CHARTER

FIRST: The name of the Corporation is DEVELOPMENT BANK OF PUERTO RICO. SECOND: The principal office of the Corporation shall be at San Juan, Puerto Rico.

THIRD: The incorporators of the Corporation shall be the members of the Executive Council of Puerto Rico.

FOURTH: The purposes for which the Corporation is formed and the business or objects to be carried on and promoted are:

To accept public and private deposits, and keep accounts current, with or without interest; to lend money on such security and terms as it may deem proper, and to charge and collect interest on money loaned by it; to buy, hold, own, discount or otherwise acquire and to sell, deal in, negotiate, assign, transfer or otherwise dispose of and to borrow money on the security of, and to pledge, hipothecate and incumber any and all kinds of choses in action, bill of exchange, drafts, notes, evidence of debt, and certificates of indebtedness, participating certificate, debentures, mortgages, deeds of trust, bills of sale, stocks, bonds, liens, reservations of title, conditional sale contracts, and securities and negotiable paper of every kind; to act as agent or representative of any and all kinds of life, fire, accident, casualty and automobile and other insurance companies and conduct an insurance agency, and to do all such acts and things as are customarily done by an insurance agent or agency; to borrow money for any and all of its purposes, and to execute, issue, pledge, hypothecate, sell, assign, transfer, or otherwise dispose of, its notes, certificates of indebtedness, participating certificates, debenture or other evidence of debt, and to indorse the same for the purpose of transfer, assignment or sale and for the purpose of enabling it to borrow money as aforesaid and to guarantee the payment of loans made by it and sold to others; and, secure the payment of money borrowed by it in such manner as said Corporation may consider proper; to pledge assets as a collateral to secure deposit of funds of the Federal, Insular and Municipal governments, and subdivisions and dependencies thereof, including courts of justice; to own, rent or lease from, or to other persons safety deposit boxes; and to receive valuables for deposit therein, and to own, lease, and occupy vaults suitable for such purposes to own and hold for itself or others stock in other corporations; to act as broker in procuring loans and to charge and collect a commission for obtaining loans from, and for, others; to undertake and execute any trust; to act as trustee in any and all kinds of trusts; to execute fiduciary or trust agreement; to accept and hold property or securities in trust and execute receipts therefor and to do any and all things necessary or proper in the execution of any power given or conferred by will or deed, deed of trust, mortgage or other written instrument, and to act as agent or broker in the buying, selling, leasing or renting of real estate.

To manufacture, purchase, or otherwise acquire, for cash or for credit, hold, own, mortgage, pledge, incumber, sell, assign, and transfer, or otherwise dispose of, to invest, trade, deal in, and deal with, goods, wares, and merchandise and real and personal property of every class and description.

To issue obligations or mortgage bonds secured by real property or mortgages owned by this Corporation; to purchase, hold, and receive by conveyance or in any other manner any real property for the following purposes: (a) Such as may be necessary for its accommodation in the transaction of its business, and for offices for hire in the same building; (b) Such as may be necessary for residence of its employees; (c) Such as shall be conveyed to it in satisfaction of personal or mortgage debts previously contracted in the course of the dealings; (d) Such as may be purchased or acquired at sales under judgments, decrees, or mortgages held by the Corporation, or as may be purchased or acquired to secure debts due to it. The Corporation shall not hold for a period longer than five (5) years any real property acquired by virtue of the provisions of Subdivisions (c) and (d) of this clause; provided that after the lapse of said five years, if the Corporation has not disposed of said property, the Treasurer of Puerto Rico may sell the same at public auction and turn over to it the net proceeds of the sale, fixing as the minimum price thereof the official assessed value of the properties to be sold.

To establish branches in Puerto Rico, as may be deemed convenient to the interests of this Corporation. To establish and conduct a savings department; to acquire, and pay for in cash or stock of this corporation or otherwise, the good will, rights, assets, and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association, or corporation; to acquire, hold, use, sell, assign, lease, grant license in respect of, mortgage, or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements, and processes,

copyrights, trade-marks, and trade names, relating to or useful in connection with any business of this Corporation; to guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge, or otherwise dispose of shares of the cpaital stock of, or any bonds, securities, or evidence of indebtedness created by any other corporation or corporations organized under the laws of Puerto Rico or any country, or state of such country, and while the owner thereof to exercise all the rights, powers, and privileges of ownership.

To contract loans and advances with the Insular Government, its agencies and instrumentalities, and public corporations thereof, municipal corporations or other dependencies of the Insular Government.

To sue and be sued.

To have complete control and supervision of any undertaking constructed or acquired by it including the power to determine the character of and necessity for all its expenditures and the manner in which they shall be incurred, allowed, and paid; to prescribe, adopt, amend, and repeal such rules and regulations as may be necessary or proper for the exercise and performance of its powers and duties, or to govern the rendering, sale, or exchange of transportation service or facilities. To make contracts and to execute all instruments necessary or convenient in the exercise of any of its powers.

To appoint such officers, agents, and employees and vest them with such powers and duties, and to fix, change, and pay such compensation for their services as the Corporation may determine.

To have one or more offices, to carry on all or any of its operations and business and without restriction or limit as to amount, and to purchase or otherwise acquire, hold, own, mortgage, sell, deal in, convey or otherwise dispose of real and personal property of every class and description in Puerto Rico or in any of the States, Districts, Territories, or Possessions of the United States, and in any and all foreign countries.

In general, to carry on any other business necessary or incidental to the foregoing activities, whether manufacturing or otherwise, and to have and exercise all the powers conferred by the laws of Puerto Rico upon corporations, and to do any or all of the things hereinbefore set forth to the same extent as natural persons might or could do.

The foregoing clauses shall be construed both as objects and powers; and it is hereby expressly provided that the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the powers of the Corporation, or the exercise of such others incidental to and necessary in general banking business. FIFTH: In maing loans or otherwise extending credit, preference and priority shall be given, when all other factors are equal, to the Puerto Rico Development Company and to enterprises recommended by said Company, so that it may effect the most diverse industrial and commercial development of Puerto Rico.

SIXTH: The Corporation is and shall be a governmental instrumentality subject, as provided herein, to the control of certain officers of the Insular Government, namely the Governor, Treasurer and the Members of the Executive Council, but it is a Corporation having legal existence and personality separate and apart from that of the government and those of the officers so controlling it. The debts, obligations, contracts, notes, debentures, receipts, expenditures, accounts, funds, undertakings, and property of the Corporation, its officers, agents, or employees shall be deemed to be those of said government-controlled corporation and not to be those of the Insular Government or any office, bureau, department, commission, dependency, municipality, branch, agent, officer, or employee thereof.

The debts and obligations of the Corporation shall not be a debt of The People of Puerto Rico or any of its municipalities or other political subdivision, and neither The People of Puerto Rico nor any such municipalities or other politic subdivisions shall be liable thereon, nor shall such obligations be payable out of any funds other than those of the Corporation.

SEVENTH: The Corporation is to have perpetual existence, but shall not accept deposits, borrow or lend money, or in any other way engage in general banking business unless and until it is authorized to do so by the Legislature of Puerto Rico. Upon receiving this authorization, the incorporators shall file one copy of this charter with the Executive Secretary of Puerto Rico and one copy with the Treasurer of Puerto Rico.

EIGHTH: (a) The powers of the Corporation shall be exercised by a Board of Directors (hereinafter referred to as the Board) consisting of five (5) persons acting as a Board. Within sixty (60) days after the issuance of this Charter, the Members of the Executive Council shall meet and organize and shall at that time by majority vote elect the five (5) Directors who shall hold office for terms of one, two, three,

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four, and five years, respectively as determined by said Members, from the date of their election and until their successors are elected and qualified. Annually thereafter the Members of the Executive Council shall meet and elect the successors of said Directors for terms of five (5) years. Vacancies on the Board shall be filled for the unexpired term in the same manner. Within thirty (30) days after their election, the Board shall meet and organize and shall at that time appoint a General Manager of the Corporation and a Secretary neither of whom shall be a Director. The General Manager shall be authorized to attend all meetings of the Board but shall not be entitled to vote.

(b) Three Directors shall constitute a quorum of the Board for all purposes, and action shall be taken only by a vote of the majority. The Directors may provide for the delegation of the General Manager or to the other officers, agents or employees of such of the powers and duties of the Corporation as the Board may deem proper. They may adopt and amend the bylaws governing the management and conduct of this Corporation.

(c) Meetings of the Board of Directors shall be held not less than once in each month, and minutes shall be kept of each meeting, which minutes shall be open to the inspection of the Treasurer of Puerto Rico and of the bank examiners.

NINTH: The General Manager shall be appointed by the Board exclusively upon the basis of merit as determined by technical training, skill, experience, and other qualifications best suited to carrying out the purposes of the Corporation. The General Manager shall be removable by the Board but only for cause and after he has been given notice and an opportunity to be heard.

TENTH: Appointments, removals, promotions, transfers, discontinuances, reinstatements, suspensions, leaves of absence and changes in grade, compensation or title of the officers and employees of the Corporation shall be made and permitted as provided in rules and regulations to be prescribed by the Board, in consultation with the chief of personnel or the executive officer of the Puerto Rico Civil Service Commission, in pursuance of a general plan similar, insofar as the Board shall deem it consistent, with the best interests of the Corporation, of its employees and of its service to the public, to that which may be in effect for employees of the Insular Government under the Civil Service Laws of Puerto Rico. The Directors, officers, and employees of the Corporation shall be entitled to reimbursement for, or per diem payment in lieu of, such necessary travel expenses as shall be authorized or approved pursuant to rules and regulations of the Board. Officers and employees of any board, commission, agency, or department of The People of Puerto Rico may be appointed to similar positions in the Corporation without examination. Any such Insular officers and employees that shall have been so appointed who, prior to said appointment were beneficiaries of any existing pension, retirement, or savings and loan fund system or systems, shall continue to have, after said appointment, the rights, privileges, obligations, and status, with respect thereto that are prescribed by law for officers and employees holding similar positions in the Insular Government, unless within six (6) months after said appointment they or any of them shall signify the intention to relinquish them, in which case they shall then have those of resigned or separated officers or employees of the Insular Government; and all employees so appointed to positions in the Corporation who, at the time of their appointment, held or shall have held positions in the Insular Government or any rights or status under the rules and classifications of the Puerto Rico Civil Service Commission, shall have the same status with respect to employment or reemployment in the service of the Insular Government as they had at the time they entered the service of the Corporation or such better or higher right or status as the Civil Service Commission shall consider to be consistent with advancement attained in the Corporation. All officers and employees appointed to positions in the Corporation, who, at the time of their appointment, had, or shall later acquire, some right or status under the rules and classifications of the Puerto Rico Civil Service Commission for appointment to any similar position in the Insular Government shall have, upon request, the same rights, privileges, obligations, and status, with respect to becoming beneficiaries of any existing pension, retirement or savings and loan fund system or systems, as if they had been appointed to similar positions in the Insular Government. The Corporation shall be subject to the provisions of Act No. 8, approved April 5, 1941.

ELEVENTH: The board shall have power to adopt and alter a seal, and to adopt and amend rules and regulations governing the operation of the Corporation, including, but not limited to, the control and supervision of any of the Corporation's property and activities; the preparation and submission to the legislature of annual and other reports; the character of and necessity for all expenditures

and the manner in which they shall be incurred, allowed and paid; the making of contracts and the execution of all instruments necessary or convenient in the exercise of any of its powers; and the frequency, notice and conduct of regular and special Board meetings.

TWELFTH: The Governor may make amendments to this charter, but no such amendments shall be effective unless they have been approved by the incorporators.

After their approval, the Governor shall report such amendments to the Legislature of Puerto Rico.

THIRTEENTH: The Corporation shall maintain a reserve which shall be called "Legal Reserve" which shall not be less than twenty (20) percent of its demand liabilities excepting deposits of the Insular, Municipal, or Federal Government, securea by actual collateral. Said reserve shall be composed of the following: (1) Not less than six and two-thirds (6%) percent of said obligations shall consist of lawful money of the United States;

(2) Not more than three and one-third (3%) percent of said obligations shall consist of checks on banks or trust companies located in any part of the Island of Puerto Rico, to be presented for collection during the day following that on which they are received;

(3) The remaining ten (10) percent shall consist of money deposited in other banks provided that said deposits are authorized by the Treasurer of Puerto Rico, subject to immediate collection. The remaining eighty (80) percent of the total amount of demand liability shall be kept by the Corporation in personal or other fully guaranteed securities due in a term of not more than one hundred and eighty days.

If the legal reserve of this Corporation is less than that required by this Charter, the Treasurer of Puerto Rico shall notify it of its obligation to make up the full amount. If the bank fails to do so within a period of thirty days the Treasurer of Puerto Rico shall notify the Governor of its delinquency. The Governor may then direct the Treasurer to proceed to liquidate the Corporation in accordance with the Eighteenth paragraph of this Charter.

FOURTEENTH: The Corporation shall not make to any one person, firm, partnership or corporation, one or more loans or discounts totaling more than twentyfive (25) percent of its paid in capital, reserve, and undistributed profits, nor shall it accept the security of any one person, firm, partnership, or corporation in an amount exceeding twenty-five (25) percent of its paid-in capital: Provided, That this restriction shall not apply to loans or documents secured by collateral worth at least thirty five (35) percent more than the amount of the loan, or to loans secured by mortgages, or to the discount of bills of exchange, provided such loans so secured by said collateral or mortgages, and such discounts of bills of exchange issued under such conditions do not exceed fifty (50) percent of the Bank's paid in capital, plus its reserve and undistributed profits: Provided, That in the application of these limitations the total amount of the loans and discounts made to any one person, firm, or corporation, plus the loans on which the same person, firm, or corporation is security, shall not exceed, in all, the fifty (50) percent hereinbefore mentioned: Provided furiher, That these restrictions are not applicable to loans secured by a collateral of sugar in warehouse pending shipment, or to the discount of bills of exchange, with their shipping documents, covering sugar, provided the total amount of such loans made to any one entity does not exceed fifty (50) percent of the bank's paid-in capital, plus its reserve and undistributed profit.

FIFTEENTH: If any Director of this Corporation shall violate, or knowingly, or negligently permit any of the officers, agents or employees of this Corporation to violate any of the provisions of this Charter, this fact shall be reported to the Governor by the Treasurer of Puerto Rico. Upon receiving such report the Governor may remove such Director.

SIXTEENTH: The Corporation shall make a written report of its condition, on the last day of each month, in such manner as the Treasurer of Puerto Rico may prescribe. Said report shall be submitted to the Treasurer within the first ten days of the following month, legal holidays excluded. The report shall show the total amount of outstanding loans to Directors, officers, agents or employees, or to private enterprises, in which the directors, officers, agents,or employees are interested, or in which a Director, officer, agent or employee is guarantor.

The aforesaid report shall be subscribed by the General Manager or other officer of the Corporation making the same, and verified by his oath, stating that the report is true and correct in all respects.

SEVENTEENTH: This Corporation shall be subject to inspections and supervision by the Treasurer of Puerto Rico, who shall either personally or through some competent person or persons appointed by him, to be known as examiners or inspectors, visit and examine this Corporation at least once a year. On such examinations, inquiry shall be made as to the condition and resources of the Bank, the mode of conducting and managing of its affairs, the actions of its Directors, the investment of its funds, the safety and prudence of its management, and the security offered for compliance with its contractual obligations; and whether the requirements of this Charter have been complied with. No fee shall be paid for such examination. The Treasurer shall report the result of this examination to the Governor and the incorporators. Reports rendered by the examiners to the Treasurer of Puerto Rico in connection with an examination of the Corporation shall be deemed to be of a confidential nature, except for the Legislature of Puerto Rico or a commission appointed thereby.

The Treasurer of Puerto Rico shall issue to the Corporation a certificate setting forth the result of such examination, which certificate shall be presented to the Board of Directors at its first regular or special meeting held subsequent to the date of its receipt by the Bank.

In addition to the examination mentioned above, this Corporation shall be obligated to make a full inspection and audit of accounts once each year, trusting said inspection and audit to a certified public accountant or accountants who are not officers and employees of the bank to be inspected. It shall be the duty of the Corporation to submit to the Treasurer of Puerto Rico within thirty (30) days after such certified public accountant or accountants has made a final report, an authenticated copy of such report. Should the Corporation fail to submit such authenticated copy of such report, the Governor shall order such investigation and audit to be made at the expense of the Corporation.

EIGHTEENTH: If, in consequence of an examination or a report made by an examiner, the Treasurer of Puerto Rico should have reason to believe that the Corporation is not in sound financial condition or, that its affairs are conducted in such a manner that the public or the persons and entities having funds or securities under its custody are in danger of losing part or all of such funds, or if the Corporation refuses to submit its books, documents, and affairs, for the inspection of any duly authorized examiner, or if it appears that its Charter has been violated, or if it becomes insolvent, in the judgment of the Treasurer of Puerto Rico, the Treasurer shall report such facts to the Governor. The Governor may then direct the Treasurer to apply to the District Court for the judicial district where the main office of the Corporation is located, and if, after having heard the Corporation, the Court deems that the facts alleged by the Treasurer are well founded, then the latter shall proceed to appoint a receiver to liquidate the Corporation.

The receiver, upon his appointment, shall, under the direction of the Treasurer, take possession of the assets and liabilities, books (including the Minute Book), records, papers, and files of every description, belonging to the Corporation, and shall collect all loans, fees, and claims of the Corporation, and shall see to the payment of its obligations and debts, and of the necessary expenditures of receivership. He shall proceed to liquidate the affairs of the Corporation as soon as possible, and to this end he may sell the personal and real property and other assets of the Bank, but subject to the order and approval of the Treasurer. NINETEENTH: It shall be the duty of this Corporation to publish in a newspaper of general circulation in the locality where it is located, every year, a report of its financial condition.

TWENTIETH: The Corporation shall make no loans to its Directors, officers, agents, or employees, or to any privately owned enterprises in which the Directors officers, agents, or employees are interested, or in which a Director, officer, agent, or employee is a guarantor.

TWENTY-FIRST: The Corporation shall file in the office of the Exectutive Secretary of Puerto Rico, annually, and not later than March 15 of each year, a report sworn to by the General Manager or by any two Directors of the Corporation, stating: (1) the name of the Bank; (2) the location, town or city, street and number, if there is a number, of its main office in Puerto Rico; (3) the object or objects of its business; (4) a general statement of all operations done and an itemized statement of its assets and liabilities; (5) the names and post-office addresses of all Directors and officers of the Bank and the time when the term of office of each expires.