<PAGE>
                                                                     EXHIBIT 4.3

                          SECOND SUPPLEMENTAL INDENTURE



                                     between




                                  POPULAR, INC.



                                       and




                           J.P. MORGAN TRUST COMPANY,
                              NATIONAL ASSOCIATION




           =========================================================

                          Dated as of November 30, 2004

           =========================================================


<PAGE>

                                TABLE OF CONTENTS

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                                                          ARTICLE 1
                                                         DEFINITIONS

         SECTION 1.1 Definition of Terms..........................................................................2

                                                          ARTICLE 2
                                        GENERAL TERMS AND CONDITIONS OF THE DEBENTURES

         SECTION 2.1 Designation and Principal Amount.............................................................3
         SECTION 2.2 Maturity.....................................................................................3
         SECTION 2.3 Form and Payment.............................................................................3
         SECTION 2.4 Global Debenture.............................................................................4
         SECTION 2.5 Interest.....................................................................................5
         SECTION 2.6 Denomination.................................................................................6

                                                          ARTICLE 3
                                                 REDEMPTION OF THE DEBENTURES

         SECTION 3.1 Optional Redemption..........................................................................6
         SECTION 3.2 Redemption Procedures........................................................................6
         SECTION 3.3 No Sinking Fund..............................................................................6

                                                          ARTICLE 4
                                             EXTENSION OF INTEREST PAYMENT PERIOD

         SECTION 4.1 Extension of Interest Payment Period.........................................................6
         SECTION 4.2 Notice of Extension..........................................................................7
         SECTION 4.3 Limitation of Transactions...................................................................7

                                                          ARTICLE 5
                                                           EXPENSES

         SECTION 5.1 Payment of Expenses..........................................................................8
         SECTION 5.2 Payment Upon Resignation or Removal..........................................................9

                                                          ARTICLE 6
                                                 COVENANT TO LIST ON EXCHANGE

         SECTION 6.1 Listing on an Exchange.......................................................................9

                                                          ARTICLE 7
                                                      FORM OF DEBENTURE

         SECTION 7.1 Form of Debenture............................................................................9
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                                       i


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         <S>                                                                                                     <C>
                                                          ARTICLE 8
                                                 ORIGINAL ISSUE OF DEBENTURES

         SECTION 8.1 Original Issue of Debentures.................................................................9

                                                          ARTICLE 9
                                                        MISCELLANEOUS

         SECTION 9.1 Ratification of Indenture...................................................................10
         SECTION 9.2 Trustee Not Responsible for Recitals........................................................10
         SECTION 9.3 Governing Law...............................................................................10
         SECTION 9.4 Separability................................................................................10
         SECTION 9.5 Counterparts................................................................................10
</TABLE>

                                       ii


<PAGE>

         SECOND SUPPLEMENTAL INDENTURE, dated as of November 30, 2004 (the
"Second Supplemental Indenture"), between Popular, Inc., a Puerto Rico
corporation (hereinafter sometimes called the "Company"), and J.P. Morgan Trust
Company, National Association (formerly known as Bank One Trust Company, N.A.),
a national banking association, as trustee (hereinafter sometimes called the
"Trustee") under the Indenture dated as of October 31, 2003, as supplemented by
a First Supplemental Indenture, dated as of October 31, 2004, between the
Company and the Trustee (the "Indenture").

         WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured junior
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;

         WHEREAS, pursuant to the terms of the Indenture, the Company desires to
provide for the establishment of a new series of such securities to be known as
its 6.125% Junior Subordinated Debentures, Series A due December 1, 2034 (the
"Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in the Indenture
and this Second Supplemental Indenture;

         WHEREAS, the Company and Popular Capital Trust II a Delaware statutory
trust (the "Trust"), propose to offer to the public $130,000,000 aggregate
liquidation amount of the Trust's 6.125% Cumulative Monthly Income Trust
Preferred Securities (the "Preferred Securities"), representing preferred
undivided beneficial interests in the assets of the Trust, and the Trust
proposes to invest the proceeds from such offering, together with the proceeds
of the issuance and sale by the Trust to the Company of $4,021,000 aggregate
liquidation amount of its 6.125% Common Securities (the "Common Securities"), in
$134,021,000 aggregate principal amount of the Debentures; and

         WHEREAS, the Company has requested that the Trustee execute and deliver
this Second Supplemental Indenture and all requirements necessary to make this
Second Supplemental Indenture a valid instrument in accordance with its terms,
and to make the Debentures, when executed by the Company, and authenticated and
delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Second Supplemental Indenture
has been duly authorized in all respects.

         NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Indenture, the form and substance of the Debentures and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:


<PAGE>

                                    ARTICLE 1
                                   DEFINITIONS

         SECTION 1.1 Definition of Terms.

         Unless the context otherwise requires:

         (a)      a term defined in the Indenture has the same meaning when used
in this Second Supplemental Indenture;

         (b)      a term defined anywhere in this Second Supplemental Indenture
has the same meaning throughout;

         (c)      the singular includes the plural and vice versa;

         (d)      a reference to a Section or Article is to a Section or Article
of this Second Supplemental Indenture;

         (e)      headings are for convenience of reference only and do not
affect interpretation;

         (f)      the following terms have the meanings given to them in the
Declaration: (i) Capital Securities Certificate; (ii) Capital Security; (iii)
Delaware Trustee; (iv) Distributions; (v) Property Trustee; and (vi)
Underwriting Agreement;

         (g)      the following terms have the meanings given to them in this
Section 1.1(g):

         "Compound Interest" shall have the meaning set forth in Section 4.1.

         "Coupon Rate" shall have the meaning set forth in Section 2.5(a).

         "Creditor" shall have the meaning set forth in Section 5.1.

         "Declaration" means the Amended and Restated Declaration of Trust and
Trust Agreement of Popular Capital Trust II, a Delaware statutory trust, dated
as of November 30, 2004.

         "Deferred Interest" shall have the meaning set forth in Section 4.1.

         "Dissolution Event" means the dissolution of the Trust and distribution
of the Debentures held by the Property Trustee pro rata to the holders of the
Trust Securities in liquidation of such holders' interests in the Trust in
accordance with the Declaration, such event to occur at the option of the
Company at any time upon the terms and conditions set forth in the Declaration.

         "Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.

         "Global Debenture" shall have the meaning set forth in Section 2.4(a).


                                       2
<PAGE>

         "Holder" means any person in whose name at the time a Debenture is
registered on the Security Register.

         "Interest Payment Date" shall have the meaning set forth in Section
2.5(a).

         "Interest Period" means the period beginning on (and including) the
date of issue and ending on (but excluding) the first Interest Payment Date and
each successive period beginning on (and including) the Interest Payment Date
and ending on (but excluding) the next succeeding Interest Payment Date.

         "Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.4(a).

         "Prepayment Price" shall have the meaning set forth in Section 3.1.

         "Special Redemption Event" means a Tax Event, Investment Company Event
or a Capital Treatment Event, as the case may be.

                                   ARTICLE 2
                 GENERAL TERMS AND CONDITIONS OF THE DEBENTURES

         SECTION 2.1 Designation and Principal Amount.

         There is hereby authorized (a) a series of Securities designated as the
"6.125% Junior Subordinated Debentures, Series A due December 1, 2034", in
aggregate principal amount of $134,021,000.

         SECTION 2.2 Maturity.

         The Debentures shall mature on December 1, 2034.

         SECTION 2.3 Form and Payment.

         Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons. Principal and
interest on the Debentures issued in certificated form will be payable, the
transfer of such Debentures will be registrable and such Debentures will be
exchangeable for Debentures bearing identical terms and provisions at the office
or agency of the Trustee in New York, New York; provided, however, that payment
of interest may be made at the option of the Company by check mailed to the
Holder entitled thereto at such address as shall appear in the Security Register
or by wire transfer to an account appropriately designated by the Holder
entitled thereto. Notwithstanding the foregoing, so long as the Holder of any
Debentures is the Property Trustee, the payment of the principal of and interest
(including Compound Interest and Additional Interest, if any) on such Debentures
held by the Property Trustee will be made at such place and to such account as
may be designated by the Property Trustee.


                                       3
<PAGE>

         SECTION 2.4 Global Debenture.

         (a)      In connection with a Dissolution Event,

                  (i)      the Debentures in certificated form may be presented
         to the Trustee by the Property Trustee in exchange for a global
         Debenture in an aggregate principal amount equal to the aggregate
         principal amount of all outstanding Debentures (a "Global Debenture"),
         to be registered in the name of the Depositary, or its nominee, and
         delivered by the Trustee to the Depositary for crediting to the
         accounts of its participants pursuant to the instructions of the
         Administrative Trustees. The Company upon any such presentation shall
         execute a Global Debenture in such aggregate principal amount and
         deliver the same to the Trustee for authentication and delivery in
         accordance with the Indenture and this Second Supplemental Indenture.
         Payments on the Debentures issued as a Global Debenture will be made to
         the Depositary; and

                  (ii)     if any Capital Securities are held in non book-entry
         certificated form ("Non Book-Entry Capital Securities"), the Debentures
         in certificated form may be presented to the Trustee by the Property
         Trustee and any Capital Security Certificate which represents Non
         Book-Entry Capital Securities will be deemed to represent beneficial
         interests in Debentures presented to the Trustee by the Property
         Trustee having an aggregate principal amount equal to the aggregate
         liquidation amount of the Non Book-Entry Capital Securities until such
         Capital Security Certificates are presented to the Security registrar
         for transfer or reissuance, at which time such Non Book-Entry Capital
         Security Certificates will be canceled and a Debenture, registered in
         the name of the holder of the Capital Security Certificate or the
         transferee of the holder of such Capital Security Certificate, as the
         case may be, with an aggregate principal amount equal to the aggregate
         liquidation amount of the Capital Security Certificate canceled, will
         be executed by the Company and delivered to the Trustee for
         authentication and delivery in accordance with the Indenture and this
         Second Supplemental Indenture. On issue of such Debentures, Debentures
         with an equivalent aggregate principal amount that were presented by
         the Property Trustee to the Trustee will be deemed to have been
         canceled.

         (b)      A Global Debenture may be transferred, in whole but not in
part, only by the Depositary to another nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary, or to a successor Depositary selected or approved by the Company or
to a nominee of such successor Depositary. The Depositary shall initially be The
Depository Trust Company, New York, New York.

         (c)      Except as otherwise provided in or pursuant to this Second
Supplemental Indenture, a Global Debenture shall be exchangeable for Debentures
in definitive registered form only if (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Company within 90 days of the date the
Company is so informed in writing or becomes aware of such condition, (ii) the
Depository ceases to be registered as a "clearing agency" under the Securities
Exchange Act of 1934, as amended, (iii) an Event of Default, as defined in the
Indenture, has occurred and is continuing with respect to the Debentures, or
(iv) the Company, in its sole discretion determines that such Global Debenture
shall be exchangeable into definitive registered form. Upon the


                                       4
<PAGE>

occurrence of any of (i) through (iv) above, the Company shall execute, and,
subject to Article II of the Indenture, the Trustee, upon written notice from
the Company, shall authenticate and deliver the Debentures in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. In the event the Company determines that
the Debentures shall no longer be represented by a Global Debenture pursuant to
clause (iv) above, the Company shall execute, and, subject to Section 305 of the
Indenture, the Trustee, upon receipt of an Officers' Certificate evidencing such
determination by the Company, shall authenticate and deliver the Debentures in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Debenture in exchange for such Global Debenture. Upon the exchange of the Global
Debenture for such Debentures in definitive registered form without coupons, in
authorized denominations, the Global Debenture shall be canceled by the Trustee.
Such Debentures in definitive registered form issued in exchange for the Global
Debenture shall be registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Debt Securities to the Depositary for delivery to the Persons in whose
names such Debt Securities are so registered.

         SECTION 2.5 Interest.

         (a)      Each Debenture will bear interest at the rate of 6.125% per
annum (the "Coupon Rate") from November 30, 2004 until the principal thereof
becomes due and payable, and on any overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on any overdue
installment of interest at the Coupon Rate, compounded monthly, payable monthly
in arrears on the first day of each month of each year (each, an "Interest
Payment Date"), commencing on January 1, 2005, to the Person in whose name such
Debenture or any predecessor Debenture is registered at the close of business on
the relevant record date, which will be, as long as the Capital Securities
remain in book-entry form (or if no Capital Securities remain outstanding, as
long as the Debentures remain in book-entry form), one Business Day prior to the
relevant Interest Payment Date and, in the event the Capital Securities are not
in book-entry form (or if no Capital Securities remain outstanding, in the event
the Debentures are not in book-entry form), the 15th day of the month next
preceding each Interest Payment Date, except as otherwise provided pursuant to
the provisions of Article IV hereof.

         (b)      The amount of interest payable for any Interest Period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
Interest Period shorter than a full monthly period for which interest is
computed, will be computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on the date that such interest otherwise would have been
payable.


                                       5
<PAGE>

         SECTION 2.6 Denomination.

         The Debentures shall be issued in denominations of $25 and integral
multiples thereof.

                                   ARTICLE 3
                          REDEMPTION OF THE DEBENTURES

         SECTION 3.1 Optional Redemption.

         Subject to any required prior approval of the Primary Federal
Regulator, the Debentures are prepayable prior to the Stated Maturity at the
option of the Company (i) in whole or in part, from time to time, on or after
December 1, 2009 or (ii) at any time prior to December 1, 2009, in whole but not
in part, at any time within 90 days following the occurrence and continuation of
a Special Redemption Event, in either case at a prepayment price (the
"Prepayment Price") equal to 100% of the principal amount thereof, plus accrued
and unpaid interest thereon (including Compound Interest, if any) to the date of
prepayment.

         SECTION 3.2 Redemption Procedures.

         Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Debentures to be
prepaid at its registered address. Unless the Company defaults in payment of the
prepayment price, on and after the redemption date interest shall cease to
accrue on such Debentures called for redemption. If the Debentures are only
partially redeemed pursuant to Section 3.1, the Debentures will be redeemed pro
rata or by lot or by any other method utilized by the Trustee; provided, that if
at the time of redemption the Debentures are registered as a Global Debenture,
the Depositary shall determine, in accordance with its procedures, the principal
amount of such Debentures held by each Depositary participant to be redeemed.
The Prepayment Price shall be paid prior to 12:00 noon, New York time, on the
date of such prepayment or at such earlier time as the Company determines;
provided that the Company shall deposit with the Trustee an amount sufficient to
pay the Prepayment Price by 10:00 a.m., New York time, on the date such
prepayment price is to be paid.

         SECTION 3.3 No Sinking Fund.

         The Debentures are not entitled to the benefit of any sinking fund.

                                   ARTICLE 4
                      EXTENSION OF INTEREST PAYMENT PERIOD

         SECTION 4.1 Extension of Interest Payment Period.

         Provided that no Event of Default has occurred and is continuing, the
Company shall have the right, at any time and from time to time during the term
of the Debentures, to defer payments of interest by extending the interest
payment period of such Debentures for a period not exceeding 60 consecutive
months (the "Extended Interest Payment Period"), during which


                                       6
<PAGE>

Extended Interest Payment Period no interest shall be due and payable; provided
that no Extended Interest Payment Period may extend beyond the Stated Maturity
of the principal of the Debentures. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear interest thereon
at the Coupon Rate compounded monthly for each month of the Extended Interest
Payment Period ("Compound Interest"). At the end of the Extended Interest
Payment Period, the Company shall pay all interest accrued and unpaid on the
Debentures, including any Compound Interest (together, "Deferred Interest") that
shall be payable to the Holders in whose names the Debentures are registered in
the Security Register on the record date for the first Interest Payment Date
after the end of the Extended Interest Payment Period. Before the termination of
any Extended Interest Payment Period, the Company may further extend such
period, provided that such period together with all such previous or further
extensions thereof shall not exceed 60 consecutive months, or extend beyond the
Stated Maturity of the Debentures. Upon the termination of any Extended Interest
Payment Period and upon the payment of all Deferred Interest then due, the
Company may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may prepay
at any time all or any portion of the interest accrued during an Extended
Interest Payment Period.

         SECTION 4.2 Notice of Extension.

         (a)      If the Property Trustee is the only registered Holder at the
time the Company selects an Extended Interest Payment Period, the Company shall
give written notice to the Property Trustee and the Trustee of its selection of
such Extended Interest Payment Period one Business Day before the earlier of (i)
the next succeeding date on which Distributions on the Trust Securities issued
by the Trust are payable, or (ii) if the Debentures are then listed on the
Nasdaq National Market or other similar self-regulatory organization, the date
the Company is required to give notice of the record date, or the date such
Distributions are payable to such organization or to holders of the Capital
Securities issued by the Trust.

         (b)      If the Property Trustee is not the only Holder at the time the
Company selects an Extended Interest Payment Period, the Company shall give the
Holders of the Debentures notice of its election of such Extended Interest
Payment Period at least ten Business Days before the earlier of (i) the next
succeeding Interest Payment Date, or (ii) if the Debentures are then listed on
the Nasdaq National Market or other similar self-regulatory organization, the
date the Company is required to give notice of the record date or the Interest
Payment Date to such organization or to Holders of the Debentures.

         (c)      The month in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 60 months
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.

         SECTION 4.3 Limitation of Transactions.

         If the Company shall exercise its right to defer payment of interest as
provided in Section 4.1 and the Extended Interest Payment Period is continuing,
the Company shall be subject to the limitations set forth in Section 1008 of the
Indenture.


                                       7
<PAGE>

                                   ARTICLE 5
                                    EXPENSES

         SECTION 5.1 Payment of Expenses.

         In connection with the offering, sale and issuance of the Debentures to
the Property Trustee and in connection with the sale of the Trust Securities by
the Trust, the Company, in its capacity as borrower with respect to the
Debentures, shall:

         (a)      pay all costs and expenses relating to the offering, sale and
issuance of the Trust Securities and the Debentures, including commissions to
the underwriter payable pursuant to the Underwriting Agreement and compensation
of the Trustee under the Indenture in accordance with the provisions of Section
607 of the Indenture;

         (b)      be responsible for and shall pay all debts and obligations
(other than with respect to the Trust Securities) and all costs and expenses of
the Trust (including, but not limited to, costs and expenses relating to the
organization, maintenance and dissolution of the Trust, the fees and expenses
(including reasonable counsel fees and expenses) of the Property Trustee, the
Delaware Trustee and the Administrative Trustees (including any amounts payable
under Article VIII of the Declaration), the costs and expenses relating to the
operation of the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, paying agent(s),
exchange rate agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition, financing, and disposition of Trust assets
and the enforcement by the Property Trustee of the rights of the holders of the
Capital Securities issued by the Trust);

         (c)      be liable for any indemnification obligations arising with
respect to the Declaration; and

         (d)      pay any and all taxes (other than United States and Puerto
Rico withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the Trust.

         The Company's obligations under this Section 5.1 shall be for the
benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
such Creditor has received notice hereof. Any such Creditor may enforce the
Company's obligations under this Section 5.1 directly against the Company and
the Company irrevocably waives any right of remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Company. The Company agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 5.1.

         The provisions of this Section shall survive the resignation or removal
of the Trustee and the satisfaction and discharge of this Second Supplemental
Indenture.


                                       8
<PAGE>

         SECTION 5.2 Payment Upon Resignation or Removal.

         Upon termination of this Second Supplemental Indenture or the Indenture
or the removal or resignation of the Trustee, unless otherwise stated, the
Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation that are payable pursuant to Section 607 of
the Indenture. Upon termination of the Declaration or the removal or resignation
of the Delaware Trustee or the Property Trustee, as the case may be, pursuant to
Section 8.10 of the Declaration, the Company shall pay to the Delaware Trustee
or the Property Trustee, as the case may be, all amounts accrued to the date of
such termination, removal or resignation.

                                   ARTICLE 6
                          COVENANT TO LIST ON EXCHANGE

         SECTION 6.1 Listing on an Exchange.

         If the Debentures are distributed to the holders of the Securities
issued by the Trust, and the Preferred Securities are then so listed, the
Company will use its commercially reasonable efforts to list such Debentures on
the Nasdaq National Market or with another organization on which the Capital
Securities of the Trust are then listed.

                                   ARTICLE 7
                                FORM OF DEBENTURE

         SECTION 7.1 Form of Debenture.

         The Debentures, and the Trustee's Certificate of Authentication to be
endorsed thereon, are to be substantially in the forms attached hereto as
Exhibit A.

                                   ARTICLE 8
                          ORIGINAL ISSUE OF DEBENTURES

         SECTION 8.1 Original Issue of Debentures.

         Debentures in the aggregate principal amount of $134,021,000, may, upon
execution of this Second Supplemental Indenture or upon any written order of the
Company setting forth the amount therefor, be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Debentures to or upon the written order of the
Company, signed by its Chairman of the Board, its President, any Senior
Executive Vice President, any Executive Vice President or any Senior Vice
President and its Secretary or any Assistant Secretary, without any further
action by the Company.


                                       9
<PAGE>

                                   ARTICLE 9
                                  MISCELLANEOUS

         SECTION 9.1 Ratification of Indenture.

         The Indenture, as supplemented by this Second Supplemental Indenture,
is in all respects ratified and confirmed, and this Second Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.

         SECTION 9.2 Trustee Not Responsible for Recitals.

         The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Second Supplemental Indenture.

         SECTION 9.3 Governing Law.

         This Second Supplemental Indenture and each Debenture shall be deemed
to be a contract made under the internal laws of the Commonwealth of Puerto
Rico, and for all purposes shall be construed in accordance with the laws of
such jurisdiction without regard to conflicts of laws principles.

         SECTION 9.4 Separability.

         In case any one or more of the provisions contained in this Second
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Second
Supplemental Indenture or of the Debentures, but this Second Supplemental
Indenture and the Debentures shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.

         SECTION 9.5 Counterparts.

         This Second Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


                                       10
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.


                                 POPULAR, INC.



                                 By  /s/ Richard Barrios
                                    -------------------------------------------
                                 Name: Richard Barrios
                                 Title: Senior Vice President and Treasurer


                                 J.P. MORGAN TRUST COMPANY,
                                 NATIONAL ASSOCIATION,
                                    as Trustee



                                 By  /s/ George Reaves
                                    -------------------------------------------
                                 Name: George Reaves
                                 Title: Vice President


                                       11
<PAGE>

                                                                       EXHIBIT A

                           (FORM OF FACE OF DEBENTURE)

         The following legend applies if this Security is a Global Security:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, New York, New York ("DTC"), to the Issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or such
other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

         This Security is not a deposit or other obligation of a depository
institution and is not insured by the Federal Deposit Insurance Corporation, the
Bank Insurance Fund or any other governmental agency.

CUSIP NO. __________                            PRINCIPAL AMOUNT: $134,021,000
REGISTERED NO. 1

                                  POPULAR, INC.

                 6.125% Junior Subordinated Debentures, Series A
                              due December 1, 2034

POPULAR, INC., a corporation duly organized and existing under the laws of the
Commonwealth of Puerto Rico (hereinafter called the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to J.P. Morgan Trust Company,
National Association (formerly known as Bank One Trust Company, N.A.), as
Property Trustee of Popular Capital Trust II, or registered assigns, the
principal sum of One Hundred Three Million Ninety-Two Thousand Eight Hundred
Dollars ($134,021,000) on December 1, 2034. The Company further promises to pay
interest on the principal sum from November 30, 2004 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for
monthly (subject to deferral as set forth herein) on the first day of each month
of each year commencing January 1, 2005 at the rate of 6.125% per annum,
together with Additional Sums, if any, as provided in Section 1007 of the
Indenture, until the principal hereof is paid or made available for payment;
provided, however, that any overdue installment of interest (after giving effect
to any Extension Period permitted by this Security) shall bear Additional
Interest at the rate of 6.125% per annum (to the extent that the payment of such
interest shall be legally enforceable), compounded monthly, from the date such
installment was due until it is paid or made available for payment. The amount
of interest payable for any period less than a full monthly interest period
shall be computed on the basis of a 360-day year of twelve 30-day months and the
actual days elapsed in a partial month in such period. The amount of interest
payable for any full monthly interest period shall be computed by dividing the


                                      A-1
<PAGE>

applicable rate per annum by twelve. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the 15th calendar day (whether or
not a Business Day, as defined below) next preceding such Interest Payment Date.
If an Interest Payment Date is not a Business Day, interest on this Security
shall be payable on the next day that is a Business Day, with the same force and
effect as if made on such Interest Payment Date, and without any interest or
other payment with respect to the delay. "Business Day" as used hereinabove is a
day other than a Saturday, a Sunday or any other day on which banking
institutions in San Juan, Puerto Rico, Wilmington, Delaware or New York, New
York are authorized or required by law, regulation or executive order to remain
closed or are customarily closed.

         Any interest not punctually paid or duly provided for will forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities of this series not less than 10
days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities of this series may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in the Indenture.

         So long as no Event of Default has occurred and is continuing, the
Company shall have the right, at any time during the term of this Security, from
time to time to defer the payment of interest on this Security for up to 60
consecutive monthly interest payment periods with respect to each deferral
period (each an "Extension Period"), during which Extension Period the Company
shall have the right to make a partial payment of interest on any Interest
Payment Date, at the end of which the Company shall pay all interest then
accrued and unpaid including any Additional Interest, as provided below;
provided, however, that no Extension Period shall extend beyond the Maturity of
the principal of this Security and no such Extension Period may end other than
at the end of a full monthly interest period; and provided, further, however,
that during any such Extension Period, the Company shall not (i) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company that rank pari passu in all
respects with or junior in interest to this Security (except for any partial
payments of interest with respect to and permitted under the Securities of this
series), or (ii) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more employees, officers, directors, consultants or
independent contractors, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange, redemption
or conversion of any class or series of the Company's capital stock (or any
capital stock of a subsidiary of the


                                      A-2
<PAGE>

Company) for any other class or series of the Company's capital stock or of any
class or series of the Company's indebtedness for any class or series of the
Company's capital stock, (c) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto, (e) payments by the Company under the
Guarantee Agreement, or (f) any dividend in the form of stock, warrants, options
or other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock). Prior
to the termination of any such Extension Period, the Company may extend such
Extension Period and further defer the payment of interest, provided that no
Extension Period shall exceed 60 consecutive monthly interest payment periods,
extend beyond the Maturity of the principal of this Security or end other than
at the end of a full monthly interest period. Upon the termination of any such
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Company may elect
to begin a new Extension Period, subject to the above conditions. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional Interest
(to the extent that the payment of such interest shall be legally enforceable)
at the rate of 6.125% per annum, compounded monthly and calculated as set forth
in the first paragraph of this Security, from the dates on which amounts would
otherwise have been due and payable until paid or made available for payment.
The Company shall give the Holder of this Security and the Trustee notice of its
election to begin any Extension Period at least one Business Day prior to the
next succeeding Interest Payment Date on which interest on this Security would
be payable but for such deferral or, so long as such Securities are held by or
on behalf of Popular Capital Trust II, at least one Business Day prior to the
earlier of (i) the next succeeding date on which Distributions on the Capital
Trust Securities of such Issuer Trust would be payable but for such deferral,
and (ii) the date on which the Property Trustee of such Issuer Trust is required
to give notice to holders of such Capital Trust Securities of the record date or
the date such Distributions are payable.

         Payment of interest, including Additional Interest, on this Security
will be made in immediately available funds at the office or agency of the
Company maintained for that purpose in the City of San Juan, Puerto Rico, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however,
that, at the option of the Company, payment of interest may be paid by check
mailed to the Person entitled thereto at such Person's last address as it
appears in the Security Register or, upon written request of a Holder of
$1,000,000 or more in aggregate principal amount of Securities of this series
not less than 15 calendar days prior to the applicable Interest Payment Date, by
wire transfer to such account as may have been designated by such Person.
Payment of principal of and interest, including Additional Interest, on this
Security at Maturity will be made against presentation of this Security at the
office or agency of the Company maintained for that purpose in the City of San
Juan, Puerto Rico.


                                      A-3
<PAGE>

         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 referred to on the reverse hereof by manual signature or its duly
authorized agent under the Indenture referred to on the reverse hereof by manual
signature, this Security shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.


DATED:

                                  POPULAR, INC.



                                  By:
                                     ----------------------------------


                                  Attest:
                                         ------------------------------

                                                   Secretary


TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities
of the series designated
therein referred to in the
within-mentioned Indenture.


J.P. Morgan Trust Company,
National Association,
   as Trustee



By:
   --------------------------------
          Authorized Signature



OR



--------------------------------, as
Authenticating Agent for the Trustee



By:
   --------------------------------
          Authorized Signature


                                      A-4
<PAGE>

                             [Reverse of Debenture]

                                  POPULAR, INC.

                 6.125% Junior Subordinated Debentures, Series A
                              due December 1, 2034

         This Security is one of a duly authorized issue of junior subordinated
securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an indenture dated as of October 31, 2003, as
amended or supplemented from time to time (herein called the "Indenture"),
between the Company and J.P. Morgan Trust Company, National Association
(formerly known as Bank One Trust Company, N.A.), as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof, limited in aggregate principal amount to $134,021,000. All
terms used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture unless otherwise defined in this
Security.

         Subject to any required prior approval of the Primary Federal
Regulator, the Company may at any time, at its option, on or after December 1,
2009, and subject to the terms and conditions of Article Eleven of the
Indenture, redeem the Securities of this series in whole at any time or in part
from time to time, at a Redemption Price equal to 100% of the principal amount
thereof, together, in the case of any such redemption, with accrued but unpaid
interest, including any Additional Interest, to but excluding the Redemption
Date.

         In addition, upon the occurrence and during the continuation of a Tax
Event, an Investment Company Event or a Capital Treatment Event in respect of
Popular Capital Trust II, the Company may, at its option, at any time within 90
days of the occurrence and during the continuation of such Tax Event, Investment
Company Event or Capital Treatment Event, as the case may be, subject to any
required prior approval of the Primary Federal Regulator, redeem the Securities
of this series, in whole but not in part, subject to the terms and conditions of
Article Eleven of the Indenture, at a Redemption Price equal to 100% of the
principal amount thereof, together, in the case of any such redemption, with
accrued but unpaid interest, including any Additional Interest, to but excluding
the Redemption Date.

         The Securities of this series are not subject to repayment at the
option of the Holder hereof. The Securities of this series will not be entitled
to any sinking fund.

         The indebtedness evidenced by the Securities of this series is, to the
extent and in the manner set forth in the Indenture, subordinate and subject in
right of payment to the prior payment in full of the principal of and premium,
if any, and interest on all Senior Debt of the Company, and each Holder of the
Securities of this series, by accepting the same, agrees to and


                                      A-5
<PAGE>

shall be bound by the provisions of the Indenture with respect hereto. The
Securities of this series shall rank on a parity with all Trust Related
Securities, including without limitation, the Guarantee Agreement related to the
6.125% Capital Securities of Popular Capital Trust II.

         If an Event of Default, as defined in the Indenture, with respect to
Securities of this series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of all series to be affected, acting together. The
Indenture also contains provisions permitting the Holders of a majority in
principal amount of the Securities of all series at the time Outstanding
affected by certain provisions of the Indenture, acting together, on behalf of
the Holders of all Securities of such series, to waive compliance by the Company
with those provisions of the Indenture. Certain past defaults under the
Indenture and their consequences may be waived under the Indenture by the
Holders of a majority in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series.
All of the rights of the Holders set forth in this paragraph are subject to the
rights of the holders of Capital Trust Securities as set forth in the Indenture.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.

         The provisions contained in Section 403 and Article Seventeen of the
Indenture for defeasance of the entire indebtedness on this Security and certain
restrictive covenants and certain Events of Default do not apply to this
Security. The provisions contained in Section 401 of the Indenture for
defeasance of the entire indebtedness on this Security in certain circumstances
shall apply to this Security.

         Upon due presentment for registration of transfer of this Security at
the office or agency of the Company in the City of San Juan, Puerto Rico, a new
Security or Securities of this series in authorized denominations of $25 or
integral multiples thereof for an equal aggregate principal amount will be
issued to the transferee in exchange herefor, as provided in the Indenture and
subject to the limitations provided therein and to the limitations described
below, without charge except for any tax or other governmental charge imposed in
connection therewith.

         If this Security is a Global Security, this Security is exchangeable
for definitive Securities in registered form only if (x) the Depositary notifies
the Company that it is unwilling or unable to continue as Depositary for this
Security or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, and a
successor depositary is not appointed within 90 days, (y) the Company in its
sole discretion determines that this Security shall be exchangeable for
definitive Securities in registered form and notifies the Trustee thereof, or
(z) an Event of Default with respect to the Securities represented hereby has


                                      A-6
<PAGE>

occurred and is continuing. If this Security is exchangeable pursuant to the
preceding sentence, it shall be exchangeable for definitive Securities in
registered form, bearing interest, including Additional Interest, at the same
rate, having the same date of issuance, redemption provisions, Stated Maturity
and other terms and of authorized denominations aggregating a like amount.

         If this Security is a Global Security, this Security may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor of the
Depositary or a nominee of such successor. Except as provided above, owners of
beneficial interests in this global Security will not be entitled to receive
physical delivery of Securities in definitive form and will not be considered
the Holders hereof for any purpose under the Indenture.

         Subject to the rights of holders of Senior Debt of the Company set
forth in this Security and the indenture referred to above, no reference herein
to the Indenture and no provision of this Security or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest, including any Additional
Interest, on this Security at the times, place and rate, and in the coin or
currency, herein prescribed, except as otherwise provided in this Security and
except that in the event the Company deposits money or Eligible Instruments as
provided in Section 401 of the Indenture, such payments will be made only from
proceeds of such money or Eligible Instruments.

         Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         No recourse shall be had for the payment of the principal of or the
interest, including Additional Interest, on this Security, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture or any indenture supplemental thereto, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.

         The Company and, by its acceptance of this Security or a beneficial
interest herein, the Holder of, and any Person that acquires a beneficial
interest in, this Security, agree that for United States Federal or Puerto Rico,
state and local tax purposes it is intended that this Security constitute
indebtedness.


                                      A-7
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM  --  as tenants in common

TEN ENT  --  as tenants by the entireties

JT TEN   --  as joint tenants with right of survivorship and not as tenants in
             common

UNIF GIFT MIN ACT -- _______________________ Custodian _______________________
                              (Cust)                            (Minor)

Under Uniform Gifts to Minors Act



---------------------------------
            (State)

         Additional abbreviations may also be used though not in the above list.

         FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto

Please Insert Social Security or
Other Identifying Number of Assignee



------------------------------------



------------------------------------------------------------------------------



------------------------------------------------------------------------------



------------------------------------------------------------------------------
(Please print or type name and address including postal zip code of Assignee)


                                      A-8
<PAGE>

the within Security of POPULAR, INC. and does hereby irrevocably constitute and
appoint __________________ attorney to transfer the said Security on the books
of the Company, with full power of substitution in the premises.



Dated:
      ---------------------------


                                          ------------------------------------


                                          ------------------------------------

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement or any change whatever.


                                      A-9