agent.

         SECTION 8.6.      Compensation; Indemnity; Fees.

               The Depositor agrees:

               (a)     to pay to the Issuer Trustees from time to time such
reasonable compensation for all services rendered by them hereunder as may be
separately agreed by the Depositor and the Issuer Trustees from time to time
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);

               (b)     except as otherwise expressly provided herein, to
reimburse the Issuer Trustees upon request for all reasonable expenses,
disbursements and advances incurred or made by the Issuer Trustees in accordance
with any provision of this Trust Agreement (including the reasonable
compensation and the expenses and disbursements of their agents and counsel),
except any such expense, disbursement or advance as may be attributable to their
negligence, bad faith or willful misconduct; and

               (c)     to the fullest extent permitted by applicable law, to
indemnify and hold harmless (i) each Issuer Trustee, (ii) any Affiliate of any
Issuer Trustee, (iii) any officer, director, shareholder, employee,
representative or agent of any Issuer Trustee, and (iv) any employee or agent of
the Issuer Trust (referred to herein as an "Indemnified Person") from and
against any loss, damage, liability, tax, penalty, expense or claim of any kind
or nature whatsoever incurred by such Indemnified Person by reason of the
creation, operation or dissolution of the Issuer Trust or any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Issuer Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of authority conferred on such Indemnified Person by this Trust
Agreement, except that no Indemnified Person shall be entitled to be indemnified
in respect of any loss, damage or claim incurred by such Indemnified Person by
reason of negligence, bad faith or willful misconduct with respect to such acts
or omissions.

               The provisions of this Section 8.6 shall survive the termination
of this Trust Agreement and the removal or resignation of any Issuer Trustee.

               No Issuer Trustee may claim any Lien on any Trust Property as a
result of any amount due pursuant to this Section 8.6.

               The Depositor and any Issuer Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Issuer Trust, and



                                       40


the Issuer Trust and the Holders of Trust Securities shall have no rights by
virtue of this Trust Agreement in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Issuer Trust, shall not be deemed wrongful
or improper. Neither the Depositor nor any Issuer Trustee shall be obligated to
present any particular investment or other opportunity to the Issuer Trust even
if such opportunity is of a character that, if presented to the Issuer Trust,
could be taken by the Issuer Trust, and the Depositor and any Issuer Trustee
shall have the right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Issuer Trustee may engage or be interested in any financial or
other transaction with the Depositor or any Affiliate of the Depositor, or may
act as depository for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Depositor or its Affiliates.

         SECTION 8.7.      Corporate Property Trustee Required; Eligibility of
Issuer Trustees and Administrative Trustees.

               (a)     There shall at all times be a Property Trustee hereunder
with respect to the Trust Securities. The Property Trustee shall be a Person
that is a national, Puerto Rico or state chartered bank and eligible pursuant to
the Trust Indenture Act to act as such and that has a combined capital and
surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 8.7
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section 8.7, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article VIII. At the time of appointment, the Property Trustee must have
securities rated in one of the three highest rating categories by a nationally
recognized statistical rating organization.

               (b)     There shall at all times be one or more Administrative
Trustees hereunder with respect to the Trust Securities. Each Administrative
Trustee shall be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more persons authorized to bind that
entity.

               (c)     There shall at all times be a Delaware Trustee with
respect to the Trust Securities. The Delaware Trustee shall either be (i) a
natural person who is at least 21 years of age and a resident of the State of
Delaware, or (ii) a legal entity with its principal place of business in the
State of Delaware and that otherwise meets the requirements of applicable
Delaware law and that shall act through one or more persons authorized to bind
such entity.

         SECTION 8.8.      Conflicting Interests.

               (a)     If the Property Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Property
Trustee shall either eliminate such interest or resign, to the extent and in the
manner




                                       41


provided by, and subject to the provisions of, the Trust Indenture Act and this
Trust Agreement.

               (b)     The Guarantee Agreement and the Indenture shall be deemed
to be specifically described in this Trust Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.

         SECTION 8.9.      Co-Trustees and Separate Trustee.

               Unless and until a Debenture Event of Default shall have occurred
and be continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust Property may at the time be located, the Holder of Common
Securities and the Administrative Trustees shall have the power to appoint one
or more Persons either to act as co-trustee, jointly with the Property Trustee,
of all or any part of such Trust Property, or to the extent required by law to
act as separate trustee of any such property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If a
Debenture Event of Default shall have occurred and be continuing, the Property
Trustee shall have the sole power to so appoint such a co-trustee or separate
trustee, and upon the written request of the Property Trustee, the Depositor and
the Administrative Trustees shall for such purpose join with the Property
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint, such co-trustee or separate trustee.
Any co-trustee or separate trustee appointed pursuant to this Section shall
either be (i) a natural person who is at least 21 years of age and a resident of
the United States or Puerto Rico, or (ii) a legal entity with its principal
place of business in the United States that shall act through one or more
persons authorized to bind such entity.

               Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Depositor.

               Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:

               (a)     The Trust Securities shall be executed by one or more
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such
co-trustee or separate trustee.

               (b)     The rights, powers, duties, and obligations hereby
conferred or imposed upon the Property Trustee in respect of any property
covered by such




                                       42


appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.

               (c)     The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee appointed
under this Section 8.9, and, in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without the
concurrence of the Depositor. Upon the written request of the Property Trustee,
the Depositor shall join with the Property Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigning or removed may be appointed in the manner provided
in this Section 8.9.

               (d)     No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee or
any other trustee hereunder.

               (e)     The Property Trustee shall not be liable by reason of any
act of a co-trustee or separate trustee.

               (f)     Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and separate
trustee.

         SECTION 8.10.     Resignation and Removal; Appointment of Successor.

               No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor Issuer Trustee pursuant to this
Article VIII shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.

               Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time by giving written notice thereof to the Holders
and by appointing a successor Relevant Trustee. The Relevant Trustee shall
appoint a successor by requesting from at least three Persons meeting the
eligibility requirements its expenses and charges to serve as the Relevant
Trustee on a form provided by the Administrative Trustees, and selecting the
Person who agrees to the lowest expenses and charges. If the instrument of
acceptance by the successor Issuer Trustee required by Section 8.11 shall not
have been delivered to the Relevant Trustee within 60 days after the giving of
such notice of resignation, the Relevant Trustee may petition, at the expense of
the Depositor, in the case of the Property Trustee, any court of competent
jurisdiction for the appointment of a successor Relevant Trustee.



                                       43


               The Administrative Trustees, or any of them, may be removed at
any time by Act of the Holders of Common Securities delivered to the Relevant
Trustee.

               The Property Trustee or the Delaware Trustee, or both of them,
may be removed by Act of the Holders of at least a Majority in Liquidation
Amount of the Capital Securities, delivered to the Relevant Trustee (in its
individual capacity and, in the case of the Property Trustee, on behalf of the
Issuer Trust) (i) for cause (including upon the occurrence of an Event of
Default described in subparagraph (d) of the definition thereof with respect to
the Relevant Trustee), or (ii) at any time if a Debenture Event of Default shall
have occurred and be continuing. Unless and until a Debenture Event of Default
shall have occurred and be continuing, the Property Trustee or the Delaware
Trustee, or both of them, may be removed at any time by Act of the Holders of
the Common Securities.

               If a resigning Property Trustee or Delaware Trustee shall fail
to appoint a successor, or if the Property Trustee or the Delaware Trustee shall
be removed or become incapable of acting as Issuer Trustee, or if a vacancy
shall occur in the office of the Property Trustee or the Delaware Trustee for
any cause, the Holders of the Common Securities by Act of such Holders delivered
to the Relevant Trustee or, if a Debenture Event of Default shall have occurred
and be continuing, the Holders of the Capital Securities, by Act of the Holders
of not less than 25% in aggregate Liquidation Amount of the Capital Securities
then Outstanding delivered to such Relevant Trustee, may appoint a successor
Relevant Trustee or Trustees, and such successor Issuer Trustee shall comply
with the applicable requirements of Section 8.11. If no successor Relevant
Trustee shall have been so appointed by the Holders of the Common Securities or
Capital Securities, as the case may be, and accepted appointment in the manner
required by Section 8.11, any Holder, on behalf of such Holder and all others
similarly situated, or any other Issuer Trustee, may petition any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.

               The Property Trustee shall give notice of each resignation and
each removal of an Issuer Trustee and each appointment of a successor Issuer
Trustee to all Holders in the manner provided in Section 10.8 and shall give
notice to the Depositor and to the Administrative Trustees. Each notice shall
include the name of the successor Relevant Trustee and the address of its
Corporate Trust Office if it is the Property Trustee.

               Notwithstanding the foregoing or any other provision of this
Trust Agreement, if any Delaware Trustee who is a natural person dies or
becomes, in the opinion of the Holders of the Common Securities, incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity may
be filled by the Property Trustee following the procedures regarding expenses
and charges set forth above (with the successor being a Person who satisfies the
eligibility requirement for the Delaware Trustee set forth in Section 8.7).

         SECTION 8.11.     Acceptance of Appointment by Successor.

               In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Relevant Trustee with
respect to the Trust Securities shall execute and deliver an amendment hereto
wherein





                                       44


each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Issuer Trust, and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Issuer Trust by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or conveyance, other
than the filing of an amendment to the Certificate of Trust to the extent
required under the Delaware Statutory Trust Act, shall become vested with all
the rights, powers, trusts and duties of the retiring Relevant Trustee; but, on
request of the Issuer Trust or any successor Relevant Trustee such retiring
Relevant Trustee shall duly assign, transfer and deliver to such successor
Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and the
Issuer Trust.

               Upon request of any such successor Relevant Trustee, the Issuer
Trust shall execute any and all instruments for more fully and certainly vesting
in and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the preceding paragraph.

               No successor Relevant Trustee shall accept its appointment unless
at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Article VIII.

         SECTION 8.12.     Merger, Conversion, Consolidation or Succession to
Business.

               Any Person into which the Property Trustee or the Delaware
Trustee may be merged or converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which such
Relevant Trustee shall be a party, or any Person, succeeding to all or
substantially all the corporate trust business of such Relevant Trustee, shall
be the successor of such Relevant Trustee hereunder, provided that such Person
shall be otherwise qualified and eligible under this Article VIII, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, other than the filing of an amendment to the Certificate of
Trust to the extent required under the Delaware Statutory Trust Act.

         SECTION 8.13.     Preferential Collection of Claims Against Depositor
or Issuer Trust.

               If and when the Property Trustee shall be or become a creditor
of the Depositor or the Issuer Trust (or any other obligor upon the Capital
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Issuer Trust (or any such other obligor).



                                       45


         SECTION 8.14.     Trustee May File Proofs of Claim.

               In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable and irrespective of whether
the Property Trustee shall have made any demand on the Issuer Trust for the
payment of any past due Distributions) shall be entitled and empowered, to the
fullest extent permitted by law, by intervention in such proceeding or
otherwise:

               (a)     to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Trust Securities and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and

               (b)     to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.

               Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement adjustment or compensation
affecting the Trust Securities or the rights of any Holder thereof or to
authorize the Property Trustee to vote in respect of the claim of any Holder in
any such proceeding.

         SECTION 8.15.     Reports by Property Trustee.

               (a)     Within 60 days after _____________ of each year
commencing with _____________, the Property Trustee shall transmit to all
Holders in accordance with Section 10.8, and to the Depositor, a brief report
dated as of the immediately preceding _____________ with respect to:

                           (i)   its eligibility under Section 8.7 or, in lieu
         thereof, if to the best of its knowledge it has continued to be
         eligible under said Section, a written statement to such effect;

                           (ii)  a statement that the Property Trustee has
         complied with all of its obligations under this Trust Agreement during
         the twelve-month period (or, in the case of the initial report, the
         period since the Closing Date) ending with such _____________ or, if
         the Property Trustee has not complied in any material respect with such
         obligations, a description of such noncompliance; and



                                       46


                           (iii) any change in the property and funds in its
         possession as Property Trustee since the date of its last report and
         any action taken by the Property Trustee in the performance of its
         duties hereunder which it has not previously reported and which in its
         opinion materially affects the Trust Securities.

               (b)     In addition, the Property Trustee shall transmit to
Holders such reports concerning the Property Trustee and its actions under this
Trust Agreement as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant thereto.

               (c)     A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with the Depositor.

         SECTION 8.16.     Reports to the Property Trustee.

               Each of the Depositor and the Administrative Trustees shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act. The Depositor and the Administrative Trustees shall annually file with the
Property Trustee a certificate specifying whether such Person is in compliance
with all of the terms and covenants applicable to such Person hereunder.

         SECTION 8.17.     Evidence of Compliance with Conditions Precedent.

               Each of the Depositor and the Administrative Trustees shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers'
Certificate.

         SECTION 8.18.     Number of Issuer Trustees.

               (a)     The number of Issuer Trustees shall be four, unless the
Property Trustee also acts as the Delaware Trustee, in which case the number of
Issuer Trustees may be three.

               (b)     If an Issuer Trustee ceases to hold office for any
reason, a vacancy shall occur. The vacancy shall be filled with an Issuer
Trustee appointed in accordance with Section 8.10.

               (c)     The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to annul or dissolve the Issuer Trust.



                                       47


         SECTION 8.19.     Delegation of Power.

               (a)     Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 2.7(a) or making any governmental filing; and

               (b)     The Administrative Trustees shall have power to delegate
from time to time to such of their number the doing of such things and the
execution of such instruments either in the name of the Issuer Trust or the
names of the Administrative Trustees or otherwise as the Administrative Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of this Trust Agreement.

                                   ARTICLE IX
                       DISSOLUTION, LIQUIDATION AND MERGER

         SECTION 9.1.      Dissolution Upon Expiration Date.

               Unless earlier dissolved, the Issuer Trust shall automatically
dissolve, and its affairs be wound up, on _____________, 20__ (the "Expiration
Date"), following the distribution of the Trust Property in accordance with
Section 9.4.

         SECTION 9.2.      Early Dissolution.

               The first to occur of any of the following events is an "Early
Dissolution Event":

               (a)     the occurrence of a Depositor Bankruptcy Event in respect
of, or the dissolution or liquidation of, the Depositor, in its capacity as the
Holder of the Common Securities, unless the Depositor shall transfer the Common
Securities as provided by Section 5.10, in which case this provision shall refer
instead to any such successor Holder of the Common Securities;

               (b)     the written direction to the Property Trustee from all of
the Holders of the Common Securities at any time to dissolve the Issuer Trust
and to distribute the Debentures to Holders in exchange for the Capital
Securities (which direction is optional and wholly within the discretion of the
Holders of the Common Securities);

               (c)     the redemption of all of the Capital Securities in
connection with the redemption or repayment of all the Debentures; and

               (d)     the entry of an order for dissolution of the Issuer Trust
by a court of competent jurisdiction.

         SECTION 9.3.      Dissolution.

               The respective obligations and responsibilities of the Issuer
Trustees, the Administrative Trustees and the Issuer Trust created and continued
hereby shall terminate upon the latest to occur of the following: (a) the



                                       48





distribution by the Property Trustee to Holders of all amounts required to be
distributed hereunder upon the liquidation of the Issuer Trust pursuant to
Section 9.4, or upon the redemption of all of the Trust Securities pursuant to
Section 4.2; (b) the payment of any expenses owed by the Issuer Trust; and (c)
the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to the
Issuer Trust or the Holders.

         SECTION 9.4.      Liquidation.

               (a)     If an Early Dissolution Event specified in clause (a),
(b) or (d) of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust
shall be liquidated by the Property Trustee as expeditiously as the Property
Trustee determines to be possible by distributing, after satisfaction of
liabilities to creditors of the Issuer Trust as provided by applicable law, to
each Holder a Like Amount of Debentures, subject to Section 9.4(d). Notice of
liquidation shall be given by the Property Trustee by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Liquidation
Date to each Holder of Trust Securities at such Holder's address appearing in
the Securities Register. All such notices of liquidation shall:

                           (i)   state the CUSIP Number of the Trust Securities;

                           (ii)  state the Liquidation Date;

                           (iii) state that from and after the Liquidation Date,
         the Trust Securities will no longer be deemed to be Outstanding and any
         Trust Securities Certificates not surrendered for exchange will be
         deemed to represent a Like Amount of Debentures, or if Section 9.4(d)
         applies, a right to receive a Liquidating Distribution; and

                           (iv)  provide such information with respect to the
         mechanics by which Holders may exchange Trust Securities Certificates
         for Debentures, or if Section 9.4(d) applies, receive a Liquidation
         Distribution, as the Property Trustee (after consultation with the
         Administrative Trustees) shall deem appropriate.

               (b)     Except where Section 9.2(c) or 9.4(d) applies, in order t
o effect the liquidation of the Issuer Trust and distribution of the Debentures
to Holders, the Property Trustee, either itself acting as exchange agent or
through the appointment of a separate exchange agent, shall establish a record
date for such distribution (which shall be not more than 30 days prior to the
Liquidation Date) and, establish such procedures as it shall deem appropriate to
effect the distribution of Debentures in exchange for the Outstanding Trust
Securities Certificates.

               (c)     Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
Certificates to the exchange agent for exchange, (iii) any Trust Securities
Certificates not so surrendered for exchange will be deemed to represent a Like



                                       49


Amount of Debentures bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities Certificates
until such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of
Trust Securities Certificates with respect to such Debentures) and (iv) all
rights of Holders holding Trust Securities will cease, except the right of such
Holders to receive Debentures upon surrender of Trust Securities Certificates.

               (d)     If, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, or if an Early
Dissolution Event specified in clause (c) of Section 9.2 occurs, the Trust
Property shall be liquidated, and the Issuer Trust shall be dissolved and its
affairs wound-up, by the Property Trustee in such manner as the Property Trustee
determines. In such event, on the date of the dissolution, winding-up or other
termination of the Issuer Trust, Holders will be entitled to receive out of the
assets of the Issuer Trust available for distribution to Holders, after
satisfaction of liabilities to creditors of the Issuer Trust as provided by
applicable law, an amount equal to the Liquidation Amount per Trust Security
plus accumulated and unpaid Distributions thereon to the date of payment (such
amount being the "Liquidation Distribution"). If, upon any such dissolution,
winding up or termination, the Liquidation Distribution can be paid only in part
because the Issuer Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Issuer Trust on the Trust Securities shall
be paid on a pro rata basis (based upon Liquidation Amounts). The Holders of the
Common Securities will be entitled to receive Liquidation Distributions upon any
such dissolution, winding-up or termination pro rata (determined as aforesaid)
with Holders of Capital Securities, except that, if a Debenture Event of Default
specified in Section 501(1) or 501(2) of the Indenture has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities as provided in Section 4.3.

         SECTION 9.5.      Mergers, Consolidations, Amalgamations or
Replacements of Issuer Trust.

               The Issuer Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to any corporation or other body, except
pursuant to this Section 9.5. At the request of the Holders of the Common
Securities, with the consent of the Administrative Trustees, but without the
consent of the Holders of the Capital Securities, the Property Trustee or the
Delaware Trustee, the Issuer Trust may merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the laws
of any state or Puerto Rico; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Issuer Trust with respect to the
Capital Securities, or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities have the same
priority as the Capital Securities with respect to distributions and payments
upon liquidation, redemption and otherwise,




                                       50


(ii) a trustee of such successor entity possessing the same powers and duties as
the Property Trustee is appointed to hold the Debentures, (iii) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor Securities) to be
downgraded by any nationally recognized statistical rating organization, (iv)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect, (v) such successor entity has a purpose substantially
identical to that of the Issuer Trust, (vi) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, the Property Trustee
has received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Capital Securities (including any Successor Securities) in any material respect,
and (b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Issuer Trust nor such successor
entity will be required to register as an "investment company" under the
Investment Company Act, and (vii) the Depositor or its permitted transferee owns
all of the Common Securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee Agreement. Notwithstanding the foregoing,
the Issuer Trust shall not, except with the consent of Holders of all of the
Capital Securities, consolidate, amalgamate, merge with or into, or be replaced
by or convey, transfer or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Issuer Trust or the successor entity to be taxable as a corporation or
classified as other than a grantor trust for United States Federal or Puerto
Rico income tax purposes.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

         SECTION 10.1.     Limitation of Rights of Holders.

               Except as set forth in Section 9.2, the death or incapacity of
any person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such person or any Holder for such person, to claim
an accounting, take any action or bring any proceeding in any court for a
partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.

         SECTION 10.2.     Amendment.

               (a)     This Trust Agreement may be amended from time to time by
the Administrative Trustees and the Holders of all of the Common Securities,
without the consent of any Holder of the Capital Securities, (i) to cure any
ambiguity, correct or supplement any provision herein that may be inconsistent
with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Trust Agreement, which shall not be
inconsistent




                                       51


with the other provisions of this Trust Agreement, or (ii) to modify, eliminate
or add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Issuer Trust will not be taxable as a corporation
or classified as other than a grantor trust for United States Federal or Puerto
Rico income tax purposes at all times that any Trust Securities are outstanding
or to ensure that the Issuer Trust will not be required to register as an
"investment company" under the Investment Company Act; provided, however, that
in the case of either clause (i) or (ii), such action shall not adversely affect
in any material respect the interests of any Holder.

               (b)     Except as provided in Section 10.2(c), any provision of
this Trust Agreement may be amended by the Administrative Trustees, the Property
Trustee, and the Holders of all of the Common Securities and with (i) the
consent of Holders of at least a Majority in Liquidation Amount of the Capital
Securities, and (ii) receipt by the Issuer Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees or the Administrative Trustees in accordance with such amendment will
not affect the Trust's status as a grantor trust or cause the Issuer Trust to be
taxable as a corporation or as other than a grantor trust for United States
Federal or Puerto Rico income tax purposes or affect the Issuer Trust's
exemption from status as an "investment company" under the Investment Company
Act.

               (c)     In addition to and notwithstanding any other provision in
this Trust Agreement, without the consent of each affected Holder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date, or (ii) restrict the right of a Holder to institute suit for the
enforcement of any such payment on or after such date; and notwithstanding any
other provision herein, without the unanimous consent of the Holders (such
consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
paragraph (c) of this Section 10.2 may not be amended.

               (d)     Notwithstanding any other provisions of this Trust
Agreement, no Issuer Trustee shall enter into or consent to any amendment to
this Trust Agreement that would cause the Issuer Trust to fail or cease to
qualify for the exemption from status as an "investment company" under the
Investment Company Act or to be taxable as a corporation or to be classified as
other than a grantor trust for United States Federal or Puerto Rico income tax
purposes.

               (e)     Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Depositor and the Administrative Trustees,
this Trust Agreement may not be amended in a manner that imposes any additional
obligation on the Depositor or the Administrative Trustees.

               (f)     Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Property Trustee, this Trust Agreement may
not be amended in a manner that imposes any additional obligation on the
Property Trustee.



                                       52


               (g)     Notwithstanding anything in this Trust Agreement to the
contrary, without the consent of the Delaware Trustee, this Trust Agreement may
not be amended in a manner that imposes any additional obligation on the
Delaware Trustee.

               (h)     In the event that any amendment to this Trust Agreement
is made, the Administrative Trustees or the Property Trustee shall promptly
provide to the Depositor a copy of such amendment.

               (i)     Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Trust Agreement that
affects its own rights, duties or immunities under this Trust Agreement. The
Property Trustee shall be entitled to receive an Opinion of Counsel and an
Officers' Certificate stating that any amendment to this Trust Agreement is in
compliance with this Trust Agreement.

         SECTION 10.3.     Separability.

               In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

         SECTION 10.4.     Governing Law.

               This Trust Agreement and the rights and obligations of each of
the Holders, the Issuer Trust, the Depositor, and the Issuer Trustees with
respect to this Trust Agreement and the Trust Securities shall be construed in
accordance with and governed by the laws of the State of Delaware without
reference to its conflicts of laws provisions.

         SECTION 10.5.     Payments Due on Non-Business Day. If the date fixed
for any payment on any Trust Security shall be a day that is not a Business Day,
then such payment need not be made on such date but may be made on the next
succeeding day that is a Business Day, with the same force and effect as though
made on the date fixed for such payment, and no Distributions shall accumulate
on such unpaid amount for the period after such date.

         SECTION 10.6.     Successors.

               This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust, and any Issuer
Trustee, including any successor by operation of law. Except in connection with
a consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.




                                       53


         SECTION 10.7.     Headings.

               The Article and Section headings are for convenience only and
shall not affect the construction of this Trust Agreement.

         SECTION 10.8.     Reports, Notices and Demands.

               Any report, notice, demand or other communication that by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Holder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Holder of Capital Securities, to such Holder as such Holder's name and address
may appear on the Securities Register; and (b) in the case of the Holder of the
Common Securities or the Depositor, to Popular, Inc., 209 Munoz Rivera Avenue,
San Juan, Puerto Rico 00918, Attention: Principal Financial Officer, or to such
other address as may be specified in a written notice by the Holder of the
Common Securities or the Depositor, as the case may be, to the Property Trustee.
Such notice, demand or other communication to or upon a Holder shall be deemed
to have been sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission. Such notice, demand or other communication to or upon
the Depositor shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Depositor.

Any notice, demand or other communication that by any provision of this Trust
Agreement is required or permitted to be given or served to or upon the Issuer
Trust, the Property Trustee, the Delaware Trustee, the Administrative Trustees
or the Issuer Trust shall be given in writing addressed to such Person as
follows: (a) with respect to the Property Trustee, to Bank One Trust Company,
N.A., 1 Bank One Plaza, Mail Code IL1-0823, Chicago, Illinois 60670-0823,
Attention: Global Corporate Trust Services Division; (b) with respect to the
Delaware Trustee, to____________________________ (c) with respect to the
Administrative Trustees, to them at ________________________________________;
and (d) with respect to the Issuer Trust, to its principal office specified in
Section 2.2, with a copy to the Property Trustee. Such notice, demand or other
communication to or upon the Issuer Trust, the Property Trustee or the
Administrative Trustees shall be deemed to have been sufficiently given or made
only upon actual receipt of the writing by the Issuer Trust, the Property
Trustee or such Administrative Trustee.

         SECTION 10.9.     Agreement Not to Petition.

               Each of the Issuer Trustees and the Depositor agree for the
benefit of the Holders that, until at least one year and one day after the
Issuer Trust has been dissolved in accordance with Article IX, they shall not
file, or join in the filing of, a petition against the Issuer Trust under any
bankruptcy, insolvency, reorganization or other similar law (including the
United States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise
join in the commencement of any proceeding against the Issuer Trust under any
Bankruptcy Law. If the Depositor takes action in violation of this Section 10.9,
the Property Trustee agrees, for the benefit of Holders, that at the expense of
the Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest




                                       54


the filing of such petition by the Depositor against the Issuer Trust or the
commencement of such action and raise the defense that the Depositor has agreed
in writing not to take such action and should be stopped and precluded therefrom
and such other defenses, if any, as counsel for the Issuer Trustee or the Issuer
Trust may assert.

         SECTION 10.10.    Trust Indenture Act; Conflict with Trust Indenture
Act.

               (a)     This Trust Agreement is subject to the provisions of the
Trust Indenture Act that are required to be part of this Trust Agreement and
shall, to the extent applicable, be governed by such provisions. Except as
otherwise expressly provided herein, if and to the extent that any provision of
this Trust Agreement limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.

               (b)     The Property Trustee shall be the only Issuer Trustee
that is a trustee for the purposes of the Trust Indenture Act.

               (c)     The application of the Trust Indenture Act to this Trust
Agreement shall not affect the nature of the Trust Securities as equity
securities representing undivided beneficial interests in the assets of the
Issuer Trust.

         SECTION 10.11.    Acceptance of Terms of Trust Agreement, Guarantee
Agreement and Indenture.

               THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH
TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE
GUARANTEE AGREEMENT AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION
PROVISIONS AND OTHER TERMS OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND
SHALL CONSTITUTE THE AGREEMENT OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS
THAT THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING,
OPERATIVE AND EFFECTIVE AS BETWEEN THE ISSUER TRUST AND SUCH HOLDER AND SUCH
OTHERS.

         SECTION 10.12.          Counterparts.

               This Trust Agreement may contain more than one counterpart of
the signature page and this Trust Agreement may be executed by the affixing of
the signature of each of the Trustees to one of such counterpart signature
pages. All of such counterpart signature pages shall be read as though one, and
they shall have the same force and effect as though all of the signers had
signed a single signature page.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]



                                       55



         IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement.

                                              POPULAR, INC.


                                              By:
                                                 ---------------------------



                                              BANK ONE TRUST COMPANY, N.A.,
                                              as Property Trustee


                                              By:
                                                 ---------------------------
                                                 Its

                                              BANK ONE DELAWARE, INC.


                                              By:                           ,
                                                 ---------------------------
                                              as Delaware Trustee


                                              By:
                                                 ---------------------------



                                                 ---------------------------,
                                                 Jorge A. Junquera
                                                 as Administrative Trustee


                                                 ---------------------------,
                                                 Richard Barrios
                                                 as Administrative Trustee



                                       56






Affidavit No.: ______

         Sworn and subscribed to before me by Jorge A. Junquera, of legal age,
married, executive, and a resident of __________, Puerto Rico, in his capacity
as Senior Executive Vice President of Popular, Inc., personally known to me, in
San Juan, Puerto Rico, this ____ day of ___________, 2003.



                                                   ----------------------------
                                                           Notary Public


STATE OF                   )
                           ) ss:
                           )

         On _____________, 2003 before me, the undersigned, a Notary Public in
and for the State of ____________, personally appeared ________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that the foregoing instrument is the free act and deed of the entity upon
behalf of which such person acted.

                                            WITNESS my hand and official seal


                                            SIGNATURE:
                                                      --------------------------

(This area for official notarial seal)



                                       57





STATE OF DELAWARE                     )
                                      ) ss:
COUNTY OF NEW CASTLE                  )

         On ______________, 2003 before me, the undersigned, a Notary Public in
and for the State of Delaware, personally appeared __________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that the foregoing instrument is the free act and deed of the entity upon
behalf of which such person acted.

                                     WITNESS my hand and official seal


                                     SIGNATURE:
                                               --------------------------

(This area for official notarial seal)





                                       58



                                                                       EXHIBIT A

                              CERTIFICATE OF TRUST





                                    Exh. A-1





                                                                       EXHIBIT B

                      FORM OF COMMON SECURITIES CERTIFICATE


THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN AFFILIATE OF
THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION 5.10 OF THE TRUST
AGREEMENT

Certificate Number _______                   Number of Common Securities _______

                    Certificate Evidencing Common Securities

                           of Popular Capital Trust __

                            _____% Common Securities

                  (liquidation amount $__ per Common Security)

         Popular Capital Trust __, a statutory trust created under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that Popular, Inc.
(the "Holder") is the registered owner of _______________________ (___________)
Common Securities of the Issuer Trust representing undivided common beneficial
interests in the assets of the Issuer Trust and designated the _____% Common
Securities (liquidation amount $__ per Common Security) (the "Common
Securities"). Except in accordance with the Trust Agreement (as defined below),
the Common Securities are not transferable and any attempted transfer hereof
other than in accordance therewith shall be void. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Declaration of Trust and
Trust Agreement of the Issuer Trust, dated as of _____________, 2003, as the
same may be amended from time to time (the "Trust Agreement"), among Popular,
Inc., as Depositor, Bank One Trust Company, N.A., as Property Trustee, Bank One
Delaware, Inc., as Delaware Trustee, and the Holders of Trust Securities,
including the designation of the terms of the Common Securities as set forth
therein. The Issuer Trust will furnish a copy of the Trust Agreement to the
Holder without charge upon written request to the Issuer Trust at its principal
place of business or registered office. Upon receipt of this certificate, the
Holder is bound by the Trust Agreement and is entitled to the benefits
thereunder.

         Terms used but not defined herein have the meanings set forth in the
Trust Agreement.

                                    Exh. B-1





         IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this ____ day of _________, 2003.

                                             POPULAR CAPITAL TRUST __


                                             By:
                                                -------------------------------
                                             Name:
                                             Title: Administrative Trustee

                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Common Securities referred to in the above mentioned
Trust Agreement.

Dated:________________                       BANK ONE TRUST COMPANY, N.A.,
                                             as Property Trustee


                                             By:_____________________________
                                             Name:
                                             Title:


                                    Exh. B-2





                                                                       EXHIBIT C

                  FORM OF GLOBAL CAPITAL SECURITIES CERTIFICATE


         This Capital Securities Certificate is a Book-Entry Capital Securities
Certificate within the meaning of the Trust Agreement hereinafter referred to
and is registered in the name of a Clearing Agency or a nominee of a Clearing
Agency. This Capital Securities Certificate is exchangeable for Capital
Securities Certificates registered in the name of a person other than the
Clearing Agency or its nominee only in the limited circumstances described in
the Trust Agreement and may not be transferred except as a whole by the Clearing
Agency to a nominee of the Clearing Agency or by a nominee of the Clearing
Agency to the Clearing Agency or another nominee of the Clearing Agency, except
in the limited circumstances described in the Trust Agreement.

         Unless this Capital Security Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to Popular Capital Trust __ or its agent for registration of transfer, exchange
or payment, and any Capital Security Certificate issued is registered in the
name of Cede & Co. or such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

         NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") (EACH, A "PLAN"), NO
ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR
ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR HOLDING OR THE
REQUIREMENTS OF U.S. DEPARTMENT OF LABOR REGULATION SECTION 2550.401c-1 ARE
SATISFIED SUCH THAT THE CAPITAL SECURITIES CERTIFICATE HELD BY THE PURCHASER OR
HOLDER DOES NOT CONSTITUTE "PLAN ASSETS" AND, IN THE CASE OF ANY PURCHASER OR
HOLDER RELYING ON ANY EXEMPTION OTHER THAN PTCE 96-23, 95-60, 91-38, 90-1 OR
84-14 OR U.S. DEPARTMENT OF LABOR REGULATION SECTION 2550.401c-1, HAS COMPLIED
WITH ANY REQUEST BY THE DEPOSITOR OR THE ISSUER TRUST FOR AN OPINION OF COUNSEL
OR OTHER EVIDENCE WITH RESPECT TO THE AVAILABILITY OF SUCH EXEMPTION. ANY
PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES CERTIFICATE OR ANY INTEREST
HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING HEREOF
THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET ENTITY AND IS NOT PURCHASING
SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS" OF ANY PLAN, OR (B) IS
ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE 96-23, 95-60, 91-38, 90-1
OR 84-14 OR ANOTHER APPLICABLE EXEMPTION WITH RESPECT TO SUCH PURCHASE OR
HOLDING OR U.S. DEPARTMENT OF LABOR REGULATION SECTION 2550.401c-1.


                                    Exh. C-1







Certificate Number _____                      Number of Capital Securities _____

CUSIP NO.

                    Certificate Evidencing Capital Securities
                           of Popular Capital Trust __
                        _____% Trust Preferred Securities
                  (liquidation amount $__ per Capital Security)

         Popular Capital Trust __, a statutory trust created under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of _________________________________
(____________) Capital Securities of the Trust representing an undivided
preferred beneficial interest in the assets of the Trust and designated the
Popular Capital Trust __ _____% Trust Preferred Securities (liquidation amount
$__ per Capital Security) (the "Capital Securities"). The Capital Securities are
transferable on the books and records of the Issuer Trust, in person or by a
duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer as provided in the Trust Agreement (as defined
below). The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Capital Securities are set forth in, and this
certificate and the Capital Securities represented hereby are issued and shall
in all respects be subject to the terms and provisions of, the Amended and
Restated Declaration of Trust and Trust Agreement of the Issuer Trust, dated as
of _____________, 2003, as the same may be amended from time to time (the "Trust
Agreement"), among Popular, Inc., as Depositor, Bank One Trust Company, N.A., as
Property Trustee, Bank One Delaware, Inc., as Delaware Trustee, and the Holders
of Trust Securities, including the designation of the terms of the Capital
Securities as set forth therein. The Holder is entitled to the benefits of the
Guarantee Agreement, dated as of _____________, 2003, (the "Guarantee
Agreement"), by and between Popular, Inc., as Guarantor, and Bank One Trust
Company, N.A., as Guarantee Trustee, to the extent provided therein. The Issuer
Trust will furnish a copy of the Issuer Trust Agreement and the Guarantee
Agreement to the Holder without charge upon written request to the Issuer Trust
at its principal place of business or registered office.

         Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

         IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this ____ day of _________________.



                                               POPULAR CAPITAL TRUST __


                                                By:
                                                   -----------------------------
                                                Name:
                                                Title: Administrative Trustee



                                    Exh. C-2




                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Capital Securities referred to in the above
mentioned Trust Agreement.

Dated:________________                       BANK ONE TRUST COMPANY, N.A.,
                                             as Property Trustee


                                             By:
                                                --------------------------------
                                             Name:
                                             Title:


                                   ASSIGNMENT


         FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security to: _____________________________________________ (Insert assignee's
social security or tax identification number) ___________________ (Insert
address and zip code of assignee) and irrevocably appoints
____________________________________________ agent to transfer this Capital
Security Certificate on the books of the Issuer Trust. The agent may substitute
another to act for him or her.

Dated:________________                      Signature:_________________________

                                                     (Sign exactly as your name
                                                     appears on the other side
                                                     of this Capital Security
                                                     Certificate) The
                                                     signature(s) should be
                                                     guaranteed by an eligible
                                                     guarantor institution
                                                     (banks, stockbrokers,
                                                     savings and loan
                                                     associations and credit
                                                     unions with membership in
                                                     an approved signature
                                                     guarantee medallion
                                                     program), pursuant to
                                                     S.E.C. Rule 17Ad-15.








                                    Exh. C-3

EX-4.7

                                                                     EXHIBIT 4.7


                                     FORM OF


                               GUARANTEE AGREEMENT


                                 BY AND BETWEEN


                                 POPULAR, INC.,
                                  AS GUARANTOR

                                       AND

                          BANK ONE TRUST COMPANY, N.A.,
                              AS GUARANTEE TRUSTEE


                                   RELATING TO


                            POPULAR CAPITAL TRUST __





                           ---------------------------


                         DATED AS OF _____________, 2003

                           ---------------------------




                                TABLE OF CONTENTS



                                                                                                               PAGE
                                                                                                               ----
                                                                                                            
ARTICLE I                  -        DEFINITIONS...................................................................2
         SECTION 1.1.      Definitions............................................................................2

ARTICLE II        -        TRUST INDENTURE ACT....................................................................6
         SECTION 2.1.      Trust Indenture Act; Application.......................................................6
         SECTION 2.2.      List of Holders........................................................................6
         SECTION 2.3.      Reports by the Guarantee Trustee.......................................................7
         SECTION 2.4.      Periodic Reports to the Guarantee
                           Trustee................................................................................7
         SECTION 2.5.      Evidence of Compliance with
                           Conditions Precedent...................................................................7
         SECTION 2.6.      Events of Default; Waiver..............................................................8
         SECTION 2.7.      Event of Default; Notice...............................................................8
         SECTION 2.8.      Conflicting Interests..................................................................8

ARTICLE III       -        POWERS, DUTIES AND RIGHTS OF THE
                           GUARANTEE TRUSTEE......................................................................9
         SECTION 3.1.      Powers and Duties of the Guarantee
                           Trustee................................................................................9
         SECTION 3.2.      Certain Rights of Guarantee Trustee...................................................11
         SECTION 3.3.      Compensation; Indemnity; Fees.........................................................13

ARTICLE IV        -        GUARANTEE TRUSTEE.....................................................................14
         SECTION 4.1.      Guarantee Trustee; Eligibility........................................................14
         SECTION 4.2.      Appointment, Removal and Resignation
                           of the Guarantee Trustee..............................................................15

ARTICLE V                  -        GUARANTEE....................................................................16
         SECTION 5.1.      Guarantee.............................................................................16
         SECTION 5.2.      Waiver of Notice and Demand...........................................................16
         SECTION 5.3.      Obligations Not Affected..............................................................16
         SECTION 5.4.      Rights of Holders.....................................................................18
         SECTION 5.5.      Guarantee of Payment..................................................................18
         SECTION 5.6.      Subrogation...........................................................................18
         SECTION 5.7.      Independent Obligations...............................................................19

ARTICLE VI        -        COVENANTS AND SUBORDINATION...........................................................19
         SECTION 6.1.      Subordination.........................................................................19
         SECTION 6.2.      Pari Passu Guarantees.................................................................19







                                                                                                               PAGE
                                                                                                               ----
                                                                                                            
ARTICLE VII       -        TERMINATION...........................................................................20
         SECTION 7.1.      Termination...........................................................................20

ARTICLE VIII      -        MISCELLANEOUS.........................................................................20
         SECTION 8.1.      Successors and Assigns................................................................20
         SECTION 8.2.      Amendments............................................................................20
         SECTION 8.3.      Notices...............................................................................21
         SECTION 8.4.      Benefit...............................................................................22
         SECTION 8.5.      Governing Law.........................................................................22
         SECTION 8.6.      Counterparts..........................................................................22



                                       ii




         GUARANTEE AGREEMENT, dated as of ___________, 2003, between POPULAR,
INC., a Commonwealth of Puerto Rico corporation (the "Guarantor"), having its
principal office at 209 Munoz Rivera Avenue, San Juan, Puerto Rico 00918, and
BANK ONE TRUST COMPANY, N.A., as trustee (the "Guarantee Trustee"), for the
benefit of the Holders (as defined herein) from time to time of the Capital
Securities (as defined herein) of POPULAR CAPITAL TRUST __, a Delaware statutory
trust (the "Issuer Trust").

                                    RECITALS

         WHEREAS, pursuant to an Amended and Restated Declaration of Trust and
Trust Agreement, of even date herewith (the "Trust Agreement"), among Popular,
Inc., as Depositor, the Property Trustee, the Delaware Trustee, and the
Administrative Trustees (each as named therein) and the holders from time to
time of undivided beneficial interests in the assets of the Issuer Trust, the
Issuer Trust is issuing $___________ aggregate Liquidation Amount (as defined in
the Trust Agreement) of its _____% Trust Preferred Securities (TruPS(R))
(liquidation amount $__ per capital security) (the "Capital Securities"),
representing preferred undivided beneficial interests in the assets of the
Issuer Trust and having the terms set forth in the Trust Agreement; and

         WHEREAS, the Capital Securities will be issued by the Issuer Trust, and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined herein), will be used to purchase the
Debentures of the Guarantor, which Debentures will be deposited with Bank One
Trust Company, N.A., as Property Trustee under the Trust Agreement, as trust
assets; and

         WHEREAS, as an incentive for the Holders to purchase Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the purchase of Capital Securities
by each Holder, which purchase the Guarantor hereby acknowledges shall benefit
the Guarantor, the Guarantor executes




and delivers this Guarantee Agreement for the benefit of the Holders from time
to time.


                                    ARTICLE I
                                   DEFINITIONS

         SECTION 1.1.  DEFINITIONS. FOR ALL PURPOSES OF THIS GUARANTEE
AGREEMENT, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED OR UNLESS THE
CONTEXT OTHERWISE REQUIRES:

                  (a)      The terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;

                  (b)      All other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

                  (c)      The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation;"

                  (d)      All accounting terms used but not defined herein have
the meanings assigned to them in accordance with United States generally
accepted accounting principles;

                  (e)      Unless the context otherwise requires, any reference
to an "Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Guarantee Agreement; and

                  (f)      The words "hereby," "herein," "hereof" and
"hereunder" and other words of similar import refer to this Guarantee Agreement
as a whole and not to any particular Article, Section or other subdivision.

         "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.



                                       2


         "Board of Directors" means the board of directors of the Guarantor or
any committee of the board of directors of the Guarantor, comprised of one or
more members of the board of directors of the Guarantor or officers of the
Guarantor, or both.

         "Capital Securities" has the meaning specified in the recitals to this
Guarantee Agreement.

         "Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.

         "Debentures" shall have the meaning specified in the Trust Agreement.

         "Distributions" shall have the meaning specified in the Trust
Agreement.

         "Event of Default" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.

         "Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions required to be paid on the Capital Securities, to the extent the
Issuer Trust shall have funds on hand available therefor at such time; (ii) the
Redemption Price with respect to any Capital Securities called for redemption by
the Issuer Trust, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of the Issuer Trust, unless Debentures
are distributed to the Holders, the lesser of (a) the Liquidation Distribution
with respect to the Capital Securities, to the extent that the Issuer Trust
shall have funds on hand available therefor at such time, and (b) the amount of
assets of the Issuer Trust remaining available for distribution to Holders on
liquidation of the Issuer.


                                       3


         "Guarantee Trustee" means Bank One Trust Company, N.A., solely in its
capacity as Guarantee Trustee and not in its individual capacity, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement, and thereafter means each
such Successor Guarantee Trustee.

         "Guarantor" has the meaning specified in the first paragraph of this
Guarantee Agreement.

         "Holder" means any Holder (as defined in the Trust Agreement) of any
Capital Securities; provided, however, that in determining whether the holders
of the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor,
the Guarantee Trustee, or any Affiliate of the Guarantor or the Guarantee
Trustee.

         "Indenture" means the Junior Subordinated Indenture, dated as of
_____________, 2003, between Popular, Inc. and Bank One Trust Company, N.A., as
trustee, as the same may be modified, amended or supplemented from time to time.

         "Issuer Trust" has the meaning specified in the first paragraph of this
Guarantee Agreement.

         "Liquidation Distribution" shall have the meaning specified in the
Trust Agreement.

         "List of Holders" has the meaning specified in Section 2.2(a).

         "Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount (as defined in the Trust
Agreement) of all Capital Securities then Outstanding (as defined in the Trust
Agreement).

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of Directors
of such Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person. Any Officers' Certificate delivered with respect to


                                       4


compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:

                  (a)      a statement by each officer signing the Officers'
Certificate that such officer has read the covenant or condition and the
definitions relating thereto;

                  (b)      a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in rendering the
Officers' Certificate;

                  (c)      a statement that such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and

                  (d)      a statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, business trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

         "Redemption Price" shall have the meaning set forth in the Trust
Agreement.

         "Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee and also means, with respect to a
particular matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.

         "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

         "Trust Agreement" means the Amended and Restated Declaration of Trust
and Trust Agreement of the Issuer Trust referred to in


                                       5



the recitals to this Guarantee Agreement, as modified, amended or supplemented
from time to time.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this Guarantee Agreement was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.

         "Vice President," when used with respect to the Guarantor, means any
duly appointed vice president, whether or not designated by a number or a word
or words added before or after the title "vice president."


                                   ARTICLE II
                               TRUST INDENTURE ACT

         SECTION 2.1.  TRUST INDENTURE ACT; APPLICATION.

                  (a)      This Guarantee Agreement is subject to the provisions
of the Trust Indenture Act that are required to be part of this Guarantee
Agreement and shall, to the extent applicable, be governed by such provisions.

                  (b)      Except as otherwise expressly provided herein, if and
to the extent that any provision of this Guarantee Agreement limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.

                  (c)      The application of the Trust Indenture Act to this
Guarantee Agreement shall not affect the nature of the Capital Securities as
equity securities representing undivided beneficial interests in the assets of
the Issuer Trust.

         SECTION 2.2.  LIST OF HOLDERS.

                  (a)      The Guarantor shall furnish or cause to be furnished
to the Guarantee Trustee (a) semiannually, on or before __________ and
___________ of each year, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders (a "List of
Holders") as of a date not more than 15 days prior to the delivery thereof, and
(b) at such other times as the Guarantee Trustee may request in writing, within
30 days after the receipt by the Guarantor of


                                       6


any such request, a List of Holders as of a date not more than 15 days prior to
the time such list is furnished, in each case to the extent such information is
in the possession or control of the Guarantor and has not otherwise been
received by the Guarantee Trustee in its capacity as such. The Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.

                  (b)      The Guarantee Trustee shall comply with the
requirements of Section 311(a), Section 311(b) and Section 312(b) of the Trust
Indenture Act.

         SECTION 2.3.  REPORTS BY THE GUARANTEE TRUSTEE.

                  Within 60 days after __________ each year, commencing
__________, 2004, the Guarantee Trustee shall provide to the Holders such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
If this Guarantee Agreement shall have been qualified under the Trust Indenture
Act, the Guarantee Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.

         SECTION 2.4.  PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.

                  The Guarantor shall provide to the Guarantee Trustee and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act, in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, provided that such
documents, reports and information shall be required to be provided to the
Securities and Exchange Commission only if this Guarantee Agreement shall have
been qualified under the Trust Indenture Act.

         SECTION 2.5.  EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

                  The Guarantor shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for in
this Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.


                                       7



         SECTION 2.6.  EVENTS OF DEFAULT; WAIVER.

                  The Holders of at least a Majority in Liquidation Amount of
the Capital Securities may, by vote, on behalf of the Holders of all the Capital
Securities, waive any past default or Event of Default and its consequences.
Upon such waiver, any such default or Event of Default shall cease to exist, and
any default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.

         SECTION 2.7.  EVENT OF DEFAULT; NOTICE.

                  (a)      The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default known to the Guarantee Trustee, transmit by
mail, first class postage prepaid, to the Holders, notice of any such Event of
Default known to the Guarantee Trustee, unless such Event of Default has been
cured before the giving of such notice, provided that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders.

                  (b)      The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Guarantee Trustee shall have
received written notice, or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice,
of such Event of Default.

         SECTION 2.8.  CONFLICTING INTERESTS.

                  The Trust Agreement and the Indenture shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.


                                       8



                                   ARTICLE III
               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

         SECTION 3.1.  POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.

                  (a)      This Guarantee Agreement shall be held by the
Guarantee Trustee for the benefit of the Holders, and the Guarantee Trustee
shall not transfer this Guarantee Agreement to any Person except to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Guarantee Trustee hereunder. The right, title and interest
of the Guarantee Trustee, as such, hereunder shall automatically vest in any
Successor Guarantee Trustee, upon acceptance by such Successor Guarantee Trustee
of its appointment hereunder, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Guarantee Trustee.

                  (b)      If an Event of Default has occurred and is
continuing, the Guarantee Trustee shall enforce this Guarantee Agreement for the
benefit of the Holders.

                  (c)      The Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement (including pursuant to Section 2.1), and no
implied covenants shall be read into this Guarantee Agreement against the
Guarantee Trustee. If an Event of Default has occurred (that has not been cured
or waived pursuant to Section 2.6), the Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Guarantee Agreement, and use the same
degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.

                  (d)      No provision of this Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:

                           (i)      prior to the occurrence of any Event of
         Default and after the curing or waiving of all such Events of Default
         that may have occurred:


                                       9



                                    (A) the duties and obligations of the
                  Guarantee Trustee shall be determined solely by the express
                  provisions of this Guarantee Agreement (including pursuant to
                  Section 2.1), and the Guarantee Trustee shall not be liable
                  except for the performance of such duties and obligations as
                  are specifically set forth in this Guarantee Agreement
                  (including pursuant to Section 2.1); and

                                    (B) in the absence of bad faith on the part
                  of the Guarantee Trustee, the Guarantee Trustee may
                  conclusively rely, as to the truth of the statements and the
                  correctness of the opinions expressed therein, upon any
                  certificates or opinions furnished to the Guarantee Trustee
                  and conforming to the requirements of this Guarantee Agreement
                  (but in the case of any such certificates or opinions that by
                  any provision hereof or of the Trust Indenture Act are
                  specifically required to be furnished to the Guarantee
                  Trustee, the Guarantee Trustee shall be under a duty to
                  examine the same to determine whether or not they conform to
                  the requirements of this Guarantee Agreement);

                           (ii)     the Guarantee Trustee shall not be liable
         for any error of judgment made in good faith by a Responsible Officer
         of the Guarantee Trustee, unless it shall be proved that the Guarantee
         Trustee was negligent in ascertaining the pertinent facts upon which
         such judgment was made;

                           (iii)    the Guarantee Trustee shall not be liable
         with respect to any action taken or omitted to be taken by it in good
         faith in accordance with the direction of the Holders of not less than
         a Majority in Liquidation Amount of the Capital Securities relating to
         the time, method and place of conducting any proceeding for any remedy
         available to the Guarantee Trustee, or exercising any trust or power
         conferred upon the Guarantee Trustee under this Guarantee Agreement;
         and

                           (iv)     subject to Section 3.1(b), no provision of
         this Guarantee Agreement shall require the Guarantee Trustee to expend
         or risk its own funds or otherwise incur personal financial liability
         in the performance of any of its duties or in the exercise of any of
         its rights or



                                       10


         powers, if the Guarantee Trustee shall have reasonable grounds for
         believing that the repayment of such funds or liability is not
         reasonably assured to it under the terms of this Guarantee Agreement or
         adequate indemnity against such risk or liability is not reasonably
         assured to it.

         SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.

                  (a)      Subject to the provisions of Section 3.1:

                           (i)      The Guarantee Trustee may rely and shall be
         fully protected in acting or refraining from acting upon any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document reasonably
         believed by it to be genuine and to have been signed, sent or presented
         by the proper party or parties.

                           (ii)     Any direction or act of the Guarantor
         contemplated by this Guarantee Agreement shall be sufficiently
         evidenced by an Officers' Certificate unless otherwise prescribed
         herein.

                           (iii)    Whenever, in the administration of this
         Guarantee Agreement, the Guarantee Trustee shall deem it desirable that
         a matter be proved or established before taking, suffering or omitting
         to take any action hereunder, the Guarantee Trustee (unless other
         evidence is herein specifically prescribed) may, in the absence of bad
         faith on its part, request and rely upon an Officers' Certificate
         which, upon receipt of such request from the Guarantee Trustee, shall
         be promptly delivered by the Guarantor.

                           (iv)     The Guarantee Trustee may consult with legal
         counsel, and the written advice or opinion of such legal counsel with
         respect to legal matters shall be full and complete authorization and
         protection in respect of any action taken, suffered or omitted to be
         taken by it hereunder in good faith and in accordance with such advice
         or opinion. Such legal counsel may be legal counsel to the Guarantor or
         any of its Affiliates and may be one of its employees. The Guarantee
         Trustee shall have the right at any time to seek instructions
         concerning the administration of this Guarantee Agreement from any
         court of competent jurisdiction.


                                       11



                           (v)      The Guarantee Trustee shall be under no
         obligation to exercise any of the rights or powers vested in it by this
         Guarantee Agreement at the request or direction of any Holder unless
         such Holder shall have provided to the Guarantee Trustee such adequate
         security and indemnity as would satisfy a reasonable person in the
         position of the Guarantee Trustee against the costs, expenses
         (including attorneys' fees and expenses) and liabilities that might be
         incurred by it in complying with such request or direction, including
         such reasonable advances as may be requested by the Guarantee Trustee;
         provided that nothing contained in this Section (a)(v) shall be taken
         to relieve the Guarantee Trustee, upon the occurrence of an Event of
         Default, of its obligation to exercise the rights and powers vested in
         it by this Guarantee Agreement.

                           (vi)     The Guarantee Trustee shall not be bound to
         make any investigation into the facts or matters stated in any
         resolution, certificate, statement, instrument, opinion, report,
         notice, request, direction, consent, order, bond, debenture, note,
         other evidence of indebtedness or other paper or document, but the
         Guarantee Trustee, in its discretion, may make such further inquiry or
         investigation into such facts or matters as it may see fit.

                           (vii)    The Guarantee Trustee may execute any of the
         trusts or powers hereunder or perform any duties hereunder either
         directly or by or through its agents or attorneys, and the Guarantee
         Trustee shall not be responsible for any misconduct or negligence on
         the part of any such agent or attorney appointed by it with due care
         hereunder.

                           (viii)   Whenever in the administration of this
         Guarantee Agreement the Guarantee Trustee shall deem it desirable to
         receive instructions with respect to enforcing any remedy or right or
         taking any other action hereunder, the Guarantee Trustee (A) may
         request instructions from the Holders, (B) may refrain from enforcing
         such remedy or right or taking such other action until such
         instructions are received, and (C) shall be protected in acting in
         accordance with such instructions.



                                       12


                  (b)      No provision of this Guarantee Agreement shall be
deemed to impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Guarantee Trustee shall be construed to be a duty to act in accordance with such
power and authority.

         SECTION 3.3.  COMPENSATION; INDEMNITY; FEES.

                  The Guarantor agrees:

                  (a)      to pay to the Guarantee Trustee from time to time
such reasonable compensation for all services rendered by it hereunder as may be
agreed by the Guarantor and the Guarantee Trustee from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);

                  (b)      except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Guarantee Trustee in
accordance with any provision of this Guarantee Agreement (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and

                  (c)      to indemnify the Guarantee Trustee, any Affiliate of
the Guarantee Trustee and any officer, director, shareholder, employee,
representative or agent of the Guarantee Trustee (each, an "Indemnified Person")
for, and to hold each Indemnified Person harmless against, any loss, liability
or expense incurred without negligence, willful misconduct or bad faith on the
part of the Indemnified Person, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.


                                       13


                  The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee Agreement.

                  The provisions of this Section 3.3 shall survive the
termination of this Guarantee Agreement or the resignation or removal of the
Guarantee Trustee.

                                   ARTICLE IV
                                GUARANTEE TRUSTEE


         SECTION 4.1.  GUARANTEE TRUSTEE; ELIGIBILITY.

                  (a)      There shall at all times be a Guarantee Trustee
which shall:

                           (i)      not be an Affiliate of the Guarantor; and

                           (ii)     be a Person that is eligible pursuant to the
         Trust Indenture Act to act as such and has a combined capital and
         surplus of at least $50,000,000, and shall be a corporation meeting the
         requirements of Section 310(a) of the Trust Indenture Act. If such
         corporation publishes reports of condition at least annually, pursuant
         to law or to the requirements of its supervising or examining
         authority, then, for the purposes of this Section 4.1 and to the extent
         permitted by the Trust Indenture Act, the combined capital and surplus
         of such corporation shall be deemed to be its combined capital and
         surplus as set forth in its most recent report of condition so
         published.

                  (b)      If at any time the Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2.

                  (c)      If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.


                                       14



         SECTION 4.2.  APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE.

                  (a)      Subject to Section 4.2(c), the Guarantee Trustee may
be appointed or removed at any time by the action of the Holders of a Majority
in Liquidation Amount of the Capital Securities delivered to the Guarantee
Trustee and the Guarantor (i) for cause or (ii) if a Debenture Event of Default
(as defined in the Trust Agreement) shall have occurred and be continuing at any
time.

                  (b)      Subject to Section 4.2(c), the Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by giving
written notice thereof to the Holders and the Guarantor and by appointing a
successor Guarantee Trustee. The Guarantee Trustee shall appoint a successor by
requesting from at least three Persons meeting the requirements of Section
4.1(a) their expenses and charges to serve as the Guarantee Trustee, and
selecting the Person who agrees to the lowest expenses and charges.

                  (c)      The Guarantee Trustee appointed hereunder shall hold
office until a Successor Guarantee Trustee shall have been appointed and shall
have accepted such appointment. No removal or resignation of a Guarantee Trustee
shall be effective until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor and, in the case of any
resignation, the resigning Guarantee Trustee.

                  (d)      If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Holders and the Guarantor of a notice of resignation,
the resigning Guarantee Trustee may petition, at the expense of the Guarantor,
any court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.

                  (e)      If a resigning Guarantee Trustee shall fail to
appoint a successor, or if a Guarantee Trustee shall be removed or become
incapable of acting as Guarantee Trustee and a replacement shall not be
appointed prior to such resignation or removal, or if a vacancy shall occur in
the office of Guarantee Trustee for any cause, the Holders of the Capital
Securities, by


                                       15


the action of the Holders of record of not less than 25% in aggregate
Liquidation Amount (as defined in the Trust Agreement) of the Capital Securities
then Outstanding (as defined in the Trust Agreement) delivered to such Guarantee
Trustee, may appoint a Successor Guarantee Trustee or Trustees. If no successor
Guarantee Trustee shall have been so appointed by the Holders of the Capital
Securities and accepted appointment, any Holder, on behalf of such Holder and
all others similarly situated, or any other Guarantee Trustee, may petition any
court of competent jurisdiction for the appointment of a successor Guarantee
Trustee.

                                    ARTICLE V
                                    GUARANTEE

         SECTION 5.1.  GUARANTEE.

                  The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by or on behalf of the Issuer Trust), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer
Trust may have or assert, except the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer Trust
to pay such amounts to the Holders.

         SECTION 5.2.  WAIVER OF NOTICE AND DEMAND.

                  The Guarantor hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.

         SECTION 5.3.  OBLIGATIONS NOT AFFECTED.

                  The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee Agreement shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:


                                       16


                  (a)      the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer Trust of any express
or implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer Trust;

                  (b)      the extension of time for the payment by the Issuer
Trust of any portion of the Distributions (other than an extension of time for
payment of Distributions that results from the extension of any interest payment
period on the Debentures as provided in the Indenture), Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the
Capital Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital Securities;

                  (c)      any failure, omission, delay or lack of diligence on
the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the Capital
Securities, or any action on the part of the Issuer Trust granting indulgence or
extension of any kind;

                  (d)      the voluntary or involuntary liquidation,
dissolution, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer Trust or any of the assets of
the Issuer Trust;

                  (e)      any invalidity of, or defect or deficiency in, the
Capital Securities;

                  (f)      the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or

                  (g)      any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a guarantor
(other than payment of the underlying obligation), it being the intent of this
Section 5.3 that the obligations of the Guarantor hereunder shall be absolute
and unconditional under any and all circumstances.

                  There shall be no obligation of the Holders to give notice to,
or obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.


                                       17


         SECTION 5.4.  RIGHTS OF HOLDERS.

                  The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.

         SECTION 5.5.  GUARANTEE OF PAYMENT.

                  This Guarantee Agreement creates a guarantee of payment and
not of collection. This Guarantee Agreement will not be discharged except by
payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Issuer Trust) or upon the distribution of Debentures to
Holders as provided in the Trust Agreement.

         SECTION 5.6.  SUBROGATION.

                  The Guarantor shall be subrogated to all rights (if any) of
the Holders against the Issuer Trust in respect of any amounts paid to the
Holders by the Guarantor under this Guarantee Agreement; provided, however, that
the Guarantor shall not (except to the extent required by mandatory provisions
of law) be entitled to enforce or exercise any rights which it may acquire by
way of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, if, at the time of
any such payment, any amounts are due and unpaid under this Guarantee Agreement.
If any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.


                                       18


         SECTION 5.7.  INDEPENDENT OBLIGATIONS.

                  The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.

                                   ARTICLE VI
                           COVENANTS AND SUBORDINATION

         SECTION 6.1.  SUBORDINATION.

                  The obligations of the Guarantor under this Guarantee
Agreement will constitute unsecured obligations of the Guarantor and will rank
subordinate and junior in right of payment to all Senior Debt (as defined in the
Indenture) of the Guarantor to the extent and in the manner set forth in the
Indenture with respect to the Debentures, and the provisions of Article Eighteen
of the Indenture will apply, mutatis mutandis, to the obligations of the
Guarantor hereunder. The obligations of the Guarantor hereunder do not
constitute Senior Debt (as defined in the Indenture) of the Guarantor.

         SECTION 6.2.  PARI PASSU GUARANTEES.

                  The obligations of the Guarantor under this Guarantee
Agreement shall rank pari passu with the obligations of the Guarantor under (i)
any similar guarantee agreements issued by the Guarantor on behalf of the
holders of preferred or capital securities issued by any statutory trust, (ii)
the Indenture and the Debt Securities (as defined therein) issued thereunder;
(iii) any expense agreements entered into by the Guarantor in connection with
the offering of preferred or capital securities by any statutory trust, and (iv)
any other security, guarantee or other agreement or obligation that is expressly
stated to rank pari passu with the obligations of the Guarantor under this
Guarantee Agreement or with any obligation that ranks pari passu with the
obligations of the Guarantor under this Guarantee Agreement.


                                       19


                                   ARTICLE VII
                                   TERMINATION

         SECTION 7.1.  TERMINATION.

                  This Guarantee Agreement shall terminate and be of no further
force and effect upon (i) full payment of the Redemption Price of all Capital
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Capital Securities or (iii) full payment of the amounts payable in
accordance with Article IX of the Trust Agreement upon liquidation of the Issuer
Trust. Notwithstanding the foregoing, this Guarantee Agreement will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder is required to repay any sums paid with respect to Capital Securities or
this Guarantee Agreement.

                                  ARTICLE VIII
                                  MISCELLANEOUS

         SECTION 8.1.  SUCCESSORS AND ASSIGNS.

                  All guarantees and agreements contained in this Guarantee
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article Eight of the Indenture and pursuant to which the successor or assignee
agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder, and any purported
assignment other than in accordance with this provision shall be void.

         SECTION 8.2.  AMENDMENTS.

                  Except with respect to any changes that do not adversely
affect the rights of the Holders in any material respect (in which case no
consent of the Holders will be required), this Guarantee Agreement may only be
amended with the prior approval of the Holders of not less than a Majority in
Liquidation Amount of the Capital Securities. The provisions of Article VI of
the Trust Agreement concerning meetings of the Holders shall apply to the giving
of such approval.


                                       20


         SECTION 8.3.  NOTICES.

                  Any notice, request or other communication required or
permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:

                  (a)      if given to the Guarantor, to the address or telecopy
number set forth below or such other address or telecopy number as the Guarantor
may give notice to the Guarantee Trustee and the Holders:

                           Popular, Inc.
                           209 Munoz Rivera Avenue
                           San Juan, Puerto Rico 00918
                           Attention: ____________________
                           Telecopy: (787) _______________

                  (b)      if given to the Guarantee Trustee, to the address or
telecopy number set forth below or such other address or telecopy number as the
Guarantee Trustee may give notice to the Guarantor and Holders:

                           Bank One Trust Company, N.A.
                           1 Bank One Plaza
                           Mail Code IL1-0823
                           Chicago, Illinois 60670-0823
                           Attention: Global Corporate Trust Services Division
                           Telecopy: (312) 336-8840

with a copy to:

                           Popular Capital Trust __
                           c/o Popular, Inc.

                           --------------------------

                           --------------------------

                           --------------------------
                           Attention: ____________________
                           Telecopy: (787) _______________

                  (c)      if given to any Holder, at the address set forth on
the books and records of the Issuer Trust.

                  All notices hereunder shall be deemed to have been given when
received in person, telecopied with receipt


                                       21


confirmed, or mailed by first class mail, postage prepaid, except that if a
notice or other document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other document
shall be deemed to have been delivered on the date of such refusal or inability
to deliver.

         SECTION 8.4.  BENEFIT.

                  This Guarantee Agreement is solely for the benefit of the
Holders and is not separately transferable from the Capital Securities.

         SECTION 8.5.  GOVERNING LAW.

                  THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF PUERTO RICO.

         SECTION 8.6.  COUNTERPARTS.

                  This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have executed this Guarantee
Agreement as of the day and year first above written.

                                                 POPULAR, INC.,
                                                 as Guarantor


                                                 By:
                                                    --------------------------
                                                 Name:
                                                 Title:

                                                 BANK ONE TRUST COMPANY, N.A.,
                                                 as Guarantee Trustee


                                                 By:
                                                    --------------------------
                                                 Name:
                                                 Title:



                                       22

EX-5.1

                                                                     EXHIBIT 5.1

                                  POPULAR, INC.
                             209 Munoz Rivera Avenue
                           San Juan, Puerto Rico 00918
                            Telephone (787) 765-9800

                                          September 5, 2003


Popular, Inc.
209 Munoz Rivera Avenue
San Juan, Puerto Rico 00918

Popular Capital Trust I
c/o Popular, Inc.
209 Munoz Rivera Avenue
San Juan, Puerto Rico 00918

Popular Capital Trust II
c/o Popular, Inc.
209 Munoz Rivera Avenue
San Juan, Puerto Rico 00918

Popular Capital Trust III
c/o Popular, Inc.
209 Munoz Rivera Avenue
San Juan, Puerto Rico 00918

Popular Capital Trust IV
c/o Popular, Inc.
209 Munoz Rivera Avenue
San Juan, Puerto Rico 00918

Ladies and Gentlemen:

         In connection with the registration under the Securities Act of 1933,
as amended (the "Act"), of (i) up to $300,000,000 aggregate liquidation amount
of trust preferred securities representing beneficial ownership interests (the
"Preferred Securities") in Popular Capital Trust I, Popular Capital Trust II,
Popular Capital Trust III and Popular Capital Trust IV (the "Trusts"), (ii) up
to $300,000,000 aggregate principal amount of junior subordinated debentures
(the "Debentures") to be issued by Popular, Inc. (the "Corporation"), and (iii)
unconditional and irrevocable guarantees (the "Guarantees" and each a




Popular Inc.
Popular Capital Trust I
Popular Capital Trust II
Popular Capital Trust III
Popular Capital Trust IV
September 5, 2003
Page 2

"Guarantee") of the obligations of the Trusts under the Preferred Securities, to
be issued by the Corporation, in each case to be offered from time to time at
prices and on terms to be determined at the time of sale, I, as Counsel to the
Corporation, have examined such corporate records, certificates and other
documents, and such questions of law, as I have considered necessary or
appropriate for the purposes of this opinion.

         Upon the basis of such examination, I advise you that, in my opinion:

         (i) the Corporation has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of Puerto Rico;
and

             (ii) when the Registration Statement has become effective under the
Act, the indenture (the "Indenture") relating to the Debentures has been duly
authorized, executed and delivered, the terms of the Debentures and of their
issuance and sale have been duly established in conformity with the Indenture so
as not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, the Debentures have been duly executed
and authenticated in accordance with the Indenture, the Debentures have been
issued and sold as contemplated in the Registration Statement, the guarantee
agreement (the "Guarantee Agreement") relating to the Guarantee has been duly
authorized, executed and delivered, the terms of the Guarantee and of its
issuance have been duly established in conformity with the Guarantee Agreement
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, and the Guarantees have been duly
authorized, executed and delivered by the Corporation, each of the Debentures
and the Guarantees will constitute valid and legally binding obligations of the
Corporation, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.

         The foregoing opinion is limited to the Federal laws of the United
States and the laws of the Commonwealth of Puerto Rico, and I am expressing no
opinion as to the effect of the laws of any other jurisdiction.

         Also, I have relied as to certain matters on information obtained from
public officials, officers of the Corporation and other sources believed by me
to be responsible.




Popular Inc.
Popular Capital Trust I
Popular Capital Trust II
Popular Capital Trust III
Popular Capital Trust IV
September 5, 2003
Page 3

         I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Legal
Opinions" in the Prospectus. In giving such consent, I do not thereby admit that
I am in the category of persons whose consent is required under Section 7 of the
Act.


                                     Very truly yours,



                                     /s/ BRUNILDA SANTOS DE ALVAREZ

EX-5.2

                                                                     EXHIBIT 5.2


                           RICHARDS, LAYTON & FINGER
                           A PROFESSIONAL ASSOCIATION
                               ONE RODNEY SQUARE
                                  P.O. BOX 551
                           WILMINGTON, DELAWARE 19899
                                 (302) 651-7700
                               FAX (302) 651-7701
                                  WWW.RLF.COM

                               September 5, 2003


Popular Capital Trust I
Popular Capital Trust II
Popular Capital Trust III
Popular Capital Trust IV
c/o Popular, Inc.
209 Munoz Rivera Avenue
San Juan, Puerto Rico 00918

       Re:      Popular Capital Trust I
                Popular Capital Trust II
                Popular Capital Trust III
                Popular Capital Trust IV

Ladies and Gentlemen:

     We have acted as special Delaware counsel for Popular Capital Trust I,
Popular Capital Trust II, Popular Capital Trust III, and Popular Capital Trust
IV, each a Delaware statutory trust (each, a "Trust" and collectively, the
"Trusts"), in connection with the matters set forth herein. At your request,
this opinion is being furnished to you.

     For purposes of giving the opinions hereinafter set forth, our examination
of documents has been limited to the examination of originals or copies of the
following:

     (a)  The Declaration of Trust and Trust Agreement for each of the Trusts,
          each dated as of September 3, 2003 (collectively, the "Original Trust
          Agreements"), by and among Popular, Inc., a Commonwealth of Puerto
          Rico corporation, as depositor (the "Depositor"), Bank One Delaware,
          Inc., a Delaware corporation, as Delaware trustee (the "Delaware
          Trustee"), Bank One Trust Company, N.A., a national banking
          association, as property trustee (the "Property Trustee"), and the
          individual trustees named therein (the "Administrative Trustees");

     (b)  A certified copy of the Certificate of Trust for each of the Trusts
          (collectively, the "Certificates of Trust"), each as filed with the
          Office of the Secretary of State of the State of Delaware (the
          "Secretary of State") on September 5, 2003;




Popular Capital Trust I
Popular Capital Trust II
Popular Capital Trust III
Popular Capital Trust IV
September 5, 2003
Page 2

     (c)  A form of Amended and Restated Declaration of Trust and Trust
          Agreement for each Trust, among the Depositor, the Property Trustee,
          the Delaware Trustee, the Administrative Trustees named therein and
          the Holders of the Trust Securities (collectively, the "Amended and
          Restated Trust Agreements," and, together with the Original Trust
          Agreements, the "Trust Agreements");

     (d)  The Registration Statement on Form S-3 (the "Registration Statement"),
          including a preliminary prospectus (the "Prospectus"), relating to,
          among other securities, the Capital Securities of each Trust
          representing preferred undivided beneficial ownership interests in the
          assets of each Trust, filed by the Depositor and the Trusts with the
          Securities and Exchange Commission (the "Commission") on or about
          September 5, 2003; and

     (e)  A Certificate of Good Standing for each Trust, each dated September 5,
          2003, obtained from the Secretary of State.

     Initially capitalized terms used herein and not otherwise defined are used
as defined in the Trust Agreements, except that reference herein to any document
shall mean such document as in effect on the date hereof.

     For purposes of this opinion, we have not reviewed any documents other than
the documents listed in paragraphs (a) through (e) above. In particular, we have
not reviewed any document (other than the documents listed in paragraphs (a)
through (e) above) that is referred to in or incorporated by reference into the
documents reviewed by us. We have assumed that there exists no provision in any
document that we have not reviewed that bears upon or is inconsistent with the
opinions stated herein. We have conducted no independent factual investigation
of our own but rather have relied solely upon the foregoing documents, the
statements and information set forth therein and the additional matters recited
or assumed herein, all of which we have assumed to be true, complete and
accurate in all material respects.

     With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.

     For purposes of this opinion, we have assumed (i) that each Trust Agreement
will constitute the entire agreement among the parties thereto with respect to
the subject matter thereof, including with respect to the creation, operation
and termination of each Trust, that the Certificates of Trust are in full force
and effect and have not been further amended and that the Trust Agreements will
be in full force and effect and will be executed in substantially the forms
reviewed by us, (ii) except to the extent provided in paragraph 1 below, the due
creation or due




Popular Capital Trust I
Popular Capital Trust II
Popular Capital Trust III
Popular Capital Trust IV
September 5, 2003
Page 3


organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) except to the extent provided in paragraph 2 below, that each of the
parties to the documents examined by us has the power and authority to execute
and deliver, and to perform its obligations under, such documents, (v) except to
the extent provided in paragraph 2 below, the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom Capital Securities are to be issued by the Trusts
(collectively, the "Capital Security Holders") of a Capital Security Certificate
for such Capital Security and the payment for the Capital Security acquired by
it, in accordance with the Trust Agreements and the Registration Statement, and
(vii) that the Capital Securities are issued and sold to the Capital Security
Holders in accordance with the Trust Agreements and the Registration Statement.
We have not participated in the preparation of the Registration Statement or
Prospectus and assume no responsibility for their contents.

     This opinion is limited to the laws of the State of Delaware (excluding the
securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.

     Based upon the foregoing, and upon our examination of such questions of law
and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:

     1. Each Trust has been duly created and is validly existing in good
standing as a statutory trust under the Delaware Statutory Trust Act, 12 Del.
C.ss.3801, et seq.

     2. Upon execution of the Amended and Restated Trust Agreements, the Capital
Securities of each Trust will be duly authorized by each Trust Agreement and,
when executed and delivered to and paid for by the purchasers thereof in
accordance with the applicable Trust Agreement and the Registration Statement,
will be duly and validly issued and, subject to the qualifications set forth in
paragraph 3 below, fully paid and non-assessable undivided beneficial interests
in the assets of the applicable Trust.

     3. The Capital Security Holders, as beneficial owners of the Trusts, will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in each Trust Agreement.




Popular Capital Trust I
Popular Capital Trust II
Popular Capital Trust III
Popular Capital Trust IV
September 5, 2003
Page 4


     We consent to the filing of this opinion with the Securities and Exchange
Commission as an exhibit to the Registration Statement. In addition, we hereby
consent to the reference to us as local counsel under the heading "Legal
Opinions" in the Prospectus. In giving the foregoing consents, we do not thereby
admit that we come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.

                                           Very truly yours,


                                           /s/ RICHARDS, LAYTON & FINGER, P.A.


DKD/MCD/rmc

EX-23.1

                                                                    EXHIBIT 23.1

                    [PRICEWATERHOUSECOOPERS LLP LETTERHEAD]

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 28, 2003 relating to the
financial statements, which appears in the 2002 Annual Report to Shareholders,
which is incorporated by reference in Popular Inc.'s Annual Report on Form 10-K
for the year ended December 31, 2002. We also consent to the references to us
under the headings "Experts" in such Registration Statement.


/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

San Juan, Puerto Rico
September 4, 2003

EX-25.1

                                                                    EXHIBIT 25.1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                      UNDER THE TRUST INDENTURE ACT OF 1939
                  OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

                CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
                   OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
               (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)

  A NATIONAL BANKING ASSOCIATION                     31-0838515
                                                     (I.R.S. EMPLOYER
                                                     IDENTIFICATION NUMBER)

100 EAST BROAD STREET
COLUMBUS, OHIO                                       43271-0181
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)             (ZIP CODE)

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
               1 BANK ONE PLAZA, 20TH FLOOR, MAIL CODE IL 1-0120
                          CHICAGO, ILLINOIS 60670-0120
             ATTN: CHRISTOPHER HOLLY, LAW DEPARTMENT (312) 732-1643
            (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

                                  POPULAR INC.
               (Exact name of obligor as specified in its charter)

                  PUERTO RICO                             66-0416582
(State or other jurisdiction of incorporation  (IRS Employer Identification No.)
               or organization)

POPULAR CENTER BUILDING
209 MUNOZ RIVERA AVENUE
SAN JUAN, PUERTO RICO                                00918
(Address of principal executive offices)             (Zip Code)

                                 --------------
                         JUNIOR SUBORDINATED DEBENTURES
                         (Title of Indenture Securities)

                                        1


ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
                  TRUSTEE:

                  (a)      NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
                  AUTHORITY TO WHICH IT IS SUBJECT.

                  Comptroller of Currency, Washington, D.C.; Federal Deposit
                  Insurance Corporation, Washington, D.C.; The Board of
                  Governors of the Federal Reserve System, Washington D.C.

                  (b)      WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
                  POWERS.

                  The trustee is authorized to exercise corporate trust powers.

ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
                  TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.

                  No such affiliation exists with the trustee.

ITEM 16.          LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF
                  THIS STATEMENT OF ELIGIBILITY.

                  1.  A copy of the articles of association of the trustee now
                      in effect.

                  2.  A copy of the certificates of authority of the trustee to
                      commence business.

                  3.  A copy of the authorization of the trustee to exercise
                      corporate trust powers.

                  4.  A copy of the existing by-laws of the trustee.

                  5.  Not Applicable.

                  6.  The consent of the trustee required by Section 321(b) of
                      the Act.

                  7.  A copy of the latest report of condition of the trustee
                      published pursuant to law or the requirements of its
                      supervising or examining authority.

                  8.  Not Applicable.

                  9.  Not Applicable.

         Pursuant to the requirements of the Trust Indenture Act of 1939, as
         amended, the trustee, Bank One Trust Company, National Association, a
         national banking association organized and existing under the laws of
         the United States of

                                        2


         America, has duly caused this Statement of Eligibility to be signed on
         its behalf by the undersigned, thereunto duly authorized, all in the
         City of Chicago and State of Illinois, on the 26th, day of August 2003.

                      BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
                      TRUSTEE

                      BY: /s/ CHRISTOPHER HOLLY
                          ---------------------
                          CHRISTOPHER HOLLY
                          VICE PRESIDENT

                                        3


                                    EXHIBIT 1

                  A COPY OF THE ARTICLES OF ASSOCIATION OF THE
                              TRUSTEE NOW IN EFFECT

                              AMENDED AND RESTATED
                             ARTICLES OF ASSOCIATION
                                       OF
                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

FIRST. The title of this Association shall be BANK ONE TRUST COMPANY, National
Association.

SECOND. The main office of the Association shall be in the City of Columbus,
County of Franklin, State of Ohio.

The business of the Association will be limited to the fiduciary powers and the
support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.

THIRD. The Board of Directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is more recent. Any combination of common or preferred stock of the
Association or holding company may be used.

Any vacancy in the Board of Directors may be filled by action of a majority of
the remaining directors between meetings of shareholders. The Board of Directors
may not increase the number of directors between meetings of shareholders to a
number which: (1) exceeds by more than two the number of directors last elected
by shareholders where the number was 15 or less; or (2) exceeds by more than
four the number of directors last elected by shareholders where the number was
16 or more, but in no event shall the number of directors exceed 25.

Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.

Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.



Honorary or advisory members of the Board of Directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full Board of Directors, or
by resolution of shareholders at any annual or special meeting. Honorary or
advisory directors shall not be counted to determine the number of directors of
the Association or the presence of a quorum in connection with any board action,
and shall not be required to own qualifying shares.

FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the Bylaws or, if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in the event of a legal holiday on the following banking day, an
election may be held on any subsequent day within 60 days of the day fixed, to
be designated by the Board of Directors or, if the directors fail to fix the
day, by shareholders representing two-thirds of the shares issued and
outstanding. In all cases at least 10 days advance notice of the meeting shall
be given to the shareholders by first class mail.

In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares such shareholder
owns by the number of directors to be elected. Those votes may be cumulated and
cast for a single candidate or may be distributed among two or more candidates
in the manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by such
shareholder. If the issuance of preferred stock with voting rights has been
authorized by a vote of shareholders owning a majority of the common stock of
the association, preferred shareholders will have cumulative voting rights and
will be included within the same class as common shareholders, for purposes of
elections of directors.

A director may resign at any time by delivering written notice to the Board of
Directors, its chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.

A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.

FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.

No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.



Unless otherwise specified in the Articles of Association or required by law,
(1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be approved by shareholders owning a majority
voting interest in the outstanding voting stock, and (2) each shareholder shall
be entitled to one vote per share.

Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or more
classes or series in the same or a substantially similar way, all the classes or
series so affected must vote together as a single voting group on the proposed
amendment.

Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be issued
as share dividends in respect of a class or series of stock if approved by a
majority of the votes entitled to be cast by the class or series to be issued
unless there are no outstanding shares of the class or series to be issued.
Unless otherwise provided by the Board of Directors, the record date for
determining shareholders entitled to a share dividend shall be the date the
Board of Directors authorizes the share dividend.

Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.

If a shareholder is entitled to fractional shares pursuant to preemptive rights,
a stock dividend, consolidation or merger, reverse stock split or otherwise, the
Association may: (a) issue fractional shares or; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder with an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share; (d) remit the cash equivalent of the
fraction to the shareholder; or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as:
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.

The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.



SIXTH. The Board of Directors shall appoint one of its members president of this
Association, and one of its members chairperson of the board and shall have the
power to appoint one or more vice presidents, a secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the Board of Directors in accordance with the Bylaws.

The Board of Directors shall have the power to:

(1)      Define the duties of the officers, employees, and agents of the
         Association.

(2)      Delegate the performance of its duties, but not the responsibility for
         its duties, to the officers, employees, and agents of the Association.

(3)      Fix the compensation and enter into employment contracts with its
         officers and employees upon reasonable terms and conditions consistent
         with applicable law.

(4)      Dismiss officers and employees.

(5)      Require bonds from officers and employees and to fix the penalty
         thereof.

(6)      Ratify written policies authorized by the Association's management or
         committees of the board.

(7)      Regulate the manner in which any increase or decrease of the capital of
         the Association shall be made, provided that nothing herein shall
         restrict the power of shareholders to increase or decrease the capital
         of the association in accordance with law, and nothing shall raise or
         lower from two-thirds the percentage for shareholder approval to
         increase or reduce the capital.

(8)      Manage and administer the business and affairs of the Association.

(9)      Adopt initial Bylaws, not inconsistent with law or the Articles of
         Association, for managing the business and regulating the affairs of
         the Association.

(10)     Amend or repeal Bylaws, except to the extent that the Articles of
         Association reserve this power in whole or in part to shareholders.

(11)     Make contracts.

(12)     Generally perform all acts that are legal for a Board of Directors to
         perform.

SEVENTH. The Board of Directors shall have the power to change the location of
the main office of this Association to any other place within the limits of the
City of Columbus, State of Ohio, without the approval of the shareholders; and
shall have the power to change the location of the main office of this
Association to any other place outside the limits of the City of Columbus, State
of Ohio, but not more than thirty miles beyond such limits, with the affirmative
vote of shareholders owning two-thirds of the stock of the Association, subject
to receipt of a certificate of approval from the Comptroller of the Currency.
The Board of Directors shall have the power to establish or change the location
of any branch or branches of the Association to any other location permitted
under applicable law without the approval of the shareholders,



subject to approval by the Office of the Comptroller of the Currency. The Board
of Directors shall have the power to establish or change the location of any
nonbranch office or facility of the Association without the approval of the
shareholders.

EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.

NINTH. The Board of Directors of this Association, or any shareholders owning,
in the aggregate, not less than 20 percent of the stock of this Association, may
call a special meeting of shareholders at any time. Unless otherwise provided by
the Bylaws or the laws of the United States, or waived by shareholders, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10, and no more than 60, days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
Association. Unless otherwise provided by the Bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.

TENTH. The Association shall provide indemnification as set forth below:

Every person who is or was a Director, officer or employee of the Association or
of any other corporation which he served as a Director, officer or employee at
the request of the Association as part of his regularly assigned duties may be
indemnified by the Association in accordance with the provisions of this Article
against all liability (including, without limitation, judgments, fines,
penalties, and settlements) and all reasonable expenses (including, without
limitation, attorneys' fees and investigative expenses) that may be incurred or
paid by him in connection with any claim, action, suit or proceeding, whether
civil, criminal or administrative (all referred to hereafter in this Article as
"Claims") or in connection with any appeal relating thereto in which he may
become involved as a party or otherwise or with which he may be threatened by
reason of his being or having been a Director, officer or employee of the
Association or such other corporation, or by reason of any action taken or
omitted by him in his capacity as such Director, officer or employee, whether or
not he continues to be such at the time such liability or expenses are incurred;
provided that nothing contained in this Article shall be construed to permit
indemnification of any such person who is adjudged guilty of, or liable for,
willful misconduct, gross neglect of duty or criminal acts, unless, at the time
such indemnification is sought, such indemnification in such instance is
permissible under applicable law and regulations, including published rulings of
the Comptroller of the Currency or other appropriate supervisory or regulatory
authority; and provided further that there shall be no indemnification of
Directors, officers, or employees against expenses, penalties, or other payments
incurred in an administrative proceeding or action instituted by an appropriate
regulatory agency which proceeding or action results in a final order assessing
civil money penalties or requiring affirmative action by an individual or
individuals in the form of payments to the Association.

Every person who may be indemnified under the provisions of this Article and who
has been wholly successful on the merits with respect to any Claim shall be
entitled to indemnification as of right. Except as provided in the preceding
sentence, any indemnification under this Article shall be at the sole discretion
of the Board of Directors and shall be made only if the Board of Directors or
the Executive Committee acting by a quorum consisting of Directors who are not
parties to such Claim shall find or if independent legal counsel (who may be the
regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that in view of all of the circumstances



then surrounding the Claim, such indemnification is equitable and in the best
interests of the Association. Among the circumstances to be taken into
consideration in arriving at such a finding or opinion is the existence or
non-existence of a contract of insurance or indemnity under which the
Association would be wholly or partially reimbursed for such indemnification,
but the existence or non-existence of such insurance is not the sole
circumstance to be considered nor shall it be wholly determinative of whether
such indemnification shall be made. In addition to such finding or opinion, no
indemnification under this Article shall be made unless the Board of Directors
or the Executive Committee acting by a quorum consisting of Directors who are
not parties to such Claim shall find or if independent legal counsel (who may be
the regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that the Directors, officer or employee acted in good faith in
what he reasonably believed to be the best interests of the Association or such
other corporation and further in the case of any criminal action or proceeding,
that the Director, officer or employee reasonably believed his conduct to be
lawful. Determination of any Claim by judgment adverse to a Director, officer or
employee by settlement with or without Court approval or conviction upon a plea
of guilty or of nolo contendere or its equivalent shall not create a presumption
that a Director, officer or employee failed to meet the standards of conduct set
forth in this Article. Expenses incurred with respect to any Claim may be
advanced by the Association prior to the final disposition thereof upon receipt
of an undertaking satisfactory to the Association by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he is
entitled to indemnification under this Article.

The rights of indemnification provided in this Article shall be in addition to
any rights to which any Director, officer or employee may otherwise be entitled
by contract or as a matter of law. Every person who shall act as a Director,
officer or employee of this Association shall be conclusively presumed to be
doing so in reliance upon the right of indemnification provided for in this
Article.

ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's Board of Directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.



                                    EXHIBIT 2

                  A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
                          TRUSTEE TO COMMENCE BUSINESS

                                   CERTIFICATE

I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:

1.       The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.

2.       "Bank One Trust Company, National Association," Columbus, Ohio,
(Charter No. 16235) is a National Banking Association formed under the laws of
the United States and is authorized thereunder to transact the business of
banking on the date of this Certificate.

                                  IN TESTIMONY WHEREOF, I have hereunto

                                  subscribed my name and caused my seal of

                                  office to be affixed to these presents at the

                                  Treasury Department in the City of

                                  Washington and District of Columbia, this

                                  25th day of July, 2001.

                                  /s/ John D. Hawke, Jr.
                                  ----------------------
                                  Comptroller of the Currency



                                    EXHIBIT 3

                   A COPY OF THE AUTHORIZATION OF THE TRUSTEE
                       TO EXERCISE CORPORATE TRUST POWERS

                                   CERTIFICATE

I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:

1.       The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.

2.       "Bank One Trust Company, National Association," Columbus, Ohio,
(Charter No. 16235) was granted, under the hand and seal of the Comptroller, the
right to act in all fiduciary capacities authorized under the provisions of the
Act of Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and
that the authority so granted remains in full force and effect on the date of
this Certificate.

                                  IN TESTIMONY WHEREOF, I have hereunto

                                  subscribed my name and caused my seal of

                                  office to be affixed to these presents at the

                                  Treasury Department in the City of

                                  Washington and District of Columbia, this

                                  25th day of July, 2001.

                                  /s/ John D. Hawke, Jr.
                                  ----------------------
                                  Comptroller of the Currency



                                    EXHIBIT 4

                  A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
                                     BY-LAWS

                                       OF

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                      AS AMENDED AND RESTATED JULY 20, 2001

                                     BY-LAWS

                                       OF

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                                    ARTICLE I

                              CORPORATE GOVERNANCE

         To the extent not inconsistent with applicable Federal banking statutes
or regulations, or safe and sound banking practices, the Bank shall follow the
corporate governance procedures of the Delaware General Corporation Law, as
amended.

                                   ARTICLE II

                                  SHAREHOLDERS

         SECTION 1. Annual Meeting. The regular annual meeting of shareholders
of the Bank to elect directors and to transact whatever other business may
properly come before the meeting shall be held in its main office on the third
Tuesday in February if not a legal holiday under the Laws of Ohio, and if a
legal holiday, then on the next business day following, at 11:30 A.M., or on
such other date and time as shall be designated by the Board of Directors. If,
for any cause, the annual election of directors should not be held on that date,
the Board shall order the election to be held on some subsequent day, of which
special notice shall be given.

         SECTION 2. Judges of Election. To the extent required by law, the Board
of Directors shall, prior to the time of the election of directors, appoint
three persons to be Judges of Election, who shall hold and conduct the same, and
who shall, after the election has been held, certify under their hands to the
Secretary of the Bank the result thereof and the names of the directors-elect.

         SECTION 3. Notice to Directors-Elect. The Secretary upon receiving the
Certificate of the Judges of Election as aforesaid, shall cause the same to be
recorded upon the minute book of the Bank, and shall notify the directors-elect
of their election and of the time at which they are required to meet at the main
office of the Bank for the purpose of organizing the new Board. If at the time
fixed for the meeting of the directors-elect there should not be a quorum
present, the members present may adjourn from time to time until a quorum is
obtained.

         SECTION 4. Special Meetings. Special meetings of the shareholders may
be called in accordance with Article NINTH of the Bank's Articles of
Association.



         SECTION 5. Record Date. The Board of Directors may fix in advance a day
not more than sixty (60) or less than ten (10) days prior to the date of holding
any regular or special meeting of shareholders as the day as of which
shareholders entitled to notice of and to vote at such meeting shall be
determined.

         SECTION 6. Notice. The Bank shall mail notice of any meeting of
shareholders at least 10 days prior to the meeting by first class mail, unless
the Office of the Comptroller of the Currency determines that an emergency
circumstance exists. If the Bank is a wholly-owned subsidiary of a company, the
sole shareholder may waive notice of the shareholder's meeting.

         SECTION 7. Consent of Shareholders in Lieu of Annual or Special
Meeting. Unless otherwise restricted by law or the Articles of Association, any
action which may be taken at any annual or special shareholder meeting may be
taken without a meeting, without prior notice and without a vote, if written
consent setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those shareholders who did not give written consent.

         SECTION 8. Minutes. The proceedings of shareholders at all regular and
special meetings or by written consent in lieu of a meeting shall be recorded in
the minute book, together with the Articles of Association of the Bank and the
returns of the Judges of Election. The minutes of each meeting shall be signed
by the Presiding Officer, and attested by the Secretary, or other officer of the
Bank acting in place of the Secretary.

                                   ARTICLE III

                                    DIRECTORS

         SECTION 1. Authority. The Board of Directors shall have the power to
manage and administer the business and affairs of the Bank. Except as expressly
limited by law, all corporate powers of the Bank shall be vested in and may be
exercised by the Board of Directors.

         SECTION 2. Number. The Board of Directors shall at all times consist of
not less than five nor more than twenty-five individuals. The exact number
within such minimum and maximum limits shall be fixed and determined from time
to time by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any meeting thereof; provided, however, that
the Board of Directors may not increase the number of directors to a number
which: (1) exceeds by more than two the number of directors last elected by
shareholders where such number was fifteen or less; or (ii) exceeds by more than
four the number of directors last elected by shareholders where such number was
sixteen or more, but in no event shall the number of directors exceed
twenty-five.

         SECTION 3. Term of Office. Each director shall hold office from the
date of his election or appointment until the next annual shareholder meeting.
Any director ceasing to be the owner of the amount of stock required by law or
in any other manner becoming disqualified shall thereupon vacate his office as
director.

         SECTION 4. Compensation. The Board of Directors may provide that a
reasonable fee be paid to any of its members or to the members of any duly
authorized committee for services rendered. No such payment shall preclude any
director from serving the Bank in any other capacity and receiving compensation
therefor.

         SECTION 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held on such dates, times and locations as determined by the Chairman
of the Board and communicated in writing to the directors.

         SECTION 6. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board or the President. Such meetings shall
be held at such times and at such places as shall be determined by the officer
calling the meeting. Notice of any special meeting of directors shall be given
to each director at the director's business or residence in writing by hand
delivery, first-class or overnight mail or courier service, telegram or
facsimile transmission, or orally by telephone. If mailed by first-class mail,
such notice shall be deemed adequately delivered when deposited in the United
States mail so addressed, with postage thereon prepaid, at least two (2) days
before such meeting. If by telegram, overnight mail or courier service, such
notice shall be



deemed adequately delivered when the telegram is delivered to the telegraph
company or the notice is delivered to the overnight mail or courier service
company at least twenty-four (24) hours before such meeting. If by facsimile
transmission, such notice shall be deemed adequately delivered when the notice
is transmitted at least twelve (12) hours before such meeting. Such notice need
not state the purposes of the meeting. Any or all directors may waive notice of
any meeting, either before or after the meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except when the
director attends for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.

         SECTION 7. Quorum; Majority Vote. A quorum of directors shall be
required to transact business at any regular or special meeting of the Board of
Directors. A majority of the directors shall constitute a quorum. Each director
shall be entitled to one vote. A vote by a majority of the directors present at
any regular or special meeting of the Board of Directors at which a quorum is
present shall be required to approve any matter or proposal at any such meeting.

         SECTION 8. Vacancies. When any vacancy occurs in the Board of
Directors, a majority of the remaining members of the Board, according to the
laws of the United States, may appoint a director to fill such vacancy at any
regular meeting of the Board of Directors, or at a special meeting called for
that purpose at which a quorum is present, or if the directors remaining in
office constitute fewer than a quorum of the Board of Directors, by the
affirmative vote of a majority of all the directors remaining in office, or by
shareholders at a special meeting called for that purpose. At any such
shareholder meeting, each shareholder entitled to vote shall have the right to
multiply the number of votes he or she is entitled to cast by the number of
vacancies being filled and cast the product for a single candidate or distribute
the product among two or more candidates. A vacancy that will occur at a
specific later date (by reason of a resignation effective at a later date) may
be filled before the vacancy occurs but the new director may not take office
until the vacancy occurs.

         SECTION 9. Presiding Officer. The Chairman of the Board shall preside
at all meetings of the Board of Directors at which he is present. In the absence
of the Chairman of the Board, the President shall perform the duties of the
Chairman of the Board and shall preside at the meetings of the Board of
Directors. In the absence of the Chairman of the Board and the President, the
Vice Chairman of the Board (or in the event there be more than one Vice Chairman
of the Board, the Vice Chairmen of the Board in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
their duties and shall preside at the meetings of the Board of Directors.

         SECTION 10. Minutes of Meeting. The Secretary to the Board of Directors
shall take minutes at any regular or special meeting of the Board of Directors.
If the Secretary is not present at any such meeting, the Chairman of the Board
may designate a secretary pro tem to take minutes at the meeting. The Secretary
or secretary pro tem shall record the actions and proceedings at each regular or
special meeting of the Board of Directors as minutes of the meeting and shall
maintain such minutes in a minute book of proceedings of such meetings of the
Board of Directors. Minutes of each such meeting shall be signed by the
presiding officer and secretary of each meeting.

         SECTION 11. Participation in Meetings by Telephone Unless otherwise
restricted by law or the Articles of Association, members of the Board of
Directors, or of any committee thereof, may participate in a meeting of the
Board of Directors or committee by means of conference telephone or similar
communications equipment which allows each person participating in the meeting
to hear each other. Participation in such a meeting shall constitute presence in
person at such meeting.

         SECTION 12. Consent of Directors in Lieu of Meeting. Unless otherwise
restricted by law or the Articles of Association, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.

         SECTION 13. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board, designate one or more committees, each
committee to consist of two or more of the Directors of the Bank.



The Board of Directors may designate one or more Directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Bank, and may authorize the
seal of the Bank to be affixed to all papers which may require it; provided,
however, that in the absence or disqualification of any member of such committee
or committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors. As used in these By-Laws,
"entire Board" means the total number of Directors the Bank would have if there
were no vacancies.

         There may be an Executive Committee composed and created as the Board
of Directors may designate by resolution passed by a majority of the entire
Board. During intervals between the regular meetings of the Board of Directors,
the Executive Committee, to the extent permitted by law, the Articles of
Association of the Bank and the By-Laws, shall have and may exercise the powers
of the Board of Directors in the management of the business and affairs of the
Bank.

         Unless otherwise provided by the Board of Directors, a majority of the
members of any committee appointed by the Board of Directors pursuant to this
Section shall constitute a quorum at any meeting thereof and the act of a
majority of the members present at a meeting at which a quorum is present shall
be the act of such committee. Any such committee shall, subject to any rules
prescribed by the Board of Directors, prescribe its own rules for calling,
giving notice of and holding meetings and its method of procedure at such
meetings and shall keep a written record of all action taken by it. Each
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.

                                   ARTICLE IV

                                    OFFICERS

         SECTION 1. Officer Titles. The officers of the Bank shall include a
Chairman of the Board and a President and may include one or more Vice Chairmen
of the Board, Executive Vice Presidents, Senior Vice Presidents, First Vice
Presidents, Vice Presidents and Assistant Vice Presidents, a General Auditor, a
General Counsel, a Secretary, and such other officers as may be appropriate for
the prompt and orderly transaction of the business of the Bank. Individuals
appointed as Chairman of the Board, President, and Vice Chairman of the Board
must be members of the Board. The same person may hold any two or more offices.
The Chairman of the Board or the President shall have such authority to
establish officer titles as from time to time delegated by the Board of
Directors and to delegate such authority further to other officers of the Bank.
Other officers may be designated by the Secretary as Assistant Secretary to
perform the duties of the Secretary.

         SECTION 2. Executive Management. The Chairman of the Board or the
President, as determined by the Board of Directors, shall be the chief executive
officer of the Bank. In case of the death or disability of the Chairman of the
Board, his powers shall be exercised and his duties discharged by the President.
In the event of the death or disability of the Chairman of the Board and the
President, the Vice Chairman of the Board (or in the event there be more than
one Vice Chairman of the Board, the Vice Chairmen of the Board in the order
designated, or in the absence of any designation, then in the order of their
election) shall exercise the powers and discharge the duties of the Chairman of
the Board.

         SECTION 3. Election of Officers. The Board of Directors of the Bank
shall have authority to appoint the officers of the Bank. The Chairman of the
Board or the President shall have such authority to appoint officers as from
time to time delegated by the Board of Directors, and to delegate such authority
further to other officers of the Bank.



         SECTION 4. Authority and Responsibility. The authorities and
responsibilities of all officers, in addition to those specifically prescribed
herein, shall be those usually pertaining to their respective offices, or as may
be designated by the Board of Directors or by the Chairman of the Board or by
the President, or by any officer of the Bank designated by one of the foregoing.

         SECTION 5. Term of Office. Officers shall be appointed for an
indefinite term, and their employment may be terminated or they may be removed
from office at any time. The Board of Directors shall have authority to
terminate or remove officers of the Bank. The Chairman of the Board or the
President shall have such authority to terminate or remove officers as from time
to time delegated by the Board of Directors, and to delegate such authority
further to other officers of the Bank.

         SECTION 6. Surety. All officers and employees of the Bank who shall be
responsible for any moneys, funds or valuables of the Bank shall give bond, or
be covered by a blanket bond, in such penal sum and with such security as shall
be approved by the Board, conditioned for the faithful and honest discharge of
their duties as such officers or employees and that they will faithfully apply
and account for all such moneys, funds and valuables and deliver the same on
proper demand to the order of the Board of the Bank, or to the person or persons
authorized to receive the same.

                                    ARTICLE V

                                      SEAL

         SECTION 1. Description. The following is a description of the Seal
adopted by the Board of the Bank:

         An inner circle with the word "CORPORATE" over the word "SEAL"; the
whole surrounded with the words, "BANK ONE TRUST COMPANY, NA."

         SECTION 2. Attestation. Any instrument which is executed for and on
behalf of the Bank by its duly authorized officers may, when necessary, be
attested and sealed with the corporate seal by any officer of the Bank other
than the officer who executes such instrument on behalf of the Bank.

                                   ARTICLE VI

                            TRANSFERS OF REAL ESTATE

         Any Vice President or higher ranking officer shall have authority on
behalf of and in the name of the Bank, to execute any document or instrument and
to take action which may be necessary or appropriate to purchase, convey, lease,
or otherwise affect any real estate or interest in real estate owned or to be
owned by the Bank; provided, however, any document or instrument purchasing,
conveying or leasing real estate used or to be used by the Bank as banking
facilities must be executed by a Senior Vice President or higher ranking
officer, or any other officer designated by any of the foregoing. Any Assistant
Vice President or higher ranking officer shall have authority to execute and
deliver on behalf of and in the name of the Bank, releases of mortgages or trust
deeds.

                                   ARTICLE VII

                          STOCK AND STOCK CERTIFICATES

         SECTION 1. Increase of Stock. In the event of any increase in the
capital stock of the Bank the preemptive rights of the shareholders in respect
of any such increased stock shall be as set forth in Article FIFTH of the
Articles of Association.



         Any warrants or certificates issuable to shareholders in connection
with any increase of the capital stock of the Bank, shall be delivered to the
respective shareholders entitled thereto, either by hand or by mail, first-class
postage prepaid, addressed to their respective addresses as shown on the books
of the Bank.

         If, in the event of a sale of additional shares, any subscription
rights shall not have been exercised at the expiration of the specified
subscription period, such unsubscribed new shares may be issued and sold at such
price, not less than the par value thereof, to such persons and on such terms as
the Board of Directors may determine.

         SECTION 2. Transfers of Stock. The stock of the Bank shall be
assignable only upon the books of the Bank, subject to the restrictions of the
Act, and a transfer book shall be kept in which all assignments and transfers of
stock shall be made. Transfers of stock may be suspended preparatory to any
election or payment of any dividends.

         SECTION 3. Certificates of Stock. Certificates of stock signed by any
Vice President or higher ranking officer and the Secretary or any Assistant
Secretary may be issued to shareholders, and the Certificates shall state upon
the face thereof that the stock is transferable only upon the books of the Bank.
If such Certificates are manually countersigned by two other officers of the
Bank, the signatures of the officers designated in the preceding sentence may be
facsimiles, engraved or printed. In case any officer who has signed or whose
facsimile signature has been placed upon such Certificates shall have ceased to
be such officer before such Certificates are issued, they may be issued by the
Bank with the same effect as if such officer had not ceased to be such at the
date of issue.

         In case of transfer of stock, new Certificates of stock shall not be
issued until other Certificate or Certificates of stock of an equal amount shall
first have been surrendered and cancelled.

         Any one of the following officers of the Bank: the Chairman of the
Board, the President, or any Vice Chairman of the Board is each hereby
authorized to cause new Certificates of stock of the Bank to be issued to
replace Certificates reported to have been lost, stolen or destroyed, upon
receipt of: (a) appropriate affidavit or affidavits setting forth whether the
Certificates were lost, stolen or destroyed and the circumstances thereof, and
(b) a bond or bonds (blanket or otherwise) or an agreement or agreements of
indemnity, sufficient in the opinion of any of such officers to protect the
interests of the Bank issuing such new Certificates.

                                  ARTICLE VIII

                                  BANKING HOURS

         The Bank shall be open for business during such days of the year and
for such hours as the Board of Directors or any officer of the Bank designated
by the Board of Directors may from time to time determine.

                                   ARTICLE IX

                  CONTRACTS, CERTIFICATES OF DEPOSIT AND NOTES

         SECTION 1. Execution of Contracts. Any officer of the bank and such
other persons as may be authorized by the Board of Directors are severally and
respectively authorized to execute documents and to take action in the Bank's
name in connection with any and all transactions conducted in the ordinary
course of business of the Bank. Such officers and other persons are also
authorized to execute and deliver various forms of documents or agreements
necessary to effectuate certain investment strategies for various fiduciary or
custody customers of the Bank, including, without limitation, exchange funds,
options, both listed and over-the-counter, commodities trading, futures trading,
hedge funds, limited partnerships, venture capital funds, swap or collar
transactions and other similar investment vehicles for which the Bank now or in
the future may deem appropriate for investment or fiduciary customers or in
which non-fiduciary customers may direct investment by the Bank.



         SECTION 2. Notes. Notwithstanding the foregoing, all notes evidencing
obligations of the Bank shall be signed either manually or by facsimile
signature by any officer of the Bank, and, if such signature is not a manual
signature, shall be validated by the manual signature of another officer of the
Bank whose signature does not already appear on said note or by the authorized
officers of corporate fiduciaries or agents with whom the Board of Directors may
from time to time by resolution authorize the officers of the Bank to contract
for services in connection with the validation and delivery of notes issued by
the Bank.

                                    ARTICLE X

                                  VOTING RIGHTS

         The vote of the Bank as stockholder in any corporation in which it may
hold stock or upon any securities carrying voting rights which it shall have the
right to vote in its individual capacity as a Bank, shall be cast at any
stockholders' or shareholders' meeting by any Vice President or higher ranking
officer, or the Secretary, in person, or by some person or persons authorized by
written proxy signed by one of said officers.

         In all cases where shares of stock or other securities carrying voting
rights and owned by the Bank shall be held in the name of a nominee of the Bank,
any Vice President or higher ranking officer, or the Secretary, may authorize
such nominee to vote such stock or other securities in person, either
unconditionally or upon such terms, limitations, or conditions as such officer
may direct, or any such officer may authorize such nominee to execute a proxy to
vote such shares of stock or other securities carrying voting rights, either
unconditionally or upon such terms, conditions and/or limitations as such
officer shall approve.

                                   ARTICLE XI

                                  EXAMINATIONS

         If the Bank has a General Auditor, it shall be the duty of the Auditor
to examine, from time to time, the various operations of the Bank, verify its
assets and liabilities, and perform such other procedures as are required to
determine that the accounting records are accurate and to ascertain whether the
Bank is in a sound and solvent condition. Major discrepancies and defalcations
shall be reported to the Board promptly and other reports shall be made directly
to the Board when deemed appropriate either by the Auditor or the Board. In the
event of the death, resignation, absence or inability of the Auditor, the Board
of Directors shall appoint a competent person who shall make such examinations
and reports, pending the election of a successor to the Auditor or the return of
the Auditor to his duties.

                                   ARTICLE XII

                               BONDS OF INDEMNITY

         Bonds of indemnity given to secure the issuance of duplicate or
substitute notes, bonds, stock certificates, checks, debentures or other
securities which may have been lost, destroyed or stolen or to secure the
payment of any such lost, destroyed or stolen securities or to secure the
payment by the Bank of funds deposited by any public authorities, shall be
executed by any Assistant Vice President or higher ranking officer, and, if
required, sealed with the corporate seal and attested by some other officer of
the Bank.



                                  ARTICLE XIII

                      AUTHORITY TO SELL STOCKS, BONDS, ETC.

         SECTION 1. U.S. Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all United States bonds now standing, or which may hereafter stand, in
the name of the Bank, and to appoint one or more attorneys for that purpose.

         SECTION 2. Other Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all notes, bonds, certificates of indebtedness or obligations of any
corporation, firm or individual, which said notes, bonds, certificates of
indebtedness or obligations are now registered, or may hereafter be registered,
in the name of, or for the benefit of, the Bank, or are payable or indorsed to
the Bank.

         SECTION 3. Stock. Any Assistant Vice President or higher ranking
officer may at any time in his discretion, sell, assign and transfer to any
assignee or transferee, for and on behalf of the Bank and in its name, any and
all shares of capital stock of any corporation or corporations held by the Bank.

                                   ARTICLE XIV

                              FIDUCIARY ACTIVITIES

         SECTION 1. Authority to Sign as Registrar, Transfer Agent, etc. Any
officer of the Bank shall have the right to sign, countersign, certify,
register, authenticate and identify all bonds, notes, interim certificates, and
depositary receipts, warrants, participation certificates, certificates of stock
and similar instruments for or in respect of which the Bank may be acting as
Trustee, Registrar, Transfer Agent or otherwise.

         SECTION 2. Authority to Vote Stock. The vote of the Bank as stockholder
in any corporation or mutual fund in which it may hold capital stock in any
fiduciary capacity, unless the governing instrument directs otherwise, may be
voted by any officer of the Bank in person, electronically or by written proxy
signed by one of said officers.

         SECTION 3. Authority to Sell, Assign and Transfer Stocks, etc. Any
officer of the Bank may sell, assign and transfer to any assignee or transferee
for the Bank and in its name, any and all shares of the capital stock or other
securities and obligations of any individual or entity held by the Bank in any
fiduciary capacity, and sign and deliver any instruments with respect to any
such items.

         SECTION 4. Authority to Sign Checks and Other Instruments. Any officer
of the Bank is authorized to sign for and on behalf of the Bank: checks against
any account or accounts of any organizational unit of the Bank exercising
fiduciary powers; petitions; schedules; accounts; reports; receipts for funds or
securities deposited with the Bank as fiduciary and all instruments or documents
that may be necessary or desirable in connection with the execution of any
fiduciary powers of the Bank.

         SECTION 5. Delegation of Authority. Anything in this Article XIV to the
contrary notwithstanding, the Chairman of the Board or President is authorized
to designate in writing such persons as shall be authorized in the name of the
Bank to sign or countersign any or all of the documents and instruments
enumerated in this Article XIV relating to transactions conducted in connection
with the execution of any fiduciary powers of the Bank.

         SECTION 6. Corporate Powers. The business of the Bank shall be to
conduct fiduciary activities and to engage in such activities as are necessary,
incident, or related to such business, and to exercise such fiduciary powers as
are authorized by the Comptroller of the Currency.



                                   ARTICLE XV

                              AMENDMENT OF BY-LAWS

         These By-Laws may be changed or amended by the vote of a majority of
the directors present at any regularly constituted meeting of the Board of
Directors.

                                   ARTICLE XVI

                           EMERGENCY OPERATION OF BANK

         In the event of an emergency declared by the President of the United
States or the person performing his functions, due to threatened or actual enemy
attack or disaster, the officers and employees of the Bank will continue to
conduct the affairs of the Bank under such guidance from the directors as may be
available, except as to matters which by statute require specific approval of
the Board of Directors, and subject to conformance with any governmental
directives during the emergency.

                                  ARTICLE XVII

                             DELEGATION OF AUTHORITY

         Each of the Chairman of the Board, the President, any Vice Chairman of
the Board and the Secretary of the Bank are severally and respectively
authorized to designate in writing such persons who shall be authorized in the
name and on behalf of the Bank to sign any document or instrument, including
certificates of deposit and notes, and to take action which may be necessary or
appropriate to the conduct of the Bank's business, in its individual capacity or
any other capacity. Any such authorization to sign such document or instrument
and to take any action may be general or limited as is determined in the
discretion of the Chairman of the Board, the President, any Vice Chairman of the
Board or the Secretary.

As amended April 24, 1991         Section 3.01 (Officers and Management Staff)

                                  Section 3.02 (Chief Executive Officer)

                                  Section 3.03 (Powers and Duties of Officers
                                                       and Management Staff)

                                  Section 3.05 (Execution of Documents)

As amended January 27, 1995       Section 2.04 (Regular Meetings)

                                  Section 2.05 (Special Meetings)

                                  Section 3.01(f) (Officers and Management
                                                       Staff)

                                  Section 3.03(e) (Powers and Duties of Officers
                                                       and Management Staff)

                                  Section 5.01 (Seal)

Amended and restated in its entirety effective May 1, 1996

As amended August 1, 1996         Section 2.09 (Trust Examining Committee)



                                  Section 2.10 (Other Committees)

As amended October 16, 1997       Section 3.01 (Officers and Management Staff)

                                  Section 3.02 (Powers and Duties of Officers
                                                       and Management Staff)

                                  Section 3.04 (Execution of Documents)

As amended January 1, 1998        Section 1.01 (Annual Meeting)

AS AMENDED AND RESTATED IN ITS ENTIRETY EFFECTIVE JULY 20, 2001



                                    EXHIBIT 6

                       THE CONSENT OF THE TRUSTEE REQUIRED
                          BY SECTION 321(b) OF THE ACT

                                                       August 11, 2003


Securities and Exchange Commission
Washington, D.C.  20549

Ladies and Gentlemen:

In connection with the qualification of an indenture between Popular Inc., and
Bank One Trust Company, National Association, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.

                           Very truly yours,

                           BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                           BY: /s/ CHRISTOPHER HOLLY
                               ---------------------
                           CHRISTOPHER HOLLY
                           VICE PRESIDENT



                                    EXHIBIT 7

                                                                                
Legal Title of Bank:  Bank One Trust Company, N.A.  Call Date: 03/31/2003  State #: 391581
Address:              100 Broad Street                                     Cert #: 21377    Page RC-1
City, State  Zip:     Columbus, OH 43271



CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS  FOR MARCH 31, 2003

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.

SCHEDULE RC--BALANCE SHEET



                                                                                   DOLLAR AMOUNTS IN THOUSANDS C300
                                                                                                        
ASSETS
1.   Cash and balances due from depository institutions (from Schedule RC-A):         RCON
     a. Noninterest-bearing balances and currency and coin(1)................         0081      173,766           1.a
     b. Interest-bearing balances(2).........................................         0071            0           1.b
2.   Securities
     a. Held-to-maturity securities(from Schedule RC-B, column A)............         1754            0           2.a
     b. Available-for-sale securities (from Schedule RC-B, column D).........         1773          119           2.b
3.   Federal funds sold and securities purchased under agreements to resell
     a. Federal Funds Sold...................................................         B987      860,578
     b. Securities Purchased under agreements to resell (3)..................         B989      808,736           3.
4.   Loans and lease financing receivables: (from Schedule RC-C):                     RCON
     a. Loans and leases held for sale.......................................         5369            0           4.a
     b. Loans and leases, net of unearned income.............................         B528       51,834           4.b
     c. LESS: Allowance for loan and lease losses............................         3123          433           4.c
     d. Loans and leases, net of unearned income and allowance (item 4.b
        minus 4.c)...........................................................         B529       51,401           4.d
5.   Trading assets (from Schedule RC-D).....................................         3545            0           5.
6.   Premises and fixed assets (including capitalized leases)................         2145       13,537           6.
7.   Other real estate owned (from Schedule RC-M)............................         2150            0           7.
8.   Investments in unconsolidated subsidiaries and associated companies
     (from Schedule RC-M)....................................................         2130            0           8.
9.   Customers' liability to this bank on acceptances outstanding............         2155            0           9.
10.  Intangible assets.......................................................
     a. Goodwill.............................................................         3163            0          10.a
     b. Other intangible assets (from Schedule RC-M).........................         0426        6,246          10.b
11.  Other assets (from Schedule RC-F).......................................         2160      209,160          11.
12.  Total assets (sum of items 1 through 11)................................         2170    1,988,092          12.


(1) Includes cash items in process of collection and unposted debits.

(2) Includes time certificates of deposit not held for trading.

(3) Includes all securities resale agreements, regardless of maturity



                                                                                
Legal Title of Bank:  Bank One Trust Company, N.A.  Call Date: 03/31/2003  State #: 391581
Address:              100 East Broad Street                                Cert #" 21377    Page RC-2
City, State  Zip:     Columbus, OH 43271



SCHEDULE RC-CONTINUED



                                                                                              DOLLAR AMOUNTS IN
                                                                                                  THOUSANDS
                                                                                                  ---------
                                                                                                       
LIABILITIES
13.  Deposits:
     a. In domestic offices (sum of totals of columns A and C from Schedule           RCON
        RC-E)................................................................         2200    1,708,409         13.a
        (1) Noninterest-bearing(1)...........................................         6631    1,240,694         13.a1
        (2) Interest-bearing.................................................         6636      467,715         13.a2
     b. Not applicable
14.  Federal funds purchased and securities sold under agreements to
     repurchase
     a. Federal funds purchased (2)..........................................         B993            0         14.a
     b. Securities sold under agreements to repurchase (3)...................         B995            0         14.b
5.   Trading Liabilities(from Schedule RC-D).................................         3548            0         15.
16.  Other borrowed money (includes mortgage indebtedness and obligations
     under capitalized leases) (from Schedule RC-M)..........................         3190            0         16.
17.  Not applicable
18.  Bank's liability on acceptances executed and outstanding................         2920            0         18.
19.  Subordinated notes and debentures (2)...................................         3200            0         19.
20.  Other liabilities (from Schedule RC-G)..................................         2930       42,582         20.
21.  Total liabilities (sum of items 13 through 20)..........................         2948    1,750,991         21.
22.  Minority interest in consolidated subsidiaries..........................         3000            0         22.
EQUITY CAPITAL
23.  Perpetual preferred stock and related surplus...........................         3838            0         23.
24.  Common stock............................................................         3230          800         24.
25.  Surplus (exclude all surplus related to preferred stock)................         3839       45,157         25.
26.  a. Retained earnings....................................................         3632      191,141         26.a
     b. Accumulated other comprehensive income (3)...........................         B530            3         26.b
27.  Other equity capital components (4).....................................         A130            0         27.
28.  Total equity capital (sum of items 23 through 27).......................         3210      237,101         28.
29.  Total liabilities, minority interest, and equity capital (sum of items
     21, 22, and 28).........................................................         3300    1,988,092         29.


Memorandum
To be reported only with the March Report of Condition      ------------

1.   Indicate in the box at the right the number of the     RCON  Number  Number
      statement below that best describes the  most         ------------   M.I.
      comprehensive level of auditing work performed for    6724    NA
      the bank by independent external auditors as of any   ------------
      date during 2000...................................

1 =  Independent audit of the bank conducted in accordance with generally
      accepted auditing standards by a certified public accounting firm which
      submits a report on the bank

2 =  Independent audit of the bank's parent holding company conducted in
      accordance with generally accepted auditing standards by a certified
      public accounting firm which submits a report on the consolidated holding
      company (but not on the bank separately)

3 =  Directors' examination of the bank conducted in accordance with generally
      accepted auditing standards by a certified public accounting firm (may be
      required by state chartering authority)

4 =  Directors' examination of the bank performed by other external auditors
      (may be required by state chartering authority)

5 =  Review of the bank's financial statements by external auditors

6 =  Compilation of the bank's financial statements by external auditors

7 =  Other audit procedures (excluding tax preparation work)

8 =  No external audit work

(1) Includes total demand deposits and noninterest-bearing time and savings
     deposits.

(2) Report overnight Federal Home Loan Bank advances in Schedule RC, item 16,
     "other borrowed money."

(3) Includes all securities repurchase agreements, regardless of maturity.

(4) Includes limited-life preferred stock and related surplus.

(5) Includes net unrealized holding gains (losses) on available-for-sale
     securities, accumulated net gains (losses) on cash flow hedges, and minimum
     pension liability adjustments.

(6) Includes treasury stock and unearned Employee Stock Ownership Plan shares.

                                       24

EX-25.2

                                                                    EXHIBIT 25.2

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                      UNDER THE TRUST INDENTURE ACT OF 1939
                  OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

                CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
                   OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
               (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)

A NATIONAL BANKING ASSOCIATION                           31-0838515
                                                         (I.R.S. EMPLOYER
                                                         IDENTIFICATION NUMBER)

100 EAST BROAD STREET
COLUMBUS, OHIO                                           43271-0181
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                 (ZIP CODE)

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
                1 BANK ONE PLAZA, 20TH FLOOR, MAIL CODE IL1-0120
                          CHICAGO, ILLINOIS 60670-0120
             ATTN: CHRISTOPHER HOLLY, LAW DEPARTMENT (312) 732-1643
            (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

                            POPULAR CAPITAL TRUST I
                            POPULAR CAPITAL TRUST II
                            POPULAR CAPITAL TRUST III
                            POPULAR CAPITAL TRUST IV
               (Exact name of obligor as specified in its charter)

            DELAWARE                                     APPLIED FOR
(State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

POPULAR CENTER BUILDING
209 MUNOZ RIVERA AVENUE
SAN JUAN, PUERTO RICO                                    00918
(Address of principal executive offices)                 (Zip Code)

                            -----------------------
               PROPERTY TRUSTEE FOR THE TRUST PREFERRED SECURITIES
              IN CONNECTION WITH THE JUNIOR SUBORDINATED DEBENTURES
                         (Title of Indenture Securities)

                                       1



ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
                  INFORMATION AS TO THE TRUSTEE:

                  (a)      NAME AND ADDRESS OF EACH EXAMINING OR
                  SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.

                  Comptroller of Currency, Washington, D.C.;
                  Federal Deposit Insurance Corporation,
                  Washington, D.C.; The Board of Governors of
                  the Federal Reserve System, Washington D.C.

                  (b)      WHETHER IT IS AUTHORIZED TO EXERCISE
                  CORPORATE TRUST POWERS.

                  The trustee is authorized to exercise corporate trust powers.

ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
                  IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
                  SUCH AFFILIATION.

                  No such affiliation exists with the trustee.

ITEM 16.          LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF
                  THIS STATEMENT OF ELIGIBILITY.

                  1.  A copy of the articles of association of the
                      trustee now in effect.

                  2.  A copy of the certificates of authority of the
                      trustee to commence business.

                  3.  A copy of the authorization of the trustee to
                      exercise corporate trust powers.

                  4.  A copy of the existing by-laws of the trustee.

                  5.  Not Applicable.

                  6.  The consent of the trustee required by
                      Section 321(b) of the Act.

                  7.  A copy of the latest report of condition of the
                      trustee published pursuant to law or the
                      requirements of its supervising or examining
                      authority.

                  8.  Not Applicable.

                  9.  Not Applicable.

         Pursuant to the requirements of the Trust Indenture Act of 1939, as
         amended, the trustee, Bank One Trust Company, National Association, a
         national banking association organized and existing under the laws of
         the United States of

                                       2



         America, has duly caused this Statement of Eligibility to be signed on
         its behalf by the undersigned, thereunto duly authorized, all in the
         City of Chicago and State of Illinois, on the 26th, day of August 2003.

                      BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
                      TRUSTEE

                      BY: /S/ CHRISTOPHER HOLLY
                          ---------------------
                          CHRISTOPHER HOLLY
                          VICE PRESIDENT

                                       3



                                    EXHIBIT 1

                  A COPY OF THE ARTICLES OF ASSOCIATION OF THE
                              TRUSTEE NOW IN EFFECT

                              AMENDED AND RESTATED
                             ARTICLES OF ASSOCIATION
                                       OF
                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

FIRST. The title of this Association shall be BANK ONE TRUST COMPANY, National
Association.

SECOND. The main office of the Association shall be in the City of Columbus,
County of Franklin, State of Ohio.

The business of the Association will be limited to the fiduciary powers and the
support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.

THIRD. The Board of Directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is more recent. Any combination of common or preferred stock of the
Association or holding company may be used.

Any vacancy in the Board of Directors may be filled by action of a majority of
the remaining directors between meetings of shareholders. The Board of Directors
may not increase the number of directors between meetings of shareholders to a
number which: (1) exceeds by more than two the number of directors last elected
by shareholders where the number was 15 or less; or (2) exceeds by more than
four the number of directors last elected by shareholders where the number was
16 or more, but in no event shall the number of directors exceed 25.

Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.

Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.



Honorary or advisory members of the Board of Directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full Board of Directors, or
by resolution of shareholders at any annual or special meeting. Honorary or
advisory directors shall not be counted to determine the number of directors of
the Association or the presence of a quorum in connection with any board action,
and shall not be required to own qualifying shares.

FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the Bylaws or, if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in the event of a legal holiday on the following banking day, an
election may be held on any subsequent day within 60 days of the day fixed, to
be designated by the Board of Directors or, if the directors fail to fix the
day, by shareholders representing two-thirds of the shares issued and
outstanding. In all cases at least 10 days advance notice of the meeting shall
be given to the shareholders by first class mail.

In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares such shareholder
owns by the number of directors to be elected. Those votes may be cumulated and
cast for a single candidate or may be distributed among two or more candidates
in the manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by such
shareholder. If the issuance of preferred stock with voting rights has been
authorized by a vote of shareholders owning a majority of the common stock of
the association, preferred shareholders will have cumulative voting rights and
will be included within the same class as common shareholders, for purposes of
elections of directors.

A director may resign at any time by delivering written notice to the Board of
Directors, its chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.

A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.

FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.

No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.



Unless otherwise specified in the Articles of Association or required by law,
(1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be approved by shareholders owning a majority
voting interest in the outstanding voting stock, and (2) each shareholder shall
be entitled to one vote per share.

Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or more
classes or series in the same or a substantially similar way, all the classes or
series so affected must vote together as a single voting group on the proposed
amendment.

Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be issued
as share dividends in respect of a class or series of stock if approved by a
majority of the votes entitled to be cast by the class or series to be issued
unless there are no outstanding shares of the class or series to be issued.
Unless otherwise provided by the Board of Directors, the record date for
determining shareholders entitled to a share dividend shall be the date the
Board of Directors authorizes the share dividend.

Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.

If a shareholder is entitled to fractional shares pursuant to preemptive rights,
a stock dividend, consolidation or merger, reverse stock split or otherwise, the
Association may: (a) issue fractional shares or; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder with an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share; (d) remit the cash equivalent of the
fraction to the shareholder; or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as:
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.

The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.



SIXTH. The Board of Directors shall appoint one of its members president of this
Association, and one of its members chairperson of the board and shall have the
power to appoint one or more vice presidents, a secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the Board of Directors in accordance with the Bylaws.

The Board of Directors shall have the power to:

(1)  Define the duties of the officers, employees, and agents of the
     Association.

(2)  Delegate the performance of its duties, but not the responsibility for its
     duties, to the officers, employees, and agents of the Association.

(3)  Fix the compensation and enter into employment contracts with its officers
     and employees upon reasonable terms and conditions consistent with
     applicable law.

(4)  Dismiss officers and employees.

(5)  Require bonds from officers and employees and to fix the penalty thereof.

(6)  Ratify written policies authorized by the Association's management or
     committees of the board.

(7)  Regulate the manner in which any increase or decrease of the capital of the
     Association shall be made, provided that nothing herein shall restrict the
     power of shareholders to increase or decrease the capital of the
     association in accordance with law, and nothing shall raise or lower from
     two-thirds the percentage for shareholder approval to increase or reduce
     the capital.

(8)  Manage and administer the business and affairs of the Association.

(9)  Adopt initial Bylaws, not inconsistent with law or the Articles of
     Association, for managing the business and regulating the affairs of the
     Association.

(10) Amend or repeal Bylaws, except to the extent that the Articles of
     Association reserve this power in whole or in part to shareholders.

(11) Make contracts.

(12) Generally perform all acts that are legal for a Board of Directors to
     perform.

SEVENTH. The Board of Directors shall have the power to change the location of
the main office of this Association to any other place within the limits of the
City of Columbus, State of Ohio, without the approval of the shareholders; and
shall have the power to change the location of the main office of this
Association to any other place outside the limits of the City of Columbus, State
of Ohio, but not more than thirty miles beyond such limits, with the affirmative
vote of shareholders owning two-thirds of the stock of the Association, subject
to receipt of a certificate of approval from the Comptroller of the Currency.
The Board of Directors shall have the power to establish or change the location
of any branch or branches of the Association to any other location permitted
under applicable law without the approval of the shareholders,



subject to approval by the Office of the Comptroller of the Currency. The Board
of Directors shall have the power to establish or change the location of any
nonbranch office or facility of the Association without the approval of the
shareholders.

EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.

NINTH. The Board of Directors of this Association, or any shareholders owning,
in the aggregate, not less than 20 percent of the stock of this Association, may
call a special meeting of shareholders at any time. Unless otherwise provided by
the Bylaws or the laws of the United States, or waived by shareholders, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10, and no more than 60, days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
Association. Unless otherwise provided by the Bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.

TENTH. The Association shall provide indemnification as set forth below:

Every person who is or was a Director, officer or employee of the Association or
of any other corporation which he served as a Director, officer or employee at
the request of the Association as part of his regularly assigned duties may be
indemnified by the Association in accordance with the provisions of this Article
against all liability (including, without limitation, judgments, fines,
penalties, and settlements) and all reasonable expenses (including, without
limitation, attorneys' fees and investigative expenses) that may be incurred or
paid by him in connection with any claim, action, suit or proceeding, whether
civil, criminal or administrative (all referred to hereafter in this Article as
"Claims") or in connection with any appeal relating thereto in which he may
become involved as a party or otherwise or with which he may be threatened by
reason of his being or having been a Director, officer or employee of the
Association or such other corporation, or by reason of any action taken or
omitted by him in his capacity as such Director, officer or employee, whether or
not he continues to be such at the time such liability or expenses are incurred;
provided that nothing contained in this Article shall be construed to permit
indemnification of any such person who is adjudged guilty of, or liable for,
willful misconduct, gross neglect of duty or criminal acts, unless, at the time
such indemnification is sought, such indemnification in such instance is
permissible under applicable law and regulations, including published rulings of
the Comptroller of the Currency or other appropriate supervisory or regulatory
authority; and provided further that there shall be no indemnification of
Directors, officers, or employees against expenses, penalties, or other payments
incurred in an administrative proceeding or action instituted by an appropriate
regulatory agency which proceeding or action results in a final order assessing
civil money penalties or requiring affirmative action by an individual or
individuals in the form of payments to the Association.

Every person who may be indemnified under the provisions of this Article and who
has been wholly successful on the merits with respect to any Claim shall be
entitled to indemnification as of right. Except as provided in the preceding
sentence, any indemnification under this Article shall be at the sole discretion
of the Board of Directors and shall be made only if the Board of Directors or
the Executive Committee acting by a quorum consisting of Directors who are not
parties to such Claim shall find or if independent legal counsel (who may be the
regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that in view of all of the circumstances



then surrounding the Claim, such indemnification is equitable and in the best
interests of the Association. Among the circumstances to be taken into
consideration in arriving at such a finding or opinion is the existence or
non-existence of a contract of insurance or indemnity under which the
Association would be wholly or partially reimbursed for such indemnification,
but the existence or non-existence of such insurance is not the sole
circumstance to be considered nor shall it be wholly determinative of whether
such indemnification shall be made. In addition to such finding or opinion, no
indemnification under this Article shall be made unless the Board of Directors
or the Executive Committee acting by a quorum consisting of Directors who are
not parties to such Claim shall find or if independent legal counsel (who may be
the regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that the Directors, officer or employee acted in good faith in
what he reasonably believed to be the best interests of the Association or such
other corporation and further in the case of any criminal action or proceeding,
that the Director, officer or employee reasonably believed his conduct to be
lawful. Determination of any Claim by judgment adverse to a Director, officer or
employee by settlement with or without Court approval or conviction upon a plea
of guilty or of nolo contendere or its equivalent shall not create a presumption
that a Director, officer or employee failed to meet the standards of conduct set
forth in this Article. Expenses incurred with respect to any Claim may be
advanced by the Association prior to the final disposition thereof upon receipt
of an undertaking satisfactory to the Association by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he is
entitled to indemnification under this Article.

The rights of indemnification provided in this Article shall be in addition to
any rights to which any Director, officer or employee may otherwise be entitled
by contract or as a matter of law. Every person who shall act as a Director,
officer or employee of this Association shall be conclusively presumed to be
doing so in reliance upon the right of indemnification provided for in this
Article.

ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's Board of Directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.



                                    EXHIBIT 2

                  A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
                          TRUSTEE TO COMMENCE BUSINESS

                                   CERTIFICATE

I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:

1.       The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.

2.       "Bank One Trust Company, National Association," Columbus, Ohio,
(Charter No. 16235) is a National Banking Association formed under the laws of
the United States and is authorized thereunder to transact the business of
banking on the date of this Certificate.

                              IN TESTIMONY WHEREOF, I have hereunto

                              subscribed my name and caused my seal of

                              office to be affixed to these presents at the

                              Treasury Department in the City of

                              Washington and District of Columbia, this

                              25th day of July, 2001.

                              /s/ John D. Hawke, Jr.
                              -----------------------------
                              Comptroller of the Currency



                                    EXHIBIT 3

                   A COPY OF THE AUTHORIZATION OF THE TRUSTEE
                       TO EXERCISE CORPORATE TRUST POWERS

                                   CERTIFICATE

I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:

1.       The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.

2.       "Bank One Trust Company, National Association," Columbus, Ohio,
(Charter No. 16235) was granted, under the hand and seal of the Comptroller, the
right to act in all fiduciary capacities authorized under the provisions of the
Act of Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and
that the authority so granted remains in full force and effect on the date of
this Certificate.

                           IN TESTIMONY WHEREOF, I have hereunto

                           subscribed my name and caused my seal of

                           office to be affixed to these presents at the

                           Treasury Department in the City of

                           Washington and District of Columbia, this

                           25th day of July, 2001.

                           /s/ John D. Hawke, Jr.
                           --------------------------------
                           Comptroller of the Currency



                                    EXHIBIT 4

                  A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
                                     BY-LAWS

                                       OF

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                      AS AMENDED AND RESTATED JULY 20, 2001

                                     BY-LAWS

                                       OF

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                                    ARTICLE I

                              CORPORATE GOVERNANCE

         To the extent not inconsistent with applicable Federal banking statutes
or regulations, or safe and sound banking practices, the Bank shall follow the
corporate governance procedures of the Delaware General Corporation Law, as
amended.

                                   ARTICLE II

                                  SHAREHOLDERS

         SECTION 1. Annual Meeting. The regular annual meeting of shareholders
of the Bank to elect directors and to transact whatever other business may
properly come before the meeting shall be held in its main office on the third
Tuesday in February if not a legal holiday under the Laws of Ohio, and if a
legal holiday, then on the next business day following, at 11:30 A.M., or on
such other date and time as shall be designated by the Board of Directors. If,
for any cause, the annual election of directors should not be held on that date,
the Board shall order the election to be held on some subsequent day, of which
special notice shall be given.

         SECTION 2. Judges of Election. To the extent required by law, the Board
of Directors shall, prior to the time of the election of directors, appoint
three persons to be Judges of Election, who shall hold and conduct the same, and
who shall, after the election has been held, certify under their hands to the
Secretary of the Bank the result thereof and the names of the directors-elect.

         SECTION 3. Notice to Directors-Elect. The Secretary upon receiving the
Certificate of the Judges of Election as aforesaid, shall cause the same to be
recorded upon the minute book of the Bank, and shall notify the directors-elect
of their election and of the time at which they are required to meet at the main
office of the Bank for the purpose of organizing the new Board. If at the time
fixed for the meeting of the directors-elect there should not be a quorum
present, the members present may adjourn from time to time until a quorum is
obtained.

         SECTION 4. Special Meetings. Special meetings of the shareholders may
be called in accordance with Article NINTH of the Bank's Articles of
Association.



         SECTION 5. Record Date. The Board of Directors may fix in advance a day
not more than sixty (60) or less than ten (10) days prior to the date of holding
any regular or special meeting of shareholders as the day as of which
shareholders entitled to notice of and to vote at such meeting shall be
determined.

         SECTION 6. Notice. The Bank shall mail notice of any meeting of
shareholders at least 10 days prior to the meeting by first class mail, unless
the Office of the Comptroller of the Currency determines that an emergency
circumstance exists. If the Bank is a wholly-owned subsidiary of a company, the
sole shareholder may waive notice of the shareholder's meeting.

         SECTION 7. Consent of Shareholders in Lieu of Annual or Special
Meeting. Unless otherwise restricted by law or the Articles of Association, any
action which may be taken at any annual or special shareholder meeting may be
taken without a meeting, without prior notice and without a vote, if written
consent setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those shareholders who did not give written consent.

         SECTION 8. Minutes. The proceedings of shareholders at all regular and
special meetings or by written consent in lieu of a meeting shall be recorded in
the minute book, together with the Articles of Association of the Bank and the
returns of the Judges of Election. The minutes of each meeting shall be signed
by the Presiding Officer, and attested by the Secretary, or other officer of the
Bank acting in place of the Secretary.

                                   ARTICLE III

                                    DIRECTORS

         SECTION 1. Authority. The Board of Directors shall have the power to
manage and administer the business and affairs of the Bank. Except as expressly
limited by law, all corporate powers of the Bank shall be vested in and may be
exercised by the Board of Directors.

         SECTION 2. Number. The Board of Directors shall at all times consist of
not less than five nor more than twenty-five individuals. The exact number
within such minimum and maximum limits shall be fixed and determined from time
to time by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any meeting thereof; provided, however, that
the Board of Directors may not increase the number of directors to a number
which: (1) exceeds by more than two the number of directors last elected by
shareholders where such number was fifteen or less; or (ii) exceeds by more than
four the number of directors last elected by shareholders where such number was
sixteen or more, but in no event shall the number of directors exceed
twenty-five.

         SECTION 3. Term of Office. Each director shall hold office from the
date of his election or appointment until the next annual shareholder meeting.
Any director ceasing to be the owner of the amount of stock required by law or
in any other manner becoming disqualified shall thereupon vacate his office as
director.

         SECTION 4. Compensation. The Board of Directors may provide that a
reasonable fee be paid to any of its members or to the members of any duly
authorized committee for services rendered. No such payment shall preclude any
director from serving the Bank in any other capacity and receiving compensation
therefor.

         SECTION 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held on such dates, times and locations as determined by the Chairman
of the Board and communicated in writing to the directors.

         SECTION 6. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board or the President. Such meetings shall
be held at such times and at such places as shall be determined by the officer
calling the meeting. Notice of any special meeting of directors shall be given
to each director at the director's business or residence in writing by hand
delivery, first-class or overnight mail or courier service, telegram or
facsimile transmission, or orally by telephone. If mailed by first-class mail,
such notice shall be deemed adequately delivered when deposited in the United
States mail so addressed, with postage thereon prepaid, at least two (2) days
before such meeting. If by telegram, overnight mail or courier service, such
notice shall be

deemed adequately delivered when the telegram is delivered to the telegraph
company or the notice is delivered to the overnight mail or courier service
company at least twenty-four (24) hours before such meeting. If by facsimile
transmission, such notice shall be deemed adequately delivered when the notice
is transmitted at least twelve (12) hours before such meeting. Such notice need
not state the purposes of the meeting. Any or all directors may waive notice of
any meeting, either before or after the meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except when the
director attends for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.

         SECTION 7. Quorum; Majority Vote. A quorum of directors shall be
required to transact business at any regular or special meeting of the Board of
Directors. A majority of the directors shall constitute a quorum. Each director
shall be entitled to one vote. A vote by a majority of the directors present at
any regular or special meeting of the Board of Directors at which a quorum is
present shall be required to approve any matter or proposal at any such meeting.

         SECTION 8. Vacancies. When any vacancy occurs in the Board of
Directors, a majority of the remaining members of the Board, according to the
laws of the United States, may appoint a director to fill such vacancy at any
regular meeting of the Board of Directors, or at a special meeting called for
that purpose at which a quorum is present, or if the directors remaining in
office constitute fewer than a quorum of the Board of Directors, by the
affirmative vote of a majority of all the directors remaining in office, or by
shareholders at a special meeting called for that purpose. At any such
shareholder meeting, each shareholder entitled to vote shall have the right to
multiply the number of votes he or she is entitled to cast by the number of
vacancies being filled and cast the product for a single candidate or distribute
the product among two or more candidates. A vacancy that will occur at a
specific later date (by reason of a resignation effective at a later date) may
be filled before the vacancy occurs but the new director may not take office
until the vacancy occurs.

         SECTION 9. Presiding Officer. The Chairman of the Board shall preside
at all meetings of the Board of Directors at which he is present. In the absence
of the Chairman of the Board, the President shall perform the duties of the
Chairman of the Board and shall preside at the meetings of the Board of
Directors. In the absence of the Chairman of the Board and the President, the
Vice Chairman of the Board (or in the event there be more than one Vice Chairman
of the Board, the Vice Chairmen of the Board in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
their duties and shall preside at the meetings of the Board of Directors.

         SECTION 10. Minutes of Meeting. The Secretary to the Board of Directors
shall take minutes at any regular or special meeting of the Board of Directors.
If the Secretary is not present at any such meeting, the Chairman of the Board
may designate a secretary pro tem to take minutes at the meeting. The Secretary
or secretary pro tem shall record the actions and proceedings at each regular or
special meeting of the Board of Directors as minutes of the meeting and shall
maintain such minutes in a minute book of proceedings of such meetings of the
Board of Directors. Minutes of each such meeting shall be signed by the
presiding officer and secretary of each meeting.

         SECTION 11. Participation in Meetings by Telephone Unless otherwise
restricted by law or the Articles of Association, members of the Board of
Directors, or of any committee thereof, may participate in a meeting of the
Board of Directors or committee by means of conference telephone or similar
communications equipment which allows each person participating in the meeting
to hear each other. Participation in such a meeting shall constitute presence in
person at such meeting.

         SECTION 12. Consent of Directors in Lieu of Meeting. Unless otherwise
restricted by law or the Articles of Association, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.

         SECTION 13. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board, designate one or more committees, each
committee to consist of two or more of the Directors of the Bank.



The Board of Directors may designate one or more Directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Bank, and may authorize the
seal of the Bank to be affixed to all papers which may require it; provided,
however, that in the absence or disqualification of any member of such committee
or committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors. As used in these By-Laws,
"entire Board" means the total number of Directors the Bank would have if there
were no vacancies.

         There may be an Executive Committee composed and created as the Board
of Directors may designate by resolution passed by a majority of the entire
Board. During intervals between the regular meetings of the Board of Directors,
the Executive Committee, to the extent permitted by law, the Articles of
Association of the Bank and the By-Laws, shall have and may exercise the powers
of the Board of Directors in the management of the business and affairs of the
Bank.

         Unless otherwise provided by the Board of Directors, a majority of the
members of any committee appointed by the Board of Directors pursuant to this
Section shall constitute a quorum at any meeting thereof and the act of a
majority of the members present at a meeting at which a quorum is present shall
be the act of such committee. Any such committee shall, subject to any rules
prescribed by the Board of Directors, prescribe its own rules for calling,
giving notice of and holding meetings and its method of procedure at such
meetings and shall keep a written record of all action taken by it. Each
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.

                                   ARTICLE IV

                                    OFFICERS

         SECTION 1. Officer Titles. The officers of the Bank shall include a
Chairman of the Board and a President and may include one or more Vice Chairmen
of the Board, Executive Vice Presidents, Senior Vice Presidents, First Vice
Presidents, Vice Presidents and Assistant Vice Presidents, a General Auditor, a
General Counsel, a Secretary, and such other officers as may be appropriate for
the prompt and orderly transaction of the business of the Bank. Individuals
appointed as Chairman of the Board, President, and Vice Chairman of the Board
must be members of the Board. The same person may hold any two or more offices.
The Chairman of the Board or the President shall have such authority to
establish officer titles as from time to time delegated by the Board of
Directors and to delegate such authority further to other officers of the Bank.
Other officers may be designated by the Secretary as Assistant Secretary to
perform the duties of the Secretary.

         SECTION 2. Executive Management. The Chairman of the Board or the
President, as determined by the Board of Directors, shall be the chief executive
officer of the Bank. In case of the death or disability of the Chairman of the
Board, his powers shall be exercised and his duties discharged by the President.
In the event of the death or disability of the Chairman of the Board and the
President, the Vice Chairman of the Board (or in the event there be more than
one Vice Chairman of the Board, the Vice Chairmen of the Board in the order
designated, or in the absence of any designation, then in the order of their
election) shall exercise the powers and discharge the duties of the Chairman of
the Board.

         SECTION 3. Election of Officers. The Board of Directors of the Bank
shall have authority to appoint the officers of the Bank. The Chairman of the
Board or the President shall have such authority to appoint officers as from
time to time delegated by the Board of Directors, and to delegate such authority
further to other officers of the Bank.



         SECTION 4. Authority and Responsibility. The authorities and
responsibilities of all officers, in addition to those specifically prescribed
herein, shall be those usually pertaining to their respective offices, or as may
be designated by the Board of Directors or by the Chairman of the Board or by
the President, or by any officer of the Bank designated by one of the foregoing.

         SECTION 5. Term of Office. Officers shall be appointed for an
indefinite term, and their employment may be terminated or they may be removed
from office at any time. The Board of Directors shall have authority to
terminate or remove officers of the Bank. The Chairman of the Board or the
President shall have such authority to terminate or remove officers as from time
to time delegated by the Board of Directors, and to delegate such authority
further to other officers of the Bank.

         SECTION 6. Surety. All officers and employees of the Bank who shall be
responsible for any moneys, funds or valuables of the Bank shall give bond, or
be covered by a blanket bond, in such penal sum and with such security as shall
be approved by the Board, conditioned for the faithful and honest discharge of
their duties as such officers or employees and that they will faithfully apply
and account for all such moneys, funds and valuables and deliver the same on
proper demand to the order of the Board of the Bank, or to the person or persons
authorized to receive the same.

                                    ARTICLE V

                                      SEAL

         SECTION 1. Description. The following is a description of the Seal
adopted by the Board of the Bank:

         An inner circle with the word "CORPORATE" over the word "SEAL"; the
whole surrounded with the words, "BANK ONE TRUST COMPANY, NA."

         SECTION 2. Attestation. Any instrument which is executed for and on
behalf of the Bank by its duly authorized officers may, when necessary, be
attested and sealed with the corporate seal by any officer of the Bank other
than the officer who executes such instrument on behalf of the Bank.

                                   ARTICLE VI

                            TRANSFERS OF REAL ESTATE

         Any Vice President or higher ranking officer shall have authority on
behalf of and in the name of the Bank, to execute any document or instrument and
to take action which may be necessary or appropriate to purchase, convey, lease,
or otherwise affect any real estate or interest in real estate owned or to be
owned by the Bank; provided, however, any document or instrument purchasing,
conveying or leasing real estate used or to be used by the Bank as banking
facilities must be executed by a Senior Vice President or higher ranking
officer, or any other officer designated by any of the foregoing. Any Assistant
Vice President or higher ranking officer shall have authority to execute and
deliver on behalf of and in the name of the Bank, releases of mortgages or trust
deeds.

                                   ARTICLE VII

                          STOCK AND STOCK CERTIFICATES

         SECTION 1. Increase of Stock. In the event of any increase in the
capital stock of the Bank the preemptive rights of the shareholders in respect
of any such increased stock shall be as set forth in Article FIFTH of the
Articles of Association.



         Any warrants or certificates issuable to shareholders in connection
with any increase of the capital stock of the Bank, shall be delivered to the
respective shareholders entitled thereto, either by hand or by mail, first-class
postage prepaid, addressed to their respective addresses as shown on the books
of the Bank.

         If, in the event of a sale of additional shares, any subscription
rights shall not have been exercised at the expiration of the specified
subscription period, such unsubscribed new shares may be issued and sold at such
price, not less than the par value thereof, to such persons and on such terms as
the Board of Directors may determine.

         SECTION 2. Transfers of Stock. The stock of the Bank shall be
assignable only upon the books of the Bank, subject to the restrictions of the
Act, and a transfer book shall be kept in which all assignments and transfers of
stock shall be made. Transfers of stock may be suspended preparatory to any
election or payment of any dividends.

         SECTION 3. Certificates of Stock. Certificates of stock signed by any
Vice President or higher ranking officer and the Secretary or any Assistant
Secretary may be issued to shareholders, and the Certificates shall state upon
the face thereof that the stock is transferable only upon the books of the Bank.
If such Certificates are manually countersigned by two other officers of the
Bank, the signatures of the officers designated in the preceding sentence may be
facsimiles, engraved or printed. In case any officer who has signed or whose
facsimile signature has been placed upon such Certificates shall have ceased to
be such officer before such Certificates are issued, they may be issued by the
Bank with the same effect as if such officer had not ceased to be such at the
date of issue.

         In case of transfer of stock, new Certificates of stock shall not be
issued until other Certificate or Certificates of stock of an equal amount shall
first have been surrendered and cancelled.

         Any one of the following officers of the Bank: the Chairman of the
Board, the President, or any Vice Chairman of the Board is each hereby
authorized to cause new Certificates of stock of the Bank to be issued to
replace Certificates reported to have been lost, stolen or destroyed, upon
receipt of: (a) appropriate affidavit or affidavits setting forth whether the
Certificates were lost, stolen or destroyed and the circumstances thereof, and
(b) a bond or bonds (blanket or otherwise) or an agreement or agreements of
indemnity, sufficient in the opinion of any of such officers to protect the
interests of the Bank issuing such new Certificates.

                                  ARTICLE VIII

                                  BANKING HOURS

         The Bank shall be open for business during such days of the year and
for such hours as the Board of Directors or any officer of the Bank designated
by the Board of Directors may from time to time determine.

                                   ARTICLE IX

                  CONTRACTS, CERTIFICATES OF DEPOSIT AND NOTES

         SECTION 1. Execution of Contracts. Any officer of the bank and such
other persons as may be authorized by the Board of Directors are severally and
respectively authorized to execute documents and to take action in the Bank's
name in connection with any and all transactions conducted in the ordinary
course of business of the Bank. Such officers and other persons are also
authorized to execute and deliver various forms of documents or agreements
necessary to effectuate certain investment strategies for various fiduciary or
custody customers of the Bank, including, without limitation, exchange funds,
options, both listed and over-the-counter, commodities trading, futures trading,
hedge funds, limited partnerships, venture capital funds, swap or collar
transactions and other similar investment vehicles for which the Bank now or in
the future may deem appropriate for investment or fiduciary customers or in
which non-fiduciary customers may direct investment by the Bank.



         SECTION 2. Notes. Notwithstanding the foregoing, all notes evidencing
obligations of the Bank shall be signed either manually or by facsimile
signature by any officer of the Bank, and, if such signature is not a manual
signature, shall be validated by the manual signature of another officer of the
Bank whose signature does not already appear on said note or by the authorized
officers of corporate fiduciaries or agents with whom the Board of Directors may
from time to time by resolution authorize the officers of the Bank to contract
for services in connection with the validation and delivery of notes issued by
the Bank.

                                    ARTICLE X

                                  VOTING RIGHTS

         The vote of the Bank as stockholder in any corporation in which it may
hold stock or upon any securities carrying voting rights which it shall have the
right to vote in its individual capacity as a Bank, shall be cast at any
stockholders' or shareholders' meeting by any Vice President or higher ranking
officer, or the Secretary, in person, or by some person or persons authorized by
written proxy signed by one of said officers.

         In all cases where shares of stock or other securities carrying voting
rights and owned by the Bank shall be held in the name of a nominee of the Bank,
any Vice President or higher ranking officer, or the Secretary, may authorize
such nominee to vote such stock or other securities in person, either
unconditionally or upon such terms, limitations, or conditions as such officer
may direct, or any such officer may authorize such nominee to execute a proxy to
vote such shares of stock or other securities carrying voting rights, either
unconditionally or upon such terms, conditions and/or limitations as such
officer shall approve.

                                   ARTICLE XI

                                  EXAMINATIONS

         If the Bank has a General Auditor, it shall be the duty of the Auditor
to examine, from time to time, the various operations of the Bank, verify its
assets and liabilities, and perform such other procedures as are required to
determine that the accounting records are accurate and to ascertain whether the
Bank is in a sound and solvent condition. Major discrepancies and defalcations
shall be reported to the Board promptly and other reports shall be made directly
to the Board when deemed appropriate either by the Auditor or the Board. In the
event of the death, resignation, absence or inability of the Auditor, the Board
of Directors shall appoint a competent person who shall make such examinations
and reports, pending the election of a successor to the Auditor or the return of
the Auditor to his duties.

                                   ARTICLE XII

                               BONDS OF INDEMNITY

         Bonds of indemnity given to secure the issuance of duplicate or
substitute notes, bonds, stock certificates, checks, debentures or other
securities which may have been lost, destroyed or stolen or to secure the
payment of any such lost, destroyed or stolen securities or to secure the
payment by the Bank of funds deposited by any public authorities, shall be
executed by any Assistant Vice President or higher ranking officer, and, if
required, sealed with the corporate seal and attested by some other officer of
the Bank.



                                  ARTICLE XIII

                      AUTHORITY TO SELL STOCKS, BONDS, ETC.

         SECTION 1. U.S. Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all United States bonds now standing, or which may hereafter stand, in
the name of the Bank, and to appoint one or more attorneys for that purpose.

         SECTION 2. Other Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all notes, bonds, certificates of indebtedness or obligations of any
corporation, firm or individual, which said notes, bonds, certificates of
indebtedness or obligations are now registered, or may hereafter be registered,
in the name of, or for the benefit of, the Bank, or are payable or indorsed to
the Bank.

         SECTION 3. Stock. Any Assistant Vice President or higher ranking
officer may at any time in his discretion, sell, assign and transfer to any
assignee or transferee, for and on behalf of the Bank and in its name, any and
all shares of capital stock of any corporation or corporations held by the Bank.

                                   ARTICLE XIV

                              FIDUCIARY ACTIVITIES

         SECTION 1. Authority to Sign as Registrar, Transfer Agent, etc. Any
officer of the Bank shall have the right to sign, countersign, certify,
register, authenticate and identify all bonds, notes, interim certificates, and
depositary receipts, warrants, participation certificates, certificates of stock
and similar instruments for or in respect of which the Bank may be acting as
Trustee, Registrar, Transfer Agent or otherwise.

         SECTION 2. Authority to Vote Stock. The vote of the Bank as stockholder
in any corporation or mutual fund in which it may hold capital stock in any
fiduciary capacity, unless the governing instrument directs otherwise, may be
voted by any officer of the Bank in person, electronically or by written proxy
signed by one of said officers.

         SECTION 3. Authority to Sell, Assign and Transfer Stocks, etc. Any
officer of the Bank may sell, assign and transfer to any assignee or transferee
for the Bank and in its name, any and all shares of the capital stock or other
securities and obligations of any individual or entity held by the Bank in any
fiduciary capacity, and sign and deliver any instruments with respect to any
such items.

         SECTION 4. Authority to Sign Checks and Other Instruments. Any officer
of the Bank is authorized to sign for and on behalf of the Bank: checks against
any account or accounts of any organizational unit of the Bank exercising
fiduciary powers; petitions; schedules; accounts; reports; receipts for funds or
securities deposited with the Bank as fiduciary and all instruments or documents
that may be necessary or desirable in connection with the execution of any
fiduciary powers of the Bank.

         SECTION 5. Delegation of Authority. Anything in this Article XIV to the
contrary notwithstanding, the Chairman of the Board or President is authorized
to designate in writing such persons as shall be authorized in the name of the
Bank to sign or countersign any or all of the documents and instruments
enumerated in this Article XIV relating to transactions conducted in connection
with the execution of any fiduciary powers of the Bank.

         SECTION 6. Corporate Powers. The business of the Bank shall be to
conduct fiduciary activities and to engage in such activities as are necessary,
incident, or related to such business, and to exercise such fiduciary powers as
are authorized by the Comptroller of the Currency.



                                   ARTICLE XV

                              AMENDMENT OF BY-LAWS

         These By-Laws may be changed or amended by the vote of a majority of
the directors present at any regularly constituted meeting of the Board of
Directors.

                                   ARTICLE XVI

                           EMERGENCY OPERATION OF BANK

         In the event of an emergency declared by the President of the United
States or the person performing his functions, due to threatened or actual enemy
attack or disaster, the officers and employees of the Bank will continue to
conduct the affairs of the Bank under such guidance from the directors as may be
available, except as to matters which by statute require specific approval of
the Board of Directors, and subject to conformance with any governmental
directives during the emergency.

                                  ARTICLE XVII

                            DELEGATION OF AUTHORITY

         Each of the Chairman of the Board, the President, any Vice Chairman of
the Board and the Secretary of the Bank are severally and respectively
authorized to designate in writing such persons who shall be authorized in the
name and on behalf of the Bank to sign any document or instrument, including
certificates of deposit and notes, and to take action which may be necessary or
appropriate to the conduct of the Bank's business, in its individual capacity or
any other capacity. Any such authorization to sign such document or instrument
and to take any action may be general or limited as is determined in the
discretion of the Chairman of the Board, the President, any Vice Chairman of the
Board or the Secretary.

As amended April 24, 1991       Section 3.01 (Officers and Management Staff)

                                Section 3.02 (Chief Executive Officer)

                                Section 3.03 (Powers and Duties of Officers and
                                                     Management Staff)

                                Section 3.05 (Execution of Documents)

As amended January 27, 1995     Section 2.04 (Regular Meetings)

                                Section 2.05 (Special Meetings)

                                Section 3.01(f) (Officers and Management Staff)

                                Section 3.03(e) (Powers and Duties of Officers
                                                     and Management Staff)

                                Section 5.01 (Seal)

Amended and restated in its entirety effective May 1, 1996

As amended August 1, 1996       Section 2.09 (Trust Examining Committee)



                                Section 2.10 (Other Committees)

As amended October 16, 1997     Section 3.01 (Officers and Management Staff)

                                Section 3.02 (Powers and Duties of Officers and
                                              Management Staff)

                                Section 3.04 (Execution of Documents)

As amended January 1, 1998      Section 1.01 (Annual Meeting)

AS AMENDED AND RESTATED IN ITS ENTIRETY EFFECTIVE JULY 20, 2001



                                    EXHIBIT 6

                       THE CONSENT OF THE TRUSTEE REQUIRED
                          BY SECTION 321(b) OF THE ACT

                                 August 11, 2003

Securities and Exchange Commission
Washington, D.C. 20549

Ladies and Gentlemen:

In connection with the qualification of an indenture between Popular Inc., and
Bank One Trust Company, National Association, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.

                                Very truly yours,

                                BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                                BY: /s/ CHRISTOPHER HOLLY
                                    -----------------------
                                    CHRISTOPHER HOLLY
                                    VICE PRESIDENT



                                    EXHIBIT 7

                                                                                                  
Legal Title of Bank:    Bank One Trust Company, N.A.       Call Date: 03/31/2003     State #: 391581
Address:                100 Broad Street                                             Cert #: 21377            Page RC-1
City, State  Zip:       Columbus, OH 43271



CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS  FOR MARCH 31, 2003

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.

SCHEDULE RC--BALANCE SHEET



                                                                                          DOLLAR AMOUNTS IN THOUSANDS C300
                                                                                          --------------------------------
                                                                                                              
ASSETS
1.  Cash and balances due from depository institutions (from Schedule RC-A):                RCON
    a. Noninterest-bearing balances and currency and coin(1).........................       0081          173,766      1.a
    b. Interest-bearing balances(2)..................................................       0071                0      1.b
2.  Securities
    a. Held-to-maturity securities(from Schedule RC-B, column A).....................       1754                0      2.a
    b. Available-for-sale securities (from Schedule RC-B, column D)..................       1773              119      2.b
3.  Federal funds sold and securities purchased under agreements to resell
    a. Federal Funds Sold............................................................       B987          860,578
    b. Securities Purchased under agreements to resell (3)...........................       B989          808,736      3.
4.  Loans and lease financing receivables: (from Schedule RC-C):                            RCON
    a. Loans and leases held for sale................................................       5369                0      4.a
    b. Loans and leases, net of unearned income......................................       B528           51,834      4.b
    c. LESS: Allowance for loan and lease losses.....................................       3123              433      4.c
    d. Loans and leases, net of unearned income and allowance (item 4.b minus 4.c)...       B529           51,401      4.d
5.  Trading assets (from Schedule RC-D)..............................................       3545                0      5.
6.  Premises and fixed assets (including capitalized leases).........................       2145           13,537      6.
7.  Other real estate owned (from Schedule RC-M).....................................       2150                0      7.
8.  Investments in unconsolidated subsidiaries and associated
    companies (from Schedule RC-M)...................................................       2130                0      8.
9.  Customers' liability to this bank on acceptances outstanding.....................       2155                0      9.
10. Intangible assets................................................................
    a. Goodwill......................................................................       3163                0      10.a
    b. Other intangible assets (from Schedule RC-M)..................................       0426            6,246      10.b
11. Other assets (from Schedule RC-F)................................................       2160          209,160      11.
12. Total assets (sum of items 1 through 11).........................................       2170        1,988,092      12.


(1)  Includes cash items in process of collection and unposted debits.

(2)  Includes time certificates of deposit not held for trading.

(3)  Includes all securities resale agreements, regardless of maturity.



                                                                                                  
Legal Title of Bank:        Bank One Trust Company, N.A.       Call Date: 03/31/03      State #:  391581
Address:                    100 East Broad Street                                       Cert #"  21377        Page RC-2
City, State  Zip:           Columbus, OH 43271



SCHEDULE RC-CONTINUED



                                                                                          DOLLAR AMOUNTS IN
                                                                                             THOUSANDS
                                                                                     ---------------------------
                                                                                                  
LIABILITIES
13. Deposits:
    a. In domestic offices (sum of totals of columns A and C                         RCON
       from Schedule RC-E) .....................................................     2200      1,708,409   13.a
       (1) Noninterest-bearing(1)...............................................     6631      1,240,694   13.a1
       (2) Interest-bearing.....................................................     6636        467,715   13.a2
    b. Not applicable
14. Federal funds purchased and securities sold under agreements
    to repurchase
    a. Federal funds purchased (2)..............................................     B993              0   14.a
    b. Securities sold under agreements to repurchase (3).......................     B995              0   14.b
5.  Trading Liabilities(from Schedule RC-D).....................................     3548              0   15.
16. Other borrowed money (includes mortgage indebtedness and
    obligations under capitalized leases) (from Schedule RC-M)..................     3190              0   16.
17. Not applicable
18. Bank's liability on acceptances executed and outstanding....................     2920              0   18.
19. Subordinated notes and debentures (2).......................................     3200              0   19.
20. Other liabilities (from Schedule RC-G)......................................     2930         42,582   20.
21. Total liabilities (sum of items 13 through 20)..............................     2948      1,750,991   21.
22. Minority interest in consolidated subsidiaries..............................     3000              0   22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus...............................     3838              0   23.
24. Common stock................................................................     3230            800   24.
25. Surplus (exclude all surplus related to preferred stock)....................     3839         45,157   25.
26. a. Retained earnings........................................................     3632        191,141   26.a
    b. Accumulated other comprehensive income (3)...............................     B530              3   26.b
27. Other equity capital components (4).........................................     A130              0   27.
28. Total equity capital (sum of items 23 through 27)...........................     3210        237,101   28.
29. Total liabilities, minority interest, and equity
    capital (sum of items 21, 22, and 28).......................................     3300      1,988,092   29.


Memorandum

To be reported only with the March Report of Condition

1.   Indicate in the box at the right the number of the   -------------
      statement below that best describes the most        RCON   Number   Number
      comprehensive level of auditing work performed      -------------    M.I.
      for the bank by independent external auditors as    6724     NA
      of any date during 2000 ........................    -------------

1 =   Independent audit of the bank conducted in accordance with generally
       accepted auditing standards by a certified public accounting firm which
       submits a report on the bank

2 =   Independent audit of the bank's parent holding company conducted in
       accordance with generally accepted auditing standards by a certified
       public accounting firm which submits a report on the consolidated
       holding company (but not on the bank separately)

3 =   Directors' examination of the bank conducted in accordance with
       generally accepted auditing standards by a certified public accounting
       firm (may be required by state chartering authority)

4 =   Directors' examination of the bank performed by other external auditors
       (may be required by state authority)

5 =   Review of the bank's financial statements by external auditors

6 =   Compilation of the bank's financial statements by external auditors

7 =   Other audit procedures (excluding tax preparation work)

8 =   No external audit work

(1) Includes total demand deposits and noninterest-bearing time and savings
     deposits.

(2) Report overnight Federal Home Loan Bank advances in Schedule RC, item 16,
     "other borrowed money."

(3) Includes all securities repurchase agreements, regardless of maturity.

(4) Includes limited-life preferred stock and related surplus.

(5) Includes net unrealized holding gains (losses) on available-for-sale
     securities, accumulated net gains (losses) on cash flow hedges, and minimum
     pension liability adjustments.

(6) Includes treasury stock and unearned Employee Stock Ownership Plan shares.

                                       24

EX-25.3

                                                                    EXHIBIT 25.3

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM T-1

                            STATEMENT OF ELIGIBILITY
                      UNDER THE TRUST INDENTURE ACT OF 1939
                  OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

                CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
                   OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
               (EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)

   A NATIONAL BANKING ASSOCIATION                         31-0838515
                                                          (I.R.S. EMPLOYER
                                                          IDENTIFICATION NUMBER)

100 EAST BROAD STREET
COLUMBUS, OHIO                                            43271-0181
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                  (ZIP CODE)

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
                1 BANK ONE PLAZA, 20TH FLOOR, MAIL CODE IL1-0120
                          CHICAGO, ILLINOIS 60670-0120
             ATTN: CHRISTOPHER HOLLY, LAW DEPARTMENT (312) 732-1643
            (NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)

                            POPULAR CAPITAL TRUST I
                            POPULAR CAPITAL TRUST II
                            POPULAR CAPITAL TRUST III
                            POPULAR CAPITAL TRUST IV
               (Exact name of obligor as specified in its charter)

            DELAWARE                                      APPLIED FOR
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)

POPULAR CENTER BUILDING
209 MUNOZ RIVERA AVENUE
SAN JUAN, PUERTO RICO                                     00918
(Address of principal executive offices)                  (Zip Code)

                              --------------------
              GUARANTEE TRUSTEE FOR THE TRUST PREFERRED SECURITIES
              IN CONNECTION WITH THE JUNIOR SUBORDINATED DEBENTURES
                         (Title of Indenture Securities)

                                        1


ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
                  TRUSTEE:

                  (a)      NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
                  AUTHORITY TO WHICH IT IS SUBJECT.

                  Comptroller of Currency, Washington, D.C.; Federal Deposit
                  Insurance Corporation, Washington, D.C.; The Board of
                  Governors of the Federal Reserve System, Washington D.C.

                  (b)      WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST
                  POWERS.

                  The trustee is authorized to exercise corporate trust powers.

ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE
                  TRUSTEE, DESCRIBE EACH SUCH AFFILIATION.

                  No such affiliation exists with the trustee.

ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART OF THIS
                  STATEMENT OF ELIGIBILITY.

                  1.   A copy of the articles of association of the trustee now
                       in effect.

                  2.   A copy of the certificates of authority of the trustee to
                       commence business.

                  3.   A copy of the authorization of the trustee to exercise
                       corporate trust powers.

                  4.   A copy of the existing by-laws of the trustee.

                  5.   Not Applicable.

                  6.   The consent of the trustee required by Section 321(b) of
                       the Act.

                  7.   A copy of the latest report of condition of the trustee
                       published pursuant to law or the requirements of its
                       supervising or examining authority.

                  8.   Not Applicable.

                  9.   Not Applicable.

         Pursuant to the requirements of the Trust Indenture Act of 1939, as
         amended, the trustee, Bank One Trust Company, National Association, a
         national banking

                                        2


         association organized and existing under the laws of the United States
         of America, has duly caused this Statement of Eligibility to be signed
         on its behalf by the undersigned, thereunto duly authorized, all in the
         City of Chicago and State of Illinois, on the 26th, day of August 2003.

                           BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
                           TRUSTEE

                           BY: /s/ CHRISTOPHER HOLLY
                               ---------------------------
                               CHRISTOPHER HOLLY
                               VICE PRESIDENT

                                        3


                                    EXHIBIT 1

                  A COPY OF THE ARTICLES OF ASSOCIATION OF THE
                              TRUSTEE NOW IN EFFECT

                              AMENDED AND RESTATED
                             ARTICLES OF ASSOCIATION
                                       OF
                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

FIRST. The title of this Association shall be BANK ONE TRUST COMPANY, National
Association.

SECOND. The main office of the Association shall be in the City of Columbus,
County of Franklin, State of Ohio.

The business of the Association will be limited to the fiduciary powers and the
support of activities incidental to the exercise of those powers. The
Association will not expand or alter its business beyond that stated in this
article without the prior approval of the Comptroller of the Currency.

THIRD. The Board of Directors of this Association shall consist of not less than
five nor more than twenty-five persons, the exact number to be fixed and
determined from time to time by resolution of a majority of the full Board of
Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association, or of a holding company owning the Association, with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is more recent. Any combination of common or preferred stock of the
Association or holding company may be used.

Any vacancy in the Board of Directors may be filled by action of a majority of
the remaining directors between meetings of shareholders. The Board of Directors
may not increase the number of directors between meetings of shareholders to a
number which: (1) exceeds by more than two the number of directors last elected
by shareholders where the number was 15 or less; or (2) exceeds by more than
four the number of directors last elected by shareholders where the number was
16 or more, but in no event shall the number of directors exceed 25.

Terms of directors, including directors selected to fill vacancies, shall expire
at the next regular meeting of shareholders at which directors are elected,
unless the directors resign or are removed from office.

Despite the expiration of a director's term, the director shall continue to
serve until his or her successor is elected and qualifies or until there is a
decrease in the number of directors and his or her position is eliminated.



Honorary or advisory members of the Board of Directors, without voting power or
power of final decision in matters concerning the business of the Association,
may be appointed by resolution of a majority of the full Board of Directors, or
by resolution of shareholders at any annual or special meeting. Honorary or
advisory directors shall not be counted to determine the number of directors of
the Association or the presence of a quorum in connection with any board action,
and shall not be required to own qualifying shares.

FOURTH. There shall be an annual meeting of the shareholders to elect directors
and transact whatever other business may be brought before the meeting. It shall
be held at the main office or any other convenient place the Board of Directors
may designate, on the day of each year specified therefor in the Bylaws or, if
that day falls on a legal holiday in the state in which the Association is
located, on the next following banking day. If no election is held on the day
fixed or in the event of a legal holiday on the following banking day, an
election may be held on any subsequent day within 60 days of the day fixed, to
be designated by the Board of Directors or, if the directors fail to fix the
day, by shareholders representing two-thirds of the shares issued and
outstanding. In all cases at least 10 days advance notice of the meeting shall
be given to the shareholders by first class mail.

In all elections of directors, the number of votes each common shareholder may
cast will be determined by multiplying the number of shares such shareholder
owns by the number of directors to be elected. Those votes may be cumulated and
cast for a single candidate or may be distributed among two or more candidates
in the manner selected by the shareholder. On all other questions, each common
shareholder shall be entitled to one vote for each share of stock held by such
shareholder. If the issuance of preferred stock with voting rights has been
authorized by a vote of shareholders owning a majority of the common stock of
the association, preferred shareholders will have cumulative voting rights and
will be included within the same class as common shareholders, for purposes of
elections of directors.

A director may resign at any time by delivering written notice to the Board of
Directors, its chairperson, or to the Association, which resignation shall be
effective when the notice is delivered unless the notice specifies a later
effective date.

A director may be removed by shareholders at a meeting called to remove him or
her, when notice of the meeting stating that the purpose or one of the purposes
is to remove him or her is provided, if there is a failure to fulfill one of the
affirmative requirements for qualification, or for cause, provided, however,
that a director may not be removed if the number of votes sufficient to elect
him or her under cumulative voting is voted against his or her removal.

FIFTH. The authorized amount of capital stock of this Association shall be
eighty thousand shares of common stock of the par value of ten dollars ($10.00)
each; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.

No holder of shares of the capital stock of any class of the Association shall
have any preemptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the Board
of Directors, in its discretion, may from time to time determine and at such
price as the Board of Directors may from time to time fix.



Unless otherwise specified in the Articles of Association or required by law,
(1) all matters requiring shareholder action, including amendments to the
Articles of Association, must be approved by shareholders owning a majority
voting interest in the outstanding voting stock, and (2) each shareholder shall
be entitled to one vote per share.

Unless otherwise specified in the Articles of Association or required by law,
all shares of voting stock shall be voted together as a class on any matters
requiring shareholder approval. If a proposed amendment would affect two or more
classes or series in the same or a substantially similar way, all the classes or
series so affected must vote together as a single voting group on the proposed
amendment.

Shares of the same class or series may be issued as a dividend on a pro rata
basis and without consideration. Shares of another class or series may be issued
as share dividends in respect of a class or series of stock if approved by a
majority of the votes entitled to be cast by the class or series to be issued
unless there are no outstanding shares of the class or series to be issued.
Unless otherwise provided by the Board of Directors, the record date for
determining shareholders entitled to a share dividend shall be the date the
Board of Directors authorizes the share dividend.

Unless otherwise provided in the Bylaws, the record date for determining
shareholders entitled to notice of and to vote at any meeting is the close of
business on the day before the first notice is mailed or otherwise sent to the
shareholders, provided that in no event may a record date be more than 70 days
before the meeting.

If a shareholder is entitled to fractional shares pursuant to preemptive rights,
a stock dividend, consolidation or merger, reverse stock split or otherwise, the
Association may: (a) issue fractional shares or; (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share;
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder with an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share; (d) remit the cash equivalent of the
fraction to the shareholder; or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as:
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.

The Association, at any time and from time to time, may authorize and issue debt
obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.



SIXTH. The Board of Directors shall appoint one of its members president of this
Association, and one of its members chairperson of the board and shall have the
power to appoint one or more vice presidents, a secretary who shall keep minutes
of the directors' and shareholders' meetings and be responsible for
authenticating the records of the Association, and such other officers and
employees as may be required to transact the business of this Association. A
duly appointed officer may appoint one or more officers or assistant officers if
authorized by the Board of Directors in accordance with the Bylaws.

The Board of Directors shall have the power to:

(1)      Define the duties of the officers, employees, and agents of the
         Association.

(2)      Delegate the performance of its duties, but not the responsibility for
         its duties, to the officers, employees, and agents of the Association.

(3)      Fix the compensation and enter into employment contracts with its
         officers and employees upon reasonable terms and conditions consistent
         with applicable law.

(4)      Dismiss officers and employees.

(5)      Require bonds from officers and employees and to fix the penalty
         thereof.

(6)      Ratify written policies authorized by the Association's management or
         committees of the board.

(7)      Regulate the manner in which any increase or decrease of the capital of
         the Association shall be made, provided that nothing herein shall
         restrict the power of shareholders to increase or decrease the capital
         of the association in accordance with law, and nothing shall raise or
         lower from two-thirds the percentage for shareholder approval to
         increase or reduce the capital.

(8)      Manage and administer the business and affairs of the Association.

(9)      Adopt initial Bylaws, not inconsistent with law or the Articles of
         Association, for managing the business and regulating the affairs of
         the Association.

(10)     Amend or repeal Bylaws, except to the extent that the Articles of
         Association reserve this power in whole or in part to shareholders.

(11)     Make contracts.

(12)     Generally perform all acts that are legal for a Board of Directors to
         perform.

SEVENTH. The Board of Directors shall have the power to change the location of
the main office of this Association to any other place within the limits of the
City of Columbus, State of Ohio, without the approval of the shareholders; and
shall have the power to change the location of the main office of this
Association to any other place outside the limits of the City of Columbus, State
of Ohio, but not more than thirty miles beyond such limits, with the affirmative
vote of shareholders owning two-thirds of the stock of the Association, subject
to receipt of a certificate of approval from the Comptroller of the Currency.
The Board of Directors shall have the power to establish or change the location
of any branch or branches of the Association to any other location permitted
under applicable law without the approval of the shareholders,



subject to approval by the Office of the Comptroller of the Currency. The Board
of Directors shall have the power to establish or change the location of any
nonbranch office or facility of the Association without the approval of the
shareholders.

EIGHTH. The corporate existence of this Association shall continue until
termination according to the laws of the United States.

NINTH. The Board of Directors of this Association, or any shareholders owning,
in the aggregate, not less than 20 percent of the stock of this Association, may
call a special meeting of shareholders at any time. Unless otherwise provided by
the Bylaws or the laws of the United States, or waived by shareholders, a notice
of the time, place, and purpose of every annual and special meeting of the
shareholders shall be given by first-class mail, postage prepaid, mailed at
least 10, and no more than 60, days prior to the date of the meeting to each
shareholder of record at his/her address as shown upon the books of this
Association. Unless otherwise provided by the Bylaws, any action requiring
approval of shareholders must be effected at a duly called annual or special
meeting.

TENTH. The Association shall provide indemnification as set forth below:

Every person who is or was a Director, officer or employee of the Association or
of any other corporation which he served as a Director, officer or employee at
the request of the Association as part of his regularly assigned duties may be
indemnified by the Association in accordance with the provisions of this Article
against all liability (including, without limitation, judgments, fines,
penalties, and settlements) and all reasonable expenses (including, without
limitation, attorneys' fees and investigative expenses) that may be incurred or
paid by him in connection with any claim, action, suit or proceeding, whether
civil, criminal or administrative (all referred to hereafter in this Article as
"Claims") or in connection with any appeal relating thereto in which he may
become involved as a party or otherwise or with which he may be threatened by
reason of his being or having been a Director, officer or employee of the
Association or such other corporation, or by reason of any action taken or
omitted by him in his capacity as such Director, officer or employee, whether or
not he continues to be such at the time such liability or expenses are incurred;
provided that nothing contained in this Article shall be construed to permit
indemnification of any such person who is adjudged guilty of, or liable for,
willful misconduct, gross neglect of duty or criminal acts, unless, at the time
such indemnification is sought, such indemnification in such instance is
permissible under applicable law and regulations, including published rulings of
the Comptroller of the Currency or other appropriate supervisory or regulatory
authority; and provided further that there shall be no indemnification of
Directors, officers, or employees against expenses, penalties, or other payments
incurred in an administrative proceeding or action instituted by an appropriate
regulatory agency which proceeding or action results in a final order assessing
civil money penalties or requiring affirmative action by an individual or
individuals in the form of payments to the Association.

Every person who may be indemnified under the provisions of this Article and who
has been wholly successful on the merits with respect to any Claim shall be
entitled to indemnification as of right. Except as provided in the preceding
sentence, any indemnification under this Article shall be at the sole discretion
of the Board of Directors and shall be made only if the Board of Directors or
the Executive Committee acting by a quorum consisting of Directors who are not
parties to such Claim shall find or if independent legal counsel (who may be the
regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that in view of all of the circumstances



then surrounding the Claim, such indemnification is equitable and in the best
interests of the Association. Among the circumstances to be taken into
consideration in arriving at such a finding or opinion is the existence or
non-existence of a contract of insurance or indemnity under which the
Association would be wholly or partially reimbursed for such indemnification,
but the existence or non-existence of such insurance is not the sole
circumstance to be considered nor shall it be wholly determinative of whether
such indemnification shall be made. In addition to such finding or opinion, no
indemnification under this Article shall be made unless the Board of Directors
or the Executive Committee acting by a quorum consisting of Directors who are
not parties to such Claim shall find or if independent legal counsel (who may be
the regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that the Directors, officer or employee acted in good faith in
what he reasonably believed to be the best interests of the Association or such
other corporation and further in the case of any criminal action or proceeding,
that the Director, officer or employee reasonably believed his conduct to be
lawful. Determination of any Claim by judgment adverse to a Director, officer or
employee by settlement with or without Court approval or conviction upon a plea
of guilty or of nolo contendere or its equivalent shall not create a presumption
that a Director, officer or employee failed to meet the standards of conduct set
forth in this Article. Expenses incurred with respect to any Claim may be
advanced by the Association prior to the final disposition thereof upon receipt
of an undertaking satisfactory to the Association by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he is
entitled to indemnification under this Article.

The rights of indemnification provided in this Article shall be in addition to
any rights to which any Director, officer or employee may otherwise be entitled
by contract or as a matter of law. Every person who shall act as a Director,
officer or employee of this Association shall be conclusively presumed to be
doing so in reliance upon the right of indemnification provided for in this
Article.

ELEVENTH. These Articles of Association may be amended at any regular or special
meeting of the shareholders by the affirmative vote of the holders of a majority
of the stock of this Association, unless the vote of the holders of a greater
amount of stock is required by law, and in that case by the vote of the holders
of such greater amount. The Association's Board of Directors may propose one or
more amendments to the Articles of Association for submission to the
shareholders.



                                    EXHIBIT 2

                  A COPY OF THE CERTIFICATE OF AUTHORITY OF THE
                          TRUSTEE TO COMMENCE BUSINESS

                                   CERTIFICATE

I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:

1.       The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.

2.       "Bank One Trust Company, National Association," Columbus, Ohio,
(Charter No. 16235) is a National Banking Association formed under the laws of
the United States and is authorized thereunder to transact the business of
banking on the date of this Certificate.

                           IN TESTIMONY WHEREOF, I have hereunto

                           subscribed my name and caused my seal of

                           office to be affixed to these presents at the

                           Treasury Department in the City of

                           Washington and District of Columbia, this

                           25th day of July, 2001.

                           /s/ John D. Hawke, Jr.
                           ---------------------------
                           Comptroller of the Currency



                                    EXHIBIT 3

                   A COPY OF THE AUTHORIZATION OF THE TRUSTEE
                       TO EXERCISE CORPORATE TRUST POWERS

                                   CERTIFICATE

I, John D. Hawke, Jr., Comptroller of the Currency, do hereby certify that:

1.       The Comptroller of the Currency, pursuant to Revised Statutes 324, et
seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody and
control of all records pertaining to the chartering of all National Banking
Associations.

2.       "Bank One Trust Company, National Association," Columbus, Ohio,
(Charter No. 16235) was granted, under the hand and seal of the Comptroller, the
right to act in all fiduciary capacities authorized under the provisions of the
Act of Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and
that the authority so granted remains in full force and effect on the date of
this Certificate.

                           IN TESTIMONY WHEREOF, I have hereunto

                           subscribed my name and caused my seal of

                           office to be affixed to these presents at the

                           Treasury Department in the City of

                           Washington and District of Columbia, this

                           25th day of July, 2001.

                           /s/ John D. Hawke, Jr.
                           ---------------------------
                           Comptroller of the Currency



                                    EXHIBIT 4

                  A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE
                                     BY-LAWS

                                       OF

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                      AS AMENDED AND RESTATED JULY 20, 2001

                                     BY-LAWS

                                       OF

                  BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                                    ARTICLE I

                              CORPORATE GOVERNANCE

         To the extent not inconsistent with applicable Federal banking statutes
or regulations, or safe and sound banking practices, the Bank shall follow the
corporate governance procedures of the Delaware General Corporation Law, as
amended.

                                   ARTICLE II

                                  SHAREHOLDERS

         SECTION 1. Annual Meeting. The regular annual meeting of shareholders
of the Bank to elect directors and to transact whatever other business may
properly come before the meeting shall be held in its main office on the third
Tuesday in February if not a legal holiday under the Laws of Ohio, and if a
legal holiday, then on the next business day following, at 11:30 A.M., or on
such other date and time as shall be designated by the Board of Directors. If,
for any cause, the annual election of directors should not be held on that date,
the Board shall order the election to be held on some subsequent day, of which
special notice shall be given.

         SECTION 2. Judges of Election. To the extent required by law, the Board
of Directors shall, prior to the time of the election of directors, appoint
three persons to be Judges of Election, who shall hold and conduct the same, and
who shall, after the election has been held, certify under their hands to the
Secretary of the Bank the result thereof and the names of the directors-elect.

         SECTION 3. Notice to Directors-Elect. The Secretary upon receiving the
Certificate of the Judges of Election as aforesaid, shall cause the same to be
recorded upon the minute book of the Bank, and shall notify the directors-elect
of their election and of the time at which they are required to meet at the main
office of the Bank for the purpose of organizing the new Board. If at the time
fixed for the meeting of the directors-elect there should not be a quorum
present, the members present may adjourn from time to time until a quorum is
obtained.

         SECTION 4. Special Meetings. Special meetings of the shareholders may
be called in accordance with Article NINTH of the Bank's Articles of
Association.



         SECTION 5. Record Date. The Board of Directors may fix in advance a day
not more than sixty (60) or less than ten (10) days prior to the date of holding
any regular or special meeting of shareholders as the day as of which
shareholders entitled to notice of and to vote at such meeting shall be
determined.

         SECTION 6. Notice. The Bank shall mail notice of any meeting of
shareholders at least 10 days prior to the meeting by first class mail, unless
the Office of the Comptroller of the Currency determines that an emergency
circumstance exists. If the Bank is a wholly-owned subsidiary of a company, the
sole shareholder may waive notice of the shareholder's meeting.

         SECTION 7. Consent of Shareholders in Lieu of Annual or Special
Meeting. Unless otherwise restricted by law or the Articles of Association, any
action which may be taken at any annual or special shareholder meeting may be
taken without a meeting, without prior notice and without a vote, if written
consent setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those shareholders who did not give written consent.

         SECTION 8. Minutes. The proceedings of shareholders at all regular and
special meetings or by written consent in lieu of a meeting shall be recorded in
the minute book, together with the Articles of Association of the Bank and the
returns of the Judges of Election. The minutes of each meeting shall be signed
by the Presiding Officer, and attested by the Secretary, or other officer of the
Bank acting in place of the Secretary.

                                   ARTICLE III

                                    DIRECTORS

         SECTION 1. Authority. The Board of Directors shall have the power to
manage and administer the business and affairs of the Bank. Except as expressly
limited by law, all corporate powers of the Bank shall be vested in and may be
exercised by the Board of Directors.

         SECTION 2. Number. The Board of Directors shall at all times consist of
not less than five nor more than twenty-five individuals. The exact number
within such minimum and maximum limits shall be fixed and determined from time
to time by resolution of a majority of the full Board of Directors or by
resolution of the shareholders at any meeting thereof; provided, however, that
the Board of Directors may not increase the number of directors to a number
which: (1) exceeds by more than two the number of directors last elected by
shareholders where such number was fifteen or less; or (ii) exceeds by more than
four the number of directors last elected by shareholders where such number was
sixteen or more, but in no event shall the number of directors exceed
twenty-five.

         SECTION 3. Term of Office. Each director shall hold office from the
date of his election or appointment until the next annual shareholder meeting.
Any director ceasing to be the owner of the amount of stock required by law or
in any other manner becoming disqualified shall thereupon vacate his office as
director.

         SECTION 4. Compensation. The Board of Directors may provide that a
reasonable fee be paid to any of its members or to the members of any duly
authorized committee for services rendered. No such payment shall preclude any
director from serving the Bank in any other capacity and receiving compensation
therefor.

         SECTION 5. Regular Meetings. Regular meetings of the Board of Directors
shall be held on such dates, times and locations as determined by the Chairman
of the Board and communicated in writing to the directors.

         SECTION 6. Special Meetings. Special meetings of the Board of Directors
may be called by the Chairman of the Board or the President. Such meetings shall
be held at such times and at such places as shall be determined by the officer
calling the meeting. Notice of any special meeting of directors shall be given
to each director at the director's business or residence in writing by hand
delivery, first-class or overnight mail or courier service, telegram or
facsimile transmission, or orally by telephone. If mailed by first-class mail,
such notice shall be deemed adequately delivered when deposited in the United
States mail so addressed, with postage thereon prepaid, at least two (2) days
before such meeting. If by telegram, overnight mail or courier service, such
notice shall be


deemed adequately delivered when the telegram is delivered to the telegraph
company or the notice is delivered to the overnight mail or courier service
company at least twenty-four (24) hours before such meeting. If by facsimile
transmission, such notice shall be deemed adequately delivered when the notice
is transmitted at least twelve (12) hours before such meeting. Such notice need
not state the purposes of the meeting. Any or all directors may waive notice of
any meeting, either before or after the meeting. Attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except when the
director attends for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.

         SECTION 7. Quorum; Majority Vote. A quorum of directors shall be
required to transact business at any regular or special meeting of the Board of
Directors. A majority of the directors shall constitute a quorum. Each director
shall be entitled to one vote. A vote by a majority of the directors present at
any regular or special meeting of the Board of Directors at which a quorum is
present shall be required to approve any matter or proposal at any such meeting.

         SECTION 8. Vacancies. When any vacancy occurs in the Board of
Directors, a majority of the remaining members of the Board, according to the
laws of the United States, may appoint a director to fill such vacancy at any
regular meeting of the Board of Directors, or at a special meeting called for
that purpose at which a quorum is present, or if the directors remaining in
office constitute fewer than a quorum of the Board of Directors, by the
affirmative vote of a majority of all the directors remaining in office, or by
shareholders at a special meeting called for that purpose. At any such
shareholder meeting, each shareholder entitled to vote shall have the right to
multiply the number of votes he or she is entitled to cast by the number of
vacancies being filled and cast the product for a single candidate or distribute
the product among two or more candidates. A vacancy that will occur at a
specific later date (by reason of a resignation effective at a later date) may
be filled before the vacancy occurs but the new director may not take office
until the vacancy occurs.

         SECTION 9. Presiding Officer. The Chairman of the Board shall preside
at all meetings of the Board of Directors at which he is present. In the absence
of the Chairman of the Board, the President shall perform the duties of the
Chairman of the Board and shall preside at the meetings of the Board of
Directors. In the absence of the Chairman of the Board and the President, the
Vice Chairman of the Board (or in the event there be more than one Vice Chairman
of the Board, the Vice Chairmen of the Board in the order designated, or in the
absence of any designation, then in the

order of their election) shall perform their duties and shall preside at the
meetings of the Board of Directors.

         SECTION 10. Minutes of Meeting. The Secretary to the Board of Directors
shall take minutes at any regular or special meeting of the Board of Directors.
If the Secretary is not present at any such meeting, the Chairman of the Board
may designate a secretary pro tem to take minutes at the meeting. The Secretary
or secretary pro tem shall record the actions and proceedings at each regular or
special meeting of the Board of Directors as minutes of the meeting and shall
maintain such minutes in a minute book of proceedings of such meetings of the
Board of Directors. Minutes of each such meeting shall be signed by the
presiding officer and secretary of each meeting.

         SECTION 11. Participation in Meetings by Telephone Unless otherwise
restricted by law or the Articles of Association, members of the Board of
Directors, or of any committee thereof, may participate in a meeting of the
Board of Directors or committee by means of conference telephone or similar
communications equipment which allows each person participating in the meeting
to hear each other. Participation in such a meeting shall constitute presence in
person at such meeting.

         SECTION 12. Consent of Directors in Lieu of Meeting. Unless otherwise
restricted by law or the Articles of Association, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.

         SECTION 13. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board, designate one or more committees, each
committee to consist of two or more of the Directors of the Bank.



The Board of Directors may designate one or more Directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the Bank, and may authorize the
seal of the Bank to be affixed to all papers which may require it; provided,
however, that in the absence or disqualification of any member of such committee
or committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors. As used in these By-Laws,
"entire Board" means the total number of Directors the Bank would have if there
were no vacancies.

         There may be an Executive Committee composed and created as the Board
of Directors may designate by resolution passed by a majority of the entire
Board. During intervals between the regular meetings of the Board of Directors,
the Executive Committee, to the extent permitted by law, the Articles of
Association of the Bank and the By-Laws, shall have and may exercise the powers
of the Board of Directors in the management of the business and affairs of the
Bank.

         Unless otherwise provided by the Board of Directors, a majority of the
members of any committee appointed by the Board of Directors pursuant to this
Section shall constitute a quorum at any meeting thereof and the act of a
majority of the members present at a meeting at which a quorum is present shall
be the act of such committee. Any such committee shall, subject to any rules
prescribed by the Board of Directors, prescribe its own rules for calling,
giving notice of and holding meetings and its method of procedure at such
meetings and shall keep a written record of all action taken by it. Each
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.

                                   ARTICLE IV

                                    OFFICERS

         SECTION 1. Officer Titles. The officers of the Bank shall include a
Chairman of the Board and a President and may include one or more Vice Chairmen
of the Board, Executive Vice Presidents, Senior Vice Presidents, First Vice
Presidents, Vice Presidents and Assistant Vice Presidents, a General Auditor, a
General Counsel, a Secretary, and such other officers as may be appropriate for
the prompt and orderly transaction of the business of the Bank. Individuals
appointed as Chairman of the Board, President, and Vice Chairman of the Board
must be members of the Board. The same person may hold any two or more offices.
The Chairman of the Board or the President shall have such authority to
establish officer titles as from time to time delegated by the Board of
Directors and to delegate such authority further to other officers of the Bank.
Other officers may be designated by the Secretary as Assistant Secretary to
perform the duties of the Secretary.

         SECTION 2. Executive Management. The Chairman of the Board or the
President, as determined by the Board of Directors, shall be the chief executive
officer of the Bank. In case of the death or disability of the Chairman of the
Board, his powers shall be exercised and his duties discharged by the President.
In the event of the death or disability of the Chairman of the Board and the
President, the Vice Chairman of the Board (or in the event there be more than
one Vice Chairman of the Board, the Vice Chairmen of the Board in the order
designated, or in the absence of any designation, then in the order of their
election) shall exercise the powers and discharge the duties of the Chairman of
the Board.

         SECTION 3. Election of Officers. The Board of Directors of the Bank
shall have authority to appoint the officers of the Bank. The Chairman of the
Board or the President shall have such authority to appoint officers as from
time to time delegated by the Board of Directors, and to delegate such authority
further to other officers of the Bank.



         SECTION 4. Authority and Responsibility. The authorities and
responsibilities of all officers, in addition to those specifically prescribed
herein, shall be those usually pertaining to their respective offices, or as may
be designated by the Board of Directors or by the Chairman of the Board or by
the President, or by any officer of the Bank designated by one of the foregoing.

         SECTION 5. Term of Office. Officers shall be appointed for an
indefinite term, and their employment may be terminated or they may be removed
from office at any time. The Board of Directors shall have authority to
terminate or remove officers of the Bank. The Chairman of the Board or the
President shall have such authority to terminate or remove officers as from time
to time delegated by the Board of Directors, and to delegate such authority
further to other officers of the Bank.

         SECTION 6. Surety. All officers and employees of the Bank who shall be
responsible for any moneys, funds or valuables of the Bank shall give bond, or
be covered by a blanket bond, in such penal sum and with such security as shall
be approved by the Board, conditioned for the faithful and honest discharge of
their duties as such officers or employees and that they will faithfully apply
and account for all such moneys, funds and valuables and deliver the same on
proper demand to the order of the Board of the Bank, or to the person or persons
authorized to receive the same.

                                    ARTICLE V

                                      SEAL

         SECTION 1. Description. The following is a description of the Seal
adopted by the Board of the Bank:

         An inner circle with the word "CORPORATE" over the word "SEAL"; the
whole surrounded with the words, "BANK ONE TRUST COMPANY, NA."

         SECTION 2. Attestation. Any instrument which is executed for and on
behalf of the Bank by its duly authorized officers may, when necessary, be
attested and sealed with the corporate seal by any officer of the Bank other
than the officer who executes such instrument on behalf of the Bank.

                                   ARTICLE VI

                            TRANSFERS OF REAL ESTATE

         Any Vice President or higher ranking officer shall have authority on
behalf of and in the name of the Bank, to execute any document or instrument and
to take action which may be necessary or appropriate to purchase, convey, lease,
or otherwise affect any real estate or interest in real estate owned or to be
owned by the Bank; provided, however, any document or instrument purchasing,
conveying or leasing real estate used or to be used by the Bank as banking
facilities must be executed by a Senior Vice President or higher ranking
officer, or any other officer designated by any of the foregoing. Any Assistant
Vice President or higher ranking officer shall have authority to execute and
deliver on behalf of and in the name of the Bank, releases of mortgages or trust
deeds.

                                   ARTICLE VII

                          STOCK AND STOCK CERTIFICATES

         SECTION 1. Increase of Stock. In the event of any increase in the
capital stock of the Bank the preemptive rights of the shareholders in respect
of any such increased stock shall be as set forth in Article FIFTH of the
Articles of Association.



         Any warrants or certificates issuable to shareholders in connection
with any increase of the capital stock of the Bank, shall be delivered to the
respective shareholders entitled thereto, either by hand or by mail, first-class
postage prepaid, addressed to their respective addresses as shown on the books
of the Bank.

         If, in the event of a sale of additional shares, any subscription
rights shall not have been exercised at the expiration of the specified
subscription period, such unsubscribed new shares may be issued and sold at such
price, not less than the par value thereof, to such persons and on such terms as
the Board of Directors may determine.

         SECTION 2. Transfers of Stock. The stock of the Bank shall be
assignable only upon the books of the Bank, subject to the restrictions of the
Act, and a transfer book shall be kept in which all assignments and transfers of
stock shall be made. Transfers of stock may be suspended preparatory to any
election or payment of any dividends.

         SECTION 3. Certificates of Stock. Certificates of stock signed by any
Vice President or higher ranking officer and the Secretary or any Assistant
Secretary may be issued to shareholders, and the Certificates shall state upon
the face thereof that the stock is transferable only upon the books of the Bank.
If such Certificates are manually countersigned by two other officers of the
Bank, the signatures of the officers designated in the preceding sentence may be
facsimiles, engraved or printed. In case any officer who has signed or whose
facsimile signature has been placed upon such Certificates shall have ceased to
be such officer before such Certificates are issued, they may be issued by the
Bank with the same effect as if such officer had not ceased to be such at the
date of issue.

         In case of transfer of stock, new Certificates of stock shall not be
issued until other Certificate or Certificates of stock of an equal amount shall
first have been surrendered and cancelled.

         Any one of the following officers of the Bank: the Chairman of the
Board, the President, or any Vice Chairman of the Board is each hereby
authorized to cause new Certificates of stock of the Bank to be issued to
replace Certificates reported to have been lost, stolen or destroyed, upon
receipt of: (a) appropriate affidavit or affidavits setting forth whether the
Certificates were lost, stolen or destroyed and the circumstances thereof, and
(b) a bond or bonds (blanket or otherwise) or an agreement or agreements of
indemnity, sufficient in the opinion of any of such officers to protect the
interests of the Bank issuing such new Certificates.

                                  ARTICLE VIII

                                  BANKING HOURS

         The Bank shall be open for business during such days of the year and
for such hours as the Board of Directors or any officer of the Bank designated
by the Board of Directors may from time to time determine.

                                   ARTICLE IX

                  CONTRACTS, CERTIFICATES OF DEPOSIT AND NOTES

         SECTION 1. Execution of Contracts. Any officer of the bank and such
other persons as may be authorized by the Board of Directors are severally and
respectively authorized to execute documents and to take action in the Bank's
name in connection with any and all transactions conducted in the ordinary
course of business of the Bank. Such officers and other persons are also
authorized to execute and deliver various forms of documents or agreements
necessary to effectuate certain investment strategies for various fiduciary or
custody customers of the Bank, including, without limitation, exchange funds,
options, both listed and over-the-counter, commodities trading, futures trading,
hedge funds, limited partnerships, venture capital funds, swap or collar
transactions and other similar investment vehicles for which the Bank now or in
the future may deem appropriate for investment or fiduciary customers or in
which non-fiduciary customers may direct investment by the Bank.



         SECTION 2. Notes. Notwithstanding the foregoing, all notes evidencing
obligations of the Bank shall be signed either manually or by facsimile
signature by any officer of the Bank, and, if such signature is not a manual
signature, shall be validated by the manual signature of another officer of the
Bank whose signature does not already appear on said note or by the authorized
officers of corporate fiduciaries or agents with whom the Board of Directors may
from time to time by resolution authorize the officers of the Bank to contract
for services in connection with the validation and delivery of notes issued by
the Bank.

                                    ARTICLE X

                                  VOTING RIGHTS

         The vote of the Bank as stockholder in any corporation in which it may
hold stock or upon any securities carrying voting rights which it shall have the
right to vote in its individual capacity as a Bank, shall be cast at any
stockholders' or shareholders' meeting by any Vice President or higher ranking
officer, or the Secretary, in person, or by some person or persons authorized by
written proxy signed by one of said officers.

         In all cases where shares of stock or other securities carrying voting
rights and owned by the Bank shall be held in the name of a nominee of the Bank,
any Vice President or higher ranking officer, or the Secretary, may authorize
such nominee to vote such stock or other securities in person, either
unconditionally or upon such terms, limitations, or conditions as such officer
may direct, or any such officer may authorize such nominee to execute a proxy to
vote such shares of stock or other securities carrying voting rights, either
unconditionally or upon such terms, conditions and/or limitations as such
officer shall approve.

                                   ARTICLE XI

                                  EXAMINATIONS

         If the Bank has a General Auditor, it shall be the duty of the Auditor
to examine, from time to time, the various operations of the Bank, verify its
assets and liabilities, and perform such other procedures as are required to
determine that the accounting records are accurate and to ascertain whether the
Bank is in a sound and solvent condition. Major discrepancies and defalcations
shall be reported to the Board promptly and other reports shall be made directly
to the Board when deemed appropriate either by the Auditor or the Board. In the
event of the death, resignation, absence or inability of the Auditor, the Board
of Directors shall appoint a competent person who shall make such examinations
and reports, pending the election of a successor to the Auditor or the return of
the Auditor to his duties.

                                   ARTICLE XII

                               BONDS OF INDEMNITY

         Bonds of indemnity given to secure the issuance of duplicate or
substitute notes, bonds, stock certificates, checks, debentures or other
securities which may have been lost, destroyed or stolen or to secure the
payment of any such lost, destroyed or stolen securities or to secure the
payment by the Bank of funds deposited by any public authorities, shall be
executed by any Assistant Vice President or higher ranking officer, and, if
required, sealed with the corporate seal and attested by some other officer of
the Bank.



                                  ARTICLE XIII

                      AUTHORITY TO SELL STOCKS, BONDS, ETC.

         SECTION 1. U.S. Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all United States bonds now standing, or which may hereafter stand, in
the name of the Bank, and to appoint one or more attorneys for that purpose.

         SECTION 2. Other Obligations. Any Assistant Vice President or higher
ranking officer may at any time, in his discretion, sell, assign and transfer
any and all notes, bonds, certificates of indebtedness or obligations of any
corporation, firm or individual, which said notes, bonds, certificates of
indebtedness or obligations are now registered, or may hereafter be registered,
in the name of, or for the benefit of, the Bank, or are payable or indorsed to
the Bank.

         SECTION 3. Stock. Any Assistant Vice President or higher ranking
officer may at any time in his discretion, sell, assign and transfer to any
assignee or transferee, for and on behalf of the Bank and in its name, any and
all shares of capital stock of any corporation or corporations held by the Bank.

                                   ARTICLE XIV

                              FIDUCIARY ACTIVITIES

         SECTION 1. Authority to Sign as Registrar, Transfer Agent, etc. Any
officer of the Bank shall have the right to sign, countersign, certify,
register, authenticate and identify all bonds, notes, interim certificates, and
depositary receipts, warrants, participation certificates, certificates of stock
and similar instruments for or in respect of which the Bank may be acting as
Trustee, Registrar, Transfer Agent or otherwise.

         SECTION 2. Authority to Vote Stock. The vote of the Bank as stockholder
in any corporation or mutual fund in which it may hold capital stock in any
fiduciary capacity, unless the governing instrument directs otherwise, may be
voted by any officer of the Bank in person, electronically or by written proxy
signed by one of said officers.

         SECTION 3. Authority to Sell, Assign and Transfer Stocks, etc. Any
officer of the Bank may sell, assign and transfer to any assignee or transferee
for the Bank and in its name, any and all shares of the capital stock or other
securities and obligations of any individual or entity held by the Bank in any
fiduciary capacity, and sign and deliver any instruments with respect to any
such items.

         SECTION 4. Authority to Sign Checks and Other Instruments. Any officer
of the Bank is authorized to sign for and on behalf of the Bank: checks against
any account or accounts of any organizational unit of the Bank exercising
fiduciary powers; petitions; schedules; accounts; reports; receipts for funds or
securities deposited with the Bank as fiduciary and all instruments or documents
that may be necessary or desirable in connection with the execution of any
fiduciary powers of the Bank.

         SECTION 5. Delegation of Authority. Anything in this Article XIV to the
contrary notwithstanding, the Chairman of the Board or President is authorized
to designate in writing such persons as shall be authorized in the name of the
Bank to sign or countersign any or all of the documents and instruments
enumerated in this Article XIV relating to transactions conducted in connection
with the execution of any fiduciary powers of the Bank.

         SECTION 6. Corporate Powers. The business of the Bank shall be to
conduct fiduciary activities and to engage in such activities as are necessary,
incident, or related to such business, and to exercise such fiduciary powers as
are authorized by the Comptroller of the Currency.



                                   ARTICLE XV

                              AMENDMENT OF BY-LAWS

         These By-Laws may be changed or amended by the vote of a majority of
the directors present at any regularly constituted meeting of the Board of
Directors.

                                   ARTICLE XVI

                           EMERGENCY OPERATION OF BANK

         In the event of an emergency declared by the President of the United
States or the person performing his functions, due to threatened or actual enemy
attack or disaster, the officers and employees of the Bank will continue to
conduct the affairs of the Bank under such guidance from the directors as may be
available, except as to matters which by statute require specific approval of
the Board of Directors, and subject to conformance with any governmental
directives during the emergency.

                                  ARTICLE XVII

                             DELEGATION OF AUTHORITY

         Each of the Chairman of the Board, the President, any Vice Chairman of
the Board and the Secretary of the Bank are severally and respectively
authorized to designate in writing such persons who shall be authorized in the
name and on behalf of the Bank to sign any document or instrument, including
certificates of deposit and notes, and to take action which may be necessary or
appropriate to the conduct of the Bank's business, in its individual capacity or
any other capacity. Any such authorization to sign such document or instrument
and to take any action may be general or limited as is determined in the
discretion of the Chairman of the Board, the President, any Vice Chairman of the
Board or the Secretary.

As amended April 24, 1991           Section 3.01 (Officers and Management Staff)

                                    Section 3.02 (Chief Executive Officer)

                                    Section 3.03 (Powers and Duties of Officers
                                                    and Management Staff)

                                    Section 3.05 (Execution of Documents)

As amended January 27, 1995         Section 2.04 (Regular Meetings)

                                    Section 2.05 (Special Meetings)

                                    Section 3.01(f) (Officers and Management
                                                    Staff)

                                    Section 3.03(e) (Powers and Duties of
                                                    Officers and Management
                                                    Staff)

                                    Section 5.01 (Seal)

Amended and restated in its entirety effective May 1, 1996

As amended August 1, 1996           Section 2.09 (Trust Examining Committee)



                                    Section 2.10 (Other Committees)

As amended October 16, 1997         Section 3.01 (Officers and Management Staff)

                                    Section 3.02 (Powers and Duties of Officers
                                    and Management Staff)

                                    Section 3.04 (Execution of Documents)

As amended January 1, 1998          Section 1.01 (Annual Meeting)

AS AMENDED AND RESTATED IN ITS ENTIRETY EFFECTIVE JULY 20, 2001



                                    EXHIBIT 6

                       THE CONSENT OF THE TRUSTEE REQUIRED
                          BY SECTION 321(b) OF THE ACT

                                                                 August 11, 2003

Securities and Exchange Commission
Washington, D.C. 20549

Ladies and Gentlemen:

In connection with the qualification of an indenture between Popular Inc., and
Bank One Trust Company, National Association, as Trustee, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.

                           Very truly yours,

                           BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION

                           BY: /s/ CHRISTOPHER HOLLY
                               -----------------------
                           CHRISTOPHER HOLLY
                           VICE PRESIDENT



                                    EXHIBIT 7

                                                                                         
Legal Title of Bank:   Bank One Trust Company, N.A.   Call Date: 03/31/2003     State #: 391581
Address:               100 Broad Street                                         Cert #: 21377        Page RC-1
City, State Zip:       Columbus, OH 43271



CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED
SAVINGS BANKS FOR MARCH 31, 2003

All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.

SCHEDULE RC--BALANCE SHEET



                                                                                            DOLLAR AMOUNTS IN THOUSANDS C300
                                                                                                                        ----
                                                                                                                 
ASSETS
1.  Cash and balances due from depository institutions (from Schedule
    RC-A):                                                                                 RCON
    a. Noninterest-bearing balances and currency and coin(1) ...................           0081        173,766            1.a
    b. Interest-bearing balances(2).............................................           0071              0            1.b
2.  Securities
    a. Held-to-maturity securities(from Schedule RC-B, column A) ...............           1754              0            2.a
    b. Available-for-sale securities (from Schedule RC-B, column D).............           1773            119            2.b
3.  Federal funds sold and securities purchased under agreements to
    resell
    a. Federal Funds Sold.......................................................           B987        860,578
    b. Securities Purchased under agreements to resell (3)......................           B989        808,736            3.
4.  Loans and lease financing receivables: (from Schedule RC-C):                           RCON
    a. Loans and leases held for sale...........................................           5369              0            4.a
    b. Loans and leases, net of unearned income...... ..........................           B528         51,834            4.b
    c. LESS: Allowance for loan and lease losses..... ..........................           3123            433            4.c
    d. Loans and leases, net of unearned income and allowance
       (item 4.b minus 4.c).....................................................           B529         51,401            4.d
5.  Trading assets (from Schedule RC-D).........................................           3545              0            5.
6.  Premises and fixed assets (including capitalized leases) ...................           2145         13,537            6.
7.  Other real estate owned (from Schedule RC-M) ...............................           2150             0             7.
8.  Investments in unconsolidated subsidiaries and associated
    companies (from Schedule RC-M)..............................................           2130              0            8.
9.  Customers' liability to this bank on acceptances outstanding ...............           2155              0            9.
10. Intangible assets...........................................................
    a.  Goodwill................................................................           3163              0            10.a
    b.  Other intangible assets (from Schedule RC-M)............................           0426          6,246            10.b
11. Other assets (from Schedule RC-F)...........................................           2160        209,160            11.
12. Total assets (sum of items 1 through 11)....................................           2170      1,988,092            12.


(1)  Includes cash items in process of collection and unposted debits.

(2)  Includes time certificates of deposit not held for trading.

(3)  Includes all securities resale agreements, regardless of maturity



                                                                                       
Legal Title of Bank:     Bank One Trust Company, N.A.   Call Date: 03/31/03     State #: 391581
Address:                 100 East Broad Street                                  Cert #" 21377      Page RC-2
City, State Zip:         Columbus, OH 43271



SCHEDULE RC-CONTINUED



                                                                                                  DOLLAR AMOUNTS IN
                                                                                                       THOUSANDS
                                                                                           --------------------------------
                                                                                                             
LIABILITIES
13. Deposits:
    a. In domestic offices (sum of totals of columns A and C                               RCON
       from Schedule RC-E) .....................................................           2200      1,708,409        13.a
       (1) Noninterest-bearing(1)...............................................           6631      1,240,694        13.a1
       (2) Interest-bearing.....................................................           6636        467,715        13.a2
    b. Not applicable
14. Federal funds purchased and securities sold under agreements
    to repurchase
    a. Federal funds purchased (2)..............................................           B993              0        14.a
    b. Securities sold under agreements to repurchase (3).......................           B995              0        14.b
5.  Trading Liabilities(from Schedule RC-D).....................................           3548              0        15.
16. Other borrowed money (includes mortgage indebtedness and
    obligations under capitalized leases) (from Schedule RC-M)..................           3190              0        16.
17. Not applicable
18. Bank's liability on acceptances executed and outstanding                               2920              0        18.
19. Subordinated notes and debentures (2).......................................           3200              0        19.
20. Other liabilities (from Schedule RC-G)......................................           2930         42,582        20.
21. Total liabilities (sum of items 13 through 20)..............................           2948      1,750,991        21.
22. Minority interest in consolidated subsidiaries..............................           3000              0        22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus...............................           3838              0        23.
24. Common stock................................................................           3230            800        24.
25. Surplus (exclude all surplus related to preferred stock)                               3839         45,157        25.
26. a. Retained earnings........................................................           3632        191,141        26.a
    b. Accumulated other comprehensive income (3)...............................           B530              3        26.b
27. Other equity capital components (4).........................................           A130              0        27.
28. Total equity capital (sum of items 23 through 27) ..........................           3210        237,101        28.
29. Total liabilities, minority interest, and equity
    capital (sum of items 21, 22, and 28).......................................           3300      1,988,092        29.


Memorandum

To be reported only with the March Report of Condition

1.  Indicate in the box at the right the number           --------------
     of the statement below that best describes the most  RCON   Number   Number
     comprehensive level of auditing work performed for                    M.I.
     the bank by independent external auditors as of any  --------------
     date during 2000 ..................................  6724     NA
                                                          --------------

1 = Independent audit of the bank conducted in accordance with generally
     accepted auditing standards by a certified public accounting firm which
     submits a report on the bank

2 = Independent audit of the bank's parent holding company conducted in
     accordance with generally accepted auditing standards by a certified public
     accounting firm which external submits a report on the consolidated holding
     company (but not on the bank separately)

3 = Directors' examination of the bank conducted in accordance with
     generally accepted auditing standards by a certified public accounting firm
     (may be required by state chartering authority)

4 = Directors' examination of the bank performed by other external auditors
     (may be required by state authority)

5 = Review of the bank's financial statements by external auditors

6 = Compilation of the bank's financial statements by auditors

7 = Other audit procedures (excluding tax preparation work)

8 = No external audit work

(1) Includes total demand deposits and noninterest-bearing time and savings
     deposits.

(2) Report overnight Federal Home Loan Bank advances in Schedule RC, item 16,
     "other borrowed money."

(3) Includes all securities repurchase agreements, regardless of maturity.

(4) Includes limited-life preferred stock and related surplus.

(5) Includes net unrealized holding gains (losses) on available-for-sale
     securities, accumulated net gains (losses) on cash flow hedges, and minimum
     pension liability adjustments.

(6) Includes treasury stock and unearned Employee Stock Ownership Plan shares.

                                       24