Document:

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                                                                    EXHIBIT 10.2

                          CONSULTING SERVICES AGREEMENT

         This Consulting Services Agreement ("Agreement") entered into as of the
26th day of May, 2004 between Belk, Inc. (the "Company") and John M. Belk
("JMB"),

                              W I T N E S S E T H:

         WHEREAS, JMB has been employed by the Company or one or more of its
predecessors for more than 60 years and has served as Chief Executive Officer
for more than 50 years;

         WHEREAS, JMB will retire from his position as Chairman and Chief
Executive Officer of the Company upon the expiration of his current term as a
director of the Company on May 26, 2004 (the "Retirement Date"); and

         WHEREAS, the Company desires to retain JMB's services as an independent
consultant following the Retirement Date;

         NOW, THEREFORE, in consideration of the covenants and agreements set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and JMB agree as
follows:

1.       Consulting Services

         JMB shall be on retainer and agrees to make himself reasonably
available from the Retirement Date until May 26, 2009 (the "Consulting Period")
to provide consulting services (the "Services") to the Company. In performing
the Services, JMB shall be an independent contractor and shall comply with all
applicable federal, state, and local laws and regulations and ethical standards
of the Company. The manner, means, details or methods by which JMB performs his
obligations under this Agreement shall be solely at his discretion. The Company

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agrees to reimburse JMB for all reasonable travel and business expenses incurred
in his performance of the Services, up to a maximum amount of $25,000 per year,
with any excess to be authorized in advance by an authorized representative the
Company.

2.       Consulting Fee

         In consideration for JMB being on retainer and providing the Services,
the Company shall make the following annual payments (based on the Company's
fiscal year) to JMB during the Consulting Period, payable in installments in
accordance with the Company's normal payroll practices and procedures, as they
exist from time to time:

                  Fiscal Year 2005 (beginning on May 26, 2004):     $400,000
                  Fiscal Year 2006                                  $500,000
                  Fiscal Year 2007                                  $500,000
                  Fiscal Year 2008                                  $500,000
                  Fiscal Year 2008                                  $500,000
                  Fiscal Year 2010 (ending on May 26, 2009)         $200,000

3.       Life Insurance

         During the Consulting Period, the Company shall make additional annual
payments to JMB in the amount of $257,000, which represents the after tax cost
of premiums payable on life insurance on JMB previously funded by the Company
under a split dollar insurance agreement.

4.       Health and Welfare Insurance

         The Company agrees to use its best efforts to allow JMB and his spouse
to participate in its group health and welfare insurance programs, as amended
from time to time, during their respective lifetimes. If insurance for JMB or
his spouse cannot be maintained under the Company's group health and welfare
insurance program, the Company shall reimburse JMB for: (1) amounts actually
incurred to maintain insurance under the Company's group health and welfare
benefit plans pursuant to COBRA and (2) amounts actually incurred for JMB to
purchase

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similar insurance for himself and/or his spouse if or when COBRA coverage
expires. JMB shall provide the Company with all documentation needed by the
Company to comply with this Paragraph 4.

5.       Title to Automobile

         The parties acknowledge and agree that JMB currently has use of one
automobile which is owned by the Company. On the Retirement Date, or as soon
thereafter as reasonably practicable, the Company shall transfer title to such
automobile to JMB, and pay all fees necessary to complete the transfer of title.

6.       Office Space

         During the Consulting Period, JMB shall have the use of his current
office and access to a secretary to be provided by the Company. Following the
Consulting Period, JMB will be provided with office space and secretarial
services upon request at the Company's headquarters as is reasonably available.

7.       Agreement to Cooperate

         JMB covenants and agrees that he shall cooperate with the Company in
any pending or future matters, including without limitation any litigation,
investigation, or other dispute, in which JMB, by virtue of JMB's prior
employment with the Company, has relevant knowledge or information.

8.       Confidentiality

         JMB acknowledges that during the Consulting Period, he may be privy to
confidential information of the Company and its affiliates which includes, but
is not limited to, sales and marketing information, financial or statistical
data, acquisition or merger information, strategic plans or plans for future
business development, plans regarding sales of assets and other

                                      -3-

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information made available to JMB not known to the public, which, if misused or
disclosed, could adversely affect the business or standing of the Company and
its affiliates and members. JMB agrees that for so long as such information
remains confidential to the Company and/or its affiliates, including after the
term of this Agreement, JMB will not disclose any such confidential information
to any person, agency, institution, company or other entity, and he will not use
any Confidential Information in any way except as required by his duties to the
Company or by law, without having first obtained the written consent of the
Company's Chairman or designee. JMB further agrees that on or before the
conclusion of the Consulting Period, JMB will return to the Company, upon
request, all property belonging to the Company and any other property or
documents which may contain or record any information confidential to the
Company. JMB acknowledges that the Company would be irreparably harmed if JMB
were to breach his obligations under this paragraph and that the Company shall
be entitled to injunctive relief for the purpose of enforcing this provision.

9.       Non-Competition

         During the Consulting Period, JMB agrees to refrain from "competing"
with the Company or any of its affiliates. For the purposes of this paragraph,
"competing" shall mean accepting employment from or acting as a consultant or
advisor to any person or entity which operates retail department stores in any
state in which the Company does business.

10.      Successors and Assigns

         JMB acknowledges and agrees that this Agreement is a contract for
personal services, and he is not entitled to assign, subcontract or transfer any
of the obligations imposed or benefits provided under this Agreement. This
Agreement will inure to the benefit of and be binding on any successor or
assigns of the Company.

                                      -4-

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8.       Applicable Law

         This Agreement has been entered into in and shall be governed by and
construed under the laws of the State of North Carolina without reference to the
choice of law principles thereof.

9.       Severability

         The provisions of this Agreement shall be deemed to be severable. If
any court or agency with authority to do so should determine that any part of
this Agreement is legally invalid, the remainder of this Agreement shall remain
in effect to the full extent permitted by law.

10.      Entire Agreement; Miscellaneous

         JMB and the Company acknowledge and agree that they are not relying on
any representations, oral or written, other than those expressly contained in
this Agreement. This Agreement supersedes all prior agreements, proposals,
negotiations, conversations, discussions and course of dealing between the
parties with respect to the subject matter hereof. Section headings are for
convenience of reference only and are not intended to create substantive rights
or obligations.

/s/                                         May 26, 2004
----------------------------------          ------------
John M. Belk                                Date

BELK, INC.

By: /s/ Thomas M. Belk, Jr.                 May 26, 2004
    ------------------------------          ------------
                                            Date
Title: Chairman
       ---------------------------

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                                                                  EXHIBIT 4.8

                          CERTIFICATE OF INCORPORATION

                                       OF

                           DORAL FINANCIAL CORPORATION

                         AS IN EFFECT ON APRIL 28, 2004

         Doral Financial Corporation, a corporation organized under the laws of
the Commonwealth of Puerto Rico, does hereby certify pursuant to Article 8.05 of
the Puerto Rico General Corporation Law, that

         FIRST: The name under which it was originally incorporated was HF, Inc.
The name was subsequently amended to First Financial Caribbean Corporation and
on September 22, 1997 was amended to Doral Financial Corporation.

         SECOND: Its original Certificate of Incorporation was filed in the
Office of the Secretary of State of the Commonwealth of Puerto Rico on October
23, 1972, Reg. No. 29,324. The original Certificate of Incorporation as amended
to such date was restated on March 26, 1997.

         THIRD: This Second Restated Certificate of Incorporation was approved
by the Board of Directors of Doral Financial Corporation at a meeting duly
called and held on October 6, 1997 and does not further amend the provisions of
Doral Financial Corporation's Restated Certificate of Incorporation as
heretofore amended, and there are no discrepancies between those provisions and
of this Second Restated Certificate of Incorporation.

         FOURTH: The text of the Restated Certificate of Incorporation of Doral
Financial Corporation, as amended, is hereby restated without further amendment
or change, effective as of the date of filing of this instrument with the
Secretary of State of the Commonwealth of Puerto Rico, to read as follows:

                  FIRST: The name of the corporation (hereinafter called the
Corporation) is DORAL FINANCIAL CORPORATION.

                  SECOND: The principal office of the Corporation in the
         Commonwealth of Puerto Rico is located at Avenida F.D. Roosevelt 1159,
         Puerto Nuevo, Puerto Rico 00920, in the Municipality of San Juan. The
         name of the resident agent of the Corporation is David Levis, the
         mailing address of such resident agent is Avenida F.D. Roosevelt 1159,
         Puerto Nuevo, Puerto Rico 00920.

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                                        2

                  THIRD: The nature of the business of the Corporation and the
         objects or purposes to be transacted, promoted or carried on by it are
         as follows:

                  1. To engage in the business of mortgage banking, including
         but not limited to the origination, servicing and resale of first and
         second mortgages, both conventional and Veterans Administration
         guaranteed and Federal Housing Administration insured, and the issuance
         and brokerage of mortgage-backed certificates.

                  2. To make, manufacture, produce, prepare, process, purchase
         or otherwise acquire, and to hold, own, use, sell, import, export,
         dispose of or otherwise trade or deal in and with, machines, machinery,
         appliances, apparatus, goods, wares, products and merchandise of every
         kind, nature and description; and, in general, to engage or participate
         in any manufacturing or other business of any kind or character
         whatsoever, whether or not related to, conducive to, incidental to or
         in any way connected with the above business.

                  3. To engage in research, exploration, laboratory and
         development work relating to any material, substance, compound or
         mixture now known or which may hereafter be known, discovered or
         developed, and to perfect, develop, manufacture, use, apply and
         generally to deal in and with any such material, substance, compound or
         mixture.

                  4. To adopt, apply for, obtain, register, purchase, lease,
         take licenses in respect of or otherwise acquire, and to maintain,
         protect, hold, use, own, exercise, develop, manufacture under, operate
         and introduce, and to sell and grant licenses or other rights in
         respect of, assign or otherwise dispose of, turn to account, or in any
         manner deal with and contract with reference to, any trademarks, trade
         names, patents, patent rights, concessions, franchises, designs,
         copyrights and distinctive marks and rights analogous thereto, and
         inventions, devices, processes, recipes, formulae and improvements and
         modifications thereof.

                  5. To act as agent or broker for any person, firm or
         corporation including, but not limited to, acting as agent for any
         local, municipal, state or Commonwealth agency or instrumentality.

                  6. To purchase, lease or otherwise acquire, to hold, own, use,
         develop, maintain, manage and operate, and to sell, transfer, lease,
         assign, convey, exchange or

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                                        3

         otherwise turn to account or dispose of, and otherwise deal in and with
         such real property, whether located within the Commonwealth of Puerto
         Rico or elsewhere, as may be necessary or convenient in connection with
         the business of the Corporation, and personal property, tangible or
         intangible, without limitation; provided, however, that the Corporation
         shall not be authorized, as respects real property located within the
         Commonwealth of Puerto Rico, to conduct the business of buying and
         selling real estate, and shall in all other respects be subject to the
         provisions of Section 14 of Article VI of the Constitution of the
         Commonwealth of Puerto Rico.

                  7. To enter into any joint ventures, agreements and any other
         lawful arrangements for sharing profits, union of interest, reciprocal
         concession or cooperation, with any corporation, association,
         partnership, syndicate, entity, person or governmental, municipal or
         public authority, domestic or foreign, in the carrying on of any
         business that the Corporation is authorized to carry on or any business
         or transaction deemed necessary, convenient or incidental to carrying
         out any of the purposes of the Corporation.

                  8. To enter into, make, perform and carry out contracts of
         every kind and description, not prohibited by law, with any person,
         firm, association, corporation or governmental body; and to guarantee
         the contracts or obligations, and the payment of interest or dividends
         on securities of any other person, firm, association, corporation or
         governmental body.

                  9. To lend its uninvested funds from time to time to such
         extent, to such persons, firms, associations, corporations or
         governments or subdivisions, agencies or instrumentalities thereof, and
         on such terms and on such security, if any, as the Board of Directors
         of the Corporation may determine.

                  10. To acquire and undertake all or any part of the business
         assets and liabilities of any person, firm, association or corporation
         on such terms and conditions as may be agreed upon, and to pay for the
         same in cash, property or securities of the Corporation, or otherwise,
         and to conduct the whole or any part of any business thus acquired,
         subject only to the provisions of the laws of the Commonwealth of
         Puerto Rico.

                  11. To merge into, merge into itself or consolidate with, and
         to enter into agreements and cooperative

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                                        4

         relations, not in contravention of law, with any person, firm,
         association or corporation.

                  12. To purchase, lease, construct or otherwise acquire, and to
         hold, own, use, maintain, manage and operate, buildings, factories,
         plants, laboratories, installations, equipment, machinery, pipelines,
         rolling stocks, and other structures, facilities and apparatus of every
         kind and description, used or useful in the conduct of the business of
         the Corporation.

                  13. To purchase, lease, construct, or otherwise acquire, and
         to hold, own, use, maintain, manage and operate dwelling houses and
         other buildings at or near any place of business of the Corporation for
         the purpose of furnishing housing and other conveniences to employees
         of the Corporation, and others, and to carry on a general mercantile
         business at or near any such place of business for the convenience of
         those residing in the vicinity thereof, and others.

                  14. To purchase or otherwise acquire, and to hold, pledge,
         sell, exchange, or otherwise dispose of securities (which term, for the
         purpose of this Article THIRD, shall include any shares of stock,
         bonds, debentures, notes, mortgages or other obligations and any
         certificates, receipts or other instruments representing rights to
         receive, purchase or subscribe for the same, or representing any other
         rights or interests therein or in any property or assets) created or
         issued by any person, firm, association, corporation or governmental
         body, and while the holder thereof to exercise all the rights, powers
         and privileges in respect thereof, including the right to vote, to the
         same extent as a natural person might or could do.

                  15. To borrow money for any of the purposes of the
         Corporation, from time to time, and without limit as to amount; from
         time to time to issue and sell its own securities in such amounts, on
         such terms and conditions, for such purposes and for such
         consideration, as may now be or hereafter shall be permitted by the
         laws of the Commonwealth of Puerto Rico; and to secure the same by
         mortgage upon, or the pledge of, or the conveyance or assignment in
         trust of, the whole or any part of the properties, assets, business and
         goodwill of the Corporation, then owned or thereafter acquired.

                  16. To purchase, or otherwise acquire and to hold, cancel,
         reissue, sell, exchange, transfer or otherwise

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                                        5

         deal in its own securities from time to time to such extent and upon
         such terms as shall be permitted by the laws of the Commonwealth of
         Puerto Rico; provided, however, that shares of its own capital stock so
         purchased or held shall not be directly or indirectly voted, nor shall
         they be entitled to dividends during such period or periods as they
         shall be held by the Corporation.

                  17. To such extent as a corporation organized under the laws
         of the Commonwealth of Puerto Rico may now or hereafter lawfully do, to
         do, either as principal or agent and either alone or through
         subsidiaries or in connection with other persons, firms, associations
         or corporations, all and everything necessary, suitable, convenient or
         proper for, or in connection with, or incident to, the accomplishment
         of any of the purposes or the attainment of any one or more of the
         objects herein enumerated, or designed directly or indirectly to
         promote the interests of the Corporation or to enhance the value of its
         properties; and in general to do any and all things and exercise any
         and all powers, rights, and privileges which a corporation may now or
         hereafter be organized to do or to exercise under the laws of the
         Commonwealth of Puerto Rico.

                  The foregoing provisions of this Article THIRD shall be
         construed both as purposes and powers and each as an independent
         purpose and power. The foregoing enumeration of specific purposes and
         powers shall not be held to limit or restrict in any manner the
         purposes and powers of the Corporation, and the purposes and powers
         herein specified shall, except when otherwise provided in this Article
         THIRD, be in no wise limited or restricted by reference to, or
         inference from, the terms of any provisions of this or any other
         Article of this Certificate of Incorporation.

                  The Corporation is to be carried on for pecuniary profit.

                  FOURTH: The total number of shares of all classes of stock
         which the Corporation is authorized to issue is 540,000,000 shares,
         consisting of 500,000,000 shares of Common Stock, $1.00 par value and
         40,000,000 shares of Serial Preferred Stock, $1.00 par value.

                  The minimum amount of capital with which the Corporation will
         commence business is $10,000.00.

                  The Board of Directors is authorized at any time, and from
         time to time, to provide for the issuance of

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                                        6

         shares of Serial Preferred Stock in one or more series, and to
         determine the designations, preferences, limitations and relative or
         other rights of the Serial Preferred Stock or any series thereof. For
         each series, the Board of Directors shall determine, by resolution or
         resolutions adopted prior to the issuance of any shares thereof, the
         designations, preferences, limitations and relative or other rights
         thereof, including but not limited to the following relative rights and
         preferences, as to which there may be variations among different
         series:

                           (a) The rates or rates (which may be floating,
                  variable or adjustable), or the method of determining such
                  rate or rates and the times and manner of payment of
                  dividends, if any (and whether such payment should be in cash
                  or securities);

                           (b) Whether shares may be redeemed or purchased, in
                  whole or in part, at the option of the holder or the
                  Corporation and, if so, the price or prices and the terms and
                  conditions of such redemption or purchase;

                           (c) The amount payable upon shares in the event of
                  voluntary or involuntary liquidation, dissolution or other
                  winding up of the Corporation;

                           (d) Sinking fund provisions, if any, for the
                  redemption or purchase of shares;

                           (e) The terms and conditions, if any, on which shares
                  may be converted or exchanged into shares of Common Stock or
                  other capital stock or securities of the Corporation;

                           (f) Voting rights, if any; and

                           (g) Any other rights and preferences of such shares,
                  to the full extent now or hereafter permitted by the laws of
                  the Commonwealth of Puerto Rico.

                  All shares of Serial Preferred Stock (i) shall rank senior to
         the Common Stock in respect of the right to receive dividends and the
         right to receive payments out of the assets of the Corporation upon
         voluntary or involuntary liquidation, dissolution or winding up of the
         Corporation, (ii) shall be of equal rank, regardless of series, and
         (iii) shall be identical in all respects except as provided in (a)
         through (g) above. The shares of any series of the Serial Preferred
         Stock shall be

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                                       7

         identical with each other in all respects except as to the dates from
         and after which dividends thereof shall be cumulative. In case the
         stated dividends or the amounts payable on liquidation are not paid in
         full, the shares of all series of the Serial Preferred Stock shall
         share ratably in the payment of dividends, including accumulations, if
         any, in accordance with the sums which would be payable on said shares
         if all dividends were declared and paid in full, and in any
         distribution of assets other than by way of dividends in accordance
         with the sums which would be payable on such distribution if all sums
         payable were discharged in full.

                  The Board of Directors shall have the authority to determine
         the number of shares that will comprise each series. Unless otherwise
         provided in the resolution establishing such series, all shares of
         Serial Preferred Stock redeemed, retired by sinking fund payment,
         repurchased by the Corporation or converted into Common Stock shall
         have the status of authorized but unissued shares of Serial Preferred
         Stock undesignated as to series.

                  Prior to the issuance of any shares of a series, but after
         adoption by the Board of Directors of the resolution establishing such
         series, the appropriate officers of the Corporation shall file such
         documents with the Commonwealth of Puerto Rico as may be required by
         law.

                  No holder of shares of Common Stock or Serial Preferred Stock
         shall be entitled as a matter right to subscribe for or purchase, or
         have any preemptive right with respect to, any part of any new or
         additional issue of stock of any class whatsoever, or of securities
         convertible into any stock of any class whatsoever, whether now or
         hereafter authorized and whether issued for cash or other consideration
         or by way of dividend.

                  FIFTH: The Corporation is to have perpetual existence.

                  SIXTH: For the management of the business and for the conduct
         of the affairs of the Corporation, and in further creation, definition,
         limitation and regulation of the powers of the Corporation and of its
         directors and stockholders, it is further provided:

                  1. The number of directors of the Corporation shall be fixed
         by, or in the manner provided in, the By-laws, but in no case shall the
         number be less than three. The directors need not be stockholders.
         Election of directors need not be by ballot unless the By-laws so
         require. Meetings of the Board of Directors may be held

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                                       8

         at such place or places within or without the Commonwealth of Puerto
         Rico as shall be specified in the respective notices thereof or in the
         respective waivers of notice thereof signed by all the directors of the
         Corporation at the time in office

                  2. In furtherance and not in limitation of the powers
         conferred by the laws of the Commonwealth of Puerto Rico, and subject
         at all times to the provisions thereof, the Board of Directors is
         expressly authorized and empowered:

                           (a) To make, alter and repeal the By-laws of the
                  Corporation, subject to the power of the stockholders to alter
                  or repeal the By-laws made by the Board of Directors.

                           (b) To determine, from time to time, whether and to
                  what extent and at what times and places and under what
                  conditions and regulations the accounts and books and
                  documents of the Corporation (other than the stock ledger), or
                  any of them, shall be open to inspection by the stockholders;
                  and no stockholder shall have any right to inspect any account
                  or book or document of the Corporation, except as conferred by
                  the laws of the Commonwealth of Puerto Rico, unless and until
                  duly authorized to do so by resolution of the Board of
                  Directors.

                           (c) To authorize and issue obligations of the
                  Corporation, secured or unsecured, to include therein such
                  provisions as to redeemability, convertibility or otherwise,
                  as the Board of Directors in its sole discretion may
                  determine, and to authorize the mortgaging or pledging of, and
                  to authorize and cause to be executed mortgages and liens
                  upon, any property of the Corporation, real or personal,
                  including after-acquired property.

                           (d) To determine whether any, and, if any, what part,
                  of the net profits of the Corporation or of its net assets in
                  excess of its capital shall be declared in dividends and paid
                  to the stockholders, and to direct and determine the use and
                  disposition thereof.

                           (e) To set apart a reserve or reserves, and to
                  abolish any such reserve or reserves, or to make such other
                  provisions, if any, as the Board of Directors may deem
                  necessary or advisable for

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                                       9

                  working capital, for additions, improvements and betterments
                  to plant and equipment, for expansion of the business of the
                  Corporation (including the acquisition of real and personal
                  property for that purpose) and for any other purpose of the
                  Corporation.

                           (f) To establish bonus, profit-sharing, pension,
                  thrift, and other types of incentive, compensation or
                  retirement plans for the officers and employees (including
                  officers and employees who are also directors) of the
                  Corporation and to fix the amounts of profits to be
                  distributed or shared or contributed and the amounts of the
                  Corporation's funds otherwise to be devoted thereto and to
                  determine the persons to participate in any such plans and the
                  amounts of their respective participations.

                           (g) To issue, or grant options for the purchase of,
                  shares of stock of the Corporation to officers and employees
                  (including officers and employees who are also directors) of
                  the Corporation and its subsidiaries for such consideration
                  and on such terms and conditions as the Board of Directors may
                  from time to time determine.

                           (h) To enter into contracts for the management of the
                  business of the Corporation for terms not exceeding three
                  years.

                           (i) By resolution or resolutions passed by a majority
                  of the whole Board, to designate one or more committees, each
                  committee to consist of two or more of the directors of the
                  Corporation, which to the extent provided in such resolution
                  or resolutions or in the Bylaws, shall have and may exercise
                  the powers of the Board of Directors (other than to remove or
                  elect officers) in the management of the business and affairs
                  of the Corporation and may have power to authorize the seal of
                  the Corporation to be affixed to all papers which may require
                  it, such committee or committees to have such name or names as
                  may be stated in the By-laws or as may be determined from time
                  to time by resolution adopted by the Board of Directors.

                           (j) To exercise all the powers of the Corporation,
                  except such as are conferred by law,

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                                       10

                  or by this Certificate of Incorporation or by the By-laws of
                  the Corporation, upon the stockholders.

                  3. Any one or all of the directors may be removed, with or
         without cause, at any time, by either (a) the vote of the holders of a
         majority of the stock of the Corporation issued and outstanding and
         entitled to vote and present in person or by proxy at any meeting of
         the stockholders called for the purpose, or (b) an instrument or
         instruments in writing addressed to the Board of Directors directing
         such removal and signed by the holders of a majority of the stock of
         the Corporation issued and outstanding and entitled to vote; and
         thereupon the term of each such director who shall be so removed shall
         terminate.

                  4. No contract or other transaction between the Corporation
         and any other corporation, whether or not such other corporation is
         related to the Corporation through the direct or indirect ownership by
         such other corporation of a majority of the shares of the capital stock
         of the Corporation or by the Corporation of a majority of the shares of
         the capital stock of such other corporation, and no other act of the
         Corporation shall, in the absence of fraud, in any way be affected or
         invalidated by the fact that any of the directors of the Corporation
         are pecuniarily or otherwise interested in, or are directors or
         officers of, such other corporation or by the fact that such other
         corporation is so related to the Corporation. Any director of the
         Corporation individually, or any firm or association of which any
         director may be a member, may be a party to, or may be pecuniarily or
         otherwise interested in, any contract or transaction of the
         Corporation, provided that the fact that he individually or such firm
         or association is so interested shall be disclosed or shall have been
         known to the Board of Directors or a majority of such members thereof
         as shall be present at any meeting of the Board of Directors at which
         action upon any such contract or transaction shall be taken. Any
         director of the Corporation who is also a director or officer of such
         other corporation or who is so interested may be counted in determining
         the existence of a quorum at any meeting of the Board of Directors
         which shall authorize any such contract or transaction, with like force
         and effect as if he were not such director or officer of such other
         corporation or not so interested.

                  5. Any person made or threatened to be made a party to any
         action or proceeding, whether civil or

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                                       11

         criminal, by reason of the fact that he, his testator or intestate is
         or was a Director, officer or employee of the Corporation or serve or
         served any other corporation, partnership, joint venture, trust,
         employee benefit plan or other enterprises in any capacity at the
         request of the Corporation shall be indemnified by the Corporation, and
         the Corporation may advance his related expenses, to the fullest extent
         permitted by law. The Corporation may purchase and maintain insurance
         on behalf of any person who is or was a Director, officer, employee or
         agent of the Corporation, or is or was serving at the request of the
         Corporation as a Director, officer, employee or agent of another
         corporation, partnership, joint venture, trust or other enterprise,
         against any liability asserted against him and incurred by him in any
         such capacity, or arising out of his status as such.

                  SEVENTH: A director of this Corporation shall not be
         personally liable to the Corporation or its stockholders for monetary
         damages for breach of fiduciary duty as a director, except to the
         extent such exemption from liability or limitation thereof is not
         permitted under the Puerto Rico General Corporation Law of 1995 as the
         same exists or may hereafter be amended. Any repeal or modification of
         the foregoing provisions of this Article SEVENTH shall not adversely
         affect any right or protection of a director of the Corporation
         existing hereunder with respect to any act or omission occurring prior
         to or at the time of such repeal or modification.

                  EIGHTH: The Corporation reserves the right to amend, alter or
         repeal any of the provisions of this Certificate of Incorporation and
         to add other provisions authorized by the laws of the Commonwealth of
         Puerto Rico at the time in force in the manner and at the time
         prescribed by said laws, and all rights, powers and privileges at any
         time conferred upon the Board of Directors and the stockholders are
         granted subject to the provisions of this Article."

                  RESOLVED, that pursuant to the authority expressly granted to
         and vested in the Board of Directors of the Corporation in accordance
         with the provisions of its Restated Certificate of Incorporation, a
         series of Serial Preferred Stock of the Corporation be and it hereby is
         created.

                  FURTHER RESOLVED, that the directors have determined that the
         preferences and relative, participating, optional or other special
         rights of the shares of such series of Preferred Stock, and the
         qualifications, limitations or restrictions thereof, as stated and
         expressed herein, are under the circumstances prevailing

<PAGE>

                                       12

         on the date hereof fair and equitable to all the existing shareholders
         of the Corporation.

                  FURTHER RESOLVED, that the designation and amount of such
         series and the voting powers, preferences and relative, participating,
         optional or other special rights of the shares of such series of
         Preferred Stock, and the qualifications, limitations or restrictions
         thereof are as follows:

                  A.       DESIGNATION AND AMOUNT

                           The shares of such series of Preferred Stock shall be
         designated as the "8% Convertible Cumulative Preferred Stock
         (Liquidation Preference $1,000 per share)" (hereinafter called the "8%
         Preferred Stock"), and the number of authorized shares constituting
         such series shall be 20,000.

                  B.       DIVIDENDS

                           (i) Holders of record of the 8% Preferred Stock
                  ("Holders") will be entitled to receive, when, as and if
                  declared by the Board of Directors of the Corporation, out of
                  funds of the Corporation legally available therefor,
                  cumulative cash dividends at the annual rate per share of 8%
                  of their liquidation preferences, or $6.662/3 per share per
                  month.

                           (ii) Dividends on the 8% Preferred Stock will accrue
                  from their date of original issuance and will be payable
                  (when, as and if declared by the Board of Directors of the
                  Corporation out of funds of the Corporation legally available
                  therefor) monthly in arrears in United States dollars
                  commencing on the last day of the month in which the 8%
                  Preferred Stock is issued, and on the last day of each
                  calendar month of each year thereafter to the holders of
                  record of the 8% Preferred Stock as they appear on the books
                  of the Corporation on the Business Day (as defined below)
                  immediately preceding the relevant date of payment. In the
                  case of the dividend payable in the month in which the 8%
                  Preferred Stock is issued, such dividend shall cover the
                  period from the date of issuance of the 8% Preferred Stock to
                  the end of such month. In the event that any date on which
                  dividends are payable is not a Business Day, then payment of
                  the dividend payable on such date will be made

<PAGE>

                                       13

                  on the next succeeding Business Day without any interest or
                  other payment in respect of any such delay, except that, if
                  such Business Day is in the next succeeding calendar year,
                  such payment will be made on the Business Day immediately
                  preceding the relevant date of payment, in each case with the
                  same force and effect as if made on such date. A "Business
                  Day" is a day other than a Saturday, Sunday or bank holiday in
                  San Juan, Puerto Rico.

                           (iii) Dividends on the 8% Preferred Stock will be
                  cumulative from their date of issuance, and will accrue, to
                  the extent not paid, on the last day of each month.

                           (iv) The amount of dividends payable for any monthly
                  dividend period will be computed on the basis of twelve 30-day
                  months and a 360-day year. The amount of dividends payable for
                  any period shorter than a full monthly dividend period will be
                  computed on the basis of the actual number of days elapsed in
                  such period.

                           (v) Subject to any applicable fiscal or other laws
                  and regulations, each dividend payment will be made by dollar
                  check drawn on a bank in New York, New York or San Juan,
                  Puerto Rico and mailed to the record holder thereof at such
                  holder's address as it appears on the register for such 8%
                  Preferred Stock or, in the case of holders of $1,000,000 or
                  more in aggregate liquidation preference of the 8% Preferred
                  Stock, by wire transfer of immediately available funds to the
                  account of such holders as notified by such holders to the
                  Corporation.

                           (vi) So long as any shares of the 8% Preferred Stock
                  remain outstanding, the Corporation shall not declare, set
                  apart or pay any dividend or make any other distribution of
                  assets (other than dividends paid or other distributions made
                  in stock of the Corporation ranking junior to the 8% Preferred
                  Stock as to the payment of dividends and the distribution of
                  assets upon liquidation, dissolution or winding up of the
                  Corporation) on, or redeem, purchase, set apart or otherwise
                  acquire (except upon conversion or exchange for stock of the
                  Corporation ranking junior to the 8% Preferred Stock as to the
                  payment of dividends and the distribution of assets upon
                  liquidation, dissolution or winding up of the Corporation),
                  shares of common stock or of any other class of stock of the
                  Corporation ranking junior to the 8% Preferred Stock as to the
                  payment of dividends or the distribution of assets upon
                  liquidation, dissolution or winding up of the Corporation,
                  unless all accrued and unpaid dividends on the 8% Preferred
                  Stock shall have been paid or are paid contemporaneously and
                  the full monthly dividend on

<PAGE>

                                       14

                  the 8% Preferred Stock for the then current month has been or
                  is contemporaneously declared and paid or declared and set
                  apart for payment and unless the Corporation has not defaulted
                  in the payment of the redemption price of any shares of 8%
                  Preferred Stock called for redemption.

                           (vii) When dividends are not paid in full on the 8%
                  Preferred Stock and any other shares of stock of the
                  Corporation ranking on a parity as to the payment of dividends
                  with the 8% Preferred Stock, all dividends declared upon the
                  8% Preferred Stock and any such other shares of stock of the
                  Corporation will be declared pro rata so that the amount of
                  dividends declared per share on the 8% Preferred Stock and any
                  such other shares of stock will in all cases bear to each
                  other the same ratio that the liquidation preference per share
                  of the 8% Preferred Stock and any such other shares of stock
                  bear to each other.

                           (viii) Holders of record of the 8% Preferred Stock
                  will not be entitled to any dividend, whether payable in cash,
                  property or stock, in excess of the dividends provided for
                  herein on the shares of 8% Preferred Stock. The Corporation
                  may, however, at its discretion, declare a special dividend in
                  an amount sufficient to allow the Corporation to pay dividends
                  on any stock of the Corporation ranking junior to the 8%
                  Preferred Stock in compliance with the provisions of Section
                  B.6 above.

                  C.       CONVERSION

                           (i) A holder of a share of 8% Preferred Stock may
                  convert it into common stock of the Corporation at any time
                  before the close of business on December 1, 2005 (the
                  "Expiration Date"). If a share of 8% Preferred Stock is called
                  for redemption, the holder may convert it at any time before
                  the close of business on the day preceding the redemption
                  date. The initial conversion price is $8.75 per share of
                  common stock of the Corporation, subject to adjustment in
                  certain events as provided in subsection 4 below (as so
                  adjusted from time to time, the "Conversion Price"). To
                  determine the number of shares of common stock of the
                  Corporation issuable upon conversion of a share of 8%
                  Preferred Stock, divide (a) the aggregate liquidation
                  preference of the shares of 8% Preferred Stock to be converted
                  by (b) the Conversion Price in effect on the conversion date.
                  The Corporation will deliver a check for an amount equal to
                  the value of any

<PAGE>

                                       15

                  fractional share plus the total amount of accrued but unpaid
                  dividends on such shares to the date of conversion.

                           (ii) To convert a share of 8% Preferred Stock a
                  Holder must (1) complete and sign the conversion election on
                  the back of the certificate, (2) surrender the certificate to
                  the Corporation, (3) furnish appropriate endorsements and
                  transfer documents if required by the Corporation, and (4) pay
                  any transfer or similar tax if required.

                           (iii) Reservation, Listing and Issuance of Shares.
                  The Corporation will at all times have authorized, and reserve
                  and keep available, free from preemptive rights, for the
                  purpose of enabling it to satisfy any obligation to issue
                  shares of common stock of the Corporation upon the conversion
                  of shares of 8% Preferred Stock, the number of shares of
                  common stock of the Corporation deliverable upon conversion of
                  the outstanding shares of 8% Preferred Stock. The Corporation
                  will, at its expense, cause the shares of common stock of the
                  Corporation deliverable upon conversion of the 8% Preferred
                  Stock to be listed (subject to issuance or notice of issuance
                  of such shares) on all stock exchanges on which the common
                  stock is listed not later than the date such common stock is
                  so listed. The Corporation agrees to list such shares (subject
                  to issuance or notice of issuance) on NASDAQ-NMS, to the
                  extent not already listed, promptly after the date of this
                  Certificate of Designation.

                           Before taking any action which could cause an
                  adjustment pursuant to subsection 4 below reducing the
                  Conversion Price below the then par value (if any) of the
                  shares of common stock of the Corporation, the Corporation
                  will take any corporate action which may be necessary in order
                  that the Corporation may validly and legally issue at the
                  Conversion Price as so adjusted shares of common stock of the
                  Corporation that are fully paid and non-assessable.

                           The Corporation covenants that all shares of common
                  stock of the Corporation deliverable upon conversion of the 8%
                  Preferred Stock will, upon issuance in accordance with the
                  terms hereof, be (i) duly authorized, fully paid and
                  non-assessable, and (ii) free from all taxes with respect to
                  the issuance thereof and from all liens, charges and security
                  interests created by the Corporation.

<PAGE>

                                       16

                           (iv) Adjustments of Conversion Price and Number of
                  Shares of Common Stock Issuable upon Conversion of the 8%
                  Preferred Stock. Adjustment of Conversion Price upon Issuance
                  of Common Stock. If and whenever, after September 25, 1995,
                  the Corporation shall issue or sell any shares of common stock
                  (except upon conversion of one or more of the 8.25%
                  convertible subordinated debentures due January 1, 2006 or of
                  one or more shares of the 8% Preferred Stock or upon exercise
                  by Popular, Inc. of certain rights to purchase shares of
                  common stock of the Corporation set forth in Article 5 of the
                  Exchange Agreement dated July 9, 1997, between the Corporation
                  and Popular, Inc.) for a consideration per share less than the
                  Market Price (as hereinafter defined) at the time of such
                  issue or sale, then, forthwith upon such issue or sale, the
                  Conversion Price shall be reduced to the price (calculated to
                  the nearest cent) determined by multiplying the Conversion
                  Price in effect immediately prior to the time of such issue or
                  sale by a fraction, the numerator of which shall be the sum of
                  (a) the number of shares of common stock of the Corporation
                  outstanding immediately prior to such issue or sale multiplied
                  by the Market Price immediately prior to such issue or sale
                  plus (b) the consideration received by the Corporation upon
                  such issue or sale, and the denominator of which shall be the
                  product of (c) the total number of shares of common stock
                  outstanding immediately after such issue or sale, multiplied
                  by (d) the Market Price immediately prior to such issue or
                  sale. No adjustment of any Conversion Price, however, shall be
                  made in an amount less than $0.01 per share, but any such
                  lesser adjustment shall be carried forward and shall be made
                  at the time of, and together with, the next subsequent
                  adjustment which together with any adjustments so carried
                  forward shall amount to $0.01 per share or more.

                                    (i) For the purposes of this subsection 4,
                           the following provisions shall also be applicable:

                                             1) Issuance of Rights or Options.
                           In case at any time the Corporation shall grant
                           (whether directly or by assumption in a merger or
                           otherwise) any rights to subscribe for or to
                           purchase, or any options for the purchase of, common
                           stock or any stock or securities convertible into or
                           exchangeable for common stock (such convertible or
                           exchangeable stock or securities being herein called
                           "Convertible Securities") whether or

<PAGE>

                                       17

                           not such rights or options or the right to convert or
                           exchange any such Convertible Securities are
                           immediately exercisable, and the price per share for
                           which common stock is issuable upon the conversion of
                           such rights or options or upon conversion or exchange
                           of such Convertible Securities (determined as
                           provided below) shall be less than the Market Price
                           determined as of the date of granting such rights or
                           options, then the total maximum number of shares of
                           common stock issuable upon the conversion of such
                           rights or options or upon conversion or exchange of
                           the total maximum amount of such Convertible
                           Securities issuable upon the conversion of such
                           rights or options shall (as of the date of granting
                           of such rights or options) be deemed to be
                           outstanding and to have been issued for such price
                           per share. Except as provided in clause (iii) of this
                           subsection, no further adjustments of any Conversion
                           Price shall be made upon the actual issue of such
                           common stock or of such Convertible Securities upon
                           conversion of such rights or options or upon the
                           actual issue of such common stock upon conversion or
                           exchange of such Convertible Securities. For the
                           purposes of this clause (i), the price per share for
                           which common stock is issuable upon the conversion of
                           any such rights or options or upon conversion or
                           exchange of any such Convertible Securities shall be
                           determined by dividing (A) the total amount, if any,
                           received or receivable by the Corporation as
                           consideration for the granting of such rights or
                           options, plus the minimum aggregate amount of
                           additional consideration payable to the Corporation
                           upon the conversion of all such rights or options,
                           plus, in the case of such rights or options which
                           relate to Convertible Securities, the minimum
                           aggregate amount of additional consideration, if any,
                           payable upon the issue or sale of such Convertible
                           Securities and upon the conversion or exchange
                           thereof, by (B) the total maximum number of shares of
                           common stock issuable upon the conversion of such
                           rights or options or upon the conversion or exchange
                           of all such Convertible Securities issuable upon the
                           conversion of such rights or options.

                                             2) Issuance of Convertible
                           Securities. In case the Corporation shall issue
                           (whether directly or by assumption in a merger

<PAGE>

                                       18

                           or otherwise) or sell any Convertible Securities,
                           whether or not the rights to exchange or convert
                           thereunder are immediately exercisable, and the price
                           per share for which common stock is issuable upon
                           conversion or exchange of such Convertible Securities
                           (determined as provided below) shall be less than the
                           Market Price, determined as of the date of such issue
                           or sale of such Convertible Securities, then the
                           total maximum number of shares of common stock
                           issuable upon conversion or exchange of all such
                           Convertible Securities shall (as of the date of the
                           issue or sale of such Convertible Securities) be
                           deemed to be outstanding and to have been issued for
                           such price per share, provided that (1) except as
                           provided in clause (iii) of this subsection, no
                           further adjustments of any Conversion Price shall be
                           made upon the actual issue of such common stock upon
                           conversion or exchange of such Convertible
                           Securities, and (2) if any such issue or sale of such
                           Convertible Securities is made upon conversion of any
                           rights to subscribe for or to purchase or any option
                           to purchase any such Convertible Securities for which
                           adjustments of any Conversion Price have been or are
                           to be made pursuant to other provisions of this
                           subsection (b), no further adjustment of any
                           Conversion Price shall be made by reason of such
                           issue or sale. For the purposes of this clause (ii),
                           the price per share for which common stock is
                           issuable upon conversion or exchange of Convertible
                           Securities shall be determined by dividing (A) the
                           total amount received or receivable by the
                           Corporation as consideration for the issue or sale of
                           such Convertible Securities, plus the minimum
                           aggregate amount of additional consideration, if any,
                           payable to the Corporation upon the conversion or
                           exchange thereof, by (B) the total maximum number of
                           shares of common stock issuable upon the conversion
                           or exchange of all such Convertible Securities.

                                             3) Change in Option Price or
                           Conversion Rate. If the purchase price provided for
                           in any rights or options referred to in clause (i)
                           above, or the additional consideration, if any,
                           payable upon the conversion or exchange of
                           Convertible Securities referred to in clause (i) or
                           (ii) above, or the rate at which any Convertible
                           Securities referred to in clause (i) or (ii)

<PAGE>

                                       19

                           above are convertible into or exchangeable for common
                           stock, shall change (other than under or by reason of
                           provisions designed to protect against dilution),
                           then the Conversion Price in effect at the time of
                           such event shall forthwith be readjusted to the
                           Conversion Price which would have been in effect at
                           such time had such rights, options or Convertible
                           Securities still outstanding provided for such
                           changed purchase price, additional consideration or
                           conversion rate, as the case may be, at the time
                           initially granted, issued or sold.

                                             4) Expiration of Options, Rights
                           and Other Similar Conversion Privileges. On the
                           expiration of any such option or right or the
                           termination of any such right to convert or exchange
                           such Convertible Securities, the Conversion Price
                           then in effect hereunder shall forthwith be increased
                           to the Conversion Price which would have been in
                           effect at the time of such expiration or termination
                           had such right, option or Convertible Security, to
                           the extent outstanding immediately prior to such
                           expiration or termination, never been issued, and the
                           common stock issuable thereunder shall no longer be
                           deemed to be outstanding. If the purchase price
                           provided for in any such right or option referred to
                           in clause (i) above or the rate at which any
                           Convertible Securities referred to in clause (i) or
                           (ii) above are convertible into or exchangeable for
                           common stock, shall decrease at any time under or by
                           reason of provisions with respect thereto designed to
                           protect against dilution, then in case of the
                           delivery of common stock upon the conversion of any
                           such right or option or upon conversion or exchange
                           of any such Convertible Security, the Conversion
                           Price then in effect hereunder shall forthwith be
                           adjusted to such respective amount as would have
                           obtained had such right, option or Convertible
                           Security never been issued as to such common stock
                           and had adjustments been made upon the issuance of
                           the shares of common stock delivered as aforesaid,
                           but only if as a result of such adjustment the
                           Conversion Price then in effect hereunder is thereby
                           decreased.

                                             5) Stock Dividends. In case the
                           Corporation shall declare a dividend or make any
                           other distribution upon any stock of the

<PAGE>

                                       20

                           Corporation payable in common stock or Convertible
                           Securities, any common stock or Convertible
                           Securities, as the case may be, issuable in payment
                           of such dividend or distribution shall be deemed to
                           have been issued or sold without consideration.

                                             6) Consideration for Stock. In case
                           any shares of common stock or Convertible Securities
                           or any rights or options to purchase any such common
                           stock or Convertible Securities shall be issued or
                           sold for cash, the consideration received therefor
                           shall be deemed to be the amount received by the
                           Corporation therefor, without deduction therefrom of
                           any expenses incurred or any underwriting commissions
                           or concessions paid or allowed by the Corporation in
                           connection therewith. In case any shares of common
                           stock or Convertible Securities or any rights or
                           options to purchase any such common stock or
                           Convertible Securities shall be issued or sold for a
                           consideration other than cash, the amount of the
                           consideration other than cash received by the
                           Corporation shall be deemed to be the fair value of
                           such consideration as determined, in good faith and
                           in the exercise of reasonable business judgment, by
                           the board of directors of the Corporation, without
                           deduction of any expenses incurred or any
                           underwriting commissions or concessions paid or
                           allowed by the Corporation in connection therewith.
                           In case any shares of common stock or Convertible
                           Securities or any rights or options to purchase such
                           shares of common stock or Convertible Securities
                           shall be issued in connection with any merger or
                           consolidation in which the Corporation is the
                           surviving corporation (other than any consolidation
                           or merger in which the previously outstanding shares
                           of common stock of the Corporation shall be changed
                           into or exchanged for the stock or other securities
                           of another corporation), the amount of consideration
                           therefor shall be deemed to be the fair value as
                           determined reasonably and in good faith by the board
                           of directors of the Corporation of such portion of
                           the assets and business of the non-surviving
                           corporation as such board may determine to be
                           attributable to such shares of common stock,
                           Convertible Securities, rights or options, as the
                           case may be. In the event of any consolidation or
                           merger of the Corporation in which the

<PAGE>

                                       21

                           Corporation is not the surviving corporation or in
                           which the previously outstanding shares of common
                           stock of the Corporation shall be changed into or
                           exchanged for the stock or other securities of
                           another corporation or in the event of any sale of
                           all or substantially all of the assets of the
                           Corporation for stock or other securities of any
                           corporation, the Corporation shall be deemed to have
                           issued a number of shares of its common stock for
                           stock or securities or other property of the other
                           corporation computed on the basis of the actual
                           exchange ratio on which the transaction was
                           predicated and for a consideration equal to the fair
                           market value on the date of such transaction of all
                           such stock or securities or other property of the
                           other corporation, and if any such calculation
                           results in adjustment of the Conversion Price, the
                           determination of the number of shares of common stock
                           issuable upon conversion of the Securities
                           immediately prior to such merger, consolidation or
                           sale, for purposes of subsection (e) below, shall be
                           made after giving effect to such adjustment of the
                           Conversion Price.

                                             7) Record Date. In case the
                           Corporation shall take a record of the holders of its
                           common stock for the purpose of entitling them (A) to
                           receive a dividend or other distribution payable in
                           common stock or in Convertible Securities, or (B) to
                           subscribe for or purchase common stock or Convertible
                           Securities, then such record date shall be deemed to
                           be the date of the issue or sale of the shares of
                           common stock deemed to have been issued or sold upon
                           the declaration of such dividend or the making of
                           such other distribution or the date of the granting
                           of such right of subscription or purchase, as the
                           case may be.

                                             8) Treasury Shares. The number of
                           shares of common stock outstanding at any given time
                           shall not include shares owned or held by or for the
                           account of the Corporation, and the disposition of
                           any such shares shall be considered an issue or sale
                           of common stock for the purposes of this subsection
                           (b).

                                             9) Definition of Market Price.
                           "Market Price" shall mean the average of the daily
                           closing prices per share of the common stock for the
                           ten consecutive trading days

<PAGE>

                                       22

                           immediately preceding the day as of which "Market
                           Price" is being determined, except that, in the case
                           of an underwritten bona fide public offering, "Market
                           Price" shall mean the initial public offering price.
                           The closing price for each day shall be the last sale
                           price regular way or, in case no such sale takes
                           place on such day, the average of the closing bid and
                           asked prices regular way, in either case on the New
                           York Stock Exchange, or, if shares of the common
                           stock are not listed or admitted to trading on the
                           New York Stock Exchange, on the principal national
                           securities exchange (including for this purpose the
                           NASDAQ-NMS) on which the shares are listed or
                           admitted to trading, or if the shares are not so
                           listed or admitted to trading, the average of the
                           highest reported bid and lowest reported asked prices
                           as furnished by the National Association of
                           Securities Dealers, Inc. through NASDAQ or through a
                           similar organization if NASDAQ is no longer reporting
                           such information. If shares of the common stock are
                           not listed or admitted to trading on any exchange or
                           quoted through NASDAQ or any similar organization,
                           the "Market Price" shall be deemed to be the higher
                           of (A) the book value of a share of the common stock
                           as determined by any firm of independent public
                           accountants of recognized standing, selected by the
                           board of directors of the Corporation, as at the last
                           day of any month ending within sixty days preceding
                           the date as of which the determination is to be made
                           or (B) the fair value thereof determined in good
                           faith by an independent brokerage firm or Standard &
                           Poor's Corporation as of a date which is within
                           fifteen days of the date as of which the
                           determination is to be made (the fees and expenses of
                           any such independent public accountants, independent
                           brokerage firm or other firm engaged pursuant to
                           subclauses (A) and (B) of this clause (ix) to be paid
                           by the Corporation).

                                             10) Determination of Market Price
                           under Certain Circumstances. Anything herein to the
                           contrary notwithstanding, in case the Corporation
                           shall issue any shares of common stock or Convertible
                           Securities in connection with the acquisition by the
                           Corporation of the stock or assets of any other
                           corporation or the merger of any other corporation
                           into the Corporation, the Market Price shall be
                           deter-

<PAGE>

                                       23

                           mined as of the date the number of shares of common
                           stock or Convertible Securities (or in the case of
                           Convertible Securities other than stock, the
                           aggregate principal amount of Convertible Securities)
                           was determined (as set forth in a written agreement
                           between the Corporation and the other party to the
                           transaction) rather than on the date of issuance of
                           such shares of common stock or Convertible
                           Securities.

                                             11) Certain Issues Excepted.
                           Anything herein to the contrary notwithstanding, the
                           Corporation shall not be required to make any
                           adjustment of any Conversion Price in case of the
                           issuance of shares of common stock (1) upon the
                           conversion of options or rights relating to up to
                           500,000 shares (subject to adjustment for stock
                           splits, stock combinations, stock dividends and
                           similar events) of the Corporation's common stock
                           granted or provided or to be granted or provided
                           under the Corporation's stock option plan, as in
                           effect on July 9, 1997, or (2) under the
                           Corporation's restricted stock plan, as in effect on
                           July 9, 1997, up to a maximum of 250,000 shares
                           (subject to adjustment for stock splits, stock
                           combinations, stock dividends and similar events),
                           and shall not be required to make any such adjustment
                           upon the granting of any options or rights referred
                           to above if and to the extent that issuance of the
                           shares covered thereby is excepted by this clause.

                                    (ii) Adjustment for Certain Special
                           Dividends. In case the Corporation shall declare a
                           dividend upon the common stock payable otherwise than
                           out of earnings or earned surplus, determined in
                           accordance with Generally Accepted Accounting
                           Principles, and otherwise than in common stock or
                           Convertible Securities, the Conversion Price in
                           effect immediately prior to the declaration of such
                           dividend shall be reduced by an amount equal, in the
                           case of a dividend in cash, to the amount per share
                           of the common stock so declared as payable otherwise
                           than out of earnings or earned surplus or, in the
                           case of any other dividend, to the fair value per
                           share of the common stock of the property so declared
                           as payable otherwise than out of earnings or earned
                           surplus, as determined, reasonably and in good faith,
                           by the board of

<PAGE>

                                       24

                           directors of the Corporation. For the purposes of the
                           foregoing a dividend other than in cash shall be
                           considered payable out of earnings or earned surplus
                           (other than revaluation or paid-in-surplus) only to
                           the extent that such earnings or earned surplus are
                           charged an amount equal to the fair value of such
                           dividend, as determined, reasonably and in good
                           faith, by the board of directors of the Corporation.
                           Such reductions shall take effect as of the date on
                           which a record is taken for the purpose of such
                           dividend, or, if a record is not taken, the date as
                           of which the holders of common stock of record
                           entitled to such dividend are determined.

                                    (iii) Subdivision or Combination of Stock.
                           In case the Corporation shall at any time subdivide
                           the outstanding shares of common stock into a greater
                           number of shares, the Conversion Price in effect
                           immediately prior to such subdivision shall be
                           proportionately reduced, and conversely, in case the
                           outstanding shares of common stock shall be combined
                           into a smaller number of shares, the Conversion Price
                           in effect immediately prior to such combination shall
                           be proportionately increased.

                                    (iv) Adjustments for Consolidation, Merger,
                           Sale of Assets, Reorganization, etc. In case the
                           Corporation (a) consolidates with or merges into any
                           other corporation and is not the continuing or
                           surviving corporation of such consolidation or
                           merger, or (b) permits any other corporation to
                           consolidate with or merge into the Corporation and
                           the Corporation is the continuing or surviving
                           corporation but, in connection with such
                           consolidation or merger, the common stock is changed
                           into or exchanged for stock or other securities of
                           any other corporation or cash or any other assets, or
                           (c) transfers all or substantially all of its
                           properties and assets to any other corporation, or
                           (d) effects a capital reorganization or
                           reclassification of the capital stock of the
                           Corporation in such a way that holders of common
                           stock shall be entitled to receive stock, securities,
                           cash or assets with respect to or in exchange for
                           common stock, then, and in each such case, proper
                           provision shall be made so that, upon the basis and
                           upon the terms and in the manner provided in this

<PAGE>

                                       25

                           subsection (e), the Holders, upon the conversion of
                           each Security at any time after the consummation of
                           such consolidation, merger, transfer, reorganization
                           or reclassification, shall be entitled to receive (at
                           the aggregate Conversion Price in effect for all
                           shares of common stock issuable upon such conversion
                           immediately prior to such consummation as adjusted to
                           the time of such transaction), in lieu of shares of
                           common stock issuable upon such conversion prior to
                           such consummation, the stock and other securities,
                           cash and assets to which such Holder would have been
                           entitled upon such consummation if such Holder had so
                           converted such Security immediately prior thereto
                           (subject to adjustments subsequent to such corporate
                           action as nearly equivalent as possible to the
                           adjustments provided for in this subsection 4).

                                    (v) Notice of Adjustment. Upon any
                           adjustment of the Conversion Price, then and in each
                           such case the Corporation shall promptly deliver a
                           notice to the registered holder of the Securities,
                           which notice shall state the Conversion Price
                           resulting from such adjustment, setting forth in
                           reasonable detail the method of calculation and the
                           facts upon which such calculation is based.

                                    (vi) Other Notices. In case at any time:

                                            (1) the Corporation shall declare or
                           pay any dividend on or make any distribution with
                           respect to its common stock, other than quarterly
                           cash dividends consistent with past practice;

                                            (2) the Corporation shall offer for
                           subscription pro rata to the holders of its common
                           stock any additional shares of stock of any class or
                           other rights;

                                            (3) there shall be any capital
                           reorganization, or reclassification of the capital
                           stock of the Corporation, or consolidation or merger
                           of the Corporation with another corporation (other
                           than a Subsidiary of the Corporation in which the
                           Corporation is the surviving or continuing
                           corporation and no change occurs in the Corporation's
                           common stock), or sale of all or

<PAGE>

                                       26

                           substantially all of its assets to, another
                           corporation;

                                            (4) there shall be a voluntary or
                           involuntary dissolution, liquidation, bankruptcy,
                           assignment for the benefit of creditors, or winding
                           up of the Corporation; or

                                            (5) the Corporation proposes to take
                           any other action or an event occurs which would
                           require an adjustment of the Conversion Price
                           pursuant to subsection (h) below;

                           then, in any one or more of said cases, the
                           Corporation shall give written notice, addressed to
                           each Holder at the address of such Holder as shown on
                           the books of the Corporation, of (1) the date on
                           which the books of the Corporation shall close or a
                           record shall be taken for such dividend, distribution
                           or subscription rights, or (2) the date (or, if not
                           then known, a reasonable approximation thereof by the
                           Corporation) on which such reorganization,
                           reclassification, consolidation, merger, sale,
                           dissolution, liquidation, bankruptcy, assignment for
                           the benefit of creditors, winding up or other action,
                           as the case may be, shall take place. Such notice
                           shall also specify (or, if not then known, reasonably
                           approximate) the date as of which the holders of
                           common stock of record shall participate in such
                           dividend, distribution or subscription rights, or
                           shall be entitled to exchange their common stock for
                           securities or other property deliverable upon such
                           reorganization, reclassification, consolidation,
                           merger, sale, dissolution, liquidation, bankruptcy,
                           assignment for the benefit of creditors, winding up,
                           or other action, as the case may be. Such written
                           notice shall be given at least twenty days prior to
                           the action in question and not less than twenty days
                           prior to the record date or the date on which the
                           Corporation's transfer books are closed in respect
                           thereto.

                                    (vii) Certain Events. If any event occurs as
                           to which in the reasonable opinion of the
                           Corporation, in good faith, the other provisions of
                           this subsection 4 are not strictly applicable but the
                           lack of any adjustment would not in the opinion of
                           the

<PAGE>

                                       27

                           Corporation fairly protect the conversion rights of
                           the Holders in accordance with the basic intent and
                           principles hereof, or if strictly applicable would
                           not fairly protect the conversion rights of the
                           Holders in accordance with the basic intent and
                           principles hereof, then the Corporation shall appoint
                           a firm of independent certified public accountants
                           (which may be the regular auditors of the
                           Corporation) of recognized national standing, which
                           shall give their opinion upon the adjustment, if any,
                           on a basis consistent with the basic intent and
                           principles established in the other provisions of
                           this subsection 4, necessary to preserve, without
                           dilution, the conversion rights of the Holders. Upon
                           receipt of such opinion, the Corporation shall
                           forthwith make the adjustments described therein.

                                    (vii) All calculations under this subsection
                           4 shall be made to the nearest cent or to the nearest
                           one hundredth (1/100) of a share, as the case may be.

                                    (viii) In any case in which the provisions
                           hereof require that an adjustment shall become
                           effective immediately after a record date for an
                           event, the Corporation may defer until the occurrence
                           of such event (i) issuing to the Holder of any
                           Security converted after such record date and before
                           the occurrence of such event the additional shares of
                           common stock issuable upon such conversion by reason
                           of the adjustments required by such event over and
                           above the shares of common stock issuable upon such
                           conversion before giving effect to such adjustment
                           and (ii) paying to such Holder any amount in cash in
                           lieu of a fractional share of common stock; provided,
                           however, that the Corporation shall deliver to such
                           Holder a due bill or other appropriate instrument
                           evidencing such Holder's right to receive such
                           additional shares and such cash upon the occurrence
                           of the event requiring such adjustment.

                  D.       REDEMPTION AT THE OPTION OF THE CORPORATION

                           (i) The shares of the 8% Preferred Stock are not
                  redeemable prior to January 1, 2001. On and after that date,
                  the shares of the 8% Preferred

<PAGE>

                                       28

                  Stock will be redeemable in whole or in part from time to time
                  at the option of the Corporation, with the consent of the
                  Board of Governors of the Federal Reserve System, upon not
                  less than thirty nor more than sixty days' notice by mail, at
                  the redemption prices set forth below, during the twelve-month
                  periods beginning on January 1 of the years set forth below,
                  plus accrued and unpaid dividends to the date fixed for
                  redemption.

<TABLE>
<CAPTION>
                                       YEAR                     REDEMPTION PRICE
                 -------------------------------------------    ----------------
                 <S>                                            <C>
                 2001.......................................        $1,020.00
                 2002.......................................        $1,015.00
                 2003.......................................        $1,010.00
                 2004.......................................        $1,005.00
                 2005 and thereafter .......................        $1,000.00
</TABLE>

                           (ii) In the event that less than all of the
                  outstanding shares of the 8% Preferred Stock are to be
                  redeemed in any redemption at the option of the Corporation,
                  the total number of shares to be redeemed in such redemption
                  shall be determined by the Board of Directors and the shares
                  to be redeemed shall be allocated pro rata or by lot as may be
                  determined by the Board of Directors or by such other method
                  as the Board of Directors may approve and deem equitable,
                  including any method to conform to any rule or regulation of
                  any national or regional stock exchange or automated quotation
                  system upon which the shares of the 8% Preferred Stock may at
                  the time be listed or eligible for quotation.

                           (iii) Notice of any proposed redemption shall be
                  given by the Corporation by mailing a copy of such notice to
                  the holders of record of the shares of 8% Preferred Stock to
                  be redeemed, at their address of record, not more than sixty
                  nor less than thirty days prior to the redemption date. The
                  notice of redemption to each holder of shares of 8% Preferred
                  Stock shall specify the number of shares of 8% Preferred Stock
                  to be redeemed, the redemption date and the redemption price
                  payable to such holder upon redemption, and shall state that
                  from and after said date dividends thereon will cease to
                  accrue. If less than all the shares owned by a holder are then
                  to be redeemed at the option of the Corporation, the notice
                  shall also specify the number of shares of 8% Preferred Stock
                  which are to be redeemed and the numbers of the certificates
                  representing such shares. Any notice which

<PAGE>

                                       29

                  is mailed as herein provided shall be conclusively presumed to
                  have been duly given, whether or not the stockholder receives
                  such notice; and failure duly to give such notice by mail, or
                  any defect in such notice, to the holders of any stock
                  designated for redemption shall not affect the validity of the
                  proceedings for the redemption of any other shares of 8%
                  Preferred Stock.

                           (iv) Notice having been mailed as aforesaid, from and
                  after the redemption date (unless default be made in the
                  payment of the redemption price for any shares to be
                  redeemed), all dividends on the shares of 8% Preferred Stock
                  called for redemption shall cease to accrue and all rights of
                  the holders of such shares as stockholders of the Corporation
                  by reason of the ownership of such shares (except the right to
                  receive the redemption price, on presentation and surrender of
                  the respective certificates representing the redeemed shares),
                  shall cease on the redemption date, and such shares shall not
                  after the redemption date be deemed to be outstanding. In case
                  less than all the shares represented by any such certificate
                  are redeemed, a new certificate shall be issued without cost
                  to the holder thereof representing the unredeemed shares.

                           (v) At its option, the Corporation may, on or prior
                  to the redemption date, irrevocably deposit the aggregate
                  amount payable upon redemption of the shares of the 8%
                  Preferred Stock to be redeemed with a bank or trust company
                  designated by the Board of Directors having its principal
                  office in New York, New York, San Juan, Puerto Rico, or any
                  other city in which the Corporation shall at that time
                  maintain a transfer agency with respect to its capital stock,
                  and having a combined capital and surplus (as shown by its
                  latest published statement) of at least $50,000,000
                  (hereinafter referred to as the "Depositary"), to be held in
                  trust by the Depositary for payment to the holders of the
                  shares of the 8% Preferred Stock then to be redeemed. If such
                  deposit is made and the funds so deposited are made
                  immediately available to the holders of the shares of the 8%
                  Preferred Stock to be redeemed, the Corporation shall
                  thereupon be released and discharged (subject to the
                  provisions of Section D.6) from any obligation to make payment
                  of the amount payable upon redemption of the shares of the 8%
                  Preferred Stock to be redeemed, and the holders of such shares
                  shall look only to the Depositary for such payment.

<PAGE>

                                       30

                           (vi) Any funds remaining unclaimed at the end of two
                  years from and after the redemption date in respect of which
                  such funds were deposited shall be returned to the Corporation
                  forthwith and thereafter the holders of shares of the 8%
                  Preferred Stock called for redemption with respect to which
                  such funds were deposited shall look only to the Corporation
                  for the payment of the redemption price thereof. Any interest
                  accrued on any funds deposited with the Depositary shall
                  belong to the Corporation and shall be paid to it from time to
                  time on demand.

                           (vii) Any shares of the 8% Preferred Stock which
                  shall at any time have been redeemed shall, after such
                  redemption, have the status of authorized but unissued shares
                  of Preferred Stock, without designation as to series, until
                  such shares are once more designated as part of a particular
                  series by the Board of Directors.

                  E.       LIQUIDATION PREFERENCE

                           (i) Upon any voluntary or involuntary liquidation,
                  dissolution, or winding up of the Corporation, the then record
                  holders of shares of 8% Preferred Stock will be entitled to
                  receive out of the assets of the Corporation available for
                  distribution to shareholders, before any distribution is made
                  to holders of common stock or any other equity securities of
                  the Corporation ranking junior upon liquidation to the 8%
                  Preferred Stock, distributions upon liquidation in the amount
                  of $1,000 per share plus an amount equal to any accrued and
                  unpaid dividends to the date of payment. Such amount shall be
                  paid to the holders of the 8% Preferred Stock prior to any
                  payment or distribution to the holders of the common stock of
                  the Corporation or of any other class of stock or series
                  thereof of the Corporation ranking junior to the 8% Preferred
                  Stock in respect of dividends or as to the distribution of
                  assets upon liquidation.

                           (ii) If upon any voluntary or involuntary
                  liquidation, dissolution or winding up of the Corporation, the
                  amounts payable with respect to the 8% Preferred Stock and any
                  other shares of stock of the Corporation ranking as to any
                  such distribution on a parity with the 8% Preferred Stock are
                  not paid in full, the holders of the 8% Preferred Stock and of
                  such other shares will share ratably in any such distribution
                  of assets of the Corporation in proportion to the full
                  liquidation preferences to which each is entitled. After

<PAGE>

                                       31

                  payment of the full amount of the liquidation preference to
                  which they are entitled, the holders of shares of 8% Preferred
                  Stock will not be entitled to any further participation in any
                  distribution of assets of the Corporation.

                           (iii) Neither the consolidation or merger of the
                  Corporation with any other corporation, nor any sale, lease or
                  conveyance of all or any part of the property or business of
                  the Corporation, shall be deemed to be a liquidation,
                  dissolution, or winding up of the Corporation.

                           (iv) If the assets distributable upon any
                  dissolution, liquidation, or winding up of the Corporation
                  shall be insufficient to permit the payment to the holders of
                  the 8% Preferred Stock of the full preferential amounts
                  aforesaid, then such assets or the proceeds thereof shall be
                  distributed among the holders of the 8% Preferred Stock
                  ratably in proportion to the respective amounts the holders of
                  such shares of stock would be entitled to receive if they were
                  paid the full preferential amounts aforesaid.

                  F.       VOTING RIGHTS

                           (i) Except as described in this Section F, or except
                  as required by applicable law, holders of the 8% Preferred
                  Stock will not be entitled to receive notice of or attend or
                  vote at any meeting of stockholders of the Corporation.

                           (ii) Any variation or abrogation of the rights,
                  preferences and privileges of the 8% Preferred Stock by way of
                  amendment of the Corporation's Restated Certificate of
                  Incorporation or otherwise (including, without limitation, the
                  authorization or issuance of any shares of the Corporation
                  ranking, as to dividend rights or rights on liquidation,
                  winding up and dissolution, senior to the 8% Preferred Stock)
                  shall not be effective (unless otherwise required by
                  applicable law) except with the consent in writing of the
                  holders of at least a majority of the outstanding shares of
                  the 8% Preferred Stock or with the sanction of a special
                  resolution passed at a separate general meeting by the holders
                  of at least a majority of the outstanding shares of the 8%
                  Preferred Stock. Notwithstanding the foregoing, the
                  Corporation may, without the consent or sanction of the
                  holders of the 8% Preferred Stock, authorize and issue shares
                  of the Corporation ranking, as to dividend rights and rights
                  on liquidation, winding

<PAGE>

                                       32

                  up and dissolution, on a parity with or junior to the 8%
                  Preferred Stock.

                           (iii) No vote of the holders of the 8% Preferred
                  Stock will be required for the Corporation to redeem or
                  purchase and cancel the 8% Preferred Stock in accordance with
                  the Restated Certificate of Incorporation of the Corporation.

                           (iv) The Corporation will cause a notice of any
                  meeting at which holders of any series of Preferred Stock are
                  entitled to vote to be mailed to each record holder of such
                  series of Preferred Stock. Each such notice will include a
                  statement setting forth (i) the date of such meeting, (ii) a
                  description of any resolution to be proposed for adoption at
                  such meeting on which such holders are entitled to vote and
                  (iii) instructions for deliveries of proxies.

                           (v) Except as set forth in this Section F, holders of
                  8% Preferred Stock shall have no special voting rights and
                  their consent shall not be required (except to the extent they
                  are entitled to vote as set forth herein) for taking any
                  corporate action.

                  g.       RANK

                           The 8% Preferred Stock will, with respect to dividend
                  rights and rights on liquidation, winding up and dissolution,
                  rank (i) senior to all classes of common stock of the
                  Corporation and to all other equity securities issued by the
                  Corporation the terms of which specifically provide that such
                  equity securities will rank junior to the 8% Preferred Stock
                  (or to a number of series of Preferred Stock which includes
                  the 8% Preferred Stock); (ii) on a parity with all equity
                  securities issued by the Corporation the terms of which
                  specifically provide that such equity securities will rank on
                  a parity with the 8% Preferred Stock (or with a number of
                  series of Preferred Stock which includes the 8% Preferred
                  Stock); and (iii) junior to all equity securities issued by
                  the Corporation the terms of which specifically provide that
                  such equity securities will rank senior to the 8% Preferred
                  Stock (or to a number of series of Preferred Stock which
                  includes the 8% Preferred Stock). For this purpose, the term
                  "equity securities" does not include debt securities
                  convertible into or exchangeable for equity securities.

<PAGE>

                                       33

                  h.       FORM OF CERTIFICATE FOR 8% PREFERRED STOCK;
                  TRANSFER AND REGISTRATION

                           (i) The 8% Preferred Stock shall be issued in
                  registered form only. The Corporation may treat the record
                  holder of a share of 8% Preferred Stock, including the
                  Depository Trust Company and its nominee and any other holder
                  that holds such share on behalf of any other person, as such
                  record holder appears on the books of the registrar for the 8%
                  Preferred Stock, as the sole owner of such share for all
                  purposes.

                           (ii) The transfer of a share of 8% Preferred Stock
                  may be registered upon the surrender of the certificate
                  evidencing the share of 8% Preferred Stock to be transferred,
                  together with the form of transfer endorsed on it duly
                  completed and executed, at the office of the transfer agent
                  and registrar.

                           (iii) Registration of transfers of shares of 8%
                  Preferred Stock will be effected without charge by or on
                  behalf of the Corporation, but upon payment (or the giving of
                  such indemnity as the transfer agent and registrar may
                  require) in respect of any tax or other governmental charges
                  which may be imposed in relation to it.

                           (iv) The Corporation will not be required to register
                  the transfer of a share of 8% Preferred Stock after such share
                  has been called for redemption.

                  i.       REPLACEMENT OF LOST CERTIFICATES

                           If any certificate for a share of 8% Preferred Stock
                  is mutilated or alleged to have been lost, stolen or
                  destroyed, a new certificate representing the same share shall
                  be issued to the holder upon request subject to delivery of
                  the old certificate or, if alleged to have been lost, stolen
                  or destroyed, compliance with such conditions as to evidence,
                  indemnity and the payment of out-of-pocket expenses of the
                  Corporation in connection with the request as the Board of
                  Directors of the Corporation may determine.

                  j.       NO PREEMPTIVE RIGHTS

                           Holders of the 8% Preferred Stock will have no
                  preemptive rights to purchase any securities of the
                  Corporation.

<PAGE>

                                       34

                  RESOLVED, that pursuant to the authority expressly granted to
         and vested in the Board of Directors of the Corporation and delegated
         to the Preferred Stock Pricing Committee in accordance with the
         provisions of its Restated Certificate of Incorporation, a series of
         Serial Preferred Stock of the Corporation be and it hereby is created.

                  FURTHER RESOLVED, that the Preferred Stock Pricing Committee
         designated by the Board of Directors has determined that the
         preferences and relative, participating, optional or other special
         rights of the shares of such series of Preferred Stock, and the
         qualifications, limitations or restrictions thereof, as stated and
         expressed herein, are under the circumstances prevailing on the date
         hereof fair and equitable to all the existing shareholders of the
         Corporation.

                  FURTHER RESOLVED, that the designation and amount of such
         series and the voting powers, preferences and relative, participating,
         optional or other special rights of the shares of such series of
         Preferred Stock, and the qualifications, limitations or restrictions
         thereof are as follows:

         A.       DESIGNATION AND AMOUNT

                  The shares of such series of Preferred Stock shall be
         designated as the "7% Noncumulative Monthly Income Preferred Stock,
         Series A" (hereinafter called the "Series A Preferred Stock"), and the
         number of authorized shares constituting such series shall be
         1,495,000.

         B.       DIVIDENDS

                  1. Holders of record of the Series A Preferred Stock
         ("Holders") will be entitled to receive, when, as and if declared by
         the Board of Directors of the Corporation, out of funds of the
         Corporation legally available therefor, noncumulative cash dividends at
         the annual rate per share of 7% of their liquidation preferences, or
         $0.2917 per share per month, with each aggregate payment made to each
         record holder of the Series A Preferred Stock being rounded to the next
         lowest cent.

                  2. Dividends on the Series A Preferred Stock will accrue from
         their date of original issuance and will be payable (when, as and if
         declared by the Board of Directors of the Corporation out of funds of
         the Corporation legally available therefor) monthly in arrears in
         United States dollars commencing on March 31, 1999, and on the last day
         of each calendar month of each year thereafter to the holders of record
         of the Series A

<PAGE>

                                       35

         Preferred Stock as they appear on the books of the Corporation on the
         second Business Day (as defined below) immediately preceding the
         relevant date of payment. In the case of the dividend payable on March
         31, 1999, such dividend shall cover the period from the date of
         issuance of the Series A Preferred Stock to March 31, 1999. In the
         event that any date on which dividends are payable is not a Business
         Day, then payment of the dividend payable on such date will be made on
         the next succeeding Business Day without any interest or other payment
         in respect of any such delay, except that, if such Business Day is in
         the next succeeding calendar year, such payment will be made on the
         Business Day immediately preceding the relevant date of payment, in
         each case with the same force and effect as if made on such date. A
         "Business Day" is a day other than a Saturday, Sunday or a general bank
         holiday in San Juan, Puerto Rico or New York, New York.

                  3. Dividends on the Series A Preferred Stock will be
         noncumulative. The Corporation is not obligated or required to declare
         or pay dividends on the Series A Preferred Stock, even if it has funds
         available for the payment of such dividends. If the Board of Directors
         of the Corporation or an authorized committee thereof does not declare
         a dividend payable on a dividend payment date in respect of the Series
         A Preferred Stock, then the holders of such Series A Preferred Stock
         shall have no right to receive a dividend in respect of the monthly
         dividend period ending on such dividend payment date and the Company
         will have no obligation to pay the dividend accrued for such monthly
         dividend period or to pay any interest thereon, whether or not
         dividends on such Series A Preferred Sock are declared for any future
         monthly dividend period.

                  4. The amount of dividends payable for any monthly dividend
         period will be computed on the basis of twelve 30-day months and a
         360-day year. The amount of dividends payable for any period shorter
         than a full monthly dividend period will be computed on the basis of
         the actual number of days elapsed in such period.

                  5. Subject to any applicable fiscal or other laws and
         regulations, each dividend payment will be made by dollar check drawn
         on a bank in New York, New York or San Juan, Puerto Rico and mailed to
         the record holder thereof at such holder's address as it appears on the
         register for such Series A Preferred Stock.

                  6. So long as any shares of the Series A Preferred Stock
         remain outstanding, the Corporation shall not declare, set apart or pay
         any dividend or make any other distribution of assets (other than
         dividends paid or

<PAGE>

                                       36

         other distributions made in stock of the Corporation ranking junior to
         the Series A Preferred Stock as to the payment of dividends and the
         distribution of assets upon liquidation, dissolution or winding up of
         the Corporation) on, or redeem, purchase, set apart or otherwise
         acquire (except upon conversion or exchange for stock of the
         Corporation ranking junior to the Series A Preferred Stock as to the
         payment of dividends and the distribution of assets upon liquidation,
         dissolution or winding up of the Corporation), shares of common stock
         or of any other class of stock of the Corporation ranking junior to the
         Series A Preferred Stock as to the payment of dividends or the
         distribution of assets upon liquidation, dissolution or winding up of
         the Corporation, unless (i) all accrued and unpaid dividends on the
         Series A Preferred Stock for the twelve monthly dividend periods ending
         on the immediately preceding dividend payment date shall have been paid
         or are paid contemporaneously and the full monthly dividend on the
         Series A Preferred Stock for the then current month has been or is
         contemporaneously declared and paid or declared and set apart for
         payment, and (ii) the Corporation has not defaulted in the payment of
         the redemption price of any shares of Series A Preferred Stock called
         for redemption.

                  7. When dividends are not paid in full on the Series A
         Preferred Stock and any other shares of stock of the Corporation
         ranking on a parity as to the payment of dividends with the Series A
         Preferred Stock, all dividends declared upon the Series A Preferred
         Stock and any such other shares of stock of the Corporation will be
         declared pro rata so that the amount of dividends declared per share on
         the Series A Preferred Stock and any such other shares of stock will in
         all cases bear to each other the same ratio that the liquidation
         preference per share of the Series A Preferred Stock and any such other
         shares of stock bear to each other.

                  8. Holders of record of the Series A Preferred Stock will not
         be entitled to any dividend, whether payable in cash, property or
         stock, in excess of the dividends provided for herein on the shares of
         Series A Preferred Stock.

         C.       CONVERSION

                  1. The Series A Preferred Stock will not be convertible into
         or exchangeable for any other securities of the Corporation.

         D.       REDEMPTION AT THE OPTION OF THE CORPORATION

                  1. The shares of the Series A Preferred Stock are not
         redeemable prior to February 28, 2004. On and after

<PAGE>

                                       37

         that date, the shares of the Series A Preferred Stock will be
         redeemable in whole or in part from time to time at the option of the
         Corporation, with the consent of the Board of Governors of the Federal
         Reserve System (the "Federal Reserve Board") to the extent required by
         D. 8 below, upon not less than thirty nor more than sixty days' notice
         by mail, at the redemption prices set forth below, during the
         twelve-month periods beginning on February 28, 2004 of the years set
         forth below, plus accrued and unpaid dividends to the date fixed for
         redemption.

<TABLE>
<CAPTION>
                                YEAR                            REDEMPTION PRICE
         ---------------------------------------------------    ----------------
         <S>                                                    <C>
         2004...............................................         $51.00
         2005...............................................         $50.50
         2006 and thereafter................................         $50.00
</TABLE>

                  2. In the event that less than all of the outstanding shares
         of the Series A Preferred Stock are to be redeemed in any redemption at
         the option of the Corporation, the total number of shares to be
         redeemed in such redemption shall be determined by the Board of
         Directors and the shares to be redeemed shall be allocated pro rata or
         by lot as may be determined by the Board of Directors or by such other
         method as the Board of Directors may approve and deem equitable,
         including any method to conform to any rule or regulation of any
         national or regional stock exchange or automated quotation system upon
         which the shares of the Series A Preferred Stock may at the time be
         listed or eligible for quotation.

                  3. Notice of any proposed redemption shall be given by the
         Corporation by mailing a copy of such notice to the holders of record
         of the shares of Series A Preferred Stock to be redeemed, at their
         address of record, not more than sixty nor less than thirty days prior
         to the redemption date. The notice of redemption to each holder of
         shares of Series A Preferred Stock shall specify the number of shares
         of Series A Preferred Stock to be redeemed, the redemption date and the
         redemption price payable to such holder upon redemption, and shall
         state that from and after said date dividends thereon will cease to
         accrue. If less than all the shares owned by a holder are then to be
         redeemed at the option of the Corporation, the notice shall also
         specify the number of shares of Series A Preferred Stock which are to
         be redeemed and the numbers of the certificates representing such
         shares. Any notice which is mailed as herein provided shall be
         conclusively presumed to have been duly given, whether or not the
         stockholder receives

<PAGE>

                                       38

         such notice; and failure duly to give such notice by mail, or any
         defect in such notice, to the holders of any stock designated for
         redemption shall not affect the validity of the proceedings for the
         redemption of any other shares of Series A Preferred Stock.

                  4. Notice having been mailed as aforesaid, from and after the
         redemption date (unless default be made in the payment of the
         redemption price for any shares to be redeemed), all dividends on the
         shares of Series A Preferred Stock called for redemption shall cease to
         accrue and all rights of the holders of such shares as stockholders of
         the Corporation by reason of the ownership of such shares (except the
         right to receive the redemption price, on presentation and surrender of
         the respective certificates representing the redeemed shares), shall
         cease on the redemption date, and such shares shall not after the
         redemption date be deemed to be outstanding. In case less than all the
         shares represented by any such certificate are redeemed, a new
         certificate shall be issued without cost to the holder thereof
         representing the unredeemed shares.

                  5. At its option, the Corporation may, on or prior to the
         redemption date, irrevocably deposit the aggregate amount payable upon
         redemption of the shares of the Series A Preferred Stock to be redeemed
         with a bank or trust company designated by the Board of Directors
         having its principal office in New York, New York, San Juan, Puerto
         Rico, or any other city in which the Corporation shall at that time
         maintain a transfer agency with respect to its capital stock, and
         having a combined capital and surplus (as shown by its latest published
         statement) of at least $50,000,000 (hereinafter referred to as the
         "Depositary"), to be held in trust by the Depositary for payment to the
         holders of the shares of the Series A Preferred Stock then to be
         redeemed. If such deposit is made and the funds so deposited are made
         immediately available to the holders of the shares of the Series A
         Preferred Stock to be redeemed, the Corporation shall thereupon be
         released and discharged (subject to the provisions of Section D.6) from
         any obligation to make payment of the amount payable upon redemption of
         the shares of the Series A Preferred Stock to be redeemed, and the
         holders of such shares shall look only to the Depositary for such
         payment.

                  6. Any funds remaining unclaimed at the end of two years from
         and after the redemption date in respect of which such funds were
         deposited shall be returned to the Corporation forthwith and thereafter
         the holders of shares of the Series A Preferred Stock called for
         redemption with respect to which such funds were deposited shall look
         only to the Corporation for the

<PAGE>

                                       39

         payment of the redemption price thereof. Any interest accrued on any
         funds deposited with the Depositary shall belong to the Corporation and
         shall be paid to it from time to time on demand.

                  7. Any shares of the Series A Preferred Stock which shall at
         any time have been redeemed shall, after such redemption, have the
         status of authorized but unissued shares of Preferred Stock, without
         designation as to series, until such shares are once more designated as
         part of a particular series by the Board of Directors.

                  8. To the extent required to have the Series A Preferred Stock
         treated as Tier 1 capital for bank regulatory purposes or otherwise
         required by applicable regulations of the Federal Reserve Board, the
         shares of Series A Preferred Stock may not be redeemed by the
         Corporation without the prior consent of the Federal Reserve Board.

         E.       LIQUIDATION PREFERENCE

                  1. Upon any voluntary or involuntary liquidation, dissolution,
         or winding up of the Corporation, the then record holders of shares of
         Series A Preferred Stock will be entitled to receive out of the assets
         of the Corporation available for distribution to shareholders, before
         any distribution is made to holders of common stock or any other equity
         securities of the Corporation ranking junior upon liquidation to the
         Series A Preferred Stock, distributions upon liquidation in the amount
         of $50 per share plus an amount equal to any accrued and unpaid
         dividends for the current monthly dividend period to the date of
         payment. Such amount shall be paid to the holders of the Series A
         Preferred Stock prior to any payment or distribution to the holders of
         the common stock of the Corporation or of any other class of stock or
         series thereof of the Corporation ranking junior to the Series A
         Preferred Stock in respect of dividends or as to the distribution of
         assets upon liquidation.

                  2. If upon any voluntary or involuntary liquidation,
         dissolution or winding up of the Corporation, the amounts payable with
         respect to the Series A Preferred Stock and any other shares of stock
         of the Corporation ranking as to any such distribution on a parity with
         the Series A Preferred Stock are not paid in full, the holders of the
         Series A Preferred Stock and of such other shares will share ratably in
         any such distribution of assets of the Corporation in proportion to the
         full liquidation preferences to which each is entitled. After payment
         of the full amount of the liquidation preference to which they would
         otherwise be entitled, the holders of shares of Series A Preferred
         Stock will not be entitled

<PAGE>

                                       40

         to any further participation in any distribution of assets of the
         Corporation.

                  3. Neither the consolidation or merger of the Corporation with
         any other corporation, nor any sale, lease or conveyance of all or any
         part of the property or business of the Corporation, shall be deemed to
         be a liquidation, dissolution, or winding up of the Corporation.

         F.       VOTING RIGHTS

                  1. Except as described in this Section F, or except as
         required by applicable law, holders of the Series A Preferred Stock
         will not be entitled to receive notice of or attend or vote at any
         meeting of stockholders of the Corporation.

                  2. If the Corporation does not pay dividends in full on the
         Series A Preferred Stock for eighteen consecutive monthly dividend
         periods, the holders of outstanding shares of the Series A Preferred
         Stock, together with the holders of any other shares of stock of the
         Corporation having the right to vote for the election of directors
         solely in the event of any failure to pay dividends, acting as a single
         class without regard to series, will be entitled, by written notice to
         the Corporation given by the holders of a majority in liquidation
         preference of such shares or by ordinary resolution passed by the
         holders of a majority in liquidation preference of such shares present
         in person or by proxy at a separate general meeting of such holders
         convened for the purpose, to appoint two additional members of the
         Board of Directors of the Corporation, to remove any such member from
         office and to appoint another person in place of such member. Not later
         than 30 days after such entitlement arises, if written notice by a
         majority of the holders of such shares has not been given as provided
         for in the preceding sentence, the Board of Directors or an authorized
         committee thereof will convene a separate general meeting for the above
         purpose. If the Board of Directors or such authorized committee fails
         to convene such meeting within such 30-day period, the holders of 10%
         of the outstanding shares of the Series A Preferred Stock and any such
         other stock will be entitled to convene such meeting. The provisions of
         the Certificate of Incorporation and By-laws of the Corporation
         relating to the convening and conduct of general meetings of
         stockholders will apply with respect to any such separate general
         meeting. Any member of the Board of Directors so appointed shall vacate
         office if, following the event which gave rise to such appointment, the
         Corporation shall have resumed the payment of dividends in full on the
         Series A Preferred Stock and

<PAGE>

                                       41

         each such other series of stock for twelve consecutive monthly dividend
         periods.

                  3. Any variation or abrogation of the rights, preferences and
         privileges of the Series A Preferred Stock by way of amendment of the
         Corporation's Restated Certificate of Incorporation or otherwise
         (including, without limitation, the authorization or issuance of any
         shares of the Corporation ranking, as to dividend rights or rights on
         liquidation, winding up and dissolution, senior to the Series A
         Preferred Stock) shall not be effective (unless otherwise required by
         applicable law) except with the consent in writing of the holders of at
         least two thirds of the outstanding aggregate liquidation preference of
         the outstanding shares of the Series A Preferred Stock or with the
         sanction of a special resolution passed at a separate general meeting
         by the holders of at least two thirds of the aggregate liquidation
         preference of the outstanding shares of the Series A Preferred Stock.
         Notwithstanding the foregoing, the Corporation may, without the consent
         or sanction of the holders of the Series A Preferred Stock, authorize
         and issue shares of the Corporation ranking, as to dividend rights and
         rights on liquidation, winding up and dissolution, on a parity with or
         junior to the Series A Preferred Stock.

                  4. No vote of the holders of the Series A Preferred Stock will
         be required for the Corporation to redeem or purchase and cancel the
         Series A Preferred Stock in accordance with the Restated Certificate of
         Incorporation of the Corporation.

                  5. The Corporation will cause a notice of any meeting at which
         holders of any series of Preferred Stock are entitled to vote to be
         mailed to each record holder of such series of Preferred Stock. Each
         such notice will include a statement setting forth (i) the date of such
         meeting, (ii) a description of any resolution to be proposed for
         adoption at such meeting on which such holders are entitled to vote and
         (iii) instructions for deliveries of proxies.

                  6. Except as set forth in this Section F, holders of Series A
         Preferred Stock shall have no special voting rights and their consent
         shall not be required (except to the extent they are entitled to vote
         as set forth herein) for taking any corporate action.

         G.       RANK

                  The Series A Preferred Stock will, with respect to dividend
         rights and rights on liquidation, winding up and dissolution, rank (i)
         senior to all classes of common

<PAGE>

                                       42

         stock of the Corporation and to all other equity securities issued by
         the Corporation the terms of which specifically provide that such
         equity securities will rank junior to the Series A Preferred Stock (or
         to a number of series of Preferred Stock which includes the Series A
         Preferred Stock); (ii) on a parity with the Corporation's outstanding
         8% Convertible Cumulative Preferred Stock (Liquidation Preference
         $1,000 per share) and with all other equity securities issued by the
         Corporation the terms of which specifically provide that such equity
         securities will rank on a parity with the Series A Preferred Stock (or
         with a number of series of Preferred Stock which includes the Series A
         Preferred Stock); and (iii) junior to all equity securities issued by
         the Corporation the terms of which specifically provide that such
         equity securities will rank senior to the Series A Preferred Stock (or
         to a number of series of Preferred Stock which includes the Series A
         Preferred Stock). For this purpose, the term "equity securities" does
         not include debt securities convertible into or exchangeable for equity
         securities.

         H.       FORM OF CERTIFICATE FOR SERIES A PREFERRED STOCK; TRANSFER AND
                  REGISTRATION

                  1. The Series A Preferred Stock shall be issued in registered
         form only. The Corporation may treat the record holder of a share of
         Series A Preferred Stock, including the Depository Trust Company and
         its nominee and any other holder that holds such share on behalf of any
         other person, as such record holder appears on the books of the
         registrar for the Series A Preferred Stock, as the sole owner of such
         share for all purposes.

                  2. The transfer of a share of Series A Preferred Stock may be
         registered upon the surrender of the certificate evidencing the share
         of Series A Preferred Stock to be transferred, together with the form
         of transfer endorsed on it duly completed and executed, at the office
         of the transfer agent and registrar.

                  3. Registration of transfers of shares of Series A Preferred
         Stock will be effected without charge by or on behalf of the
         Corporation, but upon payment (or the giving of such indemnity as the
         transfer agent and registrar may require) in respect of any tax or
         other governmental charges which may be imposed in relation to it.

                  4. The Corporation will not be required to register the
         transfer of a share of Series A Preferred Stock after such share has
         been called for redemption.

         I.       REPLACEMENT OF LOST CERTIFICATES

<PAGE>

                                       43

                  If any certificate for a share of Series A Preferred Stock is
         mutilated or alleged to have been lost, stolen or destroyed, a new
         certificate representing the same share shall be issued to the holder
         upon request subject to delivery of the old certificate or, if alleged
         to have been lost, stolen or destroyed, compliance with such conditions
         as to evidence, indemnity and the payment of out-of-pocket expenses of
         the Corporation in connection with the request as the Board of
         Directors of the Corporation may determine.

         J.       NO PREEMPTIVE RIGHTS

                  Holders of the Series A Preferred Stock will have no
         preemptive or preferential rights to purchase any securities of the
         Corporation.

         K.       NO REPURCHASE AT THE OPTION OF HOLDERS; MISCELLANEOUS

                  Holders of Series A Preferred Stock will have no right to
         require the Corporation to redeem or repurchase any shares of Series A
         Preferred Stock, and the shares of Series A Preferred Stock are not
         subject to any sinking fund or similar obligation. The Corporation may,
         at its option, purchase shares of the Series A Preferred Stock from
         holders thereof from time to time, by tender, in privately negotiated
         transactions or otherwise.

                  RESOLVED, that pursuant to the authority expressly granted to
         and vested in the Board of Directors of the Corporation and delegated
         to the Preferred Stock Pricing Committee in accordance with the
         provisions of its Restated Certificate of Incorporation, a series of
         Serial Preferred Stock of the Corporation be and it hereby is created.

                  FURTHER RESOLVED, that the Preferred Stock Pricing Committee
         designated by the Board of Directors has determined that the
         preferences and relative, participating, optional or other special
         rights of the shares of such series of Preferred Stock, and the
         qualifications, limitations or restrictions thereof, as stated and
         expressed herein, are under the circumstances prevailing on the date
         hereof fair and equitable to all the existing shareholders of the
         Corporation.

                  FURTHER RESOLVED, that the designation and amount of such
         series and the voting powers, preferences and relative, participating,
         optional or other special rights of the shares of such series of
         Preferred Stock, and the qualifications, limitations or restrictions
         thereof are as follows:

<PAGE>

                                       44

                  A.       DESIGNATION AND AMOUNT

                  The shares of such series of Preferred Stock shall be
         designated as the "8.35% Noncumulative Monthly Income Preferred Stock,
         Series B" (hereinafter called the "Series B Preferred Stock"), and the
         number of authorized shares constituting such series shall be
         2,000,000.

                  B.       DIVIDENDS

                  1. Holders of record of the Series B Preferred Stock
         ("Holders") will be entitled to receive, when, as and if declared by
         the Board of Directors of the Corporation or an authorized committee
         thereof (the "Board of Directors"), out of funds of the Corporation
         legally available therefor, noncumulative cash dividends at the annual
         rate per share of 8.35% of their liquidation preferences, or $0.173958
         per share per month, with each aggregate payment made to each record
         holder of the Series B Preferred Stock being rounded to the next lowest
         cent.

                  2. Dividends on the Series B Preferred Stock will accrue from
         their date of original issuance and will be payable (when, as and if
         declared by the Board of Directors of the Corporation out of funds of
         the Corporation legally available therefor) monthly in arrears in
         United States dollars commencing on September 30, 2000, and on the last
         day of each calendar month of each year thereafter to the holders of
         record of the Series B Preferred Stock as they appear on the books of
         the Corporation on the fifteenth day of the month for which the
         dividends are payable. In the case of the dividend payable on September
         30, 2000, such dividend shall cover the period from the date of
         issuance of the Series B Preferred Stock to September 30, 2000. In the
         event that any date on which dividends are payable is not a Business
         Day (as defined below), then payment of the dividend payable on such
         date will be made on the next succeeding Business Day without any
         interest or other payment in respect of any such delay, except that, if
         such Business Day is in the next succeeding calendar year, such payment
         will be made on the Business Day immediately preceding the relevant
         date of payment, in each case with the same force and effect as if made
         on such date. A "Business Day" is a day other than a Saturday, Sunday
         or a general bank holiday in San Juan, Puerto Rico or New York, New
         York.

                  3. Dividends on the Series B Preferred Stock will be
         noncumulative. The Corporation is not obligated or required to declare
         or pay dividends on the Series B Preferred Stock, even if it has funds
         available for the

<PAGE>

                                       45

         payment of such dividends. If the Board of Directors of the Corporation
         does not declare a dividend payable on a dividend payment date in
         respect of the Series B Preferred Stock, then the holders of such
         Series B Preferred Stock shall have no right to receive a dividend in
         respect of the monthly dividend period ending on such dividend payment
         date and the Company will have no obligation to pay the dividend
         accrued for such monthly dividend period or to pay any interest
         thereon, whether or not dividends on such Series B Preferred Sock are
         declared for any future monthly dividend period.

                  4. The amount of dividends payable for any monthly dividend
         period will be computed on the basis of twelve 30-day months and a
         360-day year. The amount of dividends payable for any period shorter
         than a full monthly dividend period will be computed on the basis of
         the actual number of days elapsed in such period.

                  5. Subject to any applicable fiscal or other laws and
         regulations, each dividend payment will be made by dollar check drawn
         on a bank in New York, New York or San Juan, Puerto Rico and mailed to
         the record holder thereof at such holder's address as it appears on the
         register for such Series B Preferred Stock.

                  6. So long as any shares of the Series B Preferred Stock
         remain outstanding, the Corporation shall not declare, set apart or pay
         any dividend or make any other distribution of assets (other than
         dividends paid or other distributions made in stock of the Corporation
         ranking junior to the Series B Preferred Stock as to the payment of
         dividends and the distribution of assets upon liquidation, dissolution
         or winding up of the Corporation) on, or redeem, purchase, set apart or
         otherwise acquire (except upon conversion or exchange for stock of the
         Corporation ranking junior to the Series B Preferred Stock as to the
         payment of dividends and the distribution of assets upon liquidation,
         dissolution or winding up of the Corporation), shares of common stock
         or of any other class of stock of the Corporation ranking junior to the
         Series B Preferred Stock as to the payment of dividends or the
         distribution of assets upon liquidation, dissolution or winding up of
         the Corporation, unless (i) all accrued and unpaid dividends on the
         Series B Preferred Stock for the twelve monthly dividend periods ending
         on the immediately preceding dividend payment date shall have been paid
         or are paid contemporaneously and the full monthly dividend on the
         Series B Preferred Stock for the then current month has been or is
         contemporaneously declared and paid or declared and set apart for
         payment, and (ii) the Corporation has not defaulted in the payment of
         the redemption price of any shares of Series B Preferred Stock called
         for redemption.

<PAGE>

                                       46

                  7. When dividends are not paid in full on the Series B
         Preferred Stock and any other shares of stock of the Corporation
         ranking on a parity as to the payment of dividends with the Series B
         Preferred Stock, all dividends declared upon the Series B Preferred
         Stock and any such other shares of stock of the Corporation will be
         declared pro rata so that the amount of dividends declared per share on
         the Series B Preferred Stock and any such other shares of stock will in
         all cases bear to each other the same ratio that the accrued dividends
         per share on the Series B Preferred Stock for the then current dividend
         period bears to the accrued dividends per share on such other shares of
         stock (which shall not include any accrual in respect of unpaid
         dividends for prior dividend periods if such preferred stock does not
         have a cumulative dividend).

                  8. Holders of record of the Series B Preferred Stock will not
         be entitled to any dividend, whether payable in cash, property or
         stock, in excess of the dividends provided for herein on the shares of
         Series B Preferred Stock.

         C.       CONVERSION

                  1. The Series B Preferred Stock will not be convertible into
         or exchangeable for any other securities of the Corporation.

         D.       REDEMPTION AT THE OPTION OF THE CORPORATION

                  1. The shares of the Series B Preferred Stock are not
         redeemable prior to September 30, 2005. On and after that date, the
         shares of the Series B Preferred Stock will be redeemable in whole or
         in part from time to time at the option of the Corporation, with the
         consent of the Board of Governors of the Federal Reserve System (the
         "Federal Reserve Board") to the extent required by D. 8 below, upon not
         less than thirty nor more than sixty days' notice by mail, at the
         redemption prices set forth below, during the twelve-month periods
         beginning on September 30, 2005 of the years set forth below, plus
         accrued and unpaid dividends from the dividend payment date immediately
         preceding the redemption date (without any cumulation for unpaid
         dividends for prior dividend periods on the Series B Preferred Stock)
         to the date fixed for redemption.

<PAGE>

                                       47

<TABLE>
<CAPTION>
                             YEAR                               REDEMPTION PRICE
         -------------------------------------------            ----------------
         <S>                                                    <C>
         2005.......................................                 $25.50
         2006.......................................                 $25.25
         2007 and thereafter........................                 $25.00
</TABLE>

                  2. In the event that less than all of the outstanding shares
         of the Series B Preferred Stock are to be redeemed in any redemption at
         the option of the Corporation, the total number of shares to be
         redeemed in such redemption shall be determined by the Board of
         Directors and the shares to be redeemed shall be allocated pro rata or
         by lot as may be determined by the Board of Directors or by such other
         method as the Board of Directors may approve and deem equitable,
         including any method to conform to any rule or regulation of any
         national or regional stock exchange or automated quotation system upon
         which the shares of the Series B Preferred Stock may at the time be
         listed or eligible for quotation.

                  3. Notice of any proposed redemption shall be given by the
         Corporation by mailing a copy of such notice to the holders of record
         of the shares of Series B Preferred Stock to be redeemed, at their
         address of record, not more than sixty nor less than thirty days prior
         to the redemption date. The notice of redemption to each holder of
         shares of Series B Preferred Stock shall specify the number of shares
         of Series B Preferred Stock to be redeemed, the redemption date and the
         redemption price payable to such holder upon redemption, and shall
         state that from and after said date dividends thereon will cease to
         accrue. If less than all the shares owned by a holder are then to be
         redeemed at the option of the Corporation, the notice shall also
         specify the number of shares of Series B Preferred Stock which are to
         be redeemed and the numbers of the certificates representing such
         shares. Any notice which is mailed as herein provided shall be
         conclusively presumed to have been duly given, whether or not the
         stockholder receives such notice; and failure duly to give such notice
         by mail, or any defect in such notice, to the holders of any stock
         designated for redemption shall not affect the validity of the
         proceedings for the redemption of any other shares of Series B
         Preferred Stock.

                  4. Notice having been mailed as aforesaid, from and after the
         redemption date (unless default be made in the payment of the
         redemption price for any shares to be redeemed), all dividends on the
         shares of Series B Preferred Stock called for redemption shall cease to
         accrue and all rights of the holders of such shares as

<PAGE>

                                       48

         stockholders of the Corporation by reason of the ownership of such
         shares (except the right to receive the redemption price, on
         presentation and surrender of the respective certificates representing
         the redeemed shares), shall cease on the redemption date, and such
         shares shall not after the redemption date be deemed to be outstanding.
         In case less than all the shares represented by any such certificate
         are redeemed, a new certificate shall be issued without cost to the
         holder thereof representing the unredeemed shares.

                  5. At its option, the Corporation may, on or prior to the
         redemption date, irrevocably deposit the aggregate amount payable upon
         redemption of the shares of the Series B Preferred Stock to be redeemed
         with a bank or trust company designated by the Board of Directors
         having its principal office in New York, New York, San Juan, Puerto
         Rico, or any other city in which the Corporation shall at that time
         maintain a transfer agency with respect to its capital stock, and
         having a combined capital and surplus (as shown by its latest published
         statement) of at least $50,000,000 (hereinafter referred to as the
         "Depositary"), to be held in trust by the Depositary for payment to the
         holders of the shares of the Series B Preferred Stock then to be
         redeemed. If such deposit is made and the funds so deposited are made
         immediately available to the holders of the shares of the Series B
         Preferred Stock to be redeemed, the Corporation shall thereupon be
         released and discharged (subject to the provisions of Section D.6) from
         any obligation to make payment of the amount payable upon redemption of
         the shares of the Series B Preferred Stock to be redeemed, and the
         holders of such shares shall look only to the Depositary for such
         payment.

                  6. Any funds remaining unclaimed at the end of two years from
         and after the redemption date in respect of which such funds were
         deposited shall be returned to the Corporation forthwith and thereafter
         the holders of shares of the Series B Preferred Stock called for
         redemption with respect to which such funds were deposited shall look
         only to the Corporation for the payment of the redemption price
         thereof. Any interest accrued on any funds deposited with the
         Depositary shall belong to the Corporation and shall be paid to it from
         time to time on demand.

                  7. Any shares of the Series B Preferred Stock which shall at
         any time have been redeemed shall, after such redemption, have the
         status of authorized but unissued shares of Preferred Stock, without
         designation as to series, until such shares are once more designated as
         part of a particular series by the Board of Directors.

<PAGE>

                                       49

                  8. To the extent required to have the Series B Preferred Stock
         treated as Tier 1 capital for bank regulatory purposes or otherwise
         required by applicable regulations of the Federal Reserve Board, the
         shares of Series B Preferred Stock may not be redeemed by the
         Corporation without the prior consent of the Federal Reserve Board.

         E.       LIQUIDATION PREFERENCE

                  1. Upon any voluntary or involuntary liquidation, dissolution,
         or winding up of the Corporation, the then record holders of shares of
         Series B Preferred Stock will be entitled to receive out of the assets
         of the Corporation available for distribution to shareholders, before
         any distribution is made to holders of common stock or any other equity
         securities of the Corporation ranking junior upon liquidation to the
         Series B Preferred Stock, distributions upon liquidation in the amount
         of $25 per share plus an amount equal to any accrued and unpaid
         dividends (without any cumulation for unpaid dividends for prior
         dividend periods on the Series B Preferred Stock) for the current
         monthly dividend period to the date of payment. Such amount shall be
         paid to the holders of the Series B Preferred Stock prior to any
         payment or distribution to the holders of the common stock of the
         Corporation or of any other class of stock or series thereof of the
         Corporation ranking junior to the Series B Preferred Stock in respect
         of dividends or as to the distribution of assets upon liquidation.

                  2. If upon any voluntary or involuntary liquidation,
         dissolution or winding up of the Corporation, the amounts payable with
         respect to the Series B Preferred Stock and any other shares of stock
         of the Corporation ranking as to any such distribution on a parity with
         the Series B Preferred Stock are not paid in full, the holders of the
         Series B Preferred Stock and of such other shares will share ratably in
         any such distribution of assets of the Corporation in proportion to the
         full liquidation preferences to which each is entitled. After payment
         of the full amount of the liquidation preference to which they would
         otherwise be entitled, the holders of shares of Series B Preferred
         Stock will not be entitled to any further participation in any
         distribution of assets of the Corporation.

                  3. Neither the consolidation or merger of the Corporation with
         any other corporation, nor any sale, lease or conveyance of all or any
         part of the property or business of the Corporation, shall be deemed to
         be a liquidation, dissolution, or winding up of the Corporation.

<PAGE>

                                       50

         F.       VOTING RIGHTS

                  1. Except as described in this Section F, or except as
         required by applicable law, holders of the Series B Preferred Stock
         will not be entitled to receive notice of or attend or vote at any
         meeting of stockholders of the Corporation.

                  2. If the Corporation does not pay dividends in full on the
         Series B Preferred Stock for eighteen consecutive monthly dividend
         periods, the holders of outstanding shares of the Series B Preferred
         Stock, together with the holders of any other shares of stock of the
         Corporation having the right to vote for the election of directors
         solely in the event of any failure to pay dividends, acting as a single
         class without regard to series, will be entitled, by written notice to
         the Corporation given by the holders of a majority in liquidation
         preference of such shares or by ordinary resolution passed by the
         holders of a majority in liquidation preference of such shares present
         in person or by proxy at a separate general meeting of such holders
         convened for the purpose, to appoint two additional members of the
         Board of Directors of the Corporation, to remove any such member from
         office and to appoint another person in place of such member. Not later
         than 30 days after such entitlement arises, if written notice by a
         majority of the holders of such shares has not been given as provided
         for in the preceding sentence, the Board of Directors or an authorized
         committee thereof will convene a separate general meeting for the above
         purpose. If the Board of Directors or such authorized committee fails
         to convene such meeting within such 30-day period, the holders of 10%
         of the outstanding shares of the Series B Preferred Stock and any such
         other stock will be entitled to convene such meeting. The provisions of
         the Certificate of Incorporation and By-laws of the Corporation
         relating to the convening and conduct of general meetings of
         stockholders will apply with respect to any such separate general
         meeting. Any member of the Board of Directors so appointed shall vacate
         office if, following the event which gave rise to such appointment, the
         Corporation shall have resumed the payment of dividends in full on the
         Series B Preferred Stock and each such other series of stock for twelve
         consecutive monthly dividend periods.

                  3. Any amendment, alteration or repeal of the rights,
         preferences and privileges of the Series B Preferred Stock by way of
         amendment of the Corporation's Restated Certificate of Incorporation
         whether by merger or otherwise (including, without limitation, the
         authorization or issuance of any shares of the Corporation ranking, as
         to dividend rights or rights on

<PAGE>

                                       51

         liquidation, winding up and dissolution, senior to the Series B
         Preferred Stock) which would materially and adversely affect the
         powers, preferences or special rights of the Series B Preferred Stock
         shall not be effective (unless otherwise required by applicable law)
         except with the consent in writing of the holders of at least two
         thirds of the outstanding aggregate liquidation preference of the
         outstanding shares of the Series B Preferred Stock or with the sanction
         of a special resolution passed at a separate general meeting by the
         holders of at least two thirds of the aggregate liquidation preference
         of the outstanding shares of the Series B Preferred Stock.
         Notwithstanding the foregoing, the Corporation may, without the consent
         or sanction of the holders of the Series B Preferred Stock, authorize
         and issue shares of the Corporation ranking, as to dividend rights and
         rights on liquidation, winding up and dissolution, on a parity with or
         junior to the Series B Preferred Stock.

                  The foregoing voting provisions shall not apply if, at or
         prior to the time when the act with respect to which such vote would
         otherwise be required shall be effected, all outstanding shares of the
         Series B Preferred Stock shall have been redeemed or called for
         redemption upon proper notice and sufficient funds shall have been
         deposited in trust to effect such redemption.

                  4. No vote of the holders of the Series B Preferred Stock will
         be required for the Corporation to redeem or purchase and cancel the
         Series B Preferred Stock in accordance with the Restated Certificate of
         Incorporation of the Corporation.

                  5. The Corporation will cause a notice of any meeting at which
         holders of any series of Preferred Stock are entitled to vote to be
         mailed to each record holder of such series of Preferred Stock. Each
         such notice will include a statement setting forth (i) the date of such
         meeting, (ii) a description of any resolution to be proposed for
         adoption at such meeting on which such holders are entitled to vote and
         (iii) instructions for deliveries of proxies.

                  6. Except as set forth in this Section F, holders of Series B
         Preferred Stock shall have no special voting rights and their consent
         shall not be required (except to the extent they are entitled to vote
         as set forth herein) for taking any corporate action.

         G.       RANK

                  The Series B Preferred Stock will, with respect to dividend
         rights and rights on liquidation, winding up and

<PAGE>

                                       52

         dissolution, rank (i) senior to all classes of common stock of the
         Corporation and to all other equity securities issued by the
         Corporation the terms of which specifically provide that such equity
         securities will rank junior to the Series B Preferred Stock (or to a
         number of series of Preferred Stock which includes the Series B
         Preferred Stock); (ii) on a parity with the Corporation's outstanding
         7% Noncumulative Monthly Income Preferred Stock, Series A and with all
         other equity securities issued by the Corporation the terms of which
         specifically provide that such equity securities will rank on a parity
         with the Series B Preferred Stock (or with a number of series of
         Preferred Stock which includes the Series B Preferred Stock); and (iii)
         subject to the provisions of F.3 hereof, junior to all equity
         securities issued by the Corporation the terms of which specifically
         provide that such equity securities will rank senior to the Series B
         Preferred Stock (or to a number of series of Preferred Stock which
         includes the Series B Preferred Stock). For this purpose, the term
         "equity securities" does not include debt securities convertible into
         or exchangeable for equity securities.

         H.       FORM OF CERTIFICATE FOR SERIES B PREFERRED STOCK; TRANSFER AND
                  REGISTRATION

                  1. The Series B Preferred Stock shall be issued in registered
         form only. The Corporation may treat the record holder of a share of
         Series B Preferred Stock, including the Depository Trust Company and
         its nominee and any other holder that holds such share on behalf of any
         other person, as such record holder appears on the books of the
         registrar for the Series B Preferred Stock, as the sole owner of such
         share for all purposes.

                  2. The transfer of a share of Series B Preferred Stock may be
         registered upon the surrender of the certificate evidencing the share
         of Series B Preferred Stock to be transferred, together with the form
         of transfer endorsed on it duly completed and executed, at the office
         of the transfer agent and registrar.

                  3. Registration of transfers of shares of Series B Preferred
         Stock will be effected without charge by or on behalf of the
         Corporation, but upon payment (or the giving of such indemnity as the
         transfer agent and registrar may require) in respect of any tax or
         other governmental charges which may be imposed in relation to it.

                  4. The Corporation will not be required to register the
         transfer of a share of Series B Preferred Stock after such share has
         been called for redemption.

<PAGE>

                                       53

         I.       REPLACEMENT OF LOST CERTIFICATES

                  If any certificate for a share of Series B Preferred Stock is
         mutilated or alleged to have been lost, stolen or destroyed, a new
         certificate representing the same share shall be issued to the holder
         upon request subject to delivery of the old certificate or, if alleged
         to have been lost, stolen or destroyed, compliance with such conditions
         as to evidence, indemnity and the payment of out-of-pocket expenses of
         the Corporation in connection with the request as the Board of
         Directors of the Corporation may determine.

         J.       NO PREEMPTIVE RIGHTS

                  Holders of the Series B Preferred Stock will have no
         preemptive or preferential rights to purchase any securities of the
         Corporation.

         K.       NO REPURCHASE AT THE OPTION OF HOLDERS; MISCELLANEOUS

                  Holders of Series B Preferred Stock will have no right to
         require the Corporation to redeem or repurchase any shares of Series B
         Preferred Stock, and the shares of Series B Preferred Stock are not
         subject to any sinking fund or similar obligation. The Corporation may,
         at its option, purchase shares of the Series B Preferred Stock from
         holders thereof from time to time, by tender, in privately negotiated
         transactions or otherwise.

                  RESOLVED, that pursuant to the authority expressly granted to
         and vested in the Board of Directors of the Corporation and delegated
         to the Pricing Committee in accordance with the provisions of its
         Restated Certificate of Incorporation, a series of Serial Preferred
         Stock of the Corporation be and it hereby is created.

                  FURTHER RESOLVED, that the Pricing Committee designated by the
         Board of Directors has determined that the preferences and relative,
         participating, optional or other special rights of the shares of such
         series of Preferred Stock, and the qualifications, limitations or
         restrictions thereof, as stated and expressed herein, are under the
         circumstances prevailing on the date hereof fair and equitable to all
         the existing shareholders of the Corporation.

                  FURTHER RESOLVED, that the designation and amount of such
         series and the voting powers, preferences and relative, participating,
         optional or other special rights of the shares of such series of
         Preferred Stock, and the

<PAGE>

                                       54

         qualifications, limitations or restrictions thereof are as follows:

         A. DESIGNATION AND AMOUNT

                  The shares of such series of Preferred Stock shall be
         designated as the "7.25% Noncumulative Monthly Income Preferred Stock,
         Series C" (hereinafter called the "Series C Preferred Stock"), and the
         number of authorized shares constituting such series shall be
         4,140,000.

         B. DIVIDENDS

                  1. Holders of record of the Series C Preferred Stock
         ("Holders") will be entitled to receive, when, as and if declared by
         the Board of Directors of the Corporation or an authorized committee
         thereof (the "Board of Directors"), out of funds of the Corporation
         legally available therefor, noncumulative cash dividends at the annual
         rate per share of 7.25% of their liquidation preferences, or $0.151042
         per share per month, with each aggregate payment made to each record
         holder of the Series C Preferred Stock being rounded to the next lowest
         cent.

                  2. Dividends on the Series C Preferred Stock will accrue from
         their date of original issuance and will be payable (when, as and if
         declared by the Board of Directors of the Corporation [PAGE] 53 out of
         funds of the Corporation legally available therefor) monthly in arrears
         in United States dollars commencing on June 30, 2002, and on the last
         day of each calendar month of each year thereafter to the holders of
         record of the Series C Preferred Stock as they appear on the books of
         the Corporation on the fifteenth day of the month for which the
         dividends are payable. In the case of the dividend payable on June 30,
         2002, such dividend shall cover the period from the date of issuance of
         the Series C Preferred Stock to June 30, 2002. In the event that any
         date on which dividends are payable is not a Business Day (as defined
         below), then payment of the dividend payable on such date will be made
         on the next succeeding Business Day without any interest or other
         payment in respect of any such delay, except that, if such Business Day
         is in the next succeeding calendar year, such payment will be made on
         the Business Day immediately preceding the relevant date of payment, in
         each case with the same force and effect as if made on such date. A
         "Business Day" is a day other than a Saturday, Sunday or a general bank
         holiday in San Juan, Puerto Rico or New York, New York.

                  3. Dividends on the Series C Preferred Stock will be
         noncumulative. The Corporation is not obligated or

<PAGE>

                                       55

         required to declare or pay dividends on the Series C Preferred Stock,
         even if it has funds available for the payment of such dividends. If
         the Board of Directors of the Corporation does not declare a dividend
         payable on a dividend payment date in respect of the Series C Preferred
         Stock, then the holders of such Series C Preferred Stock shall have no
         right to receive a dividend in respect of the monthly dividend period
         ending on such dividend payment date and the Company will have no
         obligation to pay the dividend accrued for such monthly dividend period
         or to pay any interest thereon, whether or not dividends on such Series
         C Preferred Sock are declared for any future monthly dividend period.

                  4. The amount of dividends payable for any monthly dividend
         period will be computed on the basis of twelve 30-day months and a
         360-day year. The amount of dividends payable for any period shorter
         than a full monthly dividend period will be computed on the basis of
         the actual number of days elapsed in such period.

                  5. Subject to any applicable fiscal or other laws and
         regulations, each dividend payment will be made by dollar check drawn
         on a bank in New York, New York or San Juan, Puerto Rico and mailed to
         the record holder thereof at such holder's address as it appears on the
         register for such Series C Preferred Stock.

                  6. So long as any shares of the Series C Preferred Stock
         remain outstanding, the Corporation shall not declare, set apart or pay
         any dividend or make any other distribution of assets (other than
         dividends paid or other distributions made in stock of the Corporation
         ranking junior to the Series C Preferred Stock as to the payment of
         dividends and the distribution of assets upon liquidation, dissolution
         or winding up of the Corporation) on, or redeem, purchase, set apart or
         otherwise acquire (except upon conversion or exchange for stock of the
         Corporation ranking junior to the Series C Preferred Stock as to the
         payment of dividends and the distribution of assets upon liquidation,
         dissolution or winding up of the Corporation), shares of common stock
         or of any other class of stock of the Corporation ranking junior to the
         Series C Preferred Stock as to the payment of dividends or the
         distribution of assets upon liquidation, dissolution or winding up of
         the Corporation, unless (i) all accrued and unpaid dividends on the
         Series C Preferred Stock for the twelve monthly dividend periods ending
         on the immediately preceding dividend payment date shall have been paid
         or are paid contemporaneously and the full monthly dividend on the
         Series C Preferred Stock for the then current month has been or is
         contemporaneously declared and paid or declared and set apart for
         payment, and (ii) the

<PAGE>

                                       56

         Corporation has not defaulted in the payment of the redemption price of
         any shares of Series C Preferred Stock called for redemption.

                  7. When dividends are not paid in full on the Series C
         Preferred Stock and any other shares of stock of the Corporation
         ranking on a parity as to the payment of dividends with the Series C
         Preferred Stock, all dividends declared upon the Series C Preferred
         Stock and any such other shares of stock of the Corporation will be
         declared pro rata so that the amount of dividends declared per share on
         the Series C Preferred Stock and any such other shares of stock will in
         all cases bear to each other the same ratio that the accrued dividends
         per share on the Series C Preferred Stock for the then current dividend
         period bears to the accrued dividends per share on such other shares of
         stock (which shall not include any accrual in respect of unpaid
         dividends for prior dividend periods if such preferred stock does not
         have a cumulative dividend).

                  8. Holders of record of the Series C Preferred Stock will not
         be entitled to any dividend, whether payable in cash, property or
         stock, in excess of the dividends provided for herein on the shares of
         Series C Preferred Stock.

         C. CONVERSION

                  1. The Series C Preferred Stock will not be convertible into
         or exchangeable for any other securities of the Corporation.

         D. REDEMPTION AT THE OPTION OF THE CORPORATION

                  1. The shares of the Series C Preferred Stock are not
         redeemable prior to May 31, 2007. On and after that date, the shares of
         the Series C Preferred Stock will be redeemable in whole or in part
         from time to time at the option of the Corporation, with the consent of
         the Board of Governors of the Federal Reserve System (the "Federal
         Reserve Board") to the extent required by D. 8 below, upon not less
         than thirty nor more than sixty days' notice by mail, at the redemption
         prices set forth below, during the twelve-month periods beginning on
         May 31, 2007 of the years set forth below, plus accrued and unpaid
         dividends from the dividend payment date immediately preceding the
         redemption date (without any cumulation for unpaid dividends for prior
         dividend periods on the Series C Preferred Stock) to the date fixed for
         redemption.

<PAGE>

                                       57

<TABLE>
<CAPTION>
                             YEAR                               REDEMPTION PRICE
         -------------------------------------------            ----------------
         <S>                                                    <C>
         2007.......................................                 $25.50
         2008.......................................                 $25.25
         2009 and thereafter........................                 $25.00
</TABLE>

                  2. In the event that less than all of the outstanding shares
         of the Series C Preferred Stock are to be redeemed in any redemption at
         the option of the Corporation, the total number of shares to be
         redeemed in such redemption shall be determined by the Board of
         Directors and the shares to be redeemed shall be allocated pro rata or
         by lot as may be determined by the Board of Directors or by such other
         method as the Board of Directors may approve and deem equitable,
         including any method to conform to any rule or regulation of any
         national or regional stock exchange or automated quotation system upon
         which the shares of the Series C Preferred Stock may at the time be
         listed or eligible for quotation.

                  3. Notice of any proposed redemption shall be given by the
         Corporation by mailing a copy of such notice to the holders of record
         of the shares of Series C Preferred Stock to be redeemed, at their
         address of record, not more than sixty nor less than thirty days prior
         to the redemption date. The notice of redemption to each holder of
         shares of Series C Preferred Stock shall specify the number of shares
         of Series C Preferred Stock to be redeemed, the redemption date and the
         redemption price payable to such holder upon redemption, and shall
         state that from and after said date dividends thereon will cease to
         accrue. If less than all the shares owned by a holder are then to be
         redeemed at the option of the Corporation, the notice shall also
         specify the number of shares of Series C Preferred Stock which are to
         be redeemed and the numbers of the certificates representing such
         shares. Any notice which is mailed as herein provided shall be
         conclusively presumed to have been duly given, whether or not the
         stockholder receives such notice; and failure duly to give such notice
         by mail, or any defect in such notice, to the holders of any stock
         designated for redemption shall not affect the validity of the
         proceedings for the redemption of any other shares of Series C
         Preferred Stock.

                  4. Notice having been mailed as aforesaid, from and after the
         redemption date (unless default be made in the payment of the
         redemption price for any shares to be redeemed), all dividends on the
         shares of Series C Preferred Stock called for redemption shall cease to
         accrue and all rights of the holders of such shares as

<PAGE>

                                       58

         stockholders of the Corporation by reason of the ownership of such
         shares (except the right to receive the redemption price, on
         presentation and surrender of the respective certificates representing
         the redeemed shares), shall cease on the redemption date, and such
         shares shall not after the redemption date be deemed to be outstanding.
         In case less than all the shares represented by any such certificate
         are redeemed, a new certificate shall be issued without cost to the
         holder thereof representing the unredeemed shares.

                  5. At its option, the Corporation may, on or prior to the
         redemption date, irrevocably deposit the aggregate amount payable upon
         redemption of the shares of the Series C Preferred Stock to be redeemed
         with a bank or trust company designated by the Board of Directors
         having its principal office in New York, New York, San Juan, Puerto
         Rico, or any other city in which the Corporation shall at that time
         maintain a transfer agency with respect to its capital stock, and
         having a combined capital and surplus (as shown by its latest published
         statement) of at least $50,000,000 (hereinafter referred to as the
         "Depositary"), to be held in trust by the Depositary for payment to the
         holders of the shares of the Series C Preferred Stock then to be
         redeemed. If such deposit is made and the funds so deposited are made
         immediately available to the holders of the shares of the Series C
         Preferred Stock to be redeemed, the Corporation shall thereupon be
         released and discharged (subject to the provisions of Section D.6) from
         any obligation to make payment of the amount payable upon redemption of
         the shares of the Series C Preferred Stock to be redeemed, and the
         holders of such shares shall look only to the Depositary for such
         payment.

                  6. Any funds remaining unclaimed at the end of two years from
         and after the redemption date in respect of which such funds were
         deposited shall be returned to the Corporation forthwith and thereafter
         the holders of shares of the Series C Preferred Stock called for
         redemption with respect to which such funds were deposited shall look
         only to the Corporation for the payment of the redemption price
         thereof. Any interest accrued on any funds deposited with the
         Depositary shall belong to the Corporation and shall be paid to it from
         time to time on demand.

                  7. Any shares of the Series C Preferred Stock which shall at
         any time have been redeemed shall, after such redemption, have the
         status of authorized but unissued shares of Preferred Stock, without
         designation as to series, until such shares are once more designated as
         part of a particular series by the Board of Directors. 8. To the extent
         required to have the Series C Preferred

<PAGE>

                                       59

         Stock treated as Tier 1 capital for bank regulatory purposes or
         otherwise required by applicable regulations of the Federal Reserve
         Board, the shares of Series C Preferred Stock may not be redeemed by
         the Corporation without the prior consent of the Federal Reserve Board.

         E. LIQUIDATION PREFERENCE

                  1. Upon any voluntary or involuntary liquidation, dissolution,
         or winding up of the Corporation, the then record holders of shares of
         Series C Preferred Stock will be entitled to receive out of the assets
         of the Corporation available for distribution to shareholders, before
         any distribution is made to holders of common stock or any other equity
         securities of the Corporation ranking junior upon liquidation to the
         Series C Preferred Stock, distributions upon liquidation in the amount
         of $25 per share plus an amount equal to any accrued and unpaid
         dividends (without any cumulation for unpaid dividends for prior
         dividend periods on the Series C Preferred Stock) for the current
         monthly dividend period to the date of payment. Such amount shall be
         paid to the holders of the Series C Preferred Stock prior to any
         payment or distribution to the holders of the common stock of the
         Corporation or of any other class of stock or series thereof of the
         Corporation ranking junior to the Series C Preferred Stock in respect
         of dividends or as to the distribution of assets upon liquidation.

                  2. If upon any voluntary or involuntary liquidation,
         dissolution or winding up of the Corporation, the amounts payable with
         respect to the Series C Preferred Stock and any other shares of stock
         of the Corporation ranking as to any such distribution on a parity with
         the Series C Preferred Stock are not paid in full, the holders of the
         Series C Preferred Stock and of such other shares will share ratably in
         any such distribution of assets of the Corporation in proportion to the
         full liquidation preferences to which each is entitled. After payment
         of the full amount of the liquidation preference to which they would
         otherwise be entitled, the holders of shares of Series C Preferred
         Stock will not be entitled to any further participation in any
         distribution of assets of the Corporation.

                  3. Neither the consolidation or merger of the Corporation with
         any other corporation, nor any sale, lease or conveyance of all or any
         part of the property or business of the Corporation, shall be deemed to
         be a liquidation, dissolution, or winding up of the Corporation.

<PAGE>

                                       60

         F. VOTING RIGHTS

                  1. Except as described in this Section F, or except as
         required by applicable law, holders of the Series C Preferred Stock
         will not be entitled to receive notice of or attend or vote at any
         meeting of stockholders of the Corporation.

                  2. If the Corporation does not pay dividends in full on the
         Series C Preferred Stock for eighteen consecutive monthly dividend
         periods, the holders of outstanding shares of the Series C Preferred
         Stock, together with the holders of any other shares of stock of the
         Corporation having the right to vote for the election of directors
         solely in the event of any failure to pay dividends, acting as a single
         class without regard to series, will be entitled, by written notice to
         the Corporation given by the holders of a majority in liquidation
         preference of such shares or by ordinary resolution passed by the
         holders of a majority in liquidation preference of such shares present
         in person or by proxy at a separate general meeting of such holders
         convened for the purpose, to appoint two additional members of the
         Board of Directors of the Corporation, to remove any such member from
         office and to appoint another person in place of such member. Not later
         than 30 days after such entitlement arises, if written notice by a
         majority of the holders of such shares has not been given as provided
         for in the preceding sentence, the Board of Directors or an authorized
         committee thereof will convene a separate general meeting for the above
         purpose. If the Board of Directors or such authorized committee fails
         to convene such meeting within such 30- day period, the holders of 10%
         of the outstanding shares of the Series C Preferred Stock and any such
         other stock will be entitled to convene such meeting. The provisions of
         the Certificate of Incorporation and By-laws of the Corporation
         relating to the convening and conduct of general meetings of
         stockholders will apply with respect to any such separate general
         meeting. Any member of the Board of Directors so appointed shall vacate
         office if, following the event which gave rise to such appointment, the
         Corporation shall have resumed the payment of dividends in full on the
         Series C Preferred Stock and each such other series of stock for twelve
         consecutive monthly dividend periods.

                  3. Any amendment, alteration or repeal of the rights,
         preferences and privileges of the Series C Preferred Stock by way of
         amendment of the Corporation's Restated Certificate of Incorporation
         whether by merger or otherwise (including, without limitation, the
         authorization or issuance of any shares of the Corporation ranking, as
         to dividend rights or rights on liquidation, winding up and
         dissolution, senior to the

<PAGE>

                                       61

         Series C Preferred Stock) which would materially and adversely affect
         the powers, preferences or special rights of the Series C Preferred
         Stock shall not be effective (unless otherwise required by applicable
         law) except with the consent in writing of the holders of at least two
         thirds of the outstanding aggregate liquidation preference of the
         outstanding shares of the Series C Preferred Stock or with the sanction
         of a special resolution passed at a separate general meeting by the
         holders of at least two thirds of the aggregate liquidation preference
         of the outstanding shares of the Series C Preferred Stock.
         Notwithstanding the foregoing, the Corporation may, without the consent
         or sanction of the holders of the Series C Preferred Stock, authorize
         and issue shares of the Corporation ranking, as to dividend rights and
         rights on liquidation, winding up and dissolution, on a parity with or
         junior to the Series C Preferred Stock.

                  The foregoing voting provisions shall not apply if, at or
         prior to the time when the act with respect to which such vote would
         otherwise be required shall be effected, all outstanding shares of the
         Series C Preferred Stock shall have been redeemed or called for
         redemption upon proper notice and sufficient funds shall have been
         deposited in trust to effect such redemption.

                  4. No vote of the holders of the Series C Preferred Stock will
         be required for the Corporation to redeem or purchase and cancel the
         Series C Preferred Stock in accordance with the Restated Certificate of
         Incorporation of the Corporation.

                  5. The Corporation will cause a notice of any meeting at which
         holders of any series of Preferred Stock are entitled to vote to be
         mailed to each record holder of such series of Preferred Stock. Each
         such notice will include a statement setting forth (i) the date of such
         meeting, (ii) a description of any resolution to be proposed for
         adoption at such meeting on which such holders are entitled to vote and
         (iii) instructions for deliveries of proxies.

                  6. Except as set forth in this Section F, holders of Series C
         Preferred Stock shall have no special voting rights and their consent
         shall not be required (except to the extent they are entitled to vote
         as set forth herein) for taking any corporate action.

         G. RANK

                  The Series C Preferred Stock will, with respect to dividend
         rights and rights on liquidation, winding up and dissolution, rank (i)
         senior to all classes of common

<PAGE>

                                       62

         stock of the Corporation and to all other equity securities issued by
         the Corporation the terms of which specifically provide that such
         equity securities will rank junior to the Series C Preferred Stock (or
         to a number of series of Preferred Stock which includes the Series C
         Preferred Stock); (ii) on a parity with the Corporation's outstanding
         7% Noncumulative Monthly Income Preferred Stock, Series A, and 8.35%
         Noncumulative Monthly Income Preferred Stock, Series B, and with all
         other equity securities issued by the Corporation the terms of which
         specifically provide that such equity securities will rank on a parity
         with the Series C Preferred Stock (or with a number of series of
         Preferred Stock which includes the Series C Preferred Stock); and (iii)
         subject to the provisions of F.3 hereof, junior to all equity
         securities issued by the Corporation the terms of which specifically
         provide that such equity securities will rank senior to the Series C
         Preferred Stock (or to a number of series of Preferred Stock which
         includes the Series C Preferred Stock). For this purpose, the term
         "equity securities" does not include debt securities convertible into
         or exchangeable for equity securities.

         H. FORM OF CERTIFICATE FOR SERIES C PREFERRED STOCK; TRANSFER AND
         REGISTRATION

                  1. The Series C Preferred Stock shall be issued in registered
         form only. The Corporation may treat the record holder of a share of
         Series C Preferred Stock, including the Depository Trust Company and
         its nominee and any other holder that holds such share on behalf of any
         other person, as such record holder appears on the books of the
         registrar for the Series C Preferred Stock, as the sole owner of such
         share for all purposes.

                  2. The transfer of a share of Series C Preferred Stock may be
         registered upon the surrender of the certificate evidencing the share
         of Series C Preferred Stock to be transferred, together with the form
         of transfer endorsed on it duly completed and executed, at the office
         of the transfer agent and registrar.

                  3. Registration of transfers of shares of Series C Preferred
         Stock will be effected without charge by or on behalf of the
         Corporation, but upon payment (or the giving of such indemnity as the
         transfer agent and registrar may require) in respect of any tax or
         other governmental charges which may be imposed in relation to it.

                  4. The Corporation will not be required to register the
         transfer of a share of Series C Preferred Stock after such share has
         been called for redemption.

<PAGE>

                                       63

         I. REPLACEMENT OF LOST CERTIFICATES

                  If any certificate for a share of Series C Preferred Stock is
         mutilated or alleged to have been lost, stolen or destroyed, a new
         certificate representing the same share shall be issued to the holder
         upon request subject to delivery of the old certificate or, if alleged
         to have been lost, stolen or destroyed, compliance with such conditions
         as to evidence, indemnity and the payment of out-of-pocket expenses of
         the Corporation in connection with the request as the Board of
         Directors of the Corporation may determine.

         J. NO PREEMPTIVE RIGHTS

                  Holders of the Series C Preferred Stock will have no
         preemptive or preferential rights to purchase any securities of the
         Corporation.

         K. NO REPURCHASE AT THE OPTION OF HOLDERS; MISCELLANEOUS

                  Holders of Series C Preferred Stock will have no right to
         require the Corporation to redeem or repurchase any shares of Series C
         Preferred Stock, and the shares of Series C Preferred Stock are not
         subject to any sinking fund or similar obligation. The Corporation may,
         at its option, purchase shares of the Series C Preferred Stock from
         holders thereof from time to time, by tender, in privately negotiated
         transactions or otherwise.

                  RESOLVED, that pursuant to the authority expressly granted to
         and vested in the Board of Directors of the Corporation and delegated
         to the Preferred Stock Pricing Committee in accordance with the
         provisions of its Restated Certificate of Incorporation, a series of
         Serial Preferred Stock of the Corporation be and hereby is created.

                  FURTHER RESOLVED, that the Preferred Stock Pricing Committee
         designated by the Board of Directors has determined that the
         preferences and relative, participating, optional or other special
         rights of the shares of such series of Preferred Stock, and the
         qualifications, limitations or restrictions thereof, as stated and
         expressed herein, are under the circumstances prevailing on the date
         hereof fair and equitable to all the existing shareholders of the
         Corporation.

                 FURTHER RESOLVED, that the designation and amount of such
        series and the voting powers, references and relative, participating,
        optional or other special rights of the shares of such series of
        Preferred Stock, and the

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                                       64

         qualifications, limitations or restrictions thereof are as follows:

                  1. DESIGNATION AND AMOUNT. The shares of such series of
         Preferred Stock shall be designated as the "4.75% Perpetual Cumulative
         Convertible Preferred Stock" (hereinafter called the "PREFERRED
         STOCK"), and the number of authorized shares constituting such series
         shall be 1,380,000.

                  2. CERTAIN DEFINITIONS. As used in this Certificate, the
         following terms shall have the following meanings, unless the context
         otherwise requires:

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

                  "AGENT MEMBERS" shall have the meaning assigned to it in
         Section 14(a) hereof.

                  "BOARD OF DIRECTORs" means either the board of directors of
         the Corporation or any duly authorized committee of such board.

                  "BUSINESS DAY" means any day other than a Saturday, Sunday or
         a day on which state or U.S. federally chartered banking institutions
         in San Juan, Puerto Rico or New York, New York are not required to be
         open.

                  "CAPITAL STOCK" of any Person means any and all shares,
         interests, participations or other equivalents however designated of
         corporate stock or other equity participations, including partnership
         interests, whether general or limited, of such Person and any rights
         (other than debt securities convertible or exchangeable into an equity
         interest), warrants or options to acquire an equity interest in such
         Person.

                  "CERTIFICATE" means this Certificate of Designation.

                  "CLEARING AGENCY" shall have the meaning assigned to it in
         Section 14(a) hereof.

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                                       65

                  "CLOSING SALE PRICE" with respect to shares of Common Stock or
         other capital stock or similar equity interests on any Trading Day
         means the closing sale price per share (or, if no closing sale price is
         reported, the average of the closing bid and ask prices or, if more
         than one in either case, the average of the average closing bid and the
         average closing ask prices) on such date as reported on the principal
         United States securities exchange on which shares of Common Stock or
         such other capital stock or similar equity interests are traded or, if
         the shares of Common Stock or such other capital stock or similar
         equity interests are not listed on a United States national or regional
         securities exchange, as reported by NASDAQ or by the National Quotation
         Bureau Incorporated. In the absence of such quotations, the Corporation
         shall be entitled to determine the Closing Sale Price on the basis it
         considers appropriate. The Closing Sale Price shall be determined
         without reference to extended or after hours trading.

                  "COMMON SHARE LEGEND" shall have the meaning assigned to it in
         Section 15(f).

                  "COMMON STOCK" means any stock of any class of the Corporation
         that has no preference in respect of dividends or of amounts payable in
         the event of any voluntary or involuntary liquidation, dissolution or
         winding up of the Corporation and that is not subject to redemption by
         the Corporation. Subject to the provisions of Section 10, however,
         shares issuable on conversion of the Preferred Stock shall include only
         shares of the class designated as common stock of the Corporation at
         the date of this Certificate (namely, the Common Stock, par value $1.00
         per share) or shares of any class or classes resulting from any
         reclassification or reclassifications thereof and that have no
         preference in respect of dividends or of amounts payable in the event
         of any voluntary or involuntary liquidation, dissolution or winding up
         of the Corporation and which are not subject to redemption by the
         Corporation; provided that if at any time there shall be more than one
         such resulting class, the shares of each such class then so issuable on
         conversion shall be substantially in the proportion that the total
         number of shares of such class resulting from all such
         reclassifications bears to the total number of shares of all such
         classes resulting from all such reclassifications.

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                                       66

                  "CONVERSION AGENT" shall have the meaning assigned to it in
         Section 16(a) hereof.

                  "CONVERSION PRICE" per share of Preferred Stock means, on any
         date, the Liquidation Preference divided by the Conversion Rate in
         effect on such date.

                  "CONVERSION RATE" per share of Preferred Stock means 4.1904
         shares of Common Stock, subject to adjustment pursuant to Section 9
         hereof.

                  "CORPORATION" shall have the meaning assigned to it in the
         preamble to this Certificate, and shall include any successor to such
         Corporation.

                  "CURRENT MARKET PRICE" shall mean, as of any date of
         determination, the average of the daily Closing Sale Prices per share
         of Common Stock for the ten consecutive Trading Days selected by the
         Corporation commencing no more than 30 Trading Days before and ending
         not later than the earlier of such date of determination and the day
         before the "EX" date with respect to the issuance, distribution,
         subdivision or combination requiring such computation. For purpose of
         this paragraph, the term "EX" date, (1) when used with respect to any
         issuance or distribution, means the first date on which the Common
         Stock trades, regular way, on the relevant exchange or in the relevant
         market from which the Closing Sale Price was obtained without the right
         to receive such issuance or distribution, and (2) when used with
         respect to any subdivision or combination of shares of Common Stock,
         means the first date on which the Common Stock trades, regular way, on
         such exchange or in such market after the time at which such
         subdivision or combination becomes effective. If another issuance,
         distribution, subdivision or combination to which Section 9(d) applies
         occurs during the period of ten consecutive trading days referred to
         above applicable for calculating "Current Market Price" pursuant to
         this definition, the "Current Market Price" shall be calculated for
         such period in a manner determined by the Board of Directors to reflect
         the impact of such issuance, distribution, subdivision or combination
         on the Closing Sale Price of the Common Stock during such period

                  "DEPOSITARY" means DTC or its successor depositary.

                  "DIVIDEND PAYMENT DATE" means March 15, June 15, September 15
         and December 15 each year, or if any such

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                                       67

         date is not a Business Day, the next succeeding Business Day.

                  "DIVIDEND PERIOD" shall mean the period beginning on, and
         including, a Dividend Payment Date and ending on, and excluding, the
         immediately succeeding Dividend Payment Date.

                  "DTC" shall mean The Depository Trust Corporation, New York,
         New York.

                  "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
         as amended.

                  "FAIR MARKET VALUE" shall mean the amount which a willing
         buyer would pay a willing seller in an arm's-length transaction.

                  "GLOBAL PREFERRED SHARES" shall have the meaning assigned to
         it in Section 14(a) hereof.

                  "GLOBAL SHARES LEGEND" shall have the meaning assigned to it
         in Section 14(a) hereof.

                  "INITIAL PURCHASERS" shall have the meaning assigned to it in
         the Purchase Agreement.

                  "JUNIOR STOCK" shall have the meaning assigned to it in
         Section 3(d) hereof.

                  "LIQUIDATION DAMAGES PAYMENT" shall have the meaning assigned
         to it in the Registration Rights Agreement.

                  "LIQUIDATION PREFERENCE" shall have the meaning assigned to it
         in Section 5(a) hereof.

                  "NASDAQ" means the National Association of Securities Dealers
         Automated Quotation System.

                  "OFFICER" means the Chairman of the Board, the President, any
         Vice President, the Treasurer, any Assistant Treasurer, the Controller,
         any Assistant Controller, the Secretary, any Assistant Treasurer or any
         Assistant Secretary of the Corporation.

                  "OUTSTANDING" means, when used with respect to Preferred
         Stock, as of any date of determination, all shares of Preferred Stock
         outstanding as of such date; provided, however, that, in determining
         whether the holders of Preferred Stock have given any request,

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                                       68

         demand, authorization, direction, notice, consent or waiver or taken
         any other action hereunder, Preferred Stock owned by the Corporation
         shall be deemed not to be Outstanding, except that, in determining
         whether the Registrar shall be protected in relying upon any such
         request, demand, authorization, direction, notice, consent, waiver or
         other action, only Preferred Stock which the Registrar has actual
         knowledge of being so owned shall be deemed not to be Outstanding.

                  "PARITY STOCK" shall have the meaning assigned to it in
         Section 3(c) hereof.

                  "PAYING AGENT" shall have the meaning assigned to it in
         Section 16(a) hereof.

                  "PERSON" means an individual, a corporation, a partnership, a
         limited liability company, an association, a trust or any other entity
         or organization, including a government or political subdivision or an
         agency or instrumentality thereof.

                  "PREFERRED STOCK" shall have the meaning assigned to it in
         Section 1 hereof.

                  "PREFERRED STOCK DIRECTOR" shall have the meaning assigned to
         it in Section 6(b) hereof.

                  "PURCHASE AGREEMENT" means the Purchase Agreement dated as of
         September 23, 2003 between the Corporation and Wachovia Capital
         Markets, LLC, on behalf of itself and as representative of the other
         Initial Purchasers named therein, relating to the Preferred Stock.

                  "PURCHASE PRICE" means an amount equal to 100% of the
         Liquidation Preference per share of Preferred Stock being purchased,
         plus an amount equal to any accumulated and unpaid dividends, (whether
         or not earned or declared).

                  "RECORD DATE" means (i) with respect to the dividends payable
         on March 15, June 15, September 15 and December 15 of each year, March
         1, June 1, September 1 and December 1 of each year, respectively, or
         such other record date, not more than 60 days and not less than 10 days
         preceding the applicable Dividend Payment Date, as shall be fixed by
         the Board of Directors and (ii) solely for the purpose of adjustments
         to the Conversion Rate pursuant to Section 9, with respect to any
         dividend, distribution or other transaction or event in which the

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                                       69

         holders of Common Stock have the right to receive any cash, securities
         or other property or in which the Common Stock (or other applicable
         security) is exchanged for or converted into any combination of cash,
         securities or other property, the date fixed for determination of
         stockholders entitled to receive such cash, securities or other
         property (whether such date is fixed by the Board of Directors or by
         statute, contract or otherwise).

                  "REGISTRAR" shall have the meaning assigned to it in Section
         12 hereof.

                  "REGISTRATION DEFAULT" shall have the meaning assigned to it
         in the Registration Rights Agreement.

                  "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
         Agreement dated as of September 29, 2003, between the Corporation, and
         Wachovia Capital Markets, LLC, on behalf of itself and as
         representative of the other Initial Purchasers named therein, relating
         to the Preferred Stock.

                  "RESTRICTED SHARES LEGEND" shall have the meaning assigned to
         it in Section 14(a).

                  "SECURITIES ACT" means the Securities Act of 1933, as amended.

                  "SENIOR STOCK" shall have the meaning assigned to it in
         Section 3(b) hereof.

                  "SHELF REGISTRATION STATEMENT" shall have the meaning assigned
         to it in the Registration Rights Agreement.

                  "SUBSIDIARY" means, with respect to any Person, (a) any
         corporation, association or other business entity of which more than
         50% of the total voting power of shares of capital stock entitled
         (without regard to the occurrence of any contingency) to vote in the
         election of directors, managers or trustees thereof is at the time
         owned or controlled, directly or indirectly, by such Person or one or
         more of the other Subsidiaries of that Person (or a combination
         thereof) and (b) any partnership (i) the sole general partner or the
         managing general partner of which is such Person or a Subsidiary of
         such Person or (ii) the only general partners of which are such Person
         or one or more Subsidiaries of such Person (or any combination
         thereof).

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                                       70

                  "TRADING DAY" means a day during which trading in securities
         generally occurs on the New York Stock Exchange or, if the Common Stock
         is not listed on the New York Stock Exchange, on the principal other
         national or regional securities exchange on which the Common Stock is
         then listed or, if the Common Stock is not listed on a national or
         regional securities exchange, on NASDAQ or, if the Common Stock is not
         quoted on NASDAQ, on the principal other market on which the Common
         Stock is then traded.

                  "TRANSFER AGENT" shall have the meaning assigned to it in
         Section 12 hereof.

               3. RANKING. The Preferred Stock shall, with respect to dividend
         rights and rights upon liquidation, winding up or dissolution, rank:

                  (a) junior to all existing and future debt obligations of the
         Corporation (collectively, the "SENIOR DEBT");

                  (b) junior to each class or series of Capital Stock of the
         Corporation, the terms of which expressly provide that such class or
         series ranks senior to the Preferred Stock as to dividend rights and
         rights on liquidation, winding up and dissolution of the Corporation
         (collectively, together with any warrants, rights, calls or options
         exercisable for or convertible into such Capital Stock, the "SENIOR
         STOCK");

                  (c) on a parity with the Corporation's outstanding 7.00%
         Noncumulative Monthly Income Preferred Stock, Series A, 8.35%
         Noncumulative Monthly Income Preferred Stock, Series B and 7.25%
         Noncumulative Monthly Income Preferred Stock, Series C and with any
         other class or series of Capital Stock of the Corporation, the terms of
         which expressly provide that such class or series ranks on a parity
         with the Preferred Stock as to dividend rights and rights on
         liquidation, winding up and dissolution of the Corporation
         (collectively, the "PARITY STOCK"); and

                  (d) senior to the Common Stock and any other class or series
         of Capital Stock of the Corporation, the terms of which expressly
         provide that such class or series ranks junior to the Preferred Stock
         as to dividend rights and rights on liquidation, winding up and
         dissolution of the Corporation (collectively, the "JUNIOR STOCK").

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                                       71

               4. DIVIDENDS. (a) Holders of the Preferred Stock shall be
         entitled to receive, when, as and if, declared by the Board of
         Directors, out of funds of the Corporation legally available for the
         payment of dividends, cumulative cash dividends at the annual rate of
         4.75% of the Liquidation Preference per share, or $2.96875 per share
         per quarter, with each aggregate payment made to each record holder of
         the Preferred Stock being rounded to the next lowest cent. Such
         dividends shall be payable in arrears in equal amounts quarterly on
         each Dividend Payment Date, beginning December 15, 2003, in preference
         to and in priority over dividends on any Junior Stock but subject to
         the rights of any holders of Senior Stock or Parity Stock.

                  (b) Dividends shall be cumulative from the initial date of
         issuance or the last Dividend Payment Date for which accumulated
         dividends were paid, whichever is later, whether or not funds of the
         Corporation are legally available for the payment of such dividends.
         Each such dividend shall be payable to the holders of record of shares
         of the Preferred Stock, as they appear on the Corporation's stock
         register at the close of business on a Record Date. Accumulated and
         unpaid dividends for any past Dividend Periods may be declared and paid
         at any time, without reference to any Dividend Payment Date, to holders
         of record on such date, not more than 45 days preceding the payment
         date thereof, as may be fixed by the Board of Directors.

                  (c) The amount of dividends payable for each full Dividend
         Period for the Preferred Stock shall be computed by dividing the annual
         dividend rate by four. The amount of dividends payable for the initial
         Dividend Period, or any other period shorter or longer than a full
         Dividend Period, on the Preferred Stock shall be computed on the basis
         of a 360-day year consisting of twelve 30-day months. Holders of
         Preferred Stock shall not be entitled to any dividends, whether payable
         in cash, property or stock, in excess of cumulative dividends, as
         herein provided, on the Preferred Stock.

                  (d) No dividend shall be declared or paid or set apart for
         payment or other distribution declared or made, whether in cash,
         obligations or shares of Capital Stock of the Corporation (other than
         Junior Stock) or other property, directly or indirectly, upon any
         shares of Junior Stock or Parity Stock, nor shall any shares of Junior
         Stock or Parity Stock be redeemed, repurchased or otherwise acquired
         for consideration by the Corporation

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                                       72

         through a sinking fund or otherwise, unless all accumulated and unpaid
         dividends through the most recent Dividend Payment Date (whether or not
         there are funds of the Corporation legally available for the payment of
         dividends) on the shares of Preferred Stock and any Parity Stock have
         been or contemporaneously are declared and paid in full or set apart
         for payment; provided, however, that, notwithstanding any provisions of
         this Section 4(d) to the contrary, the Corporation may redeem,
         repurchase or otherwise acquire for consideration Preferred Stock and
         Parity Stock pursuant to a purchase or exchange offer made on the same
         terms to all holders of such Preferred Stock and Parity Stock.

                  (e) When dividends are not paid in full, as aforesaid, upon
         the shares of Preferred Stock, all dividends declared on the Preferred
         Stock and any other Parity Stock shall be declared and paid pro rata so
         that the amount of dividends so declared on the shares of Preferred
         Stock and each such other class or series of Parity Stock shall in all
         cases bear to each other the same ratio as accumulated dividends on the
         shares of Preferred Stock and such class or series of Parity Stock bear
         to each other which shall not include any accrual in respect to unpaid
         dividends for prior dividend periods in the case of Capital Stock that
         does not have a cumulative dividend.

                  (f) Upon a Registration Default, a Liquidated Damages Payment
         shall accumulate and be payable to the holders of the Preferred Stock
         or holders of the Common Stock issuable upon conversion of the
         Preferred Stock in accordance with the Registration Rights Agreement.

               5. LIQUIDATION PREFERENCE. (a) In the event of any liquidation,
         dissolution or winding up of the Corporation, whether voluntary or
         involuntary, before any payment or distribution of the Corporation's
         assets (whether capital or surplus) shall be made to or set apart for
         the holders of Junior Stock, holders of Preferred Stock shall be
         entitled to receive $250.00 per share of Preferred Stock (the
         "LIQUIDATION PREFERENCE") plus an amount equal to all dividends,
         (whether or not earned or declared) accumulated and unpaid thereon to
         the date of final distribution to such holders; but such holders shall
         not be entitled to any further payment. If, upon any liquidation,
         dissolution or winding up of the Corporation, the Corporation's assets,
         or proceeds thereof, distributable among the holders of Preferred Stock
         are insufficient to pay in full the preferential amount aforesaid and

<PAGE>

                                       73

         liquidating payments on any Parity Stock, then such assets, or the
         proceeds thereof, shall be distributed among the holders of the
         Preferred Stock and any other Parity Stock ratably in accordance with
         the respective amounts that would be payable on such shares of
         Preferred Stock and any such other Parity Stock if all amounts payable
         thereon were paid in full.

                  (b) Neither the consolidation or merger of the Corporation
         with any other corporation, nor any sale, lease or conveyance of all or
         any part of the property or business of the Corporation, shall be
         deemed to be a liquidation, dissolution, or winding up of the
         Corporation.

                  (c) Subject to the rights of the holders of any Parity Stock,
         after payment has been made in full to the holders of the Preferred
         Stock, as provided in this Section 5, holders of Junior Stock shall,
         subject to the respective terms and provisions (if any) applying
         thereto, be entitled to receive any and all assets remaining to be paid
         or distributed, and the holders of Preferred Stock shall not be
         entitled to share therein.

               6. VOTING RIGHTS.

                  (a) The holders of record of shares of the Preferred Stock
         shall not be entitled to any voting rights except as hereinafter
         provided in this Section 6, as otherwise provided in the Corporation's
         Restated Certificate of Incorporation, or as otherwise provided by law.

                  (b) If at any time (1) dividends on any shares of Preferred
         Stock or any other class or series of Parity Stock having like voting
         rights shall be in arrears for consecutive dividend periods, containing
         in the aggregate a number of days equivalent to six fiscal quarters,
         the holders of shares of Preferred Stock (voting separately as a class
         with all other series of preferred stock ranking on parity with the
         Preferred Stock upon which like voting rights have been conferred and
         are exercisable) will be entitled, by written notice to the Corporation
         given by the holders of a majority in liquidation preference of such
         shares or by ordinary resolution passed by the holders of a majority in
         liquidation preference of such shares present in person or by proxy at
         a separate general meeting of such holders convened for this purpose,
         to appoint at the next annual meeting of the stockholders of the
         Corporation or at a

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                                       74

         special meeting called for such purpose, whichever is earlier, two of
         the authorized number of the Corporation's directors (each, a
         "PREFERRED STOCK DIRECTOR") at the next annual meeting of stockholders
         and each subsequent meeting until all dividends accumulated on the
         Preferred Stock have been fully paid or set aside for payment, to
         remove any such member from office and to appoint another person in
         place of such Preferred Stock Director. The term of office of such
         Preferred Stock Directors will terminate immediately upon the
         termination of the right of the holders of Preferred Stock to vote for
         directors. Not later than 30 days after such entitlement arises, if
         written notice by a majority of the holders of such shares has not been
         given as provided for in the preceding sentence, the Board of Directors
         will convene a separate general meeting for the above purpose. If the
         Board of Directors or such authorized committee fails to convene such
         meeting within such 30-day period, the holders of 10% of the
         outstanding shares of the Preferred Stock and any such other stock,
         considered as a single class, will be entitled to convene such meeting.
         The provisions of the Restated Certificate of Incorporation and By-laws
         of the Corporation relating to the convening and conduct of general
         meetings of stockholders will apply with respect to any such separate
         general meeting. Any member of the Board of Directors so appointed
         shall vacate office if, following the event which gave rise to such
         appointment, the Corporation shall have resumed the payment of
         accumulated dividends in full on the Preferred Stock and each such
         other series of stock having similar voting rights.

                  (c) The affirmative vote of holders of at least two-thirds of
         the outstanding shares of the Preferred Stock voting as a separate
         class, in person or by proxy, at a special meeting called for the
         purpose, or by written consent in lieu of meeting, shall be required to
         amend, alter or repeal, whether by merger, consolidation, combination,
         reclassification or otherwise, any provisions of the Restated
         Certificate of Incorporation if the amendment would amend, alter or
         affect the powers, preferences or rights of the Preferred Stock, so as
         to materially and adversely affect the holders thereof; provided
         however, that any increase in the amount of the authorized common stock
         or authorized preferred stock or the creation and issuance of other
         series of common stock or preferred stock ranking on a parity with or
         junior to the preferred stock as to dividends and upon liquidation will
         not be deemed to materially and adversely affect such powers,
         preference or special rights.

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                                       75

               7. CONVERSION. (a) Right to Convert. Each share of Preferred
         Stock shall be convertible in accordance with, and subject to, this
         Section 7 into a number of fully paid and non-assessable shares of
         Common Stock (as such shares shall then be constituted) equal to the
         Conversion Rate in effect on the date notice of conversion is given.
         The Preferred Stock shall be convertible only upon any of the events,
         and for the period, specified in the following clauses (i) through (iv)
         below. Upon the determination that holders of the Preferred Stock are
         or will be entitled to convert shares of Preferred Stock in accordance
         with any of the following provisions, the Corporation shall issue a
         press release and publish such information on its website.

                           (i) Conversion Rights Based on Common Stock Price. At
         any time after September 30, 2003, the Preferred Stock may be
         surrendered for conversion into shares of Common Stock in any fiscal
         quarter of the Corporation (and only during such fiscal quarter), if,
         as of the last day of the preceding fiscal quarter of the Corporation,
         the Closing Sale Price of the Common Stock for at least 20 Trading Days
         in a period of 30 consecutive Trading Days ending on the last Trading
         Day of such fiscal quarter is more than 120% of the Conversion Price as
         of each such Trading Day. A holder's right to convert pursuant to this
         Section 7(a)(i) is subject to the Corporation's right to require
         conversion pursuant to Section 8.

                           (ii) Conversion Rights Upon Occurrence of Certain
         Corporate Transactions. If the Corporation is a party to a
         consolidation, merger or binding share exchange pursuant to which
         shares of Common Stock would be converted into cash, securities or
         other property as set forth in Section 10, each share of Preferred
         Stock may be surrendered for conversion at any time from and after the
         date that is 15 days prior to the anticipated effective date of the
         transaction until 15 days after the actual date of such transaction
         and, at the effective time of the transaction, the right to convert
         Preferred Stock into shares of Common Stock shall be changed into a
         right to convert such Preferred Stock into the kind and amount of cash,
         securities or other property of the Corporation or another Person that
         the holder would have received if the holder had converted such
         Preferred Stock immediately prior to the transaction.

                           (iii) Conversion Rights Upon Certain Distributions.
         If the Corporation elects to:

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                                       76

                                    (1) distribute to all holders of any class
         of Common Stock

                                    (A) rights or warrants entitling them to
         purchase, for a period expiring within 45 days of the record date for
         such distribution, Common Stock at less than the average Closing Sale
         Price for the 10 Trading Days preceding the declaration date for such
         distribution, or

                                    (B) cash, assets, debt securities or rights
         to purchase the Corporation's securities, which distribution has a per
         share value exceeding 1.5% of the Closing Sale Price of the Common
         Stock on the Trading Day immediately preceding the declaration date for
         such distribution,

         the Preferred Stock may be surrendered for conversion on the date that
         the Corporation gives notice to the holders of such right, which shall
         not be less than 20 days prior to the time ("EX-DIVIDEND TIME")
         immediately prior to the commencement of "ex-dividend" trading for such
         distribution on the New York Stock Exchange or such other principal
         national or regional exchange or market on which the Common Stock is
         then listed or quoted for such dividend or distribution, and at any
         time thereafter until the earlier of close of business on the Business
         Day immediately preceding the Ex-Dividend Time and the date the
         Corporation announces that such dividend or distribution will not take
         place. Notwithstanding the foregoing, holders shall not have the right
         to surrender shares of Preferred Stock for conversion pursuant to this
         Section 7(a)(iii) if they will otherwise participate in the
         distribution described above without first converting Preferred Stock
         into Common Stock.

                           (iv) Conversion Upon Delisting of the Common Stock.
         The Preferred Stock may be surrendered for conversion into shares of
         Common Stock if at any time the Common Stock (or other common stock
         into which the Preferred Stock is then convertible) is neither listed
         for trading on the New York Stock Exchange or another U.S. national
         securities exchange nor approved for trading on the NASDAQ or any
         similar United States system of automated dissemination of quotations
         of securities prices.

                  (b) Conversion Procedures. (i) Conversion of shares of the
         Preferred Stock may be effected by any holder thereof upon the
         surrender to the Corporation, at

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                                       77

         the principal office of the Corporation or at the office of the
         Conversion Agent as may be designated by the Board of Directors, of the
         certificate or certificates for such shares of the Preferred Stock to
         be converted accompanied by a complete and manually signed Notice of
         Conversion (as set forth in the form of Preferred Stock certificate
         attached hereto) along with (A) appropriate endorsements and transfer
         documents as required by the Registrar or Conversion Agent and (B) if
         required pursuant to Section 7(c) funds equal to the dividend payable
         on the next Dividend Payment Date. In case such Notice of Conversion
         shall specify a name or names other than that of such holder, such
         notice shall be accompanied by payment of all transfer taxes payable
         upon the issuance of shares of Common Stock in such name or names.
         Other than such taxes, the Corporation shall pay any documentary, stamp
         or similar issue or transfer taxes that may be payable in respect of
         any issuance or delivery of shares of Common Stock upon conversion of
         shares of the Preferred Stock pursuant hereto. The conversion of the
         Preferred Stock will be deemed to have been made on the date (the
         "CONVERSION DATE") such certificate or certificates have been
         surrendered and the receipt of such notice of conversion and payment of
         all required transfer taxes, if any (or the demonstration to the
         satisfaction of the Corporation that such taxes have been paid). As
         promptly as practicable following the Conversion Date, the Corporation
         shall deliver or cause to be delivered (i) certificates representing
         the number of validly issued, fully paid and nonassessable full shares
         of Common Stock to which the holder of shares of the Preferred Stock
         being converted (or such holder's transferee) shall be entitled, and
         (ii) if less than the full number of shares of the Preferred Stock
         evidenced by the surrendered certificate or certificates is being
         converted, a new certificate or certificates, of like tenor, for the
         number of shares evidenced by such surrendered certificate or
         certificates less the number of shares being converted. On the
         Conversion Date, the rights of the holder of the Preferred Stock as to
         the shares being converted shall cease except for the right to receive
         shares of Common Stock and the Person entitled to receive the shares of
         Common Stock shall be treated for all purposes as having become the
         record holder of such shares of Common Stock at such time.

                           (i) Anything herein to the contrary notwithstanding,
         in the case of Global Preferred Shares, notices of conversion may be
         delivered and shares of the Preferred Stock representing beneficial
         interests in

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                                       78

         respect of such Global Preferred Shares may be surrendered for
         conversion in accordance with the applicable procedures of the
         Depositary as in effect from time to time.

                  (c) Dividend and Other Payments Upon Conversion. If a holder
         of shares of Preferred Stock exercises its conversion rights, such
         shares will cease to accumulate dividends as of the end of the day
         immediately preceding the Conversion Date. On conversion of the
         Preferred Stock, except for conversion during the period from the close
         of business on any Record Date corresponding to a Dividend Payment Date
         to the close of business on the Business Day immediately preceding such
         Dividend Payment Date, in which case the holder on such Dividend Record
         Date shall receive the dividends payable on such Dividend Payment Date,
         accumulated and unpaid dividends on the converted shares of Preferred
         Stock shall not be cancelled, extinguished or forfeited, but rather
         shall be deemed to be paid in full to the holder thereof through
         delivery of the Common Stock (together with the cash payment, if any,
         in lieu of fractional shares) in exchange for the Preferred Stock being
         converted pursuant to the provisions hereof. Shares of the Preferred
         Stock surrendered for conversion after the close of business on any
         Record Date for the payment of dividends declared and before the
         opening of business on the Dividend Payment Date corresponding to that
         Record Date must be accompanied by a payment to the Corporation in cash
         of an amount equal to the dividend payable in respect of those shares
         on such Dividend Payment Date; provided that a holder of shares of the
         Preferred Stock on a Record Date who converts such shares into shares
         of Common Stock on the corresponding Dividend Payment Date shall be
         entitled to receive the dividend payable on such shares of the
         Preferred Stock on such Dividend Payment Date, and such holder need not
         include payment to the Corporation of the amount of such dividend upon
         surrender of shares of the Preferred Stock for conversion.

                  (d) Fractional Shares. In connection with the conversion of
         any shares of the Preferred Stock, no fractions of shares of Common
         Stock shall be issued, but the Corporation shall pay a cash adjustment
         in respect of any fractional interest in an amount equal to the
         fractional interest multiplied by the Closing Sale Price of the Common
         Stock on the Conversion Date, rounded to the nearest whole cent.

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                                       79

                  (e) Total Shares. If more than one share of the Preferred
         Stock shall be surrendered for conversion by the same holder at the
         same time, the number of full shares of Common Stock issuable on
         conversion of those shares shall be computed on the basis of the total
         number of shares of the Preferred Stock so surrendered.

                  (f) Reservation of Shares; Shares to be Fully Paid; Compliance
         with Governmental Requirement. The Corporation shall:

                           (i) at all times reserve and keep available, free
         from preemptive rights, for issuance upon the conversion of shares of
         the Preferred Stock such number of its authorized but unissued shares
         of Common Stock as shall from time to time be sufficient to permit the
         conversion of all outstanding shares of the Preferred Stock;

                           (ii) prior to the delivery of any securities that the
         Corporation shall be obligated to deliver upon conversion of the
         Preferred Stock, comply with all applicable federal and state laws and
         regulations that require action to be taken by the Corporation
         (including, without limitation, the registration or approval, if
         required, of any shares of Common Stock to be provided for the purpose
         of conversion of the Preferred Stock hereunder); and

                           (iii) ensure that all shares of Common Stock
         delivered upon conversion of the Preferred Stock, upon delivery, be
         duly and validly issued and fully paid and nonassessable, free of all
         liens and charges and not subject to any preemptive rights.

               8. CONVERSION AT THE OPTION OF THE CORPORATION. Shares of
         Preferred Stock shall be convertible at the option of the Corporation
         in accordance with this Section 8.

                  (a) The Corporation may not require conversion of any shares
         of Preferred Stock before September 30, 2008. On or after September 30,
         2008, the Corporation shall have the option to cause the Preferred
         Stock to be converted into that number of shares of Common Stock that
         are issuable at the Conversion Price in effect on the day notice of
         conversion is given pursuant to clause (b)(i) below, but only if the
         Closing Sale Price of the Common Stock for 20 Trading Days within a
         period of 30 consecutive Trading Days ending on a Trading Day that is

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                                       80

         not more than two Trading Days prior to the date the Corporation gives
         notice of its intention to convert pursuant to clause (b)(i) below
         exceeds 130% of the Conversion Price in effect on each such Trading
         Day.

                  (b) In the event the Corporation elects to require conversion
         of the shares of Preferred Stock, the Corporation shall:

                           (i) issue a press release for Publication on the Dow
         Jones News Service (or similar news service if the Dow Jones News
         Service is no longer in existence) prior to the opening of business no
         later than the second Trading Day after the conditions described in
         Section 8(a) are met (and only while such conditions are met),
         announcing the Corporation's intention to require conversion.

                           (ii) send written notice by mail or publication (with
         subsequent prompt notice by mail) to each holder of record of the
         Preferred Stock, announcing the Corporation's intention to require
         conversion, not later than four Business Days after the date of the
         press release, stating:

                                    (A) the conversion date, which will be a
         date selected by the Corporation and will be no more than five Business
         Days after the date the Corporation issues the press release pursuant
         to clause (b)(i) above;

                                    (B) the number of shares of Common Stock to
         be issued upon conversion of each share of Preferred Stock; and

                                    (C) that dividends on the Preferred Stock to
         be converted will cease to accrue on the conversion date;

                  (c) Any notice which is mailed as herein provided shall be
         conclusively presumed to have been duly given, whether or not the
         stockholder receives such notice; and failure duly to give such notice
         by mail, or any defect in such notice, to any holder of Preferred Stock
         shall not affect the validity of the proceedings for the conversion of
         the shares Preferred Stock of any other holder.

                  (d) Notice having been mailed as aforesaid, from and after the
         conversion date, all dividends on the shares of Preferred Stock called
         for conversion shall

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                                       81

         cease to accrue and all rights of the holders of such shares by reason
         of the ownership of such shares (except the right to receive the shares
         of Common Stock issuable upon conversion thereof), shall cease on the
         conversion date, and such shares shall not after the conversion date be
         deemed to be outstanding.

                  (e) The dividend payment with respect to the shares of
         Preferred Stock called for conversion on a date during the period
         between the close of business on any Record Date for the payment of
         dividends to the close of business on the corresponding dividend
         payment date will be payable on such dividend payment date to the
         record holder of such share on such Record Date if such share has been
         converted after such Record Date and prior to such Dividend Payment
         Date. Except as provided in the immediately preceding sentence no
         payment or adjustment will be made upon conversion of Preferred Stock
         for accumulated and unpaid dividends or for dividends with respect to
         the Common Stock issued upon such conversion.

                  (f) The Corporation may not authorize, issue a press release
         or give notice of any conversion unless, prior to giving the conversion
         notice, all accumulated and unpaid dividends on the Preferred Stock for
         dividend periods ended prior to the date of such conversion notice
         shall have been paid in cash.

                  (g) At its option, the Corporation may, with the prior
         approval of the Board of Governors of the Federal Reserve System, if
         there are less than 120,000 shares of Preferred Stock outstanding, at
         any time on or after September 30, 2008, cause the Preferred Stock to
         be automatically converted into that number of shares of Common Stock
         equal to $250.00 (the liquidation preference per share of Preferred
         Stock) divided by the lesser of the Conversion Price in effect on the
         date notice of conversion is given and the average Closing Sale Price
         of the Common Stock for the five Trading Day period ending on the
         second Trading Day immediately prior to the Conversion Date.

               9. CONVERSION RATE ADJUSTMENTS. The Conversion Rate shall be
         adjusted from time to time by the Corporation in accordance with the
         provisions of this Section 9.

                  (a) If the Corporation shall hereafter pay a dividend or make
         a distribution to all holders of the outstanding Common Stock in shares
         of Common Stock, the Conversion Rate shall be increased so that the
         same shall

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                                       82

         equal the rate determined by multiplying the Conversion Rate in effect
         at the opening of business on the date following the date fixed for the
         determination of stockholders entitled to receive such dividend or
         other distribution by a fraction,

                           (i) the numerator of which shall be the sum of the
         number of shares of Common Stock outstanding at the close of business
         on the date fixed for the determination of stockholders entitled to
         receive such dividend or other distribution plus the total number of
         shares of Common Stock constituting such dividend or other
         distribution; and

                           (ii) the denominator of which shall be the number of
         shares of Common Stock outstanding at the close of business on the date
         fixed for such determination,

         such increase to become effective immediately after the opening of
         business on the day following the date fixed for such determination. If
         any dividend or distribution of the type described in this Section 9(a)
         is declared but not so paid or made, the Conversion Rate shall again be
         adjusted to the Conversion Rate that would then be in effect if such
         dividend or distribution had not been declared.

                  (b) If the Corporation shall issue rights or warrants to all
         holders of any class of Common Stock entitling them (for a period
         expiring within forty-five (45) days after the date fixed for
         determination of stockholders entitled to receive such rights or
         warrants) to subscribe for or purchase shares of Common Stock at a
         price per share less than the average of the Closing Sale Prices of the
         Common Stock for the 10 Trading Days preceding the declaration date for
         such distribution, the Conversion Rate shall be increased so that the
         same shall equal the rate determined by multiplying the Conversion Rate
         in effect immediately prior to the date fixed for determination of
         stockholders entitled to receive such rights or warrants by a fraction,

                           (i) the numerator of which shall be the number of
         shares of Common Stock outstanding on the date fixed for the
         determination of stockholders entitled to receive such rights or
         warrants plus the total number of additional shares of Common Stock
         offered for subscription or purchase; and

<PAGE>
                                       83

                           (ii) the denominator of which shall be the sum of the
         number of shares of Common Stock outstanding at the close of business
         on the date fixed for the determination of stockholders entitled to
         receive such rights or warrants plus the number of shares that the
         aggregate offering price of the total number of shares so offered would
         purchase at a price equal to the average of the Closing Sale Prices of
         the Common Stock for the 10 Trading Days preceding the declaration date
         for such distribution.

         Such adjustment shall be successively made whenever any such rights or
         warrants are issued, and shall become effective immediately after the
         opening of business on the day following the date fixed for the
         determination of stockholders entitled to receive such rights or
         warrants. To the extent that shares of Common Stock are not delivered
         after the expiration of such rights or warrants, the Conversion Rate
         shall be readjusted to the Conversion Rate that would then be in effect
         had the adjustments made upon the issuance of such rights or warrants
         been made on the basis of delivery of only the number of shares of
         Common Stock actually delivered. If such rights or warrants are not so
         issued, the Conversion Rate shall again be adjusted to be the
         Conversion Rate that would then be in effect if such date fixed for the
         determination of stockholders entitled to receive such rights or
         warrants had not been fixed. In determining whether any rights or
         warrants entitle the holders to subscribe for or purchase shares of
         Common Stock at a price less than the average of the Closing Sale
         Prices of the Common Stock for the 10 Trading Days preceding the
         declaration date for such distribution, and in determining the
         aggregate offering price of such shares of Common Stock, there shall be
         taken into account any consideration received by the Corporation for
         such rights or warrants and any amount payable on exercise or
         conversion thereof, the value of such consideration, if other than
         cash, to be determined by the Board of Directors.

                  (c) If the outstanding shares of Common Stock shall be
         subdivided into a greater number of shares of Common Stock, the
         Conversion Rate in effect at the opening of business on the day
         following the day upon which such subdivision becomes effective shall
         be proportionately increased, and conversely, in case outstanding
         shares of Common Stock shall be combined into a smaller number of
         shares of Common Stock, the Conversion Rate in effect at the opening of
         business on

<PAGE>

                                       84

         the day following the day upon which such combination becomes effective
         shall be proportionately reduced, such increase or reduction, as the
         case may be, to become effective immediately after the opening of
         business on the day following the day upon which such subdivision or
         combination becomes effective.

                  (d) If the Corporation shall, by dividend or otherwise,
         distribute to all holders of its Common Stock shares of any class of
         Capital Stock of the Corporation or evidences of its indebtedness or
         other assets (including securities, but excluding (x) any rights or
         warrants referred to in 9(b) and (y) any dividend or distribution (I)
         paid exclusively in cash or (II) referred to in Section 9(a)) (any of
         the foregoing hereinafter in this Certificate called the "DISTRIBUTED
         PROPERTY"), then, in each such case, the Conversion Rate shall be
         increased so that the same shall be equal to the rate determined by
         multiplying the Conversion Rate in effect on the Record Date with
         respect to such distribution by a fraction,

                           (i) the numerator of which shall be the Current
         Market Price on such Record Date; and

                           (ii) the denominator of which shall be the Current
         Market Price on such Record Date less the Fair Market Value (as
         determined by the Board of Directors, whose determination shall be
         conclusive, and described in a resolution of the Board of Directors) on
         the Record Date of the portion of the Distributed Property so
         distributed applicable to one share of Common Stock,

         such adjustment to become effective immediately prior to the opening of
         business on the day following such Record Date; provided that if the
         then Fair Market Value (as so determined) of the portion of the
         Distributed Property so distributed applicable to one share of Common
         Stock is equal to or greater than the Current Market Price on the
         Record Date, in lieu of the foregoing adjustment, adequate provision
         shall be made so that each holder of Preferred Stock shall have the
         right to receive upon conversion the amount of Distributed Property
         such holder would have received had such holder converted each share
         Preferred Stock on the Record Date. If such dividend or distribution is
         not so paid or made, the Conversion Rate shall again be adjusted to be
         the Conversion Rate that would then be in effect if such dividend or
         distribution had not been declared. If the Board of Directors
         determines the Fair Market Value of any distribution for

<PAGE>

                                       85

         purposes of this Section 9(d) by reference to the actual or when issued
         trading market for any securities, it must in doing so consider the
         prices in such market over the same period used in computing the
         Current Market Price on the applicable Record Date.

                  For purposes of this Section 9(d), Section 9(a) and Section
         9(b), any dividend or distribution to which this Section 9(d) is
         applicable that also includes shares of Common Stock, or rights or
         warrants to subscribe for or purchase shares of Common Stock (or both),
         shall be deemed instead to be (1) a dividend or distribution of the
         evidences of indebtedness, assets or shares of capital stock other than
         such shares of Common Stock or rights or warrants (and any Conversion
         Rate adjustment required by this Section 9(d) with respect to such
         dividend or distribution shall then be made) immediately followed by
         (2) a dividend or distribution of such shares of Common Stock or such
         rights or warrants (and any further Conversion Rate adjustment required
         by Sections 9(a) and 9(b) with respect to such dividend or distribution
         shall then be made), except (A) the Record Date of such dividend or
         distribution shall be substituted as "the date fixed for the
         determination of stockholders entitled to receive such dividend or
         other distribution", "the date fixed for the determination of
         stockholders entitled to receive such rights or warrants" and "the date
         fixed for such determination" within the meaning of Sections 9(a) and
         9(b) and (B) any shares of Common Stock included in such dividend or
         distribution shall not be deemed "outstanding at the close of business
         on the date fixed for such determination" within the meaning of Section
         9(a).

                  (e) If the Corporation shall, by dividend or otherwise,
         distribute to all holders of its Common Stock cash (excluding any
         dividend or distribution in connection with the liquidation,
         dissolution or winding up of the Corporation, whether voluntary or
         involuntary), then if the sum of the amount of such cash distributions
         per share of Common Stock plus the aggregate amount of cash
         distributions per share of Common Stock in the immediately preceding
         twelve month period exceeds the greater of:

                           (i) the annualized amount per share of Common Stock
         of the next preceding quarterly cash dividend on the Common Stock to
         the extent that such preceding quarterly dividend did not require any
         adjustment to the Conversion Rate

<PAGE>

                                       86

         pursuant to this Section 9(e) (as adjusted to reflect subdivisions, or
         combinations of the Common Stock); and

                           (ii) 1.5% of the average of the Closing Sale Price
         during the ten Trading Days immediately prior to the date of
         declaration of such dividend,

         the Conversion Rate shall be increased so that the same shall equal the
         rate determined by multiplying the Conversion Rate in effect
         immediately prior to the close of business on such record date by a
         fraction,

                           (i) the numerator of which shall be the Current
         Market Price on such record date; and

                           (ii) the denominator of which shall be the Current
         Market Price on such record date less (x) in the case of a quarterly
         cash dividend, the amount of cash distributed in excess of the
         threshold set forth above) applicable to one share of Common Stock or
         (y) in the case of a cash distribution that is not a quarterly
         dividend, the amount of such distribution applicable to one share of
         Common Stock.

         such adjustment to be effective immediately prior to the opening of
         business on the day following the Record Date; provided that if the
         portion of the cash so distributed applicable to one share of Common
         Stock is equal to or greater than the Current Market Price on the
         record date, in lieu of the foregoing adjustment, adequate provision
         shall be made so that each holder of Preferred Stock shall have the
         right to receive upon conversion the amount of cash such holder would
         have received had such holder converted each share of Preferred Stock
         on the Record Date. If such dividend or distribution is not so paid or
         made, the Conversion Rate shall again be adjusted to be the Conversion
         Rate that would then be in effect if such dividend or distribution had
         not been declared.

                  (f) If a tender or exchange offer made by the Corporation or
         any Subsidiary for all or any portion of the Common Stock shall expire
         and such tender or exchange offer (as amended upon the expiration
         thereof) shall require the payment to stockholders of consideration per
         share of Common Stock having a Fair Market Value (as determined by the
         Board of Directors, whose determination shall be conclusive and
         described in a resolution of the Board of Directors) that as of the
         last time (the "EXPIRATION TIME") tenders or exchanges may be made
         pursuant to such tender or exchange offer (as it may be

<PAGE>

                                       87

         amended) exceeds the Closing Sale Price of a share of Common Stock on
         the Trading Day next succeeding the Expiration Time, the Conversion
         Rate shall be increased so that the same shall equal the rate
         determined by multiplying the Conversion Rate in effect immediately
         prior to the Expiration Time by a fraction,

                           (i) the numerator of which shall be the sum of (x)
         the Fair Market Value (determined as aforesaid) of the aggregate
         consideration payable to stockholders based on the acceptance (up to
         any maximum specified in the terms of the tender or exchange offer) of
         all shares validly tendered or exchanged and not withdrawn as of the
         Expiration Time (the shares deemed so accepted up to any such maximum,
         being referred to as the "PURCHASED SHARES") and (y) the product of the
         number of shares of Common Stock outstanding (less any Purchased
         Shares) at the Expiration Time and the Closing Sale Price of a share of
         Common Stock on the Trading Day next succeeding the Expiration Time,
         and

                           (ii) the denominator of which shall be the number of
         shares of Common Stock outstanding (including any tendered or exchanged
         shares) at the Expiration Time multiplied by the Closing Sale Price of
         a share of Common Stock on the Trading Day next succeeding the
         Expiration Time,

         such adjustment to become effective immediately prior to the opening of
         business on the day following the Expiration Time. If the Corporation
         is obligated to purchase shares pursuant to any such tender or exchange
         offer, but the Corporation is permanently prevented by applicable law
         from effecting any such purchases or all such purchases are rescinded,
         the Conversion Rate shall again be adjusted to be the Conversion Rate
         that would then be in effect if such tender or exchange offer had not
         been made.

                  (g) If the Corporation pays a dividend or makes a distribution
         to all holders of its Common Stock consisting of capital stock of any
         class or series, or similar equity interests, of or relating to a
         Subsidiary or other business unit of the Corporation, the Conversion
         Rate shall be increased so that the same shall be equal to the rate
         determined by multiplying the Conversion Rate in effect on the Record
         Date with respect to such distribution by a fraction,

<PAGE>

                                       88

                           (i) the numerator of which shall be the sum of (A)
         the average of the Closing Sale Prices of the Common Stock for the ten
         (10) Trading Days commencing on and including the fifth Trading Day
         after the date on which "ex-dividend trading" commences for such
         dividend or distribution on The New York Stock Exchange or such other
         national or regional exchange or market which such securities are then
         listed or quoted (the "EX-DIVIDEND DATE") plus (B) the Fair Market
         Value of the securities distributed in respect of each share of Common
         Stock for which this Section 9(g) applies, which shall equal the number
         of securities distributed in respect of each share of Common Stock
         multiplied by the average of the Closing Sale Prices of those
         distributed securities for the ten (10) Trading Days commencing on and
         including the fifth Trading Day after the Ex-Dividend Date; and

                           (ii) the denominator of which shall be the average of
         the Closing Sale Prices of the Common Stock for the ten (10) Trading
         Days commencing on and including the fifth Trading Day after the
         Ex-Dividend Date,

         such adjustment to become effective immediately prior to the opening of
         business on the day following the fifteenth Trading Day after the
         Ex-Dividend Date; provided that if (x) the average of the Closing Sale
         Prices of the Common Stock for the ten (10) Trading Days commencing on
         and including the fifth Trading Day after the Ex-Dividend Date minus
         (y) the Fair Market Value of the securities distributed in respect of
         each share of Common Stock for which this Section 9(g) applies (as
         calculated in Section 9(g)(i) above) is less than $1.00, then the
         adjustment provided by for by this Section 9(g) shall not be made and
         in lieu thereof the provisions of Section 10 shall apply to such
         distribution.

                  (h) The Corporation may make such increases in the Conversion
         Rate in addition to those required by Sections 9(a), (b), (c), (d),
         (e), (f) and (g) as the Board of Directors considers to be advisable to
         avoid or diminish any income tax to holders of Common Stock or rights
         to purchase Common Stock resulting from any dividend or distribution of
         stock (or rights to acquire stock) or from any event treated as such
         for income tax purposes. To the extent permitted by applicable law, the
         Corporation from time to time may increase the Conversion Rate by any
         amount for any period of time if the Board of Directors shall have made
         a determination that such increase would be in the best interests of
         the Corporation, which determination shall be conclusive.

<PAGE>

                                       89

         Whenever the Conversion Rate is increased pursuant to the preceding
         sentence, the Corporation shall mail to holders of the Preferred Stock
         a notice of the increase prior to the date the increased Conversion
         Rate takes effect, and such notice shall state the increased Conversion
         Rate and the period during which it will be in effect.

                  (i) No adjustment in the Conversion Rate shall be required
         unless such adjustment would require an increase or decrease of at
         least one percent (1%) in such rate; provided that any adjustments that
         by reason of this Section 9(i) are not required to be made shall be
         carried forward and taken into account in any subsequent adjustment.
         All calculations under this Section 9 shall be made by the Corporation
         and shall be made to the nearest cent or to the nearest one-ten
         thousandth (1/10,000) of a share, as the case may be. No adjustment
         need be made for rights to purchase Common Stock pursuant to a
         Corporation plan for reinvestment of dividends or interest or, except
         as set forth in this Section 9, for any issuance of Common Stock or
         convertible or exchangeable securities or rights to purchase Common
         Stock or convertible or exchangeable securities. To the extent the
         securities become convertible into cash, assets, property or securities
         (other than Capital Stock of the Corporation), subject to Section 10,
         no adjustment need be made thereafter as to the cash, assets, property
         or such securities. Dividends will not accrue on any cash into which
         the Preferred Stock is convertible.

                  (j) Whenever the Conversion Rate is adjusted as herein
         provided, the Corporation shall promptly file with the Conversion Agent
         an Officer's certificate setting forth the Conversion Rate after such
         adjustment and setting forth a brief statement of the facts requiring
         such adjustment. Unless and until a responsible officer of the
         Conversion Agent shall have received such Officer's certificate, the
         Conversion Agent shall not be deemed to have knowledge of any
         adjustment of the Conversion Rate and may assume that the last
         Conversion Rate of which it has knowledge is still in effect. Promptly
         after delivery of such certificate, the Corporation shall prepare a
         notice of such adjustment of the Conversion Rate setting forth the
         adjusted Conversion Rate and the date on which each adjustment becomes
         effective and shall mail such notice of such adjustment of the
         Conversion Rate to the each holder of Preferred Stock at his last
         address appearing on the register within twenty (20) days after
         execution thereof. Failure

<PAGE>

                                       90

         to deliver such notice shall not affect the legality or validity of any
         such adjustment.

                  (k) For purposes of this Section 9, the number of shares of
         Common Stock at any time outstanding shall not include shares held in
         the treasury of the Corporation, unless such treasury shares
         participate in any distribution or dividend that requires an adjustment
         pursuant to this Section 9, but shall include shares issuable in
         respect of scrip certificates issued in lieu of fractions of shares of
         Common Stock.

              10. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE ON
         CONVERSION PRIVILEGE. (a) If any of the following events occur, namely
         (i) any reclassification or change of the outstanding shares of Common
         Stock (other than a subdivision or combination to which Section 9(c)
         applies), (ii) any consolidation, merger or combination of the
         Corporation with another Person as a result of which holders of Common
         Stock shall be entitled to receive stock, other securities or other
         property or assets (including cash) with respect to or in exchange for
         such Common Stock, or (iii) any sale or conveyance of all or
         substantially all of the properties and assets of the Corporation to
         any other Person as a result of which holders of Common Stock shall be
         entitled to receive stock, other securities or other property or assets
         (including cash) with respect to or in exchange for such Common Stock,
         then each share of Preferred Stock shall be convertible, on and after
         the effective date of such reclassification, change, consolidation,
         merger, combination, sale or conveyance, into the kind and amount of
         shares of stock, other securities or other property or assets
         (including cash) receivable upon such reclassification, change,
         consolidation, merger, combination, sale or conveyance by a holder of
         the number of shares of Common Stock issuable upon conversion of such
         Preferred Stock (assuming, for such purposes, a sufficient number of
         authorized shares of Common Stock are available to convert all such
         Preferred Stock) immediately prior to such reclassification, change,
         consolidation, merger, combination, sale or conveyance assuming such
         holder of Common Stock did not exercise his rights of election, if any,
         as to the kind or amount of stock, other securities or other property
         or assets (including cash) receivable upon such reclassification,
         change, consolidation, merger, combination, sale or conveyance
         (provided that, if the kind or amount of stock, other securities or
         other property or assets (including cash) receivable upon such
         reclassification, change, consolidation, merger,

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                                       91

         combination, sale or conveyance is not the same for each share of
         Common Stock in respect of which such rights of election shall not have
         been exercised ("NON-ELECTING SHARE"), then for the purposes of this
         Section 10 the kind and amount of stock, other securities or other
         property or assets (including cash) receivable upon such
         reclassification, change, consolidation, merger, combination, sale or
         conveyance for each non-electing share shall be deemed to be the kind
         and amount so receivable per share by a plurality of the non-electing
         shares).

                  (b) The Corporation shall cause notice of the application of
         this Section 10 within twenty (20) days after the occurrence of the
         events specified in Section 10(a) and shall issue a press release
         containing such information and publish such information on its
         website. Failure to deliver such notice shall not affect the legality
         or validity of the modification to the conversion rights of the
         Preferred Stock effected by this Section 10.

                  (c) The above provisions of this Section shall similarly apply
         to successive reclassifications, changes, consolidations, mergers,
         combinations, sales and conveyances, and the provisions of Section 9
         shall apply to any shares of Capital Stock received by the holders of
         Common Stock in any such reclassification, change, consolidation,
         merger, combination, sale or conveyance.

                  (d) If this Section 10 applies to any event or occurrence,
         Section 9 shall not apply.

              11. CONSOLIDATION, MERGER AND SALE OF ASSETS. The Corporation,
         without the consent of the holders of any of the outstanding Preferred
         Stock may, consolidate with or merge into any other Person or convey,
         transfer or lease all or substantially all of its assets to any Person
         or may permit any Person to consolidate with or merge into, or transfer
         or lease all or substantially all its properties to the Corporation;
         provided, however that (a) the successor, transferee or lessee is
         organized under the laws of the United States, any political
         subdivision thereof or Puerto Rico and (b) the shares of Preferred
         Stock will become shares of such successor, transferee or lessee,
         having in respect of such successor, transferee or lessee the same
         powers, preferences and relative participating, optional or other
         special rights and the qualification, limitations or restrictions
         thereon, that

<PAGE>

                                       92

         the Preferred Stock had immediately prior to such transaction.

                  Under any consolidation by the Corporation with, or merger by
         it into, any other Person or any conveyance, transfer or lease of all
         or substantially all its assets as described in the preceding
         paragraph, the successor resulting from such consolidation or into
         which the Corporation is merged or the transferee or lessee to which
         such conveyance, transfer or lease is made, will succeed to, and be
         substituted for, and may exercise every right and power of, the
         Corporation under the shares of Preferred Stock, and thereafter, except
         in the case of a lease, the predecessor (if still in existence) will be
         released from its obligations and covenants with respect to the
         preferred stock.

              12. TRANSFER AGENT AND REGISTRAR. The duly appointed Transfer
         Agent and Registrar for the Preferred Stock shall be Mellon Investor
         Services LLC. The Corporation may, in its sole discretion, remove the
         Transfer Agent and Registrar in accordance with the agreement between
         the Corporation and the Transfer Agent and Registrar; provided that the
         Corporation shall appoint a successor transfer agent who shall accept
         such appointment prior to the effectiveness of such removal.

              13. CURRENCY. All shares of Preferred Stock shall be denominated
         in U.S. currency, and all payments and distributions thereon or with
         respect thereto shall be made in U.S. currency. All references herein
         to "$"or "dollars" refer to U.S. currency.

              14. FORM. (a) Preferred Stock shall initially be issued in the
         form of one or more permanent global shares of Preferred Stock in
         definitive, fully registered form with the global legend (the "GLOBAL
         SHARES LEGEND") and, until such time as otherwise determined by the
         Corporation and the Transfer Agent, the restricted shares legend (the
         "RESTRICTED SHARES LEGEND"), each substantially as set forth on the
         form of Preferred Stock certificate attached hereto as Exhibit A (each,
         a "GLOBAL PREFERRED SHARE"), which is hereby incorporated in and
         expressly made a part of this Certificate. The Global Preferred Share
         may have notations, legends or endorsements required by law, stock
         exchange rules, agreements to which the Corporation is subject, if any,
         or usage (provided that any such notation, legend or endorsement is in
         a form acceptable to the Corporation). The Global Preferred Share shall
         be

<PAGE>

                                       93

         deposited on behalf of the holders of the Preferred Stock represented
         thereby with the Registrar, at its New York office, as custodian for
         DTC or a Depositary, and registered in the name of the Depositary or a
         nominee of the Depositary, duly executed by the Corporation and
         countersigned and registered by the Registrar as hereinafter provided.
         The aggregate number of shares represented by each Global Preferred
         Share may from time to time be increased or decreased by adjustments
         made on the records of the Registrar and the Depositary or its nominee
         as hereinafter provided. This Section 14(a) shall apply only to a
         Global Preferred Share deposited with or on behalf of the Depositary.
         The Corporation shall execute and the Registrar shall, in accordance
         with this Section 14, countersign and deliver initially one or more
         Global Preferred Shares that (i) shall be registered in the name of
         Cede & Co. or other nominee of the Depositary and (ii) shall be
         delivered by the Registrar to Cede & Co. or pursuant to instructions
         received from Cede & Co. or held by the Registrar as custodian for the
         Depositary pursuant to an agreement between the Depositary and the
         Registrar. Members of, or participants in, the Depositary ("AGENT
         MEMBERS") shall have no rights under this Certificate with respect to
         any Global Preferred Share held on their behalf by the Depositary or by
         the Registrar as the custodian of the Depositary or under such Global
         Preferred Share, and the Depositary may be treated by the Corporation,
         the Registrar and any agent of the Corporation or the Registrar as the
         absolute owner of such Global Preferred Share for all purposes
         whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
         the Corporation, the Registrar or any agent of the Corporation or the
         Registrar from giving effect to any written certification, proxy or
         other authorization furnished by the Depositary or impair, as between
         the Depositary and its Agent Members, the operation of customary
         practices of the Depositary governing the exercise of the rights of a
         holder of a beneficial interest in any Global Preferred Share. Unless
         otherwise required by applicable law, owners of beneficial interests in
         Global Preferred Shares shall not be entitled to receive physical
         delivery of certificated shares of Preferred Stock, unless (x) DTC is
         unwilling or unable to continue as Depositary for the Global Preferred
         Shares and the Corporation does not appoint a qualified replacement for
         DTC within 90 days, (y) DTC ceases to be a "clearing agency" registered
         under the Exchange Act or (z) the Corporation decides to discontinue
         the use of book-entry transfer through DTC (or any successor
         Depositary). In either such case, the Global Preferred Shares shall be

<PAGE>

                                       94

         exchanged in whole for definitive shares of Preferred Stock in
         registered form, with the same terms and of an equal aggregate
         Liquidation Preference, and bearing a Restricted Shares Legend (unless
         the Corporation determines otherwise in accordance with applicable
         law). Definitive shares of Preferred Stock shall be registered in the
         name or names of the Person or Person specified by DTC in a written
         instrument to the Registrar. To the extent required by law, the
         Corporation will issue Preferred Stock in certificate form to
         beneficial owners upon their written request. Such certificates shall
         be substantially in the form of Exhibit A except for references to the
         Depositary and its nominee, will bear the Restricted Shares Legend and
         may have such other modifications as deemed necessary or advisable by
         the Corporation.

                  (b)      (i) An Officer shall sign the Global Preferred Shares
         for the Corporation, in accordance with the Corporation's bylaws and
         applicable law, by manual or facsimile signature.

                           (ii) If an Officer whose signature is on a Global
         Preferred Share no longer holds that office at the time the Transfer
         Agent authenticates the Global Preferred Share, the Global Preferred
         Share shall be valid nevertheless.

                           (iii) A Global Preferred Share shall not be valid
         until an authorized signatory of the Transfer Agent manually
         countersigns the Global Preferred Share. The signature shall be
         conclusive evidence that the Global Preferred Share has been
         authenticated under this Certificate. Each Global Preferred Share shall
         be dated the date of its authentication.

              15. REGISTRATION; TRANSFER. (a) The Preferred Stock and the Common
         Stock issuable upon conversion of the shares of Preferred Stock have
         not been registered under the Securities Act and may not be resold,
         pledged or otherwise transferred prior to the date when they no longer
         constitute "restricted securities" for purposes of Rule 144(k) under
         the Securities Act other than (i) to the Corporation, (ii) to
         "qualified institutional buyers" pursuant to and in compliance with
         Rule 144A under the Securities Act ("RULE 144A"), (iii) pursuant to an
         exemption from the registration requirements of the Securities Act
         provided by Rule 144 under the Securities Act or (iv) pursuant to an
         effective registration

<PAGE>

                                       95

         statement under the Securities Act, in each case, in accordance with
         any applicable securities laws of any state of the United States.

                  (b) Notwithstanding any provision to the contrary herein, so
         long as a Global Preferred Share remains outstanding and is held by or
         on behalf of the Depositary, transfers of a Global Preferred Share, in
         whole or in part, or of any beneficial interest therein, shall only be
         made in accordance with this Section 15; provided, however, that a
         beneficial interest in a Global Preferred Share bearing the Restricted
         Shares Legend may be transferred to a Person who takes delivery thereof
         in the form of a beneficial interest in a different Global Preferred
         Share not bearing the Restricted Shares Legend in accordance with the
         transfer restrictions set forth in the Restricted Shares Legend and the
         provisions set forth in Section 15(c)(ii).

                  (c)      (i) Except for transfers or exchanges made in
         accordance with Section 15(c)(ii), transfers of a Global Preferred
         Share shall be limited to transfers of such Global Preferred Share in
         whole, but not in part, to nominees of the Depositary or to a successor
         of the Depositary or such successor's nominee.

                           (ii) If an owner of a beneficial interest in a Global
         Preferred Share deposited with the Depositary, or with the Registrar as
         custodian for the Depositary, wishes at any time to transfer its
         interest in such Global Preferred Share bearing the Restricted Shares
         Legend to a Person who is eligible to take delivery thereof in the form
         of a beneficial interest in a Global Preferred Share not bearing the
         Restricted Shares Legend, such owner may, subject to the rules and
         procedures of the Depositary, cause the exchange of such interest for a
         new beneficial interest in the applicable Global Preferred Share. Upon
         receipt by the Transfer Agent at its office in The City of New York of
         (A) instructions from the holder directing the Transfer Agent to
         transfer its interest in the applicable Global Preferred Share, such
         instructions to contain the name of the transferee and appropriate
         account information, (B) a certificate in the form of the Certificate
         of Transfer on the reverse side of the form of Preferred Stock
         certificate attached hereto as Exhibit B, given by the transferor, to
         the effect set forth therein, and (C) such other certifications, legal
         opinions and other information as the Corporation or the Registrar may
         reasonably require to confirm that such transfer is being made pursuant
         to

<PAGE>

                                       96

         an exemption from, or in a transaction not subject to, the registration
         requirements of the Securities Act, then the Registrar shall instruct
         the Depositary to reduce or cause to be reduced such Global Preferred
         Share bearing the Restricted Shares Legend (in the form attached as
         Schedule A) by the number of shares to be exchanged and to debit or
         cause to be debited from the account of the Person making such transfer
         the beneficial interest in the Global Preferred Share that is being
         transferred, and concurrently with such reduction and debit, the
         Registrar will instruct the Depositary to increase or cause to be
         increased the applicable Global Preferred Share not bearing the
         Restricted Shares Legend by the aggregate number of shares being
         exchanged and to credit or cause to be credited to the account of the
         transferee the beneficial interest in the Global Preferred Share that
         is being transferred. Similar procedures will be followed by the
         Corporation or its Transfer Agent for any Preferred Stock issued in
         certificated form.

                  (d) Except in connection with a Shelf Registration Statement
         contemplated by and in accordance with the terms of the Registration
         Rights Agreement relating to the Preferred Stock and shares of Common
         Stock issuable on conversion of the Preferred Stock (collectively, the
         "REGISTRABLE SECURITIES"), if shares of Preferred Stock are issued upon
         the transfer, exchange or replacement of Preferred Stock bearing the
         Restricted Shares Legend, or if a request is made to remove such
         Restricted Shares Legend on Preferred Stock, the Preferred Stock so
         issued shall bear the Restricted Shares Legend and the Restricted
         Shares Legend shall not be removed unless there is delivered to the
         Corporation and the Registrar such satisfactory evidence, which may
         include an opinion of counsel, as may be reasonably required by the
         Corporation or the Registrar, that neither the legend nor the
         restrictions on transfer set forth therein are required to ensure that
         transfers thereof comply with the provisions of Rule 144A or Rule 144
         under the Securities Act or that such shares of Preferred Stock are not
         "restricted securities" within the meaning of Rule 144 under the
         Securities Act. Upon provision of such satisfactory evidence, the
         Registrar, at the direction of the Corporation, shall countersign and
         deliver shares of Preferred Stock that do not bear the Restricted
         Shares Legend.

                  (e) The Corporation will refuse to register any transfer of
         Preferred Stock or any Common Stock issuable upon conversion of the
         shares of Preferred Stock that is

<PAGE>

                                       97

         not made in accordance with the provisions of the Restricted Shares
         Legend and the provisions of Rule 144A or pursuant to a registration
         statement that has been declared effective under the Securities Act or
         pursuant to an available exemption from the registration requirements
         of the Securities Act; provided that the provisions of this paragraph
         (e) shall not be applicable to any Preferred Stock that does not bear
         any Restricted Shares Legend or to any Common Stock that does not bear
         the Common Share Legend.

                  (f) Common Stock issued upon a conversion of the Preferred
         Stock prior to the effectiveness of a Shelf Registration Statement
         shall be delivered in certificated form and shall bear the common share
         legend (the "COMMON SHARE LEGEND") set forth in Exhibit C hereto and
         include on its reverse side the Form of Certificate of Transfer for
         Common Stock set out in Exhibit D. If (i) shares of Common Stock issued
         prior to the effectiveness of a Shelf Registration Statement are to be
         registered in a name other than that of the holder of Preferred Stock
         or (ii) shares of Common Stock represented by a certificate bearing the
         Common Share Legend are transferred subsequently by such holder, then
         the holder must deliver to the Registrar a certificate in substantially
         the form of Exhibit D as to compliance with the restrictions on
         transfer applicable to such Common Stock and the Transfer Agent shall
         not be required to register any transfer of such Common Stock not so
         accompanied by a properly completed certificate. Such Common Share
         Legend may be removed, and new certificates representing the Common
         Stock may be issued, upon the presentation of satisfactory evidence
         that such Common Share Legend is no longer required as described above
         in paragraph (c) of this Section 15 with respect to the Preferred
         Stock.

              16. PAYING AGENT AND CONVERSION AGENT.

                  (a) The Corporation shall maintain in the Borough of
         Manhattan, City of New York, State of New York (i) an office or agency
         for the payment of dividends on the Preferred Stock (the "PAYING
         AGENT") and (ii) an office or agency where Preferred Stock may be
         presented for conversion (the "CONVERSION AGENT"). The Transfer Agent
         shall act as Paying Agent and Conversion Agent, unless another Paying
         Agent or Conversion Agent is appointed by the Corporation. The
         Corporation may appoint the Transfer Agent, the Paying Agent and the
         Conversion Agent and may appoint one or more additional paying agents
         and one or more additional conversion agents in such other locations

<PAGE>

                                       98

         as it shall determine. The term "Paying Agent" includes any additional
         paying agent and the term "Conversion Agent" includes any additional
         conversion agent. The Corporation may change any Paying Agent or
         Conversion Agent without prior notice to any holder. The Corporation
         shall notify the Registrar of the name and address of any Paying Agent
         or Conversion Agent appointed by the Corporation. If the Corporation
         fails to appoint or maintain another entity as Paying Agent or
         Conversion Agent, the Registrar shall act as such. The Corporation or
         any of its Affiliates may act as Paying Agent, Transfer Agent,
         co-registrar or Conversion Agent.

                  (b) Payments due on the Preferred Stock shall be payable by
         United States dollar check drawn on, or wire transfer (provided that
         appropriate wire instructions have been received by the Registrar at
         least 15 days prior to the applicable date of payment) to a U.S. dollar
         account maintained by the holder with, a bank located in New York City;
         provided that at the option of the Corporation, payment of dividends
         may be made by check mailed to the address of the Person entitled
         thereto as such address shall appear in the Preferred Stock register.
         Notwithstanding the foregoing, payments due in respect of beneficial
         interests in the Global Preferred Share shall be payable by wire
         transfer of immediately available funds in accordance with the
         procedures of the Depositary.

              17. HEADINGS. The headings of the Sections of this Certificate are
         for convenience of reference only and shall not define, limit or affect
         any of the provisions hereof.

<PAGE>

                                       99

                                                                       EXHIBIT A

                 FORM OF 4.75% PERPETUAL CUMULATIVE CONVERTIBLE
                                 PREFERRED STOCK

                                  Number: ___
                                             ____________ Shares

                                   CUSIP NO.:

             4.75% Perpetual Cumulative Convertible Preferred Stock
                           (par value $1.00 per share)
                   (liquidation preference $250.00 per share)
                                       OF
                           DORAL FINANCIAL CORPORATION

                                FACE OF SECURITY

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
         COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
         AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
         IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
         DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS
         IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
         PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
         IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS
         AN INTEREST HEREIN.

         TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
         WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
         SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
         SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
         RESTRICTIONS SET FORTH IN THE CERTIFICATE OF DESIGNATION REFERRED TO
         BELOW.

         IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
         TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS THE TRANSFER
         AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
         THE FOREGOING RESTRICTIONS.

         THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
         OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
         NEITHER THIS SECURITY, THE SHARES OF COMMON STOCK ISSUABLE UPON

<PAGE>

                                       100

         CONVERSION OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR
         THEREIN 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 HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT
         OF DORAL FINANCIAL CORPORATION THAT (a) THIS SECURITY MAY NOT BE
         RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO THE COMPANY
         OR ANY SUBSIDIARY THEREOF, (2) IN A TRANSACTION ENTITLED TO AN
         EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
         ACT (IF AVAILABLE), (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
         PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A
         PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
         BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR
         FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
         GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
         RELIANCE ON RULE l44A (AS INDICATED BY THE BOX CHECKED BY THE
         TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
         SECURITY), (4) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
         REGISTRATION UNDER THE SECURITIES ACT, SUBJECT, IN THE CASE OF CLAUSES
         (2) OR (4), TO THE RECEIPT BY DORAL FINANCIAL CORPORATION OF AN OPINION
         OF COUNSEL OR SUCH OTHER EVIDENCE ACCEPTABLE TO DORAL FINANCIAL
         CORPORATION THAT SUCH RESALE, PLEDGE OR TRANSFER IS EXEMPT FROM THE
         REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT AND THAT (b) THE HOLDER WILL, AND EACH
         SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF
         THE RESALE RESTRICTIONS REFERRED TO HEREIN AND DELIVER TO THE
         TRANSFEREE (OTHER THAN A QUALIFIED INSTITUTIONAL BUYER) PRIOR TO THE
         SALE A COPY OF THE TRANSFER RESTRICTIONS APPLICABLE HERETO (COPIES OF
         WHICH MAY BE OBTAINED FROM US).

         THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
         REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE
         CERTIFICATE OF DESIGNATION REFERRED TO ON THE REVERSE HEREOF) AND, BY
         ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
         PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

<PAGE>

                                       101

         DORAL FINANCIAL CORPORATION, a Puerto Rico corporation (the
         "Corporation"), hereby certifies that Cede & Co. or registered assigns
         (the "Holder") is the registered owner of ________ fully paid and
         non-assessable shares of preferred stock of the Corporation designated
         the 4.75% Perpetual Cumulative Convertible Preferred Stock, par value
         $1.00 per share and liquidation preference $250.00 per share (the
         "Preferred Stock"). The shares of Preferred Stock are transferable on
         the books and records of the Registrar, 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 Stock represented hereby are issued and shall in all respects
         be subject to the provisions of the Certificate of Designation of the
         Corporation dated September 29, 2003, as the same may be amended from
         time to time in accordance with its terms (the "Certificate of
         Designation"). Capitalized terms used but not defined herein shall have
         the respective meanings given to them in the Certificate of
         Designation. The Corporation will provide a copy of the Certificate of
         Designation to a Holder without charge upon written request to the
         Corporation at its principal place of business.

         Reference is hereby made to select provisions of the Preferred Stock
         set forth on the reverse hereof, and to the Certificate of Designation,
         which select provisions and the Certificate of Designation shall for
         all purposes have the same effect as if set forth at this place.

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

         Unless the Transfer Agent's Certificate of Authentication hereon has
         been properly executed, the shares of Preferred Stock evidenced hereby
         shall not be entitled to any benefit under the Certificate of
         Designation or be valid or obligatory for any purpose.

<PAGE>

                                       102

         IN WITNESS WHEREOF, Doral Financial Corporation has executed this
         certificate as of the date set forth below.

                                    DORAL FINANCIAL
                                    CORPORATION

                                       By:_____________________
                                                  Name:
                                                  Title:

                                       Dated:___________________

         TRANSFER AGENT'S CERTIFICATE OF AUTHENTICATION

         This is one of the certificates representing shares of Preferred Stock
         referred to in the within mentioned Certificate of Designation.

                                                     Dated: ____________________

<PAGE>

                                      103

                              REVERSE OF SECURITY

                          DORAL FINANCIAL CORPORATION

             4.75% Perpetual Cumulative Convertible Preferred Stock

         Dividends on each share of Preferred Stock shall be payable in cash at
         a rate per annum set forth on the face hereof or as provided in the
         Certificate of Designation.

         The shares of Preferred Stock shall be convertible into the
         Corporation's Common Stock in the manner and according to the terms set
         forth in the Certificate of Designation.

         As required under Puerto Rico law, the Corporation shall furnish to any
         Holder, upon request and without charge, a full summary statement of
         the designations, voting rights, preferences, limitations and special
         rights of the shares of each class or series authorized to be issued by
         the Corporation so far as they have been fixed and determined.

<PAGE>

                                       104

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of
Preferred Stock evidenced hereby to:

         _______________________________________________________________________
         _________________

         _______________________________________________________________________
         _________________

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

         _______________________________________________________________________
         _________________

         (Insert address and zip code of assignee)

         _______________________________________________________________________
         _________________

         _______________________________________________________________________
         _________________

         and irrevocably appoints:

         _______________________________________________________________________
         _________________

         agent to transfer the shares of Preferred Stock evidenced hereby on the
         books of the Transfer Agent and Registrar. 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
         Stock Certificate)

         Signature Guarantee: _____________________1

----------------------------
         1   Signature must be guaranteed by an "eligible guarantor institution"
(i.e., a bank, stockbroker, savings and loan association or credit union)
meeting the requirements of the Registrar, which requirements include

<PAGE>

                                      105

                              NOTICE OF CONVERSION

                    (To be Executed by the Registered Holder
                    in order to Convert the Preferred Stock)

         The undersigned hereby irrevocably elects to convert (the "Conversion")
         _______ shares of 4.75% Perpetual Cumulative Convertible Preferred
         Stock (the "Preferred Stock"), represented by stock certificate No(s).
         __ (the "Preferred Stock Certificates") into shares of common stock,
         par value $1.00 per share ("Common Stock"), of Doral Financial
         Corporation (the "Corporation") according to the conditions of the
         Certificate of Designation establishing the terms of the Preferred
         Stock (the "Certificate of Designation"), as of the date written below.
         If shares are to be issued in the name of a person other than the
         undersigned, the undersigned will pay all transfer taxes payable with
         respect thereto and is delivering herewith such certificates. No fee
         will be charged to the holder for any conversion, except for transfer
         taxes, if any. A copy of each Preferred Stock Certificate is attached
         hereto (or evidence of loss, theft or destruction thereof).

         The undersigned represents and warrants that all offers and sales by
         the undersigned of the shares of Common Stock issuable to the
         undersigned upon conversion of the Preferred Stock shall be made
         pursuant to registration of the Common Stock under the Securities Act
         of 1933 (the "Act") or pursuant to an exemption from registration under
         the Act.

         Any holder, upon the exercise of its conversion rights in accordance
         with the terms of the Certificate of Designation and the Preferred
         Stock, agrees to be bound by the terms of the Registration Rights
         Agreement.

         The Corporation is not required to issue shares of Common Stock until
         the original Preferred Stock Certificate(s) (or evidence of loss, theft
         or destruction thereof) to be converted are received by the Corporation
         or its Transfer Agent. The Corporation shall issue and deliver shares
         of Common Stock to an overnight courier not later than two

-------------------------
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>

                                       106

         business days following receipt of the original Preferred Stock
         Certificate(s) to be converted.

         Capitalized terms used but not defined herein shall have the meanings
         ascribed thereto in or pursuant to the Certificate of Designation.

                  Date of Conversion:
         __________________________________________
                  Number of shares of Convertible Preferred Stock to be
                  Converted:
         _______________________________________

                  Signature:
         __________________________________________________
                  Name:
         _____________________________________________________
                  Address:2
         ___________________________________________________
                  Fax No.:
         ____________________________________________________

---------------
          2  Address where shares of Common Stock and any other payments or
certificates shall be sent by the Corporation.

<PAGE>

                                       107

                                                                      SCHEDULE A

                    SCHEDULE OF EXCHANGES FOR GLOBAL SECURITY

                 The initial number of shares of Preferred Stock
               represented by this Global Preferred Share shall be
                __________. The following exchanges of a part of
                   this Global Preferred Share have been made:

<TABLE>
<CAPTION>
                                    Number of
                                     shares
                        Amount of   represent
                        increase      ed by
           Amount of       in          this
          decrease in   number of    Global
           number of      shares    Preferred
            shares      represent     Share
          represented     ed by     following
            by this        this        such      Signature of
  Date      Global        Global    decrease      authorized
   of      Preferred    Preferred      or           officer
Exchange     Share        Share     increase     of Registrar
--------  -----------   ---------   ---------    ------------
<S>       <C>           <C>         <C>          <C>
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
</TABLE>

<PAGE>

                                       108

                                                                       EXHIBIT B

                         FORM OF CERTIFICATE OF TRANSFER
                   (Transfers pursuant to 15(c)(ii) and 15(e)
                       of the Certificate of Designation)

[               ] as Transfer Agent

[ADDRESS]
[ATTN]

Re: Doral Financial Corporation
    4.75% Perpetual Cumulative Convertible Preferred Stock (the "Preferred
    Stock")

Reference is hereby made to the Certificate of Designation relating to the
Preferred Stock dated September 25, 2003, as such may be amended from time to
time (the "Certificate of Designation"). Capitalized terms used but not defined
herein shall have the respective meanings given to them in the Certificate of
Designation.

This Certificate relates to _____ shares of the Preferred Stock (the
"Securities") which are held in the form of a Global Preferred Share bearing the
Restricted Shares Legend (CUSIP NO. ) with the Depository in the name of [name
of transferor] (the "Transferor") to effect the transfer of the Securities.

In connection with such request, and in respect of the Preferred Stock, the
Transferor does hereby certify that shares of the Preferred Stock are being
transferred (i) in accordance with the applicable securities laws of the
relevant state or jurisdiction of the United States or other jurisdiction and
(ii) in accordance with their terms:

CHECK ONE BOX BELOW, AS APPLICABLE:

(1) [ ] to a transferee that the Transferor reasonably believes is a qualified
institutional buyer, within the meaning of Rule 144A under the Securities Act,
purchasing for its own account or for the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule 144A;

(2) [ ] pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available);

<PAGE>

                                      109

(3) [ ] in accordance with another exemption from the registration requirements
of the Securities Act;

(4) [ ] to the Corporation or a subsidiary thereof; or

(5) [ ] pursuant to a registration statement that has been declared effective
under the Securities Act.

Unless one of the boxes is checked, the Transfer Agent will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (2) or
(3) is checked, the Transfer Agent and the Corporation shall be entitled to
require, prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Corporation has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, such as the exemption provided by Rule 144 under such
Act.

                                        [Name of Transferor]

                                        By:___________________________
                                        Name:
                                        Title:

Dated:

cc: Doral Financial Corporation
    Corporate Secretary
    1451 F.D. Roosevelt Avenue
    San Juan, Puerto Rico 00920-2717

<PAGE>

                                       110

                                                                       EXHIBIT C

                           Form of Common Share Legend

         THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, AGREES FOR THE BENEFIT OF DORAL FINANCIAL CORPORATION THAT (a) THIS
SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (2) IN A TRANSACTION ENTITLED TO AN
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (3) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE l44A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (4) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT, SUBJECT, IN THE CASE OF CLAUSES (2) OR (4), TO THE RECEIPT
BY DORAL FINANCIAL CORPORATION OF AN OPINION OF COUNSEL OR SUCH OTHER EVIDENCE
ACCEPTABLE TO DORAL FINANCIAL CORPORATION THAT SUCH RESALE, PLEDGE OR TRANSFER
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND THAT (b) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF
THE RESALE RESTRICTIONS REFERRED TO HEREIN AND DELIVER TO THE TRANSFEREE (OTHER
THAN A QUALIFIED INSTITUTIONAL BUYER) PRIOR TO THE SALE A COPY OF THE TRANSFER
RESTRICTIONS APPLICABLE HERETO (COPIES OF WHICH MAY BE OBTAINED FROM US).

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS
AGREEMENT (AS SUCH TERM IS DEFINED IN THE CERTIFICATE OF DESIGNATION REFERRED TO
ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND
TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

<PAGE>

                                      111

                                                                       EXHIBIT D

                         FORM OF CERTIFICATE OF TRANSFER
                                FOR COMMON STOCK

                   (Transfers pursuant to Section 15(f) of the
                           Certificate of Designation)

[Transfer Agent]

Attn:

Re: Doral Financial Corporation
    4.75% Perpetual Cumulative Convertible Preferred Stock
    (the "Preferred Stock")

Reference is hereby made to the Certificate of Designation relating to the
Preferred Stock dated September 25, 2003, as such may be amended from time to
time (the "Certificate of Designation"). Capitalized terms used but not defined
herein shall have the respective meanings given them in the Certificate of
Designation.

This letter relates to ____ shares of Common Stock represented by the
accompanying certificate(s) that were issued upon conversion of the Preferred
Stock and which are held in the name of [name of transferor] (the "Transferor")
to effect the transfer of such Common Stock.

In connection with such request and in respect of the shares of Common Stock,
the Transferor does hereby certify that the shares of Common Stock are being
transferred (i) in accordance with applicable securities laws of any state of
the United States or any other jurisdiction and (ii) in accordance with their
terms:

CHECK ONE BOX BELOW

(1) [ ] to a transferee that the Transferor reasonably believes is a qualified
institutional buyer, within the meaning of Rule 144A under the Securities Act,
purchasing for its own account or for the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule 144A;

<PAGE>

                                       112

(2) [ ] pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available);

(3) [ ] in accordance with another exemption from the registration requirements
of the Securities Act (based upon an opinion of counsel if the Corporation so
requests);

(4) [ ] to the Corporation or a subsidiary thereof; or

(5) [ ] pursuant to a registration statement that has been declared effective
under the Securities Act.

Unless one of the boxes is checked, the Transfer Agent will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (2) or
(3) is checked, the Transfer Agent shall be entitled to require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Corporation has reasonably requested
to confirm that such transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act.

                                        [Name of Transferor]

                                        By:____________________
                                        Name:
                                        Title:

Dated:

cc: Doral Financial Corporation
    Corporate Secretary
    1451 F.D. Roosevelt Avenue
    San Juan, Puerto Rico 00920-2717

         The undersigned hereby certify that the capital of the Corporation will
not be reduced under or by reason of the adoption of the above resolutions
providing for the creation of the above described Preferred Stock.

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