-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FKxW1x1KBQYc+Y7DpZDwOrPUHM3FOk88CK2Yi81gyQe3yRZzFtwT12BflIqVKoCY Kx3dZDdnY61hpTJW1QtKjw== 0000950144-99-010495.txt : 19990818 0000950144-99-010495.hdr.sgml : 19990818 ACCESSION NUMBER: 0000950144-99-010495 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 19990805 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990817 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POPULAR INC CENTRAL INDEX KEY: 0000763901 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 660416582 STATE OF INCORPORATION: PR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 002-96018 FILM NUMBER: 99694827 BUSINESS ADDRESS: STREET 1: 209 MUNOZ RIVERA AVE STREET 2: POPULAR CENTER BUILDING CITY: HATO REY STATE: PR ZIP: 00918 BUSINESS PHONE: 7877659800 MAIL ADDRESS: STREET 1: P.O. BOX 362708 CITY: SAN JUAN STATE: PR ZIP: 00936-2708 FORMER COMPANY: FORMER CONFORMED NAME: BANPONCE CORP DATE OF NAME CHANGE: 19920703 8-K 1 POPULAR, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ------------------ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): August 5, 1999 POPULAR, INC. ------------- (Exact Name of Registrant as Specified in Charter) Puerto Rico 0-13818 66-0416582 - ---------------------------- ------------ ------------------- (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918 - ---------------------------------------------- -------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (787) 765-9800 ------------- 2 ITEMS 1-4. Not Applicable. ITEM 5. OTHER EVENTS. The exhibits listed in Item 7 below are hereby incorporated herein by reference. ITEM 6. Not Applicable. ITEM 7. EXHIBITS (1)(b) Distribution Agreement, dated October 6, 1995, among BanPonce Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston Corporation and First Chicago Capital Markets, Inc. (Incorporated by reference from the Current Report on Form 8-K of BanPonce Corporation (File No. 0-13818), dated October 6, 1995, as filed with the SEC on October 6, 1995) (1)(c) Amendment No. 1, dated May 23, 1997, to the Distribution Agreement, dated October 6, 1995, among Popular, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., Credit Suisse First Boston Corporation and First Chicago Capital Markets, Inc. (Incorporated by reference from the Current Report on Form 8-K of Popular, Inc. (File No. 0-13818), dated May 23, 1997, as filed with the SEC on June 11, 1997) (1)(d) Amendment No. 2, dated August 6, 1999, to the Distribution Agreement, dated October 6, 1995, among Popular, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston Corporation, Chase Securities Inc. and Popular Securities, Inc. (1)(e) Distribution Agreement, dated October 11, 1991, among BanPonce Financial Corp., BanPonce Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and The First Boston Corporation (Incorporated by reference from the Current Report on Form 8-K of Popular, Inc. (File No. 0-13818), dated May 23, 1997, as filed with the SEC on June 11, 1997) (1)(f) Amendment No. 1, dated December 2, 1993, to the Distribution Agreement, dated October 11, 1991, among BanPonce Financial Corp., BanPonce Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated and CS First Boston Corporation (Incorporated by reference from the Current Report on Form 8-K of Popular, Inc. (File No. 0-13818), dated May 23, 1997, as filed with the SEC on June 11, 1997) (1)(g) Amendment No. 2, dated October 6, 1995, to the Distribution Agreement, dated October 11, 1991, among BanPonce Financial Corp., BanPonce Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, CS First Boston Corporation and First Chicago Capital Markets, Inc. (Incorporated by reference from the Current Report on Form 8-K of BanPonce Corporation (File No. 0-13818), dated October 6, 1995, as filed with the SEC on October 6, 1995) (1)(h) Amendment No. 3, dated May 23, 1997, to the Distribution Agreement, dated October 11, 1991, among Popular North America, Inc., Popular, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Chase Securities Inc., Credit Suisse First Boston Corporation and First Chicago Capital Markets, Inc. (Incorporated by reference from the Current Report on Form 8-K of Popular, Inc. (File No. 0-13818), dated May 23, 1997, as filed with the SEC on June 11, 1997) (1)(i) Amendment No. 4, dated August 6, 1999, to the Distribution Agreement, dated October 6, 1991, among Popular North America, Inc., Popular, Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston Corporation, Chase Securities Inc. and Popular Securities Inc. (4)(d) Senior Indenture of Popular, Inc., dated as of February 15, 1995, as supplemented by the First Supplemental Indenture thereto, dated as of May 8, 1997, each between Popular, Inc. and The First National Bank of Chicago, as trustee (Incorporated by reference from Registration Statement No. 333-26941). (4)(e) Second Supplemental Indenture of Popular, Inc., dated as of August 5, 1999, between Popular, Inc. and The First National Bank of Chicago, as trustee. -2- 3 (4)(g) Senior Indenture of Popular North America, Inc., dated as of October 1, 1991, as supplemented by the First Supplemental Indenture thereto, dated as of February 28, 1995, and the Second Supplemental Indenture thereto, dated as of May 8, 1997, each among Popular North America, Inc., Popular, Inc., as guarantor, and The First National Bank of Chicago, as trustee (Incorporated by reference to Registration Statement No. 333-26941) (4)(h) Third Supplemental Indenture of Popular North America, Inc., dated as of August 5, 1999, among Popular North America, Inc., Popular, Inc., as guarantor, and The First National Bank of Chicago, as trustee. (4)(o) Form of Fixed Rate Medium-Term Note, Series 4, of Popular, Inc. (4)(p) Form of Floating Rate Medium-Term Note, Series 4, of Popular, Inc. (4)(q) Form of Fixed Rate Medium-Term Note, Series E, of Popular North America, Inc., endorsed with the guarantee of Popular, Inc. (4)(r) Form of Floating Rate Medium-Term Note, Series E, of Popular North America, Inc., endorsed with the guarantee of Popular, Inc. (8)(a) Tax opinion of Sullivan & Cromwell in connection with Popular, Inc. Medium-Term Notes, Series 4 and with Popular North America, Inc. Medium-Term Notes, Series E. (10)(a) Administrative Procedures governing Medium-Term Notes, Series 4, of Popular, Inc. (10)(b) Administrative Procedures governing Medium-Term Notes, Series E, of Popular North America, Inc., fully guaranteed by Popular, Inc. (10)(c) Interest Calculation Agency Agreement, dated as of August 6, 1999, between Popular, Inc. and The First National Bank of Chicago. (10)(d) Interest Calculation Agency Agreement, dated as of August 6, 1999, between Popular North America, Inc. and The First National Bank of Chicago. (23)(c) Consent of Counsel (included in Exhibit (8)(a)) ITEM 8. Not Applicable. -3- 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. POPULAR, INC. Date: August 17, 1999 By: /s/ Jorge A. Junquera ---------------------------------- Jorge A. Junquera Senior Executive Vice President -4- EX-1.(D) 2 AMENDMENT NO.2 TO DISTRIBUTION AGREEMENT 1 Exhibit 1(d) AMENDMENT NO. 2 TO DISTRIBUTION AGREEMENT August 6, 1999 WHEREAS, the parties hereto have previously entered into a Distribution Agreement, dated October 6, 1995, as amended and supplemented on May 23, 1997 and on the date hereof (the "Distribution Agreement"), among Popular, Inc. (the "Corporation") (formerly BanPonce Corporation) and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston Corporation and Chase Securities Inc. (each, an "Agent" and collectively, the "Existing Agents") and First Chicago Capital Markets, Inc. (which was originally a party to the Distribution Agreement but is no longer an Agent) relating to the issue and sale by the Company of its Medium-Term Notes of various series (the "Notes"); and WHEREAS, Popular Securities, Inc. ("Popular Securities") has become an Agent upon its execution of an amended signature page to the Distribution Agreement, as provided by Section 1(a) thereof (Popular Securities and the Existing Agents being hereafter referred to herein collectively as the "Agents"); NOW, THEREFORE, the Company and each of the Agents hereby agree to amend the Distribution Agreement as follows: 1. The following paragraphs are hereby added to Section 3 of the Distribution Agreement: (d) Restrictions on Distribution in Puerto Rico. The Agents agree that Popular Securities shall have the sole right to solicit offers to purchase the Notes as agent or to make any sales of the Notes as principal, as the case may be, in Puerto Rico. (e) Restrictions on Sales to Discretionary Accounts. Each Agent hereby agrees to refrain from sales to discretionary accounts under its supervision except in accordance with procedures to obtain the prior specific written approval of the customer that have been approved by the NASD in compliance with NASD Conduct Rule 2720(l). 2 2. Except as otherwise expressly provided herein, the Distribution Agreement is in all respects ratified and confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect. -2- 3 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to the Distribution Agreement to be executed on their behalf as of the date and year first above written. POPULAR, INC. By: /s/ Jorge A. Junquera -------------------------------------- Accepted: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ N. L. Kennan ----------------------------------- CREDIT SUISSE FIRST BOSTON CORPORATION By: /s/ Julie Keogh ----------------------------------- CHASE SECURITIES INC. By: /s/ Louis P. DeCaro ----------------------------------- POPULAR SECURITIES, INC. By: /s/ Kenneth W. McGrath ---------------------------------- -3- EX-1.(I) 3 AMENDMENT NO.4 TO DISTRIBUTION AGREEMENT 1 Exhibit 1(i) AMENDMENT NO. 4 TO DISTRIBUTION AGREEMENT August 6, 1999 WHEREAS, the parties hereto have previously entered into a Distribution Agreement, dated October 11, 1991, as amended by Amendment No. 1 thereto, dated December 2, 1993, Amendment No. 2 thereto, dated October 6, 1995, and as supplemented on June 16, 1993, August 1, 1994, May 23, 1997 and on the date hereof (the "Distribution Agreement"), among Popular North America, Inc. (the "Company") (formerly BanPonce Financial Corp.), Popular, Inc. (the "Guarantor") (formerly BanPonce Corporation) and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse First Boston Corporation and Chase Securities Inc. (each, an "Agent" and collectively, the "Existing Agents") and First Chicago Capital Markets, Inc. (which was originally a party to the Distribution Agreement but is no longer an Agent) relating to the issue and sale by the Company of its Medium-Term Notes of various series (the "Notes"); and WHEREAS, Popular Securities, Inc. ("Popular Securities") has become an Agent upon its execution of an amended signature page to the Distribution Agreement, as provided by Section 1(a) thereof (Popular Securities and the Existing Agents being hereafter referred to herein collectively as the "Agents"); NOW, THEREFORE, the Company and each of the Agents hereby agree to amend the Distribution Agreement as follows: 1. The following paragraphs are hereby added to Section 3 of the Distribution Agreement: (d) Restrictions on Distribution in Puerto Rico. The Agents agree that Popular Securities shall have the sole right to solicit offers to purchase the Notes as agent or to make any sales of the Notes as principal, as the case may be, in Puerto Rico. (e) Restrictions on Sales to Discretionary Accounts. Each Agent hereby agrees to refrain from sales to discretionary accounts under its supervision except in accordance with procedures to obtain the prior specific written approval of the customer that have been approved by the NASD in compliance with NASD Conduct Rule 2720(l). 2. Except as otherwise expressly provided herein, the Distribution Agreement is in all respects ratified and confirmed, and all the terms, provisions and conditions thereof shall be and remain in full force and effect. 2 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to the Distribution Agreement to be executed on their behalf as of the date and year first above written. POPULAR NORTH AMERICA, INC. By: /s/ Jorge A. Junquera ------------------------------ Accepted: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: /s/ N.L. Kennan --------------------------------- CREDIT SUISSE FIRST BOSTON CORPORATION By: /s/ Julie Keogh --------------------------------- CHASE SECURITIES INC. By: /s/ Louis P. DeCaro --------------------------------- POPULAR SECURITIES, INC. By: /s/ Kenneth W. McGrath --------------------------------- -2- EX-4.(E) 4 SECOND SUPPLEMENTAL INDENTURE OF POPULAR, INC. 1 Exhibit 4(e) =============================================================================== POPULAR, INC., Issuer TO THE FIRST NATIONAL BANK OF CHICAGO, Trustee ---------------- SECOND SUPPLEMENTAL INDENTURE Dated as of August 5, 1999 to Indenture dated as of February 15, 1995 ---------------- =============================================================================== 2 SECOND SUPPLEMENTAL INDENTURE, dated as of August 5, 1999 between Popular, Inc. (formerly BanPonce Corporation), a Puerto Rico corporation (the "Company") and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association, as Trustee (the "Trustee"). RECITALS The Company and the Trustee, as Trustee, are parties to an Indenture, dated as of February 15, 1995 (the "Original Indenture"), which provides for the issuance from time to time of unsecured debt securities of the Company. Section 901(5) of the Original Indenture provides that 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 to the Original Indenture, in form satisfactory to the Trustee, to add to, change or eliminate any of the provisions of the Original Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding. The Company believes that Section 1011 of the Original Indenture should be amended and restated in its entirety, with effect only as to Securities of any series created after the execution of this Second Supplemental Indenture. The Board of Directors of the Company has duly authorized the execution and delivery by the Company of this Second Supplemental Indenture. NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Trustee mutually agree as follows: 3 ARTICLE ONE Definitions and Other Provisions of General Application Section 101. Definitions. Except as otherwise expressly provided or unless context otherwise requires, all terms used in this Second Supplemental Indenture shall have the meanings ascribed to them by the Original Indenture, as amended. Section 102. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 103. Successors and Assigns. All covenants and agreements in this Second Supplemental Indenture by the parties hereto shall bind their respective successors and assigns, whether so expressed or not. Section 104. Separability Clause. In case any provision in this Second Supplemental Indenture 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 105. Benefits of Instrument. Nothing in this Second Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Second Supplemental Indenture or the Original Indenture. Section 106. Governing Law. This Second Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. -2- 4 ARTICLE TWO Amendment of the Original Indenture Section 201. Amendment of Section 1011. Section 1011 of the Original Indenture is hereby amended and restated in its entirety as follows: "The Company may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1006 to 1009, inclusive, with respect to the Securities of any series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision 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 term, provision or condition shall remain in full force and effect." Section 202. Effectiveness of Section 201. Section 201 of this Second Supplemental Indenture shall neither (i) apply to any Security of any series created prior to the execution of this Second Supplemental Indenture and entitled to the benefit of Section 1011 of the Original Indenture nor (ii) modify the rights of the Holder of any such Security with respect to Section 1011 of the Original Indenture. Section 203. Reaffirmation of Original Indenture. Each of the Company and the Trustee hereby confirms, reaffirms and agrees to the Original Indenture in every particular, as amended by this Second Supplemental Indenture. Section 204. Trust Indenture Act. If any provision of this Second Supplemental Indenture limits, qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as it may be amended from time to time, that is required under such Act to be a part of and govern this Second Supplemental Indenture, the latter -3- 5 provision shall control. If any provision hereof modifies or excludes any provision of such Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Second Supplemental Indenture as so modified or excluded, as the case may be. * * * This Second Supplemental 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 instrument. -4- 6 IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental 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: /s/ Roberto R. Herencia ------------------------------- Name: Roberto R. Herencia Title: Executive Vice President By: ------------------------------- Name: Larry B. Kesler Title: Executive Vice President Attest: /s/ Ramon Lloveras San Miguel - ------------------------------- Assistant Secretary Affidavit No. ___ Subscribed to before me by Roberto R. Herencia of legal age, married and resident of Glenview, Illinois, as Executive Vice President of Popular, Inc. and ____________________, of legal age, married and resident of _______________________ as _____________________ of Popular, Inc. and who are personally known to me, in San Juan, Puerto Rico, this 16th day of August, 1999. /s/ Lucy Aviles [SEAL] -------------------------------- Notary Public -5- 7 IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental 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: ------------------------------- Name: Roberto R. Herencia Title: Executive Vice President By: /s/ Larry B. Kesler ------------------------------- Name: Larry B. Kesler Title: Executive Vice President Attest: /s/ Ramon Lloveras San Miguel - -------------------------------- Ramon Lloveras San Miguel, Assistant Secretary Affidavit No. 1,187 Subscribed to before me by Larry B. Kesler, of legal age, married and resident of Guaynabo, Puerto Rico as Executive Vice President of Popular, Inc. and who is personally known to me, in San Juan, Puerto Rico, this 12th day of August, 1999. /S/ Estela Martinez [SEAL] ----------------------------- Notary Public -5- 8 THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Michael D. Pinzon ------------------------------- Name: Michael D. Pinzon Title: Trust Officer Attest: /s/ Steve M. Husbands - --------------------- Steve M. Husbands Assistant Vice President STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the 5 day of August, 1999, before me personally came Michael Pinzon, to me known, who, being by me duly sworn, did depose and say that he/she is a Trust Officer of The First National Bank of Chicago, one of the corporations described in and which executed the foregoing instrument; that he/she knows the seal of said national banking association; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like authority. [SEAL] /s/ Mark E. Davis ------------------------------- Notary Public Mark E. Davis Notary Public, State of New York Reg. No. 01DA6004466 Qualified in New York County Commission Expires March 23, 2000 -6- EX-4.(H) 5 3RD SUP. INDENTURE OF POPULAR NORTH AMERICA, INC. 1 Exhibit 4(h) ================================================================================ POPULAR NORTH AMERICA, INC., Issuer and POPULAR, INC., Guarantor TO THE FIRST NATIONAL BANK OF CHICAGO, Trustee ---------------- THIRD SUPPLEMENTAL INDENTURE Dated as of August 5, 1999 to Indenture dated as of October 1, 1991 ---------------- ================================================================================ 2 THIRD SUPPLEMENTAL INDENTURE, dated as of August 5, 1999 among Popular North America, Inc. (formerly BanPonce Financial Corp.), a Delaware corporation (the "Company"), Popular, Inc. (formerly BanPonce Corporation), a Puerto Rico corporation (the "Guarantor"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association, as Trustee (the "Trustee"). RECITALS The Company, the Guarantor and the Trustee, as successor Trustee, are parties to an Indenture, dated as of October 1, 1991 (the "Original Indenture"), which provides for the issuance from time to time of unsecured debt securities of the Company, unconditionally guaranteed as to the payment of principal, premium (if any) and interest by the Guarantor, and are parties to a First Supplemental Indenture thereto, dated as of February 28, 1995 and a Second Supplemental Indenture thereto, dated as of May 8, 1997. Section 901(5) of the Original Indenture provides that without the consent of any Holders, the Company and the Guarantor, when authorized by Board Resolutions, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental to the Original Indenture, in form satisfactory to the Trustee, to add to, change or eliminate any of the provisions of the Original Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (i) shall neither (A) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (B) modify the rights of the Holder of any such Security with respect to such provision or (ii) shall become effective only when there is no such Security Outstanding. The Company and the Guarantor believe that Section 1013 of the Original Indenture should be amended and restated in its entirety, with effect only as to Securities of any Series created after the execution of this Third Supplemental Indenture. The respective Boards of Directors of the Company and the Guarantor have duly authorized the execution and delivery by the Company and the Guarantor, respectively, of this Third Supplemental Indenture. 3 NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Guarantor and the Trustee mutually agree as follows: ARTICLE ONE Definitions and Other Provisions of General Application Section 101. Definitions. Except as otherwise expressly provided or unless context otherwise requires, all terms used in this Third Supplemental Indenture shall have the meanings ascribed to them by the Original Indenture. Section 102. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 103. Successors and Assigns. All covenants and agreements in this Third Supplemental Indenture by the parties hereto shall bind their respective successors and assigns, whether so expressed or not. Section 104. Separability Clause. In case any provision in this Third Supplemental Indenture 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 105. Benefits of Instrument. Nothing in this Third Supplemental Indenture, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Third Supplemental Indenture or the Original Indenture. -2- 4 Section 106. Governing Law. This Third Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. ARTICLE TWO Amendment of the Original Indenture Section 201. Amendment of Section 1013. Section 1013 of the Original Indenture is hereby amended and restated in its entirety as follows: "The Company and the Guarantor may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1006, 1007 and 1009 to 1011, inclusive, with respect to the Securities of any series if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the Guarantor and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect." Section 202. Effectiveness of Section 201. Section 201 of this Third Supplemental Indenture shall neither (i) apply to any Security of a series created prior to the execution of this Third Supplemental Indenture and entitled to the benefit of Section 1013 of the Original Indenture nor (ii) modify the rights of the Holder of any such Security with respect to Section 1013 of the Original Indenture. Section 203. Reaffirmation of Original Indenture. Each of the Company, the Guarantor and the Trustee hereby confirms, reaffirms and agrees to the Original Indenture in every particular, as amended by this Third Supplemental Indenture. -3- 5 Section 204. Trust Indenture Act. If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with a provision of the Trust Indenture Act of 1939, as it may be amended from time to time, that is required under such Act to be a part of and govern this Third Supplemental Indenture, the latter provision shall control. If any provision hereof modifies or excludes any provision of such Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Third Supplemental Indenture as so modified or excluded, as the case may be. * * * This Third Supplemental 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 instrument. -4- 6 IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental 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 NORTH AMERICA, INC. By: /s/ Roberto R. Herencia -------------------------------- Name: Roberto R. Herencia Title: Executive Vice President By: -------------------------------- Name: Larry B. Kesler Title: Executive Vice President Attest: /s/ Ramon Lloveras San Miguel - ------------------------------ Assistant Secretary Affidavit No. ___ Subscribed to before me by Roberto R. Herencia of legal age, married and resident of Glenview, Illinois, as Executive Vice President of Popular North America, Inc. and ____________, of legal age, married and resident of ___________, Puerto Rico as __________________ of Popular North America, Inc. and who are personally known to me, in San Juan, Puerto Rico, this 16th day of August, 1999. /s/ Lucy Aviles [SEAL] ------------------------------ Notary Public -5- 7 IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental 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 NORTH AMERICA, INC. By: -------------------------------- Name: Roberto R. Herencia Title: Executive Vice President By: /s/ Larry B. Kesler -------------------------------- Name: Larry B. Kesler Title: Executive Vice President Attest: /s/ Ramon Lloveras San Miguel - ------------------------------ Assistant Secretary Affidavit No. 1190 Subscribed to before me by Larry b. Kesler, of legal age, married and resident of Guaynabo, Puerto Rico as Executive Vice President of Popular North America, Inc. and who is personally known to me, in San Juan, Puerto Rico, this 12th day of August, 1999. /s/ Estela Martinez [SEAL] ------------------------------ Notary Public -5- 8 POPULAR, INC. By: /s/ Roberto R. Herencia --------------------------------- Name: Roberto R. Herencia Title: Executive Vice President By: --------------------------------- Name: Larry B. Kesler Title: Executive Vice President Attest: /s/ Ramon Lloveras San Miguel - ----------------------------------- Assistant Secretary Affidavit No. ___ Subscribed to before me by Roberto R. Herencia of legal age, married and resident of Glenview, Illinois, as Executive Vice President of Popular, Inc. and _____________, of legal age, married and resident of ______, ____________ as _____________________ of Popular, Inc. and who are personally known to me, in San Juan, Puerto Rico, this 16th day of August, 1999. /s/ Lucy Aviles [SEAL] ------------------------------- Notary Public -6- 9 POPULAR, INC. By: --------------------------------- Name: Roberto R. Herencia Title: Executive Vice President By: /s/ Larry B. Kesler --------------------------------- Name: Larry B. Kesler Title: Executive Vice President Attest: /s/ Ramon Lloveras San Miguel - ----------------------------------- Assistant Secretary Affidavit No. 1191 Subscribed to before me by Larry B. Kesler, of legal age, married and resident of Guaynabo, Puerto Rico as Executive Vice President of Popular, Inc. and who is personally known to me, in San Juan, Puerto Rico, this 12th day of August, 1999. /s/ Estela Martinez [SEAL] ------------------------------- Notary Public -6- 10 THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Michael D. Pinzon --------------------------- Name: Michael D. Pinzon Title: Trust Officer Attest: /s/ Steve M. Husbands - ------------------------------ Steve M. Husbands Assistant Vice President STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the 5 day of August, 1999, before me personally came Michael Pinzon, to me known, who, being by me duly sworn, did depose and say that he/she is a Trust Officer of The First National Bank of Chicago, one of the corporations described in and which executed the foregoing instrument; that he/she knows the seal of said national banking association; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like authority. [SEAL] /s/ Mark E. Davis ---------------------------- Notary Public Mark E. Davis Notary Public, State of New York Reg. No. 01DA6004466 Qualified in New York County Commission Expires March 23, 2000 -7- EX-4.(O) 6 FORM OF FIXED RATE MEDIUM-TERM NOTE, SERIES 4 1 Exhibit 4(o) [Form of Fixed Rate Medium-Term Note] (FACE OF SECURITY) [IF A GLOBAL SECURITY, INSERT -- THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.] [IF DTC IS THE DEPOSITARY, INSERT -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO POPULAR, INC. 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 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 ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.] 2 CUSIP NO. _______ REGISTERED NO. FXR ______ POPULAR, INC. MEDIUM-TERM NOTES, SERIES 4 (Fixed Rate) The following terms apply to this Security, as and to the extent shown below: PRINCIPAL AMOUNT: REGULAR RECORD DATE: STATED MATURITY DATE: ORIGINAL ISSUE DISCOUNT SECURITY: SPECIFIED CURRENCY: U.S. dollars for all payments unless otherwise - Total Amount of OID: specified below: - Yield to Maturity: - Initial Accrual Period OID: - payments of principal and any - OID Default Amount: premium: - Default Rate: - payments of interest: REDEMPTION COMMENCEMENT DATE: - Exchange Rate Agent: REPAYMENT DATE(S): INTEREST RATE: _____% per annum REDEMPTION OR REPAYMENT PRICE(S): INTEREST PAYMENT DATE(S): OTHER TERMS: ORIGINAL ISSUE DATE*: Terms left blank or marked "N/A", "No", "None" or in a similar manner do not apply to this Security except as otherwise may be specified. Whenever used in this Security, the terms specified above that apply to this Security have the meanings specified above, unless the context requires otherwise. Other terms used in this Security that are not defined herein but that are defined in the Indenture referred to in Section 1 on the reverse of this Security are used herein as defined therein. ______________ * This date shall be the issue date of this Security, unless there is a Predecessor Security, in which case this date shall be the issue date of the first Predecessor Security. (Face of Security continued on next page) -2- 3 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 Person under the Indenture), for value received, hereby promises to pay to _____________, or registered assigns, as principal the Principal Amount on the Stated Maturity Date and to pay interest thereon, from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on the Interest Payment Date(s) in each year, commencing on the first such date that is at least 15 calendar days after the Original Issue Date, and at the Maturity of the principal hereof, at the rate per annum equal to the Interest Rate specified on the face hereof, until the principal hereof is paid or made available for payment. Notwithstanding the foregoing, interest on any principal that is overdue shall be payable on demand. 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 15th calendar day (whether or not a Business Day, as such term is defined in Section 3 on the reverse hereof) next preceding such Interest Payment Date, unless otherwise provided on the face hereof (a "Regular Record Date"). Any interest so payable, but not punctually paid or duly provided for, on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and such Defaulted Interest either may 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 the Holder of this Security not less than 10 days prior to such Special Record Date, or may be paid in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. If this Security is issued with an original issue discount, (i) if an Event of Default with respect to the Security of this series shall have occurred and be continuing, the amount of principal of this Security which may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture, shall be determined in the manner set forth under "OID Default Amount" on the face hereof, and (ii) in the case of a default of payment in principal upon acceleration, (Face of Security continued on next page) -3- 4 redemption, repayment at the option of the Holder or at the Stated Maturity Date hereof, in lieu of any interest otherwise payable, the overdue principal of this Security shall bear interest at a rate of interest per annum equal to the Default Rate stated on the face hereof (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such acceleration, redemption, repayment at the option of the Holder or Stated Maturity Date, as the case may be, to the date payment has been made or duly provided for or such default has been waived in accordance with the terms of the Indenture. CURRENCY OF PAYMENT Payment of principal of (and premium, if any) and interest on this Security will be made in the Specified Currency for such payment, except as provided in this and the next three paragraphs. The Specified Currency for any payment shall be the currency specified as such on the face of this Security unless, at the time of such payment, such currency is not legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date, in which case the Specified Currency for such payment shall be such coin or currency as at the time of such payment is legal tender for the payment of public and private debts in such country. Except as provided in the next paragraph, any payment to be made on this Security in a Specified Currency other than U.S. dollars will be made in U.S. dollars if the Person entitled to receive such payment transmits a written request for such payment to be made in U.S. dollars to the Trustee at its Corporate Trust Office, Attention: Securities Processing Division, on or before the fifth Business Day before the payment is to be made. Such written request may be mailed, hand delivered, telecopied or delivered in any other manner approved by the Trustee. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The U.S. dollar amount of any payment made pursuant to the immediately preceding paragraph will be (Face of Security continued on next page) -4- 5 determined by the Exchange Rate Agent based upon the highest bid quotation received by the Exchange Rate Agent as of 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date, from three (or, if three are not available, then two) recognized foreign exchange dealers selected by the Exchange Rate Agent in The City of New York, in each case for the purchase by the quoting dealer, for U.S. dollars and for settlement on such payment date of an amount of the Specified Currency for such payment equal to the aggregate amount of such Specified Currency payable on such payment date to all Holders of Securities of this or any other series who elect to receive U.S. dollar payments on such payment date, and at which the applicable dealer commits to execute a contract. If the Exchange Rate Agent determines that two such bid quotations are not available on such second Business Day, such payment will be made in the Specified Currency for such payment. All currency exchange costs associated with any payment in U.S. dollars on this Security will be borne by the Holder entitled to receive such payment, by deduction from such payment. Notwithstanding the foregoing, if any amount payable on this Security is payable on any day (including at Maturity) in a Specified Currency other than U.S. dollars, and if such Specified Currency is not available to the Company on the two Business Days before such day, due to the imposition of exchange controls, disruption in a currency market or any other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligation to pay such amount in such Specified Currency by making such payment in U.S. dollars. The amount of such payment in U.S. dollars shall be determined by the Exchange Rate Agent on the basis of the noon buying rate for cable transfers in The City of New York for such Specified Currency (the "Exchange Rate") as of the latest day before the day on which such payment is to be made. Any payment made under such circumstances in U.S. dollars where the required payment is in other than U.S. dollars will not constitute an Event of Default under the Indenture or this Security. MANNER OF PAYMENT - U.S. DOLLARS Except as provided in the next paragraph, payment of any amount payable on this Security in U.S. dollars will be made at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose), against surrender of this Security in the case of any payment due at the Maturity of the principal hereof (Face of Security continued on next page) -5- 6 (other than any payment of interest that first becomes due on an Interest Payment Date); provided, however, that, at the option of the Company and subject to the next paragraph, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Payment of any amount payable on this Security in U.S. dollars will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the Borough of Manhattan, The City of New York, if (i) the principal of this Security is at least $10,000,000 and (ii) the Holder entitled to receive such payment transmits a written request for such payment to be made in such manner to the Paying Agent at its Corporate Trust Office, Attention: Securities Processing Division, on or before the Regular Record Date preceding the day on which such payment is to be made; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the Regular Record Date preceding the day on which such payment is to be made, in which case such revocation shall be effective for such payment and all later payments; provided that in the case of any payment due at Maturity of the principal of this Security to be effective any request for revocation must be made no later than the 15th day prior to the Maturity of the principal of this Security. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES (Face of Security continued on next page) -6- 7 Payment of any amount payable on this Security in a Specified Currency other than U.S. dollars will be made by wire transfer of immediately available funds to such account as is maintained in such Specified Currency at a bank or other financial institution acceptable to the Company and the Trustee and as shall have been designated at least five Business Days prior to the applicable payment date by the Person entitled to receive such payment; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Such account designation shall be made by transmitting the appropriate information to the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier or in any other manner approved by the Trustee. Unless revoked, any such account designation made with respect to this Security by the Holder hereof will remain in effect with respect to any further payments with respect to this Security payable to such Holder. If a payment in a Specified Currency other than U.S. dollars with respect to this Security cannot be made by wire transfer because the required account designation has not been received by the Trustee on or before the requisite date or for any other reason, the Company will cause a notice to be given to the Holder of this Security at its registered address requesting an account designation pursuant to which such wire transfer can be made and such payment will be made within five Business Days after the Trustee's receipt of such a designation meeting the requirements specified above, with the same force and effect as if made on the due date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - GLOBAL SECURITIES Notwithstanding any provision of this Security or the Indenture, if this Security is a Global Security, the Company may make any and all payments of principal, premium and interest on this Security pursuant to the Applicable Procedures of the Depositary for this Security as permitted in the Indenture. (Face of Security continued on next page) -7- 8 PAYMENTS DUE ON A BUSINESS DAY Unless otherwise specified on the face of this Security, the following sentence shall apply to this Security. Notwithstanding any provision of this Security or the Indenture, if any amount of principal, premium or interest would otherwise be due on this Security on a day (the "Specified Day") that is not a Business Day, such amount may be paid or made available for payment on the next succeeding Business Day with the same force and effect as if such amount were paid on the Specified Day. The provisions of this paragraph shall apply to the Security in lieu of the provisions of Section 113 of the Indenture. ______________________________ 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. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. (Face of Security continued on next page) -8- 9 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: POPULAR, INC. By____________________________ Name: Title: By____________________________ Name: Title: Attest: ______________________ This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By_________________________________ Authorized Officer -9- 10 (Reverse of Security) 1. SECURITIES AND INDENTURE This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities") issued and to be issued in one or more series under an Indenture, dated as of February 15, 1995 as supplemented by the First Supplemental Indenture, dated as of May 8, 1997 and the Second Supplemental Indenture dated as of August 5, 1999 (together herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), between the Company and The First National Bank of Chicago, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture 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. 2. SERIES AND DENOMINATIONS This Security is one of the series designated on the face hereof, limited to an aggregate initial offering price not to exceed $1,500,000,000 (or the equivalent thereof in any other currency or currencies or currency units) less the aggregate initial offering price of "Securities" (as defined in the Prospectus dated August 4, 1999 relating to debt securities and preferred stock of the Company, Popular International Bank, Inc. and Popular North America, Inc.) authenticated and delivered upon initial issuance, other than the Securities of this series, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to "this series" mean the series of securities designated on the face hereof. The Securities of this series are issuable only in registered form without coupons in "Authorized Denominations", which term shall have the following meaning. For each Security of this series having a principal amount payable in U.S. dollars, the Authorized Denominations shall be $100,000 and any integral multiples of $1,000 in excess thereof. For each Security of this series having a principal amount payable in a Specified Currency other than U.S. dollars, the Authorized Denominations shall be the amount of such Specified Currency equivalent, at the Exchange Rate on (Reverse of Security continued on next page) -10- 11 the first Business Day next preceding the date on which the Company accepts the offer to purchase such Security, to $100,000 and any integral multiples of $1,000 in excess thereof. 3. EXCHANGE RATE AGENT AND RELATED TERMS If the principal of or interest on this Security is payable in a Specified Currency other than U.S. dollars, the Company has initially appointed the institution named on the face of this Security as Exchange Rate Agent to act as such agent with respect to this Security, but the Company may, in its sole discretion, appoint any other institution (including any Affiliate of the Company) to serve as any such agent from time to time. The Company will give the Trustee prompt written notice of any change in any such appointment. Insofar as this Security provides for any such agent to obtain rates, quotes or other data from a bank, dealer or other institution for use in making any determination hereunder, such agent may do so from any institution or institutions of the kind contemplated hereby notwithstanding that any one or more of such institutions are such agent, Affiliates of such agent, any of the agents named on the cover of the Company's Prospectus Supplement dated August 6, 1999 relating to the Company's Medium-Term Notes, Series 4 or any Affiliate of any such agent or Affiliates of the Company. All determinations made by the Exchange Rate Agent may be made by such agent in its sole discretion and, absent manifest error, shall be conclusive for all purposes and binding on the Holder of this Security and the Company. The Exchange Rate Agent shall not have any liability therefor. Unless otherwise specified on the face hereof, for all purposes of this Security, the term "Business Day" means each Monday, Tuesday, Wednesday, Thursday or Friday that (i) is not a day on which banking institutions in New York City generally are authorized or obligated by law, regulation or executive order to close and (ii) if the Specified Currency for any payment on this Security is other than U.S. dollars, is not a day on which banking institutions in the principal financial center of the country issuing such Specified Currency generally are authorized or obligated by law, regulation or executive order to close. With respect to any particular location, the close of business on any day on which business is not being conducted shall be deemed to mean 5:00 P.M., New York City time, on that day. (Reverse of Security continued on next page) -11- 12 References in this Security to U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the United States of America. References in this Security to a particular currency other than U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date. 4. REDEMPTION AT THE COMPANY'S OPTION Unless a Redemption Commencement Date is specified on the face hereof, except as provided below, this Security shall not be redeemable at the option of the Company before the Stated Maturity Date. If a Redemption Commencement Date is so specified, and unless otherwise specified on the face hereof, this Security is subject to redemption upon not less than 30 days' nor more than 60 days' notice at any time and from time to time on or after the Redemption Commencement Date, in each case as a whole or in part, at the election of the Company and at the applicable Redemption Price specified on the face hereof (expressed as a percentage of the principal amount of this Security to be redeemed), together with accrued interest to the Redemption Date, but interest installments due on or prior to such Redemption Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant record date, all as provided in the Indenture; provided, however, that the first two paragraphs of Section 1103 of the Indenture shall not apply to this Security, and if less than all of the Securities of this series are to be redeemed, the Company may select, from Securities of this series that are subject to redemption pursuant to the terms thereof, the Security or Securities, or portion or portions thereof, to be redeemed. In the event that the Company shall be obligated to pay any Additional Amounts due to a change in law, regulation or interpretation, the Company may, at its option, redeem this Security as a whole at a redemption price of 100% of the principal amount thereof (or, if this Security is an original issue discount note, 100% of the OID Default Amount) together with accrued interest to the date fixed for redemption. (Reverse of Security continued on next page) -12- 13 5. REPAYMENT AT THE HOLDER'S OPTION Except as otherwise may be provided on the face hereof, if one or more Repayment Dates are specified on the face hereof, this Security will be repayable in whole or in part in an amount equal to any Authorized Denomination (provided that the remaining principal amount of any Security surrendered for partial repayment shall at least equal an Authorized Denomination), on any such Repayment Date, in each case at the option of the Holder and at the applicable Repayment Price specified on the face hereof (expressed as a percentage of the principal amount to be repaid), together with accrued interest to the applicable Repayment Date (but interest installments due on or prior to such Repayment Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date as provided in the Indenture). If this Security provides for more than one Repayment Date and the Holder exercises its option to elect repayment, the Holder shall be deemed to have elected repayment on the earliest Repayment Date after all conditions to such exercise have been satisfied, and references herein to the "applicable Repayment Date" shall mean such earliest Repayment Date. In order for the exercise of such option to be effective and this Security to be repaid, the Company must receive at the applicable address of the Paying Agent set forth below (or at such other place or places of which the Company shall from time to time notify the Holder of this Security), on any Business Day not later than the 30th, and not earlier than the 60th, calendar day prior to the applicable Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), either (i) this Security, with the form below entitled "Option to Elect Repayment" duly com pleted and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that the Company will receive this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, not later than five Business Days after the date of such telegram, telex, facsimile trans- (Reverse of Security continued on next page) -13- 14 mission or letter (provided that this Security and form duly completed and signed are received by the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The First National Bank of Chicago, Attention: Securities Processing Division, 14 Wall Street, Eighth Floor, New York, New York 10005 (or at such other places as the Company or the Paying Agent shall notify the Holder of this Security). All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final and binding. Notwithstanding the foregoing, (x) if this Security is a Global Security, the option of the Holder to elect repayment may be exercised in accordance with the Applicable Procedures of the Depositary for this Security at least 30 calendar days prior to the applicable Repayment Date and (y) whether or not this Security is a Global Security, the option of the Holder to elect repayment may be exercised in any such manner as the Company may approve. 6. TRANSFER AND EXCHANGE As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of Authorized Denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different Authorized Denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. (Reverse of Security continued on next page) -14- 15 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 nor the Trustee nor any such agent shall be affected by notice to the contrary. If this Security is a Global Security, this Security shall be subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities. 7. [RESERVED]. 8. REMEDIES. If an Event of Default 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. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or (Reverse of Security continued on next page) -15- 16 impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 9. MODIFICATION AND WAIVER. 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 (considered together as one class for this purpose). The Indenture also contains provisions (i) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. 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. 10. GOVERNING LAW. THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (Reverse of Security continued on next page) -16- 17 REGISTERED NO. FXR __________ CUSIP NO. __________ ORIGINAL ISSUE DATE: __________ POPULAR, INC. MEDIUM-TERM NOTE, SERIES 4 OPTION TO ELECT REPAYMENT TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHT The undersigned hereby irrevocably requests and instructs the Company to repay the Security referred to in this notice (or the portion thereof specified below) at the applicable Repayment Price, together with interest to the Repayment Date, all as provided for in such Security, to the undersigned, whose name, address and telephone number are as follows: ________________________________________________________________________________ (please print name of the undersigned) ________________________________________________________________________________ (please print address of the undersigned) ________________________________________________________________________________ (please print telephone number of the undersigned) If such Security provides for more than one Repayment Date, the undersigned requests repayment on the earliest Repayment Date after the requirements for exercising this option have been satisfied, and references in this notice to the Repayment Date mean such earliest Repayment Date. Terms used in this notice that are defined in such Security are used herein as defined therein. For such Security to be repaid the Company must receive at the applicable address of the Trustee set forth below or at such other place or places of which the Company or the Trustee shall from time to time notify the Holder of such Security, any Business Day not later than the 30th or earlier than the 60th calendar day prior to the Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), (i) such Security, with this "Option to Elect Repayment" form duly completed and signed, or (ii) a telegram, telex, facsimile transmission or -17- 18 letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of such Security, (b) the principal amount of such Security and the amount of such Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that such Security to be repaid with the form entitled "Option to Elect Repayment" on the addendum to the Security duly completed and signed will be received by the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that such Security and form duly completed and signed are received by the Company by such fifth Business Day). The address to which such deliveries are to be made is: The First National Bank of Chicago Attention: Securities Processing Division 14 Wall Street - Eighth Floor New York, New York 10005 or at such other place as the Company or the Paying Agent shall notify the holder of such Security. If less than the entire principal amount of such Security is to be repaid, specify the portion thereof (which shall equal any Authorized Denomination) that the Holder elects to have repaid: _________________________ and specify the denomination or denominations (which shall equal any Authorized Denomination) of the Security or Securities to be issued to the Holder in respect of the portion of such Security not being repaid (in the absence of any specification, one Security will be issued in respect of the portion not being repaid): _________________________ Date: _______________ ______________________________ Notice: The signature to this Option to Elect Repayment must correspond with the name of the Holder as written on the face of such Security in every particular without -18- 19 alteration or enlargement or any other change whatsoever. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Security, 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 the 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. ___________________________ -19- 20 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto ________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE _____________________ /_____________________/ ________________________________________________________________________ ________________________________________________________________________ (Please Print or Typewrite Name and Address Including Postal Zip Code of Assignee) ________________________________________________________________________ the attached Security and all rights thereunder, and hereby irrevocably constitutes and appoints_________________________________________________ _________________________________________________________________________ to transfer said Security on the books of the Company, with full power of substitution in the premises. Dated:______________ Signature Guaranteed _________________________ _______________________________ NOTICE: Signature must be NOTICE: The signature to guaranteed. this assignment must correspond with the name of the Holder as written upon the face of the attached Security in every particular, without alteration or enlargement or any change whatever. -20- EX-4.(P) 7 FORM OF FLOATING RATE MEDIUM-TERM NOTE, SERIES 4 1 Exhibit 4(p) [Form of Floating Rate Medium-Term Note] (FACE OF SECURITY) [IF A GLOBAL SECURITY, INSERT - THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.] [IF DTC IS THE DEPOSITARY, INSERT -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO POPULAR, INC., 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 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 ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.] 2 REGISTERED NO. FLR___ CUSIP NO. _______ POPULAR, INC. MEDIUM-TERM NOTES, SERIES 4 (Floating Rate) The following terms apply to this Security, as and to the extent shown below: PRINCIPAL AMOUNT: REPAYMENT DATE(S): STATED MATURITY DATE: REDEMPTION OR REPAYMENT PRICE(S): SPECIFIED CURRENCY: U.S. BASE RATE: dollars for all payments - Commercial Paper Rate: unless otherwise specified below: - Prime Rate: - payments of principal and - LIBOR: any premium: - Telerate LIBOR Page: - payments of interest: - Reuters Screen LIBOR Page: - Exchange Rate Agent: - Index Currency: *ORIGINAL ISSUE DATE: - Treasury Rate: - CMT Rate: REGULAR RECORD DATE: - Telerate Page 7051: - Telerate Page 7052 ORIGINAL ISSUE DISCOUNT (weekly/monthly): - CMT Index Maturity: SECURITY: - Total Amount of OID: - CD Rate: - Yield to Maturity: - Federal Funds Rate: - Initial Accrual Period OID: - 11th District Rate: - OID Default Amount: - Default Rate: REDEMPTION COMMENCEMENT DATE: ______________ * This date shall be the issue date of this Security, unless there is a Predecessor Security, in which case this date shall be the issue date of the first Predecessor Security. (Face of Security continued on next page) -2- 3 INDEX MATURITY: the third Wednesday of the following: SPREAD: - each of the 12 calendar months in each year SPREAD MULTIPLIER: - each March, June, September and December in each year INITIAL BASE RATE: - each of the following two calendar months in each year: MAXIMUM RATE: - the following calendar month in each year: MINIMUM RATE: subject to the second paragraph under "Payments Due on a Business Day" below INTEREST RESET PERIOD: INTEREST CALCULATION DATE(S): as provided in Section 3(n) on the - if semi-annual, reset reverse of this Security (unless will occur in each of otherwise specified) the following two months in each year: CALCULATION AGENT: - if annual, reset will OTHER TERMS: occur in the following month in each year: - otherwise, reset will occur daily, weekly, monthly or quarterly in each year as follows: INTEREST RESET DATE(S): as provided in Section 3(a) on the reverse of this Security (unless otherwise specified) INTEREST DETERMINATION DATE(S): as provided in Sections 3(b) through 3(j), as applicable, on the reverse of this Security (unless otherwise specified) INTEREST PAYMENT DATE(S): unless otherwise specified, (Face of Security continued on next page) -3- 4 Terms left blank or marked "N/A", "No", "None" or in a similar manner do not apply to this Security except as otherwise may be specified. Whenever used in this Security, the terms specified above that apply to this Security have the meanings specified above, unless the context requires otherwise. Other terms used in this Security that are not defined herein but that are defined in the Indenture referred to in Section 1 on the reverse of this Security are used herein as defined therein. (Face of Security continued on next page) -4- 5 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 Person under the Indenture), for value received, hereby promises to pay to _____________, or registered assigns, as principal the Principal Amount on the Stated Maturity Date and to pay interest thereon, from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on the Interest Payment Date(s) in each year, commencing on the first such date that is at least 15 calendar days after the Original Issue Date, and at the Maturity of the principal hereof, at a rate per annum determined in accordance with the applicable provisions of Section 3 on the reverse hereof, until the principal hereof is paid or made available for payment. Notwithstanding the foregoing, interest on any principal that is overdue shall be payable on demand. 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 15th calendar day (whether or not a Business Day, as such term is defined in Section 3(n) on the reverse hereof) next preceding such Interest Payment Date, unless otherwise provided on the face hereof (a "Regular Record Date"). Any interest so payable, but not punctually paid or duly provided for, on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and such Defaulted Interest either may 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 the Holder of this Security not less than 10 days prior to such Special Record Date, or may be paid in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. If this Security is issued with an original issue discount, (i) if an Event of Default with respect to the Security of this series shall have occurred and be continuing, the amount of principal of this Security which may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture, shall be determined in the manner set forth under (Face of Security continued on next page) -5- 6 "OID Default Amount" on the face hereof, and (ii) in the case of a default of payment in principal upon acceleration, redemption, repayment at the option of the Holder or at the Stated Maturity Date hereof, in lieu of any interest otherwise payable, the overdue principal of this Security shall bear interest at a rate of interest per annum equal to the Default Rate stated on the face hereof (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such acceleration, redemption, repayment at the option of the Holder or Stated Maturity Date, as the case may be, to the date payment has been made or duly provided for or such default has been waived in accordance with the terms of the Indenture. CURRENCY OF PAYMENT Payment of principal of (and premium, if any) and interest on this Security will be made in the Specified Currency for such payment, except as provided in this and the next three paragraphs. The Specified Currency for any payment shall be the currency specified as such on the face of this Security unless, at the time of such payment, such currency is not legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date, in which case the Specified Currency for such payment shall be such coin or currency as at the time of such payment is legal tender for the payment of public and private debts in such country. Except as provided in the next paragraph, any payment to be made on this Security in a Specified Currency other than U.S. dollars will be made in U.S. dollars if the Person entitled to receive such payment transmits a written request for such payment to be made in U.S. dollars to the Trustee at its Corporate Trust Office, Attention: Securities Processing Division, on or before the fifth Business Day before the payment is to be made. Such written request may be mailed, hand delivered, telecopied or delivered in any other manner approved by the Trustee. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request (Face of Security continued on next page) -6- 7 must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The U.S. dollar amount of any payment made pursuant to the preceding paragraph will be determined by the Exchange Rate Agent based upon the highest bid quotation received by the Exchange Rate Agent as of 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date, from three (or, if three are not available, then two) recognized foreign exchange dealers selected by the Exchange Rate Agent in The City of New York, in each case for the purchase by the quoting dealer, for U.S. dollars and for settlement on such payment date of an amount of the Specified Currency for such payment equal to the aggregate amount of such Specified Currency payable on such payment date to all Holders of Securities of this or any other series who elect to receive U.S. dollar payments on such payment date, and at which the applicable dealer commits to execute a contract. If the Exchange Rate Agent determines that two such bid quotations are not available on such second Business Day, such payment will be made in the Specified Currency for such payment. All currency exchange costs associated with any payment in U.S. dollars on this Security will be borne by the Holder entitled to receive such payment, by deduction from such payment. Notwithstanding the foregoing, if any amount payable on this Security is payable on any day (including at Maturity) in a Specified Currency other than U.S. dollars, and if such Specified Currency is not available to the Company on the two Business Days before such day, due to the imposition of exchange controls, disruption in a currency market or any other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligation to pay such amount in such Specified Currency by making such payment in U.S. dollars. The amount of such payment in U.S. dollars shall be determined by the Exchange Rate Agent on the basis of the noon buying rate for cable transfers in The City of New York for such Specified Currency (the "Exchange Rate") as of the latest day before the day on which such payment is to be made. Any payment made under such circumstances in U.S. dollars where the required payment is in other than U.S. dollars will not constitute an Event of Default under the Indenture or this Security. MANNER OF PAYMENT - U.S. DOLLARS (Face of Security continued on next page) -7- 8 Except as provided in the next paragraph, payment of any amount payable on this Security in U.S. dollars will be made at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose), against surrender of this Security in the case of any payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date); provided, however, that, at the option of the Company and subject to the next paragraph, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Payment of any amount payable on this Security in U.S. dollars will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the Borough of Manhattan, The City of New York, if (i) the principal of this Security is at least $10,000,000 and (ii) the Holder entitled to receive such payment transmits a written request for such payment to be made in such manner to the Paying Agent at its Corporate Trust Office, Attention: Securities Processing Division, on or before the Regular Record Date preceding the day on which such payment is to be made; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the Regular Record Date preceding the day on which such payment is to be made, in which case such revocation shall be effective for such and all later payments; provided that in the case of any payment due at Maturity of the principal of this Security to be effective any request for revocation must be made no later than the 15th day prior to the Maturity of the principal of this Security. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire (Face of Security continued on next page) -8- 9 transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES Payment of any amount payable on this Security in a Specified Currency other than U.S. dollars will be made by wire transfer of immediately available funds to such account as is maintained in such Specified Currency at a bank or other financial institution acceptable to the Company and the Trustee and as shall have been designated at least five Business Days prior to the applicable payment date by the Person entitled to receive such payment; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Such account designation shall be made by transmitting the appropriate information to the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier or in any other manner approved by the Trustee. Unless revoked, any such account designation made with respect to this Security by the Holder hereof will remain in effect with respect to any further payments with respect to this Security payable to such Holder. If a payment in a Specified Currency other than U.S. dollars with respect to this Security cannot be made by wire transfer because the required account designation has not been received by the Trustee on or before the requisite date or for any other reason, the Company will cause a notice to be given to the Holder of this Security at its registered address requesting an account designation pursuant to which such wire transfer can be made and such payment will be made within five Business Days after the Trustee's receipt of such a designation meeting the requirements specified above, with the same force and effect as if made on the due date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne (Face of Security continued on next page) -9- 10 by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - GLOBAL SECURITIES Notwithstanding any provision of this security or the Indenture, if this Security is a Global Security, the Company may make any and all payments of principal, premium and interest on this Security pursuant to the Applicable Procedures of the Depositary for this Security as permitted in the Indenture. PAYMENTS DUE ON A BUSINESS DAY Unless otherwise specified on the face of this Security, the following sentence shall apply to this Security. Notwithstanding any provision of this Security or the Indenture other than the following paragraph, if any amount of principal, premium or interest would otherwise be due on this Security on a day (the "Specified Day") that is not a Business Day, such amount may be paid or made available for payment on the next succeeding Business Day (unless the Base Rate is LIBOR and such next succeeding Business Day falls in the next calendar month, in which case such amount may be paid or made available for payment on the next preceding Business Day) with the same force and effect as if such amount were paid on the Specified Day. The provisions of this paragraph shall apply to this Security in lieu of the provisions of Section 113 of the Indenture. Unless otherwise specified on the face of this Security, the following sentence shall apply to each Interest Payment Date other than one that falls on the date of Maturity of the principal hereof. If any such Interest Payment Date would otherwise be a day that is not a Business Day, such Interest Payment Date shall be deferred to the next succeeding Business Day, provided that, if the Base Rate is LIBOR and the next succeeding Business Day would fall in the next calendar month, then such Interest Payment Date will be advanced to the next preceding Business Day. ___________________________ 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. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this (Face of Security continued on next page) -10- 11 Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. (Face of Security continued on next page) -11- 12 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: POPULAR, INC. By____________________________ Name: Title: By____________________________ Name: Title: Attest:________________________ This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By_________________________________ Authorized Officer 13 (Reverse of Security) 1. SECURITIES AND INDENTURE This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities") issued and to be issued in one or more series under an Indenture, dated as of February 15, 1995, as supplemented by the First Supplemental Indenture, dated as of May 8, 1997 and the Second Supplemental Indenture, dated as of August 5, 1999 (together herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), between the Company and The First National Bank of Chicago, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture 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. 2. SERIES AND DENOMINATIONS This Security is one of the series designated on the face hereof, limited to an aggregate initial offering price not to exceed $1,500,000,000 (or the equivalent thereof in any other currency or currencies or currency units) less the aggregate initial offering price of "Securities" (as defined in the Prospectus dated August 4, 1999 relating to debt securities and preferred stock of the Company, Popular International Bank, Inc. and Popular North America, Inc.) authenticated and delivered upon initial issuance, other than the Securities of this series, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to "this series" mean the series of securities designated on the face hereof. The Securities of this series are issuable only in registered form without coupons in "Authorized Denominations", which term shall have the following meaning. For each Security of this series having a principal amount payable in U.S. dollars, the Authorized Denominations shall be $100,000 and any integral multiple of $1,000 in excess thereof. For each Security of this series having a principal amount payable in a Specified Currency other than U.S. dollars, the Authorized Denominations shall be the amount of such Specified Currency equivalent, at the Exchange Rate on the first Business Day next preceding the (Reverse of Security continued on next page) -13- 14 date on which the Company accepts the offer to purchase such Security, to $100,000 and any integral multiple of $1,000 in excess thereof. 3. INTEREST RATE (a) INTEREST RATE RESET. The interest rate on this Security will be reset from time to time, as provided in this Section 3, and each date upon which such rate is reset as so provided is hereinafter called an "Interest Reset Date". Unless otherwise specified on the face hereof, the Interest Reset Dates with respect to this Security will be as follows: (i) if the Interest Reset Period is daily, each Business Day; (ii) if the Interest Reset Period is weekly and the Base Rate is not the Treasury Rate, the Wednesday of each week; (iii) if the Interest Reset Period is weekly and the Base Rate is the Treasury Rate, except as otherwise provided in the definition of "Treasury Interest Determination Date" in Section 3(n) below, the Tuesday of each week; (iv) if the Interest Reset Period is monthly, the third Wednesday of each month; (v) if the Interest Reset Period is quarterly, the third Wednesday of each March, June, September and December; (vi) if the Interest Reset Period is semi-annual, the third Wednesday of each of two months in each year specified under "Interest Reset Period" on the face hereof; and (vii) if the Interest Reset Period is annual, the third Wednesday of the month in each year specified under "Interest Reset Period" on the face hereof; provided, however, that (x) the Base Rate in effect from the Original Issue Date to but excluding the first Interest Reset Date will be the Initial Base Rate and (y) if the Interest Reset Period is daily or weekly, the Base Rate in effect for each day following the second Business Day immediately prior to an Interest Payment Date to but excluding such Interest Payment Date, and for each day (Reverse of Security continued on next page) -14- 15 following the second Business Day immediately prior to the day of Maturity of the principal hereof to but excluding such day of Maturity, will be the Base Rate in effect on such applicable second Business Day; and provided, further, that, if any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be the next succeeding day that is a Business Day, except that, unless otherwise specified on the face hereof, if the Base Rate is LIBOR and such next succeeding Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Subject to applicable provisions of law and except as otherwise specified herein, on each Interest Reset Date the interest rate on this Security shall be the rate determined in accordance with such of the following Sections 3(b) through 3(j) as provided for determination of the Base Rate for this Security. The Calculation Agent shall determine the interest rate of this Security in accordance with the applicable Section below. Unless the Base Rate is LIBOR, the Calculation Agent will determine the interest rate of this Security that takes effect on any Interest Reset Date on a day no later than the Calculation Date (as defined in Section 3(n) below) corresponding to such Interest Reset Date. However, the Calculation Agent need not wait until the Calculation Date to determine such interest rate if the rate information it needs to make such determination in the manner specified in the applicable provisions of Sections 3(b) through 3(j) hereof is available from the relevant sources specified in such applicable provisions. Upon request of the Holder to the Calculation Agent, the Calculation Agent will provide the interest rate then in effect on this Security and, if determined, the interest rate that will become effective on the next Interest Reset Date. (b) DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate is the Commercial Paper Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the Money Market Yield (as defined in Section 3(n) below) of the rate, for the second Business Day immediately preceding such Interest Reset Date (the "Commercial Paper Interest Determination Date"), for commercial paper having the Index Maturity, as published in H.15(519) (as defined in (Reverse of Security continued on next page) -15- 16 Section 3(n) below) under the heading "Commercial Paper -- Nonfinancial". If the Commercial Paper Rate cannot be determined as described above, the following procedures will apply in determining the Commercial Paper Rate: (i) If the rate described above is not published in H.15(519) by 3:00 P.M., New York City time, on the Calculation Date (as defined in Section 3(n) below) corresponding to such Commercial Paper Interest Determination Date, then the Commercial Paper Rate will be the rate, for such Commercial Paper Interest Determination Date, for commercial paper having the Index Maturity, as published in H.15 Daily Update (as defined in Section 3(n) below) or any other recognized electronic source used for displaying that rate, under the heading "Commercial Paper -- Nonfinancial". (ii) If the rate described in clause (i) above does not appear in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Commercial Paper Rate will be the Money Market Yield of the arithmetic mean of the following offered rates for U.S. dollar commercial paper that has the Index Maturity and is placed for an industrial issuer whose bond rating is "AA", or the equivalent, from a nationally recognized rating agency: the rates offered as of 11:00 A.M., New York City time, on such Commercial Paper Interest Determination Date by three leading U.S. dollar commercial paper dealers in New York City selected by the Calculation Agent. (iii) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (ii) above, the Commercial Paper Rate shall be the Commercial Paper Rate in effect on such Commercial Paper Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(b) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (Reverse of Security continued on next page) -16- 17 (c) DETERMINATION OF PRIME RATE. If the Base Rate is the Prime Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, for the second Business Day immediately preceding such Interest Reset Date (the "Prime Interest Determination Date"), published in H.15(519) under the heading "Bank Prime Loan". If the Prime Rate cannot be determined as described above, the following procedures will apply in determining the Prime Rate: (i) If the rate described above is not published in H.15(519) by 3:00 P.M., New York City time, on the Calculation Date corresponding to such Prime Interest Determination Date, then the Prime Rate will be the rate, for such Prime Interest Determination Date, as published in H.15 Daily Update or another recognized electronic source used for the purpose of displaying that rate, under the heading "Bank Prime Loan". (ii) If the rate described in clause (i) above is not published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), then the Prime Rate will be the arithmetic mean of the following rates as they appear on the Reuters Screen US PRIME 1 Page (as defined in Section 3(n) below): the rate of interest publicly announced by each bank appearing on that page as that bank's prime rate or base lending rate, as of 11:00 A.M., New York City time, on such Prime Interest Determination Date. (iii) If fewer than four of the rates referred to in clause (ii) above appear on the Reuters Screen US PRIME 1 Page, the Prime Rate will be the arithmetic mean of the prime rates or base lending rates, as of the close of business on such Prime Interest Determination Date, of three major banks in New York City selected by the Calculation Agent. For this purpose, the Calculation Agent will use rates quoted on the basis of the actual number of days in the year divided by a 360-day year. (Reverse of Security continued on next page) -17- 18 (iv) If fewer than three banks selected by the Calculation Agent are quoting as described in clause (iii) above, the Prime Rate shall be the Prime Rate in effect on such Prime Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(c) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (d) DETERMINATION OF LIBOR. If the Base Rate is LIBOR, the Base Rate that takes effect on any Interest Reset Date shall be LIBOR on the corresponding LIBOR Interest Determination Date (as defined in Section 3(n) below) and shall be determined in accordance with the following provisions: LIBOR will be either of the following rates, whichever appears on the face hereof: (x) the offered rate appearing on the Telerate LIBOR Page (as defined in Section 3(n) below); or (y) the arithmetic mean of the offered rates appearing on the Reuters Screen LIBOR Page (as defined in Section 3(n) below) unless that page by its terms cites only one rate, in which case that rate; in either case, as of 11:00 A.M., London time, on such LIBOR Interest Determination Date for deposits of the Index Currency having the Index Maturity beginning on such Interest Reset Date. If no reference page is specified on the face hereof, Telerate LIBOR Page will apply to this Security: (i) If Telerate LIBOR Page is specified on the face hereof and the rate referenced in clause (x) above does not appear on that page, or if Reuters Screen LIBOR Page is specified on the face hereof and fewer than two of the rates referenced in clause (y) above appear on that page or no rate appears on any page on which only one rate normally appears, then LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on such (Reverse of Security continued on next page) -18- 19 LIBOR Interest Determination Date, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selected by the Calculation Agent: deposits of the Index Currency having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount (as defined in Section 3(n) below). The Calculation Agent will request the principal London office of each such bank to provide a quotation of its rate. If at least two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the quotations. (ii) If fewer than two quotations are provided as described in clause (i) above, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. in the principal financial center for the country issuing the Index Currency, on such LIBOR Interest Determination Date, by three major banks in that financial center selected by the Calculation Agent: loans of the Index Currency having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount. (iii) If fewer than three banks selected by the Calculation Agent are quoting as described in clause (ii) above, LIBOR will be the LIBOR in effect on such LIBOR Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(d) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. If the Base Rate is LIBOR and no currency is specified on the face hereof as the Index Currency, the Index Currency shall be U.S. dollars. (e) [RESERVED] (f) DETERMINATION OF TREASURY RATE. If the Base Rate is the Treasury Rate, the Base Rate that takes effect (Reverse of Security continued on next page) -19- 20 on any Interest Reset Date shall equal the rate for the auction on the corresponding Treasury Interest Determination Date (as defined in Section 3(n) below) of direct obligations of the United States ("Treasury Bills") having the Index Maturity, as that rate appears on Telerate Page 56 or 57 under the heading "Investment Rate". If the Treasury Rate cannot be determined as described above, the following procedures will apply in determining the Treasury Rate: (i) If the rate described above does not appear on either Telerate Page 56 or 57 at 3:00 P.M., New York City time, on the Calculation Date corresponding to such Treasury Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), the Treasury Rate will be the Bond Equivalent Yield (as defined in Section 3(n) below) of the rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High". (ii) If the rate described in clause (i) above does not appear in H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Treasury Rate will be the Bond Equivalent Yield of the auction rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as announced by the U.S. Department of the Treasury. (iii) If the auction rate described in clause (ii) above is not so announced by 3:00 P.M., New York City time, on such Calculation Date, or if no such auction is held for the relevant week, then the Treasury Rate will be the Bond Equivalent Yield of the rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as published in H.15(519) under the heading "U.S. Government Securities/Treasury Bills/Secondary Market". (iv) If the rate described in clause (iii) above does not appear in H.15(519) by 3:00 P.M., New York City time, on such Calculation Date, then the Treasury (Reverse of Security continued on next page) -20- 21 Rate will be the rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "U.S. Government Securities/ Treasury Bills /Secondary Market". (v) If the rate described in clause (iv) above does not appear in H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Treasury Rate will be the Bond Equivalent Yield of the arithmetic mean of the following secondary market bid rates for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity: the rates bid as of approximately 3:30 P.M., New York City time, on such Treasury Interest Determination Date, by three primary U.S. government securities dealers in New York City selected by the Calculation Agent. (vi) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (v) above, the Treasury Rate shall be the Treasury Rate in effect on such Treasury Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(f) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any, specified on the face hereof. (g) DETERMINATION OF CMT RATE. If the Base Rate is the CMT Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the CMT Rate on the second Business Day immediately preceding such Interest Reset Date (the "CMT Interest Determination Date"). "CMT Rate" means the following rate displayed on the Designated CMT Telerate Page (as defined in Section 3(n) below) under the heading " . . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.", under the column for the Designated CMT Index Maturity (as defined in Section 3(n) below): (Reverse of Security continued on next page) -21- 22 (x) if the Designated CMT Telerate Page is Telerate Page 7051, the rate for such CMT Interest Determination Date; or (y) if the Designated CMT Telerate Page is Telerate Page 7052, the weekly or monthly average, as specified on the face hereof, for the week that ends immediately before the week in which such CMT Interest Determination Date falls, or for the month that ends immediately before the month in which such CMT Interest Determination Date falls, as applicable. If the CMT Rate cannot be determined as described above, the following procedures will apply in determining the CMT Rate: (i) If the applicable rate described above is not displayed on the relevant Designated CMT Telerate Page at 3:00 P.M., New York City time, on the Calculation Date corresponding to such CMT Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the CMT Rate will be the applicable Treasury constant maturity rate described above -- i.e., for the Designated CMT Index Maturity and for either such CMT Interest Determination Date or the weekly or monthly average, as applicable -- as published in H.15(519). (ii) If the applicable rate described in clause (i) above is not published in H.15(519) by 3:00 P.M., New York City time, on such Calculation Date, then the CMT Rate will be the Treasury constant maturity rate, or other U.S. Treasury rate, for the Designated CMT Index Maturity and with reference to such CMT Interest Determination Date, that: (a) is published by the Board of Governors of the Federal Reserve System, or the U.S. Department of the Treasury, and (b) is determined by the Calculation Agent to be comparable to the applicable rate formerly displayed on the Designated CMT Telerate Page and published in H.15(519). (iii) If the rate described in clause (ii) above is not published by 3:00 P.M., New York City time, on such Calculation Date, then the CMT Rate will be the (Reverse of Security continued on next page) -22- 23 yield to maturity of the arithmetic mean of the following secondary market offered rates for the most recently issued Treasury Notes (as defined in Section 3(n) below) having an original maturity of approximately the Designated CMT Index Maturity, having a remaining term to maturity of not less than the Designated CMT Index Maturity minus one year and in a Representative Amount: the offered rates, as of approximately 3:30 P.M., New York City time, on such CMT Interest Determination Date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting such offered rates, the Calculation Agent will request quotations from five such primary dealers and will disregard the highest quotation -- or, if there is equality, one of the highest -- and the lowest quotation -- or, if there is equality, one of the lowest. (iv) If the Calculation Agent is unable to obtain three quotations of the kind described in clause (iii) above, the CMT Rate will be the yield to maturity of the arithmetic mean of the following secondary market offered rates for Treasury Notes having an original maturity longer than the Designated CMT Index Maturity, having a remaining term to maturity closest to the Designated CMT Index Maturity and in a Representative Amount: the offered rates, as of approximately 3:30 P.M., New York City time, on such CMT Interest Determination Date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting such offered rates, the Calculation Agent will request quotations from five such primary dealers and will disregard the highest quotation -- or, if there is equality, one of the highest -- and the lowest quotation -- or, if there is equality, one of the lowest. If two Treasury Notes with an original maturity longer than the Designated CMT Index Maturity have remaining terms to maturity that are equally close to the Designated CMT Index Maturity, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity. (v) If fewer than five but more than two such primary dealers are quoting as described in clause (iv) above, then the CMT Rate for such CMT Interest Determination Date will be based on the arithmetic mean (Reverse of Security continued on next page) -23- 24 of the offered rates so obtained, and neither the highest nor the lowest of such quotations will be disregarded. (vi) If two or fewer primary dealers selected by the Calculation Agent are quoting as described in clause (v) above, the CMT Rate shall be the CMT Rate in effect on such CMT Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(g) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (h) DETERMINATION OF CD RATE. If the Base Rate is the CD Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, on the second Business Day immediately preceding such Interest Reset Date (the "CD Interest Determination Date"), for negotiable U.S. dollar certificates of deposit having the Index Maturity as published in H.15(519) under the heading "CDs (Secondary Market)". If the CD Rate cannot be determined as described above, the following procedures will apply in determining the CD Rate: (i) If the rate described above is not published in H.15(519) by 3:00 P.M., New York City time, on the Calculation Date corresponding to such CD Interest Determination Date, then the CD Rate shall be the rate described above as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "CDs (Secondary Market)". (ii) If the rate described in clause (i) above is not published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the CD Rate shall be the arithmetic mean of the following secondary market offered rates for negotiable U.S. dollar certificates of deposit of major U.S. money center banks having a remaining maturity closest to the Index Maturity and in a Representative Amount: the rates (Reverse of Security continued on next page) -24- 25 offered as of 10:00 A.M., New York City time, on such CD Interest Determination Date, by three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in New York City, as selected by the Calculation Agent. (iii) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (ii) above, the CD Rate will be the CD Rate in effect on such CD Interest Determination Date (or, in the case of the first Base Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(h) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (i) DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate is the Federal Funds Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, on the second Business Day immediately preceding such Interest Reset Date (the "Federal Funds Interest Determination Date"), for U.S. dollar Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)", as that rate is displayed on Telerate Page 120. If the Federal Funds Rate cannot be determined as described above, the following procedures will apply in determining the Federal Funds Rate: (i) If the rate described above is not displayed on Telerate Page 120 at 3:00 P.M., New York City time, on the Calculation Date corresponding to such Federal Funds Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the Federal Funds Rate will be the rate described above, on such Federal Funds Interest Determination Date, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "Federal Funds (Effective)". (ii) If the rate described in clause (i) above is not displayed on Telerate Page 120 and is not published in H.15 (519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those (Reverse of Security continued on next page) -25- 26 sources at that time), the Federal Funds Rate will be the arithmetic mean of the rates for the last transaction in overnight, U.S. dollar federal funds arranged, before 9:00 A.M., New York City time, on such Federal Funds Interest Determination Date, by three leading brokers of U.S. dollar federal funds transactions in New York City selected by the Calculation Agent. (iii) If fewer than three brokers selected by the Calculation Agent are quoting as described in clause (ii) above, the Federal Funds Rate will be the Federal Funds Rate in effect on such Federal Funds Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The interest rate determined in accordance with this Section 3(i) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (j) DETERMINATION OF 11TH DISTRICT RATE. If the Base Rate is the 11th District Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the 11th District Rate on the 11th District Interest Determination Date (as defined in Section 3(n) below) corresponding to such Interest Reset Date. The 11th District Rate on any 11th District Interest Determination Date shall be the rate equal to the monthly weighted average cost of funds for the calendar month immediately before such date, as displayed on Telerate Page 7058 under the heading "11th District" as of 11:00 A.M., San Francisco time, on such date. If the 11th District Rate cannot be determined as described above, the following procedures will apply in determining the 11th District Rate: (i) If the rate described above does not appear on Telerate Page 7058 on such 11th District Interest Determination Date, then the 11th District Rate on such date will be the monthly weighted average cost of funds paid by institutions that are members of the Eleventh Federal Home Loan Bank District for the calendar month immediately preceding such date, as most recently announced by the Federal Home Loan Bank of San Francisco as such monthly weighted average cost of funds. (Reverse of Security continued on next page) -26- 27 (ii) If the Federal Home Loan Bank of San Francisco fails to announce the cost of funds described in clause (i) above on or before such 11th District Interest Determination Date, the 11th District Rate that takes effect on such Interest Reset Date will be the 11th District Rate in effect on such 11th District Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The interest rate determined in accordance with this Section 3(j) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (k) MINIMUM AND MAXIMUM LIMITS. Notwithstanding the foregoing, the rate at which interest accrues on this Security (i) shall not at any time be higher than the Maximum Rate, if any, or less than the Minimum Rate, if any, specified on the face hereof, in each case on an accrual basis, and (ii) shall not at any time be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. (l) CALCULATION OF INTEREST. Payments of interest hereon with respect to any Interest Payment Date or at the Maturity of the principal hereof will include interest accrued to but excluding such Interest Payment Date or the date of such Maturity, as the case may be. Accrued interest from the date of issue or from the last date to which interest has been paid or duly provided for shall be calculated by the Calculation Agent by multiplying the Principal Amount by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factors calculated for each day from and including the Original Issue Date or from and including the last date to which interest has been paid or duly provided for, to but excluding the date for which accrued interest is being calculated. The interest factor for each such day shall be expressed as a decimal and computed by dividing the interest rate (also expressed as a decimal) in effect on such day by 360, if the Base Rate is the Commercial Paper Rate, Prime Rate, LIBOR, CD Rate, Federal Funds Rate or 11th District Rate, or by the actual number of days in the year, if the Base Rate is the Treasury Rate or CMT Rate. All percentages resulting from any calculation with respect to this Security will be rounded upward or (Reverse of Security continued on next page) -27- 28 downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point (e.g., 9.876541% (or .09876541) being rounded down to 9.87654% (or .0987654) and 9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655) ). All amounts used in or resulting from any calculation with respect to this Security will be rounded upward or downward, as appropriate, to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward. (m) CALCULATION AGENT AND EXCHANGE RATE AGENT. The Company has initially appointed the institutions named on the face of this Security as Calculation Agent and Exchange Rate Agent, respectively, to act as such agents with respect to this Security, but the Company may, in its sole discretion, appoint any other institution (including any Affiliate of the Company) to serve as any such agent from time to time. The Company will give the Trustee prompt written notice of any change in any such appointment. Insofar as this Security provides for any such agent to obtain rates, quotes or other data from a bank, dealer or other institution for use in making any determination hereunder, such agent may do so from any institution or institutions of the kind contemplated hereby notwithstanding that any one or more of such institutions are any such agent, Affiliates of any such agent, any of the agents named on the cover of the Company's Prospectus Supplement dated August 6, 1999 relating to the Company's Medium-Term Notes, Series 4 or any Affiliate of any such agent or Affiliates of the Company. All determinations made by the Calculation Agent or the Exchange Rate Agent may be made by such agent in its sole discretion and, absent manifest error, shall be conclusive for all purposes and binding on the Holder of this Security and the Company. Neither the Calculation Agent nor the Exchange Rate Agent shall have any liability therefor. (n) DEFINITIONS OF CALCULATION TERMS. As used in this Security, the following terms have the meanings set forth below: (Reverse of Security continued on next page) -28- 29 "Bond Equivalent Yield" means a yield expressed as a percentage and calculated in accordance with the following formula: Bond Equivalent Yield = D x N ------------- x 100, 360 - (D x M) where - "D" equals the annual rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal; - "N" equals 365 or 366, as the case may be; and - "M" equals the actual number of days in the period from and including the relevant Interest Reset Date to but excluding the next succeeding Interest Reset Date. "Business Day" means, for this Security, a day that meets the requirements set forth in each of clauses (i) through (iii) below, in each case to the extent such requirements apply to this Security as specified below: (i) is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York City generally are authorized or obligated by law, regulation or executive order to close; (ii) if the Base Rate is LIBOR, is also a London Business Day; and (iii) if the Specified Currency for payment of principal of or interest on this Security is other than U.S. dollars, is also a day on which banking institutions are not authorized or obligated by law, regulation or executive order to close in the principal financial center of the country issuing such Specified Currency. Solely when used in the third paragraph under the heading "Currency of Payment" on the face of this Security, the meaning of the term "Business Day" shall be determined as if the Base Rate for this Security is not LIBOR. With respect to any particular location, the close of business on any day (Reverse of Security continued on next page) -29- 30 on which business is not being conducted at that location shall be deemed to mean 5:00 P.M., New York City time, on that day. The "Calculation Date" corresponding to any Commercial Paper Interest Determination Date, Prime Interest Determination Date, LIBOR Interest Determination Date, Treasury Interest Determination Date, CMT Interest Determination Date, CD Interest Determination Date, Federal Funds Interest Determination Date or 11th District Interest Determination Date, as the case may be, means the earlier of: (i) the tenth day after such interest determination date or, if any such day is not a Business Day, the next succeeding Business Day; and (ii) the Business Day immediately preceding the Interest Payment Date or the date of Maturity of the principal hereof, whichever is the day on which the next payment of interest will be due. The Calculation Date corresponding to any Interest Reset Date means the Calculation Date corresponding to the relevant interest determination date immediately preceding such Interest Reset Date. "Designated CMT Index Maturity" means, if the Base Rate is the CMT Rate, the Index Maturity for this Security and will be the original period to maturity of a U.S. Treasury security -- either 1, 2, 3, 5, 7, 10, 20 or 30 years -- specified on the face hereof, provided that, if no such original maturity period is so specified, the Designated CMT Index Maturity will be 2 years. "Designated CMT Telerate Page" means, if the Base Rate is the CMT Rate, the Telerate Page specified on the face hereof that displays Treasury constant maturities as reported in H.15(519), provided that, if no Telerate Page is so specified, then the applicable page will be Telerate Page 7052 and provided, further, that if Telerate Page 7052 applies but it is not specified on the face hereof whether the weekly or monthly average applies, the weekly average will apply. The "11th District Interest Determination Date" corresponding to a particular Interest Reset Date will be (Reverse of Security continued on next page) -30- 31 the last working day in San Francisco, in the first calendar month preceding such Interest Reset Date, on which the Federal Home Loan Bank of San Francisco publishes the monthly average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District for the second calendar month preceding such Interest Reset Date. "H.15(519)" means the weekly statistical release entitled "Statistical Release H.15 (519)", or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of H.15 (519) available through the worldwide-web site of the Board of Governors of the Federal Reserve System, at http://www.bog.frb.fed.us/releases/h15/update, or any successor site or publication. The "LIBOR Interest Determination Date" corresponding to any Interest Reset Date means the second London Business Day preceding such Interest Reset Date, unless the Index Currency is pounds sterling, in which case the LIBOR Interest Determination Date will be the Interest Reset Date. "London Business Day" means any day on which dealings in the Index Currency are transacted in the London interbank market. "Money Market Yield" means a yield expressed as a percentage and calculated in accordance with the following formula: Money Market Yield = D x 360 --------------- x 100, 360 - (D x M) where - "D" equals the per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and - "M" equals the actual number of days in the period from and including the relevant Interest Reset Date to but excluding the next succeeding Interest Reset Date. (Reverse of Security continued on next page) -31- 32 "Representative Amount" means an amount that, in the Calculation Agent's judgment, is representative of a single transaction in the relevant market at the relevant time. "Reuters Screen LIBOR Page" means the display on the Reuters Monitor Money Rates Service, or any successor service, on the page designated as "LIBO" or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed. "Reuters Screen US PRIME 1 Page" means the display on the "US PRIME 1" page on the Reuters Monitor Money Rates Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks. "Telerate LIBOR Page" means Telerate Page 3750 or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed. "Telerate Page" means the display on Bridge Telerate, Inc., or any successor service, on the page or pages specified on the face hereof, or any replacement page or pages on that service. The "Treasury Interest Determination Date" corresponding to any Interest Reset Date means the day of the week in which such Interest Reset Date falls on which Treasury bills would normally be auctioned. If, as the result of a legal holiday, an auction is so held on the Friday in the week immediately preceding the week in which such Interest Reset Day falls, such Friday will be the corresponding Treasury Interest Determination Date. If an auction date shall fall on a day that would otherwise be an Interest Reset Date, then such Interest Reset Date shall instead be the first Business Day immediately following such auction date. "Treasury Notes" means direct, noncallable, fixed rate obligations of the U.S. government. References in this Security to U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the United States of America. (Reverse of Security continued on next page) -32- 33 References in this Security to a particular currency other than U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date. References in this Security to a particular heading or headings on any of Designated CMT Telerate Page, H.15(519), H.15 Daily Update, Reuters Screen LIBOR Page, Reuters Screen US Prime 1 Page, Telerate LIBOR Page or Telerate Page include any successor or replacement heading or headings as determined by the Calculation Agent. 4. REDEMPTION AT THE COMPANY'S OPTION Unless a Redemption Commencement Date is specified on the face hereof, except as provided below, this Security shall not be redeemable at the option of the Company before the Stated Maturity Date. If a Redemption Commencement Date is so specified, and unless otherwise specified on the face hereof, this Security is subject to redemption upon not less than 30 days' nor more than 60 days' notice at any time and from time to time on or after the Redemption Commencement Date, in each case as a whole or in part, at the election of the Company and at the applicable Redemption Price specified on the face hereof (expressed as a percentage of the principal amount of this Security to be redeemed), together with accrued interest to the Redemption Date, but interest installments due on or prior to such Redemption Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant record date, all as provided in the Indenture; provided, however, that the first two paragraphs of Section 1103 of the Indenture shall not apply to this Security, and if less than all of the Securities of this series are to be redeemed, the Company may select, from Securities of this series that are subject to redemption pursuant to the terms thereof, the Security or Securities, or portion or portions thereof, to be redeemed. In the event that the Company shall be obligated to pay any Additional Amounts due to a change in law, regulation or interpretation, the Company may, at its option, redeem this Security as a whole at a redemption price of 100% of the principal amount thereof (or, if this Security is an original issue discount note, 100% of the OID (Reverse of Security continued on next page) -33- 34 Default Amount) together with accrued interest to the date fixed for redemption. 5. REPAYMENT AT THE HOLDER'S OPTION Except as otherwise may be provided on the face hereof, if one or more Repayment Dates are specified on the face hereof, this Security will be repayable in whole or in part in increments of $1,000 (provided that the remaining principal amount of any Security surrendered for partial repayment shall at least equal an Authorized Denomination), on any such Repayment Date, in each case at the option of the Holder and at the applicable Repayment Price specified on the face hereof (expressed as a percentage of the principal amount to be repaid), together with accrued interest to the applicable Repayment Date (but interest installments due on or prior to such Repayment Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date as provided in the Indenture). If this security provides for more than one Repayment Date, and the Holder exercises its option to elect repayment, the Holder shall be deemed to have elected repayment on the earliest repayment date after all conditions to such exercise have been satisfied, and references herein to the applicable Repayment Date shall mean such earliest Repayment Date. In order for the exercise of such option to be effective and this Security to be repaid, the Company must receive at the applicable address of the Paying Agent set forth below (or at such other place or places of which the Company shall from time to time notify the Holder of this Security), on any Business Day not later than the 30th, and not earlier than the 60th, calendar day prior to the applicable Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), either (i) this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect (Reverse of Security continued on next page) -34- 35 repayment is being exercised thereby and (d) a guarantee stating that the Company will receive this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that this Security and form duly completed and signed are received by the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The First National Bank of Chicago, Attention: Securities Processing Division, 14 Wall Street, Eighth Floor, New York, New York 10005 (or at such other places as the Company or the Paying Agent shall notify the Holder of this Security). All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final and binding. Notwithstanding the foregoing, (x) if this Security is a Global Security, the option of the Holder to elect repayment may be exercised in accordance with the Applicable Procedures of the Depositary for this Security at least 15 calendar days prior to the applicable Repayment Date and (y) whether or not this Security is a Global Security, the option of the Holder to elect repayment may be exercised in any such manner as the Company may approve. 6. TRANSFER AND EXCHANGE As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of Authorized Denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a (Reverse of Security continued on next page) -35- 36 different Authorized Denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. 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 nor the Trustee nor any such agent shall be affected by notice to the contrary. If this Security is a Global Security, this Security shall be subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities. 7. [RESERVED.] 8. REMEDIES. If an Event of Default 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. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding (Reverse of Security continued on next page) -36- 37 a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. 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 premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 9. MODIFICATION AND WAIVER. 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 (considered together as one class for this purpose). The Indenture also contains provisions (i) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. 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. 10. GOVERNING LAW. -37- 38 THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. -38- 39 CUSIP NO. __________ ORIGINAL ISSUE DATE: __________ POPULAR, INC. MEDIUM-TERM NOTE, SERIES 4 OPTION TO ELECT REPAYMENT TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHT The undersigned hereby irrevocably requests and instructs the Company to repay the Security referred to in this notice (or the portion thereof specified below) at the applicable Repayment Price, together with interest to the Repayment Date, all as provided for in such Security, to the undersigned, whose name, address and telephone number are as follows: ________________________________________________________________________________ (please print name of the undersigned) ________________________________________________________________________________ (please print address of the undersigned) ________________________________________________________________________________ (please print telephone number of the undersigned) If such Security provides for more than one Repayment Date, the undersigned requests repayment on the earliest Repayment Date after the requirements for exercising this option have been satisfied, and references in this notice to the Repayment Date mean such earliest Repayment Date. Terms used in this notice that are defined in such Security are used herein as defined therein. For such Security to be repaid the Company must receive at the applicable address of the Paying Agent set forth below or at such other place or places of which the Company shall from time to time notify the Holder of such Security, any Business Day not later than the 30th or earlier than the 60th calendar day prior to the Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), (i) such Security, with -39- 40 this "Option to Elect Repayment" form duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of such Security, (b) the principal amount of such Security and the amount of such Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that such Security to be repaid with the form entitled "Option to Elect Repayment" on the addendum to the Security duly completed and signed will be received by the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that such Security and form duly completed and signed are received by the Company by such fifth Business Day). The address to which such deliveries are to be made is: The First National Bank of Chicago Attention: Securities Processing Division 14 Wall Street - Eighth Floor New York, New York 10005 or at such other place as the Company or the Paying Agent shall notify the holder of such Security. If less than the entire principal amount of such Security is to be repaid, specify the portion thereof (which shall equal any Authorized Denomination) that the Holder elects to have repaid: __________________________ and specify the denomination or denominations (which shall equal any Authorized Denomination) of the Security or Securities to be issued to the Holder in respect of the portion of such Security not being repaid (in the absence of any specification, one Security will be issued in respect of the portion not being repaid): __________________________ -40- 41 Date: _______________ ______________________________ Notice: The signature to this Option to Elect Repayment must correspond with the name of the Holder as written on the face of such Security in every particular without alteration or enlargement or any other change whatsoever. -41- 42 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Security, 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 the 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. ____________________________ -42- 43 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto ________________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ____________________ /___________________/ ________________________________________________________________________________ ________________________________________________________________________________ (Please Print or Typewrite Name and Address Including Postal Zip Code of Assignee) ________________________________________________________________________________ the attached Security and all rights thereunder, and hereby irrevocably constitutes and appoints________________________________________________________ ________________________________________________________________________________ to transfer said Security on the books of the Company, with full power of substitution in the premises. Dated:______________ Signature Guaranteed _________________________ ________________________________ NOTICE: Signature must be NOTICE: The signature to guaranteed. this assignment must correspond with the name of the Holder as written upon the face of the attached Security in every particular, without alteration or enlargement or any change whatever. -43- EX-4.(Q) 8 FORM OF FIXED RATE MEDIUM-TERM NOTE, SERIES E 1 Exhibit 4(q) [Form of Fixed Rate Medium-Term Note] (FACE OF SECURITY) [IF A GLOBAL SECURITY, INSERT -- THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.] [IF DTC IS THE DEPOSITARY, INSERT -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO POPULAR NORTH AMERICA, INC. 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 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 ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.] 2 CUSIP NO. _______ REGISTERED NO. FXR ______ POPULAR NORTH AMERICA, INC. MEDIUM-TERM NOTES, SERIES E (Fixed Rate) Payment of Principal, Premium, if any, and Interest Guaranteed by POPULAR, INC. The following terms apply to this Security, as and to the extent shown below: PRINCIPAL AMOUNT: REGULAR RECORD DATE: STATED MATURITY DATE: ORIGINAL ISSUE DISCOUNT SECURITY: SPECIFIED CURRENCY: U.S. - Total Amount of OID: dollars for all payments - Yield to Maturity: unless otherwise specified - Initial Accrual Period OID: below: - OID Default Amount: - Default Rate: - payments of principal and any premium: REDEMPTION COMMENCEMENT DATE: - payments of interest: REPAYMENT DATE(S): - Exchange Rate Agent: REDEMPTION OR REPAYMENT PRICE(S): INTEREST RATE: _____% per annum OTHER TERMS: INTEREST PAYMENT DATE(S): ORIGINAL ISSUE DATE*: Terms left blank or marked "N/A", "No", "None" or in a similar manner do not apply to this Security except as otherwise may be specified. Whenever used in this Security, the terms specified above that apply to this Security have the meanings specified above, unless the context requires otherwise. Other terms used in this Security that are not defined herein but that are __________________ * This date shall be the issue date of this Security, unless there is a Predecessor Security, in which case this date shall be the issue date of the first Predecessor Security. (Face of Security continued on next page) -2- 3 defined in the Indenture referred to in Section 1 on the reverse of this Security are used herein as defined therein. Popular North America, Inc., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company", which term includes any successor Person under the Indenture), for value received, hereby promises to pay to _____________, or registered assigns, as principal the Principal Amount on the Stated Maturity Date and to pay interest thereon, from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on the Interest Payment Date(s) in each year, commencing on the first such date that is at least 15 calendar days after the Original Issue Date, and at the Maturity of the principal hereof, at the rate per annum equal to the Interest Rate specified on the face hereof, until the principal hereof is paid or made available for payment. Notwithstanding the foregoing, interest on any principal that is overdue shall be payable on demand. 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 15th calendar day (whether or not a Business Day, as such term is defined in Section 3 on the reverse hereof) next preceding such Interest Payment Date, unless otherwise provided on the face hereof (a "Regular Record Date"). Any interest so payable, but not punctually paid or duly provided for, on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and such Defaulted Interest either may 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 the Holder of this Security not less than 10 days prior to such Special Record Date, or may be paid in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. If this Security is issued with an original issue discount, (i) if an Event of Default with respect to the Security of this series shall have occurred and be continuing, the amount of principal of this Security which may be declared due and payable in the manner, with the effect and subject to the conditions provided in the (Face of Security continued on next page) -3- 4 Indenture, shall be determined in the manner set forth under "OID Default Amount" on the face hereof, and (ii) in the case of a default of payment in principal upon acceleration, redemption, repayment at the option of the Holder or at the Stated Maturity Date hereof, in lieu of any interest otherwise payable, the overdue principal of this Security shall bear interest at a rate of interest per annum equal to the Default Rate stated on the face hereof (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such acceleration, redemption, repayment at the option of the Holder or Stated Maturity Date, as the case may be, to the date payment has been made or duly provided for or such default has been waived in accordance with the terms of the Indenture. CURRENCY OF PAYMENT Payment of principal of (and premium, if any) and interest on this Security will be made in the Specified Currency for such payment, except as provided in this and the next three paragraphs. The Specified Currency for any payment shall be the currency specified as such on the face of this Security unless, at the time of such payment, such currency is not legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date, in which case the Specified Currency for such payment shall be such coin or currency as at the time of such payment is legal tender for the payment of public and private debts in such country. Except as provided in the next paragraph, any payment to be made on this Security in a Specified Currency other than U.S. dollars will be made in U.S. dollars if the Person entitled to receive such payment transmits a written request for such payment to be made in U.S. dollars to the Trustee at its Corporate Trust Office, Attention: Securities Processing Division, on or before the fifth Business Day before the payment is to be made. Such written request may be mailed, hand delivered, telecopied or delivered in any other manner approved by the Trustee. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. (Face of Security continued on next page) -4- 5 The U.S. dollar amount of any payment made pursuant to the immediately preceding paragraph will be determined by the Exchange Rate Agent based upon the highest bid quotation received by the Exchange Rate Agent as of 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date, from three (or, if three are not available, then two) recognized foreign exchange dealers selected by the Exchange Rate Agent in The City of New York, in each case for the purchase by the quoting dealer, for U.S. dollars and for settlement on such payment date of an amount of the Specified Currency for such payment equal to the aggregate amount of such Specified Currency payable on such payment date to all Holders of Securities of this or any other series who elect to receive U.S. dollar payments on such payment date, and at which the applicable dealer commits to execute a contract. If the Exchange Rate Agent determines that two such bid quotations are not available on such second Business Day, such payment will be made in the Specified Currency for such payment. All currency exchange costs associated with any payment in U.S. dollars on this Security will be borne by the Holder entitled to receive such payment, by deduction from such payment. Notwithstanding the foregoing, if any amount payable on this Security is payable on any day (including at Maturity) in a Specified Currency other than U.S. dollars, and if such Specified Currency is not available to the Company on the two Business Days before such day, due to the imposition of exchange controls, disruption in a currency market or any other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligation to pay such amount in such Specified Currency by making such payment in U.S. dollars. The amount of such payment in U.S. dollars shall be determined by the Exchange Rate Agent on the basis of the noon buying rate for cable transfers in The City of New York for such Specified Currency (the "Exchange Rate") as of the latest day before the day on which such payment is to be made. Any payment made under such circumstances in U.S. dollars where the required payment is in other than U.S. dollars will not constitute an Event of Default under the Indenture or this Security. MANNER OF PAYMENT - U.S. DOLLARS Except as provided in the next paragraph, payment of any amount payable on this Security in U.S. dollars will be made at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that (Face of Security continued on next page) -5- 6 purpose), against surrender of this Security in the case of any payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date); provided, however, that, at the option of the Company and subject to the next paragraph, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Payment of any amount payable on this Security in U.S. dollars will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the Borough of Manhattan, The City of New York, if (i) the principal of this Security is at least $10,000,000 and (ii) the Holder entitled to receive such payment transmits a written request for such payment to be made in such manner to the Paying Agent at its Corporate Trust Office, Attention: Securities Processing Division, on or before the Regular Record Date preceding the day on which such payment is to be made; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the Regular Record Date preceding the day on which such payment is to be made, in which case such revocation shall be effective for such payment and all later payments; provided that in the case of any payment due at Maturity of the principal of this Security to be effective any request for revocation must be made no later than the 15th day prior to the Maturity of the principal of this Security. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES (Face of Security continued on next page) -6- 7 Payment of any amount payable on this Security in a Specified Currency other than U.S. dollars will be made by wire transfer of immediately available funds to such account as is maintained in such Specified Currency at a bank or other financial institution acceptable to the Company and the Trustee and as shall have been designated at least five Business Days prior to the applicable payment date by the Person entitled to receive such payment; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Such account designation shall be made by transmitting the appropriate information to the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier or in any other manner approved by the Trustee. Unless revoked, any such account designation made with respect to this Security by the Holder hereof will remain in effect with respect to any further payments with respect to this Security payable to such Holder. If a payment in a Specified Currency other than U.S. dollars with respect to this Security cannot be made by wire transfer because the required account designation has not been received by the Trustee on or before the requisite date or for any other reason, the Company will cause a notice to be given to the Holder of this Security at its registered address requesting an account designation pursuant to which such wire transfer can be made and such payment will be made within five Business Days after the Trustee's receipt of such a designation meeting the requirements specified above, with the same force and effect as if made on the due date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - GLOBAL SECURITIES Notwithstanding any provision of this Security or the Indenture, if this Security is a Global Security, the Company may make any and all payments of principal, premium and interest on this Security pursuant to the Applicable Procedures of the Depositary for this Security as permitted in the Indenture. (Face of Security continued on next page) -7- 8 PAYMENTS DUE ON A BUSINESS DAY Unless otherwise specified on the face of this Security, the following sentence shall apply to this Security. Notwithstanding any provision of this Security or the Indenture, if any amount of principal, premium or interest would otherwise be due on this Security on a day (the "Specified Day") that is not a Business Day, such amount may be paid or made available for payment on the next succeeding Business Day with the same force and effect as if such amount were paid on the Specified Day. The provisions of this paragraph shall apply to the Security in lieu of the provisions of Section 113 of the Indenture. __________________________ 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. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. (Face of Security continued on next page) -8- 9 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: POPULAR NORTH AMERICA, INC. By____________________________ Name: Title: By____________________________ Name: Title: Attest:______________________ This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By_________________________________ Authorized Officer -9- 10 (Reverse of Security) 1. SECURITIES AND INDENTURE This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), all unconditionally guaranteed by Popular, Inc. (hereinafter called the "Guarantor") and issued and to be issued in one or more series under an Indenture, dated as of October 1, 1991, as supplemented by the First Supplemental Indenture, dated as of February 28, 1995, the Second Supplemental Indenture, dated as of May 8, 1997 and the Third Supplemental Indenture, dated as of August 5, 1999 (together herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), duly executed and delivered by the Company and the Guarantor to The First National Bank of Chicago, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture) and as Successor Trustee to Citibank, N.A., and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. 2. SERIES AND DENOMINATIONS This Security is one of the series designated on the face hereof, limited to an aggregate initial offering price not to exceed $1,500,000,000 (or the equivalent thereof in any other currency or currencies or currency units) less the aggregate initial offering price of "Securities" (as defined in the Prospectus dated August 4, 1999 relating to debt securities and preferred stock of the Company, Popular International Bank, Inc. and the Guarantor) authenticated and delivered upon initial issuance, other than the Securities of this series, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to "this series" mean the series of securities designated on the face hereof. The Securities of this series are issuable only in registered form without coupons in "Authorized Denominations", which term shall have the following meaning. For each Security of this series having a principal amount payable in U.S. dollars, the Authorized Denominations shall be $100,000 and any integral multiples of $1,000 in excess (Reverse of Security continued on next page) -10- 11 thereof. For each Security of this series having a principal amount payable in a Specified Currency other than U.S. dollars, the Authorized Denominations shall be the amount of such Specified Currency equivalent, at the Exchange Rate on the first Business Day next preceding the date on which the Company accepts the offer to purchase such Security, to $100,000 and any integral multiples of $1,000 in excess thereof. 3. EXCHANGE RATE AGENT AND RELATED TERMS If the principal of or interest on this Security is payable in a Specified Currency other than U.S. dollars, the Company has initially appointed the institution named on the face of this Security as Exchange Rate Agent to act as such agent with respect to this Security, but the Company may, in its sole discretion, appoint any other institution (including any Affiliate of the Company) to serve as any such agent from time to time. The Company will give the Trustee prompt written notice of any change in any such appointment. Insofar as this Security provides for any such agent to obtain rates, quotes or other data from a bank, dealer or other institution for use in making any determination hereunder, such agent may do so from any institution or institutions of the kind contemplated hereby notwithstanding that any one or more of such institutions are such agent, Affiliates of such agent, any of the agents named on the cover of the Company's Prospectus Supplement dated August 6, 1999 relating to the Company's Medium-Term Notes, Series E or any Affiliate of any such agent or Affiliates of the Company. All determinations made by the Exchange Rate Agent may be made by such agent in its sole discretion and, absent manifest error, shall be conclusive for all purposes and binding on the Holder of this Security and the Company. The Exchange Rate Agent shall not have any liability therefor. Unless otherwise specified on the face hereof, for all purposes of this Security, the term "Business Day" means each Monday, Tuesday, Wednesday, Thursday or Friday that (i) is not a day on which banking institutions in New York City generally are authorized or obligated by law, regulation or executive order to close and (ii) if the Specified Currency for any payment on this Security is other than U.S. dollars, is not a day on which banking institutions in the principal financial center of the country issuing such Specified Currency generally are authorized or obligated by law, regulation or executive order to (Reverse of Security continued on next page) -11- 12 close. With respect to any particular location, the close of business on any day on which business is not being conducted shall be deemed to mean 5:00 P.M., New York City time, on that day. References in this Security to U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the United States of America. References in this Security to a particular currency other than U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date. 4. REDEMPTION AT THE COMPANY'S OPTION Unless a Redemption Commencement Date is specified on the face hereof, except as provided below, this Security shall not be redeemable at the option of the Company before the Stated Maturity Date. If a Redemption Commencement Date is so specified, and unless otherwise specified on the face hereof, this Security is subject to redemption upon not less than 30 days' nor more than 60 days' notice at any time and from time to time on or after the Redemption Commencement Date, in each case as a whole or in part, at the election of the Company and at the applicable Redemption Price specified on the face hereof (expressed as a percentage of the principal amount of this Security to be redeemed), together with accrued interest to the Redemption Date, but interest installments due on or prior to such Redemption Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant record date, all as provided in the Indenture; provided, however, that the first two paragraphs of Section 1103 of the Indenture shall not apply to this Security, and if less than all of the Securities of this series are to be redeemed, the Company may select, from Securities of this series that are subject to redemption pursuant to the terms thereof, the Security or Securities, or portion or portions thereof, to be redeemed. In the event that the Guarantor shall be obligated to pay any Additional Amounts due to a change in law, regulation or interpretation, the Company may, at its option, redeem this Security as a whole at a redemption price of 100% of the principal amount thereof (or, if this Security is an original issue discount note, 100% of the OID (Reverse of Security continued on next page) -12- 13 Default Amount) together with accrued interest to the date fixed for redemption. 5. REPAYMENT AT THE HOLDER'S OPTION Except as otherwise may be provided on the face hereof, if one or more Repayment Dates are specified on the face hereof, this Security will be repayable in whole or in part in an amount equal to any Authorized Denomination (provided that the remaining principal amount of any Security surrendered for partial repayment shall at least equal an Authorized Denomination), on any such Repayment Date, in each case at the option of the Holder and at the applicable Repayment Price specified on the face hereof (expressed as a percentage of the principal amount to be repaid), together with accrued interest to the applicable Repayment Date (but interest installments due on or prior to such Repayment Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date as provided in the Indenture). If this Security provides for more than one Repayment Date and the Holder exercises its option to elect repayment, the Holder shall be deemed to have elected repayment on the earliest Repayment Date after all conditions to such exercise have been satisfied, and references herein to the "applicable Repayment Date" shall mean such earliest Repayment Date. In order for the exercise of such option to be effective and this Security to be repaid, the Company must receive at the applicable address of the Paying Agent set forth below (or at such other place or places of which the Company shall from time to time notify the Holder of this Security), on any Business Day not later than the 30th, and not earlier than the 60th, calendar day prior to the applicable Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), either (i) this Security, with the form below entitled "Option to Elect Repayment" duly com pleted and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that the Company will receive this Security, with (Reverse of Security continued on next page) -13- 14 the form below entitled "Option to Elect Repayment" duly completed and signed, not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that this Security and form duly completed and signed are received by the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The First National Bank of Chicago, Attention: Securities Processing Division, 14 Wall Street, Eighth Floor, New York, New York 10005 (or at such other places as the Company or the Paying Agent shall notify the Holder of this Security). All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final and binding. Notwithstanding the foregoing, (x) if this Security is a Global Security, the option of the Holder to elect repayment may be exercised in accordance with the Applicable Procedures of the Depositary for this Security at least 30 calendar days prior to the applicable Repayment Date and (y) whether or not this Security is a Global Security, the option of the Holder to elect repayment may be exercised in any such manner as the Company may approve. 6. TRANSFER AND EXCHANGE As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of Authorized Denominations and for the same aggregate princi pal amount, will be issued to the designated transferee or transferees. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different Authorized Denomination, as requested by the Holder surrendering the same. (Reverse of Security continued on next page) -14- 15 No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor 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 nor the Guarantor nor the Trustee nor any such agent shall be affected by notice to the contrary. If this Security is a Global Security, this Security shall be subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities. 7. [RESERVED]. 8. REMEDIES. If an Event of Default 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. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this (Reverse of Security continued on next page) -15- 16 Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. 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 premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 9. MODIFICATION AND WAIVER. 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 Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company, the Guarantor 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 (considered together as one class for this purpose). The Indenture also contains provisions (i) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantor with certain provisions of the Indenture and (ii) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. 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. 10. GOVERNING LAW. THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (Reverse of Security continued on next page) -16- 17 GUARANTEE OF POPULAR, INC. Popular, Inc. (the "Guarantor") hereby unconditionally guarantees to the Holder of this Security duly authenticated and delivered by the Trustee, the due and punctual payment of the principal, and premium, if any, of (including any amount in respect of original issue discount), and interest, if any (together with any Additional Amounts payable pursuant to the terms of this Security), on this Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of this Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption, repayment or upon declaration of acceleration or otherwise according to the terms of this Security and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), any premium or interest (together with any Additional Amounts payable pursuant to the terms of this Security), sinking fund payment, or analogous obligation, the Guarantor agrees duly and punctually to pay the same. The Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute and unconditional irrespective of any extension of the time for payment of this Security, any modification of this Security, any invalidity, irregularity or unenforceability of this Security or the Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the Holder of this Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to this Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this guarantee will not be discharged as to this Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium or interest (together with any Additional Amounts payable pursuant to the terms of this Security), thereon. The Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or otherwise, upon making any payment hereunder (i) to be subrogated to the rights of a Holder against the Company (Reverse of Security continued on next page) -17- 18 with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other obligor with respect to such payment. This guarantee shall not be valid or become obligatory for any purpose with respect to this Security until the certificate of authentication on this Security shall have been signed by the Trustee. This guarantee is governed by and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, Popular, Inc. has caused this guarantee to be signed by facsimile by its duly authorized officers and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. POPULAR, INC. By: ________________________ By: ________________________ Attested: ________________________ (Reverse of Security continued on next page) -18- 19 REGISTERED NO. FXR __________ CUSIP NO. __________ ORIGINAL ISSUE DATE: __________ POPULAR NORTH AMERICA, INC. MEDIUM-TERM NOTE, SERIES E OPTION TO ELECT REPAYMENT TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHT The undersigned hereby irrevocably requests and instructs the Company to repay the Security referred to in this notice (or the portion thereof specified below) at the applicable Repayment Price, together with interest to the Repayment Date, all as provided for in such Security, to the undersigned, whose name, address and telephone number are as follows: ________________________________________________________________________________ (please print name of the undersigned) ________________________________________________________________________________ (please print address of the undersigned) ________________________________________________________________________________ (please print telephone number of the undersigned) If such Security provides for more than one Repayment Date, the undersigned requests repayment on the earliest Repayment Date after the requirements for exercising this option have been satisfied, and references in this notice to the Repayment Date mean such earliest Repayment Date. Terms used in this notice that are defined in such Security are used herein as defined therein. For such Security to be repaid the Company must receive at the applicable address of the Trustee set forth below or at such other place or places of which the Company or the Trustee shall from time to time notify the Holder of such Security, any Business Day not later than the 30th or earlier than the 60th calendar day prior to the Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), (i) such Security, with this "Option to Elect Repayment" form duly completed and signed, or (ii) a telegram, telex, facsimile transmission or -19- 20 letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of such Security, (b) the principal amount of such Security and the amount of such Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that such Security to be repaid with the form entitled "Option to Elect Repayment" on the addendum to the Security duly completed and signed will be received by the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that such Security and form duly completed and signed are received by the Company by such fifth Business Day). The address to which such deliveries are to be made is: The First National Bank of Chicago Attention: Securities Processing Division 14 Wall Street - Eighth Floor New York, New York 10005 or at such other place as the Company or the Paying Agent shall notify the holder of such Security. If less than the entire principal amount of such Security is to be repaid, specify the portion thereof (which shall equal any Authorized Denomination) that the Holder elects to have repaid: ___________________________ and specify the denomination or denominations (which shall equal any Authorized Denomination) of the Security or Securities to be issued to the Holder in respect of the portion of such Security not being repaid (in the absence of any specification, one Security will be issued in respect of the portion not being repaid): ___________________________ Date: _______________ ______________________________ Notice: The signature to this Option to Elect Repayment must correspond with the name of the Holder as written on the face of such Security in every particular without -20- 21 alteration or enlargement or any other change whatsoever. ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Security, 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 the 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. _____________________________ -21- 22 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto _______________________________________________________________________________ PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________ /_______________________/ _______________________________________________________________________________ _______________________________________________________________________________ (Please Print or Typewrite Name and Address Including Postal Zip Code of Assignee) _______________________________________________________________________________ the attached Security and all rights thereunder, and hereby irrevocably constitutes and appoints_______________________________________________________ _______________________________________________________________________________ to transfer said Security on the books of the Company, with full power of substitution in the premises. Dated:______________ Signature Guaranteed _________________________ _______________________________ NOTICE: Signature must be NOTICE: The signature to guaranteed. this assignment must correspond with the name of the Holder as written upon the face of the attached Security in every particular, without alteration or enlargement or any change whatever. -22- EX-4.(R) 9 FORM OF FLOATING RATE MEDIUM-TERM NOTE, SERIES E 1 Exhibit 4(r) [Form of Floating Rate Medium-Term Note] (FACE OF SECURITY) [IF A GLOBAL SECURITY, INSERT - THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.] [IF DTC IS THE DEPOSITARY, INSERT -- UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO POPULAR NORTH AMERICA, INC., 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 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 ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.] 2 REGISTERED No. FLR___ CUSIP No. _______ POPULAR NORTH AMERICA, INC. MEDIUM-TERM NOTES, SERIES E (Floating Rate) Payment of Principal, Premium, if any, and Interest Guaranteed by POPULAR, INC. The following terms apply to this Security, as and to the extent shown below: PRINCIPAL AMOUNT: REPAYMENT DATE(S): STATED MATURITY DATE: REDEMPTION OR REPAYMENT PRICE(S): SPECIFIED CURRENCY: U.S. dollars for all payments BASE RATE: unless otherwise specified - Commercial Paper Rate: below: - Prime Rate: - payments of principal and any premium: - LIBOR: - Telerate LIBOR Page: - payments of interest: - Reuters Screen LIBOR Page: - Exchange Rate Agent: - Index Currency ORIGINAL ISSUE DATE*: - Treasury Rate: REGULAR RECORD DATE: - CMT Rate: ORIGINAL ISSUE DISCOUNT SECURITY: - Telerate Page 7051: - Telerate Page 7052 - Total Amount of OID: (weekly/monthly): - Yield to Maturity: - CMT Index Maturity: - Initial Accrual Period - CD Rate: OID: - OID Default Amount: - Federal Funds Rate: - Default Rate: - 11th District Rate: REDEMPTION COMMENCEMENT DATE:
- --------------------- * This date shall be the issue date of this Security, unless there is a Predecessor Security, in which case this date shall be the issue date of the first Predecessor Security. (Face of Security continued on next page) -2- 3 INDEX MATURITY: the third Wednesday of the following: SPREAD: - each of the 12 calendar months in each year SPREAD MULTIPLIER: - each March, June, September and December in each year INITIAL BASE RATE: - each of the following two calendar months in MAXIMUM RATE: each year: - the following calendar MINIMUM RATE: month in each year: subject to the second INTEREST RESET PERIOD: paragraph under "Payments Due on a Business Day" below - if semi-annual, reset will occur in each of INTEREST CALCULATION the following two months DATE(S): as provided in in each year: Section 3(n) on the reverse of this Security (unless - if annual, reset will otherwise specified) occur in the following month in each year: CALCULATION AGENT: - otherwise, reset will occur daily, weekly, OTHER TERMS: monthly or quarterly in each year as follows: INTEREST RESET DATE(S): as provided in Section 3(a) on the reverse of this Security (unless otherwise specified) INTEREST DETERMINATION DATE(S): as provided in Sections 3(b) through 3(j), as applicable, on the reverse of this Security (unless otherwise specified) INTEREST PAYMENT DATE(S): unless otherwise specified,
(Face of Security continued on next page) -3- 4 Terms left blank or marked "N/A", "No", "None" or in a similar manner do not apply to this Security except as otherwise may be specified. Whenever used in this Security, the terms specified above that apply to this Security have the meanings specified above, unless the context requires otherwise. Other terms used in this Security that are not defined herein but that are defined in the Indenture referred to in Section 1 on the reverse of this Security are used herein as defined therein. (Face of Security continued on next page) -4- 5 Popular North America, Inc., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company", which term includes any successor Person under the Indenture), for value received, hereby promises to pay to _____________, or registered assigns, as principal the Principal Amount on the Stated Maturity Date and to pay interest thereon, from the Original Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, on the Interest Payment Date(s) in each year, commencing on the first such date that is at least 15 calendar days after the Original Issue Date, and at the Maturity of the principal hereof, at a rate per annum determined in accordance with the applicable provisions of Section 3 on the reverse hereof, until the principal hereof is paid or made available for payment. Notwithstanding the foregoing, interest on any principal that is overdue shall be payable on demand. 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 15th calendar day (whether or not a Business Day, as such term is defined in Section 3(n) on the reverse hereof) next preceding such Interest Payment Date, unless otherwise provided on the face hereof (a "Regular Record Date"). Any interest so payable, but not punctually paid or duly provided for, on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and such Defaulted Interest either may 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 the Holder of this Security not less than 10 days prior to such Special Record Date, or may be paid in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Security may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. If this Security is issued with an original issue discount, (i) if an Event of Default with respect to the Security of this series shall have occurred and be continuing, the amount of principal of this Security which may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture, shall be determined in the manner set forth under (Face of Security continued on next page) -5- 6 "OID Default Amount" on the face hereof, and (ii) in the case of a default of payment in principal upon acceleration, redemption, repayment at the option of the Holder or at the Stated Maturity Date hereof, in lieu of any interest otherwise payable, the overdue principal of this Security shall bear interest at a rate of interest per annum equal to the Default Rate stated on the face hereof (to the extent that the payment of such interest shall be legally enforceable), which shall accrue from the date of such acceleration, redemption, repayment at the option of the Holder or Stated Maturity Date, as the case may be, to the date payment has been made or duly provided for or such default has been waived in accordance with the terms of the Indenture. CURRENCY OF PAYMENT Payment of principal of (and premium, if any) and interest on this Security will be made in the Specified Currency for such payment, except as provided in this and the next three paragraphs. The Specified Currency for any payment shall be the currency specified as such on the face of this Security unless, at the time of such payment, such currency is not legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date, in which case the Specified Currency for such payment shall be such coin or currency as at the time of such payment is legal tender for the payment of public and private debts in such country. Except as provided in the next paragraph, any payment to be made on this Security in a Specified Currency other than U.S. dollars will be made in U.S. dollars if the Person entitled to receive such payment transmits a written request for such payment to be made in U.S. dollars to the Trustee at its Corporate Trust Office, Attention: Securities Processing Division, on or before the fifth Business Day before the payment is to be made. Such written request may be mailed, hand delivered, telecopied or delivered in any other manner approved by the Trustee. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the fifth Business Day before a payment is to be made, in which case such revocation shall be effective for such and all later payments. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. (Face of Security continued on next page) -6- 7 The U.S. dollar amount of any payment made pursuant to the preceding paragraph will be determined by the Exchange Rate Agent based upon the highest bid quotation received by the Exchange Rate Agent as of 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date, from three (or, if three are not available, then two) recognized foreign exchange dealers selected by the Exchange Rate Agent in The City of New York, in each case for the purchase by the quoting dealer, for U.S. dollars and for settlement on such payment date of an amount of the Specified Currency for such payment equal to the aggregate amount of such Specified Currency payable on such payment date to all Holders of Securities of this or any other series who elect to receive U.S. dollar payments on such payment date, and at which the applicable dealer commits to execute a contract. If the Exchange Rate Agent determines that two such bid quotations are not available on such second Business Day, such payment will be made in the Specified Currency for such payment. All currency exchange costs associated with any payment in U.S. dollars on this Security will be borne by the Holder entitled to receive such payment, by deduction from such payment. Notwithstanding the foregoing, if any amount payable on this Security is payable on any day (including at Maturity) in a Specified Currency other than U.S. dollars, and if such Specified Currency is not available to the Company on the two Business Days before such day, due to the imposition of exchange controls, disruption in a currency market or any other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligation to pay such amount in such Specified Currency by making such payment in U.S. dollars. The amount of such payment in U.S. dollars shall be determined by the Exchange Rate Agent on the basis of the noon buying rate for cable transfers in The City of New York for such Specified Currency (the "Exchange Rate") as of the latest day before the day on which such payment is to be made. Any payment made under such circumstances in U.S. dollars where the required payment is in other than U.S. dollars will not constitute an Event of Default under the Indenture or this Security. MANNER OF PAYMENT - U.S. DOLLARS Except as provided in the next paragraph, payment of any amount payable on this Security in U.S. dollars will be made at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that (Face of Security continued on next page) -7- 8 purpose), against surrender of this Security in the case of any payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date); provided, however, that, at the option of the Company and subject to the next paragraph, payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. Payment of any amount payable on this Security in U.S. dollars will be made by wire transfer of immediately available funds to an account maintained by the payee with a bank located in the Borough of Manhattan, The City of New York, if (i) the principal of this Security is at least $10,000,000 and (ii) the Holder entitled to receive such payment transmits a written request for such payment to be made in such manner to the Paying Agent at its Corporate Trust Office, Attention: Securities Processing Division, on or before the Regular Record Date preceding the day on which such payment is to be made; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Any such request made with respect to any payment on this Security payable to a particular Holder will remain in effect for all later payments on this Security payable to such Holder, unless such request is revoked on or before the Regular Record Date preceding the day on which such payment is to be made, in which case such revocation shall be effective for such and all later payments; provided that in the case of any payment due at Maturity of the principal of this Security to be effective any request for revocation must be made no later than the 15th day prior to the Maturity of the principal of this Security. In the case of any payment of interest payable on an Interest Payment Date, such written request must be made by the Person who is the registered Holder of this Security on the relevant Regular Record Date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. (Face of Security continued on next page) -8- 9 MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES Payment of any amount payable on this Security in a Specified Currency other than U.S. dollars will be made by wire transfer of immediately available funds to such account as is maintained in such Specified Currency at a bank or other financial institution acceptable to the Company and the Trustee and as shall have been designated at least five Business Days prior to the applicable payment date by the Person entitled to receive such payment; provided that, in the case of any such payment due at the Maturity of the principal hereof (other than any payment of interest that first becomes due on an Interest Payment Date), this Security must be surrendered at the office or agency of the Company maintained for that purpose in The City of New York (or at any other office or agency maintained by the Company for that purpose) in time for the Paying Agent to make such payment in such funds in accordance with its normal procedures. Such account designation shall be made by transmitting the appropriate information to the Trustee at its Corporate Trust Office in the Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier or in any other manner approved by the Trustee. Unless revoked, any such account designation made with respect to this Security by the Holder hereof will remain in effect with respect to any further payments with respect to this Security payable to such Holder. If a payment in a Specified Currency other than U.S. dollars with respect to this Security cannot be made by wire transfer because the required account designation has not been received by the Trustee on or before the requisite date or for any other reason, the Company will cause a notice to be given to the Holder of this Security at its registered address requesting an account designation pursuant to which such wire transfer can be made and such payment will be made within five Business Days after the Trustee's receipt of such a designation meeting the requirements specified above, with the same force and effect as if made on the due date. The Company will pay any administrative costs imposed by banks in connection with making payments by wire transfer with respect to this Security, but any tax, assessment or other governmental charge imposed upon any payment will be borne by the Holder of this Security and may be deducted from the payment by the Company or the Paying Agent. MANNER OF PAYMENT - GLOBAL SECURITIES Notwithstanding any provision of this security or the Indenture, if this Security is a Global Security, the Company may make any and all payments of principal, premium (Face of Security continued on next page) -9- 10 and interest on this Security pursuant to the Applicable Procedures of the Depositary for this Security as permitted in the Indenture. PAYMENTS DUE ON A BUSINESS DAY Unless otherwise specified on the face of this Security, the following sentence shall apply to this Security. Notwithstanding any provision of this Security or the Indenture other than the following paragraph, if any amount of principal, premium or interest would otherwise be due on this Security on a day (the "Specified Day") that is not a Business Day, such amount may be paid or made available for payment on the next succeeding Business Day (unless the Base Rate is LIBOR and such next succeeding Business Day falls in the next calendar month, in which case such amount may be paid or made available for payment on the next preceding Business Day) with the same force and effect as if such amount were paid on the Specified Day. The provisions of this paragraph shall apply to this Security in lieu of the provisions of Section 113 of the Indenture. Unless otherwise specified on the face of this Security, the following sentence shall apply to each Interest Payment Date other than one that falls on the date of Maturity of the principal hereof. If any such Interest Payment Date would otherwise be a day that is not a Business Day, such Interest Payment Date shall be deferred to the next succeeding Business Day, provided that, if the Base Rate is LIBOR and the next succeeding Business Day would fall in the next calendar month, then such Interest Payment Date will be advanced to the next preceding Business Day. 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. Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. (Face of Security continued on next page) -10- 11 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: POPULAR NORTH AMERICA, INC. By ------------------------------ Name: Title: By ------------------------------ Name: Title: Attest: --------------- This Security is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. THE FIRST NATIONAL BANK OF CHICAGO, as Trustee By ----------------------------------- Authorized Officer -11- 12 (Reverse of Security) 1. SECURITIES AND INDENTURE This Security is one of a duly authorized issue of securities of the Company (herein called the "Securities"), all unconditionally guaranteed by Popular, Inc. (hereinafter called the "Guarantor") and issued and to be issued in one or more series under an Indenture, dated as of October 1, 1991, as supplemented by the First Supplemental Indenture, dated as of February 28, 1995, the Second Supplemental Indenture, dated as of May 8, 1997 and the Third Supplemental Indenture, dated as of August 5, 1999 (together herein called the "Indenture", which term shall have the meaning assigned to it in such instrument), duly executed and delivered by the Company and the Guarantor to The First National Bank of Chicago, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture) and as Successor Trustee to Citibank, N.A., and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Guarantor, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. 2. SERIES AND DENOMINATIONS This Security is one of the series designated on the face hereof, limited to an aggregate initial offering price not to exceed $1,500,000,000 (or the equivalent thereof in any other currency or currencies or currency units) less the aggregate initial offering price of "Securities" (as defined in the Prospectus dated August 4, 1999 relating to debt securities and preferred stock of the Company, Popular International Bank, Inc. and the Guarantor) authenticated and delivered upon initial issuance, other than the Securities of this series, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to "this series" mean the series of securities designated on the face hereof. The Securities of this series are issuable only in registered form without coupons in "Authorized Denominations", which term shall have the following meaning. For each Security of this series having a principal amount payable in U.S. dollars, the Authorized Denominations shall be $100,000 and any integral multiple of $1,000 in excess thereof. For each Security of this series having a principal amount payable in a Specified Currency other than (Reverse of Security continued on next page) -12- 13 U.S. dollars, the Authorized Denominations shall be the amount of such Specified Currency equivalent, at the Exchange Rate on the first Business Day next preceding the date on which the Company accepts the offer to purchase such Security, to $100,000 and any integral multiple of $1,000 in excess thereof. 3. INTEREST RATE (a) INTEREST RATE RESET. The interest rate on this Security will be reset from time to time, as provided in this Section 3, and each date upon which such rate is reset as so provided is hereinafter called an "Interest Reset Date". Unless otherwise specified on the face hereof, the Interest Reset Dates with respect to this Security will be as follows: (i) if the Interest Reset Period is daily, each Business Day; (ii) if the Interest Reset Period is weekly and the Base Rate is not the Treasury Rate, the Wednesday of each week; (iii) if the Interest Reset Period is weekly and the Base Rate is the Treasury Rate, except as otherwise provided in the definition of "Treasury Interest Determination Date" in Section 3(n) below, the Tuesday of each week; (iv) if the Interest Reset Period is monthly, the third Wednesday of each month; (v) if the Interest Reset Period is quarterly, the third Wednesday of each March, June, September and December; (vi) if the Interest Reset Period is semi-annual, the third Wednesday of each of two months in each year specified under "Interest Reset Period" on the face hereof; and (vii) if the Interest Reset Period is annual, the third Wednesday of the month in each year specified under "Interest Reset Period" on the face hereof; provided, however, that (x) the Base Rate in effect from the Original Issue Date to but excluding the first Interest Reset Date will be the Initial Base Rate and (y) if the Interest Reset Period is daily or weekly, the Base Rate in effect for each day following the second Business Day (Reverse of Security continued on next page) -13- 14 immediately prior to an Interest Payment Date to but excluding such Interest Payment Date, and for each day following the second Business Day immediately prior to the day of Maturity of the principal hereof to but excluding such day of Maturity, will be the Base Rate in effect on such applicable second Business Day; and provided, further, that, if any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be the next succeeding day that is a Business Day, except that, unless otherwise specified on the face hereof, if the Base Rate is LIBOR and such next succeeding Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Subject to applicable provisions of law and except as otherwise specified herein, on each Interest Reset Date the interest rate on this Security shall be the rate determined in accordance with such of the following Sections 3(b) through 3(j) as provided for determination of the Base Rate for this Security. The Calculation Agent shall determine the interest rate of this Security in accordance with the applicable Section below. Unless the Base Rate is LIBOR, the Calculation Agent will determine the interest rate of this Security that takes effect on any Interest Reset Date on a day no later than the Calculation Date (as defined in Section 3(n) below) corresponding to such Interest Reset Date. However, the Calculation Agent need not wait until the Calculation Date to determine such interest rate if the rate information it needs to make such determination in the manner specified in the applicable provisions of Sections 3(b) through 3(j) hereof is available from the relevant sources specified in such applicable provisions. Upon request of the Holder to the Calculation Agent, the Calculation Agent will provide the interest rate then in effect on this Security and, if determined, the interest rate that will become effective on the next Interest Reset Date. (b) DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate is the Commercial Paper Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the Money Market Yield (as defined in Section 3(n) below) of the rate, for the second Business Day immediately preceding such Interest Reset Date (the "Commercial Paper Interest (Reverse of Security continued on next page) -14- 15 Determination Date"), for commercial paper having the Index Maturity, as published in H.15(519) (as defined in Section 3(n) below) under the heading "Commercial Paper -- Nonfinancial". If the Commercial Paper Rate cannot be determined as described above, the following procedures will apply in determining the Commercial Paper Rate: (i) If the rate described above is not published in H.15(519) by 3:00 P.M., New York City time, on the Calculation Date (as defined in Section 3(n) below) corresponding to such Commercial Paper Interest Determination Date, then the Commercial Paper Rate will be the rate, for such Commercial Paper Interest Determination Date, for commercial paper having the Index Maturity, as published in H.15 Daily Update (as defined in Section 3(n) below) or any other recognized electronic source used for displaying that rate, under the heading "Commercial Paper -- Nonfinancial". (ii) If the rate described in clause (i) above does not appear in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Commercial Paper Rate will be the Money Market Yield of the arithmetic mean of the following offered rates for U.S. dollar commercial paper that has the Index Maturity and is placed for an industrial issuer whose bond rating is "AA", or the equivalent, from a nationally recognized rating agency: the rates offered as of 11:00 A.M., New York City time, on such Commercial Paper Interest Determination Date by three leading U.S. dollar commercial paper dealers in New York City selected by the Calculation Agent. (iii) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (ii) above, the Commercial Paper Rate shall be the Commercial Paper Rate in effect on such Commercial Paper Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(b) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (Reverse of Security continued on next page) -15- 16 (c) DETERMINATION OF PRIME RATE. If the Base Rate is the Prime Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, for the second Business Day immediately preceding such Interest Reset Date (the "Prime Interest Determination Date"), published in H.15(519) under the heading "Bank Prime Loan". If the Prime Rate cannot be determined as described above, the following procedures will apply in determining the Prime Rate: (i) If the rate described above is not published in H.15(519) by 3:00 P.M., New York City time, on the Calculation Date corresponding to such Prime Interest Determination Date, then the Prime Rate will be the rate, for such Prime Interest Determination Date, as published in H.15 Daily Update or another recognized electronic source used for the purpose of displaying that rate, under the heading "Bank Prime Loan". (ii) If the rate described in clause (i) above is not published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), then the Prime Rate will be the arithmetic mean of the following rates as they appear on the Reuters Screen US PRIME 1 Page (as defined in Section 3(n) below): the rate of interest publicly announced by each bank appearing on that page as that bank's prime rate or base lending rate, as of 11:00 A.M., New York City time, on such Prime Interest Determination Date. (iii) If fewer than four of the rates referred to in clause (ii) above appear on the Reuters Screen US PRIME 1 Page, the Prime Rate will be the arithmetic mean of the prime rates or base lending rates, as of the close of business on such Prime Interest Determination Date, of three major banks in New York City selected by the Calculation Agent. For this purpose, the Calculation Agent will use rates quoted on the basis of the actual number of days in the year divided by a 360-day year. (Reverse of Security continued on next page) -16- 17 (iv) If fewer than three banks selected by the Calculation Agent are quoting as described in clause (iii) above, the Prime Rate shall be the Prime Rate in effect on such Prime Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(c) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (d) DETERMINATION OF LIBOR. If the Base Rate is LIBOR, the Base Rate that takes effect on any Interest Reset Date shall be LIBOR on the corresponding LIBOR Interest Determination Date (as defined in Section 3(n) below) and shall be determined in accordance with the following provisions: LIBOR will be either of the following rates, whichever appears on the face hereof: (x) the offered rate appearing on the Telerate LIBOR Page (as defined in Section 3(n) below); or (y) the arithmetic mean of the offered rates appearing on the Reuters Screen LIBOR Page (as defined in Section 3(n) below) unless that page by its terms cites only one rate, in which case that rate; in either case, as of 11:00 A.M., London time, on such LIBOR Interest Determination Date for deposits of the Index Currency having the Index Maturity beginning on such Interest Reset Date. If no reference page is specified on the face hereof, Telerate LIBOR Page will apply to this Security: (i) If Telerate LIBOR Page is specified on the face hereof and the rate referenced in clause (x) above does not appear on that page, or if Reuters Screen LIBOR Page is specified on the face hereof and fewer than two of the rates referenced in clause (y) above appear on that page or no rate appears on any page on which only one rate normally appears, then LIBOR will be determined on the basis of the rates, at approximately 11:00 A.M., London time, on such (Reverse of Security continued on next page) -17- 18 LIBOR Interest Determination Date, at which deposits of the following kind are offered to prime banks in the London interbank market by four major banks in that market selected by the Calculation Agent: deposits of the Index Currency having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount (as defined in Section 3(n) below). The Calculation Agent will request the principal London office of each such bank to provide a quotation of its rate. If at least two quotations are provided, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the quotations. (ii) If fewer than two quotations are provided as described in clause (i) above, LIBOR for such LIBOR Interest Determination Date will be the arithmetic mean of the rates for loans of the following kind to leading European banks quoted, at approximately 11:00 A.M. in the principal financial center for the country issuing the Index Currency, on such LIBOR Interest Determination Date, by three major banks in that financial center selected by the Calculation Agent: loans of the Index Currency having the Index Maturity beginning on such Interest Reset Date and in a Representative Amount. (iii) If fewer than three banks selected by the Calculation Agent are quoting as described in clause (ii) above, LIBOR will be the LIBOR in effect on such LIBOR Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(d) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. If the Base Rate is LIBOR and no currency is specified on the face hereof as the Index Currency, the Index Currency shall be U.S. dollars. (e) [RESERVED] (f) DETERMINATION OF TREASURY RATE. If the Base Rate is the Treasury Rate, the Base Rate that takes effect (Reverse of Security continued on next page) -18- 19 on any Interest Reset Date shall equal the rate for the auction on the corresponding Treasury Interest Determination Date (as defined in Section 3(n) below) of direct obligations of the United States ("Treasury Bills") having the Index Maturity, as that rate appears on Telerate Page 56 or 57 under the heading "Investment Rate". If the Treasury Rate cannot be determined as described above, the following procedures will apply in determining the Treasury Rate: (i) If the rate described above does not appear on either Telerate Page 56 or 57 at 3:00 P.M., New York City time, on the Calculation Date corresponding to such Treasury Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), the Treasury Rate will be the Bond Equivalent Yield (as defined in Section 3(n) below) of the rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "U.S. Government Securities/Treasury Bills/Auction High". (ii) If the rate described in clause (i) above does not appear in H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Treasury Rate will be the Bond Equivalent Yield of the auction rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as announced by the U.S. Department of the Treasury. (iii) If the auction rate described in clause (ii) above is not so announced by 3:00 P.M., New York City time, on such Calculation Date, or if no such auction is held for the relevant week, then the Treasury Rate will be the Bond Equivalent Yield of the rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as published in H.15(519) under the heading "U.S. Government Securities/Treasury Bills/Secondary Market". (iv) If the rate described in clause (iii) above does not appear in H.15(519) by 3:00 P.M., New York City time, on such Calculation Date, then the Treasury (Reverse of Security continued on next page) -19- 20 Rate will be the rate, for such Treasury Interest Determination Date and for Treasury Bills having the Index Maturity, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "U.S. Government Securities/ Treasury Bills /Secondary Market". (v) If the rate described in clause (iv) above does not appear in H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the Treasury Rate will be the Bond Equivalent Yield of the arithmetic mean of the following secondary market bid rates for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity: the rates bid as of approximately 3:30 P.M., New York City time, on such Treasury Interest Determination Date, by three primary U.S. government securities dealers in New York City selected by the Calculation Agent. (vi) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (v) above, the Treasury Rate shall be the Treasury Rate in effect on such Treasury Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(f) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any, specified on the face hereof. (g) DETERMINATION OF CMT RATE. If the Base Rate is the CMT Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the CMT Rate on the second Business Day immediately preceding such Interest Reset Date (the "CMT Interest Determination Date"). "CMT Rate" means the following rate displayed on the Designated CMT Telerate Page (as defined in Section 3(n) below) under the heading " . . . Treasury Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.", under the column for the Designated CMT Index Maturity (as defined in Section 3(n) below): (Reverse of Security continued on next page) -20- 21 (x) if the Designated CMT Telerate Page is Telerate Page 7051, the rate for such CMT Interest Determination Date; or (y) if the Designated CMT Telerate Page is Telerate Page 7052, the weekly or monthly average, as specified on the face hereof, for the week that ends immediately before the week in which such CMT Interest Determination Date falls, or for the month that ends immediately before the month in which such CMT Interest Determination Date falls, as applicable. If the CMT Rate cannot be determined as described above, the following procedures will apply in determining the CMT Rate: (i) If the applicable rate described above is not displayed on the relevant Designated CMT Telerate Page at 3:00 P.M., New York City time, on the Calculation Date corresponding to such CMT Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the CMT Rate will be the applicable Treasury constant maturity rate described above -- i.e., for the Designated CMT Index Maturity and for either such CMT Interest Determination Date or the weekly or monthly average, as applicable -- as published in H.15(519). (ii) If the applicable rate described in clause (i) above is not published in H.15(519) by 3:00 P.M., New York City time, on such Calculation Date, then the CMT Rate will be the Treasury constant maturity rate, or other U.S. Treasury rate, for the Designated CMT Index Maturity and with reference to such CMT Interest Determination Date, that: (a) is published by the Board of Governors of the Federal Reserve System, or the U.S. Department of the Treasury, and (b) is determined by the Calculation Agent to be comparable to the applicable rate formerly displayed on the Designated CMT Telerate Page and published in H.15(519). (iii) If the rate described in clause (ii) above is not published by 3:00 P.M., New York City time, on such Calculation Date, then the CMT Rate will be the (Reverse of Security continued on next page) -21- 22 yield to maturity of the arithmetic mean of the following secondary market offered rates for the most recently issued Treasury Notes (as defined in Section 3(n) below) having an original maturity of approximately the Designated CMT Index Maturity, having a remaining term to maturity of not less than the Designated CMT Index Maturity minus one year and in a Representative Amount: the offered rates, as of approximately 3:30 P.M., New York City time, on such CMT Interest Determination Date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting such offered rates, the Calculation Agent will request quotations from five such primary dealers and will disregard the highest quotation -- or, if there is equality, one of the highest -- and the lowest quotation -- or, if there is equality, one of the lowest. (iv) If the Calculation Agent is unable to obtain three quotations of the kind described in clause (iii) above, the CMT Rate will be the yield to maturity of the arithmetic mean of the following secondary market offered rates for Treasury Notes having an original maturity longer than the Designated CMT Index Maturity, having a remaining term to maturity closest to the Designated CMT Index Maturity and in a Representative Amount: the offered rates, as of approximately 3:30 P.M., New York City time, on such CMT Interest Determination Date, of three primary U.S. government securities dealers in New York City selected by the Calculation Agent. In selecting such offered rates, the Calculation Agent will request quotations from five such primary dealers and will disregard the highest quotation -- or, if there is equality, one of the highest -- and the lowest quotation -- or, if there is equality, one of the lowest. If two Treasury Notes with an original maturity longer than the Designated CMT Index Maturity have remaining terms to maturity that are equally close to the Designated CMT Index Maturity, the Calculation Agent will obtain quotations for the Treasury Note with the shorter remaining term to maturity. (v) If fewer than five but more than two such primary dealers are quoting as described in clause (iv) above, then the CMT Rate for such CMT Interest Determination Date will be based on the arithmetic mean (Reverse of Security continued on next page) -22- 23 of the offered rates so obtained, and neither the highest nor the lowest of such quotations will be disregarded. (vi) If two or fewer primary dealers selected by the Calculation Agent are quoting as described in clause (v) above, the CMT Rate shall be the CMT Rate in effect on such CMT Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(g) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (h) DETERMINATION OF CD RATE. If the Base Rate is the CD Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, on the second Business Day immediately preceding such Interest Reset Date (the "CD Interest Determination Date"), for negotiable U.S. dollar certificates of deposit having the Index Maturity as published in H.15(519) under the heading "CDs (Secondary Market)". If the CD Rate cannot be determined as described above, the following procedures will apply in determining the CD Rate: (i) If the rate described above is not published in H.15(519) by 3:00 P.M., New York City time, on the Calculation Date corresponding to such CD Interest Determination Date, then the CD Rate shall be the rate described above as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "CDs (Secondary Market)". (ii) If the rate described in clause (i) above is not published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those sources at that time), the CD Rate shall be the arithmetic mean of the following secondary market offered rates for negotiable U.S. dollar certificates of deposit of major U.S. money center banks having a remaining maturity closest to the Index Maturity and in a Representative Amount: the rates (Reverse of Security continued on next page) -23- 24 offered as of 10:00 A.M., New York City time, on such CD Interest Determination Date, by three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in New York City, as selected by the Calculation Agent. (iii) If fewer than three dealers selected by the Calculation Agent are quoting as described in clause (ii) above, the CD Rate will be the CD Rate in effect on such CD Interest Determination Date (or, in the case of the first Base Reset Date, the Initial Base Rate). The Base Rate determined in accordance with this Section 3(h) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (i) DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate is the Federal Funds Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the rate, on the second Business Day immediately preceding such Interest Reset Date (the "Federal Funds Interest Determination Date"), for U.S. dollar Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)", as that rate is displayed on Telerate Page 120. If the Federal Funds Rate cannot be determined as described above, the following procedures will apply in determining the Federal Funds Rate: (i) If the rate described above is not displayed on Telerate Page 120 at 3:00 P.M., New York City time, on the Calculation Date corresponding to such Federal Funds Interest Determination Date (unless the calculation is made earlier and the rate is available from that source at that time), then the Federal Funds Rate will be the rate described above, on such Federal Funds Interest Determination Date, as published in H.15 Daily Update, or another recognized electronic source used for displaying that rate, under the heading "Federal Funds (Effective)". (ii) If the rate described in clause (i) above is not displayed on Telerate Page 120 and is not published in H.15 (519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date (unless the calculation is made earlier and the rate is available from one of those (Reverse of Security continued on next page) -24- 25 sources at that time), the Federal Funds Rate will be the arithmetic mean of the rates for the last transaction in overnight, U.S. dollar federal funds arranged, before 9:00 A.M., New York City time, on such Federal Funds Interest Determination Date, by three leading brokers of U.S. dollar federal funds transactions in New York City selected by the Calculation Agent. (iii) If fewer than three brokers selected by the Calculation Agent are quoting as described in clause (ii) above, the Federal Funds Rate will be the Federal Funds Rate in effect on such Federal Funds Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The interest rate determined in accordance with this Section 3(i) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (j) DETERMINATION OF 11TH DISTRICT RATE. If the Base Rate is the 11th District Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the 11th District Rate on the 11th District Interest Determination Date (as defined in Section 3(n) below) corresponding to such Interest Reset Date. The 11th District Rate on any 11th District Interest Determination Date shall be the rate equal to the monthly weighted average cost of funds for the calendar month immediately before such date, as displayed on Telerate Page 7058 under the heading "11th District" as of 11:00 A.M., San Francisco time, on such date. If the 11th District Rate cannot be determined as described above, the following procedures will apply in determining the 11th District Rate: (i) If the rate described above does not appear on Telerate Page 7058 on such 11th District Interest Determination Date, then the 11th District Rate on such date will be the monthly weighted average cost of funds paid by institutions that are members of the Eleventh Federal Home Loan Bank District for the calendar month immediately preceding such date, as most recently announced by the Federal Home Loan Bank of San Francisco as such monthly weighted average cost of funds. (Reverse of Security continued on next page) -25- 26 (ii) If the Federal Home Loan Bank of San Francisco fails to announce the cost of funds described in clause (i) above on or before such 11th District Interest Determination Date, the 11th District Rate that takes effect on such Interest Reset Date will be the 11th District Rate in effect on such 11th District Interest Determination Date (or, in the case of the first Interest Reset Date, the Initial Base Rate). The interest rate determined in accordance with this Section 3(j) will be adjusted by the addition or subtraction of the Spread, if any, or by multiplying such Base Rate by the Spread Multiplier, if any. (k) MINIMUM AND MAXIMUM LIMITS. Notwithstanding the foregoing, the rate at which interest accrues on this Security (i) shall not at any time be higher than the Maximum Rate, if any, or less than the Minimum Rate, if any, specified on the face hereof, in each case on an accrual basis, and (ii) shall not at any time be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. (l) CALCULATION OF INTEREST. Payments of interest hereon with respect to any Interest Payment Date or at the Maturity of the principal hereof will include interest accrued to but excluding such Interest Payment Date or the date of such Maturity, as the case may be. Accrued interest from the date of issue or from the last date to which interest has been paid or duly provided for shall be calculated by the Calculation Agent by multiplying the Principal Amount by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factors calculated for each day from and including the Original Issue Date or from and including the last date to which interest has been paid or duly provided for, to but excluding the date for which accrued interest is being calculated. The interest factor for each such day shall be expressed as a decimal and computed by dividing the interest rate (also expressed as a decimal) in effect on such day by 360, if the Base Rate is the Commercial Paper Rate, Prime Rate, LIBOR, CD Rate, Federal Funds Rate or 11th District Rate, or by the actual number of days in the year, if the Base Rate is the Treasury Rate or CMT Rate. All percentages resulting from any calculation with respect to this Security will be rounded upward or (Reverse of Security continued on next page) -26- 27 downward, as appropriate, to the next higher or lower one hundred-thousandth of a percentage point (e.g., 9.876541% (or .09876541) being rounded down to 9.87654% (or .0987654) and 9.876545% (or .09876545) being rounded up to 9.87655% (or .0987655)). All amounts used in or resulting from any calculation with respect to this Security will be rounded upward or downward, as appropriate, to the nearest cent, in the case of U.S. dollars, or to the nearest corresponding hundredth of a unit, in the case of a currency other than U.S. dollars, with one-half cent or one-half of a corresponding hundredth of a unit or more being rounded upward. (m) CALCULATION AGENT AND EXCHANGE RATE AGENT. The Company has initially appointed the institutions named on the face of this Security as Calculation Agent and Exchange Rate Agent, respectively, to act as such agents with respect to this Security, but the Company may, in its sole discretion, appoint any other institution (including any Affiliate of the Company) to serve as any such agent from time to time. The Company will give the Trustee prompt written notice of any change in any such appointment. Insofar as this Security provides for any such agent to obtain rates, quotes or other data from a bank, dealer or other institution for use in making any determination hereunder, such agent may do so from any institution or institutions of the kind contemplated hereby notwithstanding that any one or more of such institutions are any such agent, Affiliates of any such agent, any of the agents named on the cover of the Company's Prospectus Supplement dated August 6, 1999 relating to the Company's Medium-Term Notes, Series E or any Affiliate of any such agent or Affiliates of the Company. All determinations made by the Calculation Agent or the Exchange Rate Agent may be made by such agent in its sole discretion and, absent manifest error, shall be conclusive for all purposes and binding on the Holder of this Security and the Company. Neither the Calculation Agent nor the Exchange Rate Agent shall have any liability therefor. (n) DEFINITIONS OF CALCULATION TERMS. As used in this Security, the following terms have the meanings set forth below: (Reverse of Security continued on next page) -27- 28 "Bond Equivalent Yield" means a yield expressed as a percentage and calculated in accordance with the following formula: Bond Equivalent Yield = D x N x 100, --------------- 360 - (D x M) where - "D" equals the annual rate for Treasury Bills quoted on a bank discount basis and expressed as a decimal; - "N" equals 365 or 366, as the case may be; and - "M" equals the actual number of days in the period from and including the relevant Interest Reset Date to but excluding the next succeeding Interest Reset Date. "Business Day" means, for this Security, a day that meets the requirements set forth in each of clauses (i) through (iii) below, in each case to the extent such requirements apply to this Security as specified below: (i) is a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York City generally are authorized or obligated by law, regulation or executive order to close; (ii) if the Base Rate is LIBOR, is also a London Business Day; and (iii) if the Specified Currency for payment of principal of or interest on this Security is other than U.S. dollars, is also a day on which banking institutions are not authorized or obligated by law, regulation or executive order to close in the principal financial center of the country issuing such Specified Currency. Solely when used in the third paragraph under the heading "Currency of Payment" on the face of this Security, the meaning of the term "Business Day" shall be determined as if the Base Rate for this Security is not LIBOR. With respect to any particular location, the close of business on any day (Reverse of Security continued on next page) -28- 29 on which business is not being conducted at that location shall be deemed to mean 5:00 P.M., New York City time, on that day. The "Calculation Date" corresponding to any Commercial Paper Interest Determination Date, Prime Interest Determination Date, LIBOR Interest Determination Date, Treasury Interest Determination Date, CMT Interest Determination Date, CD Interest Determination Date, Federal Funds Interest Determination Date or 11th District Interest Determination Date, as the case may be, means the earlier of: (i) the tenth day after such interest determination date or, if any such day is not a Business Day, the next succeeding Business Day; and (ii) the Business Day immediately preceding the Interest Payment Date or the date of Maturity of the principal hereof, whichever is the day on which the next payment of interest will be due. The Calculation Date corresponding to any Interest Reset Date means the Calculation Date corresponding to the relevant interest determination date immediately preceding such Interest Reset Date. "Designated CMT Index Maturity" means, if the Base Rate is the CMT Rate, the Index Maturity for this Security and will be the original period to maturity of a U.S. Treasury security -- either 1, 2, 3, 5, 7, 10, 20 or 30 years -- specified on the face hereof, provided that, if no such original maturity period is so specified, the Designated CMT Index Maturity will be 2 years. "Designated CMT Telerate Page" means, if the Base Rate is the CMT Rate, the Telerate Page specified on the face hereof that displays Treasury constant maturities as reported in H.15(519), provided that, if no Telerate Page is so specified, then the applicable page will be Telerate Page 7052 and provided, further, that if Telerate Page 7052 applies but it is not specified on the face hereof whether the weekly or monthly average applies, the weekly average will apply. The "11th District Interest Determination Date" corresponding to a particular Interest Reset Date will be (Reverse of Security continued on next page) -29- 30 the last working day in San Francisco, in the first calendar month preceding such Interest Reset Date, on which the Federal Home Loan Bank of San Francisco publishes the monthly average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District for the second calendar month preceding such Interest Reset Date. "H.15(519)" means the weekly statistical release entitled "Statistical Release H.15 (519)", or any successor publication, published by the Board of Governors of the Federal Reserve System. "H.15 Daily Update" means the daily update of H.15 (519) available through the worldwide-web site of the Board of Governors of the Federal Reserve System, at http://www. bog.frb.fed.us/releases/h15/update, or any successor site or publication. The "LIBOR Interest Determination Date" corresponding to any Interest Reset Date means the second London Business Day preceding such Interest Reset Date, unless the Index Currency is pounds sterling, in which case the LIBOR Interest Determination Date will be the Interest Reset Date. "London Business Day" means any day on which dealings in the Index Currency are transacted in the London interbank market. "Money Market Yield" means a yield expressed as a percentage and calculated in accordance with the following formula: Money Market Yield = D x 360 x 100, -------------- 360 - (D x M)
where - "D" equals the per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and - "M" equals the actual number of days in the period from and including the relevant Interest Reset Date to but excluding the next succeeding Interest Reset Date. (Reverse of Security continued on next page) -30- 31 "Representative Amount" means an amount that, in the Calculation Agent's judgment, is representative of a single transaction in the relevant market at the relevant time. "Reuters Screen LIBOR Page" means the display on the Reuters Monitor Money Rates Service, or any successor service, on the page designated as "LIBO" or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed. "Reuters Screen US PRIME 1 Page" means the display on the "US PRIME 1" page on the Reuters Monitor Money Rates Service, or any successor service, or any replacement page or pages on that service, for the purpose of displaying prime rates or base lending rates of major U.S. banks. "Telerate LIBOR Page" means Telerate Page 3750 or any replacement page or pages on which London interbank rates of major banks for the Index Currency are displayed. "Telerate Page" means the display on Bridge Telerate, Inc., or any successor service, on the page or pages specified on the face hereof, or any replacement page or pages on that service. The "Treasury Interest Determination Date" corresponding to any Interest Reset Date means the day of the week in which such Interest Reset Date falls on which Treasury bills would normally be auctioned. If, as the result of a legal holiday, an auction is so held on the Friday in the week immediately preceding the week in which such Interest Reset Day falls, such Friday will be the corresponding Treasury Interest Determination Date. If an auction date shall fall on a day that would otherwise be an Interest Reset Date, then such Interest Reset Date shall instead be the first Business Day immediately following such auction date. "Treasury Notes" means direct, noncallable, fixed rate obligations of the U.S. government. References in this Security to U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the United States of America. (Reverse of Security continued on next page) -31- 32 References in this Security to a particular currency other than U.S. dollars shall mean, as of any time, the coin or currency that is then legal tender for the payment of public and private debts in the country issuing such currency on the Original Issue Date. References in this Security to a particular heading or headings on any of Designated CMT Telerate Page, H.15(519), H.15 Daily Update, Reuters Screen LIBOR Page, Reuters Screen US Prime 1 Page, Telerate LIBOR Page or Telerate Page include any successor or replacement heading or headings as determined by the Calculation Agent. 4. REDEMPTION AT THE COMPANY'S OPTION Unless a Redemption Commencement Date is specified on the face hereof, except as provided below, this Security shall not be redeemable at the option of the Company before the Stated Maturity Date. If a Redemption Commencement Date is so specified, and unless otherwise specified on the face hereof, this Security is subject to redemption upon not less than 30 days' nor more than 60 days' notice at any time and from time to time on or after the Redemption Commencement Date, in each case as a whole or in part, at the election of the Company and at the applicable Redemption Price specified on the face hereof (expressed as a percentage of the principal amount of this Security to be redeemed), together with accrued interest to the Redemption Date, but interest installments due on or prior to such Redemption Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant record date, all as provided in the Indenture; provided, however, that the first two paragraphs of Section 1103 of the Indenture shall not apply to this Security, and if less than all of the Securities of this series are to be redeemed, the Company may select, from Securities of this series that are subject to redemption pursuant to the terms thereof, the Security or Securities, or portion or portions thereof, to be redeemed. In the event that the Guarantor shall be obligated to pay any Additional Amounts due to a change in law, regulation or interpretation, the Company may, at its option, redeem this Security as a whole at a redemption price of 100% of the principal amount thereof (or, if this Security is an original issue discount note, 100% of the OID (Reverse of Security continued on next page) -32- 33 Default Amount) together with accrued interest to the date fixed for redemption. 5. REPAYMENT AT THE HOLDER'S OPTION Except as otherwise may be provided on the face hereof, if one or more Repayment Dates are specified on the face hereof, this Security will be repayable in whole or in part in increments of $1,000 (provided that the remaining principal amount of any Security surrendered for partial repayment shall at least equal an Authorized Denomination), on any such Repayment Date, in each case at the option of the Holder and at the applicable Repayment Price specified on the face hereof (expressed as a percentage of the principal amount to be repaid), together with accrued interest to the applicable Repayment Date (but interest installments due on or prior to such Repayment Date will be payable to the Holder of this Security, or one or more Predecessor Securities, of record at the close of business on the relevant Record Date as provided in the Indenture). If this security provides for more than one Repayment Date, and the Holder exercises its option to elect repayment, the Holder shall be deemed to have elected repayment on the earliest repayment date after all conditions to such exercise have been satisfied, and references herein to the applicable Repayment Date shall mean such earliest Repayment Date. In order for the exercise of such option to be effective and this Security to be repaid, the Company must receive at the applicable address of the Paying Agent set forth below (or at such other place or places of which the Company shall from time to time notify the Holder of this Security), on any Business Day not later than the 30th, and not earlier than the 60th, calendar day prior to the applicable Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), either (i) this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of this Security, (b) the principal amount of this Security and the amount of this Security to be repaid, (c) a statement that the option to elect (Reverse of Security continued on next page) -33- 34 repayment is being exercised thereby and (d) a guarantee stating that the Company will receive this Security, with the form below entitled "Option to Elect Repayment" duly completed and signed, not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that this Security and form duly completed and signed are received by the Company by such fifth Business Day). Any such election shall be irrevocable. The address to which such deliveries are to be made is The First National Bank of Chicago, Attention: Securities Processing Division, 14 Wall Street, Eighth Floor, New York, New York 10005 (or at such other places as the Company or the Paying Agent shall notify the Holder of this Security). All questions as to the validity, eligibility (including time of receipt) and acceptance of any Security for repayment will be determined by the Company, whose determination will be final and binding. Notwithstanding the foregoing, (x) if this Security is a Global Security, the option of the Holder to elect repayment may be exercised in accordance with the Applicable Procedures of the Depositary for this Security at least 15 calendar days prior to the applicable Repayment Date and (y) whether or not this Security is a Global Security, the option of the Holder to elect repayment may be exercised in any such manner as the Company may approve. 6. TRANSFER AND EXCHANGE As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of Authorized Denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a (Reverse of Security continued on next page) -34- 35 different Authorized Denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor 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 nor the Guarantor nor the Trustee nor any such agent shall be affected by notice to the contrary. If this Security is a Global Security, this Security shall be subject to the provisions of the Indenture relating to Global Securities, including the limitations in Section 305 thereof on transfers and exchanges of Global Securities. 7. [RESERVED.] 8. REMEDIES. If an Event of Default 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. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal (Reverse of Security continued on next page) -35- 36 amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. 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 premium, if any) and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. 9. MODIFICATION AND WAIVER. 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 Guarantor and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company, the Guarantor 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 (considered together as one class for this purpose). The Indenture also contains provisions (i) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company and the Guarantor with certain provisions of the Indenture and (ii) permitting the Holders of a majority in principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences. 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. -36- 37 10. GOVERNING LAW. THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. -37- 38 GUARANTEE OF POPULAR, INC. Popular, Inc. (the "Guarantor") hereby unconditionally guarantees to the Holder of this Security duly authenticated and delivered by the Trustee, the due and punctual payment of the principal, and premium, if any, of (including any amount in respect of original issue discount), and interest, if any (together with any Additional Amounts payable pursuant to the terms of this Security), on this Security and the due and punctual payment of the sinking fund payments, if any, and analogous obligations, if any, provided for pursuant to the terms of this Security, when and as the same shall become due and payable, whether at Stated Maturity or upon redemption, repayment or upon declaration of acceleration or otherwise according to the terms of this Security and of the Indenture. In case of default by the Company in the payment of any such principal (including any amount in respect of original issue discount), any premium or interest (together with any Additional Amounts payable pursuant to the terms of this Security), sinking fund payment, or analogous obligation, the Guarantor agrees duly and punctually to pay the same. The Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute and unconditional irrespective of any extension of the time for payment of this Security, any modification of this Security, any invalidity, irregularity or unenforceability of this Security or the Indenture, any failure to enforce the same or any waiver, modification, consent or indulgence granted to the Company with respect thereto by the Holder of this Security or the Trustee, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a demand or proceeding first against the Company, protest or notice with respect to this Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this guarantee will not be discharged as to this Security except by payment in full of the principal of (including any amount payable in respect of original issue discount), and any premium or interest (together with any Additional Amounts payable pursuant to the terms of this Security), thereon. The Guarantor irrevocably waives any and all rights to which it may be entitled, by operation of law or -38- 39 otherwise, upon making any payment hereunder (i) to be subrogated to the rights of a Holder against the Company with respect to such payment or otherwise to be reimbursed, indemnified or exonerated by the Company in respect thereof or (ii) to receive any payment, in the nature of contribution or for any other reason, from any other obligor with respect to such payment. This guarantee shall not be valid or become obligatory for any purpose with respect to this Security until the certificate of authentication on this Security shall have been signed by the Trustee. This guarantee is governed by and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, Popular, Inc. has caused this guarantee to be signed by facsimile by its duly authorized officers and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. POPULAR, INC. By: ---------------------------- By: ---------------------------- Attested: ------------------------------- -39- 40 CUSIP NO. __________ ORIGINAL ISSUE DATE: __________ POPULAR NORTH AMERICA, INC. MEDIUM-TERM NOTE, SERIES E OPTION TO ELECT REPAYMENT TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE AT THE OPTION OF THE HOLDER AND THE HOLDER ELECTS TO EXERCISE SUCH RIGHT The undersigned hereby irrevocably requests and instructs the Company to repay the Security referred to in this notice (or the portion thereof specified below) at the applicable Repayment Price, together with interest to the Repayment Date, all as provided for in such Security, to the undersigned, whose name, address and telephone number are as follows: - ------------------------------------------------------------------------------ (please print name of the undersigned) - ------------------------------------------------------------------------------ (please print address of the undersigned) - ------------------------------------------------------------------------------ (please print telephone number of the undersigned) If such Security provides for more than one Repayment Date, the undersigned requests repayment on the earliest Repayment Date after the requirements for exercising this option have been satisfied, and references in this notice to the Repayment Date mean such earliest Repayment Date. Terms used in this notice that are defined in such Security are used herein as defined therein. For such Security to be repaid the Company must receive at the applicable address of the Paying Agent set forth below or at such other place or places of which the Company shall from time to time notify the Holder of such Security, any Business Day not later than the 30th or earlier than the 60th calendar day prior to the Repayment Date (or, if either such calendar day is not a Business Day, the next succeeding Business Day), (i) such Security, with -40- 41 this "Option to Elect Repayment" form duly completed and signed, or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc., a commercial bank or a trust company in the United States of America setting forth (a) the name, address and telephone number of the Holder of such Security, (b) the principal amount of such Security and the amount of such Security to be repaid, (c) a statement that the option to elect repayment is being exercised thereby and (d) a guarantee stating that such Security to be repaid with the form entitled "Option to Elect Repayment" on the addendum to the Security duly completed and signed will be received by the Company not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter (provided that such Security and form duly completed and signed are received by the Company by such fifth Business Day). The address to which such deliveries are to be made is: The First National Bank of Chicago Attention: Securities Processing Division 14 Wall Street - Eighth Floor New York, New York 10005 or at such other place as the Company or the Paying Agent shall notify the holder of such Security. If less than the entire principal amount of such Security is to be repaid, specify the portion thereof (which shall equal any Authorized Denomination) that the Holder elects to have repaid: ------------------------ and specify the denomination or denominations (which shall equal any Authorized Denomination) of the Security or Securities to be issued to the Holder in respect of the portion of such Security not being repaid (in the absence of any specification, one Security will be issued in respect of the portion not being repaid): ------------------------ -41- 42 Date: --------------------- ------------------------------ Notice: The signature to this Option to Elect Repayment must correspond with the name of the Holder as written on the face of such Security in every particular without alteration or enlargement or any other change whatsoever. -42- 43 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Security, 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 the 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. ----------------------------- -43- 44 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - --------------------------------------------------------------------------- PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ----------------------- / / - ----------------------- - ---------------------------------------------------------------------------- (Please Print or Typewrite Name and Address Including Postal Zip Code of Assignee) - ---------------------------------------------------------------------------- the attached Security and all rights thereunder, and hereby irrevocably constitutes and appoints --------------------------------------------------- - ---------------------------------------------------------------------------- to transfer said Security on the books of the Company, with full power of substitution in the premises. Dated: ------------------- Signature Guaranteed - ------------------------- ---------------------------- NOTICE: Signature must be NOTICE: The signature to guaranteed. this assignment must correspond with the name of the Holder as written upon the face of the attached Security in every particular, without alteration or enlargement or any change whatever. -44-
EX-8.(A) 10 TAX OPINION OF SULLIVAN & CROMWELL 1 Exhibit 8(a) [letterhead of Sullivan & Cromwell] August 4, 1999 Popular, Inc., Popular International Bank Inc., Popular North America, Inc. , c/o Popular, Inc., 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918. Ladies and Gentlemen: As counsel to Popular, Inc., Popular International Bank, Inc. and Popular North America, Inc. (the "Registrants") in connection with the registration of $1,500,000,000 aggregate principal amount of Debt Securities, we hereby confirm to you our opinions set forth under the headings "United States Taxation" in the Prospectus Supplements each of which forms a part of the Registration Statement of the Registrants to which this opinion is filed as an exhibit, subject to the limitations set forth therein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us under the heading "United States Taxation" in the Prospectus. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Very truly yours, /s/ Sullivan & Cromwell EX-10.(A) 11 ADMINISTRATIVE PROCEDURES, SERIES 4 1 Exhibit 10(a) POPULAR, INC. MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES (DATED AS OF AUGUST 6, 1999) Medium-Term Notes (collectively, the "Notes") in the aggregate principal amount of up to $1,500,000,000 are to be offered on a continuous basis by Popular, Inc. (the "Company") through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Credit Suisse First Boston Corporation ("Credit Suisse First Boston"), Chase Securities Inc. ("Chase Securities") and Popular Securities, Inc. ("Popular Securities") who, as agents (each an "Agent"), have agreed to use their reasonable efforts to solicit offers to purchase the Notes from the Company. The Agents also may purchase Notes as principal for resale. The Notes are being sold pursuant to a Distribution Agreement among the Company, the Agents, and First Chicago Capital Markets, Inc., dated October 6, 1995, as amended on May 23, 1997 and August 6, 1999 (as so amended, the "Distribution Agreement"). The Notes will be issued pursuant to the Indenture, dated as of February 15, 1995, as supplemented by the First Supplemental Indenture, dated as of May 8, 1997 and the Second Supplemental Indenture, dated as of August 5, 1999 (together, the "Indenture"), each between the Company and The First National Bank of Chicago, as trustee (the "Trustee"). A Registration Statement (the "Registration Statement", which term shall include any additional registration statements filed in connection with the Notes as provided in the Distribution Agreement) with respect to the Notes has been filed with the Securities and Exchange Commission (the "Commission"). The Prospectus dated August 6, 1999, as supplemented with respect to the Notes, is herein referred to as the "Prospectus." The most recent supplement to the Prospectus with respect to the specific terms of the Notes is herein referred to as the "Pricing Supplement." The Notes will either be issued (a) in book-entry form and represented by one or more fully registered Notes (each, a "Book-Entry Note") delivered to the appropriate Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC, or (b) in certificated form (each, a "Certificated Note") delivered to the purchaser thereof 2 or a person designated by such purchaser. Owners of beneficial interests in Book-Entry Notes will be entitled to physical delivery of Certificated Notes equal in principal amount to their respective beneficial interests only upon certain limited circumstances described in the Prospectus. General procedures relating to the issuance of all Notes are set forth in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance with the procedures set forth in Part II hereof and Certificated Notes will be issued in accordance with the procedures set forth in Part III hereof. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Indenture or the Notes, as the case may be. PART I: PROCEDURES OF GENERAL APPLICABILITY Date of Issuance/ Authentication: Each Note will be dated as of the date of its authentication by the Trustee or its duly appointed authenticating agent. Each Note shall also bear an original issue date (the "Original Issue Date"). The Original Issue Date shall remain the same for all Notes subsequently issued upon transfer, exchange or substitution of an original Note regardless of their dates of authentication. Maturities: Each Note will mature on a date selected by the purchaser and agreed to by the Company which is not less than nine months from its Original Issue Date; provided, however, that Notes bearing interest at rates determined by reference to selected indices ("Floating Rate Notes") will mature on an Interest Payment Date. Currencies: Each Note shall be denominated in one of the currencies or currency units, as specified in the relevant Pricing Supplement, or in such -2- 3 other currency or currency unit as may be agreed from time to time between the Company and each Agent and as specified in the relevant Pricing Supplement, or, if no currency or currency unit is specified therein, in U.S. dollars. Notes denominated in one or more currencies or currency units other than in U.S. dollars are herein referred to as "Multi-Currency Notes." Notes that have the amount of principal payments determined by reference to an index currency are herein referred to as "Indexed Notes." Denominations: The Notes will be issued in denominations of a minimum of $100,000 and integral multiples of $1,000 in excess thereof. Any Notes denominated other than in U.S. dollars will be issuable in denominations as set forth in the relevant Multi-Currency and Indexed Note Prospectus Supplement. For special provisions relating to Multi-Currency Notes and Indexed Notes, see the related Multi-Currency and Indexed Note Supplement. Registration: Notes will be issued only in fully registered form. Redemption/Repayment: The Notes will be subject to repayment at the option of the Holders thereof in accordance with the terms of the Notes on their respective Optional Repayment Dates, if any. Optional Repayment Dates, if any, will be fixed at the time of sale and set forth in the applicable Pricing Supplement and in the applicable Note. If no Optional Repayment Dates are indicated with respect to a Note, such Note will -3- 4 not be repayable at the option of the Holder prior to Maturity. The Notes will be subject to redemption by the Company on and after their respective Initial Redemption Dates, if any. Initial Redemption Dates, if any, will be fixed at the time of sale and set forth in the applicable Pricing Supplement and in the applicable Note. If no Initial Redemption Dates are indicated with respect to a Note, such Note will not be redeemable prior to Maturity, except as set forth in the Prospectus in the event that the Company is obligated to pay Additional Amounts in respect of the Notes. Calculation of Interest: In the case of Fixed Rate Notes, interest (including payments for partial periods) will be calculated and paid on the basis of a 360-day year of twelve 30-day months. In the case of Floating Rate Notes, interest will be calculated and paid on the basis of the actual number of days in the interest period divided by 360, with the exception of Treasury Rate Notes and CMT Rate Notes, for which interest will be calculated on the basis of the actual number of days in the interest period divided by the actual number of days in the year. If an Interest Payment Date with respect to any Fixed Rate Note falls on a day that is not a Business Day (as hereinafter defined), the payment of interest required to be made on such Interest Payment Date need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date and no interest shall accrue on such payment for the -4- 5 period from and after such Interest Payment Date. If an Interest Payment Date with respect to any Floating Rate Note would otherwise fall on a day that is not a Business Day, such Interest Payment Date will be the following day that is a Business Day, except that in the case of a LIBOR Note, if such day falls in the next calendar month, such Interest Payment Date will be the preceding day that is a Business Day. If the Stated Maturity, or date of earlier redemption or repayment, as the case may be, of a Note is not a Business Day, the payment of principal and interest due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Stated Maturity, or date of earlier redemption or repayment. For special provisions relating to Multi-Currency Notes and Indexed Notes, see the related Multi- Currency and Indexed Note Prospectus Supplement. Acceptance and Rejection of Offers: The Company shall have the sole right to accept offers to purchase Notes from the Company and may reject any such offer in whole or in part. Each Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Notes from the Company received by it. Each Agent shall have the right, in its discretion reasonably exercised, without notice to the Company, to reject any offer to purchase Notes through it in whole or in part. Preparation of -5- 6 Pricing Supplement: If any offer to purchase a Note is accepted by the Company, the Company, with the approval of the Agent which presented the order (the "Presenting Agent"), will prepare a Pricing Supplement reflecting the terms of such Note and file the Pricing Supplement relating to the Notes with the Commission in accordance with Rule 424 under the Act. Information to be included in the Pricing Supplement shall include: 1. the name of the Company; 2. the title of the securities, including series designation, if any; 3. the date of the Pricing Supplement and the date of the Prospectus Supplement to which the Pricing Supplement relates; 4. the Price to Public (but only if (a) the trade is being made on an agency basis and (b) such Price to Public is other than 100%); 5. Net Proceeds to the Company (but only if (a) the trade is being made on a principal basis and (b) the Net Proceeds to the Company is other than 100%), less what would have been the applicable agency commission; 6. the information with respect to the terms of the Notes set forth below (whether or not the applicable Note is a Book-Entry Note) under "Procedures for Notes Issued in Book-Entry Form -- Settlement Procedures", items 2, 3, 7, 8 and 9; and -6- 7 7. any other terms of the Notes not otherwise specified in the Prospectus or Prospectus Supplement including, without limitation, any other terms required by the Prospectus or Prospectus Supplement. One copy of such filed document will be sent by telecopy or overnight express (for delivery not later than 11:00 A.M. on the Business Day next following the trade date) to the applicable Presenting Agent at the following addresses: To Merrill Lynch: If by overnight, express or special delivery: Merrill Lynch & Co., Tritech Services, 40 Colonial Drive, Piscataway, New Jersey 08854, Attention: Prospectus Operations /Susan Putnam, If by all other types of deliveries: Tritech Services, #4 Corporate Place, Corporate Park 287, Piscataway, New Jersey 08854, Attention: Prospectus Operations /Nachman Kimerling Telephone: (908) 885-2769 Telecopy: (908) 885-2774/2775 /2776 To Credit Suisse First Boston: Credit Suisse First Boston Corporation, Five World Trade Center, New York, New York 10048, Attention: Joan Bryan, Transaction Advisory Group Telephone: (212) 322-5105 Telecopy: (212) 803-4096 To Chase Securities: Chase Securities Inc. -7- 8 270 Park Avenue 8th Floor New York, New York 10017 Attention: Medium-Term Note Desk Telephone: (212) 834-4421 Telecopy: (212) 834-6081 To Popular Securities: Popular Securities Inc. 209 Munoz Rivera Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 The Presenting Agent will cause a stickered supplemented Prospectus with the trade confirmation to be delivered to the purchaser of the Note. -8- 9 For record keeping purposes, one copy of each Pricing Supplement shall also be mailed or telecopied to each Agent and the Trustee at the following respective addresses: To Merrill Lynch: Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower, 10th Floor, New York, New York 10281-1310, Attention: MTN Product Management Telephone: (212) 449-7476 Telecopy: (212) 449-2234 To Credit Suisse First Boston: Credit Suisse First Boston Corporation, 55 East 52nd Street, New York, New York 10055, Attention: Short and Medium-Term Finance Department Telephone: (212) 909-3842 Telecopy: (212) 318-1498 To Chase Securities: Chase Securities Inc. 270 Park Avenue 8th Floor New York, New York 10017 Attention: Medium-Term Note Desk Telephone: (212) 834-4421 Telecopy: (212) 834-6081 To Popular Securities: Popular Securities, Inc. 209 Munoz Rivera Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 To the Trustee: The First National Bank of Chicago 153 W. 51st Street 5th Floor -9- 10 New York, NY 10019 Attention: Corporate Trust Administration In each instance that a Pricing Supplement is prepared, the Presenting Agent will affix the Pricing Supplement to supplemented Prospectuses prior to its use. Outdated Pricing Supplements and the Prospectuses to which they are attached (other than those retained for files) will be destroyed. Settlement: The receipt of immediately available funds by the Company in payment for a Note and the authentication and delivery of such Note shall, with respect to such Note, constitute "settlement." Offers accepted by the Company will be settled at a time as the purchaser and the Company shall agree and pursuant to the timetable for settlement set forth in Parts II and III hereof under "Settlement Procedures" with respect to Book-Entry Notes and Certificated Notes, respectively (each such date fixed for settlement, a "Settlement Date"). If procedures A and B of the applicable Settlement Procedures with respect to a particular offer are not completed on or before the time set forth under the applicable "Settlement Procedures Timetable", such offer shall not be settled until the Business Day following the completion of Settlement Procedures A and B or such later date as the purchaser and the Company shall agree. In the event of a purchase of Notes by the Presenting Agent as principal, appropriate settlement details will be set forth in the -10- 11 applicable Terms Agreement to be entered into between the Presenting Agent and the Company pursuant to the Distribution Agreement. Procedure for Changing Rates or Other Variable Terms: When a decision has been reached to change the interest rate or any other variable term on any Notes being offered by the Company, the Company will promptly advise the Agents and the Agents will forthwith suspend solicitation of offers to purchase such Notes. Each Agent will telephone the Company with recommendations as to the changed interest rates or other variable terms. At such time as the Company advises the Agents of the new interest rates or other variable terms, the Agents may resume solicitation of offers to purchase such Notes. Until such time, only "indications of interest" may be recorded. Immediately after acceptance by the Company of an offer to purchase at a new interest rate or new variable term, the Company, the Agents and the Trustee shall follow the procedures set forth under the applicable "Settlement Procedures." Suspension of Solicitation; Amendment or Supplement: The Company may instruct the Agents to suspend solicitation of purchases at any time. Upon receipt of such instructions, the Agents will forthwith suspend solicitation of offers to purchase from the Company until such time as the Company has advised them that solicitation of offers to purchase -11- 12 may be resumed. If the Company decides to amend the Registration Statement (including incorporating any documents by reference therein) or supplement any of such documents (other than to change rates or other variable terms), it will promptly advise the Agents and, except in the case of an amendment by the filing of a document incorporated by reference in the Registration Statement, will furnish each Agent and its counsel with copies of the proposed amendment or supplement. One copy of such filed document, along with a copy of the cover letter sent to the Commission, will be delivered or mailed to the Agents at the following addresses: To Merrill Lynch: Product Management MTNs, Merrill Lynch Money Markets, North Tower, World Financial Center, 10th Floor, New York, New York 10281-1310 Telephone: (212) 449-7476 Telecopy: (212) 449-2234 To Credit Suisse First Boston: Credit Suisse First Boston Corporation, 55 East 52nd Street, New York, New York 10055, Attention: Short and Medium-Term Finance Department Telephone: (212) 909-3842 Telecopy: (212) 318-1498 To Chase Securities: Chase Securities Inc. 270 Park Avenue 8th Floor New York, New York 10017 Attention: Medium-Term Note Desk Telephone: (212) 834-4421 Telecopy: (212) 834-6081 -12- 13 To Popular Securities: Popular Securities, Inc. 209 Munoz Rivera Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 In the event that at the time the solicitation of offers to purchase from the Company is suspended (other than to change interest rates or other variable terms) there shall be any offers to purchase Notes that have been accepted by the Company which have not been settled, the Company will promptly advise the Agents and the Trustee whether such offers may be settled and whether copies of the Prospectus as theretofore amended and/or supplemented as in effect at the time of the suspension may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus: A copy of the most recent Prospectus and Pricing Supplement must accompany or precede the earlier of (a) the written confirmation of a sale sent to a customer or his agent and (b) the delivery of Notes to a customer or his agent. Authenticity of Signatures: The Agents will have no obligation or liability to the Company or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the -13- 14 Company or the Trustee on any Note or related Guarantee. Documents Incorporated by Reference: The Company shall supply each Agent with an adequate supply of all documents incorporated by reference in the Registration Statement. Business Day: "Business Day" has the meaning set forth in the Prospectus Supplement. -14- 15 PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM In connection with the qualification of Book-Entry Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its obligations under a Letter of Representations from the Company and the Trustee to DTC, dated August 6, 1999, and a Medium-Term Note Certificate Agreement between the Trustee and DTC, dated May 26, 1989 (the "Certificate Agreement"), and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: All Fixed Rate Book-Entry Notes having the same Original Issue Date, interest rate, terms of redemption or repayment, if any, and Stated Maturity (collectively, the "Fixed Rate Terms") will be represented initially by a single global security in fully registered form without coupons; and all Floating Rate Book-Entry Notes having the same Original Issue Date, interest rate basis or bases upon which interest may be determined (each, an "Interest Rate Basis"), which may be one or more of the Commercial Paper Rate, the Treasury Rate, LIBOR, the CD Rate, the CMT Rate, the Federal Funds Rate, the Prime Rate, the 11th District Rate, any other rate set forth by the Company, Initial Interest Rate, Index Maturity, Spread and/or Spread Multiplier, if any, Minimum Interest Rate, if any, Maximum Interest Rate, if any, terms of redemption or repayment, if any, and Stated Maturity (collectively, "Floating Rate Terms") will be represented initially by a single Book-Entry Note. -15- 16 Each Book-Entry Note will be dated and issued as of the date of its authentication by the Trustee or its duly appointed authenticating agent. Each Book-Entry Note will bear interest from a date (the "Interest Accrual Date") which will be (a) with respect to an original Book-Entry Note (or any portion thereof), its Original Issue Date and (b) with respect to any Book-Entry Note (or portion thereof) issued subsequently upon exchange or transfer of a Book-Entry Note or in lieu of a destroyed, lost or stolen Book-Entry Note, the most recent Interest Payment Date (or, in the case of Floating Rate Notes with interest rates which reset daily or weekly, the day following the most recent Record Date to which interest has been paid or duly provided for on the predecessor Book-Entry Note or Notes or if no such payment or provision has been made, the Original Issue Date of the predecessor Book-Entry Note or Notes), regardless of the date of authentication of such subsequently issued Book-Entry Note. No Book- Entry Note shall represent any Certificated Note. Identification: The Agents have arranged with the CUSIP Service Bureau (the "CUSIP Service Bureau") of Standard & Poor's Ratings Service, a division of the McGraw-Hill Companies ("S&P"), for the reservation of approximately 900 CUSIP numbers for each rank of Notes which have been reserved for future assignment to Book-Entry Notes representing Notes issued in book-entry form and have delivered to the Company, the Trustee and DTC an initial written list of such CUSIP numbers. The -16- 17 Trustee will assign CUSIP numbers to Book-Entry Notes as described below under Settlement Procedure B. DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has assigned to Book-Entry Notes. The Trustee will notify the Company at any time when fewer than 100 of the respective reserved CUSIP numbers remain unassigned to Book-Entry Notes, and, if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Book-Entry Notes representing Notes issued in book-entry form. Upon obtaining such additional CUSIP numbers, the Company will deliver a list of such additional numbers to the Trustee and DTC. Book-Entry Notes having an aggregate principal amount in excess of $200,000,000 and otherwise required to be represented by the same Global Certificate will instead be represented by two or more Global Certificates which shall be assigned the same CUSIP number. Registration: Each Book-Entry Note will be registered in the name of CEDE & CO., as nominee for DTC, on the register maintained by the Trustee under the Indenture. The beneficial owner of a Book-Entry Note (i.e., an owner of a beneficial interest in a Book-Entry Note), or one or more indirect participants in DTC designated by such owner, will designate one or more participants in DTC (with respect to such Book-Entry Note, the "Participants") to act as agent for such beneficial owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions pro- -17- 18 vided by such Participants, a credit balance with respect to such Book-Entry Note in the account of such Participants. The ownership interest of such beneficial owner in such Book-Entry Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of beneficial interests in a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Book-Entry Note. Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau at any time a written notice specifying (a) the CUSIP numbers of two or more Book-Entry Notes Outstanding on such date that represent Book-Entry Notes having the same Fixed Rate Terms or Floating Rate Terms, as the case may be, other than Original Issue Dates, and for which interest has been paid to the same date; (b) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date for the related Book-Entry Notes, on which such Book-Entry Notes shall be exchanged for a single replacement Book-Entry Note; and (c) a new CUSIP number to be assigned to such replacement Book-Entry Note. Upon receipt of such a notice, DTC will send to its Participants (including the Trustee) a written reorganization -18- 19 notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Trustee will deliver to the CUSIP Service Bureau written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Book-Entry Notes to be exchanged will no longer be valid. On the specified exchange date, the Trustee will exchange such Book-Entry Notes for a single Book-Entry Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Book-Entry Notes will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. Notwithstanding the foregoing, if the Book-Entry Notes to be exchanged exceed $200,000,000 in aggregate principal amount, one replacement Book-Entry Note will be authenticated and issued to represent each $200,000,000 of principal amount of the exchanged Book-Entry Notes and an additional Book-Entry Note will be authenticated and issued to represent any remaining principal amount of such Book-Entry Notes (see "Denominations" below). Denominations: All Book-Entry Notes will be denominated in U.S. dollars and will be issued in denominations of a minimum of $100,000 and integral multiples of $1,000 in excess thereof. Book-Entry Notes will be denominated in principal amounts not in excess of $200,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of $200,000,000 would, but for the preceding sentence, be represented by a single Book-Entry -19- 20 Note, then one Book-Entry Note will be issued to represent each $200,000,000 principal amount of such Note or Notes issued in book-entry form and an additional Book-Entry Note will be issued to represent any remaining principal amount of such Note or Notes issued in book-entry form. In such a case, each of the Book-Entry Notes shall be assigned the same CUSIP number. Interest: General. Interest on each Note issued in book-entry form will accrue from the Interest Accrual Date of the Book-Entry Note representing such Note. Each payment of interest on a Book-Entry Note will include interest accrued through the day preceding, as the case may be, the Interest Payment Date (provided that in the case of Floating Rate Notes with interest rates which reset daily or weekly interest payments will include interest accrued to and including the Regular Record Date immediately preceding the Interest Payment Date), the Stated Maturity Date, Redemption Date or Repayment Date. Interest payable at Maturity of a Book-Entry Note will be payable to the Person to whom the principal of such Note is payable. DTC will arrange for each pending deposit message described under Settlement Procedure C below to be transmitted to S&P, which will use the information in the message to include certain terms of the related Book-Entry Note in the appropriate daily bond report published by S&P. Interest Payment Dates. Interest -20- 21 payments will be made on each Interest Payment Date commencing with the first Interest Payment Date following the Original Issue Date; provided, however, the first payment of interest on any Book-Entry Note originally issued between a Regular Record Date and an Interest Payment Date will occur on the Interest Payment Date following the next Regular Record Date. Fixed Rate Notes. Interest payments on Fixed Rate Book-Entry Notes will be made semiannually on June 15 and December 15 of each year and at Maturity. Floating Rate Notes. Except as provided in Part I under "Calculation of Interest", the Interest Payment Date for a Floating Rate Note will be, in the case of Floating Rate Notes which reset daily, weekly or monthly, on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year as specified in the applicable Pricing Supplement; in the case of Floating Rate Notes which reset quarterly, on the third Wednesday of March, June, September and December of each year; in the case of Floating Rate Notes which reset semiannually, on the third Wednesday of the two months of each year specified in the applicable Pricing Supplement; and in the case of Floating Rate Notes which reset annually, on the third Wednesday of the month specified in the applicable Pricing Supplement; and, in each case, at Maturity. For additional special provisions -21- 22 relating to Floating Rate Notes, see the Prospectus Supplement. Regular Record Dates. The Regular Record Date with respect to any Interest Payment Date for a Fixed Rate Note shall be the May 31 or November 30 preceding such Interest Payment Date. The Regular Record Date with respect to any Interest Payment Date for any Floating Rate Note shall be the date 15 calendar days (whether or not a Business Day) preceding such Interest Payment Date. Notice of Interest Payments and Regular Record Dates. On the first Business Day of January, April, July and October of each year, the Trustee will deliver to the Company and DTC a written list of Regular Record Dates and Interest Payment Dates that will occur during the six-month period beginning on such first Business Day with respect to Floating Rate Book-Entry Notes. Promptly after each Interest Determination Date for Floating Rate Book-Entry Notes, the Company will notify S&P of the interest rates determined on such Interest Determination Date. Payments of Principal and Interest: Payments of Interest Only. Promptly after each Regular Record Date, the Trustee will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Book-Entry Note issued under the Indenture on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will -22- 23 confirm the amount payable on each Book-Entry Note on such Interest Payment Date by reference to the daily bond reports published by Standard & Poor's. On such Interest Payment Date, the Company will pay to the Trustee, and the Trustee in turn will pay to DTC, such total amount of interest due (other than at Maturity), at the times and in the manner set forth below under "Manner of Payment." Payments at Maturity. On or about the first Business Day of each month, the Trustee will deliver to the Company and DTC a written list of principal, interest and premium, if any, to be paid on each Book-Entry Note issued under the Indenture having a Maturity in the following month. The Trustee and DTC will confirm the amounts of such principal, premium and interest payments with respect to a Book-Entry Note on or about the fifth Business Day preceding the Maturity of such Book-Entry Note. At such maturity, the Company will pay to the Trustee, and the Trustee in turn will pay to DTC, the principal amount of such Note, together with interest and premium, if any, due at such Maturity, at the times and in the manner set forth below under "Manner of Payment." Promptly after payment to DTC of the principal, interest and premium, if any, due at the Maturity of such Book-Entry Note, the Trustee will cancel and destroy such Book-Entry Note and deliver to the Company a certificate of destruction therefor. Manner of Payment. The total amount of any principal, premium, -23- 24 if any, and interest due on Book-Entry Notes on any Interest Payment Date or at Maturity shall be paid by the Company to the Trustee in funds available for use as of 9:30 a.m., New York City time, on such date. The Company will make such payment on such Book-Entry Notes by instructing the Trustee to withdraw funds from an account maintained by the Company with the Trustee. The Company will confirm such instructions in writing to the Trustee. Prior to 10:00 a.m., New York City time, on such date or as soon as possible thereafter, the Trustee will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of principal (together with interest and premium, if any) due on a Book-Entry Note on such date. Thereafter on such payment date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names such Notes are recorded in the book-entry system maintained by DTC. Neither the Company nor the Trustee shall have any responsibility or liability for the payment by DTC of the principal of, or interest on, the Book-Entry Notes to such Participants. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Note will be determined and withheld by the -24- 25 Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Note. Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note sold by the Agents, as agents of the Company, will be as follows: A. The Presenting Agent will advise the Company by telephone of the following Settlement information: 1. Taxpayer identification number of the purchaser. 2. Principal amount of the Note. 3. Fixed Rate Notes: (a) interest rate Floating Rate Notes: (a) interest rate basis; (b) initial interest rate; (c) spread and/or spread multiplier, if any; (d) initial interest reset dates; (e) interest reset dates; (f) interest payment dates; (g) index maturity; (h) calculation agent; (i) maximum interest rate, if any; (j) minimum interest rate, if any; (k) alternate rate event spread; and -25- 26 (l) interest rate reset dates. 5. Price to public of the Note. 6. Trade date. 7. Settlement Date (Original Issue Date). 8. Stated Maturity. 9. Redemption provisions, if any: (a) Initial Redemption Date (b) Initial Redemption Percentage (c) Annual Redemption Percentage Reduction 10. Optional Repayment Date(s), if any. 11. Net proceeds to the Company. 12. Presenting Agent's commission. B. The Company will advise the Trustee by telecopy or other method acceptable to the Trustee of the above settlement information received with respect to each Note from the Presenting Agent and shall confirm to the Trustee that the principal amount of Notes, including such Note, issued as of the relevant Settlement Date shall not exceed the limit with respect to the principal amount of Notes -26- 27 specified in the most recent Company Order delivered to the Trustee pursuant to Section 303 of the Indenture. C. The Trustee will assign a CUSIP Number to the Book-Entry Note and will telephone and advise the Company and the Presenting Agent of such CUSIP Number. The Trustee will communicate to DTC and the Presenting Agent through DTC's Participant Terminal System a pending deposit message specifying the following settlement information: 1. The information set forth in Settlement Procedure A. 2. Identification numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Presenting Agent. 3. Identification as a Fixed Rate Book-Entry Note or Floating Rate Book-Entry Note. 4. Initial Interest Payment Date for such Note, number of days by which such date succeeds the related record date for DTC purposes (or, in the case of Floating Rate Notes which reset daily or weekly, the date five calendar days preceding the Interest Payment Date) and, if then calculable, the amount of interest payment on such Interest Payment Date -27- 28 (which amount shall have been confirmed by the Trustee). 5. CUSIP number of the Book-Entry Note representing such Note. 6. Whether such Book-Entry Note represents any other Notes issued or to be issued in book-entry form. D. The Company will deliver to the Trustee a Book-Entry Note representing such Note in a form that has been approved by the Company, the Agents and the Trustee. E. The Trustee will complete and authenticate the Book-Entry Note. F. DTC will credit such Note to the participant account of the Trustee maintained by DTC. G. The Trustee will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Trustee's participant account and credit such Note to the participant account of the Presenting Agent maintained by DTC and (ii) to debit the settlement account of the Presenting Agent and credit the settlement account of the Trustee maintained by DTC, in an amount equal to the price of such Note less the Presenting Agent's commission. Any entry of such a deliver order shall -28- 29 be deemed to constitute a representation and warranty by the Trustee to DTC that (i) the Book-Entry Note has been issued and authenticated and (ii) the Trustee is holding such Book-Entry Note pursuant to the Certificate Agreement between the Trustee and DTC. H. The Presenting Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Presenting Agent's participant account and credit such Note to the participant account of the Participants maintained by DTC and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Presenting Agent maintained by DTC, in an amount equal to the initial public offering price of such Note. I. Transfers of funds in accordance with SDFS delivery orders described in Settlement Procedures G and H will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. J. The Trustee will credit to an account of the Company maintained by the Trustee funds available for immediate use in the amount transferred to the Trustee in accordance with Settlement Procedure G. K. The Trustee will send a copy of the Book-Entry Note to the -29- 30 Company together with a statement setting forth the principal amount of Notes Outstanding as of the related Settlement Date after giving effect to such transaction and all other offers to purchase Notes of which the Company has advised the Trustee but which have not been settled. L. The Presenting Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participant with respect to such Note a confirmation order through DTC's Participant Terminal System or by mailing a written confirmation to such purchaser. Settlement Procedures Timetable: For offers to purchase Notes accepted by the Company, Settlement Procedures "A" through "L" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below:
Settlement Procedure Time --------- ---- A 11:00 a.m. on the trade date B 12:00 noon on the trade date C 2:00 p.m. on the trade date D 3:00 p.m. on the Business Day before Settlement Date E 9:00 a.m. on Settlement Date F 10:00 a.m. on Settlement Date
-30- 31 G-H No later than 2:00 p.m. on Settlement Date I 4:45 p.m. on Settlement Date J-L 5:00 p.m. on Settlement Date
If a sale is to be settled more than one Business Day after the trade date, Settlement Procedures A, B, and C may, if necessary, be completed at any time prior to the specified times on the first Business Day after such trade date. In connection with a sale which is to be settled more than one Business Day after the trade date, if the initial interest rate for a Floating Rate Note is not known at the time that Settlement Procedure A is completed, Settlement Procedures B and C shall be completed as soon as such rates have been determined, but no later than 11:00 a.m. and 2:00 p.m., New York City time, respectively, on the second Business Day before the Settlement Date. Settlement Procedure I is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date. If settlement of a Book-Entry Note is rescheduled or cancelled, the Company shall notify the Trustee and the Trustee will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 p.m., New York City time, on the Business Day immediately preceding the scheduled Settlement Date. -31- 32 Failure to Settle: If the Trustee has not entered an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure G, then upon written request (which may be evidenced by facsimile transmission) of the Company the Trustee shall deliver to DTC, through DTC's Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Note to the participant account of the Trustee maintained at DTC. DTC will process the withdrawal message, provided that such participant account contains a principal amount of the Book-Entry Note representing such Note that is at least equal to the principal amount to be debited. If withdrawal messages are processed with respect to all the Notes represented by a Book-Entry Note, the Trustee will mark such Book-Entry Note "cancelled", make appropriate entries in its records and send such cancelled Book-Entry Note to the Company. The CUSIP number assigned to such Book-Entry Note shall, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. If withdrawal messages are processed with respect to a portion of the Notes represented by a Book-Entry Note, the Trustee will exchange such Book-Entry Note for two Book-Entry Notes, one of which shall represent the Book-Entry Notes for which withdrawal messages are processed and shall be cancelled immediately after issuance, and the other of which shall represent the other Notes previously represented by the surrendered Book-Entry Note and shall bear the -32- 33 CUSIP number of the surrendered Book-Entry Note. If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Presenting Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing Settlement Procedures G and H, respectively. Thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than default by the Presenting Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse the Presenting Agent on an equitable basis for its loss of the use of funds during the period when the funds were credited to the account of the Company. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to a Note that was to have been represented by a Book-Entry Note also representing other Notes, the Trustee will provide, in accordance with Settlement Procedures D and E, for the authentication and issuance of a Book-Entry Note representing such remaining Notes and will make appropriate entries in its records. -33- 34 PART III: PROCEDURES FOR NOTES ISSUED IN CERTIFICATED FORM Denominations: The Certificated Notes, other than Index Notes and Multi-Currency Notes, will be issued in denominations of a minimum of $100,000 and integral multiples of $1,000 in excess thereof. Index Notes and Multi-Currency Notes will be issued in the denominations specified in a related Multi-Currency and Indexed Note Prospectus Supplement and Pricing Supplement. Interest: Each Certificated Note will bear interest in accordance with its terms. Interest will begin to accrue on the Original Issue Date of a Certificated Note for the first Interest Payment Period and on the most recent Interest Payment Date to which interest has been paid for all subsequent Interest Payment Periods. Each payment of interest shall include interest accrued to, but excluding, the date of such payment. Interest payments in respect of Fixed Rate Certificated Notes will be made semiannually on June 15 and December 15 of each year and at Maturity. However, the first payment of interest on any Certificated Note issued between a Regular Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Regular Record Date. The Regular Record Date with respect to any Interest Payment Date for a Fixed Rate Certificated Note shall be the May 31 or November 30 preceding -34- 35 such Interest Payment Date. Interest at Maturity will be payable to the person to whom the principal is payable. Except as provided in Part I under "Calculation of Interest", the Interest Payment Date for a Floating Rate Certificated Note will be, in the case of Floating Rate Notes which reset daily, weekly or monthly, on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year as specified in the applicable Pricing Supplement; in the case of Floating Rate Notes which reset quarterly, on the third Wednesday of March, June, September and December of each year; in the case of Floating Rate Notes which reset semiannually, on the third Wednesday of the two months of each year specified in the applicable Pricing Supplement; or, in the case of 11th District Rate Notes, on the first Business Day of each month or the first Business Day of each March, June, September or December as specified in the applicable Pricing Supplement and in the case of Floating Rate Notes which reset annually, on the third Wednesday of the month specified in the applicable Pricing Supplement; and, in each case, at Maturity. The Regular Record Date with respect to a Floating Rate Note shall be the date 15 calendar days (whether or not a Business Day) preceding an Interest Payment Date. Notwithstanding the above, in the case of Floating Rate Certificated Notes having interest rates which reset daily or weekly, interest -35- 36 payments shall include accrued interest from, and including, the date of issue or from, but excluding, the last date in respect of which interest has been accrued and paid, as the case may be, through, and including, the Regular Record Date, except that at Maturity the interest payable will include interest accrued to, but excluding, the date of Maturity. For additional special provisions relating to Floating Rate Certificated Notes, see the Prospectus Supplement. Payments of Principal and Interest: Upon presentment and delivery of the Certificated Note, the Trustee or the Company's duly authorized agent will pay the principal amount of each Certificated Note at Maturity and the final installment of interest in next-day funds. All interest payments in U.S. dollars on a Certificated Note, other than interest due at Maturity, will be made by check drawn on the Trustee or the Company's duly authorized agent and mailed by such Trustee or agent to the person entitled thereto as provided in the Certificated Note. However, the Registered Owners (as hereinafter defined) of ten million dollars or more in aggregate principal amount of the same series of Certificated Notes (whether having identical or different terms and provisions) shall be entitled to receive payments of interest, other than at Maturity, by wire transfer of immediately available funds if appropriate wire transfer instructions have been received in writing by the appropriate Trustee or such agent not less than 16 days prior -36- 37 to the applicable Interest Payment Date. For special provisions relating to Multi-Currency Notes and Indexed Notes, see the related Multi-Currency and Indexed Note Prospectus Supplement. The Trustee will provide monthly to the Company a list of the principal and interest in each currency to be paid on Certificated Notes maturing in the next succeeding month. Such Trustee or agent will be responsible for withholding taxes on interest paid as required by applicable law, but shall be relieved from any such responsibility if it acts in good faith and in reliance upon an opinion of counsel. Certificated Notes presented to the Trustee or the Company's duly authorized agent at Maturity for payment will be cancelled by such Trustee or agent. All cancelled Certificated Notes held by such Trustee shall be destroyed, and the Trustee shall furnish to the Company a certificate with respect to such destruction. Settlement Procedures: Settlement Procedures with regard to each Certificated Note purchased through the Agents, as agents, shall be as follows: A. Each Agent will advise the Company by telephone of the following Settlement information with regard to each Certificated Note: 1. Exact name in which the Certificated Note is to -37- 38 be registered (the "Registered Owner"). 2. Exact address or addresses of the Registered Owner for delivery, notices and payments of principal, premium, if any, and interest. 3. Taxpayer identification number of the Registered Owner. 4. Principal amount of the Certificated Note. 5. Denomination of the Certificated Note. 6. Fixed Rate Notes: (a) interest rate Floating Rate Notes: (a) interest rate basis or bases; (b) initial interest rate; (c) spread or spread multiplier, if any; (d) initial interest reset date; (e) interest reset dates; (f) interest payment dates; (g) index maturity; (h) calculation agent; (i) maximum interest rates, if any; (j) minimum interest rate, if any; (k) alternate rate event spread; and -38- 39 (l) interest determination dates Indexed Notes: (a) specified currency; (b) indexed currency; and (c) base rate of exchange. 8. Currency or currency unit in which the Certificated Note is to be denominated. 9. Price to public of the Certificated Note. 10. Settlement Date (Original Issue Date). 11. Stated Maturity. 12. Redemption provisions, if any: (a) Initial Redemption Date (b) Initial Redemption Percentage (c) Annual Redemption Percentage Reduction 13. Optional Repayment Date(s), if any. 14. Net proceeds to the Company. 15. Presenting Agent's commission. B. The Company shall provide to the Trustee by telecopy or other method acceptable to the Trustee the above Settlement -39- 40 information with respect to each Certificated Note received from the Agents, the name of the Presenting Agent and shall confirm to the Trustee that the principal amount of Notes, including such Certificated Note, issued as of the relevant Settlement Date shall not exceed the limit with respect to the principal amount of Notes specified in the most recent Company Order delivered to the Trustee pursuant to Section 303 of the Indenture. The Company also shall cause the Trustee or its duly appointed agent to issue, authenticate and deliver Certificated Notes in accordance with the Settlement Procedures Timetable set forth below. The Company also shall provide to the Trustee and the Presenting Agent a copy of the applicable Pricing Supplement. The Company also shall provide to the Trustee and the Presenting Agent a copy of a Multi-Currency and Indexed Note Supplement, if applicable. C. The Trustee or its duly appointed agent will complete and authenticate the Certificated Notes, including the Guarantee, in forms approved by the Company. D. With respect to each trade, the Trustee will deliver the Certificated Notes and one photocopy thereof to the -40- 41 applicable Presenting Agent at the following addresses: Merrill Lynch & Co., Money Markets Clearance, 55 Water Street, 3rd Floor, N.S.C.C. Window, New York, New York 10041, Attention: Al Mitchell Telephone: (212) 558-2405 Telecopy: (212) 558-2457 Credit Suisse First Boston Corporation, Five World Trade Center, New York, New York 10048, Attention: Paul Riley Chase Securities, Inc., 55 Water Street, Room 226, Windows 17 and 18, New York, New York 10041 Telephone: (212) 638-6787 Telecopy: (212) 638-5618 Popular Securities, Inc. 209 Munoz Rivera Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 The Trustee will keep Stub 1. The Presenting Agent will acknowledge receipt of the Certificated Note through a broker's receipt and will keep the photocopy. Delivery of the Certificated Note will be made only against such acknowledgment of receipt. Upon determination that the Certificated Note, including the related Guarantee, has been authorized, delivered and completed as aforementioned, the Presenting Agent will wire -41- 42 the net proceeds of the Certificated Note after deduction of its applicable commission to the Company pursuant to standard wire instructions given by the Company. E. The Presenting Agent will deliver the Certificated Note, the related Guarantee endorsed thereon, as well as a copy of the Prospectus and any applicable Pricing Supplement or Supplements received from the Trustee, to the purchaser against payment in immediately available funds. F. The Trustee will send a photocopy of the Certified Note to the Company. Settlement Procedures Timetable: For offers to purchase Certificated Notes accepted by the Company, Settlement Procedures "A" through "F" set forth above shall be completed on or before the respective times set forth below:
Settlement Procedure Time --------- ---- A-B 3:00 PM on Business Day prior to Settlement C-D 2:15 PM on Settlement Date E 3:00 PM on Settlement Date F 5:00 PM on Settlement Date
Failure to Settle: In the event that a purchaser of a Certificated Note from the Company shall either fail to accept delivery of or make payment for a -42- 43 Certificated Note on the date fixed for settlement, the Presenting Agent will forthwith notify the Trustee and the Company by telephone, confirmed in writing, and return the Certificated Note to such Trustee. The Trustee or the Company's duly authorized agent, upon receipt of the Certificated Note from the Presenting Agent, will immediately advise the Company, and the Company will promptly arrange to credit the account of the Presenting Agent in an amount of immediately available funds equal to the amount previously paid by the Presenting Agent in settlement for the Certificated Note. Such credits will be made on the Settlement Date if possible, and in any event not later than the Business Day following the Settlement Date; provided that the Company has received notice on the same day. If such failure shall have occurred for any reason other than failure by the Presenting Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse the Presenting Agent on an equitable basis for its loss of the use of funds during the period when the funds were credited to the account of the Company. Immediately upon receipt of the Certificated Note in respect of which the failure occurred, the Trustee or the Company's duly authorized agent will cancel and destroy the Certificated Note, make appropriate entries in its records to reflect the fact that the Certificated Note was never issued, and accordingly notify in writing the Company. -43-
EX-10.(B) 12 ADMINISTRATIVE PROCEDURES, SERIES E 1 Exhibit (10)(b) POPULAR NORTH AMERICA, INC. MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES (DATED AS OF AUGUST 6, 1999) Medium-Term Notes (collectively, the "Notes") in the aggregate principal amount of up to $1,500,000,000 are to be offered on a continuous basis by Popular North America, Inc. (the "Company") through Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Credit Suisse First Boston Corporation ("Credit Suisse First Boston"), Chase Securities Inc. ("Chase Securities") and Popular Securities, Inc. ("Popular Securities") who, as agents (each an "Agent"), have agreed to use their reasonable efforts to solicit offers to purchase the Notes from the Company. The Agents also may purchase Notes as principals for resale. The Notes are being sold pursuant to a Distribution Agreement among the Company, the Agents, First Chicago Capital Markets, Inc. and Popular, Inc. (the "Guarantor"), dated October 11, 1991, as amended on December 2, 1993, October 6, 1995 and August 6, 1999 and as supplemented on June 16, 1993 and August 1, 1994 and as amended and supplemented on May 23, 1997 (as so amended and supplemented, the "Distribution Agreement"). The Notes will be issued pursuant to the Indenture, dated as of October 1, 1991, as supplemented by the First Supplemental Indenture, dated as of February 28, 1995, the Second Supplemental Indenture, dated as of May 8, 1997 and the Third Supplemental Indenture, dated as of August 5, 1999 (together, the "Indenture"), each between the Company and The First National Bank of Chicago, as Trustee (the "Trustee") and as Successor Trustee to Citibank, N.A. (the "Original Trustee"). A Registration Statement (the "Registration Statement", which term shall include any additional registration statements filed in connection with the Notes as provided in the Distribution Agreement) with respect to the Notes has been filed with the Securities and Exchange Commission (the "Commission"). The Prospectus dated August 6, 1999, as supplemented with respect to the Notes, is herein referred to as the "Prospectus." The most recent supplement to the Prospectus with respect to the 2 specific terms of the Notes is herein referred to as the "Pricing Supplement." The Notes will either be issued (a) in book-entry form and represented by one or more fully registered Notes (each, a "Book-Entry Note") delivered to the appropriate Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC, or (b) in certificated form (each, a "Certificated Note") delivered to the purchaser thereof or a person designated by such purchaser. Owners of beneficial interests in Book-Entry Notes will be entitled to physical delivery of Certificated Notes equal in principal amount to their respective beneficial interests only upon certain limited circumstances described in the Prospectus. General procedures relating to the issuance of all Notes are set forth in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance with the procedures set forth in Part II hereof and Certificated Notes will be issued in accordance with the procedures set forth in Part III hereof. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed thereto in the Indenture or the Notes, as the case may be. PART I: PROCEDURES OF GENERAL APPLICABILITY Date of Issuance/ Authentication: Each Note will be dated as of the date of its authentication by the Trustee or its duly appointed authenticating agent. Each Note shall also bear an original issue date (the "Original Issue Date"). The Original Issue Date shall remain the same for all Notes subsequently issued upon transfer, exchange or substitution of an original Note regardless of their dates of authentication. Maturities: Each Note will mature on a date selected by the purchaser and agreed to by the Company which is not less than nine months from its Original Issue Date; provided, however, that -2- 3 Notes bearing interest at rates determined by reference to selected indices ("Floating Rate Notes") will mature on an Interest Payment Date. Currencies: Each Note shall be denominated in one of the currencies or currency units, as specified in the relevant Pricing Supplement, or in such other currency or currency unit as may be agreed from time to time between the Company and each Agent and as specified in the relevant Pricing Supplement, or, if no currency or currency unit is specified therein, in U.S. dollars. Notes denominated in one or more currencies or currency units other than in U.S. dollars are herein referred to as "Multi-Currency Notes." Notes that have the amount of principal payments determined by reference to an index currency are herein referred to as "Indexed Notes." Denominations: The Notes will be issued in denominations of a minimum of $100,000 and integral multiples of $1,000 in excess thereof. Any Notes denominated other than in U.S. dollars will be issuable in denominations as set forth in the relevant Multi-Currency and Indexed Note Prospectus Supplement. For special provisions relating to Multi-Currency Notes and Indexed Notes, see the related Multi-Currency and Indexed Note Supplement. Registration: Notes will be issued only in fully registered form. Redemption/Repayment: The Notes will be subject to repayment at the option of the Holders -3- 4 thereof in accordance with the terms of the Notes on their respective repayment dates, if any. Optional Repayment dates, if any, will be fixed at the time of sale and set forth in the applicable Pricing Supplement and in the applicable Note. If no Optional Repayment dates are indicated with respect to a Note, such Note will not be repayable at the option of the Holder prior to Maturity. The Notes will be subject to redemption by the Company on and after their respective Initial Redemption dates, if any. Initial Redemption dates, if any, will be fixed at the time of sale and set forth in the applicable Pricing Supplement and in the applicable Note. If no Initial Redemption dates are indicated with respect to a Note, such Note will not be redeemable prior to Maturity, except as set forth in the Prospectus in the event that the Guarantor is obligated to pay Additional Amounts in respect of the Notes. Calculation of Interest: In the case of Fixed Rate Notes, interest (including payments for partial periods) will be calculated and paid on the basis of a 360-day year of twelve 30-day months. In the case of Floating Rate Notes, interest will be calculated and paid on the basis of the actual number of days in the interest period divided by 360, with the exception of Treasury Rate Notes and CMT Rate Notes, for which interest will be calculated on the basis of the actual number of days in the interest period divided by the actual number of days in the year. If an Interest Payment Date with respect to any Fixed Rate Note falls on a day that is not a Business Day (as hereinafter defined), the payment -4- 5 of interest required to be made on such Interest Payment Date need not be made on such day, but may be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date and no interest shall accrue on such payment for the period from and after such Interest Payment Date. If an Interest Payment Date with respect to any Floating Rate Note would otherwise fall on a day that is not a Business Day, such Interest Payment Date will be the following day that is a Business Day, except that in the case of a LIBOR Note, if such day falls in the next calendar month, such Interest Payment Date will be the preceding day that is a Business Day. If the Stated Maturity, or date of earlier redemption or repayment, as the case may be, of a Note is not a Business Day, the payment of principal and interest due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Stated Maturity, or date of earlier redemption or repayment. For special provisions relating to Multi-Currency Notes and Indexed Notes, see the related Multi-Currency and Indexed Note Prospectus Supplement. Acceptance and Rejection of Offers: The Company shall have the sole right to accept offers to purchase Notes from the Company and may reject any such offer in whole or in part. Each Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Notes from the Company -5- 6 received by it. Each Agent shall have the right, in its discretion reasonably exercised, without notice to the Company, to reject any offer to purchase Notes through it in whole or in part. Preparation of Pricing Supplement: If any offer to purchase a Note is accepted by the Company, the Company, with the approval of the Agent which presented the order (the "Presenting Agent"), will prepare a Pricing Supplement reflecting the terms of such Note and file the Pricing Supplement relating to the Notes with the Commission in accordance with Rule 424 under the Act. Information to be included in the Pricing Supplement shall include: 1. the name of the Company; 2. the title of the securities, including series designation, if any; 3. the date of the Pricing Supplement and the date of the Prospectus Supplement to which the Pricing Supplement relates; 4. the Price to Public (but only if (a) the trade is being made on an agency basis and (b) such Price to Public is other than 100%); 5. Net Proceeds to the Company (but only if (a) the trade is being made on a principal basis and (b) the Net Proceeds to the Company is other than 100%), less what -6- 7 would have been the applicable agency commission; 6. the information with respect to the terms of the Notes set forth below (whether or not the applicable Note is a Book-Entry Note) under "Procedures for Notes Issued in Book-Entry Form -- Settlement Procedures", items 2, 3, 7, 8 and 9; and 7. any other terms of the Notes not otherwise specified in the Prospectus or Prospectus Supplement. One copy of such filed document will be sent by telecopy or over night express (for delivery not later than 11:00 A.M. on the Business Day next following the trade date) to the applicable Presenting Agent at the following addresses: To Merrill Lynch: If by overnight, express or special delivery: Merrill Lynch & Co., Tritech Services, 40 Colonial Drive, Piscataway, New Jersey 08854, Attention: Prospectus Operations /Susan Putnam, If by all other types of deliveries: Tritech Services, #4 Corporate Place, Corporate Park 287, Piscataway, New Jersey 08854, Attention: Prospectus Operations /Nachman Kimerling Telephone: (908) 885-2769 Telecopy: (908) 885-2774/2775/2776 -7- 8 To Credit Suisse First Boston: Credit Suisse First Boston Corporation, Five World Trade Center, New York, New York 10048, Attention: Joan Bryan, Transaction Advisory Group Telephone: (212) 322-5105 Telecopy: (212) 803-4096 To Chase Securities: Chase Securities Inc. 270 Park Avenue 8th Floor New York, New York 10017 Attention: Medium-Term Note Desk Telephone: (212) 834-4421 Telecopy: (212) 834-6081 To Popular Securities: Popular Securities Inc. 209 Munoz Rivera Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 The Presenting Agent will cause a stickered supplemented Prospectus with the trade confirmation to be delivered to the purchaser of the Note. For record keeping purposes, one copy of each Pricing Supplement shall also be mailed or telecopied to each Agent and the Trustee at the following respective addresses: To Merrill Lynch: Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower, 10th Floor, New York, New York 10281-1310, Attention: MTN Product Management Telephone: (212) 449-7476 -8- 9 Telecopy: (212) 449-2234 To Credit Suisse First Boston: Credit Suisse First Boston Corporation, 11 Madison Avenue New York, New York 10010, Attention: Short and Medium-Term Finance Department Telephone: (212) 909-3842 Telecopy: (212) 318-1498 To Chase Securities: Chase Securities Inc. 270 Park Avenue 8th Floor New York, New York 10017 Attention: Medium-Term Note Desk Telephone: (212) 834-4421 Telecopy: (212) 834-6081 To Popular Securities: Popular Securities Inc. 209 Munoz Rivea Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 To the Trustee: The First National Bank of Chicago 153 W. 51st Street 5th Floor New York, NY 10019 Attention: Corporate Trust Administration In each instance that a Pricing Supplement is prepared, the Presenting Agent will affix the Pricing Supplement to supplemented Prospectuses prior to its use. Outdated Pricing Supplements and the Prospectuses to which they are attached (other than those retained for files) will be destroyed. -9- 10 Settlement: The receipt of immediately avail able funds by the Company in payment for a Note and the authentication and delivery of such Note shall, with respect to such Note, constitute "settlement." Offers accepted by the Company will be settled at a time as the purchaser and the Company shall agree and pursuant to the timetable for settlement set forth in Parts II and III hereof under "Settlement Procedures" with respect to Book-Entry Notes and Certificated Notes, respectively (each such date fixed for settlement, a "Settlement Date"). If procedures A and B of the applicable Settlement Procedures with respect to a particular offer are not completed on or before the time set forth under the applicable "Settlement Procedures Timetable", such offer shall not be settled until the Business Day following the completion of Settlement Procedures A and B or such later date as the purchaser and the Company shall agree. In the event of a purchase of Notes by the Presenting Agent as principal, appropriate settlement details will be set forth in the applicable Terms Agreement to be entered into between the Presenting Agent and the Company pursuant to the Distribution Agreement. Procedure for Changing Rates or Other Variable Terms: When a decision has been reached to change the interest rate or any other variable term on any Notes being offered by the Company, the Company will promptly advise the Agents and the Agents will -10- 11 forthwith suspend solicitation of offers to purchase such Notes. Each Agent will telephone the Company with recommendations as to the changed interest rates or other variable terms. At such time as the Company advises the Agents of the new interest rates or other variable terms, the Agents may resume solicitation of offers to purchase such Notes. Until such time, only "indications of interest" may be recorded. Immediately after acceptance by the Company of an offer to purchase at a new interest rate or new variable term, the Company, the Agents and the Trustee shall follow the procedures set forth under the applicable "Settlement Procedures." Suspension of Solicitation; Amendment or Supplement: The Company may instruct the Agents to suspend solicitation of purchases at any time. Upon receipt of such instructions, the Agents will forthwith suspend solicitation of offers to purchase from the Company until such time as the Company has advised them that solicitation of offers to purchase may be resumed. If the Company decides to amend the Registration Statement (including incorporating any documents by reference therein) or supplement any of such documents (other than to change rates or other variable terms), it will promptly advise the Agents and, except in the case of an amendment by the filing of a document incorporated by reference in the Registration Statement, will furnish each Agent and its counsel with copies of the proposed amend- -11- 12 ment or supplement. One copy of such filed document, along with a copy of the cover letter sent to the Commission, will be delivered or mailed to the Agents at the following addresses: To Merrill Lynch: Product Management MTNs, Merrill Lynch Money Markets, North Tower, World Financial Center, 10th Floor, New York, New York 10281-1310 Telephone: (212) 449-7476 Telecopy: (212) 449-2234 To Credit Suisse First Boston: Credit Suisse First Boston Corporation, 11 Madison Avenue New York, New York 10010, Attention: Short and Medium-Term Finance Department Telephone: (212) 909-3842 Telecopy: (212) 318-1498 To Chase Securities: Chase Securities Inc. 270 Park Avenue 8th Floor New York, New York 10017 Attention: Medium-Term Note Desk Telephone: (212) 834-4421 Telecopy: (212) 834-6081 To Popular Securities: Popular Securities Inc. 209 Munoz Rivea Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 In the event that at the time the solicitation of offers to purchase from the Company is suspended (other than to change interest -12- 13 rates or other variable terms) there shall be any offers to purchase Notes that have been accepted by the Company which have not been settled, the Company will promptly advise the Agents and the Trustee whether such offers may be settled and whether copies of the Prospectus as theretofore amended and/or supplemented as in effect at the time of the suspension may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. Delivery of Prospectus: A copy of the most recent Prospectus and Pricing Supplement must accompany or precede the earlier of (a) the written confirmation of a sale sent to a customer or his agent and (b) the delivery of Notes to a customer or his agent. Authenticity of Signatures: The Agents will have no obligation or liability to the Company or the Trustee in respect of the authen- ticity of the signature of any officer, employee or agent of the Company or the Trustee on any Note or related Guarantee. Documents Incorporated by Reference: The Company shall supply each Agent with an adequate supply of all documents incorporated by reference in the Registration Statement. Business Day: "Business Day" has the meaning set forth in -13- 14 the Prospectus Supplement. -14- 15 PART II: PROCEDURES FOR NOTES ISSUED IN BOOK-ENTRY FORM In connection with the qualification of Book-Entry Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its obligations under a Letter of Representations from the Company and the Trustee to DTC, dated August 6, 1999, and a Medium-Term Note Certificate Agreement between the Trustee and DTC, dated May 26, 1989 (the "Certificate Agreement"), and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: All Fixed Rate Book-Entry Notes having the same Original Issue Date, interest rate, terms of redemption or repayment, if any, and Stated Maturity (collectively, the "Fixed Rate Terms") will be represented initially by a single global security in fully registered form without coupons; and all Floating Rate Book-Entry Notes having the same Original Issue Date, interest rate basis or bases upon which interest may be determined (each, an "Interest Rate Basis"), which may be one or more of the Commercial Paper Rate, the Treasury Rate, LIBOR, the CD Rate, the CMT Rate, the Federal Funds Rate, the Prime Rate, the 11th District Rate, any other rate set forth by the Company, Initial Interest Rate, Index Maturity, Spread and/or Spread Multiplier, if any, Minimum Interest Rate, if any, Maximum Interest Rate, if any, terms of redemption or repayment, if any, and Stated Maturity (collectively, "Floating Rate Terms") will be represented initially by a single Book-Entry Note. -15- 16 Each Book-Entry Note will be dated and issued as of the date of its authentication by the Trustee or its duly appointed authenticating agent. Each Book-Entry Note will bear interest from a date (the "Interest Accrual Date") which will be (a) with respect to an original Book-Entry Note (or any portion thereof), its Original Issue Date and (b) with respect to any Book-Entry Note (or portion thereof) issued subsequently upon exchange or transfer of a Book-Entry Note or in lieu of a destroyed, lost or stolen Book-Entry Note, the most recent Interest Payment Date (or, in the case of Floating Rate Notes with interest rates which reset daily or weekly, the day following the most recent Record Date to which interest has been paid or duly provided for on the predecessor Book-Entry Note or Notes or if no such payment or provision has been made, the Original Issue Date of the predecessor Book-Entry Note or Notes), regardless of the date of authentication of such subsequently issued Book-Entry Note. No Book- Entry Note shall represent any Certificated Note. Identification: The Agents have arranged with the CUSIP Service Bureau (the "CUSIP Service Bureau") of Standard & Poor's Ratings Service, a division of the McGraw-Hill Companies ("S&P"), for the reservation of approximately 900 CUSIP numbers for each rank of Notes which have been reserved for future assignment to Book-Entry Notes representing Notes issued in book-entry form and have delivered to the Company, the Trustee and DTC an initial written list of such CUSIP numbers. The -16- 17 Trustee will assign CUSIP numbers to Book-Entry Notes as described below under Settlement Procedure B. DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has assigned to Book-Entry Notes. The Trustee will notify the Company at any time when fewer than 100 of the respective reserved CUSIP numbers remain unassigned to Book-Entry Notes, and, if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Book-Entry Notes representing Notes issued in book-entry form. Upon obtaining such additional CUSIP numbers, the Company will deliver a list of such additional numbers to the Trustee and DTC. Book-Entry Notes having an aggregate principal amount in excess of $200,000,000 and otherwise required to be represented by the same Global Certificate will instead be represented by two or more Global Certificates which shall be assigned the same CUSIP number. Registration: Each Book-Entry Note will be registered in the name of CEDE & CO., as nominee for DTC, on the register maintained by the Trustee under the Indenture. The beneficial owner of a Book-Entry Note (i.e., an owner of a beneficial interest in a Book-Entry Note), or one or more indirect participants in DTC designated by such owner, will designate one or more participants in DTC (with respect to such Book-Entry Note, the "Participants") to act as agent for such beneficial owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions pro- -17- 18 vided by such Participants, a credit balance with respect to such Book-Entry Note in the account of such Participants. The ownership interest of such beneficial owner in such Book-Entry Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of beneficial interests in a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Book-Entry Note. Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau at any time a written notice specifying (a) the CUSIP numbers of two or more Book-Entry Notes Outstanding on such date that represent Book-Entry Notes having the same Fixed Rate Terms or Floating Rate Terms, as the case may be, other than Original Issue Dates, and for which interest has been paid to the same date; (b) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date for the related Book-Entry Notes, on which such Book-Entry Notes shall be exchanged for a single replacement Book-Entry Note; and (c) a new CUSIP number to be assigned to such replacement Book-Entry Note. Upon receipt of such a notice, DTC will send to its Participants (including the Trustee) a written reorganization -18- 19 notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Trustee will deliver to the CUSIP Service Bureau written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Book-Entry Notes to be exchanged will no longer be valid. On the specified exchange date, the Trustee will exchange such Book-Entry Notes for a single Book-Entry Note bearing the new CUSIP number and the CUSIP numbers of the exchanged Book-Entry Notes will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. Not withstanding the foregoing, if the Book-Entry Notes to be exchanged exceed $200,000,000 in aggregate principal amount, one replacement Book-Entry Note will be authenti- cated and issued to represent each $200,000,000 of principal amount of the exchanged Book-Entry Notes and an additional Book-Entry Note will be authenticated and issued to represent any remaining principal amount of such Book-Entry Notes (see "Denominations" below). Denominations: All Book-Entry Notes will be denominated in U.S. dollars and will be issued in denominations of a minimum of $100,000 and integral multiples of $1,000 in excess thereof. Book-Entry Notes will be denominated in principal amounts not in excess of $200,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of $200,000,000 would, but for the preceding sentence, be represented by a single Book-Entry Note, then -19- 20 one Book-Entry Note will be issued to represent each $200,000,000 principal amount of such Note or Notes issued in book-entry form and an additional Book-Entry Note will be issued to represent any remaining principal amount of such Note or Notes issued in book-entry form. In such a case, each of the Book-Entry Notes shall be assigned the same CUSIP number. Interest: General. Interest on each Note issued in book-entry form will accrue from the Interest Accrual Date of the Book-Entry Note representing such Note. Each payment of interest on a Book-Entry Note will include interest accrued through the day preceding, as the case may be, the Interest Payment Date (provided that in the case of Floating Rate Notes with interest rates which reset daily or weekly interest payments will include interest accrued to and including the Regular Record Date immediately preceding the Interest Payment Date), the Stated Maturity Date, Redemption Date or Repayment Date. Interest payable at Maturity of a Book-Entry Note will be payable to the Person to whom the principal of such Note is payable. DTC will arrange for each pending deposit message described under Settlement Procedure C below to be transmitted to S&P, which will use the information in the message to include certain terms of the related Book-Entry Note in the appropriate daily bond report published by S&P. Interest Payment Dates. Interest payments will be made on each -20- 21 Interest Payment Date commencing with the first Interest Payment Date following the Original Issue Date; provided, however, the first payment of interest on any Book-Entry Note originally issued between a Regular Record Date and an Interest Payment Date will occur on the Interest Payment Date fol- lowing the next Regular Record Date. Fixed Rate Notes. Interest payments on Fixed Rate Book-Entry Notes will be made semiannually on June 15 and December 15 of each year and at Maturity. Floating Rate Notes. Except as provided in Part I under "Calculation of Interest", the Interest Payment Date for a Floating Rate Note will be, in the case of Floating Rate Notes which reset daily, weekly or monthly, on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year as specified in the applicable Pricing Supplement; in the case of Floating Rate Notes which reset quarterly, on the third Wednesday of March, June, September and December of each year; in the case of Floating Rate Notes which reset semiannually, on the third Wednesday of the two months of each year specified in the applicable Pricing Supplement; and in the case of Floating Rate Notes which reset annually, on the third Wednesday of the month specified in the applicable Pricing Supplement; and, in each case, at Maturity. For additional special provisions relating to Floating Rate Notes, see the Prospectus Supplement. -21- 22 Regular Record Dates. The Regular Record Date with respect to any Interest Payment Date for a Fixed Rate Note shall be the May 31 or November 30 preceding such Interest Payment Date. The Regular Record Date with respect to any Interest Payment Date for any Floating Rate Note shall be the date 15 calendar days (whether or not a Business Day) preceding such Interest Payment Date. Notice of Interest Payments and Regular Record Dates. On the first Business Day of January, April, July and October of each year, the Trustee will deliver to the Company and DTC a written list of Regular Record Dates and Interest Payment Dates that will occur during the six-month period beginning on such first Business Day with respect to Floating Rate Book-Entry Notes. Promptly after each Interest Determination Date for Floating Rate Book-Entry Notes, the Company will notify S&P of the interest rates determined on such Interest Determination Date. Payments of Principal and Interest: Payments of Interest Only. Promptly after each Regular Record Date, the Trustee will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Book-Entry Note issued under the Indenture on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will confirm the amount payable on each Book-Entry Note on such Interest Payment Date by reference to the -22- 23 daily bond reports published by Standard & Poor's. On such Interest Payment Date, the Company will pay to the Trustee, and the Trustee in turn will pay to DTC, such total amount of interest due (other than at Maturity), at the times and in the manner set forth below under "Manner of Payment." Payments at Maturity. On or about the first Business Day of each month, the Trustee will deliver to the Company and DTC a written list of principal, interest and premium, if any, to be paid on each Book-Entry Note issued under the Indenture having a Maturity in the following month. The Trustee and DTC will confirm the amounts of such principal, premium and interest payments with respect to a Book-Entry Note on or about the fifth Business Day preceding the Maturity of such Book-Entry Note. At such maturity, the Company will pay to the Trustee, and the Trustee in turn will pay to DTC, the principal amount of such Note, together with interest and premium, if any, due at such Maturity, at the times and in the manner set forth below under "Manner of Payment." Promptly after payment to DTC of the principal, interest and premium, if any, due at the Maturity of such Book-Entry Note, the Trustee will cancel and destroy such Book-Entry Note and deliver to the Company a certificate of destruction therefor. Manner of Payment. The total amount of any principal, premium, if any, and interest due on Book- Entry Notes on any Interest Payment Date or at Maturity shall be paid -23- 24 by the Company to the Trustee in funds available for use as of 9:30 a.m., New York City time on such date. The Company will make such payment on such Book-Entry Notes by instructing the Trustee to withdraw funds from an account maintained by the Company with the Trustee. The Company will confirm such instructions in writing to the Trustee. Prior to 10:00 a.m., New York City time, on such date or as soon as possible thereafter, the Trustee will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of principal (together with interest and premium, if any) due on a Book-Entry Note on such date. There after on such payment date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names such Notes are recorded in the book-entry system maintained by DTC. Neither the Company nor the Trustee shall have any responsibility or liability for the payment by DTC of the principal of, or interest on, the Book-Entry Notes to such Participants. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any inter- est payment on a Note will be determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and -24- 25 materials directly to the beneficial owner of such Note. Settlement Procedures: Settlement Procedures with regard to each Book-Entry Note sold by the Agents, as agents of the Company, will be as follows: A. The Presenting Agent will advise the Company by telephone of the following Settlement information: 1. Taxpayer identification number of the purchaser. 2. Principal amount of the Note. 3. Fixed Rate Notes: (a) interest rate Floating Rate Notes: (a) interest rate basis; (b) initial interest rate; (c) spread and/or spread multiplier, if any; (d) initial interest reset dates; (e) interest reset dates; (f) interest payment dates; (g) index maturity; (h) calculation agent; (i) maximum interest rate, if any; (j) minimum interest rate, if any; (k) alternate rate event spread; and (l) interest rate reset dates. -25- 26 5. Price to public of the Note. 6. Trade date. 7. Settlement Date (Original Issue Date). 8. Stated Maturity. 9. Redemption provisions, if any: (a) Initial Redemption Date (b) Initial Redemption Percentage (c) Annual Redemption Percentage Reduction 10. Optional Repayment Date(s), if any. 11. Net proceeds to the Company. 12. Presenting Agent's commission. B. The Company will advise the Trustee by telecopy or other method acceptable to the Trustee of the above settlement information received with respect to each Note from the Presenting Agent and shall confirm to the Trustee that the principal amount of Notes, including such Note, issued as of the relevant Settlement Date shall not exceed the limit with respect to the principal amount of Notes specified in the most recent Company Order delivered to the -26- 27 Trustee pursuant to Section 303 of the Indenture. C. The Trustee will assign a CUSIP Number to the Book-Entry Note and will telephone and advise the Company and the Presenting Agent of such CUSIP Number. The Trustee will communicate to DTC and the Presenting Agent through DTC's Participant Terminal System a pending deposit message specifying the following settlement information: 1. The information set forth in Settlement Procedure A. 2. Identification numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Presenting Agent. 3. Identification as a Fixed Rate Book-Entry Note or Floating Rate Book-Entry Note. 4. Initial Interest Payment Date for such Note, number of days by which such date succeeds the related record date for DTC purposes (or, in the case of Floating Rate Notes which reset daily or weekly, the date five calendar days preceding the Interest Payment Date) and, if then calculable, the amount of interest payment on such Interest Payment Date (which amount shall have -27- 28 been confirmed by the Trustee). 5. CUSIP number of the Book-Entry Note representing such Note. 6. Whether such Book-Entry Note represents any other Notes issued or to be issued in book-entry form. D. The Company will deliver to the Trustee a Book-Entry Note representing such Note in a form that has been approved by the Company, the Agents and the Trustee. E. The Trustee will complete and authenticate the Book-Entry Note. F. DTC will credit such Note to the participant account of the Trustee maintained by DTC. G. The Trustee will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Trustee's participant account and credit such Note to the participant account of the Presenting Agent maintained by DTC and (ii) to debit the settlement account of the Presenting Agent and credit the settlement account of the Trustee maintained by DTC, in an amount equal to the price of such Note less the Presenting Agent's commission. Any entry of such a deliver order shall be deemed to constitute a -28- 29 representation and warranty by the Trustee to DTC that (i) the Book-Entry Note has been issued and authenticated and (ii) the Trustee is holding such Book-Entry Note pursuant to the Certificate Agreement between the Trustee and DTC. H. The Presenting Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to the Presenting Agent's parti- cipant account and credit such Note to the participant account of the Participants maintained by DTC and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Presenting Agent maintained by DTC, in an amount equal to the initial public offering price of such Note. I. Transfers of funds in accordance with SDFS delivery orders described in Settlement Procedures G and H will be settled in accordance with SDFS operating procedures in effect on the Settlement Date. J. The Trustee will credit to an account of the Company maintained by the Trustee funds available for immediate use in the amount transferred to the Trustee in accordance with Settlement Procedure G. K. The Trustee will send a copy of the Book-Entry Note to the Company together with a -29- 30 statement setting forth the principal amount of Notes Outstanding as of the related Settlement Date after giving effect to such transaction and all other offers to purchase Notes of which the Company has advised the Trustee but which have not been settled. L. The Presenting Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participant with respect to such Note a confirmation order through DTC's Participant Terminal System or by mailing a written confirmation to such purchaser. Settlement Procedures Timetable: For offers to purchase Notes accepted by the Company, Settlement Procedures "A" through "L" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below: Settlement Procedure Time --------- ---- A 11:00 a.m. on the trade date B 12:00 noon on the trade date C 2:00 p.m. on the trade date D 3:00 p.m. on the Business Day before Settlement Date E 9:00 a.m. on Settlement Date F 10:00 a.m. on Settlement Date -30- 31 G-H No later than 2:00 p.m. on Settlement Date I 4:45 p.m. on Settlement Date J-L 5:00 p.m. on Settlement Date If a sale is to be settled more than one Business Day after the trade date, Settlement Procedures A, B, and C may, if necessary, be completed at any time prior to the specified times on the first Business Day after such trade date. In connection with a sale which is to be settled more than one Business Day after the trade date, if the initial interest rate for a Floating Rate Note is not known at the time that Settlement Procedure A is completed, Settlement Procedures B and C shall be completed as soon as such rates have been determined, but no later than 11:00 a.m. and 2:00 p.m., New York City time, respectively, on the second Business Day before the Settlement Date. Settlement Procedure I is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date. If settlement of a Book-Entry Note is rescheduled or cancelled, the Company shall notify the Trustee and the Trustee will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 p.m., New York City time, on the Business Day immediately preceding the scheduled Settlement Date. -31- 32 Failure to Settle: If the Trustee has not entered an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure G, then upon written request (which may be evidenced by facsimile transmission) of the Company the Trustee shall deliver to DTC, through DTC's Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Note to the participant account of the Trustee maintained at DTC. DTC will process the withdrawal message, provided that such participant account contains a principal amount of the Book-Entry Note representing such Note that is at least equal to the principal amount to be debited. If withdrawal messages are processed with respect to all the Notes represented by a Book-Entry Note, the Trustee will mark such Book-Entry Note "cancelled", make appropriate entries in its records and send such cancelled Book-Entry Note to the Company. The CUSIP number assigned to such Book-Entry Note shall, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. If withdrawal messages are processed with respect to a portion of the Notes represented by a Book-Entry Note, the Trustee will exchange such Book-Entry Note for two Book-Entry Notes, one of which shall represent the Book-Entry Notes for which withdrawal messages are processed and shall be can celled immediately after issuance, and the other of which shall represent the other Notes previously represented by the surrendered Book-Entry Note and shall bear the -32- 33 CUSIP number of the surrendered Book-Entry Note. If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Presenting Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing Settlement Procedures G and H, respectively. Thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than default by the Presenting Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse the Presenting Agent on an equitable basis for its loss of the use of funds during the period when the funds were credited to the account of the Company. Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to a Note that was to have been represented by a Book-Entry Note also F representing other Notes, the Trustee will provide, in accordance with Settlement Procedures D and E, for the authentication and issuance of a Book-Entry Note representing such remaining Notes and will make appropriate entries in its records. -33- 34 PART III: PROCEDURES FOR NOTES ISSUED IN CERTIFICATED FORM Denominations: The Certificated Notes, other than Index Notes and Multi-Currency Notes, will be issued in denominations of a minimum of $100,000 and integral multiples of $1,000 in excess thereof. Index Notes and Multi-Currency Notes will be issued in the denominations specified in a related Multi-Currency and Indexed Note Prospectus Supplement and Pricing Supplement. Interest: Each Certificated Note will bear interest in accordance with its terms. Interest will begin to accrue on the Original Issue Date of a Certificated Note for the first Interest Payment Period and on the most recent Interest Payment Date to which interest has been paid for all subsequent Interest Payment Periods. Each payment of interest shall include interest accrued to, but excluding, the date of such payment. Interest payments in respect of Fixed Rate Certificated Notes will be made semiannually on June 15 and December 15 of each year and at Maturity. However, the first payment of interest on any Certificated Note issued between a Regular Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Regular Record Date. The Regular Record Date with respect to any Interest Payment Date for a Fixed Rate Certificated Note shall be the May 31 or November 30 preceding such Interest Payment Date. Interest at Maturity will be payable to -34- 35 the person to whom the principal is payable. Except as provided in Part I under "Calculation of Interest", the Interest Payment Date for a Floating Rate Certificated Note will be, in the case of Floating Rate Notes which reset daily, weekly or monthly, on the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year as specified in the applicable Pricing Supplement; in the case of Floating Rate Notes which reset quarterly, on the third Wednesday of March, June, September and December of each year; in the case of Floating Rate Notes which reset semiannually, on the third Wednesday of the two months of each year specified in the applicable Pricing Supplement; or, in the case of 11th District Rate Notes, on the first Business Day of each month or the first Business Day of each March, June, September or December as specified in the applicable Pricing Supplement and in the case of Floating Rate Notes which reset annually, on the third Wednesday of the month specified in the applicable Pricing Supplement; and, in each case, at Maturity. The Regular Record Date with respect to a Floating Rate Note shall be the date 15 calendar days (whether or not a Business Day) preceding an Interest Payment Date. Notwithstanding the above, in the case of Floating Rate Certificated Notes having interest rates which reset daily or weekly, interest payments shall include accrued interest from, and including, the -35- 36 date of issue or from, but excluding, the last date in respect of which interest has been accrued and paid, as the case may be, through, and including, the Regular Record Date, except that at Maturity the interest payable will include interest accrued to, but excluding, the date of Maturity. For additional special provisions relating to Floating Rate Certificated Notes, see the Prospectus Supplement. Payments of Principal and Interest: Upon presentment and delivery of the Certificated Note, the Trustee or the Company's duly authorized agent will pay the principal amount of each Certificated Note at Maturity and the final installment of interest in next day funds. All interest payments in U.S. dollars on a Certificated Note, other than interest due at Maturity, will be made by check drawn on the Trustee or the Company's duly authorized agent and mailed by such Trustee or agent to the person entitled thereto as provided in the Certificated Note. However, the Registered Owners (as hereinafter defined) of ten million dollars or more in aggregate principal amount of the same series of Certificated Notes (whether having identical or different terms and provisions) shall be entitled to receive payments of interest, other than at Maturity, by wire transfer of immediately available funds if appropriate wire transfer instructions have been received in writing by the appropriate Trustee or such agent not less than 16 days prior to the applicable Interest Payment Date. -36- 37 For special provisions relating to Multi-Currency Notes and Indexed Notes, see the related Multi-Cur- rency and Indexed Note Prospectus Supplement. The Trustee will provide monthly to the Company a list of the principal and interest in each currency to be paid on Certificated Notes maturing in the next succeeding month. Such Trustee or agent will be responsible for withholding taxes on interest paid as required by applicable law, but shall be relieved from any such responsibility if it acts in good faith and in reliance upon an opinion of counsel. Certificated Notes presented to the Trustee or the Company's duly authorized agent at Maturity for payment will be cancelled by such Trustee or agent. All cancelled Certificated Notes held by such Trustee shall be destroyed, and the Trustee shall furnish to the Company a certificate with respect to such destruction. Settlement Procedures: Settlement Procedures with regard to each Certificated Note purchased through the Agents, as agents, shall be as follows: A. Each Agent will advise the Company by telephone of the following Settlement information with regard to each Certificated Note: 1. Exact name in which the Certificated Note is to be registered (the "Registered Owner"). -37- 38 2. Exact address or addresses of the Registered Owner for delivery, notices and payments of principal, premium, if any, and interest. 3. Taxpayer identification number of the Registered Owner. 4. Principal amount of the Certificated Note. 5. Denomination of the Certificated Note. 6. Fixed Rate Notes: (a) interest rate Floating Rate Notes: (a) interest rate basis or bases; (b) initial interest rate; (c) spread or spread multiplier, if any; (d) initial interest reset date; (e) interest reset dates; (f) interest payment dates; (g) index maturity; (h) calculation agent; (i) maximum interest rates, if any; (j) minimum interest rate, if any; (k) alternate rate event spread; and (l) interest determination dates Indexed Notes: -38- 39 (a) specified currency; (b) indexed currency; and (c) base rate of exchange. 8. Currency or currency unit in which the Certificated Note is to be denominated. 9. Price to public of the Certificated Note. 10. Settlement Date (Original Issue Date). 11. Stated Maturity. 12. Redemption provisions, if any: (a) Initial Redemption Date (b) Initial Redemption Percentage (c) Annual Redemption Percentage Reduction 13. Optional Repayment Date(s), if any. 14. Net proceeds to the Company. 15. Presenting Agent's commission. B. The Company shall provide to the Trustee by telecopy or other method acceptable to the Trustee the above Settlement information with respect to each Certificated Note received from the Agents, the name of the Presenting Agent and shall confirm to the -39- 40 Trustee that the principal amount of Notes, including such Certificated Note, issued as of the relevant Settlement Date shall not exceed the limit with respect to the principal amount of Notes specified in the most recent Company Order delivered to the Trustee pursuant to Section 303 of the Indenture. The Company also shall cause the Trustee or its duly appointed agent to issue, authenticate and deliver Certificated Notes in accordance with the Settlement Procedures Timetable set forth below. The Company also shall provide to the Trustee and the Presenting Agent a copy of the applicable Pricing Supplement. The Company also shall provide to the Trustee and the Presenting Agent a copy of a Multi-Currency and Indexed Note Supplement, if applicable. C. The Trustee or its duly appointed agent will complete and authenticate the Certificated Notes, including the Guarantee, in forms approved by the Company. D. With respect to each trade, the Trustee will deliver the Certificated Notes and one photocopy thereof to the applicable Presenting Agent at the following addresses: Merrill Lynch & Co., Money Markets Clearance, 55 Water Street, 3rd Floor, N.S.C.C. -40- 41 Window, New York, New York 10041, Attention: Al Mitchell Telephone: (212) 558-2405 Telecopy: (212) 558-2457 Credit Suisse First Boston Corporation, Five World Trade Center, New York, New York 10048, Attention: Paul Riley Chase Securities, Inc., 55 Water Street, Room 226, Windows 17 and 18, New York, New York 10041 Telephone: (212) 638-6787 Telecopy: (212) 638-5618 To Popular Securities: Popular Securities Inc. 209 Munoz Rivera Avenue Suite 1020 Hato Rey, Puerto Rico 00918 Attention: Ken McGrath Telephone: (787) 766-4200 Telecopy: (787) 766-3485 The Trustee will keep Stub 1. The Presenting Agent will acknowledge receipt of the Certificated Note through a broker's receipt and will keep the photocopy. Delivery of the Certificated Note will be made only against such acknowledgment of receipt. Upon determination that the Certificated Note, including the related Guarantee, has been authorized, delivered and completed as aforementioned, the Presenting Agent will wire the net proceeds of the Certificated Note after deduction of its applicable commission to the Company pursuant to standard wire -41- 42 instructions given by the Company. E. The Presenting Agent will deliver the Certificated Note, the related Guarantee endorsed thereon, as well as a copy of the Prospectus and any applicable Pricing Supplement or Supplements received from the Trustee, to the purchaser against payment in immediately available funds. F. The Trustee will send a photocopy of the Certified Note to the Company. Settlement Procedures Timetable: For offers to purchase Certificated Notes accepted by the Company, Settlement Procedures "A" through "F" set forth above shall be completed on or before the respective times set forth below: Settlement Procedure Time --------- ---- A-B 3:00 PM on Business Day prior to Settlement C-D 2:15 PM on Settlement Date E 3:00 PM on Settlement Date F 5:00 PM on Settlement Date Failure to Settle: In the event that a purchaser of a Certificated Note from the Company shall either fail to accept delivery of or make payment for a Certificated Note on the date fixed for settlement, the Presenting Agent will forthwith notify the Trustee and the Company by telephone, confirmed in writing, -42- 43 and return the Certificated Note to such Trustee. The Trustee or the Company's duly authorized agent, upon receipt of the Certificated Note from the Presenting Agent, will immediately advise the Company, and the Company will promptly arrange to credit the account of the Presenting Agent in an amount of immediately available funds equal to the amount previously paid by the Presenting Agent in settlement for the Certificated Note. Such credits will be made on the Settlement Date if possible, and in any event not later than the Business Day follow- ing the Settlement Date; provided that the Company has received notice on the same day. If such failure shall have occurred for any reason other than failure by the Presenting Agent to perform its obligations hereunder or under the Distribution Agreement, the Company will reimburse the Presenting Agent on an equitable basis for its loss of the use of funds during the period when the funds were credited to the account of the Company. Immediately upon receipt of the Certificated Note in respect of which the failure occurred, the Trustee or the Company's duly authorized agent will cancel and destroy the Certificated Note, make appropriate entries in its records to reflect the fact that the Certificated Note was never issued, and accordingly notify in writing the Company. -43- EX-10.(C) 13 INTEREST CALCULATION AGENCY AGREEMENT OF POPULAR 1 Exhibit 10(c) POPULAR, INC. INTEREST CALCULATION AGENCY AGREEMENT INTEREST CALCULATION AGENCY AGREEMENT between Popular, Inc. a Puerto Rico corporation (the "Issuer"), and The First National Bank of Chicago, dated as of August 6, 1999. PRELIMINARY STATEMENT 1. The Issuer proposes to issue and sell its Medium-Term Notes, Series 4 (the "Notes") from time to time under, and pursuant to, the terms of an Indenture, dated as of February 15, 1995, as supplemented by the First Supplemental Indenture dated as of May 8, 1997 and the Second Supplemental Indenture dated as of August 5, 1999 (together the "Indenture," the terms defined being used herein as defined therein or in the Notes), between the Issuer and The First National Bank of Chicago, trustee thereunder (acting in such capacity, the "Trustee"). 2. The Issuer desires to appoint an agent of the Issuer to calculate the base rates applicable to those Notes on which interest is to accrue at a variable or floating rate ("Floating Rate Notes"), determined by references to LIBOR, the 11th District Rate, the Commercial Paper Rate, the Treasury Rate, the CD Rate, the CMT Rate, the Prime Rate or the Federal Funds Rate (collectively, the "Base Rates") as are specified and described in the Floating Rate Notes, a copy of which is attached hereto as Exhibit A. NOW, THEREFORE, the Issuer and The First National Bank of Chicago hereby agree as follows: Section 1. Appointment of Calculation Agent. The Issuer hereby appoints The First National Bank of Chicago as Calculation Agent (in such capacity, the "Calculation Agent") of the Issuer with respect to any Floating Rate Notes to be issued by the Issuer under and pursuant to the terms of the Indenture, and the Calculation Agent hereby accepts its obligations as set forth in this Agreement upon the terms and conditions set forth herein. Section 2. Calculation of Base Rates. Unless otherwise specified to the Calculation Agent with respect to any particular Note, the calculation date for each applicable Interest Determination Date for any Note shall be -1- 2 the earlier of (i) the tenth calendar day after such Interest Determination Date, or if any such day is not a Business Day (as defined in the Notes) the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity, as the case may be. The Calculation Agent shall notify the Issuer and the Trustee of such Base Rate on such calculation date. If at any time the Calculation Agent is not also acting as Trustee under the Indenture, the Issuer shall, upon the issuance of each Floating Rate Note having a different Base Rate or different Interest Determination Dates than the Base Rate or Interest Determination Dates for any prior Floating Rate Note, notify such Calculation Agent of such Interest Determination Dates and Base Rate for such Floating Rate Note. Section 3. New Base Rates. If the Issuer proposes to issue Floating Rate Notes whose interest rate will be determined on a basis or formula not referred to above (a "New Base Rate"), the Issuer shall give a description of such New Base Rate to the Calculation Agent. The Calculation Agent shall determine if it is able and willing to calculate the New Base Rate and upon its agreement in writing to do so the term "Base Rate" shall be deemed to include the New Base Rate. If the Calculation Agent notifies the Issuer that it is not able or willing to calculate the New Base Rate, or that it is only willing to do so on the basis of an increase of its fees not acceptable to the Issuer, the Calculation Agent shall have no responsibility with respect to such New Base Rate and the Issuer shall appoint a different calculation agent to determine the New Base Rate. Section 4. Fees and Expenses. The Calculation Agent shall be entitled to such compensation for its services under this Agreement as may be agreed upon with the Issuer, and the Issuer shall pay such compensation and shall reimburse the Calculation Agent for all reasonable expenses, disbursements and advances incurred or made by the Calculation Agent in connection with the services rendered by it under this Agreement, including reasonable legal fees and expenses, upon receiving an accounting therefor from the Calculation Agent. Section 5. Right and Liabilities of Calculation Agent. The Calculation Agent shall incur no liability for, or in respect of, any action taken, omitted to be taken or suffered by it in reliance upon any Floating Rate Note, certificate, affidavit, instruction, notice, request, direction, order, statement or other paper, document or -2- 3 communication reasonably believed by it to be genuine. Any order, certificate, affidavit, instruction, notice, request, direction, statement or other communication from the Issuer made or given by it and sent, delivered or directed to the Calculation Agent under, pursuant to or as permitted by any provision of this Agreement shall be sufficient for purposes of this Agreement if such communication is in writing and signed by any officer of the Issuer. The Calculation Agent may consult with counsel satisfactory to it and the opinion of such counsel shall constitute full and complete authorization and protection of the Calculation Agent with respect to any action taken, omitted to be taken or suffered by it hereunder in good faith and in accordance with and in reliance upon the opinion of such counsel. In acting under this Agreement, the Calculation Agent (in its capacity as such) does not assume any obligation towards, or any relationship of agency or trust for or with the holders of the Notes. Section 6. Right of Calculation Agent to Own Floating Rate Notes. The Calculation Agent may act as Trustee under the Indenture and it, its officers, employees and shareholders may become owners of, or acquire any interests in, Floating Rate Notes, with the same rights as if the Calculation Agent were not the Calculation Agent, and may engage in, or have an interest in, any financial or other transaction with the Issuer as if the Calculation Agent were not the Calculation Agent. Section 7. Duties of Calculation Agent. The Calculation Agent shall be obliged only to perform such duties as are specifically set forth herein and no other duties or obligations on the part of the Calculation Agent, in its capacity as such, shall be implied by this Agreement. Section 8. Termination, Resignation or Removal of Calculation Agent. The Calculation Agent may at any time terminate this Agreement by giving no less than 90 days' written notice to the Issuer unless the Issuer consents in writing to a shorter time. Upon receipt of notice of termination by the Calculation Agent, the Issuer agrees promptly to appoint a successor Calculation Agent. The Issuer may terminate this Agreement at any time by giving written notice to the Calculation Agent and specifying the date when the termination shall become effective; provided, however, that termination by the Calculation Agent or by the Issuer shall not become effective prior to the date of the appointment by the Issuer, as provided in Section 9 hereof, of a successor Calculation Agent and the acceptance of such appointment by such successor Calculation Agent. If an -3- 4 instrument of acceptance by a successor Calculation Agent shall not have been delivered to the Calculation Agent within 30 days after the giving of such notice of resignation, the resigning Calculation Agent may petition any court of competent jurisdiction for the appointment of a successor Calculation Agent. Upon termination by either party pursuant to the provisions of this Section, the Calculation Agent shall be entitled to the payment of any compensation owed to it by the Issuer hereunder and to the reimbursement of all reasonable expenses, disbursements and advances incurred or made by the Calculation Agent in connection with the services rendered by it hereunder, as provided by Section 4 hereof. Section 9. Appointment of Successor Calculation Agent. Any successor Calculation Agent appointed by the Issuer or by a court following termination of this Agreement pursuant to the provisions of Section 8 hereof shall execute and deliver to the Calculation Agent and to the Issuer an instrument accepting such appointment, and thereupon such successor Calculation Agent shall, without any further act or instrument, become vested with all the rights, immunities, duties and obligations of the Calculation Agent, with like effect as if originally named as Calculation Agent hereunder, and the Calculation Agent shall thereupon be obligated to transfer and deliver, and such successor Calculation Agent shall be entitled to receive and accept, copies of any available records maintained by the Calculation Agent in connection with performance of its obligations hereunder. Section 10. Indemnification. The Issuer shall indemnify and hold harmless the Calculation Agent, its officers and employees from and against all actions, claims, damages, liabilities, losses and expenses (including reasonable legal fees and expenses) relating to or arising out of actions or omissions in any capacity hereunder, except actions, claims, damages, liabilities, losses and expenses caused by the gross negligence or wilful misconduct of the Calculation Agent, its officers or employees. This Section 10 shall survive the payment in full of all obligations under the Notes, whether by redemption, repayment or otherwise. Section 11. Merger, Consolidation or Sale of Business by Calculation Agent. Any corporation into which the Calculation Agent may be merged, converted or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Calculation Agent may be a party, or any corporation to which the Calculation -4- 5 Agent may sell or otherwise transfer all or substantially all of its corporate trust business, shall, to the extent permitted by applicable law, become the Calculation Agent under this Agreement without the execution of any paper or any further act by the parties hereto. Section 12. Notices. Any notice or other communication given hereunder shall be delivered in person, sent by letter, telecopy or telex or communicated by telephone (subject, in the case of communication by telephone, to written confirmation dispatched within 24 hours) to the addresses given below or such other address as the party to receive such notice may have previously specified: To the Issuer: Popular, Inc. 209 Munoz Rivera Avenue Hato Rey, Puerto Rico 00918 Attention: Chief Financial Officer Facsimile: (787) 751-2137 To the Calculation Agent: The First National Bank of Chicago 153 W. 51st Street Suite 4011 New York, New York 10019 Attention: Corporate Trust Administration Facsimile: (212) 373-1383 To the Trustee: The First National Bank of Chicago One First National Plaza Suite 0126 Chicago, Illinois 60670-0126 Attention: Corporate Trust Administration Facsimile: (312) 407-1708 Any notice hereunder given by letter, telecopy or telex shall be deemed to have been received when it would have been received in the ordinary course of post or transmission, as the case may be. -5- 6 Section 13. Benefit of Agreement. Except as provided herein, this Agreement is solely for the benefit of the parties hereto and their successors and assigns and no other persons shall acquire or have any rights under or by virtue hereof. Section 14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Section 15. Counterparts. This Agreement 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 one and the same instrument. -6- 7 IN WITNESS WHEREOF, this Agreement has been entered into the day and year first above written. POPULAR, INC. By: /s/ Jorge A. Junquera -------------------------------------------- Name: Jorge A. Junquera Title: Senior Executive Vice President THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Michael D. Pinzon -------------------------------------------- Name: Michael D. Pinzon Title: Trust Officer -7- EX-10.(D) 14 INTEREST CALCULATION AGENCY AGRMT OF POPULAR N.A. 1 EXHIBIT 10(d) POPULAR NORTH AMERICA, INC. INTEREST CALCULATION AGENCY AGREEMENT INTEREST CALCULATION AGENCY AGREEMENT between Popular North America, Inc., a Delaware corporation (the "Issuer"), and The First National Bank of Chicago, dated as of August 6, 1999. PRELIMINARY STATEMENT 1. The Issuer proposes to issue and sell its Medium-Term Notes, Series E (the "Notes") from time to time under, and pursuant to, the terms of an Indenture, dated as of October 1, 1991, as amended by the First Supplemental Indenture, dated as of February 28, 1995, by the Second Supplemental Indenture, dated as of May 8, 1997 and by the Third Supplemental Indenture, dated as of August 5, 1999 (together, the "Indenture," the terms defined being used herein as defined therein or in the Notes), among the Issuer, Popular, Inc., a Puerto Rico corporation, and The First National Bank of Chicago, trustee thereunder (acting in such capacity, the "Trustee"), as Successor Trustee to Citibank, N.A. 2. The Issuer desires to appoint an agent of the Issuer to calculate the base rates applicable to those Notes on which interest is to accrue at a variable or floating rate ("Floating Rate Notes"), determined by references to LIBOR, the 11th District Cost of Funds Rate, the Commercial 2 Paper Rate, the Treasury Rate, the Certificate of Deposit Rate, the CMT Rate, the Prime Rate or the Federal Funds Rate (collectively, the "Base Rates") as are specified and described in the Floating Rate Notes, a copy of which is attached hereto as Exhibit A. NOW, THEREFORE, the Issuer and The First National Bank of Chicago hereby agree as follows: Section 1. Appointment of Calculation Agent. The Issuer hereby appoints The First National Bank of Chicago as Calculation Agent (in such capacity, the "Calculation Agent") of the Issuer with respect to any Floating Rate Notes to be issued by the Issuer under and pursuant to the terms of the Indenture, and the Calculation Agent hereby accepts its obligations as set forth in this Agreement upon the terms and conditions set forth herein. Section 2. Calculation of Base Rates. Unless otherwise specified to the Calculation Agent with respect to any particular note, the calculation date for each applicable Interest Determination Date for any Note shall be the earlier of (i) the tenth calendar day after such Interest Determination Date, or if any such day is not a Business Day (as defined in the Indenture) the next succeeding Business Day or (ii) the Business Day preceding the applicable Interest Payment Date or Maturity, as the case may be. The Calculation Agent shall notify the Issuer and the Trustee of such Base Rate on such calculation date. -2- 3 If at any time the Calculation Agent is not also acting as Trustee under the Indenture, the Issuer shall, upon the issuance of each Floating Rate Note having a different Base Rate or different Interest Determination Dates than the Base Rate or Interest Determination Dates for any prior Floating Rate Note, notify such Calculation Agent of such Interest Determination Dates and Base Rate for such Floating Rate Note. Section 3. New Base Rates. If the Issuer proposes to issue Floating Rate Notes whose interest rate will be determined on a basis or formula not referred to above (a "New Base Rate"), the Issuer shall give a description of such New Base Rate to the Calculation Agent. The Calculation Agent shall determine if it is able and willing to calculate the New Base Rate and upon its agreement in writing to do so the term "Base Rate" shall be deemed to include the New Base Rate. If the Calculation Agent notifies the Issuer that it is not able or willing to calculate the New Base Rate, or that it is only willing to do so on the basis of an increase of its fees not acceptable to the Issuer, the Calculation Agent shall have no responsibility with respect to such New Base Rate and the Issuer shall appoint a different calculation agent to determine the New Base Rate. Section 4. Fees and Expenses. The Calculation Agent shall be entitled to such compensation for its -3- 4 services under this Agreement as may be agreed upon with the Issuer, and the Issuer shall pay such compensation and shall reimburse the Calculation Agent for all reasonable expenses, disbursements and advances incurred or made by the Calculation Agent in connection with the services rendered by it under this Agreement, including reasonable legal fees and expenses, upon receiving an accounting therefor from the Calculation Agent. Section 5. Right and Liabilities of Calculation Agent. The Calculation Agent shall incur no liability for, or in respect of, any action taken, omitted to be taken or suffered by it in reliance upon any Floating Rate Note, certificate, affidavit, instruction, notice, request, direction, order, statement or other paper, document or communication reasonably believed by it to be genuine. Any order, certificate, affidavit, instruction, notice, request, direction, statement or other communication from the Issuer made or given by it and sent, delivered or directed to the Calculation Agent under, pursuant to or as permitted by any provision of this Agreement shall be sufficient for purposes of this Agreement if such communication is in writing and signed by any officer of the Issuer. The Calculation Agent may consult with counsel satisfactory to it and the opinion of such counsel shall constitute full and complete authorization and protection of the Calculation Agent with respect to any action taken, omitted to be taken or suffered -4- 5 by it hereunder in good faith and in accordance with and in reliance upon the opinion of such counsel. In acting under this Agreement, the Calculation Agent (in its capacity as such) does not assume any obligation towards, or any relationship of agency or trust for or with the holders of the Notes. Section 6. Right of Calculation Agent to Own Floating Rate Notes. The Calculation Agent may act as Trustee under the Indenture and it, its officers, employees and shareholders may become owners of, or acquire any interests in, Floating Rate Notes, with the same rights as if the Calculation Agent were not the Calculation Agent, and may engage in, or have an interest in, any financial or other transaction with the Issuer as if the Calculation Agent were not the Calculation Agent. Section 7. Duties of Calculation Agent. The Calculation Agent shall be obliged only to perform such duties as are specifically set forth herein and no other duties or obligations on the part of the Calculation Agent, in its capacity as such, shall be implied by this Agreement. Section 8. Termination, Resignation or Removal of Calculation Agent. The Calculation Agent may at any time terminate this Agreement by giving no less than 90 days' written notice to the Issuer unless the Issuer consents in writing to a shorter time. Upon receipt of notice of termination by the Calculation Agent, the Issuer agrees -5- 6 promptly to appoint a successor Calculation Agent. The Issuer may terminate this Agreement at any time by giving written notice to the Calculation Agent and specifying the date when the termination shall become effective; provided, however, that not termination by the Calculation Agent or by the Issuer shall become effective prior to the date of the appointment by the Issuer, as provided in Section 9 hereof, of a successor Calculation Agent and the acceptance of such appointment by such successor Calculation Agent. If an instrument of acceptance by a successor Calculation Agent shall not have been delivered to the Calculation Agent within 30 days after the giving of such notice of resignation, the resigning Calculation Agent may petition any court of competent jurisdiction for the appointment of a successor Calculation Agent. Upon termination by either party pursuant to the provisions of this Section, the Calculation Agent shall be entitled to the payment of any compensation owed to it by the Issuer hereunder and to the reimbursement of all reasonable expenses, disbursements and advances incurred or made by the Calculation Agent in connection with the services rendered by it hereunder, as provided by Section 4 hereof. Section 9. Appointment of Successor Calculation Agent. Any successor Calculation Agent appointed by the Issuer or by a court following termination of this Agreement pursuant to the provisions of Section 8 hereof shall execute -6- 7 and deliver to the Calculation Agent and to the Issuer an instrument accepting such appointment, and thereupon such successor Calculation Agent shall, without any further act or instrument, become vested with all the rights, immunities, duties and obligations of the Calculation Agent, with like effect as if originally named as Calculation Agent hereunder, and the Calculation Agent shall thereupon be obligated to transfer and deliver, and such successor Calculation Agent shall be entitled to receive and accept, copies of any available records maintained by the Calculation Agent in connection with performance of its obligations hereunder. Section 10. Indemnification. The Issuer shall indemnify and hold harmless the Calculation Agent, its officers and employees from and against all actions, claims, damages, liabilities, losses and expenses (including reasonable legal fees and expenses) relating to or arising out of actions or omissions in any capacity hereunder, except actions, claims, damages, liabilities, losses and expenses caused by the gross negligence or wilful misconduct of the Calculation Agent, its officers or employees. This Section 10 shall survive the payment in full of all obligations under the Notes, whether by redemption, repayment or otherwise. Section 11. Merger, Consolidation or Sale of Business by Calculation Agent. Any corporation into which -7- 8 the Calculation Agent may be merged, converted or consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Calculation Agent may be a party, or any corporation to which the Calculation Agent may sell or otherwise transfer all or substantially all of its corporate trust business, shall, to the extent permitted by applicable law, become the Calculation Agent under this Agreement without the execution of any paper or any further act by the parties hereto. Section 12. Notices. Any notice or other communication given hereunder shall be delivered in person, sent by letter, telecopy or telex or communicated by telephone (subject, in the case of communication by telephone, to written confirmation dispatched within 24 hours) to the addresses given below or such other address as the party to receive such notice may have previously specified: To the Issuer: Popular North America, Inc. c/o Popular, Inc. 209 Munoz Rivera Avenue Hato Rey, Puerto Rico 00918 Attention: Chief Financial Officer Facsimile: (787) 767-8948 To the Calculation Agent: The First National Bank of Chicago 153 W. 51st Street Suite 4011 New York, New York 10019 Attention: Corporate Trust Administration Facsimile: (212) 373-1383 -8- 9 To the Trustee: The First National Bank of Chicago One First National Plaza Suite 0126 Chicago, Illinois 60670-0126 Attention: Corporate Trust Administration Facsimile: (312) 407-1708 Any notice hereunder given by letter, telecopy or telex shall be deemed to have been received when it would have been received in the ordinary course of post or transmission, as the case may be. Section 13. Benefit of Agreement. Except as provided herein, this Agreement is solely for the benefit of the parties hereto and their successors and assigns and no other persons shall acquire or have any rights under or by virtue hereof. Section 14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. Section 15. Counterparts. This Agreement 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 one and the same instrument. -9- 10 IN WITNESS WHEREOF, this Agreement has been entered into the day and year first above written. POPULAR NORTH AMERICA, INC. By: /s/ Jorge A. Junquera --------------------------- Name: Jorge A. Junquera Title: President THE FIRST NATIONAL BANK OF CHICAGO By: /s/ Michael D. Pinzon ---------------------------- Name: Michael D. Pinzon Title: Trust Officer -10-
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