Document:

<PAGE>

                    [Form of Floating Rate Medium-Term Note]

                               (Face of Security)

                  [IF A GLOBAL SECURITY, INSERT - - THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

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

                  [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND
THE REGULATIONS THEREUNDER.]

<PAGE>
REGISTERED NO. FLR___                                        CUSIP NO. _______

                           POPULAR NORTH AMERICA, INC.

                           MEDIUM-TERM NOTES, SERIES F
                                 (Floating Rate)

                     Payment of Principal, Premium, if any,
                           and Interest Guaranteed by

                                  POPULAR, INC.

            The following terms apply to this Security, as and to the
extent shown below:

<TABLE>
<S>                                                     <C>
PRINCIPAL AMOUNT:                                       REPAYMENT DATE(S):

STATED MATURITY DATE:                                   REDEMPTION OR REPAYMENT PRICE(S):

SPECIFIED CURRENCY:  U.S. dollars for
all payments unless otherwise specified                 BASE RATE:
below:

        -        payments of principal and any premium:         -        Commercial Paper Rate:

        -        payments of interest:                          -        Prime Rate:

        -        Exchange Rate Agent:                           -        LIBOR:

                                                                         -        Moneyline Telerate LIBOR Page:

                                                                         -        Reuters Screen LIBOR Page:

                                                                         -        Index Currency:

ORIGINAL ISSUE DATE*:                                           -        Treasury Rate:

REGULAR RECORD DATE(S):                                         -        CMT Rate:

ORIGINAL ISSUE DISCOUNT SECURITY:                       REDEMPTION COMMENCEMENT DATE:

        -        Total Amount of OID:                           -        Moneyline Telerate Page 7051:
        -        Yield to Maturity:
        -        Initial Accrual Period OID:                    -        Moneyline Telerate Page 7052
        -        OID Default Amount:                                     (weekly/monthly)
        -        Default Rate:
                                                                -        CMT Index Maturity
</TABLE>

--------------------------
*        This date shall be the issue date of this Security, unless there is a
         Predecessor Security, in which case this date shall be the issue date
         of the first Predecessor Security.

                    (Face of Security continued on next page)
                                       -2-
<PAGE>

-     CD Rate:                          INDEX MATURITY:

-     Federal Funds Rate:               SPREAD:

-     11th District Rate:               SPREAD MULTIPLIER:

                                        INITIAL BASE RATE:

                                        MAXIMUM RATE:

                                        MINIMUM RATE:

                                        INTEREST RESET PERIOD:

                                          -  if semi-annual, reset will occur in
                                             each of the following two months in
                                             each year:

                                          -  if annual, reset will occur in the
                                             following month in each year:

                                          -  otherwise, reset will occur daily,
                                             weekly, monthly or quarterly in
                                             each year as follows:

                                    INTEREST RESET DATE(S): as provided in
                                    Section 3(a) on the reverse of this Security
                                    (unless otherwise specified)

                                    INTEREST DETERMINATION DATE(S): as provided
                                    in Sections 3(b) through 3(j), as
                                    applicable, on the reverse of this Security
                                    (unless otherwise specified)

                                    INTEREST PAYMENT DATE(S): unless otherwise
                                    specified, the third Wednesday of the
                                    following:

                    (Face of Security continued on next page)
                                       -3-

<PAGE>

<TABLE>
<S>                                                                     <C>
-        each of the 12 calendar months in each year                    subject to the second paragraph under "Payments Due on a
                                                                        Business Day" below

-        each March, June, September and December in each year          CALCULATION DATE(S): as provided in Section 3(n) on the
                                                                        reverse of this Security (unless otherwise specified)

-        each of the following two calendar months in each year:

-        the following calendar month in each year:                     CALCULATION AGENT:

                                                                        OTHER TERMS:
</TABLE>

                  Terms left blank or marked "N/A", "No", "None" or in a similar
manner do not apply to this Security except as otherwise may be specified.

                  Whenever used in this Security, the terms specified above that
apply to this Security have the meanings specified above, unless the context
requires otherwise. Other terms used in this Security that are not defined
herein but that are defined in the Indenture referred to in Section 1 on the
reverse of this Security are used herein as defined therein.

                  Popular North America, Inc., a corporation duly organized and
existing under the laws of the State of Delaware (hereinafter called the
"Company", which term includes any successor Person under the Indenture), for
value received, hereby promises to pay to _____________, or registered assigns,
as principal the Principal Amount on the Stated Maturity Date and to pay
interest thereon, from the Original Issue Date or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, on the
Interest Payment Date(s) in each year, commencing on the first such date that is
at least 15 calendar days after the Original Issue Date, and at the Maturity of
the principal hereof, at a rate per annum determined in accordance with the
applicable provisions of Section 3 on the reverse hereof, until the principal
hereof is paid or made available for payment. Notwithstanding the foregoing,
interest on any principal that is overdue shall be payable on demand.

                  The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on the 15th calendar day (whether or not
a Business Day, as such term is defined in Section 3(n) on the reverse hereof)
next preceding such Interest Payment Date, unless otherwise provided on the face
hereof (a "Regular Record Date"). Any interest so payable, but not punctually
paid or duly provided for, on any Interest Payment Date will forthwith cease to
be payable to the Holder on such Regular Record Date and such Defaulted Interest
either may be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of this Security not less
than 10 days prior to such

                    (Face of Security continued on next page)
                                      -4-
<PAGE>

Special Record Date, or may be paid in any other lawful manner not inconsistent
with the requirements of any securities exchange on which this Security may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture.

                  If this Security is issued with an original issue discount,
(i) if an Event of Default with respect to the Securities of this series shall
have occurred and be continuing, the amount of principal of this Security which
may be declared due and payable in the manner, with the effect and subject to
the conditions provided in the Indenture, shall be determined in the manner set
forth under "OID Default Amount" on the face hereof, and (ii) in the case of a
default in payment of principal upon acceleration, redemption, repayment at the
option of the Holder or at the Stated Maturity Date hereof, in lieu of any
interest otherwise payable, the overdue principal of this Security shall bear
interest at a rate of interest per annum equal to the Default Rate stated on the
face hereof (to the extent that the payment of such interest shall be legally
enforceable), which shall accrue from the date of such acceleration, redemption,
repayment at the option of the Holder or Stated Maturity Date, as the case may
be, to the date payment has been made or duly provided for or such default has
been waived in accordance with the terms of the Indenture.

         CURRENCY OF PAYMENT

                  Payment of principal of (and premium, if any) and interest on
this Security will be made in the Specified Currency for such payment, except as
provided in this and the next three paragraphs. The Specified Currency for any
payment shall be the currency specified as such on the face of this Security
unless, at the time of such payment, such currency is not legal tender for the
payment of public and private debts in the country issuing such currency on the
Original Issue Date, in which case the Specified Currency for such payment shall
be such coin or currency as at the time of such payment is legal tender for the
payment of public and private debts in such country.

                  Except as provided in the next paragraph, any payment to be
made on this Security in a Specified Currency other than U.S. dollars will be
made in U.S. dollars if the Person entitled to receive such payment transmits a
written request for such payment to be made in U.S. dollars to the Trustee at
its Corporate Trust Office, Attention: Securities Processing Division, on or
before the fifth Business Day before the payment is to be made. Such written
request may be mailed, hand delivered, telecopied or delivered in any other
manner approved by the Trustee. Any such request made with respect to any
payment on this Security payable to a particular Holder will remain in effect
for all later payments on this Security payable to such Holder, unless such
request is revoked on or before the fifth Business Day before a payment is to be
made, in which case such revocation shall be effective for such and all later
payments. In the case of any payment of interest payable on an Interest Payment
Date, such written request must be made by the Person who is the registered
Holder of this Security on the relevant Regular Record Date.

                    (Face of Security continued on next page)
                                      -5-
<PAGE>

                  The U.S. dollar amount of any payment made pursuant to the
preceding paragraph will be determined by the Exchange Rate Agent based upon the
highest bid quotation received by the Exchange Rate Agent as of 11:00 A.M., New
York City time, on the second Business Day preceding the applicable payment
date, from three (or, if three are not available, then two) recognized foreign
exchange dealers selected by the Exchange Rate Agent in The City of New York, in
each case for the purchase by the quoting dealer, for U.S. dollars and for
settlement on such payment date of an amount of the Specified Currency for such
payment equal to the aggregate amount of such Specified Currency payable on such
payment date to all Holders of Securities of this or any other series who elect
to receive U.S. dollar payments on such payment date, and at which the
applicable dealer commits to execute a contract. If the Exchange Rate Agent
determines that two such bid quotations are not available on such second
Business Day, such payment will be made in the Specified Currency for such
payment. All currency exchange costs associated with any payment in U.S. dollars
on this Security will be borne by the Holder entitled to receive such payment,
by deduction from such payment.

                  Notwithstanding the foregoing, if any amount payable on this
Security is payable on any day (including at Maturity) in a Specified Currency
other than U.S. dollars, and if such Specified Currency is not available to the
Company on the two Business Days before such day, due to the imposition of
exchange controls, disruption in a currency market or any other circumstances
beyond the control of the Company, the Company will be entitled to satisfy its
obligation to pay such amount in such Specified Currency by making such payment
in U.S. dollars. The amount of such payment in U.S. dollars shall be determined
by the Exchange Rate Agent on the basis of the noon buying rate for cable
transfers in The City of New York for such Specified Currency (the "Exchange
Rate") as of the latest day before the day on which such payment is to be made.
Any payment made under such circumstances in U.S. dollars where the required
payment is in other than U.S. dollars will not constitute an Event of Default
under the Indenture or this Security.

         MANNER OF PAYMENT - U.S. DOLLARS

                  Except as provided in the next paragraph, payment of any
amount payable on this Security in U.S. dollars will be made at the office or
agency of the Company maintained for that purpose in The City of New York (or at
any other office or agency maintained by the Company for that purpose), against
surrender of this Security in the case of any payment due at the Maturity of the
principal hereof (other than any payment of interest that first becomes due on
an Interest Payment Date); provided, however, that, at the option of the Company
and subject to the next paragraph, payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.

                  Payment of any amount payable on this Security in U.S. dollars
will be made by wire transfer of immediately available funds to an account
maintained by the payee with a bank located in the Borough of Manhattan, The
City of New York, if (i) the principal of this Security is at least $10,000,000
and (ii) the Holder entitled to receive such payment transmits a written request
for such payment to be made in such manner to

                    (Face of Security continued on next page)
                                      -6-
<PAGE>
the Paying Agent at its Corporate Trust Office, Attention: Securities Processing
Division, on or before the Regular Record Date preceding the day on which such
payment is to be made; provided that, in the case of any such payment due at the
Maturity of the principal hereof (other than any payment of interest that first
becomes due on an Interest Payment Date), this Security must be surrendered at
the office or agency of the Company maintained for that purpose in The City of
New York (or at any other office or agency maintained by the Company for that
purpose) in time for the Paying Agent to make such payment in such funds in
accordance with its normal procedures. Any such request made with respect to any
payment on this Security payable to a particular Holder will remain in effect
for all later payments on this Security payable to such Holder, unless such
request is revoked on or before the Regular Record Date preceding the day on
which such payment is to be made, in which case such revocation shall be
effective for such and all later payments; provided that in the case of any
payment due at Maturity of the principal of this Security to be effective any
request for revocation must be made no later than the 15th day prior to the
Maturity of the principal of this Security. In the case of any payment of
interest payable on an Interest Payment Date, such written request must be made
by the Person who is the registered Holder of this Security on the relevant
Regular Record Date. The Company will pay any administrative costs imposed by
banks in connection with making payments by wire transfer with respect to this
Security, but any tax, assessment or other governmental charge imposed upon any
payment will be borne by the Holder of this Security and may be deducted from
the payment by the Company or the Paying Agent.

         MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES

                  Payment of any amount payable on this Security in a Specified
Currency other than U.S. dollars will be made by wire transfer of immediately
available funds to such account as is maintained in such Specified Currency at a
bank or other financial institution acceptable to the Company and the Trustee
and as shall have been designated at least five Business Days prior to the
applicable payment date by the Person entitled to receive such payment; provided
that, in the case of any such payment due at the Maturity of the principal
hereof (other than any payment of interest that first becomes due on an Interest
Payment Date), this Security must be surrendered at the office or agency of the
Company maintained for that purpose in The City of New York (or at any other
office or agency maintained by the Company for that purpose) in time for the
Paying Agent to make such payment in such funds in accordance with its normal
procedures. Such account designation shall be made by transmitting the
appropriate information to the Trustee at its Corporate Trust Office in the
Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier
or in any other manner approved by the Trustee. Unless revoked, any such account
designation made with respect to this Security by the Holder hereof will remain
in effect with respect to any further payments with respect to this Security
payable to such Holder. If a payment in a Specified Currency other than U.S.
dollars with respect to this Security cannot be made by wire transfer because
the required account designation has not been received by the Trustee on or
before the requisite date or for any other reason, the Company will cause a
notice to be given to the Holder of this Security at its registered address
requesting an account designation

                    (Face of Security continued on next page)
                                      -7-
<PAGE>

pursuant to which such wire transfer can be made and such payment will be made
within five Business Days after the Trustee's receipt of such a designation
meeting the requirements specified above, with the same force and effect as if
made on the due date. The Company will pay any administrative costs imposed by
banks in connection with making payments by wire transfer with respect to this
Security, but any tax, assessment or other governmental charge imposed upon any
payment will be borne by the Holder of this Security and may be deducted from
the payment by the Company or the Paying Agent.

         MANNER OF PAYMENT - GLOBAL SECURITIES

                  Notwithstanding any provision of this Security or the
Indenture, if this Security is a Global Security, the Company may make any and
all payments of principal, premium and interest on this Security pursuant to the
Applicable Procedures of the Depositary for this Security as permitted in the
Indenture.

         PAYMENTS DUE ON A BUSINESS DAY

                  Unless otherwise specified on the face of this Security, the
following sentence shall apply to this Security. Notwithstanding any provision
of this Security or the Indenture other than the following paragraph, if any
amount of principal, premium or interest would otherwise be due on this Security
on a day (the "Specified Day") that is not a Business Day, such amount may be
paid or made available for payment on the next succeeding Business Day (unless
the Base Rate is LIBOR and such next succeeding Business Day falls in the next
calendar month, in which case such amount may be paid or made available for
payment on the next preceding Business Day) with the same force and effect as if
such amount were paid on the Specified Day. The provisions of this paragraph
shall apply to this Security in lieu of the provisions of Section 113 of the
Indenture.

                  Unless otherwise specified on the face of this Security, the
following sentence shall apply to each Interest Payment Date other than one that
falls on the date of Maturity of the principal hereof. If any such Interest
Payment Date would otherwise be a day that is not a Business Day, such Interest
Payment Date shall be deferred to the next succeeding Business Day, provided
that, if the Base Rate is LIBOR and the next succeeding Business Day would fall
in the next calendar month, then such Interest Payment Date will be advanced to
the next preceding Business Day.

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

                  Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

                  Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Security shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.

                    (Face of Security continued on next page)
                                      -8-
<PAGE>
                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.

Dated:

                                           POPULAR NORTH AMERICA, INC.

                                           By
                                              ----------------------------------
                                              Name:
                                              Title:

                                           By
                                              ----------------------------------
                                              Name:
                                              Title:

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

                  This Security is one of the Securities of the series
designated herein and referred to in the within-mentioned Indenture.

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

                                           By
                                             ----------------------------------
                                                    Authorized Officer

<PAGE>

                              (Reverse of Security)

         1. SECURITIES AND INDENTURE

         This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), all unconditionally guaranteed by
Popular, Inc. (hereinafter called the "Guarantor") and issued and to be issued
in one or more series under an Indenture, dated as of October 1, 1991, as
supplemented by the First Supplemental Indenture, dated as of February 28, 1995,
the Second Supplemental Indenture, dated as of May 8, 1997 and the Third
Supplemental Indenture, dated as of August 5, 1999 (together herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), duly executed and delivered by the Company and the Guarantor to
J.P. Morgan Trust Company, National Association (successor in interest to Bank
One, N.A.), as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture) and as Successor Trustee to Citibank,
N.A., and reference is hereby made to the Indenture for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered.

         2. SERIES AND DENOMINATIONS

         This Security is one of the series designated on the face hereof,
limited to an aggregate initial offering price not to exceed $2,500,000,000 (or
the equivalent thereof in any other currency or currencies or currency units)
less the aggregate initial offering price of "Securities" (as defined in the
Prospectus dated December 29, 2003 relating to debt securities and preferred
stock of the Company, Popular International Bank, Inc. and the Guarantor)
authenticated and delivered upon initial issuance, other than the Securities of
this series, which amount may be increased at the option of the Company if in
the future it determines that it may wish to sell additional Securities of this
series. References herein to "this series" mean the series of securities
designated on the face hereof.

         The Securities of this series are issuable only in registered form
without coupons in "Authorized Denominations", which term shall have the
following meaning. For each Security of this series having a principal amount
payable in U.S. dollars, the Authorized Denominations shall be $1,000 and any
integral multiples of $1,000. For each Security of this series having a
principal amount payable in a Specified Currency other than U.S. dollars, the
Authorized Denominations shall be the amount of such Specified Currency
equivalent, at the Exchange Rate on the first Business Day next preceding the
date on which the Company accepts the offer to purchase such Security, to $1,000
and any integral multiples of $1,000.

         3. INTEREST RATE

         (a) INTEREST RATE RESET. The interest rate on this Security will be
reset from time to time, as provided in this Section 3, and each date upon which
such rate

                  (Reverse of Security continued on next page)
                                      -10-
<PAGE>

is reset as so provided is hereinafter called an "Interest Reset Date". Unless
otherwise specified on the face hereof, the Interest Reset Dates with respect to
this Security will be as follows:

                  (i) if the Interest Reset Period is daily, each Business Day;

                  (ii) if the Interest Reset Period is weekly and the Base Rate
         is not the Treasury Rate, the Wednesday of each week;

                  (iii) if the Interest Reset Period is weekly and the Base Rate
         is the Treasury Rate, except as otherwise provided in the definition of
         "Treasury Interest Determination Date" in Section 3(n) below, the
         Tuesday of each week;

                  (iv) if the Interest Reset Period is monthly and the Base Rate
         is not the 11th District Rate, the third Wednesday of each month;

                  (v) if the Interest Reset Period is monthly and the Base Rate
         is the 11th District Rate, the first calendar day of the month;

                  (vi) if the Interest Reset Period is quarterly, the third
         Wednesday of each March, June, September and December;

                  (vii) if the Interest Reset Period is semi-annual, the third
         Wednesday of each of two months in each year specified under "Interest
         Reset Period" on the face hereof; and

                  (viii) if the Interest Reset Period is annual, the third
         Wednesday of the month in each year specified under "Interest Reset
         Period" on the face hereof;

provided, however, that (x) the Base Rate in effect from the Original Issue Date
to but excluding the first Interest Reset Date will be the Initial Base Rate and
(y) if the Interest Reset Period is daily or weekly, the Base Rate in effect for
each day following the second Business Day immediately prior to an Interest
Payment Date to but excluding such Interest Payment Date, and for each day
following the second Business Day immediately prior to the day of Maturity of
the principal hereof to but excluding such day of Maturity, will be the Base
Rate in effect on such applicable second Business Day; and provided, further,
that, if any Interest Reset Date would otherwise be a day that is not a Business
Day, such Interest Reset Date shall be the next succeeding day that is a
Business Day, except that, unless otherwise specified on the face hereof, if the
Base Rate is LIBOR and such next succeeding Business Day falls in the next
succeeding calendar month, such Interest Reset Date shall be the immediately
preceding Business Day.

         Subject to applicable provisions of law and except as otherwise
specified herein, on each Interest Reset Date the interest rate on this Security
shall be the rate determined in accordance with such of the following Sections
3(b) through 3(j) as provided for determination of the Base Rate for this
Security. The Calculation Agent

                  (Reverse of Security continued on next page)

                                      -11-
<PAGE>

shall determine the interest rate of this Security in accordance with the
applicable Section below.

                  Unless the Base Rate is LIBOR, the Calculation Agent will
determine the interest rate of this Security that takes effect on any Interest
Reset Date on a day no later than the Calculation Date (as defined in Section
3(n) below) corresponding to such Interest Reset Date. However, the Calculation
Agent need not wait until the Calculation Date to determine such interest rate
if the rate information it needs to make such determination in the manner
specified in the applicable provisions of Sections 3(b) through 3(j) hereof is
available from the relevant sources specified in such applicable provisions.

                  Upon request of the Holder to the Calculation Agent, the
Calculation Agent will provide the interest rate then in effect on this Security
and, if determined, the interest rate that will become effective on the next
Interest Reset Date.

                  (b) DETERMINATION OF COMMERCIAL PAPER RATE. If the Base Rate
is the Commercial Paper Rate, the Base Rate that takes effect on any Interest
Reset Date shall equal the Money Market Yield (as defined in Section 3(n) below)
of the rate, for the second Business Day immediately preceding such Interest
Reset Date (the "Commercial Paper Interest Determination Date"), for commercial
paper having the Index Maturity, as published in H.15(519) (as defined in
Section 3(n) below) under the heading "Commercial Paper -- Nonfinancial". If the
Commercial Paper Rate cannot be determined as described above, the following
procedures will apply in determining the Commercial Paper Rate:

                  (i) If the rate described above is not published in H.15(519)
         by 3:00 P.M., New York City time, on the Calculation Date (as defined
         in Section 3(n) below) corresponding to such Commercial Paper Interest
         Determination Date, then the Commercial Paper Rate will be the rate,
         for such Commercial Paper Interest Determination Date, for commercial
         paper having the Index Maturity, as published in H.15 Daily Update (as
         defined in Section 3(n) below) or any other recognized electronic
         source used for displaying that rate, under the heading "Commercial
         Paper -- Nonfinancial".

                  (ii) If the rate described in clause (i) above does not appear
         in H.15(519), H.15 Daily Update or another recognized electronic source
         by 3:00 P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), the Commercial Paper Rate will be the Money
         Market Yield of the arithmetic mean of the following offered rates for
         U.S. dollar commercial paper that has the Index Maturity and is placed
         for an industrial issuer whose bond rating is "Aa", or the equivalent,
         from a nationally recognized rating agency: the rates offered as of
         11:00 A.M., New York City time, on such Commercial Paper Interest
         Determination Date by three leading U.S. dollar commercial paper
         dealers in New York City selected by the Calculation Agent.

                  (Reverse of Security continued on next page)
                                      -12-
<PAGE>
                  (iii) If fewer than three dealers selected by the Calculation
         Agent are quoting as described in clause (ii) above, the Commercial
         Paper Rate shall be the Commercial Paper Rate in effect on such
         Commercial Paper Interest Determination Date (or, if the Initial Base
         Rate has been in effect for the prior Interest Reset Period, the
         Initial Base Rate).

                  The Base Rate determined in accordance with this Section 3(b)
will be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any.

                  (c) DETERMINATION OF PRIME RATE. If the Base Rate is the Prime
Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the
rate, for the second Business Day immediately preceding such Interest Reset Date
(the "Prime Interest Determination Date"), published in H.15(519) under the
heading "Bank Prime Loan". If the Prime Rate cannot be determined as described
above, the following procedures will apply in determining the Prime Rate:

                  (i) If the rate described above is not published in H.15(519)
         by 3:00 P.M., New York City time, on the Calculation Date corresponding
         to such Prime Interest Determination Date, then the Prime Rate will be
         the rate, for such Prime Interest Determination Date, as published in
         H.15 Daily Update or another recognized electronic source used for the
         purpose of displaying that rate, under the heading "Bank Prime Loan".

                  (ii) If the rate described in clause (i) above is not
         published in H.15(519), H.15 Daily Update or another recognized
         electronic source by 3:00 P.M., New York City time, on such Calculation
         Date (unless the calculation is made earlier and the rate is available
         from one of those sources at that time), then the Prime Rate will be
         the arithmetic mean of the following rates as they appear on the
         Reuters Screen US PRIME 1 Page (as defined in Section 3(n) below): the
         rate of interest publicly announced by each bank appearing on that page
         as that bank's prime rate or base lending rate, as of 11:00 A.M., New
         York City time, on such Prime Interest Determination Date.

                  (iii) If fewer than four of the rates referred to in clause
         (ii) above appear on the Reuters Screen US PRIME 1 Page, the Prime Rate
         will be the arithmetic mean of the prime rates or base lending rates,
         as of the close of business on such Prime Interest Determination Date,
         of three major banks in New York City selected by the Calculation
         Agent. For this purpose, the Calculation Agent will use rates quoted on
         the basis of the actual number of days in the year divided by a 360-day
         year.

                  (iv) If fewer than three banks selected by the Calculation
         Agent are quoting as described in clause (iii) above, the Prime Rate
         shall be the Prime Rate in effect on such Prime Interest Determination
         Date (or, if the Initial Base Rate has been in effect for the prior
         Interest Reset Period, the Initial Base Rate).

                  (Reverse of Security continued on next page)
                                      -13-
<PAGE>

                  The Base Rate determined in accordance with this Section 3(c)
will be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any.

                  (d) DETERMINATION OF LIBOR. If the Base Rate is LIBOR, the
Base Rate that takes effect on any Interest Reset Date shall be LIBOR on the
corresponding LIBOR Interest Determination Date (as defined in Section 3(n)
below) and shall be determined in accordance with the following provisions:

                 LIBOR will be either of the following rates, whichever appears
on the face hereof:

                  (x) the offered rate appearing on the Moneyline Telerate LIBOR
         Page (as defined in Section 3(n) below); or

                  (y) the arithmetic mean of the offered rates appearing on the
         Reuters Screen LIBOR Page (as defined in Section 3(n) below) unless
         that page by its terms cites only one rate, in which case that rate;

in either case, as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date for deposits of the Index Currency having the Index Maturity
beginning on such Interest Reset Date. If no reference page is specified on the
face hereof, Moneyline Telerate LIBOR Page will apply to this Security:

                  (i) If Moneyline Telerate LIBOR Page is specified on the face
         hereof and the rate referenced in clause (x) above does not appear on
         that page, or if Reuters Screen LIBOR Page is specified on the face
         hereof and fewer than two of the rates referenced in clause (y) above
         appear on that page or no rate appears on any page on which only one
         rate normally appears, then LIBOR will be determined on the basis of
         the rates, at approximately 11:00 A.M., London time, on such LIBOR
         Interest Determination Date, at which deposits of the following kind
         are offered to prime banks in the London interbank market by four major
         banks in that market selected by the Calculation Agent: deposits of the
         Index Currency having the Index Maturity beginning on such Interest
         Reset Date and in a Representative Amount (as defined in Section 3(n)
         below). The Calculation Agent will request the principal London office
         of each such bank to provide a quotation of its rate. If at least two
         quotations are provided, LIBOR for such LIBOR Interest Determination
         Date will be the arithmetic mean of the quotations.

                  (ii) If fewer than two quotations are provided as described in
         clause (i) above, LIBOR for such LIBOR Interest Determination Date will
         be the arithmetic mean of the rates for loans of the following kind to
         leading European banks quoted, at approximately 11:00 A.M. in the
         principal financial center for the country issuing the Index Currency,
         on such LIBOR Interest Determination Date, by three major banks in that
         financial center selected by the Calculation Agent: loans of the Index
         Currency having the Index Maturity beginning on such Interest Reset
         Date and in a Representative Amount.

                  (Reverse of Security continued on next page)
                                      -14-
<PAGE>

                  (iii) If fewer than three banks selected by the Calculation
         Agent are quoting as described in clause (ii) above, LIBOR will be the
         LIBOR in effect on such LIBOR Interest Determination Date (or, if the
         Initial Base Rate has been in effect for the prior Interest Reset
         Period, the Initial Base Rate).

                  The Base Rate determined in accordance with this Section 3(d)
will be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any. If the Base Rate is
LIBOR and no currency is specified on the face hereof as the Index Currency, the
Index Currency shall be U.S. dollars.

                  (e) [RESERVED]

                  (f) DETERMINATION OF TREASURY RATE. If the Base Rate is the
Treasury Rate, the Base Rate that takes effect on any Interest Reset Date shall
equal the rate for the auction on the corresponding Treasury Interest
Determination Date (as defined in Section 3(n) below) of direct obligations of
the United States ("Treasury Bills") having the Index Maturity, as that rate
appears on Moneyline Telerate Page 56 or 57 under the heading "Investment Rate".
If the Treasury Rate cannot be determined as described above, the following
procedures will apply in determining the Treasury Rate:

                  (i) If the rate described above does not appear on either
         Moneyline Telerate Page 56 or 57 at 3:00 P.M., New York City time, on
         the Calculation Date corresponding to such Treasury Interest
         Determination Date (unless the calculation is made earlier and the rate
         is available from that source at that time), the Treasury Rate will be
         the Bond Equivalent Yield (as defined in Section 3(n) below) of the
         rate, for such Treasury Interest Determination Date and for Treasury
         Bills having the Index Maturity, as published in H.15 Daily Update, or
         another recognized electronic source used for displaying that rate,
         under the heading "U.S. Government Securities/Treasury Bills/Auction
         High".

                  (ii) If the rate described in clause (i) above does not appear
         in H.15 Daily Update or another recognized electronic source by 3:00
         P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), the Treasury Rate will be the Bond Equivalent
         Yield of the auction rate, for such Treasury Interest Determination
         Date and for Treasury Bills having the Index Maturity, as announced by
         the U.S. Department of the Treasury.

                  (iii) If the auction rate described in clause (ii) above is
         not so announced by 3:00 P.M., New York City time, on such Calculation
         Date, or if no such auction is held for the relevant week, then the
         Treasury Rate will be the Bond Equivalent Yield of the rate, for such
         Treasury Interest Determination Date and for Treasury Bills having the
         Index Maturity, as published in H.15(519) under the heading "U.S.
         Government Securities/Treasury Bills/Secondary Market".

                  (Reverse of Security continued on next page)
                                      -15-
<PAGE>

                  (iv) If the rate described in clause (iii) above does not
         appear in H.15(519) by 3:00 P.M., New York City time, on such
         Calculation Date, then the Treasury Rate will be the rate, for such
         Treasury Interest Determination Date and for Treasury Bills having the
         Index Maturity, as published in H.15 Daily Update, or another
         recognized electronic source used for displaying that rate, under the
         heading "U.S. Government Securities/ Treasury Bills /Secondary Market".

                  (v) If the rate described in clause (iv) above does not appear
         in H.15 Daily Update or another recognized electronic source by 3:00
         P.M., New York City time, on such Calculation Date (unless the
         calculation is made earlier and the rate is available from one of those
         sources at that time), the Treasury Rate will be the Bond Equivalent
         Yield of the arithmetic mean of the following secondary market bid
         rates for the issue of Treasury Bills with a remaining maturity closest
         to the Index Maturity: the rates bid as of approximately 3:30 P.M., New
         York City time, on such Treasury Interest Determination Date, by three
         primary U.S. government securities dealers in New York City selected by
         the Calculation Agent.

                  (vi) If fewer than three dealers selected by the Calculation
         Agent are quoting as described in clause (v) above, the Treasury Rate
         shall be the Treasury Rate in effect on such Treasury Interest
         Determination Date (or, if the Initial Base Rate has been in effect for
         the prior Interest Reset Period, the Initial Base Rate).

                  The Base Rate determined in accordance with this Section 3(f)
will be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any, specified on the
face hereof.

                  (g) DETERMINATION OF CMT RATE. If the Base Rate is the CMT
Rate, the Base Rate that takes effect on any Interest Reset Date shall equal the
CMT Rate on the second Business Day immediately preceding such Interest Reset
Date (the "CMT Interest Determination Date"). "CMT Rate" means the following
rate displayed on the Designated CMT Telerate Page (as defined in Section 3(n)
below) under the heading " . . . Treasury Constant Maturities", under the column
for the Designated CMT Index Maturity (as defined in Section 3(n) below):

                  (x) if the Designated CMT Moneyline Telerate Page is Moneyline
         Telerate Page 7051, the rate for such CMT Interest Determination Date;
         or

                  (y) if the Designated CMT Moneyline Telerate Page is Moneyline
         Telerate Page 7052, the weekly or monthly average, as specified on the
         face hereof, for the week that ends immediately before the week in
         which such CMT Interest Determination Date falls, or for the month that
         ends immediately before the month in which such CMT Interest
         Determination Date falls, as applicable.

If the CMT Rate cannot be determined as described above, the following
procedures will apply in determining the CMT Rate:

                  (Reverse of Security continued on next page)
                                      -16-
<PAGE>

                  (i) If the applicable rate described above is not displayed on
         the relevant Designated CMT Moneyline Telerate Page at 3:00 P.M., New
         York City time, on the Calculation Date corresponding to such CMT
         Interest Determination Date (unless the calculation is made earlier and
         the rate is available from that source at that time), then the CMT Rate
         will be the applicable Treasury constant maturity rate described above
         -- i.e., for the Designated CMT Index Maturity and for either such CMT
         Interest Determination Date or the weekly or monthly average, as
         applicable -- as published in H.15(519).

                  (ii) If the applicable rate described in clause (i) above is
         not published in H.15(519) by 3:00 P.M., New York City time, on such
         Calculation Date, then the CMT Rate will be the Treasury constant
         maturity rate, or other U.S. Treasury rate, for the Designated CMT
         Index Maturity and with reference to such CMT Interest Determination
         Date, that:

                  (x) is published by the Board of Governors of the Federal
         Reserve System, or the U.S. Department of the Treasury, and

                  (y) is determined by the Calculation Agent to be comparable to
         the applicable rate formerly displayed on the Designated CMT Moneyline
         Telerate Page and published in H.15(519).

                  (iii) If the rate described in clause (ii) above is not
         published by 3:00 P.M., New York City time, on such Calculation Date,
         then the CMT Rate will be the yield to maturity of the arithmetic mean
         of the following secondary market offered rates for the most recently
         issued Treasury Notes (as defined in Section 3(n) below) having an
         original maturity of approximately the Designated CMT Index Maturity,
         having a remaining term to maturity of not less than the Designated CMT
         Index Maturity minus one year and in a Representative Amount: the
         offered rates, as of approximately 3:30 P.M., New York City time, on
         such CMT Interest Determination Date, of three primary U.S. government
         securities dealers in New York City selected by the Calculation Agent.
         In selecting such offered rates, the Calculation Agent will request
         quotations from five such primary dealers and will disregard the
         highest quotation -- or, if there is equality, one of the highest --
         and the lowest quotation -- or, if there is equality, one of the
         lowest.

                  (iv) If fewer than five but more than two such primary dealers
         are quoting as described in clause (iii) above, then the CMT Rate for
         such CMT Interest Determination Date will be based on the arithmetic
         mean of the offered rates so obtained, and neither the highest nor the
         lowest of such quotations will be disregarded.

                  (v) If the Calculation Agent is unable to obtain three
         quotations of the kind described in clause (iii) above, the CMT Rate
         will be the yield to maturity of the arithmetic mean of the following
         secondary market offered rates for Treasury Notes having an original
         maturity longer than the Designated CMT Index

                  (Reverse of Security continued on next page)
                                      -17-
<PAGE>

         Maturity, having a remaining term to maturity closest to the Designated
         CMT Index Maturity and in a Representative Amount: the offered rates,
         as of approximately 3:30 P.M., New York City time, on such CMT Interest
         Determination Date, of three primary U.S. government securities dealers
         in New York City selected by the Calculation Agent. In selecting such
         offered rates, the Calculation Agent will request quotations from five
         such primary dealers and will disregard the highest quotation -- or, if
         there is equality, one of the highest -- and the lowest quotation --
         or, if there is equality, one of the lowest. If two Treasury Notes with
         an original maturity longer than the Designated CMT Index Maturity have
         remaining terms to maturity that are equally close to the Designated
         CMT Index Maturity, the Calculation Agent will obtain quotations for
         the Treasury Note with the shorter remaining term to maturity.

                  (vi) If fewer than five but more than two such primary dealers
         are quoting as described in clause (v) above, then the CMT Rate for
         such CMT Interest Determination Date will be based on the arithmetic
         mean of the offered rates so obtained, and neither the highest nor the
         lowest of such quotations will be disregarded.

                  (vii) If two or fewer primary dealers selected by the
         Calculation Agent are quoting as described in clause (v) above, the CMT
         Rate shall be the CMT Rate in effect on such CMT Interest Determination
         Date (or, if the Initial Base Rate has been in effect for the prior
         Interest Reset Period, the Initial Base Rate).

                  The Base Rate determined in accordance with this Section 3(g)
will be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any.

                  (h) DETERMINATION OF CD RATE. If the Base Rate is the CD Rate,
the Base Rate that takes effect on any Interest Reset Date shall equal the rate,
on the second Business Day immediately preceding such Interest Reset Date (the
"CD Interest Determination Date"), for negotiable U.S. dollar certificates of
deposit having the Index Maturity as published in H.15(519) under the heading
"CDs (Secondary Market)". If the CD Rate cannot be determined as described
above, the following procedures will apply in determining the CD Rate:

                  (i) If the rate described above is not published in H.15(519)
         by 3:00 P.M., New York City time, on the Calculation Date corresponding
         to such CD Interest Determination Date, then the CD Rate shall be the
         rate described above as published in H.15 Daily Update, or another
         recognized electronic source used for displaying that rate, under the
         heading "CDs (Secondary Market)".

                  (ii) If the rate described in clause (i) above is not
         published in H.15(519), H.15 Daily Update or another recognized
         electronic source by 3:00 P.M., New York City time, on such Calculation
         Date (unless the calculation is made earlier and the rate is available
         from one of those sources at that time), the CD Rate shall be the
         arithmetic mean of the following secondary market offered rates for

                  (Reverse of Security continued on next page)
                                      -18-
<PAGE>

         negotiable U.S. dollar certificates of deposit of major U.S. money
         center banks having a remaining maturity closest to the Index Maturity
         and in a Representative Amount: the rates offered as of 10:00 A.M., New
         York City time, on such CD Interest Determination Date, by three
         leading nonbank dealers in negotiable U.S. dollar certificates of
         deposit in New York City, as selected by the Calculation Agent.

                  (iii) If fewer than three dealers selected by the Calculation
         Agent are quoting as described in clause (ii) above, the CD Rate will
         be the CD Rate in effect on such CD Interest Determination Date (or, if
         the Initial Base Rate has been in effect for the prior Reset Period,
         the Initial Base Rate).

                  The Base Rate determined in accordance with this Section 3(h)
will be adjusted by the addition or subtraction of the Spread, if any, or by
multiplying such Base Rate by the Spread Multiplier, if any.

                  (i) DETERMINATION OF FEDERAL FUNDS RATE. If the Base Rate is
the Federal Funds Rate, the Base Rate that takes effect on any Interest Reset
Date shall equal the rate, on the second Business Day immediately preceding such
Interest Reset Date (the "Federal Funds Interest Determination Date"), for U.S.
dollar Federal Funds as published in H.15(519) under the heading "Federal Funds
(Effective)", as that rate is displayed on Moneyline Telerate Page 120. If the
Federal Funds Rate cannot be determined as described above, the following
procedures will apply in determining the Federal Funds Rate:

                  (i) If the rate described above is not displayed on Moneyline
         Telerate Page 120 by 3:00 P.M., New York City time, on the Calculation
         Date corresponding to such Federal Funds Interest Determination Date
         (unless the calculation is made earlier and the rate is available from
         that source at that time), then the Federal Funds Rate will be the rate
         described above, on such Federal Funds Interest Determination Date, as
         published in H.15 Daily Update, or another recognized electronic source
         used for displaying that rate, under the heading "Federal Funds
         (Effective)".

                  (ii) If the rates described above are not displayed on
         Moneyline Telerate Page 120 or are not published in H.15 (519), H.15
         Daily Update or another recognized electronic source by 3:00 P.M., New
         York City time, on such Calculation Date (unless the calculation is
         made earlier and the rate is available from one of those sources at
         that time), the Federal Funds Rate will be the arithmetic mean of the
         rates for the last transaction in overnight U.S. dollar federal funds
         arranged, before 9:00 A.M., New York City time, on such Federal Funds
         Interest Determination Date, by three leading brokers of U.S. dollar
         federal funds transactions in New York City selected by the Calculation
         Agent.

                  (iii) If fewer than three brokers selected by the Calculation
         Agent are quoting as described in clause (ii) above, the Federal Funds
         Rate will be the Federal Funds Rate in effect on such Federal Funds
         Interest Determination Date

                  (Reverse of Security continued on next page)
                                      -19-
<PAGE>

         (or, if the Initial Base Rate has been in effect for the prior Interest
         Reset Period, the Initial Base Rate).

                  The interest rate determined in accordance with this Section
3(i) will be adjusted by the addition or subtraction of the Spread, if any, or
by multiplying such Base Rate by the Spread Multiplier, if any.

                  (j) DETERMINATION OF 11TH DISTRICT RATE. If the Base Rate is
the 11th District Rate, the Base Rate that takes effect on any Interest Reset
Date shall equal the 11th District Rate on the 11th District Interest
Determination Date (as defined in Section 3(n) below) corresponding to such
Interest Reset Date. The 11th District Rate on any 11th District Interest
Determination Date shall be the rate equal to the monthly weighted average cost
of funds for the calendar month immediately before such date, as displayed on
Moneyline Telerate Page 7058 under the heading "11th District" as of 11:00 A.M.,
San Francisco time, on such date. If the 11th District Rate cannot be determined
as described above, the following procedures will apply in determining the 11th
District Rate:

                  (i) If the rate described above does not appear on Moneyline
         Telerate Page 7058 on such 11th District Interest Determination Date,
         then the 11th District Rate on such date will be the monthly weighted
         average cost of funds paid by institutions that are members of the
         Eleventh Federal Home Loan Bank District for the calendar month
         immediately preceding such date, as most recently announced by the
         Federal Home Loan Bank of San Francisco as such monthly weighted
         average cost of funds.

                  (ii) If the Federal Home Loan Bank of San Francisco fails to
         announce the cost of funds described in clause (i) above on or before
         such 11th District Interest Determination Date, the 11th District Rate
         that takes effect on such Interest Reset Date will be the 11th District
         Rate in effect on such 11th District Interest Determination Date (or,
         if the Initial Base Rate has been in effect for the prior Interest
         Reset Period, the Initial Base Rate).

                  The interest rate determined in accordance with this Section
3(j) will be adjusted by the addition or subtraction of the Spread, if any, or
by multiplying such Base Rate by the Spread Multiplier, if any.

                  (k) MINIMUM AND MAXIMUM LIMITS. Notwithstanding the foregoing,
the rate at which interest accrues on this Security (i) shall not at any time be
higher than the Maximum Rate, if any, or less than the Minimum Rate, if any,
specified on the face hereof, in each case on an accrual basis, and (ii) shall
not at any time be higher than the maximum rate permitted by New York law, as
the same may be modified by United States law of general application.

                  (l) CALCULATION OF INTEREST. Payments of interest hereon with
respect to any Interest Payment Date or at the Maturity of the principal hereof
will include interest accrued to but excluding such Interest Payment Date or the
date of such Maturity,

                  (Reverse of Security continued on next page)
                                      -20-
<PAGE>
as the case may be. Accrued interest from the date of issue or from the last
date to which interest has been paid or duly provided for shall be calculated by
the Calculation Agent by multiplying the Principal Amount by an accrued interest
factor. Such accrued interest factor shall be computed by adding the interest
factors calculated for each day from and including the Original Issue Date or
from and including the last date to which interest has been paid or duly
provided for, to but excluding the date for which accrued interest is being
calculated. The interest factor for each such day shall be expressed as a
decimal and computed by dividing the interest rate (also expressed as a decimal)
in effect on such day by 360, if the Base Rate is the Commercial Paper Rate,
Prime Rate, LIBOR, CD Rate, Federal Funds Rate or 11th District Rate, or by the
actual number of days in the year, if the Base Rate is the Treasury Rate or CMT
Rate.

                  All percentages resulting from any calculation with respect to
this Security will be rounded upward or downward, as appropriate, to the next
higher or lower one hundred-thousandth of a percentage point (e.g., 9.876541%
(or .09876541) being rounded down to 9.87654% (or .0987654) and 9.876545% (or
..09876545) being rounded up to 9.87655% (or .0987655) ). All amounts used in or
resulting from any calculation with respect to this Security will be rounded
upward or downward, as appropriate, to the nearest cent, in the case of U.S.
dollars, or to the nearest corresponding hundredth of a unit, in the case of a
currency other than U.S. dollars, with one-half cent or one-half of a
corresponding hundredth of a unit or more being rounded upward.

                  (m) CALCULATION AGENT AND EXCHANGE RATE AGENT. The Company has
initially appointed the institutions named on the face of this Security as
Calculation Agent and Exchange Rate Agent, respectively, to act as such agents
with respect to this Security, but the Company may, in its sole discretion,
appoint any other institution (including any Affiliate of the Company) to serve
as any such agent from time to time. The Company will give the Trustee prompt
written notice of any change in any such appointment. Insofar as this Security
provides for any such agent to obtain rates, quotes or other data from a bank,
dealer or other institution for use in making any determination hereunder, such
agent may do so from any institution or institutions of the kind contemplated
hereby notwithstanding that any one or more of such institutions are any such
agent, Affiliates of any such agent, any of the agents named on the cover of the
Company's Prospectus Supplement dated June 23, 2004 relating to the Company's
Medium-Term Notes, Series F or any Affiliate of any such agent or Affiliates of
the Company.

                  All determinations made by the Calculation Agent or the
Exchange Rate Agent may be made by such agent in its sole discretion and, absent
manifest error, shall be conclusive for all purposes and binding on the Holder
of this Security and the Company. Neither the Calculation Agent nor the Exchange
Rate Agent shall have any liability therefor.

                  (n) DEFINITIONS OF CALCULATION TERMS. As used in this
Security, the following terms have the meanings set forth below:

                  (Reverse of Security continued on next page)
                                      -21-
<PAGE>

                  "Bond Equivalent Yield" means a yield expressed as a
percentage and calculated in accordance with the following formula:

                  Bond Equivalent Yield =                 D x N         x 100,
                                                     ---------------
                                                      360 - (D x M)

         where

         -        "D" equals the annual rate for Treasury Bills quoted on a bank
                  discount basis and expressed as a decimal;

         -        "N" equals 365 or 366, as the case may be; and

         -        "M" equals the actual number of days in the period from and
                  including the relevant Interest Reset Date to but excluding
                  the next succeeding Interest Reset Date.

                  "Business Day" means, for this Security, a day that meets the
requirements set forth in each of clauses (i) through (iii) below, in each case
to the extent such requirements apply to this Security as specified below:

(i)      is a Monday, Tuesday, Wednesday, Thursday or Friday that is neither a
         legal holiday nor a day on which commercial banking institutions in New
         York City generally are authorized or required by law, regulation or
         executive order to close;

(ii)     if the Base Rate is LIBOR, is also a London Banking Day; and

(iii)    if the Specified Currency for payment of principal of or interest on
         this Security is other than U.S. dollars, is also a day on which
         banking institutions are not authorized or required by law, regulation
         or executive order to close in the principal financial center of the
         country issuing such Specified Currency.

Solely when used in the third paragraph under the heading "Currency of Payment"
on the face of this Security, the meaning of the term "Business Day" shall be
determined as if the Base Rate for this Security is not LIBOR. With respect to
any particular location, the close of business on any day on which business is
not being conducted at that location shall be deemed to mean 5:00 P.M., New York
City time, on that day.

                  The "Calculation Date" corresponding to any Commercial Paper
Interest Determination Date, Prime Interest Determination Date, LIBOR Interest
Determination Date, Treasury Interest Determination Date, CMT Interest
Determination Date, CD Interest Determination Date, Federal Funds Interest
Determination Date or 11th District Interest Determination Date, as the case may
be, means the earlier of:

                  (Reverse of Security continued on next page)
                                      -22-
<PAGE>

                  (i) the tenth day after such interest determination date or,
         if any such day is not a Business Day, the next succeeding Business
         Day; and

                  (ii) the Business Day immediately preceding the Interest
         Payment Date or the date of Maturity of the principal hereof, whichever
         is the day on which the next payment of interest will be due.

The Calculation Date corresponding to any Interest Reset Date means the
Calculation Date corresponding to the relevant interest determination date
immediately preceding such Interest Reset Date.

                  "Designated CMT Index Maturity" means, if the Base Rate is the
CMT Rate, the Index Maturity for this Security and will be the original period
to maturity of a U.S. Treasury security -- either 1, 2, 3, 5, 7, 10, 20 or 30
years -- specified on the face hereof, provided that, if no such original
maturity period is so specified, the Designated CMT Index Maturity will be 2
years.

                  "Designated CMT Moneyline Telerate Page" means, if the Base
Rate is the CMT Rate, the Moneyline Telerate Page specified on the face hereof
that displays Treasury constant maturities as reported in H.15(519), provided
that, if no Moneyline Telerate Page is so specified, then the applicable page
will be Moneyline Telerate Page 7052 and provided, further, that if Moneyline
Telerate Page 7052 applies but it is not specified on the face hereof whether
the weekly or monthly average applies, the weekly average will apply.

                  The "11th District Interest Determination Date" corresponding
to a particular Interest Reset Date will be the last working day in San
Francisco, in the first calendar month preceding such Interest Reset Date, on
which the Federal Home Loan Bank of San Francisco publishes the monthly average
cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank
District for the second calendar month preceding such Interest Reset Date.

                  "H.15(519)" means the weekly statistical release entitled
"Statistical Release H.15 (519)", or any successor publication, published by the
Board of Governors of the Federal Reserve System.

                  "H.15 Daily Update" means the daily update of H.15 (519)
available through the worldwide-web site of the Board of Governors of the
Federal Reserve System, at http://www.federalreserve.gov/releases/h15/update, or
any successor site or publication.

                  The "LIBOR Interest Determination Date" corresponding to any
Interest Reset Date means the second London Banking Day preceding such Interest
Reset Date, unless the Index Currency is pounds sterling, in which case the
LIBOR Interest Determination Date will be the Interest Reset Date.

                  (Reverse of Security continued on next page)
                                      -23-
<PAGE>

                  "London Banking Day" means a day on which commercial banks are
open for business (including dealings in the Index Currency) in London.

                  "Money Market Yield" means a yield expressed as a percentage
and calculated in accordance with the following formula:

                  Money Market Yield =       D x 360               x 100,
                                        ----------------
                                           360 - (D x M)

where

         -        "D" equals the per annum rate for commercial paper quoted on a
                  bank discount basis and expressed as a decimal; and

         -        "M" equals the actual number of days in the period from and
                  including the relevant Interest Reset Date to but excluding
                  the next succeeding Interest Reset Date.

                  "Moneyline Telerate LIBOR Page" means Moneyline Telerate Page
3750 or any replacement page or pages on which London interbank rates of major
banks for the Index Currency are displayed.

                  "Moneyline Telerate Page" means the display on Moneyline
Telerate, Inc., or any successor service, on the page or pages specified on the
face hereof, or any replacement page or pages on that service.

                  "Representative Amount" means an amount that, in the
Calculation Agent's judgment, is representative of a single transaction in the
relevant market at the relevant time.

                  "Reuters Screen LIBOR Page" means the display on the Reuters
Monitor Money Rates Service, or any successor service, on the page designated as
"LIBO" or any replacement page or pages on which London interbank rates of major
banks for the Index Currency are displayed.

                  "Reuters Screen US PRIME 1 Page" means the display on the "US
PRIME 1" page on the Reuters Monitor Money Rates Service, or any successor
service, or any replacement page or pages on that service, for the purpose of
displaying prime rates or base lending rates of major U.S. banks.

                  The "Treasury Interest Determination Date" corresponding to
any Interest Reset Date means the day of the week in which such Interest Reset
Date falls on which Treasury bills would normally be auctioned. If, as the
result of a legal holiday, an auction is so held on the Friday in the week
immediately preceding the week in which such Interest Reset Date falls, such
Friday will be the corresponding Treasury Interest Determination Date. If no
auction is held for the week in which such Interest Reset Date falls, then the
Interest Reset Date with respect to such week shall be the first Business

                  (Reverse of Security continued on next page)
                                      -24-
<PAGE>

Day of such week. If an auction date shall fall on a day that would otherwise be
an Interest Reset Date, then such Interest Reset Date shall instead be the first
Business Day immediately following such auction date.

                  "Treasury Notes" means direct, noncallable, fixed rate
obligations of the U.S. government.

                  References in this Security to U.S. dollars shall mean, as of
any time, the coin or currency that is then legal tender for the payment of
public and private debts in the United States of America.

                  References in this Security to a particular currency other
than U.S. dollars shall mean, as of any time, the coin or currency that is then
legal tender for the payment of public and private debts in the country issuing
such currency on the Original Issue Date.

                  References in this Security to a particular heading or
headings on any of Designated CMT Telerate Page, H.15(519), H.15 Daily Update,
Moneyline Telerate LIBOR Page, Moneyline Telerate Page, Reuters Screen LIBOR
Page or Reuters Screen US Prime 1 Page include any successor or replacement
heading or headings as determined by the Calculation Agent.

                  4. REDEMPTION AT THE COMPANY'S OPTION

                  Unless a Redemption Commencement Date is specified on the face
hereof, except as provided below, this Security shall not be redeemable at the
option of the Company before the Stated Maturity Date. If a Redemption
Commencement Date is so specified, and unless otherwise specified on the face
hereof, this Security is subject to redemption upon not less than 30 days' nor
more than 60 days' notice at any time and from time to time on or after the
Redemption Commencement Date, in each case as a whole or in part, at the
election of the Company and at the applicable Redemption Price specified on the
face hereof (expressed as a percentage of the principal amount of this Security
to be redeemed), together with accrued interest to the Redemption Date, but
interest installments due on or prior to such Redemption Date will be payable to
the Holder of this Security, or one or more Predecessor Securities, of record at
the close of business on the relevant record date, all as provided in the
Indenture; provided, however, that the first two paragraphs of Section 1103 of
the Indenture shall not apply to this Security, and if less than all of the
Securities of this series are to be redeemed, the Company may select, from
Securities of this series that are subject to redemption pursuant to the terms
thereof, the Security or Securities, or portion or portions thereof, to be
redeemed.

                  In the event that the Guarantor shall be obligated to pay any
Additional Amounts due to a change in law, regulation or interpretation, the
Company may, at its option, redeem this Security as a whole at a redemption
price of 100% of the principal amount thereof (or, if this Security is issued
with an original issue discount, 100% of the OID Default Amount) together with
accrued interest to the date fixed for redemption.

                  (Reverse of Security continued on next page)
                                     -25-
<PAGE>

                  5. REPAYMENT AT THE HOLDER'S OPTION

                  Except as otherwise may be provided on the face hereof, if one
or more Repayment Dates are specified on the face hereof, this Security will be
repayable in whole or in part in increments of $1,000 (provided that the
remaining principal amount of any Security surrendered for partial repayment
shall at least equal an Authorized Denomination), on any such Repayment Date, in
each case at the option of the Holder and at the applicable Repayment Price
specified on the face hereof (expressed as a percentage of the principal amount
to be repaid), together with accrued interest to the applicable Repayment Date
(but interest installments due on or prior to such Repayment Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant record date as provided in
the Indenture). If this security provides for more than one Repayment Date, and
the Holder exercises its option to elect repayment, the Holder shall be deemed
to have elected repayment on the earliest Repayment Date after all conditions to
such exercise have been satisfied, and references herein to the applicable
Repayment Date shall mean such earliest Repayment Date.

                  In order for the exercise of such option to be effective and
this Security to be repaid, the Company must receive at the applicable address
of the Paying Agent set forth below (or at such other place or places of which
the Company shall from time to time notify the Holder of this Security), on any
Business Day not later than the 30th, and not earlier than the 60th, calendar
day prior to the applicable Repayment Date (or, if either such calendar day is
not a Business Day, the next succeeding Business Day), either (i) this Security,
with the form below entitled "Option to Elect Repayment" duly completed and
signed, or (ii) a telegram, telex, facsimile transmission or letter from a
member of a national securities exchange or the National Association of
Securities Dealers, Inc., a commercial bank or a trust company in the United
States of America setting forth (a) the name, address and telephone number of
the Holder of this Security, (b) the principal amount of this Security and the
amount of this Security to be repaid, (c) a statement that the option to elect
repayment is being exercised thereby and (d) a guarantee stating that the
Company will receive this Security, with the form below entitled "Option to
Elect Repayment" duly completed and signed, not later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter
(provided that this Security and form duly completed and signed are received by
the Company by such fifth Business Day). Any such election shall be irrevocable.
The address to which such deliveries are to be made is J.P. Morgan Trust
Company, National Association, Attention: Institutional Trust Services/George N.
Reaves, 227 W. Monroe Street/Suite 2600, Chicago, IL 60607 (or at such other
places as the Company or the Paying Agent shall notify the Holder of this
Security). All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Security for repayment will be determined by the
Company, whose determination will be final and binding. Notwithstanding the
foregoing, (x) if this Security is a Global Security, the option of the Holder
to elect repayment may be exercised in accordance with the Applicable Procedures
of the Depositary for this Security at least 15 calendar days prior to the
applicable Repayment Date and (y) whether or not this Security is a Global
Security, the

                  (Reverse of Security continued on next page)
                                      -26-
<PAGE>
option of the Holder to elect repayment may be exercised in any such manner as
the Company may approve.

                  6. TRANSFER AND EXCHANGE

                  As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Security is registrable in
the Security Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company in any place where the principal
of and any premium and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his or
her attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of Authorized Denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees.

                  As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different Authorized Denomination, as requested by the Holder surrendering
the same.

                  No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

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

                  If this Security is a Global Security, this Security shall be
subject to the provisions of the Indenture relating to Global Securities,
including the limitations in Section 305 thereof on transfers and exchanges of
Global Securities.

                  7. [RESERVED.]

                  8. REMEDIES.

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

                  As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a

                  (Reverse of Security continued on next page)
                                      -27-
<PAGE>
continuing Event of Default with respect to the Securities of this series, the
Holders of not less than 25% in principal amount of the Securities of this
series at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee indemnity reasonably satisfactory to it, and the Trustee shall not
have received from the Holders of a majority in principal amount of Securities
of this series at the time Outstanding a direction inconsistent with such
request, and shall have failed to institute any such proceeding, for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.

                  No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest on this Security at the times, place and rate, and
in the coin or currency, herein prescribed.

                  9. MODIFICATION AND WAIVER.

                  The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the Guarantor and the rights of the Holders of
the Securities of each series to be affected under the Indenture at any time by
the Company, the Guarantor and the Trustee with the consent of the Holders of a
majority in principal amount of the Securities at the time Outstanding of all
series to be affected (considered together as one class for this purpose). The
Indenture also contains provisions (i) permitting the Holders of a majority in
principal amount of the Securities at the time Outstanding of all series to be
affected under the Indenture (considered together as one class for this
purpose), on behalf of the

                  (Reverse of Security continued on next page)
                                      -28-
<PAGE>
Holders of all Securities of such series, to waive compliance by the Company and
the Guarantor with certain provisions of the Indenture and (ii) permitting the
Holders of a majority in principal amount of the Securities at the time
Outstanding of any series to be affected under the Indenture (with each such
series considered separately for this purpose), on behalf of the Holders of all
Securities of such series, to waive certain past defaults under the Indenture
and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

                  10. GOVERNING LAW.

                  THIS SECURITY AND THE INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

                                      -29-
<PAGE>
                                    GUARANTEE
                                       OF
                                  POPULAR, INC.

                  Popular, Inc. (the "Guarantor") hereby unconditionally
guarantees to the Holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if any,
of (including any amount in respect of original issue discount), and interest,
if any (together with any Additional Amounts payable pursuant to the terms of
this Security), on this Security and the due and punctual payment of the sinking
fund payments, if any, and analogous obligations, if any, provided for pursuant
to the terms of this Security, when and as the same shall become due and
payable, whether at Stated Maturity or upon redemption, repayment or upon
declaration of acceleration or otherwise according to the terms of this Security
and of the Indenture. In case of default by the Company in the payment of any
such principal (including any amount in respect of original issue discount), any
premium or interest (together with any Additional Amounts payable pursuant to
the terms of this Security), sinking fund payment, or analogous obligation, the
Guarantor agrees duly and punctually to pay the same. The Guarantor hereby
agrees that its obligations hereunder shall be as principal and not merely as
surety, and shall be absolute and unconditional irrespective of any extension of
the time for payment of this Security, any modification of this Security, any
invalidity, irregularity or unenforceability of this Security or the Indenture,
any failure to enforce the same or any waiver, modification, consent or
indulgence granted to the Company with respect thereto by the Holder of this
Security or the Trustee, or any other circumstances which may otherwise
constitute a legal or equitable discharge of a surety or guarantor. The
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a demand or proceeding first against the Company, protest or
notice with respect to this Security or the indebtedness evidenced thereby and
all demands whatsoever, and covenants that this guarantee will not be discharged
as to this Security except by payment in full of the principal of (including any
amount payable in respect of original issue discount), and any premium or
interest (together with any Additional Amounts payable pursuant to the terms of
this Security), thereon.

                  The Guarantor irrevocably waives any and all rights to which
it may be entitled, by operation of law or otherwise, upon making any payment
hereunder (i) to be subrogated to the rights of a Holder against the Company
with respect to such payment or otherwise to be reimbursed, indemnified or
exonerated by the Company in respect thereof or (ii) to receive any payment, in
the nature of contribution or for any other reason, from any other obligor with
respect to such payment.

                  This guarantee shall not be valid or become obligatory for any
purpose with respect to this Security until the certificate of authentication on
this Security shall have been signed by the Trustee.

                  This guarantee is governed by and construed in accordance with
the laws of the State of New York.

                                      -30-
<PAGE>

                  IN WITNESS WHEREOF, Popular, Inc. has caused this guarantee to
be signed by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.

                                   POPULAR INC.

                                   By:
                                      ------------------------------------
                                       Name:
                                            ------------------------------
                                       Title:
                                             -----------------------------

                                   By:
                                      ------------------------------------
                                       Name:
                                            ------------------------------
                                       Title:
                                             -----------------------------

                                   By:
                                      ------------------------------------
                                       Name:
                                            ------------------------------
                                       Title:
                                             -----------------------------

Attested:  ________________________

                                      -31-
<PAGE>
                                                            CUSIP NO. __________

                                                 ORIGINAL ISSUE DATE: __________

                           POPULAR NORTH AMERICA, INC.
                           MEDIUM-TERM NOTE, SERIES F

                            OPTION TO ELECT REPAYMENT

               TO BE COMPLETED ONLY IF THIS SECURITY IS REPAYABLE
                   AT THE OPTION OF THE HOLDER AND THE HOLDER
                          ELECTS TO EXERCISE SUCH RIGHT

                  The undersigned hereby irrevocably requests and instructs the
Company to repay the Security referred to in this notice (or the portion thereof
specified below) at the applicable Repayment Price, together with interest to
the Repayment Date, all as provided for in such Security, to the undersigned,
whose name, address and telephone number are as follows:

-------------------------------------------------------------------------------
                     (please print name of the undersigned)

-------------------------------------------------------------------------------
                    (please print address of the undersigned)

-------------------------------------------------------------------------------
               (please print telephone number of the undersigned)

                  If such Security provides for more than one Repayment Date,
the undersigned requests repayment on the earliest Repayment Date after the
requirements for exercising this option have been satisfied, and references in
this notice to the Repayment Date mean such earliest Repayment Date. Terms used
in this notice that are defined in such Security are used herein as defined
therein.

                  For such Security to be repaid the Company must receive at the
applicable address of the Paying Agent set forth below or at such other place or
places of which the Company shall from time to time notify the Holder of such
Security, on any Business Day not later than the 30th or earlier than the 60th
calendar day prior to the Repayment Date (or, if either such calendar day is not
a Business Day, the next succeeding Business Day), either (i) such Security,
with this "Option to Elect Repayment" form duly completed and signed, or (ii) a
telegram, telex, facsimile transmission or letter from a member of a national
securities exchange or the National Association of Securities Dealers, Inc., a
commercial bank or a trust company in the United States of America setting forth
(a) the name, address and telephone number of the Holder of such Security,

                                      -32-
<PAGE>

(b) the principal amount of such Security and the amount of such Security to be
repaid, (c) a statement that the option to elect repayment is being exercised
thereby and (d) a guarantee stating that such Security to be repaid with the
form entitled "Option to Elect Repayment" on the addendum to the Security duly
completed and signed will be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (provided that such Security and form duly completed and signed are
received by the Company by such fifth Business Day). The address to which such
deliveries are to be made is:

                  J.P. Morgan Trust Company National Association
                  Attention:  Institutional Trust Services/George N. Reaves
                  227 W. Monroe Street/Suite 2600
                  Chicago, IL  60607

or at such other place as the Company or the Paying Agent shall notify the
Holder of such Security.

                  If less than the entire principal amount of such Security is
to be repaid, specify the portion thereof (which shall equal any Authorized
Denomination) that the Holder elects to have repaid:

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

and specify the denomination or denominations (which shall equal any Authorized
Denomination) of the Security or Securities to be issued to the Holder in
respect of the portion of such Security not being repaid (in the absence of any
specification, one Security will be issued in respect of the portion not being
repaid):

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

Date:
     ---------------------          -------------------------------------------
                                    Notice: The signature to this Option to
                                    Elect Repayment must correspond with the
                                    name of the Holder as written on the face of
                                    such Security in every particular without
                                    alteration or enlargement or any other
                                    change whatsoever.

                                      -33-
<PAGE>
                                  ABBREVIATIONS

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

                  TEN COM  -       as tenants in common

                  TEN ENT  -       as tenants by the entireties

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

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

                        under Uniform Gifts to Minors Act

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

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

                                      -34-
<PAGE>
                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

--------------------------------
/-------------------------------/

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

-------------------------------------------------------------------------------
                   (Please Print or Typewrite Name and Address
                     Including Postal Zip Code of Assignee)

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

the attached Security and all rights thereunder, and hereby irrevocably
constitutes and

appoints
         ----------------------------------------------------------------------

to transfer said Security on the books of the Company, with full power of
substitution in

the premises.

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

Signature Guaranteed

NOTICE: Signature must be guaranteed.     NOTICE:  The signature to this
                                          assignment must correspond with the
                                          name of the Holder as written upon
                                          the face of the attached Security
                                          in every particular, without
                                          alteration or enlargement or any
                                          change whatever.

                                      -35-<PAGE>

                                  POPULAR, INC.

                   MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
                           (Dated as of June 30, 2004)

         Medium-Term Notes, Series 5 (collectively, the "Notes") in the
aggregate principal amount of up to $2,500,000,000, less the aggregate initial
offering price of Securities (as defined in the Prospectus, dated December 29,
2003, relating to debt securities and preferred stock of the Company, Popular
International Bank, Inc. and Popular North America, Inc.) authenticated and
delivered upon original issuance other than the Notes prior to or after the date
hereof, are to be offered on a continuous basis by Popular, Inc. (the "Company")
through UBS Securities LLC, Banc of America Securities LLC, Keefe, Bruyette &
Woods, Inc. and Popular Securities, Inc., who, as agents (each an "Agent"), have
agreed to use their reasonable efforts to solicit offers to purchase the Notes
from the Company. The Agents also may purchase Notes as principal for resale.

         The Notes are being sold pursuant to a Distribution Agreement among the
Company and the Agents, dated as of June 30, 2004 (the "Distribution
Agreement"). The Notes will be issued pursuant to the Indenture, dated as of
February 15, 1995, as supplemented by the First Supplemental Indenture, dated as
of May 8, 1997 and the Second Supplemental Indenture, dated as of August 5, 1999
(together, the "Indenture"), each between the Company and J.P. Morgan Trust
Company, National Association (successor in interest to Bank One, N.A.), as
Trustee (the "Trustee"). A Registration Statement (the "Registration Statement,"
which term shall include any additional registration statements filed in
connection with the Notes as provided in the Distribution Agreement) with
respect to the Notes has been filed with the Securities and Exchange Commission
(the "Commission"). The Prospectus dated December 29, 2003, as supplemented with
respect to the Notes, is herein referred to as the "Prospectus." The most recent
supplement to the Prospectus with respect to the specific terms of the Notes is
herein referred to as the "Pricing Supplement."

         The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes (each, a "Book-Entry Note") delivered to
the Trustee, as agent for The Depository Trust Company ("DTC"), and recorded in
the book-entry system maintained by DTC, or (b) in certificated form (each, a
"Certificated Note") delivered to the purchaser thereof or a person designated
by such purchaser. Owners of beneficial interests in Book-Entry Notes will be
entitled to physical delivery of Certificated Notes equal in principal amount to
their respective beneficial interests only upon certain limited circumstances
described in the Prospectus.

         General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in Part III hereof.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed thereto in the Indenture or the Notes, as the case may be.

<PAGE>

                   PART I: PROCEDURES OF GENERAL APPLICABILITY

Date of Issuance/
  Authentication:              Each Note will be dated as of the date of its
                               authentication by the Trustee or its duly
                               appointed authenticating agent. Each Note shall
                               also bear an original issue date (the "Original
                               Issue Date"). The Original Issue Date shall
                               remain the same for all Notes subsequently issued
                               upon transfer, exchange or substitution of an
                               original Note regardless of their dates of
                               authentication.

Maturities:                    Each Note will mature on a date selected by the
                               purchaser and agreed to by the Company which is
                               not less than nine months from its Original Issue
                               Date; provided, however, that Notes bearing
                               interest at rates determined by reference to
                               selected indices ("Floating Rate Notes") will
                               mature on an Interest Payment Date.

Currencies:                    Each Note shall be denominated in one of the
                               currencies or currency units, as specified in the
                               relevant Pricing Supplement, or in such other
                               currency or currency unit as may be agreed from
                               time to time between the Company and the
                               applicable Agent(s) and as specified in the
                               relevant Pricing Supplement, or, if no currency
                               or currency unit is specified therein, in U.S.
                               dollars. Notes denominated in one or more
                               currencies or currency units other than in U.S.
                               dollars are herein referred to as "Multi-Currency
                               Notes." Notes that have the amount of principal
                               payments determined by reference to an index are
                               herein referred to as "Indexed Notes."

Denominations:                 The Notes will be issued in denominations of a
                               minimum of $1,000 and integral multiples of
                               $1,000. Any Notes denominated other than in U.S.
                               dollars will be issuable in denominations as set
                               forth in the relevant Multi-Currency Note
                               Prospectus Supplement. For special provisions
                               relating to Multi-Currency Notes or Indexed
                               Notes, see the related Multi-Currency or Indexed
                               Note Prospectus Supplement.

Registration:                  Notes will be issued only in fully registered
                               form.

Redemption/Repayment:          The Notes will be subject to repayment at the
                               option of the Holders thereof in accordance with
                               the terms of

                                      -2-
<PAGE>

                               the Notes on their respective Repayment Dates, if
                               any. Repayment Dates, if any, will be fixed at
                               the time of sale and set forth in the applicable
                               Pricing Supplement and in the applicable Note. If
                               no Repayment Dates are indicated with respect to
                               a Note, such Note will not be repayable at the
                               option of the Holder prior to Maturity.

                               The Notes will be subject to redemption by the
                               Company on and after their respective Redemption
                               Commencement Dates, if any. Redemption
                               Commencement Dates, if any, will be fixed at the
                               time of sale and set forth in the applicable
                               Pricing Supplement and in the applicable Note. If
                               no Redemption Commencement Dates are indicated
                               with respect to a Note, such Note will not be
                               redeemable prior to Maturity, except as set forth
                               in the Prospectus in the event that the Company
                               is obligated to pay Additional Amounts in respect
                               of the Notes.

Calculation of
  Interest:                    In the case of Fixed Rate Notes, interest
                               (including payments for partial periods) will be
                               calculated and paid on the basis of a 360-day
                               year of twelve 30-day months. In the case of
                               Floating Rate Notes, interest will be calculated
                               and paid on the basis of the actual number of
                               days in the interest period divided by 360, with
                               the exception of Treasury Rate Notes and CMT Rate
                               Notes, for which interest will be calculated on
                               the basis of the actual number of days in the
                               interest period divided by the actual number of
                               days in the year. If an Interest Payment Date
                               with respect to any Fixed Rate Note falls on a
                               day that is not a Business Day (as hereinafter
                               defined), the payment of interest required to be
                               made on such Interest Payment Date need not be
                               made on such day, but may be made on the next
                               succeeding Business Day with the same force and
                               effect as if made on such Interest Payment Date
                               and no interest shall accrue on such payment for
                               the period from and after such Interest Payment
                               Date. If an Interest Payment Date with respect to
                               any Floating Rate Note would otherwise fall on a
                               day that is not a Business Day, such Interest
                               Payment Date will be the following day that is a
                               Business Day, except that in the case of a LIBOR
                               Note, if such day falls in the next calendar
                               month, such Interest Payment Date will be

                                      -3-
<PAGE>

                               the preceding day that is a Business Day. If the
                               Stated Maturity, or date of earlier redemption or
                               repayment, as the case may be, of a Note is not a
                               Business Day, the payment of principal and
                               interest due on such day shall be made on the
                               next succeeding Business Day and no interest
                               shall accrue on such payment for the period from
                               and after such Stated Maturity, or date of
                               earlier redemption or repayment. For special
                               provisions relating to Multi-Currency Notes or
                               Indexed Notes, see the related Multi-Currency or
                               Indexed Note Prospectus Supplement.

Acceptance and
  Rejection of Offers:         The Company shall have the sole right to accept
                               offers to purchase Notes from the Company and may
                               reject any such offer in whole or in part. Each
                               Agent shall communicate to the Company, orally or
                               in writing, each reasonable offer to purchase
                               Notes from the Company received by it. Each Agent
                               shall have the right, in its discretion
                               reasonably exercised, without notice to the
                               Company, to reject any offer to purchase Notes
                               through it in whole or in part.

Preparation of
  Pricing Supplement:          If any offer to purchase a Note is accepted by
                               the Company, the Company, with the approval of
                               the Agent which presented the order, will prepare
                               a Pricing Supplement reflecting the terms of such
                               Note and file the Pricing Supplement relating to
                               the Notes with the Commission in accordance with
                               Rule 424 under the Securities Act of 1933, as
                               amended. Information to be included in the
                               Pricing Supplement shall include:

                                      1. the name of the Company;

                                      2. the title of the securities, including
                               series designation, if any;

                                      3. the date of the Pricing Supplement and
                               the date of the Prospectus Supplement to which
                               the Pricing Supplement relates;

                                      4. the price to public (but only if (a)
                               the trade is being made on an agency basis and
                               (b) such price to public is other than 100%);

                                      -4-
<PAGE>

                                      5. net proceeds to the Company (but only
                               if (a) the trade is being made on a principal
                               basis and (b) the net proceeds to the Company is
                               other than 100%), less what would have been the
                               applicable agency commission;

                                      6. the information with respect to the
                               terms of the Notes set forth below (whether or
                               not the applicable Note is a Book-Entry Note)
                               under "Procedures for Notes Issued in Book-Entry
                               Form -- Settlement Procedures," items A.2, A.3,
                               A.4, A.5, A.6, A.7, A.8 and A.9; and

                                      7. any other terms of the Notes not
                               otherwise specified in the Prospectus or
                               Prospectus Supplement, including, without
                               limitation, any other terms required by the
                               Prospectus or Prospectus Supplement.

                               One copy of such filed document will be sent by
                               telecopy or overnight express (for delivery not
                               later than 11:00 A.M. on the Business Day next
                               following the trade date) to the applicable Agent
                               at the following addresses:

                               To UBS Securities LLC:
                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention: Fixed Income Syndicate
                               Telephone: (203) 719-1088
                               Telecopy: (203) 719-0495

                               To Banc of America Securities LLC:
                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-301-2M-01
                               New York, New York 10019
                               Attention: High Grade Debt Capital Markets
                                          Transaction Management
                               Telecopy: (212) 847-5184

                                      -5-
<PAGE>

                               To Keefe, Bruyette & Woods, Inc.:
                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York  10019
                               Attention: Fixed Income Syndicate
                               Telecopy:  (212) 582-5419

                               To Popular Securities, Inc.:
                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico  00918
                               Attention: Ken McGrath
                               Telecopy:  (787) 766-3485

                               The applicable Agent will cause a stickered
                               supplemented Prospectus with the trade
                               confirmation to be delivered to the purchaser of
                               the Note.

                               For record keeping purposes, one copy of each
                               Pricing Supplement shall also be mailed or
                               telecopied to each Agent and the Trustee at the
                               following respective addresses:

                               To UBS Securities LLC:
                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention: Fixed Income Syndicate
                               Telephone: (203) 719-1088
                               Telecopy:   (203) 719-0495

                               To Banc of America Securities LLC:
                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-103-2M-01
                               New York, New York 10019
                               Attention:  High Grade Debt Capital Markets
                                           Transaction Management
                               Telecopy:   (212) 847-5184

                                      -6-
<PAGE>

                               To Keefe, Bruyette & Woods, Inc.:
                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York  10019
                               Attention: Fixed Income Syndicate
                               Telecopy: (212) 582-5419

                               To Popular Securities, Inc.:
                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico  00918
                               Attention:  Ken McGrath
                               Telecopy:   (787) 766-3485

                               To the Trustee:
                               J.P. Morgan Trust Company, National Association
                               227 W. Monroe Street, Suite 2600
                               Chicago, IL  60606
                               Attention:  Institutional Trust Services/Georges
                                           N. Reaves
                               Telephone:  (312) 267-5121
                               Telecopy:   (312) 267-5209

                               In each instance that a Pricing Supplement is
                               prepared, the applicable Agent will affix the
                               Pricing Supplement to supplemented Prospectuses
                               prior to its use. Outdated Pricing Supplements
                               and the Prospectuses to which they are attached
                               (other than those retained for files) will be
                               destroyed.

Settlement:                    The receipt of immediately available funds by the
                               Company in payment for a Note and the
                               authentication and delivery of such Note shall,
                               with respect to such Note, constitute
                               "settlement." Offers accepted by the Company will
                               be settled at a time as the purchaser and the
                               Company shall agree and pursuant to the timetable
                               for settlement set forth in Parts II and III
                               hereof under "Settlement Procedures" with respect
                               to Book-Entry Notes and Certificated Notes,
                               respectively (each such date fixed for
                               settlement, a "Settlement Date"). If procedures A
                               and B of the applicable Settlement Procedures
                               with respect to a particular offer are not
                               completed on or before the time set forth under
                               the applicable "Settlement Procedures Timetable,"
                               such offer shall not be settled until the
                               Business Day following the completion of

                                      -7-
<PAGE>

                               Settlement Procedures A and B or such later date
                               as the purchaser and the Company shall agree.

                               In the event of a purchase of Notes by an Agent
                               as principal, appropriate settlement details will
                               be set forth in the applicable Terms Agreement to
                               be entered into between the applicable Agent and
                               the Company pursuant to the Distribution
                               Agreement.

Procedure for Changing
  Rates or Other
  Variable Terms:              When a decision has been reached to change the
                               interest rate or any other variable term on any
                               Notes being offered by the Company, the Company
                               will promptly advise the Agents and the Agents
                               will forthwith suspend solicitation of offers to
                               purchase such Notes. Each Agent will telephone
                               the Company with recommendations as to the
                               changed interest rates or other variable terms.
                               At such time as the Company advises the Agents of
                               the new interest rates or other variable terms,
                               the Agents may resume solicitation of offers to
                               purchase such Notes. Until such time, only
                               "indications of interest" may be recorded.
                               Immediately after acceptance by the Company of an
                               offer to purchase at a new interest rate or new
                               variable term, the Company, the Agents and the
                               Trustee shall follow the procedures set forth
                               under the applicable "Settlement Procedures."

                                      -8-
<PAGE>

Suspension of
  Solicitation;
  Amendment or
  Supplement:                  The Company may instruct the Agents to suspend
                               solicitation of purchases at any time. Upon
                               receipt of such instructions, the Agents will
                               forthwith suspend solicitation of offers to
                               purchase from the Company until such time as the
                               Company has advised them that solicitation of
                               offers to purchase may be resumed. If the Company
                               decides to amend the Registration Statement
                               (including incorporating any documents by
                               reference therein) or supplement any of such
                               documents (other than to change rates or other
                               variable terms), it will promptly advise the
                               Agents and, except in the case of an amendment by
                               the filing of a document incorporated by
                               reference in the Registration Statement, will
                               furnish each Agent and its counsel with copies of
                               the proposed amendment or supplement. One copy of
                               such filed document, along with a copy of the
                               cover letter sent to the Commission, will be
                               delivered or mailed to the Agents at the
                               following addresses:

                               To UBS Securities LLC:
                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention: Fixed Income Syndicate
                               Telephone: (203) 719-1088
                               Telecopy:  (203) 719-0495

                               To Banc of America Securities LLC:
                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-301-2M-01
                               New York, New York 10019
                               Attention: High Grade Debt Capital Markets
                                          Transaction Management
                               Telecopy:  (212) 847-5184

                                      -9-
<PAGE>

                               To Keefe, Bruyette & Woods, Inc.:
                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York  10019
                               Attention: Fixed Income Syndicate
                               Telecopy:  (212) 582-5419

                               To Popular Securities, Inc.:
                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico  00918
                               Attention: Ken McGrath
                               Telecopy:  (787) 766-3485

                               In the event that at the time the solicitation of
                               offers to purchase from the Company is suspended
                               (other than to change interest rates or other
                               variable terms) there shall be any offers to
                               purchase Notes that have been accepted by the
                               Company which have not been settled, the Company
                               will promptly advise the Agents and the Trustee
                               whether such offers may be settled and whether
                               copies of the Prospectus as theretofore amended
                               and/or supplemented as in effect at the time of
                               the suspension may be delivered in connection
                               with the settlement of such orders. The Company
                               will have the sole responsibility for such
                               decision and for any arrangements which may be
                               made in the event that the Company determines
                               that such orders may not be settled or that
                               copies of such Prospectus may not be so
                               delivered.

Delivery of Prospectus:        A copy of the most recent Prospectus and Pricing
                               Supplement must accompany or precede the earlier
                               of (a) the written confirmation of a sale sent to
                               a customer or his agent and (b) the delivery of
                               Notes to a customer or his agent.

Authenticity of
  Signatures:                  The Agents will have no obligation or liability
                               to the Company or the Trustee in respect of the
                               authenticity of the signature of any officer,
                               employee or agent of the Company or the Trustee
                               on any Note.

                                      -10-
<PAGE>

Documents Incorporated
  by Reference:                The Company shall supply each Agent with an
                               adequate supply of all documents incorporated by
                               reference in the Registration Statement.

Business Day:                  "Business Day" has the meaning set forth in the
                               Prospectus Supplement.

                                      -11-
<PAGE>

                      PART II: PROCEDURES FOR NOTES ISSUED
                               IN BOOK-ENTRY FORM

         In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations from the
Company and The First National Bank of Chicago to DTC, dated August 6, 1999, as
supplemented by a Bring-Down Letter of Representations from the Company and the
Trustee to DTC, dated June 30, 2004, and a Medium-Term Note Certificate
Agreement between The First National Bank of Chicago and DTC, dated May 26, 1989
(the "Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").

Issuance:                      All Fixed Rate Book-Entry Notes having the same
                               Original Issue Date, interest rate, terms of
                               redemption or repayment, if any, and Stated
                               Maturity (collectively, the "Fixed Rate Terms")
                               will be represented initially by a single global
                               security in fully registered form without
                               coupons; and all Floating Rate Book-Entry Notes
                               having the same Original Issue Date, interest
                               rate basis or bases upon which interest may be
                               determined (each, an "Interest Rate Basis"),
                               which may be one or more of the Commercial Paper
                               Rate, the Treasury Rate, LIBOR, the CD Rate, the
                               CMT Rate, the Federal Funds Rate, the Prime Rate,
                               the 11th District Rate, and any other rate set
                               forth by the Company, Initial Interest Rate,
                               Index Maturity, Spread and/or Spread Multiplier,
                               if any, Minimum Interest Rate, if any, Maximum
                               Interest Rate, if any, terms of redemption or
                               repayment, if any, and Stated Maturity
                               (collectively, "Floating Rate Terms") will be
                               represented initially by a single Book-Entry
                               Note.

                               Each Book-Entry Note will be dated and issued as
                               of the date of its authentication by the Trustee
                               or its duly appointed authenticating agent. Each
                               Book-Entry Note will bear interest from a date
                               (the "Interest Accrual Date") which will be (a)
                               with respect to an original Book-Entry Note (or
                               any portion thereof), its Original Issue Date and
                               (b) with respect to any Book-Entry Note (or
                               portion thereof) issued subsequently upon
                               exchange or transfer of a Book-Entry Note or in
                               lieu of a destroyed, lost or

                                      -12-
<PAGE>

                               stolen Book-Entry Note, the most recent Interest
                               Payment Date to which interest has been paid or
                               duly provided for on the predecessor Book-Entry
                               Note or Notes or if no such payment or provision
                               has been made, the Original Issue Date of the
                               predecessor Book-Entry Note or Notes, regardless
                               of the date of authentication of such
                               subsequently issued Book-Entry Note. No
                               Book-Entry Note shall represent any Certificated
                               Note.

Identification:                The Agents have arranged with the CUSIP Service
                               Bureau (the "CUSIP Service Bureau") of Standard &
                               Poor's Ratings Service, a division of the
                               McGraw-Hill Companies ("S&P"), for the
                               reservation of approximately 900 CUSIP numbers
                               for each rank of Notes which have been reserved
                               for future assignment to Book-Entry Notes
                               representing Notes issued in book-entry form and
                               have delivered to the Company, the Trustee and
                               DTC an initial written list of such CUSIP
                               numbers. The Trustee will assign CUSIP numbers to
                               Book-Entry Notes as described below under
                               Settlement Procedure B. DTC will notify the CUSIP
                               Service Bureau periodically of the CUSIP numbers
                               that the Trustee has assigned to Book-Entry
                               Notes. The Trustee will notify the Company at any
                               time when fewer than 100 of the respective
                               reserved CUSIP numbers remain unassigned to
                               Book-Entry Notes, and, if it deems necessary, the
                               Company will reserve additional CUSIP numbers for
                               assignment to Book-Entry Notes representing Notes
                               issued in book-entry form. Upon obtaining such
                               additional CUSIP numbers, the Company will
                               deliver a list of such additional numbers to the
                               Trustee and DTC. Book-Entry Notes having an
                               aggregate principal amount in excess of
                               $500,000,000 and otherwise required to be
                               represented by the same Global Certificate will
                               instead be represented by two or more Global
                               Certificates which shall be assigned the same
                               CUSIP number.

Registration:                  Each Book-Entry Note will be registered in the
                               name of CEDE & CO., as nominee for DTC, on the
                               register maintained by the Trustee under the
                               Indenture. The beneficial owner of a Book-Entry
                               Note (i.e., an owner of a beneficial interest in
                               a

                                      -13-
<PAGE>

                               Book-Entry Note), or one or more indirect
                               participants in DTC designated by such owner,
                               will designate one or more participants in DTC
                               (with respect to such Book-Entry Note, the
                               "Participants") to act as agent for such
                               beneficial owner in connection with the
                               book-entry system maintained by DTC, and DTC will
                               record in book-entry form, in accordance with
                               instructions provided by such Participants, a
                               credit balance with respect to such Book-Entry
                               Note in the account of such Participants. The
                               ownership interest of such beneficial owner in
                               such Book-Entry Note will be recorded through the
                               records of such Participants or through the
                               separate records of such Participants and one or
                               more indirect participants in DTC.

Transfers:                     Transfers of beneficial interests in a Book-Entry
                               Note will be accomplished by book entries made by
                               DTC and, in turn, by Participants (and in certain
                               cases, one or more indirect participants in DTC)
                               acting on behalf of beneficial transferors and
                               transferees of such Book-Entry Note.

Exchanges:                     The Trustee may deliver to DTC and the CUSIP
                               Service Bureau at any time a written notice
                               specifying (a) the CUSIP numbers of two or more
                               Book-Entry Notes Outstanding on such date that
                               represent Book-Entry Notes having the same Fixed
                               Rate Terms or Floating Rate Terms, as the case
                               may be, other than Original Issue Dates, and for
                               which interest has been paid to the same date;
                               (b) a date, occurring at least 30 days after such
                               written notice is delivered and at least 30 days
                               before the next Interest Payment Date for the
                               related Book-Entry Notes, on which such
                               Book-Entry Notes shall be exchanged for a single
                               replacement Book-Entry Note; and (c) a new CUSIP
                               number to be assigned to such replacement
                               Book-Entry Note. Upon receipt of such a notice,
                               DTC will send to its Participants (including the
                               Trustee) a written reorganization notice to the
                               effect that such exchange will occur on such
                               date. Prior to the specified exchange date, the
                               Trustee will deliver to the CUSIP Service Bureau
                               written notice setting forth such exchange date
                               and the new CUSIP number and stating that, as of
                               such exchange date, the CUSIP numbers of the
                               Book-Entry Notes to be

                                      -14-
<PAGE>

                               exchanged will no longer be valid. On the
                               specified exchange date, the Trustee will
                               exchange such Book-Entry Notes for a single
                               Book-Entry Note bearing the new CUSIP number and
                               the CUSIP numbers of the exchanged Book-Entry
                               Notes will, in accordance with CUSIP Service
                               Bureau procedures, be cancelled and not
                               immediately reassigned. Notwithstanding the
                               foregoing, if the Book-Entry Notes to be
                               exchanged exceed $500,000,000 in aggregate
                               principal amount, one replacement Book-Entry Note
                               will be authenticated and issued to represent
                               each $500,000,000 of principal amount of the
                               exchanged Book-Entry Notes and an additional
                               Book-Entry Note will be authenticated and issued
                               to represent any remaining principal amount of
                               such Book-Entry Notes (see "Denominations"
                               below).

Denominations:                 All Book-Entry Notes will be denominated in U.S.
                               dollars and will be issued in denominations of a
                               minimum of $1,000 and integral multiples of
                               $1,000. Book-Entry Notes will be denominated in
                               principal amounts not in excess of $500,000,000.
                               If one or more Book-Entry Notes having an
                               aggregate principal amount in excess of
                               $500,000,000 would, but for the preceding
                               sentence, be represented by a single Book-Entry
                               Note, then one Book-Entry Note will be issued to
                               represent each $500,000,000 principal amount of
                               such Note or Notes issued in book-entry form and
                               an additional Book-Entry Note will be issued to
                               represent any remaining principal amount of such
                               Note or Notes issued in book-entry form. In such
                               a case, each of the Book-Entry Notes shall be
                               assigned the same CUSIP number.

Interest:                      General. Interest on each Note issued in
                               book-entry form will accrue from the Interest
                               Accrual Date of the Book-Entry Note representing
                               such Note. Each payment of interest on a
                               Book-Entry Note will include interest accrued
                               through the day preceding, as the case may be,
                               the Interest Payment Date, Stated Maturity Date,
                               Redemption Date or Repayment Date. Interest
                               payable at Maturity of a Book-Entry Note will be
                               payable to the Person to whom the principal of
                               such Note is payable. DTC will arrange for each
                               pending deposit message described under
                               Settlement Procedure C below to be transmitted to

                                      -15-
<PAGE>

                               S&P, which will use the information in the
                               message to include certain terms of the related
                               Book-Entry Note in the appropriate daily bond
                               report published by S&P.

                               Interest Payment Dates. Interest payments will be
                               made on each Interest Payment Date commencing
                               with the first Interest Payment Date following
                               the Original Issue Date; provided, however, the
                               first payment of interest on any Book-Entry Note
                               originally issued between a Regular Record Date
                               and an Interest Payment Date will occur on the
                               Interest Payment Date following the next Regular
                               Record Date.

                               Fixed Rate Notes. Unless otherwise specified in
                               the applicable Pricing Supplement, interest
                               payments on Fixed Rate Book-Entry Notes will be
                               made semiannually on June 15 and December 15 of
                               each year and at Maturity.

                               Floating Rate Notes. Except as provided in Part I
                               under "Calculation of Interest" and unless
                               otherwise specified in the applicable Pricing
                               Supplement, the Interest Payment Date for a
                               Floating Rate Note will be, in the case of
                               Floating Rate Notes which reset daily, weekly or
                               monthly, on the third Wednesday of each month or
                               on the third Wednesday of March, June, September
                               and December of each year as specified in the
                               applicable Pricing Supplement; in the case of
                               Floating Rate Notes which reset quarterly, on the
                               third Wednesday of March, June, September and
                               December of each year; in the case of Floating
                               Rate Notes which reset semiannually, on the third
                               Wednesday of the two months of each year
                               specified in the applicable Pricing Supplement;
                               and in the case of Floating Rate Notes which
                               reset annually, on the third Wednesday of the
                               month specified in the applicable Pricing
                               Supplement; and, in each case, at Maturity. For
                               additional special provisions relating to
                               Floating Rate Notes, see the Prospectus
                               Supplement.

                               Regular Record Dates. Unless otherwise specified
                               in the applicable Pricing Supplement, the Regular
                               Record Date with respect to any Interest Payment

                                      -16-
<PAGE>

                               Date for a Fixed Rate Note shall be the June 1 or
                               December 1 (whether or not a Business Day)
                               preceding such Interest Payment Date. Unless
                               otherwise specified in the applicable Pricing
                               Supplement, the Regular Record Date with respect
                               to any Interest Payment Date for any Floating
                               Rate Note shall be the date 15 calendar days
                               (whether or not a Business Day) preceding such
                               Interest Payment Date.

                               Notice of Interest Payments and Regular Record
                               Dates. On the first Business Day of January,
                               April, July and October of each year, the Trustee
                               will deliver to the Company and DTC a written
                               list of Regular Record Dates and Interest Payment
                               Dates that will occur during the six-month period
                               beginning on such first Business Day with respect
                               to Floating Rate Book-Entry Notes. Promptly after
                               each Interest Determination Date for Floating
                               Rate Book-Entry Notes, the Company will notify
                               S&P of the interest rates determined on such
                               Interest Determination Date.

Payments of Principal          Payments of Interest Only. Promptly after each
  and Interest:                Regular Record Date, the Trustee will deliver to
                               the Company and DTC a written notice specifying
                               by CUSIP number the amount of interest to be paid
                               on each Book-Entry Note issued under the
                               Indenture on the following Interest Payment Date
                               (other than an Interest Payment Date coinciding
                               with Maturity) and the total of such amounts. DTC
                               will confirm the amount payable on each
                               Book-Entry Note on such Interest Payment Date by
                               reference to the daily bond reports published by
                               Standard & Poor's. On such Interest Payment Date,
                               the Company will pay to the Trustee, and the
                               Trustee in turn will pay to DTC, such total
                               amount of interest due (other than at Maturity),
                               at the times and in the manner set forth below
                               under "Manner of Payment."

                               Payments at Maturity. On or about the first
                               Business Day of each month, the Trustee will
                               deliver to the Company and DTC a written list of
                               principal, interest and premium, if any, to be
                               paid on each Book-Entry Note issued under the
                               Indenture having a Maturity in the following
                               month. The Trustee and DTC will

                                      -17-
<PAGE>

                               confirm the amounts of such principal, premium
                               and interest payments with respect to a
                               Book-Entry Note on or about the fifth Business
                               Day preceding the Maturity of such Book-Entry
                               Note. At such maturity, the Company will pay to
                               the Trustee, and the Trustee in turn will pay to
                               DTC, the principal amount of such Note, together
                               with interest and premium, if any, due at such
                               Maturity, at the times and in the manner set
                               forth below under "Manner of Payment." Promptly
                               after payment to DTC of the principal, interest
                               and premium, if any, due at the Maturity of such
                               Book-Entry Note, the Trustee will cancel and
                               destroy such Book-Entry Note and deliver to the
                               Company a certificate of destruction therefor.

                               Manner of Payment. The total amount of any
                               principal, premium, if any, and interest due on
                               Book-Entry Notes on any Interest Payment Date or
                               at Maturity shall be paid by the Company to the
                               Trustee in funds available for use as of 9:30
                               a.m., New York City time, on such date. The
                               Company will make such payment on such Book-Entry
                               Notes by instructing the Trustee to withdraw
                               funds from an account maintained by the Company
                               with the Trustee. The Company will confirm such
                               instructions in writing to the Trustee. Prior to
                               10:00 a.m., New York City time, on such date or
                               as soon as possible thereafter, the Trustee will
                               pay by separate wire transfer (using Fedwire
                               message entry instructions in a form previously
                               specified by DTC) to an account at the Federal
                               Reserve Bank of New York previously specified by
                               DTC, in funds available for immediate use by DTC,
                               each payment of principal, premium, if any, and
                               interest due on a Book-Entry Note on such date.
                               Thereafter on such payment date, DTC will pay, in
                               accordance with its SDFS operating procedures
                               then in effect, such amounts in funds available
                               for immediate use to the respective Participants
                               in whose names such Notes are recorded in the
                               book-entry system maintained by DTC. Neither the
                               Company nor the Trustee shall have any
                               responsibility or liability for the payment by
                               DTC of the principal, premium, if any, or
                               interest due on the Book-Entry Notes to such
                               Participants.

                                      -18-
<PAGE>

                               Withholding Taxes. The amount of any taxes
                               required under applicable law to be withheld from
                               any interest payment on a Note will be determined
                               and withheld by the Participant, indirect
                               participant in DTC or other Person responsible
                               for forwarding payments and materials directly to
                               the beneficial owner of such Note.

Settlement Procedures:         Settlement Procedures with regard to each
                               Book-Entry Note sold by the Agents, as agents of
                               the Company, will be as follows:

                               A.    The applicable Agent will advise the
                                     Company by telephone of the following
                                     Settlement information:

                                     1.    Taxpayer identification number of the
                                           purchaser.

                                     2.    Principal amount of the Note.

                                     3.    Fixed Rate Notes:

                                           (a)   interest rate;

                                           (b)   Regular Record Dates; and

                                           (c)   Interest Payment Dates.

                                           Floating Rate Notes:

                                           (a)   interest rate basis;

                                           (b)   index maturity;

                                           (c)   spread and/or spread
                                                 multiplier, if any;

                                           (d)   initial interest rate;

                                           (e)   maximum interest rate, if any;

                                           (f)   minimum interest rate, if any;

                                           (g)   interest reset dates;

                                           (h)   interest determination dates;

                                           (i)   interest payment dates; and

                                           (j)   calculation agent.

                                     4.    Price to public of the Note.

                                      -19-
<PAGE>

                                     5.    Trade date.

                                     6.    Settlement Date (Original Issue
                                           Date).

                                     7.    Stated Maturity.

                                     8.    Redemption provisions, if any:

                                           (a)   Redemption Commencement Date

                                           (b)   initial redemption percentage

                                           (c)   annual redemption percentage
                                                 reduction

                                     9.    Repayment Date(s), if any.

                                     10.   Net proceeds to the Company.

                                     11.   Agent's commission.

                               B.    The Company will advise the Trustee by
                                     telecopy or other method acceptable to the
                                     Trustee of the above settlement information
                                     received with respect to each Note from the
                                     applicable Agent and shall confirm to the
                                     Trustee that the principal amount of Notes,
                                     including such Note, issued as of the
                                     relevant Settlement Date shall not exceed
                                     the limit with respect to the principal
                                     amount of Notes specified in the most
                                     recent Company Order delivered to the
                                     Trustee pursuant to Section 303 of the
                                     Indenture.

                               C.    The Trustee will assign a CUSIP Number to
                                     the Book-Entry Note and will telephone and
                                     advise the Company and the applicable Agent
                                     of such CUSIP Number. The Trustee will
                                     communicate to DTC and the applicable Agent
                                     through DTC's Participant Terminal System a
                                     pending deposit message specifying the
                                     following settlement information:

                                     1.    The information set forth in
                                           Settlement Procedure A.

                                     2.    Identification numbers of the
                                           participant accounts maintained by
                                           DTC on behalf of the Trustee and the
                                           applicable Agent.

                                      -20-
<PAGE>

                                     3.    Identification as a Fixed Rate
                                           Book-Entry Note or Floating Rate
                                           Book-Entry Note.

                                     4.    Initial Interest Payment Date for
                                           such Note, number of days by which
                                           such date succeeds the related record
                                           date for DTC purposes (which in the
                                           case of Floating Rate Notes that
                                           reset daily or weekly will be the
                                           date five calendar days immediately
                                           preceding the applicable Interest
                                           Payment Date and in the case of all
                                           other Book-Entry Notes will be the
                                           Regular Record Date, as defined in
                                           the Notes) and, if then calculable,
                                           the amount of interest payment on
                                           such Interest Payment Date (which
                                           amount shall have been confirmed by
                                           the Trustee).

                                     5.    CUSIP number of the Book-Entry Note
                                           representing such Note.

                                     6.    Whether such Book-Entry Note
                                           represents any other Notes issued or
                                           to be issued in book-entry form.

                               D.    The Company will deliver to the Trustee a
                                     Book-Entry Note representing such Note in a
                                     form that has been approved by the Company,
                                     the applicable Agent and the Trustee.

                               E.    The Trustee will complete and authenticate
                                     the Book-Entry Note.

                               F.    DTC will credit such Note to the
                                     participant account of the Trustee
                                     maintained by DTC.

                               G.    The Trustee will enter an SDFS deliver
                                     order through DTC's Participant Terminal
                                     System instructing DTC (i) to debit such
                                     Note to the Trustee's participant account
                                     and credit such Note to the participant
                                     account of the applicable Agent maintained
                                     by DTC and (ii) to debit the settlement
                                     account of the applicable Agent and credit
                                     the settlement account of the Trustee
                                     maintained by DTC, in an amount equal to
                                     the price of such Note less the applicable
                                     Agent's commission. Any entry of such a
                                     deliver order shall be deemed to constitute
                                     a representation

                                      -21-
<PAGE>

                                     and warranty by the Trustee to DTC that (i)
                                     the Book-Entry Note has been issued and
                                     authenticated and (ii) the Trustee is
                                     holding such Book-Entry Note pursuant to
                                     the Certificate Agreement between the
                                     Trustee and DTC.

                               H.    The applicable Agent will enter an SDFS
                                     deliver order through DTC's Participant
                                     Terminal System instructing DTC (i) to
                                     debit such Note to the applicable Agent's
                                     participant account and credit such Note to
                                     the participant account of the appropriate
                                     Participants maintained by DTC and (ii) to
                                     debit the settlement accounts of such
                                     Participants and credit the settlement
                                     account of the applicable Agent maintained
                                     by DTC, in an amount equal to the initial
                                     public offering price of such Note.

                               I.    Transfers of funds in accordance with SDFS
                                     deliver orders described in Settlement
                                     Procedures G and H will be settled in
                                     accordance with SDFS operating procedures
                                     in effect on the Settlement Date.

                               J.    The Trustee will credit to an account of
                                     the Company maintained by the Trustee funds
                                     available for immediate use in the amount
                                     transferred to the Trustee in accordance
                                     with Settlement Procedure G.

                               K.    The Trustee will send a copy of the
                                     Book-Entry Note stamped "SPECIMEN" on each
                                     page to the Company together with a
                                     statement setting forth the principal
                                     amount of Notes Outstanding as of the
                                     related Settlement Date after giving effect
                                     to such transaction and all other offers to
                                     purchase Notes of which the Company has
                                     advised the Trustee but which have not been
                                     settled.

                                      -22-
<PAGE>

                               L.    The applicable Agent will confirm the
                                     purchase of such Note to the purchaser
                                     either by transmitting to the Participant
                                     with respect to such Note a confirmation
                                     order through DTC's Participant Terminal
                                     System or by mailing a written confirmation
                                     to such purchaser.

Settlement Procedures
  Timetable:                   For offers to purchase Notes accepted by the
                               Company, Settlement Procedures "A" through "L"
                               set forth above shall be completed as soon as
                               possible but not later than the respective times
                               (New York City time) set forth below:

                               Settlement
                               Procedure                  Time
                               ----------                 ----

                                   A        11:00 a.m. on the trade date
                                   B        12:00 noon on the trade date
                                   C        2:00 p.m. on the trade date
                                   D        3:00 p.m. on the Business Day before
                                            Settlement Date
                                   E        9:00 a.m. on Settlement Date
                                   F        10:00 a.m. on Settlement Date
                                   G-H      No later than 2:00 p.m. on
                                            Settlement Date
                                   I        4:45 p.m. on Settlement Date
                                   J-L      5:00 p.m. on Settlement Date

                               If a sale is to be settled more than one Business
                               Day after the trade date, Settlement Procedures
                               A, B, and C may, if necessary, be completed at
                               any time prior to the specified times on the
                               first Business Day after such trade date. In
                               connection with a sale which is to be settled
                               more than one Business Day after the trade date,
                               if the initial interest rate for a Floating Rate
                               Note is not known at the time that Settlement
                               Procedure A is completed, Settlement Procedures B
                               and C shall be completed as soon as such rate has
                               been determined, but no later than 11:00 a.m. and
                               2:00 p.m., New York City time, respectively, on
                               the second Business Day before the Settlement
                               Date. Settlement Procedure I is subject to
                               extension in accordance with any extension of
                               Fedwire closing deadlines and in the other events
                               specified in the

                                      -23-
<PAGE>

                               SDFS operating procedures in effect on the
                               Settlement Date.

                               If settlement of a Book-Entry Note is rescheduled
                               or cancelled, the Company shall notify the
                               Trustee and the Trustee will deliver to DTC,
                               through DTC's Participant Terminal System, a
                               cancellation message to such effect by no later
                               than 2:00 p.m., New York City time, on the
                               Business Day immediately preceding the scheduled
                               Settlement Date.

Failure to Settle:             If the Trustee has not entered an SDFS deliver
                               order with respect to a Book-Entry Note pursuant
                               to Settlement Procedure G, then upon written
                               request (which may be evidenced by facsimile
                               transmission) of the Company, the Trustee shall
                               deliver to DTC, through DTC's Participant
                               Terminal System, as soon as practicable a
                               withdrawal message instructing DTC to debit such
                               Note to the participant account of the Trustee
                               maintained at DTC. DTC will process the
                               withdrawal message, provided that such
                               participant account contains a principal amount
                               of the Book-Entry Note representing such Note
                               that is at least equal to the principal amount to
                               be debited. If withdrawal messages are processed
                               with respect to all the Notes represented by a
                               Book-Entry Note, the Trustee will mark such
                               Book-Entry Note "cancelled," make appropriate
                               entries in its records and send such cancelled
                               Book-Entry Note to the Company. The CUSIP number
                               assigned to such Book-Entry Note shall, in
                               accordance with CUSIP Service Bureau procedures,
                               be cancelled and not immediately reassigned. If
                               withdrawal messages are processed with respect to
                               a portion of the Notes represented by a
                               Book-Entry Note, the Trustee will exchange such
                               Book-Entry Note for two Book-Entry Notes, one of
                               which shall represent the Book-Entry Notes for
                               which withdrawal messages are processed and shall
                               be cancelled immediately after issuance, and the
                               other of which shall represent the other Notes
                               previously represented by the surrendered
                               Book-Entry Note and shall bear the CUSIP number
                               of the surrendered Book-Entry Note.

                               If the purchase price for any Book-Entry Note is
                               not timely paid to the Participants with respect
                               to such

                                      -24-
<PAGE>

                               Note by the beneficial purchaser thereof (or a
                               person, including an indirect participant in DTC,
                               acting on behalf of such purchaser), such
                               Participants and, in turn, the applicable Agent
                               may enter SDFS deliver orders through DTC's
                               Participant Terminal System reversing Settlement
                               Procedures G and H, respectively. Thereafter, the
                               Trustee will deliver the withdrawal message and
                               take the related actions described in the
                               preceding paragraph. If such failure shall have
                               occurred for any reason other than default by the
                               applicable Agent to perform its obligations
                               hereunder or under the Distribution Agreement,
                               the Company will reimburse the applicable Agent
                               on an equitable basis for its loss of the use of
                               funds during the period when the funds were
                               credited to the account of the Company.

                               Notwithstanding the foregoing, upon any failure
                               to settle with respect to a Book-Entry Note, DTC
                               may take any actions in accordance with its SDFS
                               operating procedures then in effect. In the event
                               of a failure to settle with respect to a Note
                               that was to have been represented by a Book-Entry
                               Note also representing other Notes, the Trustee
                               will provide, in accordance with Settlement
                               Procedures D and E, for the authentication and
                               issuance of a Book-Entry Note representing such
                               remaining Notes and will make appropriate entries
                               in its records.

                                      -25-
<PAGE>

                      PART III: PROCEDURES FOR NOTES ISSUED
                              IN CERTIFICATED FORM

Denominations:                 The Certificated Notes, other than Indexed Notes
                               and Multi-Currency Notes, will be issued in
                               denominations of a minimum of $1,000 and integral
                               multiples of $1,000. Indexed Notes or
                               Multi-Currency Notes will be issued in the
                               denominations specified in the related
                               Multi-Currency or Indexed Note Prospectus
                               Supplement and Pricing Supplement.

Interest:                      Each Certificated Note will bear interest in
                               accordance with its terms. Interest will begin to
                               accrue on the Original Issue Date of a
                               Certificated Note for the first Interest Payment
                               Period and on the most recent Interest Payment
                               Date to which interest has been paid for all
                               subsequent Interest Payment Periods. Each payment
                               of interest shall include interest accrued to,
                               but excluding, the date of such payment. Unless
                               otherwise specified in the applicable Pricing
                               Supplement, interest payments in respect of Fixed
                               Rate Certificated Notes will be made semiannually
                               on June 15 and December 15 of each year and at
                               Maturity. However, the first payment of interest
                               on any Certificated Note issued between a Regular
                               Record Date and an Interest Payment Date will be
                               made on the Interest Payment Date following the
                               next succeeding Regular Record Date. Unless
                               otherwise specified in the applicable Pricing
                               Supplement, the Regular Record Date with respect
                               to any Interest Payment Date for a Fixed Rate
                               Certificated Note shall be the June 1 or December
                               1 (whether or not a Business Day) preceding such
                               Interest Payment Date. Interest at Maturity will
                               be payable to the person to whom the principal is
                               payable.

                               Except as provided in Part I under "Calculation
                               of Interest" and unless otherwise specified in
                               the applicable Pricing Supplement, the Interest
                               Payment Date for a Floating Rate Certificated
                               Note will be, in the case of Floating Rate Notes
                               which reset daily, weekly or monthly, on the
                               third Wednesday of each month or on the third

                                      -26-
<PAGE>

                               Wednesday of March, June, September and December
                               of each year as specified in the applicable
                               Pricing Supplement; in the case of Floating Rate
                               Notes which reset quarterly, on the third
                               Wednesday of March, June, September and December
                               of each year; in the case of Floating Rate Notes
                               which reset semiannually, on the third Wednesday
                               of the two months of each year specified in the
                               applicable Pricing Supplement; and in the case of
                               Floating Rate Notes which reset annually, on the
                               third Wednesday of the month specified in the
                               applicable Pricing Supplement; and, in each case,
                               at Maturity. Unless otherwise specified in the
                               applicable Pricing Supplement, the Regular Record
                               Date with respect to a Floating Rate Note shall
                               be the date 15 calendar days (whether or not a
                               Business Day) preceding an Interest Payment Date.

Payments of Principal
  and Interest:                Upon presentment and delivery of the Certificated
                               Note, the Trustee or the Company's duly
                               authorized agent will pay the principal amount of
                               each Certificated Note at Maturity and the final
                               installment of interest in next day funds. All
                               interest payments in U.S. dollars on a
                               Certificated Note, other than interest due at
                               Maturity, will be made by check drawn on the
                               Trustee or the Company's duly authorized agent
                               and mailed by such Trustee or agent to the person
                               entitled thereto as provided in the Certificated
                               Note. However, the Registered Owners (as
                               hereinafter defined) of ten million dollars or
                               more in aggregate principal amount of the same
                               series of Certificated Notes (whether having
                               identical or different terms and provisions)
                               shall be entitled to receive payments of
                               interest, other than at Maturity, by wire
                               transfer of immediately available funds if
                               appropriate wire transfer instructions have been
                               received in writing by the Trustee or such agent
                               not less than 16 days prior to the applicable
                               Interest Payment Date.

                               For special provisions relating to Multi-Currency
                               Notes or Indexed Notes, see the related
                               Multi-Currency or Indexed Note Prospectus
                               Supplement.

                                      -27-
<PAGE>

                               The Trustee will provide monthly to the Company a
                               list of the principal and interest in each
                               currency to be paid on Certificated Notes
                               maturing in the next succeeding month. Such
                               Trustee or agent will be responsible for
                               withholding taxes on interest paid as required by
                               applicable law, but shall be relieved from any
                               such responsibility if it acts in good faith and
                               in reliance upon an opinion of counsel.

                               Certificated Notes presented to the Trustee or
                               the Company's duly authorized agent at Maturity
                               for payment will be cancelled by such Trustee or
                               agent. All cancelled Certificated Notes held by
                               such Trustee or agent shall be destroyed, and the
                               Trustee or agent shall furnish to the Company a
                               certificate with respect to such destruction.

Settlement Procedures:         Settlement Procedures with regard to each
                               Certificated Note purchased through the Agents,
                               as agents, shall be as follows:

                               A.    Each Agent will advise the Company by
                                     telephone of the following Settlement
                                     information with regard to each
                                     Certificated Note:

                                     1.    Exact name in which the Certificated
                                           Note is to be registered (the
                                           "Registered Owner").

                                     2.    Exact address or addresses of the
                                           Registered Owner for delivery,
                                           notices and payments of principal,
                                           premium, if any, and interest.

                                     3.    Taxpayer identification number of the
                                           Registered Owner.

                                     4.    Principal amount of the Certificated
                                           Note.

                                     5.    Denomination of the Certificated
                                           Note.

                                     6.    Fixed Rate Notes:

                                           (a)   interest rate;

                                           (b)   Regular Record Dates; and

                                           (c)   Interest Payment Dates.

                                      -28-
<PAGE>

                                     Floating Rate Notes:

                                           (a)   interest rate basis or bases;

                                           (b)   index maturity;

                                           (c)   spread or spread multiplier, if
                                                 any;

                                           (d)   initial interest rate;

                                           (e)   maximum interest rate, if any;

                                           (f)   minimum interest rate, if any;

                                           (g)   interest reset dates;

                                           (h)   interest determination dates;

                                           (i)   interest payment dates; and

                                           (j)   calculation agent.

                                     Multi-Currency or Indexed Notes:

                                           (a)   specified currency;

                                           (b)   index, if any;

                                           (c)   base rate of exchange, if any;
                                                 and

                                           (d)   any other applicable terms.

                                     7.    Currency or currency unit in which
                                           the Certificated Note is to be
                                           denominated.

                                     8.    Price to public of the Certificated
                                           Note.

                                     9.    Settlement Date (Original Issue
                                           Date).

                                     10.   Stated Maturity.

                                     11.   Redemption provisions, if any:

                                           (a)   Redemption Commencement Date

                                           (b)   initial redemption percentage

                                           (c)   annual redemption percentage
                                                 reduction

                                     12.   Repayment Date(s), if any.

                                     13.   Net proceeds to the Company.

                                     14.   Agent's commission.

                               B.    The Company shall provide to the Trustee by
                                     telecopy or other method acceptable to the

                                      -29-
<PAGE>

                                     Trustee the above Settlement information
                                     with respect to each Certificated Note
                                     received from the Agents and the name of
                                     the applicable Agent and shall confirm to
                                     the Trustee that the principal amount of
                                     Notes, including such Certificated Note,
                                     issued as of the relevant Settlement Date
                                     shall not exceed the limit with respect to
                                     the principal amount of Notes specified in
                                     the most recent Company Order delivered to
                                     the Trustee pursuant to Section 303 of the
                                     Indenture. The Company also shall cause the
                                     Trustee or its duly appointed agent to
                                     issue, authenticate and deliver
                                     Certificated Notes in accordance with the
                                     Settlement Procedures Timetable set forth
                                     below. The Company also shall provide to
                                     the Trustee and the applicable Agent a copy
                                     of the applicable Pricing Supplement. The
                                     Company also shall provide to the Trustee
                                     and the applicable Agent a copy of a
                                     Multi-Currency or Indexed Note Prospectus
                                     Supplement, if applicable.

                               C.    The Trustee or its duly appointed agent
                                     will complete and authenticate the
                                     Certificated Notes in form approved by the
                                     Company.

                               D.    With respect to each trade, the Trustee
                                     will deliver the Certificated Note and one
                                     photocopy thereof stamped "SPECIMEN" on
                                     each page to the applicable Agent at the
                                     following addresses:

                               UBS Securities LLC
                               677 Washington Boulevard
                               Stamford, Connecticut 06901
                               Attention:  Fixed Income Syndicate
                               Telephone:  (203) 719-1088
                               Telecopy:   (203) 719-0495

                               Banc of America Securities LLC
                               9 West 57th Street
                               NY1-301-2M-01
                               New York, New York 10019
                               Attention: High Grade Debt Capital Markets
                                          Transaction Management

                                      -30-
<PAGE>

                               Telecopy:   (212) 847-5184

                               Keefe, Bruyette & Woods, Inc.
                               787 Seventh Avenue
                               New York, New York 10019
                               Attention: Fixed Income Syndicate
                               Telecopy: (212) 582-5419

                               Popular Securities, Inc.
                               209 Munoz Rivera Avenue
                               Hato Rey, Puerto Rico 00918
                               Attention: Ken McGrath
                               Telecopy: (787) 766-3485

                               The Trustee will keep Stub 1. The applicable
                               Agent will acknowledge receipt of the
                               Certificated Note through a broker's receipt and
                               will keep the photocopy. Delivery of the
                               Certificated Note will be made only against such
                               acknowledgment of receipt.

                               Upon determination that the Certificated Note has
                               been authorized, delivered and completed as
                               aforementioned, the applicable Agent will wire
                               the net proceeds of the Certificated Note after
                               deduction of its applicable commission to the
                               Company pursuant to standard wire instructions
                               given by the Company.

                               E.    The applicable Agent will deliver the
                                     Certificated Note, as well as a copy of the
                                     Prospectus and any applicable Pricing
                                     Supplement or Supplements received from the
                                     Trustee, to the purchaser against payment
                                     in immediately available funds.

                               F.    The Trustee will send a photocopy of the
                                     Certificated Note stamped "SPECIMEN" on
                                     each page to the Company.

Settlement Procedures
  Timetable:                   For offers to purchase Certificated Notes
                               accepted by the Company, Settlement Procedures
                               "A" through "F" set forth above shall be
                               completed on or before the respective times set
                               forth below:

                                      -31-
<PAGE>

                               Settlement
                               Procedure         Time
                               ----------        ----

                                   A-B      3:00 PM on Business Day prior to
                                              Settlement
                                   C-D      2:15 PM on Settlement Date
                                   E        3:00 PM on Settlement Date
                                   F        5:00 PM on Settlement Date

Failure to Settle:             In the event that a purchaser of a Certificated
                               Note from the Company shall either fail to accept
                               delivery of or make payment for a Certificated
                               Note on the date fixed for settlement, the
                               applicable Agent will forthwith notify the
                               Trustee and the Company by telephone, confirmed
                               in writing, and return the Certificated Note to
                               the Trustee.

                               The Trustee or the Company's duly authorized
                               agent, upon receipt of the Certificated Note from
                               the applicable Agent, will immediately advise the
                               Company, and the Company will promptly arrange to
                               credit the account of the applicable Agent in an
                               amount of immediately available funds equal to
                               the amount previously paid by the applicable
                               Agent in settlement for the Certificated Note.
                               Such credits will be made on the Settlement Date
                               if possible, and in any event not later than the
                               Business Day following the Settlement Date;
                               provided that the Company has received notice on
                               the same day. If such failure shall have occurred
                               for any reason other than failure by the
                               applicable Agent to perform its obligations
                               hereunder or under the Distribution Agreement,
                               the Company will reimburse the applicable Agent
                               on an equitable basis for its loss of the use of
                               funds during the period when the funds were
                               credited to the account of the Company.
                               Immediately upon receipt of the Certificated Note
                               in respect of which the failure occurred, the
                               Trustee or the Company's duly authorized agent
                               will cancel and destroy the Certificated Note,
                               make appropriate entries in its records to
                               reflect the fact that the Certificated Note was
                               never issued, and accordingly notify the Company
                               in writing.

                                      -32-

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