Document:

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                                                                    EXHIBIT 4(h)

                    [Form of Floating Rate Medium-Term Note]

                               (FACE OF SECURITY)

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

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

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

<PAGE>

REGISTERED NO. FLR___                                          CUSIP NO. _______

                           POPULAR NORTH AMERICA, INC.

                           MEDIUM-TERM NOTES, SERIES E
                                 (Floating Rate)

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

                                  POPULAR, INC.

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

PRINCIPAL AMOUNT:

STATED MATURITY DATE:

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

         -        payments of principal and any premium:

         -        payments of interest:

         -        Exchange Rate Agent:

ORIGINAL ISSUE DATE*:

REGULAR RECORD DATE(S):

ORIGINAL ISSUE DISCOUNT SECURITY:

         -        Total Amount of OID:

         -        Yield to Maturity:

         -        Initial Accrual Period OID:

         -        OID Default Amount:

         -        Default Rate:

         -        CD Rate:

         -        Federal Funds Rate:

         -        11th District Rate:

REPAYMENT DATE(S):

REDEMPTION OR REPAYMENT PRICE(S):

BASE RATE:

         -        Commercial Paper Rate:

         -        Prime Rate:

         -        LIBOR:

                  -        Moneyline Telerate LIBOR Page:

                  -        Reuters Screen LIBOR Page:

                  -        Index Currency:

         -        Treasury Rate:

         -        CMT Rate:

REDEMPTION COMMENCEMENT DATE:

         -        Moneyline Telerate Page 7051:

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

                    (Face of Security continued on next page)

                                       -2-
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         -        Moneyline Telerate Page 7052 (weekly/monthly):

         -        CMT Index Maturity:

INDEX MATURITY:

SPREAD:

SPREAD MULTIPLIER:

INITIAL BASE RATE:

MAXIMUM RATE:

MINIMUM RATE:

INTEREST RESET PERIOD:

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

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

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

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

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

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                                       -3-
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INTEREST PAYMENT DATE(S): unless otherwise specified, the third Wednesday of the
following:

         -        each of the 12 calendar months in each year

         -        each March, June, September and December in each year

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

         -        the following calendar month in each year:

subject to the second paragraph under "Payments Due on a Business Day" below

CALCULATION DATE(S): as provided in Section 3(n) on the reverse of this Security
(unless otherwise specified)

CALCULATION AGENT:

OTHER TERMS:

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

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

                    (Face of Security continued on next page)

                                       -4-

<PAGE>

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

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

                  If this Security is issued with an original issue discount,
(i) if an Event of Default with respect to the Securities of this series shall
have occurred and

                    (Face of Security continued on next page)

                                       -5-

<PAGE>

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

         CURRENCY OF PAYMENT

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

                  Except as provided in the next paragraph, any payment to be
made on this Security in a Specified Currency other than U.S. dollars will be
made in U.S. dollars if the Person entitled to receive such payment transmits a
written request for such payment to be made in U.S. dollars to the Trustee at
its Corporate Trust Office, Attention: Securities Processing Division, on or
before the fifth Business Day before the payment is to be made. Such written
request may be mailed, hand delivered, telecopied or delivered in any other
manner approved by the Trustee. Any such request made with respect to any
payment on this Security payable to a

                    (Face of Security continued on next page)

                                      -6-
<PAGE>

particular Holder will remain in effect for all later payments on this Security
payable to such Holder, unless such request is revoked on or before the fifth
Business Day before a payment is to be made, in which case such revocation shall
be effective for such and all later payments. In the case of any payment of
interest payable on an Interest Payment Date, such written request must be made
by the Person who is the registered Holder of this Security on the relevant
Regular Record Date.

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

                  Notwithstanding the foregoing, if any amount payable on this
Security is payable on any day (including at Maturity) in a Specified Currency
other than U.S. dollars, and if such Specified Currency is not available to the
Company on the two Business Days before such day, due to the imposition of
exchange controls, disruption in a currency market or any other circumstances
beyond the control of the Company, the Company will be entitled to satisfy its
obligation to pay such amount in such Specified Currency by making such payment
in U.S. dollars. The amount of such payment in U.S. dollars shall be determined
by the Exchange Rate Agent on the

                    (Face of Security continued on next page)

                                      -7-
<PAGE>

basis of the noon buying rate for cable transfers in The City of New York for
such Specified Currency (the "Exchange Rate") as of the latest day before the
day on which such payment is to be made. Any payment made under such
circumstances in U.S. dollars where the required payment is in other than U.S.
dollars will not constitute an Event of Default under the Indenture or this
Security.

         MANNER OF PAYMENT - U.S. DOLLARS

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

                  Payment of any amount payable on this Security in U.S. dollars
will be made by wire transfer of immediately available funds to an account
maintained by the payee with a bank located in the Borough of Manhattan, The
City of New York, if (i) the principal of this Security is at least $10,000,000
and (ii) the Holder entitled to receive such payment transmits a written request
for such payment to be made in such manner to the Paying Agent at its Corporate
Trust Office, Attention: Securities Processing Division, on or before the
Regular Record Date preceding the day on which such payment is to be made;
provided that, in the case of any such payment due at the Maturity of the
principal hereof (other than any payment of interest that first becomes due on
an Interest Payment Date), this Security must be surrendered at the office or
agency of the Company maintained for that purpose in The City of New York (or at
any other office or agency maintained by the Company for that purpose) in time
for the Paying Agent to make such payment in such funds in accordance with its
normal procedures. Any such request made with respect to any payment on this
Security payable to a particular Holder

                    (Face of Security continued on next page)

                                      -8-
<PAGE>

will remain in effect for all later payments on this Security payable to such
Holder, unless such request is revoked on or before the Regular Record Date
preceding the day on which such payment is to be made, in which case such
revocation shall be effective for such and all later payments; provided that in
the case of any payment due at Maturity of the principal of this Security to be
effective any request for revocation must be made no later than the 15th day
prior to the Maturity of the principal of this Security. In the case of any
payment of interest payable on an Interest Payment Date, such written request
must be made by the Person who is the registered Holder of this Security on the
relevant Regular Record Date. The Company will pay any administrative costs
imposed by banks in connection with making payments by wire transfer with
respect to this Security, but any tax, assessment or other governmental charge
imposed upon any payment will be borne by the Holder of this Security and may be
deducted from the payment by the Company or the Paying Agent.

         MANNER OF PAYMENT - OTHER SPECIFIED CURRENCIES

                  Payment of any amount payable on this Security in a Specified
Currency other than U.S. dollars will be made by wire transfer of immediately
available funds to such account as is maintained in such Specified Currency at a
bank or other financial institution acceptable to the Company and the Trustee
and as shall have been designated at least five Business Days prior to the
applicable payment date by the Person entitled to receive such payment; provided
that, in the case of any such payment due at the Maturity of the principal
hereof (other than any payment of interest that first becomes due on an Interest
Payment Date), this Security must be surrendered at the office or agency of the
Company maintained for that purpose in The City of New York (or at any other
office or agency maintained by the Company for that purpose) in time for the
Paying Agent to make such payment in such funds in accordance with its normal
procedures. Such account designation shall be made by transmitting the
appropriate information to the Trustee at its Corporate Trust Office in the
Borough of Manhattan, The City of New York, by mail, hand delivery, telecopier
or in any other manner approved by the Trustee. Unless revoked, any such account
designation made with respect to this Security by the Holder hereof

                    (Face of Security continued on next page)

                                      -9-
<PAGE>

will remain in effect with respect to any further payments with respect to this
Security payable to such Holder. If a payment in a Specified Currency other than
U.S. dollars with respect to this Security cannot be made by wire transfer
because the required account designation has not been received by the Trustee on
or before the requisite date or for any other reason, the Company will cause a
notice to be given to the Holder of this Security at its registered address
requesting an account designation pursuant to which such wire transfer can be
made and such payment will be made within five Business Days after the Trustee's
receipt of such a designation meeting the requirements specified above, with the
same force and effect as if made on the due date. The Company will pay any
administrative costs imposed by banks in connection with making payments by wire
transfer with respect to this Security, but any tax, assessment or other
governmental charge imposed upon any payment will be borne by the Holder of this
Security and may be deducted from the payment by the Company or the Paying
Agent.

         MANNER OF PAYMENT - GLOBAL SECURITIES

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

         PAYMENTS DUE ON A BUSINESS DAY

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

                    (Face of Security continued on next page)

                                      -10-
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                  Unless otherwise specified on the face of this Security, the
following sentence shall apply to each Interest Payment Date other than one that
falls on the date of Maturity of the principal hereof. If any such Interest
Payment Date would otherwise be a day that is not a Business Day, such Interest
Payment Date shall be deferred to the next succeeding Business Day, provided
that, if the Base Rate is LIBOR and the next succeeding Business Day would fall
in the next calendar month, then such Interest Payment Date will be advanced to
the next preceding Business Day.

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

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

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

                    (Face of Security continued on next page)

                                      -11-
<PAGE>

                  IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.

Dated:

                                            POPULAR NORTH AMERICA, INC.

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

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

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

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

                                            BANK ONE, NA
                                            as Trustee

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

<PAGE>

                              (Reverse of Security)

                  1.       SECURITIES AND INDENTURE

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

                  2.       SERIES AND DENOMINATIONS

                  This Security is one of the series designated on the face
hereof, limited to an aggregate initial offering price not to exceed
$3,500,000,000 (or the equivalent thereof in any other currency or currencies or
currency units) less the aggregate initial offering price of "Securities" (as
defined in the Prospectus dated November 19, 2001 relating to debt securities
and preferred stock of the Company, Popular International Bank, Inc. and the
Guarantor) authenticated and delivered upon initial issuance, other than the
Securities of this series, which amount may be increased at the option of the
Company if in the future it determines that it may wish to sell additional
Securities of this series. References herein to "this series" mean the series of
securities designated on the face hereof.

                  The Securities of this series are issuable only in registered
form without coupons in "Authorized

                  (Reverse of Security continued on next page)

                                      -13-
<PAGE>

Denominations", which term shall have the following meaning. For each Security
of this series having a principal amount payable in U.S. dollars, the Authorized
Denominations shall be $1,000 and any integral multiples of $1,000. For each
Security of this series having a principal amount payable in a Specified
Currency other than U.S. dollars, the Authorized Denominations shall be the
amount of such Specified Currency equivalent, at the Exchange Rate on the first
Business Day next preceding the date on which the Company accepts the offer to
purchase such Security, to $1,000 and any integral multiples of $1,000.

                  3.       INTEREST RATE

                  (a)      INTEREST RATE RESET. The interest rate on this
Security will be reset from time to time, as provided in this Section 3, and
each date upon which such rate is reset as so provided is hereinafter called an
"Interest Reset Date". Unless otherwise specified on the face hereof, the
Interest Reset Dates with respect to this Security will be as follows:

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

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

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

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

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

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

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                                      -14-
<PAGE>

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

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

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

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

                  Unless the Base Rate is LIBOR, the Calculation Agent will
determine the interest rate of this Security that takes effect on any Interest
Reset Date on a day no later than the Calculation Date (as defined in

                  (Reverse of Security continued on next page)

                                      -15-
<PAGE>

Section 3(n) below) corresponding to such Interest Reset Date. However, the
Calculation Agent need not wait until the Calculation Date to determine such
interest rate if the rate information it needs to make such determination in the
manner specified in the applicable provisions of Sections 3(b) through 3(j)
hereof is available from the relevant sources specified in such applicable
provisions.

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

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

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

                  (ii)     If the rate described in clause (i) above does not
         appear in H.15(519), H.15 Daily Update or another recognized electronic
         source by 3:00 P.M.,

                  (Reverse of Security continued on next page)

                                      -16-
<PAGE>

         New York City time, on such Calculation Date (unless the calculation is
         made earlier and the rate is available from one of those sources at
         that time), the Commercial Paper Rate will be the Money Market Yield of
         the arithmetic mean of the following offered rates for U.S. dollar
         commercial paper that has the Index Maturity and is placed for an
         industrial issuer whose bond rating is "AA", or the equivalent, from a
         nationally recognized rating agency: the rates offered as of 11:00
         A.M., New York City time, on such Commercial Paper Interest
         Determination Date by three leading U.S. dollar commercial paper
         dealers in New York City selected by the Calculation Agent.

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

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

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

                  (i)      If the rate described above is not published in
         H.15(519) by 3:00 P.M., New York City time, on the Calculation Date
         corresponding to such Prime Interest Determination Date, then the Prime
         Rate will be the rate, for such Prime Interest Determination Date, as
         published in

                  (Reverse of Security continued on next page)

                                      -17-
<PAGE>

         H.15 Daily Update or another recognized electronic source used for the
         purpose of displaying that rate, under the heading "Bank Prime Loan".

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

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

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

                  The Base Rate determined in accordance with this Section 3(c)
will be adjusted by the addition or

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                                      -18-
<PAGE>

subtraction of the Spread, if any, or by multiplying such Base Rate by the
Spread Multiplier, if any.

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

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

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

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

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

                  (i)      If Moneyline Telerate LIBOR Page is specified on the
         face hereof and the rate referenced in clause (x) above does not appear
         on that page, or if Reuters Screen LIBOR Page is specified on the face
         hereof and fewer than two of the rates referenced in clause (y) above
         appear on that page or no rate appears on any page on which only one
         rate normally appears, then LIBOR will be determined on the basis of
         the rates, at approximately 11:00 A.M., London time, on such LIBOR
         Interest Determination Date, at which deposits of the following kind
         are offered to prime banks in the London interbank market by four major
         banks in that market

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                                      -19-
<PAGE>

         selected by the Calculation Agent: deposits of the Index Currency
         having the Index Maturity beginning on such Interest Reset Date and in
         a Representative Amount (as defined in Section 3(n) below). The
         Calculation Agent will request the principal London office of each such
         bank to provide a quotation of its rate. If at least two quotations are
         provided, LIBOR for such LIBOR Interest Determination Date will be the
         arithmetic mean of the quotations.

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

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

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

                  (e)      [RESERVED]

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                                      -20-
<PAGE>

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

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

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

                  (iii)    If the auction rate described in clause (ii) above is
         not so announced by 3:00 P.M., New York City time, on such Calculation
         Date, or if no such auction is held for the relevant week, then the
         Treasury Rate will be the Bond Equivalent Yield of

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                                      -21-
<PAGE>

         the rate, for such Treasury Interest Determination Date and for
         Treasury Bills having the Index Maturity, as published in H.15(519)
         under the heading "U.S. Government Securities/Treasury Bills/Secondary
         Market".

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

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

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

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

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                                      -22-
<PAGE>

Base Rate by the Spread Multiplier, if any, specified on the face hereof.

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

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

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

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

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

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                                      -23-
<PAGE>

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

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

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

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

                  (iv)     If fewer than five but more than two such primary
         dealers are quoting as described in clause (iii) above, then the CMT
         Rate for such CMT Interest Determination Date will be based on the
         arithmetic

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                                      -24-
<PAGE>

         mean of the offered rates so obtained, and neither the highest nor the
         lowest of such quotations will be disregarded.

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

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

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

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                                      -25-
<PAGE>

         the prior Interest Reset Period, the Initial Base Rate).

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

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

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

                  (ii)     If the rate described in clause (i) above is not
         published in H.15(519), H.15 Daily Update or another recognized
         electronic source by 3:00 P.M., New York City time, on such Calculation
         Date (unless the calculation is made earlier and the rate is available
         from one of those sources at that time), the CD Rate shall be the
         arithmetic mean of the following secondary market offered rates for
         negotiable U.S. dollar certificates of deposit of major U.S. money
         center banks having a remaining maturity closest to the Index Maturity
         and in a Representative Amount: the rates offered as of 10:00 A.M., New
         York City time, on such CD Interest Determination Date, by three
         leading nonbank dealers in negotiable U.S. dollar certificates of
         deposit in New York City, as selected by the Calculation Agent.

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                                      -26-
<PAGE>

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

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

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

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

                  (ii)     If the rates described above are not displayed on
         Moneyline Telerate Page 120 or are not published in H.15 (519), H.15
         Daily Update or another recognized electronic source by 3:00 P.M., New
         York City time, on such Calculation Date (unless the calculation is
         made earlier and the rate is available from one of those sources at
         that time), the

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                                      -27-
<PAGE>

         Federal Funds Rate will be the arithmetic mean of the rates for the
         last transaction in overnight U.S. dollar federal funds arranged,
         before 9:00 A.M., New York City time, on such Federal Funds Interest
         Determination Date, by three leading brokers of U.S. dollar federal
         funds transactions in New York City selected by the Calculation Agent.

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

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

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

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

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                                      -28-
<PAGE>

         preceding such date, as most recently announced by the Federal Home
         Loan Bank of San Francisco as such monthly weighted average cost of
         funds.

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

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

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

                  (l)      CALCULATION OF INTEREST. Payments of interest hereon
with respect to any Interest Payment Date or at the Maturity of the principal
hereof will include interest accrued to but excluding such Interest Payment Date
or the date of such Maturity, as the case may be. Accrued interest from the date
of issue or from the last date to which interest has been paid or duly provided
for shall be calculated by the Calculation Agent by multiplying the Principal
Amount by an accrued interest factor. Such accrued interest factor shall be
computed by adding the interest factors calculated for each day from and
including the Original Issue Date or from and including the last date to which
interest has been paid or duly provided for, to but excluding the date for which

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                                      -29-
<PAGE>

accrued interest is being calculated. The interest factor for each such day
shall be expressed as a decimal and computed by dividing the interest rate (also
expressed as a decimal) in effect on such day by 360, if the Base Rate is the
Commercial Paper Rate, Prime Rate, LIBOR, CD Rate, Federal Funds Rate or 11th
District Rate, or by the actual number of days in the year, if the Base Rate is
the Treasury Rate or CMT Rate.

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

                  (m)      CALCULATION AGENT AND EXCHANGE RATE AGENT. The
Company has initially appointed the institutions named on the face of this
Security as Calculation Agent and Exchange Rate Agent, respectively, to act as
such agents with respect to this Security, but the Company may, in its sole
discretion, appoint any other institution (including any Affiliate of the
Company) to serve as any such agent from time to time. The Company will give the
Trustee prompt written notice of any change in any such appointment. Insofar as
this Security provides for any such agent to obtain rates, quotes or other data
from a bank, dealer or other institution for use in making any determination
hereunder, such agent may do so from any institution or institutions of the kind
contemplated hereby notwithstanding that any one or more of such institutions
are any such agent, Affiliates of any such agent, any of the agents named on the
cover of the Company's Prospectus Supplement dated March 21, 2003 relating to
the Company's Medium-Term Notes, Series E or

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                                      -30-
<PAGE>

any Affiliate of any such agent or Affiliates of the Company.

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

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

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

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

         where

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

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

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

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

         (i)      is a Monday, Tuesday, Wednesday, Thursday or Friday that is
                  neither a legal holiday nor a day on which commercial banking

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                                      -31-
<PAGE>

                  institutions in New York City generally are authorized or
                  required by law, regulation or executive order to close;

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

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

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

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

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

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

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                                      -32-
<PAGE>

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

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

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

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

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

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

                  (Reverse of Security continued on next page)

                                      -33-
<PAGE>

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

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

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

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

         where

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

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

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

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

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

                  (Reverse of Security continued on next page)

                                      -34-
<PAGE>

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

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

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

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

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

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

                  (Reverse of Security continued on next page)

                                      -35-
<PAGE>

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

                  4.       REDEMPTION AT THE COMPANY'S OPTION

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

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

                  (Reverse of Security continued on next page)

                                      -36-
<PAGE>

discount, 100% of the OID Default Amount) together with accrued interest to the
date fixed for redemption.

                  5.       REPAYMENT AT THE HOLDER'S OPTION

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

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

                  (Reverse of Security continued on next page)

                                      -37-
<PAGE>

(a) the name, address and telephone number of the Holder of this Security, (b)
the principal amount of this Security and the amount of this Security to be
repaid, (c) a statement that the option to elect repayment is being exercised
thereby and (d) a guarantee stating that the Company will receive this Security,
with the form below entitled "Option to Elect Repayment" duly completed and
signed, not later than five Business Days after the date of such telegram,
telex, facsimile transmission or letter (provided that this Security and form
duly completed and signed are received by the Company by such fifth Business
Day). Any such election shall be irrevocable. The address to which such
deliveries are to be made is Bank One, NA, Attention: Securities Processing
Division, 55 Water Street, 1st Floor, Jeanette Park Entrance, New York, New York
10041 (or at such other places as the Company or the Paying Agent shall notify
the Holder of this Security). All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Security for repayment will be
determined by the Company, whose determination will be final and binding.
Notwithstanding the foregoing, (x) if this Security is a Global Security, the
option of the Holder to elect repayment may be exercised in accordance with the
Applicable Procedures of the Depositary for this Security at least 15 calendar
days prior to the applicable Repayment Date and (y) whether or not this Security
is a Global Security, the option of the Holder to elect repayment may be
exercised in any such manner as the Company may approve.

                  6.       TRANSFER AND EXCHANGE

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

                  (Reverse of Security continued on next page)

                                      -38-
<PAGE>

this series and of like tenor, of Authorized Denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

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

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

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

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

                  7.       [RESERVED.]

                  8.       REMEDIES.

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

                  (Reverse of Security continued on next page)

                                      -39-
<PAGE>

                  As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee indemnity reasonably satisfactory to
it, and the Trustee shall not have received from the Holders of a majority in
principal amount of Securities of this series at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof or any
premium or interest hereon on or after the respective due dates expressed
herein.

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

                  9.       MODIFICATION AND WAIVER.

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

                                      -40-
<PAGE>

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

                  10.      GOVERNING LAW.

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

                                      -41-
<PAGE>

                                    GUARANTEE
                                       OF
                                  POPULAR, INC.

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

                                      -42-
<PAGE>

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

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

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

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

                                     POPULAR, INC.

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

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

Attested:
         -----------------

                                      -43-
<PAGE>

                                                     CUSIP NO.
                                                               ----------------

                                          ORIGINAL ISSUE DATE:
                                                               ----------------

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

                            OPTION TO ELECT REPAYMENT

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

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

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

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

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

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

                  For such Security to be repaid the Company must receive at the
applicable address of the Paying Agent set forth below or at such other place or
places of which the Company shall from time to time notify the Holder of such
Security, on

                                      -44-
<PAGE>

any Business Day not later than the 30th or earlier than the 60th calendar day
prior to the Repayment Date (or, if either such calendar day is not a Business
Day, the next succeeding Business Day), either (i) such Security, with this
"Option to Elect Repayment" form duly completed and signed, or (ii) a telegram,
telex, facsimile transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc., a commercial
bank or a trust company in the United States of America setting forth (a) the
name, address and telephone number of the Holder of such Security, (b) the
principal amount of such Security and the amount of such Security to be repaid,
(c) a statement that the option to elect repayment is being exercised thereby
and (d) a guarantee stating that such Security to be repaid with the form
entitled "Option to Elect Repayment" on the addendum to the Security duly
completed and signed will be received by the Company not later than five
Business Days after the date of such telegram, telex, facsimile transmission or
letter (provided that such Security and form duly completed and signed are
received by the Company by such fifth Business Day). The address to which such
deliveries are to be made is:

                  Bank One, NA
                  Attention: Securities Processing Division
                  55 Water Street, 1st Floor
                  Jeanette Park Entrance
                  New York, New York 10041

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

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

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

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

                                      -45-
<PAGE>

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

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

                                      -46-
<PAGE>

                                  ABBREVIATIONS

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

         TEN COM - as tenants in common

         TEN ENT - as tenants by the entireties

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

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

                               under Uniform Gifts to Minors Act

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

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

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

                                      -47-
<PAGE>

                                   ASSIGNMENT

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

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

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

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

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

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

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

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

the attached Security and all rights thereunder, and hereby irrevocably
constitutes and appoints _____________________________________________________
to transfer said Security on the books of the Company, with full power of
substitution in the premises.

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

Signature Guaranteed

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

                                      -48-<PAGE>
                                                                   EXHIBIT 10(a)

                                  POPULAR, INC.

                   MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
                          (Dated as of March 21, 2003)

         Medium-Term Notes, Series 4 (collectively, the "Notes") in the
aggregate principal amount of up to an additional $2,000,000,000 so as to be
limited to $3,500,000,000, less the aggregate initial offering price of
"Securities" (as defined in the Prospectus, dated November 19, 2001, relating to
debt securities and preferred stock of the Company, Popular International Bank,
Inc. and Popular North America, Inc.) authenticated and delivered upon original
issuance other than the Notes prior to or after the date hereof, are to be
offered on a continuous basis by Popular, Inc. (the "Company") through Credit
Suisse First Boston LLC ("Credit Suisse First Boston"), J.P. Morgan Securities
Inc. ("JPMorgan"), Keefe, Bruyette & Woods, Inc. ("KBW"), Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), Popular
Securities, Inc. ("Popular Securities") and UBS Warburg LLC ("UBS"), who, as
agents (each an "Agent"), have agreed to use their reasonable efforts to solicit
offers to purchase the Notes from the Company. The Agents also may purchase
Notes as principal for resale.

         The Notes are being sold pursuant to a Distribution Agreement among the
Company and the Agents, dated March 21, 2003 (the "Distribution Agreement"). The
Notes will be issued pursuant to the Indenture, dated as of February 15, 1995,
as supplemented by the First Supplemental Indenture, dated as of May 8, 1997 and
the Second Supplemental Indenture, dated as of August 5, 1999 (together, the
"Indenture"), each between the Company and Bank One, NA (formerly known as The
First National Bank of Chicago), as Trustee. A Registration Statement (the
"Registration Statement," which term shall include any additional registration
statements filed in connection with the Notes as provided in the Distribution
Agreement) with respect to the Notes has been filed with the Securities and
Exchange Commission (the "Commission"). The Prospectus dated November 19, 2001,
as supplemented with respect to the Notes, is herein referred to as the
"Prospectus." The most recent supplement to the Prospectus with respect to the
specific terms of the Notes is herein referred to as the "Pricing Supplement."

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

         General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Book-Entry Notes will be issued in accordance
with the procedures set forth in Part II hereof and Certificated Notes will be
issued in accordance with the procedures set forth in

<PAGE>

Part III hereof. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed thereto in the Indenture or the Notes, as the case
may be.

                                      -2-
<PAGE>

                   PART I: PROCEDURES OF GENERAL APPLICABILITY

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

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

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

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

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

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

                                      -3-
<PAGE>

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

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

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

                                      -4-
<PAGE>

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

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

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

                                    1.       the name of the Company;

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

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

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

                                      -5-
<PAGE>

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

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

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

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

                           To Credit Suisse First Boston:
                           Credit Suisse First Boston LLC,
                           1 Madison Avenue
                           New York, New York 10010
                           Attention: Joan Bryan, Transaction Advisory Group
                           Telephone: (212) 538-7764
                           Telecopy: (212) 538-6259

                           To JPMorgan:
                           J.P. Morgan Securities Inc.
                           270 Park Avenue
                           8th Floor
                           New York, New York  10017
                           Attention:  Medium-Term Note Desk
                           Telephone:  (212) 834-4421
                           Telecopy:   (212) 834-6081

                                      -6-
<PAGE>

                           To KBW:
                           Keefe, Bruyette & Woods, Inc.
                           787 Seventh Avenue
                           New York, New York  10019
                           Attention:  Fixed Income Syndicate
                           Telephone: (212) 887-8936
                           Telecopy:  (212) 582-5419

                           To Merrill Lynch:
                           If by overnight, express or special delivery:
                           Merrill Lynch & Co., Tritech Services, 40 Colonial
                            Drive,
                           Piscataway, New Jersey  08854,
                           Attention:  Prospectus Operations/ Susan Putnam

                           If by all other types of deliveries:
                           Tritech Services, #4 Corporate Place, Corporate Park
                           287, Piscataway, New Jersey  08854
                           Attention:  Prospectus Operations/ Nachman Kimerling
                           Telephone:  (908) 885-2769
                           Telecopy:   (908) 885-2774/2775/2776

                           To Popular Securities:
                           Popular Securities Inc.
                           209 Munoz Rivera Avenue
                           Suite 1020
                           Hato Rey, Puerto Rico  00918
                           Attention:  Ken McGrath
                           Telephone:  (787) 766-4200
                           Telecopy:   (787) 766-3485

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

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

                                      -7-
<PAGE>

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

                           To Credit Suisse First Boston:
                           Credit Suisse First Boston LLC
                           11 Madison Avenue
                           New York, New York  10010
                           Attention: Short and Medium-Term Finance
                                      Department
                           Telephone:  (212) 909-3842
                           Telecopy:   (212) 318-1498

                           To JPMorgan:
                           J.P. Morgan Securities Inc.
                           270 Park Avenue
                           8th Floor
                           New York, New York  10017
                           Attention:  Medium-Term Note Desk
                           Telephone:  (212) 834-4421
                           Telecopy:   (212) 834-6081

                           To KBW:
                           Keefe, Bruyette & Woods, Inc.
                           787 Seventh Avenue
                           New York, New York  10019
                           Attention: Fixed Income Syndicate
                           Telephone: (212) 887-8936
                           Telecopy: (212) 582-5419

                           To Merrill Lynch:
                           Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
                                               Smith Incorporated
                           World Financial Center, North Tower, 10th Floor
                           New York, New York  10281-1310
                           Attention:  MTN Product Management
                           Telephone:  (212) 449-7476
                           Telecopy:   (212) 449-2234

                                      -8-
<PAGE>

                           To Popular Securities:
                           Popular Securities, Inc.
                           209 Munoz Rivera Avenue
                           Suite 1020
                           Hato Rey, Puerto Rico  00918
                           Attention:  Ken McGrath
                           Telephone:  (787) 766-4200
                           Telecopy:   (787) 766-3485

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

                           To the Trustee:
                           Bank One, NA
                           153 West 51st Street
                           5th Floor
                           New York, New York  10019
                           Attention:  Corporate Trust Services
                           Telephone:  (212) 373-1339
                           Telecopy:   (212) 373-1383

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

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

                                      -9-
<PAGE>

                           time set forth under the applicable "Settlement
                           Procedures Timetable," such offer shall not be
                           settled until the Business Day following the
                           completion of Settlement Procedures A and B or such
                           later date as the purchaser and the Company shall
                           agree.

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

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

                                      -10-
<PAGE>

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

                           To Credit Suisse First Boston: Credit Suisse First
                           Boston LLC 11 Madison Avenue New York, New York 10010
                           Attention: Short and Medium-Term Finance Department
                           Telephone: (212) 909-3842 Telecopy: (212) 318-1498

                           To JPMorgan:
                           J.P. Morgan Securities Inc.
                           270 Park Avenue, 8th Floor
                           New York, New York  10017
                           Attention:  Medium-Term Note Desk
                           Telephone:  (212) 834-4421
                           Telecopy:   (212) 834-6081

                                      -11-
<PAGE>

                           To KBW:
                           Keefe, Bruyette & Woods, Inc.
                           787 Seventh Avenue
                           New York, New York  10019
                           Attention: Fixed Income Syndicate
                           Telephone: (212) 887-8936
                           Telecopy: (212) 582-5419

                           To Merrill Lynch:
                           Product Management MTNs
                           Merrill Lynch Money Markets
                           North Tower, World Financial Center, 10th Floor,
                           New York, New York  10281-1310
                           Telephone:  (212) 449-7476
                           Telecopy:   (212) 449-2234

                           To Popular Securities:
                           Popular Securities, Inc.
                           209 Munoz Rivera Avenue, Suite 1020
                           Hato Rey, Puerto Rico  00918
                           Attention:  Ken McGrath
                           Telephone:  (787) 766-4200
                           Telecopy:   (787) 766-3485

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

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

                                      -12-
<PAGE>

                           settled or that copies of such Prospectus may not be
                           so delivered.

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

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

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

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

                                      -13-
<PAGE>

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

         In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, the Trustee will perform
the custodial, document control and administrative functions described below, in
accordance with its obligations under a Letter of Representations from the
Company and The First National Bank of Chicago to DTC, dated August 6, 1999, as
supplemented by a Bring-Down Letter of Representations from the Company and the
Trustee to DTC, dated March 21, 2003, and a Medium-Term Note Certificate
Agreement between The First National Bank of Chicago and DTC, dated May 26, 1989
(the "Certificate Agreement"), and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").

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

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

                                      -14-
<PAGE>

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

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

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

                                      -15-
<PAGE>

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

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

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

                                      -16-
<PAGE>

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

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

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

                                      -17-
<PAGE>

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

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

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

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

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

                                      -18-
<PAGE>

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

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

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

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

                                      -19-
<PAGE>

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

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

                                      -20-
<PAGE>

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

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

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

                                    1.       Taxpayer identification number of
                                             the purchaser.

                                    2.       Principal amount of the Note.

                                    3.       Fixed Rate Notes:

                                             (a)      interest rate;

                                             (b)      Regular Record Dates; and

                                             (c)      Interest Payment Dates.

                                                      Floating Rate Notes:

                                             (a)      interest rate basis;

                                             (b)      index maturity;

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

                                             (d)      initial interest rate;

                                             (e)      maximum interest rate, if
                                                      any;

                                             (f)      minimum interest rate, if
                                                      any;

                                             (g)      interest reset dates;

                                             (h)      interest determination
                                                      dates;

                                             (i)      interest payment dates;
                                                      and

                                             (j)      calculation agent.

                                    4.       Price to public of the Note.

                                      -21-
<PAGE>

                                    5.       Trade date.

                                    6.       Settlement Date (Original Issue
                                             Date).

                                    7.       Stated Maturity.

                                    8.       Redemption provisions, if any:

                                             (a)      Redemption Commencement
                                                      Date

                                             (b)      initial redemption
                                                      percentage

                                             (c)      annual redemption
                                                      percentage reduction

                                    9.       Repayment Date(s), if any.

                                    10.      Net proceeds to the Company.

                                    11.      Agent's commission.

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

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

                                    1.       The information set forth in
                                             Settlement Procedure A.

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

                                      -22-
<PAGE>

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

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

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

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

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

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

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

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

                                      -23-
<PAGE>

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

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

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

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

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

                                      -24-
<PAGE>

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

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

<TABLE>
<CAPTION>
                                    Settlement
                                    Procedure         Time
                                    ---------         ----

                                    <S>        <C>
                                      A        11:00 a.m. on the trade date

                                      B        12:00 noon on the trade date

                                      C        2:00 p.m. on the trade date

                                      D        3:00 p.m. on the Business Day
                                               before Settlement Date

                                      E        9:00 a.m. on Settlement Date

                                      F        10:00 a.m. on Settlement Date

                                      G-H      No later than 2:00 p.m. on
                                               Settlement Date

                                      I        4:45 p.m. on Settlement Date

                                      J-L      5:00 p.m. on Settlement Date
</TABLE>

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

                                      -25-
<PAGE>

                                    SDFS operating procedures in effect on the
                                    Settlement Date.

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

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

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

                                      -26-
<PAGE>

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

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

                                      -27-
<PAGE>

                      PART III: PROCEDURES FOR NOTES ISSUED
                              IN CERTIFICATED FORM

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

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

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

                                      -28-
<PAGE>

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

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

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

                                      -29-
<PAGE>

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

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

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

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

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

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

                                             3.       Taxpayer identification
                                                      number of the Registered
                                                      Owner.

                                             4.       Principal amount of the
                                                      Certificated Note.

                                             5.       Denomination of the
                                                      Certificated Note.

                                             6.       Fixed Rate Notes:

                                                      (a)      interest rate;

                                                      (b)      Regular Record
                                                               Dates; and

                                                      (c)      Interest Payment
                                                               Dates.

                                      -30-
<PAGE>

                                             Floating Rate Notes:

                                                      (a)      interest rate
                                                               basis or bases;

                                                      (b)      index maturity;

                                                      (c)      spread or spread
                                                               multiplier, if
                                                               any;

                                                      (d)      initial interest
                                                               rate;

                                                      (e)      maximum interest
                                                               rate, if any;

                                                      (f)      minimum interest
                                                               rate, if any;

                                                      (g)      interest reset
                                                               dates;

                                                      (h)      interest
                                                               determination
                                                               dates;

                                                      (i)      interest payment
                                                               dates; and

                                                      (j)      calculation
                                                               agent.

                                             Multi-Currency or Indexed Notes:

                                                      (a)      specified
                                                               currency;

                                                      (b)      index, if any;

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

                                                      (d)      any other
                                                               applicable terms.

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

                                             8.       Price to public of the
                                                      Certificated Note.

                                             9.       Settlement Date (Original
                                                      Issue Date).

                                             10.      Stated Maturity.

                                             11.      Redemption provisions, if
                                                      any:

                                                      (a)  Redemption
                                                           Commencement Date

                                                      (b)  initial redemption
                                                           percentage

                                                      (c)  annual redemption
                                                           percentage reduction

                                             12.      Repayment Date(s), if any.

                                             13.      Net proceeds to the
                                                      Company.

                                             14.      Agent's commission.

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

                                      -31-
<PAGE>

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

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

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

                                     Credit Suisse First Boston LLC
                                     1 Madison Avenue
                                     New York, New York  10010
                                     Attention:  Paul Riley

                                     J.P. Morgan Securities Inc.,
                                     55 Water Street, Room 226, Windows 17 and
                                     18
                                     New York, New York  10041
                                     Telephone:  (212) 638-6787
                                     Telecopy:   (212) 638-5618

                                      -32-
<PAGE>

                                     Keefe, Bruyette & Woods, Inc.
                                     787 Seventh Avenue
                                     New York, New York  10019
                                     Attention: Fixed Income Syndicate
                                     Telephone: (212) 887-8936
                                     Telecopy:  (212) 582-5419

                                     Merrill Lynch & Co., Money Markets
                                     Clearance, 55 Water
                                     Street, 3rd Floor, N.S.C.C. Window
                                     New York, New York  10041,
                                     Attention:  Al Mitchell
                                     Telephone:  (212) 558-2405
                                     Telecopy:   (212) 558-2457

                                     Popular Securities Inc.
                                     209 Munoz Rivera Avenue
                                     Suite 1020
                                     Hato Rey, Puerto Rico  00918
                                     Attention: Ken McGrath
                                     Telephone:  (787) 766-4200
                                     Telecopy:   (787) 766-3485

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

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

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

                                      -33-
<PAGE>

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

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

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

<TABLE>
<CAPTION>
                                   Settlement
                                   Procedure    Time
                                   ---------    ----
                                   <S>          <C>

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

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

                                    The Trustee or the Company's duly authorized
                                    agent, upon receipt of the Certificated Note
                                    from the applicable Agent, will immediately
                                    advise the Company, and the Company will
                                    promptly arrange to credit the account of
                                    the applicable Agent in an amount of
                                    immediately available funds equal to the
                                    amount previously paid by the applicable
                                    Agent in settlement for the Certificated
                                    Note. Such credits will be made on the
                                    Settlement Date if possible, and in any
                                    event not later than the Business Day
                                    following the Settlement Date; provided that
                                    the Company has received notice on the same
                                    day. If such failure

                                      -34-
<PAGE>

                                    shall have occurred for any reason other
                                    than failure by the applicable Agent to
                                    perform its obligations hereunder or under
                                    the Distribution Agreement, the Company will
                                    reimburse the applicable Agent on an
                                    equitable basis for its loss of the use of
                                    funds during the period when the funds were
                                    credited to the account of the Company.
                                    Immediately upon receipt of the Certificated
                                    Note in respect of which the failure
                                    occurred, the Trustee or the Company's duly
                                    authorized agent will cancel and destroy the
                                    Certificated Note, make appropriate entries
                                    in its records to reflect the fact that the
                                    Certificated Note was never issued, and
                                    accordingly notify the Company in writing.

                                      -35-

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