exv10w4xby



 







EXHIBIT 10.4(b)




The Merrill Lynch Non-Qualified Deferred

Compensation Plan Trust Agreement




 TRUST UNDER:

Fremont General Corporation Supplemental Executive Retirement Plan II



DEFERRED COMPENSATION PLAN




 This Agreement is by and between Fremont General Corporation
(the “Employer”) and Merrill Lynch Trust Company, FSB, (the
“the Trustee”);



 WHEREAS, the Employer has adopted the Non-Qualified Deferred Compensation Plan identified above.



 WHEREAS, the Employer has incurred or expects to incur
liability under the terms of such Plan with respect to the
individuals participating in such Plan.



 WHEREAS, the Employer wishes to establish a trust (the
“Trust”) and to contribute to the Trust assets that shall be
held therein, subject to the claims of the Employer’s
creditors in the event of the Employer’s Insolvency, as herein
defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in
the Plan;



 WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect
the status of the Plan as an unfunded plan maintained for the
purpose of providing deferred compensation for a select group
of management or highly compensated employees for purpose of
Title I of the Employee Retirement Income Security Act of
1974.



 WHEREAS, it is the intention of the Employer to make
contributions to the Trust to provide itself with a source of
funds to assist it in the meeting of its liabilities under the
Plan;



 NOW, THEREFORE, the parties do hereby establish the Trust and
agree that the Trust shall be comprised, held and disposed of
as follows:



Section 1. Establishment Of Trust





	 	(a)  	Deposit of Funds. The Employer hereby deposits with the
Trustee in trust such cash and/or marketable securities, if
any, which shall become the principal of the Trust to be
held, administered and disposed of by the Trustee as
provided in this Trust Agreement.
	 
	 	(b)  	Irrevocability. The Trust hereby established shall be irrevocable.
	 
	 	(c)  	Grantor Trust. The Trust is intended to be a grantor
trust, of which the Employer is the grantor, within the
meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended,
and shall be construed accordingly.
	 
	 	(d)  	Trust Assets. The principal of the Trust, and any
earnings thereon, shall be held separate and apart from
other funds of the Employer and shall be used exclusively
for the uses and purposes of Plan participants and general
creditors as herein set forth. Plan participants and their
beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust.
Any rights created under the Plan and this Trust Agreement
shall be mere unsecured 




-1-









 






	 	   	contractual rights of Plan
participants and their beneficiaries against the Employer.
Any assets held by the Trust will be subject to the claims
of the Employer’s general creditors under federal and state
law in the event of Insolvency, as defined in Section 3(a)
herein.


	 	(e)  	Additional Deposits. The Employer, in its sole
discretion, may at any time, or from time to time, make
additional deposits of cash or other property in trust with
the Trustee to augment the principal to be held,
administered and disposed of by the Trustee as provided in
this Trust Agreement. Neither the Trustee nor any Plan
participant or beneficiary shall have any right to compel
such additional deposits.

	 
	 	(f)  	Acceptance of Additional Deposits. The Trustee shall
not be obligated to receive such cash and/or property unless
prior thereto the Trustee has agreed that such cash and/or
property is acceptable to the Trustee and the Trustee has
received such reconciliation, allocation, investment or
other information concerning, or representation with respect
to, the cash and/or property as the Trustee may reasonably
require. The Trustee shall have no duty or authority to (a)
require any deposits to be made under the Plan or to the
Trustee; (b) compute any amount to be deposited under the
Plan to the Trustee; or (c) determine whether amounts
received by the Trustee comply with the Plan. Assets of the
Trust may, in the Trustee’s discretion, be held in an
account with an affiliate of the Trustee.
	 
	 	(g)  	Participation by Affiliates. The Employer may permit
other affiliated corporations whose employees participate in
the Plan (“Affiliates”) to contribute to this Trust. Each
participant shall be identified as being employed by either
the Employer or an Affiliate, and all participant accounts
shall also be so identified. The assets in aggregate
attributable to each Affiliate’s employees (the “Affiliate
Accounts”) shall be deemed to be held in a separate subtrust
and shall be subject solely to the claims of the
participants employed by that respective Affiliate and its
creditors, the Affiliate shall be treated as the grantor of
the Affiliate Accounts, and Sections 2, 3 and 4 herein shall
be applied separately to the Affiliate Accounts with
reference to the respective Affiliate as if the Affiliate
were the “Employer.”





Section 2. Payments To Plan Participants And Their Beneficiaries





	 	(a)  	Payment of Benefits by Trustee. With respect to each
Plan participant, the Employer shall deliver to the Trustee
a schedule (the “Payment Schedule”) that indicates the
amounts payable in respect of the participant (and his or
her beneficiaries), that provides a formula or other
instructions acceptable to the Trustee for determining the
amounts so payable, the form in which such amounts are to be
paid (as provided for or available under the Plan), and the
time of commencement for payment of such amounts. The
Payment Schedule shall be delivered to the Trustee not more
than thirty (30) business days nor fewer than fifteen (15)
business days prior to the first date on which a payment is
to be made to the Plan participant. Any change to a Payment
Schedule shall be delivered
to the Trustee not more than thirty (30) business days nor
fewer than fifteen (15) business days prior to the date on
which the first payment is to be made in accordance with the
changed Payment Schedule. Except as otherwise provided
herein, the Trustee shall make payments to Plan participants
and their beneficiaries in accordance with such Payment
Schedule. The Trustee shall make provisions for the
reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to
the payment of benefits pursuant to the terms of the Plan
and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been
reported, withheld and paid by the Employer, it being
understood between the parties hereto that (1) the Employer
shall on a timely basis provide the Trustee specific
information as to the amount of taxes to be withheld and (2)
the




-2-









 






	 	   	Employer shall be obligated to receive such withheld taxes
from the Trustee and properly pay and report such amounts
to the appropriate taxing authorities.


	 	(b)  	Entitlement to Benefits. The entitlement of a Plan
participant or his or her beneficiaries to benefits under
the Plan shall be determined by the Employer or such party
as it shall designate under the Plan, and any claim for such
benefits shall be considered and reviewed under the
procedures set out in the Plan.
	 
	 	(c)  	Payment of Benefits by Employer. The Employer may make
payment of benefits directly to Plan participants or their beneficiaries as they become
due under the terms of the Plan. If the Employer
determines to make a payment of a deferred compensation
benefit directly to a participant or beneficiary as the
benefit becomes payable to the participant or such
participant’s beneficiary under the terms of the Plan, the
Employer shall notify the Trustee of the decision to make
payment of the benefit directly to the participant or the
participant’s beneficiary prior to the time the benefit
becomes payable to the participant or the participant’s
beneficiary. The Employer shall provide written
certification to the Trustee evidencing such payment, and
may at that time or at a subsequent time request
reimbursement from the Trustee of the amount of such
payment. The Trustee, upon receipt of such written
certification and such request, shall distribute such
amount to the Employer. In addition, if the principal of
the Trust, and any earnings thereon, are not sufficient to
make payments of benefits in accordance with the terms of
the Plan, the Employer shall make the balance of each
payment as it falls due. The Trustee shall notify the
Employer when principal and earnings are not sufficient.
	 
	 	(d)  	No Duty to Determine Sufficiency. The Trustee shall
have no responsibility to determine whether the Trust is sufficient to meet the liabilities under the Plan, and shall
not be liable for payments or Plan liabilities in excess of
the value of the assets held in the Trust.





Section 3. Trustee Responsibility Regarding Payments In The Event Of Insolvency





	 	(a)  	Insolvency. The Trustee shall cease payment of benefits
to Plan participants and their beneficiaries if the Employer
is Insolvent. The Employer shall be considered “Insolvent”
for purposes of this Trust Agreement if (i) the Employer is
unable to pay its debts as they become due, or (ii) the
Employer is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code. For purposes of
this Section 3, if the Employer is determined to be
Insolvent, no Affiliate in which the Employer has an equity
interest shall be deemed to be an Insolvent entity by reason
of the Employer’s Insolvency. Similarly, the Insolvency of
an Affiliate will not cause the Employer to be deemed
Insolvent.
	 
	 	(b)  	Notice of Insolvency. At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust, for
which the Employer is treated as grantor and owner shall
be subject to the claims of general creditors of the
Employer under federal and state law as set forth below.






	 	(i)  	The Board of Directors and the Chief Executive Officer
of the Employer (or, if there is no Chief Executive
Officer, the highest ranking officer) shall have the duty
to inform the Trustee in writing of the Insolvency of the
Employer. If a person claiming to be a creditor of the
Employer alleges in writing to the Trustee that the
Employer has become Insolvent, the Trustee shall determine
whether the Employer is Insolvent and, pending such
determination, the Trustee shall discontinue payment of
benefits to Plan participants or their beneficiaries.




-3-









 






	 	(ii)  	Unless the Trustee has actual knowledge of the
Insolvency of the Employer, or has received notice from
the Employer or a person claiming to be a creditor
alleging that the Employer is Insolvent, the Trustee shall
have no duty to inquire whether the Employer is Insolvent.
The Trustee may in all events rely on such evidence
concerning the solvency of the Employer as may be
furnished to the Trustee and that provides the Trustee
with a reasonable basis for making a determination
concerning the solvency of the Employer.
	 	(iii)  	If at any
time the Trustee has determined that the Employer is
Insolvent, the Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of the general
creditors of the Employer. Nothing in this Trust
Agreement shall in any way diminish any rights of Plan
participants or their beneficiaries to pursue their rights
as general creditors of the Employer with respect to
benefits due under the Plan or otherwise.
	 
	 	(iv)  	The Trustee shall resume the payment of benefits to
Plan participants or their beneficiaries in accordance
with Section 2 of this Trust Agreement only after the
Trustee has determined that the Employer is not Insolvent
(or is no longer Insolvent).






	 	(c)  	Amount of Payments after Insolvency. Provided that
there are sufficient assets, if the Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first
payment following such discontinuance shall include the
aggregate amount of all payments due to Plan participants or
their beneficiaries under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of
any payments made to Plan participants provided for
hereunder during any such period of discontinuance; provided
that the Employer has given the Trustee the information with
respect to such payments made during the period of
discontinuance prior to resumption of payments by the
Trustee.
	 
	 	(d)  	Parent Assets after Insolvency. Notwithstanding the
foregoing provisions of this Section 3, to the extent the
parent company of Company, if any (“Parent”), contributes
Parent stock or other assets to the Trust to satisfy
Company’s obligations to the Plan participants and
beneficiaries (“Parent Assets”), such Parent Assets are
subject to claims of both Company’s general creditors and
Parent’s general creditors.





Section 4. Payments To The Company




 Except as provided in Section 1(g), Section 2(c), Section 3,
and Section 13 hereof, since the Trust is irrevocable, in
accordance with Section 1(b) hereof, the Employer shall have
no right or power to direct the Trustee to return to the
Employer or to divert to others any of the Trust assets before
the payment of all benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of
the Plan and this Trust Agreement.



Section 5. Investment Authority





	 	(a)  	Investment of Principal and Interest. The Trustee shall
invest and reinvest the principal and income of the Trust as
directed by the Employer (including directions that the
Trustee follow Plan participants’ deemed investment
elections made in accordance with the terms of the Plan),
which directions may be changed from time to time, all in
accordance with procedures established by the Trustee. The
Trustee may limit the categories of assets in which the
Trust may be invested.




-4-









 






	 	(b)  	Voting Rights. All rights associated with assets of the
Trust shall be exercised by the Trustee or the person
designated by the Trustee, and shall in no event be
exercised by or rest with Plan participants, except that
voting rights with respect to Trust assets will be exercised
by the Employer, unless an investment adviser has been
appointed pursuant to Section 5(d) and voting authority has
been delegated to such investment adviser.
	 
	 	(c)  	Substitution of Assets. The Employer shall have the
right at any time, and from time to time in its sole
discretion, to substitute assets of equal fair market value
for any asset held by the Trust. This right is exercised by
the Employer in a nonfiduciary capacity without the approval
or consent of any person in a fiduciary capacity.
	 
	 	(d)  	Appointment of Investment Manager. The Employer may
appoint one or more investment managers, including any
entities affiliated with the Trustee, who shall have the
power to manage, acquire, or dispose of such portion of the
assets of the Trust as the Employer shall determine subject
to the following:






	 	(i)  	An investment manager shall act in accordance with the
provisions of an investment management agreement entered
into between it and the Employer, an executed copy of
which investment management agreement shall be filed with
the Trustee;
	 
	 	(ii)  	Each such investment manager must be registered as an
investment adviser under the Investment Advisers Act of
1940, and shall provide investment advice on a
discretionary or nondiscretionary basis with respect to
that portion of the assets of the Trust as the Employer
shall specify from time to time by written direction(s) to
the Trustee;
	 
	 	(iii)  	The indicia of ownership of the assets of the Trust shall be held by the Trustee at all
times;
	 
	 	(iv)  	Any entity affiliated with the Trustee may act as
broker or dealer to execute transactions, including the
purchase of any securities directly distributed,
underwritten, or issued by an entity affiliated with the
Trustee, at standard commission rates, mark-ups or
concessions, and to provide other management or investment
services with respect to such trust, including the custody
of assets;
	 
	 	(v)  	Any direction provided to the Trustee by an investment
manager shall be provided in writing or given orally and
confirmed in writing, or by telephonic or electronic
methods acceptable to the Trustee as soon as practicable.
Alternatively, an investment manager may provide
investment instructions directly to the broker or dealer
and receipt by the Trustee of a confirmation of the
transaction from the broker or dealer shall be conclusive
evidence of such transactions. In either case, the
Trustee shall have the authority within twenty-four (24)
hours of receipt of such direction from the investment
manager or confirmation of a transaction to instruct the
investment manager to rescind the transaction if the
Trustee determines that the investment is inconsistent
with its operational or administrative requirements; and
	 
	 	(vi)  	The Trustee may pay any such investment manager for
any such services from the assets of the Trust without
reduction for any fees or compensation paid to the Trustee
for its services as trustee.





 Notwithstanding any other provision of the Trust Agreement to
the contrary, with respect to the investment of the assets of
the Trust managed by an investment manager, the Trustee shall
have only the duty to follow the directions of the investment
manager and the Trustee shall not be liable to anyone:



-5-









 






	 	(I)  	for an act or omission of the investment manager with
respect to the investment of such assets;
	 
	 	(II)  	for failing to act with respect to the investment or
reinvestment of such assets absent direction from the
investment manager; or
	 
	 	(III)  	for failing to invest, periodically review or
otherwise deal with the investment of such assets.





 In the event the Employer is Insolvent for purposes of Section
3 and the Employer fails to provide effective investment
instructions to the Trustee as provided in Section 5(a), the
Trustee may appoint one or more investment advisers who are
registered as investment advisers under the Investment
Advisers Act of 1940, who may be affiliates of the Trustee, to
provide investment advice on a discretionary or
non-discretionary basis with respect to all or a specified
portion of the assets of the Trust.




	 	(e)  	Powers of Trustee. Subject to Section 5(a), the
Trustee, or the Trustee’s designee, is authorized and
empowered:






	 	(i)  	To invest and reinvest Trust assets, together with the
income therefrom, in common stock, preferred stock,
convertible preferred stock, bonds, debentures,
convertible debentures and bonds, mortgages, notes,
commercial paper and other evidences of indebtedness
(including those issued by the Trustee), shares of mutual
funds (which funds may be sponsored, managed or offered by
an affiliate of the Trustee), guaranteed investment
contracts, bank investment contracts, other securities,
policies of life insurance, annuity contracts, options,
options to buy or sell securities or other assets, and all
other property of any type (personal, real or mixed, and
tangible or intangible);
	 
	 	(ii)  	To deposit or invest all or any part of the assets of
the Trust in savings accounts or certificates of deposit
or other deposits in a bank or savings and loan
association or other
depository institution, including the Trustee or any of
its affiliates, provided with respect to such deposits
with the Trustee or an affiliate the deposits bear a
reasonable interest rate;
	 
	 	(iii)  	To hold, manage, improve, repair and control all
property, real or personal, forming part of the Trust; to
sell, convey, transfer, exchange, partition, lease for any
term, even extending beyond the duration of this Trust,
and otherwise dispose of the same from time to time;
	 
	 	(iv)  	To hold in cash, without liability for interest, such
portion of the Trust as is pending investments, or payment
of expenses, or the distribution of benefits;
	 
	 	(v)  	To take such actions as may be necessary or desirable
to protect the Trust from loss due to the default on
mortgages held in the Trust including the appointment of
agents or trustees in such other jurisdictions as may seem
desirable, to transfer property to such agents or
trustees, to grant to such agents such powers as are
necessary or desirable to protect the Trust, to direct
such agent or trustee, or to delegate such power to
direct, and to remove such agent or trustee;
	 
	 	(vi)  	To settle, compromise or abandon all claims and demands in favor of or against the Trust;
	 
	 	(vii)  	To exercise all of the further rights, powers,
options and privileges granted, provided for, or vested in
trustees generally under the laws of the state in which
the Trustee has its principal place of business so that
the powers conferred upon the Trustee herein shall not be
in limitation of any authority conferred by law, but shall
be in addition thereto;




-6-









 






	 	(viii)  	To borrow money from any source and to execute
promissory notes, mortgages or other obligations and to
pledge or mortgage any trust assets as security; and
	 
	 	(ix)  	To maintain accounts at, execute transactions
through, and lend on an adequately secured basis stocks,
bonds or other securities to, any brokerage or other firm,
including any firm which is an affiliate of the Trustee.





Section 6. Additional Powers Of The Trustee




 To the extent necessary or which it deems appropriate to
implement its powers under Section 5 or otherwise to fulfill
any of its duties and responsibilities as the Trustee of the
Trust, the Trustee shall have the following additional powers
and authority:




	 	(a)  	To register securities, or any other property, in its
name or in the name of any nominee, including the name of
any affiliate or the nominee name designated by any
affiliate, with or without indication of the capacity in
which property shall be held, or to hold securities in
bearer form and to deposit any securities or other property
in a depository or clearing corporation;
	 
	 	(b)  	To designate and engage the services of, and to delegate
powers and responsibilities to, such agents,
representatives, advisers, counsel and accountants as the
Trustee considers necessary or appropriate, any of whom may
be an affiliate of the Trustee or a person who renders
services to such an affiliate, and, as part of its expenses
under this Trust Agreement, to pay their reasonable expenses
and compensation;
	 
	 	(c)  	To make, execute and deliver, as the Trustee, any and
all deeds, leases, mortgages, conveyances, waivers, releases
or other instruments in writing necessary or appropriate for
the accomplishment of any of the powers listed in this Trust
Agreement; and
	 
	 	(d)  	Generally to do all other acts which the Trustee deems
necessary or appropriate for the protection of the Trust.





Section 7. Disposition Of Income




 During the term of this Trust Agreement, all income received
by the Trust, net of expenses and taxes, shall be accumulated
and reinvested.



Section 8. Accounting By The Trustee




 The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other
transactions required to be made, including such specific
records as shall be agreed upon in writing between the
Employer and the Trustee. Within ninety (90) calendar days
following the close of each calendar year and within ninety
(90) calendar days after removal or resignation of the
Trustee, the Trustee shall deliver to the Employer a written
account of its administration of the Trust during such year or
during the period from the close of the last preceding year to
the date of such removal or resignation, setting forth all
investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash,



-7-









 






securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as
the case may be. The Trustee may satisfy its obligation under
this Section 8 by rendering to the Employer monthly statements
setting forth the information required by this Section
separately for the month covered by the statement.



Section 9. Responsibility And Indemnity of the Trustee





	 	(a)  	Standard of Conduct. The Trustee shall act with the
care, skill, prudence and diligence under the circumstances
then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like
aims, provided, however, that the Trustee shall incur no
liability to any person for any action taken pursuant to a
direction, request or approval given by the Employer which
is contemplated by, and in conformity with, the terms of the
Plan and this Trust and is given in writing by the Employer
or in such other manner prescribed by the Trustee. The
Trustee shall also incur no liability to any person for any
failure to act in the absence of direction, request or
approval from the Employer which is contemplated by, and in
conformity with, the terms of this Trust. In the event of
a dispute between the Employer and a party, the Trustee may
apply to a court of competent jurisdiction to resolve the
dispute.
	 
	 	(b)  	Indemnification of Trustee. The Employer hereby
indemnifies the Trustee and each of its affiliates
(collectively, the “Indemnified Parties”) against, and shall
hold them harmless from, any and all loss, claims,
liability, and expense, including reasonable attorneys’
fees, imposed upon or
incurred by any Indemnified Party as a result of any acts
taken, or any failure to act, in accordance with the
directions from the Employer or any designee of the Employer
which is contemplated by, and in conformity with, the terms
of the Trust, or by reason of the Indemnified Party’s good
faith execution of its duties with respect to the Trust,
including, but not limited to, its holding of assets of the
Trust. Trustee is authorized to prosecute or defend
actions, suits, claims or proceedings for the protection of
Trust assets and of the Trustee in the performance of the
duties of the Trustee and to represent the Trust in all
actions, suits, claims or proceedings. The Trustee shall
notify the Employer of any such actions, suits, claims or
proceedings as soon as reasonably practicable. In
connection therewith, upon prior approval from the Employer,
the Trustee shall have the authority to pay, contest or
settle any claim by or against the Trust by compromise,
arbitration or otherwise; to release, in whole or in part,
any claim belonging to the Trust to the extent that the
claim is deemed uncollectible by the Trustee.
Notwithstanding the foregoing, the Trustee may only pay or
settle a claim assessed against the Trust by the Employer if
it is compelled to do so by a final order of a court of
competent jurisdiction which is not subject to appeal. The
Employer agrees to indemnify the Trustee against the
Trustee’s reasonable costs, expenses and liabilities
(including, without limitation, attorneys’ fees and
expenses) relating thereto, but only if such costs are
related to claims by or for the Trust as described above or
in connection with a claim against the Trustee that is
subject to the indemnity described in the first sentence of
this subsection (b). The Employer’s obligations in the
foregoing regard shall be satisfied promptly by the
Employer, provided that in the event the loss, claim,
liability or expense involved is determined by a no longer
appealable final judgment entered in a lawsuit or proceeding
to have resulted from the negligence or willful misconduct
of the Trustee, the Trustee shall promptly on request
thereafter return to the Employer any amount previously
received by the Trustee under this Section with respect to
such loss, claim, liability or expense. If the Employer
does not dispute or pay such costs, expenses and liabilities
within 60 days after receipt of the Trustee’s invoice
therefor, the Trustee may obtain payment from the Trust
without direction from the Employer.




-8-









 












	 	(c)  	Legal Counsel. The Trustee may consult with legal
counsel (who may also be counsel for the Employer generally)
with respect to any of its duties or obligations hereunder.
	 
	 	(d)  	Other Advisers. The Trustee may hire agents,
accountants, actuaries, investment advisers, financial
consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
	 
	 	(e)  	Authority of Trustee. The Trustee shall have, without
exclusion, all powers conferred on the Trustee by applicable
law, unless expressly provided otherwise herein, provided,
however, that if an insurance policy is held as an asset of
the Trust, the Trustee shall have no power to name a
beneficiary of the policy other than the Trust, to assign
the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to
loan to any person the proceeds of any borrowing against
such policy.
	 
	 	(f)  	Loan Against Insurance Policy. However, notwithstanding
the provisions of Section 9(e) above, the Trustee may loan
to the Employer the proceeds of any borrowing against an
insurance policy held as an asset of the Trust.
	 
	 	(g)  	Limitation on Trustee. Notwithstanding any powers
granted to the Trustee pursuant to this Trust Agreement or
to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a
business and dividing the gains therefrom, within the
meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the
Internal Revenue Code.





Section 10. Compensation And Expenses Of The Trustee




 If the Employer does not pay or dispute the Trustee’s fees
within 60 days of the Trustee’s invoice therefore, the Trustee
is authorized, unless otherwise agreed by the Trustee, to
withdraw from the Trust without direction from the Employer
such fees. The Employer shall pay all administrative
expenses, but if not so paid, the expenses shall be paid from
the Trust.



Section 11. Resignation And Removal Of The Trustee





	 	(a)  	Resignation of Trustee. The Trustee may resign at any
time by written notice to the Employer, which shall be
effective sixty (60) calendar days after receipt of such
notice unless the Employer and the Trustee agree otherwise.
	 
	 	(b)  	Removal of Trustee. The Trustee may be removed by the
Employer on sixty (60) calendar days’ written notice or upon
shorter written notice accepted by the Trustee.
	 
	 	(c)  	Transfer of Assets to Successor.






	 	(i)  	Upon resignation or removal of the Trustee and
appointment of a successor Trustee, all assets shall
subsequently be transferred to the successor Trustee. The
transfer shall be completed within 60 days after receipt
of notice of resignation, removal or transfer, unless the
Employer extends the time limit, provided that the Trustee
is provided assurance by the Employer satisfactory to the
Trustee that all fees and expenses reasonably anticipated
will be paid.




-9-









 












	 	(ii)  	Upon settlement of the account and transfer of the
Trust assets to the successor Trustee, all responsibility
and liability of the Trustee with respect to the Trust and
assets thereof shall terminate subject only to the
requirement that the Trustee execute all necessary
documents to transfer the Trust assets to the successor
Trustee.





Section 12. Appointment Of Successor





	 	(a)  	Employer Appointment of Successor. If the Trustee
resigns or is removed in accordance with Section 11(a) or
Section 11(b), the Employer may appoint any third party,
such as a bank trust department or other party that may be
granted corporate trustee powers under state law, as a
successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted
in writing by the new Trustee. The former Trustee shall
execute any instrument necessary or reasonably requested by
the Employer or the successor Trustee to evidence the
transfer.
	 
	 	(b)  	Court Appointment of Successor. If the Trustee resigns
or is removed, a successor shall be appointed, in accordance
with Section 12(a) hereof, by the effective date of
resignation or removal under Section 11(a) or Section 11(b).
If no such appointment has been made, the Trustee may apply
to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of the Trustee
in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
	 
	 	(c)  	Duty of Successor Trustee. The successor Trustee need
not examine the records and acts of any prior Trustee and
may retain or dispose of existing Trust assets, subject to
Sections 8 and 9.





Section 13. Amendment Or Termination





	 	(a)  	Amendment. This Trust Agreement may be amended by a
written instrument executed by the Trustee and the Employer.
Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan, make the Trust
revocable, since the Trust is irrevocable in accordance with
Section 1(b) hereof, or make the Trust a trust which is not
a grantor trust.
	 
	 	(b)  	Termination by Employer. The Trust shall not terminate
until the date on which Plan participants and their
beneficiaries are no longer entitled to benefits pursuant to
the terms of the Plan. Such termination date shall be
determined by the Employer and communicated to the Trustee
in writing. Upon termination of the Trust any assets
remaining in the Trust shall be returned to the Employer.
Notwithstanding the preceding sentence, if Parent Assets
remain in the Trust at termination, such Parent Assets shall
be returned to Parent.
	 
	 	(c)  	Termination with Participant Approval. Notwithstanding the foregoing, the Employer may
terminate the Trust upon (i) written approval of all
participants or beneficiaries entitled to payment of
benefits pursuant to the terms of the Plan, (ii) the
exhaustion of all appeals of a final determination of a
court of competent jurisdiction that the interests in the
Trust of Trust beneficiaries is includible for federal
income tax purposes in the gross income of such Trust
beneficiaries, without such determination having been
reversed (or the earlier expiration of the time to appeal),
(iii) a determination by the Employer that applicable law
requires the Trust to be amended in a way that could make it
taxable to its beneficiaries and failure to so amend would
subject the Employer to material penalties, (iv) the
expiration of the maximum length of time for which





-10-









 











	 	   	trusts
may be established under any applicable state law, or (v) a
determination of the Employer to terminate the Trust because
the Employer concludes, after consulting with legal counsel,
that judicial authority or the opinion of the U.S.
Department of Labor (as expressed in its proposed or final
regulations, advisory opinions, or similar administrative
announcements) creates a significant possibility that the
Trust will not be considered a component of an unfunded plan
maintained primarily to provide deferred compensation for a
select group of management or highly compensated employees,
as described in Section 201(2) of ERISA. All assets in the
Trust at termination shall be returned to the Employer.





Section 14. Miscellaneous





	 	(a)  	Severability. Any provision of this Trust Agreement
prohibited by law shall be ineffective to the extent of any
such prohibition, without invalidating the remaining
provisions hereof.
	 
	 	(b)  	No Assignment of Benefits. Benefits payable to Plan
participants and their beneficiaries under this Trust
Agreement may not be anticipated, assigned (either at law or
in equity), alienated, pledged, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or
equitable process.
	 
	 	(c)  	Governing Law. This Trust Agreement and its enforcement
shall be governed by and construed in accordance with the
laws of the State of New Jersey.
	 
	 	(d)  	Survival. The provisions of Sections 2(d), 3(b)(iii),
9(b) and 15 of this Agreement shall survive termination of
this Agreement.
	 
	 	(e)  	Conflict with Plan Document. The rights, duties,
responsibilities, obligations and liabilities of the Trustee
are as set forth in this Trust Agreement, and no provision
of the Plan or any other documents shall affect such rights,
responsibilities, obligations and liabilities. If there is
a conflict between provisions of the Plan and this Trust
Agreement with respect to any subject involving the Trustee,
including but not limited to the responsibility, authority
or powers of the Trustee, the provisions of this Trust
Agreement shall be controlling.
	 
	 	(f)  	Shareholder Communications Act. The Employer agrees
that the Trustee will not supply the Employer’s name to
issuers of any securities held in the Trust and, therefore,
the Employer will not receive information regarding those
securities directly from the issuer. Instead, the Employer
will receive information from the Trustee, unless the
Employer notifies the Trustee in writing otherwise.
	 
	 	(g)  	Counterparts. This instrument may be executed in one
or more counterparts, each of which is legally binding
and enforceable.
	 
	 	(h)  	Gender. Terms used in the masculine shall include the
feminine and vice versa and terms used in the singular
shall include the plural and vice versa, unless the
context clearly indicates otherwise.
	 
	 	(i)  	Successors. This Trust Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and
their successors and assigns.





-11-









 





Employer Copy




Section 16. Effective Date




 The effective date of this Trust Agreement shall be ___, 2004.



 IN WITNESS WHEREOF, the Employer and the Trustee have executed
this Trust Agreement each by action of a duly authorized
person.





Merrill Lynch Trust Company, FSB





		
	By: 	







		
	Name/Title: 	







		
	Date: 	









Fremont General Corporation





		
	By: 	







		
	Name/Title: 	







		
	Date: 	






Add second signature if required:





		
	By: 	







		
	Name/Title: 	







		
	Date: 	









  








-12-









 





Merrill Lynch Trust Company, FSB Copy




Section 16. Effective Date




 The effective date of this Trust Agreement shall be ___, 2004.



 IN WITNESS WHEREOF, the Employer and the Trustee have executed
this Trust Agreement each by action of a duly authorized
person.





Merrill Lynch Trust Company, FSB





		
	By: 	







		
	Name/Title: 	







		
	Date: 	









Fremont General Corporation





		
	By: 	







		
	Name/Title: 	







		
	Date: 	






Add second signature if required:





		
	By: 	







		
	Name/Title: 	







		
	Date: 	















-13-