NATIONALMERCANTILE BANCORP

asIssuer

 

 

 

INDENTURE

 

Datedas of July 16, 2001

 

 

THEBANK OF NEW YORK

asTrustee

 

JUNIORSUBORDINATED DEBT SECURITIES

 

 

 

 
| ARTICLE  I  DEFINITIONS                                       |
|---------------------------------------------------------------|
| Section 1.01                                                  |   | Definitions |   |
| ARTICLE II  DEBT SECURITIES                                   |
| Section 2.01                                                  |   | Authentication  and Dating |   |
| Section  2.02                                                 |   | Form  of Trustee's Certificate of Authentication |   |
| Section  2.03                                                 |   | Form  and Denomination of Debt Securities |   |
| Section 2.04                                                  |   | Execution of  Debt Securities |   |
| Section  2.05                                                 |   | Exchange  and Registration of Transfer of Debt Securities |   |
| Section  2.06                                                 |   | Mutilated,  Destroyed, Lost or Stolen Debt Securities |   |
| Section 2.07                                                  |   | Temporary Debt  Securities |   |
| Section 2.08                                                  |   | Payment of Interest |   |
| Section  2.09                                                 |   | Cancellation  of Debt Securities Paid, etc |   |
| Section 2.10                                                  |   | Computation of  Interest |   |
| Section  2.11                                                 |   | Extension  of Interest Payment Period |   |
| Section 2.12                                                  |   | CUSIP Numbers |   |
| ARTICLE  III  PARTICULAR COVENANTS OF THE COMPANY             |
| Section  3.01                                                 |   | Payment  of Principal, Premium and Interest; Agreed Treatment of the Debt Securities |   |
| Section  3.02                                                 |   | Offices  for Notices and Payments, etc |   |
| Section  3.03                                                 |   | Appointments  to Fill Vacancies in Trustee's Office |   |
| Section  3.04                                                 |   | Provision  as to Paying Agent |   |
| Section 3.05                                                  |   | Certificate to  Trustee |   |
| Section 3.06                                                  |   | Additional Interest |   |
| Section  3.07                                                 |   | Compliance  with Consolidation Provisions |   |
| Section 3.08                                                  |   | Limitation on  Dividends |   |
| Section 3.09                                                  |   | Covenants as  to the Trust |   |
| ARTICLE  IV  LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE |
| Section 4.01                                                  |   | Securityholders'  Lists |   |
| Section  4.02                                                 |   | Preservation  and Disclosure of Lists |   |

 
| ARTICLE  V  REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS UPON AN EVENT OF  DEFAULT |
|-----------------------------------------------------------------------------------|
| Section 5.01                                                                      |   | Events of Default |   |
| Section  5.02                                                                     |   | Payment  of Debt Securities on Default; Suit Therefor |   |
| Section  5.03                                                                     |   | Application  of Moneys Collected by Trustee |   |
| Section  5.04                                                                     |   | Proceedings  by Securityholders |   |
| Section 5.05                                                                      |   | Proceedings by Trustee |   |
| Section  5.06                                                                     |   | Remedies  Cumulative and Continuing |   |
| Section  5.07                                                                     |   | Direction  of Proceedings and Waiver of Defaults by Majority of Securityholders |   |
| Section 5.08                                                                      |   | Notice of Defaults |   |
| Section 5.09                                                                      |   | Undertaking to  Pay Costs |   |
| ARTICLE VI  CONCERNING THE TRUSTEE                                                |
| Section  6.01                                                                     |   | Duties  and Responsibilities of Trustee |   |
| Section  6.02                                                                     |   | Reliance  on Documents, Opinions, etc |   |
| Section  6.03                                                                     |   | No  Responsibility for Recitals, etc |   |
| Section  6.04                                                                     |   | Trustee,  Authenticating Agent, Paying Agents, Transfer Agents or Registrar May Own  Debt Securities |   |
| Section 6.05                                                                      |   | Moneys to be  Held in Trust |   |
| Section  6.06                                                                     |   | Compensation  and Expenses of Trustee |   |
| Section  6.07                                                                     |   | Officers'  Certificate as Evidence |   |
| Section 6.08                                                                      |   | Eligibility of  Trustee |   |
| Section  6.09                                                                     |   | Resignation  or Removal of Trustee |   |
| Section  6. 10                                                                    |   | Acceptance  by Successor Trustee |   |
| Section 6.11                                                                      |   | Succession by  Merger, etc |   |
| Section 6.12                                                                      |   | Authenticating  Agents |   |
| ARTICLE VII  CONCERNING THE SECURITYHOLDERS                                       |
| Section 7.01                                                                      |   | Action by  Securityholders |   |
| Section  7.02                                                                     |   | Proof  of Execution by Securityholders |   |
| Section  7.03                                                                     |   | Who Are  Deemed Absolute Owners |   |
| Section  7.04                                                                     |   | Debt  Securities Owned by Company Deemed Not Outstanding |   |

 
| Section  7.05                                                  |   | Revocation  of Consents; Future Holders Bound                                |   |
|----------------------------------------------------------------|--------|------------------------------------------------------------------------------|--------|
| ARTICLE VIII  SECURITYHOLDERS' MEETINGS                        |
| Section 8.01                                                   |   | Purposes of  Meetings                                                        |   |
| Section 8.02                                                   |   | Call of  Meetings by Trustee                                                 |   |
| Section  8.03                                                  |   | Call  of Meetings by Company or Securityholders                              |   |
| Section 8.04                                                   |   | Qualifications  for Voting                                                   |   |
| Section 8.05                                                   |   | Regulations                                                                  |   |
| Section  8.06                                                  |   | Voting                                                                       |   |
| Section 8.07                                                   |   | Quorum; Actions                                                              |   |
| ARTICLE IX  SUPPLEMENTAL INDENTURES                            |
| Section  9.01                                                  |   | Supplemental  Indentures without Consent of Securityholders                  |   |
| Section  9.02                                                  |   | Supplemental  Indentures with Consent of Securityholders                     |   |
| Section  9.03                                                  |   | Effect  of Supplemental Indentures                                           |   |
| Section 9.04                                                   |   | Notation on  Debt Securities                                                 |   |
| Section  9.05                                                  |   | Evidence  of Compliance of Supplemental Indenture to be Furnished to Trustee |   |
| ARTICLE X  REDEMPTION OF SECURITIES                            |
| Section 10.01                                                  |   | Optional  Redemption                                                         |   |
| Section 10.02                                                  |   | Special Event  Redemption                                                    |   |
| Section  10.03                                                 |   | Notice  of Redemption; Selection of Debt Securities                          |   |
| Section  10.04                                                 |   | Payment  of Debt Securities Called for Redemption                            |   |
| ARTICLE  XI  CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE |
| Section  11.01                                                 |   | Company  May Consolidate, etc., on Certain Terms                             |   |
| Section  11.02                                                 |   | Successor  Entity to be Substituted                                          |   |
| Section  11.03                                                 |   | Opinion  of Counsel to be Given to Trustee                                   |   |
| ARTICLE  XII  SATISFACTION AND DISCHARGE OF INDENTURE          |
| Section 12.01                                                  |   | Discharge of  Indenture                                                      |   |
| Section  12.02                                                 |   | Deposited  Moneys to be Held in Trust by Trustee                             |   |
| Section  12.03                                                 |   | Paying  Agent to Repay Moneys Held                                           |   |

 
| Section  12.04                                                                 |   | Return of  Unclaimed Moneys                                 |   |
|--------------------------------------------------------------------------------|--------|-------------------------------------------------------------|--------|
| ARTICLE  XIII  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS |
| Section  13.01                                                                 |   | Indenture  and Debt Securities Solely Corporate Obligations |   |
| ARTICLE XIV  MISCELLANEOUS PROVISIONS                                          |
| Section 14.01                                                                  |   | Successors                                                  |   |
| Section  14.02                                                                 |   | Official  Acts by Successor Entity                          |   |
| Section  14.03                                                                 |   | Surrender  of Company Powers                                |   |
| Section  14.04                                                                 |   | Addresses for  Notices, etc                                 |   |
| Section 14.05                                                                  |   | Governing Law                                               |   |
| Section  14.06                                                                 |   | Evidence  of Compliance with Conditions Precedent           |   |
| Section 14.07                                                                  |   | Non–Business  Days                                     |   |
| Section  14.08                                                                 |   | Table  of Contents, Headings, etc                           |   |
| Section 14.09                                                                  |   | Execution in  Counterparts                                  |   |
| Section 14.10                                                                  |   | Separability                                                |   |
| Section 14.11                                                                  |   | Assignment                                                  |   |
| Section 14.12                                                                  |   | Acknowledgment  of Rights                                   |   |
| ARTICLE XV  SUBORDINATION OF DEBT SECURITIES                                   |
| Section 15.01                                                                  |   | Agreement to  Subordinate                                   |   |
| Section  15.02                                                                 |   | Default  on Senior Indebtedness                             |   |
| Section  15.03                                                                 |   | Liquidation;  Dissolution; Bankruptcy                       |   |
| Section 15.04                                                                  |   | Subrogation                                                 |   |
| Section  15.05                                                                 |   | Trustee  to Effectuate Subordination                        |   |
| Section 15.06                                                                  |   | Notice by the  Company                                      |   |
| Section  15.07                                                                 |   | Rights  of the Trustee; Holders of Senior Indebtedness      |   |
| Section  15.08                                                                 |   | Subordination  May Not Be Impaired                          |   |
|                                                                           |   |                                                        |   |
| EXHIBITS                                                                       |   |                                                        |   |
|                                                                           |   |                                                        |   |
| EXHIBIT A                                                                      |   | FORM OF DEBT  SECURITY                                      |   |

 

 

THIS INDENTURE, dated asof July 16, 2001, between National Mercantile Bancorp, a bank holding companyincorporated in California (hereinafter sometimes called the"Company"), and The Bank of New York, as trustee (hereinaftersometimes called the "Trustee").

 

WI T N E S S E T H :

 

WHEREAS, for itslawful corporate purposes, the Company has duly authorized the issuance of its10.25% Junior Subordinated Deferrable Interest Debentures due July 25, 2031(the "Debt Securities") under this Indenture and to provide, amongother things, for the execution and authentication, delivery and administrationthereof, the Company has duly authorized the execution of this Indenture; and

 

WHEREAS, all acts andthings necessary to make this Indenture a valid agreement according to itsterms, have been done and performed;

 

NOW, THEREFORE,This Indenture Witnesseth:

 

In consideration of thepremises, and the purchase of the Debt Securities by the holders thereof, theCompany covenants and agrees with the Trustee for the equal and proportionatebenefit of the respective holders from time to time of the Debt Securities asfollows:

 

ARTICLEI

DEFINITIONS

 

Section 1.01      Definitions.

 

The terms definedin this Section 1.01 (except as herein otherwise expressly provided or unlessthe context otherwise requires) for all purposes of this Indenture and of anyindenture supplemental hereto shall have the respective meanings specified inthis Section 1.01. All accounting terms used herein and not expressly definedshall have the meanings assigned to such terms in accordance with generally acceptedaccounting principles and the term "generally accepted accountingprinciples" means such accounting principles as are generally accepted atthe time of any computation. The words "herein," "hereof"and "hereunder" and other words of similar import refer to thisIndenture as a whole and not to any particular Article, Section or othersubdivision.

 

"AdditionalInterest" shall have the meaning set forth in Section 3.06.

 

"AuthenticatingAgent" means any agent or agents of the Trustee which at the time shall beappointed and acting pursuant to Section 6.12.

 

"BankruptcyLaw" means Title 11, U.S. Code, or any similar federal or state law forthe relief of debtors.

 

"Board ofDirectors" means the board of directors or the executive committee or anyother duly authorized designated officers of the Company.

 

"BoardResolution" means a copy of a resolution certified by the Secretary or anAssistant Secretary of the Company to have been duly adopted by the Board ofDirectors and to be in full force and effect on the date of such certificationand delivered to the Trustee.

 

"Business Day"means any day other than a Saturday, Sunday or any other day on which bankinginstitutions in New York City or Los Angeles, California are permitted orrequired by any applicable law to close.

 

"Capital,Securities" means undivided beneficial interests in the assets of theTrust which rank *pari passu* withCommon Securities issued by the Trust; provided, however, that if anEvent of Default (as defined in the Declaration) has occurred and iscontinuing, the rights of holders of such Common Securities to payment inrespect of distributions and payments upon liquidation, redemption andotherwise are subordinated to the rights of holders of such Capital Securities.

 

"Capital SecuritiesGuarantee" means the guarantee that the Company will enter into with TheBank of New York or other Persons that operates directly or indirectly for thebenefit of holders of Capital Securities of the Trust.

 

"Capital TreatmentEvent" means the receipt by the Company and the Trust of an opinion ofcounsel experienced in such matters to the effect that, as a result of theoccurrence of any amendment to, or change in, the laws, rules or regulations ofthe United States or any political subdivision thereof or therein, or as theresult of any official or administrative pronouncement or action or decisioninterpreting or applying such laws, rules or regulations, which amendment orchange is effective or which pronouncement, action or decision is announced onor after the date of original issuance of the Debt Securities, there is morethan an insubstantial risk that the Company will not, within 90 days of thedate of such opinion, be entitled to treat an amount equal to the aggregateLiquidation Amount of the Capital Securities as "Tier I Capital" (orthe then equivalent thereof) for purposes of the capital adequacy guidelines ofthe Federal Reserve, as then in effect and applicable to the Company; provided,however, that the distribution of Debt Securities in connection with theLiquidation of the Trust by the Company shall not in and of itself constitute aCapital Treatment Event unless such Liquidation shall have occurred inconnection with a Tax Event or an Investment Company Event.

 

"Certificate"means a certificate signed by any one of the principal executive officer, theprincipal financial officer or the principal accounting officer of the Company.

 

"CommonSecurities" means undivided beneficial interests in the assets of theTrust which rank *pari passu* with CapitalSecurities issued by the Trust; provided, however, that if an Event ofDefault (as defined in the Declaration) has occurred and is continuing, therights of holders of such Common Securities to payment in respect ofdistributions and payments upon liquidation, redemption and otherwise aresubordinated to the rights of holders of such Capital Securities.

 

"Company"means National Mercantile Bancorp, a bank holding company incorporated inCalifornia, and, subject to the provisions of Article XI, shall include itssuccessors and assigns.

 

"Comparable TreasuryIssue" means with respect to any Special Redemption Date, the UnitedStates Treasury security selected by the Quotation Agent as having a maturitycomparable to the Remaining Life that would be utilized, at the time ofselection and in accordance with customary financial practice, in pricing newissues of corporate debt securities of comparable maturity to the RemainingLife. If no United States Treasury security has a maturity which is within a periodfrom three months before to three months after July 25, 2006, the two mostclosely corresponding United States Treasury securities shall be used as theComparable Treasury Issue, and the Treasury Rate shall be interpolated orextrapolated on a straight–line basis, rounding to the nearest monthusing such securities.

 

"ComparableTreasury Price" means (a) the average of five Reference Treasury DealerQuotations for such Special Redemption Date, after excluding the highest andlowest such Reference Treasury Dealer Quotations, or (b) if the Trustee obtainsfewer than five such Reference Treasury Dealer Quotations, the average of allsuch Quotations.

 

"DebtSecurity" or "Debt Securities" has the meaning stated in thefirst recital of this Indenture.

 

“Debt SecurityRegister" has the meaning specified in Section 2.05.

 

"Declaration"means the Amended and Restated Declaration of Trust of the Trust, as amended orsupplemented from time to time.

 

"Default"means any event, act or condition that with notice or lapse of time, or both,would constitute an Event of Default.

 

"DefaultedInterest" has the meaning set forth in Section 2.08.

 

"DeferredInterest" has the meaning set forth in Section 2.11.

 

"Event ofDefault" means any event specified in Section 5.01, which has continuedfor the period of time, if any, and after the giving of the notice, if any,therein designated.

 

"ExtensionPeriod" has the meaning set forth in Section 2.11.

 

"FederalReserve" means the Board of Governors of the Federal Reserve System.

 

"Indenture"means this instrument as originally executed or, if amended or supplemented asherein provided, as so amended or supplemented, or both.

 

"InstitutionalTrustee" has the meaning set forth in the Declaration.

 

"Interest PaymentDate" means January 25th and July 25th of each year, commencing on January25, 2002, during the term of this Indenture.

 

"InterestRate" means 10.25% per annum 

 

"Investment CompanyEvent" means the receipt by the Company and the Trust of an opinion ofcounsel experienced in such matters to the effect that, as a result of theoccurrence of a change in law or regulation or written change in interpretationor application of law or regulation by any legislative body, court,governmental agency or regulatory authority, there is more than aninsubstantial risk that the Trust is or, within 90 days of the date of suchopinion will be, considered an "investment company" that is requiredto be registered under the Investment Company Act of 1940, as amended, whichchange or prospective change becomes effective or would become effective, asthe case may be, on or after the date of the original issuance of the DebtSecurities.

 

"LiquidationAmount" means the stated amount of $ 1,000 per Trust Security.

 

"MaturityDate" means July 25, 2031.

 

"Officers'Certificate" means a certificate signed by the Chairman of the Board ofDirectors, the Vice Chairman, the President or any Vice President, and by theChief Financial Officer, the Treasurer, an Assistant Treasurer, theComptroller, an Assistant Comptroller, the Secretary or an Assistant Secretaryof the Company, and delivered to the Trustee. Each such certificate shallinclude the statements provided for in Section 14.06 if and to the extentrequired by the provisions of such Section.

 

"Opinion ofCounsel" means an opinion in writing signed by legal counsel, who may bean employee of or counsel to the Company, or may be other counsel satisfactoryto the Trustee. Each such opinion shall include the statements provided for inSection 14.06 if and to the extent required by the provisions of such Section.

 

The term"outstanding," when used with reference to Debt Securities, subjectto the provisions of Section 7.04, means, as of any particular time, all DebtSecurities authenticated and delivered by the Trustee or the AuthenticatingAgent under this Indenture, except

 

(a) DebtSecurities theretofore canceled by the Trustee or the Authenticating Agent ordelivered to the Trustee for cancellation;

 

(b) DebtSecurities, or portions thereof, for the payment or redemption of which moneysin the necessary amount shall have been deposited in trust with the Trustee orwith any paying agent (other than the Company) or shall have been set aside andsegregated in trust by the Company (if the Company shall act as its own payingagent); provided that, if such Debt Securities, or portions thereof, are to beredeemed prior to maturity thereof, notice of such redemption shall have beengiven as provided in Articles Ten and Fourteen or provision satisfactory to theTrustee shall have been made for giving such notice; and

 

(c) DebtSecurities paid pursuant to Section 2.06 or in lieu of or in substitution forwhich other Debt Securities shall have been authenticated and deliveredpursuant to the terms of Section 2.06 unless proof satisfactory to the Companyand the Trustee is presented that any such Debt Securities are held by bonafide holders in due course.

 

"Person" meansany individual, corporation, limited liability company, partnership, jointventure, association, joint–stock company, trust, unincorporatedorganization or government or any agency or political subdivision thereof.

 

"PredecessorSecurity" of any particular Debt Security means every previous DebtSecurity evidencing all or a portion of the same debt as that evidenced by suchparticular Debt Security; and, for the purposes of this definition, any DebtSecurity authenticated and delivered under Section 2.06 in lieu of a lost,destroyed or stolen Debt Security shall be deemed to evidence the same debt asthe lost, destroyed or stolen Debt Security.

 

"Primary TreasuryDealer" means a primary United States Government securities dealer in NewYork City.

 

"Principal Officeof the Trustee," or other similar term, means the office of the Trustee,at which at any particular time its corporate trust business shall beprincipally administered, which at all times shall be located within the UnitedStates and at the time of the execution of this Indenture shall be 101 BarclayStreet, Floor 21 West, New York, NY 10286.

 

"QuotationAgent" means Salomon Smith Barney Inc. and its successors; provided,however, that if the foregoing shall cease to be a Primary Treasury Dealer,the Company shall substitute therefor another Primary Treasury Dealer.

 

"RedemptionDate" has the meaning set forth in Section 10.01.

 

"RedemptionPrice" means the price set forth in the following table for any RedemptionDate or Special Redemption Date that occurs within the twelve–monthperiod beginning in the relevant date indicated below, expressed in percentageof the principal amount of the Debt Securities being redeemed:

 

| **Year Beginning**       |   | **Percentage** |
|--------------------------|--------|----------------|
| July  25, 2006           |   | 107.6875%      |
| July  25, 2007           |   | 106.1500%      |
| July  25, 2008           |   | 104.6125%      |
| July  25, 2009           |   | 103.0750%      |
| July  25, 2010           |   | 101.5375%      |
| July  25, 2011 and after |   | 100.0000%      |

 

 

plus accrued and unpaidinterest on such Debt Securities to the Redemption Date or, in the case of aredemption due to the occurrence of a Special Event, to the Special RedemptionDate.

 

"Reference TreasuryDealer" means (i) the Quotation Agent and (ii) any other Primary TreasuryDealer selected by the Trustee after consultation with the Company.

 

"Reference TreasuryDealer Quotations" means, with respect to each Reference Treasury Dealerand any Special Redemption Date, the average, as determined by the QuotationAgent, of the bid and asked prices forthe Comparable Treasury Issue (expressed in each case as a percentage ofits principal amount) quoted in writing to the Trustee by such ReferenceTreasury Dealer at 5:00 p.m., New York City time, on the third Business Daypreceding such Special Redemption Date.

 

"RemainingLife" means, with respect to any Debt Security, the period from theSpecial Redemption Date for such Debt Security to July 25, 2006.

 

"ResponsibleOfficer" means, with respect to the Trustee, any officer within thePrincipal Office of the Trustee, including any vice–president, anyassistant vice–president, any secretary, any assistant secretary, thetreasurer, any assistant treasurer, any trust officer or other officer of the PrincipalTrust Office of the Trustee customarily performing functions similar to thoseperformed by any of the above designated officers and also means, with respectto a particular corporate trust matter, any other officer to whom such matteris referred because of that officer's knowledge of and familiarity with theparticular subject.

 

"Securityholder,""holder of Debt Securities" or other similar terms, means any Personin whose name at the time a particular Debt Security is registered on the DebtSecurity Register.

 

"SeniorIndebtedness" means, with respect to the Company, (i) the principal,premium, if any, and interest in respect of (A) indebtedness of the Company formoney borrowed and (B) indebtedness evidenced by securities, debentures, notes,bonds or other similar instruments issued by the Company; (ii) all capitallease obligations of the Company; (iii) all obligations of the Company issuedor assumed as the deferred purchase price of property, all conditional saleobligations of the Company and all obligations of the Company under any titleretention agreement (but excluding trade accounts payable arising in theordinary course of business); (iv) all obligations of the Company for thereimbursement of any letter of credit, any banker's acceptance, any securitypurchase facility, any repurchase agreement or similar arrangement, anyinterest rate swap, any other hedging arrangement, any obligation under optionsor any similar credit or other transaction; (v) all obligations of the typereferred to in clauses (i) through (iv) above of other Persons for the paymentof which the Company is responsible or liable as obligor, guarantor orotherwise; and (vi) all obligations of the type referred to in clauses (i)through (v) above of other Persons secured by any lien on any property or assetof the Company (whether or not such obligation is assumed by the Company),whether incurred on or prior to the date of this Indenture or thereafterincurred, unless, with the prior approval of the Federal Reserve if nototherwise generally approved, in the instrument creating or evidencing the sameor pursuant to which the same is outstanding, it is provided that suchobligations are not superior or are *paripassu* in right of payment to the Debt Securities.

 

"Special Event"means any of a Tax Event, an Investment Company Event or a Capital TreatmentEvent.

 

"Special RedemptionDate" has the meaning set forth in 10.02.

 

"Special RedemptionPrice" means (1) if the Special Redemption Date is before July 25, 2006,the greater of (a) 100% of the principal amount of the Debt Securities beingredeemed pursuant to Section 10.02 or (b) as determined by a Quotation Agent,the sum of the present values of the principal amount and the premium payableas part of the Redemption Price with respect to a redemption as of July 25,2006 together with the present value of scheduled payments of interest over theRemaining Life of such Debt Securities, discounted to the Special RedemptionDate on a semi–annual basis (assuming a 360–day year consisting oftwelve 30–day months) at the Treasury Rate plus 0.50%, plus, in the caseof either (a) or (b), accrued and unpaid interest on such Debt Securities tothe Special Redemption Date and (2) if the Special Redemption Date is on orafter July 25, 2006, the Redemption Price for such Special Redemption Date.

 

"Subsidiary"means, with respect to any Person, (i) any corporation at least a majority ofthe outstanding voting stock of which is owned, directly or indirectly, by suchPerson or by one or more of its Subsidiaries, or by such Person and one or moreof its Subsidiaries, (ii) any general partnership, joint venture or similarentity, at least a majority of the outstanding partnership or similar interestsof which shall at the time be owned by such Person, or by one or more of itsSubsidiaries, or by such Person and one or more of its Subsidiaries, and (iii)any limited partnership of which such Person or any of its Subsidiaries is ageneral partner. For the purposes of this definition, "voting stock"means shares, interests, participations or other equivalents in the equityinterest (however designated) in such Person having ordinary voting power forthe election of a majority of the directors (or the equivalent) of such Person,other than shares, interests, participations or other equivalents having suchpower only by reason of the occurrence of a contingency.

 

"Tax Event"means the receipt by the Company and the Trust of an opinion of counselexperienced in such matters to the effect that, as a result of any amendment toor change (including any announced prospective change) in the laws or anyregulations thereunder of the United States or any political subdivision ortaxing authority thereof or therein, or as a result of any officialadministrative pronouncement (including any private letter ruling, technicaladvice memorandum, regulatory procedure, notice or announcement (an"Administrative Action")) or judicial decision interpreting orapplying such laws or regulations, regardless of whether such AdministrativeAction or judicial decision is issued to or in connection with a proceedinginvolving the Company or the Trust and whether or not subject to review orappeal, which amendment, clarification, change, Administrative Action ordecision is enacted, promulgated or announced, in each case on or after thedate of original issuance of the Debt Securities, there is more than aninsubstantial risk that: (i) the Trust is, or will be within 90 days of thedate of such opinion, subject to United States federal income tax with respectto income received or accrued on the Debt Securities; (ii) interest payable bythe Company on the Debt Securities is not, or within 90 days of the date ofsuch opinion, will not be, deductible by the Company, in whole or in part, forUnited States federal income tax purposes; or (iii) the Trust is, or will bewithin 90 days of the date of such opinion, subject to more than a de minimisamount of other taxes, duties, assessments or other governmental charges.

 

"TreasuryRate" means (i) the yield, under the heading which represents the averagefor the week immediately prior to the date of calculation, appearing in themost recently published statistical release designated H.15 (519) or anysuccessor publication which is published weekly by the Federal Reserve andwhich establishes yields on actively traded United States Treasury securitiesadjusted to constant maturity under the caption "Treasury ConstantMaturities," for the maturity corresponding to the Remaining Life (if nomaturity is within three months before or after the Remaining Life, yields forthe two published maturities most closely corresponding to the Remaining Lifeshall be determined and the Treasury Rate shall be interpolated or extrapolatedfrom such yields on a straight–line basis, rounding to the nearest month)or (ii) if such release (or any successor release) is not published during theweek preceding the calculation date or does not contain such yields, the rateper annum equal to the semi–annual equivalent yield to maturity of theComparable Treasury Issue, calculated using a price for the Comparable TreasuryIssue (expressed as a percentage of its principal amount) equal to theComparable Treasury Price for such Special Redemption Date. The Treasury Rateshall be calculated on the third Business Day preceding the Special RedemptionDate.

 

"Trust" meansNational Mercantile Capital Trust 1, the Delaware business trust, or any othersimilar trust created for the purpose of issuing Capital Securities inconnection with the issuance of Debt Securities under this Indenture, of whichthe Company is the sponsor.

 

"Trust IndentureAct" means the Trust Indenture Act of 1939, as amended.

 

"TrustSecurities" means Common Securities and Capital Securities of NationalMercantile Capital Trust 1.

 

"Trustee"means the Person identified as "Trustee" in the first paragraphhereof, and, subject to the provisions of Article VI hereof, shall also includeits successors and assigns as Trustee hereunder.

 

"UnitedStates" means the United States of America and the District of Columbia.

 

"U.S. Person"has the meaning given to United States Person as set forth in Section 7701(a)(30) of the Internal Revenue Code of 1986, as amended.

 

ARTICLEII

DEBTSECURITIES

 

Section 2.01         Authentication and Dating.

 

Upon the execution anddelivery of this Indenture, or from time to time thereafter, Debt Securities inan aggregate principal amount not in excess of $15,464,000 may be executed anddelivered by the Company to the Trustee for authentication, and the Trusteeshall thereupon authenticate and make available for delivery said DebtSecurities to or upon the written order of the Company, signed by its Chairmanof the Board of Directors, Vice Chairman, President, Chief Financial Officer orone of its Vice Presidents and by its Secretary, any Assistant Secretary,Treasurer or any Assistant Treasurer, without any further action by the Companyhereunder. In authenticating such Debt Securities, and accepting the additionalresponsibilities under this Indenture in relation to such Debt Securities, theTrustee shall be entitled to receive, and (subject to Section 6.01) shall befully protected in relying upon:

 

(a)           a copy of any Board Resolution orBoard Resolutions relating thereto and, if applicable, an appropriate record ofany action taken pursuant to such resolution, in each case certified by theSecretary or an Assistant Secretary of the Company as the case may be; and

 

(b)           an Opinion of Counsel prepared inaccordance with Section 14.06 which shall also state:

 

(1)           that such Debt Securities, whenauthenticated and delivered by the Trustee and issued by the Company in eachcase in the manner and subject to any conditions specified in such Opinion ofCounsel, will constitute valid and legally binding obligations of the Company;and

 

(2)           that all laws and requirements inrespect of the execution and delivery by the Company of the Debt Securities,have been complied with and that authentication and delivery of the DebtSecurities by the Trustee will not violate the terms of this Indenture.

 

The Trustee shall havethe right to decline to authenticate and deliver any Debt Securities under thisSection if the Trustee, being advised by counsel, determines that such actionmay not lawfully be taken or if a Responsible Officer of the Trustee in goodfaith shall determine that such action would expose the Trustee to personalliability to existing holders.

 

The definitive DebtSecurities shall be typed, printed, lithographed or engraved on steel engravedborders or may be produced in any other manner, all as determined by theofficers executing such Debt Securities, as evidenced by their execution ofsuch Debt Securities.

 

Section 2.02         Form of Trustee's Certificate ofAuthentication.

 

The Trustee'scertificate of authentication on all Debt Securities shall be in substantiallythe following form:

 

This is one of the DebtSecurities referred to in the within–mentioned Indenture.

 

                                                                 , AS TRUSTEE

 

By                                             

       Authorized Officer

 

Section 2.03         Form and Denomination of DebtSecurities.

 

The Debt Securitiesshall be substantially in the form of Exhibit A hereto. The Debt. Securitiesshall be in registered, certificated form without coupons and in minimumdenominations of $100,000 and any multiple of $1,000 in excess thereof. TheDebt Securities shall be numbered, lettered, or otherwise distinguished in suchmanner or in accordance with' such plans as the officers executing the same maydetermine with the approval of the Trustee as evidenced by the execution andauthentication thereof.

 

Section 2.04         Execution of Debt Securities.

 

The Debt Securitiesshall be signed in the name and on behalf of the Company by the manual orfacsimile signature of its Chairman of the Board of Directors, Vice Chairman,President, Chief Financial Officer, Executive Vice President, Senior VicePresident or Vice President, under its corporate seal which may be affixedthereto or printed, engraved or otherwise reproduced thereon, by facsimile orotherwise, and which need not be attested. Only such Debt Securities as shallbear thereon a certificate of authentication substantially in the form hereinbefore recited, executed by the Trustee or the Authenticating Agent by themanual signature of an authorized officer, shall be entitled to the benefits ofthis Indenture or be valid or obligatory for any purpose. Such certificate bythe Trustee or the Authenticating Agent upon any Debt Security executed by the Companyshall be conclusive evidence that the Debt Security so authenticated has beenduly authenticated and delivered hereunder and that the holder is entitled tothe benefits of this Indenture.

 

In case any officer ofthe Company who shall have signed any of the Debt Securities shall cease to besuch officer before the Debt Securities so signed shall have been authenticatedand delivered by the Trustee or the Authenticating Agent, or disposed of by theCompany, such Debt Securities nevertheless may be authenticated and deliveredor disposed of as though the Person who signed such Debt Securities had notceased to be such officer of the Company; and any Debt Security may be signedon behalf of the Company by such Persons as, at the actual date of the executionof such Debt Security, shall be the proper officers of the Company, although atthe date of the execution of this Indenture any such person was not such an–officer.

 

Every Debt Securityshall be dated the date of its authentication.

 

Section 2.05         Exchange and Registration ofTransfer of Debt Securities,

 

The Company shall causeto be kept, at the office or agency maintained for the purpose of registrationof transfer and for exchange as provided in Section 3.02, a register (the"Debt Security Register") for the Debt Securities issued hereunder inwhich, subject to such reasonable regulations as it may prescribe, the Companyshall provide for the registration and transfer of all Debt Securities as inthis Article Two provided. Such register shall be in written form or in anyother form capable of being converted into written form within a reasonabletime.

 

Debt Securities to beexchanged may be surrendered at the Principal Office of the Trustee or at anyoffice or agency to be maintained by the Company for such purpose as providedin Section 3.02, and the Company shall execute, the Company or the Trusteeshall register and the Trustee or the Authenticating Agent shall authenticateand make available for delivery in exchange therefor the Debt Security or Debt Securitieswhich the Securityholder making the exchange shall be entitled to receive. Upondue presentment for registration of transfer of any Debt Security at theprincipal corporate trust office of the Trustee or at any office or agency ofthe Company maintained for such purpose as provided in Section 3.02, theCompany shall execute, the Company or the Trustee shall register and theTrustee or the Authenticating Agent shall authenticate and make available fordelivery in the name of the transferee or transferees a new Debt Security for alike aggregate principal amount. Registration or registration of transfer ofany Debt Security by the Trustee or by any agent of the Company appointedpursuant to Section 3.02, and delivery of such Debt Security, shall be deemedto complete the registration or registration of transfer of such Debt Security.

 

All Debt Securitiespresented for registration of transfer or for exchange or payment shall (if sorequired by the Company or the Trustee or the Authenticating Agent) be dulyendorsed by, or be accompanied by a written instrument or instruments oftransfer in form satisfactory to the Company and either the Trustee or theAuthenticating Agent duly executed by, the holder or his attorney dulyauthorized in writing.

 

No service charge shallbe made for any exchange or registration of transfer of Debt Securities, butthe Company or the Trustee may require payment of a sum sufficient to cover anytax, fee or other governmental charge that may be imposed in connection therewith.

 

The Company or theTrustee shall not be required to exchange or register a transfer of any DebtSecurity for a period of 15 days next preceding the date of selection of DebtSecurities for redemption.

 

Notwithstanding theforegoing, Debt Securities may not be transferred except in compliance with therestricted securities legend set forth below (the "Restrictive SecuritiesLegend"), unless otherwise determined by the Company in accordance withapplicable law:

 

THISSECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHERAPPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST ORPARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION ORUNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITSACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITYONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASESFOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TOWHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,(C) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH(a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRINGTHE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITEDINVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER ORSALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR(D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTSOF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER,SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF ANOPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO ITIN ACCORDANCE WITH THE INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THECOMPANY. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THEFOREGOING RESTRICTIONS.

 

THE HOLDER OF THIS SECURITYBY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT ANEMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENTSUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, ASAMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF1986, AS AMENDED (THE "CODE"), (EACH A "PLAN"), OR ANENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANYPLAN'S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING "PLAN ASSETS"OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN, UNLESSSUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDERU.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96–23, 95–60,91–38, 90–1 OR 84–14 OR ANOTHER APPLICABLE EXEMPTION OR ITSPURCHASE AND HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISAOR SECTION 4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANYPURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TOHAVE REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOTAN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLANTO WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSONACTING ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON ORENTITY USING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCHPURCHASE, OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTIONUNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NOAPPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

 

IN CONNECTION WITH ANYTRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCHCERTIFICATE AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TOCONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

THIS SECURITY WILL BEISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOTLESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTEDTRANSFER OF THIS SECURITY IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN$100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCHPURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FORANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ONTHIS SECURITY, AND SUCH PURPORTED, TRANSFEREE SHALL BE DEEMED TO HAVE NOINTEREST WHATSOEVER IN THIS SECURITY.

 

THISOBLIGATION IS NOT A DEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANYAGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCECORPORATION (THE "FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORS AND THE CLAIMS OF GENERAL AND SECUREDCREDITORS OF THE COMPANY, IS INELIGIBLE AS COLLATERAL FOR A LOAN BY THE COMPANYAND IS NOT SECURED.

 

Section 2.06         Mutilated, Destroyed, Lost or StolenDebt Securities.

 

In case any DebtSecurity shall become mutilated or be destroyed, lost or stolen, the Companyshall execute, and upon its written request the Trustee shall authenticate anddeliver, a new Debt Security bearing a number not contemporaneouslyoutstanding, in exchange and substitution for the mutilated Debt Security, orin lieu of and in substitution for the Debt Security so destroyed, lost orstolen. In every case the applicant for a substituted Debt Security shallfurnish to the Company and the Trustee such security or indemnity as may berequired by them to save each of them harmless, and, in every case ofdestruction, loss or theft, the applicant shall also furnish to the Company andthe Trustee evidence to their satisfaction of the destruction, loss or theft ofsuch Debt Security and of the ownership thereof.

 

The Trustee mayauthenticate any such substituted Debt Security and deliver the same upon thewritten request or authorization of any officer of the Company. Upon theissuance of any substituted Debt Security, the Company may require the paymentof a sum sufficient to cover any tax or other governmental charge that may beimposed in relation thereto and any other expenses connected therewith. In caseany Debt Security which has matured or is about to mature or has been calledfor redemption in full shall become mutilated or be destroyed, lost or stolen,the Company may, instead of issuing a substitute Debt Security, pay orauthorize the payment of the same (without surrender thereof except in the caseof a mutilated Debt Security) if the applicant for such payment shall furnishto the Company and the Trustee such security or indemnity as may be required bythem to save each of them harmless and, in case of destruction, loss or theft,evidence satisfactory to the Company and to the Trustee of the destruction,loss or theft of such Security and of the ownership thereof.

 

Every substituted DebtSecurity issued pursuant to the provisions of this Section 2.06 by virtue ofthe fact that any such Debt Security is destroyed, lost or stolen shallconstitute an additional contractual obligation of the Company, whether or notthe destroyed, lost or stolen Debt Security shall be found at any time, andshall be entitled to all the benefits of this Indenture equally andproportionately with any and all other Debt Securities duly issued hereunder.All Debt Securities shall be held and owned upon the express condition that, tothe extent permitted by applicable law, the foregoing provisions are exclusivewith respect to the replacement or payment of mutilated, destroyed, lost orstolen Debt Securities and shall preclude any and all other  rights or remedies notwithstanding any lawor statute existing or hereafter enacted to the contrary with respect to thereplacement or payment of negotiable instruments or other securities withouttheir surrender.

 

Section 2.07         Temporary Debt Securities.

 

Pending the preparationof definitive Debt Securities, the Company may execute and the Trustee shallauthenticate and make available for delivery temporary Debt Securities that aretyped, printed or lithographed. Temporary Debt Securities shall be issuable inany authorized denomination, and substantially in the form of the definitiveDebt Securities but with such omissions, insertions and variations as may be appropriate for temporary DebtSecurities, all as may be determined by the Company. Every suchtemporary Debt Security shall be executed by the Company and be authenticatedby the Trustee upon the same conditions and in substantially the same manner,and with the same effect, as the definitive Debt Securities. Withoutunreasonable delay the Company will execute and deliver to the Trustee or theAuthenticating Agent definitive Debt Securities and thereupon any or alltemporary Debt Securities may be surrendered in exchange therefor, at theprincipal corporate trust office of the Trustee or at any office or agencymaintained by the Company for such purpose as provided in Section 3.02, and theTrustee or the Authenticating Agent shall authenticate and make available fordelivery in exchange for such temporary Debt Securities a like aggregateprincipal amount of such definitive Debt Securities. Such exchange shall bemade by the Company at its own expense and without any charge therefor exceptthat in case of any such exchange involving a registration of transfer theCompany may require payment of a sum sufficient to cover any tax, fee or othergovernmental charge that may be imposed in relation thereto. Until soexchanged, the temporary Debt Securities shall in all respects be entitled tothe same benefits under this Indenture as definitive Debt Securitiesauthenticated and delivered hereunder.

 

Section 2.08         Payment of Interest.

 

Each Debt Security willbear interest at the Interest Rate from and including the original date ofissuance of such Debt Security until the Maturity Date on the principalthereof, on any overdue principal and (to the extent that payment of suchinterest is enforceable under applicable law) on Deferred Interest on anyoverdue installment of interest (including Defaulted Interest), payable(subject to the provisions of Article XII) on each Interest Payment Datecommencing on January 25, 2002. Interest and any Deferred Interest on any DebtSecurity that is payable, and is punctually paid or duly provided for, on anyInterest Payment Date shall be paid to the Person in whose name said DebtSecurity (or one or more Predecessor Securities) is registered at the close ofbusiness on the regular record date for such interest installment, except thatinterest and any Deferred Interest payable on the Maturity Date shall be paidto the Person to whom principal is paid. In the event that any Debt Security orportion thereof is called for redemption and the redemption date is subsequentto a regular record date with respect to any Interest Payment Date and prior tosuch Interest Payment Date, interest on such Debt Security will be paid uponpresentation and surrender of such Debt Security.

 

Anyinterest on any Debt Security, other than Deferred Interest, that is payable,but is not punctually paid or duly provided for, on any Interest Payment Date(herein called "Defaulted Interest") shall forthwith cease to bepayable to the registered holder on the relevant regular record date by virtueof having been such holder, and such Defaulted Interest shall be paid by theCompany to the Persons in whose names such Debt Securities (or their respectivePredecessor Securities) are registered at the close of business on a specialrecord date for the payment of such Defaulted Interest, which shall be fixed inthe following manner: the Company shall notify the Trustee in writing of theamount of Defaulted Interest proposed to be paid on each such Debt Security andthe date of the proposed payment, and at the same time the Company shalldeposit with the Trustee an amount of money equal to the aggregate amountproposed to be paid in respect of such Defaulted Interest or shall makearrangements satisfactory to the Trustee for such deposit prior to the date ofthe proposed payment, such money when deposited to be held in trust for thebenefit of the Persons entitled to such Defaulted Interest as in this clauseprovided. Thereupon the Trustee shall fix a special record date for the paymentof such Defaulted Interest which shall not be more than fifteen nor less thanten days prior to the date of the proposed payment and not less than ten daysafter the receipt by the Trustee of the notice of the proposed payment. TheTrustee shall promptly notify the Company of such special record date and, inthe name and at the expense of the Company, shall cause notice of the proposedpayment of such Defaulted Interest and the special record date therefor to bemailed, first class postage prepaid, to each Securityholder at his or heraddress as it appears in the Debt Security Register, not less than ten daysprior to such special record date. Notice of the proposed payment of suchDefaulted Interest and the special record date therefor having been mailed asaforesaid, such Defaulted Interest shall be paid to the Persons in whose namessuch Debt Securities (or their respective Predecessor Securities) areregistered on such special record date and thereafter the Company shall have nofurther payment obligation in respect of the Defaulted Interest.

 

Any interest scheduledto become payable on an Interest Payment Date occurring during an ExtensionPeriod shall not be Defaulted Interest and shall be payable on such other dateas may be specified in the terms of such Debt Securities.

 

The term "regularrecord date" as used in this Section shall mean the tenth day of the monthin which an Interest Payment shall occur, whether or not such date is aBusiness Day.

 

Subject to the foregoingprovisions of this Section, each Debt Security delivered under this Indentureupon registration of transfer of or in exchange for or in lieu of any otherDebt Security shall carry the rights to interest accrued and unpaid, and toaccrue, that were carried by such other Debt Security.

 

Section 2.09         Cancellation of Debt SecuritiesPaid, etc.

 

All Debt Securitiessurrendered for the purpose of payment, redemption, exchange or registration oftransfer, shall, if surrendered to the Company or any paying agent, besurrendered to the Trustee and promptly canceled by it, or, if surrendered tothe Trustee or any Authenticating Agent, shall be promptly canceled by it, andno Debt Securities shall be issued in lieu thereof except as expresslypermitted by any of the provisions of this Indenture. All Debt Securitiescanceled by any Authenticating Agent shall be delivered to the Trustee. TheTrustee shall destroy all canceled Debt Securities unless the Company otherwisedirects the Trustee in writing. If the Company shall acquire any of the DebtSecurities, however, such acquisition shall not operate as a redemption orsatisfaction of the indebtedness represented by such Debt Securities unless anduntil the same are surrendered to the Trustee for cancellation.

 

Section 2.10         Computation of Interest.

 

Theamount of interest payable for any period will be computed on the basis of a360–day year of twelve 30–day months.

 

Section 2.11         Extension of Interest PaymentPeriod.

 

Solong as no Event of Default has occurred and is continuing, the Company shallhave the right, from time to time and without causing an Event of Default, todefer payments of interest on the Debt Securities by extending the interestpayment period on the Debt Securities at any time and from time to time duringthe term of the Debt Securities, for up to ten consecutive semi–annualperiods (each such extended interest payment period, an "ExtensionPeriod"), during which Extension Period no interest shall be due andpayable (except any Additional Interest that may be due and payable). NoExtension Period may end on a date other than an Interest Payment Date. Duringany Extension Period, interest will continue to accrue on the Debt Securitiesand interest on such accrued interest (such accrued interest and interestthereon referred to herein as "Deferred Interest") will accrue at theInterest Rate, compounded semi-annually from the date such Deferred Interestwould have been payable were it not for the Extension Period, both to theextent permitted by law. No interest or Deferred Interest shall be due andpayable during an Extension Period, except at the end thereof, but eachinstallment of interest that would otherwise have been due and payable duringsuch Extension Period shall bear Deferred Interest. At the end of any suchExtension Period the Company shall pay all Deferred Interest then accrued andunpaid on the Debt Securities; provided, however that no ExtensionPeriod may extend beyond the Maturity Date; and provided further, however,that during any such Extension Period, the Company shall be subject to therestrictions set forth in Section 3.08 of this Indenture. Prior to thetermination of any Extension Period, the Company may further extend suchperiod, provided that such period together with all such previous and furtherconsecutive extensions thereof shall not exceed ten consecutive semi–annualperiods, or extend beyond the Maturity Date. Upon the termination of anyExtension Period and upon the payment of all Deferred Interest, the Company maycommence a new Extension Period, subject to the foregoing requirements. TheCompany must give the Trustee notice of its election to begin such ExtensionPeriod at least one Business Day prior to the earlier of (i) the nextsucceeding date on which interest on the Debt Securities would have beenpayable except for the election to begin such Extension Period or (ii) the datesuch interest is payable, but in any event not later than the related regularrecord date. The Trustee shall give notice of the Company's election to begin anew Extension Period to the Securityholders.

 

Section 2.12         CUSIP Numbers.

 

TheCompany in issuing the Debt Securities may use "CUSIP" numbers (ifthen generally in use), and, if so, the Trustee shall use "CUSIP"numbers in notices of redemption as a convenience to Securityholders; providedthat any such notice may state that no representation is made as to thecorrectness of such numbers either as printed on the Debt Securities or ascontained in any notice of a redemption and that reliance may be placed only onthe other identification numbers printed on the Debt Securities, and any suchredemption shall not be affected by any defect in or omission of such numbers.The Company will promptly notify the Trustee in writing of any change in theCUSIP numbers.

 

ARTICLEIII

PARTICULARCOVENANTS OF THE COMPANY

 

Section 3.01         Payment of Principal, Premium andInterest, Agreed Treatment of the Debt Securities.

 

(a) TheCompany covenants and agrees that it will duly and punctually pay or cause tobe paid the principal of and premium, if any, and interest on the DebtSecurities at the place, at the respective times and in the manner provided inthis Indenture and the Debt Securities. At the option of the Company, eachinstallment of interest on the Debt Securities may be paid (i) by mailingchecks for such interest payable to the order of the holders of Debt Securitiesentitled thereto as they appear on the Debt Security Register or (ii) by wiretransfer to any account with a banking institution located in the United Statesdesignated by such Person to the paying agent no later than the related recorddate.

 

(b) TheCompany will treat the Debt Securities as indebtedness, and the amounts payablein respect of the principal amount of such Debt Securities as interest, for allU.S. federal income tax purposes. All payments in respect of such DebtSecurities will be made free and clear of U.S. withholding tax to anybeneficial owner thereof that has provided an Internal Revenue Service Form W8BEN (or any substitute or successor form) establishing its non–US statusfor U.S. federal income tax purposes.

 

(c) Asof the date of this Indenture, the Company has no intention to exercise itsright under Section 2.11 to defer payments of interest on the Debt Securitiesby commencing an Extension Period.

 

(d) Asof the date of this Indenture, the Company believes that the likelihood that itwould exercise its right under Section 2.11 to defer payments of interest onthe Debt Securities by commencing an Extension Period at any time during whichthe Debt Securities are outstanding is remote because of the restrictions thatwould be imposed on the Company's ability to declare or pay dividends ordistributions on, or to redeem, purchase or make a liquidation payment withrespect to, any of its outstanding equity and on the Company's ability to makeany payments of principal of or interest on, or repurchase or redeem, any ofits debt securities that rank *pari passu*in all respects with (or junior in interest to) the Debt Securities.

 

Section 3.02         Offices for Notices and Payments,etc.

 

So long as any of theDebt Securities remain outstanding, the Company will maintain in Los Angeles,California, an office or agency where the Debt Securities may be presented forpayment, an office or agency where the Debt Securities may be presented forregistration of transfer and for exchange as in this Indenture provided and anoffice or agency where notices and demands to or upon the Company in respect ofthe Debt Securities or of this Indenture may be served. The Company will giveto the Trustee written notice of the location of any such office or agency andof any change of location thereof. Until otherwise designated from time to timeby the Company in a notice to the Trustee, or specified as contemplated by Section2.05, such office or agency for all of the above purposes shall be the officeor agency of the Trustee. In case the Company shall fail to maintain any suchoffice or agency in Los Angeles, California, or shall fail to give such noticeof the location or of any change in the location thereof, presentations anddemands may be made and notices may be served at the principal corporate trustoffice of the Trustee.

 

In addition to any suchoffice or agency, the Company may from time to time designate one or moreoffices or agencies outside Los Angeles, California, where the Debt Securitiesmay be presented for registration of transfer and for exchange in the mannerprovided in this Indenture, and the Company may from time to time rescind suchdesignation, as the Company may deem desirable or expedient; provided,however, that no such designation or rescission shall in any manner relievethe Company of its obligation to maintain any such office or agency in LosAngeles, California, for the purposes above mentioned. The Company will give tothe Trustee prompt written notice of any such designation or rescissionthereof.

 

Section 3.03         Appointments to Fill Vacancies inTrustee's Office.

 

The Company, whenevernecessary to avoid or fill a vacancy in the office of Trustee, will appoint, inthe manner provided in Section 6.09, a Trustee, so that there shall at alltimes be a Trustee hereunder.

 

Section 3.04         Provision as to Paying Agent.

 

(a)If the Company shall appoint a paying agent other than the Trustee, it willcause such paying agent to execute and deliver to the Trustee an instrument inwhich such agent shall agree with the Trustee, subject to the provision of thisSection 3.04,

 

(1)  that it will hold all sums held by it as suchagent for the payment of the principal of and premium, if any, or interest, ifany, on the Debt Securities (whether such sums have been paid to it by theCompany or by any other obligor on the Debt Securities) in trust for thebenefit of the holders of the Debt Securities;

 

(2)  that it will give the Trustee prompt writtennotice of any failure by the Company (or by any other obligor on the DebtSecurities) to make any payment of the principal of and premium, if any, orinterest, if any, on the Debt Securities when the same shall be due andpayable; and

 

(3)  that it will, at any time during thecontinuance of any Event of Default, upon the written request of the Trustee,forthwith pay to the Trustee all sums so held in trust by such paying agent.

 

(b) Ifthe Company shall act as its own payingagent, it will, on or before each due date of the principal of andpremium, if any, or interest, if any, on the Debt Securities, set aside,segregate and hold in trust for the benefit of the holders of the DebtSecurities a sum sufficient to pay such principal, premium or interest sobecoming due and will notify the Trustee in writing of any failure to take suchaction and of any failure by the Company (or by any other obligor under the DebtSecurities) to make any payment of the principal of and premium, if any, orinterest, if any, on the Debt Securities when the same shall become due andpayable.

 

Whenever the Companyshall have one or more paying agents for the Debt Securities, it will, on orprior to each due date of the principal of and premium, if any, or interest, ifany, on the Debt Securities, depositwith a paying agent a sum sufficient to pay the principal, premium or interestso becoming due, such sum to be held in trust for the benefit of thePersons entitled thereto and (unless such paying agent is the Trustee) theCompany shall promptly notify the Trustee in writing of its action or failureto act.

 

(c)  Anything in this Section 3.04 to the contrarynotwithstanding, the Company may, at any time, for the purpose of obtaining asatisfaction and discharge with respect to the Debt Securities, or for anyother reason, pay, or direct any paying agent to pay to the Trustee all sumsheld in trust by the Company or any such paying agent, such sums to be held bythe Trustee upon the same terms and conditions herein contained.

 

(d) Anythingin this Section 3.04 to the contrary notwithstanding, the agreement to holdsums in trust as provided in this Section 3.04 is subject to Sections 12.03 and12.04.

 

Section 3.05         Certificate to Trustee.

 

The Company will deliverto the Trustee on or before 120 days after the end of each fiscal year, so longas Debt Securities are outstanding hereunder, a Certificate stating that in thecourse of the performance by the signers of their duties as officers of theCompany they would normally have knowledge of any default by the Company in theperformance of any covenants contained herein, stating whether or not they haveknowledge of any such default and, if so, specifying each such default of whichthe signers have knowledge and the nature thereof.

 

Section 3.06         Additional Interest.

 

If and for so long asthe Trust is the holder of all Debt Securities and is required to pay anyadditional taxes, duties, assessments or other governmental charges as a resultof a Tax Event, the Company will pay such additional amounts (the"Additional Interest") on the Debt Securities as shall be required sothat the net amounts received and retained by the Trust after paying taxes,duties, assessments or other governmental charges will be equal to the amountsthe Trust would have received if no such taxes, duties, assessments or othergovernmental charges had been imposed. Whenever in this Indenture or the DebtSecurities there is a reference in any context to the payment of principal ofor interest on the Debt Securities, such mention shall be deemed to includemention of payments of the Additional Interest provided for in this paragraphto the extent that, in such context, Additional Interest is, was or would bepayable in respect thereof pursuant to the provisions of this paragraph andexpress mention of the payment of Additional Interest (if applicable) in anyprovisions hereof shall not be construed as excluding, Additional Interest inthose provisions hereof where such express mention is not made, provided,however, that the deferral of the payment of interest during an ExtensionPeriod pursuant to Section 2.11 shall not defer the payment of any AdditionalInterest that may be due and payable.

 

Section 3.07         Compliance with ConsolidationProvisions.

 

TheCompany will not, while any of the Debt Securities remain outstanding,consolidate with, or merge into, or merge into itself, or sell or convey all orsubstantially all of its property to any other Person unless the provisions ofArticle XI hereof are complied with.

 

Section 3.08         Limitation on Dividends.

 

IfDebt Securities are initially issued to the Trust or a trustee of such trust inconnection with the issuance of Trust Securities by the Trust (regardless ofwhether Debt Securities continue to be held by such trust) and (i) there shallhave occurred and be continuing an Event of Default, (ii) the Company shall bein default with respect to its payment of any obligations under the CapitalSecurities Guarantee or (iii) the Company shall have given notice of itselection to defer payments of interest on the Debt Securities by extending theinterest payment period as provided herein and such period, or any extensionthereof, shall have commenced and be continuing, then the Company may not (A)declare or pay any dividends or distributions on, or redeem, purchase, acquire,or make a liquidation payment with respect to, any of the Company's capitalstock or (B) make any payment of principal of or interest or premium, if any,on or repay, repurchase or redeem any debt securities of the Company that rank *pari passu* in all respects with or juniorin interest to the Debt Securities (other than (a) repurchases, redemptions orother acquisitions of shares of capital stock of the Company in connection withany employment contract, benefit plan or other similar arrangement with or forthe benefit of one or more employees, officers, directors or consultants, inconnection with a dividend reinvestment or stockholder stock purchase plan orin connection with the issuance of capital stock of the Company (or securitiesconvertible into or exercisable for such capital stock) as consideration in anacquisition transaction entered into prior to the occurrence of any of (i),(ii) or (iii), above, (b) as a result of any exchange or conversion of anyclass or series of the Company's capital stock (or any capital stock of asubsidiary of the Company) for any class or series of the Company's capitalstock or of any class or series of the Company's indebtedness for any class orseries of the Company's capital stock, (c) the purchase of fractional interestsin shares of the Company's capital stock pursuant to the conversion or exchangeprovisions of such capital stock or the security being converted or exchanged,(d) any declaration of a dividend in connection with any stockholder's rightsplan, or the issuance of rights, stock or other property under anystockholder's rights plan, or the redemption or repurchase of rights pursuantthereto, or (e) any dividend in the form of stock, warrants, options or otherrights where the dividend stock or the stock issuable upon exercise of suchwarrants, options or other rights is the same stock as that on which thedividend is being paid or ranks *pari passu*with or junior to such stock).

 

Section 3.09         Covenants as to the Trust.

 

For so long as suchTrust Securities remain outstanding, the Company shall maintain 100% ownershipof the Common Securities; provided, however, that any permittedsuccessor of the Company under this Indenture that is a U.S. Person may succeedto the Company's ownership of such Common Securities. The Company, as owner ofthe Common Securities, shall use commercially reasonable efforts to cause theTrust (a) to remain a statutory business trust, except in connection with adistribution of Debt Securities to the holders of Trust Securities inliquidation of the Trust, the redemption of all of the Trust Securities orcertain mergers, consolidations or amalgamations, each as permitted by theDeclaration, (b) to otherwise continue to be classified as a grantor trust forUnited States federal income tax purposes and (c) to cause each holder of TrustSecurities to be treated as owning an undivided beneficial interest in the DebtSecurities.

 

ARTICLEIV

LISTSAND REPORTS

BYTHE COMPANY AND THE TRUSTEE

 

Section 4.01         Securityholders' Lists.

 

The Company covenantsand agrees that it will furnish or cause to be furnished to the Trustee:

 

(a)  on each regular record date for an InterestPayment Date, a list, in such form as the Trustee may reasonably require, ofthe names and addresses of the Securityholders of the Debt Securities as ofsuch record date; and

 

(b) atsuch other times as the Trustee may request in writing, within 30 days afterthe receipt by the Company of any such request, a list of similar form andcontent as of a date not more than 15 days prior to the time such list isfurnished;

 

except that no suchlists need be furnished under this Section 4.01 so long as the Trustee is inpossession thereof by reason of its acting as Debt Security registrar.

 

Section 4.02         Preservation and Disclosure ofLists.

 

(a)The Trustee shall preserve, in as current a form as is reasonably practicable,all information as to the names and addresses of the holders of Debt Securities(1) contained in the most recent list furnished to it as provided in Section4.01 or (2) received by it in the capacity of Debt Securities registrar (if soacting) hereunder. The Trustee may destroy any list furnished to it as providedin Section 4.01 upon receipt of a new list so furnished.

 

(b)In case three or more holders of Debt Securities (hereinafter referred to as"applicants") apply in writing to the Trustee and furnish to theTrustee reasonable proof that each such applicant has owned a Debt Security fora period of at least six months preceding the date of such application, andsuch application states that the applicants desire to communicate with otherholders of Debt Securities with respect to their rights under this Indenture orunder such Debt Securities and is accompanied by a copy of the form of proxy orother communication which such applicants propose to transmit, then the Trusteeshall within five Business Days after the receipt of such application, at itselection, either:

 

(1)  afford such applicants access to theinformation preserved at the time by the Trustee in accordance with theprovisions of subsection (a) of this Section 4.02, or

 

(2)  inform such applicants as to the approximatenumber of holders of Debt Securities whose names and addresses appear in theinformation preserved at the time by the Trustee in accordance with theprovisions of subsection (a) of this Section 4.02, and as to the approximatecost of mailing to such Securityholders the form of proxy or othercommunication, if any, specified in such application.

 

If the Trustee shallelect not to afford such applicants access to such information, the Trusteeshall, upon the written request of such applicants, mail to each Securityholderof Debt Securities whose name and address appear in the information preservedat the time by the Trustee in accordance with the provisions of subsection (a)of this Section 4.02 a copy of the form of proxy or other communication whichis specified in such request with reasonable promptness after a tender to theTrustee of the material to be mailed and of payment, or provision for thepayment, of the reasonable expenses of mailing, unless within five days aftersuch tender, the Trustee shall mail to such applicants and file with theSecurities and Exchange Commission, if permitted or required by applicable law,together with a copy of the material to be mailed, a written statement to theeffect that, in the opinion of the Trustee, such mailing would be contrary tothe best interests of the holders of all Debt Securities, as the case may be,or would be in violation of applicable law. Such written statement shallspecify the basis of such opinion. If said Commission, as permitted or requiredby applicable law, after opportunity for a hearing upon the objectionsspecified in the written statement so filed, shall enter an order refusing tosustain any of such objections or if, after the entry of an order sustainingone or more of such objections, said Commission shall find, after notice andopportunity for hearing, that all the objections so sustained have been met andshall enter an order so declaring, the Trustee shall mail copies of suchmaterial to all such Securityholders with reasonable promptness after the entryof such order and the renewal of such tender; otherwise the Trustee shall berelieved of any obligation or duty to such applicants respecting theirapplication.

 

(c)  Each and every holder of Debt Securities, byreceiving and holding the same, agrees with the Company and the Trustee thatneither the Company nor the Trustee nor any paying agent shall be heldaccountable by reason of the disclosure of any such information as to the namesand addresses of the holders of Debt Securities in accordance with theprovisions of subsection (b) of this Section 4.02, regardless of the sourcefrom which such information was derived, and that the Trustee shall not be heldaccountable by reason of mailing any material pursuant to a request made under saidsubsection (b).

 

ARTICLEV

REMEDIESOF THE TRUSTEE AND SECURITYHOLDERS,

UPONAN EVENT OF DEFAULT

 

Section 5.01         Events of Default.

 

The following Events ofDefault shall be "Events of Default" with respect to Debt Securities:

 

(a)  the Company defaults in the payment of anyinterest upon any Debt Security when it becomes due and payable, andcontinuance of such default for a period of 30 days; for the avoidance ofdoubt, an extension of any interest payment period by the Company in accordancewith Section 2.11 of this Indenture shall not constitute a default under thisclause 5.01 (a); or

 

(b) theCompany defaults in the payment of all or any part of the principal of (orpremium, if any, on) any Debt Securities as and when the same shall become dueand payable either at maturity, upon redemption, by declaration of accelerationor otherwise; or

 

(c)  the Company defaults in the performance of, orbreaches, any of its covenants or agreements in Sections 3.06, 3.07, 3.08 and3.09 of this Indenture (other than a covenant or agreement a default in whoseperformance or whose breach is elsewhere in this Section specifically dealtwith), and continuance of such default or breach for a period of 90 days afterthere has been given, by registered or certified mail, to the Company by theTrustee or to the Company and the Trustee by the holders of at least 25% inaggregate principal amount of the outstanding Debt Securities, a written noticespecifying such default or breach and requiring it to be remedied and statingthat such notice is a "Notice of Default" hereunder; or

 

(d) acourt having jurisdiction in the premises shall enter a decree or order forrelief in respect of the Company in an involuntary case under any applicablebankruptcy, insolvency or other similar law now or hereafter in effect, orappoints a receiver, liquidator, assignee, custodian, trustee, sequestrator (orsimilar official) of the Company or for any substantial part of its property,or orders the winding–up or liquidation of its affairs and such decree ororder shall remain unstayed and in effect for a period of 90 consecutive days;or

 

(e)  the Company shall commence a voluntary caseunder any applicable bankruptcy, insolvency or other similar law now orhereafter in effect, shall consent to the entry of an order for relief in aninvoluntary case under any such law, or shall consent to the appointment of ortaking possession by a receiver, liquidator, assignee, trustee, custodian,sequestrator (or other similar official) of the Company or of any substantialpart of its property, or shall make any general assignment for the benefit ofcreditors, or shall fail generally to pay its debts as they become due; or

 

(f)  the Trust shallhave voluntarily or involuntarily liquidated, dissolved, wound–up itsbusiness or otherwise terminated its existence except in connection with (1)the distribution of the Debt Securities to holders of such Trust Securities inliquidation of their interests in the Trust, (2) the redemption of all of theoutstanding Trust Securities or (3) certain mergers, consolidations oramalgamations, each as permitted by the Declaration.

 

If an Event of Defaultoccurs and is continuing with respect to the Debt Securities, then, and in eachand every such case, unless the principal of the Debt Securities shall havealready become due and payable, either the Trustee or the holders of not lessthan 25% in aggregate principal amount of the Debt Securities then outstandinghereunder, by notice in writing to the Company (and to the Trustee if given bySecurityholders), may declare the entire principal of the Debt Securities andthe interest accrued thereon, if any, to be due and payable immediately, andupon any such declaration the same shall become immediately due and payable.

 

The foregoing provisions,however, are subject to the condition that if, at any time after the principalof the Debt Securities shall have been so declared due and payable, and beforeany judgment or decree for the payment of the moneys due shall have beenobtained or entered as hereinafter provided, (i) the Company shall pay or shalldeposit with the Trustee a sum sufficient to pay all matured installments ofinterest upon all the Debt Securities and the principal of and premium, if any,on the Debt Securities which shall have become due otherwise than byacceleration (with interest upon such principal and premium, if any, andDeferred Interest, to the extent permitted by law) and such amount as shall besufficient to cover reasonable compensation to the Trustee and each predecessorTrustee, their respective agents, attorneys and counsel, and all other amountsdue to the Trustee pursuant to Section 6.06, and if any and (ii) all Events ofDefault under this Indenture, other than the non–payment of the principalof or premium, if any, on Debt Securities which shall have become due byacceleration, shall have been cured, waived or otherwise remedied as providedherein –– then and in every such case the holders of a majority inaggregate principal amount of the Debt Securities then outstanding, by writtennotice to the Company and to the Trustee, may waive all defaults and rescindand annul such declaration and its consequences, but no such waiver orrescission and annulment shall extend to or shall affect any subsequent defaultor shall impair any right consequent thereon.

 

In case the Trusteeshall have proceeded to enforce any right under this Indenture and suchproceedings shall have been discontinued or abandoned because of suchrescission or annulment or for any other reason or shall have been determinedadversely to the Trustee, then and in every such case the Company, the Trusteeand the holders of the Debt Securities shall be restored respectively to theirseveral positions and rights hereunder, and all rights, remedies and powers ofthe Company, the Trustee and the holders of the Debt Securities shall continueas though no such proceeding had been taken.

 

Section 5.02         Payment of Debt Securities onDefault, Suit Therefor.

 

The Company covenantsthat upon the occurrence of an Event of Default pursuant to clause 5.01(a) or5.01(b) and upon demand of the Trustee, the Company will pay to the Trustee,for the benefit of the holders of the Debt Securities the whole amount thatthen shall have become due and payable on all Debt Securities for principal andpremium, if any, or interest, or both, as the case may be, including DeferredInterest accrued on the Debt Securities; and, in addition thereto, such furtheramount as shall be sufficient to cover the costs and expenses of collection, includinga reasonable compensation to the Trustee, its agents, attorneys and counsel,and any other amounts due to the Trustee under Section 6.06. In case theCompany shall fail forthwith to paysuch amounts upon such demand, the Trustee, in its own name and as trustee ofan express trust, shall be entitled and empowered to institute anyactions or proceedings at law or in equity for the collection of the sums sodue and unpaid, and may prosecute any such action or proceeding to judgment orfinal decree, and may enforce any such judgment or final decree against theCompany or any other obligor on such Debt Securities and collect in the mannerprovided by law out of the property of the Company or any other obligor on suchDebt Securities wherever situated the moneys adjudged or decreed to be payable.

 

In case there shall bepending proceedings for the bankruptcy or for the reorganization of the Companyor any other obligor on the Debt Securities under Bankruptcy Law, or in case areceiver or trustee shall have been appointed for the property of the Companyor such other obligor, or in the case of any other similar judicial proceedingsrelative to the Company or other obligor upon the Debt Securities, or to thecreditors or property of the Company or such other obligor, the Trustee,irrespective of whether the principal of the Debt Securities shall then be dueand payable as therein expressed or by declaration of acceleration or otherwiseand irrespective of whether the Trustee shall have made any demand pursuant tothe provisions of this Section 5.02, shall be entitled and empowered, byintervention in such proceedings or otherwise, to file and prove a claim orclaims for the whole amount of principal and interest owing and unpaid inrespect of the Debt Securities and, in case of any judicial proceedings, tofile such proofs of claim and other papers or documents as may be necessary oradvisable in order to have the claims of the Trustee (including any claim forreasonable compensation to the Trustee and each predecessor Trustee, and theirrespective agents, attorneys and counsel, and for reimbursement of all otheramounts due to the Trustee under Section 6.06) and of the Securityholdersallowed in such judicial proceedings relative to the Company or any other obligoron the Debt Securities, or to the creditors or property of the Company or suchother obligor, unless prohibited by applicable law and regulations, to vote onbehalf of the holders of the Debt Securities in any election of a trustee or astandby trustee in arrangement, reorganization, liquidation or other bankruptcyor insolvency proceedings or Person performing similar functions in comparableproceedings, and to collect and receive any moneys or other property payable ordeliverable on any such claims, and to distribute the same after the deductionof its charges and expenses; and any receiver, assignee or trustee inbankruptcy or reorganization is hereby authorized by each of theSecurityholders to make such payments to the Trustee, and, in the event thatthe Trustee shall consent to the making of such payments directly to theSecurityholders, to pay to the Trustee such amounts as shall be sufficient tocover reasonable compensation to the Trustee, each predecessor Trustee andtheir respective agents, attorneys and counsel, and all other amounts due tothe Trustee under Section 6.06.

 

Nothing herein containedshall be construed to authorize the Trustee to authorize or consent to oraccept or adopt on behalf of any Securityholder any plan of reorganization,arrangement, adjustment or composition affecting the Debt Securities or therights of any holder thereof or to authorize the Trustee to vote in respect ofthe claim of any Securityholder in any such proceeding.

 

All rights of action andof asserting claims under this Indenture, or under any of the Debt Securities,may be enforced by the Trustee without the possession of any of the DebtSecurities, or the production thereof at any trial or other proceeding relativethereto, and any such suit or proceeding instituted by the Trustee shall bebrought in its own name as trustee of an express trust, and any recovery ofjudgment shall be for the ratable benefit of the holders of the DebtSecurities.

 

In any proceedingsbrought by the Trustee (and also any proceedings involving the interpretationof any provision of this Indenture to which the Trustee shall be a party) the Trusteeshall be held to represent all the holders of the Debt Securities, and it shallnot be necessary to make any holders of the Debt Securities parties to any suchproceedings.

 

Section 5.03         Application of Moneys Collected byTrustee.

 

Any moneys collected bythe Trustee shall be applied in the following order, at the date or dates fixedby the Trustee for the distribution of such moneys, upon presentation of theseveral Debt Securities in respect of which moneys have been collected, andstamping thereon the payment, if only partially paid, and upon surrenderthereof if fully paid:

 

First: To the payment ofcosts and expenses incurred by, and reasonable fees of, the Trustee, itsagents, attorneys and counsel, and of all other amounts due to the Trusteeunder Section 6.06;

 

Second: To the paymentof all Senior Indebtedness of the Company if and to the extent required byArticle XV;

 

Third: To the payment ofthe amounts then due and unpaid upon Debt Securities for principal (andpremium, if any), and interest on the Debt Securities, in respect of which orfor the benefit of which money has been collected, ratably, without preferenceor priority of any kind, according to the amounts due on such Debt Securitiesfor principal (and premium, if any) and interest, respectively; and

 

Fourth: The balance, ifany, to the Company.

 

Section 5.04         Proceedings by Securityholders.

 

No holder of any DebtSecurity shall have any right to institute any suit, action or proceeding forany remedy hereunder, unless such holder previously shall have given to theTrustee written notice of an Event of Default with respect to the DebtSecurities and unless the holders of not less than 25% in aggregate principalamount of the Debt Securities then outstanding shall have given the Trustee awritten request to institute such action, suit or proceeding and shall haveoffered to the Trustee such reasonable indemnity as it may require against thecosts, expenses and liabilities to be incurred thereby, and the Trustee for 60days after its receipt of such notice, request and offer of indemnity shallhave failed to institute any such action, suit or proceeding; provided, thatno holder of Debt Securities shall have any right to prejudice the rights ofany other holder of Debt Securities, obtain priority or preference over anyother such holder or enforce any right under this Indenture except in themanner herein provided and for the equal, ratable and common benefit of allholders of Debt Securities.

 

Notwithstanding anyother provisions in this Indenture, however, the right of any holder of anyDebt Security to receive payment of the principal of, premium, if any, andinterest, on such Debt Security when due, or to institute suit for theenforcement of any such payment, shall not be impaired or affected without theconsent of such holder. For the protection and enforcement of the provisions ofthis Section, each and every Securityholder and the Trustee shall be entitledto such relief as can be given either at law or in equity.

 

Section 5.05         Proceedings by Trustee.

 

In case of an Event ofDefault hereunder the Trustee may in its discretion proceed to protect andenforce the rights vested in it by this Indenture by such appropriate judicialproceedings as the Trustee shall deem most effectual to protect and enforce anyof such rights, either by suit in equity or by action at law or by proceedingin bankruptcy or otherwise, whether for the specific enforcement of anycovenant or agreement contained in this Indenture or in aid of the exercise ofany power granted in this Indenture, or to enforce any other legal or equitableright vested in the Trustee by this Indenture or by law.

 

Section 5.06         Remedies Cumulative and Continuing.

 

Except as otherwiseprovided in Section 2.06, all powers and remedies given by this Article V tothe Trustee or to the Securityholders shall, to the extent permitted by law, bedeemed cumulative and not exclusive of any other powers and remedies availableto the Trustee or the holders of the Debt Securities, by judicial proceedingsor otherwise, to enforce the performance or observance of the covenants andagreements contained in this Indenture or otherwise established with respect tothe Debt Securities, and no delay or omission of the Trustee or of any holderof any of the Debt Securities to exercise any right or power accruing upon anyEvent of Default occurring and continuing as aforesaid shall impair any such rightor power, or shall be construed to be a waiver of any such default or anacquiescence therein; and, subject to the provisions of Section 5.04, everypower and remedy given by this Article V or by law to the Trustee or to theSecurityholders may be exercised from time to time, and as often as shall bedeemed expedient, by the Trustee or by the Securityholders.

 

Section 5.07         Direction of Proceedings and Waiverof Defaults by Majority of Securityholders.

 

The holders of amajority in aggregate principal amount of the Debt Securities affected (votingas one class) at the time outstanding shall have the right to direct the time,method, and place of conducting any proceeding for any remedy available to theTrustee, or exercising any trust or power conferred on the Trustee with respectto such Debt Securities; provided, however, that (subject to theprovisions of Section 6.01) the Trustee shall have the right to decline tofollow any such direction if the Trustee shall determine that the action sodirected would be unjustly prejudicial to the holders not taking part in suchdirection or if the Trustee being advised by counsel determines that the actionor proceeding so directed may not lawfully be taken or if a Responsible Officerof the Trustee shall determine that the action or proceedings so directed wouldinvolve the Trustee in personal liability. Prior to any declarationaccelerating the maturity of the Debt Securities, the holders of a majority inaggregate principal amount of the Debt Securities at the time outstanding mayon behalf of the holders of all of the Debt Securities waive (or modify anypreviously granted waiver of) any past default or Event of Default and itsconsequences, except a default (a) in the payment of principal of, premium, ifany, or interest on any of the Debt Securities, (b) in respect of covenants orprovisions hereof which cannot be modified or amended without the consent ofthe holder of each Debt Security affected, or (c) in respect of the covenantscontained in Section 3.09; provided, however, that if the DebtSecurities are held by the Trust or a trustee of such trust, such waiver ormodification to such waiver shall not be effective until the holders of amajority in liquidation preference of Trust Securities of the Trust shall haveconsented to such waiver or modification to such waiver; provided, further,that if the consent of the holder of each outstanding Debt Security isrequired, such waiver shall not be effective until each holder of the TrustSecurities of the Trust shall have consented to such waiver. Upon any suchwaiver, the default covered thereby shall be deemed to be cured for allpurposes of this Indenture and the Company, the Trustee and the holders of theDebt Securities shall be restored to their former positions and rightshereunder, respectively; but no such waiver shall extend to any subsequent orother default or Event of Default or impair any right consequent thereon.Whenever any default or Event of Default hereunder shall have been waived aspermitted by this Section 5.07, said default or Event of Default shall for allpurposes of the Debt Securities and this Indenture be deemed to have been curedand to be not continuing.

 

Section 5.08         Notice of Defaults.

 

The Trustee shall,within 90 days after a Responsible Officer of the Trustee shall have receivednotice or obtained actual knowledge of the occurrence of a default with respectto the Debt Securities, mail to all Securityholders, as the names and addressesof such holders appear upon the Debt Security Register, notice of all defaultswith respect to the Debt Securities known to the Trustee, unless such defaultsshall have been cured before the giving of such notice (the term"defaults" for the purpose of this Section 5.08 being hereby defined tobe the events specified in subsections (a), (b), (c), (d) and (e) of Section5.01, not including periods of grace, if any, provided for therein); provided,that, except in the case of default in the payment of the principal of,premium, if any, or interest on any of the Debt Securities, the Trustee shallbe protected in withholding such notice if and so long as a Responsible Officerof the Trustee in good faith determines that the withholding of such notice isin the interests of the Securityholders.

 

Section 5.09         Undertaking to Pay Costs.

 

All parties to thisIndenture agree, and each holder of any Debt Security by his acceptance thereofshall be deemed to have agreed, that any court may in its discretion require,in any suit for the enforcement of any right or remedy under this Indenture, orin any suit against the Trustee for any action taken or omitted by it asTrustee, the filing by any party litigant in such suit of an undertaking to paythe costs of such suit, and that such court may in its discretion assess reasonablecosts, including reasonable attorneys' fees and expenses, against any partylitigant in such suit, having due regard to the merits and good faith of theclaims or defenses made by such party litigant; but the provisions of thisSection 5.09 shall not apply to any suit instituted by the Trustee, to any suitinstituted by any Securityholder, or group of Securityholders, holding in theaggregate more than 10% in principal amount of the Debt Securities outstanding,or to any suit instituted by any Securityholder for the enforcement of thepayment of the principal of (or premium, if any) or interest on any DebtSecurity against the Company on or after the same shall have become due andpayable.

 

ARTICLEVI

CONCERNINGTHE TRUSTEE

 

Section 6.01         Duties and Responsibilities ofTrustee.

 

With respect to theholders of Debt Securities issued hereunder, the Trustee, prior to theoccurrence of an Event of Default with respect to the Debt Securities and afterthe curing or waiving of all Events of Default which may have occurred, withrespect to the Debt Securities, undertakes to perform such duties and only suchduties as are specifically set forth in this Indenture. In case an Event ofDefault with respect to the Debt Securities has occurred (which has not been curedor waived) the Trustee shall exercise such of the rights and powers vested init by this Indenture, and use the same degree of care and skill in theirexercise, as a prudent man would exercise or use under the circumstances in theconduct of his own affairs.

 

No provision of thisIndenture shall be construed to relieve the Trustee from liability for its ownnegligent action, its own negligent failure to act or its own willfulmisconduct, except that:

 

(a) priorto the occurrence of an Event of Default with respect to Debt Securities andafter the curing or waiving of all Events of Default which may have occurred

 

(1) theduties and obligations of the Trustee with respect to Debt Securities shall bedetermined solely by the express provisions of this Indenture, and the Trusteeshall not be liable except for the performance of such duties and obligationswith respect to the Debt Securities as are specifically set forth in thisIndenture, and no implied covenants or obligations shall be read into this Indentureagainst the Trustee, and

 

(2) in the absence of bad faith on the part of the Trustee, theTrustee may conclusively rely, as to the truth of the statements and thecorrectness of the opinions expressed therein, upon any certificates oropinions furnished to the Trustee and conforming to the requirements of thisIndenture; but, in the case of any such certificates or opinions which by anyprovision hereof are specifically required to be furnished to the Trustee, theTrustee shall be under a duty to examine the same to determine whether or notthey conform to the requirements of this Indenture;

 

(b) theTrustee shall not be liable for any error of judgment made in good faith by aResponsible Officer or Officers of the Trustee, unless it shall be proved thatthe Trustee was negligent in ascertaining the pertinent facts; and

 

(c) theTrustee shall not be liable with respect to any action taken or omitted to betaken by it in good faith, in accordance with the direction of theSecurityholders pursuant to Section 5.07, relating to the time, method andplace of conducting any proceeding for any remedy available to the Trustee, orexercising any trust or power conferred upon the Trustee, under this Indenture.

 

None of the provisionscontained in this Indenture shall require the Trustee to expend or risk its ownfunds or otherwise incur personal financial liability in the performance of anyof its duties or in the exercise of any of its rights or powers.

 

Section 6.02         Reliance on Documents, Opinions,etc.

 

Except as otherwiseprovided in Section 6.01:

 

(a) theTrustee may conclusively rely and shall be fully protected in acting orrefraining from acting upon any resolution, certificate, statement, instrument,opinion, report, notice, request, consent, order, bond, note, debenture orother paper or document believed by it to be genuine and to have been signed orpresented by the proper party or parties;

 

(b) anyrequest, direction, order or demand of the Company mentioned herein shall besufficiently evidenced by an Officers' Certificate (unless other evidence inrespect thereof be herein specifically prescribed); and any Board Resolutionmay be evidenced to the Trustee by a copy thereof certified by the Secretary oran Assistant Secretary of the Company;

 

(c) theTrustee may consult with counsel of its selection and any advice or Opinion ofCounsel shall be full and complete authorization and protection in respect ofany action taken, suffered or omitted by it hereunder in good faith and inaccordance with such advice or Opinion of Counsel;

 

(d) theTrustee shall be under no obligation to exercise any of the rights or powersvested in it by this Indenture at the request, order or direction of any of theSecurityholders, pursuant to the provisions of this Indenture, unless suchSecurityholders shall have offered to the Trustee reasonable security orindemnity against the costs, expenses and liabilities which may be incurredtherein or thereby;

 

(e) theTrustee shall not be liable for any action taken or omitted by it in good faithand believed by it to be authorized or within the discretion or rights orpowers conferred upon it by this Indenture; nothing contained herein shall,however, relieve the Trustee of the obligation, upon the occurrence of an Eventof Default with respect to the Debt Securities (that has not been cured orwaived) to exercise with respect to Debt Securities such of the rights andpowers vested in it by this Indenture, and to use the same degree of care andskill in their exercise, as a prudent man would exercise or use under thecircumstances in the conduct of his own affairs;

 

(f) theTrustee shall not be bound to make any investigation into the facts or mattersstated in any resolution, certificate, statement, instrument, opinion, report,notice, request, consent, order, approval, bond, debenture, coupon or otherpaper or document, unless requested in writing to do so by the holders of notless than a majority in principal amount of the outstanding Debt Securitiesaffected thereby; provided, however, that if the payment within areasonable time to the Trustee of the costs, expenses or liabilities likely tobe incurred by it in the making of such investigation is, in the opinion of theTrustee, not reasonably assured to the Trustee by the security afforded to itby the terms of this Indenture, the Trustee may require reasonable indemnityagainst such expense or liability as a condition to so proceeding;

 

(g) the Trustee may execute any of the trusts orpowers hereunder or perform any duties hereunder either directly or byor through agents (including any Authenticating Agent) or attorneys, and theTrustee shall not be responsible for any misconduct or negligence on the partof any such agent or attorney appointed by it with due care; and

 

(h) theTrustee shall not be charged with knowledge of any Default or Event of Defaultwith respect to the Debt Securities unless either (1) a Responsible Officershall have actual knowledge of such Default or Event of Default or (2) writtennotice of such Default or Event of Default shall have been given to the Trusteeby the Company or any other obligor on the Debt Securities or by any holder ofthe Debt Securities.

 

Section 6.03         No Responsibility for Recitals, etc.

 

The recitals containedherein and in the Debt Securities (except in the certificate of authenticationof the Trustee or the Authenticating Agent) shall be taken as the statements ofthe Company and the trustee and the Authenticating Agent assume noresponsibility for the correctness of the same. The Trustee and theAuthenticating Agent make no representations as to the validity or sufficiencyof this Indenture or of the Debt Securities. The Trustee and the AuthenticatingAgent shall not be accountable for the use or application by the Company of anyDebt Securities or the proceeds of any Debt Securities authenticated anddelivered by the Trustee or the Authenticating Agent in conformity with theprovisions of this Indenture.

 

Section 6.04         Trustee, Authenticating Agent,Paying Agents, Transfer Agents or Registrar May Own Debt Securities.

 

The Trustee or anyAuthenticating Agent or any paying agent or any transfer agent or any DebtSecurity registrar, in its individual or any other capacity, may become theowner or pledgee of Debt Securities with the same rights it would have if itwere not Trustee, Authenticating Agent, paying agent, transfer agent or DebtSecurity registrar.

 

Section 6.05         Moneys to be Held in Trust. 

 

Subject to theprovisions of Section 12.04, all moneys received by the Trustee or any paying agentshall, until used or applied as herein provided, be held in trust for thepurpose for which they were received, but need not be segregated from otherfunds except to the extent required by law. The Trustee and any paying agentshall be under no liability for interest on any money received by it hereunderexcept as otherwise agreed in writing with the Company. So long as no Event ofDefault shall have occurred and be continuing, all interest allowed on any suchmoneys, if any, shall be paid from time to time to the Company upon the writtenorder of the Company, signed by the Chairman of the Board of Directors, theVice Chairman, the President, the Chief Financial Officer, the Chief OperatingOfficer, a Vice President, the Treasurer or an Assistant Treasurer of theCompany.

 

Section 6.06         Compensation and Expenses ofTrustee.

 

The Company covenantsand agrees to pay to the Trustee from time to time, and the Trustee shall beentitled to, such compensation as shall be agreed to in writing between theCompany and the Trustee (which shall not be limited by any provision of law inregard to the compensation of a trustee of an express trust), and the Companywill pay or reimburse the Trustee upon its written request for all documentedreasonable expenses, disbursements and advances incurred or made by the Trusteein accordance with any of the provisions of this Indenture (including thereasonable compensation and the expenses and disbursements of its counsel andof all Persons not regularly in its employ) except any such expense,disbursement or advance as may arise from its negligence or bad faith. TheCompany also covenants to indemnify each of the Trustee or any predecessorTrustee (and its officers, agents, directors and employees) for, and to hold itharmless against, any and all loss, damage, claim, liability or expenseincluding taxes (other than taxes based on the income of the Trustee) incurredwithout negligence or bad faith on the part of the Trustee and arising out ofor in connection with the acceptance or administration of this Trust, includingthe costs and expenses of defending itself against any claim of liability inthe premises. The obligations of the Company under this Section 6.06 tocompensate and indemnify the Trustee and to pay or reimburse the Trustee fordocumented expenses, disbursements and advances shall constitute additionalindebtedness hereunder. Such. additional indebtedness shall be secured by alien prior to that of the Debt Securities upon all property and funds held orcollected by the Trustee as such, except funds held in trust for the benefit ofthe holders of particular Debt Securities.

 

Without prejudice to anyother rights available to the Trustee under applicable law, when the Trusteeincurs expenses or renders services in connection with an Event of Defaultspecified in subsections (d), (e) or (f) of Section 5.01, the expenses(including the reasonable charges and expenses of its counsel) and thecompensation for the services are intended to constitute expenses of administrationunder any applicable federal or state bankruptcy, insolvency or other similarlaw.

 

The provisions of thisSection shall survive the resignation or removal of the Trustee and thedefeasance or other termination of this Indenture.

 

Section 6.07         Officers' Certificate as Evidence.

 

Except as otherwiseprovided in Sections 6.01 and 6.02, whenever in the administration of theprovisions of this Indenture the Trustee shall deem it necessary or desirablethat a matter be proved or established prior to taking or omitting any actionhereunder, such matter (unless other evidence in respect thereof be hereinspecifically prescribed) may, in the absence of negligence or bad faith on thepart of the Trustee, be deemed to be conclusively proved and established by anOfficers' Certificate delivered to the Trustee, and such certificate, in theabsence of negligence or bad faith on the part of the Trustee, shall be fullwarrant to the Trustee for any action taken or omitted by it under theprovisions of this Indenture upon the faith thereof.

 

Section 6.08         Eligibility of Trustee.

 

The Trustee hereundershall at all times be a U.S. Person that is a banking corporation organized anddoing business under the laws of the United States of America or any statethereof or of the District of Columbia and authorized under such laws toexercise corporate trust powers, having a combined capital and surplus of atleast 50 million U.S. dollars ($50,000,000) and subject to supervision orexamination by federal, state, or District of Columbia authority. If suchcorporation publishes reports of condition at least annually, pursuant to lawor to the requirements of the aforesaid supervising or examining authority,then for the purposes of this Section 6.08 the combined capital and surplus ofsuch corporation shall be deemed to be its combined capital and surplus as setforth in its most recent records of condition so published.

 

The Company may not, normay any Person directly or indirectly controlling, controlled by, or undercommon control with the Company, serve as Trustee, notwithstanding that suchcorporation shall be otherwise eligible and qualified under this Article.

 

In case at any time theTrustee shall cease to be eligible in accordance with the provisions of thisSection 6.08, the Trustee shall resign immediately in the manner and with theeffect specified in Section 6.09.

 

If the Trustee has orshall acquire any "conflicting interest" within the meaning of§310(b) of the Trust Indenture Act, the Trustee shall either eliminate such interestor resign, to the extent and in the manner provided by, and subject to thisIndenture.

 

Section 6.09         Resignation or Removal of Trustee.

 

(a)  The Trustee, or any trustee or trusteeshereafter appointed, may at any time resign by giving written notice of suchresignation to the Company and by mailing notice thereof, at the Company'sexpense, to the holders of the Debt Securities at their addresses as they shallappear on the Debt Security Register. Upon receiving such notice ofresignation, the Company shall promptly appoint a successor trustee or trusteesby written instrument, in duplicate, executed by order of its Board ofDirectors, one copy of which instrument shall be delivered to the resigningTrustee and one copy to the successor Trustee. If no successor Trustee shallhave been so appointed and have accepted appointment within 30 days after themailing of such notice of resignation to the affected Securityholders, theresigning Trustee may petition any court of competent jurisdiction for the appointmentof a successor Trustee, or any Securityholder who has been a bona fide holderof a Debt Security or Debt Securities for at least six months may, subject tothe provisions of Section 5.09, on behalf of himself and all others similarlysituated, petition any such court for the appointment of a successor Trustee.Such court may thereupon, after such notice, if any, as it may deem proper andprescribe, appoint a successor Trustee.

 

(b) Incase at any time any of the following shall occur –­

 

(1)  the Trustee shall fail to comply with theprovisions of the last paragraph of Section 6.08 after written request thereforby the Company or by any Securityholder who has been a bona fide holder of aDebt Security or Debt Securities for at least six months,

 

(2)  the Trustee shall cease to be eligible inaccordance with the provisions of Section 6.08 and shall fail to resign afterwritten request therefor by the Company or by any such Securityholder, or

 

(3)  the Trustee shall become incapable of acting,or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee orof its property shall be appointed, or any public officer shall take charge orcontrol of the Trustee or of its property or affairs for the purpose ofrehabilitation, conservation or liquidation,

 

then, in any such case,the Company may remove the Trustee and appoint a successor Trustee by writteninstrument, in duplicate, executed by order of the Board of Directors, one copyof which instrument shall be delivered to the Trustee so removed and one copyto the successor Trustee, or, subject to the provisions of Section 5.09, anySecurityholder who has been a bona fide holder of a Debt Security or DebtSecurities for at least six months may, on behalf of himself and all otherssimilarly situated, petition any court of competent jurisdiction for theremoval of the Trustee and the appointment of a successor Trustee. Such courtmay thereupon, after such notice, if any, as it may deem proper and prescribe,remove the Trustee  and appointsuccessor Trustee.

 

(c)  Upon prior written notice to the Company andthe Trustee, the –holders of a majority in aggregate principal amount ofthe Debt Securities at the time outstanding may at any time remove the Trusteeand nominate a successor Trustee, which shall be deemed appointed as successorTrustee unless within ten Business Days after such nomination the Companyobjects thereto, in which case or in the case of a failure by such holders tonominate a successor Trustee, the Trustee so removed or any Securityholder,upon the terms and conditions and otherwise as in subsection (a) of thisSection 6.09 provided, may petition any court of competent jurisdiction for anappointment of a successor.

 

(d) Anyresignation or removal of the Trustee and appointment of a successor Trusteepursuant to any of the provisions of this Section 6.09 shall become effectiveupon acceptance of appointment by the successor Trustee as provided in Section6.10.

 

Section 6.10         Acceptance by Successor Trustee.

 

Any successor Trusteeappointed as provided in Section 6.09 shall execute, acknowledge and deliver tothe Company and to its predecessor Trustee an instrument accepting suchappointment hereunder, and thereupon the resignation or removal of the retiringTrustee shall become effective and such successor Trustee, without any furtheract, deed or conveyance, shall become vested with all the rights, powers,duties and obligations with respect to the Debt Securities of its predecessorhereunder, with like effect as if originally named as Trustee herein; but,nevertheless, on the written request of the Company or of the successorTrustee, the Trustee ceasing to act shall, upon payment of any amounts then dueit pursuant to the provisions of Section 6.06, execute and deliver aninstrument transferring to such successor Trustee all the rights and powers ofthe Trustee so ceasing to act and shall duly assign, transfer and deliver tosuch successor Trustee all property and money held by such retiring Trusteethereunder. Upon request of any such successor Trustee, the Company shallexecute any and all instruments in writing for more fully and certainly vestingin and confirming to such successor Trustee all such rights and powers. AnyTrustee ceasing to act shall, nevertheless, retain a lien upon all property orfunds held or collected by such Trustee to secure any amounts then due itpursuant to the provisions of Section 6.06.

 

If a successor Trusteeis appointed, the Company, the retiring Trustee and the successor Trustee shallexecute and deliver an indenture supplemental hereto which shall contain suchprovisions as shall be deemed necessary or desirable to confirm that all therights, powers, trusts and duties of the retiring Trustee with respect to theDebt Securities as to which the predecessor Trustee is not retiring shallcontinue to be vested in the predecessor Trustee, and shall add to or changeany of the provisions of this Indenture as shall be necessary to provide for orfacilitate the administration of the Trust hereunder by more than one Trustee,it being understood that nothing herein or in such supplemental indenture shallconstitute such Trustees co–trustees of the same trust and that each suchTrustee shall be Trustee of a trust or trusts hereunder separate and apart fromany trust or trusts hereunder administered by any other such Trustee.

 

No successor Trusteeshall accept appointment as provided in this Section 6.10 unless at the time ofsuch acceptance such successor Trustee shall be eligible under the provisionsof Section 6.08.

 

In no event shall aretiring Trustee be liable for the acts or omissions of any successor Trusteehereunder.

 

Upon acceptance ofappointment by a successor Trustee as provided in this Section 6.10, theCompany shall mail notice of the succession of such Trustee hereunder to theholders of Debt Securities at their addresses as they shall appear on the DebtSecurity Register. If the Company fails to mail such notice within ten BusinessDays after the acceptance of appointment by the successor Trustee, the successorTrustee shall cause such notice to be mailed at the expense of the Company.

 

Section 6.11         Succession by Merger, etc.

 

Any corporation intowhich the Trustee may be merged or converted or with which it may beconsolidated, or any corporation resulting from any merger, conversion orconsolidation to which the Trustee shall be a party, or any corporationsucceeding to all or substantially all of the corporate trust business of theTrustee, shall be the successor of the Trustee hereunder without the executionor filing of any paper or any further act on the part of any of the partieshereto; provided, that such corporation shall be otherwise eligible andqualified under this Article.

 

In case at the time suchsuccessor to the Trustee shall succeed to the trusts created by this Indentureany of the Debt Securities shall have been authenticated but not delivered, anysuch successor to the Trustee may adopt the certificate of authentication ofany predecessor Trustee, and deliver such Debt Securities so authenticated; andin case at that time any of the Debt Securities shall not have beenauthenticated, any successor to the Trustee may authenticate such DebtSecurities either in the name of any predecessor hereunder or in the name ofthe successor Trustee; and in all such cases such certificates shall have thefull force which it is anywhere in the Debt Securities or in this Indentureprovided that the certificate of the Trustee shall have; provided, however,that the right to adopt the certificate of authentication of any predecessorTrustee or authenticate Debt Securities in the name of any predecessor Trusteeshall apply only to its successor or successors by merger, conversion orconsolidation.

 

Section 6.12         Authenticating Agents.

 

There may be one or moreAuthenticating Agents appointed by the Trustee upon the request of the Companywith power to act on its behalf and subject to its direction in theauthentication and delivery of Debt Securities issued upon exchange orregistration of transfer thereof as fully to all intents and purposes as thoughany such Authenticating Agent had been expressly authorized to authenticate anddeliver Debt Securities; provided that the Trustee shall have no liability tothe Company for any acts or omissions of the Authenticating Agent with respectto the authentication and delivery of Debt Securities. Any such AuthenticatingAgent shall at all times be a corporation organized and doing business underthe laws of the United States or of any state or territory thereof or of theDistrict of Columbia authorized under such laws to act as Authenticating Agent,having a combined capital and surplus of at least $50,000,000 and being subjectto supervision or examination by federal, state, territorial or District ofColumbia authority. If such corporation publishes reports of condition at leastannually pursuant to law or the requirements of such authority, then for thepurposes of this Section 6.12 the combined capital and surplus of suchcorporation shall be deemed to be its combined capital and surplus as set forthin its most recent report of condition so published. If at any time anAuthenticating Agent shall cease to be eligible in accordance with theprovisions of this Section, it shall resign immediately in the manner and with theeffect herein specified in this Section.

 

Any corporation intowhich any Authenticating Agent may be merged or converted or with which it maybe consolidated, or any corporation resulting from any merger, consolidation orconversion to which any Authenticating Agent shall be a party, or anycorporation succeeding to all or substantially all of the corporate trustbusiness of any Authenticating Agent, shall be the successor of suchAuthenticating Agent hereunder, if such successor corporation is otherwiseeligible under this Section 6.12 without the execution or filing of any paperor any further act on the part of the parties hereto or such AuthenticatingAgent.

 

Any Authenticating Agentmay at any time resign by giving written notice of resignation to the Trusteeand to the Company. The Trustee may at any time terminate the agency of anyAuthenticating Agent with respect to the Debt Securities by giving writtennotice of termination to such Authenticating Agent and to the Company. Uponreceiving such a notice of resignation or upon such a termination, or in caseat any time any Authenticating Agent shall cease to be eligible under thisSection 6.12, the Trustee may, and upon the request of the Company shall,promptly appoint a successor Authenticating Agent eligible under this Section6.12, shall give written notice of such appointment to the Company and shallmail notice of such appointment to all holders of Debt Securities as the namesand addresses of such holders appear on the Debt Security Register. Anysuccessor Authenticating Agent upon acceptance of its appointment hereundershall become vested with all rights, powers, duties and responsibilities withrespect to the Debt Securities of its predecessor hereunder, with like effectas if originally named as Authenticating Agent herein.

 

The Company agrees topay to any Authenticating Agent from time to time reasonable compensation forits services. Any Authenticating Agent shall have no responsibility orliability for any action taken by it as such in accordance with the directionsof the Trustee.

 

ARTICLEVII

CONCERNINGTHE SECURITYHOLDERS

 

Section 7.01         Action by Securityholders.

 

Whenever in thisIndenture it is provided that the holders of a specified percentage inaggregate principal amount of the Debt Securities may take any action(including the making of any demand or request, the giving of any notice,consent or waiver or the taking of any other action), the fact that at the timeof taking any such action the holders of such specified percentage have joinedtherein may be evidenced (a) by any instrument or any number of instruments ofsimilar tenor executed by such Securityholders in person or by agent or proxyappointed in writing, or (b) by the record of such holders of Debt Securitiesvoting in favor thereof at any meeting of such Securityholders duly called andheld in accordance with the provisions of Article VIII, or (c) by a combinationof such instrument or instruments and any such record of such a meeting of suchSecurityholders or (d) by any other method the Trustee deems satisfactory.

 

If the Company shallsolicit from the Securityholders any request, demand, authorization, direction,notice, consent, waiver or other action or revocation of the same, the Companymay, at its option, as evidenced by an Officers' Certificate, fix in advance arecord date for such Debt Securities for the determination of Securityholdersentitled to give such request, demand, authorization, direction, notice,consent, waiver or other action or revocation of the same, but the Companyshall have no obligation to do so. If such a record date is fixed, suchrequest, demand, authorization, direction, notice, consent, waiver or otheraction or revocation of the same may be given before or after the record date,but only the Securityholders of record at the close of business on the recorddate shall be deemed to be Securityholders for the purposes of determiningwhether Securityholders of the requisite proportion of outstanding DebtSecurities have authorized or agreed or consented to such request, demand,authorization, direction, notice, consent, waiver or other action or revocationof the same, and for that purpose the outstanding Debt Securities shall becomputed as of the record date; provided, however that no such authorization,agreement or consent by such Securityholders on the record date shall be deemedeffective unless it shall become effective pursuant to the provisions of thisIndenture not later than six months after the record date.

 

Section 7.02         Proof of Execution bySecurityholders.

 

Subject to theprovisions of Sections 6.01, 6.02 and 8.05, proof of the execution of anyinstrument by a Securityholder or his agent or proxy shall be sufficient ifmade in accordance with such reasonable rules and regulations as may beprescribed by the Trustee or in such manner as shall be satisfactory to theTrustee. The ownership of Debt Securities shall be proved by the Debt SecurityRegister or by a certificate of the Debt Security registrar. The Trustee mayrequire such additional proof of any matter referred to in this Section as itshall deem necessary.

 

The record of anySecurityholders' meeting shall be proved in the manner provided in Section8.06.

 

Section 7.03         Who Are Deemed Absolute Owners.

 

Prior to due presentmentfor registration of transfer of any Debt Security, the Company, the Trustee,any Authenticating Agent, any paying agent, any transfer agent and any DebtSecurity registrar may deem the Person in whose name such Debt Security shallbe registered upon the Debt Security Register to be, and may treat him as, theabsolute owner of such Debt Security (whether or not such Debt Security shallbe overdue) for the purpose of receiving payment of or on account of theprincipal of, premium, if any, and interest on such Debt Security and for allother purposes; and neither the Company nor the Trustee nor any AuthenticatingAgent nor any paying agent nor any transfer agent nor any Debt Securityregistrar shall be affected by any notice to the contrary. All such payments somade to any holder for the time being or upon his order shall be valid, and, tothe extent of the sum or sums so paid, effectual to satisfy and discharge theliability for moneys payable upon any such Debt Security.

 

Section 7.04         Debt Securities Owned by CompanyDeemed Not Outstanding.

 

In determining whetherthe holders of the requisite aggregate principal amount of Debt Securities haveconcurred in any direction, consent or waiver under this Indenture, DebtSecurities which are owned by the Company or any other obligor on the DebtSecurities or by any Person directly or indirectly controlling or controlled byor under direct or indirect common control with the Company or any otherobligor on the Debt Securities shall be disregarded and deemed not to beoutstanding for the purpose of any such determination; provided, thatfor the purposes of determining whether the Trustee shall be protected inrelying on any such direction, consent or waiver, only Debt Securities which aResponsible Officer of the Trustee actually knows are so owned shall be sodisregarded. Debt Securities so owned which have been pledged in good faith maybe regarded as outstanding for the purposes of this Section 7.04 if the pledgeeshall establish to the satisfaction of the Trustee the pledgee's right to votesuch Debt Securities and that the pledgee is not the Company or any such otherobligor or Person directly or indirectly controlling or controlled by or underdirect or indirect common control with the Company or any such other obligor.In the case of a dispute as to such right, any decision by the Trustee takenupon the advice of counsel shall be full protection to the Trustee.

 

Section 7.05         Revocation of Consents, FutureHolders Bound.

 

At any time prior to(but not after) the evidencing to the Trustee, as provided in Section 7.01, ofthe taking of any action by the holders of the percentage in aggregateprincipal amount of the Debt Securities specified in this Indenture inconnection with such action, any holder (in cases where no record date has beenset pursuant to Section 7.01) or any holder as of an applicable record date (incases where a record date has been set pursuant to Section 7.01) of a DebtSecurity (or any Debt Security issued in whole or in part in exchange or substitutiontherefor) the serial number of which is shown by the evidence to be included inthe Debt Securities the holders of which have consented to such action may, byfiling written notice with the Trustee at the Principal Office of the Trusteeand upon proof of holding as provided in Section 7.02, revoke such action sofar as concerns such Debt Security (or so far as concerns the principal amountrepresented by any exchanged or substituted Debt Security). Except as aforesaidany such action taken by the holder of any Debt Security shall be conclusiveand binding upon such holder and upon all future holders and owners of suchDebt Security, and of any Debt Security issued in exchange or substitutiontherefor or on registration of transfer thereof, irrespective of whether or notany notation in regard thereto is made upon such Debt Security or any DebtSecurity issued in exchange or substitution therefor.

 

ARTICLEVIII

SECURITYHOLDERS'MEETINGS

 

Section 8.01         Purposes of Meetings.

 

A meeting ofSecurityholders may be called at any time and from time to time pursuant to theprovisions of this Article VIII for any of the following purposes:

 

(a)  to give any notice to the Company or to theTrustee, or to give any directions to the Trustee, or to consent to the waivingof any default hereunder and its consequences, or to take any other actionauthorized to be taken by Securityholders pursuant to any of the provisions ofArticle V;

 

(b) toremove the Trustee and nominate a successor trustee pursuant to the provisionsof Article VI;

 

(c)  to consent to the execution of an indenture orindentures supplemental hereto pursuant to the provisions of Section 9.02; or

 

(d) totake any other action authorized to be taken by or on behalf of the holders ofany specified aggregate principal amount of such Debt Securities under anyother provision of this Indenture or under applicable law.

 

Section 8.02         Call of Meetings by Trustee.

 

The Trustee may at anytime call a meeting of Securityholders to take any action specified in Section8.01, to be held at such time and at such place in New York, as the Trusteeshall determine. Notice of every meeting of the Securityholders, setting forththe time and the place of such meeting and in general terms the action proposedto be taken at such meeting, shall be mailed to holders of Debt Securitiesaffected at their addresses as they shall appear on the Debt SecuritiesRegister. Such notice shall be mailed not less than 20 nor more than 180 daysprior to the date fixed for the meeting.

 

Section 8.03         Call of Meetings by Company orSecurityholders.

 

In case at any time the Company pursuant to a Board Resolution, orthe holders of at least 10% in aggregate principal amount of the DebtSecurities, as the case may be, then outstanding, shall have requested theTrustee to call a meeting of Securityholders, by written request setting forthin reasonable detail the action proposed to be taken at the meeting, and theTrustee shall not have mailed the notice of such meeting within 20 days afterreceipt of such request, then the Company or such Securityholders may determinethe time and the place in Los Angeles, California for such meeting and may callsuch meeting to take any action authorized in Section 8.01, by mailing noticethereof as provided in Section 8.02.

 

Section 8.04         Qualifications for Voting.

 

To be entitled to voteat any meeting of Securityholders a Person shall (a) be a holder of one or moreDebt Securities with respect to which the meeting is being held or (b) a Personappointed by an instrument in writing as proxy by a holder of one or more suchDebt Securities. The only Persons who shall be entitled to be present or tospeak at any meeting of Securityholders shall be the Persons entitled to voteat such meeting and their counsel and any representatives of the Trustee andits counsel and any representatives of the Company and its counsel.

 

Section 8.05         Regulations.

 

Notwithstanding anyother provisions of this Indenture, the Trustee may make such reasonableregulations as it may deem advisable for any meeting of Securityholders, inregard to proof of the holding of Debt Securities and of the appointment ofproxies, and in regard to the appointment and duties of inspectors of votes,the submission and examination of proxies, certificates and other evidence ofthe right to vote, and such other matters concerning the conduct of the meetingas it shall think fit.

 

The Trustee shall, by aninstrument in writing, appoint a temporary chairman of the meeting, unless themeeting shall have been called by the Company or by Securityholders as providedin Section 8.03, in which case the Company or the Securityholders calling themeeting, as the case may be, shall in like manner appoint a temporary chairman.A permanent chairman and a permanent secretary of the meeting shall be electedby majority vote of the meeting.

 

Subject to theprovisions of Section 7.04, at any meeting each holder of Debt Securities withrespect to which such meeting is being held or proxy therefor shall be entitledto one vote, for each $1,000 principal amount of Debt Securities held orrepresented by him; provided, however, that no vote shall be cast orcounted at any meeting in respect of any Debt Security challenged as notoutstanding and ruled by the chairman of the meeting to be not outstanding. Thechairman of the meeting shall have no right to vote other than by virtue ofDebt Securities held by him or instruments in writing as aforesaid dulydesignating him as the Person to vote on behalf of other Securityholders. Anymeeting of Securityholders duly called pursuant to the provisions of Section8.02 or 8.03 may be adjourned from time to time by a majority of those present,whether or not constituting a quorum, and the meeting may be held as soadjourned without further notice.

 

Section 8.06         Voting.

 

The vote upon anyresolution submitted to any meeting of holders of Debt Securities with respectto which such meeting is being held shall be by written ballots on which shallbe subscribed the signatures of such holders or of their representatives byproxy and the serial number or numbers of the Debt Securities held orrepresented by them. The permanent chairman of the meeting shall appoint twoinspectors of votes who shall count all votes cast at the meeting for oragainst any resolution and who shall make and file with the secretary of themeeting their verified written reports in triplicate of all votes cast at themeeting. A record in duplicate of the proceedings of each meeting ofSecurityholders shall be prepared by the secretary of the meeting and thereshall be attached to said record the original reports of the inspectors ofvotes on any vote by ballot taken thereat and affidavits by one or more Personshaving knowledge of the facts setting forth a copy of the notice of the meetingand showing that said notice was mailed as provided in Section 8.02. The recordshall show the serial numbers of the Debt Securities voting in favor of oragainst any resolution. The record shall be signed and verified by theaffidavits of the permanent chairman and secretary of the meeting and one ofthe duplicates shall be delivered to the Company and the other to the Trusteeto be preserved by the Trustee, the latter to have attached thereto the ballotsvoted at the meeting.

 

Any record so signed andverified shall be conclusive evidence of the matters therein stated.

 

Section 8.07         Quorum; Actions.

 

The Persons entitled tovote a majority in principal amount of the Debt Securities shall constitute aquorum for a meeting of Securityholders; provided, however, that if anyaction is to be taken at such meeting with respect to a consent, waiver,request, demand, notice, authorization, direction or other action which may begiven by the holders of not less than a specified percentage in principalamount of the Debt Securities, the Persons holding or representing suchspecified percentage in principal amount of the Debt Securities will constitutea quorum. In the absence of a quorum within 30 minutes of the time appointedfor any such meeting, the meeting shall, if convened at the request ofSecurityholders, be dissolved. In any other case the meeting may be adjournedfor a period of not less than 10 days as determined by the permanent chairmanof the meeting prior to the adjournment of such meeting. In the absence of aquorum at any such adjourned meeting, such adjourned meeting may be furtheradjourned for a period of not less than10 days as determined by the permanent chairman of the meeting prior to theadjournment of such adjourned meeting. Notice of the reconvening of anyadjourned meeting shall be given as provided in Section 8.02, except that suchnotice need be given only once not less than five days prior to the date onwhich the meeting is scheduled to be reconvened. Notice of the reconvening ofan adjourned meeting shall state expressly the percentage, as provided above,of the principal amount of the Debt Securities which shall constitute a quorum.

 

Except as limited by theproviso in the first paragraph of Section 9.02, any resolution presented to ameeting or adjourned meeting duly reconvened at which a quorum is present asaforesaid may be adopted by the affirmative vote of the holders of a majorityin principal amount of the Debt Securities; provided, however, that,except as limited by the proviso in the first paragraph of Section 9.02, anyresolution with respect to any consent, waiver, request, demand, notice,authorization, direction or other action that this Indenture expressly providesmay be given by the holders of not less than a specified percentage inprincipal amount of the Debt Securities may be adopted at a meeting or anadjourned meeting duly reconvened and at which a quorum is present as aforesaidonly by the affirmative vote of the holders of a not less than such specifiedpercentage in principal amount of the Debt Securities.

 

Any resolution passed ordecision taken at any meeting of holders of Debt Securities duly held inaccordance with this Section shall be binding on all the Securityholders,whether or not present or represented at the meeting.

 

ARTICLEIX

SUPPLEMENTALINDENTURES

 

Section 9.01         Supplemental Indentures withoutConsent of Securityholders.

 

The Company, whenauthorized by a Board Resolution, and the Trustee may from time to time and atany time enter into an indenture or indentures supplemental hereto, without theconsent of the Securityholders, for one or more of the following purposes:

 

(a)  to evidence the succession of anothercorporation to the Company, or successive successions, and the assumption bythe successor corporation of the covenants, agreements and obligations of theCompany, pursuant to Article XI hereof;

 

(b) toadd to the covenants of the Company such further covenants, restrictions orconditions for the protection of the holders of Debt Securities as the Board ofDirectors shall consider to be for the protection of the holders of such DebtSecurities, and to make the occurrence, or the occurrence and continuance, of adefault in any of such additional covenants, restrictions or conditions adefault or an Event of Default permitting the enforcement of all or any of theseveral remedies provided in this Indenture as herein set forth; provided,however,  that in respect of anysuch additional covenant, restriction or condition such supplemental indenturemay provide for a particular period of grace after default (which period may beshorter or longer than that allowed in the case of other defaults) or mayprovide for an immediate enforcement upon such default or may limit theremedies available to the­Trustee upon such default;

 

(c)  to cure any ambiguity or to correct orsupplement any provision contained herein or in any supplemental indenturewhich may be defective or inconsistent with any other provision containedherein or in any supplemental indenture, or to make such other provisions inregard to matters or questions arising under this Indenture; provided that anysuch action shall not adversely affect the interests of the holders of the DebtSecurities;

 

(d) toadd to, delete from, or revise the terms of Debt Securities, including, withoutlimitation, any terms relating to the issuance, exchange, registration ortransfer of Debt Securities, including to provide for transfer procedures andrestrictions substantially similar to those applicable to the CapitalSecurities as required by Section 2.05 (for purposes of assuring that noregistration of Debt Securities is required under the Securities Act of 1933,as amended); provided that any such action shall not adversely affect theinterests of the holders of the Debt Securities then outstanding (it beingunderstood, for purposes of this proviso, that transfer restrictions on DebtSecurities substantially similar to those that were applicable to CapitalSecurities shall not be deemed to adversely affect the holders of the DebtSecurities);

 

(e)  to evidence and provide for the acceptance ofappointment hereunder by a successor Trustee with respect to the DebtSecurities and to add to or change any of the provisions of this Indenture asshall be necessary to provide for or facilitate the administration of thetrusts hereunder by more than one Trustee, pursuant to the requirements ofSection 6.10;

 

(f)  to make any change (other than as elsewhereprovided in this paragraph) that does not adversely affect the rights of anySecurityholder in any material respect; or

 

(g) toprovide for the issuance of and establish the form and terms and conditions ofthe Debt Securities, to establish the form of any certifications required to befurnished pursuant to the terms of this Indenture or the Debt Securities, or toadd to the rights of the holders of Debt Securities.

 

The Trustee is herebyauthorized to join with the Company in the execution of any such supplementalindenture, to make any further appropriate agreements and stipulations whichmay be therein contained and to accept the conveyance, transfer and assignmentof any property thereunder, but the Trustee shall not be obligated to, but mayin its discretion, enter into any such supplemental indenture which affects theTrustee's own rights, duties or immunities under this Indenture or otherwise.

 

Any supplementalindenture authorized by the provisions of this Section 9.01 may be executed bythe Company and the Trustee without the consent of the holders of any of theDebt Securities at the time outstanding, notwithstanding any of the provisionsof Section 9.02.

 

Section 9.02         Supplemental Indentures with Consentof Securityholders.

 

With the consent(evidenced as provided in Section 7.01) of the holders of not less than a majorityin aggregate principal amount of the Debt Securities at the time outstandingaffected by such supplemental indenture (voting as a class), the Company, whenauthorized by a Board Resolution, and the Trustee may from time to time and atany time enter into an indenture or indentures supplemental hereto (which shallconform to the provisions of the Trust Indenture Act, then in effect,applicable to indentures qualified thereunder) for the purpose of adding anyprovisions to or changing in any manner or eliminating any of the provisions ofthis Indenture or of any supplemental indenture or of modifying in any mannerthe rights of the holders of the Debt Securities; provided, however,that no such supplemental indenture shall without the consent of the holders ofeach Debt Security then outstanding and affected thereby (i) extend the fixedmaturity of any Debt Security, or reduce the principal amount thereof or anypremium thereon, or reduce the rate or extend the time of payment of interestthereon, or reduce any amount payable on redemption thereof or make theprincipal thereof or any interest or premium thereon payable in any coin orcurrency other than that provided in the Debt Securities, or impair or affectthe right of any Securityholder to institute suit for payment thereof or impairthe right of repayment, if any, at the option of the holder, or (ii) reduce theaforesaid percentage of Debt Securities the holders of which are required toconsent to any such supplemental indenture; and provided, further, thatif the Debt Securities are held by the Trust or a trustee of such trust, suchsupplemental indenture shall not be effective until the holders of a majorityin liquidation preference of Trust Securities shall have consented to suchsupplemental indenture; provided further, that if the consent of theSecurityholder of each outstanding Debt Security is required, such supplementalindenture shall not be effective until each holder of the Trust Securitiesshall have consented to such supplemental indenture.

 

Upon the request of theCompany accompanied by a Board Resolution authorizing the execution of any suchsupplemental indenture, and upon the filing with the Trustee of evidence of theconsent of Securityholders as aforesaid, the Trustee shall join with theCompany in the execution of such supplemental indenture unless suchsupplemental indenture affects the Trustee's own rights, duties or immunitiesunder this Indenture or otherwise, in which case the Trustee may in itsdiscretion, but shall not be obligated to, enter into such supplementalindenture.

 

Promptly after theexecution by the Company and the Trustee of any supplemental indenture pursuantto the provisions of this Section, the Trustee shall transmit by mail, firstclass postage prepaid, a notice, prepared by the Company, setting forth ingeneral terms the substance of such supplemental indenture, to theSecurityholders thereby as their names and addresses appear upon the DebtSecurity Register. Any failure of the Trustee to mail such notice, or anydefect therein, shall not, however, in any way impair or affect the validity ofany such supplemental indenture.

 

It shall not benecessary for the consent of the Securityholders under this Section 9.02 toapprove the particular form of any proposed supplemental indenture, but itshall be sufficient if such consent shall approve the substance thereof

 

Section 9.03         Effect of Supplemental Indentures.

 

Upon the execution ofany supplemental indenture pursuant to the provisions of this Article IX, this Indentureshall be and be deemed to be modified and amended in accordance therewith andthe respective rights, limitations of rights, obligations, duties andimmunities under this Indenture of the Trustee, the Company and the holders ofDebt Securities shall thereafter be determined, exercised and enforcedhereunder subject in all respects to such modifications and amendments and allthe terms and conditions of any such supplemental indenture shall be and bedeemed to be part of the terms and conditions of this Indenture for any and allpurposes.

 

Section 9.04         Notation on Debt Securities.

 

Debt Securitiesauthenticated and delivered after the execution of any supplemental indenturepursuant to the provisions of this Article IX may bear a notation as to any matterprovided for in such supplemental indenture. If the Company or the Trusteeshall so determine, new Debt Securities so modified as to conform, in theopinion of the Board of Directors of the Company, to any modification of thisIndenture contained in any such supplemental indenture may be prepared andexecuted by the Company, authenticated by the Trustee or the AuthenticatingAgent and delivered in exchange for the Debt Securities then outstanding.

 

Section 9.05         Evidence of Compliance ofSupplemental Indenture to be Furnished to Trustee.

 

The Trustee, subject tothe provisions of Sections 6.01 and 6.02, shall, in addition to the documentsrequired by Section 14.06, receive an Officers' Certificate and an Opinion ofCounsel as conclusive evidence that any supplemental indenture executedpursuant hereto complies with the requirements of this Article IX. The Trusteeshall receive an Opinion of Counsel as conclusive evidence that anysupplemental indenture executed pursuant to this Article IX is authorized orpermitted by, and conforms to, the terms of this Article IX and that it isproper for the Trustee under the provisions of this Article IX to join in theexecution thereof.

 

ARTICLEX

REDEMPTIONOF SECURITIES

 

Section 10.01       Optional Redemption.

 

At any time the Companyshall have the right, subject to the receipt by the Company of prior approvalfrom the Federal Reserve, if then required under applicable capital guidelinesor policies of the Federal Reserve, to redeem the Debt Securities, in whole orin part, on any January 25th or July 25th on or after July 25, 2006 (the"Redemption Date"), at the Redemption Price.

 

Section 10.02       Special Event Redemption.

 

If a Special Event shalloccur and be continuing, the Company shall have the right, subject to the receiptby the Company of prior approval from the Federal Reserve if then requiredunder applicable capital guidelines or policies of the Federal Reserve, toredeem the Debt Securities, in whole but not in part, at any time within 90days following the occurrence of such Special Event (the "Special Redemption Date"), at theSpecial Redemption Price.

 

Section 10.03       Notice of Redemption, Selection ofDebt Securities.

 

In case the Companyshall desire to exercise the right to redeem all, or, as the case may be, anypart of the Debt Securities, it shall fix a date for redemption and shall maila notice of such redemption at least 30 and not more than 60 days prior to thedate fixed for redemption to the holders of Debt Securities so to be redeemedas a whole or in part at their last addresses as the same appear on the DebtSecurity Register. Such mailing shall be by first class mail. The notice ifmailed in the manner herein provided shall be conclusively presumed to havebeen duly given, whether or not the holder receives such notice. In any case,failure to give such notice by mail or any defect in the notice to the holderof any Debt Security designated for redemption as a whole or in part shall notaffect the validity of the proceedings for the redemption of any other DebtSecurity.

 

Each such notice ofredemption shall specify the CUSIP number, if any, of the Debt Securities to beredeemed, the date fixed for redemption, the redemption price at which DebtSecurities are to be redeemed, the place or places of payment, that paymentwill be made upon presentation and surrender of such Debt Securities, thatinterest accrued to the date fixed for redemption will be paid as specified insaid notice, and that on and after said date interest thereon or on the portionsthereof to be redeemed will cease to accrue. If less than all the DebtSecurities are to be redeemed the notice of redemption shall specify thenumbers of the Debt Securities to be redeemed. In case the Debt Securities areto be redeemed in part only, the notice of redemption shall state the portionof the principal amount thereof to be redeemed and shall state that on andafter the date fixed for redemption, upon surrender of such Debt Security, anew Debt Security or Debt Securities in principal amount equal to theunredeemed portion thereof will be issued.

 

Prior to 10:00 a.m. NewYork City time on the Redemption Date or on the Special Redemption Date (as thecase may be) specified in the notice of redemption given as provided in thisSection, the Company will deposit with the Trustee or with one or more payingagents an amount of money sufficient to redeem on the redemption date all theDebt Securities so called for redemption at the appropriate, redemption price,together with accrued interest to the date fixed for redemption.

 

The Company will givethe Trustee notice not less than 45 nor more than 60 days prior to theredemption date as to the aggregate principal amount of Debt Securities to beredeemed and the Trustee shall select, in such manner as in its sole discretionit shall deem appropriate and fair, the Debt Securities or portions thereof (inintegral multiples of $1,000) to be redeemed.

 

Section 10.04       Payment of Debt Securities Called forRedemption.

 

If notice of redemptionhas been given as provided in Section 10.03, the Debt Securities or portions ofDebt Securities with respect to which such notice has been given shall becomedue and payable on the Redemption Date or the Special Redemption Date (as thecase may be) and at the place or places stated in such notice at the applicableredemption price, together with interest accrued to the date fixed forredemption, and on and after said Redemption Date or the Special RedemptionDate (as the case may be) (unless the Company shall default in the payment ofsuch Debt Securities at the redemption price, together with interest accrued tosaid date) interest on the Debt Securities or portions of Debt Securities socalled for redemption shall cease to accrue. On presentation and surrender ofsuch Debt Securities at a place of payment specified in said notice, such DebtSecurities or the specified portions thereof shall be paid and redeemed by theCompany at the applicable redemption price, together with interest accruedthereon to the Redemption Date or the Special Redemption Date (as the case maybe).

 

Upon presentation of anyDebt Security redeemed in part only, the Company shall execute and the Trusteeshall authenticate and make available for delivery to the holder thereof, atthe expense of the Company, a new Debt Security or Debt Securities ofauthorized denominations in principal amount equal to the unredeemed portion ofthe Debt Security so presented.

 

ARTICLEXI

CONSOLIDATION,MERGER, SALE, CONVEYANCE AND LEASE

 

Section 11.01       Company May Consolidate, etc., onCertain Terms.

 

Nothing contained inthis Indenture or in the Debt Securities shall prevent any consolidation ormerger of the Company with or into any other corporation or corporations(whether or not affiliated with the Company) or successive consolidations ormergers in which the Company or its successor or successors shall be a party orparties, or shall prevent any sale, conveyance, transfer or other dispositionof the property or capital stock of the Company or its successor or successorsas an entirety, or substantially as an entirety, to any other corporation(whether or not affiliated with the Company, or its successor or successors)authorized to acquire and operate the same; provided, however, that theCompany hereby covenants and agrees that, upon any such consolidation, merger(where the Company is not the surviving corporation), sale, conveyance,transfer or other disposition, the due and punctual payment of the principal of(and premium, if any) and interest on all of the Debt Securities in accordancewith their terms, according to their tenor, and the due and punctualperformance and observance of all the covenants and conditions of thisIndenture to be kept or performed by the Company, shall be expressly assumed bysupplemental indenture satisfactory in form to the Trustee executed anddelivered to the Trustee by the entity formed by such consolidation, or intowhich the Company shall have been merged, or by the entity which shall haveacquired such property or capital stock.

 

Section 11.02       Successor Entity to be Substituted.

 

In case of any suchconsolidation, merger, sale, conveyance, transfer or other disposition and uponthe assumption by the successor entity, by supplemental indenture, executed anddelivered to the Trustee and satisfactory in form to the Trustee, of the dueand punctual payment of the principal of and premium, if any, and interest onall of the Debt Securities and the due and punctual performance and observanceof all of the covenants and conditions of this Indenture to be performed orobserved by the Company, such successor entity shall succeed to and besubstituted for the Company, with the same effect as if it had been namedherein as the Company, and thereupon the predecessor entity shall be relievedof any further liability or obligation hereunder or upon the Debt Securities.Such successor entity thereupon may cause to be signed, and may issue either inits own name or in the name of the Company, any or all of the Debt Securitiesissuable hereunder which theretofore shall not have been signed by the Companyand delivered to the Trustee or the Authenticating Agent; and, upon the orderof such successor entity instead of the Company and subject to all the terms,conditions and limitations in this Indenture prescribed, the Trustee or theAuthenticating Agent shall authenticate and deliver any Debt Securities whichpreviously shall have been signed and delivered by the officers of the Company,to the Trustee or the Authenticating Agent for authentication, and any DebtSecurities which such successor entity thereafter shall cause to be signed anddelivered to the Trustee or the Authenticating Agent for that purpose. All theDebt Securities so issued shall in all respects have the same legal rank andbenefit under this Indenture as the Debt Securities theretofore or thereafterissued in accordance with the terms of this Indenture as though all of suchDebt Securities had been issued at the date of the execution hereof.

 

Section 11.03       Opinion of Counsel to be Given toTrustee.

 

The Trustee, subject tothe provisions of Sections 6.01 and 6.02, shall receive, in addition to theOpinion of Counsel required by Section 9.05, an Opinion of Counsel asconclusive evidence that any consolidation, merger, sale, conveyance, transferor other disposition, and any assumption, permitted or required by the terms ofthis Article XI complies with the provisions of this Article XI.

 

ARTICLEXII

SATISFACTIONAND DISCHARGE OF INDENTURE

 

Section 12.01       Discharge of Indenture.

 

When (a) the Companyshall deliver to the Trustee for cancellation all Debt Securities theretoforeauthenticated (other than any Debt Securities which shall have been destroyed,lost or stolen and which shall have been replaced or paid as provided inSection 2.06) and not theretofore canceled, or (b) all the Debt Securities nottheretofore canceled or delivered to the Trustee for cancellation shall havebecome due and payable, or are by their terms to become due and payable withinone year or are to be called for redemption within one year under arrangementssatisfactory to the Trustee for the giving of notice of redemption, and theCompany shall deposit with the Trustee, in trust, funds, which shall beimmediately due and payable, sufficient to pay at maturity or upon redemptionall of the Debt Securities (other than any Debt Securities which shall havebeen destroyed, lost or stolen and which shall have been replaced or paid asprovided in Section 2.06) not theretofore canceled or delivered to the Trusteefor cancellation, including principal and premium, if any, and interest due orto become due to such date of maturity or redemption date, as the case may be,but excluding, however, the amount of any moneys for the payment of principalof, and premium, if any, or interest on the Debt Securities (1) theretoforerepaid to the Company in accordance with the provisions of Section 12.04, or(2) paid to any state or to the District of Columbia pursuant to its unclaimedproperty or similar laws, and if in the case of either clause (a) or clause (b)the Company shall also pay or cause to be paid all other sums payable hereunderby the Company, then this Indenture shall cease to be of further effect exceptfor the provisions of Sections 2.05, 2.06, 2.08, 3.01, 3.02, 3.04, 6.06, 6.09and 12.04 hereof shall survive until such Debt Securities shall mature or areredeemed, as the case may be, and are paid. Thereafter, Sections 6.09 and 12.04shall survive, and the Trustee, on demand of the Company accompanied by anOfficers' Certificate and an Opinion of Counsel, each stating that allconditions precedent herein provided for relating to the satisfaction anddischarge of this Indenture have been complied with, and at the cost andexpense of the Company, shall execute proper instruments acknowledgingsatisfaction of and discharging this Indenture, the Company, however, herebyagreeing to reimburse the Trustee for any costs or expenses thereafterreasonably and properly incurred by the Trustee in connection with thisIndenture or the Debt Securities.

 

Section 12.02       Deposited Moneys to be Held in Trustby Trustee.

 

Subject to theprovisions of Section 12.04, all moneys deposited with the Trustee pursuant toSection 12.01 shall be held in trust and applied by it to the payment, eitherdirectly or through any paying agent (including the Company if acting as itsown paying agent), to the holders of the particular Debt Securities for thepayment of which such moneys have been deposited with the Trustee, of all sumsdue and to become due thereon for principal, and premium, if any, and interest.

 

Section 12.03       Paying Agent to Repay Moneys Held.

 

Upon the satisfactionand discharge of this Indenture, all moneys then held by any paying agent ofthe Debt Securities (other than the Trustee) shall, upon demand of the Company,be repaid to it or paid to the Trustee, and thereupon such paying agent shallbe released from all further liability with respect to such moneys.

 

Section 12.04       Return of Unclaimed Moneys.

 

Any moneys depositedwith or paid to the Trustee or any paying agent for payment of the principalof, and premium, if any, or interest on Debt Securities and not applied butremaining unclaimed by the holders of Debt Securities for two years after thedate upon which the principal of, and premium, if any, or interest on such DebtSecurities, as the case may be, shall have become due and payable, shall berepaid to the Company by the Trustee or such paying agent on written demand;and the holder of any of the Debt Securities shall thereafter look only to theCompany for any payment which such holder may be entitled to collect and allliability of the Trustee or such paying agent with respect to such moneys shallthereupon cease.

 

ARTICLEXIII

IMMUNITYOF INCORPORATORS, STOCKHOLDERS,

OFFICERSAND DIRECTORS

 

Section 13.01       Indenture and Debt Securities SolelyCorporate Obligations.

 

No recourse for thepayment of the principal of or premium, if any, or interest on any DebtSecurity, or for any claim based thereon or otherwise in respect thereof, andno recourse under or upon any obligation, covenant or agreement of the Companyin this Indenture or in any supplemental indenture, or in any such DebtSecurity, or because of the creation of any indebtedness represented thereby,shall be had against any incorporator, stockholder, officer, director, employeeor agent, as such, past, present or future, of the Company or of any successorcorporation of the Company, either directly or through the Company or anysuccessor corporation of the Company, whether by virtue of any constitution,statute or rule of law, or by the enforcement of any assessment or penalty orotherwise; it being expressly understood that all such liability is herebyexpressly waived and released as a condition of, and as a consideration for,the execution of this Indenture and the issue of the Debt Securities.

 

ARTICLEXIV

MISCELLANEOUSPROVISIONS

 

Section 14.01       Successors.

 

All the covenants,stipulations, promises and agreements of the Company contained in thisIndenture shall bind its successors and assigns whether so expressed or not.

 

Section 14.02       Official Acts by Successor Entity.

 

Any act or proceeding byany provision of this Indenture authorized or required to be done or performedby any board, committee or officer of the Company shall and may be done andperformed with like force and effect by the like board, committee, officer orother authorized Person of any entity that shall at the time be the lawfulsuccessor of the Company.

 

Section 14.03       Surrender of Company Powers.

 

The Company byinstrument in writing executed by authority of 2/3 (two–thirds) of itsBoard of Directors and delivered to the Trustee may surrender any of the powersreserved to the Company and thereupon such power so surrendered shall terminateboth as to the Company, and as to any permitted successor.

 

Section 14.04       Addresses for Notices, etc.

 

Any notice or demandwhich by any provision of this Indenture is required or permitted to be givenor served by the Trustee or by the Securityholders on the Company may be givenor served in writing by being deposited postage prepaid by registered orcertified mail in a post office letter box addressed (until another address isfiled by the Company, with the Trustee for the purpose) to National MercantileBancorp at 1840 Century Park East, Los Angeles, California 90067, Attention:Scott A. Montgomery. Any notice, direction, request or demand by anySecurityholder or the Company to or upon the Trustee shall be deemed to havebeen sufficiently given or made, for all purposes, if given or made in writingat the office of the Trustee, addressed to the Trustee, 101 Barclay Street,Floor 21W, New York, NY 10286, Attention: Corporate Trust Administration.

 

Section 14.05       Governing Law.

 

This Indenture and eachDebt Security shall be deemed to be a contract made under the law of the Stateof New York, and for all purposes shall be governed by and construed inaccordance with the law of said State, without regard to conflict of lawsprinciples thereof.

 

Section 14.06       Evidence Of Compliance with ConditionsPrecedent.

 

Upon any application ordemand by the Company to the Trustee to take any action under any of theprovisions of this Indenture, the Company shall furnish to the Trustee anOfficers' Certificate stating that in the opinion of the signers all conditionsprecedent, if any, provided for in this Indenture relating to the proposedaction have been complied with and an Opinion of Counsel stating that, in theopinion of such counsel, all such conditions precedent have been complied with.

 

Each certificate oropinion provided for in this Indenture and delivered to the Trustee withrespect to compliance with a condition or covenant provided for in thisIndenture (except certificates delivered pursuant to Section 3.05) shallinclude (a) a statement that the person making such certificate or opinion hasread such covenant or condition; (b) a brief statement as to the nature andscope of the examination or investigation upon which the statements or opinionscontained in such certificate or opinion are based; (c) a statement that, inthe opinion of such person, he has made such examination or investigation as isnecessary to enable him to express an informed opinion as to whether or notsuch covenant or condition has been complied with; and (d) a statement as towhether or not, in the opinion of such person, such condition or covenant hasbeen complied with.

 

Section 14.07       Non–BusinessDays.

 

In any case where thedate of payment of interest on or principal of the Debt Securities is not aBusiness Day, the payment of such interest on or principal of the DebtSecurities need not be made on such date but may be made on the next succeedingBusiness Day, with the same force and effect as if made on the date of paymentand no interest shall accrue for the period from and after such date, except ifsuch Business Day is in the next succeeding calendar year, such payment will bemade on the immediately preceding Business Day.

 

Section 14.08       Table of Contents, Headings, etc.

 

The table of contentsand the titles and headings of the articles and sections of this Indenture havebeen inserted for convenience of reference only, are not to be considered apart hereof, and shall in no way modify or restrict any of the terms orprovisions hereof

 

Section 14.09       Execution in Counterparts.

 

This Indenture may beexecuted in any number of counterparts, each of which shall be an original, butsuch counterparts shall together constitute but one and the same instrument.

 

Section 14.10       Separability.

 

In case any one or moreof the provisions contained in this Indenture or in the Debt Securities shallfor any reason be held to be invalid, illegal or unenforceable in any respect,such invalidity, illegality or unenforceability shall not affect any otherprovisions of this Indenture or of such Debt Securities, but this Indenture andsuch Debt Securities shall be construed as if such invalid or illegal orunenforceable provision had never been contained herein or therein.

 

Section 14.11       Assignment.

 

The Company will havethe right at all times to assign any of its rights or obligations under thisIndenture to a direct or indirect wholly owned Subsidiary of the Company,provided that, in the event of any such assignment, the Company will remainliable for all such obligations. Subject to the foregoing, this Indenture isbinding upon and inures to the benefit of the parties hereto and theirrespective successors and assigns. This Indenture may not otherwise be assignedby the parties thereto.

 

Section 14.12       Acknowledgment of Rights.

 

The Company acknowledgesthat, with respect to any Debt Securities held by the Trust or theInstitutional Trustee of the Trust, if the Institutional Trustee of the Trustfails to enforce its rights under this Indenture as the holder of DebtSecurities held as the assets of the Trust after the holders of a majority inLiquidation Amount of the Capital Securities of the Trust have so directed inwriting such Institutional Trustee, a holder of record of such CapitalSecurities may to the fullest extent permitted by law institute legalproceedings directly against the Company to enforce such InstitutionalTrustee's rights under this Indenture without first instituting any legalproceedings against such Institutional Trustee or any other Person.Notwithstanding the foregoing, if an Event of Default has occurred and iscontinuing and such event is attributable to the failure of the Company to payinterest (or premium, if any) or principal on the Debt Securities on the datesuch interest (or premium, if any) or principal is otherwise due and payable(or in the case of redemption, on the redemption date), the Companyacknowledges that a holder of record of Capital Securities of the Trust maydirectly institute a proceeding against the Company for enforcement of paymentto such holder directly of the principal of (or premium, if any) or interest onthe Debt Securities having an aggregate principal amount equal to the aggregateLiquidation Amount of the Capital Securities of such holder on or after therespective due date specified in the Debt Securities.

 

ARTICLEXV

SUBORDINATIONOF DEBT SECURITIES

 

Section 15.01       Agreement to Subordinate.

 

The Company covenantsand agrees, and each holder of Debt Securities issued hereunder and under anysupplemental indenture or by any Board Resolution (the "AdditionalProvisions") by such Securityholder's acceptance thereof likewisecovenants and agrees, that all Debt Securities shall be issued subject to theprovisions of this Article XV; and each holder of a Debt Security, whether uponoriginal issue or upon transfer or assignment thereof, accepts and agrees to bebound by such provisions.

 

The payment by theCompany of the principal of, and premium, if any, and interest on all DebtSecurities issued hereunder and under any Additional Provisions shall, to theextent and in the manner hereinafter set forth, be subordinated and junior inright of payment to the prior payment in full of all Senior Indebtedness of theCompany, whether outstanding at the date of this Indenture or thereafter incurred.

 

No provision of thisArticle XV shall prevent the occurrence of any default or Event of Defaulthereunder.

 

Section 15.02       Default on Senior Indebtedness.

 

In the event and duringthe continuation of any default by the Company in the payment of principal,premium, interest or any other payment due on any Senior Indebtedness of theCompany following any grace period, or in the event that the maturity of anySenior Indebtedness of the Company has been accelerated because of a default,and such acceleration has not been rescinded or canceled then, in either case,no payment shall be made by the Company with respect to the principal of, orpremium, if any, or interest on the Debt Securities.

 

In the event that,notwithstanding the foregoing, any payment shall be received by the Trusteewhen such payment is prohibited by the preceding paragraph of this Section15.02, such payment shall, subject to Section 15.06, be held in trust for thebenefit of, and shall be paid over or delivered to, the holders of SeniorIndebtedness or their respective representatives, or to the trustee or trusteesunder any indenture pursuant to which any of such Senior Indebtedness may havebeen issued, as their respective interests may appear, but only to the extentthat the holders of the Senior Indebtedness (or their representative orrepresentatives or a trustee) notify the Trustee in writing within 90 days ofsuch payment of the amounts then due and owing on the Senior Indebtedness andonly the amounts specified in such notice to the Trustee shall be paid to theholders of Senior Indebtedness.

 

Section 15.03       Liquidation, Dissolution, Bankruptcy.

 

Upon any payment by theCompany or distribution of assets of the Company of any kind or character,whether in cash, property or securities, to creditors upon any dissolution orwinding–up or liquidation or reorganization of the Company, whethervoluntary or involuntary or in bankruptcy, insolvency, receivership or otherproceedings, all amounts due upon all Senior Indebtedness of the Company shallfirst be paid in full, or payment thereof provided for in money in accordancewith its terms, before any payment is made by the Company, on account of theprincipal (and premium, if any) or interest on the Debt Securities; and uponany such dissolution or winding–up or liquidation or reorganization, anypayment by the Company, or distribution of assets of the Company of any kind orcharacter, whether in cash, property or securities, to which theSecurityholders or the Trustee would be entitled to receive from the Company,except for the provisions of this Article XV, shall be paid by the Company, orby any receiver, trustee in bankruptcy, liquidating trustee, agent or otherPerson making such payment or distribution, or by the Securityholders or by theTrustee under this Indenture if received by them or it, directly to the holdersof Senior Indebtedness of the Company (pro rata to such holders on the basis ofthe respective amounts of Senior Indebtedness held by such holders, ascalculated by the Company) or their representative or representatives, or tothe trustee or trustees under any indenture pursuant to which any instrumentsevidencing such Senior Indebtedness may have been issued, as their respectiveinterests may appear, to the extentnecessary to pay such Senior Indebtedness in full, in money or money'sworth, after giving effect to any concurrent payment or distribution to or forthe holders of such Senior Indebtedness, before any payment or distribution ismade to the Securityholders.

 

In the event that,notwithstanding the foregoing, any payment or distribution of assets of theCompany of any kind or character, whether in cash, property or securities,prohibited by the foregoing, shall be received by the Trustee before all SeniorIndebtedness of the Company is paid in full, or provision is made for suchpayment in money in accordance with its terms, such payment or distributionshall be held in trust for the benefit of and shall be paid over or deliveredto the holders of such Senior Indebtedness or their representative orrepresentatives, or to the trustee or trustees under any indenture pursuant towhich any instruments evidencing such Senior Indebtedness may have been issued,as their respective interests may appear, as calculated by the Company, forapplication to the payment of all Senior Indebtedness of the Company, remainingunpaid to the extent necessary to pay such Senior Indebtedness in full in moneyin accordance with its terms, after, giving effect to any concurrent payment ordistribution to or for the benefit of the holders of such Senior Indebtedness.

 

For purposes of thisArticle XV, the words "cash, property or securities" shall not bedeemed to include shares of stock of the Company as reorganized or readjusted,or securities of the Company or any other corporation provided for by a plan ofreorganization or readjustment, the payment of which is subordinated at leastto the extent provided in this Article XV with respect to the Debt Securitiesto the payment of all Senior Indebtedness of the Company, that may at the timebe outstanding, provided that (a) such Senior Indebtedness is assumed by thenew corporation, if any, resulting from any such reorganization orreadjustment, and (b) the rights of the holders of such Senior Indebtedness arenot, without the consent of such holders, altered by such reorganization orreadjustment. The consolidation of the Company with, or the merger of theCompany into, another corporation or the liquidation or dissolution of theCompany following the conveyance or transfer of its property as an entirety, orsubstantially as an entirety, to another corporation upon the terms andconditions provided for in Article IX of this Indenture shall not be deemed adissolution, winding–up, liquidation or reorganization for the purposesof this Section 15.03 if such other corporation shall, as a part of suchconsolidation, merger, conveyance or transfer, comply with the conditionsstated in Article IX of this Indenture. Nothing in Section 15.02 or in this Section15.03 shall apply to claims of, or payments to, the Trustee under or pursuantto Section 6.06 of this Indenture.

 

Section 15.04       Subrogation.

 

Subject to the paymentin full of all Senior Indebtedness of the Company, the Securityholders shall besubrogated to the rights of the holders of such Senior Indebtedness to receivepayments or distributions of cash, property or securities of the Company,applicable to such Senior Indebtedness until the principal of (and premium, ifany) and interest on the Debt Securities shall be paid in full; and, for thepurposes of such subrogation, no payments or distributions to the holders ofsuch Senior Indebtedness of any cash, property or securities to which theSecurityholders or the Trustee would be entitled except for the provisions ofthis Article XV, and no payment over pursuant to the provisions of this ArticleXV to or for the benefit of the holders of such Senior Indebtedness bySecurityholders or the Trustee, shall, as between the Company, its creditorsother than holders of Senior Indebtedness of the Company, and the holders ofthe Debt Securities be deemed to be a payment or distribution by the Company toor on account of such Senior Indebtedness. It is understood that the provisionsof this Article XV are and are intended solely for the purposes of defining therelative rights of the holders of the Debt Securities, on the one hand, and theholders of such Senior Indebtedness, on the other hand.

 

Nothing contained inthis Article XV or elsewhere in this Indenture, any Additional Provisions or inthe Debt Securities is intended to or shall impair, as between the Company, itscreditors other than the holders of Senior Indebtedness of the Company, and theholders of the Debt Securities, the obligation of the Company, which isabsolute and unconditional, to pay to the holders of the Debt Securities theprincipal of (and premium, if any) and interest on the Debt Securities as andwhen the same shall become due and payable in accordance with their terms, oris intended to or shall affect the relative rights of the holders of the DebtSecurities and creditors of the Company, other than the holders of SeniorIndebtedness of the Company, nor shall anything herein or therein prevent theTrustee or the holder of any Debt Security from exercising all remediesotherwise permitted by applicable law upon default under this Indenture,subject to the rights, if any, under this Article XV of the holders of suchSenior Indebtedness in respect of cash, property or securities of the Company,received upon the exercise of any such remedy.

 

Upon any payment ordistribution of assets of the Company referred to in this Article XV, theTrustee, subject to the provisions of Article VI of this Indenture, and theSecurityholders shall be entitled to conclusively rely upon any order or decreemade by any court of competent jurisdiction in which such dissolution, winding–up,liquidation or reorganization proceedings are pending, or a certificate of thereceiver, trustee in bankruptcy, liquidation trustee, agent or other Personmaking such payment or distribution, delivered to the Trustee or to theSecurityholders, for the purposes of ascertaining the Persons entitled toparticipate in such distribution, the holders of Senior Indebtedness and otherindebtedness of the Company, the amount thereof or payable thereon, the amountor amounts paid or distributed thereon and all other facts pertinent thereto orto this Article XV.

 

Section 15.05       Trustee to Effectuate Subordination.

 

Each Securityholder by suchSecurityholder's acceptance thereof authorizes and directs the Trustee on suchSecurityholder's behalf to take such action as may be necessary or appropriateto effectuate the subordination provided in this Article XV and appoints theTrustee such Securityholder's attorney–in–fact for any and all suchpurposes.

 

Section 15.06       Notice by the Company.

 

The Company shall giveprompt written notice to a Responsible Officer of the Trustee at the PrincipalOffice of the Trustee of any fact known to the Company that would prohibit themaking of any payment of monies to or by the Trustee in respect of the DebtSecurities pursuant to the provisions of this Article XV. Notwithstanding theprovisions of this Article XV or any other provision of this Indenture or anyAdditional Provisions, the Trusteeshall not be charged with knowledge of the existence of any facts that wouldprohibit the making of any payment of monies to or by the Trustee in respect ofthe Debt Securities pursuant to the provisions of this Article XV,unless and until a Responsible Officer of the Trustee at the Principal Officeof the Trustee shall have received written notice thereof from the Company or aholder or holders of Senior Indebtedness or from any trustee therefor; andbefore the receipt of any such written notice, the Trustee, subject to theprovisions of Article VI of this Indenture, shall be entitled in all respectsto assume that no such facts exist; provided, however, that if theTrustee shall not have received the notice provided for in this Section 15.06at least two Business Days prior to the date upon which by the terms hereof anymoney may become payable for any purpose (including, without limitation, thepayment of the principal of (or premium, if any) or interest on any Debt Security),then, anything herein contained to the contrary notwithstanding, the Trusteeshall have full power and authority to receive such money and to apply the sameto the purposes for which they were received, and shall not be affected by anynotice to the contrary that may be received by it within two Business Daysprior to such date.

 

The Trustee, subject tothe provisions of Article VI of this Indenture, shall be entitled toconclusively rely on the delivery to it of a written notice by a Person representinghimself to be a holder of Senior Indebtedness of the Company (or a trustee orrepresentative on behalf of such holder), to establish that such notice hasbeen given by a holder of such Senior Indebtedness or a trustee orrepresentative on behalf of any such holder or holders. In the event that theTrustee determines in good faith that further evidence is required with respectto the right of any Person as a holder of such Senior Indebtedness toparticipate in any payment or distribution pursuant to this Article XV, theTrustee may request such Person to furnish evidence to the reasonablesatisfaction of the Trustee as to the amount of such Senior Indebtedness heldby such Person, the extent to which such Person is entitled to participate insuch payment or distribution and any other facts pertinent to the rights ofsuch Person under this Article XV, and, if such evidence is not furnished, theTrustee may defer any payment to such Person pending judicial determination asto the right of such Person to receive such payment.

 

Section 15.07       Rights of the Trustee; Holders ofSenior Indebtedness.

 

The Trustee in itsindividual capacity shall be entitled to all the rights set forth in thisArticle XV in respect of any Senior Indebtedness at any time held by it, to thesame extent as any other holder of Senior Indebtedness, and nothing in thisIndenture or any Additional Provisions shall deprive the Trustee of any of itsrights as such holder.

 

With respect to theholders of Senior Indebtedness of the Company, the Trustee undertakes toperform or to observe only such of its covenants and obligations as arespecifically set forth in this Article XV, and no implied covenants orobligations with respect to the holders of such Senior Indebtedness shall beread into this Indenture or any Additional Provisions against the Trustee. TheTrustee shall not be deemed to owe any fiduciary duty to the holders of suchSenior Indebtedness and, subject to the provisions of Article VI of thisIndenture, the Trustee shall not be liable to any holder of such SeniorIndebtedness if it shall pay over or deliver to Securityholders, the Company orany other Person money or assets to which any holder of such SeniorIndebtedness shall be entitled by virtue of this Article XV or otherwise.

 

Nothing in this ArticleXV shall apply to claims of, or payments to, the Trustee under or pursuant toSection 6.06.

 

Section 15.08       Subordination May Not Be Impaired.

 

No right of any presentor future holder of any Senior Indebtedness of the Company to enforcesubordination as herein provided shall at any time in any way be prejudiced orimpaired by any act or failure to act on the part of the Company, or by any actor failure to act, in good faith, by any such holder, or by any noncomplianceby the Company, with the terms, provisions and covenants of this Indenture,regardless of any knowledge thereof that any such holder may have or otherwisebe charged with.

 

Without in any waylimiting the generality of the foregoing paragraph, the holders of Senior Indebtednessof the Company may, at any time and from time to time, without the consent ofor notice to the Trustee or the Securityholders, without incurringresponsibility to the Securityholders and without impairing or releasing thesubordination provided in this Article XV or the obligations hereunder of theholders of the Debt Securities to the holders of such Senior Indebtedness, doany one or more of the following: (a) change the manner, place or terms ofpayment or extend the time of payment of, or renew or alter, such SeniorIndebtedness, or otherwise amend or supplement in any manner such SeniorIndebtedness or any instrument evidencing the same or any agreement under whichsuch Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwisedeal with any property pledged, mortgaged or otherwise securing such SeniorIndebtedness; (c) release any Person liable in any manner for the collection ofsuch Senior Indebtedness; and (d) exercise or refrain from exercising anyrights against the Company, and any other Person.

 

The Bank of New York inits capacity as trustee hereby accepts the trusts in this Indenture declaredand provided, upon the terms and conditions herein above set forth.

 

 

 

IN WITNESS WHEREOF, theparties hereto have caused this Indenture to be duly executed by theirrespective officers thereunto duly authorized, as of the day and year firstabove written.

 
|   | NATIONAL MERCANTILE  BANCORP   |
|--------|--------------------------------|
|   |                           |   |
|   | By                             | /s/ Scott A.  Montgomery |
|   |                           | Name: Scott A.  Montgomery |
|   |                           | Title: President and  Chief Executive Officer |
|   |                           |   |
|   |                           |   |
|   |                           |   |
|   | THE BANK OF NEW YORK,  Trustee |
|   |                           |   |
|   |                           |   |
|   | By                             | /s/ [ILLEGIBLE] |
|   |                           | Name: [ILLEGIBLE] |
|   |                           | Title: Vice President |

 

 

**EXHIBIT A**

 

**FORM OFJUNIOR SUBORDINATED DEBT SECURITY**

 

[FORMOF FACE OF SECURITY]

 

THIS SECURITY HAS NOTBEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS OR ANY OTHERAPPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST ORPARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION ORUNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITSACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITYONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THATPURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONALBUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ONRULE 144A, (C) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OFSUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THATIS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEWTO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OFTHE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THEREGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHTPRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TOREQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHERINFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE INDENTURE, A COPY OFWHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS SECURITY AGREES THATIT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

 

THE HOLDER OF THISSECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT ITIS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN ORARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACTOF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNALREVENUE CODE OF 1986, AS AMENDED (THE "CODE"), (EACH A"PLAN"), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLANASSETS" BY REASON OF ANY PLAN'S INVESTMENT IN THE ENTITY AND NO PERSONINVESTING "PLAN ASSETS", OF ANY PLAN MAY ACQUIRE OR HOLD THISSECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLEFOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITEDTRANSACTION CLASS EXEMPTION 96–23, 95–60, 91–38, 90–1OR 84–14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OFTHIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THECODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THISSECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITSPURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLANWITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OFTHE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANEMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETSOF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCHPURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISAOR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY ORADMINISTRATIVE EXEMPTION.

 

IN CONNECTION WITH ANYTRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCHCERTIFICATE AND OTHER INFORMATION AS MAY BE REQUIRED BY THE INDENTURE TOCONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

THIS SECURITY WILL BEISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOTLESS THAN $100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTEDTRANSFER OF THIS SECURITY IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN$100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCHPURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SECURITY FORANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ONTHIS SECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NOINTEREST WHATSOEVER IN THIS SECURITY.

 

THIS OBLIGATION IS NOT ADEPOSIT AND IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY OR FUND OF THEUNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE"FDIC"). THIS OBLIGATION IS SUBORDINATED TO THE CLAIMS OF DEPOSITORSAND THE CLAIMS OF GENERAL AND SECURED CREDITORS OF THE COMPANY, IS INELIGIBLEAS COLLATERAL FOR A LOAN BY THE COMPANY AND IS NOT SECURED.

 

 

 

10.25%Junior Subordinated Debt Security

 

of

 

NationalMercantile Bancorp

 

NationalMercantile Bancorp, a California corporation (the "Company"), forvalue received promises to pay to [________________] (the "Holder")or registered assigns, the principal sum of [________________] ($[___________])on July 25, 2031, and to pay interest on said principal sum from January 25, 2002, or from the most recentinterest payment date (each such date, an "Interest Payment Date") towhich interest has been paid or duly provided for, semi­annually (subject todeferral as set forth herein) in arrears on January 25th and July 25th, of eachyear commencing January 25, 2002, at a fixed annual rate equal to 10.25% (the"Interest Rate") until the principal hereof shall have become due andpayable, and on any overdue principal and (without duplication and to theextent that payment of such interest is enforceable under applicable law) onany overdue installment of interest at an annual rate equal to 10.25%compounded semi–annually. The amount of interest payable on any InterestPayment Date shall be computed on the basis of a 360–day year of twelve30–day months. In the event that any date on which the principal orinterest is payable on this Debt Security is not a Business Day, then paymentpayable on such date will be made on the next succeeding day that is a BusinessDay (and without any interest or other payment in respect of any such delay),except that, if such Business Day is in the next succeeding calendar year, suchpayment shall be made on the immediately preceding Business Day, in each casewith the same force and effect as if made on such date. The interestinstallment so payable, and punctually paid or duly provided for, on anyInterest Payment Date will, as provided in the Indenture, be paid to the Personin whose name this Debt Security (or one or more Predecessor Securities, asdefined in said Indenture) is registered at the close of business on the RecordDate for such interest installment, which shall be the close of business on the15th day next preceding such Interest Payment Date. Any such interestinstallment not punctually paid or duly provided for shall forthwith cease tobe payable to the registered holders on such Record Date and may be paid to thePerson in whose name this Debt Security (or one or more Predecessor DebtSecurities) is registered at the close of business on a special record date tobe fixed by the Trustee for the payment of such defaulted interest, noticewhereof shall be given to the registered holders of the Debt Securities notless than 10 days prior to such special record date, all as more fully providedin the Indenture. The principal of and interest on this Debt Security shall bepayable at the office or agency of the Trustee (or other paying agent appointedby the Company) maintained for that purpose in any coin or currency of theUnited States of America that at the time of payment is legal tender forpayment of public and private debts; provided, however, that payment ofinterest may be made at the option of the Company by check mailed to theregistered holder at such address as shall appear in the Debt Security Registeror by wire transfer to an account appropriately designated by the holder hereof.Notwithstanding the foregoing, so long as the holder of this Debt Security isthe Institutional Trustee, the payment of the principal of and interest on thisDebt Security will be made in immediately available funds at such place and tosuch account as may be designated by the Trustee.

 

So long as no Event ofDefault has occurred and is continuing, the Company shall have the right, fromtime to time, to defer payments of interest on the Debt Securities by extendingthe interest payment period on the Debt Securities at any time and from time totime during the term of the Debt Securities, for up to 10 consecutive semi–annualperiods (each such extended interest payment period, an "ExtensionPeriod"), during which Extension Period no interest shall be due andpayable (except any Additional Interest that may be due and payable). During any Extension Period, interest will continueto accrue on the Debt Securities and interest on such accrued interest(such accrued interest and interest thereon referred to herein as"Deferred Interest") will accrue at the Interest Rate, compoundedsemi–annually from the date such Deferred Interest would have beenpayable were it not for the Extension Period, both to the extent permitted bylaw. No Extension Period may end on a date other than an Interest Payment Date.At the end of any such Extension Period the Company shall pay all DeferredInterest then accrued and unpaid on the Debt Securities; provided however, thatno Extension Period may extend beyond the Maturity Date and provided furtherhowever, during any such Extension Period, the Company may not (i) declare orpay any dividends or distributions on, or redeem, purchase, acquire, or make aliquidation payment with respect to, any of the Company's capital stock or (ii)make any payment of principal of or interest or premium, if any, on or repay,repurchase or redeem any debt securities of the Company that rank *pari passu* in all respects with or juniorin interest to the Debt Securities (other than (a) repurchases, redemptions orother acquisitions of shares of capital stock of the Company in connection withany employment contract, benefit plan or other similar arrangement with or forthe benefit of one or more employees, officers, directors or consultants, inconnection with a dividend reinvestment or stockholder stock purchase plan orin connection with the issuance of capital stock of the Company (or securitiesconvertible into or exercisable for such capital stock) as consideration in anacquisition transaction entered into prior to the applicable Extension Period,(b) as a result of any exchange or conversion of any class or series of theCompany's capital stock (or any capital stock of a subsidiary of the Company)for any class or series of the Company's capital stock or of any class orseries of the Company's indebtedness for any class or series of the Company'scapital stock, (c) the purchase of fractional interests in shares of theCompany's capital stock pursuant to the conversion or exchange provisions ofsuch capital stock or the security being converted or exchanged, (d) anydeclaration of a dividend in connection with any stockholder's rights plan, orthe issuance of rights, stock or other property under any stockholder's rightsplan, or the redemption or repurchase of rights pursuant thereto, or (e) anydividend in the form of stock, warrants, options or other rights where thedividend stock or the stock issuable upon exercise of such warrants, options orother rights is the same stock as that on which the dividend is being paid orranks *pari passu* with or juniorto such stock). Prior to the termination of any Extension Period, the Companymay further extend such period, provided that such period together with allsuch previous and further consecutive extensions thereof shall not exceed 10consecutive semi–annual periods, or extend beyond the Maturity Date. Uponthe termination of any Extension Period and upon the payment of all DeferredInterest, the Company may commence a new Extension Period, subject to the foregoingrequirements. No interest or Deferred Interest shall be due and payable duringan Extension Period, except at the end thereof, but each installment ofinterest that would otherwise have been due and payable during such ExtensionPeriod shall bear Deferred Interest. The Company must give the Trustee noticeof its election to begin such Extension Period at least one Business Day priorto the earlier of (i) the date interest on the Debt Securities would have beenpayable except for the election to begin such Extension Period or (ii) the datesuch interest is payable, but in any event not less than one Business Day priorto such record date.

 

The indebtednessevidenced by this Debt Security is, to the extent provided in the Indenture,subordinate and junior in right of payment to the prior payment in full of allSenior Indebtedness, and this Debt Security is issued subject to the provisionsof the Indenture with respect thereto. Each holder of this Debt Security, byaccepting the same, (a) agrees to and shall be bound by such provisions, (b)authorizes and directs the Trustee on his or her behalf to take such action asmay be necessary or appropriate to acknowledge or effectuate the subordinationso provided and (c) appoints the Trustee his or her attorney–in–fact for any and all such purposes. Each holderhereof, by his or her acceptance hereof, hereby waives all notice of the acceptanceof the subordination provisions contained herein and in the Indenture by eachholder of Senior Indebtedness, whether now outstanding or hereafter incurred,and waives reliance by each such holder upon said provisions.

 

The Company waivesdemand, presentment for payment, notice of nonpayment, notice of protest, andall other notices.

 

This Debt Security shallnot be entitled to any benefit under the Indenture hereinafter referred to, bevalid or become obligatory for any purpose until the certificate ofauthentication hereon shall have been signed by or on behalf of the Trustee.

 

The provisions of thisDebt Security are continued on the reverse side hereof and such continuedprovisions shall for all purposes have the same effect as though fully setforth at this place.

 

 

                                INWITNESS WHEREOF, the Company has duly executed this certificate.

 
|                               | National Mercantile  Bancorp |
|------------------------------------|------------------------------|
|                               |                         |   |
|                               | By:                          |   |
|                               |                         | Name: |
|                               |                         | Title: |
|                               |                         |   |
| Dated:   [_____], [____] |                         |   |

 

CERTIFICATEOF AUTHENTICATION

 

Thisis one of the Debt Securities referred to in the within–mentionedIndenture.

 
|                               | THE BANK OF NEW YORK,  as the Trustee |
|------------------------------------|---------------------------------------|
|                               |                                  |   |
|                               | By:                                   |   |
|                               |                                  | Authorized Officer |
|                               |                                  |   |
| Dated:   [_____], [____] |                                  |   |

 

 

[FORMOF REVERSE OF SECURITY]

 

This Debt Security isone of a duly authorized series of Debt Securities of the Company, all issuedor to be issued pursuant to an Indenture (the "Indenture") dated asof July 16, 2001, duly executed and delivered between the Company and The Bankof New York, as Trustee (the "Trustee"), to which Indenture and allindentures supplemental thereto reference is hereby made for a description ofthe rights, limitations of rights, obligations, duties and immunitiesthereunder of the Trustee, the Company and the holders of the Debt Securities(referred to herein as the "Debt Securities") of which this DebtSecurity is a part. The summary of the terms of this Debt Security containedherein does not purport to be complete and is qualified by reference to theIndenture.

 

Upon the occurrence andcontinuation of a Tax Event, an Investment Company Event or a Capital TreatmentEvent, this Debt Security may become due and payable, in whole but not in part,at any time, within 90 days following the occurrence of such Tax Event,Investment Company Event or Capital Treatment Event (the "SpecialRedemption Date"), as the case may be, at the Special Redemption Price.The Company shall also have the right to redeem this Debt Security at theoption of the Company, in whole or in part, on any January 25th or July 25th onor after July 25, 2006 (a "Redemption Date"), at the RedemptionPrice.

 

Any redemption pursuantto the preceding paragraph will be made, subject to the receipt by the Companyof prior approval from the Board of Governors of the Federal Reserve System(the "Federal Reserve") if then required under applicable capitalguidelines or policies of the Federal Reserve, upon not less than 30 days' normore than 60 days' notice. If the Debt Securities are only partially redeemedby the Company, the Debt Securities will be redeemed pro rata or by lotor by any other method utilized by the Trustee.

 

"RedemptionPrice" means the price set forth in the following table for any RedemptionDate or Special Redemption Date that occurs within the twelve–monthperiod beginning in the relevant date indicated below, expressed in percentageof the principal amount of the Debt Securities being redeemed:

 

| **Year  Beginning**      |   | **Percentage** |
|--------------------------|--------|----------------|
| July 25, 2006            |   | 107.6875%      |
| July 25, 2007            |   | 106.1500%      |
| July 25, 2008            |   | 104.6125%      |
| July 25, 2009            |   | 103.0750%      |
| July 25, 2010            |   | 101.5375%      |
| July 25, 2011 and  after |   | 100.0000%      |

 

 

plus accrued and unpaidinterest on such Debentures to the Redemption Date or Special Redemption Date,as the case may be.

 

"SpecialRedemption Price" means (1) if the Special Redemption Date is before July25, 2006, the greater of (a) 100% of the principal amount of the DebtSecurities being redeemed pursuant to Section 10.02 or (b) as determined by aQuotation Agent, the sum of the present values of the principal amount and thepremium payable as part of the Redemption Price with respect to a redemption asof July 25, 2006 together with the present value of scheduled payments ofinterest over the Remaining Life of such Debt Securities, discounted to theSpecial Redemption Date on a semi–annual basis (assuming a 360–dayyear consisting of twelve 30–day months) at the Treasury Rate plus 0.50%,plus, in the case of either (a) or (b), accrued and unpaid interest on suchDebt Securities to the Special Redemption Date and (2) if the SpecialRedemption Date is on or after July 25, 2006, the Redemption Price for suchSpecial Redemption Date.

 

"ComparableTreasury Issue" means with respect to any Special Redemption Date theUnited States Treasury security selected by the Quotation Agent as having amaturity comparable to the Remaining Life that would be utilized, at the timeof selection and in accordance with customary financial practice, in pricingnew issues of corporate debt securities of comparable maturity to the RemainingLife. If no United States Treasury security has a maturity which is within aperiod from three months before to three months after July 25, 2006, the twomost closely corresponding United States Treasury securities shall be used asthe Comparable Treasury Issue, and the Treasury Rate shall be interpolated orextrapolated on a straight–line basis, rounding to the nearest monthusing such securities.

 

"ComparableTreasury Price" means (a) the average of five Reference Treasury DealerQuotations for such Special Redemption Date, after excluding the highest andlowest such Reference Treasury Dealer Quotations, or (b) if the Trustee obtainsfewer than five such Reference Treasury Dealer Quotations, the average of allsuch Quotations.

 

"Primary TreasuryDealer" shall mean a primary United States Government securities dealer inNew York City.

 

"QuotationAgent" means Salomon Smith Barney Inc. and its successors; provided,however, that if the foregoing shall cease to be a Primary Treasury Dealer,the Company shall substitute therefor another Primary Treasury Dealer.

 

"Reference TreasuryDealer" means (i) the Quotation Agent and (ii) any other Primary TreasuryDealer selected by the Trustee after consultation with the Company.

 

"Reference TreasuryDealer Quotations" means, with respect to each Reference Treasury Dealerand any Special Redemption Date, the average, as determined by the QuotationAgent, of the bid and asked prices for the Comparable Treasury Issue (expressedin each case as a percentage of its principal amount) quoted in writing to theTrustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, onthe third Business Day preceding such Special Redemption Date.

 

"TreasuryRate" means (i) the yield, under the heading which represents the averagefor the week immediately prior to the date of calculation, appearing in themost recently published statistical release designated H.15 (519) or anysuccessor publication which is published weekly by the Federal Reserve andwhich establishes yields on actively traded United States Treasury securitiesadjusted to constant maturity under the caption "Treasury ConstantMaturities", for the maturity corresponding to the Remaining Life (if nomaturity is within three months before or after the Remaining Life, yields forthe two published maturities most closely corresponding to the Remaining Lifeshall be determined and the Treasury Rate shall be interpolated or extrapolatedfrom such yields on a straight–line basis, rounding to the nearest month)or (ii) if such release (or any successor release) is not published during theweek preceding the calculation date or does not contain such yields, the rateper annum equal to the semi–annual equivalent yield to maturity of theComparable Treasury Issue, calculated using a price for the Comparable TreasuryIssue (expressed as a percentage of its principal amount) equal to theComparable Treasury Price for such Special Redemption Date. The Treasury Rateshall be calculated on the third Business Day preceding the Special RedemptionDate.

 

In the event ofredemption of this Debt Security in part only, a new Debt Security or DebtSecurities for the unredeemed portion hereof will be issued in the name of theholder hereof upon the cancellation hereof.

 

In case an Event ofDefault, as defined in the Indenture, shall have occurred and be continuing,the principal of all of the Debt Securities may be declared due and payable,and upon such declaration of acceleration shall become due and payable, in themanner, with the effect and subject to the conditions provided in theIndenture.

 

The Indenture containsprovisions permitting the Company and the Trustee, with the consent of theholders of not less than a majority in aggregate principal amount of the DebtSecurities at the time outstanding affected thereby, as specified in theIndenture, to execute supplemental indentures for the purpose of adding anyprovisions to or changing in any manner or eliminating any of the provisions ofthe Indenture or of any supplemental indenture or of modifying in any mannerthe rights of the holders of the Debt Securities; provided, however,that no such supplemental indenture shall, among other things, without theconsent of the holders of each Debt Security then outstanding and affectedthereby (i) extend the fixed maturity of the Debt Securities, or reduce theprincipal amount thereof or any redemption premium thereon, or reduce the rateor extend the time of payment of interest thereon, or make the principal of, orinterest or premium on, the Debt Securities payable in any coin or currencyother than that provided in the Debt Securities, or impair or affect the rightof any holder of Debt Securities to institute suit for the payment thereof, or(ii) reduce the aforesaid percentage of Debt Securities, the holders of whichare required to consent to any such supplemental indenture. The Indenture alsocontains provisions permitting the holders of a majority in aggregate principalamount of the Debt Securities at the time outstanding affected thereby asprovided in the Indenture, on behalf of all of the holders of the DebtSecurities, to waive any past default in the performance of any of thecovenants contained in the Indenture, or established pursuant to the Indenture,and its consequences, except a default in the payment of the principal of orpremium, if any, or interest on any of the Debt Securities. Any such consent orwaiver by the registered holder of this Debt Security (unless revoked asprovided in the Indenture) shall be conclusive and binding upon such holder andupon all future holders and owners of this Debt Security and of any DebtSecurity issued in exchange herefor or in place hereof (whether by registrationof transfer or otherwise), irrespective of whether or not any notation of suchconsent or waiver is made upon this Debt Security.

 

No reference herein tothe Indenture and no provision of this Debt Security or of the Indenture shallalter or impair the obligation of the Company, which is absolute andunconditional, to pay the principal of and premium, if any, and interest onthis Debt Security at the time and place and at the rate and in the moneyherein prescribed.

 

As provided in theIndenture and subject to certain limitations herein and therein set forth, thisDebt Security is transferable by the registered holder hereof on the DebtSecurity Register of the Company, upon surrender of this Debt Security forregistration of transfer at the office or agency of the Trustee in the City andState of New York accompanied by a written instrument or instruments oftransfer in form satisfactory to the Company or the Trustee duly executed bythe registered holder hereof or his attorney duly authorized in writing, andthereupon one or more new Debt Securities of authorized denominations and forthe same aggregate principal amount will be issued to the designated transfereeor transferees. No service charge will be made for any such registration oftransfer, but the Company may require payment of a sum sufficient to cover anytax or other governmental charge payable in relation thereto.

 

Prior to due presentmentfor registration of transfer of this Debt Security, the Company, the Trustee,any Authenticating Agent, any paying agent, any transfer agent and the DebtSecurity registrar may deem and treat the registered holder hereof as theabsolute owner hereof (whether or not this Debt Security shall be overdue andnotwithstanding any notice of ownership or writing hereon) for the purpose ofreceiving payment of or on account of the principal hereof and interest duehereon and for all other purposes, and neither the Company nor the Trustee norany Authenticating Agent nor any paying agent nor any transfer agent nor anyDebt Security registrar shall be affected by any notice to the contrary.

 

No recourse shall be hadfor the payment of the principal of or the interest on this Debt Security, orfor any claim based hereon, or otherwise in respect hereof, or based on or inrespect of the Indenture, against any incorporator, stockholder, officer ordirector, past, present or future, as such, of the Company or of anypredecessor or successor corporation, whether by virtue of any constitution,statute or rule of law, or by the enforcement of any assessment or penalty orotherwise, all such liability being, by the acceptance hereof and as part ofthe consideration for the issuance hereof, expressly waived and released.

 

The Debt Securities areissuable only in registered certificated form without coupons. As provided inthe Indenture and subject to certain limitations herein and therein set forth,Debt Securities are exchangeable for a like aggregate principal amount of DebtSecurities of a different authorized denomination, as requested by the holdersurrendering the same.

 

All terms used in thisDebt Security that are defined in the Indenture shall have the meaningsassigned to them in the Indenture.

 

THE LAW OF THE STATE OF NEW YORK SHALLGOVERN THE INDENTURE AND THE DEBT SECURITIES, WITHOUT REGARD TO CONFLICT OFLAWS PRINCIPLES THEREOF.