Guarantee Agreement National Mercantile Bancorp



 Exhibit 10.12 
  
  
  

  
 GUARANTEE AGREEMENT 
 NATIONAL MERCANTILE BANCORP 
 Dated as of July 16, 2001 

 
  

  
  
  







 TABLE OF CONTENTS 
  


					
	 	  	 	  	Page No.
	 ARTICLE I
	  	 DEFINITIONS AND INTERPRETATION
	  	1
			
	 Section 1.1
	  	Definitions and Interpretation	  	1
			
	 ARTICLE II
	  	 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
	  	3
			
	 Section 2.1
	  	Powers and Duties of the Guarantee Trustee	  	3
			
	 Section 2.2
	  	Certain Rights of Guarantee Trustee	  	4
			
	 Section 2.3
	  	Not Responsible for Recitals or Issuance of Guarantee	  	6
			
	 Section 2.4
	  	Events of Default, Waiver	  	6
			
	 Section 2.5
	  	Events of Default, Notice	  	6
			
	 ARTICLE III
	  	 GUARANTEE TRUSTEE
	  	6
			
	 Section 3.1
	  	Guarantee Trustee, Eligibility	  	6
			
	 Section 3.2
	  	Appointment Removal and Resignation of Guarantee Trustee	  	7
			
	 ARTICLE IV
	  	 GUARANTEE
	  	7
			
	 Section 4.1
	  	Guarantee	  	7
			
	 Section 4.2
	  	Waiver of Notice and Demand	  	7
			
	 Section 4.3
	  	Obligations Not Affected	  	8
			
	 Section 4.4
	  	Rights of Holders	  	8
			
	 Section 4.5
	  	Guarantee of Payment	  	8
			
	 Section 4.6
	  	Subrogation	  	9
			
	 Section 4.7
	  	Independent Obligations	  	9
			
	 Section 4.8
	  	Enforcement.	  	9
			
	 ARTICLE V
	  	 LIMITATION OF TRANSACTIONS; SUBORDINATION
	  	9
			
	 Section 5.1
	  	Limitation of Transactions	  	9
			
	 Section 5.2
	  	Ranking	  	10
			
	 ARTICLE VI
	  	 TERMINATION
	  	10
			
	 Section 6.1
	  	Termination	  	10
			
	 ARTICLE VII
	  	 INDEMNIFICATION
	  	10
			
	 Section 7.1
	  	Exculpation	  	10
			
	 Section 7.2
	  	Indemnification	  	11
			
	 Section 7.3
	  	Compensation, Reimbursement of Expenses	  	11
			
	 ARTICLE VIII
	  	 MISCELLANEOUS
	  	12
			
	 Section 8.1
	  	Successors and Assigns	  	12
			
	 Section 8.2
	  	Amendments	  	12
			
	 Section 8.3
	  	Notices	  	12
			
	 Section 8.4
	  	Benefit	  	13
			
	 Section 8.5
	  	Governing Law	  	13
			
	 Section 8.6
	  	Counterparts	  	13

  

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 GUARANTEE AGREEMENT 
 This GUARANTEE AGREEMENT (the “Guarantee”), dated as of July 16, 2001, is executed and delivered by National Mercantile Bancorp, a bank holding company incorporated in California (the
“Guarantor”), and The Bank of New York, as trustee (the “(“Guarantee Trustee”), for the benefit of the Holders (as defined herein) from time to time of the Capital Securities (as defined herein) of National Mercantile
Capital Trust 1, a Delaware statutory business trust (the “Issuer”). 
 WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the “Declaration”), dated as of July 16, 2001, among the trustees named therein of the Issuer, National Mercantile Bancorp, as sponsor, and the Holders from time to time of undivided beneficial interests in the assets of the
Issuer, the Issuer is issuing on the date hereof securities, having an aggregate liquidation amount of up to $15,000,000, designated the 10.25% Fixed Rate MMCapS (the “Capital Securities”); 
 WHEREAS, as incentive for the Holders to purchase the Capital Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay to the Holders of Capital Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein; and 
 NOW, THEREFORE, in consideration of the purchase by each Holder of the Capital Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of the Holders. 
 ARTICLE I 
 DEFINITIONS AND INTERPRETATION 
 Section 1.1
Definitions and Interpretation 
 In this Guarantee, unless the context otherwise requires: 
 (a) capitalized terms used in this Guarantee but not defined in the preamble above have the respective meanings assigned to them in this
Section 1.1; 
 (b) a term defined anywhere in this Guarantee has the same meaning throughout; 
 (c) all references to “the Guarantee” or “this Guarantee” are to this Guarantee as modified, supplemented or amended
from time to time; 
 (d) all references in this Guarantee to Articles and Sections are to Articles and Sections of this
Guarantee, unless otherwise specified; 
 (e) terms defined in the Declaration as at the date of execution of this Guarantee
have the same meanings when used in this Guarantee, unless otherwise defined in this Guarantee or unless the context otherwise requires; and 
 (f) a reference to the singular includes the plural and vice versa. 
 “Beneficiaries” means any
Person to whom the Issuer is or hereafter becomes indebted or liable. 
 “Corporate Trust Office” means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall, at any particular time, be principally administered, which office at the date of execution of this Guarantee Agreement is located at 101 Barclay Street, Floor 21 W, New
York, NY 10286. 
 “Covered Person” means any Holder of Capital Securities. 
  

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 “Debentures” means the junior subordinated debentures of the Guarantor, designated the 10.25%
Junior Subordinated Deferrable Interest Debentures due July 25, 2031, held by the Institutional Trustee (as defined in the Declaration) of the Issuer. 
 “Event of Default” has the meaning set forth in Section 2.4. 
 “Guarantee Payments”
means the following payments or distributions, without duplication, with respect to the Capital Securities, to the extent not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined in the Declaration) which are
required to be paid on such Capital Securities to the extent the Issuer shall have funds available in the Property Account (as defined in the declaration) therefor at such time, (ii) the Redemption Price (as defined in the Indenture) to the
extent the Issuer has funds available in the Property Account therefor at such time, with respect to any Capital Securities called for redemption by the Issuer, (iii) the Special Redemption Price (as defined in the Indenture) to the extent the
Issuer has funds available in the Property Account therefor at such time, with respect to Capital Securities called for redemption upon the occurrence of a Special Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than in connection with the distribution of Debentures to the Holders of the Capital Securities in exchange therefor as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on the Capital Securities to the date of payment, to the extent the Issuer shall have funds available in the Property Account therefor at such time, and (b) the amount
of assets of the Issuer remaining available for distribution to E4olders in liquidation of the Issuer after satisfaction of liabilities to creditors of the Issuer as required by applicable law (in either case, the “Liquidation
Distribution”). 
 “Guarantee Trustee” means The Bank of New York, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee and thereafter means each such Successor Guarantee Trustee. 
 “Holder” means any holder, as registered on the books and records of the Issuer, of any Capital Securities; provided, however, that, in determining whether the holders of the requisite percentage of Capital Securities have
given any request, notice, consent or waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of the Guarantor. 
 “Indemnified Person” means the Guarantee Trustee, any Affiliate of the Guarantee Trustee, or any officers, directors, shareholders, members, partners, employees, representatives, nominees, custodians or agents of the Guarantee
Trustee. 
 “Indenture” means the Indenture dated as of July 16, 2001, between the Guarantor and The Bank of New York, not in
its individual capacity but solely as trustee, and any indenture supplemental thereto pursuant to which the Debentures are to be issued to the Institutional Trustee of the Issuer. 
 “Liquidation Distribution” has the meaning set forth in the definition of “Guarantee Payments” herein. 
 “Majority in liquidation amount of the Capital Securities” means Holder(s) of outstanding Capital Securities, voting together as a class, but
separately fiam the holders of Common Securities, of more than 50% of the aggregate liquidation amount (including the stated amount that would be paid on redemption, liquidation or otherwise, plus accrued and unpaid Distributions to, but excluding,
the date upon which the voting percentages are determined) of all Capital Securities then outstanding. 
 “Obligations” means any
costs, expenses or liabilities (but not including liabilities related to taxes) of the Issuer, other than obligations of the Issuer to pay to holders of any Trust Securities the amounts due such holders pursuant to the terms of the Trust Securities.

  

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 “Officer’s Certificate” means, with respect to any Person, a certificate signed by one
Authorized Officer of such Person. Any Officer’s Certificate delivered with respect to compliance with a condition or covenant provided for in this Guarantee shall include: 
 (a) a statement that each officer signing the Officer’s Certificate has read the covenant or condition and the definitions relating
thereto; 
 (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in
rendering the Officer’s Certificate; 
 (c) a statement that each such officer has made such examination or investigation
as, in such officer’s opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and 
 (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. 
 “Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature. 
 “Responsible Officer” means, with respect to the Guarantee Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee including any Vice President, Assistant Vice President, Secretary,
Assistant Secretary or any other officer of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer’s knowledge of and familiarity with the particular subject. 
 “Successor
Guarantee Trustee” means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 3.1. 
 “Trust Securities” means the Common Securities and the Capital Securities. 
 ARTICLE II 
 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE 
 Section 2.1 Powers and Duties of the Guarantee Trustee 
 (a) This Guarantee shall be held by the
Guarantee Trustee for the benefit of the Holders of the Capital Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Capital Securities exercising his or her rights pursuant to Section 4.4
(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor
Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been execute<i and delivered pursuant to the appointment of such Successor Guarantee Trustee. 
 (b) If an Event of Default actually known to a Responsible Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee for the benefit of the Holders of the Capital Securities. 
 (c) The Guarantee Trustee,
before the occurrence of any Event of Default and after curing all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee, and no implied covenants shall be read into
this Guarantee against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.4) and is actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee Trustee
shall exercise such 

  

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of the rights and powers vested in it by this Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own affairs. 
 (d) No provision of this Guarantee shall
be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: 
 (i) prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may hav= occurred:

 (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this
Guarantee, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee, and no implied covenants or obligations shall be read into this Guarantee against the
Guarantee Trustee; and 
 (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee; but in the case of
any such certificates or opinions furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee: 
 (ii) the Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that such Responsible Officer of the Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; 
 (iii) the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance
with the written direction of the Holders of not less than a Majority in liquidation amount of the Capital Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and 
 (iv) no provision of this
Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds is not reasonably assured to it under the terms of this Guarantee, or security and indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk or liability is
not reasonably assured to it. 
 Section 2.2 Certain Rights of Guarantee Trustee 
 (a) Subject to the provisions of Section 2.1: 
 (i) The Guarantee ‘Trustee may conclusively rely, and shall be fully protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. 
 (ii) Any direction or act of the Guarantor contemplated by this Guarantee shall be sufficiently evidenced by an Officer’s
Certificate. 
 (iii) Whenever, in the administration of this Guarantee, the Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely
upon an Officer’s Certificate of the Guarantor which, upon receipt of’ such request, shall be promptly delivered by the Guarantor. 
  

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 (iv) The Guarantee Trustee shall have no duty to see to any recording, filing or
registration of any instrument (or any recording, refiling or registration thereof). 
 (v) The Guarantee Trustee may consult
with counsel of its selection, and the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent jurisdiction. 
 (vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this Guarantee at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such security and indemnity, reasonably satisfactory to the
(guarantee Trustee, against the costs, expenses (including attorneys’ fees and expenses and the expenses of the Guarantee Trustee’s agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided, however, that nothing contained in this Section 2.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence of
an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee. 
 (vii) The
Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit. 
 (viii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or
through agents. nominees, custodians or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. 
 (ix) Any action taken by the Guarantee Trustee or its agents hereunder shall bind the Holders of the Capital Securities, and the signature
of the Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third party shall be required to inquire as to the authority of the Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Guarantee, both of which shall be conclusively evidenced by the Guarantee Trustee’s or its agent’s taking such action. 
 (x) Whenever in the administration of this Guarantee the Guarantee Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (A) may request instructions from the Holders of a Majority in liquidation amount of the Capital Securities, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions are received and (C) shall be protected in conclusively relying on or acting in accordance with such instructions. 
 (xi) The Guarantee Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee. 
 (b) No provision of this
Guarantee shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it, in any jurisdiction in which it shall be illegal or in which
the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty. 
  

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 Section 2.3 Not Responsible for Recitals or Issuance of Guarantee

 The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee. 
 Section 2.4 Events of Default, Waiver 
 (a) An Event of Default under this Guarantee will occur
upon the failure of the Guarantor to perform any of its payment or other obligations hereunder. 
 (b) The Holders of a Majority in
liquidation amount of Capital Securities may, voting or consenting as a class, on behalf of the Holders of all of the Capital Securities, waive any past Event of Default and its consequences. Upon such waiver, any such Event of Default shall cease
to exist, and shall be deemed to have been cured, for every purpose of this Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. 
 Section 2.5 Events of Default, Notice 
 (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Capital Securities, notices of all Events of Default
actually known to a Responsible Officer of the Guarantee Trustee, unless such defaults have been cured before the giving of such notice, provided, however, that the Guarantee Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Capital Securities. 
 (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless the Guarantee Trustee shall have received written notice from the Guarantor or a Holder of the Capital Securities (except
in the case of a payment default), or a Responsible Officer of the Guarantee Trustee charged with the administration of this Guarantee shall have obtained actual knowledge, thereof. 
 ARTICLE III 
 GUARANTEE TRUSTEE 
 Section 3.1 Guarantee Trustee, Eligibility 
 (a) There shall at all times be a Guarantee Trustee which shall: 
 (i) not be an Affiliate of
the Guarantor; and 
 (ii) be a corporation organized and doing business under the laws of the United States of America or any
State or Territory thereof or of the District of Columbia, or Person authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 3.1 (a) (ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so
published. 
 (b) If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 3.1 (a), the Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section 3.2(c). 
 (c) If the Guarantee Trustee has or shall
acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee shall either eliminate such interest or resign to the extent and in the manner provided by, and subject to
this Guarantee. 
  

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 Section 3.2 Appointment Removal and Resignation of Guarantee Trustee

 (a) Subject to Section 3.2(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default. 
 (b) The Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. 
 (c) The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted
such appointment by an instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. 
 (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 3.2 within 60 days after delivery of an instrument of removal or resignation, the Guarantee
Trustee resigning or being removed may petition any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor
Guarantee Trustee. 
 (e) No Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Guarantee Trustee.

 (f) Upon termination of this Guarantee or removal or resignation of the Guarantee Trustee pursuant to this Section 3.2, the Guarantor
shall pay to the Guarantee Trustee all amounts owing to the Guarantee Trustee under Sections 7.2 and 7.3 accrued to the date of such termination, removal or resignation. 
 ARTICLE IV 
 GUARANTEE 
 Section 4.1 Guarantee 
 (a) The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Issuer), as and when due, regardless of any defense (except as defense of
payment by the Issuer), right of set-off or counterclaim that the Issuer may have or assert. The Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders. 
 (b) The Guarantor hereby also agrees to assume any and all Obligations of the
Issuer and in the event any such Obligation is not so assumed, subject to the terms and conditions hereof, the Guarantor hereby irrevocably and unconditionally guarantees to. each Beneficiary the full payment, when and as due, of any and all
obligations to such Beneficiaries. This Agreement is intended to be for the Beneficiaries who have received notice hereof. 
 Section 4.2 Waiver of Notice and Demand 
 The Guarantor hereby waives notice of acceptance of this Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor,
notice of redemption and all other notices and demands. 
  

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 Section 4.3 Obligations Not Affected 
 The obligations, covenants, agreements and duties of the Guarantor under this Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following: 
 (a) the release or waiver, by operation of law or otherwise, of the performance
or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Capital Securities to be performed or observed by the Issuer; 
 (b) the extension of time for the payment by the Issuer of all or any portion of the Distributions, Redemption Price, Special Redemption
Price, Liquidation Distribution or any other sums payable under the terms of the Capital Securities or the extension of time for the performance of any other obligation under, arising out of, or in connection with, the Capital Securities (other than
an extension of time for payment of Distributions, Redemption Price, Special Redemption Price, Liquidation Distribution or other sum payable that results from the extension of any interest payment period on the Debentures or any extension of the
maturity date of the Debentures permitted by the Indenture); 
 (c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Capital Securities, or any action on the part of the Issuer granting indulgence or extension of any kind;

 (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; 
 (e) any invalidity of; or defect or deficiency in, the Capital Securities; 
 (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; or 
 (g) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 4.3 that the obligations of the Guarantor hereunder shall be absolute and unconditional under any and all circumstances. 
 There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. 
 Section 4.4 Rights of Holders 
 (a) The Holders of a Majority in liquidation amount of the Capital Securities have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of this Guarantee or to direct the exercise of any trust or power conferred upon the Guarantee Trustee under this Guarantee; provided, however, that (subject to Sections 2.1 and 2.2) the Guarantee Trustee shall have the right to
decline to follow any such direction if the Guarantee Trustee shall determine that the actions so directed would be unjustly prejudicial to the Holders not taking part in such direction or if the Guarantee Trustee being advised by counsel determines
that the action or proceeding so directed may not lawfully be taken or if the Guarantor Trustee in good faith by its board of directors or trustees, executive committees or a trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceedings so directed would involve the Guarantee Trustee in personal liability. 
 (b) Any Holder of Capital
Securities may institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee, without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other
Person. The Guarantor waives any right or remedy to require that any such action be brought first against the Issuer, the Guarantee Trustee or any other Person before so proceeding directly against the Guarantor. 
 Section 4.5 Guarantee of Payment 
 This Guarantee creates a guarantee of payment and not of collection. 
  

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 Section 4.6 Subrogation 
 The Guarantor shall be subrogated to all (if any) rights of the Holders of Capital Securities against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by applicable provisions of law) be entitled to enforce or exercise any right that it may acquire by way of subrogation or
any indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee, if, after giving effect to any such payment, any amounts are due and unpaid under this Guarantee. If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such amount in trust for the Holders and to pay over such amount to the Holders. 
 Section 4.7 Independent Obligations 
 The Guarantor acknowledges that its obligations hereunder
are independent of the obligations of the Issuer with respect to the Capital Securities and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee notwithstanding
the occurrence of any event referred to in subsections (a) through (g), inclusive, of Section 4.:3 hereof. 
 Section 4.8 Enforcement. 
 A Beneficiary may enforce the obligations of the Guarantor contained in
Section 4.1(b) directly against the Guarantor, and the Guarantor waives any right or remedy to require that any action be brought against the Issuer or any other person or entity before proceeding against the Guarantor. 
 The Guarantor shall be subrogated to all rights (if any) of any Beneficiary against the Issuer in respect of any amounts paid to the Beneficiaries by the
Guarantor under this Guarantee; provided, however, that the Guarantor shall not (except to the extent required by applicable provisions of law) be entitled to enforce or exercise any rights that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of payment under this Guarantee, if, after giving effect to such payment, any amounts are due and unpaid under this Guarantee. 
 ARTICLE V 
 LIMITATION OF
TRANSACTIONS; SUBORDINATION 
 Section 5.1 Limitation of Transactions 
 So long as any Capital Securities remain outstanding, if (a) there shall have occurred and be continuing an Event of Default or (b) the
Guarantor shall have selected an Extension Period as provided in the Declaration and such period, or any extension thereof, shall have commenced and be continuing, then the Guarantor may not (x) declare or pay any dividends or distributions on,
or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Guarantor’s capital stock or (y) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt securities
of the Guarantor that rank pari passu in all respects with or junior in interest to the Debentures (other than (i) payments under this Guarantee, (ii) repurchases, redemptions or other acquisitions of shares of capital stock of the
Guarantor in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of one or more employees, officers, directors, or consultants, in connection with a dividend reinvestment or stockholder stock
purchase plan or in connection with the issuance of capital stock of the Guarantor (or securities convertible into or exercisable for such capital stock) a consideration in an acquisition transaction entered into prior to occurrence of the Event of
Default or the applicable Extension Period, (iii) as a result of any exchange of conversion of any class or series of the Guarantor’s capital stock (or any capital stock of a subsidiary of the Guarantor) for any class or series of the
Guarantor’s capital stock or of any class or series of the Guarantor’s indebtedness for any class or series of the Guarantor’s capital stock, (iv) the purchase of fractional interests in shares of the Guarantor’s capital


  

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stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (v) any declaration of a
dividend in connection with any stockholder’s rights plan, or the issuance of rights, stock or other property under any stockholder’s rights plan, or the redemption or repurchase of rights pursuant thereto, or (vi) any dividend in the
form of stock, warrants, options or other rights where the dividend stock or the stock issuable upon exercise of such warrants, options or other rights is the same stock as that on which the dividend is being paid or ranks pari passu with or junior
to such stock). 
 Section 5.2 Ranking 
 This Guarantee will constitute an unsecured obligation of the Guarantor and will rank subordinate and junior in right of payment to all present and future
Senior Indebtedness (as defined in the Indenture) of the Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees to the foregoing provisions of this Guarantee and the other terms set forth herein. 
 The right of the Guarantor to participate in any distribution of assets of any of its subsidiaries upon any such subsidiary’s liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that subsidiary, except to the extent the Guarantor may itself be recognized as a creditor of that subsidiary. Accordingly, the Guarantor’s obligations under this
Guarantee will be effectively subordinated to all existing and future liabilities of the Guarantor’s subsidiaries, and claimants should look only to the assets of the Guarantor for payments thereunder. This Guarantee does not limit the
incurrence or issuance of other secured or unsecured debt of the Guarantor, including Senior Indebtedness of the Guarantor, under any indenture or agreement that the Guarantor may enter into in the future or otherwise. 
 ARTICLE VI 
 TERMINATION

 Section 6.1 Termination 
 This Guarantee shall terminate as to the Capital Securities (i) upon full payment of the Redemption Price or the Special Redemption Price, as the case may be, of all Capital Securities then outstanding,
(ii) upon the distribution of all of the Debentures to the Holders of all of the Capital Securities or (iii) upon full payment of the amounts payable in accordance with the Declaration upon dissolution of the Issuer. This Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any time any Holder of Capital Securities must restore payment of’ any sums paid under the Capital Securities or under this Guarantee. 
 ARTICLE VII 
 INDEMNIFICATION

 Section 7.1 Exculpation 
 (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions. 
 (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Issuer or the Guarantor and upon such information,
opinions, reports or statements presented to the Issuer or the Guarantor 

  

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by any Person as to matters the Indemnified Person reasonably believes are within such other Person’s professional or expert competence and who, if
selected by such Indemnified Person, has been selected with reasonable care by such Indemnified Person, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to Holders of Capital Securities might properly be paid. 
 Section 7.2 Indemnification 
 (a) The Guarantor agrees to indemnify each Indemnified Person for, and to hold each
Indemnified Person harmless against, any and all loss, liability, damage, claim or expense incurred without negligence or willful misconduct on the part of the Indemnified Person, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including but not limited to the costs and expenses (including reasonable legal fees and expenses) of the Indemnified Person defending itself against, or investigating, any claim or liability in connection with the
exercise or performance of any of the Indemnified Person’s powers or duties hereunder. The obligation to indemnify as set forth in this Section 7.2 shall survive the resignation or removal of the Guarantee Trustee and the termination of
this Guarantee. 
 (b) Promptly after receipt by an Indemnified Person under this Section 7.2 of notice of the commencement of any
action, such Indemnified Person will, if a claim in respect thereof is to be made against the Guarantor under this Section 7.2, notify the Guarantor in writing of the commencement thereof; but the failure so to notify the Guarantor
(i) will not relieve the Guarantor from liability under paragraph (a) above unless and to the extent that the Guarantor did not otherwise learn of such action and such failure results in the forfeiture by the Guarantor of substantial
rights and defenses and (ii) will not, in any event, relieve the Guarantor from any obligations to any Indemnified Person other than the indemnification obligation provided in paragraph (a) above. The Guarantor shall be entitled to appoint
counsel of the Guarantor’s choice at the Guarantor’s expense to represent the Indemnified Person in any action for which indemnification is sought (in which case the Guarantor shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the Indemnified Person or Persons except as set forth below); provided, however, that such counsel shall be satisfactory to the Indemnified Person. Notwithstanding the Guarantor’s election to appoint
counsel to represent the Guarantor in an action, the Indemnified Person shall have the right to employ separate counsel (including local counsel), and the Guarantor shall bear the reasonable fees, costs and expenses of such separate counsel if
(i) the use of counsel chosen by the Guarantor to represent the Indemnified Person would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the
Indemnified Person and the Guarantor and the Indemnified Person shall have reasonably concluded that there may be legal defenses available to it and/or other Indemnified Person which are different from or additional to those available to the
Guarantor, (iii) the Guarantor shall not have employed counsel satisfactory to the Indemnified Person to represent the Indemnified Person within a reasonable time after notice of the institution of such action or (iv) the Guarantor shall
authorize the Indemnified Person to employ separate counsel at the expense of the Guarantor. The Guarantor will not, without the prior written consent of the Indemnified Persons, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release of each Indemnified Person from all liability arising out of such claim, action, suit or proceeding. 
 Section 7.3 Compensation, Reimbursement of Expenses 
 The Guarantor agrees: 
 (a) to
pay to the Guarantee Trustee from time to time such compensation for all services rendered by it hereunder as the parties shall agree to from time to time (which compensation shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust); and 
  

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 (b) except as otherwise expressly provided herein, to reimburse the Guarantee Trustee
upon request for all reasonable expenses, disbursements and advances incurred or made by it in accordance with any provision of this Guarantee (including the reasonable compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct. 
 The provisions of this
Section 7.3 shall survive the resignation or removal of the Guarantee Trustee and the termination of this Guarantee. 
 ARTICLE VIII

 MISCELLANEOUS 
 Section 8.1 Successors and Assigns 
 All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Capital Securities then outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer or lease of the Guarantor’s assets to another entity, in each case, to the extent permitted under the Indenture, the Guarantor may not assign its rights or delegate its obligations
under this Guarantee without the prior approval of the Holders of at least a Majority in liquidation amount of the Capital Securities. 
 Section 8.2 Amendments 
 Except with respect to any changes that do not adversely affect the
rights of Holders of the Capital Securities in any material respect (in which case no consent of Holders will be required), this Guarantee may be amended only with the prior approval of the Holders of not less than a Majority in liquidation amount
of the Capital Securities. The provisions of the Declaration with respect to amendments thereof shall apply equally with respect to amendments of the Guarantee. 
 Section 8.3 Notices 
 All notices provided for in this Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows: 
 (a) If given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Holders of the Capital Securities): 
 The Bank of New York 
 101 Barclay Street, Floor 21W 
 New York, NY 10286 
 Attention: Corporate Trust Administration 
 Telecopy: 212-813-5915 
 (b) If given to the 4uarantor, at the Guarantor’s mailing address set forth below (or such other address as the Guarantor may give notice of to the Holders of the Capital Securities and to the Guarantee Trustee):

 National Mercantile Bancorp 
 1840 Century Park East 
 Los Angeles, California 90067 
 Attention: Scott A. Montgomery 
 Telecopy: 310-201-0629 
 (c) If given to any Holder of the Capital Securities, at the address
set forth on the books and records of the Issuer. 
  

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 All such notices shall be deemed to have been given when received in person, telecopied with receipt
confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed
to have been delivered on the date of such refusal or inability to deliver, 
 Section 8.4 Benefit 

This Guarantee is solely for the benefit of the Holders of the Capital Securities and, subject to Section 2.1(a), is not separately transferable
from the Capital Securities. 
 Section 8.5 Governing Law 
 THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF. 
 Section 8.6 Counterparts 
 This Guarantee may contain more than one counterpart of the signature page and this Guarantee may be executed by the affixing of the signature of the
Guarantor and the Guarantee Trustee to any of such counterpart signature pages. All of such counterpart signature pages shall be read as though one, and they shall have the same force and effect as though all of the signers had signed a single
signature page. 
 THIS GUARANTEE is executed as of the day and year first above written. 
  

			
	 NATIONAL MERCANTILE BANCORP,
 as Guarantor

		
	 By:
	 	 /s/    SCOTT. A.
MONTGOMERY        

	Name:	 	Scott A. Montgomery
	Title:	 	President and Chief Executive Officer
	
	 THE BANK OF NEW YORK
 as Guarantee Trustee

		
	 By:
	 	 /s/    MARY LA
GUMINA        

	Name:	 	Mary La Gumina
	Title:	 	Vice President


  

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