Document:

<PAGE>

                                                                     EXHIBIT 4.5

                              R&G CAPITAL TRUST III

                              AMENDED AND RESTATED
                              DECLARATION OF TRUST

                                      AMONG

                     R&G FINANCIAL CORPORATION, AS SPONSOR,

           WILMINGTON TRUST COMPANY, AS PROPERTY AND DELAWARE TRUSTEE,

                                       AND

                    THE ADMINISTRATIVE TRUSTEES NAMED HEREIN

                             DATED AS OF _____, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                             PAGE
                                                                                                             ----
<S>                                                                                                          <C>
ARTICLE I DEFINED TERMS....................................................................................    2
         1.1      Definitions..............................................................................    2
ARTICLE II ESTABLISHMENT OF THE TRUST......................................................................    9
         2.1      Name.....................................................................................    9
         2.2      Office of the Delaware Trustee; Principal Place of Business..............................   10
         2.3      Organizational Expenses..................................................................   10
         2.4      Issuance of the Preferred Securities.....................................................   10
         2.5      Issuance of the Common Securities; Subscription and Purchase of Debentures...............   10
         2.6      Declaration of Trust.....................................................................   10
         2.7      Authorization to Enter into Certain Transactions.........................................   11
         2.8      Assets of Trust..........................................................................   14
         2.9      Title to Trust Property..................................................................   14
ARTICLE III PAYMENT ACCOUNT................................................................................   15
         3.1      Payment Account..........................................................................   15
ARTICLE IV DISTRIBUTIONS; REDEMPTION.......................................................................   15
         4.1      Distributions............................................................................   15
         4.2      Redemption...............................................................................   16
         4.3      Subordination of Common Securities.......................................................   19
         4.4      Payment Procedures.......................................................................   19
         4.5      Tax Returns and Reports..................................................................   20
         4.6      Payment of Taxes, Duties, etc. of the Trust..............................................   20
         4.7      Payments Under Indenture.................................................................   20
ARTICLE V TRUST SECURITIES CERTIFICATES....................................................................   20
         5.1      Initial Ownership........................................................................   20
         5.2      The Trust Securities Certificates........................................................   20
         5.3      Execution, Authentication and Delivery of Trust Securities Certificates..................   21
         5.4      Registration of Transfer and Exchange of Preferred Securities Certificates...............   21
         5.5      Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates.......................   23
         5.6      Persons Deemed Securityholders...........................................................   23
         5.7      Access to List of Securityholders' Names and Addresses...................................   23
         5.8      Maintenance of Office or Agency..........................................................   24
         5.9      Appointment of Paying Agent..............................................................   24
         5.10     Ownership of Common Securities by Sponsor................................................   24
         5.11     Trust Securities Certificates............................................................   25
         5.12     [INTENTIONALLY LEFT BLANK]...............................................................   25
         5.13     Rights of Securityholders................................................................   25
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING.......................................................   26
         6.1      Limitations on Voting Rights.............................................................   26
         6.2      Notice of Meetings.......................................................................   27
         6.3      Meetings of Preferred Securityholders....................................................   27
         6.4      Voting Rights............................................................................   28
         6.5      Proxies, etc.............................................................................   28
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                                                           <C>
         6.6      Securityholder Action by Written Consent.................................................   28
         6.7      Record Date for Voting and Other Purposes................................................   28
         6.8      Acts of Securityholders..................................................................   29
         6.9      Inspection of Records....................................................................   30
ARTICLE VII REPRESENTATIONS AND WARRANTIES.................................................................   30
         7.1      Representations and Warranties of Bank and the Property Trustee..........................   30
         7.2      Representations and Warranties of the Delaware Bank and the Delaware Trustee.............   31
         7.3      Representations and Warranties of Sponsor................................................   32
ARTICLE VIII TRUSTEES......................................................................................   33
         8.1      Certain Duties and Responsibilities......................................................   33
         8.2      Certain Notices..........................................................................   35
         8.3      Certain Rights of Property Trustee.......................................................   35
         8.4      Not Responsible for Recitals or Issuance of Securities...................................   37
         8.5      May Hold Securities......................................................................   38
         8.6      Compensation; Indemnity; Fees............................................................   38
         8.7      Corporate Property Trustee Required; Eligibility of Trustees.............................   39
         8.8      Conflicting Interests....................................................................   39
         8.9      Co-Trustees and Separate Trustee.........................................................   39
         8.10     Resignation and Removal; Appointment of Successor........................................   41
         8.11     Acceptance of Appointment by Successor...................................................   43
         8.12     Merger, Conversion, Consolidation or Succession to Business..............................   43
         8.13     Preferential Collection of Claims Against Sponsor or Trust...............................   44
         8.14     Reports by Property Trustee..............................................................   44
         8.15     Reports to the Property Trustee..........................................................   44
         8.16     Evidence of Compliance with Conditions Precedent.........................................   44
         8.17     Number of Trustees.......................................................................   44
         8.18     Delegation of Power......................................................................   45
         8.19     Voting...................................................................................   45
ARTICLE IX TERMINATION, LIQUIDATION AND MERGER.............................................................   45
         9.1      Termination Upon Expiration Date.........................................................   45
         9.2      Early Termination........................................................................   45
         9.3      Termination..............................................................................   46
         9.4      Liquidation..............................................................................   46
         9.5      Mergers, Consolidations, Amalgamations or Replacements of the Trust......................   48
ARTICLE X MISCELLANEOUS PROVISIONS.........................................................................   49
         10.1     Limitation of Rights of Securityholders..................................................   49
         10.2     Amendment................................................................................   49
         10.3     Severability.............................................................................   51
         10.4     Governing Law............................................................................   51
         10.5     Payments Due on Non-Business Day.........................................................   51
         10.6     Successors...............................................................................   51
         10.7     Headings.................................................................................   51
         10.8     Reports, Notices and Demands.............................................................   51
         10.9     Agreement Not to Petition................................................................   52
         10.10    Trust Indenture Act; Conflict with Trust Indenture Act...................................   52
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                                                           <C>
         10.11    Acceptance of Terms of Trust Agreement, Guarantee and Indenture..........................   53
         10.12    Counterparts.............................................................................   53
         10.13    Exchange Act Obligations.................................................................   59
</TABLE>

EXHIBITS

         Exhibit A       Certificate of Trust
         Exhibit B       Form of Common Securities Certificate
         Exhibit C       Form of Preferred Securities Certificate
         Exhibit D       Form of Preferred Securities Certificate Authentication

                                      iii

<PAGE>

                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
                         Section of                                 Amended and Restated
           Trust Indenture Act of 1939, as amended                  Declaration of Trust
<S>                                                                 <C>
310(a)(1).......................................................                   807
310(a)(2).......................................................                   807
310(a)(3).......................................................                   807
310(a)(4).......................................................            207(a)(ii)
310(b)..........................................................                   808
311(a)..........................................................                   813
311(b)..........................................................                   813
312(a)..........................................................                   507
312(b)..........................................................                   507
312(c)..........................................................                   507
313(a)..........................................................                814(a)
313(a)(4).......................................................                814(b)
313(b)..........................................................                814(b)
313(c)..........................................................                  1008
313(d)..........................................................                814(c)
314(a)..........................................................                   815
314(b)..........................................................        Not Applicable
314(c)(1).......................................................                   816
314(c)(2).......................................................                   816
314(c)(3).......................................................        Not Applicable
314(d)..........................................................        Not Applicable
314(e)..........................................................              101, 816
315(a)..........................................................        801(a), 803(a)
315(b)..........................................................             802, 1008
315(c)..........................................................                801(a)
315(d)..........................................................              801, 803
316(a)(2).......................................................        Not Applicable
316(b)..........................................................        Not Applicable
316(c)..........................................................                   607
317(a)(1).......................................................        Not Applicable
317(a)(2).......................................................        Not Applicable
317(b)..........................................................                   509
318(a)..........................................................                  1010
</TABLE>

Note: This Cross-Reference Table does not constitute part of this Agreement
      and shall not affect the interpretation of any of its terms or
      provisions.

                                       iv

<PAGE>

                    AMENDED AND RESTATED DECLARATION OF TRUST

         AMENDED AND RESTATED DECLARATION OF TRUST, dated as of ____, 2003,
among (i) R&G FINANCIAL CORPORATION, a Puerto Rico corporation (including any
successors or assigns, the "Sponsor"), (ii) WILMINGTON TRUST COMPANY, a Delaware
banking corporation, as property trustee and Delaware trustee (the "Delaware
Trustee," "Property Trustee" and, in its separate corporate capacity and not in
its capacity as the Property Trustee or Delaware Trustee, the "Bank"), (iii)
VICTOR J. GALAN, an individual, and JOSEPH R. SANDOVAL, an individual, each of
whose address is c/o Company (each an "Administrative Trustee" and collectively
the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and
the Administrative Trustees referred to collectively as the "Trustees"), and (v)
the several Holders (as hereinafter defined).

                                    RECITALS

         WHEREAS, the Sponsor, the Delaware Trustee, and Victor J. Galan and
Joseph R. Sandoval, each as an administrative trustee, have heretofore duly
declared and established a statutory trust pursuant to the Delaware Statutory
Trust Act by the entering into that certain Declaration of Trust dated as of
July 22, 2003 (the "Original Trust Agreement") and by the execution and filing
by the Delaware Trustee and the administrative trustees with the Secretary of
State of the State of Delaware of the Certificate of Trust, filed on July 22,
2003, the form of which is attached as Exhibit A; and

         WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety as set forth herein to provide for, among other
things, (i) the issuance of the Common Securities (as defined herein) by the
Trust (as defined herein) to the Sponsor; (ii) the issuance and sale of the
Preferred Securities (as defined herein) by the Trust pursuant to the Placement
Agreement (as defined herein); (iii) the acquisition by the Trust from the
Sponsor of all of the right, title and interest in the Debentures (as defined
herein); and (iv) the appointment of the Trustees;

         NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Securityholders (as defined herein),
hereby amends and restates the Original Trust Agreement in its entirety and
agrees as follows:

                                     - 1 -

<PAGE>

                                   ARTICLE I

                                  DEFINED TERMS

         1.1      Definitions

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

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

                  (b)      all other terms used herein that are defined in the
                           Trust Indenture Act, either directly or by reference
                           therein, have the meanings assigned to them therein;

                  (c)      unless the context otherwise requires,  any reference
                           to an "Article" or a "Section" refers to an Article
                           or a Section, as the case may be, of this Trust
                           Agreement; and

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

         "Act" has the meaning specified in Section 6.8.

         "Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount equal to accrued interest,
including compound interest, in arrears and paid by the Sponsor on a Like Amount
of Debentures for such period.

         "Additional Interest" has the meaning specified in Section 1.1 of the
Indenture.

         "Administrative Trustee" means each of Victor J. Galan and Joseph R.
Sandoval, solely in his capacity as Administrative Trustee of the Trust formed
and continued hereunder and not in his individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.

         "Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified Person is a
general partner; (e) any officer or director of the specified Person; and (f) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.

                                      - 2 -

<PAGE>

         "Authenticating Agent" means an authenticating agent with respect to
the Preferred Securities appointed by the Property Trustee pursuant to Section
5.3.

         "Bank" has the meaning specified in the Preamble to this Trust
Agreement.

         "Bankruptcy Event" means, with respect to any Person:

         (a)      the entry of a decree or order by a court having jurisdiction
in the premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of or in respect
of such Person under the United States Bankruptcy Code of 1978, as amended, or
any other similar applicable federal or state law, and the continuance of any
such decree or order unvacated and unstayed for a period of 90 days; or the
commencement of an involuntary case under the United States Bankruptcy Code of
1978, as amended, in respect of such Person, which shall continue undismissed
for a period of 90 days or entry of an order for relief in such case; or the
entry of a decree or order of a court having jurisdiction in the premises for
the appointment on the ground of insolvency or bankruptcy of a receiver,
custodian, liquidator, trustee or assignee in bankruptcy or insolvency of such
Person or of its property, or for the winding up or liquidation of its affairs,
and such decree or order shall have remained in force unvacated and unstayed for
a period of 90 days; or

         (b)      the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the filing of
a bankruptcy proceeding against it, or the filing by such Person of a petition
or answer or consent seeking liquidation or reorganization under the United
States Bankruptcy Code of 1978, as amended, or other similar applicable federal
or state law, or the consent by such Person to the filing of any such petition
or to the appointment on the ground of insolvency or bankruptcy of a receiver or
custodian or liquidator or trustee or assignee in bankruptcy or insolvency of
such Person or of its property, or shall make a general assignment for the
benefit of creditors.

         "Bankruptcy Laws" has the meaning specified in Section 10.9.

         "Board Resolution" means a copy of a resolution certified by the
Secretary of the Sponsor to have been duly adopted by the Sponsor's Board of
Directors, or such committee of the Board of Directors or officers of the
Sponsor to which authority to act on behalf of the Board of Directors has been
delegated, and to be in full force and effect on the date of such certification,
and delivered to the appropriate Trustee.

         "Business Day" means a day other than a Saturday or Sunday, a day on
which banking institutions in San Juan, Puerto Rico, Wilmington, Delaware or The
City of New York are authorized or required by law, executive order or
regulation to remain closed, or a day on which the Property Trustee's Corporate
Trust Office or the Corporate Trust Office of the Debenture Trustee is closed
for business.

         "Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.

         "Closing Date" means the date of execution and delivery of this Trust
Agreement.

                                     - 3 -

<PAGE>

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

         "Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.

         "Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.

         "Company" means R&G Financial Corporation, a Puerto Rico corporation.

         "Corporate Trust Office" means the office at which, at any particular
time, the corporate trust business of the Property Trustee or the Debenture
Trustee, as the case may be, shall be principally administered, which office at
the date hereof, in each such case, is located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attn: Corporate Trust
Administration.

         "Debenture Event of Default" means an "Event of Default" as defined in
Section 7.1 of the Indenture.

         "Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.

         "Debenture Trustee" means Wilmington Trust Company, a Delaware banking
corporation and any successor thereto, as trustee under the Indenture.

         "Debentures" means up to $103,092,800 principal amount of the Sponsor's
____ Junior Subordinated Debentures due _____, 2033 issued pursuant to the
Indenture.

         "Definitive Preferred Securities Certificates" means Preferred
Securities Certificates issued in certified, fully registered form as provided
in Section 5.4.

         "Delaware Bank" means Wilmington Trust Company or its successor in
interest in such capacity, or any successor appointed as herein provided.

         "Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code Sections 3801 et seq. as it may be amended from
time to time.

         "Delaware Trustee" means the commercial bank or trust company
identified as the "Delaware Trustee" in the Preamble to this Trust Agreement
solely in its capacity as Delaware Trustee of the Trust and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.

         "Distribution Date" has the meaning specified in Section 4.1(a).

                                     - 4 -

<PAGE>

         "Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.

         "Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

         (a)      the occurrence of a Debenture Event of Default; or

         (b)      default by the Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period of 30
days; or

         (c)      default by the Trust in the payment of any Redemption Price or
Special Event Redemption Price, as applicable, of any Trust Security when it
becomes due and payable; or

         (d)      default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust Agreement
(other than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (b) or (c), above) and continuation of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or

         (e)      the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Sponsor to appoint a successor Property
Trustee within 60 days thereof.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Expiration Date" has the meaning specified in Section 9.1.

         "Extended Interest Payment Period" has the meaning specified in Section
4.1 of the Indenture.

         "Guarantee" means the Preferred Securities Guarantee Agreement executed
and delivered by the Sponsor and Wilmington Trust Company, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Preferred Securities, as amended from time to
time.

         "Indenture" means the Indenture, dated as of ____, 2003, between the
Sponsor and the Debenture Trustee, as trustee, as amended or supplemented from
time to time.

         "Investment Company Act," means the Investment Company Act of 1940, as
amended, as in effect at the date of execution of this instrument.

                                     - 5 -

<PAGE>

         "Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.

         "Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having an aggregate Liquidation Amount equal to the
aggregate principal amount of Debentures to be contemporaneously redeemed in
accordance with the Indenture and the proceeds of which shall be used to pay the
Redemption Price or Special Event Redemption Price, as applicable, of such Trust
Securities; and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a termination or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed. Each
Debenture distributed pursuant to clause (b) above shall carry with it accrued
interest in an amount equal to the accrued and unpaid interest then due on such
Debentures.

         "Liquidation Amount" means the stated amount of $25 per Trust Security.

         "Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a dissolution and
liquidation of the Trust pursuant to Section 9.4(a).

         "Liquidation Distribution" has the meaning specified in Section 9.4(d).

         "Officers' Certificate" means a certificate signed by the Chief
Executive Officer or an Executive Vice President and by the Chief Financial
Officer, of the Sponsor, and delivered to the appropriate Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 8.16 shall
be the principal executive, financial or accounting officer of the Sponsor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:

         (a)      a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;

         (b)      a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;

         (c)      a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

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

         "Opinion of Counsel" means an opinion in writing of independent,
outside legal counsel for the Trust, the Property Trustee, the Delaware Trustee
or the Sponsor, who shall be reasonably acceptable to the Property Trustee.

                                     - 6 -

<PAGE>

         "Original Trust Agreement" has the meaning specified in the Recitals to
this Trust Agreement.

         "Outstanding", when used with respect to Preferred Securities, means,
as of the date of determination, all Preferred Securities theretofore executed
and delivered under this Trust Agreement, except:

         (a)      Preferred Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;

         (b)      Preferred Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent for the Holders of such Preferred Securities; provided that, if
such Preferred Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and

         (c)      Preferred Securities which have been paid for in exchange for,
or in lieu of, which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5 and 5.11; provided, however, that in determining
whether the Holders of the requisite Liquidation Amount of the Outstanding
Preferred Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Preferred Securities owned by the Sponsor,
any Trustee or any Affiliate of the Sponsor or any Trustee shall be disregarded
and deemed not to be Outstanding, except that (a) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
that such Trustee knows to be so owned shall be so disregarded; and (b) the
foregoing shall not apply at any time when all of the outstanding Preferred
Securities are owned by the Sponsor, one or more of the Trustees and/or any such
Affiliate. Preferred Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the satisfaction of
the Administrative Trustees the pledgee's right so to act with respect to such
Preferred Securities and the pledgee is not the Sponsor or any other Obligor
upon the Preferred Securities or a Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Sponsor or any
Affiliate of the Sponsor.

         "Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and shall initially be the Bank.

         "Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures shall be held and from which the Property Trustee
shall make payments to the Securityholders in accordance with Sections 4.1 and
4.2.

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

         "Placement Agreement" means the Placement Agreement, dated as of ____,
2003, among the Trust, the Sponsor and the Placement Agent named therein.

                                     - 7 -

<PAGE>

         "Preferred Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.

         "Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit C.

         "Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee," in the Preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust and not in its
individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.

         "Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.

         "Redemption Price" with respect to any Trust Security as of any given
date identified in the chart below, means the price which is expressed as a
percentage of the Liquidation Amount:

<TABLE>
<CAPTION>
    YEAR BEGINNING                         PERCENTAGE
    --------------                         ----------
<S>                                        <C>
On or after _____, 2008                       105%
On or after _____, 2009                       104%
On or after _____, 2010                       103%
On or after _____, 2011                       102%
On or after _____, 2012                       101%
On or after _____, 2013                       100%
</TABLE>

         plus accumulated and unpaid Distributions to the Redemption Date
allocated on a pro rata basis (based on Liquidation Amounts).

         "Relevant Trustee" shall have the meaning specified in Section 8.10.

         "Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.

         "Securityholder" or "Holder" means a Person in whose name a Trust
Security is or Trust Securities are registered in the Securities Register; any
such Person is a beneficial owner within the meaning of the Delaware Statutory
Trust Act.

         "Special Event" means a "Special Event" as defined in Section 1.1 of
the Indenture.

                                     - 8 -

<PAGE>

         "Special Event Redemption Price" with respect to a Trust Security on
the occurrence of a Special Event, means the Liquidation Amount of such Trust
Security, plus accumulated and unpaid Distributions to the Redemption Date
allocated on a pro rata basis (based on Liquidation Amounts).

         "Sponsor" has the meaning specified in the Preamble to this Trust
Agreement.

         "Trust" means the Delaware statutory trust created and continued hereby
and identified on the cover page to this Trust Agreement.

         "Trust Agreement" means this Amended and Restated Declaration of Trust,
as the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, as in force at the date as of which this instrument was executed;
provided, however, that in the event the Trust Indenture Act of 1939, as
amended, is amended after such date, "Trust Indenture Act" means, to the extent
required by any such amendment, the Trust Indenture Act of 1939 as so amended.

         "Trust Property" means (a) the Debentures; (b) any cash on deposit in,
or owing to, the Payment Account; and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Property Trustee pursuant to the trusts of this Trust
Agreement.

         "Trust Security" means any one of the Common Securities or the
Preferred Securities.

         "Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.

         "Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.

                                   ARTICLE II

                           ESTABLISHMENT OF THE TRUST

         2.1      Name.

         The Trust continued hereby shall be known as "R&G Capital Trust III,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other
Trustees, in which name the Trustees may engage in the transactions contemplated
hereby, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.

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<PAGE>

         2.2      Office of the Delaware Trustee; Principal Place of Business.

         The address of the Delaware Trustee in the State of Delaware is c/o
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, DE 19890, Attn: Corporate Trust Administration, or such other
address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Sponsor. The principal executive
office of the Trust is c/o R&G Financial Corporation, 280 Jesus T. Pinero
Avenue, San Juan, Puerto Rico 00918.

         2.3      Organizational Expenses.

         The Sponsor shall pay organizational expenses of the Trust as they
arise or shall, upon request of any Trustee, promptly reimburse such Trustee for
any such expenses paid by such Trustee. The Sponsor shall make no claim upon the
Trust Property for the payment of such expenses.

         2.4      Issuance of the Preferred Securities.

         The Sponsor and an Administrative Trustee, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the Placement
Agreement. Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver in accordance with the Placement
Agreement, Preferred Securities Certificates, registered in the name of the
Person or Persons entitled thereto in an aggregate amount of 4,000,000 Preferred
Securities, having an aggregate Liquidation Amount of $100,000,000, against
receipt of the aggregate purchase price for such Preferred Securities of
$100,000,000, which amount such Administrative Trustee shall promptly deliver to
the Property Trustee.

         2.5      Issuance of the Common Securities; Subscription and Purchase
                  of Debentures.

         Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Sponsor, a Common Securities
Certificate, registered in the name of the Sponsor, in an aggregate amount of
Common Securities having an aggregate Liquidation Amount of $3,092,800 against
payment by the Sponsor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Sponsor Debentures, registered in the name of the Property Trustee on
behalf of the Trust and having an aggregate principal amount equal to
$3,092,800, and, in satisfaction of the purchase price for such Debentures, the
Property Trustee, on behalf of the Trust, shall deliver to the Sponsor the sum
of $3,092,800.

         2.6      Declaration of Trust.

         The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities representing undivided beneficial interests in the assets
of the Trust, (b) to invest the gross proceeds from such sale to acquire certain
Debentures of the Debenture Issuer, (c) to facilitate direct investment in the
assets of the Trust through the issuance of the securities, and use the proceeds
from such sale to acquire the Debentures; and (d) to engage in those activities
necessary or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest the proceeds derived from investments, pledge any of its assets, or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust not to be classified for United States and Puerto Rico income tax
purposes as a trust whose assets are deemed to be owned by the grantor (grantor
trust). The Sponsor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein and in the
Delaware Statutory Trust Act, and the Trustees hereby accept such appointment.
The

                                     - 10 -

<PAGE>

Property Trustee hereby declares that it shall hold the Trust Property in trust
upon and subject to the conditions set forth herein for the benefit of the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Statutory Trust Act.

         2.7      Authorization to Enter into Certain Transactions.

                  (a)      The Trustees shall conduct the affairs of the Trust
                           in accordance with the terms of this Trust Agreement.
                           Subject to the limitations set forth in paragraph (b)
                           of this Section 2.7 and Article VIII, and in
                           accordance with the following provisions (i) and
                           (ii), the Administrative Trustees shall have the
                           authority to enter into all transactions and
                           agreements determined by the Administrative Trustees
                           to be appropriate in exercising the authority,
                           express or implied, otherwise granted to the
                           Administrative Trustees under this Trust Agreement,
                           and to perform all acts in furtherance thereof,
                           including without limitation, the following:

                           (i)      As among the Trustees, each Administrative
                                    Trustee, acting singly or jointly, shall
                                    have the power and authority to act on
                                    behalf of the Trust with respect to the
                                    following matters:

                                    (A)     issuance and sale of the Trust
                                            Securities and the compliance with
                                            the Placement Agreement in
                                            connection therewith;

                                    (B)     causing the Trust to enter into, and
                                            execute, deliver and perform on
                                            behalf of the Trust, the Placement
                                            Agreement, and such other agreements
                                            or documents as may be necessary or
                                            desirable in connection with the
                                            purposes and function of the Trust;

                                    (C)     assisting in the registration of the
                                            Preferred Securities under the
                                            Securities Act of 1933, as amended,
                                            and under State securities "blue
                                            sky" laws including the execution of
                                            a registration statement and the
                                            qualification of this Trust
                                            Agreement as a trust indenture under
                                            the Trust Indenture Act;

                                    (D)     sending of notices (other than
                                            notices of default) and other
                                            information regarding the Trust
                                            Securities and the Debentures to the
                                            Securityholders in accordance with
                                            this Trust Agreement;

                                     - 11 -

<PAGE>

                                    (E)     appointment of a Paying Agent,
                                            Authenticating Agent and
                                            Securities Registrar in accordance
                                            with this Trust Agreement;

                                    (F)     to the extent provided in this Trust
                                            Agreement, the winding up of the
                                            affairs of and liquidation of the
                                            Trust and the preparation, execution
                                            and filing of the certificate of
                                            cancellation with the Secretary of
                                            State of the State of Delaware;

                                    (G)     taking all action that may be
                                            necessary or appropriate for the
                                            preservation and the continuation of
                                            the Trust's valid existence, rights,
                                            franchises and privileges as a
                                            statutory trust under the laws of
                                            the State of Delaware and of each
                                            other jurisdiction in which such
                                            existence is necessary to protect
                                            the limited liability of the Holders
                                            of the Preferred Securities or to
                                            enable the Trust to effect the
                                            purposes for which the Trust was
                                            created; and

                                    (H)     taking any action incidental to the
                                            foregoing as the Administrative
                                            Trustees may from time to time
                                            determine is necessary or advisable
                                            to give effect to the terms of this
                                            Trust Agreement for the benefit of
                                            the Securityholders (without
                                            consideration of the effect of any
                                            such action on any particular
                                            Securityholder).

                           (ii)     As among the Trustees, the Property Trustee
                                    shall have the power, duty and authority to
                                    act on behalf of the Trust with respect to
                                    the following matters:

                                    (A)     the establishment of the Payment
                                            Account;

                                    (B)     the receipt of the Debentures;

                                    (C)     the collection of interest,
                                            principal and any other payments
                                            made in respect of the Debentures in
                                            the Payment Account;

                                    (D)     the distribution of amounts owed
                                            to the Securityholders in respect of
                                            the Trust Securities in accordance
                                            with the terms of this Trust
                                            Agreement;

                                    (E)     the exercise of all of the rights,
                                            powers and privileges of a holder of
                                            the Debentures;

                                    (F)     the sending of notices of default
                                            and other information regarding the
                                            Trust Securities and the Debentures
                                            to the Securityholders in accordance
                                            with this Trust Agreement;

                                     - 12 -

<PAGE>

                                    (G)     the distribution of the Trust
                                            Property in accordance with the
                                            terms of this Trust Agreement;

                                    (H)     to the extent provided in this
                                            Trust Agreement, the winding up of
                                            the affairs of and liquidation of
                                            the Trust;

                                    (I)     after an Event of Default, the
                                            taking of any action incidental to
                                            the foregoing as the Property
                                            Trustee may from time to time
                                            determine is necessary or advisable
                                            to give effect to the terms of this
                                            Trust Agreement and protect and
                                            conserve the Trust Property for the
                                            benefit of the Securityholders
                                            (without consideration of the effect
                                            of any such action on any particular
                                            Securityholder);

                                    (J)     registering transfers of the Trust
                                            Securities in accordance with this
                                            Trust Agreement; and

                                    (K)     except as otherwise provided in this
                                            Section 2.7(a)(ii), the Property
                                            Trustee shall have none of the
                                            duties, liabilities, powers or the
                                            authority of the Administrative
                                            Trustees set forth in Section
                                            2.7(a)(i).

                  (b)      So long as this Trust Agreement remains in effect,
                           the Trust (or the Trustees acting on behalf of the
                           Trust) shall not engage in any activity or
                           transaction except as expressly provided herein or
                           contemplated hereby. In particular, the Trustees
                           shall not (i) acquire any investments or engage in
                           any activities not authorized by this Trust
                           Agreement; (ii) sell, assign, transfer, exchange,
                           mortgage, pledge, set-off or otherwise dispose of any
                           of the Trust Property or interests therein, including
                           to Securityholders, or acquire any assets, in each
                           case, except as expressly provided herein; (iii) take
                           any action that would cause the Trust to fail or
                           cease to qualify as a grantor trust, or to be
                           classified as an association taxable as a corporation
                           for United States federal or Puerto Rico income tax
                           purposes; (iv) incur any indebtedness for borrowed
                           money or issue any other debt; or (v) take or consent
                           to any action that would result in the placement of a
                           Lien on any of the Trust Property. The Administrative
                           Trustees shall defend all claims and demands of all
                           Persons at any time claiming any Lien on any of the
                           Trust Property adverse to the interest of the Trust
                           or the Securityholders in their capacity as
                           Securityholders.

                  (c)      In connection with the issue and sale of the
                           Preferred Securities, the Sponsor shall have the
                           right and responsibility to assist the Trust with
                           respect to, or effect on behalf of the Trust, the
                           following (and any actions taken by the Sponsor in
                           furtherance of the following prior to the date of
                           this Trust Agreement are hereby ratified and
                           confirmed in all respects):

                                     - 13 -

<PAGE>

                           (i)      the preparation and filing by the Trust with
                                    the Commission and the execution of a
                                    registration statement on the appropriate
                                    form in relation to the Preferred
                                    Securities, the Debentures, and the
                                    Guarantee, including any amendments thereto;

                           (ii)     the determination of the States in which to
                                    take appropriate action to qualify or,
                                    register for sale all or part of the
                                    Preferred Securities and to do any and all
                                    such acts, other than actions which must be
                                    taken by or on behalf of the Trust, and
                                    advise the Trustees of actions they must
                                    take on behalf of the Trust, and prepare for
                                    execution and filing any documents to be
                                    executed and filed by the Trust or on behalf
                                    of the Trust, as the Sponsor deems necessary
                                    or advisable in order to comply with the
                                    applicable laws of any such States;

                           (iii)    the taking of any other actions necessary or
                                    desirable to carry out any of the foregoing
                                    activities.

                  (d)      Notwithstanding anything herein to the contrary,
                           the Trustees are authorized and directed to conduct
                           the affairs of the Trust and to operate the Trust so
                           that the Trust: shall not be deemed to be an
                           "investment company" required to be registered under
                           the Investment Company Act, shall be classified as a
                           grantor trust, and not as an association taxable as a
                           corporation so that the Debentures shall be treated
                           as indebtedness of the Sponsor for United States
                           federal and Puerto Rico income tax purposes. In this
                           connection, subject to Section 10.2, the Sponsor and
                           the Administrative Trustees are authorized to take
                           any action, not inconsistent with applicable law or
                           this Trust Agreement, that each of the Sponsor and
                           the Trustees determines in their discretion to be
                           necessary or desirable for such purposes.

         2.8      Assets of Trust.

         The assets of the Trust shall consist of the Trust Property.

         2.9      Title to Trust Property.

         Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Securityholders in accordance with
this Trust Agreement.

                                     - 14 -

<PAGE>

                                   ARTICLE III

                                 PAYMENT ACCOUNT

         3.1      Payment Account.

                  (a)      On or prior to the Closing Date, the Property Trustee
                           shall establish the Payment Account. The Property
                           Trustee and any agent of the Property Trustee shall
                           have exclusive control and sole right of withdrawal
                           with respect to the Payment Account for the purpose
                           of making deposits and withdrawals from the Payment
                           Account in accordance with this Trust Agreement. All
                           monies and other property deposited or held from time
                           to time in the Payment Account shall be held by the
                           Property Trustee in the Payment Account for the
                           exclusive benefit of the Securityholders and for
                           distribution as herein provided, including (and
                           subject to) any priority of payments provided for
                           herein.

                  (b)      The Property Trustee shall deposit in the Payment
                           Account, promptly upon receipt, all payments of
                           principal of or interest on, and any other payments
                           or proceeds with respect to, the Debentures. Amounts
                           held in the Payment Account shall not be invested by
                           the Property Trustee pending distribution thereof.

                                   ARTICLE IV

                            DISTRIBUTIONS; REDEMPTION

         4.1      Distributions.

                  (a)      Distributions on the Trust Securities shall be
                           cumulative, and shall accumulate whether or not there
                           are funds of the Trust available for the payment of
                           Distributions. Distributions shall accumulate from
                           _____, 2003, and, except during any Extended Interest
                           Payment Period with respect to the Debentures, shall
                           be payable monthly in arrears on the twenty sixth day
                           of each month, commencing on ________, 2003. If any
                           date on which a Distribution is otherwise payable on
                           the Trust Securities is not a Business Day, then the
                           payment of such Distribution shall be made on the
                           next succeeding day that is a Business Day (and
                           without any interest or other payment in respect of
                           any such delay) except that, if such Business Day is
                           in the next succeeding calendar year, such payment
                           shall be made on the immediately preceding Business
                           Day (and without any reduction of interest or any
                           other payment in respect of any such acceleration),
                           in each case with the same force and effect as if
                           made on such date (each date on which distributions
                           are payable in accordance with this Section 4.1(a), a
                           "Distribution Date").

                                     - 15 -

<PAGE>

                  (b)      The Trust Securities represent undivided beneficial
                           interests in the Trust Property. Distributions on the
                           Trust Securities shall be payable at a rate of ___%
                           per annum of the Liquidation Amount of the Trust
                           Securities. The amount of Distributions payable for
                           any full period shall be computed on the basis of a
                           360-day year of twelve 30-day months. The amount of
                           Distributions for any partial period shall be
                           computed on the basis of the number of days elapsed
                           in a 360-day year of twelve 30-day months. During any
                           Extended Interest Payment Period with respect to the
                           Debentures, Distributions on the Preferred Securities
                           shall be deferred for a period equal to the Extended
                           Interest Payment Period. The amount of Distributions
                           payable for any period shall include the Additional
                           Amounts, if any.

                  (c)      Distributions on the Trust Securities shall be made
                           by the Property Trustee solely from the Payment
                           Account and shall be payable on each Distribution
                           Date only to the extent that the Trust has funds on
                           hand and immediately available by 12:30 p.m. on each
                           Distribution Date in the Payment Account for the
                           payment of such Distributions.

                  (d)      Distributions on the Trust Securities with respect to
                           a Distribution Date shall be payable to the Holders
                           thereof as they appear on the Securities Register for
                           the Trust Securities on the relevant record date,
                           which shall be the fifteenth day of the month
                           immediately preceding the Distribution Date.

         4.2      Redemption.

                  (a)      On each Debenture Redemption Date and on the maturity
                           of the Debentures, the Trust shall be required to
                           redeem a Like Amount of Trust Securities at the
                           Redemption Price or Special Event Redemption Price,
                           as applicable.

                  (b)      Notice of redemption shall be given by the Property
                           Trustee by first-class mail, postage prepaid, mailed
                           not less than 30 nor more than 60 days prior to the
                           Redemption Date to each Holder of Trust Securities to
                           be redeemed, at such Holder's address appearing in
                           the Securities Register. All notices of redemption
                           shall state:

                           (i)      the Redemption Date;

                           (ii)     the Redemption Price or Special Event
                                    Redemption Price, as applicable;

                           (iii)    if less than all the Outstanding Trust
                                    Securities are to be redeemed, the
                                    identification and the aggregate Liquidation
                                    Amount of the particular Trust Securities to
                                    be redeemed;

                                     - 16 -

<PAGE>

                           (iv)     that, on the Redemption Date, the Redemption
                                    Price or Special Event Redemption Price, as
                                    applicable, shall become due and payable
                                    upon each such Trust Security to be redeemed
                                    and that Distributions thereon shall cease
                                    to accumulate on and after said date, except
                                    as provided in Section 4.2(d); and

                           (v)      the place or places at which Trust
                                    Securities are to be surrendered for the
                                    payment of the Redemption Price or Special
                                    Event Redemption Price, as applicable.

                  (c)      Upon the occurrence of a Special Event,  the Trust
                           Securities may be redeemed on a Redemption Date, in
                           whole but not in part, at the Special Event
                           Redemption Price. The Trust Securities may otherwise
                           be redeemed on a Redemption Date at the Redemption
                           Price. In each instance, the Trust Securities shall
                           be redeemed with the proceeds from the
                           contemporaneous redemption of Debentures. Redemptions
                           of the Trust Securities shall be made and the
                           Redemption Price or Special Event Redemption Price,
                           as applicable, shall be payable on each Redemption
                           Date only to the extent that the Trust has
                           immediately available funds then on hand and
                           available in the Payment Account for the payment of
                           such Redemption Price or Special Event Redemption
                           Price, as applicable.

                  (d)      If the Property Trustee gives a notice of
                           redemption in respect of any Preferred Securities,
                           then, by 12:00 noon, New York City time, on the
                           Redemption Date, the Property Trustee, subject to
                           Section 4.2(c), shall deposit with the Paying Agent
                           funds sufficient to pay the Redemption Price or
                           Special Event Redemption Price, as applicable, and
                           shall give the Paying Agent irrevocable instructions
                           and authority to pay the Redemption Price or Special
                           Event Redemption Price, as applicable, to the record
                           holders thereof upon surrender of their Preferred
                           Securities Certificates. Notwithstanding the
                           foregoing, Distributions payable on or prior to the
                           Redemption Date for any Trust Securities called for
                           redemption shall be payable to the Holders of such
                           Trust Securities as they appear on the Securities
                           Register for the Trust Securities on the relevant
                           record dates for the related Distribution Dates. If
                           notice of redemption shall have been given and funds
                           deposited as required, then upon the date of such
                           deposit, (i) all rights of Securityholders holding
                           Trust Securities so called for redemption shall
                           cease, except the right of such Securityholders to
                           receive the Redemption Price or Special Event
                           Redemption Price, as applicable, but without interest
                           and (ii) such Trust Securities shall cease to be
                           Outstanding. In the event that any date on which any
                           Redemption Price or Special Event Redemption Price,
                           as applicable, is payable is not a Business Day, then
                           payment of the Redemption Price or Special Event
                           Redemption Price, as applicable, payable on such date
                           shall be made on the next succeeding day that is a
                           Business Day (and without any interest or other
                           payment in respect of any such delay) except that, if
                           such Business Day is in the next succeeding calendar
                           year, such payment shall be made

                                     - 17 -

<PAGE>

                           on the immediately preceding Business Day (and
                           without any reduction of interest or any other
                           payment in respect of any such acceleration), in each
                           case with the same force and effect as if made on
                           such date. In the event that payment of the
                           Redemption Price or Special Event Redemption Price,
                           as applicable, in respect of any Trust Securities
                           called for redemption is improperly withheld or
                           refused and not paid either by the Trust or by the
                           Sponsor pursuant to the Guarantee, Distributions on
                           such Trust Securities shall continue to accumulate,
                           at the then applicable rate, from the Redemption Date
                           originally established by the Trust for such Trust
                           Securities to the date such Redemption Price or
                           Special Event Redemption Price, as applicable, is
                           actually paid, in which case the actual payment date
                           shall be the date fixed for redemption for purposes
                           of calculating the Redemption Price or Special Event
                           Redemption Price, as applicable.

                  (e)      Payment of the Redemption Price or Special Event
                           Redemption Price, as applicable, on the Trust
                           Securities shall be made to the record holders
                           thereof as they appear on the Securities Register for
                           the Trust Securities on the relevant record date,
                           which shall be the fifteenth day of the month prior
                           to the relevant Redemption Date.

                  (f)      Subject to Section 4.3(a),  if less than all the
                           Outstanding Trust Securities are to be redeemed on a
                           Redemption Date, then the aggregate Liquidation
                           Amount of Trust Securities to be redeemed shall be
                           allocated on a pro rata basis (based on Liquidation
                           Amounts) among the Common Securities and the
                           Preferred Securities. The particular Preferred
                           Securities to be redeemed shall be selected not more
                           than 60 days prior to the Redemption Date by the
                           Property Trustee from the Outstanding Preferred
                           Securities not previously called for redemption, by
                           such method (including, without limitation, by lot)
                           as the Property Trustee shall deem fair and
                           appropriate and which may provide for the selection
                           for redemption of portions (equal to such Liquidation
                           Amount or an integral multiple of such Liquidation
                           Amount in excess thereof) of the Liquidation Amount
                           of Preferred Securities of a denomination larger than
                           such Liquidation Amount; provided, however, in the
                           event the redemption relates only to Preferred
                           Securities purchased and held by the Sponsor being
                           redeemed in exchange for a Like Amount of Debentures,
                           the Property Trustee shall select those particular
                           Preferred Securities for redemption. The Property
                           Trustee shall promptly notify the Securities
                           Registrar in writing of the Preferred Securities
                           selected for redemption and, in the case of any
                           Preferred Securities selected for partial redemption,
                           the Liquidation Amount thereof to be redeemed. For
                           all purposes of this Trust Agreement, unless the
                           context otherwise requires, all provisions relating
                           to the redemption of Preferred Securities shall
                           relate, in the case of any Preferred Securities
                           redeemed or to be redeemed only in part, to the
                           portion of the Liquidation Amount of Preferred
                           Securities which has been or is to be redeemed.

                                     - 18 -

<PAGE>

         4.3      Subordination of Common Securities.

                  (a)      Payment of Distributions (including Additional
                           Amounts, if applicable) on, and the Redemption Price
                           or Special Event Redemption Price, as applicable, of,
                           the Trust Securities, as applicable, shall be made,
                           subject to Section 4.2(f), pro rata among the Common
                           Securities and the Preferred Securities based on the
                           Liquidation Amount of the Trust Securities; provided,
                           however, that if on any Distribution Date or
                           Redemption Date any Event of Default resulting from a
                           Debenture Event of Default shall have occurred and be
                           continuing, no payment of any Distribution (including
                           Additional Amounts, if applicable) on, or Redemption
                           Price or Special Event Redemption Price, as
                           applicable, of, any Common Security, and no other
                           payment on account of the redemption, liquidation or
                           other acquisition of Common Securities, shall be made
                           unless payment in full in cash of all accumulated and
                           unpaid Distributions (including Additional Amounts,
                           if applicable) on all Outstanding Preferred
                           Securities for all Distribution periods terminating
                           on or prior thereto, or in the case of payment of the
                           Redemption Price or Special Event Redemption Price,
                           as applicable, the full amount of such Redemption
                           Price or Special Event Redemption Price, as
                           applicable, on all Outstanding Preferred Securities
                           then called for redemption, shall have been made or
                           provided for, and all funds immediately available to
                           the Property Trustee shall first be applied to the
                           payment in full in cash of all Distributions
                           (including Additional Amounts, if applicable) on, or
                           the Redemption Price or Special Event Redemption
                           Price, as applicable, of, Preferred Securities then
                           due and payable.

                  (b)      In the case of the occurrence of any Event of
                           Default resulting from a Debenture Event of Default,
                           the Holder of Common Securities shall be deemed to
                           have waived any right to act with respect to any such
                           Event of Default under this Trust Agreement until the
                           effect of all such Events of Default with respect to
                           the Preferred Securities shall have been cured,
                           waived or otherwise eliminated. Until any such Event
                           of Default under this Trust Agreement with respect to
                           the Preferred Securities shall have been so cured,
                           waived or otherwise eliminated, the Property Trustee
                           shall act solely on behalf of the Holders of the
                           Preferred Securities and not the Holder of the Common
                           Securities, and only the Holders of the Preferred
                           Securities shall have the right to direct the
                           Property Trustee to act on their behalf.

         4.4      Payment Procedures.

         Payments of Distributions (including Additional Amounts, if applicable)
in respect of the Preferred Securities shall be made by wire or by check mailed
to the address of the Person entitled thereto as such address shall appear on
the Securities Register.

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<PAGE>

         4.5      Tax Returns and Reports.

         The Administrative Trustees shall prepare (or cause to be prepared), at
the Sponsor's expense, and file all United States federal, Puerto Rico, state
and local tax and information returns and reports required to be filed by or in
respect of the Trust. In this regard, the Administrative Trustees shall (a)
prepare and file (or cause to be prepared and filed) the appropriate Internal
Revenue Service and Puerto Rico Treasury Department forms required to be filed
in respect of the Trust in each taxable year of the Trust; and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
appropriate Internal Revenue Service or Puerto Rico Treasury Department forms
required to be furnished to such Securityholder or the information required to
be provided on such form. The Administrative Trustees shall provide the Sponsor
with a copy of all such returns and reports promptly after such filing or
furnishing. The Property Trustee shall comply with United States federal and
Puerto Rico withholding and backup withholding tax laws and information
reporting requirements with respect to any payments to Securityholders under the
Trust Securities.

         4.6      Payment of Taxes, Duties, etc. of the Trust.

         Upon receipt under the Debentures of Additional Interest, the Property
Trustee, at the direction of an Administrative Trustee or the Sponsor, shall
promptly pay any taxes, duties or governmental charges of whatsoever nature
(other than withholding taxes) imposed on the Trust by the United States or any
other taxing authority.

         4.7      Payments Under Indenture.

         Any amount payable hereunder to any Holder of Preferred Securities
shall be reduced by the amount of any corresponding payment such Holder has
directly received under the Indenture pursuant to Section 5.13(b) or (c) hereof.

                                   ARTICLE V

                          TRUST SECURITIES CERTIFICATES

         5.1      Initial Ownership.

         Upon the creation of the Trust and the contribution by the Sponsor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Sponsor shall be
the sole beneficial owner of the Trust.

         5.2      The Trust Securities Certificates.

         The Preferred Securities Certificates shall be issued in minimum
denominations of the Liquidation Amount and integral multiples of the
Liquidation Amount in excess thereof, and the Common Securities Certificates
shall be issued in denominations of the Liquidation Amount and multiples thereof
(which may, in the case of the Common Securities, include fractional amounts).
The Trust Securities Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual

                                     - 20 -

<PAGE>

or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 5.4, 5.11
and 5.13.

         5.3      Execution, Authentication and Delivery of Trust Securities
                  Certificates.

                  (a)      On the Closing Date, the Administrative Trustees
                           shall cause Trust Securities Certificates, in an
                           aggregate Liquidation Amount as provided in Sections
                           2.4 and 2.5, to be executed on behalf of the Trust by
                           at least one of the Administrative Trustees and
                           delivered to or upon the written order of the
                           Sponsor, signed by its Chief Executive Officer,
                           President, any Vice President or its Treasurer
                           without further corporate action by the Sponsor, in
                           authorized denominations.

                  (b)      A Preferred Securities Certificate shall not be valid
                           until authenticated by the manual signature of an
                           authorized signatory of the Property Trustee in
                           substantially the form of Exhibit D attached hereto.
                           The signature shall be conclusive evidence that the
                           Preferred Securities Certificate has been
                           authenticated under this Trust Agreement. Each
                           Preferred Security Certificate shall be dated the
                           date of its authentication.

         Upon the written order of the Trust signed by one of the Administrative
Trustees, the Property Trustee shall authenticate and make available for
delivery the Preferred Securities Certificates.

         The Property Trustee may appoint an Authenticating Agent acceptable to
the Trust to authenticate the Preferred Securities. An Authenticating Agent may
authenticate the Preferred Securities whenever the Property Trustee may do so.
Each reference in this Trust Agreement to authentication by the Property Trustee
includes authentication by such agent. An Authenticating Agent has the same
rights as the Property Trustee to deal with the Company or the Trust.

         5.4      Registration of Transfer and Exchange of Preferred Securities
                  Certificates.

                  (a)      The Sponsor shall keep or cause to be kept, at the
                           office or agency maintained pursuant to Section 5.8,
                           a register or registers for the purpose of
                           registering Trust Securities Certificates and
                           transfers and exchanges of Preferred Securities
                           Certificates (herein referred to as the "Securities
                           Register") in which the registrar designated by the
                           Sponsor (the "Securities Registrar"), subject to such
                           reasonable regulations as it may prescribe, shall
                           provide for the registration of Preferred Securities
                           Certificates and Common Securities Certificates
                           (subject to Section 5.10 in the case of the Common
                           Securities Certificates) and registration of

                                     - 21 -

<PAGE>

                           transfers and exchanges of Preferred Securities
                           Certificates as herein provided. The Property Trustee
                           shall be the initial Securities Registrar.

                  (b)      Upon surrender for registration of transfer of any
                           Preferred Securities Certificate at the office or
                           agency maintained pursuant to Section 5.8, the
                           Administrative Trustees or any one of them shall
                           execute and deliver, in the name of the designated
                           transferee or transferees, one or more new Preferred
                           Securities Certificates in authorized denominations
                           of a like aggregate Liquidation Amount dated the date
                           of execution by such Administrative Trustee or
                           Trustees. The Securities Registrar shall not be
                           required to register the transfer of any Preferred
                           Securities that have been called for redemption. At
                           the option of a Holder, Preferred Securities
                           Certificates may be exchanged for other Preferred
                           Securities Certificates in authorized denominations
                           of the same class and of a like aggregate Liquidation
                           Amount upon surrender of the Preferred Securities
                           Certificates to be exchanged at the office or agency
                           maintained pursuant to Section 5.8.

                  (c)      Every Preferred Securities Certificate presented
                           or surrendered for registration of transfer or
                           exchange shall be accompanied by a written instrument
                           of transfer in form satisfactory to the Property
                           Trustee and the Securities Registrar duly executed by
                           the Holder or his, her, or its attorney duly
                           authorized in writing. Each Preferred Securities
                           Certificate surrendered for registration of transfer
                           or exchange shall be canceled and subsequently
                           disposed of by the Property Trustee in accordance
                           with its customary practice. The Trust shall not be
                           required to (i) issue, register the transfer of, or
                           exchange any Preferred Securities during a period
                           beginning at the opening of business 15 calendar days
                           before the date of mailing of a notice of redemption
                           of any Preferred Securities called for redemption and
                           ending at the close of business on the day of such
                           mailing; or (ii) register the transfer of or exchange
                           any Preferred Securities so selected for redemption,
                           in whole or in part, except the unredeemed portion of
                           any such Preferred Securities being redeemed in part.

                  (d)      No service charge shall be made for any registration
                           of transfer or exchange of Preferred Securities
                           Certificates, but the Securities Registrar may
                           require payment of a sum sufficient to cover any tax
                           or governmental charge that may be imposed in
                           connection with any transfer or exchange of Preferred
                           Securities Certificates.

                  (e)      Preferred Securities may only be transferred, in
                           whole or in part, in accordance with the terms and
                           conditions set forth in this Trust Agreement. To the
                           fullest extent permitted by law, any transfer or
                           purported transfer of any Preferred Security not made
                           in accordance with this Trust Agreement shall be null
                           and void. A Preferred Security may be transferred, in
                           whole or in part, to a Person who takes delivery in
                           the form of another Preferred Security as provided in
                           Section 5.4(a).

                                     - 22 -

<PAGE>

         5.5      Mutilated, Destroyed, Lost or Stolen Trust Securities
                  Certificates.

         If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate; and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section 5.5, the Administrative Trustees or the Securities Registrar may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section 5.5 shall constitute conclusive
evidence of an undivided beneficial interest in the assets of the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.

         5.6      Persons Deemed Securityholders.

         The Trustees, the Paying Agent and the Securities Registrar shall treat
the Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving Distributions and for all other purposes whatsoever,
and neither the Trustees nor the Securities Registrar shall be bound by any
notice to the contrary.

         5.7      Access to List of Securityholders' Names and Addresses.

         At any time when the Property Trustee is not also acting as the
Securities Registrar, the Administrative Trustees or the Sponsor shall furnish
or cause to be furnished to the Property Trustee (a) on the 15th day of each
month, a list, in such form as the Property Trustee may reasonably require, of
the names and addresses of the Securityholders as of the most recent record
date; and (b) promptly after receipt by any Administrative Trustee or the
Sponsor of a request therefor from the Property Trustee in order to enable the
Property Trustee to discharge its obligations under this Trust Agreement, in
each case to the extent such information is in the possession or control of the
Administrative Trustees or the Sponsor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each owner shall be
deemed to have agreed not to hold the Sponsor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.

                                     - 23 -

<PAGE>

         5.8      Maintenance of Office or Agency.

         The Administrative Trustees shall maintain, or cause to be maintained,
in Wilmington, Delaware, or other location designated by the Administrative
Trustees, an office or offices or agency or agencies where Preferred Securities
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustees in respect of the Trust
Securities Certificates may be served. The Administrative Trustees initially
designate the Corporate Trust Office of the Property Trustee, Wilmington Trust
Company, as the principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Sponsor and to
the Securityholders of any change in the location of the Securities Register or
any such office or agency.

         5.9      Appointment of Paying Agent.

         The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying Agent
shall initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee must be acceptable to the Administrative Trustees and the
Sponsor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Sponsor. In the event that the Property Trustee shall
no longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Sponsor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent shall hold all sums, if any, held by it for payment
to the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and, upon removal of a
Paying Agent, such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.1, 8.3 and 8.6 shall apply to
the Property Trustee also in its role as Paying Agent, for so long as the
Property Trustee shall act as Paying Agent and, to the extent applicable, to any
other Paying Agent appointed hereunder. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.

         5.10     Ownership of Common Securities by Sponsor.

         On the Closing Date, the Sponsor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, any attempted transfer of the Common Securities (other than a transfer
in connection with a merger or consolidation of the Sponsor into another
corporation pursuant to Section 12.1 of the Indenture)

                                     - 24 -

<PAGE>

shall be void. The Administrative Trustees shall cause each Common Securities
Certificate issued to the Sponsor to contain a legend stating "TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT
AS PROVIDED IN THE TRUST AGREEMENT (AS DEFINED BELOW)."

         5.11     Trust Securities Certificates.

                  (a)      Upon their original issuance, Preferred Securities
                           Certificates shall be issued in definitive form, as
                           provided in Section 5.4.

                  (b)      A single Common Securities Certificate representing
                           the Common Securities shall be issued to the Sponsor
                           in the form of a definitive Common Securities
                           Certificate.

         5.12     [INTENTIONALLY LEFT BLANK]

         5.13     Rights of Securityholders.

                  (a)      The legal title to the Trust Property is vested
                           exclusively in the Property Trustee (in its capacity
                           as such) in accordance with Section 2.9, and the
                           Securityholders shall not have any right or title
                           therein other than the undivided beneficial interest
                           in the assets of the Trust conferred by their Trust
                           Securities and they shall have no right to call for
                           any partition or division of property, profits or
                           rights of the Trust except as described below. The
                           Trust Securities shall be personal property giving
                           only the rights specifically set forth therein and in
                           this Trust Agreement. The Trust Securities shall have
                           no preemptive or similar rights. When issued and
                           delivered to Holders of the Preferred Securities
                           against payment of the purchase price therefor, the
                           Preferred Securities shall be fully paid and, to the
                           fullest extent permitted by applicable law,
                           nonassessable interests in the Trust. The Holders of
                           the Preferred Securities, in their capacities as
                           such, shall be entitled to the same limitation of
                           personal liability extended to stockholders of
                           private corporations for profit organized under the
                           General Corporation Law of the State of Delaware.

                  (b)      For so long as any Preferred Securities remain
                           Outstanding, if, upon a Debenture Event of Default,
                           the Debenture Trustee fails or the holders of not
                           less than 25% in principal amount of the outstanding
                           Debentures fail to declare the principal of all of
                           the Debentures to be immediately due and payable, the
                           Holders of at least 25% in Liquidation Amount of the
                           Preferred Securities then Outstanding shall have such
                           right by a notice in writing to the Sponsor and the
                           Debenture Trustee; and upon any such declaration such
                           principal amount of and the accrued interest on all
                           of the Debentures shall become immediately due and
                           payable, provided that the payment of principal and
                           interest on such Debentures shall remain subordinated
                           to the extent provided in the Indenture.

                                     - 25 -

<PAGE>

                  (c)      For so long as any Preferred Securities remain
                           Outstanding, upon a Debenture Event of Default
                           arising from the failure to pay interest or principal
                           on the Debentures, the Holders of any Preferred
                           Securities then Outstanding shall, to the fullest
                           extent permitted by law, have the right to directly
                           institute proceedings for enforcement of payment to
                           such Holders of principal of or interest on the
                           Debentures having a principal amount equal to the
                           Liquidation Amount of the Preferred Securities of
                           such Holders.

                                   ARTICLE VI

                    ACTS OF SECURITYHOLDERS; MEETINGS; VOTING

         6.1      Limitations on Voting Rights.

                  (a)      Except as provided in this Section 6.1, in Sections
                           5.13, 8.10 and 10.2 and in the Indenture and as
                           otherwise required by law, no record Holder of
                           Preferred Securities shall have any right to vote or
                           in any manner otherwise control the administration,
                           operation and management of the Trust or the
                           obligations of the parties hereto, nor shall anything
                           herein set forth, or contained in the terms of the
                           Trust Securities Certificates, be construed so as to
                           constitute the Securityholders from time to time as
                           partners or members of an association.

                  (b)      So long as any Debentures are held by the Property
                           Trustee on behalf of the Trust, the Trustees shall
                           not (i) direct the time, method and place of
                           conducting any proceeding for any remedy available to
                           the Debenture Trustee, or executing any trust or
                           power conferred on the Debenture Trustee with respect
                           to such Debentures; (ii) waive any past default which
                           is waivable under Article VII of the Indenture; (iii)
                           exercise any right to rescind or annul a declaration
                           that the principal of all the Debentures shall be due
                           and payable; or (iv) consent to any amendment,
                           modification or termination of the Indenture or the
                           Debentures, where such consent shall be required,
                           without, in each case, obtaining the prior approval
                           of the Holders of at least two-thirds in Liquidation
                           Amount of all Outstanding Preferred Securities;
                           provided, however, that where a consent under the
                           Indenture would require the consent of each holder of
                           outstanding Debentures affected thereby, no such
                           consent shall be given by the Property Trustee
                           without the prior written consent of each Holder of
                           Preferred Securities. The Trustees shall not revoke
                           any action previously authorized or approved by a
                           vote of the Holders of the Outstanding Preferred
                           Securities, except by a subsequent vote of the
                           Holders of the Outstanding Preferred Securities. The
                           Property Trustee shall notify each Holder of the
                           Outstanding Preferred Securities of any notice of
                           default received from the Debenture Trustee with
                           respect to the Debentures. In addition to obtaining
                           the foregoing approvals of the Holders of the
                           Preferred Securities, prior to taking any of the
                           foregoing actions, the

                                     - 26 -

<PAGE>

                           Trustees shall, at the expense of the Sponsor, obtain
                           an Opinion of Counsel experienced in such matters to
                           the effect that the Trust shall continue to be
                           classified as a grantor trust, and not as an
                           association taxable as a corporation for United
                           States federal or Puerto Rico income tax purposes on
                           account of such action.

                  (c)      If any proposed amendment to the Trust Agreement
                           provides for, or the Trustees otherwise propose to
                           effect, (i) any action that would adversely affect in
                           any material respect the powers, preferences or
                           special rights of the Preferred Securities, whether
                           by way of amendment to the Trust Agreement or
                           otherwise; or (ii) the dissolution, winding-up or
                           termination of the Trust, other than pursuant to the
                           terms of this Trust Agreement, then the Holders of
                           Outstanding Preferred Securities as a class shall be
                           entitled to vote on such amendment or proposal and
                           such amendment or proposal shall not be effective
                           except with the approval of the Holders of at least a
                           majority in Liquidation Amount of the Outstanding
                           Preferred Securities. No amendment to this Trust
                           Agreement may be made if, as a result of such
                           amendment, the Trust would cease to be classified as
                           a grantor trust, or would be classified as an
                           association taxable as a corporation for United
                           States federal or Puerto Rico income tax purposes.

         6.2      Notice of Meetings.

         Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.

         6.3      Meetings of Preferred Securityholders.

                  (a)      No annual meeting of Securityholders is required to
                           be held. The Administrative Trustees, however, shall
                           call a meeting of Securityholders to vote on any
                           matter in respect of which Preferred Securityholders
                           are entitled to vote upon the written request of the
                           Preferred Securityholders of 25% of the Outstanding
                           Preferred Securities (based upon their aggregate
                           Liquidation Amount) and the Administrative Trustees
                           or the Property Trustee may, at any time in their
                           discretion, call a meeting of Preferred
                           Securityholders to vote on any matters as to which
                           the Preferred Securityholders are entitled to vote.

                  (b)      Preferred Securityholders of record of 50% of the
                           Outstanding Preferred Securities (based upon their
                           aggregate Liquidation Amount), present in person or
                           by proxy, shall constitute a quorum at any meeting of
                           Securityholders.

                                     - 27 -

<PAGE>

                  (c)      If a quorum is present at a meeting, an affirmative
                           vote by the Preferred Securityholders of record
                           present, in person or by proxy, holding a majority of
                           the Preferred Securities (based upon their aggregate
                           Liquidation Amount) held by the Preferred
                           Securityholders of record present, either in person
                           or by proxy, at such meeting shall constitute the
                           action of the Securityholders, unless this Trust
                           Agreement requires a greater number of affirmative
                           votes.

         6.4      Voting Rights.

         Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities (with any fractional
multiple thereof rounded up or down as the case may be to the closest integral
multiple) in respect of any matter as to which such Securityholders are entitled
to vote.

         6.5      Proxies, etc.

         At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy, shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
Only Holders shall be entitled to vote. When Trust Securities are held jointly
by several Persons, any one of them may vote at any meeting in person or by
proxy in respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Securityholder shall be deemed valid unless challenged at
or prior to its exercise, and, the burden of proving invalidity shall rest on
the challenger. No proxy shall be valid more than three years after its date of
execution.

         6.6      Securityholder Action by Written Consent.

         Any action which may be taken by Securityholders at a meeting may be
taken without a meeting and without prior notice if all Securityholders are
provided with a request for written consent and Securityholders holding a
majority of all Outstanding Trust Securities (based upon their aggregate
Liquidation Amount) entitled to vote in respect of such action (or such larger
proportion thereof as shall be required by any express provision of this Trust
Agreement) shall consent to the action in writing (based upon their aggregate
Liquidation Amount).

         6.7      Record Date for Voting and Other Purposes.

         For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees or the Property Trustee may from time
to time fix a date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of Distribution or other action, as the case may
be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.

                                     - 28 -

<PAGE>

         6.8      Acts of Securityholders.

                  (a)      Any request,  demand,  authorization,  direction,
                           notice, consent, waiver or other action provided or
                           permitted by this Trust Agreement to be given, made
                           or taken by Securityholders may be embodied in and
                           evidenced by one or more instruments of substantially
                           similar tenor signed by such Securityholders in
                           person or by an agent duly appointed in writing; and,
                           except as otherwise expressly provided herein, such
                           action shall become effective when such instrument or
                           instruments are delivered to an Administrative
                           Trustee. Such instrument or instruments (and the
                           action embodied therein and evidenced thereby) are
                           herein sometimes referred to as the "Act" of the
                           Securityholders signing such instrument or
                           instruments. Proof of execution of any such
                           instrument or of a writing appointing any such agent
                           shall be sufficient for any purpose of this Trust
                           Agreement and (subject to Section 8.1) conclusive in
                           favor of the Trustees, if made in the manner provided
                           in this Section 6.8.

                  (b)      The fact and date of the execution by any Person of
                           any such instrument or writing may be proved by the
                           affidavit of a witness of such execution or by a
                           certificate of a notary public or other officer
                           authorized by law to take acknowledgments of deeds,
                           certifying that the individual signing such
                           instrument or writing acknowledged to him the
                           execution thereof. Where such execution is by a
                           signer acting in a capacity other than his individual
                           capacity, such certificate or affidavit shall also
                           constitute sufficient proof of his authority. The
                           fact and date of the execution of any such instrument
                           or writing, or the authority of the Person executing
                           the same, may also be proved in any other manner
                           which any Trustee receiving the same deems
                           sufficient.

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

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

                  (e)      Without limiting the foregoing, a Securityholder
                           entitled hereunder to take any action hereunder with
                           regard to any particular Trust Security may do so
                           with regard to all or any part of the Liquidation
                           Amount of such Trust Security or by one or more duly
                           appointed agents each of which may do so pursuant to
                           such appointment with regard to all or any part of
                           such liquidation amount.

                                     - 29 -

<PAGE>

         6.9      Inspection of Records.

         Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection at the principal
executive office of the Trust (as indicated in Section 2.2) by Holders of the
Trust Securities during normal business hours for any purpose reasonably related
to such Holder's interest as a Holder.

                                  ARTICLE VII

                         REPRESENTATIONS AND WARRANTIES

         7.1      Representations and Warranties of Bank and the Property
Trustee.

         The Bank and the Property Trustee, each severally on behalf of and as
to itself, as of the date hereof, and each successor Property Trustee at the
time of the successor Property Trustee's acceptance of its appointment as
Property Trustee hereunder (in the case of a successor Property Trustee, the
term "Bank" as used herein shall be deemed to refer to such successor Property
Trustee in its separate corporate capacity), hereby represents and warrants (as
applicable) for the benefit of the Sponsor and the Securityholders that:

                  (a)      the Bank is duly organized, validly existing and in
                           good standing under the laws of the State of
                           Delaware;

                  (b)      the Bank has full corporate power, authority and
                           legal right to execute, deliver and perform its
                           obligations under this Trust Agreement and has taken
                           all necessary action to authorize the execution,
                           delivery and performance by it of this Trust
                           Agreement;

                  (c)      this Trust Agreement has been duly authorized,
                           executed and delivered by the Property Trustee and
                           constitutes the valid and legally binding agreement
                           of the Property Trustee enforceable against it in
                           accordance with its terms, subject to bankruptcy,
                           insolvency, fraudulent transfer, reorganization,
                           moratorium and similar laws of general applicability
                           relating to or affecting creditors, rights and to
                           general equity principles;

                  (d)      the execution, delivery and performance by the
                           Property Trustee of this Trust Agreement have been
                           duly authorized by all necessary corporate or other
                           action on the part of the Property Trustee and do not
                           require any approval of stockholders of the Bank and
                           such execution, delivery and performance shall not
                           (i) violate the Bank's charter or by-laws; (ii)
                           violate any provision of, or constitute, with or
                           without notice or lapse of time, a default under, or
                           result in the creation or imposition of, any Lien on
                           any properties included in the Trust Property
                           pursuant to the provisions of, any indenture,
                           mortgage, credit agreement, license or other
                           agreement or instrument to which the Property Trustee
                           or the Bank is a party or by which it is bound; or
                           (iii) violate any law, governmental rule or
                           regulation of the United States or the State of
                           Delaware, as the case may be,

                                     - 30 -

<PAGE>

                           governing the banking or trust powers of the Bank or
                           the Property Trustee (as appropriate in context) or
                           any order, judgment or decree applicable to the
                           Property Trustee or the Bank;

                  (e)      neither the authorization, execution or delivery by
                           the Property Trustee of this Trust Agreement nor the
                           consummation of any of the transactions by the
                           Property Trustee contemplated herein or therein
                           requires the consent or approval of, the giving of
                           notice to, the registration with or the taking of any
                           other action with respect to any governmental
                           authority or agency under any existing federal law
                           governing the banking or trust powers of the Bank or
                           the Property Trustee, as the case may be, under the
                           laws of the United States or the State of Delaware;

                  (f)      there are no proceedings pending or, to the best of
                           the Property Trustee's knowledge, threatened against
                           or affecting the Bank or the Property Trustee in any
                           court or before any governmental authority, agency or
                           arbitration board or tribunal which, individually or
                           in the aggregate, would materially and adversely
                           affect the Trust or would question the right, power
                           and authority of the Property Trustee to enter into
                           or perform its obligations as one of the Trustees
                           under this Trust Agreement; and

                  (g)      the Property Trustee is a Person eligible pursuant to
                           the Trust Indenture Act to act as such and has a
                           combined capital and surplus of at least $50,000,000.

         7.2      Representations and Warranties of the Delaware Bank and the
Delaware Trustee.

         The Delaware Bank and the Delaware Trustee, each severally on behalf of
and as to itself, as of the date hereof, and each successor Delaware Trustee at
the time of the successor Delaware Trustee's acceptance of appointment as
Delaware Trustee hereunder (the term "Delaware Bank" being used to refer to such
successor Delaware Trustee in its separate corporate capacity), hereby
represents and warrants (as applicable) for the benefit of the Sponsor and the
Securityholders that:

                  (a)      the Delaware Bank is duly organized, validly existing
                           and in good standing under the laws of the State of
                           Delaware;

                  (b)      the Delaware Bank has full corporate power, authority
                           and legal right to execute, deliver and perform its
                           obligations under this Trust Agreement and has taken
                           all necessary action to authorize the execution,
                           delivery and performance by it of this Trust
                           Agreement;

                  (c)      this Trust Agreement has been duly authorized,
                           executed and delivered by the Delaware Trustee and
                           constitutes the valid and legally binding agreement
                           of the Delaware Trustee enforceable against it in
                           accordance with its terms, subject to bankruptcy,
                           insolvency, fraudulent transfer, reorganization,
                           moratorium and similar laws of general applicability
                           relating to or affecting creditors, rights and to
                           general equity principles;

                                     - 31 -

<PAGE>

                  (d)      the execution, delivery and performance by the
                           Delaware Trustee of this Trust Agreement have been
                           duly authorized by all necessary corporate or other
                           action on the part of the Delaware Trustee and do not
                           require any approval of stockholders of the Delaware
                           Bank and such execution, delivery and performance
                           shall not (i) violate the Delaware Bank's charter or
                           by-laws; (ii) violate any provision of, or
                           constitute, with or without notice or lapse of time,
                           a default under, or result in the creation or
                           imposition of, any Lien on any properties included in
                           the Trust Property pursuant to the provisions of, any
                           indenture, mortgage, credit agreement, license or
                           other agreement or instrument to which the Delaware
                           Bank or the Delaware Trustee is a party or by which
                           it is bound; or (iii) violate any law, governmental
                           rule or regulation of the United States or the State
                           of Delaware, as the case may be, governing the
                           banking or trust powers of the Delaware Bank or the
                           Delaware Trustee (as appropriate in context) or any
                           order, judgment or decree applicable to the Delaware
                           Bank or the Delaware Trustee;

                  (e)      neither the authorization, execution or delivery by
                           the Delaware Trustee of this Trust Agreement nor the
                           consummation of any of the transactions by the
                           Delaware Trustee contemplated herein or therein
                           requires the consent or approval of, the giving of
                           notice to, the registration with or the taking of any
                           other action with respect to any governmental
                           authority or agency under any existing federal law
                           governing the banking or trust powers of the Delaware
                           Bank or the Delaware Trustee, as the case may be,
                           under the laws of the United States or the State of
                           Delaware, other than the filing of a certificate of
                           trust in accordance with the Delaware Statutory Trust
                           Act; and

                  (f)      there are no proceedings pending or, to the best of
                           the Delaware Trustee's knowledge, threatened against
                           or affecting the Delaware Bank or the Delaware
                           Trustee in any court or before any governmental
                           authority, agency or arbitration board or tribunal
                           which, individually or in the aggregate, would
                           materially and adversely affect the Trust or would
                           question the right, power and authority of the
                           Delaware Trustee to enter into or perform its
                           obligations as one of the Trustees under this Trust
                           Agreement.

         7.3      Representations and Warranties of Sponsor.

         The Sponsor hereby represents and warrants for the benefit of the
Securityholders that:

                  (a)      the Trust Securities Certificates issued on the
                           Closing Date, on behalf of the Trust have been duly
                           authorized and, shall have been, duly and validly
                           executed, issued and delivered by the Administrative
                           Trustees pursuant to the terms and provisions of, and
                           in accordance with the requirements of, this Trust
                           Agreement and the Securityholders shall be, as of
                           such date, entitled to the benefits of this Trust
                           Agreement; and

                                     - 32 -

<PAGE>

                  (b)      there are no taxes, fees or other governmental
                           charges payable by the Trust (or the Trustees on
                           behalf of the Trust) in connection with the
                           execution, delivery and performance by the Bank, the
                           Property Trustee or the Delaware Trustee, as the case
                           may be, of this Trust Agreement.

                                  ARTICLE VIII

                                    TRUSTEES

         8.1      Certain Duties and Responsibilities.

                  (a)      The duties and responsibilities of the Trustees shall
                           be as provided by this Trust Agreement and, in the
                           case of the Property Trustee, by the Trust Indenture
                           Act. Notwithstanding the foregoing, no provision of
                           this Trust Agreement shall require the Trustees to
                           expend or risk their own funds or otherwise incur any
                           financial liability in the performance of any of
                           their duties hereunder, or in the exercise of any of
                           their rights or powers, if they shall have reasonable
                           grounds for believing that repayment of such funds or
                           adequate indemnity against such risk or liability is
                           not reasonably assured to it. No Administrative
                           Trustee nor the Delaware Trustee shall be liable for
                           its act or omissions hereunder except as a result of
                           its own gross negligence or willful misconduct. The
                           Property Trustee's liability shall be determined
                           under the Trust Indenture Act. Whether or not therein
                           expressly so provided, every provision of this Trust
                           Agreement relating to the conduct or affecting the
                           liability of or affording protection to the Trustees
                           shall be subject to the provisions of this Section
                           8.1. To the extent that, at law or in equity, the
                           Delaware Trustee or an Administrative Trustee has
                           duties (including fiduciary duties) and liabilities
                           relating thereto to the Trust or to the
                           Securityholders, the Delaware Trustee or such
                           Administrative Trustee shall not be liable to the
                           Trust or to any Securityholder for such Trustee's
                           good faith reliance on the provisions of this Trust
                           Agreement. The provisions of this Trust Agreement, to
                           the extent that they restrict the duties and
                           liabilities of the Delaware Trustee or the
                           Administrative Trustees otherwise existing at law or
                           in equity, are agreed by the Sponsor and the
                           Securityholders to replace such other duties and
                           liabilities of the Delaware Trustee or the
                           Administrative Trustees, as the case may be.

                  (b)      All payments made by the Property Trustee or a Paying
                           Agent in respect of the Trust Securities shall be
                           made only from the revenue and proceeds from the
                           Trust Property and only to the extent that there
                           shall be sufficient revenue or proceeds from the
                           Trust Property to enable the Property Trustee or a
                           Paying Agent to make payments in accordance with the
                           terms hereof. Each Securityholder, by its acceptance
                           of a Trust Security, agrees that it shall look solely
                           to the revenue and proceeds from the Trust Property
                           to the extent legally available for distribution to
                           it as herein

                                     - 33 -

<PAGE>

                           provided and that the Trustees are not personally
                           liable to it for any amount distributable in respect
                           of any Trust Security or for any other liability in
                           respect of any Trust Security. This Section 8.1(b)
                           does not limit the liability of the Trustees
                           expressly set forth elsewhere in this Trust Agreement
                           or, in the case of the Property Trustee, in the Trust
                           Indenture Act.

                  (c)      No provision of this Trust Agreement shall be
                           construed to relieve the Property Trustee from
                           liability for its own negligent action, its own
                           negligent failure to act, or its own willful
                           misconduct, except that:

                           (i)      the Property Trustee shall not be liable for
                                    any error of judgment made in good faith by
                                    an authorized officer of the Property
                                    Trustee, unless it shall be proved that the
                                    Property Trustee was negligent in
                                    ascertaining the pertinent facts;

                           (ii)     the Property Trustee shall not be liable
                                    with respect to any action taken or omitted
                                    to be taken by it in good faith in
                                    accordance with the direction of the Holders
                                    of not less than a majority in Liquidation
                                    Amount of the Trust Securities relating to
                                    the time, method and place of conducting any
                                    proceeding for any remedy available to the
                                    Property Trustee, or exercising any trust or
                                    power conferred upon the Property Trustee
                                    under this Trust Agreement;

                           (iii)    the Property Trustee's sole duty with
                                    respect to the custody, safe keeping and
                                    physical preservation of the Debentures and
                                    the Payment Account shall be to deal with
                                    such property in a similar manner as the
                                    Property Trustee deals with similar property
                                    for its own account, subject to the
                                    protections and limitations on liability
                                    afforded to the Property Trustee under this
                                    Trust Agreement and the Trust Indenture Act;

                           (iv)     the Property Trustee shall not be liable for
                                    any interest on any money received by it
                                    except as it may otherwise agree with the
                                    Sponsor and money held by the Property
                                    Trustee need not be segregated from other
                                    funds held by it except in relation to the
                                    Payment Account maintained by the Property
                                    Trustee pursuant to Section 3.1 and except
                                    to the extent otherwise required by law; and

                  (d)      the Property Trustee shall not be responsible for
                           monitoring the compliance by the Administrative
                           Trustees or the Sponsor with their respective duties
                           under this Trust Agreement, nor shall the Property
                           Trustee be liable for the negligence, default or
                           misconduct of the Administrative Trustees or the
                           Sponsor.

                                     - 34 -

<PAGE>

         8.2      Certain Notices.

                  (a)      Within five Business Days after the occurrence of any
                           Event of Default actually known to the Property
                           Trustee, the Property Trustee shall transmit, in the
                           manner and to the extent provided in Section 10.8,
                           notice of such Event of Default to the
                           Securityholders, the Administrative Trustees and the
                           Sponsor, unless such Event of Default shall have been
                           cured or waived. For purposes of this Section 8.2 the
                           term "Event of Default" means any event that is, or
                           after notice or lapse of time or both would become,
                           an Event of Default.

                  (b)      The Administrative Trustees shall transmit, to the
                           Securityholders in the manner and to the extent
                           provided in Section 10.8, notice of the Sponsor's
                           election to begin or further extend an Extended
                           Interest Payment Period on the Debentures (unless
                           such election shall have been revoked) and of any
                           election by the Sponsor to accelerate the Maturity
                           Date of the Debentures, as defined in the Indenture,
                           within the time specified for transmitting such
                           notice to the holders of the Debentures pursuant to
                           the Indenture as originally executed.

         8.3      Certain Rights of Property Trustee.

         Subject to the provisions of Section 8.1:

                  (a)      the Property Trustee may rely and shall be protected
                           in acting or refraining from acting in good faith
                           upon any resolution, Opinion of Counsel, certificate,
                           written representation of a Holder or transferee,
                           certificate of auditors or any other certificate,
                           statement, instrument, opinion, report, notice,
                           request, consent, order, appraisal, bond, debenture,
                           note, other evidence of indebtedness or other paper
                           or document believed by it to be genuine and to have
                           been signed or presented by the proper party or
                           parties;

                  (b)      if (i) in performing its duties under this Trust
                           Agreement, the Property Trustee is required to decide
                           between alternative courses of action; or (ii) in
                           construing any of the provisions of this Trust
                           Agreement, the Property Trustee finds the same
                           ambiguous or inconsistent with other provisions
                           contained herein; or (iii) the Property Trustee is
                           unsure of the application of any provision of this
                           Trust Agreement, then, except as to any matter as to
                           which the Preferred Securityholders are entitled to
                           vote under the terms of this Trust Agreement, the
                           Property Trustee shall deliver a notice to the
                           Sponsor requesting written instructions of the
                           Sponsor as to the course of action to be taken and
                           the Property Trustee shall take such action, or
                           refrain from taking such action, as the Property
                           Trustee shall be instructed in writing to take, or to
                           refrain from taking, by the Sponsor; provided,
                           however, that if the Property Trustee does not
                           receive such instructions of the Sponsor within 10
                           Business Days after it has delivered

                                     - 35 -

<PAGE>

                           such notice, or such reasonably shorter period of
                           time set forth in such notice (which to the extent
                           practicable shall not be less than 2 Business Days),
                           it may, but shall be under no duty to, take or
                           refrain from taking such action not inconsistent with
                           this Trust Agreement as it shall deem advisable and
                           in the best interests of the Securityholders, in
                           which event the Property Trustee shall have no
                           liability except for its own bad faith, negligence or
                           willful misconduct;

                  (c)      any direction or act of the Sponsor or the
                           Administrative Trustees contemplated by this Trust
                           Agreement shall be sufficiently evidenced by an
                           Officers' Certificate;

                  (d)      whenever in the administration of this Trust
                           Agreement, the Property Trustee shall deem it
                           desirable that a matter be established before
                           undertaking, suffering or omitting any action
                           hereunder, the Property Trustee (unless other
                           evidence is herein specifically prescribed) may, in
                           the absence of bad faith on its part, request and
                           conclusively rely upon an Officers' Certificate
                           which, upon receipt of such request, shall be
                           promptly delivered by the Sponsor or the
                           Administrative Trustees;

                  (e)      the Property Trustee shall have no duty to see to any
                           recording, filing or registration of any instrument
                           (including any financing or continuation statement,
                           any filing under tax or securities laws or any filing
                           under tax or securities laws) or any rerecording,
                           refiling or reregistration thereof;

                  (f)      the Property Trustee may consult with counsel of its
                           choice (which counsel may be counsel to the Sponsor
                           or any of its Affiliates) and the advice of such
                           counsel shall be full and complete authorization and
                           protection in respect of any action taken, suffered
                           or omitted by it hereunder in good faith and in
                           reliance thereon and, in accordance with such advice,
                           such counsel may be counsel to the Sponsor or any of
                           its Affiliates, and may include any of its employees;
                           the Property Trustee shall have the right at any time
                           to seek instructions concerning the administration of
                           this Trust Agreement from any court of competent
                           jurisdiction;

                  (g)      the Property Trustee shall be under no obligation to
                           exercise any of the rights or powers vested in it by
                           this Trust Agreement at the request or direction of
                           any of the Securityholders pursuant to this Trust
                           Agreement, unless such Securityholders shall have
                           offered to the Property Trustee reasonable security
                           or indemnity against the costs, expenses and
                           liabilities which might be incurred by it in
                           compliance with such request or direction; nothing
                           contained herein shall, however, relieve the Property
                           Trustee of the obligation, upon the occurrence of any
                           Event of Default (that has not been cured or waived)
                           to exercise such of the rights and powers vested in
                           it by this Trust Agreement, and to use the same
                           degree of

                                     - 36 -

<PAGE>

                           care and skill in their exercise as a prudent man
                           would exercise or use under the circumstances in the
                           conduct of his own affairs;

                  (h)      the Property Trustee shall not be bound to make any
                           investigation into the facts or matters stated in any
                           resolution, certificate, statement, instrument,
                           opinion, report, notice, request, consent, order,
                           approval, bond, debenture, note or other evidence of
                           indebtedness or other paper or document, unless
                           requested in writing to do so by one or more
                           Securityholders, but the Property Trustee may make
                           such further inquiry or investigation into such facts
                           or matters as it may see fit;

                  (i)      the Property Trustee may execute any of the trusts or
                           powers hereunder or perform any duties hereunder
                           either directly or by or through its agents or
                           attorneys, and the Property Trustee shall not be
                           liable for the default or misconduct of such other
                           agents or attorneys; provided that the Property
                           Trustee shall be responsible for its own negligence
                           or recklessness with respect to selection of any
                           agent or attorney appointed by it hereunder;

                  (j)      whenever in the administration of this Trust
                           Agreement the Property Trustee shall deem it
                           desirable to receive instructions with respect to
                           enforcing any remedy or right or taking any other
                           action hereunder the Property Trustee (i) may request
                           instructions from the Holders of the Trust Securities
                           which instructions may only be given by the Holders
                           of the same proportion in Liquidation Amount of the
                           Trust Securities as would be entitled to direct the
                           Property Trustee under the terms of the Trust
                           Securities in respect of such remedy, right or
                           action; (ii) may refrain from enforcing such remedy
                           or right or taking such other action until such
                           instructions are received; and (iii) shall be
                           protected in acting in accordance with such
                           instructions; and

                  (k)      except as otherwise expressly provided by this Trust
                           Agreement, the Property Trustee shall not be under
                           any obligation to take any action that is
                           discretionary under the provisions of this Trust
                           Agreement. No provision of this Trust Agreement shall
                           be deemed to impose any duty or obligation on the
                           Property Trustee to perform any act or acts or
                           exercise any right, power, duty or obligation
                           conferred or imposed on it, in any jurisdiction in
                           which it shall be illegal, or in which the Property
                           Trustee shall be unqualified or incompetent in
                           accordance with applicable law, to perform any such
                           act or acts, or to exercise any such right, power,
                           duty or obligation. No permissive power or authority
                           available to the Property Trustee shall be construed
                           to be a duty.

         8.4      Not Responsible for Recitals or Issuance of Securities.

         The Recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness.

                                     - 37 -

<PAGE>

The Trustees shall not be accountable for the use or application by the Sponsor
of the proceeds of the Debentures.

         8.5      May Hold Securities.

         Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.

         8.6      Compensation; Indemnity; Fees.

         The Sponsor agrees:

                  (a)      to pay to the Trustees from time to time compensation
                           for all services rendered by them hereunder (which
                           compensation shall not be limited by any provision of
                           law in regard to the compensation of a trustee of an
                           express trust), in the case of the Property Trustee,
                           as set forth in a written agreement between the
                           Sponsor and the Property Trustee;

                  (b)      except as otherwise expressly provided herein, to
                           reimburse the Trustees upon request for all
                           reasonable expenses, disbursements and advances
                           incurred or made by the Trustees in accordance with
                           any provision of this Trust Agreement (including the
                           reasonable compensation and the expenses and
                           disbursements of its agents and counsel), except any
                           such expense, disbursement or advance as may be
                           attributable to such Trustee's negligence, bad faith
                           or willful misconduct (or, in the case of the
                           Administrative Trustees or the Delaware Trustee, any
                           such expense, disbursement or advance as may be
                           attributable to its, his or her gross negligence, bad
                           faith or willful misconduct); and

                  (c)      to indemnify each of the Trustees or any predecessor
                           Trustee for, and to hold the Trustees harmless
                           against, any loss, damage, claims, liability, action,
                           suit, cost, penalty or expense of any kind or nature
                           whatsoever, arising out of or in connection with the
                           acceptance or administration of this Trust Agreement,
                           including the costs and expenses of defending itself
                           against any claim or liability in connection with the
                           exercise or performance of any of its powers or
                           duties hereunder, except any such expense,
                           disbursement or advance as may be attributable to
                           such Trustee's negligence, bad faith or willful
                           misconduct for (or, in the case of the Administrative
                           Trustees or the Delaware Trustee, any such expense,
                           disbursement or advance as may be attributable to
                           its, his or her gross negligence, bad faith or
                           willful misconduct).

         No Trustee may claim any Lien or charge on Trust Property as a result
of any amount due and unpaid pursuant to this Section 8.6. The indemnities
provided under this Section 8.6 shall survive the resignation or removal of the
Trustees and the termination of this Trust Agreement.

                                     - 38 -

<PAGE>

         8.7      Corporate Property Trustee Required; Eligibility of Trustees.

                  (a)      There shall at all times be a Property Trustee
                           hereunder with respect to the Trust Securities. The
                           Property Trustee shall be a Person that is eligible
                           pursuant to the Trust Indenture Act to act as such
                           and has a combined capital and surplus of at least
                           $50,000,000. If any such Person publishes reports of
                           condition at least annually, pursuant to law or to
                           the requirements of its supervising or examining
                           authority, then for the purposes of this Section 8.7,
                           the combined capital and surplus of such Person shall
                           be deemed to be its combined capital and surplus as
                           set forth in its most recent report of condition so
                           published. If at any time the Property Trustee with
                           respect to the Trust Securities shall cease to be
                           eligible in accordance with the provisions of this
                           Section 8.7, it shall resign immediately in the
                           manner and with the effect hereinafter specified in
                           this Article VIII. The Property Trustee and the
                           Delaware Trustee may be the same Person.

                  (b)      There shall at all times be one or more
                           Administrative Trustees hereunder with respect to the
                           Trust Securities. Each Administrative Trustee shall
                           be either a natural person who is at least 21 years
                           of age or a legal entity that shall act through one
                           or more persons authorized to bind that entity.

                  (c)      There shall at all times be a Delaware Trustee with
                           respect to the Trust Securities. The Delaware Trustee
                           shall either be (i) a natural person who is at least
                           21 years of age and a resident of the State of
                           Delaware; or (ii) a legal entity with its principal
                           place of business in the State of Delaware and that
                           otherwise meets the requirements of applicable
                           Delaware law that shall act through one or more
                           persons authorized to bind such entity.

         8.8      Conflicting Interests.

         If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.

         8.9      Co-Trustees and Separate Trustee.

                  (a)      Unless a Debenture Event of Default shall have
                           occurred and be continuing, at any time or times, for
                           the purpose of meeting the legal requirements of the
                           Trust Indenture Act or of any jurisdiction in which
                           any part of the Trust Property may at the time be
                           located, the Sponsor shall have power to appoint, and
                           upon the written request of the Property Trustee, the
                           Sponsor shall for such purpose join with the Property
                           Trustee in the execution, delivery and performance of
                           all instruments and agreements necessary or proper to
                           appoint, one or more Persons approved by the Property
                           Trustee either to act as co-trustee, jointly with the
                           Property

                                     - 39 -

<PAGE>

                           Trustee, of all or any part of such Trust Property,
                           or to the extent required by law to act as separate
                           trustee of any such property, in either case with
                           such powers as may be provided in the instrument of
                           appointment, and to vest in such Person or Persons in
                           the capacity aforesaid, any property, title, right or
                           power deemed necessary or desirable, subject to the
                           other provisions of this Section 8.9. If the Sponsor
                           does not join in such appointment within 15 days
                           after the receipt by it of a request so to do, or in
                           case a Debenture Event of Default has occurred and is
                           continuing, the Property Trustee alone shall have
                           power to make such appointment. Any co-trustee or
                           separate trustee appointed pursuant to this Section
                           8.9 shall either be (i) a natural person who is at
                           least 21 years of age and a resident of the United
                           States; or (ii) a legal entity with its principal
                           place of business in the United States that shall act
                           through one or more persons authorized to bind such
                           entity.

                  (b)      Should any written instrument from the Sponsor be
                           required by any co-trustee or separate trustee so
                           appointed for more fully confirming to such
                           co-trustee or separate trustee such property, title,
                           right, or power, any and all such instruments shall,
                           on request, be executed, acknowledged, and delivered
                           by the Sponsor.

                  (c)      Every co-trustee or separate trustee shall, to the
                           extent permitted by law, but to such extent only, be
                           appointed subject to the following terms, namely:

                           (i)      The Trust Securities shall be executed and
                                    delivered and all rights, powers, duties and
                                    obligations hereunder in respect of the
                                    custody of securities, cash and other
                                    personal property held by, or required to be
                                    deposited or pledged with, the Trustees
                                    specified hereunder, shall be exercised,
                                    solely by such Trustees and not by such
                                    co-trustee or separate trustee.

                           (ii)     The rights, powers, duties and obligations
                                    hereby conferred or imposed upon the
                                    Property Trustee in respect of any property
                                    covered by such appointment shall be
                                    conferred or imposed upon and exercised or
                                    performed by the Property Trustee or by the
                                    Property Trustee and such co-trustee or
                                    separate trustee jointly, as shall be
                                    provided in the instrument appointing such
                                    co-trustee or separate trustee, except to
                                    the extent that under any law of any
                                    jurisdiction in which any particular act is
                                    to be performed, the Property Trustee shall
                                    be incompetent or unqualified to perform
                                    such act, in which event such rights,
                                    powers, duties and obligations shall be
                                    exercised and performed by such co-trustee
                                    or separate trustee.

                           (iii)    The Property Trustee at any time, by an
                                    instrument in writing executed by it, with
                                    the written concurrence of the Sponsor, may

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<PAGE>

                                    accept the resignation of or remove any
                                    co-trustee or separate trustee appointed
                                    under this Section 8.9, and, in case a
                                    Debenture Event of Default has occurred and
                                    is continuing, the Property Trustee shall
                                    have the power to accept the resignation of,
                                    or remove, any such co-trustee or separate
                                    trustee without the concurrence of the
                                    Sponsor. Upon the written request of the
                                    Property Trustee, the Sponsor shall join
                                    with the Property Trustee in the execution,
                                    delivery and performance of all instruments
                                    and agreements necessary or proper to
                                    effectuate such resignation or removal. A
                                    successor to any co-trustee or separate
                                    trustee so resigned or removed may be
                                    appointed in the manner provided in this
                                    Section 8.9.

                           (iv)     No co-trustee or separate trustee hereunder
                                    shall be personally liable by reason of any
                                    act or omission of the Property Trustee or
                                    any other trustee hereunder.

                           (v)      The Property Trustee shall not be liable by
                                    reason of any act of a co-trustee or
                                    separate trustee.

                           (vi)     Any Act of Holders delivered to the Property
                                    Trustee shall be deemed to have been
                                    delivered to each such co-trustee and
                                    separate trustee.

         8.10     Resignation and Removal; Appointment of Successor.

                  (a)      No resignation or removal of any Trustee (the
                           "Relevant Trustee") and no appointment of a successor
                           Trustee pursuant to this Article VIII shall become
                           effective until the acceptance of appointment by the
                           successor Trustee in accordance with the applicable
                           requirements of Section 8.11.

                  (b)      Subject to the immediately preceding paragraph, the
                           Relevant Trustee may resign at any time with respect
                           to the Trust Securities by giving written notice
                           thereof to the Securityholders. If the instrument of
                           acceptance by the successor Trustee required by
                           Section 8.11 shall not have been delivered to the
                           Relevant Trustee within 30 days after the giving of
                           such notice of resignation, the Relevant Trustee may
                           petition, at the expense of the Sponsor, any court of
                           competent jurisdiction for the appointment of a
                           successor Relevant Trustee with respect to the Trust
                           Securities.

                  (c)      Unless a Debenture Event of Default shall have
                           occurred and be continuing, any Trustee may be
                           removed at any time by Act of the Common
                           Securityholder. If a Debenture Event of Default shall
                           have occurred and be continuing, the Property Trustee
                           or the Delaware Trustee, or both of them, may be
                           removed at such time by Act of the Holders of a
                           majority in Liquidation Amount of the Preferred
                           Securities, delivered to the Relevant Trustee (in its
                           individual capacity and on behalf of the Trust).

                                     - 41 -

<PAGE>

                           An Administrative Trustee may be removed by the
                           Common Securityholder at any time.

                  (d)      If any Trustee shall resign, be removed or become
                           incapable of acting as Trustee, or if a vacancy shall
                           occur in the office of any Trustee for any cause, at
                           a time when no Debenture Event of Default shall have
                           occurred and be continuing, the Common
                           Securityholder, by Act of the Common Securityholder
                           delivered to the retiring Trustee, shall promptly
                           appoint a successor Trustee or Trustees with respect
                           to the Trust Securities and the Trust, and the
                           successor Trustee shall comply with the applicable
                           requirements of Section 8.11. If the Property Trustee
                           or the Delaware Trustee shall resign, be removed or
                           become incapable of continuing to act as the Property
                           Trustee or the Delaware Trustee, as the case may be,
                           at a time when a Debenture Event of Default shall
                           have occurred and is continuing, the Preferred
                           Securityholders, by Act of the Securityholders of a
                           majority in Liquidation Amount of the Preferred
                           Securities then Outstanding delivered to the retiring
                           Relevant Trustee, shall promptly appoint a successor
                           Relevant Trustee or Trustees with respect to the
                           Trust Securities and the Trust, and such successor
                           Trustee shall comply with the applicable requirements
                           of Section 8.11. If an Administrative Trustee shall
                           resign, be removed or become incapable of acting as
                           Administrative Trustee, at a time when a Debenture
                           Event of Default shall have occurred and be
                           continuing, the Common Securityholder, by Act of the
                           Common Securityholder delivered to an Administrative
                           Trustee, shall promptly appoint a successor
                           Administrative Trustee or Administrative Trustees
                           with respect to the Trust Securities and the Trust,
                           and such successor Administrative Trustee or
                           Administrative Trustees shall comply with the
                           applicable requirements of Section 8.11. If no
                           successor Relevant Trustee with respect to the Trust
                           Securities shall have been so appointed by the Common
                           Securityholder or the Preferred Securityholders and
                           accepted appointment in the manner required by
                           Section 8.11, any Securityholder who has been a
                           Securityholder of Trust Securities on behalf of
                           himself and all others similarly situated may
                           petition a court of competent jurisdiction for the
                           appointment Trustee with respect to the Trust
                           Securities.

                  (e)      The Property Trustee shall give notice of each
                           resignation and each removal of a Trustee and each
                           appointment of a successor Trustee to all
                           Securityholders in the manner provided in Section
                           10.8 and shall give notice to the Sponsor. Each
                           notice shall include the name of the successor
                           Relevant Trustee and the address of its Corporate
                           Trust office if it is the Property Trustee.

                  (f)      Notwithstanding the foregoing or any other provision
                           of this Trust Agreement, in the event any
                           Administrative Trustee or a Delaware Trustee who is a
                           natural person dies or becomes, in the opinion of the
                           Sponsor, incompetent or incapacitated, the vacancy
                           created by such death, incompetence or incapacity may
                           be filled by (a) the unanimous act of

                                     - 42 -

<PAGE>

                           remaining Administrative Trustees if there are at
                           least two of them; or (b) otherwise by the Sponsor
                           (with the successor in each case being a Person who
                           satisfies the eligibility requirement for
                           Administrative Trustees set forth in Section 8.7).

         8.11     Acceptance of Appointment by Successor.

                  (a)      In case of the appointment hereunder of a successor
                           Relevant Trustee with respect to the Trust Securities
                           and the Trust, the retiring Relevant Trustee (if
                           requested by the Sponsor) and each successor Relevant
                           Trustee with respect to the Trust Securities shall
                           execute and deliver an instrument hereto wherein each
                           successor Relevant Trustee shall accept such
                           appointment and which shall contain such provisions
                           as shall be necessary or desirable to transfer and
                           confirm to, and to vest in, each successor Relevant
                           Trustee all the rights, powers, trusts and duties of
                           the retiring Relevant Trustee with respect to the
                           Trust Securities and the Trust and upon the execution
                           and delivery of such instrument the resignation or
                           removal of the retiring Relevant Trustee shall become
                           effective to the extent provided therein and each
                           such successor Relevant Trustee, without any further
                           act, deed or conveyance, shall become vested with all
                           the rights, powers, trusts and duties of the retiring
                           Relevant Trustee with respect to the Trust Securities
                           and the Trust; but, on request of the Trust or any
                           successor Relevant Trustee such retiring Relevant
                           Trustee shall duly assign, transfer and deliver to
                           such successor Relevant Trustee all Trust Property,
                           all proceeds thereof and money held by such retiring
                           Relevant Trustee hereunder with respect to the Trust
                           Securities and the Trust.

                  (b)      Upon request of any such successor Relevant Trustee,
                           the Trust shall execute any and all instruments for
                           more fully and certainly vesting in and confirming to
                           such successor Relevant Trustee all such rights,
                           powers and trusts referred to in the immediately
                           preceding paragraph, as the case may be.

                  (c)      No successor Relevant Trustee shall accept its
                           appointment unless at the time of such acceptance
                           such successor Relevant Trustee shall be qualified
                           and eligible under this Article VIII.

         8.12     Merger, Conversion, Consolidation or Succession to Business.

         Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which such Relevant Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article VIII, without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided however,

                                     - 43 -

<PAGE>

that any successor Delaware Trustee shall file an amendment to the Certificate
of Trust as required by the Delaware Statutory Trust Act.

         8.13     Preferential Collection of Claims Against Sponsor or Trust.

         If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Sponsor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Sponsor or Trust (or any such
other obligor).

         8.14     Reports by Property Trustee.

         On or before July 31 of each year, commencing July 31, 2004, the
Property Trustee shall transmit to the Securityholders such reports concerning
the Property Trustee, its actions under this Trust Agreement and the property
and funds in its possession in its capacity as the Property Trustee as may be
required pursuant to the Trust Indenture Act in the manner provided pursuant
thereto.

         8.15     Reports to the Property Trustee.

         The Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.

         8.16     Evidence of Compliance with Conditions Precedent.

         Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.

         8.17     Number of Trustees.

                  (a)      The number of Trustees shall be four, provided that
                           the Holder of all of the Common Securities by written
                           instrument may increase or decrease the number of
                           Administrative Trustees. The Property Trustee and the
                           Delaware Trustee may be the same Person.

                  (b)      If a Trustee ceases to hold office for any reason and
                           the number of Administrative Trustees is not reduced
                           pursuant to Section 8.17(a), or if the number of
                           Trustees is increased pursuant to Section 8.17(a), a
                           vacancy shall occur. The vacancy shall be filled with
                           a Trustee appointed in accordance with Section 8.10.

                                     - 44 -

<PAGE>

                  (c)      The death, resignation, retirement, removal,
                           bankruptcy, incompetence or incapacity to perform the
                           duties of a Trustee shall not operate to annul the
                           Trust. Whenever a vacancy in the number of
                           Administrative Trustees shall occur, until such
                           vacancy is filled by the appointment of an
                           Administrative Trustee in accordance with Section
                           8.10, the Administrative Trustees in office,
                           regardless of their number (and notwithstanding any
                           other provision of this Agreement), shall have all
                           the powers granted to the Administrative Trustees and
                           shall discharge all the duties imposed upon the
                           Administrative Trustees by this Trust Agreement.

         8.18     Delegation of Power.

                  (a)      Any Administrative Trustee may, by power of attorney
                           consistent with applicable law, delegate to any other
                           natural person over the age of 21 his or her power
                           for the purpose of executing any documents
                           contemplated in Section 2.7(a); and

                  (b)      The Administrative Trustees shall have power to
                           delegate from time to time to such of their number or
                           to the Sponsor the doing of such things and the
                           execution of such instruments either in the name of
                           the Trust or the names of the Administrative Trustees
                           or otherwise as the Administrative Trustees may deem
                           expedient, to the extent such delegation is not
                           prohibited by applicable law or contrary to the
                           provisions of the Trust, as set forth herein.

         8.19     Voting.

         Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.

                                   ARTICLE IX

                       TERMINATION, LIQUIDATION AND MERGER

         9.1      Termination Upon Expiration Date.

         Unless earlier dissolved, the Trust shall automatically dissolve on
____, 2033 (the "Expiration Date"), subject to distribution of the Trust
Property in accordance with Section 9.4.

         9.2      Early Termination.

         The first to occur of any of the following events is an "Early
Termination Event", upon occurrence of which the Trust shall dissolve:

                  (a)      the occurrence of a Bankruptcy Event in respect of,
                           or the dissolution or liquidation of, the Sponsor;

                                     - 45 -

<PAGE>

                  (b)      delivery of written direction to the Property Trustee
                           by the Sponsor (which direction is wholly optional
                           and within the discretion of the Sponsor, subject to
                           Sponsor having received prior approval of the Board
                           of Governors of the Federal Reserve System if so
                           required under applicable guidelines, policies or
                           regulations thereof) to dissolve the Trust and
                           distribute the Debentures to Securityholders in
                           exchange for the Preferred Securities in accordance
                           with Section 9.4;

                  (c)      the redemption of all of the Preferred Securities in
                           connection with the redemption of all of the
                           Debentures (whether upon a Debenture Redemption Date
                           or the maturity of the Debenture); or

                  (d)      an order for dissolution of the Trust shall have been
                           entered by a court of competent jurisdiction.

         9.3      Termination.

         The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; (c) the discharge
of all administrative duties of the Administrative Trustees, including the
performance of any tax reporting obligations with respect to the Trust or the
Securityholders; and (d) the filing of a Certificate of Cancellation by an
Administrative Trustee under the Delaware Statutory Trust Act.

         9.4      Liquidation.

                  (a)      If an Early Termination Event specified in clause
                           (a), (b), or (d) of Section 9.2 occurs or upon the
                           Expiration Date, the Trust shall be liquidated by the
                           Trustees as expeditiously as the Trustees determine
                           to be possible by distributing, after satisfaction of
                           liabilities to creditors of the Trust as provided by
                           applicable law, to each Securityholder a Like Amount
                           of Debentures, subject to Section 9.4(d). Notice of
                           liquidation shall be given by the Property Trustee by
                           first-class mail, postage prepaid, mailed not later
                           than 30 nor more than 60 days prior to the
                           Liquidation Date to each Holder of Trust Securities
                           at such Holder's address appearing in the Securities
                           Register. All notices of liquidation shall:

                           (i)      state the Liquidation Date;

                           (ii)     state that from and after the Liquidation
                                    Date, the Trust Securities shall no longer
                                    be deemed to be Outstanding and any Trust
                                    Securities Certificates not surrendered for
                                    exchange shall be deemed to represent a Like
                                    Amount of Debentures; and

                                     - 46 -

<PAGE>

                           (iii)    provide such information with respect to the
                                    mechanics by which Holders may exchange
                                    Trust Securities Certificates for
                                    Debentures, or, if Section 9.4(d) applies,
                                    receive a Liquidation Distribution, as the
                                    Administrative Trustees or the Property
                                    Trustee shall deem appropriate.

                  (b)      Except where Section 9.2(c) or 9.4(d) applies, in
                           order to effect the liquidation of the Trust and
                           distribution of the Debentures to Securityholders,
                           the Property Trustee shall establish a record date
                           for such distribution (which shall be not more than
                           45 days prior to the Liquidation Date) and, either
                           itself acting as exchange agent or through the
                           appointment of a separate exchange agent, shall
                           establish such procedures as it shall deem
                           appropriate to effect the distribution of Debentures
                           in exchange for the outstanding Trust Securities
                           Certificates.

                  (c)      Except where Section 9.2(c) or 9.4(d) applies, after
                           the Liquidation Date, (i) the Trust Securities shall
                           no longer be deemed to be outstanding; (ii)
                           certificates representing a Like Amount of Debentures
                           shall be issued to Holders of Trust Securities
                           Certificates upon surrender of such certificates to
                           the Administrative Trustees or their agent for
                           exchange; (iii) any Trust Securities Certificates not
                           so surrendered for exchange shall be deemed to
                           represent a Like Amount of Debentures, accruing
                           interest at the rate provided for in the Debentures
                           from the last Distribution Date on which a
                           Distribution was made on such Trust Securities
                           Certificates until such certificates are so
                           surrendered (and until such certificates are so
                           surrendered, no payments of interest or principal
                           shall be made to Holders of Trust Securities
                           Certificates with respect to such Debentures); and
                           (iv) all rights of Securityholders holding Trust
                           Securities shall cease, except the right of such
                           Securityholders to receive Debentures upon surrender
                           of Trust Securities Certificates.

                  (d)      In the event that, notwithstanding the other
                           provisions of this Section 9.4, whether because of an
                           order for dissolution entered by a court of competent
                           jurisdiction or otherwise, distribution of the
                           Debentures in the manner provided herein is
                           determined by the Property Trustee not to be
                           practical, the Trust Property shall be liquidated,
                           and the Trust shall be wound-up by the Property
                           Trustee in such manner as the Property Trustee
                           determines. In such event, on the date of the winding
                           up of the Trust, Securityholders shall be entitled to
                           receive out of the assets of the Trust available for
                           distribution to Securityholders, after satisfaction
                           of liabilities to creditors of the Trust as provided
                           by applicable law, an amount equal to the Liquidation
                           Amount per Trust Security plus accumulated and unpaid
                           Distributions thereon to the date of payment (such
                           amount being the "Liquidation Distribution"). If the
                           Liquidation Distribution can be paid only in part
                           because the Trust has insufficient assets available
                           to pay in full the aggregate Liquidation
                           Distribution, then, subject to the next succeeding
                           sentence, the amounts payable by the Trust on the
                           Trust

                                     - 47 -

<PAGE>

                           Securities shall be paid on a pro rata basis (based
                           upon Liquidation Amounts). The Holder of the Common
                           Securities shall be entitled to receive Liquidation
                           Distributions upon any such dissolution, winding-up
                           or termination pro rata (determined as aforesaid)
                           with Holders of Preferred Securities, except that, if
                           a Debenture Event of Default has occurred and is
                           continuing, the Preferred Securities shall have a
                           priority over the Common Securities.

         9.5      Mergers, Consolidations, Amalgamations or Replacements of the
Trust.

         The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except pursuant
to this Section 9.5. At the request of the Sponsor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Preferred
Securities, the Property Trustee or the Delaware Trustee, the Trust may merge
with or into, consolidate, amalgamate, be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any state; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Trust with
respect to the Preferred Securities; or (b) substitutes for the Preferred
Securities other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise; (ii) the
Sponsor expressly appoints a trustee of such successor entity possessing
substantially the same powers and duties as the Property Trustee as the holder
of the Debentures; (iii) the Successor Securities are listed or traded, or any
Successor Securities shall be listed or traded upon notification of issuance, on
any national securities exchange or other organization on which the Preferred
Securities are then listed, if any; (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect; (v)
such successor entity has a purpose substantially identical to that of the
Trust; (vi) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Sponsor has received an Opinion of Counsel to
the effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the Holders of the Preferred Securities (including any
Successor Securities) in any material respect; and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity shall be required to register as an
"investment company" under the Investment Company Act; and (vii) the Sponsor
owns all of the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor Securities at least to
the extent provided by the Guarantee, the Debentures, and this Trust Agreement.
For purposes of this Section 9.5, any such consolidation, merger, sale,
conveyance, transfer or other disposition as a result of which (a) the Company
is not the surviving Person, and (b) the same Person is not both (i) the primary
obligor in respect of the Debentures and (ii) the Guarantor under that certain
Preferred Securities Guarantee Agreement of even date herewith (the "Guarantee")
between the Company and Wilmington Trust Company, shall be deemed to constitute
a replacement of the Trust by a successor entity; provided further that,
notwithstanding the foregoing, in the event that upon the consummation of such a
consolidation, merger, sale, conveyance, transfer or other

                                     - 48 -

<PAGE>

disposition, the parent company (if any) of the Company, or its successor, is a
bank holding company or financial holding company or comparably regulated
financial institution, such parent company shall guarantee the obligations of
the Trust (and any successor thereto) under the Preferred Securities (including
any Successor Securities) at least to the extent provided by the Guarantee, the
Debentures, and the Trust Agreement. Notwithstanding the foregoing, the Trust
shall not, except with the consent of holders of 100% in Liquidation Amount of
the Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any other Person or permit any other Person to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Trust or the successor
entity to be classified as other than a grantor trust for United States federal
or Puerto Rico income tax purposes.

                                   ARTICLE X

                            MISCELLANEOUS PROVISIONS

         10.1     Limitation of Rights of Securityholders.

         The death or incapacity of any Person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.

         10.2     Amendment.

                  (a)      This Trust Agreement may be amended from time to time
                           by the Trustees and the Sponsor, without the consent
                           of any Securityholders, (i) as provided in Section
                           8.11 with respect to acceptance of appointment by a
                           successor Trustee; (ii) to cure any ambiguity,
                           correct or supplement any provision herein or therein
                           which may be inconsistent with any other provision
                           herein or therein, or to make any other provisions
                           with respect to matters or questions arising under
                           this Trust Agreement, that shall not be inconsistent
                           with the other provisions of this Trust Agreement; or
                           (iii) to modify, eliminate or add to any provisions
                           of this Trust Agreement to such extent as shall be
                           necessary to ensure that the Trust shall be
                           classified for United States federal or Puerto Rico
                           tax purposes as a grantor trust, at all times that
                           any Trust Securities are outstanding or to ensure
                           that the Trust shall not be required to register as
                           an "investment company" under the Investment Company
                           Act; provided, however, that in the case of clause
                           (ii), such action shall not adversely affect in any
                           material respect the interests of any Securityholder;
                           and any amendments of this Trust Agreement shall
                           become effective when notice thereof is given to the
                           Securityholders.

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<PAGE>

                  (b)      Except as provided in Section 6.1(c) or Section
                           10.2(c) hereof, any provision of this Trust Agreement
                           may be amended by the Trustees and the Sponsor (i)
                           with the consent of Trust Securityholders
                           representing not less than a majority (based upon
                           Liquidation Amounts) of the Trust Securities then
                           Outstanding; and (ii) upon receipt by the Trustees of
                           an Opinion of Counsel to the effect that such
                           amendment or the exercise of any power granted to the
                           Trustees in accordance with such amendment shall not
                           affect the Trust's status as a grantor trust for
                           United States federal or Puerto Rico income tax
                           purposes or the Trust's exemption from status of an
                           "investment company" under the Investment Company
                           Act.

                  (c)      In addition to and notwithstanding any other
                           provision in this Trust Agreement, without the
                           consent of each affected Securityholder, this Trust
                           Agreement may not be amended to (i) change the amount
                           or timing of any Distribution on the Trust Securities
                           or otherwise adversely affect the amount of any
                           Distribution required to be made in respect of the
                           Trust Securities as of a specified date; or (ii)
                           restrict the right of a Securityholder to institute
                           suit for the enforcement of any such payment on or
                           after such date; notwithstanding any other provision
                           herein, without the unanimous consent of the
                           Securityholders this paragraph (c) of this Section
                           10.2 may not be amended.

                  (d)      Notwithstanding any other provisions of this Trust
                           Agreement, no Trustee shall enter into or consent to
                           any amendment to this Trust Agreement which would
                           cause the Trust to fail or cease to qualify for the
                           exemption from status of an "investment company"
                           under the Investment Company Act or to fail or cease
                           to be classified as a grantor trust for United States
                           federal or Puerto Rico income tax purposes.

                  (e)      Notwithstanding anything in this Trust Agreement to
                           the contrary, without the consent of the Sponsor,
                           this Trust Agreement may not be amended in a manner
                           which imposes any additional obligation on the
                           Sponsor.

                  (f)      In the event that any amendment to this Trust
                           Agreement is made, the Administrative Trustees shall
                           promptly provide to the Sponsor a copy of such
                           amendment.

                  (g)      Neither the Property Trustee nor the Delaware Trustee
                           shall be required to enter into any amendment to this
                           Trust Agreement which affects its own rights, duties
                           or immunities under this Trust Agreement. The
                           Property Trustee shall be entitled to receive an
                           Opinion of Counsel and an Officers' Certificate
                           stating that all conditions precedent to the
                           execution of such amendment to the Trust Agreement
                           have been met and that any amendment to this Trust
                           Agreement has been effected in compliance with this
                           Trust Agreement.

                                     - 50 -

<PAGE>

         10.3     Severability.

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

         10.4     Governing Law.

         THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF).

         10.5     Payments Due on Non-Business Day.

         If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day which is a Business Day, except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day (and without any reduction of
interest or any other payment in respect of any such acceleration), in each case
with the same force and effect as though made on the date fixed for such
payment, and no distribution shall accumulate thereon for the period after such
date.

         10.6     Successors.

         This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Sponsor, the Trust or the Relevant Trustee(s),
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Sponsor that is permitted under
Article XII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Sponsor's obligations hereunder, the Sponsor shall not
assign its obligations hereunder.

         10.7     Headings.

         The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.

         10.8     Reports, Notices and Demands.

         Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Sponsor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder, the Administrative Trustees or the
Sponsor, to R&G Financial Corporation, 280 Jesus T. Pinero Avenue, San Juan,
Puerto Rico 00918, Attention: Chief Financial Officer,

                                     - 51 -

<PAGE>

facsimile no: (787) 756-8175. Any notice to Preferred Securityholders shall also
be given to such owners as have, within two years preceding the giving of such
notice, filed their names and addresses with the Property Trustee for that
purpose. Such notice, demand or other communication to or upon a Securityholder
shall be deemed to have been sufficiently given or made, for all purposes, upon
hand delivery, mailing or transmission.

         Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee shall be given in writing with respect to the
Property Trustee and the Delaware Trustee to Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration for the Property Trustee. Such notice, demand or
other communication to or upon the Trust or the Property Trustee shall be deemed
to have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.

         10.9     Agreement Not to Petition.

         Each of the Trustees and the Sponsor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code of 1978, as amended) (collectively, "Bankruptcy Laws") or
otherwise join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. In the event the Sponsor or any of the Trustees takes action in
violation of this Section 10.9, the Property Trustee agrees, for the benefit of
Securityholders, that at the expense of the Sponsor (which expense shall be paid
prior to the filing), it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Sponsor or such
Trustee against the Trust or the commencement of such action and raise the
defense that the Sponsor or such Trustee has agreed in writing not to take such
action and should be stopped and precluded therefrom. The provisions of this
Section 10.9 shall survive the termination of this Trust Agreement.

         10.10    Trust Indenture Act; Conflict with Trust Indenture Act.

                  (a)      This Trust Agreement is subject to the provisions of
                           the Trust Indenture Act that are required to be part
                           of this Trust Agreement and shall, to the extent
                           applicable, be governed by such provisions.

                  (b)      The Property Trustee shall be the only Trustee which
                           is a trustee for the purposes of the Trust Indenture
                           Act.

                  (c)      If any provision hereof limits, qualifies or
                           conflicts with another provision hereof which is
                           required to be included in this Trust Agreement by
                           any of the provisions of the Trust Indenture Act,
                           such required provision shall control. If any
                           provision of this Trust Agreement modifies or
                           excludes any provision of the Trust Indenture Act
                           which may be so modified or

                                     - 52 -

<PAGE>

                           excluded, the latter provision shall be deemed to
                           apply to this Trust Agreement as so modified or to be
                           excluded, as the case may be.

                  (d)      The application of the Trust Indenture Act to this
                           Trust Agreement shall not affect the nature of the
                           Trust Securities as equity securities representing
                           undivided beneficial interests in the assets of the
                           Trust.

         10.11    Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.

         THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND
AGREEMENT TO ALL OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL
CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT
THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.

         10.12    Counterparts.

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

         10.13    Exchange Act Obligations.

         For so long as the Trust Securities shall remain outstanding, Sponsor
shall fulfill all reporting and filing obligations under the Securities Exchange
Act of 1934, as amended, as applicable to companies having a class of securities
registered under Section 12(b) or 12(g) thereunder.

                            [SIGNATURE PAGE FOLLOWS]

                                     - 53 -

<PAGE>

R&G FINANCIAL CORPORATION

By: ___________________________________

     Name: Joseph R. Sandoval
     Title: Executive Vice President and Chief Financial Officer

WILMINGTON TRUST COMPANY, AS
         PROPERTY AND DELAWARE TRUSTEE

By: ___________________________________
     Name:
     Title:

_______________________________________
Victor J. Galan,
         as Administrative Trustee

_______________________________________
Joseph R. Sandoval,
         as Administrative Trustee

                                     - 54 -

<PAGE>

                                                                       EXHIBIT A

                              CERTIFICATE OF TRUST

                                       OF

                              R&G CAPITAL TRUST III

         This Certificate of Trust is being executed as of July __, 2003 for the
purposes of organizing a statutory trust pursuant to the Delaware Statutory
Trust Act, 12 Del. C. Sections 3801 et seq. (the "Act").

         The undersigned hereby certifies as follows:

1.       Name. The name of the statutory trust formed hereby is "R&G Capital
         Trust III" (the "Trust").

2.       Delaware Trustee. The name and business address of the Delaware trustee
         of the Trust meeting the requirements of Section 3807 of the Act are as
         follows:

                  Wilmington Trust Company
                  Rodney Square North
                  1100 North Market Street
                  Wilmington, DE 19890-0001
                  Attn: Corporate Trust Administration

3.       Effective. This Certificate of Trust shall be effective immediately
         upon filing in the Office of the Secretary of State of the State of
         Delaware.

         IN WITNESS WHEREOF, the undersigned being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written in accordance with Section 3811(a) of the Act.

WILMINGTON TRUST COMPANY, AS
  DELAWARE TRUSTEE

By: ______________________
    Name:
    Title:

                                      A - 1

<PAGE>

ADMINISTRATIVE TRUSTEE

_______________________________________
Victor J. Galan,
as Administrative Trustee

ADMINISTRATIVE TRUSTEE

_______________________________________
Joseph R. Sandoval,
as Administrative Trustee

                                      A - 2

<PAGE>

                                                                       EXHIBIT B

                      THIS CERTIFICATE IS NOT TRANSFERABLE
           EXCEPT AS DESCRIBED IN THE TRUST AGREEMENT AS DEFINED BELOW

CERTIFICATE NUMBER 1                         NUMBER OF COMMON SECURITIES 123,712

                    CERTIFICATE EVIDENCING COMMON SECURITIES
                                       OF
                              R&G CAPITAL TRUST III

                                COMMON SECURITIES
                  (LIQUIDATION AMOUNT $25 PER COMMON SECURITY)

         R&G CAPITAL TRUST III, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that R&G FINANCIAL CORPORATION
(the "Holder") is the registered owner of one hundred twenty three thousand
seven hundred twelve (123,712) common securities of the Trust representing
undivided beneficial interests in the assets of the Trust and designated the
Common Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). Except as provided in Section 5.10 of the Trust Agreement (as
defined below), the Common Securities are not transferable, to the fullest
extent permitted below, and any attempted prohibited transfer hereof shall be
void. The designations, rights, privileges, restrictions, preferences, and other
terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall in
all respects be subject to the terms and provisions of, the Amended and Restated
Declaration of Trust of the Trust dated as of _____, 2003, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of the Common Securities as set forth therein. The Trust shall furnish
a copy of the Trust Agreement to the Holder without charge upon written request
to the Trust at its principal place of business or registered office.

         Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

         IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ___ day of ____, 2003.

R&G CAPITAL TRUST III

By: ______________________________
    Name: Joseph R. Sandoval
    Title: Administrative Trustee

                                      B - 1

<PAGE>

                                                                       EXHIBIT C

CERTIFICATE NUMBER 1                    NUMBER OF PREFERRED SECURITIES 4,000,000

                   CERTIFICATE EVIDENCING PREFERRED SECURITIES
                                       OF
                              R&G CAPITAL TRUST III

          _____ % CUMULATIVE MONTHLY INCOME TRUST PREFERRED SECURITIES
                 (LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)

         R&G Capital Trust III, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that the Conservation Trust of
Puerto Rico (the "Holder") is the registered owner of Four Million (4,000,000)
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust and designated the ____% Cumulative Monthly Income Trust
Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined herein). The
designations, rights, privileges, restrictions, preferences, and other terms and
provisions of the Preferred Securities are set forth in, and this Certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Declaration of Trust of the Trust dated as of _____, 2003, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of Preferred Securities as set forth therein. The Holder is entitled
to the benefits of the Preferred Securities Guarantee Agreement entered into by
R&G Financial Corporation, a Puerto Rico corporation, and Wilmington Trust
Company as guarantee trustee, dated as of ______, 2003, as the same may be
amended from time to time (the "Guarantee"), to the extent provided therein. The
Trust shall furnish a copy of the Trust Agreement and the Guarantee to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.

         Upon receipt of this Certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.

         Unless the Certificate of Authentication has been manually executed by
the Authentication Agent, this Certificate is not valid or effective.

                                      C - 2

<PAGE>

         IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this Certificate this ___ day of ____, 2003.

R&G CAPITAL TRUST III

By: _______________________________
    Name: Joseph R. Sandoval
    Title: Administrative Trustee

                                      C - 3

<PAGE>

                        [FORM OF REVERSE OF CERTIFICATE]

         The Trust will furnish without charge to any registered owner of
Preferred Securities who so requests, a copy of the Trust Agreement and the
Guarantee. Any such request should be in writing and addressed to R&G Capital
Trust III, c/o Wilmington Trust Company, 1100 North Market Street, Wilmington,
Delaware 19890, or to the Registrar named on the face of this Certificate.

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

TEN COM -- as tenants in common       UNIF GIFT MIN ACT -- under Uniform Gift
TEN ENT -- as tenants by the entireties                    to Minors Act and
JT TEN --  as joint tenants with right of                  not as tenants
           survival

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

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

     (Please insert social security or other identifying number of assignee)

                    (insert address and zip code of assignee)

the within Certificate and all rights and interests represented by the Preferred
Securities evidenced thereby, and hereby irrevocably constitutes and appoints

_______________________________________________________________________ attorney
to transfer the said Preferred Securities on the books of the within-named Trust
with full power of substitution in the premises.

Dated: _________________________          Signature: __________________________
                                                     Note: The signature(s) to
                                                     this assignment must
                                                     correspond with the name(s)
                                                     as written upon the face of
                                                     this Certificate in every
                                                     particular, without
                                                     alteration or enlargement,
                                                     or any change whatever.

Signature(s) Guaranteed:

________________________________
NOTICE:  Signature(s)  must be  guaranteed by an "eligible
guarantor  institution" that is a member or participant in
a "signature  guarantee  program"  (i.e.,  the  Securities
Transfer  Agents  Medallion  Program,  the Stock  Exchange
Medallion  Program  or the New York Stock  Exchange,  Inc.
Medallion Signature Program).

                                      C - 4

<PAGE>

                                                                       EXHIBIT D

             FORM OF PREFERRED SECURITIES CERTIFICATE AUTHENTICATION

         This is one of the _____% Cumulative Monthly Income Trust Preferred
Securities referred to in the within-mentioned Trust Agreement.

WILMINGTON TRUST COMPANY,
   as Authentication Agent and Registrar

By: ____________________________________
         AUTHORIZED SIGNATURE<PAGE>

                                                                     EXHIBIT 4.7

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

                                 BY AND BETWEEN

                            R&G FINANCIAL CORPORATION

                                       AND

                            WILMINGTON TRUST COMPANY

                            DATED AS OF ______, 2003

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                      Page No.
<S>                                                                                   <C>
ARTICLE I DEFINITIONS AND INTERPRETATION.............................................     1
         1.1        Definitions and Interpretation...................................     1
ARTICLE II TRUST INDENTURE ACT.......................................................     5
         2.1        Trust Indenture Act; Application.................................     5
         2.2        Lists of Holders of Securities...................................     5
         2.3        Reports by the Guarantee Trustee.................................     5
         2.4        Periodic Reports to Guarantee Trustee............................     6
         2.5        Evidence of Compliance with Conditions Precedent.................     6
         2.6        Events of Default; Waiver........................................     6
         2.7        Event of Default; Notice.........................................     6
ARTICLE III POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE...........................     7
         3.1        Powers and Duties of the Guarantee Trustee.......................     7
         3.2        Certain Rights of Guarantee Trustee..............................     9
         3.3        Not Responsible for Recitals or Issuance of Guarantee............    11
ARTICLE IV GUARANTEE TRUSTEE.........................................................    11
         4.1        Guarantee Trustee; Eligibility...................................    11
         4.2        Appointment, Removal and Resignation of Guarantee Trustee........    12
ARTICLE V GUARANTEE                                                                      12
         5.1        Guarantee........................................................    12
         5.2        Waiver of Notice and Demand......................................    13
         5.3        Obligations not Affected.........................................    13
         5.4        Rights of Holders................................................    14
         5.5        Guarantee of Payment.............................................    14
         5.6        Subrogation......................................................    14
         5.7        Independent Obligations..........................................    15
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION.................................    15
         6.1        Limitation of Transactions.......................................    15
         6.2        Ranking..........................................................    15
ARTICLE VII TERMINATION..............................................................    16
         7.1        Termination......................................................    16
ARTICLE VIII INDEMNIFICATION.........................................................    16
         8.1        Exculpation......................................................    16
         8.2        Indemnification..................................................    17
ARTICLE IX MISCELLANEOUS.............................................................    17
         9.1        Successors and Assigns...........................................    17
         9.2        Amendments.......................................................    17
         9.3        Notices..........................................................    17
         9.4        Benefit..........................................................    18
         9.5        Governing Law....................................................    18
</TABLE>

                                      - i -

<PAGE>

                              CROSS REFERENCE TABLE

<TABLE>
<CAPTION>
Section of Trust                                                  Section of
Indenture Act of                                                  Guarantee
1939, as amended                                                  Agreement
<S>                                                             <C>
     310(a)                                                     4.1(a)
     310(b)                                                     4.1(c), 2.8
     310(c)                                                     Not Applicable
     311(a)                                                     2.2(b)
     311(b)                                                     2.2(b)
     311(c)                                                     Not Applicable
     312(a)                                                     2.2(a)
     312(b)                                                     2.2(b)
     313                                                        2.3
     314(a)                                                     2.4
     314(b)                                                     Not Applicable
     314(c)                                                     2.5
     314(d)                                                     Not Applicable
     314(e)                                                     1.1, 2.5, 3.2
     314(f)                                                     2.1, 3.2
     315(a)                                                     3.1(d)
     315(b)                                                     2.7
     315(c)                                                     3.1
     315(d)                                                     3.1(d)
     316(a)                                                     1.1, 2.6, 5.4
     316(b)                                                     5.3
     317(a)                                                     3.1
     317(b)                                                     Not Applicable
     318(a)                                                     2.1(a)
     318(b)                                                     2.1
     318(c)                                                     2.1(b)
</TABLE>

Note: This Cross-Reference Table does not constitute part of this Agreement and
shall not affect the interpretation of any of its terms or provisions.

                                     - ii -

<PAGE>

                    PREFERRED SECURITIES GUARANTEE AGREEMENT

         This PREFERRED SECURITIES GUARANTEE AGREEMENT (this "Preferred
Securities Guarantee"), dated as of _____, 2003, is executed and delivered by
R&G FINANCIAL CORPORATION, a Puerto Rico corporation (the "Guarantor"), and
WILMINGTON TRUST COMPANY, a Delaware banking corporation (the "Guarantee
Trustee"), for the benefit of the Holders (as defined herein) from time to time
of the Preferred Securities (as defined herein) of R&G Capital Trust III, a
Delaware statutory business trust (the "Trust").

                                    RECITALS

         WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Trust Agreement"), dated as of _______, 2003, among the trustees of the Trust
named therein and the Guarantor, as sponsor, the Trust is issuing on the date
hereof up to 4,000,000 preferred securities, having an aggregate Liquidation
Amount of up to $100,000,000 designated the __% Cumulative Monthly Income Trust
Preferred Securities;

         WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.

         NOW, THEREFORE, in consideration of the purchase by each Holder of the
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.

                                   ARTICLE I

                         DEFINITIONS AND INTERPRETATION

         1.1      Definitions and Interpretation.

         In this Preferred Securities Guarantee, unless the context otherwise
requires:

                  (a)      capitalized terms used in this Preferred Securities
                           Guarantee but not defined in the preamble above have
                           the respective meanings assigned to them in this
                           Section 1.1;

                  (b)      terms defined in the Trust Agreement as at the date
                           of execution of this Preferred Securities Guarantee
                           have the same meaning when used in this Preferred
                           Securities Guarantee, unless otherwise defined in
                           this Preferred Securities Guarantee;

                                     - 1 -

<PAGE>

                  (c)      a term defined anywhere in this Preferred Securities
                           Guarantee has the same meaning throughout;

                  (d)      all references to "the Preferred Securities
                           Guarantee" or "this Preferred Securities Guarantee"
                           are to this Preferred Securities Guarantee as
                           modified, supplemented or amended from time to time;

                  (e)      all references in this Preferred Securities Guarantee
                           to Articles and Sections are to Articles and Sections
                           of this Preferred Securities Guarantee, unless
                           otherwise specified;

                  (f)      a term defined in the Trust Indenture Act has the
                           same meaning when used in this Preferred Securities
                           Guarantee, unless otherwise defined in this Preferred
                           Securities Guarantee or unless the context otherwise
                           requires; and

                  (g)      a reference to the singular includes the plural and
                           vice versa.

         "Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.

         "Business Day" means any day other than a Saturday, Sunday, a day on
which federal or State banking institutions in San Juan, Puerto Rico or New
York, New York are authorized or required by law, executive order or regulation
to close or a day on which the Corporate Trust Office of the Guarantee Trustee
is closed for business.

         "Corporate Trust Office" means the office of the Guarantee Trustee at
which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890, Attention: Corporate Trust Administration.

         "Covered Person" means any Holders or beneficial owner of Preferred
Securities.

         "Debentures" means the ___% Junior Subordinated Debentures due _______
__, 2033, of the Debenture Issuer held by the Property Trustee of the Trust.

         "Debenture Issuer" means R&G Financial Corporation, issuer of the
Debentures under the Indenture.

         "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.

         "Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Trust: (i) any accrued and unpaid Distributions that are
required to be paid on such Preferred Securities, to the

                                     - 2 -

<PAGE>

extent the Trust shall have funds available therefor, (ii) the redemption price,
including all accrued and unpaid Distributions to the date of redemption (the
"Redemption Price"), to the extent the Trust has funds available therefor, with
respect to any Preferred Securities called for redemption by the Trust, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
the Trust (other than in connection with the distribution of Debentures to the
Holders in exchange for Preferred Securities as provided in the Trust
Agreement), the lesser of (a) the aggregate of the Liquidation Amount and all
accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Trust shall have funds available therefor (the
"Liquidation Distribution"), and (b) the amount of assets of the Trust remaining
available for distribution to the Holders in liquidation of the Trust.

         "Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Preferred Securities Guarantee and thereafter means each
such Successor Guarantee Trustee.

         "Guarantor" means R&G Financial Corporation, a Puerto Rico corporation.

         "Holders" shall mean any holder, as registered on the books and records
of the Trust, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holders" shall not include the Guarantor, the Guarantee Trustee or any of their
respective Affiliates.

         "Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, or any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Guarantee
Trustee.

         "Indenture" means the Indenture dated as of _________, 2003, among the
Debenture Issuer and Wilmington Trust Company, as trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee of the Trust.

         "Liquidation Amount" means the stated value of $25 per Preferred
Security.

         "Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.

         "Majority in Liquidation Amount of the Preferred Securities" means the
holders of more than 50% of the Liquidation Amount of all of the Preferred
Securities.

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by two authorized officers of such Person, at least one of
whom shall be the principal executive officer, principal financial officer,
principal accounting officer, treasurer or any vice president of such Person.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Preferred Securities Guarantee shall include:

                  (a)      a statement that each officer signing the Officers'
                           Certificate has read the covenant or condition and
                           the definition relating thereto;

                                      - 3 -

<PAGE>

                  (b)      a brief statement of the nature and scope of the
                           examination or investigation undertaken by each
                           officer in rendering the Officers' Certificate;

                  (c)      a statement that each such officer has made such
                           examination or investigation as, in such officer's
                           opinion, is necessary to enable such officer to
                           express an informed opinion as to whether or not such
                           covenant or condition has been complied with; and

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

         "Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

         "Preferred Securities" means the __% Cumulative Monthly Income Trust
Preferred Securities representing undivided beneficial interests in the assets
of the Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.

         "Redemption Price" has the meaning provided therefor in the definition
of Guarantee Payments.

         "Responsible Officer" means, with respect to the Guarantee Trustee, any
officer within the Corporate Trust Office of the Guarantee Trustee with direct
responsibility for the administration of this Preferred Securities Guarantee,
including any vice-president, any assistant vice-president, any assistant
secretary or other officer or assistant officer of the Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.

         "Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
                                     - 4 -

<PAGE>

                                   ARTICLE II

                               TRUST INDENTURE ACT

         2.1      Trust Indenture Act; Application.

                  (a)      This Preferred Securities Guarantee is subject to the
                           provisions of the Trust Indenture Act that are
                           required to be part of this Preferred Securities
                           Guarantee and shall, to the extent applicable, be
                           governed by such provisions.

                  (b)      If and to the extent that any provision of this
                           Preferred Securities Guarantee limits, qualifies or
                           conflicts with the duties imposed by Section 310 to
                           317, inclusive, of the Trust Indenture Act, such
                           imposed duties shall control.

         2.2      Lists of Holders of Securities.

                  (a)      In the event the Guarantee Trustee is not also acting
                           in the capacity of the Property Trustee under the
                           Trust Agreement, the Guarantor shall cause to be
                           provided to the Guarantee Trustee a list, in such
                           form as the Guarantee Trustee may reasonably require,
                           of the names and addresses of the Holders of the
                           Preferred Securities ("List of Holders") as of the
                           date (i) within one Business Day of the 15th of each
                           month, and (ii) at any other time within 30 days of
                           receipt by the Guarantor of a written request for a
                           List of Holders as of a date no more than 15 days
                           before such List of Holders is given to the Guarantee
                           Trustee; provided, that the Guarantor shall not be
                           obligated to provide such List of Holders at any time
                           the List of Holders does not differ from the most
                           recent List of Holders caused to have been given to
                           the Guarantee Trustee by the Guarantor. The Guarantee
                           Trustee may destroy any List of Holders previously
                           given to it on receipt of a new List of Holders.

                  (b)      The Guarantee Trustee shall comply with its
                           obligations under Sections 311(a), 311(b) and Section
                           312(b) of the Trust Indenture Act.

         2.3      Reports by the Guarantee Trustee.

         On or before July 31 of each year, commencing July 31, 2004 the
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Guarantee Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.

                                      - 5 -

<PAGE>

         2.4      Periodic Reports to Guarantee Trustee.

         The Guarantor shall provide to the Guarantee Trustee such documents,
reports and information as required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.

         2.5      Evidence of Compliance with Conditions Precedent.

         The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.

         2.6      Events of Default; Waiver.

         The Holders of a Majority in Liquidation Amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

         2.7      Event of Default; Notice.

                  (a)      The Guarantee Trustee shall, within 90 days after the
                           occurrence of an Event of Default, transmit by mail,
                           first class postage prepaid, to the Holders of the
                           Preferred Securities, notices of all Events of
                           Default actually known to a Responsible Officer of
                           the Guarantee Trustee, unless such defaults have been
                           cured before the giving of such notice; provided,
                           that, except in the case of a default by Guarantor on
                           any of its payment obligations, the Guarantee Trustee
                           shall be protected in withholding such notice if and
                           so long as a Responsible Officer of the Guarantee
                           Trustee in good faith determines that the withholding
                           of such notice is in the interests of the Holders of
                           the Preferred Securities.

                  (b)      The Guarantee Trustee shall not be deemed to have
                           knowledge of any Event of Default unless the
                           Guarantee Trustee shall have received written notice,
                           or of which a Responsible Officer of the Guarantee
                           Trustee charged with the administration of the Trust
                           Agreement shall have obtained actual knowledge.

                                      - 6 -

<PAGE>

         2.8      Conflicting Interests.

         The Trust Agreement shall be deemed to be specifically described in
this Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III

                 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

         3.1      Powers and Duties of the Guarantee Trustee.

                  (a)      This Preferred Securities Guarantee shall be held by
                           the Guarantee Trustee for the benefit of the Holders
                           of the Preferred Securities, and the Guarantee
                           Trustee shall not transfer this Preferred Securities
                           Guarantee to any Person except a Holders of Preferred
                           Securities exercising his or her rights pursuant to
                           Section 5.4(b) or to a Successor Guarantee Trustee on
                           acceptance by such Successor Guarantee Trustee of its
                           appointment to act as Successor Guarantee Trustee.
                           The right, title and interest of the Guarantee
                           Trustee shall automatically vest in any Successor
                           Guarantee Trustee, and such vesting and cessation of
                           title shall be effective whether or not conveyancing
                           documents have been executed and delivered pursuant
                           to the appointment of such Successor Guarantee
                           Trustee.

                  (b)      If an Event of Default actually known to a
                           Responsible Officer of the Guarantee Trustee has
                           occurred and is continuing, the Guarantee Trustee
                           shall enforce this Preferred Securities Guarantee for
                           the benefit of the Holders of the Preferred
                           Securities.

                  (c)      The Guarantee Trustee, before the occurrence of any
                           Event of Default and after the curing of all Events
                           of Default that may have occurred, shall undertake to
                           perform only such duties as are specifically set
                           forth in this Preferred Securities Guarantee, and no
                           implied covenants shall be read into this Preferred
                           Securities Guarantee against the Guarantee Trustee.
                           In case an Event of Default has occurred (that has
                           not been cured or waived pursuant to Section 2.6) and
                           is actually known to a Responsible Officer of the
                           Guarantee Trustee, the Guarantee Trustee shall
                           exercise such of the rights and powers vested in it
                           by this Preferred Securities Guarantee, and use the
                           same degree of care and skill in its exercise
                           thereof, as a prudent person would exercise or use
                           under the circumstances in the conduct of his or her
                           own affairs.

                  (d)      No provision of this Preferred Securities Guarantee
                           shall be construed to relieve the Guarantee Trustee
                           from liability for its own negligent action, its own
                           negligent failure to act, or its own willful
                           misconduct, except that:

                                      - 7 -

<PAGE>

                           (i)      prior to the occurrence of any Event of
                                    Default and after the curing or waiving of
                                    all such Events of Default that may have
                                    occurred:

                                    (A)      the duties and obligations of the
                                             Guarantee Trustee shall be
                                             determined solely by the express
                                             provisions of this Preferred
                                             Securities Guarantee, and the
                                             Guarantee Trustee shall not be
                                             liable except for the performance
                                             of such duties and obligations as
                                             are specifically set forth in this
                                             Preferred Securities Guarantee, and
                                             no implied covenants or obligations
                                             shall be read into this Preferred
                                             Securities Guarantee against the
                                             Guarantee Trustee; and

                                    (B)      in the absence of bad faith on the
                                             part of the Guarantee Trustee, the
                                             Guarantee Trustee may conclusively
                                             rely, as to the truth of the
                                             statements and the correctness of
                                             the opinions expressed therein,
                                             upon any certificates or opinions
                                             furnished to the Guarantee Trustee
                                             and conforming to the requirements
                                             of this Preferred Securities
                                             Guarantee; but in the case of any
                                             such certificates or opinions that
                                             by any provision hereof are
                                             specifically required to be
                                             furnished to the Guarantee Trustee,
                                             the Guarantee Trustee shall be
                                             under a duty to examine the same to
                                             determine whether or not they
                                             conform to the requirements of this
                                             Preferred Securities Guarantee;

                           (ii)     the Guarantee Trustee shall not be liable
                                    for any error of judgment made in good faith
                                    by a Responsible Officer of the Guarantee
                                    Trustee, unless it shall be proved that the
                                    Guarantee Trustee was negligent in
                                    ascertaining the pertinent facts upon which
                                    such judgment was made;

                           (iii)    the Guarantee Trustee shall not be liable
                                    with respect to any action taken or omitted
                                    to be taken by it in good faith in
                                    accordance with the direction of the Holders
                                    of not less than a Majority in Liquidation
                                    Amount of the Preferred Securities relating
                                    to the time, method and place of conducting
                                    any proceeding for any remedy available to
                                    the Guarantee Trustee, or exercising any
                                    trust or power conferred upon the Guarantee
                                    Trustee under this Preferred Securities
                                    Guarantee; and

                           (iv)     no provision of this Preferred Securities
                                    Guarantee shall require the Guarantee
                                    Trustee to expend or risk its own funds or
                                    otherwise incur personal financial liability
                                    in the performance of any of its duties or
                                    in the exercise of any of its rights or
                                    powers, if the Guarantee Trustee shall have
                                    reasonable grounds for believing that the
                                    repayment of such funds or liability is not
                                    reasonably assured to it under the terms of
                                    this Preferred Securities Guarantee or

                                      - 8 -

<PAGE>

                                    indemnity, reasonably satisfactory to the
                                    Guarantee Trustee, against such risk or
                                    liability is not reasonably assured to it.

         3.2      Certain Rights of Guarantee Trustee.

                  (a)      Subject to the provisions of Section 3.1:

                           (i)      the Guarantee Trustee may conclusively rely,
                                    and shall be fully protected in acting or
                                    refraining from acting upon, any resolution,
                                    certificate, statement, instrument, opinion,
                                    report, notice, request, direction, consent,
                                    order, bond, debenture, note, other evidence
                                    of indebtedness or other paper or document
                                    believed by it to be genuine and to have
                                    been signed, sent or presented by the proper
                                    party or parties;

                           (ii)     Any direction or act of the Guarantor
                                    contemplated by this Preferred Securities
                                    Guarantee shall be sufficiently evidenced by
                                    an Officers' Certificate;

                           (iii)    whenever, in the administration of this
                                    Preferred Securities Guarantee, the
                                    Guarantee Trustee shall deem it desirable
                                    that a matter be proved or established
                                    before taking, suffering or omitting any
                                    action hereunder, the Guarantee Trustee
                                    (unless other evidence is herein
                                    specifically prescribed) may, in the absence
                                    of bad faith on its part, request and
                                    conclusively rely upon an Officers'
                                    Certificate which, upon receipt of such
                                    request, shall be promptly delivered by the
                                    Guarantor;

                           (iv)     the Guarantee Trustee shall have no duty to
                                    see to any recording, filing or registration
                                    of any instrument (or any rerecording,
                                    refiling or registration thereof);

                           (v)      the Guarantee Trustee may consult with
                                    counsel, and the written advice or opinion
                                    of such counsel with respect to legal
                                    matters shall be full and complete
                                    authorization and protection in respect of
                                    any action taken, suffered or omitted by it
                                    hereunder in good faith and in accordance
                                    with such advice or opinion. Such counsel
                                    may be counsel to the Guarantor or any of
                                    its Affiliates and may include any of its
                                    employees. The Guarantee Trustee shall have
                                    the right at any time to seek instructions
                                    concerning the administration of this
                                    Preferred Securities Guarantee from any
                                    court of competent jurisdiction;

                           (vi)     the Guarantee Trustee shall be under no
                                    obligation to exercise any of the rights or
                                    powers vested in it by this Preferred
                                    Securities Guarantee at the request or
                                    direction of any Holders, unless such
                                    Holders shall have provided to the Guarantee
                                    Trustee such security

                                      - 9 -

<PAGE>

                                    and indemnity, reasonably satisfactory to
                                    the Guarantee Trustee, against the costs,
                                    expenses (including attorneys' fees and
                                    expenses and the expenses of the Guarantee
                                    Trustee's agents, nominees or custodians)
                                    and liabilities that might be incurred by it
                                    in complying with such request or direction,
                                    including such reasonable advances as may be
                                    requested by the Guarantee Trustee; provided
                                    that, nothing contained in this Section
                                    3.2(a)(vi) shall be taken to relieve the
                                    Guarantee Trustee, upon the occurrence of an
                                    Event of Default, of its obligation to
                                    exercise the rights and powers vested in it
                                    by this Preferred Securities Guarantee;

                           (vii)    the Guarantee Trustee shall not be bound to
                                    make any investigation into the facts or
                                    matters stated in any resolution,
                                    certificate, statement, instrument, opinion,
                                    report, notice, request, direction, consent,
                                    order, bond, debenture, note, other evidence
                                    of indebtedness or other paper or document,
                                    but the Guarantee Trustee, in its
                                    discretion, may make such further inquiry or
                                    investigation into such facts or matters as
                                    it may see fit;

                           (viii)   the Guarantee Trustee may execute any of the
                                    trusts or powers hereunder or perform any
                                    duties hereunder either directly or by or
                                    through agents, nominees, custodians or
                                    attorneys, and the Guarantee Trustee shall
                                    not be responsible for any misconduct or
                                    negligence on the part of any agent or
                                    attorney appointed with due care by it
                                    hereunder;

                           (ix)     no third party shall be required to inquire
                                    as to the authority of the Guarantee Trustee
                                    to so act or as to its compliance with any
                                    of the terms and provisions of this
                                    Preferred Securities Guarantee, both of
                                    which shall be conclusively evidenced by the
                                    Guarantee Trustee's or its agent's taking
                                    such action; and

                           (x)      whenever in the administration of this
                                    Preferred Securities Guarantee the Guarantee
                                    Trustee shall deem it desirable to receive
                                    instructions with respect to enforcing any
                                    remedy or right or taking any other action
                                    hereunder, the Guarantee Trustee (i) may
                                    request instructions from the Holders of a
                                    Majority in Liquidation Amount of the
                                    Preferred Securities, (ii) may refrain from
                                    enforcing such remedy or right or taking
                                    such other action until such instructions
                                    are received, and (iii) shall be protected
                                    in conclusively relying on or acting in
                                    accordance with such instructions.

                  (b)      No provision of this Preferred Securities Guarantee
                           shall be deemed to impose any duty or obligation on
                           the Guarantee Trustee to perform any act or acts or
                           exercise any right, power, duty or obligation
                           conferred or imposed on it in any jurisdiction in
                           which it shall be illegal, or in which the Guarantee
                           Trustee shall be unqualified or incompetent in
                           accordance

                                     - 10 -

<PAGE>

                           with applicable law, to perform any such act or acts
                           or to exercise any such right, power, duty or
                           obligation. No permissive power or authority
                           available to the Guarantee Trustee shall be construed
                           to be a duty.

         3.3      Not Responsible for Recitals or Issuance of Guarantee.

         The Recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

         4.1      Guarantee Trustee; Eligibility.

                  (a)      There shall at all times be a Guarantee Trustee which
                           shall:

                           (i)      not be an Affiliate of the Guarantor; and

                           (ii)     be a corporation organized and doing
                                    business under the laws of the United States
                                    of America or any State or territory thereof
                                    or of the District of Columbia, or a
                                    corporation or Person permitted by the
                                    Securities and Exchange Commission to act as
                                    an institutional trustee under the Trust
                                    Indenture Act, authorized under such laws to
                                    exercise corporate trust powers, having a
                                    combined capital and surplus of at least
                                    $50,000,000, and subject to supervision or
                                    examination by federal, State, territorial
                                    or District of Columbia authority. If such
                                    corporation publishes reports of condition
                                    at least annually, pursuant to law or to the
                                    requirements of the supervising or examining
                                    authority referred to above, then, for the
                                    purposes of this Section 4.1(a)(ii), the
                                    combined capital and surplus of such
                                    corporation shall be deemed to be its
                                    combined capital and surplus as set forth in
                                    its most recent report of condition so
                                    published.

                  (b)      If at any time the Guarantee Trustee shall cease to
                           be eligible to so act under Section 4.1(a), the
                           Guarantee Trustee shall immediately resign in the
                           manner and with the effect set out in Section 4.2(c).

                  (c)      If the Guarantee Trustee has or shall acquire any
                           "conflicting interest" within the meaning of Section
                           310(b) of the Trust Indenture Act, the Guarantee
                           Trustee and Guarantor shall in all respects comply
                           with the provisions of Section 310(b) of the Trust
                           Indenture Act.

                                     - 11 -

<PAGE>

         4.2      Appointment, Removal and Resignation of Guarantee Trustee.

                  (a)      Subject to Section 4.2(b), the Guarantee Trustee may
                           be appointed or removed without cause at any time by
                           the Guarantor.

                  (b)      The Guarantee Trustee shall not be removed in
                           accordance with Section 4.2(a) until a Successor
                           Guarantee Trustee has been appointed and has accepted
                           such appointment by written instrument executed by
                           such Successor Guarantee Trustee and delivered to the
                           Guarantor.

                  (c)      The Guarantee Trustee appointed to office shall hold
                           office until a Successor Guarantee Trustee shall have
                           been appointed or until its removal or resignation.
                           The Guarantee Trustee may resign from office (without
                           need for prior or subsequent accounting) by an
                           instrument in writing executed by the Guarantee
                           Trustee and delivered to the Guarantor, which
                           resignation shall not take effect until a Successor
                           Guarantee Trustee has been appointed and has accepted
                           such appointment by instrument in writing executed by
                           such Successor Guarantee Trustee and delivered to the
                           Guarantor and the resigning Guarantee Trustee.

                  (d)      If no Successor Guarantee Trustee shall have been
                           appointed and accepted appointment as provided in
                           this Section 4.2 within 60 days after delivery to the
                           Guarantor of an instrument of resignation, the
                           resigning Guarantee Trustee may petition any court of
                           competent jurisdiction for appointment of a Successor
                           Guarantee Trustee. Such court may thereupon, after
                           prescribing such notice, if any, as it may deem
                           proper, appoint a Successor Guarantee Trustee.

                  (e)      No Guarantee Trustee shall be liable for the acts or
                           omissions to act of any Successor Guarantee Trustee.

                  (f)      Upon termination of this Preferred Securities
                           Guarantee or removal or resignation of the Guarantee
                           Trustee pursuant to this Section 4.2, the Guarantor
                           shall pay to the Guarantee Trustee all fees and
                           expenses accrued to the date of such termination,
                           removal or resignation.

                                   ARTICLE V

                                   GUARANTEE

         5.1      Guarantee.

         The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Trust), as and when due, regardless of any defense, right of set-off
or counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of

                                     - 12 -

<PAGE>

the required amounts by the Guarantor to the Holders or by causing the Trust to
pay such amounts to the Holders.

         5.2      Waiver of Notice and Demand.

         The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

         5.3      Obligations not Affected.

         The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

                  (a)      the release or waiver, by operation of law or
                           otherwise, of the performance or observance by the
                           Trust of any express or implied agreement, covenant,
                           term or condition relating to the Preferred
                           Securities to be performed or observed by the Trust;

                  (b)      the extension of time for the payment by the Trust of
                           all or any portion of the Distributions, Redemption
                           Price, Liquidation Distribution or any other sums
                           payable under the terms of the Preferred Securities
                           or the extension of time for the performance of any
                           other obligation under, arising out of, or in
                           connection with, the Preferred Securities (other than
                           an extension of time for payment of Distributions,
                           Redemption Price, Liquidation Distribution or other
                           sum payable that results from the extension of any
                           interest payment period on the Debentures or any
                           extension of the maturity date of the Debentures
                           permitted by the Indenture);

                  (c)      any failure, omission, delay or lack of diligence on
                           the part of the Holders to enforce, assert or
                           exercise any right, privilege, power or remedy
                           conferred on the Holders pursuant to the terms of the
                           Preferred Securities, or any action on the part of
                           the Trust granting indulgence or extension of any
                           kind;

                  (d)      the voluntary or involuntary liquidation,
                           dissolution, sale of any collateral, receivership,
                           insolvency, bankruptcy, assignment for the benefit of
                           creditors, reorganization, arrangement, composition
                           or readjustment of debt of, or other similar
                           proceedings affecting, the Trust or any of the assets
                           of the Trust;

                  (e)      any invalidity of, or defect or deficiency in, the
                           Preferred Securities;

                                     - 13 -

<PAGE>

                  (f)      any failure or omission to receive any regulatory
                           approval or consent required in connection with the
                           Preferred Securities (or the common equity securities
                           issued by the Trust), including the failure to
                           receive any approval of the Board of Governors of the
                           Federal Reserve System required for the redemption of
                           the Preferred Securities;

                  (g)      the settlement or compromise of any obligation
                           guaranteed hereby or hereby incurred; or

                  (h)      any other circumstance whatsoever that might
                           otherwise constitute a legal or equitable discharge
                           or defense of a guarantor, it being the intent of
                           this Section 5.3 that the obligations of the
                           Guarantor hereunder shall be absolute and
                           unconditional under any and all circumstances.

         There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

         5.4      Rights of Holders.

                  (a)      Subject to Section 5.4(b), the Holders of a Majority
                           in Liquidation Amount of the Preferred Securities
                           have the right to direct the time, method and place
                           of conducting of any proceeding for any remedy
                           available to the Guarantee Trustee in respect of this
                           Preferred Securities Guarantee or exercising any
                           trust or power conferred upon the Guarantee Trustee
                           under this Preferred Securities Guarantee.

                  (b)      Any Holders of Preferred Securities may institute and
                           prosecute a legal proceeding directly against the
                           Guarantor to enforce its rights under this Preferred
                           Securities Guarantee, without first instituting a
                           legal proceeding against the Trust, the Guarantee
                           Trustee or any other Person.

         5.5      Guarantee of Payment.

         This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.

         5.6      Subrogation.

         The Guarantor shall be subrogated to all (if any) rights of the Holders
of Preferred Securities against the Trust in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.

                                     - 14 -

<PAGE>

         5.7      Independent Obligations.

         The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (h), inclusive, of Section 5.3 hereof.

                                   ARTICLE VI

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

         6.1      Limitation of Transactions.

         So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default under this Preferred Securities Guarantee, an
event of default under the Trust Agreement or during an Extended Interest
Payment Period (as defined in the Indenture), then the Guarantor shall not (i)
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than as a result of a reclassification of its capital
stock for another class of its capital stock), (ii) make any payment of interest
or principal on or repay, repurchase or redeem any debt securities issued by the
Guarantor which rank pari passu with or junior to the Debentures (iii) make any
guarantee payments with respect to any of the foregoing (other than (a)
dividends or distributions in shares of, or options, warrants, rights to
subscribe for or purchase shares of, common stock of the Guarantor, (b) any
declaration of a non-cash dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (c)
payments under this Preferred Securities Guarantee, (d) the purchase of
fractional shares resulting from a reclassification of the Guarantor's capital
stock, (e) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged and (f) purchases of common
stock related to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or employees or any of the
Guarantor's dividend reinvestment plans).

         6.2      Ranking.

         This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank subordinate and junior in right of
payment to all Senior Debt, Subordinated Debt and Additional Senior Obligations,
of the Guarantor (as defined in the Indenture), to the extent and in the manner
set forth in the Indenture, and the applicable provisions of the Indenture will
apply, in all relevant respects, to the obligations of the Guarantor hereunder.

                                     - 15 -

<PAGE>

                                  ARTICLE VII

                                  TERMINATION

         7.1      Termination.

         This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) upon full
payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of the Trust, or (iii) upon distribution of the Debentures to the
Holders of the Preferred Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee shall continue to be effective or shall be
reinstated, as the case may be, if at any time any Holders of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.

                                  ARTICLE VIII

                                 INDEMNIFICATION

         8.1      Exculpation.

                  (a)      No Indemnified Person shall be liable, responsible or
                           accountable in damages or otherwise to the Guarantor
                           or any Covered Person for any loss, damage or claim
                           incurred by reason of any act or omission performed
                           or omitted by such Indemnified Person in good faith
                           in accordance with this Preferred Securities
                           Guarantee and in a manner that such Indemnified
                           Person reasonably believed to be within the scope of
                           the authority conferred on such Indemnified Person by
                           this Preferred Securities Guarantee or by law, except
                           that an Indemnified Person shall be liable for any
                           such loss, damage or claim incurred by reason of such
                           Indemnified Person's negligence or willful misconduct
                           with respect to such acts or omissions.

                  (b)      An Indemnified Person shall be fully protected in
                           relying in good faith upon the records of the
                           Guarantor and upon such information, opinions,
                           reports or statements presented to the Guarantor by
                           any Person as to matters the Indemnified Person
                           reasonably believes are within such other Person's
                           professional or expert competence and who has been
                           selected with reasonable care by or on behalf of the
                           Guarantor, including information, opinions, reports
                           or statements as to the value and amount of the
                           assets, liabilities, profits, losses, or any other
                           facts pertinent to the existence and amount of assets
                           from which Distributions to Holders of Preferred
                           Securities might properly be paid.

                                     - 16 -

<PAGE>

         8.2      Indemnification.

         The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.

                                   ARTICLE IX

                                  MISCELLANEOUS

         9.1      Successors and Assigns.

         All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.

         9.2      Amendments.

         Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least two thirds in Liquidation Amount of
the Preferred Securities. The provisions of Article VI of the Trust Agreement
with respect to meetings of Holders of the Preferred Securities apply to the
giving of such approval.

         9.3      Notices.

         All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:

                  (a)      If given to the Guarantee Trustee, at the Guarantee
                           Trustee's mailing address set forth below (or such
                           other address as the Guarantee Trustee may give
                           notice of to the Holders of the Preferred
                           Securities):

                           Wilmington Trust Company
                           Rodney Square North
                           1100 North Market Street
                           Wilmington, DE 19890-0001
                           Attention: Corporate Trust Administration

                                     - 17 -

<PAGE>

                  (b)      If given to the Guarantor, at the Guarantor's mailing
                           address set forth below (or such other address as the
                           Guarantor may give notice of to the Holders of the
                           Preferred Securities):

                           R&G Financial Corporation
                           280 Jesus T. Pinero Avenue
                           San Juan, Puerto Rico 00918
                           Telephone: (787) 758-2424.
                           Attention: Chief Financial Officer

                  (c)      If given to any Holders of Preferred Securities, at
                           the address set forth on the books and records of the
                           Trust.

         All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

         9.4      Benefit.

         This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.

         9.5      Governing Law.

         THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK

                                     - 18 -

<PAGE>

         This Preferred Securities Guarantee is executed as of the day and year
first above written.

                                      R&G FINANCIAL CORPORATION, as Guarantor

                                      By: _____________________
                                      Name: Joseph R. Sandoval
                                      Title: Executive Vice President and Chief
                                      Financial Officer

                                      WILMINGTON TRUST COMPANY,
                                        as Guarantee Trustee

                                      By:______________________
                                      Its:

                                     - 19 -

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