Document:

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                                                                     Exhibit 4.6

                                     FORM OF

                              DECLARATION OF TRUST

                                       OF

                             R&G CAPITAL TRUST ____

                         DATED AS OF __________, 200___

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                                TABLE OF CONTENTS

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                                                                                   PAGE
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                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.1    Definitions......................................................      1

                                   ARTICLE II
                                  ORGANIZATION

SECTION 2.1    Name.............................................................      3
SECTION 2.2    Office...........................................................      4
SECTION 2.3    Purpose..........................................................      4
SECTION 2.4    Authority........................................................      4
SECTION 2.5    Title to Property of the Trust...................................      4
SECTION 2.6    Powers of the Administrative Trustees............................      4
SECTION 2.7    Filing of Certificate of Trust...................................      5
SECTION 2.8    Duration of Trust................................................      5
SECTION 2.9    Responsibilities of the Sponsor..................................      5

                                   ARTICLE III
                                    TRUSTEES

SECTION 3.1    Trustees.........................................................      6
SECTION 3.2    Delaware Trustee.................................................      6
SECTION 3.3    Execution of Documents...........................................      7
SECTION 3.4    Not Responsible for Recitals or Sufficiency of Declaration.......      7

                                   ARTICLE IV
                      LIMITATION OF LIABILITY OF HOLDERS OF
                         SECURITIES, TRUSTEES OR OTHERS

SECTION 4.1    Exculpation......................................................      7
SECTION 4.2    Fiduciary Duty...................................................      7
SECTION 4.3    Indemnification..................................................      8
SECTION 4.4    Outside Businesses...............................................     11

                                    ARTICLE V
                     AMENDMENTS, TERMINATION, MISCELLANEOUS

SECTION 5.1    Amendments.......................................................     11
SECTION 5.2    Termination of Trust.............................................     11
SECTION 5.3    Governing Law....................................................     12
SECTION 5.4    Headings.........................................................     12
SECTION 5.5    Successors and Assigns...........................................     12
SECTION 5.6    Partial Enforceability...........................................     12
SECTION 5.7    Counterparts.....................................................     12
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                              DECLARATION OF TRUST
                                       OF
                              R&G CAPITAL TRUST ___

                                 _______, 200___

         DECLARATION OF TRUST ("Declaration") dated and effective as of _______,
200__ by the Trustees (as defined herein) and the Sponsor (as defined herein).

         WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Statutory Trust Act (as defined herein) for the sole
purpose of (i) issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust, (ii) holding certain Debentures
of the Debenture Issuer (each as defined herein) and (iii) engaging in only
those other activities that are necessary or incidental thereto; and

         NOW, THEREFORE, it being the intention of the parties hereto that the
Trust constitute a statutory trust under the Statutory Trust Act and that this
Declaration constitute the governing instrument of such statutory trust, the
Sponsor hereby, assigns, transfers and conveys to the Trustee the sum of $10,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the Sponsor, initially, and upon issuance of
Securities, the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.

                                    ARTICLE I
                                   DEFINITIONS

SECTION 1.1       Definitions.

                  Unless the context otherwise requires:

                           (a)      Capitalized terms used in this Declaration
                                    but not defined in the preamble above have
                                    the respective meanings assigned to them in
                                    this Section 1.1;

                           (b)      a term defined anywhere in this Declaration
                                    has the same meaning throughout;

                           (c)      all references to "the Declaration" or "this
                                    Declaration" are to this Declaration of
                                    Trust as modified, supplemented or amended
                                    from time to time;

                           (d)      all references in this Declaration to
                                    Articles and Sections are to Articles and
                                    Sections of this Declaration unless
                                    otherwise specified;

                           (e)      a reference to the singular includes the
                                    plural and vice versa;

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                           (f)      a reference to any Person shall include its
                                    successors and assigns;

                           (g)      a reference to any agreement or instrument
                                    shall mean such agreement or instrument as
                                    supplemented, modified, amended and restated
                                    and in effect from time to time; and

                           (h)      a reference to any statute, law, rule or
                                    regulation, shall include any amendments
                                    thereto and any successor, statute, law,
                                    rule or regulation.

            "Administrative Trustees" means any Trustee other than the Delaware
Trustee and the Property Trustee.

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

            "Business Day" means any day other than a Saturday, Sunday or day on
which banking institutions in New York, New York, Wilmington, Delaware or in San
Juan, Puerto Rico are authorized or required by any applicable law or executive
order to close.

            "Capital Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set out
in any amendment to this Declaration.

            "Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is not existing and performing the duties
now assigned to it under applicable Federal Securities laws, then the body
performing such duties at such time.

            "Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set out
in any amendment to this Declaration.

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

            "Company Indemnified Person" means: (a) any Administrative Trustee;
(b) any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any employee or agent of the Trust or its
affiliates.

            "Covered Person" means any officer, director, shareholder, partner,
member, representative, employee or agent of the Trust or the Trust's
Affiliates.

            "Debenture Issuer" means the Company in its capacity as the issuer
of the Debentures under the Indenture.

            "Debentures" means Debentures to be issued by the Debenture Issuer
and acquired by the Trust.

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            "Debenture Trustee" means the original trustee under the Indenture
until a successor is appointed thereunder, and thereafter means any such
successor trustee.

            "Delaware Trustee" has the meaning set forth in Section 3.1.

            "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.

            "Fiduciary Indemnified Person" has the meaning set forth in Section
4.3(b).

            "Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.

            "Indenture" means the indenture to be entered into between the
Debenture Issuer and the Debenture Trustee pursuant to which the Debentures are
to be issued.

            "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.

            "Property Trustee" has the meaning set forth in Section 3.1.

            "Securities" means collectively the Common Securities and the
Capital Securities.

            "Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.

            "Sponsor" means the Company in its capacity as sponsor of the Trust.

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

            "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and reference herein to a Trustee or the Trustees shall refer
to such Person or Persons solely in their capacity as trustees hereunder.

                                   ARTICLE II
                                  ORGANIZATION

SECTION 2.1 Name.

            The Trust created by this Declaration is named "R&G Capital Trust
____." The Trust's activities may be conducted under the name of the Trust or
any other name deemed advisable by the Administrative Trustees.

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SECTION 2.2 Office.

            The address of the principal office of the Trust is R&G Capital
Trust V, c/o R&G Financial Corporation, 280 Jesus T. Pinero Avenue, San Juan,
Puerto Rico 00918. On ten Business Days written notice to the holders of the
Securities and the Delaware Trustee, the Administrative Trustees may designate
another principal office.

SECTION 2.3 Purpose.

            The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities, (b) to purchase and hold certain Debentures of the
Debenture Issuer and (c) to engage in only those other activities necessary,
advisable or incidental thereto. The Trust shall not borrow money, issue debt or
reinvest 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 Puerto Rico income tax purposes as an
ordinary Trust.

SECTION 2.4 Authority.

            Subject to the limitations provided in this Declaration, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustee in
accordance with their powers shall constitute the act of and serve to bind the
Trust. In dealing with the Administrative Trustees acting on behalf of the
Trust, no person shall be required to inquire into the authority of the
Administrative Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Administrative
Trustees as set forth in this Declaration.

SECTION 2.5 Title to Property of the Trust.

            Legal title to all assets of the Trust shall be vested in the Trust.

SECTION 2.6 Powers of the Administrative Trustees.

            The Administrative Trustees shall have the exclusive power and
authority to cause the Trust to engage in the following activities:

            (a) to issue and sell the Capital Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Capital Securities and no more than
one series of Common Securities, and, provided, further, that there shall be no
interests in the Trust other than the Securities;

            (b) in connection with the issue and sale of the Capital Securities,
to:

                  (i)      file with the Commission (the "Commission") and
                           execute, on behalf of the Trust: (a) a Registration
                           Statement on Form S-3, or other appropriate form (the
                           "1933 Act Registration Statement"), including
                           pre-effective or post-effective amendments to the
                           1933 Act Registration Statement, relating to the
                           registration under the Securities Act of 1933, as
                           amended (the "1933 Act"),

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                           of the Capital Securities of the Trust, and (b) any
                           preliminary prospectus or prospectus or supplement
                           thereto relating to the Capital Securities required
                           to be filed pursuant to the 1933 Act;

                  (ii)     execute, deliver and perform on behalf of the Trust a
                           placement agreement with the Sponsor and the
                           placement agent of the Capital Securities of the
                           Trust;

                  (iii)    execute and enter into a subscription agreement,
                           providing for the sale of the Common Securities;

            (c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and provide for reasonable compensation for such services;

            (d) to incur expenses that are necessary or incidental to carry out
any of the purposes of this Declaration, which expenses shall be paid for the
Sponsor in all respects; and

            (e) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.

SECTION 2.7 Filing of Certificate of Trust.

            On or after the date of execution of this Declaration, the Trustees
shall cause the filing of the Certificate of Trust for the Trust in the form
attached hereto as Exhibit A with the Secretary of State of the State of
Delaware.

SECTION 2.8 Duration of Trust.

            The Trust, absent termination pursuant to the provisions of Section
5.2, shall have existence for thirty (30) years from the date hereof.

SECTION 2.9 Responsibilities of the Sponsor.

            In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:

            (a) to prepare the 1933 Act Registration Statement, and any
preliminary prospectus or prospectus or supplement thereto with respect to the
Capital Securities, including in each case, any amendments or supplements
thereto; and

            (b) to negotiate the terms of subscription agreement and the
placement agreement with the placement agent providing for the sale of the
Common Securities and Capital Securities, respectively.

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                                   ARTICLE III
                                    TRUSTEES

SECTION 3.1 Trustees.

            The number of Trustees initially shall be three (3), and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Sponsor. The Sponsor is entitled to
appoint or remove without cause any Trustee at any time; provided, however that
the number of Trustees shall in no event be less than two (2); provided further
that (1) one Trustee, in the case of a natural person, shall be a person who is
a resident of the State of Delaware or which, if not a natural person, is an
entity which has its principal place of business in the Statement of Delaware
(the "Delaware Trustee") and (2) there shall be at least one Administrative
Trustee who is an officer of the Sponsor.

            Except as expressly set forth in this Declaration, if there are more
than two Administrative Trustees, any power of such Administrative Trustees may
be exercised by, or with the consent of, a majority of such Administrative
Trustees; provided that if there are two Administrative Trustees, any power of
such Administrative Trustees shall be exercised by both Administrative Trustees;
provided further that if there is only one Administrative Trustee, all powers of
the Administrative Trustees shall be exercised by such one Administrative
Trustee.

            The initial Administrative Trustee(s) shall be:

                 ______________________

                 ______________________

            The initial Delaware Trustee shall be:

                 Wilmington Trust Company

            Prior to the issuance of the Capital Securities and Common
Securities, the Sponsor shall appoint another trustee (the "Property Trustee")
meeting the requirements of the Trust Indenture Act of 1939, as amended, by the
execution of an amendment to this Declaration executed by the Administrative
Trustees, the Sponsor, the Property Trustee and the Delaware Trustee.

SECTION 3.2 Delaware Trustee.

            Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities, of the
Administrative Trustees described in this Declaration. The Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Statutory Trust Act. Notwithstanding
anything herein to the contrary, the Delaware Trustee shall not be liable for
the acts or omissions to act of the Trust or of the Administrative Trustees
except such acts as the Delaware Trustee is expressly obligated or authorized to
undertake under this Declaration or the Statutory Trust Act and except for the
gross negligence or willful misconduct of the Delaware Trustee.

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SECTION 3.3 Execution of Documents.

            (a) Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Statutory Trust Act, any Administrative
Trustee is authorized to execute on behalf of the Trust any documents which the
Administrative Trustees have the power and authority to cause the Trust to
execute pursuant to Section 2.6; and

            (b) an 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 purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 2.6.

SECTION 3.4 Not Responsible for Recitals or Sufficiency of Declaration.

            The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration.

                                   ARTICLE IV
                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 4.1 Exculpation.

            (a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust 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 on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration 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; and

            (b) an Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
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 Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to holders of Securities might properly be paid.

SECTION 4.2 Fiduciary Duty.

            (a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered

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Person, an Indemnified Person acting under this Declaration shall not be liable
to the Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person;

            (b) unless otherwise expressly provided herein:

                  (i)      whenever a conflict of interest exists or arises
                           between Covered Persons; or

                  (ii)     whenever this Declaration or any other agreement
                           contemplated herein provides that an Indemnified
                           Person shall act in a manner that is, or provides
                           terms that are, fair and reasonable to the Trust or
                           any holder of Securities, the Indemnified Person
                           shall resolve such conflict of interest, take such
                           action or provide such terms, considering in each
                           case the relative interest of each party (including
                           its own interest) to such conflict, agreement,
                           transaction or situation and the benefits and burdens
                           relating to such interests, any customary or accepted
                           industry practices, and any applicable generally
                           accepted accounting practices or principles. In the
                           absence of bad faith by the Indemnified Person, the
                           resolution, action or term so made, taken or provided
                           by the Indemnified Person shall not constitute a
                           breach of this Declaration or any other agreement
                           contemplated herein or of any duty or obligation of
                           the Indemnified Person at law or in equity or
                           otherwise; and

            (c) whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:

                  (i)      in its "discretion" or under a grant of similar
                           authority, the Indemnified Person shall be entitled
                           to consider such interests and factors as it desires,
                           including its own interest, and shall have no duty or
                           obligation to give any consideration to any interest
                           of or factors affecting the Trust or any other
                           Person; or

                  (ii)     in its "good faith" or under another express
                           standard, the Indemnified Person shall act under such
                           express standard and shall not be subject to any
                           other or different standard imposed by this
                           Declaration or by applicable law.

SECTION 4.3 Indemnification.

            (a) (i) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys

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fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

                (ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Trust to procure a judgment in its favor by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Trust, except that no such indemnification shall be made in respect of any
claim, issue or matter as to which such Company Indemnified Person shall have
been adjudged to be liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.

                (iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.

                (iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Administrative Trustees by a majority
vote of quorum consisting of such Administrative Trustees who were not parties
to such action, suit or proceeding, (2) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Administrative Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.

                (v) Expenses (including attorneys fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a) shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Company Indemnified Person to repay such amount if it

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shall ultimately be determined that he is not entitled to be indemnified by the
Sponsor as authorized in this Section 4.3(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Administrative Trustees by a majority vote of a quorum
of disinterested Administrative Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Administrative
Trustees so directs, by independent legal counsel in a written opinion or (iii)
the Common Security Holder of the Trust, that, based upon the facts known to the
Administrative Trustees, counsel or the Common Security Holder at the time such
determination is made, such Company Indemnified Person acted in bad faith or in
a manner that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Administrative Trustees, independent legal counsel or the Common Security
Holder reasonably determine that such person deliberately breached his duty to
the Trust or the Common Security or Capital Security Holders.

                (vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 4.3(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the Sponsor or Capital
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Sponsor and each Company Indemnified Person
who serves in such capacity at any time while this Section 4.3(a) is in effect.
Any repeal or modification of this Section 4.3(a) shall not affect any rights or
obligations then existing.

                (vii) The Sponsor or the Trust may purchase and maintain
liability insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the Sponsor
would have the power to indemnify him against such liability under the
provisions of this Section 4.3(a).

                (viii) For purposes of this Section 4.3(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 4.3(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.

                (ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 4.3(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.

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            (b) The Sponsor agrees to indemnify (i) the Delaware Trustee, (ii)
any Affiliate of the Delaware Trustee, and (iii) any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Delaware Trustee (each of the Persons in (i) through
(iii) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or bad faith or 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 4.3(b) shall
survive the termination of this Declaration and the resignation or removal of
the Delaware Trustee.

SECTION 4.4 Outside Businesses.

            Any Covered Person, the Sponsor and the Delaware Trustee may engage
in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Trust, and the Trust and the holders of Securities shall have no rights
by virtue of this Declaration in and to such independent ventures or the income
or profits derived therefrom and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor or the Delaware Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee may
engage or be interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depository for, trustee or agent
for or may act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.

                                    ARTICLE V
                     AMENDMENTS, TERMINATION, MISCELLANEOUS

SECTION 5.1 Amendments.

            At any time before the issue of any Securities, this Declaration may
be amended by, and only by, a written instrument executed by all of the
Administrative Trustees and the Sponsor, provided, however, that if such
amendment affects the rights, privileges, immunities, duties or obligations of
the Delaware Trustee, the Declaration may be amended only upon the Delaware
Trustee's prior written consent.

SECTION 5.2 Termination of Trust.

            (a) The Trust shall dissolve and be wound up in accordance with
applicable law:

                                       11

<PAGE>

                  (i)      upon the occurrence of an Event of Default described
                           in section 5.01(d) and (e) of the Indenture with
                           respect to the Sponsor;

                  (ii)     upon the filing of a certificate of dissolution or
                           its equivalent with respect to the Sponsor or the
                           revocation of the Sponsor's charter or of the Trust's
                           certificate of trust;

                  (iii)    upon the entry of a decree of judicial dissolution of
                           the Sponsor or the Trust; and

                  (iv)     before issuance of any Securities, with the consent
                           of all of the Administrative Trustees and the
                           Sponsor.

            (b) Upon completion of the winding up of the Trust and as soon as is
practicable after the occurrence of an event referred to in Section 5.2(a), the
Administrative Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.

SECTION 5.3 Governing Law.

            THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICT OF LAWS.

SECTION 5.4 Headings.

            Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.

SECTION 5.5 Successors and Assigns.

            Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.

SECTION 5.6 Partial Enforceability.

            If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

SECTION 5.7 Counterparts.

            This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as

                                       12

<PAGE>

though one, and they shall have the same force and effect as though all of the
signers had signed a single signature page.

                                       13

<PAGE>

      IN WITNESS WHEREOF the undersigned have caused this Declaration to be
executed as of the day and year first above written.

                                    WILMINGTON TRUST COMPANY,
                                    as Delaware Trustee

                                    By: ________________________________________
                                    Name: ______________________________________
                                    Title: _____________________________________

                                    ADMINISTRATIVE TRUSTEE

                                    ____________________________________________
                                    Name:

                                    ADMINISTRATIVE TRUSTEE

                                    ____________________________________________
                                    Name:

                                    R&G FINANCIAL CORPORATION,
                                    as Sponsor

                                    By: ________________________________________
                                        Name:
                                        Title:<PAGE>

                                                                     Exhibit 4.7

                              AMENDED AND RESTATED
                              DECLARATION OF TRUST

                                       OF

                              R&G CAPITAL TRUST ___

                          Dated as of _______ __ , 200_

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
ARTICLE I INTERPRETATION AND DEFINITIONS

Section 1.1      Definitions...................................................................     1

ARTICLE II TRUST INDENTURE ACT

Section 2.1      Trust Indenture Act; Application..............................................     7
Section 2.2      Lists of Holders of Securities................................................     8
Section 2.3      Reports by the Property Trustee...............................................     8
Section 2.4      Periodic Reports to Property Trustee..........................................     8
Section 2.5      Evidence of Compliance with Conditions Precedent..............................     8
Section 2.6      Events of Default; Waiver.....................................................     9
Section 2.7      Event of Default; Notice......................................................    10

ARTICLE III ORGANIZATION

Section 3.1      Name..........................................................................    11
Section 3.2      Office........................................................................    11
Section 3.3      Purpose.......................................................................    11
Section 3.4      Authority.....................................................................    12
Section 3.5      Title to Property of the Trust................................................    12
Section 3.6      Powers and Duties of the Administrative Trustees..............................    12
Section 3.7      Prohibition of Actions by the Trust and the Trustees..........................    15
Section 3.8      Powers and Duties of the Property Trustee.....................................    16
Section 3.9      Certain Duties and Responsibilities of the Property Trustee...................    18
Section 3.10     Certain Rights of Property Trustee............................................    20
Section 3.11     Delaware Trustee..............................................................    22
Section 3.12     Execution of Documents........................................................    23
Section 3.13     Not Responsible for Recitals or Issuance of Securities........................    24
Section 3.14     Duration of Trust.............................................................    24
Section 3.15     Mergers.......................................................................    24
Section 3.16     Property Trustee May File Proofs of Claim.....................................    26

ARTICLE IV SPONSOR

Section 4.1      Sponsor's Purchase of Common Securities.......................................    27
Section 4.2      Responsibilities of the Sponsor...............................................    27
Section 4.3      Right to Proceed..............................................................    27
Section 4.4      Right to Dissolve Trust.......................................................    28
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
ARTICLE V TRUSTEES

Section 5.1       Number of Trustees: Appointment of Co-Trustee................................    27
Section 5.2       Delaware Trustee.............................................................    27
Section 5.3       Property Trustee; Eligibility................................................    28
Section 5.4       Certain Qualifications of Administrative Trustees and Delaware Trustee
                              Generally........................................................    29
Section 5.5       Administrative Trustees......................................................    29
Section 5.6       Delaware Trustee.............................................................    29
Section 5.7       Appointment, Removal and Resignation of Trustees.............................    29
Section 5.8       Vacancies among Trustees.....................................................    31
Section 5.9       Effect of Vacancies..........................................................    31
Section 5.10      Meetings.....................................................................    31
Section 5.11      Delegation of Power..........................................................    32
Section 5.12      Merger, Conversion, Consolidation or Succession to Business..................    32

ARTICLE VI DISTRIBUTIONS

Section 6.1       Distributions................................................................    33

ARTICLE VII ISSUANCE OF SECURITIES

Section 7.1       General Provisions Regarding Securities......................................    33
Section 7.2       Execution and Authentication.................................................    33
Section 7.3       Form and Dating..............................................................    34
Section 7.4       Registrar and Paying Agent...................................................    35
Section 7.5       Paying Agent to Hold Money in Trust..........................................    36
Section 7.6       Replacement Securities.......................................................    36
Section 7.7       Outstanding Preferred Securities.............................................    36
Section 7.8       Preferred Securities in Treasury.............................................    37
Section 7.9       Definitive Securities........................................................    37
Section 7.10      Cancellation.................................................................    38
Section 7.11      CUSIP Numbers................................................................    38

ARTICLE VIII TERMINATION OF TRUST

Section 8.1       Dissolution and Termination of Trust.........................................    38

ARTICLE IX TRANSFER OF INTERESTS

Section 9.1       Transfer of Securities.......................................................    39
Section 9.2       Transfer Procedures and Restrictions.........................................    40
Section 9.3       Deemed Security Holders......................................................    43
Section 9.4       Book Entry Interests.........................................................    43
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
Section 9.5      Notices to Clearing Agency....................................................    43
Section 9.6      Appointment of Successor Clearing Agency......................................    44

ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

Section 10.1     Liability.....................................................................    44
Section 10.2     Exculpation...................................................................    44
Section 10.3     Fiduciary Duty................................................................    44
Section 10.4     Indemnification...............................................................    44
Section 10.5     Outside Businesses............................................................    48
Section 10.6     Compensation; Fees............................................................    48

ARTICLE XI ACCOUNTING

Section 11.1     Fiscal Year...................................................................    49
Section 11.2     Certain Accounting Matters....................................................    49
Section 11.3     Banking.......................................................................    50
Section 11.4     Withholding...................................................................    50

ARTICLE XII AMENDMENTS AND MEETINGS

Section 12.1     Amendments....................................................................    50
Section 12.2     Meetings of the Holders; Action by Written Consent............................    52

ARTICLE XIII   REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE

Section 13.1     Representations and Warranties of Property Trustee............................    53
Section 13.2     Representations and Warranties of Delaware Trustee............................    54

ARTICLE XIV MISCELLANEOUS

Section 14.1     Notices.......................................................................    55
Section 14.2     Governing Law.................................................................    56
Section 14.3     Intention of the Parties......................................................    56
Section 14.4     Headings......................................................................    56
Section 14.5     Successors and Assigns........................................................    56
Section 14.6     Partial Enforceability........................................................    56
Section 14.7     Counterparts..................................................................    56
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                  PAGE
                                                                                                  ----
<S>                                                                                               <C>
ANNEX I           TERMS OF SECURITIES..........................................................   I-1
EXHIBIT A-1       FORM OF PREFERRED SECURITY CERTIFICATE.......................................   A-1
EXHIBIT A-2       FORM OF COMMON SECURITY CERTIFICATE..........................................   A2-1
EXHIBIT B         SPECIMEN OF DEBENTURE........................................................   B-1
EXHIBIT C         UNDERWRITING AGREEMENT.......................................................   C-1
</TABLE>

<PAGE>

                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>
                                   Section of
                              Trust Indenture Act
                              of 1939, as amended                                     Section of Declaration
                              -------------------                                     ----------------------
<S>                                                                                   <C>
310(a)..........................................................................          5.3
310(b)..........................................................................          5.3(c), 5.3(d)
311(a)..........................................................................          2.2(b)
311(b)..........................................................................          2  (b)
312(a)..........................................................................          2.2(a)
312(b)..........................................................................          2.2(b)
313.............................................................................          2.3
314(a)..........................................................................          2.4; 3.6(j)
314(c)..........................................................................          2.5
315(a)..........................................................................          3.9
315(b)..........................................................................          2.7(a)
315(c)..........................................................................          3.9(a)
315(d)..........................................................................          3.9(b)
316(a)..........................................................................          2.6
316(c)..........................................................................          3.6(e)
317(a)..........................................................................          3.8(e); 3.8(h)
317(b)..........................................................................          3.8(i); 7.5
</TABLE>

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

* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.

<PAGE>

                    AMENDED AND RESTATED DECLARATION OF TRUST
                                       OF
                              R&G CAPITAL TRUST ___

                               __________ __, 200_

         AMENDED AND RESTATED DECLARATION OF TRUST, including Annex I and all
exhibits attached hereto (this "Declaration"), dated and effective as of
________ __, 200_, by the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided beneficial interests
in the assets of the Trust to be issued pursuant to this Declaration;

         WHEREAS, the Trustees (other than the Property Trustee (as defined
herein)) and the Sponsor established R&G Capital Trust ___ (the "Trust"), a
statutory trust formed under the Statutory Trust Act (as defined herein)
pursuant to a Declaration of Trust dated as of _______ __, 200_ (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on ________ __, 200_ (the "Certificate of Trust"), for the
sole purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain Debentures of the Debenture Issuer (each as hereinafter
defined), and engaging in only those other activities that are necessary or
incidental thereto; and

         WHEREAS, prior to the date hereof, no interests in the Trust have been
issued; and

         WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate in its entirety each and every term and provision of the
Original Declaration;

         NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act and that
this Declaration constitute the governing instrument of such statutory trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the Holders (as defined herein), from time to time, of
the securities representing undivided beneficial interests in the assets of the
Trust issued hereunder, subject to the provisions of this Declaration.

                                    ARTICLE I
                         INTERPRETATION AND DEFINITIONS

SECTION 1.1 DEFINITIONS.

         Unless the context otherwise requires:

         (a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;

         (b) a term defined anywhere in this Declaration has the same meaning
throughout;

                                       1

<PAGE>

         (c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;

         (d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;

         (e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and

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

         "Administrative Trustee" has the meaning set forth in Section 5.1(b).

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

         "Agent" means any Paying Agent or Registrar.

         "Authorized Officer" of a Person means any other Person that is
authorized to legally bind such former Person.

         "Book Entry Interest" means a beneficial interest in a Global
Certificate registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.

         "Business Day" means any day other than a Saturday or a Sunday or a day
on which banking institutions in the cities of New York, New York, Wilmington,
Delaware or San Juan, Puerto Rico, are authorized or required by law or
executive order to close.

         "Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Preferred
Securities.

         "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.

         "Closing Time" means the "Closing Date" under the Underwriting
Agreement, including pursuant to the exercise of any over-allotment option
granted to the underwriter thereunder.

                                       2

<PAGE>

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.

         "Commission" means the United States Securities and Exchange Commission
as from time to time constituted, or if any time after the execution of this
Declaration such Commission is not existing and performing the duties now
assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.

         "Common Securities" has the meaning specified in Section 7.1(a).

         "Common Securities Guarantee" means the guarantee agreement dated as of
________ __, 2004 of the Sponsor in respect of the Common Securities.

         "Company Indemnified Person" means (a) any Administrative Trustee; (b)
any Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.

         "Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at ______________________,
________________, _____________________.

         "Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.

         "Debentures" means the ____% Junior Subordinated Deferrable Interest
Debentures due ________ __, ____ of the Debenture Issuer issued pursuant to the
Indenture.

         "Debenture Issuer" means R&G Financial Corporation, a Puerto Rico
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.

         "Debenture Trustee" means _______________________, a __________ banking
corporation, as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

         "Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

         "Definitive Preferred Securities" shall have the meaning set forth in
Section 7.3(c).

         "Delaware Trustee" has the meaning set forth in Section 5.2.

                                       3

<PAGE>

         "Direct Action" shall have the meaning set forth in Section 3.8(e).

         "Distribution" means a distribution payable to Holders in accordance
with Section 6.1.

         "DTC" means The Depository Trust Company, the initial Clearing Agency.

         "Event of Default" in respect of the Securities means an Event of
Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.

         "Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).

         "Fiscal Year" has the meaning set forth in Section 11.1.

         "Global Preferred Security" has the meaning set forth in Section
7.3(a).

         "Holder" means a Person in whose name a Security is registered, such
Person being a beneficial owner within the meaning of the Statutory Trust Act;
provided, however, that in determining whether the Holders of the requisite
liquidation amount of Preferred Securities have voted on any matter provided for
in this Declaration, then for the purpose of such determination only (and not
for any other purpose hereunder), if the Preferred Securities remain in the form
of one or more Global Certificates, the term "Holders" shall mean the holder of
the Global Certificate acting at the direction of the Preferred Security
Beneficial Owners.

         "Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.

         "Indenture" means the Indenture dated, as of ___________ __, 200_,
between the Debenture Issuer and the Debenture Trustee, as amended or
supplemented from time to time.

         "Investment Company" means an investment company as defined in the
Investment Company Act.

         "Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.

         "Investment Company Event" has the meaning set forth in Annex I.

         "Legal Action" has the meaning set forth in Section 3.6(g).

         "List of Holders" has the meaning set forth in Section 2.2(a).

         "Majority in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting

                                       4

<PAGE>

separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount of all outstanding Securities of the relevant
class.

         "Officers' Certificate" means, with respect to any Person, a
certificate signed by any two of the following: the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, the Chief Financial Officer, a Vice
President, the Comptroller, the Secretary or an Assistant Secretary of such
Person. Any Officers' Certificate delivered by the Trust shall be signed by at
least one Administrative Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration 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 a written opinion of counsel, who (except as
specifically provided to the contrary herein by reference to "independent
counsel") may be an employee of the Sponsor, and who shall be acceptable to the
Property Trustee.

         "Paying Agent" has the meaning specified in Section 7.4.

         "Payment Amount" has the meaning specified in Section 6.1.

         "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 Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).

         "Preferred Securities" means the _____% Cumulative Trust Preferred
Securities.

         "Preferred Securities Guarantee" means the guarantee agreement dated as
of ________ __, 200___ of the Sponsor in respect of the Preferred Securities.

         "Property Trustee" has the meaning set forth in Section 5.3(a).

                                       5

<PAGE>

         "Property Trustee Account" has the meaning set forth in Section
3.8(c)(i).

         "Prospectus" has the meaning set forth in Section 3.6(b)(i).

         "Quorum" means a majority of the Administrative Trustees or, if there
are only two Administrative Trustees, both of them.

         "Registrar" has the meaning set forth in Section 7.4.

         "Registration Statement" has the meaning set forth in Section
3.6(b)(i).

         "Regulatory Capital Event" has the meaning set forth in Annex I.

         "Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.

         "Responsible Officer" means any officer within the Corporate Trust
Office of the Property Trustee with direct responsibility for the administration
of this Declaration 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.

         "Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.

         "Securities" or "Trust Securities" means the Common Securities and the
Preferred Securities.

         "Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.

         "Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.

         "Special Event" has the meaning set forth in Section 4(c) of Annex I
hereto.

         "Sponsor" means R&G Financial Corporation, a Puerto Rico corporation,
or any successor entity resulting from any merger, consolidation, amalgamation
or other business combination, in its capacity as sponsor of the Trust.

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

         "Successor Delaware Trustee" has the meaning set forth in Section
5.7(b)(ii).

         "Successor Entity" has the meaning set forth in Section 3.15(b)(i).

         "Successor Property Trustee" has the meaning set forth in Section
3.8(f)(ii).

         "Super Majority" has the meaning set forth in Section 2.6(a)(ii).

         "Tax Event" has the meaning set forth in Annex I.

                                       6

<PAGE>

         "10% in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount of all outstanding Securities of the relevant
class.

         "Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).

         "Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.

         "Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue as a trustee in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.

         "Underwriting Agreement" means the Underwriting Agreement for the
initial offering and sale of Preferred Securities in the form of Exhibit C.

                                   ARTICLE II
                               TRUST INDENTURE ACT

SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.

         (a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration in order for this
Declaration to be qualified under the Trust Indenture Act 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 and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.

         (d) The application of the Trust Indenture Act to this Declaration
shall not affect the Trust's classification as a grantor trust for United States
federal or Puerto Rico income tax purposes or the nature of the Securities as
equity securities representing undivided beneficial interests in the assets of
the Trust.

                                       7

<PAGE>

SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.

         (a) Each of the Sponsor and the Administrative Trustees on behalf of
the Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities, (i) within 10 Business Days after each record date
for payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time that the List of Holders does not differ from
the most recent List of Holders given to the Property Trustee by the Sponsor and
the Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.

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

SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.

         Within 60 days after May 15 of each year, commencing May 15, 200_, the
Property Trustee shall provide to the Holders of the Preferred Securities such
reports dated as of such May 15 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 Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.

SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.

         Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as are required by Section 314 of the Trust Indenture Act (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(a)(4) of
the Trust Indenture Act, such compliance certificate to be delivered annually on
or before 120 days after the end of each fiscal year of the Sponsor. Delivery of
such documents, reports and information to the Property Trustee is for
informational purposes only and the Property Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Sponsor's
compliance with any of its covenants hereunder (as to which the Property Trustee
is entitled to rely exclusively on Officers' Certificates).

SECTION 2.5 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 provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust

                                       8

<PAGE>

Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be given in the
form of an Officers' Certificate.

SECTION 2.6 EVENTS OF DEFAULT; WAIVER.

         (a) 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 in respect of the Preferred
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:

                  (i) is not waivable under the Indenture, the Event of Default
                  under the Declaration shall also not be waivable; or

                  (ii) requires the consent or vote of greater than a majority
                  in aggregate principal amount of the holders of the Debentures
                  (a "Super Majority") to be waived under the Indenture, the
                  Event of Default under the Declaration may only be waived by
                  the vote of the Holders of at least the proportion in
                  aggregate liquidation amount of the Preferred Securities that
                  the relevant Super Majority represents of the aggregate
                  principal amount of the Debentures outstanding.

         The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote or
consent of the Holders of the Common Securities.

         (b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:

                  (i) is not waivable under the Indenture, except where the
                  Holders of the Common Securities are deemed to have waived
                  such Event of Default under the Declaration as provided below
                  in this Section 2.6(b), the Event of Default under the
                  Declaration shall also not be waivable; or

                  (ii) requires the consent or vote of a Super Majority to be
                  waived under the Indenture, except where the Holders of the
                  Common Securities are deemed to have waived such Event of
                  Default under the Declaration as provided below in this
                  Section 2.6(b), the Event of Default under the Declaration may
                  only be

                                       9

<PAGE>

                  waived by the vote of the Holders of at least the proportion
                  in aggregate liquidation amount of the Common Securities that
                  the relevant Super Majority represents of the aggregate
                  principal amount of the Debentures outstanding; provided
                  further, each Holder of Common Securities will be deemed to
                  have waived any such Event of Default and all Events of
                  Default with respect to the Common Securities and their
                  consequences until Events of Default with respect to the
                  Preferred Securities have been cured, waived or otherwise
                  eliminated, and until such Events of Default have been so
                  cured, waived or otherwise eliminated, the Property Trustee
                  will be deemed to be acting solely on behalf of the Holders of
                  the Preferred Securities and only the Holders of the Preferred
                  Securities will have the right to direct the Property Trustee
                  in accordance with the terms of the Securities. The foregoing
                  provisions of this Section 2.6(b) shall be in lieu of Sections
                  316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
                  such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust
                  Indenture Act are hereby expressly excluded from this
                  Declaration and the Securities, as permitted by the Trust
                  Indenture Act. Subject to the foregoing provisions of this
                  Section 2.6(b), upon such waiver, any such default shall cease
                  to exist and any Event of Default with respect to the Common
                  Securities arising therefrom shall be deemed to have been
                  cured for every purpose of this Declaration, but no such
                  waiver shall extend to any subsequent or other default or
                  Event of Default with respect to the Common Securities or
                  impair any right consequent thereon.

         (c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.

SECTION 2.7 EVENT OF DEFAULT; NOTICE.

         (a) The Property Trustee shall, within 90 days after the occurrence of
a Default (as such term is defined in the Indenture) actually known to a
Responsible Officer, transmit by mail, first class postage prepaid, to the
Holders of the Preferred Securities, the Administrative Trustees and the
Sponsor, notices of all Defaults with respect to the Securities actually known
to a Responsible Officer, unless such Defaults have been cured before the giving
of such notice; provided that, except for a default in the payment of principal
of or interest (including Compounded Interest and Additional Sums (as such terms
are defined in the Indenture) if any, on any of the Debentures, the Property
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer in good faith determines that the withholding of such notice
is in the interests of the Holders. The Sponsor and the Administrative Trustees
shall file annually with the Property Trustee a certification as to whether or
not they are in compliance with all the conditions and covenants applicable to
them under this Declaration.

         (b) The Property Trustee shall not be deemed to have knowledge of any
default except:

                                       10

<PAGE>

                  (i) a default under Sections 5.01(a) (other than the payment
                  of Compounded Interest and Additional Sums, each as defined in
                  the Indenture) and 5.01(b) of the Indenture provided that the
                  Property Trustee is the Paying Agent under the Indenture; or

                  (ii) any default as to which the Property Trustee shall have
                  received written notice at the corporate trust office of the
                  Property Trustee and such notice references the Preferred
                  Securities and this Declaration or of which a Responsible
                  Officer charged with the administration of the Declaration
                  shall have actual knowledge.

                                   ARTICLE III
                                  ORGANIZATION

SECTION 3.1 NAME.

         The Trust is named "R&G Capital Trust ___" as such name may be modified
from time to time by the Administrative Trustees following written notice to the
Delaware Trustee, the Property Trustee and the Holders. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.

SECTION 3.2 OFFICE.

         The address of the principal office of the Trust is c/o R&G Financial
Corporation, 280 Jesus T. Pinero Avenue, San Juan, Puerto Rico 00918. On ten
Business Days written notice to the Delaware Trustee, the Property Trustee and
the Holders of Securities, the Administrative Trustees may designate another
principal office.

SECTION 3.3 PURPOSE.

         The exclusive purposes and functions of the Trust are (a) to issue and
sell the Securities, (b) use the proceeds from the sale of the Securities to
acquire the Debentures, and (c) except as otherwise limited herein, to engage in
only those other activities that are necessary or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or 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 federal or Puerto Rico income tax purposes as a
grantor trust.

         The Trust will be classified as a grantor trust for United States
federal and Puerto Rico income tax purposes, pursuant to which the owners of the
Preferred Securities and the Common Securities will be the owners of the Trust
for United States federal and Puerto Rico income tax purposes, and such owners
will include directly in their gross income the income, gain, deduction or loss
of the Trust as if the Trust did not exist. By the acceptance of this Trust,
none of the Trustees, the Sponsor or the Holders of the Securities will take any
position which is contrary to the classification of the Trust as a grantor trust
for United States federal or Puerto Rico income tax purposes.

                                       11

<PAGE>

SECTION 3.4 AUTHORITY.

         Subject to the limitations provided in this Declaration and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.

SECTION 3.5 TITLE TO PROPERTY OF THE TRUST.

         Except as may be otherwise provided in this Declaration, legal title to
all assets of the Trust shall be vested in the Property Trustee for the benefit
of the Trust and the Holders. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.

SECTION 3.6 POWERS AND DUTIES OF THE ADMINISTRATIVE TRUSTEES.

         The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:

         (a) to execute, enter into and deliver the Common Securities
Subscription Agreement and to execute, deliver, issue and sell the Securities in
accordance with this Declaration and pursuant to the Underwriting Agreement;
provided, however, that except as contemplated in Section 7.1(a), (i) the Trust
may issue no more than one series of Preferred Securities and no more than one
series of Common Securities, (ii) there shall be no interests in the Trust other
than the Securities, and (iii) the issuance of Securities shall be limited to a
simultaneous issuance of both the Preferred Securities and Common Securities at
the Closing Time;

         (b) in connection with the issuance and sale of the Preferred
Securities, to:

                  (i) prepare and execute a Prospectus (the "Prospectus") in
                  preliminary and final form prepared by the Sponsor, in
                  relation to the offering and sale of the Preferred Securities
                  and to execute and file with the Commission a registration
                  statement on Form S-3(the "Registration Statement"), including
                  any amendments thereto, for the offering and sale of the
                  Preferred Securities;

                  (ii) execute and file any documents prepared by the Sponsor,
                  or take any acts as determined by the Sponsor to be necessary,
                  in order to qualify or register all or part of the Preferred
                  Securities in any State in which the Sponsor has determined to
                  qualify or register such Preferred Securities for sale;

                  (iii) execute and file an application, prepared by the
                  Sponsor, to permit the Preferred Securities to trade or be
                  quoted or listed in or on the Nasdaq National Market or any
                  other securities exchange or quotation system.

                                       12

<PAGE>

                  (iv) execute and deliver letters, documents or instruments
                  with DTC and other Clearing Agencies relating to the Preferred
                  Securities;

                  (v) execute and file with the Commission a registration
                  statement on Form 8-A, including any amendments thereto,
                  prepared by the Sponsor, relating to the registration of the
                  Preferred Securities under Section 12(b) or (g) of the
                  Exchange Act; and

                  (vi) execute and enter into the Underwriting Agreement
                  providing for the sale of the Preferred Securities;

         (c) to execute, enter into and deliver the Debenture Subscription
Agreement and to acquire the Debentures with the proceeds of the sale of the
Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders;

         (d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event;

         (e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;

         (f) to take all actions and perform such duties as may be required of
the Administrative Trustees pursuant to the terms of this Declaration and the
Securities;

         (g) to the fullest extent permitted by law, to bring or defend, pay,
collect, compromise, arbitrate, resort to legal action, or otherwise adjust
claims or demands of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e), the Property Trustee has the exclusive power to bring such Legal
Action;

         (h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct the services that the Administrative Trustees have
authority to conduct directly and pay reasonable compensation for such services;

         (i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;

         (j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee;

         (k) to incur expenses that are necessary or incidental to carry out any
of the purposes of the Trust;

                                       13

<PAGE>

         (l) to act as, or appoint another Person to act as, Registrar for the
Securities or to appoint a Paying Agent for the Securities as provided in
Section 7.4 except for such time as such power to appoint a Paying Agent is
vested in the Property Trustee;

         (m) to give prompt written notice to the Property Trustee and to
Holders of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;

         (n) to take 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 or to enable the Trust to effect
the purposes for which the Trust was created;

         (o) to take any action, not inconsistent with this Declaration or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:

                  (i) causing the Trust not to be deemed to be an Investment
                  Company required to be registered under the Investment Company
                  Act;

                  (ii) causing the Trust to be classified for United States
                  federal or Puerto Rico income tax purposes as a grantor trust
                  or causing each Holder to be treated as owning an undivided
                  beneficial interest in the Debentures; and

                  (iii) causing the interest payable on the Debentures to be
                  deductible for Puerto Rico income tax purposes;

                  (iv) provided that such action does not adversely affect the
                  interest of the Holders;

         (p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust; and

         (q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.

         The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.

         Subject to this Section 3.6, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.

         The Administrative Trustees may take all actions on behalf of the Trust
that are not specifically required by this Declaration to be taken by any other
Trustee.

                                       14

<PAGE>

         Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.

SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES.

         (a) The Trust shall not, and the Trustees (including the Property
Trustee and the Delaware Trustee) shall not, engage in any activity other than
as required or authorized by this Declaration. The Trust shall not:

                  (i) invest any proceeds received by the Trust from holding the
                  Debentures, but shall distribute all such proceeds to Holders
                  pursuant to the terms of this Declaration and of the
                  Securities;

                  (ii) acquire any assets other than as expressly provided
                  herein;

                  (iii) possess Trust property for other than a Trust purpose;

                  (iv) make any loans or incur any indebtedness other than loans
                  represented by the Debentures;

                  (v) possess any power or otherwise act in such a way as to
                  vary the Trust assets or the terms of the Securities in any
                  way whatsoever, except as otherwise expressly provided herein;

                  (vi) issue any securities or other evidences of beneficial
                  ownership of, or beneficial interest in, the Trust other than
                  the Securities;

                  (vii) other than as provided in this Declaration or Annex I,
                  (A) direct the time, method and place of conducting any
                  proceeding with respect to any remedy available to the
                  Debenture Trustee, or exercising any trust or power conferred
                  upon the Debenture Trustee with respect to the Debentures, (B)
                  waive any past default that is waivable under the Indenture or
                  (C) exercise any right to rescind or annul any declaration
                  that the principal of all the Debentures shall be due and
                  payable; or

                  (viii) consent to any amendment, modification or termination
                  of the Indenture or the Debentures where such consent shall be
                  required unless the Trust shall have received (A) an opinion
                  of tax counsel (who shall not be an employee of the Sponsor or
                  the Trust) experienced in such matters to the effect that such
                  amendment, modification or termination will not cause more
                  than an insubstantial risk that for United States federal or
                  Puerto Rico income tax purposes the Trust will not be
                  classified as a grantor trust, and (B) an Opinion of Counsel
                  from a firm experienced in such matters, to the effect that
                  the amendment, modification or termination will not cause more
                  than an insubstantial risk that the Trust will be deemed to be
                  an investment company required to be registered under the
                  Investment Company Act of 1940, as amended.

                                       15

<PAGE>

SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE.

         (a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders. The right, title and interest of the Property Trustee to the Debentures
shall vest automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.7. Such vesting and cessation of
title shall be effective whether or not conveyancing documents with regard to
the Debentures have been executed and delivered.

         (b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).

         (c) The Property Trustee shall:

                  (i) establish and maintain a segregated non-interest bearing
                  trust account (the "Property Trustee Account") in the name of
                  and under the exclusive control of the Property Trustee on
                  behalf of the Holders and, upon the receipt of payments of
                  funds made in respect of the Debentures held by the Property
                  Trustee, deposit such funds into the Property Trustee Account
                  and make payments or cause the Paying Agent to make payments
                  to the Holders from the Property Trustee Account in accordance
                  with Section 6.1. Funds in the Property Trustee Account shall
                  be held uninvested until disbursed in accordance with this
                  Declaration. The Property Trustee Account shall be an account
                  that is maintained with a banking institution the rating on
                  whose long-term unsecured indebtedness is rated in one of four
                  highest rating categories by a "nationally recognized
                  statistical rating organization", as that term is defined for
                  purposes of Rule 436(g)(2) under the Securities Act;

                  (ii) engage in such ministerial activities as shall be
                  necessary or appropriate to effect the redemption of the Trust
                  Securities to the extent the Debentures are redeemed or
                  mature; and

                  (iii) upon written notice of distribution issued by the
                  Administrative Trustees in accordance with the terms of the
                  Securities, engage in such ministerial activities as shall be
                  necessary or appropriate to effect the distribution of the
                  Debentures to Holders upon the occurrence of certain events
                  set forth in Sections 2.7 and 8.1 hereof.

         (d) The Property Trustee shall take all actions and perform such duties
as may be specifically required of the Property Trustee pursuant to the terms of
this Declaration and the Securities.

         (e) Subject to Section 3.9(a), the Property Trustee shall take any
Legal Action which arises out of or in connection with an Event of Default of
which a Responsible Officer has actual knowledge or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act and if
the Property Trustee shall have failed to take such Legal Action following a
written request and offer of indemnity or security, satisfactory to the Property
Trustee, from the

                                       16

<PAGE>

Holders, the Holders of the Preferred Securities may, to the fullest extent
permitted by law, take such Legal Action, to the same extent as if such Holders
of Preferred Securities held an aggregate principal amount of Debentures equal
to the aggregate liquidation amount of such Preferred Securities, without first
proceeding against the Property Trustee or the Trust; provided, however, that if
an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Debenture Issuer to pay the principal of or
interest (including Compounded Interest and Additional Sums (each as defined in
Indenture), if any) on the Debentures on the date such principal or interest
(including Compounded Interest and Additional Sums, if any) is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest (including Compounded
Interest and Additional Sums, if any), if any, on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
Holders of the Common Securities will be subrogated to the rights of such Holder
of Preferred Securities to the extent of any payment made by the Debenture
Issuer to such Holder of Preferred Securities in such Direct Action. If the
Property Trustee fails to declare the principal of all of the Debentures due and
payable upon an Event of Default (as defined in the Indenture), so long as the
Property Trustee is holding the Debentures on behalf of the Trust, the Holders
of at least 25% in liquidation amount of the Preferred Securities then
outstanding will have the right to declare the Debentures immediately due and
payable. Except as provided in this Section 3.8(e), the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.

         (f) The Property Trustee shall not resign as a Trustee unless either:

                  (i) the Trust has been completely liquidated and the proceeds
                  of the liquidation distributed to the Holders pursuant to the
                  terms of the Securities; or

                  (ii) a successor Property Trustee has been appointed and has
                  accepted that appointment in accordance with Section 5.7 (a
                  "Successor Property Trustee").

         (g) The Property Trustee shall have the legal power to exercise all of
the rights, powers and privileges of a holder of Debentures under the Indenture
and, if an Event of Default actually known to a Responsible Officer occurs and
is continuing, the Property Trustee shall, for the benefit of Holders, enforce
its rights, including without limitation, its rights under the Indenture as
holder of the Debentures, subject to the rights of the Holders pursuant to the
terms of such Securities.

         (h) The Property Trustee shall be authorized to undertake any actions
set forth in Section 317(a) of the Trust Indenture Act.

         (i) For such time as the Property Trustee is the Paying Agent, the
Property Trustee may authorize one or more Persons to act as additional Paying
Agents and to pay Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any such additional
Paying Agent may be removed by the Property Trustee at any time the Property

                                       17

<PAGE>

Trustee remains as Paying Agent and a successor Paying Agent or additional
Paying Agents may be (but are not required to be) appointed at any time by the
Property Trustee while the Property Trustee is so acting as Paying Agent.

         (j) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.6.

         Notwithstanding anything expressed or implied to the contrary in this
Declaration or any Annex or Exhibit hereto, (i) the Property Trustee must
exercise the powers set forth in this Section 3.8 in a manner that is consistent
with the purposes and functions of the Trust set out in Section 3.3 and (ii) the
Property Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.

SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.

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

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

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

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

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

                                       18

<PAGE>

                  Declaration (but need not confirm or investigate the accuracy
                  of mathematical calculations or other facts stated therein);

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

                  (iii) the Property Trustee shall not be liable with respect to
                  any action taken or omitted to be taken by it in good faith in
                  accordance with the direction of the Holders of not less than
                  a Majority in liquidation amount of the 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 Declaration;

                  (iv) no provision of this Declaration shall require the
                  Property Trustee to expend or risk its own funds or otherwise
                  incur personal financial liability in the performance of any
                  of its duties or in the exercise of any of its rights or
                  powers, if it 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 Declaration or indemnity
                  reasonably satisfactory to the Property Trustee against such
                  risk or liability is not reasonably assured to it;

                  (v) the Property Trustee's sole duty with respect to the
                  custody, safe keeping and physical preservation of the
                  Debentures and the Property Trustee 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 Declaration and the Trust
                  Indenture Act;

                  (vi) the Property Trustee shall have no duty or liability for
                  or with respect to the value, genuineness, existence or
                  sufficiency of the Debentures or the payment of any taxes or
                  assessments levied thereon or in connection therewith;

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

                  (viii) the Property Trustee shall not be responsible for
                  monitoring the compliance by the Administrative Trustees or
                  the Sponsor with their respective duties under this
                  Declaration, nor shall the Property Trustee be liable for any
                  act, omission, default or misconduct of the Administrative
                  Trustees or the Sponsor; and

                  (ix) the Property Trustee shall not be deemed to have notice
                  of any Event of Default unless a Responsible Officer of the
                  Property Trustee has actual

                                       19

<PAGE>

                  knowledge thereof or unless written notice of any event which
                  is in fact such a default is received by the Property Trustee
                  at the Corporate Trust Office of the Property Trustee.

SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.

         (a) Subject to the provisions of Section 3.9:

                  (i) the Property 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, opinion of counsel, 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 Sponsor or the Administrative
                  Trustees contemplated by this Declaration may be sufficiently
                  evidenced by an Officers' Certificate;

                  (iii) whenever in the administration of this Declaration, the
                  Property Trustee shall deem it desirable that a matter be
                  proved or established before taking, 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;

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

                  (v) the Property Trustee may consult with counsel or other
                  experts of its selection and the advice or opinion of such
                  counsel and experts with respect to legal matters or advice
                  within the scope of such experts' area of expertise 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 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 Declaration from any
                  court of competent jurisdiction;

                  (vi) the Property Trustee shall be under no obligation to
                  exercise any of the rights or powers vested in it by this
                  Declaration at the request or direction of any Holder, unless
                  such Holder shall have provided to the Property Trustee
                  security or indemnity, reasonably satisfactory to the Property
                  Trustee, against the costs, expenses (including reasonable
                  attorneys' fees and expenses and the expenses of the Property
                  Trustee's agents, nominees or custodians) and liabilities that
                  might be

                                       20

<PAGE>

                  incurred by it in complying with such request or direction,
                  including such reasonable advances as may be requested by the
                  Property Trustee; provided that, nothing contained in this
                  Section 3.10(a)(vi) shall be taken to relieve the Property
                  Trustee, upon the occurrence of an Event of Default, of its
                  obligation to exercise the rights and powers vested in it by
                  this Declaration;

                  (vii) 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, direction, consent, order, bond,
                  debenture, note, other evidence of indebtedness or other paper
                  or document, but the Property Trustee, in its discretion, may
                  make such further inquiry or investigation into such facts or
                  matters as it may see fit, and, if the Property Trustee shall
                  determine to make such further inquiry or investigation, it
                  shall be entitled to examine the books, records and premises
                  of the Trust, personally or by agent or attorney at the sole
                  cost of the Sponsor and shall incur no liability or additional
                  liability of any kind by reason of such inquiry or
                  investigation;

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

                  (ix) any authorized or required action taken by the Property
                  Trustee or its agents hereunder shall bind the Trust and the
                  Holders, and the signature of the Property Trustee or its
                  agents alone shall be sufficient and effective to perform any
                  such action and no third party shall be required to inquire as
                  to the authority of the Property Trustee to so act or as to
                  its compliance with any of the terms and provisions of this
                  Declaration, both of which shall be conclusively evidenced by
                  the Property Trustee's or its agent's taking such action;

                  (x) whenever in the administration of this Declaration the
                  Property Trustee shall deem it desirable to receive
                  instructions with respect to enforcing any remedy or right or
                  taking any other action hereunder, the Property Trustee (i)
                  may request instructions from the Holders which instructions
                  may only be given by the Holders of the same proportion in
                  liquidation amount of the Securities as would be entitled to
                  direct the Property Trustee under the terms of the 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 conclusively relying on or acting in or
                  accordance with such instructions;

                  (xi) except as otherwise expressly provided by this
                  Declaration, the Property Trustee shall not be under any
                  obligation to take any action that is discretionary under the
                  provisions of this Declaration;

                                       21

<PAGE>

                  (xii) the Property Trustee shall not be liable for any action
                  taken, suffered, or omitted to be taken by it in good faith,
                  without negligence, and reasonably believed by it to be
                  authorized or within the discretion or rights or powers
                  conferred upon it by this Declaration;

                  (xiii) the rights, privileges, protections, immunities and
                  benefits given to the Property Trustee, including, without
                  limitation, its right to be indemnified, are extended to, and
                  shall be enforceable by, the Property Trustee in each of its
                  capacities hereunder, and to each agent, custodian and other
                  Person employed to act hereunder; and

                  (xiv) If no Event of Default has occurred and is continuing
                  and the Property Trustee is required to decide between
                  alternative causes of action, construe ambiguous provisions in
                  this Declaration or is unsure of the application of any
                  provision of this Declaration, and the matter is not one on
                  which the Holders are, under this Declaration, entitled to
                  vote, then the Property Trustee may take the action as is
                  directed by, and, if not so directed, may take action as it
                  deems advisable and in the best interests of, the Holders and
                  will have no liability except for its own bad faith,
                  negligence or willful misconduct.

         (b) No provision of this Declaration 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.

SECTION 3.11 DELAWARE TRUSTEE.

         Notwithstanding any other provision of this Declaration other than
Section 5.2, 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 Administrative Trustees or the Property Trustee described in this
Declaration, or any other duties or responsibilities except as expressly stated
in this Section 3.11. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Statutory Trust Act; provided that, the
Delaware Trustee shall have the power and authority and is hereby authorized to
execute and file with the Secretary of State of the State of Delaware any
certificate required to be filed under the Statutory Trust Act, except as
provided in Section 8.1(b). In the event the Delaware Trustee shall at any time
be required to take any action or perform any duty hereunder, the Delaware
Trustee shall be entitled to the benefits of Section 3.9(b)(ii)-(viii) and
Section 3.10. No implied covenants or obligations shall be read into this
Declaration against the Delaware Trustee.

SECTION 3.12 EXECUTION OF DOCUMENTS.

         Except as otherwise required by the Statutory Trust Act or this
Declaration, each Administrative Trustee, individually, is authorized to execute
on behalf of the Trust any

                                       22

<PAGE>

documents that the Administrative Trustees have the power and authority to
execute pursuant to Section 3.6; provided that the Registration Statement,
including any amendments thereto, shall be signed by all of the Administrative
Trustees.

SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

         The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration, the Debentures or the Securities.

SECTION 3.14 DURATION OF TRUST.

         The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall continue without dissolution until _________ __, 20___.

SECTION 3.15 MERGERS.

         (a) 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 Person, except as described in Section
3.15(b) and (c) of this Declaration or Sections 3 and 4 of Annex I.

         (b) The Trust may, at the request of the Sponsor, with the consent of
the Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge with or into, consolidate, amalgamate or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, a trust organized as such under the
laws of any State; provided that:

                  (i) such successor entity (the "Successor Entity") either:

                           (A) expressly assumes all of the obligations of the
                  Trust under the Securities; or

                           (B) substitutes for the Securities other securities
                  having substantially the same terms as the Securities (the
                  "Successor Securities") so long as the Successor Securities
                  rank the same as the Securities rank with respect to
                  Distributions and payments upon liquidation, redemption and
                  otherwise;

                  (ii) the Sponsor expressly appoints a trustee of the Successor
                  Entity that possesses the same powers and duties as the
                  Property Trustee as the holder of the Debentures;

                  (iii) the Preferred Securities or the Successor Securities are
                  listed, or any Successor Securities will be listed upon
                  notification of issuance, on any national securities exchange
                  or with another organization on which the Preferred Securities
                  are then listed or quoted, if any;

                                       23

<PAGE>

                  (iv) if the Preferred Securities (including any Successor
                  Securities) are rated by any nationally recognized statistical
                  rating organization prior to such transaction, such merger,
                  consolidation, amalgamation, replacement, conveyance, transfer
                  or lease does not cause the Preferred Securities (including
                  any Successor Securities), or if the Debentures are so rated,
                  the Debentures, to be downgraded by any nationally recognized
                  statistical rating organization;

                  (v) such merger, consolidation, amalgamation, replacement,
                  conveyance, transfer or lease does not adversely affect the
                  rights, preferences and privileges of the Holders (including
                  the holders of any Successor Securities) in any material
                  respect (other than with respect to any dilution of such
                  Holders' interests in the new entity);

                  (vi) such Successor Entity has a purpose substantially
                  identical to that of the Trust;

                  (vii) prior to such merger, consolidation, amalgamation,
                  replacement, conveyance, transfer or lease, the Sponsor has
                  received an opinion of an independent counsel to the Trust
                  (who shall not be an employee of the Sponsor or the Trust)
                  experienced in such matters 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
                  (including the holders of any Successor Securities) in any
                  material respect (other than with respect to any dilution of
                  the Holders' interest in the new entity);

                           (B) following such merger, consolidation,
                  amalgamation, replacement, conveyance, transfer or lease,
                  neither the Trust nor the Successor Entity will be required to
                  register as an Investment Company; and

                           (C) the Trust will continue to be, or the Successor
                  Entity will be, classified as a grantor trust for United
                  States federal and Puerto Rico income tax purposes;

                  (viii) the Sponsor or any permitted successor or assignee owns
                  all of the common securities of such Successor Entity and
                  guarantees the obligations of such Successor Entity under the
                  Successor Securities at least to the extent provided by the
                  Preferred Securities Guarantee and the Common Securities
                  Guarantee; and

                  (ix) there shall have been furnished to the Property Trustee
                  an Officer's Certificate and an Opinion of Counsel, each to
                  the effect that all conditions precedent in this Declaration
                  to such transaction have been satisfied.

         (c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by, or convey,
transfer or lease its properties and assets as an entirety or 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,

                                       24

<PAGE>

replacement, conveyance, transfer or lease would cause the Trust or the
Successor Entity not to be classified as a grantor trust for United States
federal or Puerto Rico income tax purposes.

SECTION 3.16 PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM

         In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or their
creditors, the Property Trustee (irrespective of whether any Distributions on
the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:

         (a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities are
original issue discount Securities, such portion of the liquidation amount as
may be specified in the terms of such Securities) and to file such other papers
or documents as may be necessary or advisable in order to have the claims of the
Property Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding; and

         (b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Property Trustee and, in the event the Property Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Property Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents and counsel, and
any other amounts due the Property Trustee.

         Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.

                                   ARTICLE IV
                                     SPONSOR

SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.

         At the Closing Time, the Sponsor will purchase all of the Common
Securities then issued by the Trust, in an amount equal to at least 3% of the
total capital of the Trust, at the same time as the Preferred Securities are
issued and sold.

                                       25
<PAGE>

SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.

         In connection with the issue and sale of the Preferred Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:

         (a) to prepare the Prospectus in preliminary and final form, and to
prepare and file the Registration Statement and any other necessary documents
with the Commission, including any amendments thereto and to pay any
registration fees in connection therewith;

         (b) to determine 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 the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;

         (c) if deemed necessary or advisable by the Sponsor, to prepare for
filing by the Trust an application to permit the Preferred Securities to trade
or be quoted or listed in or on the National Market System or any other
securities exchange or quotation system;

         (d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A, including any amendments thereto, relating
to the registration of the Preferred Securities under Section 12(b) or (g) of
the Exchange Act; and

         (e) to negotiate the terms of the Underwriting Agreement providing for
the sale of the Preferred Securities.

SECTION 4.3 RIGHT TO PROCEED.

         The Sponsor acknowledges the rights of the Holders of Preferred
Securities under Section 3.8(e) of the Declaration and Section 5(b) of Annex I,
in the event that a failure of the Trust to pay Distributions on the Preferred
Securities is attributable to the failure of the Debenture Issuer to pay
interest or principal on the Debentures, to institute a proceeding directly
against the Debenture Issuer for enforcement of its payment obligations on the
Debentures and the Sponsor irrevocably waives any right or remedy to require
that any such Holder take any action against the Trust or any other Person
before proceeding against the Sponsor.

SECTION 4.4 RIGHT TO DISSOLVE TRUST

         The Sponsor will have the right to any time to dissolve the Trust and
after satisfaction of liabilities to creditors of the Trust as required by
applicable law, to cause the Debentures to be distributed to the Holders in
liquidation of the Trust. Such right is subject to the Sponsor's having received
(i) an Opinion of Counsel to the effect that such distribution will not cause
the Holder of Preferred Securities to recognize gain or loss for United States
federal or Puerto Rico income tax purposes and (ii) all required regulatory
approvals.

                                       26

<PAGE>

                                    ARTICLE V
                                    TRUSTEES

SECTION 5.1 NUMBER OF TRUSTEES: APPOINTMENT OF CO-TRUSTEE.

         The number of Trustees initially shall be five (5), and:

         (a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees; and

         (b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that, the number of Trustees shall in
no event be less than two (2); provided further that (1) one Trustee shall
satisfy the requirements of the Delaware Trustee pursuant to Section 5.2; (2)
there shall be at least one Trustee who is an officer of the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an 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's property may at the time be
located, the Holders of a Majority in liquidation amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more Persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any part of the Trust's property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of this Declaration. In case an Event of Default has
occurred and is continuing, the Property Trustee alone shall have power to make
any such appointment of a co-trustee.

SECTION 5.2 DELAWARE TRUSTEE.

         If required by the Statutory Trust Act, one Trustee (the "Delaware
Trustee") shall be:

         (a) a natural person who is a resident of the State of Delaware; or

         (b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
Section 3807(a) of the Statutory Trust Act and any other applicable law,
provided that, if the Property Trustee has its principal place of business in
the State ---- of Delaware and otherwise meets the requirements of applicable
law, then the Property Trustee shall also be the Delaware Trustee, the Person
theretofore serving as Delaware Trustee (if other than the Property Trustee)
automatically shall cease to be a Trustee, the Property Trustee promptly shall
provide to the Person theretofore serving as Delaware Trustee written notice of
the same (in relying on which the Person theretofore serving as Delaware Trustee
shall be fully justified and protected), the number of Trustees automatically

                                       27

<PAGE>

shall be reduced by one (1), the Property Trustee promptly shall cause the
certificate of trust of the Trust to be amended as necessary, and Section 3.11
shall have no application.

SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.

         (a) There shall at all times be one Trustee (the "Property Trustee")
which shall act as Property Trustee which shall:

                  (i) not be an Affiliate of the Sponsor; 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 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 million U.S. dollars
                  ($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 5.3(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 Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 5.7(c).

         (c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

         (d) The Preferred Securities Guarantee and the Indenture shall be
deemed to be specifically described in this Declaration for purposes of clause

                  (i) of the first proviso contained in Section 310(b) of the
                  Trust Indenture Act.

         (e) The initial Property Trustee shall be:

                  _________________________
                  _________________________
                  _________________________
                  Attention: Corporate Trust Trustee Administration

                                       28

<PAGE>

SECTION 5.4 CERTAIN QUALIFICATIONS OF ADMINISTRATIVE TRUSTEES AND DELAWARE
            TRUSTEE GENERALLY.

         Each Administrative Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware 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 Authorized Officers.

SECTION 5.5 ADMINISTRATIVE TRUSTEES.

         The initial Administrative Trustees shall be:

                  _________________________
                  _________________________
                  _________________________

         (a) Except as expressly set forth in this Declaration and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.

         (b) An Administrative Trustee shall have the authority set forth in
Section 3.12 to execute on behalf of the Trust any documents which the
Administrative Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6; provided that the Registration Statement,
including any amendment thereto, shall be signed by all of the Administrative
Trustees.

         (c) An 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 purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.

SECTION 5.6 DELAWARE TRUSTEE.

         The initial Delaware Trustee shall be:

                  _________________________
                  _________________________
                  _________________________
                  Attention: Corporate Trust Department

SECTION 5.7 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.

         (a) Subject to Section 5.7(b) of this Declaration and to Section 6(b)
of Annex I hereto, Trustees may be appointed or removed without cause at any
time:

                  (i) until the issuance of any Securities, by written
                  instrument executed by the Sponsor;

                                       29

<PAGE>

                  (ii) unless an Event of Default shall have occurred and be
                  continuing after the issuance of any Securities, by vote of
                  the Holders of a Majority in liquidation amount of the Common
                  Securities voting as a class at a meeting of the Holders of
                  the Common Securities; and

                  (iii) if an Event of Default shall have occurred and be
                  continuing after the issuance of the Securities, with respect
                  to the Property Trustee or the Delaware Trustee, by vote of
                  Holders of a Majority in liquidation amount of the Preferred
                  Securities voting as a class at a meeting of Holders of the
                  Preferred Securities.

         (b)      (i) The Trustee that acts as Property Trustee shall not be
                  removed in accordance with Section 5.7(a) until a Successor
                  Property Trustee has been appointed and has accepted such
                  appointment by written instrument executed by such Successor
                  Property Trustee and delivered to the Administrative Trustees
                  and the Sponsor; and

                  (ii) the Trustee that acts as Delaware Trustee shall not be
                  removed in accordance with this Section 5.7(a) until a
                  successor Trustee possessing the qualifications to act as
                  Delaware Trustee under Sections 5.2 and 5.4 (a "Successor
                  Delaware Trustee") has been appointed and has accepted such
                  appointment by written instrument executed by such Successor
                  Delaware Trustee and delivered to the Administrative Trustees
                  and the Sponsor.

         (c) A Trustee appointed to office shall hold office until its or his
successor shall have been appointed or until his death or its dissolution, or
until his or its removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:

                  (i) No such resignation of the Trustee that acts as the
                  Property Trustee shall be effective:

                           (A) until a Successor Property Trustee has been
                  appointed and has accepted such appointment by instrument
                  executed by such Successor Property Trustee and delivered to
                  the Trust, the Sponsor and the resigning Property Trustee; or

                           (B) until the assets of the Trust have been
                  completely liquidated and the proceeds thereof distributed to
                  the Holders; and

                  (ii) no such resignation of the Trustee that acts as the
                  Delaware Trustee shall be effective until a Successor Delaware
                  Trustee has been appointed and has accepted such appointment
                  by instrument executed by such Successor Delaware Trustee and
                  delivered to the Trust, the Sponsor and the resigning Delaware
                  Trustee.

         (d) The Holders of the Common Securities or, if an Event of Default
shall have occurred and be continuing after the issuance of the Securities, the
Holders of the Preferred Securities

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shall use their best efforts to promptly appoint a Successor Delaware Trustee or
Successor Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance with this
Section 5.7.

         (e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.7 within 60 days after delivery of an instrument of resignation or removal,
the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may, at the expense of the Sponsor, petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee, as applicable. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, and appoint a Successor Property
Trustee or Successor Delaware Trustee, as the case may be.

         (f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.

         (g) At the time of resignation or removal of the Property Trustee or
the Delaware Trustee, the Debenture Issuer shall pay to such Trustee any amounts
that may be owed to such Trustee pursuant to Section 10.4.

         (h) Any successor to an Administrative Trustee shall be an officer,
director, employee or Affiliate of the Sponsor.

SECTION 5.8 VACANCIES AMONG TRUSTEES.

         If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1 or Section 5.2, or if the number
of Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Administrative
Trustees or, if there are more than two, a majority of the Administrative
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 5.7.

SECTION 5.9 EFFECT OF VACANCIES.

         The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or 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 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Declaration.

SECTION 5.10 MEETINGS.

         If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees,
provided, however, that meetings of the Administrative Trustees shall

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<PAGE>

not be held in any jurisdiction which would subject the Trust to taxation under
the laws of such jurisdiction. Notice of any in-person meetings of the
Administrative Trustees shall be hand delivered or otherwise delivered in
writing (including by facsimile, with a hard copy by overnight courier) not less
than 24 hours before such meeting. Notice of any telephonic meetings of the
Administrative Trustees or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of an Administrative
Trustee at a meeting shall constitute a waiver of notice of such meeting except
where an Administrative Trustee attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Administrative Trustees may be taken at a meeting
by vote of a majority of the Administrative Trustees present (whether in person
or by telephone) and eligible to vote with respect to such matter, provided that
a Quorum is present, or without a meeting and without notice by the unanimous
written consent of the Administrative Trustees. In the event there is only one
Administrative Trustee, any and all action of such Administrative Trustee shall
be evidenced by a written consent of such Administrative Trustee.

SECTION 5.11 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
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and

         (b) the Administrative Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust 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.

SECTION 5.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.

         Any Person into which the Property Trustee or the Delaware Trustee that
is not a natural person, as the case may be, may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Property Trustee or the Delaware
Trustee, as the case may be, shall be a party, or any Person succeeding to all
or substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder, provided such
Person shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.

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                                   ARTICLE VI
                                  DISTRIBUTIONS

SECTION 6.1 DISTRIBUTIONS.

         Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. Distributions shall be made on the
Preferred Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to the extent that the
Debenture Issuer makes a payment of interest (including Compounded Interest and
Additional Sums, each as defined in the Indenture) or principal on the
Debentures held by the Property Trustee or any other payments with respect to
the Debentures held by the Property Trustee (the amount of any such payment
being a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.

                                   ARTICLE VII
                             ISSUANCE OF SECURITIES

SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.

         (a) The Administrative Trustees shall on behalf of the Trust issue one
class of capital securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the
"Preferred Securities") and one class of common securities representing
undivided beneficial interests in the assets of the Trust having such terms as
are set forth in Annex I (the "Common Securities"). The Trust shall issue no
securities or other interests in the assets of the Trust other than the Trust
Securities.

         (b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.

         (c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of the Trust.

         (d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration and the terms of the Securities, the Preferred
Securities Guarantee, the Indenture and the Debentures.

SECTION 7.2 EXECUTION AND AUTHENTICATION.

         (a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee by manual or facsimile signature. In case any
Administrative Trustee of the Trust who shall have signed any of the Securities
shall cease to be such Administrative Trustee before the Securities so signed
shall be delivered by the Trust, such Securities nevertheless may be delivered
as though the person who signed such Securities had not ceased to be such
Administrative Trustee; and any Securities may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the

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<PAGE>

date of the execution and delivery of the Declaration any such person was not
such an Administrative Trustee.

         (b) One Administrative Trustee shall sign the Preferred Securities for
the Trust by manual or facsimile signature. Unless otherwise determined by the
Administrative Trustees, such signature shall, in the case of Common Securities,
be a manual signature.

         A Preferred Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.

         Upon a written order of the Trust signed by one Administrative Trustee,
the Property Trustee shall authenticate the Preferred Securities for original
issue. The aggregate number of Preferred Securities outstanding at any time
shall not exceed the number set forth in the terms in Annex I hereto except as
provided in Section 7.6.

         The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration 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 Sponsor or an Affiliate.

SECTION 7.3 FORM AND DATING.

         The Preferred Securities and the Property Trustee's certificate of
authentication shall be substantially in the form of Exhibit A-1 and the Common
Securities shall be substantially in the form of Exhibit A-2, each of which is
hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrative Trustees, as evidenced by their execution thereof. The
Securities may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend to the Property Trustee in writing. Each Preferred Security shall be
dated the date of its authentication. The terms and provisions of the Securities
set forth in Annex I and the forms of Securities set forth in Exhibits A-1 and
A-2 are part of the terms of this Declaration and to the extent applicable, the
Property Trustee and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby.

         (a) Global Securities. The Preferred Securities shall be issued in the
form of one or more permanent global Securities in definitive, fully registered
form without distribution coupons as set forth in Exhibit A-1 hereto (a "Global
Preferred Security"), which shall be deposited on behalf of the purchasers of
the Preferred Securities represented thereby with the Property Trustee, as
custodian for the Clearing Agency, and registered in the name of the Clearing
Agency or a nominee of the Clearing Agency, duly executed by the Trust and
authenticated by the Property Trustee as hereinafter provided. The number of
Preferred Securities represented by

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<PAGE>

a Global Preferred Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the Clearing Agency
or its nominee as hereinafter provided.

         (b) Book-Entry Provisions. This Section 7.3(b) shall apply only to the
Global Preferred Securities and such other Preferred Securities in global form
as may be authorized by the Trust to be deposited with or on behalf of the
Clearing Agency.

         The Trust shall execute and the Property Trustee shall, in accordance
with this Section 7.3, authenticate and make available for delivery initially
one or more Global Preferred Securities that (i) shall be registered in the name
of Cede & Co. or other nominee of such Clearing Agency and (ii) shall be
delivered by the Property Trustee to such Clearing Agency or pursuant to such
Clearing Agency's written instructions or held by the Property Trustee as
custodian for the Clearing Agency.

         Members of, or participants in, the Clearing Agency ("Participants")
shall have no rights under this Declaration with respect to any Global Preferred
Security held on their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Global Preferred Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Preferred Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the rights
of a holder of a beneficial interest in any Global Preferred Security.

(c) Definitive Preferred Securities. Except as provided in Section 7.9 or
9.2(d), owners of beneficial interests in a Global Preferred Security will not
be entitled to receive physical delivery of certificated Preferred Securities
("Definitive Preferred Securities").

(d) Authorized Denominations. The Preferred Securities are issuable only in
denominations of $_____________ and any integral multiple thereof.

SECTION 7.4 REGISTRAR AND PAYING AGENT.

         The Trust shall maintain in the Wilmington, Delaware, (i) an office or
agency where Preferred Securities may be presented for registration of transfer
("Registrar") and (ii) an office or agency where Preferred Securities may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Preferred Securities and of their transfer. The Administrative Trustees on
behalf of the Trust may appoint the Registrar and the Paying Agent and may
appoint one or more co-registrars and one or more additional paying agents in
such other locations as it shall determine. The term "Registrar" includes any
additional registrar and "Paying Agent" includes any additional paying agent.
The Administrative Trustees on behalf of the Trust may change any Paying Agent,
Registrar or co-registrar without prior notice to any Holder. The Paying Agent
or Registrar shall be permitted to resign as Paying Agent or Registrar, as the
case may be, upon 30 days' written notice to the Administrative

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<PAGE>

Trustees. The Administrative Trustees on behalf of the Trust shall notify the
Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Administrative Trustees on behalf of the Trust fails to
appoint or maintain another entity as Registrar or Paying Agent, the Property
Trustee shall act as such. The Trust or any of its Affiliates may act as Paying
Agent or Registrar. The Property Trustee shall act as Paying Agent and Registrar
for the Common Securities.

         The Trust initially appoints the Property Trustee as Registrar and
Paying Agent for the Preferred Securities.

SECTION 7.5 PAYING AGENT TO HOLD MONEY IN TRUST.

         The Trust shall require each Paying Agent other than the Property
Trustee to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions, and will notify the
Property Trustee if there are insufficient funds for such purpose. While any
such insufficiency continues, the Property Trustee may require a Paying Agent to
pay all money held by it to the Property Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Property Trustee and
to account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the monies previously held by it. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.

SECTION 7.6 REPLACEMENT SECURITIES.

         If a Holder claims that a Security owned by it has been lost, destroyed
or wrongfully taken or if such Security is mutilated and is surrendered to the
Trust or in the case of the Preferred Securities to the Property Trustee, the
Trust shall issue and the Property Trustee shall, upon written order of the
Trust, authenticate a replacement Security if the Property Trustee's and the
Trust's requirements, as the case may be, are met. An indemnity bond must be
provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor, the Trust or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Trust may charge such Holder for its expenses in replacing a Security.

SECTION 7.7 OUTSTANDING PREFERRED SECURITIES.

         The Preferred Securities outstanding at any time are all the Preferred
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation and those described in this Section
as not outstanding.

         If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a protected purchaser.

         If Preferred Securities are considered paid in full in accordance with
the terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.

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<PAGE>

         Except as provided in Section 7.8, a Preferred Security does not cease
to be outstanding because one of the Trust, the Sponsor or an Affiliate of the
Sponsor holds the Security.

SECTION 7.8 PREFERRED SECURITIES IN TREASURY.

         In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Preferred Securities owned
by the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be,
shall be disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be fully protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer of the Property Trustee actually knows are so owned shall be
so disregarded.

SECTION 7.9 DEFINITIVE SECURITIES.

         (a) A Global Preferred Security deposited with the Clearing Agency or
with the Property Trustee as custodian for the Clearing Agency pursuant to
Section 7.3 shall be transferred to the beneficial owners thereof in the form of
Definitive Preferred Securities only if such transfer complies with Section 9.2
and (i) the Clearing Agency notifies the Sponsor that it is unwilling or unable
to continue as Clearing Agency for such Global Preferred Security or if at any
time such Clearing Agency ceases to be a "clearing agency" registered under the
Exchange Act and a clearing agency is not appointed by the Sponsor within 90
days of such notice, (ii) a Default or an Event of Default has occurred and is
continuing or (iii) the Trust at its sole discretion elects to cause the
issuance of Definitive Preferred Securities.

         (b) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of Definitive Preferred Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in Wilmington, Delaware, to be so transferred, in whole
or from time to time in part, without charge, and the Property Trustee shall
authenticate and make available for delivery, upon such transfer of each portion
of such Global Preferred Security, an equal aggregate liquidation amount of
Preferred Securities of authorized denominations in the form of certificated
Preferred Securities. Any portion of a Global Preferred Security so transferred
pursuant to this Section 7.9(b) shall be registered in such names as the
Clearing Agency shall direct.

         (c) Subject to the provisions of Section 7.9(b), the Holder of a Global
Preferred Security may grant proxies and otherwise authorize any Person,
including Participants and Persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.

         (d) In the event of the occurrence of any of the events specified in
Section 7.9(a), the Trust will promptly make available to the Property Trustee a
reasonable supply of certificated Preferred Securities in fully registered form
without distribution coupons.

         (e) Payments on the Preferred Securities that are not held by the
Depositary will be made by check mailed to the address of the holder certified
thereto at the address which appears on the register.

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<PAGE>

SECTION 7.10 CANCELLATION.

         The Registrar at any time may deliver Preferred Securities to the
Property Trustee for cancellation. The Registrar and Paying Agent shall forward
to the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, or payment. The Property Trustee shall
promptly cancel all Preferred Securities, surrendered for registration of
transfer, redemption, payment, replacement or cancellation and shall dispose of
canceled Preferred Securities in accordance with its customary procedures unless
the Trust otherwise directs. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation.

SECTION 7.11 CUSIP NUMBERS.

         The Trust in issuing the Preferred Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Preferred
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Preferred
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Preferred
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.

                                  ARTICLE VIII
                      DISSOLUTION AND TERMINATION OF TRUST

SECTION 8.1 DISSOLUTION AND TERMINATION OF TRUST.

         (a) The Trust shall automatically dissolve and be wound up in
accordance with applicable law:

                  (i) upon the occurrence of an Event of Default with respect to
                  the Sponsor as described in Section 5.01(d) or (e) of the
                  Indenture;

                  (ii) upon the filing of a certificate of dissolution or
                  liquidation or its equivalent with respect to the Sponsor; or
                  the revocation of the Sponsor's charter and the expiration of
                  90 days after the date of revocation without a reinstatement
                  thereof;

                  (iii) based upon an election by the Sponsor to dissolve the
                  Trust, following the distribution of the Debentures from the
                  Trust to the Holders in exchange for all of the Securities,
                  provided, that the Property Trustee has received written
                  notice from the Sponsor directing the Property Trustee to
                  dissolve the Trust (which election is optional, and except as
                  otherwise expressly provided below, within the discretion of
                  the Sponsor), and provided, further, that such direction and
                  such distribution is conditioned on (a) the receipt by the
                  Sponsor of any and all required regulatory approvals, and (b)
                  the Sponsor's receipt and delivery to the Administrative
                  Trustees of an opinion of independent tax counsel experienced
                  in such matters (who shall not be an employee of the Sponsor
                  or the Trust) to the effect that the Holders of the Preferred
                  Securities will not recognize any gain or

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<PAGE>

                  loss for United States federal or Puerto Rico income tax
                  purposes as a result of the dissolution of the Trust and the
                  distribution of Debentures;

                  (iv) upon the entry of a decree of judicial dissolution of the
                  Sponsor or the Trust by a court of competent jurisdiction;

                  (v) when all of the Securities shall have been called for
                  redemption and the amounts necessary for redemption thereof
                  shall have been paid to the Holders in accordance with the
                  terms of the Securities;

                  (vi) upon redemption or repayment of the Debentures or at such
                  time as no Debentures are outstanding; or;

                  (vii) the expiration of the term of the Trust provided in
                  Section 3.14.

         (b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), but within 30 days of such event, notice of such
dissolution shall be given to the Holders and upon completion of the winding up
of Trust, the Administrative Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware and the Trust shall
terminate.

         (c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.

                                   ARTICLE IX
                              TRANSFER OF INTERESTS

SECTION 9.1 TRANSFER OF SECURITIES.

         (a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. To the fullest extent permitted by applicable law,
any transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void.

         (b) The Administrative Trustees shall provide for the registration of
Preferred Securities and of the transfer of Preferred Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Preferred Securities, the Administrative Trustees shall cause
one or more new Preferred Securities to be issued in the name of the designated
transferee or transferees. Every Preferred Security surrendered for registration
of transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Administrative Trustees and the Registrar or co-registrar,
duly executed by the Holder or such Holder's attorney duly authorized in
writing. Each Preferred Security surrendered for registration of transfer shall
be canceled by the Property Trustee. A transferee of a Preferred Security shall
be entitled to the rights and subject to the obligations of a Holder hereunder
upon the receipt by such transferee of a Preferred Security. By acceptance of a
Preferred Security, each transferee shall be bound by this Declaration.

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<PAGE>

          (c) The Holder of the Common Securities may not transfer the Common
Securities except (a) in connection with transactions permitted under Section
10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws); provided that, any such transfer is subject
to the condition precedent that the transferor obtain the written opinion of
qualified independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:

                  (i) the Trust would not be classified for United States
                  federal or Puerto Rico income tax purposes as a grantor trust
                  and each Holder of Securities would not be treated as owning
                  an undivided beneficial interest in the Debentures; and

                  (ii) the Trustee would be an Investment Company or the
                  transferee would become an Investment Company.

         To the fullest extent permitted by law, any attempted transfer of the
Common Securities other than as set forth in the immediately preceding sentence
shall be void. For so long as the Trust Securities remain outstanding, the
Sponsor will covenant (i) to directly or indirectly maintain 100% direct or
indirect ownership of the Common Securities of the Trust; provided, however,
that any permitted successor of the Sponsor under the Indenture may succeed to
the Sponsor's ownership of such Common Securities, (ii) to use its reasonable
efforts to cause the Trust (a) to remain a Statutory trust, except in connection
with the distribution of Debentures to the Holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities, or
certain mergers, consolidations or amalgamations, each as permitted by this
Declaration, and (b) to otherwise continue to be classified as a grantor trust
for United States federal or Puerto Rico income tax purposes and (iii) to use
its reasonable efforts to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Debentures.

SECTION 9.2 TRANSFER PROCEDURES AND RESTRICTIONS.

         (a) Transfer and Exchange of Definitive Preferred Securities. When
Definitive Preferred Securities are presented to the Registrar or co-registrar
(x) to register the transfer of such Definitive Preferred Securities; or (y) to
exchange such Definitive Preferred Securities which became mutilated, destroyed,
defaced, stolen or lost, for an equal number of Definitive Preferred Securities,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing;

         (b) Transfer and Exchange of Global Preferred Securities. The transfer
and exchange of Global Preferred Securities or beneficial interests therein
shall be effected through the Clearing Agency, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Clearing Agency therefor.

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<PAGE>

         (c) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in this Section 9.2 and subsection (a) of Section 7.9),
a Global Preferred Security may not be transferred as a whole except by the
Clearing Agency to a nominee of the Clearing Agency or another nominee of the
Clearing Agency or by the Clearing Agency or any such nominee to a successor
Clearing Agency or a nominee of such successor Clearing Agency.

         (d) Authentication of Definitive Preferred Securities. If at any time:

                  (i) the Clearing Agency notifies the Sponsor that it is
                  unwilling or unable to continue as Clearing Agency for such
                  Global Preferred Security or if at any time such Clearing
                  Agency ceases to be a "clearing agency" registered under the
                  Exchange Act and a clearing agency is not appointed by the
                  Sponsor within 90 days of such notice;

                  (ii) there occurs a Default or an Event of Default which is
                  continuing, or

                  (iii) the Trust (by the Administrative Trustees), in its sole
                  discretion, notifies the Property Trustee in writing that it
                  elects to cause the issuance of Definitive Preferred
                  Securities under this Declaration, then an Administrative
                  Trustee on behalf of the Trust will execute, and the Property
                  Trustee, upon receipt of a written order of the Trust signed
                  by one Administrative Trustee requesting the authentication
                  and delivery of Definitive Preferred Securities to the Persons
                  designated by the Trust, will authenticate and make available
                  for delivery Definitive Preferred Securities, equal in number
                  to the number of Preferred Securities represented by the
                  Global Preferred Securities, in exchange for such Global
                  Preferred Securities.

         (e) Cancellation or Adjustment of Global Preferred Security. At such
time as all beneficial interests in a Global Preferred Security have either been
exchanged for Definitive Preferred Securities to the extent permitted by this
Declaration or redeemed, repurchased or canceled in accordance with the terms of
this Declaration, such Global Preferred Security shall be canceled by the
Property Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Preferred Security is exchanged for Definitive Preferred
Securities, Preferred Securities represented by such Global Preferred Security
shall be reduced and an adjustment shall be made on the books and records of the
Clearing Agency and the Registrar, to reflect such reduction.

         (f) Obligations with Respect to Transfers of Preferred Securities.

                  (i) To permit registrations of transfers, an Administrative
                  Trustee on behalf of the Trust shall execute and the Property
                  Trustee shall authenticate Definitive Preferred Securities and
                  Global Preferred Securities at the Registrar's or
                  co-registrar's request in accordance with the terms of this
                  Declaration.

                  (ii) Registrations of transfers will be effected without
                  charge, but only upon payment (with such indemnity as the
                  Trust or the Sponsor may require) in respect of any tax or
                  other governmental charge that may be imposed in relation to
                  it.

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<PAGE>

                  (iii) The Registrar or co-registrar shall not be required to
                  register the transfer of (a) Preferred Securities during a
                  period beginning at the opening of business 15 days before the
                  day of mailing of a notice of redemption or any notice of
                  selection of Preferred Securities for redemption and ending at
                  the close of business on the day of such mailing; or (b) any
                  Preferred Security so selected for redemption in whole or in
                  part, except the unredeemed portion of any Preferred Security
                  being redeemed in part.

                  (iv) Prior to the due presentation for registration of
                  transfer of any Preferred Security, the Trust, the Property
                  Trustee, the Paying Agent, the Registrar or any co-registrar
                  may deem and treat the Person in whose name a Preferred
                  Security is registered as the absolute owner of such Preferred
                  Security for the purpose of receiving Distributions on such
                  Preferred Security (subject to Section 2(c) of Annex I) and
                  for all other purposes whatsoever, and none of the Trust, the
                  Property Trustee, the Paying Agent, the Registrar or any
                  co-registrar shall be affected by notice to the contrary.

                  (v) All Preferred Securities issued upon any registration of
                  transfer pursuant to the terms of this Declaration shall
                  evidence the same security and shall be entitled to the same
                  benefits under this Declaration as the Preferred Securities
                  surrendered upon such registration of transfer.

         (g) No Obligation of the Property Trustee.

                  (i) The Property Trustee shall have no responsibility or
                  obligation to any beneficial owner of a Global Preferred
                  Security, a Clearing Agency Participant in the Clearing Agency
                  or other Person with respect to the accuracy of the records of
                  the Clearing Agency or its nominee or of any Clearing Agency
                  Participant thereof, with respect to any ownership interest in
                  the Preferred Securities or with respect to the delivery to
                  any Clearing Agency Participant, beneficial owner or other
                  Person (other than the Clearing Agency) of any notice
                  (including any notice of redemption) or the payment of any
                  amount, under or with respect to such Preferred Securities.
                  All notices and communications to be given to the Holders and
                  all payments to be made to Holders under the Preferred
                  Securities shall be given or made only to or upon the order of
                  the registered Holders (which shall be the Clearing Agency or
                  its nominee in the case of a Global Preferred Security). The
                  rights of beneficial owners in any Global Preferred Security
                  shall be exercised only through the Clearing Agency subject to
                  the applicable rules and procedures of the Clearing Agency.
                  The Property Trustee may conclusively rely and shall be fully
                  protected in relying upon information furnished by the
                  Clearing Agency or any agent thereof with respect to its
                  Clearing Agency Participants and any beneficial owners.

                  (ii) The Property Trustee and the Registrar shall have no
                  obligation or duty to monitor, determine or inquire as to
                  compliance with any restrictions on transfer imposed under
                  this Declaration or under applicable law with respect to any
                  transfer of any interest in any Preferred Security (including
                  any transfers between

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<PAGE>

                  or among Clearing Agency Participants or beneficial owners in
                  any Global Preferred Security) other than to require delivery
                  of such certificates and other documentation or evidence as
                  are expressly required by, and to do so if and when expressly
                  required by, the terms of this Declaration, and to examine the
                  same to determine substantial compliance as to form with the
                  express requirements hereof.

SECTION 9.3 DEEMED SECURITY HOLDERS.

         The Trustees may treat the Person in whose name any Security shall be
registered on the books and records of the Trust as the sole owner of such
Security for purposes of receiving Distributions and for all other purposes
whatsoever (subject to the definition of "Holder" contained herein) and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Security on the part of any Person, whether or not the Trust
shall have actual or other notice thereof.

SECTION 9.4 BOOK ENTRY INTERESTS.

         Global Preferred Securities shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Preferred Security Beneficial Owner will receive a definitive
Preferred Security Certificate representing such Preferred Security Beneficial
Owner's interests in such Global Preferred Securities, except as provided in
Section 7.9 and Section 9.2. Unless and until definitive, fully registered
Preferred Securities certificates have been issued to the Preferred Security
Beneficial Owners pursuant to Section 7.9 or Section 9.2:

         (a) the provisions of this Section 9.4 shall be in full force and
effect;

         (b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Preferred Securities and receiving approvals, votes
or consents hereunder) as the Holder of the Preferred Securities and the sole
holder of the Global Certificates and shall have no obligation to the Preferred
Security Beneficial Owners;

         (c) to the extent that the provisions of this Section 9.4 conflict with
any other provisions of this Declaration, the provisions of this Section 9.4
shall control; and

         (d) the rights of the Preferred Security Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Preferred Security Beneficial
Owners and the Clearing Agency and/or the Clearing Agency Participants and the
Clearing Agency shall receive and transmit payments of Distributions on the
Global Certificates to such Clearing Agency Participants. DTC will make book
entry transfers among the Clearing Agency Participants.

SECTION 9.5 NOTICES TO CLEARING AGENCY.

         Whenever a notice or other communication to the Preferred Security
Holders is required under this Declaration, unless and until definitive, fully
registered Preferred Securities certificates have been issued to the Preferred
Security Beneficial Owners pursuant to Section 7.9

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<PAGE>

or Section 9.2, the Trustees shall give all such notices and communications
specified herein to be given to the Holders of Global Preferred Securities to
the Clearing Agency, and shall have no notice obligations to the Preferred
Security Beneficial Owners.

SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.

         If any Clearing Agency ceases to continue its services as securities
depositary with respect to the Preferred Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Preferred Securities.

                                    ARTICLE X
                           LIMITATION OF LIABILITY OF
                    HOLDERS OF SECURITIES, TRUSTEES OR OTHERS

SECTION 10.1 LIABILITY.

         (a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:

                  (i) personally liable for the return of any portion of the
                  capital contributions (or any return thereon) of the Holders
                  which shall be made solely from assets of the Trust; and

                  (ii) required to pay to the Trust or to any Holder any deficit
                  upon dissolution or termination of the Trust or otherwise.

         (b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than in respect of the payment of principal and
interest on the Securities) to the extent not satisfied out of the Trust's
assets.

         (c) Pursuant to Section 3803(a) of the Statutory Trust Act, the Holders
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.

SECTION 10.2 EXCULPATION.

         (a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust 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 on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration 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 Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and, if selected by such Indemnified Person,

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<PAGE>

has been selected by such Indemnified Person with reasonable care on behalf of
the Trust, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.

SECTION 10.3 FIDUCIARY DUTY.

         (a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.

         (b) Unless otherwise expressly provided herein:

                  (i) whenever a conflict of interest exists or arises between
                  any Covered Persons and Indemnified Persons; or

                  (ii) whenever this Declaration or any other agreement
                  contemplated herein or therein provides that an Indemnified
                  Person shall act in a manner that is, or provides terms that
                  are, fair and reasonable to the Trust or any Holder of
                  Securities, the Indemnified Person shall resolve such conflict
                  of interest, take such action or provide such terms,
                  considering in each case the relative interest of each party
                  (including its own interest) to such conflict, agreement,
                  transaction or situation and the benefits and burdens relating
                  to such interests, any customary or accepted industry
                  practices, and any applicable generally accepted accounting
                  practices or principles. In the absence of bad faith by the
                  Indemnified Person, the resolution, action or term so made,
                  taken or provided by the Indemnified Person shall not
                  constitute a breach of this Declaration or any other agreement
                  contemplated herein or of any duty or obligation of the
                  Indemnified Person at law or in equity or otherwise.

         (c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:

                  (i) in its "discretion" or under a grant of similar authority,
                  the Indemnified Person shall be entitled to consider such
                  interests and factors as it desires, including its own
                  interests, and shall have no duty or obligation to give any
                  consideration to any interest of or factors affecting the
                  Trust or any other Person; or

                  (ii) in its "good faith" or under another express standard,
                  the Indemnified Person shall act under such express standard
                  and shall not be subject to any other or different standard
                  imposed by this Declaration.

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<PAGE>

SECTION 10.4 INDEMNIFICATION.

         (a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust, and, with
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.

         (ii) The Debenture Issuer shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Trust to procure a judgment in its favor by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such Person is fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem proper.

         (iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.

         (iv) Any indemnification under paragraphs (i) and (ii) of this Section
10.4(a) (unless ordered by a court) shall be made by the Debenture Issuer only
as authorized in the specific case upon a determination that indemnification of
the Company Indemnified Person is proper in the circumstances because he has met
the applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Administrative Trustees by a majority
vote of a Quorum consisting of such Administrative Trustees who were not parties
to such action, suit or proceeding, (2) if such a Quorum is not obtainable, or,
even if obtainable, if a Quorum of

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<PAGE>

disinterested Administrative Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.

         (v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Administrative
Trustees by a majority vote of a Quorum of disinterested Administrative
Trustees, (ii) if such a Quorum is not obtainable, or, even if obtainable, if a
Quorum of disinterested Administrative Trustees so directs, by independent legal
counsel in a written opinion or (iii) the Common Security Holder of the Trust,
that, based upon the facts known to the Administrative Trustees, counsel or the
Common Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Administrative Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or
Preferred Security Holders.

         (vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer or Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.

         (vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified Person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Debenture
Issuer would have the power to indemnify him against such liability under the
provisions of this Section 10.4(a).

         (viii) For purposes of this Section 10.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
10.4(a) with respect to the resulting or

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<PAGE>

surviving entity as he would have with respect to such constituent entity if its
separate existence had continued.

         (ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a Company
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a person.

         (b) To the fullest extent permitted by law, the Debenture Issuer agrees
to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any
Affiliate of the Property Trustee or the Delaware Trustee, and (iv) any
officers, directors, shareholders, members, partners, employees,
representatives, custodians, nominees or agents of the Property Trustee or the
Delaware Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any and all loss, liability, damage, claim, action,
suit, cost, penalty or expense of any kind or nature whatsoever including taxes
(other than taxes based on the income of such Fiduciary Indemnified Person)
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 10.4(b)
shall survive the resignation or removal of the Property Trustee or the Delaware
Trustee, the dissolution of the Trust and the satisfaction and discharge of this
Declaration.

SECTION 10.5 OUTSIDE BUSINESSES.

         Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee (subject to Section 5.3(c)) may engage in or possess an interest in
other business ventures of any nature or description, independently or with
others, similar or dissimilar to the business of the Trust, and the Trust and
the Holders shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee shall
have the right to take for its own account (individually or as a partner or
fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.

SECTION 10.6 COMPENSATION; FEES.

         The Debenture Issuer agrees:

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<PAGE>

         (a) to pay to the Trustees from time to time such compensation for all
services rendered by them hereunder as the parties shall agree in writing from
time to time (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); and

         (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
Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.

         The provisions of this Section 10.6 shall survive the dissolution of
the Trust and the termination of this Declaration and the removal or resignation
of any Trustee.

         No Trustee may claim any lien or charge on any property of the Trust as
a result of any amount due pursuant to this Section 10.6.

                                   ARTICLE XI
                                   ACCOUNTING

SECTION 11.1 FISCAL YEAR.

         The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.

SECTION 11.2 CERTAIN ACCOUNTING MATTERS.

         (a) At all times during the existence of the Trust, the Administrative
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the
Administrative Trustees.

         (b) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any required annual United States federal or
Puerto Rico income tax information statement containing such information with
regard to the Securities held by each Holder as is required. Notwithstanding any
right under any law to deliver any such statement at a later date, the
Administrative Trustees shall endeavor to deliver all such information
statements within 30 days after the end of each Fiscal Year of the Trust.

         (c) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, all United States federal and
Puerto Rico income tax returns, and any other annual income tax returns required
to be filed by the Administrative Trustees on behalf of the Trust with any state
or local taxing authority.

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<PAGE>

SECTION 11.3 BANKING.

         The Trust may maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.

SECTION 11.4 WITHHOLDING.

         The Trust and the Administrative Trustees shall comply with all
withholding requirements under United States federal, Puerto Rico, state and
local law. The Trust shall request, and the Holders shall provide to the Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Administrative
Trustees shall file required forms with applicable jurisdictions and, unless an
exemption from withholding is properly established by a Holder, shall remit
amounts withheld with respect to the Holder to applicable jurisdictions. To the
extent that the Trust is required to withhold and pay over any amounts to any
authority with respect to Distributions or allocations to any Holder, the amount
withheld shall be deemed to be a Distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such withholding.

                                   ARTICLE XII
                             AMENDMENTS AND MEETINGS

SECTION 12.1 AMENDMENTS.

         (a) Except as otherwise provided in this Declaration (including Section
7 of Annex I hereto) or by any applicable terms of the Securities, this
Declaration may only be amended by a written instrument approved and executed
by:

                  (i) the Administrative Trustees (or if there are more than two
                  Administrative Trustees a majority of the Administrative
                  Trustees);

                  (ii) if the amendment affects the rights, powers, duties,
                  obligations or immunities of the Property Trustee, the
                  Property Trustee; and

                  (iii) if the amendment affects the rights, powers, duties,
                  obligations or immunities of the Delaware Trustee, the
                  Delaware Trustee.

         (b) No amendment shall be made, and any such purported amendment shall
be void and ineffective:

                  (i) unless the Property Trustee shall have first received:

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<PAGE>

                           (A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and conforms to, the terms
of this Declaration (including the terms of the Securities) and that the
interests of any Holder of Securities will not be materially affected by such
amendment; and

                           (B) an Opinion of Counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities) and that all
conditions precedent, if any, in this Declaration to the execution and delivery
of such amendment have been satisfied, provided, however, that the Property
Trustee shall not be required to sign any such amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee; and

                  (ii) to the extent the result of such amendment would be to:

                           (A) cause the Trust to fail to continue to be
classified for purposes of United States federal or Puerto Rico income taxation
as a grantor trust;

                           (B) reduce or otherwise adversely affect the powers
of the Property Trustee in contravention of the Trust Indenture Act;

                           (C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company Act; or

                           (D) cause a Tax Event.

         (c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder may be effected only with such additional requirements
as may be set forth in the terms of such Securities;

         (d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders;

         (e) Article Four shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities;

         (f) The rights of the Holders of the Common Securities under Article
Five to increase or decrease the number of, and appoint and remove Trustees
shall not be amended without the consent of the Holders of a Majority in
liquidation amount of the Common Securities; and

         (g) Notwithstanding Section 12.1(c), this Declaration may be amended by
the Sponsor, the Property Trustee and the Administrative Trustees without the
consent of the Holders to:

                  (i) cure any ambiguity, correct or supplement any provision in
                  this Declaration that may be inconsistent with any other
                  provision of this Declaration or to make any other provisions
                  with respect to matters or questions arising under this
                  Declaration which shall not be inconsistent with the other
                  provisions of the Declaration; and

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<PAGE>

                  (ii) to modify, eliminate or add to any provisions of the
                  Declaration to such extent as shall be necessary to ensure
                  that the Trust will be classified for United States federal or
                  Puerto Rico income tax purposes as a grantor trust at all
                  times that any Securities are outstanding or to ensure that
                  the Trust will not be required to register as an Investment
                  Company under the Investment Company Act; provided, however,
                  that in each case such action shall not adversely affect the
                  interests of the Holders, and any such amendments of this
                  Declaration shall become effective when notice thereof is
                  given to the Holders.

SECTION 12.2 MEETINGS OF THE HOLDERS; ACTION BY WRITTEN CONSENT.

         (a) Meetings of the Holders of any class of Securities may be called at
any time by the Administrative Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in writing stating that the signing Holders wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Securities
held by the Holders exercising the right to call a meeting and only those
Securities specified shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.

         (b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders:

                  (i) notice of any such meeting shall be given to all the
                  Holders having a right to vote there at least seven days and
                  not more than 60 days before the date of such meeting.
                  Whenever a vote, consent or approval of the Holders is
                  permitted or required under this Declaration or the rules of
                  any stock exchange on which the Preferred Securities are
                  listed or admitted for trading, such vote, consent or approval
                  may be given at a meeting of the Holders. Any action that may
                  be taken at a meeting of the Holders may be taken without a
                  meeting and without prior notice if a consent in writing
                  setting forth the action so taken is signed by the Holders
                  owning not less than the minimum amount of Securities in
                  liquidation amount that would be necessary to authorize or
                  take such action at a meeting at which all Holders having a
                  right to vote thereon were present and voting. Prompt notice
                  of the taking of any action without a meeting shall be given
                  to Holders entitled to vote who have not consented to such
                  action in writing. The Administrative Trustees may specify
                  that any written ballot submitted to the Holder of Securities
                  for the purpose of taking any action without a meeting shall
                  be returned to the Trust within the time specified by the
                  Administrative Trustees;

                  (ii) each Holder may authorize any Person to act for it by
                  proxy on all matters in which a Holder is entitled to
                  participate, including waiving notice of any meeting, or
                  voting or participating at a meeting. No proxy shall be valid
                  after the expiration

                                       52

<PAGE>

                  of 11 months from the date thereof unless otherwise provided
                  in the proxy. Every proxy shall be revocable at the pleasure
                  of the Holder executing it. Except as otherwise provided
                  herein, all matters relating to the giving, voting or validity
                  of proxies shall be governed by the General Corporation Law of
                  the State of Delaware relating to proxies, and judicial
                  interpretations thereunder, as if the Trust were a Delaware
                  corporation and the Holders were stockholders of a Delaware
                  corporation;

                  (iii) each meeting of the Holders shall be conducted by the
                  Administrative Trustees or by such other Person that the
                  Administrative Trustees may designate; and

                  (iv) unless the Statutory Trust Act, this Declaration, the
                  terms of the Securities, the Trust Indenture Act or the
                  listing rules of any stock exchange on which the Preferred
                  Securities are then listed or trading, otherwise provides, the
                  Administrative Trustees, in their sole discretion, shall
                  establish all other provisions relating to meetings of
                  Holders, including notice of the time, place or purpose of any
                  meeting at which any matter is to be voted on by any Holders,
                  waiver of any such notice, action by consent without a meeting
                  and without prior notice, the establishment of a record date,
                  quorum requirements, voting in person or by proxy or any other
                  matter with respect to the exercise of any such right to vote,
                  provided, however, the meetings of Holders shall not be held
                  in any jurisdiction which would subject the Trust to taxation
                  under the laws of such jurisdiction.

                                  ARTICLE XIII
                       REPRESENTATIONS OF PROPERTY TRUSTEE
                              AND DELAWARE TRUSTEE

SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE.

         The Trustee that acts as initial Property Trustee represents and
warrants to the Trust, to the Holders of Securities and to the Sponsor at the
date of this Declaration, and each Successor Property Trustee represents and
warrants to the Trust, to the Holders of Securities, and to the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:

         (a) The Property Trustee is a Delaware banking corporation, a national
banking association or a bank or trust company duly organized, validly existing
and in good standing under the laws of any State of the United States or the
District of Columbia, in any case with trust powers and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;

         (b) the Property Trustee satisfies the requirements set forth in
Section 5.3(a);

         (c) The execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee.

                                       53

<PAGE>

This Declaration has been duly executed and delivered by the Property Trustee
and constitutes a legal, valid and binding obligation of the Property Trustee,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of equity and
the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);

         (d) The execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and

         (e) No consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Property Trustee of this Declaration.

SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.

         The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust, to the Holders of Securities and to the Sponsor at the
date of this Declaration, and each Successor Delaware Trustee represents and
warrants to the Trust, to the Holders of Securities, and to the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:

         (a) The Delaware Trustee satisfies the requirements set forth in
Section 5.2 and, if it is not a natural person, is duly organized, validly
existing and in good standing under the laws of the State of Delaware or the
United States, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration;

         (b) The execution, delivery and performance by the Delaware Trustee of
this Declaration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. This Declaration has been duly executed and
delivered by the Delaware Trustee and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);

         (c) No consent, approval or authorization of, or registration with or
notice to, any federal banking authority is required for the execution, delivery
or performance by the Delaware Trustee of this Declaration; and

         (d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.

                                       54

<PAGE>

                                   ARTICLE XIV
                                  MISCELLANEOUS

SECTION 14.1 NOTICES.

         All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, overnight courier service or confirmed telecopy, as
follows:

         (a) if given to the Trust, in care of the Administrative Trustees at
the mailing address set forth below (or such other address as the Trust may give
notice of to the Property Trustee, the Delaware Trustee and the Holders):

                  R&G Capital Trust ___
                  c/o R&G Financial Corporation
                  280 Jesus T. Pinero Avenue,
                  San Juan, Puerto Rico  00918,
                  Attention: _____________________ Administrative Trustee
                  Telecopy: (787) 766-7175

         (b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Administrative Trustees and the Property Trustee):

                  _________________________
                  _________________________
                  _________________________
                  Attention: Corporate Trust Department
                  Telecopy: ___________

         (c) if given to the Property Trustee, at the Property Trustee's mailing
address set forth below (or such other address as the Property Trustee may give
notice of to the Administrative Trustees, the Delaware Trustee and the Holders):

                  _________________________
                  _________________________
                  _________________________
                  Attention: Corporate Trust Trustee Administration
                  Telecopy: ___________

         (d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Property Trustee and the Trust):

                                       55

<PAGE>

                  R&G Financial Corporation
                  280 Jesus T. Pinero Avenue
                  San Juan, Puerto Rico  00918
                  Attention: ____________________
                  Telecopy:   (787) 766-7175

         (e) if given to any other Holder, 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.

SECTION 14.2 GOVERNING LAW.

         This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.

SECTION 14.3 INTENTION OF THE PARTIES.

         It is the intention of the parties hereto that the Trust be classified
for United States federal and Puerto Rico income tax purposes as a grantor
trust. The provisions of this Declaration shall be interpreted to further this
intention of the parties.

SECTION 14.4 HEADINGS.

         Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.

SECTION 14.5 SUCCESSORS AND ASSIGNS

         Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.

SECTION 14.6 PARTIAL ENFORCEABILITY.

         If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

                                       56

<PAGE>

SECTION 14.7 COUNTERPARTS.

         This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.

                                       57

<PAGE>

         IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.

                                   R&G CAPITAL TRUST ____

                                   _________________________________________,
                                   _________________________
                                   as Administrative Trustee

                                   _________________________________________,
                                   _________________________
                                   as Administrative Trustee

                                   _________________________________________,
                                   as Delaware Trustee

                                   By:_______________________________________
                                   Name:
                                   Title:

                                   _________________________________________,
                                   as Property Trustee

                                   By:_______________________________________
                                   Name:
                                   Title:

                                   R&G FINANCIAL CORPORATION as Sponsor
                                     and Debenture Issuer

                                   By:_______________________________________
                                      Name:
                                      Title:

                                       58

<PAGE>

                                                                         ANNEX I

         Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of _________ __, 200_ (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Securities are set out below (each
capitalized term used but not defined herein has the meaning set forth in the
Declaration or, if not defined in such Declaration, as defined in the Prospectus
referred to below in Section 2(c) of this Annex I):

         1. Designation and Number.

                  (a) Preferred Securities. ____________ ___% Cumulative Trust
                  Preferred Securities of the Trust with an aggregate
                  liquidation amount with respect to the assets of the Trust of
                  ____________________ dollars ($___________) and each with a
                  liquidation amount with respect to the assets of the Trust of
                  per security are hereby designated for the purposes of
                  identification only as Preferred Securities. The certificates
                  evidencing the Preferred Securities shall be substantially in
                  the form of Exhibit A-1 to the Declaration, with such changes
                  and additions thereto or deletions therefrom as may be
                  required by ordinary usage, custom or practice or to conform
                  to the rules of any exchange or quotation system on or in
                  which the Preferred Securities are listed, traded or quoted.

                  (b) Common Securities. ________ Common Securities of the Trust
                  with an aggregate liquidation amount with respect to the
                  assets of the Trust of _____________________ dollars
                  ($____________), and a liquidation amount with respect to the
                  assets of the Trust of per security (if the underwriters
                  exercise their Option are hereby designated for the purposes
                  of identification only as Common Securities. The certificates
                  evidencing the Common Securities shall be substantially in the
                  form of Exhibit A-2 to the Declaration, with such changes and
                  additions thereto or deletions therefrom as may be required by
                  ordinary usage, custom or practice.

         2. Distributions.

                  (a) Distributions payable on each Security will be fixed at a
                  rate per annum of ____% (the "Coupon Rate") of the liquidation
                  amount of per Security (the "Liquidation Amount"), such rate
                  being the rate of interest payable on the Debentures to be
                  held by the Property Trustee. Distributions in arrears for
                  more than one quarterly period will bear additional
                  distributions thereon compounded quarterly at the Coupon Rate
                  (to the extent permitted by applicable law). A Distribution is
                  payable only to the extent that payments are made in respect
                  of the Debentures held by the Property Trustee and to the
                  extent the Property Trustee has funds on hand legally
                  available therefor.

                  (b) Distributions on the Securities will be cumulative, will
                  accumulate from the most recent date to which Distributions
                  have been paid or duly provided for

                                       1

<PAGE>

                  or, if no Distributions have been paid or duly provided for,
                  from __________ __, 200_, and will be payable quarterly in
                  arrears on the last day of March, June, September and December
                  of each year, commencing on ________ __, 200_ (each, a
                  "Distribution Date"), except as otherwise described below.
                  Distributions will be computed on the basis of a 360- day year
                  consisting of twelve 30-day months and for any period less
                  than a full calendar quarter on the basis of the actual number
                  of days elapsed in such 90- day quarter based on 30-day
                  months. As long as no Event of Default has occurred and is
                  continuing under the Indenture, the Debenture Issuer has the
                  right under the Indenture to defer payments of interest on the
                  Debentures by extending the interest payment period at any
                  time and from time to time for a period not exceeding 20
                  consecutive quarterly periods, including the first such
                  quarterly period during such period (each an "Extension
                  Period"), during which Extension Period no interest shall be
                  due and payable on the Debentures, provided that no Extension
                  Period shall end on a date other than an Interest Payment Date
                  for the Debentures or extend beyond the Maturity Date of the
                  Debentures. As a consequence of such deferral, Distributions
                  will also be deferred. Despite such deferral, Distributions
                  will continue to accrue with interest thereon (to the extent
                  permitted by applicable law) at the Coupon Rate compounded
                  quarterly during any such Extension Period. Prior to the
                  termination of any such Extension Period, the Debenture Issuer
                  may further defer payments of interest by further extending
                  such Extension Period; provided that such further deferment
                  shall only be permitted to the extent that such Extension
                  Period, together with all extensions occurring both before and
                  after such deferment, does not exceed 20 consecutive quarterly
                  periods, including the first quarterly period during such
                  Extension Period, or extend beyond the Maturity Date of the
                  Debentures. Payments of deferred Distributions will be payable
                  to Holders of record as they appear on the books and records
                  of the Trust on the record date for Distributions due at the
                  end of such Extension Period. Upon the termination of any
                  Extension Period and the payment of all amounts then due, the
                  Debenture Issuer may commence a new Extension Period, subject
                  to the above requirements.

                  (c) Distributions on the Securities will be payable to the
                  Holders thereof as they appear on the books and records of the
                  Trust which for so long as the Securities remain in book entry
                  form, will be one Business Day prior to the relevant
                  Distribution Date and, in the event the Securities are not in
                  book entry form, will be the close of business on the 15th day
                  of the month in which the relevant Distribution Date occurs.
                  Subject to any applicable laws and regulations and the
                  provisions of the Declaration, each such payment in respect of
                  the Global Preferred Securities will be made as described
                  under the heading "Description of Trust Preferred Securities
                  -- Global Trust Preferred Securities" and "Book-Entry
                  Issuance" in the Prospectus dated _________ __, 200_, of the
                  Debenture Issuer and the Trust relating to the Securities and
                  the Debentures. Payments in respect of Preferred Securities
                  held in certificated form will be made by check mailed or by
                  wire to the Holder entitled thereto. The relevant record dates
                  for the Common Securities shall be the same as the record
                  dates for the Preferred Securities. Distributions payable on
                  any Securities that are not punctually paid on any

                                       2

<PAGE>

                  Distribution Date, as a result of the Debenture Issuer having
                  failed to make a payment under the Debentures, will cease to
                  be payable to the Holder on the relevant record date, and such
                  defaulted Distribution will instead be payable to the Person
                  in whose name such Securities are registered on the special
                  record date or other specified date determined in accordance
                  with the Indenture. If any date on which Distributions are
                  payable on the Securities is not a Business Day, then payment
                  of the Distribution payable on such date will be made on the
                  next succeeding Business Day (and without any interest or
                  other payment in respect of any such delay), except that, if
                  such next succeeding Business Day is in the next succeeding
                  calendar year, such payment shall be made on the immediately
                  preceding Business Day with the same force and effect as if
                  made on such date.

                  (d) In the event that there is any money or other property
                  held by or for the Trust that is not accounted for hereunder,
                  such property shall be distributed Pro Rata (as defined
                  herein) among the Holders.

         3. Liquidation Distribution Upon Dissolution.

         In the event of any voluntary or involuntary dissolution or termination
of the Trust or the Sponsor otherwise gives notice of its election to dissolve
the Trust pursuant to Section 8.1(a)(iii) of the Declaration, the Trust shall be
liquidated by the Administrative Trustees as expeditiously as the Administrative
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
Holders a Like Amount (as defined below) of the Debentures, unless such
distribution is determined by the Property Trustee not to be practicable, in
which event such Holders will be entitled to receive Pro Rata out of the assets
of the Trust legally available for distribution to Holders, after satisfaction
of liabilities to creditors of the Trust as provided by applicable law, an
amount equal to the aggregate of the liquidation amount of per Security plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").

         "Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to that portion of principal amount
of Debentures to be contemporaneously redeemed in accordance with their terms
allocated to the Common Securities and the Preferred Securities based upon the
relative Liquidation Amounts of such classes and the proceeds of which will be
used to pay the redemption price of such Securities and (ii) with respect to a
distribution of Debentures upon the dissolution or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.

         If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.

                                       3

<PAGE>

         4. Redemption and Distribution.

                  (a) Upon the repayment of the Debentures in whole or in part,
                  at maturity or upon early redemption (either at the option of
                  the Debenture Issuer or pursuant to a Special Event, as
                  described below), the proceeds from such repayment shall be
                  simultaneously applied by the Property Trustee (subject to the
                  Property Trustee having received written notice no later than
                  45 days prior to such repayment) to redeem a Like Amount of
                  the Securities at a redemption price equal to the accrued and
                  unpaid interest on the Securities to be so redeemed to the
                  date fixed for redemption, plus 100% of the principal amount
                  thereof (the "Redemption Price").

                  (b) In the case of an optional redemption, if fewer than all
                  the outstanding Securities are to be so redeemed, the
                  Securities to be redeemed will be determined as described in
                  Section 4(f)(ii) below.

         The Debenture Issuer shall have the right (subject to the conditions in
the Indenture) to elect to redeem the Debentures in whole or in part at any time
on or after _________ __, 20__, upon not less than 30 days and not more than 60
days written notice, at the Redemption Price and, simultaneous with such
redemption, to cause a Like Amount of the Securities to be redeemed by the Trust
at the Redemption Price on a Pro Rata basis or such other method as the Property
Trustee shall deem appropriate, subject to the receipt of prior approval of any
applicable regulatory agency if it is then required under applicable regulatory
requirements.

                  (c) If at any time an Investment Company Event, a Tax Event or
                  a Regulatory Capital Event (each as defined below, and each a
                  "Special Event") occurs and shall be continuing, the Debenture
                  Issuer shall have the right (subject to the conditions set
                  forth in the Indenture) upon not less than 30 nor more than 60
                  days written notice, to redeem the Debentures in whole, but
                  not in part, within the 90 days following the occurrence of
                  such Special Event (the "90 Day Period"), and, simultaneous
                  with such redemption, to cause a Like Amount of the Securities
                  to be redeemed by the Trust at the Redemption Price on a Pro
                  Rata basis or such other method as the Property Trustee shall
                  deem appropriate, in each case subject to the receipt of prior
                  approval of any applicable regulatory agency if it is then
                  required under applicable regulatory requirements.

         "Investment Company Event" means the receipt by the Sponsor of an
Opinion of Counsel, rendered by a law firm experienced in such matters, to the
effect that, as a result of change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, the Trust is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended, which change becomes effective on or
after the date of original issuance of the Preferred Securities of R&G Capital
Trust ____.

         A "Regulatory Capital Event" shall occur at any time that the Sponsor
shall have received an opinion of independent bank regulatory counsel (who shall
not be an employee of the Sponsor or the Trust) experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations

                                       4

<PAGE>

thereunder) of the United States or any rules, guidelines or policies of
applicable regulatory agencies or (b) any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after the date of Declaration, the Preferred Securities do not constitute,
or within 90 days of the date thereof, will not constitute, Tier 1 Capital (or
its then equivalent) applied as if the Sponsor (or its successor) were a bank
holding company for purposes of the capital adequacy guidelines of the Board of
Governors of the Federal Reserve (or any successor regulatory authority with
jurisdiction over bank holding companies), or any capital adequacy guidelines as
then in effect and applicable to the Sponsor; provided, however, that the
distribution of the Junior Subordinated Debentures in connection with a
termination of the Trust by the Sponsor shall not in and of itself constitute a
Regulatory Capital Event.

         "Tax Event" shall occur upon receipt by the Sponsor and the Trust of an
Opinion of Counsel from counsel experienced in such matters to the effect that,
as a result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of, the United States, any
political subdivision thereof or Puerto Rico, or taxing authority of the United
States or Puerto Rico, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which pronouncement or
decision is announced on or after the date of the Declaration, there is more
than an insubstantial risk that (i) the Trust is, or will be within 90 days of
the date of such opinion, subject to United States federal or Puerto Rico income
tax with respect to income received or accrued on the Debentures, (ii) interest
payable by the Debenture Issuer on the Debentures is not, or within 90 days of
the date of such opinion, will not be, deductible by the Debenture Issuer, in
whole or in part, for Puerto Rico tax purposes or United States federal income
tax purposes, or (iii) the Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.

                  (d) On and from the date fixed by the Administrative Trustees
                  for any distribution of Debentures and liquidation of the
                  Trust: (i) the Securities will no longer be deemed to be out
                  standing, (ii) the Clearing Agency or its nominee (or any
                  successor Clearing Agency or its nominee), as the Holder of
                  the Preferred Securities, will receive a registered global
                  certificate or certificates representing the Debentures to be
                  delivered upon such distribution and (iii) any certificates
                  representing Securities not held by the Clearing Agency or its
                  nominee (or any successor Clearing Agency or its nominee) will
                  be deemed to represent beneficial interests in a Like Amount
                  of Debentures until such certificates are presented to the
                  Debenture Issuer or its agent for transfer or reissue.

                  (e) The Trust may not redeem fewer than all the outstanding
                  Securities unless all accumulated and unpaid Distributions
                  have been paid on all Securities for all quarterly
                  Distribution periods terminating on or before the date of
                  redemption.

                  (f) The procedure with respect to redemptions or distributions
                  of Securities shall be as follows:

                                       5

<PAGE>

         (i) Notice of any redemption of, or notice of distribution of
         Debentures in exchange for, the Securities (a "Redemption/Distribution
         Notice") will be given by the Trust by mail to each Holder to be
         redeemed or exchanged not fewer than 30 nor more than 60 days before
         the date fixed for redemption or exchange thereof which, in the case of
         a redemption, will be the date fixed for redemption of the Debentures.
         For purposes of the calculation of the date of redemption or exchange
         and the dates on which notices are given pursuant to this Section
         4(f)(i), a Redemption/Distribution Notice shall be deemed to be given
         on the day such notice is first mailed by first-class mail, postage
         prepaid, to Holders. Each Redemption/Distribution Notice shall be
         addressed to the Holders at the address of each such Holder appearing
         in the books and records of the Trust. No defect in the
         Redemption/Distribution Notice or in the mailing of either thereof with
         respect to any Holder shall affect the validity of the redemption or
         exchange proceedings with respect to any other Holder.

         (ii) In the event that fewer than all the outstanding Securities are to
         be redeemed, the particular Securities to be redeemed shall be selected
         on a Pro Rata basis (based upon Liquidation Amounts), or such other
         method as the Property Trustee shall deem appropriate, not more than 60
         days prior to the date fixed for redemption from the outstanding
         Preferred Securities not previously called for redemption, provided,
         however, that with respect to Holders that would be required to hold
         less than 100 but more than zero Securities as a result of such pro
         rata redemption, the Trust shall redeem Securities of each such Holder
         so that after such redemption such Holder shall hold either 100
         Securities or such Holder no longer holds any Securities and shall use
         such method (including, without limitation, by lot) as the Property
         Trustee shall deem fair and appropriate, provided, further, that any
         such proration may be made on the basis of the aggregate Liquidation
         Amount of Securities held by each Holder thereof and may be made by
         making such adjustments as the Property Trustee deems fair and
         appropriate in order that only Securities in denominations of or
         integral multiples thereof shall be redeemed. In respect of Preferred
         Securities registered in the name of and held of record by the Clearing
         Agency or its nominee (or any successor Clearing Agency or its nominee)
         or any nominee, the distribution of the proceeds of such redemption
         will be made to the Clearing Agency and disbursed by such Clearing
         Agency in accordance with the procedures applied by such agency or
         nominee.

         (iii) If Securities are to be redeemed and the Trust gives a
         Redemption/Distribution Notice (which notice will be irrevocable), then
         (A) with respect to Preferred Securities issued in book-entry form, by
         12:00 noon, New York City time, on the redemption date, provided that
         the Debenture Issuer has paid the Property Trustee a sufficient amount
         of cash in connection with the related redemption or maturity of the
         Debentures by 10:00 a.m., New York City time, on the maturity date or
         the date of redemption, as the case requires, the Property Trustee will
         deposit irrevocably with the Clearing Agency or its nominee (or
         successor Clearing Agency or its nominee) funds sufficient to pay the
         Redemption Price with respect to such Preferred Securities and will
         give the Clearing Agency irrevocable instructions and authority to pay
         the Redemption Price to the relevant Clearing Agency Participants, and
         (B) with respect to Preferred Securities issued in certificated form
         and Common Securities, provided that the Debenture Issuer has paid the
         Property Trustee a sufficient amount of cash in connection with the
         related

                                       6

<PAGE>

         redemption or maturity of the Debentures, the Property Trustee will pay
         the Redemption Price to the Holders by check mailed to the address of
         the relevant Holder appearing on the books and records of the Trust on
         the redemption date, provided, that any such payment shall become due
         only upon surrender by the Holder of the related certificated Preferred
         Securities. If a Redemption/Distribution Notice shall have been given
         and funds deposited as required, if applicable, then immediately prior
         to the close of business on the date of such deposit, or on the
         redemption date, as applicable, Distributions will cease to accumulate
         on the Securities so called for redemption and all rights of Holders so
         called for redemption will cease, except the right of the Holders of
         such Securities to receive the Redemption Price, but without interest
         on such Redemption Price, and such Securities shall cease to be
         outstanding.

         (iv) Payment of accumulated and unpaid Distributions on the Redemption
         Date of the Securities will be subject to the rights of Holders on the
         close of business on a regular record date in respect of a Distribution
         Date occurring on or prior to such Redemption Date. Neither the
         Administrative Trustees nor the Trust shall be required to register or
         cause to be registered the transfer of (i) any Securities beginning on
         the opening of business 15 days before the day of mailing of a notice
         of redemption and ending at the close of business on the day of such
         mailing or (ii) any Securities selected for redemption except the
         unredeemed portion of any Security being redeemed. If any date fixed
         for redemption of Securities is not a Business Day, then payment of the
         Redemption Price payable on such date will be made on the next
         succeeding day that is a Business Day (and without any interest or
         other payment in respect of any such delay) except that, if such next
         succeeding Business Day falls in the next calendar year, such payment
         shall be made on the immediately preceding Business Day, with the same
         force and effect as if made on such date fixed for redemption. If
         payment of the Redemption Price in respect of any Securities is
         improperly withheld or refused and not paid by the Sponsor as guarantor
         pursuant to the relevant Securities Guarantee, Distributions on such
         Securities will continue to accumulate from the original redemption
         date to the actual date of payment, in which case the actual payment
         date will be considered the date fixed for redemption for purposes of
         calculating the Redemption Price.

         (v) Redemption/Distribution Notices shall be sent by the Property
         Trustee on behalf of the Trust to (A) in respect of the Preferred
         Securities, the Clearing Agency or its nominee (or any successor
         Clearing Agency or its nominee) if the Global Certificates have been
         issued or, if Definitive Preferred Security Certificates have been
         issued, to the Holder there of, and (B) in respect of the Common
         Securities to the Holder thereof.

         (vi) Subject to the foregoing and applicable law (including, without
         limitation, United States federal securities laws and banking laws),
         provided the acquiror is not the Holder of the Common Securities or the
         obligor under the Indenture, the Sponsor or any of its subsidiaries may
         at any time and from time to time purchase outstanding Preferred
         Securities by tender, in the open market or by private agreement.

         5. Voting Rights - Preferred Securities.

                                       7

<PAGE>

         (a) Except as provided under Sections 5(b), 6(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Preferred Securities
will have no voting rights.

         (b) So long as any Debentures are held by the Property Trustee, subject
to the requirement of the Property Trustee obtaining a tax opinion in certain
circumstances set forth in the last sentence of this paragraph, the Holders of a
majority in Liquidation Amount of the Preferred Securities have the right to (i)
direct the time, method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or direct the exercise of any trust or power
conferred on such Debenture Trustee with respect to the Debentures, (ii) waive
any past default that is waivable under Section 5.07 of the Indenture, (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required, however, where a consent under the Indenture would
require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior approval of
each Holder of the Preferred Securities. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of the
Preferred Securities except by subsequent vote of such Holders. Subject to
Section 2.7 of the Declaration, the Property Trustee shall notify each Holder of
Preferred Securities of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of the Preferred
Securities, prior to taking any of the foregoing actions, except with respect to
directing the time, method and place of conducting a proceeding for a remedy,
the Trustees shall obtain an opinion of counsel experienced in such matters to
the effect that the Trust will not be classified as an association taxable as a
corporation for United States federal or Puerto Rico income tax purposes on
account of such action.

         If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or interest on a Like Amount of Debentures (a
"Direct Action") on or after the respective due date specified in the
Debentures, and the amount of the payment will be based on the Holder's pro rata
share of the amount due and owing on all Preferred Securities. In connection
with such Direct Action, the Common Securities Holder will be subrogated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Preferred Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.

         Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent and without prior notice. The Administrative
Trustees will cause a notice of any meeting at which Holders of Preferred
Securities are entitled to vote, to be mailed to each Holder of record of
Preferred Securities. Each such notice will include a statement setting forth
(i) the date of such meeting, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote and (iii)
instructions for the delivery of proxies.

                                       8

<PAGE>

         No vote or consent of the Holders of the Preferred Securities will be
required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.

         Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.

         6. Voting Rights - Common Securities.

                  (a) Except as provided under Sections 6(b), 6(c), and 7 and as
                  otherwise required by law and the Declaration, the Holders of
                  the Common Securities will have no voting rights.

                  (b) Unless an Event of Default shall have occurred and be
                  continuing, any Trustee may be removed at any time by the
                  holder of the Common Securities. If an Event of Default has
                  occurred and is continuing, the Property Trustee and the
                  Delaware Trustee may be removed at such time by the holders of
                  a Majority in liquidation amount of the outstanding Preferred
                  Securities. In no event will the holders of the Preferred
                  Securities have the right to vote to appoint, remove or
                  replace, or increase or decrease the number of, the
                  Administrative Trustees, which voting rights are vested
                  exclusively in the Holder of the Common Securities. No
                  resignation or removal of a Trustee and no appointment of a
                  successor trustee shall be effective until the acceptance of
                  appointment by the successor trustee in accordance with the
                  provisions of the Declaration.

                  (c) So long as any Debentures are held by the Property
                  Trustee, subject to Section 2.6 of the Declaration and only
                  after any Event of Default with respect to the Preferred
                  Securities has been cured, waived or otherwise eliminated, 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 such Debenture Trustee with respect to the Debentures, (ii)
                  waive any past default that is waivable under Section 5.07 of
                  the Indenture, (iii) exercise any right to rescind or annul a
                  declaration of acceleration of the maturity of the principal
                  of the Debentures 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 a
                  Majority in liquidation amount of all outstanding Common
                  Securities; provided, however, that where a consent under the
                  Indenture would require the consent of each holder of
                  Debentures affected thereby, no such consent shall be given by
                  the Property Trustee without the prior approval of each Holder
                  of the Common Securities. The Trustees shall not revoke any
                  action previously authorized or approved by a vote of the
                  Holders of the Common Securities except by subsequent vote of
                  such Holders. Subject to Section 2.7 of the Declaration, the
                  Property Trustee shall notify each Holder of Common Securities
                  of any notice of default with respect to the Debentures. In
                  addition to

                                       9

<PAGE>

                  obtaining the foregoing approvals of such Holders of the
                  Common Securities, prior to taking any of the foregoing
                  actions, the Trustees shall obtain an opinion of counsel
                  experienced in such matters to the effect that the Trust will
                  not be classified as an association taxable as a corporation
                  for United States federal or Puerto Rico income tax purposes
                  on account of such action.

         If an Event of Default under the Declaration has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of Common Securities
may institute a Direct Action for enforcement of payment to such Holder of the
principal of or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection with Direct
Action, the rights of the Common Securities Holder will be subordinated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Common Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Common Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.

         Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent without prior notice. The Administrative Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled to vote
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies.

         No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.

         7. Amendments to Declaration and Indenture. In addition to the
requirements set out in Section 12.1 of the Declaration, the Declaration may be
amended from time to time by the Sponsor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders (i) to cure any
ambiguity, correct or supplement any provisions in the Declaration that may be
inconsistent with any other provisions, or to make any other provisions with
respect to matters or questions arising under the Declaration which shall not be
inconsistent with the other provisions of the Declaration or (ii) to modify,
eliminate or add to any provisions of the Declaration to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
or Puerto Rico income tax purposes as a grantor trust at all times that any
Securities are outstanding or to ensure that the Trust will not be required to
register as an "Investment Company" under the Investment Company Act provided,
however, that in each case such action shall not adversely affect the interests
of any Holder. Any amendments of the Declaration pursuant to the immediately
preceding sentence shall become effective when notice thereof is given to the
Holders. Under the circumstances referred to in Section 12.1(c) of the
Declaration, the Declaration also may be amended by the Trustees and the Sponsor
with (i) the consent of Holders representing a Majority in liquidation amount of
all outstanding Securities,

                                       10

<PAGE>

and (ii) receipt by the Trustees of an Opinion of Counsel to the effect that
such amendment or the exercise of any power granted to the Trustees in
accordance with such amendment will not affect 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 as an Investment Company under the Investment
Company Act, provided that, without the consent of each Holder of Trust
Securities, the Declaration may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a Holder of
Trust Securities to institute suit for the enforcement of any such payment on or
after such date.

         8. Pro Rata. A reference in these terms of the Securities to any
payment, distribution or treatment as being "Pro Rata" shall mean pro rata to
each Holder according to the aggregate liquidation amount of the Securities held
by the relevant Holder in relation to the aggregate liquidation amount of all
Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding. In any such
proration, the Property Trustee on behalf of the Trust may make such adjustments
as may be appropriate in order that only securities in authorized denominations
shall be redeemed.

         9. Ranking. The Preferred Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration occurs and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, redemption or otherwise with respect to, the Common Securities
shall be made until the Holders of the Preferred Securities shall be paid in
full the Distributions, Redemption Price, Liquidation Distribution and other
payments to which they are entitled at such time.

         10. Acceptance of Securities Guarantee and Indenture. Each Holder of
Preferred Securities and Common Securities, by the acceptance thereof, agrees to
the provisions of the Preferred Securities Guarantee and the Common Securities
Guarantee, respectively, including the subordination provisions therein and to
the provisions of the Indenture.

         11. No Preemptive Rights. The Holders shall have no preemptive or
similar rights to subscribe for any additional securities in the Trust. The
issuance of the Securities is not subject to any preemptive or similar rights.

         12. Miscellaneous. These terms constitute a part of the Declaration.

         The Sponsor will provide a copy of the Declaration, the Preferred
Securities Guarantee, the Common Securities Guarantee (as may be appropriate)
and the Indenture (including any

                                       11

<PAGE>

supplemental indenture) to a Holder without charge upon written request to the
Sponsor at its principal place of business.

                                       12

<PAGE>

                                                                     EXHIBIT A-1

          FORM OF ____% CUMULATIVE TRUST PREFERRED SECURITY CERTIFICATE

         [if issued as a Global Security insert:

         THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY.

         UNLESS THIS PREFERRED SECURITY CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSONS IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

                  NUMBER OF
                  PREFERRED SECURITIES:                        CUSIP NO.

         CERTIFICATE EVIDENCING _____% CUMULATIVE TRUST PREFERRED SECURITIES

                                       OF

                             R&G CAPITAL TRUST ____

         _____% Cumulative Trust Preferred Securities (liquidation amount ___
per Preferred Security)

         R&G Capital Trust ___, a statutory trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner

<PAGE>

of __________ Preferred Securities (as defined below) ($________ in aggregate
liquidation amount of Preferred Securities) of the Trust representing undivided
beneficial interests in the assets of the Trust designated the ____% Cumulative
Trust Preferred Securities (liquidation amount per Preferred Security) (the
"Preferred Securities"). Subject to the Declaration (as defined below), 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. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of __________ __, 200_, as the same may be amended from time to time
(the "Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration, the Preferred Securities
Guarantee, the Common Securities Guarantee (as may be appropriate), and the
Indenture (including any supplemental indenture) to a Holder without charge upon
written request to the Sponsor at its principal place of business.

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred Securities Guarantee to the extent provided therein.

         By acceptance, the Holder agrees to treat, for United States federal
and Puerto Rico income tax purposes, the Debentures as indebtedness and the
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to principles of conflict of
laws.

<PAGE>

         IN WITNESS WHEREOF, the Trust has duly executed this certificate this
___ day of _______ 2004.

                                        R&G CAPITAL TRUST ____

                                        By: _________________________________
                                            Administrative Trustee

                PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION

         This is one of the Preferred Securities referred to in the within-
mentioned Declaration.

                                        __________________________________,
                                        as Property Trustee

Dated:

         By:_________________________________ Authorized Signatory

<PAGE>

         Distributions payable on each Preferred Security will be fixed at a
rate per annum of ____% (the "Coupon Rate") of the liquidation amount of per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for more
than one quarterly period will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Property Trustee and to the extent the Property Trustee has funds on
hand legally available therefor.

         Distributions on the Preferred Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for, if no Distributions have been paid or duly provided for, from
_________ __, 200_ and will be payable quarterly in arrears, on the last day of
March, June, September and December of each year, commencing on ________ __,
____, except as otherwise described below. Distributions will be computed on the
basis of a 360-day year consisting of twelve 30-day months and, for any period
less than a full calendar quarter, the number of days elapsed in such 90- day
quarter based on 30-day months. As long as no Event of Default has occurred and
is continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
20 consecutive calendar quarterly periods, including the first such quarterly
period during such extension period (each an "Extension Period"), provided that
no Extension Period shall end on a date other than an Interest Payment Date for
the Debentures or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions also will be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debenture Issuer may further defer payments of
interest by further extending such Extension Period; provided that such further
deferment shall only be permitted to the extent that such Extension Period,
together with all extensions occurring both before and after such deferment,
does not exceed 20 consecutive quarterly periods, including the first quarterly
period during such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accumulated Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.

         Subject to the receipt of any required regulatory approval and to
certain other conditions set forth in the Declaration and the Indenture, the
Property Trustee may, at the direction of the Sponsor, at any time dissolve the
Trust and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any redemption of
the Debentures, cause a Like Amount of the Securities to be redeemed by the
Trust.

         The Preferred Securities shall be redeemable as provided in the
Declaration.

<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security Certificate to:

                                      __________________________________________
                                      __________________________________________
                                      (Insert assignee's social security or tax
                                      identification number)

                                      __________________________________________
                                      __________________________________________
                                      __________________________________________
                                      (Insert address and zip code of assignee)

                                      and irrevocably appoints

                                      __________________________________________
                                      __________________________________________

         ___________________________________________________________ as agent to
transfer this Preferred Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.

Date: _______________________

                                      Signature:

                                      __________________________________________
                                      (Sign exactly as your name appears on the
                                      other side of this Preferred Security
                                      Certificate)

Signature Guarantee*:______________________________

* Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

<PAGE>

                                                                   Schedule A***

         The initial number of Preferred Securities evidenced by the Certificate
to which this Schedule is attached is ________ (having an aggregate liquidation
amount of $________). The notations in the following table evidence decreases
and increases in the number of Preferred Securities evidenced by such
Certificate.

                         NUMBER OF PREFERRED SECURITIES

<TABLE>
<CAPTION>
DECREASE IN NUMBER   INCREASE IN NUMBER    REMAINING AFTER
  OF PREFERRED          OF PREFERRED       SUCH DECREASE OR       NOTATION BY
   SECURITIES           SECURITIES            INCREASE             REGISTRAR
<S>                  <C>                   <C>                    <C>
</TABLE>

* Append to Global Preferred Securities only.

<PAGE>

                                                                     EXHIBIT A-2

         THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

         THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH R&G FINANCIAL
CORPORATION (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) SO LONG AS THIS COMMON SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THIS COMMON SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS COMMON SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS COMMON SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

<PAGE>

         THIS COMMON SECURITY IS NOT TRANSFERABLE EXCEPT AS SET FORTH IN Section
9.1(c) OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF R&G CAPITAL TRUST
_____, DATED AS OF __________ __, 200_, AS THE SAME MAY BE AMENDED FROM TIME TO
TIME.

         Certificate No. 1

                    Certificate Evidencing Common Securities

                                       of

                              R&G Capital Trust ___

         ____% Common Securities (liquidation amount ___ per Common Security)

         R&G Capital Trust ____, a statutory trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that R&G Financial Corporation
(the "Holder") is the registered owner of ______ common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the ____% Common Securities (liquidation amount per Common Security)
(the "Common Securities"). Subject to the limitations in Section 9.1(c) of the
Declaration (as defined below), the Common 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. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of _______ __, 200_, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Common Securities as set forth in Annex I to the Declaration.
Capitalized terms used but not defined herein shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Common Securities Guarantee, the Preferred Securities Guarantee (as may be
appropriate) and the Indenture (including any supplemental indenture) to a
Holder without charge upon written request to the Sponsor at its principal place
of business.

<PAGE>

         Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Common Securities Guarantee to the extent provided therein.

         By acceptance, the Holder agrees to treat, for United States federal
and Puerto Rico income tax purposes, the Debentures as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the
Debentures.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to principles of conflicts of
laws.

         IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of ________ 200_.

                        R&G CAPITAL TRUST ____

                        By:___________________________________
                           ______________________
                           Administrative Trustee

         Distributions payable on each Common Security will be fixed at a rate
per annum of _____% (the "Coupon Rate") of the liquidation amount of per Common
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one
quarterly period will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor.

         Distributions on the Common Securities will be cumulative, will accrue
from the most recent date to which Distributions have been paid or duly provided
for or, if no Distributions have been paid or duly provided for, from _________
__, 200_ and will be payable quarterly in arrears, on the last day of March,
June, September and December of each year, commencing on __________ __, ____,
except as otherwise described below. Distributions will be computed on the basis
of a 360-day year consisting of twelve 30-day months and, for any period less
than a full calendar quarter, the number of days elapsed in such 90-day quarter
based on 30-day months. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
20 consecutive calendar quarterly periods, including the first such quarterly
period during such extension period (each an "Extension Period"), provided that
no Extension Period shall end on a date other than an Interest Payment Date for
the Debentures or extend beyond the

<PAGE>

Maturity Date of the Debentures. As a consequence of such deferral,
Distributions also will be deferred. Despite such deferral, Distributions will
continue to accumulate with interest thereon (to the extent permitted by
applicable law) at the Coupon Rate compounded quarterly during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such further deferment shall only be
permitted to the extent that such Extension Period, together with all extensions
occurring both before and after such deferment, does not exceed 20 consecutive
quarterly periods, including the first quarterly period during such Extension
Period, or end on a date other than an Interest Payment Date for the Debentures
or extend beyond the Maturity Date of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.

         Subject to the receipt of any required regulatory approval and to
certain other conditions set forth in the Declaration and the Indenture, the
Property Trustee may, at the direction of the Sponsor, at any time dissolve the
Trust and cause the Debentures to be distributed to the holders to the
Securities in liquidation of the Trust or, simultaneous with any redemption of
the Debentures, cause a Like Amount of the Securities to be redeemed by the
Trust.

         Under certain circumstances, the right of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Preferred
Securities (as defined in the Declaration), as provided in the Declaration.

         The Common Securities shall be redeemable as provided in the
Declaration.

<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:

         ___________________________________________________________________
         ___________________________________________________________________
         ___________________________________________________________________

          (Insert assignee's social security or tax identification number)

         ___________________________________________________________________
         ___________________________________________________________________
         ___________________________________________________________________

                    (Insert address and zip code of assignee)

         and irrevocably appoints

         ___________________________________________________________________
         ___________________________________________________________________

         ___________________________________________________________ as agent to
transfer this Common Security Certificate on the books of the Trust. The agent
may substitute another to act for him or her.

         Date: _______________________

         Signature: ___________________________________________________

         (Sign exactly as your name appears on the other side of this Common
Security Certificate)

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