Document:

EX-4.10

 

 

EXHIBIT 4.10

POPULAR, INC.

DESCRIPTION OF THE REGISTRANT’S SECURITIES REGISTERED PURSUANT

TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

AS OF DECEMBER 31, 2021

The following is a summary description of the 
securities of Popular, Inc. (the
“Company”) that are registered 
under Section 12 
of the
Securities 
Exchange Act 
of 1934, as 
amended,
consisting 
of (1) our 
Common Stock and 
(2)

our 6.125% Cumulative Monthly Income Trust Preferred 
Securities.

In 
this 

summary, 
when 
we 
refer 

to 
the 
“Company,” 

“we,” 
“us” 
or 

“our” 
or 
when 

we 
otherwise 
refer 
to

ourselves, we mean 
Popular,
Inc., 
excluding the Company’s 
subsidiaries, unless otherwise 
expressly
stated or 
as the 
context requires; all references to “common stock”
refer only to common stock issued 
by the Company and not to any 
common stock issued
by any subsidiary. 
Description of Common Stock

The 
following 

description 
of 
the 

Company’s 
Common 
Stock 

is 
a 
summary 
and 

does 
not 
purport 
to 

be

complete. 
It 

is 
subject 
to 
and 

qualified 
in 
its 

entirety 
by 
reference 

to 
the 
Company’s 

Restated 
Certificate 
of

Incorporation (the 
“Charter”)
and 
the Company’s 
Amended and 
Restated
By-laws 
(the “Bylaws”), 
each of 
which is

filed as an 
exhibit to
the 
Annual Report on 
Form 10 K 
of which
this 
exhibit is a 
part. We 
encourage you
to 
read the 
Charter
and 
Bylaws and the 
applicable provisions 
of the
General 
Corporations Act of 
the Commonwealth 
of Puerto

Rico for additional information.

Authorized Capital Shares

Pursuant to 
the
Charter, 
the Company’s 
authorized capital 
stock
consists 
of 170,000,000 
million shares 
of

common stock, 
$0.01 par
value 
per share 
(“Common Stock”), 
and
30,000,000 
shares of preferred 
stock without 
par

value (“Preferred Stock”).

Voting 
Rights

The holders of the Company’s Common Stock 
are entitled to
one 
vote per share on 
all matters brought before

the stockholders. The holders 
of the Common
Stock 
do not have cumulative voting 
rights. The Charter provides 
that

the 
approval 

of 
the 
Company’s 

merger, 
reorganization, 
or 

consolidation 
or 
the 

sale, 
lease 
or 

hypothecation 
of

substantially 
all 

of 
the 
Company’s 

assets 
or 
the 
approval 

of 
the 
Company’s 

voluntary 
dissolution 
requires 
the

affirmative 
vote 

of 
the 
holders 
of 

a 
majority 
of 
the 

outstanding 
shares 
of 

the 
Common 
Stock 
(the 

minimum 
vote 
standard required
by 
the Puerto Rico General 
Corporations Act). In 
addition, the
affirmative 
vote of the holders 
of a

majority of the outstanding shares of Common Stock are required to amend 
the
Charter. 
Dividend Rights

Subject to the rights of 
holders of any Preferred Stock outstanding,
holders 
of the Common Stock are 
entitled

to receive 
ratably
such 
dividends, if 
any, 
as
the 
Company’s 
Board of 
Directors
may 
in its 
discretion declare 
out of

legally available funds.

Liquidation Rights

In 
the 

event 
of 
liquidation, 

holders 
of 
the 
Common 

Stock 
are 
entitled 
to 

receive 
pro 
rata 
any 

assets 
distributable to a stockholder with respect to the shares held 
by them,
after payment of liabilities and such preferential 

 
 

amounts as may be required to be paid to the holders 
of the Company’s
outstanding 
series of preferred stock and any 
preferred stock the Company may
hereafter issue. 
Other Rights and Preferences

The Company’s 
Common
Stock 
has no 
sinking fund 
or
redemption 
provisions or 
preemptive, conversion,

exchange or call rights.

Classification of the Board of Directors

Until our existing classified Board of Directors structure is fully phased out
beginning 
with our 2023 annual 
meeting of stockholders, the Charter provides that the
members of the Company’s Board of Directors are divided into

three 
classes. 

At 
the 
2021 
annual 

meeting 
of 
stockholders, 

one-third 
of 
the 

members 
of 
the 

Company’s 
Board 
of

Directors were elected for a 
term expiring at the 2022 annual
meeting 
of stockholders, at the 2022 annual 
meeting of

stockholders, two-thirds 
of the
members 
of the Company’s 
Board of 
Directors will
be 
elected for a 
term expiring at

the 2023 annual meeting of stockholders, and thereafter directors will be elected annually.

The Charter 
provides that
a 
director, or 
the entire Board 
of Directors,
may 
be removed by 
the stockholders

only for cause. 
The Charter
and the Bylaws also 
provide that the affirmative vote 
of the holders of at least
two-thirds 
of the

combined 
voting 

power 
of 
the 

outstanding 
capital 
stock 

entitled 
to 
vote 

generally 
for 
the 

election 
of 
directors 
is

required to remove a director or the entire Board of Directors from office 
for
cause. 
Advance Notice Requirements

The Company’s 
Bylaws establish
advance 
notice procedures 
with respect to 
shareholder
proposals 
relating

to 
nominations 

or 
any 
other 
matter 

to 
be 
brought 
before 

any 
meetings 
of 

shareholders 
of 
the 

Company. 
These 
procedures
provide 
that notice of 
such shareholder proposals 
must be
timely 
given in writing 
to the Secretary 
of the

Company prior to 
the meeting at
which 
the action is to 
be taken. The required 
notice period
varies 
depending on the 
timing of
the 
proposal and the 
shareholders meeting 
to which
it 
relates. The notice 
must contain certain 
information

specified in the Bylaws and must otherwise comply with the amended and 
restated
Bylaws. 
“Blank Check” Preferred Stock

The Charter authorizes the 
issuance of
“blank 
check” preferred stock, 
which may be 
issued by
the 
Company’s

Board 
of 

Directors 
without 
shareholder 

approval 
and 
may 

contain 
voting, 
liquidation, 

dividend 
and 
other 
rights

superior to the Common Stock.

Listing 
The
Common Stock is traded on The Nasdaq Stock Market LLC under 
the trading symbol “BPOP”.

 

 
 

 
  

Description of 6.125% Cumulative Monthly Income Trust 
Preferred
Securities of Popular Capital Trust 
II 
(Fully and
Unconditionally Guaranteed by Popular, 
Inc.). 
The following description of the
Company’s 6.125% Cumulative Monthly Income Trust Preferred Securities 
(the “Capital Securities”) is
a 
summary and does not purport to 
be complete. It is 
subject to and qualified
in 
its entirety 
by reference to (i) the Amended and Restated Declaration of Trust
and Trust Agreement, dated as of August 31, 2009

(the 
“Trust 

Agreement”), 
among 
the 

Company, 
as 
depositor, 

the 
Property 
Trustee, 

the 
Delaware 
Trustee, 
the

Administrative 
Trustees 

and 
the 
several 

Holders 
(as 
defined 

therein), 
as 
amended, 

amended 
and 
restated 
or

supplemented from time to time, and (ii) the Prospectus Supplement (to Prospectus dated November 18, 2004), dated

as 
of 

November 
24, 
2004, 

relating 
to 
the 

Capital 
Securities 
(the 

“Prospectus 
Supplement”), 
each 

of 
which 
is

incorporated 
by 

reference 
as 
an 

exhibit 
to 
the 
Annual 

Report 
on 
Form 
10-K 

of 
which 
this 
exhibit 

is 
a 
part. 
We

encourage you to read the Trust Agreement, the Prospectus Supplement and the Delaware Statutory Trust Act and the

Trust Indenture Act for more information.

The Capital Securities and the Common Securities (the
“Common 
Securities”, and together with the Capital

Securities, 
the 

“Trust 
Securities”) 
of 

Popular 
Capital 
Trust 

II 
(the 
“Trust”), 

a 
Delaware 
statutory 

trust, 
represent

beneficial 
interests 

in 
the 
Trust. 
The 

Trust 
holds 
the 

Company’s 
6.125% 
junior 

subordinated 
debentures 
(the

“Debentures”).

Each 
holder 
of
the 
Capital 
Securities 
has 

a 
beneficial 
interest 

in 
the 
Trust 
but 

does 
not 
own 
any 

specific 
Debentures 
held
by 
the Trust. 
However, 
the
Trust 
Agreement under 
which
the 
Trust 
operates defines 
the financial

entitlements of the 
Capital Securities
in 
a manner that 
causes those financial 
entitlements to correspond
to 
the financial 
entitlements of the Trust in the Debentures it holds.

The Trust

The Trust is a statutory trust formed under Delaware law pursuant to the Trust Agreement and the certificate

of trust filed with the Delaware Secretary of State.

The Trust exists for the exclusive purposes of:

●
issuing the Trust
Securities;

●
investing the gross
proceeds of the Trust Securities 
in an equivalent amount of the Debentures and

holding the Debentures; and

●
engaging in only
those activities convenient, necessary or incidental to the 
activities described above.

In addition to 
the Capital Securities,
the 
Trust Agreement 
authorizes the Trust 
to issue Common Securities.

All of the Common Securities are directly or indirectly owned 
by the Company. The
Common Securities rank equally 
with the 
Capital
Securities 
and 
the Trust 
makes
payment 
on the 
Trust 
Securities
pro 
rata, except 
that upon 
certain

events of default under the Trust 
Agreement relating to payment
defaults 
on the Debentures, the rights of the 
holders

of 
the 

Common 
Securities 
to 

payment 
in 
respect 
of 

distributions 
and 
payments 

upon 
liquidation, 
redemption 
and

otherwise 
are 

subordinated 
to the 
rights of 
the
holders 
of
the 
Capital 
Securities. 
The 

Company 
acquired 
Common

Securities in an aggregate liquidation amount equal to at least three percent
of 
the total capital of the Trust. 
The
Trust 
Agreement does 
not permit 
the
Trust 
to issue 
any securities 
other
than 
the Trust 
Securities or 
to

incur any indebtedness. 
The
Trust’s 
business and 
affairs are 
conducted
by 
its respective 
trustees. The 
Property
Trustee 
acts as 
sole

trustee under 
the
Trust 
Agreement for 
purposes of 
compliance
with 
the Trust 
Indenture Act 
and
also 
acts as 
trustee

under the Guarantee (as defined below). 

 
 

The 
Trust 

has 
a 
term 
of 

approximately 
30 
years, 

but 
may 
be 
terminated 

earlier 
as 
provided 
in 

the 
Trust 
Agreement.

The Company pays all fees and expenses related to the Trus 
t.

DESCRIPTION OF THE CAPITAL 
SECURITIES

General 
The
terms 
of the 
Capital Securities 
include
(i) 
those stated 
in
the 
Trust 
Agreement, as 
amended, amended

and restated, or 
supplemented from
time 
to time, 
and (ii) 
those
made 
part of 
the Trust Agreement 
by
the 
Trust Indenture 
Act and the Delaware Statutory Trust Act.

The
Property 
Trustee 
acts as 
indenture
trustee 
for purposes 
of compliance 
with
the 
provisions of 
the Trust

Indenture Act with respect to the Trust. The Capital Securities have 
a liquidation
amount of $25. 
The payment of distributions out 
of money held by the
Trust, 
and payments upon redemption 
of the Capital

Securities or 
liquidation
of 
the Trust, 
are guaranteed 
by the
Company 
to the 
extent described 
under
“Description 
of

the 
Guarantee”. 

The 
Guarantee, 
when 

taken 
together 
with 

the 
Company’s 
obligations 

under 
the 
Trust 
Agreement,

including the Company’s 
obligations to pay costs, expenses, debts and
liabilities of the 
Trust, other than with respect 
to the
Trust 
Securities, has the 
effect of 
providing
a 
full and unconditional 
guarantee of amounts 
due on
the 
Capital 
Securities. The Property
Trustee, 
in its role as the guarantee trustee with respect to the Trust, 
holds the Guarantee for

the benefit of the holders of the Capital Securities. The 
Guarantee does not cover
payment of distributions or amounts 
payable on redemption 
or liquidation of the
Capital 
Securities when the Trust 
does not have funds 
on hand available

to make such payments. 
The
Capital Securities 
were issued in 
the form of 
one or
more 
global securities deposited with 
The Depository

Trust Company (“DTC”).

The Capital Securities are 
securities of the
Trust 
and are issued pursuant 
to the Trust 
Agreement. Under the

Trust 
Agreement,
the 
Trust 
holds the 
Debentures
for 
the benefit 
of the 
holders
of 
the Trust 
Securities. The 
Capital

Securities are limited to $130,000,000 aggregate liquidation amount. The
Capital 
Securities are traded on The Nasdaq 
Stock Market LLC under the trading
symbol “BPOPM”. 
Distributions

Distributions on the Capital Securities are fixed at an annual rate of 6.125% of the stated liquidation amount

of $25 per Capital Security. 
Distributions under the Trust Agreement are
cumulative. 
Distributions under 
the
currently 
effective Trust 
Agreement are 
payable
monthly 
in arrears on 
the first 
day

of each 
month,
commencing 
on September 
1, 2009. 
Distributions
under 
the Amended 
and Restated 
Declaration of

Trust and Trust 
Agreement dated as of
November 
30, 2004 (the “Initial Trust 
Agreement”) were payable
monthly 
in 
arrears on the first day of each month commencing on January 1, 2005.
Funds available for distributions 
with respect 
to the Capital Securities are
limited to payments received from the Company 
on the Debentures. 
If the Trust is
terminated and 
its assets distributed, for 
each Capital Security, each holder
is 
entitled to receive

a 
like 

amount 
of 
the 
Debentures 

held 
by 
the 
Trust 

or 
the 
liquidation 

amount 
of 
$25 
plus
accumulated 
but 
unpaid

distributions from 
the
assets 
of the 
Trust 
available
for 
distribution, after 
it has 
paid
liabilities 
owed to 
its creditors,

subject to the rights of the holders of the Common Securities to receive a pro rata distribution.
Distributions 
to which 
holders of the Capital Securities
are 
entitled and that are past 
due will accumulate additional distributions to
the 
extent 
permitted by applicable
law, 
at an annual rate of 6.125% of the unpaid distributions, compounded monthly. 
The term

“distribution” includes any additional distributions payable unless
otherwise 
stated. 
The term “like amount” as used in this description
means: 
●
with respect
to a redemption 
of any Trust Securities, 
Capital Securities or Common 
Securities
having a 
liquidation amount equal 
to that
portion 
of the principal amount 
of the Debentures held 
by the
Trust 
to 

 
 

be contemporaneously 
redeemed
in 
accordance with 
the Indenture, 
the
proceeds 
of which 
are used 
to

pay the redemption price of the Capital Securities or Common Securities; and

●
with respect to a
distribution of 
the Debentures held by the Trust 
to holders of any Capital Securities or

Common 
Securities
in 
exchange therefor 
in connection 
with
a 
dissolution or 
liquidation of 
the Trust,

Debentures held 
by the
Trust 
having a 
principal amount 
equal to
the 
liquidation amount 
of the Capital

Securities or Common Securities of the holder to whom the Debentures 
would be
distributed. 
Under the 
Trust
Agreement, 
the amount of 
distributions payable 
for any
period 
less than a 
full distribution

period is computed on the basis of a 360-day year of twelve 30- day months and the actual number of days elapsed in

a partial month in 
that period. Under the Trust Agreement,
the 
amount of distributions payable for 
any full distribution

period is computed by dividing the rate per annum by twelve.

Payment of Distributions

The Trust pays 
distributions on its Capital
Securities 
to DTC, which credits 
the applicable accounts at 
DTC

on the 
applicable
payment 
dates, or 
if the 
securities
certificate 
for the 
Capital Securities 
is
no 
longer held 
by or 
on

behalf of DTC, 
the
Trust 
will make the 
payments by 
check mailed
to 
the addresses of 
the holders as 
such addresses

appear on the books and records of the Trust on the 
applicable record dates.
However, a holder of $1 
million or more 
in aggregate
liquidation 
amount of the 
Capital Securities may receive 
distribution
payments, other 
than distributions 
payable
at 
maturity, 
by wire transfer 
of
immediately 
available funds 
upon written 
request to
the 
Trust not 
later than

15 calendar days prior to the date on which the 
distribution is payable. The
record date for distributions on the Capital 
Securities is the fifteenth day of the month preceding the
distribution 
date, whether or not a business day. 
The Trust pays
distributions 
through the Property 
Trustee. The Property Trustee holds 
amounts
received from 
the Debentures in the payment account for the benefit of the holders of the
Trust 
Securities. 
If
a 
distribution 
is
payable 
pursuant 
to
the 
Trust 
Agreement 
on
a 
day that 
is not 
a
business 
day, 
then that

distribution is to be paid 
on the next day
that 
is a business day, and without any interest 
or other payment for
any 
delay 
with the same force and effect as if made on the payment date.

The Trust 
Agreement
defines 
a business 
day as 
a
day 
other than 
a Saturday, 
a
Sunday 
or any 
other day 
on

which banking institutions in 
New
York, 
New York, 
San Juan, Puerto Rico or 
Wilmington,
Delaware 
are authorized 
or required by
law, 
regulation or executive order to remain closed or are customarily closed.

Deferral of Distributions

As long as there is no event of default under the Debentures, the Company has
the 
right to defer payments of 
interest on the Debentures at any time and from
time to 
time by extending the interest payment period for a period (an

“Extension Period”) of up to 60 consecutive months, but not beyond the
maturity 
of the Debentures. 
As a consequence, during an
Extension 
Period, the Trust will defer payment 
of the monthly distributions on

the Capital Securities. The accumulated but unpaid 
distributions will continue to
accumulate additional distributions, 
as permitted by applicable law, 
at an annual
rate of 6.125% compounded monthly. 
While the Company defers interest payments on the Debentures, it will be
restricted 
from:

●
declaring 

or 
paying 
any 

dividends 
or 
distributions 

on, 
or 
redeeming, 

purchasing, 
acquiring 
or

making a liquidation payment on, any shares of its capital stock; and

●
making 

payments 
on 
or 

repaying, 
repurchasing 
or 

redeeming 
any 
of 
its 

debt 
securities 
that 
rank

equal or junior to the Debentures.

If the 
Trust 
defers
distributions, 
the
deferred 
distributions, 
including 

accumulated 
additional distributions, 
are
to 
be paid 
on the 
distribution
payment 
date following 
the last 
day
of 
the Extension 
Period to 
the
holders 
on the 
record date
for 
that distribution payment 
date. Upon termination 
of an Extension
Period 
and payment of all 
amounts 

 
 

due on the Capital Securities, the 
Company may elect to begin
a 
new Extension Period with respect to 
the Debentures,

subject to the above conditions.

Redemption

Repayment or Redemption of the Debentures

When the Company 
repays or
redeems 
the Debentures, whether at 
stated maturity or 
upon earlier redemption,

the Property Trustee 
will apply
the 
proceeds from the 
repayment or redemption 
to redeem
Capital 
Securities having 
an aggregate liquidation amount
equal 
to that portion of 
the principal amount of 
Debentures being repaid or
redeemed.

The 
redemption 

price 
per 
security 
is
the 
$25 
liquidation 
amount, 

plus 
accumulated 
but
unpaid 
distributions 
to 
the

redemption date. 
If less
than all of 
the Debentures are to 
be repaid or redeemed, 
then the aggregate
liquidation 
amount of the 
Trust Securities to be redeemed will be allocated
approximately 3% to the 
Common Securities and 97% to the Capital 
Securities, except
in the case of an event of default as a result of any failure by the Company to make 
any principal or

interest payments under the Debentures when due.

The Company 
has
the 
right, 
subject
to 
any 
required 
prior 

approval of 
the Federal 
Reserve,
to 
redeem 
the 
Debentures
at a redemption price equal to 100% 
of the principal amount, plus accrued and unpaid 
interest to the date

of redemption:

●
on or after December
1, 2009, in whole or in part, on one or more occasions, 
at any time; and

●
in 

whole, 
but not 
in
part, 
at 
any 
time
within 
90 days 
following 
the
occurrence 
and 
continuation 
of
a 
Tax 
Event, an Investment Company Event or a Capital
Treatment 
Event, each as described below. 
If less than all of the
Debentures 
are to be repaid or redeemed on 
the date of redemption, then the
proceeds 
from 
such repayment or redemption will be allocated to the redemption of
Trust 
Securities proportionately. 
A redemption of the Debentures will cause a
mandatory redemption of the Trust 
Securities. 
Tax Event;
Investment 
Company Event; Capital Treatment Event 
A “Tax
Event”, 
under the Trust Agreement, means the 
receipt by the Trust of an
opinion 
of counsel experienced 
in such matters to the effect that as a result of:

●
any amendment
to, 
or change, including any 
announced prospective change, 
in the laws,
or 
any regulations 
thereunder,
of 
the United States or 
any political subdivision 
thereof or
Puerto 
Rico, or a taxing 
authority of

the United States or Puerto Rico, affecting taxation; or

●
any official or
administrative pronouncement or 
action or judicial decision 
interpreting or applying such laws

or regulations; 
there
is more 
than an insubstantial risk that:

(1)
the 

Trust 
is, or 
will be 
within
90 
days of 
the
delivery 
of 
the
opinion 
of 
counsel, 
subject
to 
United 
States 
federal
or Puerto Rico income tax with respect to income received 
or accrued on the Debentures held by the

Trust;

(2)
interest payable by the
Company to the Trust on the 
Debentures held by the Trust is not, or 
will not be within

90 days of the delivery of the opinion of counsel, deductible by the Company, in whole or in part, for Puerto

Rico income tax purposes or for U.S. income tax purposes, to the extent
applicable 
to the Company; or

(3)
the 

Trust 
is, or 
will
be 
within 
90 
days 

of 
the delivery 
of 
the
opinion 
of 
counsel, 
subject 

to 
more 
than 
an

immaterial amount of taxes, duties or other governmental charges. 

 
 

If a Tax Event 
has occurred and is continuing with respect to the
Trust 
Agreement, and the Trust is the holder of 
all the Debentures, the
Company 
will pay any additional sums required 
so that distributions on the
Capital 
Securities

will 
not 

be 
reduced 
by 
any 

additional 
taxes 
(other 

than 
withholding 
taxes), 

duties 
or 
other 

governmental 
charges 
payable by the Trust as a result of the
Tax 
Event. 
An
“Investment 
Company Event”, 
under
the 
Trust 
Agreement, means 
the
receipt 
by the 
Trust 
of
an 
opinion of 
counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or 
a written change, including any announced prospective change,
in 
interpretation or application of law or 
regulation by

any legislative body, 
court, governmental agency or
regulatory 
authority, there 
is more than an insubstantial risk that

the 
Trust 
is
or 
will be 
considered 
an
“investment 
company” 
that 
is
required 
to be 
registered 
under
the 
Investment 
Company Act.

A “Capital Treatment 
Event”, under
the 
Trust Agreement, 
means the reasonable 
determination
of 
the Company

that, 
as 

a 
result 
of 
any 

amendment 
to, 
or 

change 
in, 
including 

any 
announced 
proposed 

change 
in, 
the 
laws 

or

regulations 
of 

the 
United 
States 
or 

any 
political 
subdivision 

thereof 
or 
therein, 
or 

as 
a 
result 
of 

any 
official 
or

administrative 
pronouncement 

or action 
or judicial 
decision interpreting 
or
applying 
such laws 
or regulations, 
that

there is more than 
an insubstantial risk
that 
the Company will not 
be entitled to treat 
an amount equal
to 
the liquidation 
amount
of 
the Capital 
Securities
as 
Tier 
1 capital, 
or
the 
then-equivalent thereof, 
for purposes 
of
capital 
adequacy 
guidelines of the Federal Reserve, as then in effect and
applicable 
to the Company. 
Redemption Procedures

The Trust may redeem the Capital Securities only in an amount equal to the funds it has on hand and legally

available to pay the redemption price.

The Property 
Trustee 
will
mail 
written notice 
of the 
redemption
of 
the Capital 
Securities to 
the registered

holders 
at 

least 
30 
but 
not 

more 
than 
60 
days 

before 
the 
date 
fixed 

for 
redemption. 
If 
the 

Trust 
gives 
a 
notice 

of

redemption, 
then, 

by 
12:00 
noon, 
New 

York 
City 
time, 
on 

the 
date 
of 

redemption, 
if 
the 
funds 

are 
available 
for

payment, the Property Trustee will, for Capital Securities 
held in book-entry
form: 
●
irrevocably
deposit with DTC funds sufficient to pay the redemption 
price; and

●
give 

DTC irrevocable 
instructions and 
authority 
to
pay 
the redemption 
price 
to
the 
holders of 
the Capital

Securities. 
With respect to
the Capital 
Securities not held in 
book-entry form, if funds 
are available
for 
payment, the Property 
Trustee will:

●
irrevocably deposit
with the paying agent funds sufficient 
to pay the redemption price; and

●
give the paying agent
irrevocable instructions and authority to pay the redemption price to the holders of the 
Capital Securities upon surrender of the
certificates evidencing the 
Capital Securities. 
Notwithstanding the
above, 
distributions payable on 
or prior to 
the date
of 
redemption for Capital 
Securities called

for redemption are payable to the holders of the Capital Securities on 
the
applicable record dates. 
Once notice 
of
redemption 
pursuant to 
the Trust 
Agreement
is 
given and 
funds are 
deposited,
then 
all rights 
of 
the
holders of the Capital Securities called for redemption terminate, except the right 
to receive the redemption price,

but without any interest or other payment for any 
delay in receiving it. If such
notice 
of redemption is given and funds 
deposited as required, the Capital
Securities then will cease to be outstanding.

If 
payment 
of
the 
redemption 
price 
for 

the
Capital 
Securities 
called 

for 
redemption 
is
improperly 
withheld 
or

refused and not 
paid either by
the 
Trust or 
by the Company 
under the
Guarantee, 
then distributions on 
those Capital

Securities will 
continue
to 
accumulate at 
the then-applicable 
rate,
from 
the date 
of redemption 
to
the 
date of 
actual 

 
 

payment. In 
this case, 
the
actual 
payment date 
will be 
the
date 
fixed for 
redemption for 
purposes
of 
calculating the 
redemption price.

If less than all of the Trust Securities are redeemed, then the aggregate liquidation amount of the
Trust 
Securities

to 
be 

redeemed 
normally 
will 

be 
allocated 
approximately 

3% 
to 
the 
Common 

Securities 
and 
97% 
to 

the 
Capital 
Securities. However, if
an 
event of default 
has occurred as 
a
result 
of any failure 
by the Company 
to make
any 
principal 
or interest payments
under 
the Debentures when due, 
holders of the Capital Securities 
will be paid
in 
full before any 
payments are made
to 
holders of the Common 
Securities. The Property Trustee selects 
the
particular Capital Securities 
to be 
redeemed
on 
the pro 
rata
basis 
described 
above not 
more
than 
60 days 
before the 
date
of 
redemption by 
any

method the Property Trustee deems fair and appropriate or, 
if the Capital
Securities are then held in book-entry form, 
in accordance with DTC’s
customary 
procedures. 
Under the Trust
Agreement, 
if any 
date fixed for 
redemption is
not 
a business 
day, then payment of the 
redemption

price will be made on the next day that is a business day, 
without any interest or
other payment for the delay.

Subject 
to 

the 
above 
and 

applicable 
law 
and 

regulations, 
including 
United 

States 
federal 
securities 

laws 
and 
banking
laws 
and regulations, 
the Company 
or
its 
affiliates 
may, 
under
the 
Trust Agreement, 
at any 
time
and 
from 
time to time
purchase 
outstanding Capital Securities by 
tender, in the 
open market or by
private 
agreement, and may 
resell the Capital Securities.

Ranking of Capital Securities

Payment of distributions on, and the redemption price of 
and the liquidation
distribution in respect of 
Capital 
Securities
and 
Common Securities, 
as applicable, 
are
made 
pro rata 
based on 
the
relative 
liquidation amount 
of the

Capital 
Securities 

and 
Common 
Securities, 

except 
that 
upon 
certain 

events 
of 
default 
under 

the 
Trust 
Agreement

relating to payment defaults on Debentures, the rights of the holders of the
Common 
Securities to payment in respect 
of distributions and payments upon
liquidation, redemption and 
otherwise are subordinated to the rights of 
the holders

of the Capital Securities.

In the 
case of 
any
event 
of default 
under the 
Trust
Agreement 
resulting from 
an event 
of
default 
under the 
Indenture,
the 
Company, 
as holder 
of
the 
Common Securities, 
will be 
deemed
to 
have waived 
any right 
to
act 
with 
respect to
any 
such event of default 
under the Trust Agreement 
until all
such 
events of default have 
been cured, waived

or otherwise eliminated. Until 
all events
of 
default under the 
Trust Agreement have been 
so cured,
waived 
or otherwise

eliminated, 
the 

Property 
Trustee 
will 

act 
solely 
on 
behalf 

of 
the 
holders 
of 

the 
Capital 
Securities 

and 
not 
on 
the

Company’s behalf, 
and only the
holders 
of the Capital Securities 
will have the right 
to direct the
Property 
Trustee to 
act on their behalf.

Liquidation Distribution Upon Dissolution

The amount 
payable on 
the
Capital 
Securities in 
the event 
of
any 
liquidation of 
the Trust 
is
the 
liquidation 
amount
of 
$25 per 
Capital Security 
plus
accumulated 
but unpaid 
distributions, subject 
to
certain 
exceptions, which 
may be paid in the form of a distribution of Debentures.

The Company can at any time dissolve the Trust. If the Trust 
dissolves and it has
paid the liabilities owed to 
its creditors, the Debentures will be distributed to the holders of the
Trust 
Securities. 
Any distributions of the Debentures may require approval of the
Federal 
Reserve. 
The Trust Agreement states that the
Trust 
will dissolve automatically on December 1, 2035 or earlier upon:

(1)
the bankruptcy,
dissolution 
or liquidation of the Company;

(2)
the 

distribution 
of 
Debentures 

having 
a 
principal 

amount 
equal 
to 
the 

liquidation 
amount 
of 

the 
Trust 
Securities of the holders to whom the Debentures are distributed,
if the Company has given written direction 
to the Property Trustee to dissolve
the 
Trust, which direction, subject to the foregoing restrictions, 
is optional

and wholly within the discretion of the Company; 

 
 

(3)
the redemption of all Capital
Securities in connection with the redemption of all the Debentures or the stated 
maturity of the Debentures; or

(4)
the entry of an order
for the dissolution of the Trust 
by a court of competent jurisdiction. 
If
the 
Trust 
dissolves as 
described
in 
clauses (1), 
(2) or 
(4)
in 
the preceding 
paragraph, after 
the
Trust 
pays all 
amounts owed to
creditors, 
holders of the Capital Securities 
and holders of its Common 
Securities
will be entitled to 
receive Debentures having a principal amount equal to the
liquidation 
amount of the Trust Securities of the holders. 
If the Trust cannot
pay the full amount due 
on the Trust Securities because it has insufficient 
assets for payment,

then the amounts the Trust 
owes on the Capital
Securities 
will be proportionately allocated. 
The holders of Common

Securities are entitled to receive 
distributions upon any
liquidation 
on a pro rata basis 
with the holders of the 
Capital

Securities, except 
that
if 
an event 
of default 
under
the 
Debentures has 
occurred and 
is
continuing 
as a 
result of 
any

failure by the Company to make any principal or interest payments 
in respect of
Debentures when due, the Trust will 
pay the total amounts due on the Capital Securities before making any
distributi 
on on the Common Securities. 
After the liquidation date is fixed for
any distribution of Debentures, upon dissolution 
the Trust:

●
the Trust Securities
will no longer be deemed to be outstanding;

●
DTC 

or 
its 
nominee, 
as 

the 
registered 
holder 

of 
the 
Capital 

Securities, 
will 
receive 

a 
registered 
global

certificate 
or
certificates 
representing the 
Debentures to 
be
delivered 
upon distribution 
with respect 
to the

Capital Securities held by DTC or its nominee; and

●
any 

certificates 
representing 
the
Capital 
Securities 
will 
be 

deemed 
to 
represent 

the 
Debentures 
having 
an

aggregate principal amount equal to the 
liquidation amount of the Capital
Securities, 
and bearing accrued but 
unpaid interest equal to
accumulated 
but unpaid distributions on Capital 
Securities, until the holder
of 
those 
certificates presents them to the security registrar for Capital
Securities for transfer 
or reissuance. 
Exchanges

If 
at 

any 
time 
a 
Depositor 

Affiliated 
Owner 
is 

the 
owner 
of 
Capital 

Securities, 
such 
Depositor 
Affiliated

Owner will have the right to deliver to the Property Trustee all or such portion of its Capital Securities as it elects and

receive, 
in 

exchange 
therefore, 
a 

like 
amount 
of 

Debentures. 
After 
the 

exchange, 
the 
Capital 

Securities 
will 
be

cancelled and will no longer 
be deemed to
be 
outstanding and all rights of 
the Depositor Affiliated Owner with 
respect

to the Capital Securities will cease.

In the case of an exchange described in the previous paragraph, the Trust will, on the date of such exchange,

exchange Debentures having 
a principal
amount 
equal to a proportional 
amount of the 
aggregate liquidation amount

of its outstanding Common Securities, based on the ratio of the aggregate
liquidation 
amount of its Capital Securities 
exchanged divided by the
aggregate 
liquidation amount of its Capital 
Securities outstanding immediately prior to such

exchange, for 
such proportional
amount 
of its Common 
Securities held by 
the Company
(which 
contemporaneously 
will be cancelled and no longer be deemed to be
outstanding). 
Events of Default; Notice

Any one of the following events constitutes an event of default 
of the Trust,
regardless of the reason for such 
event of default and whether 
it will be
voluntary or involuntary 
or be effected by operation 
of law or pursuant to any

judgment, decree or order of any court or any order, 
rule or regulation of any
administrative or governmental body:

●
the occurrence of an
event of default under the Indenture with 
respect to the Debentures held by the Trust; or 

 
 

●
the default by
the 
Property Trustee in 
the payment of any 
distribution on the
Capital 
Securities or Common 
Securities when such distribution becomes due and
payable, and 
continuation of such default for a period of 
30 days; or

●
the default by the
Property Trustee in the payment of any redemption price of Capital Securities or Common 
Securities when such redemption price becomes due
and payable; or

●
the failure to
perform or the breach, in any material respect, 
of any other covenant or warranty of the trustees

of the Trust in 
the Trust
Agreement 
for 90 days after the defaulting 
trustee or trustees have
received 
written 
notice of the failure to perform or breach of warranty in the
manner 
specified in the Trust Agreement; or

●
the
occurrence 
of certain 
events
of 
bankruptcy 
or insolvency 
with
respect 
to the 
Property Trustee 
and the

Company’s failure to appoint a successor 
property trustee within 90 days.

Within ten days after any event 
of default of the Trust
actually 
known to the Property Trustee occurs, 
the Property

Trustee will transmit notice of such event of default to 
the holders of the Capital
Securities or Common Securities 
and

to 
the 

Administrative 
Trustees, 
unless 

such 
event 
of 
default 

shall 
have 
been 
cured 

or 
waived. 
The 

Company, 
as

depositor, 
and
the 
Administrative Trustees 
are required 
to
file 
annually with 
the
Property 
Trustee 
a certificate 
as to

whether or not 
the Company
or 
the Administrative Trustees 
are in compliance 
with all the
conditions 
and covenants 
applicable to the Company and the Administrative
Trustees 
under the Trust Agreement. 
The
existence 
of an event 
of default under 
the
Trust 
Agreement, in and 
of itself, with 
respect to
the 
Debentures 
does not entitle the holders of the Capital Securities to accelerate
the maturity of 
the Debentures. 
Removal of Trustees

Unless an event 
of default under
the 
Indenture has occurred 
and is continuing, 
the Property
Trustee 
and the 
Delaware Trustee may be removed at any time by the holder of the
Common Securities. The Property Trustee and the

Delaware 
Trustee 

may 
be 
removed 
by 

the 
holders 
of 
a 

majority 
in 
liquidation 

amount 
of 
the 

outstanding 
Capital 
Securities for
cause 
or if an event 
of default under the 
Indenture has
occurred 
and is continuing. In 
no event will the

holders 
of
the 
Capital 
Securities
have 
the 
right 
to
vote 
to 
appoint, 
remove 

or replace 
the Administrative 
Trustees,

which voting 
rights are
vested 
exclusively in the 
Company, 
as the
holder 
of the Common 
Securities. No resignation

or removal of a trustee and 
no appointment of a successor trustee
will 
be effective until the acceptance of appointment 
by the successor trustee in
accordance with the provisions of the Trust 
Agreement.

Co-Trustees and Separate 
Property Trustee

Unless an event of default under 
the Debentures has occurred
and 
is continuing, at any time or 
from time to

time, for the purpose of meeting the legal requirements of the Trust 
Indenture Act
or of any jurisdiction in which any 
part of the 
trust property
may 
at the time 
be located,
the 
Company, 
as the holder 
of the
Common 
Securities, and the 
Administrative Trustees have the power
to 
appoint one or more 
persons either to act 
as a co-trustee
of 
the Trust, jointly 
with the
Property 
Trustee, of all 
or any part 
of such trust
property, 
or to act as 
separate trustee of 
any such property,

in either 
case with
such 
powers as 
may be provided 
in
the 
instrument of 
appointment, and 
to vest
in 
such person or 
persons in such capacity any property, title, right or power
deemed necessary or desirable, subject to the provisions of 
the Trust 
Agreement.
If an 
event of default 
under the Indenture 
has occurred
and 
is continuing, the Property 
Trustee

alone shall have power to make such appointment.

Mergers or Consolidation of Trustees

Any person into which the Property Trustee or the Delaware Trustee, if not a natural person, may be merged

or 
converted 

or 
with 
which 
it 

may 
be 
consolidated, 

or 
any 
person 

resulting 
from 
any 

merger, 
conversion 
or

consolidation to 
which such
trustee 
is a party, 
or any person 
succeeding
to 
all or substantially 
all the corporate 
trust

business of 
such
trustee, 
will be 
the successor 
of
such 
trustee under 
the Trust 
Agreement,
provided 
such person 
is

otherwise qualified and eligible. 

 
 

Mergers, Consolidations, Amalgamations or Replacements of the Trusts

The Trust 
may
not 
merge 
with or 
into,
consolidate, 
amalgamate, or 
be
replaced 
by, 
or convey, 
transfer or

lease its 
properties 
and
assets 
substantially as 
an entirety 
to
the 
Company or 
any other 
person,
except 
as described 
below or as otherwise
described 
in the Trust 
Agreement. The Trust 
may,
at 
the Company’s 
request, with the consent

of the Administrative 
Trustees
but 
without the 
consent of 
the
holders 
of the Capital 
Securities, the Property 
Trustee

or the Delaware Trustee, merge 
with or into, consolidate, amalgamate, or
be 
replaced by, or convey, 
transfer or lease

its properties and assets 
substantially as an
entirety 
to, a trust 
organized as such under the 
laws of
any 
state, the District 
of Columbia or the Commonwealth of Puerto Rico if:

●
such successor
entity either: 
o
expressly
assumes all of the obligations of the Trust 
with respect to the Capital Securities, or

o
substitutes 

for 
the 
Capital 

Securities 
other 
securities 

having 
substantially 
the 

same 
terms 
as 
the

Capital Securities, or the “Successor 
Securities”, so long as
the 
Successor Securities rank the same

as 
the 

substituted 
Capital 
Securities 

in 
priority 
with 

respect 
to 
distributions 

and 
payments 
upon

liquidation, redemption and otherwise;

●
the Company
expressly appoints a trustee of such successor entity possessing the same powers and duties as 
the Property Trustee as the holder of the
Debentures;

●
such 

merger, 
consolidation, 
amalgamation, 

replacement, 
conveyance, 
transfer 

or 
lease 
does
not 
cause 
the

Capital 
Securities, 

including 
any 
Successor 

Securities, 
to 
be 

downgraded 
by 
any 

nationally 
recognized 
statistical rating organization;

●
such 

merger, 
consolidation, 
amalgamation, 

replacement, 
conveyance, 
transfer 

or 
lease 
does not 
adversely

affect the rights, preferences and privileges 
of the holders of the Capital
Securities, including any 
Successor 
Securities, in any material respect;

●
such successor entity
has a purpose substantially identical to that of the Trust;

●
prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease, the Company 
has received an opinion from independent
counsel to the Trust experienced in such matters to the effect that:

o
such 

merger, 
consolidation, 
amalgamation, 

replacement, 
conveyance, 
transfer 

or 
lease 
does 
not

adversely 
affect 

the 
rights, 
preferences 

and 
privileges 
of 
the 

holders 
of 
the 
Capital 

Securities, 
including any Successor Securities, in any material respect, and

o
following 

such
merger, 
consolidation, 
amalgamation, 

replacement, 
conveyance, 
transfer or 
lease,

neither the 
Trust 
nor
such 
successor entity 
will be 
required
to 
register as 
an investment 
company

under the Investment Company Act; and

●
the
Company 
or any permitted 
successor or assignee 
owns all
of 
the Common 
Securities of such 
successor

entity and 
guarantees
the 
obligations of 
such successor 
entity
under 
the Successor 
Securities at least 
to the

extent provided by the Guarantee.

Notwithstanding 
the 

foregoing, 
the 
Trust 

may 
not, 
except 
with 

the 
consent 
of 
holders 

of 
100% 
in 
liquidation

amount of the 
Capital Securities,
consolidate, 
amalgamate, merge 
with or into, or 
be replaced
by 
or convey, 
transfer 
or
lease its 
properties and assets 
substantially as an 
entirety to
any 
other entity or 
permit any other 
entity to consolidate,

amalgamate, merge with or into, or replace it if such consolidation, amalgamation, merger,
replacement, 
conveyance, 
transfer or lease
would 
cause the Trust 
or the successor entity 
to be classified as
other 
than a grantor trust 
for United

States federal or Puerto Rico income tax purposes. 

 
 

Voting 
Rights; Amendment of the
Trust 
Agreement 
Except as otherwise provided
below 
and as otherwise required by law 
and the Trust Agreement, 
the holders

of the Capital Securities have no voting rights.

The Company and 
the Administrative
Trustees 
may amend the 
Trust Agreement 
without the
consent 
of the

holders 
of 

the 
Capital 
Securities, 

unless 
such 
amendment 

will 
materially 
and 

adversely 
affect 
the 

interests 
of 
any

holder of the Capital Securities, to:

●
cure
any 
ambiguity, 
correct or supplement 
any
provisions 
in the 
Trust Agreement 
that may
be 
inconsistent 
with any other
provision, 
or to make any other 
provisions with respect to matters 
or questions
arising under 
the Trust Agreement, which may not be inconsistent 
with the other
provisions of the Trust Agreement; 
or

●
modify, 

eliminate 
or add 
to
any 
provisions 
of
the 
Trust 
Agreement 
to
such 
extent as 
will
be 
necessary 
to

ensure 
that
the 
Trust 
will be 
classified
for 
United 
States federal 
or
Puerto 
Rico income 
tax purposes 
as a

grantor trust at all times that any Capital Securities and Common Securities are outstanding or to ensure that

the Trust will not be required to register as an “investment 
company”
under the Investment Company Act. 
The Company, 
the Administrative
Trustees 
and the Property Trustee 
may generally amend the 
Trust Agreement

with:

●
the 

consent 
of 
holders 

representing 
not 
less 

than 
a 
majority, 
based 

upon 
liquidation 
amounts, 

of 
the 
outstanding Capital Securities; and

●
receipt by
the 
trustees of an 
opinion of counsel 
to the effect
that 
such amendment or the 
exercise of any 
power

granted to the trustees in accordance with such amendment will not affect the Trust’s status as a grantor trust

for 
United 

States 
federal 
or 

Puerto 
Rico 
income 
tax 

purposes 
or 
the 

Trust’s 
exemption 
from 

status 
as 
an

“investment company” under the Investment Company Act.

However, without the consent of each holder 
of Trust Securities, the
Trust 
Agreement may not be amended to:

●
change the amount or
timing of any distribution required to be made in respect of the Trust Securities as of a 
specified date; or

●
restrict the right of a
holder of Trust Securities to institute a suit for the enforcement of any such payment on 
or after such date.

So long 
as the 
Property
Trustee 
holds any 
Debentures, the 
trustees
of 
the Trust 
may not, 
without
obtaining 
the 
prior approval of the holders of a majority in aggregate liquidation
amount 
of all outstanding Capital Securities:

●
direct 

the 
time, 
method 
and 

place 
of 
conducting 

any 
proceeding 
for 
any 

remedy 
available 
to 

the 
junior 
subordinated trustee,
or 
executing any trust 
or power conferred 
on the
junior 
subordinated trustee with 
respect

to the Debentures;

●
waive any past
default that is waivable under the Indenture;

●
exercise any right
to rescind 
or annul a declaration that 
the principal of all 
the Debentures is due
and payable; 
or

●
consent 

to 
any 
amendment, 

modification 
or 
termination 

of 
the 
Indenture 
or 

the 
Debentures, 
where 
such

consent will be required.

If a consent under the Indenture 
would require the consent
of 
each holder of Debentures affected thereby, no such 
consent may be given
by 
the Property Trustee without 
the prior consent of each 
holder of the
Capital Securities. The 
Property Trustee may not revoke any action previously authorized or approved by a vote of the holders of the
Capital 
Securities except 
by
subsequent 
vote of 
the holders 
of
the 
Capital Securities. 
The Property 
Trustee
will 
notify each 

 
 

holder 
of 

Capital 
Securities 
of 

any 
notice 
of 
default 

with 
respect 
to 
the 

Debentures. 
In 
addition 

to 
obtaining 
the

foregoing approvals 
of
the 
holders of 
the Capital 
Securities,
before 
taking any 
of the 
foregoing
actions, 
the trustees 
will obtain an opinion of counsel experienced in
such 
matters to the effect that such action would 
not cause the Trust

to be classified as other than a grantor trust for United States federal or Puerto Rico income
tax 
purposes. 
Any required approval of holders of Capital Securities may be
given at a meeting of holders of Capital Securities 
convened for such purpose or pursuant to written consent. The Property
Trustee 
will cause a notice of any meeting at 
which holders of Capital Securities
are entitled to vote, or of any matter upon which action 
by written consent of such

holders is 
to be taken, 
to
be given 
to each holder 
of record of 
Capital
Securities 
in the manner 
set forth 
in the Trust

Agreement. 
Notwithstanding
that holders of 
Capital Securities are entitled to 
vote or consent under any
of 
the circumstances 
described above, any of the Capital Securities that are
owned by the Company or its affiliates or the trustees or any of 
their affiliates, will, for purposes of such vote or consent, be treated
as if they 
were not outstanding. 
Payment and Paying Agent

Payments on 
the
Capital 
Securities are made 
to DTC, which 
credits the
applicable 
accounts at DTC 
on the

applicable distribution dates. If any Capital Securities are not held by DTC, such payments are made by check mailed

to the address of the holder as such address appears on the register.

The paying agent 
for the
Trust 
is Banco Popular 
de Puerto Rico. The 
paying agent
is 
permitted to resign 
as

paying agent of the Trust 
upon 30 days’ written
notice 
to the Administrative Trustees 
and to the Property Trustee. 
In

the event 
that
Banco 
Popular de 
Puerto Rico 
is
no 
longer be 
the paying 
agent,
the 
Property Trustee 
will appoint 
a

successor to act as paying agent, which will be a 
bank or trust company
acceptable to the Administrative Trustees and 
to the Company.

Registrar and Transfer 
Agent

Banco Popular de Puerto Rico Trust Division acts as registrar 
and transfer agent
for the Capital Securities. 
Registrations of 
transfers of
Capital 
Securities are effected 
without charge 
by or
on 
behalf of the 
Trust, but

upon 
payment 

of 
any 
tax 
or 

other 
governmental 
charges 

that 
may 
be 
imposed 

in 
connection 
with 
any 

transfer 
or 
exchange. The Trust
is 
not required to register or cause to be 
registered the transfer of the Capital
Securities 
after the 
Capital Securities have been called for redemption.

Information Concerning the Property Trustee

Other 
than 

during 
the 
occurrence 

and 
continuance 
of 
an 

event 
of 
default 
under 

the 
Trust 
Agreement, 
the

Property Trustee undertakes to perform only the duties that are specifically set forth in the
Trust 
Agreement. After an 
event of default under the Trust Agreement, the Property
Trustee 
must exercise the same degree of care and skill as a 
prudent individual would
exercise 
or use in 
the conduct of 
his or
her 
own affairs. Subject to 
this provision, the 
Property

Trustee is under no obligation to exercise 
any of the powers vested in it by the
Trust 
Agreement at the request of any

holder 
of 

the 
Capital 
Securities 

unless 
it 
is 
offered 

indemnity 
satisfactory 
to 

it 
by 
such 
holder 

against 
the 
costs,

expenses and liabilities 
that might
be 
incurred. If no event 
of default under 
the Trust
Agreement 
has occurred and 
is

continuing and the 
Property
Trustee 
is required to 
decide between alternative 
courses of
action, 
construe ambiguous 
provisions the Trust Agreement or
is 
unsure of the application 
of any provision of 
the Trust Agreement, and
the 
matter

is 
not 

one 
upon 
which 
holders 

of 
the 
Capital 

Securities 
are 
entitled 

under 
the 
Trust 

Agreement 
to 
vote, 
then 

the

Property 
Trustee 

will 
take 
any 
action 

that 
the 
Company 

directs. 
If 
the 

Company 
does 
not 

provide 
direction, 
the

Property 
Trustee 

may 
take 
any 
action 

that 
it
deems 
advisable 
and 
in 

the 
best 
interests 
of 

the 
holders 
of 
the 

Trust 
Securities and will have no liability except for its own bad faith, negligence
or 
willful misconduct. 
The Company
and 
its affiliates maintain 
certain accounts and 
other banking
relationships 
with the Property 
Trustee and its affiliates in the
ordinary 
course of business. 
Trust Expenses 

 

Pursuant to the Trust Agreement, the Company, 
as depositor, has agreed to pay:

●
all debts and
other obligations of the Trust (other 
than with respect the Capital Securities);

●
all costs and
expenses of the Trust, including costs and expenses relating to the organization of the Trust, the 
fees and expenses of the trustees of
the Trust and the cost and expenses relating to the 
operation of the Trust;

and

●
any 

and 
all taxes 
and 
costs
and 
expenses 
with
respect 
thereto, 
other 
than 

withholding 
taxes, to 
which 
the

Trust might become subject.

Governing Law

The Trust Agreement is governed by and construed 
in accordance with the laws of
Delaware. 
Miscellaneous

The Administrative Trustees are authorized 
and directed to conduct the affairs of
and to operate 
the Trust in 
such a way that it will not be required to
register 
as an “investment company” under the Investment Company 
Act or

characterized 
as 

other 
than 
a 
grantor 

trust 
for 
United 

States 
federal 
or 

Puerto 
Rico 
income 
tax 

purposes. 
The 
Administrative
Trustees 
are authorized and 
directed to conduct 
their affairs
so 
that the Debentures 
will be treated 
as

indebtedness of the Company for Puerto Rico income tax purposes.

In 
this 

regard, 
the 
Company 

and 
the 
Administrative 

Trustees 
are 
authorized 

to 
take 
any 
action, 

not 
inconsistent with applicable law, the certificate of trust of the Trust or the Trust Agreement, that the Company and the

Administrative Trustees 
determine
to 
be necessary 
or desirable to 
achieve
such 
end, as long 
as such action 
does not

materially and adversely affect the interests of the holders of the Capital Securities.

Holders of the Capital Securities have no preemptive or similar rights.

The Trust may not borrow money or issue debt or 
mortgage or pledge any of its
assets. 
DESCRIPTION OF THE GUARANTEE

The following description of the terms of the guarantee
(the 
“Guarantee”) is a summary and does not purport 
to
be 
complete. It 
is subject 
to and
qualified 
in its 
entirety by 
reference
to 
(i) the 
Guarantee Agreement, 
dated
as 
of 
August 31, 2009 (the “Guarantee Agreements”) and (ii) the
Prospectus Supplement, each of which is incorporated by 
reference as an exhibit
to 
the Annual Report on Form 10-K of 
which this exhibit is a part.
We 
encourage you to read 
the Guarantee Agreement and Prospectus Supplement for
more information. 
General

The Company’s obligation to make a Guarantee Payment (as defined below) to the Trust may be satisfied by

direct payment 
of
the 
required amounts 
to the 
holders
of 
the Capital 
Securities or 
by
causing 
the Trust 
to pay 
such

amounts to such holders. 
The
Guarantee does not apply to any payment of distributions by the Trust except to the extent the Trust has 
funds
available 
for such 
payments. If 
the
Company 
does not 
make interest 
payments
on 
the Debentures 
held by 
the

Trust, the Trust will 
not pay
distributions 
on the Capital 
Securities and will 
not have
funds 
available for such 
payments.

See “— Status of the Guarantee”. Because the Company is a holding company, the Company’s rights to participate in

the assets 
of any 
of
the 
Company’s 
subsidiaries upon 
the
subsidiary’s 
liquidation or 
reorganization is 
subject
to 
the 
prior claims
of 
the subsidiary’s creditors except to 
the extent that 
the Company
may 
itself be a 
creditor with recognized

claims against the 
subsidiary. Except as otherwise
described 
in this exhibit, 
the Guarantee does 
not limit
the 
incurrence 
or issuance by the Company of other secured or unsecured debt.

The Guarantee, 
when
taken 
together with 
the
Company’s 
obligations 
under
the 
Debentures, 
the Indenture

and 
the 

Trust 
Agreement, 
including 

the 
Company’s 
obligations 

to 
pay 
costs, 

expenses, 
debts 
and 

liabilities 
of 
the 

 
 

Trust, other than 
those
relating 
to Capital 
Securities or Common 
Securities, provides
a 
full and 
unconditional guarantee

on a subordinated basis of payments due on the Capital Securities issued by the Trust.

Under the 
Guarantee
Agreement, 
the Company 
irrevocably and 
unconditionally
agrees 
to pay in 
full to the

holders of 
the
Trust 
Securities, except 
to the 
extent
paid 
by the 
Trust, 
as
and 
when due, 
regardless of 
any defense,

right of set-off or counterclaim which the Trust 
may have or assert, the
Guarantee Payments without duplication:

●
any accrued
and 
unpaid distributions that 
are required to 
be paid
on 
the Capital Securities, 
to the extent 
the

Trust has funds available for distributions;

●
the
redemption 
price, plus 
all accrued 
and
unpaid 
distributions relating 
to any 
Capital
Securities 
called for 
redemption by the Trust, to the extent the
Trust 
has funds available for redemptions; and

●
upon a voluntary
or involuntary dissolution, winding-up or termination of the 
Trust, other than in connection

with the distribution of Debentures to the holders of Capital Securities or the
redemption 
of all of its Capital 
Securities, the lesser of:

●
the aggregate of
the liquidation 
amount and all accrued and unpaid 
distributions on the Capital
Securities 
to 
the date of payment to the extent the Trust has funds
available; 
and

●
the amount of
assets of 
the Trust remaining 
for distribution to holders of 
Capital Securities
in liquidation of 
the Trust.

Status of the Guarantee

The Guarantee is unsecured and ranks:

●
subordinate
and 
junior in right 
of payment 
to all
the 
Company’s 
other liabilities in 
the
same 
manner as 
the

Debentures as set forth in the Indenture; and

●
equally with all
other Guarantees that the Company issues. 
The Guarantee 
constitutes a
guarantee 
of payment and 
not of collection, 
which means
that 
the guaranteed party 
may sue
the 
guarantor to enforce 
its rights 
under the
Guarantee 
without suing any 
other person or 
entity. The Guarantee

is held by the guarantee trustee for the benefit of the 
holders of the Trust
Securities. The Guarantee will be discharged 
only 
by
payment 
of the 
Guarantee Payments 
in
full 
to the 
extent 
not
paid 
by the 
Trust 
or
upon 
the distribution 
of

Debentures.

Amendments and Assignment

The Guarantee 
may
be 
amended only 
with the 
prior
approval 
of the 
holders of 
not
less 
than a 
majority in

aggregate liquidation amount of the outstanding Capital Securities. 
No vote is
required, however, for any changes that

do 
not 

adversely 
affect 
the 

rights 
of 
holders 
of 

the 
Capital 
Securities 
in 

any 
material 
respect. 
All 

guarantees 
and

agreements 
contained 

in 
the 
Guarantee 
bind 

the 
Company’s 
successors, 

assignees, 
receivers, 
trustees 
and

representatives and will be for the benefit of the holders of the Capital Securities
then 
outstanding.

Termination 
of the Guarantee

The Guarantee will 
terminate (1) upon
full 
payment of the 
redemption price of all 
Capital Securities, (2) upon

distribution of the 
Debentures to the
holders 
of the Trust 
Securities or (3) upon 
full payment of
the 
amounts payable 
in accordance with the Trust Agreement
upon 
liquidation of the Trust. The Guarantee will continue 
to be effective or

will be reinstated, as the 
case may be, if
at 
any time any holder of 
Capital Securities must restore payment of 
any sums

paid under the Capital Securities or the Guarantee.

Events of Default 

 
 

Under the Guarantee, an event of default will occur if the Company fails to perform 
any
payment obligation 
or other obligation under the Guarantee.

With respect to the Guarantee, the holders 
of a majority in liquidation amount
of the Capital Securities have 
the right to direct the time, method and place of conducting any proceeding for any remedy available to the
guarantee 
trustee or to 
direct the
exercise 
of any trust 
or power conferred 
upon the
guarantee 
trustee under the 
Guarantee. Holders

of 
the 

Capital 
Securities 
may 

institute 
a 
legal 

proceeding 
directly 
against 

the 
Company 
to 
enforce 

the 
guarantee 
trustee’s rights and the Company’s obligations
under the Guarantee, 
without first instituting a 
legal proceeding against

the Trust, the guarantee trustee or any other person 
or entity.

As 
guarantor 

under 
the 
Guarantee, 
the 

Company 
is 
required 
to 

file 
annually 
with 
the 

guarantee 
a 
trustee

certificate pursuant to the Guarantee, 
as to whether
or 
not the Company is 
in compliance with all 
applicable conditions

and covenants under the Guarantee.

Information Concerning the Guarantee Trustee

With 
respect to 
the
Guarantee, 
prior to 
the occurrence 
of
an 
event of 
default relating 
to
the 
Guarantee, the 
guarantee trustee is
required 
to perform only the duties 
that are specifically set forth 
in the
Guarantee. Following 
the 
occurrence of
an 
event of default, the 
guarantee trustee will exercise 
the same
degree 
of care as a 
prudent individual

would exercise in the 
conduct of his or
her 
own affairs. Provided that 
the foregoing requirements have 
been met, the

guarantee trustee 
is under
no 
obligation to 
exercise any of 
the powers
vested 
in it by 
the Guarantee at 
the request of

any holder 
of
Capital 
Securities unless 
offered indemnity 
satisfactory
to 
it against the 
costs, expenses 
and liabilities

which might be incurred thereby.

The Company and its affiliates maintain certain accounts and other banking relationships with the guarantee

trustee and its affiliates in the ordinary course of business.

Governing Law

The Guarantee is 
governed by
and 
construed in accordance with 
the internal laws 
of the
Commonwealth 
of 
Puerto Rico.

DESCRIPTION OF THE DEBENTURES

The following is a brief description 
of the terms of the Debentures
held 
by the Trust. This summary 
does not purport

to be 
complete and 
is
subject 
to and 
qualified in 
its
entirety 
by reference 
to the 
Junior
Subordinated 
Indenture (the 
“Base Indenture”),
dated 
as of 
October 31, 2003, 
as supplemented
by 
the Second Supplemental 
Indenture (the “Second

Supplemental Indenture”, and together with the Base 
Indenture, the
“Indenture”), as supplemented by the Supplement 
to Second Supplemental Indenture, dated as of August 31, 2009; and (ii) the
Prospectus Supplement, each of which is 
incorporated by 
reference
to 
the Annual 
Report on 
Form
10 
K of 
which this 
exhibit
is 
a part. 
We 
encourage
you 
to 
read the Indenture and the Prospectus Supplement for more information.

General

The 
Debentures 

are 
unsecured, 
junior 

subordinated 
obligations 
of 

the 
Company. 
The 

Debentures 
are 
limited 
in

aggregate principal amount to $134,021,000. The 
aggregate principal amount of the
Debentures is limited to the 
sum 
of:

●
the aggregate
stated liquidation amount of the Capital Securities; and

●
the amount of
capital contributed by the Company in exchange for the Common Securities. 
The Debentures ranks junior to the Company’s senior debt,
including the subordinated debt of the Company. 
For 
information on the
subordination of the Debentures, see “Description of 
the Debentures — Subordination”.

The entire principal amount of 
the Debentures will become
due 
and payable, with any accrued 
and unpaid interest

thereon, on December 1, 2034. There is no sinking fund for the Debentures. 

 
 

The Company 
does not 
pay
any 
additional amounts 
on the 
Debentures
to 
compensate any 
holder or 
beneficial

owner for any Puerto Rico tax withheld from payments of principal or interest 
on
the Debentures. 
The Debentures are registered in the name 
of the Trust. The
Property Trustee holds the Debentures in trust 
for the 
benefit of the holders of
the Trust Securities. 
Interest

The Debentures bear interest 
at an annual rate
of 
6.125%,from and including their 
date of issuance until the

principal becomes 
due and
payable. 
Interest is payable 
monthly in arrears 
on the
first 
day of each 
month, beginning

January 1, 
2005.
Interest 
payments not 
paid when 
due
accrue, 
to the 
extent permitted 
by
applicable 
law, 
additional

interest, compounded 
monthly,
at 
the annual rate 
of 6.125%, computed 
on the
basis 
of a 360-day 
year of twelve 
30-

day months and the actual number of days elapsed in a partial month in such period.

The Company 
pays
interest 
on the 
Debentures to 
the
holders 
of record 
on the 
applicable
record 
date. The 
record
date 
for interest 
payments on 
the
Debentures 
is the 
fifteenth 
day
of 
the month 
preceding
the 
payment 
date,

whether or not a business day.

The amount 
of
interest 
payable for 
any period 
less
than 
a full interest 
period is 
computed
on 
the basis of 
a

360-day year 
of
twelve 
30-day months 
and the 
actual days
elapsed 
in a partial 
month in 
that
period. 
The amount 
of

interest payable for any full interest period is computed by dividing the 
annual
rate by twelve. 
If any date on which interest is payable on the Debentures is not a business day, then payment of the interest

payable 
on that 
date
will 
be made 
on the 
next
succeeding 
day 
that is 
a
business 
day, 
without 
any
interest 
or other 
payment
in 
respect of 
the delay, 
with
the 
same force 
and effect 
as
if 
made on 
the date 
that
payment 
was originally 
payable.

The amount of additional interest payable for any full interest period is 
computed
by dividing the annual rate 
by twelve. 
The
term 
“interest” as 
used in 
this
description 
includes 
monthly 
interest
payments, 
interest on 
monthly

interest payments not 
paid when
due, 
compounded interest and 
additional sums, as 
applicable. The
interest 
payment 
provisions for the Debentures correspond to the distribution
provisions for the Capital Securities. See “Description of 
the Capital Securities — Payment of Distributions” in this
description. 
Option to Extend Interest Payment Period

As long as the 
Company is not in
default 
under the Debentures, the 
Company has the right, 
at any time and

from time to time, to 
defer payments of
interest 
during an Extension Period, 
of up to 60 consecutive 
months, but not

beyond the maturity 
date of the
Debentures. 
During an Extension 
Period, interest continues 
to accrue
and 
holders of 
the
Debentures, 
or holders 
of Capital 
Securities
using 
the accrual 
method of 
accounting
to 
determine 
their taxable

income, are required to accrue interest income for Puerto Rico income tax purposes.

On the interest 
payment date
following 
the last day of 
any Extension Period, 
the Company
pays 
all interest 
then accrued and unpaid, together with additional
interest 
on the accrued and unpaid interest 
to the extent as permitted

by law, compounded monthly, 
at the annual rate of 6.125%, plus any additional
sums, as described below. 
Before termination of an 
Extension Period
for 
the Debentures, the 
Company may further 
extend the payments

of interest. However, 
no Extension Period, including
all 
previous and further extensions, may 
exceed 60 consecutive

months or extend beyond 
the maturity of the
Debentures. 
If any Debentures are called 
for redemption before the end

of an Extension Period relating 
to the Debentures,
such 
Extension Period will end 
on that redemption date 
or an earlier

date as determined by the Company. After the termination of an Extension Period
for 
the Debentures and the payment 
of
all 
amounts due, 
the Company 
may
begin 
a new 
Extension Period, 
as
described 
above. There 
is no 
limitation on

the number of times the 
Company may elect to
begin 
an Extension Period for the 
Debentures. Interest is not payable

during 
an 

Extension 
Period 
for 

the 
Debentures, 
only 

at 
the 
end 
of 

the 
Extension 
Period 

for 
the 
Debentures. 
The

Company may, 
however,
prepay, 
on any interest 
payment date, at 
any time
all 
or any portion 
of the interest 
accrued

during an Extension Period for the Debentures. 

 
 

If the Property Trustee is the sole holder of the Debentures, the Company 
will give the
Property Trustee and 
the Delaware Trustee written notice of its election of an Extension Period for the
Debentures 
at least one business day 
before the earlier of:

●
the next
succeeding date on which the distributions on the Capital Securities are payable; 
and

●
the
date 
the Property 
Trustee is 
required
to 
give notice 
to holders 
of
the 
Capital Securities 
of the 
record or

payment date for the applicable distribution.

The Property Trustee will give notice of the Company’s election of an Extension Period for the Debentures to the

holders of the Capital Securities.

With 
respect 

to 
either 
Trust, 
if 

the 
Property 
Trustee 

is 
not 
the 
sole 

holder, 
or 
is 
not 

itself 
the 
holder, 
of 

the 
Debentures, the Company 
will
give 
the holders of 
the Debentures and 
the indenture
trustee 
written notice of 
its election

of 
an 

Extension 
Period 
for 
the 

Debentures 
at 
least 
one 

business 
day 
before 
the 

next 
interest 
payment 

date 
for 
the

Debentures.

Additional Sums

If, at 
any time 
while
the 
Property Trustee 
is the 
holder
of 
the Debentures, 
the Trust 
is
required 
to pay 
any

additional taxes (other 
than withholding taxes),
duties 
or other governmental 
charges as a result 
of a
Tax 
Event with 
respect
to 
the Trust, 
the Company 
will
pay 
as additional 
interest on 
the
Debentures 
any additional 
amounts that 
are

required 
so 

that 
the 
distributions 

paid 
by the 
Trust 
will
not 
be 
reduced 
as
a 
result 
of any 
of 
those
taxes, 
duties 
or

governmental charges.

Redemption

The Company 
has
the 
right, 
subject
to 
any 
required 
prior 

approval of 
the Federal 
Reserve,
to 
redeem 
the 
Debentures
at a redemption price equal to 100% 
of the principal amount, plus accrued and unpaid 
interest to the date

of redemption:

●
on or after
December 1, 2009, in whole or in part, on one or more occasions, 
at any time; and

●
in 

whole, 
but not 
in
part, 
at 
any 
time
within 
90 days 
following 
the
occurrence 
and 
continuation 
of
a 
Tax 
Event, an Investment Company Event or a Capital
Treatment 
Event, each as described above. 
Notice of
any 
redemption will be 
mailed at least 45 
days but
not 
more than 75 days 
before the redemption 
date.

Unless the Company defaults in payment of the redemption price, 
on and after the
redemption date, interest will 
cease 
to accrue on the
Debentures 
or portions thereof called for 
redemption. The Debentures are
not 
subject to any sinking 
fund and are not redeemable at the option of the
holder. 
Restrictions on Certain Payments; Certain Covenants of the Company

Any money that the Company pays to a paying agent for the purpose of
making 
payments on the Debentures

and 
that 

remains 
unclaimed 
two 

years 
after 
the 

payments 
were 
due 
under 

the 
Debentures, 
will, 

at 
the 
Company’s

request, be returned 
to the Company
and 
after that time any 
holder of the 
Debentures can
only 
look to the Company 
for the payments on the Debentures.

With respect to the Debentures, the Company 
may not:

●
declare
or 
pay any 
dividends or distributions, 
or
redeem, 
purchase, acquire, 
or make 
a liquidation payment

on any of its capital stock; or

●
make 

any payment 
of principal 
of or 
interest
or 
premium, if 
any, 
on
or 
repay, 
repurchase or 
redeem debt

securities of the Company that rank equal or junior to the Debentures,

if at such time: 

 
 

●
there
has 
occurred any 
event of 
default
under 
the Debentures 
resulting from 
a
failure 
to make 
principal or

interest payments 
on
the 
Debentures or 
from certain 
events
in 
bankruptcy, 
insolvency
or 
reorganization 
of 
the
Company;

●
the 

Debentures 
are 
held 

by 
the 
Trust 
and 

the 
Company 
is 
in 

default 
with 
respect 

to 
its 
payment 
of 

any 
obligations under the Guarantee; or

●
the Company has
given 
notice of its election of 
an Extension Period with 
respect to the
Debentures 
and has 
not rescinded that notice, and such Extension Period, or any
extension thereof, 
is continuing. 
The restrictions listed above do not apply to:

●
repurchases,
redemptions or other acquisitions of shares of 
capital stock of the Company in connection with

(1) any employment contract, benefit plan 
or other similar arrangement with or
for 
the benefit of any one or 
more
employees, 
officers, directors, 
consultants or 
independent
contractors, 
(2) a dividend 
reinvestment or

stockholder stock purchase plan, or 
(3) the issuance
of 
capital stock of the 
Company, or securities convertible

into or exercisable 
for such capital
stock, 
as consideration in an 
acquisition transaction entered 
into prior to

the Extension Period for the Debentures;

●
an exchange,
redemption or 
conversion of any class or 
series of the Company’s 
capital
stock, or any capital 
stock of a subsidiary of the Company, 
for any other class
or series of the Company’s 
capital stock, or of any 
class or series of the
Company’s indebtedness 
for any class or series of the Company’s capital stock;

●
the purchase
of 
fractional interests in 
shares of the 
Company’s capital stock under
the 
conversion or exchange 
provisions of the capital stock or the security being
converted or exchanged;

●
any declaration of
a 
dividend in connection with 
any stockholder’s rights plan, or 
the
issuance of rights, 
stock 
or other
property 
under any stockholder’s 
rights plan, or 
the redemption
or 
repurchase of rights 
pursuant to

the plan;

●
payments by the
Company under the Guarantee; or

●
any
dividend 
in the 
form of 
stock,
warrants, 
options or 
other rights 
where
the 
dividend stock 
or the 
stock

issuable upon exercise 
of
such 
warrants, options or 
other rights 
is the
same 
stock as 
that on which 
the dividend

is being paid or ranks equal or junior to that stock.

In addition, as long as the Trust holds the Debentures, 
the Company agrees, with
respect to the Debentures:

●
to continue to
hold, directly or 
indirectly, 100% 
of the Common Securities, provided 
that
certain successors 
that are permitted 
under the Indenture
may 
succeed to the 
Company’s ownership of such Common 
Securities;

●
as holder of the
Common Securities, not to 
voluntarily dissolve, wind up or liquidate the Trust, other than 
(a)

as part 
of
the 
distribution of 
the Debentures 
to
the 
holders of 
the Capital 
Securities
in 
accordance with 
the

terms of the Capital Securities 
or (b) as part
of 
a merger, 
consolidation or amalgamation which 
is permitted

under the Trust Agreement; and

●
to
use 
its reasonable 
efforts, consistent 
with
the 
terms and 
provisions of 
the
Trust 
Agreement, to 
cause the

Trust 
to 

continue 
not 
to 
be 

taxable 
as 
a 
corporation 

for 
United 
States 

federal 
or 
Puerto 
Rico 

income 
tax 
purposes.

Registration, Denomination and Transfer 

 
 

The 
Company 

registered 
the
Debentures 
in 
the 
name 

of 
the
Property 
Trustee 
on 
behalf
of 
the 
Trust. 
The

Property Trustee 
holds the
Debentures 
in trust for 
the benefit of 
the
holders 
of the Trust 
Securities. The 
Debentures

are issued in denominations of $1,000 and integral multiples of $1,000.

DTC acts as securities depositary for the Debentures.

With respect to the Debentures, if the Debentures are in certificated form, payments of principal and interest

will be 
payable,
the 
transfer of 
the Debentures 
will
be 
registrable, and 
the Debentures 
will
be 
exchangeable for 
the

Debentures of other authorized denominations of a like aggregate principal amount. In such case, payment of interest

may also be made at the option of the Company by 
check mailed to the address of
the holder entitled to the payment. 
Upon written request to the paying agent not less than 15 calendar days prior to the date on
which 
interest is payable, 
a
holder 
of $1,000,000 
or more 
in
aggregate 
principal amount 
of the 
Debentures
may 
receive payment 
of interest,

other than payments of interest payable at maturity, 
by wire transfer of
immediately available funds. 
The Debentures may be presented for registration of transfer or exchange with an endorsed
form 
of transfer, 
or a duly executed and satisfactory written instrument of
transfer, at the security registrar’s 
office in San Juan, Puerto 
Rico
or 
the office 
of any 
transfer
agent 
selected by 
the Company 
without
service 
charge and 
upon payment 
of any

taxes and other 
governmental
charges 
as described 
in the Indenture. 
The Company
has 
appointed Banco 
Popular de

Puerto 
Rico 
as
transfer 
agent 
and 
security 

registrar 
under 
the Indenture. 
The
Company 
may 
at 
any 
time
designate 
additional transfer agents with respect to the Debentures.

With respect 
to the
Debentures, 
in the event 
of any 
redemption,
the 
Company and 
the indenture 
trustee for

the Debentures will not be required to:

●
issue, register
the transfer of or exchange the 
Debentures during a period beginning 15 calendar days before

the first mailing of the notice of redemption; or

●
register
the 
transfer of 
or exchange 
the
Debentures 
selected for 
redemption, except, 
in
the 
case of 
any the

Debentures being redeemed in part, any portion not to be redeemed.

At 
the 

request 
of 
the 

Company, 
funds 
deposited 

with 
the 
indenture 

trustee 
or 
any 
paying 

agent 
held 
for 
the

Company for the payment 
of principal, interest, and
premium, 
if any, 
on any Debenture which remain 
unclaimed for

two years 
after
the 
principal, interest, 
and premium, 
if
any, 
has become 
payable will 
be
repaid 
to the 
Company and

the holder of the Debentures will, as a general unsecured creditor, 
look only to
the Company for payment thereof. 
Limitation on Mergers and Sales of Assets

The Indenture generally 
permit a
consolidation 
or merger between 
the Company and 
another entity. The Indenture

also permits the sale or transfer by the Company of all or substantially all of its property and
assets. 
Such transactions 
are permitted if:

●
the resulting
or 
acquiring entity, 
if other than 
the
Company, 
is organized 
and existing under 
the laws of the

United States or any state, the District of Columbia or the Commonwealth of Puerto Rico and assumes all of

the Company’s responsibilities and liabilities under 
the Indenture,
including the payment of all amounts due 
on the Debentures and performance of the covenants in the Indenture; and

●
immediately after
the transaction, and giving 
effect to the transaction, no event 
of default under the Indenture

exists. 
If the Company
consolidates or merges with or into any other entity or sells or leases all or substantially all of its 
assets according
to 
the terms and conditions 
of the Indenture, 
the resulting
or 
acquiring entity will be 
substituted for

the Company in the Indenture with the 
same effect as if it had
been 
an original party to the 
Indenture. As a result, such

successor entity 
may
exercise 
the Company’s 
rights and 
powers
under 
the Indenture, 
in
the 
Company’s 
name and,

except in the case of a lease 
of all or substantially all
of 
the Company’s properties, the Company will be released from 
all the
Company’s liabilities and 
obligations under the Indenture and under the Debentures. 

 
 

Modification of Indenture

With respect to the Capital Securities, if any of the 
Capital Securities are
outstanding: 
●
no
modification 
may be 
made to 
the
Indenture 
that materially 
adversely affects 
the
holders 
of the 
Capital

Securities;

●
no termination of
the Indenture may occur; and

●
no waiver of any
event of 
default under the Debentures or compliance with any 
covenant under the Indenture

may be effective, 
without the
prior 
consent of the 
holders of at 
least a
majority 
of the aggregate 
liquidation

amount of 
such outstanding
Capital 
Securities unless and 
until the principal 
of and
premium, 
if any, 
on the

Debentures and 
all
accrued 
and unpaid 
interest thereon 
have
been 
paid in 
full and 
certain
other 
conditions 
are satisfied.

In addition, 
with respect
to 
the Capital Securities, 
if any of 
the Capital
Securities 
are outstanding, all 
holders of

the Capital Securities must consent if the Company wants to amend the
Indenture 
to:

●
remove the rights
of holders of the Capital Securities to institute a Direct Action (as defined 
below); or

●
modify a provision
of the 
Indenture that requires the consent 
of all the holders of 
the
outstanding Debentures. 
Events of Default and the Rights of Capital Securities Holders to
Take 
Action Against the Company 
An event of default under the Indenture means
any of the following, with 
respect to the Debentures:

●
failure to
pay 
interest on the Debentures 
for 30 days after 
the payment is
due 
(subject to the deferral 
of any

due date in the case of an Extension Period with respect to the Debentures);

●
failure to pay the
principal of or any premium on any the Debentures when due;

●
failure
to 
perform any 
other covenant 
in
the 
Indenture for 
90 days 
after
the 
Company has 
received written

notice of the failure to perform in the manner specified in the Indenture;

●
certain events
relating to a bankruptcy, 
insolvency or reorganization of the Company; or

●
any other event of
default that may be specified for the Debentures in the 
Indenture.

With 
respect 

to 
the 
Trust, 
so 

long 
as
the 
Trust 
holds 
Debentures, 

the 
Property 
Trustee 
and 

the 
holders 
of 
the

Capital Securities will have the following rights under the Indenture upon
the 
occurrence of an event of default:

●
the 

Property 
Trustee 
and 
the
holders 
of not 
less than 
25%
in 
aggregate 
liquidation 

amount 
of the 
Capital

Securities may declare the principal of and interest accrued on the Debentures due and payable immediately;

●
if all defaults
have been cured, the consent of the holders of more than 50% in aggregate liquidation amount 
of the
Capital 
Securities is required 
to annul a 
declaration by
the 
indenture trustee, 
the Trust 
or the holders

of Capital Securities that the principal of the Debentures is due and
payable 
immediately;

●
unless the
default 
is cured, the consent 
of each holder 
of Capital
Securities 
is required to 
waive a default 
in

the 
payment 

of 
principal, 
premium 
or 

interest 
with 
respect 

to 
the 
Debentures 
or 

a 
default 
in 
respect 

of 
a

covenant 
or 

provision 
that 
cannot 
be 

modified 
or 
amended 

without 
the 
consent 
of 

the 
holder 
of 
each

outstanding Debenture; and

●
unless the
default 
is cured, the 
consent of the 
holders of
more 
than 50% in 
aggregate liquidation amount 
of

the Capital Securities is required to waive any other default. 

 
 

If the event 
of default
under 
the Debentures is 
the failure of 
the Company
to 
make payments of 
principal or interest

on 
the 

Debentures 
when 
due, 

then 
a 
registered 

holder 
of 
Capital 

Securities 
may 
bring 
a 

legal 
action 
against 
the

Company directly 
for enforcement
of 
payment to such 
registered holder of 
amounts owed
on 
the Debentures 
with a

principal amount 
equal
to 
the aggregate 
liquidation amount 
of
such 
registered holder’s 
Capital Securities 
(a “Direct

Action”). The Company may not amend the Debentures to 
remove this right to
bring a 
Direct Action without the prior 
written consent of the registered holders
of all the 
Capital Securities. The Company can offset against 
payments then

due 
under 

the 
Debentures 
any 

corresponding 
payments 
made 

to 
holders 
of 
Capital 

Securities 
by 
the 

Company 
in 
connection with a Direct Action.

The holders of the Capital Securities are not able to exercise directly any remedies available to the holders of the

Debentures except under the circumstance described in the preceding 
paragraph.

The Indenture Does Not Restrict the Company’s Ability to Take 
Certain
Actions that may Affect the Debentures 
The Indenture does not contain restrictions on the
Company’s 
ability to:

●
incur, assume or
become liable for any type of debt 
or other obligation;

●
create liens on
the Company’s property 
for any purpose; or

●
pay dividends or
make distributions on the Company’s capital stock or repurchase or redeem the Company’s 
capital stock, except as set forth
under “— Restrictions on Certain Payments” 
above. 
The
Indenture does not 
require the maintenance of 
any financial ratios
or 
specified levels of 
net worth or liquidity.

In addition, the Indenture does contain 
any provisions which would
require 
the Company to repurchase or redeem 
or

modify the terms of any of the 
Debentures upon a change of control
or 
other event involving the Company which may 
adversely affect the
creditworthiness of such debt securities. 
Subordination

The Debentures are subordinated to all of the Company’s existing
and 
future Senior Debt, as defined below. 
The Company’s “Senior
Debt” includes 
its senior debt securities and its subordinated debt securities and means:

●
any of the
Company’s 
indebtedness for borrowed or 
purchased money, 
whether or not
evidenced 
by bonds, 
debt securities, notes or other written instruments,

●
the
Company’s obligations 
under letters of credit,

●
any
of 
the Company’s 
indebtedness or 
other
obligations 
with respect 
to commodity 
contracts,
interest 
rate 
and
currency 
swap agreements, 
cap, floor 
and
collar 
agreements, currency 
spot and 
forward
contracts, 
and 
other
similar 
agreements or 
arrangements designed 
to
protect 
against fluctuations 
in currency 
exchange or

interest rates, and

●
any 

guarantees, 
endorsements 
(other 

than 
by 
endorsement 
of 

negotiable 
instruments 
for 

collection 
in 
the

ordinary course 
of
business) 
or other 
similar contingent 
obligations
in 
respect of 
obligations of 
others
of 
a 
type
described 
above, whether or 
not such obligation 
is classified
as 
a liability on 
a balance sheet 
prepared

in accordance with generally accepted accounting principles,

whether outstanding on the date 
of execution of the
Indenture 
or thereafter incurred, other than 
obligations expressly

on a parity with or junior to the Debentures. The 
Debentures rank on a parity with
obligations evidenced 
by any debt 
securities,
and 
guarantees in 
respect of 
those
debt 
securities, initially 
issued to 
any
trust, 
partnership or 
other entity

affiliated with 
the
Company, 
that is, 
directly
or 
indirectly, 
the Company’s 
financing
vehicle 
in connection 
with the

issuance by such entity of capital securities or other similar securities. 

 
 

If certain events relating to a bankruptcy, 
insolvency or reorganization of the Company
occur, 
the Company 
will first pay all Senior Debt, including any interest accrued
after the events occur, in full before the Company makes 
any payment or distribution, whether in cash, securities or other property, on
account of the principal of or interest on 
the Debentures. In such an event, the Company will pay or deliver directly to the holders of
Senior Debt any payment 
or distribution 
otherwise
payable 
or deliverable 
to holders 
of the
Debentures. 
The Company 
makes the payments 
to

the holders of Senior Debt according to priorities existing among those holders until the Company has paid all Senior

Debt, including accrued interest, in 
full. Notwithstanding the subordination
provisions discussed in 
this paragraph, the 
Company may make payments or
distributions on the Debentures so 
long as:

●
the payments or
distributions consist of securities issued by the Company or another company in connection 
with a plan of reorganization or
readjustment; and

●
payment on those
securities is subordinate to outstanding Senior 
Debt and any securities issued with respect

to Senior Debt under 
such plan of
reorganization 
or readjustment at least to 
the same extent provided 
in the

subordination provisions of the Debentures.

If such 
events
relating 
to a bankruptcy, 
insolvency or 
reorganization
of 
the Company 
occur, 
after
it 
has paid 
in 
full
all 
amounts owed on 
Senior Debt, the 
holders of
the 
Debentures, together with 
the holders 
of any
of 
the Company’s 
other obligations ranking equal with the Debentures, will
be entitled to receive from the Company’s 
remaining assets 
any principal,
premium or interest due at that time on the Debentures and such other 
obligations before the Company

makes any 
payment 
or
other 
distribution 
on account 
of
any 
of the 
Company’s 
capital
stock 
or obligations 
ranking

junior to the Debentures. 
If
the Company violates the Indenture by making a payment or distribution to holders of the Debentures before it 
has paid all the Senior Debt
in full, then the holders 
of the Debentures will be deemed to have received the payments

or distributions in trust for the benefit of, and will have to pay or transfer the payments or distributions to, the holders

of the 
Senior
Debt 
outstanding at 
the time. 
The
payment 
or transfer 
to the 
holders
of 
the Senior 
Debt will 
be made

according to 
the
priorities 
existing among 
those holders. 
Notwithstanding
the 
subordination provisions 
discussed in

this paragraph, holders 
of the Debentures
are 
not required to pay, 
or transfer payments 
or distributions to,
holders 
of 
Senior Debt so long as:

●
the payments or
distributions consist of securities issued by the Company or another company in connection 
with a plan of reorganization or
readjustment; and

●
payment on those
securities is subordinate to outstanding Senior 
Debt and any securities issued with respect

to Senior Debt under 
such plan of
reorganization 
or readjustment at least to 
the same extent provided 
in the

subordination provisions of those Debentures.

Because 
of 

the 
subordination, 
if 

the 
Company 
becomes 

insolvent, 
holders 
of 

Senior 
Debt 
may 
receive 

more, 
ratably, 
and
holders 
of the 
Debentures
may 
receive 
less,
ratably, 
than 
the
Company’s 
other 
creditors. 
This
type 
of

subordination 
will 

not 
prevent 
an 
event 

of 
default 
from 

occurring 
under 
the 

Indenture 
in 
connection 

with 
the 
Debentures.

Any modification or amendment 
of the Indenture
may 
not, without the consent 
of the holders of all 
Senior Debt

outstanding, 
modify 

any 
of 
the 
provisions 

of 
the 
Debentures 

relating 
to 
the 

subordination 
of 
the 

Debentures 
in 
a

manner that would adversely affect the holders of Senior Debt.

The Indenture does not place a limitation on the amount of Senior Debt that 
the
Company may incur. 
Concerning the Indenture Trustee

The indenture 
trustee
has 
all the 
duties and 
responsibilities
specified 
under the 
Trust 
Indenture
Act. 
Other 
than its duties in case of a default, the indenture trustee is under
no obligation to exercise any of the powers under the 
Indenture at the request, order or direction of any holders of Debentures
unless 
offered reasonable indemnification. 

 
 

From time to time, the Company 
and certain of its subsidiaries
maintain 
deposit accounts and conduct other 
banking transactions, including
lending transactions, with the indenture 
trustee in the ordinary course of business.

Governing Law

The Indenture 
and
the 
Debentures are 
governed by, 
and
construed 
in accordance 
with, the 
internal
laws 
of 
the Commonwealth of Puerto Rico.Document

Exhibit 10.18

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment to the Employment Agreement (the “Second Amendment”) is effective August 17, 2020 (the “Second Amendment Effective Date”) by and between Subroto Mukerji (“Employee”) and Rackspace US, Inc. (the “Company”).  
WHEREAS, the Company and Employee are parties to that certain Employment Agreement effective July 1, 2019 and First Amendment to Employment Agreement effective September 11, 2019 (together the “Agreement”); and
WHEREAS, the parties hereto desire to amend the Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreement contained in the Agreement, as amended, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1.Unless otherwise defined herein, all capitalized terms used in this Second Amendment shall have the same meanings ascribed to them in the Agreement.
2.The annual base salary amount outlined in Section 3(a) is increased to $560,000.
3.Section 3(b) is amended to read in its entirety as follows:
Annual Corporate Bonus. Employee is eligible for an annualized on-target bonus of 90% of annual salary, subject to the Rackspace Corporate Cash Bonus Plan and as approved by the board of directors or compensation committee. 

All other terms and conditions of the Agreement not expressly amended herein remain in full force and effect.

																			
	EMPLOYEE:
					
							
	   /s/ Subroto Mukerji    
					
	Subroto Mukerji
			Date:    21 August 2020    
		
							
	COMPANY:
					
							
	    /s/ Kelly Butler    
			Date:    21 August 2020    
		
	Rackspace US, Inc.
					
	By:
	Kelly Butler                
					
	Title:
	VP, Racker Rewards & HR Operations - US

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