** **

** **

** **

** **

** **

**AMENDED AND RESTATED DECLARATION**

** **

**OF TRUST**

** **

**NATIONAL MERCANTILE CAPITAL TRUST I**

** **

**Dated as of July 16, 2001**

** **

** **

** **

** **

** **

 

** **

**TABLE OF CONTENTS**

** **
| **ARTICLE I**                                                            |
|--------------------------------------------------------------------------|
| **INTERPRETATION AND DEFINITIONS**                                       |
|                                                                     |
| **Section 1.1**                                                          | **Definitions** |
|                                                                     |   |
| **ARTICLE  II**                                                          |
| **ORGANIZATION**                                                         |
| **Section  2.1**                                                         | **Name** |
|                                                                     |   |
| **Section 2.2**                                                          | **Office** |
|                                                                     |   |
| **Section 2.3**                                                          | **Purpose** |
|                                                                     |   |
| **Section 2.4**                                                          | **Authority** |
|                                                                     |   |
| **Section 2.5**                                                          | **Title to Property of the Trust** |
|                                                                     |   |
| **Section 2.6**                                                          | **Powers and Duties of the Trustees and the  Administrators** |
|                                                                     |   |
| **Section 2.7**                                                          | **Prohibition of Actions by the Trust and the  Trustees** |
|                                                                     |   |
| **Section 2.8**                                                          | **Powers and Duties of the Institutional  Trustee** |
|                                                                     |   |
| **Section 2.9**                                                          | **Certain Duties and Responsibilities of the  Trustees and Administrators** |
|                                                                     |   |
| **Section 2.10**                                                         | **Certain Rights of Institutional Trustee** |
|                                                                     |   |
| **Section 2.11**                                                         | **Delaware Trustee** |
|                                                                     |   |
| **Section 2.12**                                                         | **Execution of Documents** |
|                                                                     |   |
| **Section 2.13**                                                         | **Not Responsible for Recitals or Issuance of  Securities** |
|                                                                     |   |
| **Section 2.14**                                                         | **Duration of Trust** |
|                                                                     |   |
| **Section 2.15**                                                         | **Mergers** |
|                                                                     |   |
| **ARTICLE  III**                                                         |
| **SPONSOR**                                                              |
|                                                                     |   |
| **Section 3.1**                                                          | **Sponsor’s Purchase of Common Securities** |
|                                                                     |   |
| **Section 3.2**                                                          | **Responsibilities of the Sponsor** |
|                                                                     |   |
| **ARTICLE  IV**                                                          |
| **TRUSTEES AND ADMINISTRATORS**                                          |
|                                                                     |
| **Section 4.1**                                                          | **Number of Trustees** |
|                                                                     |   |
| **Section 4.2**                                                          | **Delaware Trustee** |
|                                                                     |   |
| **Section 4.3**                                                          | **Institutional  Trustee; Eligibility** |
|                                                                     |   |
| **Section 4.4**                                                          | **Certain Qualifications of the Delaware  Trustee Generally** |
|                                                                     |   |
| **Section 4.5**                                                          | **Administrators** |
|                                                                     |   |
| **Section 4.6**                                                          | **Initial Delaware Trustee** |
|                                                                     |   |
| **Section 4.7**                                                          | **Appointment, Removal and Resignation of  Trustees and Administrators** |
|                                                                     |   |
| **Section 4.8**                                                          | **Vacancies Among Trustees** |
|                                                                     |   |
| **Section 4.9**                                                          | **Effect of Vacancies** |
|                                                                     |   |
| **Section 4.10**                                                         | **Meetings of the Trustees and the  Administrators** |
|                                                                     |   |
| **Section 4.11**                                                         | **Delegation of Power** |
|                                                                     |   |
| **Section 4.12**                                                         | **Conversion, Consolidation or Succession to  Business** |
|                                                                     |   |
| **ARTICLE  V**                                                           |
| **DISTRIBUTIONS**                                                        |
|                                                                     |   |
| **Section 5.1**                                                          | **Distributions** |
|                                                                     |   |
| **ARTICLE  VI**                                                          |
| **ISSUANCE OF SECURITIES**                                               |
|                                                                     |
| **Section 6.1**                                                          | **General Provisions Regarding Securities** |
|                                                                     |   |
| **Section 6.2**                                                          | **Paying Agent, Transfer Agent and Registrar** |
|                                                                     |   |
| **Section 6.3**                                                          | **Form and Dating** |
|                                                                     |   |
| **Section 6.4**                                                          | **Mutilated, Destroyed, Lost or Stolen  Certificates** |
|                                                                     |   |
| **Section 6.5**                                                          | **Temporary Securities** |
|                                                                     |   |
| **Section 6.6**                                                          | **Cancellation** |
|                                                                     |   |
| **Section 6.7**                                                          | **Rights of Holders; Waivers of Past Defaults** |
|                                                                     |   |
| **ARTICLE  VII**                                                         |
| **DISSOLUTION AND TERMINATION OF TRUST**                                 |
|                                                                     |
| **Section 7.1**                                                          | **Dissolution and Termination of Trust** |
|                                                                     |   |
| **ARTICLE  VIII**                                                        |
| **TRANSFER OF INTERESTS**                                                |
|                                                                     |
| **Section 8.1**                                                          | **General** |
|                                                                     |   |
| **Section 8.2**                                                          | **Transfer Procedures and Restrictions** |
|                                                                     |   |
| **Section 8.3**                                                          | **Deemed Security Holders** |
|                                                                     |   |
| **ARTICLE  IX**                                                          |
| **LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS** |
|                                                                     |
| **Section 9.1**                                                          | **Liability** |
|                                                                     |   |
| **Section 9.2**                                                          | **Exculpation** |
|                                                                     |   |
| **Section 9.3**                                                          | **Fiduciary Duty** |
|                                                                     |   |
| **Section 9.4**                                                          | **Indemnification** |
|                                                                     |   |
| **Section 9.5**                                                          | **Outside Businesses** |
|                                                                     |   |
| **Section 9.6**                                                          | **Compensation; Fee** |
|                                                                     |   |
| **ARTICLE  X**                                                           |
| **ACCOUNTING**                                                           |
|                                                                     |
| **Section 10.1**                                                         | **Fiscal Year** |
|                                                                     |   |
| **Section 10.2**                                                         | **Certain Accounting Matters** |
|                                                                     |   |
| **Section 10.3**                                                         | **Banking** |
|                                                                     |   |
| **Section 10.4**                                                         | **Withholding** |
|                                                                     |   |
| **ARTICLE  XI**                                                          |
| **AMENDMENTS AND MEETINGS**                                              |
|                                                                     |
| **Section 11.1**                                                         | **Amendments** |
|                                                                     |   |
| **Section 11.2**                                                         | **Meetings of the Holders of Securities;  Action by Written Consent** |
|                                                                     |   |
| **ARTICLE  XII**                                                         |
| **REPRESENTATIONS OF INSTITUTIONAL TRUSTEE  AND DELAWARE TRUSTEE**       |
|                                                                     |   |
| **Section 12.1**                                                         | **Representations and Warranties of  Institutional Trustee** |
|                                                                     |   |
| **Section 12.2**                                                         | **Representations and Warranties of Delaware  Trustee** |
|                                                                     |   |
| **ARTICLE  XIII**                                                        |
| **MISCELLANEOUS**                                                        |
|                                                                     |
| **Section 13.1**                                                         | **Notices** |
|                                                                     |   |
| **Section 13.2**                                                         | **Governing Law** |
|                                                                     |   |
| **Section 13.3**                                                         | **Submission to Jurisdiction** |
|                                                                     |   |
| **Section 13.4**                                                         | **Intention of the Parties** |
|                                                                     |   |
| **Section 13.5**                                                         | **Headings** |
|                                                                     |   |
| **Section 13.6**                                                         | **Successors and Assigns** |
|                                                                     |   |
| **Section 13.7**                                                         | **Partial Enforceability** |
|                                                                     |   |
| **Section 13.8**                                                         | **Counterparts** |

** **

** **

**ANNEXES AND EXHIBITS**
| **ANNEX I**      | **Terms of Fixed Rate MMCapSSM**                                                  |
|------------------|-----------------------------------------------------------------------------------|
|             |                                                                              |
| **EXHIBIT A- 1** | **Form of Capital  Securities Certificate**                                       |
| **EXHIBIT A-2**  | **Form of Common Security  Certificate**                                          |
| **EXHIBIT B**    | **Form of Transferee Certificate to be Executed  by Transferees Other than QIBs** |
| **EXHIBIT C**    | **Form of Transferee Certificate to be Executed  for QIBs**                       |

** **

** **

**AMENDED AND RESTATED DECLARATION OF TRUST**

**OF**

**NATIONAL MERCANTILE CAPITAL TRUST I**

**July 16, 200l**

**AMENDED ANDRESTATED DECLARATION OF TRUST (this “Declaration”) dated and effective as ofJuly 16, 2001, by the Trustees (as defined herein), the Administrators (asdefined herein), the Sponsor (as defined herein) and the holders, from time totime, of undivided beneficial interests in the assets of the Trust (as definedherein) to be issued pursuant to this Declaration;**

**WHEREAS, certain ofthe Trustees, the Administrators and the Sponsor established NationalMercantile Capital Trust I (the “Trust”), a statutory business trust under theBusiness Trust Act (as defined herein) pursuant to a Declaration of Trust datedas of June 27, 2001 (the “Original Declaration”), and a Certificate of Trustfiled with the Secretary of State of the State of Delaware on June 27, 2001,for the sole purpose of issuing and selling certain securities representingundivided beneficial interests in the assets of the Trust and investing theproceeds thereof in certain debentures of the Debenture Issuer (as definedherein) in connection with the MMCapSSM Transaction;**

**WHEREAS, as of thedate hereof, no interests in the assets of the Trust have been issued; and**

**WHEREAS, all of theTrustees, the Administrators and the Sponsor, by this Declaration, amend andrestate each and every term and provision of the Original Declaration;**

**NOW, THEREFORE, itbeing the intention of the parties hereto to continue the Trust as a statutorybusiness trust under the Business Trust Act and that this Declarationconstitutes the governing instrument of such statutory business trust, theTrustees declare that all assets contributed to the Trust will be held in trustfor the benefit of the holders, from time to time, of the securitiesrepresenting undivided beneficial interests in the assets of the Trust issued hereunder,subject to the provisions of this Declaration.**

**ARTICLE I**

**INTERPRETATION AND DEFINITIONS**

**Section 1.1            Definitions.**

**Unless the contextotherwise requires:**

**(a)           Capitalized terms used in thisDeclaration but not defined in the preamble**above have the respective meanings assigned to them in this Section 1.1or, if not defined in this Section 1.1, in the Indenture;

**(b)         **a term defined anywhere in this Declaration has the same meaningthroughout;

** **

**(c)         **all references to “the Declaration” or “this Declaration” are to thisDeclaration as modified, supplemented or amended from time to time;

**(d)         **all references in this Declaration to Articles and Sectionsand Annexes and Exhibits are toArticles and Sections of and Annexes and Exhibits to this Declaration unlessotherwise specified;

**(e)         **a term defined in the Trust Indenture Act (as defined herein) has thesame meaning when used in this Declaration unless otherwise defined in thisDeclaration or unless the context otherwise requires; and

**(f)          **a reference to the singular includes the plural and vice versa. 

**“AdditionalInterest” has the meaning set forth in Section 3.06 of the Indenture.**

**“AdministrativeAction” has the meaning set forth in paragraph 4(a) of Annex I.**

**“Administrators”means each of Scott A. Montgomery and David R. Brown, solely in such Person’scapacity as Administrator of the Trust created and continued hereunder and notin such Person’s individual capacity, or such Administrator’s successor ininterest in such capacity, or any successor appointed as herein provided.**

**“Affiliate”has the same meaning as given to that term in Rule 405 of the**Securities Act or any successor rule thereunder.

**“AuthorizedOfficer” of a Person means any Person that is authorized to bind suchPerson.**

**“Bankruptcy Event”means, with respect to any**Person:

**(a)          **a court having jurisdiction in the premises enters a decree or orderfor relief in respect ofsuch Person 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 such Person or for any substantial part of its property, ororders the winding-up or liquidation of its affairs, and such decree,appointment or order remains unstayed and in effect for a period of 90consecutive days; or

**(b)          **such Person commences a voluntary case under any applicable bankruptcy,insolvency or other similar law now or hereafter in effect, consents to theentry of an order for relief in an involuntary case under any such law, orconsents to the appointment of or taking possession by a receiver, liquidator,assignee, trustee, custodian, sequestrator or other similar official of such Person of any substantial part of its property, ormakes any general assignment for the benefit of creditors, or fails generally to pay itsdebts as they become due.

**“Business Day” means any day other than Saturday, Sunday or anyother day on which banking institutions in New York City or Los Angeles,California are permitted or required by any applicable law to close.**

** **

**“Business TrustAct” means Chapter 3 8 of Title 12 of the Delaware Code, 12 Del. Code §3801et seq., as it may be amended from time to time, or any successor legislation.**

**“CapitalSecurities” has the meaning set forth in Section 6.1 (a).**

**“CapitalSecurity Certificate” means a definitive Certificate representing a CapitalSecurity substantially in the form of Exhibit A-l.**

**“CapitalTreatment Event” has the meaning set forth in paragraph 4(a) of Annex I.**

**“Certificate”means any certificate evidencing Securities.**

**“Certificate ofTrust” means the certificate of trust filed with the Secretary of State ofthe State of Delaware with respect to the Trust, as amended and restated fromtime to time.**

**“Closing Date”has the meaning set forth in the Placement Agreement.**

**“Code” meansthe Internal Revenue Code of 1986, as amended from time to time, or anysuccessor legislation.**

**“Commission”means the Securities and Exchange Commission.**

**“CommonSecurities” has the meaning set forth in Section 6.1 (a).**

**“Common SecurityCertificate” means a definitive Certificate registered in the name of theHolder representing a Common Security substantially in the form of Exhibit A-2.**

**“CompanyIndemnified Person” means (a) any Administrator; (b) any Affiliate of anyAdministrator; (c) any officers, directors, shareholders, members, partners,employees, representatives or agents of any Administrator; or (d) any officer,employee or agent of the Trust or its Affiliates.**

**“ComparableTreasury Issue” has the meaning set forth in paragraph 4(a) of Annex I.**

**“ComparableTreasury Price” has the meaning set forth in paragraph 4(a) of Annex I.**

**“Corporate Trust Office” means the office of the InstitutionalTrustee at which the corporate trust business of the Institutional Trusteeshall, at any particular time, be principally administered, which office shallat all times be located in the United States and at the date of execution ofthis Declaration is located at 101 Barclay Street, Floor 21 West, New York, NY10286.**

**“Covered Person” means: (a) any Administrator, officer,director, shareholder, partner, member, representative, employee or agent of(i) the Trust or (ii) the Trust’s Affiliates; and (b) any Holder of Securities.**

** **

**“DebentureIssuer” means National Mercantile Bancorp, a bank holding companyincorporated in California, in its capacity as issuer of the Debentures underthe Indenture.**

**“DebentureTrustee” means The Bank of New York, as trustee under the Indenture until asuccessor is appointed thereunder, and thereafter means such successor trustee.**

**“Debentures”means the 10.25% Junior Subordinated Deferrable Interest Debentures due July25, 2031 to be issued by the Debenture Issuer under the Indenture.**

**“DeferredInterest” means any interest on the Debentures that would have been overdueand unpaid for more than one Distribution Payment Date but for the impositionof an Extension Period, and the interest that shall accrue (to the extent thatthe payment of such interest is legally enforceable) on such interest at therate per annum equal to 10.25%, compounded semi-annually from the date on whichsuch Deferred Interest would otherwise have been due and payable until paid ormade available for payment.**

**“DefinitiveCapital Securities” means any Capital Securities in definitive form issuedby the Trust.**

**“DelawareTrustee” has the meaning set forth in Section 4.2.**

**“Direct Action”has the meaning set forth in Section 2.8(e).**

**“Distribution”means a distribution payable to Holders of Securities in accordance withSection 5.1.**

**“DistributionPayment Date” has the meaning set forth in paragraph 2(b) of Annex I.**

**“Event ofDefault” means the occurrence of an Indenture Event of Default.**

**“Exchange Act”means the Securities Exchange Act of 1934, as amended from time to time, or anysuccessor legislation.**

**“ExtensionPeriod” has the meaning set forth in paragraph 2(b) of Annex I.**

**“Federal Reserve”has the meaning set forth in paragraph 3 of Annex I.**

**“Fiduciary Indemnified Person” shall mean the InstitutionalTrustee, the Delaware Trustee, any Affiliate of the Institutional Trustee orthe Delaware Trustee, and any officers, directors, shareholders, members,partners, employees, representatives, custodians, nominees or agents of theInstitutional Trustee and the Delaware Trustee.**

**“Fiscal Year” has the meaning set forth in Section 10.1**

**“Guarantee” means the guarantee agreement to be dated as of July16, 2001, of the Sponsor in respect of the Capital Securities.**

**“Holder”means a Person in whose name a Certificate representing a Security isregistered, such Person being a beneficial owner within the meaning of theBusiness Trust Act.**

**“IndemnifiedPerson” means a Company Indemnified Person or a Fiduciary IndemnifiedPerson.**

**“Indenture”means the Indenture dated as of July 16, 2001, among the Debenture Issuer andthe Debenture Trustee, and any indenture supplemental thereto pursuant to whichthe Debentures are to be issued.**

**“Indenture Eventof Default” means an “Event of Default” as defined in the Indenture.**

**“InstitutionalTrustee” means the Trustee meeting the eligibility requirements set forthin Section 4.3.**

**“Interest”means any interest due on the Debentures, including any Deferred Interest andDefaulted Interest (as each such term is defined in the Indenture).**

**“Investment Company”means an investment company as defined in the Investment Company Act.**

**“InvestmentCompany Act” means the Investment Company Act of 1940, as amended from timeto time, or any successor legislation.**

**“InvestmentCompany Event” has the meaning set forth in paragraph 4(a) of Annex I.**

**“Legal Action”has the meaning set forth in Section 2.8(e). “Liquidation” has the meaning setforth in paragraph 3 of Annex I. “Liquidation Distribution” has the meaning setforth in paragraph 3 of Annex I.**

**“Majority in liquidation amount of the Securities” meansHolder(s) of outstanding Securities voting together as a single class or, asthe context may require, Holders of outstanding Capital Securities or Holdersof outstanding Common Securities voting separately as a class, who are therecord owners of more than 50% of the aggregate liquidation amount (includingthe stated amount that would be paid on redemption, liquidation or otherwise,plus accrued and unpaid Distributions to the date upon which the votingpercentages are determined) of all**outstanding Securities of the relevant class.

** **

**“Officers’ Certificates” means, with respect to any Person, acertificate signed by two Authorized Officers of such Person. Any Officers’Certificate delivered with respect to compliance with a condition or covenantprovided for it in this Declaration shall include:**

**(a)          a statement that eachofficer signing the Officers’ Certificate has read the covenant or conditionand the definitions relating thereto;**

**(b)         **a brief statement of the nature and scope of the examination orinvestigation undertaken by each officer in rendering the Officers’Certificate;

**(c)         **a statement that each such officer has made such examination or

**investigation as,in such officer’s opinion, is necessary to enable such officer to express aninformed opinion as to whether or not such covenant or condition has beencomplied with; and**

**(d)         **a statement as to whether, in the opinion of each such officer, suchcondition or covenant has been complied with.

**“Paying Agent”has the meaning specified in Section 6.2.**

**“Payment Amount”has the meaning set forth in Section 5.1.**

**“Person”means a legal person, including any individual, corporation, estate,partnership, joint venture, association, joint stock company, limited liabilitycompany, trust, unincorporated association, or government or any agency orpolitical subdivision thereof, or any other entity of whatever nature.**

**“PlacementAgreement” means the Placement Agreement relating to the offering and saleof Capital Securities.**

**“PORTAL” hasthe meaning set forth in Section 2.6(a)(i).**

**“PrimaryTreasury Dealer” has the meaning set forth in paragraph 4(a) of Annex I.**

**“Property Account”**has the meaning set forth in Section 2.8(c). “Pro Rata” has themeaning set forth in paragraph 8 of Annex I. “QIB” means a “qualifiedinstitutional buyer” as defined under Rule 144A.

**“Quorum”means a majority of the Administrators or, if there are only twoAdministrators, both of them.**

**“Quotation Agent”has the meaning set forth in paragraph 4(a) of Annex I.**

**“Redemption/Distribution Notice” has the meaning set forth inparagraph 4(e) of Annex I.**

**“Redemption Price” hasthe meaning set forth in paragraph 4(a) of Annex I.**

**“Registrar” has the meaning set forth in Section 6.2.**

**“Reference Treasury Dealer” has the meaning set forth inparagraph 4(a) of Annex I.**

** **

**“ReferenceTreasury Dealer Quotations” has the meaning set forth in paragraph 4(a) ofAnnex I.**

**“RelevantTrustee” has the meaning set forth in Section 4.7(a).**

**“Remaining Life”has the meaning set forth in paragraph 4(a) of Annex I.**

**“ResponsibleOfficer” means, with respect to the Institutional Trustee, any officerwithin the Corporate Trust Office of the Institutional Trustee, including anyvice-president, any assistant vice-president, any assistant secretary, thetreasurer, any assistant treasurer, any trust officer or other officer of theCorporate Trust Office of the Institutional Trustee customarily performingfunctions similar to those performed by any of the above designated officersand also means, with respect to a particular corporate trust matter, any otherofficer to whom such matter is referred because of that officer’s knowledge ofand familiarity with the particular subject.**

**“RestrictedSecurities Legend” has the meaning set forth in Section 8.2(c).**

**“Rule 144A”means Rule 144A under the Securities Act.**

**“Rule 3a-5”means Rule 3a-5 under the Investment Company Act.**

**“Rule 3a-7”means Rule 3a-7 under the Investment Company Act.**

**“Securities”means the Common Securities and the Capital Securities.**

**“Securities Act”means the Securities Act of 1933, as amended.**

**“Sponsor”means National Mercantile Bancorp, a bank holding company that is a U.S. Personincorporated in California, or any successor entity in a merger, consolidationor amalgamation that is a U.S. Person, in its capacity as sponsor of the Trust.**

**“SuccessorDelaware Trustee” has the meaning set forth in Section 4.7(a).**

**“SuccessorEntity” has the meaning set forth in Section 2.15(b).**

**“SuccessorInstitutional Trustee” has the meaning set forth in Section 4.7(a).**

**“SuccessorSecurities” has the meaning set forth in Section 2.15(b).**

**“Super Majority”has the meaning set forth in paragraph 5(b) of Annex I.**

**“Tax Event” has themeaning set forth in paragraph 4(a) of Annex 1.**

**“10% in liquidation amount of the Securities” means Holder(s) ofoutstanding Securities voting together as a single class or, as the context mayrequire, Holders of outstanding Capital Securities or Holders of outstandingCommon Securities voting separately as a class, who are the record owners of10% or more of the aggregate liquidation amount (including the stated amountthat would be paid on redemption, liquidation or otherwise, plus accrued andunpaid Distributions to the date upon which the voting percentages aredetermined) of all outstanding Securities of the relevant class.**

**“**Transfer Agent” has the meaning setforth in Section 6.2.

** **

**“Treasury Rate” has the meaning set forth in paragraph 4(a) ofAnnex I.**

** **

**“TreasuryRegulations” means the income tax regulations, including temporary andproposed regulations, promulgated under the Code by the United States Treasury,as such regulations may be amended from time to time (including correspondingprovisions of succeeding regulations).**

**“Trust IndentureAct” means the Trust Indenture Act of 1939, as amended.**

**“Trustee” or“Trustees” means each Person who has signed this Declaration as atrustee, so long as such Person shall continue in office in accordance with theterms hereof, and all other Persons who may from time to time be duly appointed,qualified and serving as Trustees in accordance with the provisions hereof, andreferences herein to a Trustee or the Trustees shall refer to such Person orPersons solely in their capacity as trustees hereunder.**

**“Trust Property”means (a) the Debentures, (b) any cash on deposit in, or owing to, the PropertyAccount and (c) all proceeds and rights in respect of the foregoing and anyother property and assets for the time being held or deemed to be held by theInstitutional Trustee pursuant to the trusts of this Declaration.**

**“U.S. Person”means a United States Person as defined a Section 7701(a)(30) of the Code.**

**ARTICLE II**

**ORGANIZATION**

** **

**Section 2.1            Name**. The Trust is named “National Mercantile Capital Trust I,” as suchname may be modified from time to time by the Administrators following writtennotice to the Holders of the Securities. The Trust’s activities may beconducted under the name of the Trust or any other name deemed advisable by theAdministrators.

**Section 2.2            Office**. The address of the principal office of the Trust, which shall be in aState of the United States or the District of Columbia, is c/o NationalMercantile Bancorp, 1840 Century Park East, Los Angeles, California 90067. Onten Business Days written notice to the Holders of the Securities, theAdministrators may designate another principal office, which shall be in aState of the United States or the District of Columbia.

**Section 2.3            Purpose**. The exclusive purposes and functions of the Trust are (a) to issueand sell the Securities representing undivided beneficial interests in theassets of the Trust, (b) to invest the gross proceeds from such sale to acquirethe Debentures and (c) except as otherwise limited herein, to engage in onlythose other activities incidental thereto that are deemed necessary oradvisable by the Institutional Trustee, including, without limitation, thoseactivities specified in this Declaration. The Trust shall not borrow money,issue debt or reinvest proceeds derived from investments, pledge any of its assets,or otherwise undertake (or permit to be undertaken) any activity that wouldcause the Trust not to be classified for United States federal income taxpurposes as a grantor trust.

** **

**Section 2.4            Authority**. Except as specifically provided in this Declaration, theInstitutional Trustee shall have exclusive and complete authority to carry outthe purposes of the Trust. An action taken by a Trustee on behalf of the Trustand in accordance with its powers shall constitute the act of and serve to bindthe Trust. In dealing with the Trustees acting on behalf of the Trust, noPerson shall be required to inquire into the authority of the Trustees to bindthe Trust. Persons dealing with the Trust are entitled to rely conclusively onthe power and authority of the Trustees as set forth in this Declaration. TheAdministrators shall have only those ministerial duties set forth herein withrespect to accomplishing the purposes of the Trust and are not intended to betrustees or fiduciaries with respect to the Trust or the Holders. TheInstitutional Trustee shall have the right, but shall not be obligated exceptas provided in Section 2.6, to perform those duties assigned to theAdministrators.

**Section 2.5            Title to Property of the Trust**. Except as provided in Section 2.8 with respect to the Debentures andthe Property Account or as otherwise provided in this Declaration, legal titleto all assets of the Trust shall be vested in the Trust. The Holders shall nothave legal title to any part of the assets of the Trust, but shall have anundivided beneficial interest in the assets of the Trust.

**Section 2.6            Powersand Duties of the Trustees and the Administrators.**

**(a)          **The Trustees and the Administrators shall conduct the affairs of theTrust in accordance with the terms of this Declaration. Subject to thelimitations set forth in paragraph (b) of this Section, and in accordance withthe following provisions (i) and (ii), the Trustees and the Administratorsshall have the authority to enter into all transactions and agreements determinedby the Trustees to be appropriate in exercising the authority, express orimplied, otherwise granted to the Trustees or the Administrators, as the casemay be, under this Declaration, and to perform all acts in furtherance thereof,including without limitation, the following:

**(i)           **Each Administrator shall have the power and authority to act on behalfof the Trust with respect to the following matters:

**(A)          the issuance and sale of theSecurities;**

**(B)          **to cause the Trust to enter into, and to execute, deliver and performon behalf of the Trust, such agreements as may be necessary or desirable inconnection with the purposes and function of the Trust, including agreementswith the Paying Agent;

**(C)          **ensuring compliance with the Securities Act, applicable statesecurities or blue sky laws;

**(D)          **if and at such time determined by the Sponsor at the request of theHolders, assisting in the designation of the Capital Securities for trading inthe Private Offering, Resales and Trading through the Automatic Linkages(“PORTAL”) system;

**(E)          **the sending of notices (other than notices of default) and other information regarding the Securities and the Debentures tothe Holders in accordance with this Declaration;

** **

**(F)          **the appointment of a Paying Agent, Transfer Agent and Registrar inaccordance with this Declaration;

**(G)          **execution and delivery of the Securities in accordance with thisDeclaration;

**(H)         **execution and delivery of closing certificates, pursuant to thePlacement Agreement and the application for a taxpayer identification number;

**(I)           **unless otherwise determined by the Institutional Trustee or the Holdersof a Majority in liquidation amount of the Securities or as otherwise requiredby the Business Trust Act, to execute on behalf of the Trust (either actingalone or together with any or all of the Administrators) any documents that theAdministrators have the power to execute pursuant to this Declaration;

**(J)           **the taking of any action incidental to the foregoing as theInstitutional Trustee may from time to time determine is necessary or advisableto give effect to the terms of this Declaration for the benefit of the Holders(without consideration of the effect of any such action on any particularHolder);

**(K)          to establish a record date withrespect to all actions to be taken hereunder that require a record date beestablished, including Distributions, voting rights, redemptions and exchanges,and to issue relevant notices to the Holders of Capital Securities and Holdersof Common Securities as to such actions and applicable record dates; and**

**(L)          **to duly prepare and file all applicable tax returns and tax informationreports that are required to be filed with respect to the Trust on behalf ofthe Trust.

**(ii)           As among the Trustees and theAdministrators, the Institutional Trustee shall have the power, duty andauthority to act on behalf of the Trust with respect to the following matters:**

**(A)          the establishment of the PropertyAccount;**

**(B)           the receipt of the Debentures;**

**(C)           the collection of interest, principaland any other payments made in respect of the Debentures in the PropertyAccount;**

**(D)          the distribution through the PayingAgent of amounts owed to the Holders in respect of the Securities;**

**(E)           the exercise of all of the rights,powers and privileges of a holder**of the Debentures;

**(F)          **the sending of notices of default and other information regarding theSecurities and the Debentures to the Holders in accordance with thisDeclaration;

**(G)           the distribution of the TrustProperty in accordance with the terms of this Declaration;**

**(H)          to the extent provided in thisDeclaration, the winding up of the affairs of and liquidation of the Trust andthe preparation, execution and filing of the certificate of cancellation withthe Secretary of State of the State of Delaware;**

**(I)           **after any Event of Default (provided that such Event of Default is notby or with respect to the Institutional Trustee) the taking of any actionincidental to the foregoing as the Institutional Trustee may from time to timedetermine is necessary or advisable to give effect to the terms of thisDeclaration and protect and conserve the Trust Property for the benefit of theHolders (without consideration of the effect of any such action on anyparticular Holder); and

**(J)           **to take all action that may be necessary or appropriate for thepreservation and the continuation of the Trust’s valid existence, rights,franchises and privileges as a statutory business trust under the laws of theState of Delaware and of each other jurisdiction in which such existence is necessaryto protect the limited liability of the Holders of the Capital Securities or toenable the Trust to effect the purposes for which the Trust was created.

**(iii)          The Institutional Trustee shall havethe power and authority to act on behalf of the Trust with respect to any ofthe duties, liabilities, powers or the authority of the Administrators setforth in Section 2.6(a)(i)(E) and (F) herein but shall not have a duty to doany such act unless specifically requested to do so in writing by the Sponsor, andshall then be fully protected in acting pursuant to such written request; andin the event of a conflict between the action of the Administrators and theaction of the Institutional Trustee, the action of the Institutional Trusteeshall prevail.**

**(b)          **So long as this Declaration remains in effect, the Trust (or theTrustees or Administrators acting on behalf of the Trust) shall not undertakeany business, activities or transaction except as expressly provided herein orcontemplated hereby. In particular, neither the Trustees nor the Administratorsmay cause the Trust to (i) acquire any investments or engage in any activitiesnot authorized by this Declaration, (ii) sell, assign, transfer, exchange,mortgage, pledge, set-off or otherwise dispose of any of the Trust Property orinterests therein, including to Holders, except as expressly provided herein,(iii) take any action that would cause the Trust to fail or cease to qualify asa “grantor trust” for United States federal income tax purposes, (iv) incur anyindebtedness for borrowed money or issue any other debt or (v) take or consentto any action that would result in the placement of a lien on any of the TrustProperty. The Institutional Trustee shall, at the sole cost and expense of theTrust, defend all claims and demands of all Persons at any time claiming anylien on any of the Trust Property adverse to the interest of the Trust or theHolders in their capacity as Holders.

**(c)          **In connection with the issuance and sale of the Capital Securities, theSponsor shall have the right and responsibility to assist the Trust withrespect to, or effect on behalf of the Trust, the following (and any actionstaken by the Sponsor in furtherance of the following prior to the date of thisDeclaration are hereby ratified and confirmed in all respects):

**(i)           **the taking of any action necessary to obtain an exemption from theSecurities Act;

**(ii)           the determination of the States inwhich to take appropriate action to qualify or register for sale all or part ofthe Capital Securities and the determination of any and all such acts, otherthan actions which must be taken by or on behalf of the Trust, and theadvisement of the Trustees of actions they must take on behalf of the Trust,and the preparation for execution and filing of any documents to be executedand filed by the Trust or on behalf of the Trust, as the Sponsor deemsnecessary or advisable in order to comply with the applicable laws of any suchStates in connection with the sale of the Capital Securities;**

**(iii)          the negotiation of the terms of, andthe execution and delivery of, the Placement Agreement providing for the saleof the Capital Securities; and**

**(iv)          the taking of any other actionsnecessary or desirable to carry out any of the foregoing activities.**

**(d)          **Notwithstanding anything herein to the contrary, the Administrators,the Institutional Trustee and the Holders of a Majority in liquidation amountof the Common Securities are authorized and directed to conduct the affairs ofthe Trust and to operate the Trust so that (i) the Trust will not be deemed tobe an “investment company” required to be registered under the InvestmentCompany Act, and (ii) the Trust will not fail to be classified as a grantortrust for United States federal income tax purposes and (iii) the Trust willnot take any action inconsistent with the treatment of the Debentures asindebtedness of the Debenture Issuer for United States federal income taxpurposes. In this connection, the Institutional Trustee and the Holders of aMajority in liquidation amount of the Common Securities are authorized to takeany action, not inconsistent with applicable laws, the Original Declaration orthis Declaration, as amended from time to time, that each of the InstitutionalTrustee and such Holders determine in their discretion to be necessary ordesirable for such purposes, even if such action adversely affects theinterests of the Holders of the Capital Securities.

**(e)          **All expenses incurred by the Administrators or the Trustees pursuant tothis Section 2.6 shall be reimbursed by the Sponsor, and the Trustees shallhave no obligations with respect to such expenses.

**(f)            The** assets of the Trust shall consist of the Trust Property.

**(g)          **Legal title to all Trust Property shall be vested at all timesin the Institutional Trustee (in its capacity assuch) and shall be held and administered by the Institutional Trustee for thebenefit of the Trust and neither the Administrators nor the Holders inaccordance with this Declaration.

**(h)          **If the Institutional Trustee or any Holder has instituted anyproceeding to enforce any right or remedy under this Declaration and suchproceeding has been discontinued or abandoned for any reason, or has beendetermined adversely to the Institutional Trustee or to such Holder, then andin every such case the Sponsor, the Institutional Trustee and the Holdersshall, subject to any determination in such proceeding, be restored severallyand respectively to their former positions hereunder, and thereafter all rightsand remedies of the Institutional Trustee and the Holders shall continue asthough no such proceeding had been instituted.

**Section 2.7             Prohibitionof Actions by the Trust and the Trustees.**

**(a)          **The Trust shall not, and the Institutional Trustee and theAdministrators shall not, cause the Trust to engage in any activity other thanas required or authorized by this Declaration. In particular, the Trust shall not and the Institutional Trustee, andthe Administrators shall not, cause the Trust to:

**(i)           **invest any proceeds received by the Trust from holding the Debentures,but shall distribute all such proceeds to Holders of the Securities pursuant tothe terms of this Declaration and of the Securities;

**(ii)          **acquire any assets other than as expressly provided herein;

**(iii)          possess Trust Property for other thana Trust purpose;**

**(iv)         **make any loans or incur any indebtedness other than loans representedby the Debentures;

**(v)           possess any power or otherwise act insuch a way as to vary the Trust Property or the terms of the Securities;**

**(vi)         **issue any securities or other evidences of beneficial ownership of, orbeneficial interest in, the Trust other than the Securities; or

**(vii)         other than asprovided in this Declaration (including Annex I), (A) direct the time,**method and place of exercising any trust or power conferredupon the Debenture Trustee with respect to the Debentures, (B) waive any pastdefault that is waivable under theIndenture, (C) exercise any right to rescind or annul any declaration that theprincipal of all the Debentures shall be due and payable, or (D) consent to anyamendment, modification or termination of the Indenture or the Debentures wheresuch consent shall be required unless the Trust shall have received an opinionof counsel experienced in such matters to the effect that such modificationwill not cause the Trust to cease to be classified as a grantor trust forUnited States federal income tax purposes.

** **

**Section 2.8           Powersand Duties of the Institutional Trustee.**

**(a)          **The legal title to the Debentures shall be owned by and held of recordin the name of the Institutional Trustee in trust for the benefit of the Trust.The right, title and interest of the Institutional Trustee to the Debenturesshall vest automatically in each Person who may hereafter be appointed asInstitutional Trustee in accordance with Section 4.7. Such vesting andcessation of title shall be effective whether or not conveyancing documentswith regard to the Debentures have been executed and delivered.

**(b)          **The Institutional Trustee shall not transfer its right, title andinterest in the Debentures to the Administrators or to the Delaware Trustee.

**(c)**           The Institutional Trustee shall:

**(i)           **establish and maintain a segregated non-interest bearing trust account(the “Property Account”) in the United States (as defined in TreasuryRegulations section 301.7701-7), in the name of and under the exclusive controlof the Institutional Trustee, and maintained in the Institutional Trustee’strust department, on behalf of the Holders of the Securities and, upon the receiptof payments of funds made in respect of the Debentures held by theInstitutional Trustee, deposit such funds into the Property Account and makepayments to the Holders of the Capital Securities and Holders of the CommonSecurities from the Property Account in accordance with Section 5.1. Funds inthe Property Account shall be held uninvested until disbursed in accordancewith this Declaration;

**(ii)          **engage in such ministerial activities as shall be necessary or appropriate toeffect the redemption of the Capital Securities and the Common Securities tothe extent the Debentures are redeemed or mature; and

**(iii)         **upon written notice of distribution issued by the Administrators inaccordance with the terms of the Securities, engage in such ministerialactivities as shall be necessary or appropriate to effect the distribution ofthe Debentures to Holders of Securities upon the occurrence of certaincircumstances pursuant to the terms of the Securities.

**(d)          **The Institutional Trustee shall take all actions and perform suchduties as may be specifically required of the Institutional Trustee pursuant tothe terms of the Securities.

**(e)**           The Institutional Trustee may bring or defend, pay, collect, compromise, arbitrate, resort to legal action with respect to, or otherwise adjustclaims or demands of or against, the Trust (a “Legal Action”) which arises outof or in connection with an Event of Default of which a Responsible Officer ofthe Institutional Trustee has actual knowledge or the Institutional Trustee’sduties and obligations under this Declaration or the Trust Indenture Act;provided, however, that if an Event of Default has occurred and is continuingand such event is attributable to the failure of the Debenture Issuer to payinterest or principal on the Debentures on the date such interest or principalis otherwise payable (or in the case of redemption, on the redemption date),then a Holder of the Capital Securities may directly institute a proceeding forenforcement of payment to such Holder of the principal of or interest on theDebentures having a principal amount equal to the aggregate liquidation amountof the Capital Securities of such Holder (a “Direct Action”) on or after therespective due date specified in the Debentures. In connection with such DirectAction, the rights of the Holders of the Common Securities will be subrogatedto the rights of such Holder of the Capital Securities to the extent of anypayment made by the Debenture Issuer to such Holder of the Capital Securitiesin such Direct Action; provided, however, that a Holder of the CapitalSecurities may exercise such right of subrogation only so long as an Event ofDefault with respect to the Capital Securities has occurred and is continuing.

 

**(f)           **The Institutional Trustee shall continue to serve as a Trustee untileither: 

**(i)           **the Trust has been completely liquidated and the proceeds of theliquidation distributed to the Holders of the Securities pursuant to the termsof the Securities and this Declaration (including Annex I); or

**(ii)           a Successor Institutional Trustee hasbeen appointed and has accepted that appointment in accordance with Section4.7.**

**(g)          **The Institutional Trustee shall have the legal power to exercise all ofthe rights, powers and privileges of a Holder of the Debentures under theIndenture and, if an Event of Default occurs and is continuing, theInstitutional Trustee may, for the benefit of Holders of the Securities,enforce its rights as holder of the Debentures subject to the rights of theHolders pursuant to this Declaration (including Annex I) and the terms of theSecurities.

**The Institutional Trustee must exercise the powers set forth in thisSection 2.8 in a manner that is consistent with the purposes and functions ofthe Trust set out in Section 2.3, and the Institutional Trustee shall not takeany action that is inconsistent with the purposes and functions of the Trustset out in Section 2.3.**

**Section 2.9            Certain Duties andResponsibilities of the Trustees and Administrators.**

**(a)          **The Institutional Trustee, before the occurrence of any Event ofDefault and after the curing of all Events of Default that may have occurred,shall undertake to perform only such duties as are specifically set forth inthis Declaration and no implied covenants shall be read into this Declarationagainst the Institutional Trustee. In case an Event of Default has occurred(that has not been cured or waived pursuant to Section 6.7), the InstitutionalTrustee shall exercise such of the rights and powers vested in it by thisDeclaration, and use the same degree of care and skill in their exercise, as aprudent person would exercise or use under the circumstances in the conduct ofhis or her own affairs.

** **

**(b)          **The duties and responsibilities of the Trustees and the Administratorsshall be as provided by this Declaration and, in the case of the InstitutionalTrustee, by the Trust Indenture Act. Notwithstanding the foregoing, noprovision of this Declaration shall require the Trustees or Administrators toexpend or risk their own funds or otherwise incur any financial liability inthe performance of any of their duties hereunder, or in the exercise of any oftheir rights or powers, if they shall have reasonable grounds for believingthat repayment of such funds or adequate indemnity satisfactory to it againstsuch risk or liability is not reasonably assured to it. Whether or not thereinexpressly so provided, every provision of this Declaration relating to theconduct or affecting the liability of or affording protection to the Trusteesor Administrators shall be subject to the provisions of this Article. Nothingin this Declaration shall be construed to release an Administrator or Trusteefrom liability for its own negligent action, its own negligent failure to act,or its own willful misconduct. To the extent that, at law or in equity, aTrustee or an Administrator has duties and liabilities relating to the Trust orto the Holders, such Trustee or Administrator shall not be liable to the Trustor to any Holder for such Trustee’s or Administrator’s good faith reliance onthe provisions of this Declaration. The provisions of this Declaration, to theextent that they restrict the duties and liabilities of the Administrators orthe Trustees otherwise existing at law or in equity, are agreed by the Sponsorand the Holders to replace such other duties and liabilities of theAdministrators or the Trustees.

**(c)          **All payments made by the Institutional Trustee or a Paying Agent inrespect of the Securities shall be made only from the revenue and proceeds fromthe Trust Property and only to the extent that there shall be sufficientrevenue or proceeds from the Trust Property to enable the Institutional Trusteeor a Paying Agent to make payments in accordance with the terms hereof. EachHolder, by its acceptance of a Security, agrees that it will look solely to therevenue and proceeds from the Trust Property to the extent legally availablefor distribution to it as herein provided and that the Trustees and theAdministrators are not personally liable to it for any amount distributable inrespect of any Security or for any other liability in respect of any Security.This Section 2.9(c) does not limit the liability of the Trustees expressly setforth elsewhere in this Declaration or, in the case of the InstitutionalTrustee, in the Trust Indenture Act.

**(d)          **No provision of this Declaration shall be construed to relieve theInstitutional Trustee from liability with respect to matters that are withinthe authority of the Institutional Trustee under this Declaration for its ownnegligent action, its own negligent failure to act, or its own willfulmisconduct, except that:

**(i)           **the Institutional Trustee shall not be liable for any error or judgmentmade in good faith by an Authorized Officer of the Institutional Trustee,unless it shall be proved that the Institutional Trustee was negligent inascertaining the pertinent facts;

**(ii)           the InstitutionalTrustee 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 the Holders ofnot less than a Majority in liquidation amount of the Capital Securities or theCommon Securities, as applicable, relating to the time, method and place ofconducting any proceeding for any remedy available to the InstitutionalTrustee, or exercising any trust or power conferred upon the InstitutionalTrustee under this Declaration;**

 

**(iii)          the Institutional Trustee’s sole dutywith respect to the custody, safe keeping and physical preservation of theDebentures and the Property Account shall be to deal with such property in asimilar manner as the Institutional Trustee deals with similar property for itsown account, subject to the protections and limitations on liability affordedto the Institutional Trustee under this Declaration and the Trust IndentureAct;**

**(iv)          the Institutional Trustee shall not beliable for any interest on any money received by it except as it may otherwiseagree in writing with the Sponsor; and money held by the Institutional Trusteeneed not be segregated from other funds held by it except in relation to theProperty Account maintained by the Institutional Trustee pursuant to Section2.8(c)(i) and except to the extent otherwise required by law; and**

**(v)          **the Institutional Trustee shall not be responsible for monitoring thecompliance by the Administrators or the Sponsor with their respective dutiesunder this Declaration, nor shall the Institutional Trustee be liable for anydefault or misconduct of the Administrators or the Sponsor.

**Section 2.10          Certain Rights of InstitutionalTrustee**. Subject to theprovisions of Section 2.9:

**(a)          **the Institutional Trustee may conclusively rely and shall fully beprotected in acting or refraining from acting in good faith upon anyresolution, opinion of counsel, certificate, written representation of a Holderor transferee, certificate of auditors or any other certificate, statement,instrument, opinion, report, notice, request, direction, consent, order,appraisal, bond, debenture, note, other evidence of indebtedness or other paperor document believed by it to be genuine and to have been signed, sent orpresented by the proper party or parties;

**(b)          **if (i) in performing its duties under thisDeclaration, the Institutional Trustee is required to decide betweenalternative courses of action, (ii) in construing any of the provisions of thisDeclaration, the Institutional Trustee finds the same ambiguous or inconsistentwith any other provisions contained herein, or (iii) the Institutional Trusteeis unsure of the application of any provision of this Declaration, then, exceptas to any matter as to which the Holders of Capital Securities are entitled tovote under the terms of this Declaration, the Institutional Trustee may delivera notice to the Sponsor requesting the Sponsor’s opinion as to the course ofaction to be taken and the Institutional Trustee shall take such action, orrefrain from taking such action, as the Institutional Trustee in its solediscretion shall deem advisable and in the best interests of the Holders, inwhich event the Institutional Trustee shall have no liability except for itsown negligence or willful misconduct;

**(c)          **any direction or act of the Sponsor or the Administrators contemplatedby this Declaration shall be sufficiently evidenced by an Officers’ Certificate;

**(d)          **whenever in the administration of this Declaration, the InstitutionalTrustee shall deem it desirable that a matter be proved or established beforeundertaking, suffering or omitting any action hereunder, the InstitutionalTrustee (unless other evidence is herein specifically prescribed) may, in theabsence of bad faith on its part, request and conclusively rely upon anOfficers’ Certificate as to factual matters which, upon receipt of suchrequest, shall be promptly delivered by the Sponsor or the Administrators;

 

**(e)          **the Institutional Trustee shall have no duty to see to any recording,filing or registration of any instrument (including any financing orcontinuation statement or any filing under tax or securities laws) or anyrerecording, refiling or reregistration thereof;

**(f)           **the Institutional Trustee may consult with counsel of its selection(which counsel may be counsel to the Sponsor or any of its Affiliates) and theadvice of such counsel shall be full and complete authorization and protection inrespect of any action taken, suffered or omitted by it hereunder in good faithand in reliance thereon and in accordance with such advice; the InstitutionalTrustee shall have the right at any time to seek instructions concerning theadministration of this Declaration from any court of competent jurisdiction;

**(g)          **the Institutional Trustee shall be under no obligation to exercise anyof the rights or powers vested in it by this Declaration at the request ordirection of any of the Holders pursuant to this Declaration, unless suchHolders shall have offered to the Institutional Trustee security or indemnityreasonably satisfactory to it against the costs, expenses and liabilities whichmight be incurred by it in compliance with such request or direction; provided,that nothing contained in this Section 2.10(g) shall be taken to relieve theInstitutional Trustee, upon the occurrence of an Event of Default that has notbeen cured or waived, of its obligation to exercise the rights and powersvested in it by this Declaration;

**(h)          **the Institutional Trustee shall not be bound to make any investigationinto the facts or matters stated in any resolution, certificate, statement,instrument, opinion, report, notice, request, consent, order, approval, bond,debenture, note or other evidence of indebtedness or other paper or document,unless requested in writing to do so by one or more Holders, but theInstitutional Trustee may make such further inquiry or investigation into suchfacts or matters as it may see tit;

**(i)           **the Institutional Trustee may execute any of the trusts or powershereunder or perform any duties hereunder either directly or by or through itsagents or attorneys and the Institutional Trustee shall not be responsible forany misconduct or negligence on the part of, or for the supervision of, anysuch agent or attorney appointed with due care by it hereunder;

**(j)           **whenever in the administration of this Declaration the InstitutionalTrustee shall deem it desirable to receive instructions with respect to enforcingany remedy or right or taking any other action hereunder, the InstitutionalTrustee (i) may request instructions from the Holders of the Common Securitiesand the Capital Securities, which instructions may be given only by the Holdersof the same proportion in liquidation amount of the Common Securities and theCapital Securities as would be entitled to direct the Institutional Trusteeunder the terms of the Common Securities and the Capital Securities in respectof such remedy, right or action, (ii) may refrain from enforcing such remedy orright or taking such other action until such instructions are received, and(iii) shall be fully protected in acting in accordance with such instructions;

 

**(k)          **except as otherwise expressly provided in this Declaration, the Institutional Trustee shall not be under any obligation to take anyaction that is discretionary under the provisions of this Declaration;

**(l)           **when the Institutional Trustee incurs expenses or renders services inconnection with a Bankruptcy Event, such expenses (including the fees andexpenses of its counsel) and the compensation for such services are intended toconstitute expenses of administration under any bankruptcy law or law relatingto creditors rights generally;

**(m)          the Institutional Trusteeshall not be charged with knowledge of an Event of Default unless a ResponsibleOfficer of the Institutional Trustee obtains actual knowledge of such event orthe Institutional Trustee receives written notice of such event from anyHolder;**

**(n)          **any action taken by the Institutional Trustee or its agents hereundershall bind the Trust and the Holders of the Securities, and the signature ofthe Institutional Trustee or its agents alone shall be sufficient and effectiveto perform any such action and no third party shall be required to inquire asto the authority of the Institutional Trustee to so act or as to its compliancewith any of the terms and provisions of this Declaration, both of which shallbe conclusively evidenced by the Institutional Trustee’s or its agent’s takingsuch action; and

**(o)          **no provision of this Declaration shall be deemed to impose any duty orobligation on the Institutional Trustee to perform any act or acts or exerciseany right, power, duty or obligation conferred or imposed on it, in anyjurisdiction in which it shall be illegal, or in which the InstitutionalTrustee shall be unqualified or incompetent in accordance with applicable law,to perform any such act or acts, or to exercise any such right, power, duty orobligation. No permissive power or authority available to the InstitutionalTrustee shall be construed to be a duty.

**Section** 2.11           Delaware Trustee. Notwithstanding any other provision of this Declaration other thanSection 4.2, the Delaware Trustee shall not be entitled to exercise any powers,nor shall the Delaware Trustee have any of the duties and responsibilities ofany of the Trustees or the Administrators described in this Declaration (exceptas may be required under the Business Trust Act). Except as set forth in Section4.2, the Delaware Trustee shall be a Trustee for the sole and limited purposeof fulfilling the requirements of 0 3807 of the Business Trust Act.

**Section 2.**12           Execution ofDocuments. Unless otherwisedetermined in writing by the Institutional Trustee, and except as otherwiserequired by the Business Trust Act, the Institutional Trustee, or any one ormore of the Administrators, as the case may be, is authorized to execute onbehalf of the Trust any documents that the Trustees or the Administrators, asthe case may be, have the power and authority to execute pursuant to Section2.6.

**Section 2.13           Not Responsible for Recitals orIssuance of Securities**. The recitals contained in this Declaration and the Securities shallbe taken as the statements of the Sponsor, and the Trustees do not assume anyresponsibility for their correctness. The Trustees make no representations as to the value or condition of theproperty of the Trust or any part thereof. The Trusteesmake no representations as to the validity or sufficiency of this Declaration,the Debentures or the Securities.

 

**Section 2.14           Durationof Trust**. The Trust, unlessdissolved pursuant to the provisions of Article VII hereof, shall haveexistence for thirty-five (35) years from the Closing Date.

**Section 2.15           Mergers**. (a) The Trust may not consolidate, amalgamate, merge with or into, orbe replaced by, or convey, transfer or lease its properties and assetssubstantially as an entirety to any corporation or other Person, except asdescribed in this Section 2.15(b) and (c) and except with respect to thedistribution of Debentures to Holders of Securities pursuant to Section7.l(a)(iv) of the Declaration or Section 4 of Annex I.

**(b)          **The Trust may, withthe consent of the Institutional Trustee (which consent will not beunreasonably withheld) and without the consent of the Delaware Trustee or theHolders of the Capital Securities, consolidate, amalgamate, merge with or into,or be replaced by a trust organized as such under the laws of any State;provided, that:

**(i)           **if the Trust is not the survivor, such successor entity (the “SuccessorEntity”) either:

**(A)         **expressly assumes all of the obligations of the Trust under theSecurities; or

**(B)          **substitutes for the Securities other securities having substantiallythe same terms as the Securities (the “Successor Securities”) so that theSuccessor Securities rank the same as the Securities rank with respect toDistributions and payments upon Liquidation, redemption and otherwise;

**(ii)           the Sponsor expressly appoints, as theHolder of the Debentures, a trustee of the Successor Entity that possesses thesame powers and duties as the Institutional Trustee;**

**(iii)          the Capital Securities or anySuccessor Securities (excluding any securities substituted for the CommonSecurities) are listed, or any Successor Securities will be listed uponnotification of issuance, on any national securities exchange or with anotherorganization on which the Capital Securities are then listed or quoted, if any;**

**(iv)         **such merger, consolidation, amalgamation or replacement does not causethe Capital Securities (including any Successor Securities) to be downgraded byany nationally recognized statistical rating organization, if the CapitalSecurities are then rated;

**(v)          **such merger, consolidation, amalgamation or replacement does notadversely affect the rights, preferences and privileges of the Holders of theSecurities (including any Successor Securities) in any material respect (otherthan with respect to any dilution of such Holders’ interests in the SuccessorEntity as a result of such merger, consolidation, amalgamation or replacement);

**(vi)         **such Successor Entity has a purpose substantially identical to that ofthe Trust;

**(vii)         prior to such merger, consolidation,amalgamation or replacement, the Trust has received a written opinion of anationally recognized independent counsel to the Trust experienced in suchmatters to the effect that:**

**(A)         **such merger, consolidation, amalgamation or replacement does notadversely affect the rights, preferences and privileges of the Holders of theSecurities (including any Successor Securities) in any material respect (otherthan with respect to any dilution of the Holders’ interest in the SuccessorEntity);

**(B)          **following such merger, consolidation, amalgamation or replacement,neither the Trust nor the Successor Entity will be required to register as anInvestment Company; and

**(C)          **following such merger, consolidation, amalgamation or replacement, theTrust (or the Successor Entity) will continue to be classified as a grantortrust for United States federal income tax purposes;

**(viii)        the Sponsor guarantees the obligationsof such Successor Entity under the Successor Securities at least to the extentprovided by the Guarantee, the Debentures and this Declaration; and**

**(ix)           prior to such merger, consolidation,amalgamation or replacement, the Institutional Trustee shall have received anOfficers’ Certificate of the Administrators and an opinion of counsel, each tothe effect that all conditions precedent of this paragraph (b) to suchtransaction have been satisfied.**

**(c)          **Notwithstanding Section 2.15(b), the Trust shall not, except with theconsent of Holders of 100% in liquidation amount of the Securities,consolidate, amalgamate, merge with or into, or be replaced by any other Personor permit any other Person to consolidate, amalgamate, merge with or into, orreplace it if such consolidation, amalgamation, merger or replacement wouldcause the Trust or Successor Entity to be classified as other than a grantortrust for United States federal income tax purposes.

**ARTICLE III**

**SPONSOR**

** **

**Section 3.1             Sponsor’s Purchase of CommonSecurities**. On the Closing Date,the Sponsor will purchase all of the Common Securities issued by the Trust, inan amount at least equal to 3% of the capital of the Trust, at the same time asthe Capital Securities are sold.

**Section 3.2            **Responsibilities of the Sponsor. In connection with the issue and sale of the Capital Securities, the Sponsor shall have the exclusiveright and responsibility to engage in, or direct the Administrators to engagein, the following activities:

 

**(a)          **to determine the States in which to take appropriate action to qualifyor register for sale of all or part of the Capital Securities and to do any andall such acts, other than actions which must be taken by the Trust, and advisethe Trust of actions it must take, and prepare for execution and filing anydocuments to be executed and filed by the Trust, as the Sponsor deems necessaryor advisable in order to comply with the applicable laws of any such States;

**(b)          **to prepare for filing and request the Administrators to cause thefiling by the Trust, as may be appropriate, of an application to the PORTALsystem, for listing or quotation upon notice of issuance of any Capital Securities,if required; and

**(c)**           to negotiate the terms of and/or execute on behalf of the Trust, thePlacement Agreement and other related agreements providing for the sale of theCapital Securities.

**ARTICLE IV**

**TRUSTEES AND ADMINISTRATORS**

**Section 4.1             Numberof Trustees**. The number ofTrustees initially shall be two, and:

**(a)          **at any time before theissuance of any Securities, the Sponsor may, by written instrument, increase ordecrease the number of Trustees; and

**(b)          **after the issuance ofany Securities, the number of Trustees may be increased or decreased by vote ofthe Holder of a Majority in liquidation amount of the Common Securities votingas a class at a meeting of the Holder of the Common Securities; provided,however, that there shall be a Delaware Trustee if required by Section 4.2; andthere shall always be one Trustee who shall be the Institutional Trustee, andsuch Trustee may also serve as Delaware Trustee if it meets the applicablerequirements, in which case Section 2.11 shall have no application to suchentity in its capacity as Institutional Trustee.

**Section 4.2             DelawareTrustee**. If required by theBusiness Trust Act, one Trustee (the “Delaware Trustee”) shall be:

**(a)          **a natural person whois a resident of the State of Delaware; or

**(b)          **if not a naturalperson, an entity which is organized under the laws of the United States or anyState thereof or the District of Columbia, has its principal place of businessin the State of Delaware, and otherwise meets the requirements of applicablelaw, including §3807 of the Business Trust Act.

**Section 4.3             Institutional Trustee; Eligibility.(a) There shall**at all times be one Trustee which shall act as Institutional Trustee which shall:

**(i)           **not be an Affiliate ofthe Sponsor;

**(ii)           not offer orprovide credit or credit enhancement to the Trust; and**

** **

**(iii)          be a bankingcorporation organized and doing business under the laws of the United States ofAmerica or any State thereof or of the District of Columbia and authorizedunder such laws to exercise corporate trust powers, having a combined capitaland surplus of at least 50 million U.S. dollars ($50,000,000), and subject tosupervision or examination by Federal, State or District of Columbia authority.If such corporation publishes reports of condition at least annually, pursuantto law or to the requirements of the supervising or examining authorityreferred to above, then for the purposes of this Section 4.3(a)(iii), thecombined capital and surplus of such corporation shall be deemed to be itscombined capital and surplus as set forth in its most recent report ofcondition so published.**

**(b)          **If at any time theInstitutional Trustee shall cease to be eligible to so act under Section4.3(a), the Institutional Trustee shall immediately resign in the manner andwith the effect set forth in Section 4.7(a).

**(c)          **If the InstitutionalTrustee has or shall acquire any “conflicting interest” within the meaning of§310(b) of the Trust Indenture Act, the Institutional Trustee shall eithereliminate such interest or resign, to the extent and in the manner provided by,and subject to this Declaration.

**(d)**           The initialInstitutional Trustee shall be The Bank of New York.

**Section 4.4             CertainQualifications of the Delaware Trustee Generally**. The Delaware Trustee shall be a U.S. Person and either a naturalperson who is at least 21 years of age or a legal entity that shall act throughone or more Authorized Officers.

**Section 4.5             Administrators**. Each Administrator shall be a U.S. Person. The initial Administratorsshall be Scott A. Montgomery and David R. Brown. There shall at all times be atleast one Administrator.

**Except where a requirement for action by aspecific number of Administrators is expressly set forth in this Declarationand except with respect to any action the taking of which is the subject of ameeting of the Administrators, any action required or permitted to be taken bythe Administrators may be taken by, and any power of the Administrators may beexercised by, or with the consent of, any one such Administrator.**

**Section 4.6             InitialDelaware Trustee**. The initial DelawareTrustee shall be The Bank of New York (Delaware).

**Section 4.7             Appointment,Removal and Resignation of Trustees and Administrators**.

**(a)          **No resignation or removal of any Trustee (the “Relevant Trustee”) andno appointment of a successor Trustee pursuant to this Article shall becomeeffective until the acceptance of appointment by the successor Trustee inaccordance with the applicable requirements of this Section 4.7.

** **

**Subject to the immediately preceding paragraph,a Relevant Trustee may resign at any time by giving written notice thereof tothe Holders of the Securities and by appointing a successor Relevant Trustee.Upon the resignation of the Institutional Trustee, the Institutional Trusteeshall appoint a successor by requesting from at least three Persons meeting theeligibility requirements, its expenses and charges to serve as the successorInstitutional Trustee on a form provided by the Administrators, and selectingthe Person who agrees to the lowest expense and charges (the “SuccessorInstitutional Trustee”). If the instrument of acceptance by the successorRelevant Trustee required by Section 4.7 shall not have been delivered to theRelevant Trustee within 60 days after the giving of such notice of resignationor delivery of the instrument of removal, the Relevant Trustee may petition, atthe expense of the Trust, any Federal, State or District of Columbia court ofcompetent jurisdiction for the appointment of a successor Relevant Trustee.Such court may thereupon, after prescribing such notice, if any, as it may deemproper, appoint a Relevant Trustee. The Institutional Trustee shall have noliability for the selection of such successor pursuant to this Section 4.7.**

**Unless an Event of Default shall have occurredand be continuing, any Trustee may be removed at any time by an act of theHolder of a majority in liquidation amount of the Common Securities. If anyTrustee shall be so removed, the Holders of the Common Securities, by act ofthe Holders of a Majority in liquidation amount of the Common Securities thenoutstanding delivered to the Relevant Trustee, shall promptly appoint asuccessor Relevant Trustee or Trustees, and such successor Trustee shall complywith the applicable requirements of this Section 4.7. If an Event of Defaultshall have occurred and be continuing, the Institutional Trustee or theDelaware Trustee, or both of them, may be removed by the act of the Holders ofa Majority in liquidation amount of the Capital Securities, delivered to theRelevant Trustee (in its individual capacity and on behalf of the Trust). Ifany Trustee shall be so removed, the Holders of Capital Securities, by act ofthe Holders of a Majority in liquidation amount of the Capital Securities thenoutstanding delivered to the Relevant Trustee, shall promptly appoint asuccessor Relevant Trustee or Trustees, and such successor Trustee shall complywith the applicable requirements of this Section 4.7. If no successor RelevantTrustee shall have been so appointed by the Holders of a Majority inliquidation amount of the Capital Securities and accepted appointment in themanner required by this Section 4.7, within 30 days after delivery of aninstrument of removal, the Relevant Trustee or any Holder who has been a Holderof the Securities for at least six months may, on behalf of himself and allothers similarly situated, petition any Federal, State or District of Columbiacourt of competent jurisdiction for the appointment of a successor RelevantTrustee. Such court may thereupon, after prescribing such notice, if any, as itmay deem proper, appoint a successor Relevant Trustee or Trustees.**

**The Institutional Trustee shall give noticeof each resignation and each removal of a Trustee and each appointment of asuccessor Trustee to all Holders in the manner provided in Section 4.7(b) andshall give notice to the Sponsor. Each notice shall include the name of thesuccessor Relevant Trustee and the address of its Corporate Trust Office if itis the Institutional Trustee.**

**Notwithstanding the foregoing or any other provision of thisDeclaration, in the event a Delaware Trustee who is a natural person dies or isadjudged by a court to have become incompetent or incapacitated, the vacancycreated by such death, incompetence or incapacity may be filled by theInstitutional Trustee following the procedures in this Section 4.7 (with thesuccessor being a Person who satisfies the eligibility requirement for aDelaware Trustee set forth in this Declaration) (the “Successor Delaware Trustee”).**

** **

**(b)          **In case of theappointment hereunder of a successor Relevant Trustee, the retiring RelevantTrustee and each successor Relevant Trustee with respect to the Securitiesshall execute and deliver an amendment hereto wherein each successor RelevantTrustee shall accept such appointment and which (a) shall contain suchprovisions as shall be necessary or desirable to transfer and confirm to, andto vest in, each successor Relevant Trustee all the rights, powers, trusts andduties of the retiring Relevant Trustee with respect to the Securities and theTrust and (b) shall add to or change any of the provisions of this Declarationas shall be necessary to provide for or facilitate the administration of theTrust by more than one Relevant Trustee, it being understood that nothingherein or in such amendment shall constitute such Relevant Trustees co-trusteesand upon the execution and delivery of such amendment the resignation orremoval of the retiring Relevant Trustee shall become effective to the extent providedtherein and each such successor Relevant Trustee, without any further act, deedor conveyance, shall become vested with all the rights, powers, trusts andduties of the retiring Relevant Trustee; but, on request of the Trust or anysuccessor Relevant Trustee such retiring Relevant Trustee shall duly assign,transfer and deliver to such successor Relevant Trustee all Trust Property, allproceeds thereof and money held by such retiring Relevant Trustee hereunderwith respect to the Securities and the Trust, subject to the payment of allunpaid fees, expenses and indemnities of such Retiring Relevant Trustee.

**(c)          **No InstitutionalTrustee or Delaware Trustee shall be liable for the acts or omissions to act ofany Successor Institutional Trustee or Successor Delaware Trustee, as the casemay be.

**(d)**           The Holders of the Capital Securities will have no right to vote toappoint, remove or replace the Administrators, which voting rights are vestedexclusively in the Holders of the Common Securities.

**(e)          **Any successor Delaware Trustee shall file an amendment to the Certificate of Trustwith the Delaware Secretary of State identifying the name and principal placeof business of such Delaware Trustee in the State of Delaware.

**Section** 4.8             VacanciesAmong Trustees. If a Trustee ceasesto hold office for any reason and the number of Trustees is not reducedpursuant to Section 4.1, or if the number of Trustees is increased pursuant toSection 4.1, a vacancy shall occur. A resolution certifying the existence ofsuch vacancy by the Trustees or, if there are more than two, a majority of theTrustees shall be conclusive evidence of the existence of such vacancy. Thevacancy shall be filled with a Trustee appointed in accordance with Section4.7.

**Section 4.9             Effect of Vacancies**. The death, resignation, retirement, removal, bankruptcy, dissolution, liquidation, incompetence orincapacity to perform the duties of a Trustee shall notoperate to dissolve, terminate or annul the Trust or terminate thisDeclaration. Whenever a vacancy in the number of Trustees shall occur, untilsuch vacancy is filled by the appointment of a Trustee in accordance withSection 4.7, the Institutional Trustee shall have all the powers granted to theTrustees and shall discharge all the duties imposed upon the Trustees by thisDeclaration.

** **

**Section 4.10           Meetingsof the Trustees and the Administrators**. Meetings of the Trustees or the Administrators shall be held fromtime to time upon the call of any Trustee or Administrator, as applicable.Regular meetings of the Trustees and the Administrators, respectively, may bein person in the United States or by telephone, at a place (if applicable) andtime fixed by resolution of the Trustees or the Administrators, as applicable.Notice of any in-person meetings of the Trustees or the Administrators shall behand delivered or otherwise delivered in writing (including by facsimile, witha hard copy by overnight courier) not less than 48 hours before such meeting.Notice of any telephonic meetings of the Trustees or the Administrators or anycommittee thereof shall be hand delivered or otherwise delivered in writing(including by facsimile, with a hard copy by overnight courier) not less than24 hours before a meeting. Notices shall contain a brief statement of the time,place and anticipated purposes of the meeting. The presence (whether in personor by telephone) of a Trustee or an Administrator, as the case may be, at ameeting shall constitute a waiver of notice of such meeting except where aTrustee or an Administrator, as the case may be, attends a meeting for theexpress purpose of objecting to the transaction of any activity on the groundthat the meeting has not been lawfully called or convened. Unless providedotherwise in this Declaration, any action of the Trustees or theAdministrators, as the case may be, may be taken at a meeting by vote of amajority of the Trustees or the Administrators present (whether in person or bytelephone) and eligible to vote with respect to such matter; provided, that aQuorum is present, or without a meeting by the unanimous written consent of theTrustees or the Administrators. Meetings of the Trustees and the Administratorstogether shall be held from the time to time upon the call of any Trustee orAdministrator.

**Section 4.11           Delegationof Power**. (a) Any Trustee orany Administrator, as the case may be, may, by power of attorney consistentwith applicable law, delegate to any other natural person over the age of 21that is a U.S. Person his or her power for the purpose of executing anydocuments contemplated in Section 2.6; and

**(b)          **the Trustees shallhave power to delegate from time to time to such of their number or to anyofficer of the Trust that is a U.S. Person, the doing of such things and theexecution of such instruments either in the name of the Trust or the names ofthe Trustees or otherwise as the Trustees may deem expedient, to the extentsuch delegation is not prohibited by applicable law or contrary to theprovisions of the Trust, as set forth herein.

**Section 4.12           Conversion, Consolidation orSuccession to Business**. Any Person into which the Institutional Trustee or the DelawareTrustee, as the case may be, may be merged or converted or with which eithermay be consolidated, or any Person resulting from any merger, conversion orconsolidation to which the Institutional Trustee or the Delaware Trustee, asthe case may be, shall be a party, or any Person succeeding to all orsubstantially all the corporate trust business of the Institutional Trustee orthe Delaware Trustee, as the case may be, shall be the successor of theInstitutional Trustee or the Delaware Trustee, as the case may be, hereunder,provided such Person shall be otherwise qualified and eligible under thisArticle, provided, further, that such Person shall file an amendment to theCertificate of Trust with the Delaware Secretary of State as contemplated inSection 4.7(e) without the execution or filing of any paper or any further acton the part of any of the parties hereto.

** **

**ARTICLE V**

**DISTRIBUTIONS**

**Section 5.1             Distributions**. Holders shall receive Distributions in accordance with the applicableterms of the relevant Holder’s Securities. Distributions shall be made on theCapital Securities and the Common Securities in accordance with the preferencesset forth in their respective terms. If and to the extent that the DebentureIssuer makes a payment of interest (including any Additional Interest orDeferred Interest) and/or principal on the Debentures held by the InstitutionalTrustee (the amount of any such payment being a “Payment Amount”), theInstitutional Trustee shall and is directed, to the extent funds are availablein the Property Account for that purpose, to make a distribution (a“Distribution”) of the Payment Amount to Holders.

**ARTICLE VI**

**ISSUANCE OF SECURITIES**

**Section 6.1             GeneralProvisions Regarding Securities.**

**(a)          **The Administrators shall on behalf of the Trust issue one series ofcapital securities substantially in the form of Exhibit A-l representingundivided beneficial interests in the assets of the Trust having such terms asare set forth in Annex I (the “Capital Securities”) and one series of commonsecurities representing undivided beneficial interests in the assets of theTrust having such terms as are set forth in Annex I (the “Common Securities”).The Trust shall issue no securities or other interests in the assets of theTrust other than the Capital Securities and the Common Securities. The CapitalSecurities rank *pari passu*andpayment thereon shall be made Pro Rata with the Common Securities except that,where an Event of Default has occurred and is continuing, the rights of Holdersof the Common Securities to payment in respect of Distributions and paymentsupon liquidation, redemption and otherwise are subordinated to the rights to paymentof the Holders of the Capital Securities.

**(b)          **The Certificates shall be signed on behalf of the Trust by one or moreAdministrators. Such signature shall be the facsimile or manual signature ofany Administrator. In case any Administrator of the Trust who shall have signedany of the Securities shall cease to be such Administrator before theCertificates so signed shall be delivered by the Trust, such Certificatesnevertheless may be delivered as though the person who signed such Certificateshad not ceased to be such Administrator; and any Certificate may be signed onbehalf of the Trust by such person who, at the actual date of execution of suchSecurity, shall be an Administrator of the Trust, although at the date of theexecution and delivery of the Declaration any such person was not such anAdministrator. A Capital Security shall not be valid until authenticated by themanual signature of an Authorized Officer of the Institutional Trustee. Suchsignature shall be conclusive evidence that the Capital Security has been authenticatedunder this Declaration. Upon written order ofthe Trust signed by one Administrator, the Institutional Trustee shallauthenticate the Capital Securities for original issue. The InstitutionalTrustee may appoint an authenticating agent that is a U.S. Person acceptable tothe Trust to authenticate the Capital Securities. A Common Security need not beso authenticated.

** **

**(c)**           The consideration received by the Trust for the issuance of theSecurities shall constitute a contribution to the capital of the Trust andshall not constitute a loan to the Trust.

**(d)          **Upon issuance of theSecurities as provided in this Declaration, the Securities so issued shall bedeemed to be validly issued, fully paid and non-assessable.

**(e)          **Every Person, byvirtue of having become a Holder in accordance with the terms of thisDeclaration, shall be deemed to have expressly assented and agreed to the termsof, and shall be bound by, this Declaration and the Guarantee.

**Section 6.2             PayingAgent, Transfer Agent and Registrar**. The Trust shall maintain in New York, New York, an office or agencywhere the Securities may be presented for payment (the “Paying Agent”), and anoffice or agency where Securities may be presented for registration of transferor exchange (the “Transfer Agent”). The Trust shall keep or cause to be kept atsuch office or agency a register for the purpose of registering Securities andtransfers and exchanges of Securities, such register to be held by a registrar(the “Registrar”). The Administrators may appoint the Paying Agent, theRegistrar and the Transfer Agent, and may appoint one or more additional PayingAgents or one or more co-Registrars, or one or more co-Transfer Agents in suchother locations as it shall determine. The term “Paying Agent” includes anyadditional paying agent, the term “Registrar” includes any additional registraror co-Registrar and the term “Transfer Agent” includes any additional transferagent. The Administrators may change any Paying Agent, Transfer Agent orRegistrar at any time without prior notice to any Holder. The Administratorsshall notify the Institutional Trustee of the name and address of any PayingAgent, Transfer Agent and Registrar not a party to this Declaration. TheAdministrators hereby initially appoint the Institutional Trustee to act asPaying Agent, Transfer Agent and Registrar for the Capital Securities and theCommon Securities. The Institutional Trustee or any of its Affiliates in theUnited States may act as Paying Agent, Transfer Agent or Registrar.

**Section 6.3             Formand Dating**. The CapitalSecurities and the Institutional Trustee’s certificate of authenticationthereon shall be substantially in the form of Exhibit A-l, and the CommonSecurities shall be substantially in the form of Exhibit A-2, each of which ishereby incorporated in and expressly made a part of this Declaration.Certificates may be typed, printed, lithographed or engraved or may be producedin any other manner as is reasonably acceptable to the Administrators, as conclusivelyevidenced by their execution thereof. The Securities may have letters, numbers,notations or other marks of identification or designation and such legends orendorsements required by law, stock exchange rule, agreements to which theTrust is subject, if any, or usage (provided, that any such notation, legend orendorsement is in a form acceptable to the Sponsor). The Trust at the direction of theSponsor shall furnish any such legend not containedin Exhibit A-l to the Institutional Trustee in writing. Each Capital Security shall bedated the date of its authentication. The terms and provisions of theSecurities set forth in Annex I and the forms of Securities set forth inExhibits A-l and A-2 are part of the terms of this Declaration and to the extentapplicable, the Institutional Trustee, the Delaware Trustee, the Administratorsand the Sponsor, by their execution and delivery of this Declaration, expresslyagree to such terms and provisions and to be bound thereby. Capital Securitieswill be issued only in blocks having a stated liquidation amount of not lessthan $1,000.

**The Capital Securities are being offered andsold by the Trust pursuant to the Placement Agreement in definitive form,registered in the name of the Holder thereof, without coupons with theRestricted Securities Legend.**

**Section 6.4             Mutilated,Destroyed, Lost or Stolen Certificates**. If:

**(a)          **any mutilatedCertificates should be surrendered to the Registrar, or if the Registrar shallreceive evidence to its satisfaction of the destruction, loss or theft of anyCertificate; and

**(b)          **there shall bedelivered to the Registrar, the Administrators and the Institutional Trusteesuch security or indemnity as may be required by them to keep each of themharmless; then, in the absence of notice that such Certificate shall have beenacquired by a bona fide purchaser, an Administrator on behalf of the Trustshall execute (and in the case of a Capital Security Certificate, theInstitutional Trustee shall authenticate) and deliver, in exchange for or inlieu of any such mutilated, destroyed, lost or stolen Certificate, a newCertificate of like denomination. In connection with the issuance of any newCertificate under this Section 6.4, the Registrar or the Administrators mayrequire the payment of a sum sufficient to cover any tax or other governmentalcharge that may be imposed in connection therewith. Any duplicate Certificateissued pursuant to this Section shall constitute conclusive evidence of anownership interest in the relevant Securities, as if originally issued, whetheror not the lost, stolen or destroyed Certificate shall be found at any time.

**Section 6.5             TemporarySecurities**. Until definitiveSecurities are ready for delivery, the Administrators may prepare and, in thecase of the Capital Securities, the Institutional Trustee shall authenticate,temporary Securities. Temporary Securities shall be substantially in form ofdefinitive Securities but may have variations that the Administrators considerappropriate for temporary Securities. Without unreasonable delay, theAdministrators shall prepare and, in the case of the Capital Securities, theInstitutional Trustee shall authenticate definitive Securities in exchange fortemporary Securities.

**Section 6.6             Cancellation**. The Administrators at any time may deliver Securities to theInstitutional Trustee for cancellation. The Registrar shall forward to theInstitutional Trustee any Securities surrendered to it for registration oftransfer, redemption or payment. The Institutional Trustee shall promptlycancel all Securities surrendered for registration of transfer, payment,replacement or cancellation and shall dispose of such canceled Securities asthe Administrators direct. The Administrators may not issue new Securities toreplace Securities that have been paid or that have been delivered to theInstitutional Trustee for cancellation.

 

**Section 6.7             Rightsof Holders; Waivers of Past Defaults**.

**(a)          **The legal title to theTrust Property is vested exclusively in the Institutional Trustee (in itscapacity as such) in accordance with Section 2.5, and the Holders shall nothave any right or title therein other than the undivided beneficial interest inthe assets of the Trust conferred by their Securities and they shall have noright to call for any partition or division of property, profits or rights ofthe Trust except as described below. The Securities shall be personal propertygiving only the rights specifically set forth therein and in this Declaration.The Securities shall have no preemptive or similar rights and when issued anddelivered to Holders against payment of the purchase price therefore will befully paid and nonassessable by the Trust.

**(b)          **For so long as anyCapital Securities remain outstanding, if, upon an Indenture Event of Default,the Debenture Trustee fails or the holders of not less than 25% in principalamount of the outstanding Debentures fail to declare the principal of all ofthe Debentures to be immediately due and payable, the Holders of at least amajority in liquidation amount of the Capital Securities then outstanding shallhave the right to make such declaration by a notice in writing to theInstitutional Trustee, the Sponsor and the Debenture Trustee.

**At any time after a declaration ofacceleration with respect to the Debentures has been made and before a judgmentor decree for payment of the money due has been obtained by the DebentureTrustee as provided in the Indenture, if the Institutional Trustee, subject tothe provisions hereof, fails to annul any such declaration and waive suchdefault, the Holders of at least a majority in liquidation amount of theCapital Securities, by written notice to the Institutional Trustee, the Sponsorand the Debenture Trustee, may rescind and annul such declaration and itsconsequences if:**

**(i)           **the Sponsor has paid or deposited with the Debenture Trustee a sumsufficient to pay

**(A)         **all overdue installments of interest on all of the Debentures,

**(B)           any accrued DeferredInterest on all of the Debentures,**

**(C)           the principal of(and premium, if any, on) any Debentures that have become due otherwise than bysuch declaration of acceleration and interest and Deferred Interest thereon atthe rate borne by the Debentures, and**

**(D)         **all sums paid or advanced by the Debenture Trustee under the Indentureand the reasonable compensation, expenses, disbursements and advances of theDebenture Trustee and the Institutional Trustee, their agents and counsel; and

**(ii)           allEvents of Default with respect to the Debentures, other than the nonpayment ofthe principal of the Debentures that has become due solely by suchacceleration, have been cured or waived as provided in Section 5.07 of theIndenture.**

** **

**The Holders of at least a majority inliquidation amount of the Capital Securities may, on behalf of the Holders ofall the Capital Securities, waive any past default or Event of Default, excepta default or Event of Default in the payment of principal or interest (unlesssuch default or Event of Default has been cured and a sum sufficient to pay allmatured installments of interest and principal due otherwise than byacceleration has been deposited with the Debenture Trustee) or a default orEvent of Default in respect of a covenant or provision that under the Indenturecannot be modified or amended without the consent of the holder**of each outstanding Debenture.No such rescission shall affect any subsequent default or impair any rightconsequent thereon.

**Upon receipt by the Institutional Trustee ofwritten notice declaring such an acceleration, or rescission and annulmentthereof, by Holders of any part of the Capital Securities a record date shallbe established for determining Holders of outstanding Capital Securitiesentitled to join in such notice, which record date shall be at the close ofbusiness on the day the Institutional Trustee receives such notice. The Holderson such record date, or their duly designated proxies, and only such Persons,shall be entitled to join in such notice, whether or not such Holders remainHolders after such record date; provided, that, unless such declaration ofacceleration, or rescission and annulment, as the case may be, shall havebecome effective by virtue of the requisite percentage having joined in suchnotice prior to the day that is 90 days after such record date, such notice ofdeclaration of acceleration, or rescission and annulment, as the case may be,shall automatically and without further action by any Holder be canceled and ofno further effect. Nothing in this paragraph shall prevent a Holder, or a proxyof a Holder, from giving, after expiration of such 90-day period, a new writtennotice of declaration of acceleration, or rescission and annulment thereof, asthe case may be, that is identical to a written notice that has been canceledpursuant to the proviso to the preceding sentence, in which event a new recorddate shall be established pursuant to the provisions of this Section 6.7.**

**(c)          **Except as otherwiseprovided in paragraphs (a) and (b) of this Section 6.7, the Holders of at leasta majority in liquidation amount of the Capital Securities may, on behalf ofthe Holders of all the Capital Securities, waive any past default or Event ofDefault and its consequences. Upon such waiver, any such default or Event ofDefault shall cease to exist, and any default or Event of Default arisingtherefrom shall be deemed to have been cured, for every purpose of this TrustAgreement, but no such waiver shall extend to any subsequent or other defaultor Event of Default or impair any right consequent thereon.

**ARTICLE VII**

**DISSOLUTION AND TERMINATION OF TRUST**

**Section 7.1             Dissolutionand Termination of Trust**. (a) The Trust shall dissolve on the first to occur of :

**(i)           **unless earlier dissolved, on July 25, 2036, the expiration of the termof the Trust;

**(ii)           aBankruptcy Event with respect to the Sponsor, the Trust or the DebentureIssuer;**

 

**(iii)          (other than inconnection with a merger, consolidation or similar transaction not prohibitedby the Indenture, this Declaration or the Guarantee, as the case may be) thefiling of a certificate of dissolution or its equivalent with respect to theSponsor or upon the revocation of the charter of the Sponsor and the expirationof 90 days after the date of revocation without a reinstatement thereof;**

**(iv)          the distribution ofthe Debentures to the Holders of the Securities, upon exercise of the right ofthe Holders of all of the outstanding Common Securities to dissolve the Trustas provided in Annex I hereto;**

**(iv)         **the entry of a decree of judicial dissolution of any Holder of theCommon Securities, the Sponsor, the Trust or the Debenture Issuer;

**(v)          **when all of the Securities shall have been called for redemption andthe amounts necessary for redemption thereof shall have been paid to theHolders in accordance with the terms of the Securities; or

**(vii)         before the issuanceof any Securities, with the consent of all of the Trustees and the Sponsor.**

**(b)          **As soon as ispracticable after the occurrence of an event referred to in Section 7.1(a), andafter satisfaction of liabilities to creditors of the Trust as required byapplicable law, including Section 3808 of the Business Trust Act, and subjectto the terms set forth in Annex I, the Institutional Trustee shall terminatethe Trust by filing a certificate of cancellation with the Secretary of Stateof the State of Delaware.

**(c)          **The provisions ofSection 2.9 and Article IX shall survive the termination of the Trust.

**ARTICLE VIII**

**TRANSFER OF INTERESTS**

**Section 8.1             General**. (a) Where Capital Securities are presented to the Registrar or aco-registrar with a request to register a transfer or to exchange them for anequal number of Capital Securities represented by different certificates, theRegistrar shall register the transfer or make the exchange if its requirementsfor such transactions are met. To permit registrations of transfer andexchanges, the Trust shall issue and the Institutional Trustee shallauthenticate Capital Securities at the Registrar’s request.

**(b)          **Upon issuance of theCommon Securities, the Sponsor shall acquire and retain beneficial and recordownership of the Common Securities and for so long as the Securities remainoutstanding, the Sponsor shall maintain 100% ownership of the CommonSecurities; provided, however, that any permitted successor of the Sponsorunder the Indenture that is a U.S. Person may succeed to the Sponsor’sownership of the Common Securities.

**(c)           Capital Securitiesmay only be transferred, in whole or in part, in accordance with the terms andconditions set forth in this Declaration and in the terms of the CapitalSecurities. To the fullest extent permitted by applicable law, any transfer orpurported transfer of any Security not made in accordance with this Declarationshall be null and void and will be deemed to be of no legal effect whatsoeverand any such transferee shall be deemed not to be the holder of such CapitalSecurities for any purpose, including but not limited to the receipt ofDistributions on such Capital Securities, and such transferee shall be deemedto have no interest whatsoever in such Capital Securities.**

** **

**(d)          **The Registrar shallprovide for the registration of Securities and of transfers of Securities,which will be effected without charge but only upon payment (with suchindemnity as the Registrar may require) in respect of any tax or othergovernmental charges that may be imposed in relation to it. Upon surrender forregistration of transfer of any Securities, the Registrar shall cause one ormore new Securities to be issued in the name of the designated transferee ortransferees. Any Security issued upon any registration of transfer or exchangepursuant to the terms of this Declaration shall evidence the same Security andshall be entitled to the same benefits under this Declaration as the Securitysurrendered upon such registration of transfer or exchange. Every Securitysurrendered for registration of transfer shall be accompanied by a writteninstrument of transfer in form similar to Exhibits B and C satisfactory to theRegistrar duly executed by the Holder or such Holder’s attorney duly authorizedin writing. Each Security surrendered for registration of transfer shall becanceled by the Institutional Trustee pursuant to Section 6.6. A transferee ofa Security shall be entitled to the rights and subject to the obligations of aHolder hereunder upon the receipt by such transferee of a Security. Byacceptance of a Security, each transferee shall be deemed to have agreed to bebound by this Declaration.

**(e)          **Neither the Trust northe Registrar shall be required (i) to issue, register the transfer of, or exchangeany Securities during a period beginning at the opening of business 15 daysbefore the day of any selection of Securities for redemption and ending at theclose of business on the earliest date on which the relevant notice ofredemption is deemed to have been given to all Holders of the Securities to beredeemed, or (ii) to register the transfer or exchange of any Security soselected for redemption in whole or in part, except the unredeemed portion ofany Security being redeemed in part.

**Section 8.2            TransferProcedures and Restrictions**.

**(a)          **General. The Capital Securities shall bear the Restricted Securities Legend,which shall not be removed unless there is delivered to the Trust suchsatisfactory evidence, which may include an opinion of counsel licensed topractice law in the State of New York, as may be reasonably required by theTrust, that neither the legend nor the restrictions on transfer set forththerein are required to ensure that transfers thereof comply with theprovisions of the Securities Act or that such Securities are not “restricted”within the meaning of Rule 144 under the Securities Act. Upon provision of suchsatisfactory evidence, the Institutional Trustee, at the written direction ofthe Trust, shall authenticate and deliver Capital Securities that do not bearthe legend.

**(b)          **Transfer and Exchange of Capital Securities. When Capital Securities are presented to the Registrar (x) toregister the transfer of such Capital Securities, or (y) to exchange suchCapital Securities for an equal number of Capital Securities of another number,the Registrar shall register the transfer or make the exchange as requested ifits reasonable requirements for such transaction are met; provided, however,that the Capital Securities surrendered for registration of transfer orexchange shall be duly endorsed or accompanied by a written instrument oftransfer in form reasonably satisfactory to the Trust and the Registrar, dulyexecuted by the Holder thereof or his attorney duly authorized in writing and (i)if such Capital Securities are being transferred to a QIB, accompanied by acertificate of the transferee substantially in the form set forth as Exhibit Chereto or (ii) if such Capital Securities are being transferred otherwise thanto a QIB, accompanied by a certificate of the transferee substantially in theform set forth as Exhibit B hereto.

** **

**(c)           Legend.Except as permitted by Section 8.2(a), each Capital Security shall bear alegend (the “Restricted Securities Legend”) in substantially the following form:**

**THIS SECURITY 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 DEBENTURE ISSUER OR THE TRUST, (B) PURSUANT TO RULE 144A UNDERTHE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A“QUALIFIED INSTITUTIONAL BUYER’ AS DEFINED IN RULE 144A THAT PURCHASES FOR ITSOWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOMNOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (a) (l), (2),(3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITYFOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN “ACCREDITED INVESTOR,” FORINVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTIONWITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TOANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THESECURITIES ACT, SUBJECT TO THE DEBENTURE ISSUER’S AND THE TRUST’S RIGHT PRIORTO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C) OR (D) TO REQUIRETHE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATIONSATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, ACOPY OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUER OR THE TRUST. THEHOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOINGRESTRICTIONS.**

** **

**THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCEHEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT,INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE IOF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”),OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”),(EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BYREASON OF ANY PLAN’S INVESTMENT IN THE ENTITY AND NO PERSON INVESTING “PLANASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST THEREIN,UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLEUNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,95-60, 91-38, 90-l OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE ANDHOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING. ANY PURCHASER ORHOLDER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVEREPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT ANEMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TOWHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTINGON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITYUSING THE ASSETS OF ANY EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE,OR (ii) SUCH PURCHASE WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLESTATUTORY OR ADMINISTRATIVE EXEMPTION.**

**IN CONNECTION WITH ANY TRANSFER, THE HOLDERWILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATE AND OTHERINFORMATION AS MAY BE REQUIRED BY THE DECLARATION OF TRUST TO CONFIRM THAT THETRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.**

**THIS SECURITY WILL BE ISSUED AND MAY BETRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN$100,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OFTHIS SECURITY IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000SHALL 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.**

**(d)          **Minimum Transfers. Capital Securitiesmay only be transferred in minimum blocks of $100,000 aggregate liquidationamount (100 Capital Securities) and multiples of $1,000 in excess thereof. Anyattempted transfer of Capital Securities in a block having an aggregateliquidation amount of less than $100,000 shall be deemed to be voided and of nolegal effect whatsoever. Any such purported transferee shall be deemed not tobe a Holder of such Capital Securitiesfor any purpose, including, but not limited to, the receipt of Distributions on such Capital Securities, and such purported transfereeshall be deemed to have no interest whatsoever in such Capital Securities.

 

**Section 8.3             DeemedSecurity Holders**. The Trust, theAdministrators, the Trustees, the Paying Agent, the Transfer Agent or theRegistrar may treat the Person in whose name any Certificate shall beregistered on the books and records of the Trust as the sole holder of suchCertificate and of the Securities represented by such Certificate for purposesof receiving Distributions and for all other purposes whatsoever and,accordingly, shall not be bound to recognize any equitable or other claim to orinterest in such Certificate or in the Securities represented by suchCertificate on the part of any Person, whether or not the Trust, theAdministrators, the Trustees, the Paying Agent, the Transfer Agent or theRegistrar shall have actual or other notice thereof.

**ARTICLE IX**

**LIMITATION OF LIABILITY OF**

**HOLDERS OF SECURITIES, TRUSTEES OR OTHERS**

**Section 9.1             Liability**. (a) Except as expressly set forth in this Declaration, the Guaranteeand the terms of the Securities, the Sponsor shall not be:

**(i)           **personally liable for the return of any portion of the capitalcontributions (or any return thereon) of the Holders of the Securities whichshall be made solely from assets of the Trust; and

**(ii)           required to pay to the Trust or toany Holder of the Securities any deficit upon dissolution of the Trust orotherwise.**

**(b)          **The Holder of the Common Securities shall be liable for all of thedebts and obligations of the Trust (other than with respect to the Securities)to the extent not satisfied out of the Trust’s assets.

**(c)          **Pursuant to §3803(a) of the Business Trust Act, the Holders of theCapital Securities shall be entitled to the same limitation of personalliability extended to stockholders of private corporations for profit organizedunder the General Corporation Law of the State of Delaware.

**Section 9.2             Exculpation**. (a) No Indemnified Person shall be liable, responsible or accountablein damages or otherwise to the Trust or any Covered Person for any loss, damageor claim incurred by reason of any act or omission performed or omitted by suchIndemnified Person in good faith on behalf of the Trust and in a manner suchIndemnified Person reasonably believed to be within the scope of the authorityconferred on such Indemnified Person by this Declaration or by law, except thatan Indemnified Person shall be liable for any such loss, damage or claimincurred by reason of such Indemnified Person’s negligence or willfulmisconduct with respect to such acts or omissions.

**(b)**           An Indemnified Person shall be fullyprotected in relying in good faith upon the records of the Trust and upon such information, opinions, reportsor statements presented to the Trustby any Person as to matters the Indemnified Person reasonably believes arewithin such other Person’s professional or expert competence and, if selectedby such Indemnified Person, has been selected by such Indemnified Person withreasonable care by or on behalf of the Trust, including information, opinions,reports or statements as to the value and amount of the assets, liabilities,profits, losses or any other facts pertinent to the existence and amount ofassets from which Distributions to Holders of Securities might properly bepaid.

** **

**Section 9.3             FiduciaryDuty**. (a) To the extentthat, at law or in equity, an Indemnified Person has duties (includingfiduciary duties) and liabilities relating thereto to the Trust or to any otherCovered Person, an Indemnified Person acting under this Declaration shall notbe liable to the Trust or to any other Covered Person for its good faithreliance on the provisions of this Declaration. The provisions of thisDeclaration, to the extent that they restrict the duties and liabilities of anIndemnified Person otherwise existing at law or in equity (other than theduties imposed on the Institutional Trustee under the Trust Indenture Act), areagreed by the parties hereto to replace such other duties and liabilities ofthe Indemnified Person.

**(b)          **Whenever in thisDeclaration an Indemnified Person is permitted or required to make a decision:

**(i)           **in its “discretion” or under a grant of similar authority, theIndemnified Person shall be entitled to consider such interests and factors asit desires, including its own interests, and shall have no duty or obligationto give any consideration to any interest of or factors affecting the Trust orany other Person; or

**(ii)           in its “good faith” or under anotherexpress standard, the Indemnified Person shall act under such express standardand shall not be subject to any other or different standard imposed by thisDeclaration or by applicable law.**

**Section 9.4             Indemnification**. (a) (i) The Sponsor shall indemnify, to the full extent permitted bylaw, any Indemnified Person who was or is a party or is threatened to be made aparty to any threatened, pending or completed action, suit or proceeding,whether civil, criminal, administrative or investigative (other than an actionby or in the right of the Trust) by reason of the fact that he is or was anIndemnified Person against expenses (including attorneys’ fees and expenses),judgments, fines and amounts paid in settlement actually and reasonablyincurred by him in connection with such action, suit or proceeding if he actedin good faith and in a manner he reasonably believed to be in or not opposed tothe best interests of the Trust, and, with respect to any criminal action orproceeding, had no reasonable cause to believe his conduct was unlawful. Thetermination of any action, suit or proceeding by judgment, order, settlement,conviction, or upon a plea of nolo contendere or its equivalent, shall not, ofitself, create a presumption that the Indemnified Person did not act in goodfaith and in a manner which he reasonably believed to be in or not opposed tothe best interests of the Trust, and, with respect to any criminal action orproceeding, had reasonable cause to believe that his conduct was unlawful.

**(ii)           The Sponsor shallindemnify, to the full extent permitted by law, any Indemnified Person who wasor is a party or is threatened to be made a party to any threatened, pending orcompleted action or suit by or in the right of the Trust to procure a judgmentin its favor by reason of the fact that he is or was an Indemnified Personagainst expenses (including attorneys’ fees and expenses) actually andreasonably incurred by him in connection with the defense or settlement of suchaction or suit if he acted in good faith and in a manner he reasonably believedto be in or not opposed to the best interests of the Trust and except that nosuch indemnification shall be made in respect of any claim, issue or matter asto which such Indemnified Person shall have been adjudged to be liable to theTrust unless and only to the extent that the Court of Chancery of Delaware orthe court in which such action or suit was brought shall determine uponapplication that, despite the adjudication of liability but in view of all thecircumstances of the case, such person is fairly and reasonably entitled toindemnity for such expenses which such Court of Chancery or such other courtshall deem proper.**

** **

**(iii)          To the extent that an IndemnifiedPerson shall be successful on the merits or otherwise (including dismissal ofan action without prejudice or the settlement of an action without admission ofliability) in defense of any action, suit or proceeding referred to inparagraphs (i) and (ii) of this Section 9.4(a), or in defense of any claim,issue or matter therein, he shall be indemnified, to the full extent permittedby law, against expenses (including attorneys’ fees and expenses) actually andreasonably incurred by him in connection therewith.**

**(iv)          Any indemnification of anAdministrator under paragraphs (i) and (ii) of this Section 9.4(a) (unlessordered by a court) shall be made by the Sponsor only as authorized in thespecific case upon a determination that indemnification of the IndemnifiedPerson is proper in the circumstances because he has met the applicablestandard of conduct set forth in paragraphs (i) and (ii). Such determinationshall be made (A) by the Administrators by a majority vote of a Quorumconsisting of such Administrators who were not parties to such action, suit orproceeding, (B) if such a Quorum is not obtainable, or, even if obtainable, ifa Quorum of disinterested Administrators so directs, by independent legalcounsel in a written opinion, or (C) by the Common Security Holder of theTrust.**

**(v)          **To the fullest extent permitted by law, expenses (including attorneys’fees and expenses) incurred by an Indemnified Person in defending a civil,criminal, administrative or investigative action, suit or proceeding referredto in paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by theSponsor in advance of the final disposition of such action, suit or proceedingupon receipt of an undertaking by or on behalf of such Indemnified Person torepay such amount if it shall ultimately be determined that he is not entitledto be indemnified by the Sponsor as authorized in this Section 9.4(a).Notwithstanding the foregoing, no advance shall be made by the Sponsor if adetermination is reasonably and promptly made (A) by the Administrators by amajority vote of a Quorum of disinterested Administrators, (B) if such a Quorumis not obtainable, or, even if obtainable, if a Quorum of disinterestedAdministrators so directs, by independent legal counsel in a written opinion or(C) by the Common Security Holder of the Trust, that, based upon the factsknown to the Administrators, counsel or the Common Security Holder at the timesuch determination is made, such Indemnified Person acted in bad faith or in a manner that such Person didnot believe to be in or not opposed to the bestinterests of the Trust, or, with respect to any criminal proceeding, that suchIndemnified Person believed or had reasonable cause to believe his conduct wasunlawful. In no event shall any advance be made in instances where theAdministrators, independent legal counsel or the Common Security Holderreasonably determine that such Person deliberately breached his duty to theTrust or its Common or Capital Security Holders.

** **

**(b)          **The Sponsor shall indemnify, to the fullest extent permitted byapplicable law, each Indemnified Person from and against any and all loss,damage, liability, tax (other than taxes based on the income of suchIndemnified Person), penalty, expense or claim of any kind or nature whatsoeverincurred by such Indemnified Person arising out of or in connection with or byreason of the creation, administration or termination of the Trust, or any actor omission performed or omitted by such Indemnified Person in good faith onbehalf of the Trust and in a manner such Indemnified Person reasonably believedto be within the scope of authority conferred on such Indemnified Person bythis Declaration, except that no Indemnified Person shall be entitled to beindemnified in respect of any loss, damage, liability, tax, penalty, expense orclaim incurred by such Indemnified Person by reason of negligence or willfulmisconduct with respect to such acts or omissions.

**(c)          **The indemnification and advancement of expenses provided by, or grantedpursuant to, the other paragraphs of this Section 9.4 shall not be deemedexclusive of any other rights to which those seeking indemnification andadvancement of expenses may be entitled under any agreement, vote ofstockholders or disinterested directors of the Sponsor or Capital SecurityHolders of the Trust or otherwise, both as to action in his official capacityand as to action in another capacity while holding such office. All rights toindemnification under this Section 9.4 shall be deemed to be provided by a contractbetween the Sponsor and each Indemnified Person who serves in such capacity atany time while this Section 9.4 is in effect. Any repeal or modification ofthis Section 9.4 shall not affect any rights or obligations then existing.

**(d)          **The Sponsor or the Trust may purchase and maintain insurance on behalfof any Person who is or was an Indemnified Person against any liabilityasserted against him and incurred by him in any such capacity, or arising outof his status as such, whether or not the Sponsor would have the power toindemnify him against such liability under the provisions of this Section 9.4.

**(e)          **For purposes of this Section 9.4, references to “the Trust” shallinclude, in addition to the resulting or surviving entity, any constituententity (including any constituent of a constituent) absorbed in a consolidationor merger, so that any Person who is or was a director, trustee, officer oremployee of such constituent entity, or is or was serving at the request ofsuch constituent entity as a director, trustee, officer, employee or agent ofanother entity, shall stand in the same position under the provisions of thisSection 9.4 with respect to the resulting or surviving entity as he would havewith respect to such constituent entity if its separate existence hadcontinued.

**(f)**            The indemnification and advancementof expenses provided by, or granted pursuant to, this Section 9.4 shall, unless otherwise provided whenauthorized or ratified, continue as to aPerson who has ceased to be an Indemnified Person and shall inure to thebenefit of the heirs, executors and administrators of such a Person.

 

**The provisions of this Section shall survive the termination of thisDeclaration or the earlier resignation or removal of the Institutional Trustee.The obligations of the Sponsor under this Section 9.4 to compensate andindemnify the Trustees and to pay or reimburse the Trustees for expenses,disbursements and advances shall constitute additional indebtedness hereunder.Such additional indebtedness shall be secured by a lien prior to that of theSecurities upon all property and funds held or collected by the Trustees assuch, except funds held in trust for the benefit of the holders of particularSecurities.**

**Section 9.5             OutsideBusinesses**. Any Covered Person, theSponsor, the Delaware Trustee and the Institutional Trustee (subject to Section4.3(c)) may engage in or possess an interest in other business ventures of anynature or description, independently or with others, similar or dissimilar tothe business of the Trust, and the Trust and the Holders of Securities shallhave no rights by virtue of this Declaration in and to such independentventures or the income or profits derived therefrom, and the pursuit of anysuch venture, even if competitive with the business of the Trust, shall not bedeemed wrongful or improper. None of any Covered Person, the Sponsor, theDelaware Trustee or the Institutional Trustee shall be obligated to present anyparticular investment or other opportunity to the Trust even if such opportunityis of a character that, if presented to the Trust, could be taken by the Trust,and any Covered Person, the Sponsor, the Delaware Trustee and the InstitutionalTrustee shall have the right to take for its own account (individually or as apartner or fiduciary) or to recommend to others any such particular investmentor other opportunity. Any Covered Person, the Delaware Trustee and theInstitutional Trustee may engage or be interested in any financial or othertransaction with the Sponsor or any Affiliate of the Sponsor, or may act asdepositary for, trustee or agent for, or act on any committee or body ofholders of, securities or other obligations of the Sponsor or its Affiliates.

**Section 9.6             Compensation;Fee**. The Sponsor agrees:

**(a)          **to pay to the Trustees from time to time such compensation for allservices rendered by them hereunder as the parties shall agree in writing fromtime to time (which compensation shall not be limited by any provision of lawin regard to the compensation of a trustee of an express trust); and

**(b)          **except as otherwise expressly provided herein, to reimburse theTrustees upon request for all reasonable expenses, disbursements and advancesincurred or made by the Trustees in accordance with any provision of thisDeclaration (including the reasonable compensation and the expenses anddisbursements of their respective agents and counsel), except any such expense,disbursement or advance as may be attributable to its negligence or willfulmisconduct.

**The provisions of this Section 9.6 shall survive the dissolution of theTrust and the termination of this Declaration and the removal or resignation ofany Trustee.**

 

**ARTICLE X**

**ACCOUNTING**

**Section 10.1           FiscalYear**. The fiscal year (the“Fiscal Year”) of the Trust shall be the calendar year, or such other year asis required by the Code.

**Section 10.2           CertainAccounting Matters**.

**(a)          **At all times duringthe existence of the Trust, the Administrators shall keep, or cause to be keptat the principal office of the Trust in the United States, as defined forpurposes of Treasury regulations section 301.7701-7, full books of account,records and supporting documents, which shall reflect in reasonable detail eachtransaction of the Trust. The books of account shall be maintained on the accrualmethod of accounting, in accordance with generally accepted accountingprinciples, consistently applied.

**(b)          **The Administratorsshall either (i) cause each Form 10K and Form 1OQ prepared by the Sponsor andfiled with the Securities and Exchange Commission in accordance with theSecurities Exchange Act of 1934 to be delivered to each Holder of Securities,within 90 days after the filing of each Form 10K and within 30 days after thefiling of each Form 1OQ or (ii) cause to be prepared at the principal office ofthe Trust in the United States, as defined for purposes of Treasury regulationssection 301.7701-7, and delivered to each of the Holders of Securities, within90 days after the end of each Fiscal Year of the Trust, annual financialstatements of the Trust, including a balance sheet of the Trust as of the endof such Fiscal Year, and the related statements of income or loss.

**(c)**           The Administrators shall cause to be duly prepared and delivered toeach of the Holders of Securities Form 1099 or such other annual United Statesfederal income tax information statement required by the Code, containing suchinformation with regard to the Securities held by each Holder as is required bythe Code and the Treasury Regulations. Notwithstanding any right under the Codeto deliver any such statement at a later date, the Administrators shallendeavor to deliver all such statements within 30 days after the end of eachFiscal Year of the Trust.

**(d)          **The Administratorsshall cause to be duly prepared in the United States, as defined for purposesof Treasury regulations section 301.7701-7, and filed an annual United Statesfederal income tax return on a Form 1041 or such other form required by UnitedStates federal income tax law, and any other annual income tax returns requiredto be filed by the Administrators on behalf of the Trust with any state orlocal taxing authority.

**(e)**So long as the only Holder of the Capital Securities is MM CommunityFunding Ltd, the Administrators will cause the Sponsor’s reports on Form FR Y-9C,FR Y-9LP and FR Y-6 to be delivered to the Holder promptly following theirfiling with the Federal Reserve.

**Section 10.3           Banking**. The Trust shall maintain one or more bank accounts in the UnitedStates, as defined for purposes of Treasury regulations section 301.7701-7, inthe name and for the sole benefit of the Trust; provided, however, that allpayments of funds in respect of the Debentures held by the InstitutionalTrustee shall be made directly to the Property Account and no other funds ofthe Trust shall be deposited in the Property Account. The sole signatories forsuch accounts (including the Property Account) shall be designated by theInstitutional Trustee.

 

**Section 10.4           Withholding**. The Institutional Trustee or any Paying Agent and the Administratorsshall comply with all withholding requirements under United States federal,state and local law. The Institutional Trustee or any Paying Agent shallrequest, and each Holder shall provide to the Institutional Trustee or anyPaying Agent, such forms or certificates as are necessary to establish anexemption from withholding with respect to the Holder, and any representationsand forms as shall reasonably be requested by the Institutional Trustee or anyPaying Agent to assist it in determining the extent of, and in fulfilling, itswithholding obligations. The Administrators shall file required forms withapplicable jurisdictions and, unless an exemption from withholding is properlyestablished by a Holder, shall remit amounts withheld with respect to theHolder to applicable jurisdictions. To the extent that the InstitutionalTrustee or any Paying Agent is required to withhold and pay over any amounts toany authority with respect to distributions or allocations to any Holder, theamount withheld shall be deemed to be a Distribution to the Holder in theamount of the withholding. In the event of any claimed over-withholding,Holders shall be limited to an action against the applicable jurisdiction. Ifthe amount required to be withheld was not withheld from actual Distributionsmade, the Institutional Trustee or any Paying Agent may reduce subsequentDistributions by the amount of such withholding.

**ARTICLE XI**

**AMENDMENTS AND MEETINGS**

**Section 11.1           Amendments**. (a) Except as otherwise provided in this Declaration or by anyapplicable terms of the Securities, this Declaration may only be amended by awritten instrument approved and executed by

**(i)           **the Institutional Trustee,

**(ii)           if the amendment affects the rights,powers, duties, obligations or immunities of the Delaware Trustee, the DelawareTrustee,**

**(iii)          if the amendment affects the rights,powers, duties, obligations or immunities of the Administrator, theAdministrator, and**

**(iv)          the Holder of a Majority inliquidation amount of the Common Securities.**

**(b)          **Notwithstanding any other provision of this Article XI, no amendmentshall be made, and any such purported amendment shall be void and ineffective:

**(i)           **unless the Institutional Trustee shall have first received

**(A)         **an Officers’ Certificate from each of the Trust and the Sponsor thatsuch amendment is permitted by, and conforms to, the terms of this Declaration(including the terms of the Securities); and 

 

**(B)          **an opinion of counsel (who may be counsel to the Sponsor or the Trust)that such amendment is permitted by, and conforms to, the terms of thisDeclaration (including the terms of the Securities); or

**(ii)           if the**result of such amendmentwould be to

**(A)         **cause the Trust to cease to be classified for purposes of United States federalincome taxation as a grantor trust;

**(B)          **reduce or otherwise adversely affect the powers of the InstitutionalTrustee in contravention of the Trust Indenture Act;

**(C)          **cause the Trust to be deemed to be an Investment Company required to beregistered under the Investment Company Act; or

**(D)         **cause the Debenture Issuer to be unable to treat an amount equal to theLiquidation Amount of the Debentures as “Tier 1 Capital” for purposes of thecapital adequacy guidelines of the Federal Reserve.

**(c)          **Except as provided inSection 11.1 (d), (e) or (h), no amendment shall be made, and any suchpurported amendment shall be void and ineffective unless the Holders of aMajority in liquidation amount of the Capital Securities shall have consentedto such amendment.

**(d)          **In addition to andnotwithstanding any other provision in this Declaration, without the consent ofeach affected Holder, this Declaration may not be amended to (i) change theamount or timing of any Distribution on the Securities or otherwise adverselyaffect the amount of any Distribution required to be made in respect of theSecurities as of a specified date or (ii) restrict the right of a Holder toinstitute suit for the enforcement of any such payment on or after such date.

**(e)          **Section 9.1(b) and9.1(c) and this Section 11.1 shall not be amended without the consent of all ofthe Holders of the Securities.

**(f)           **Article III shall notbe amended without the consent of the Holders of a Majority in liquidationamount of the Common Securities.

**(g)          **The rights of theHolders of the Capital Securities and Common Securities, as applicable, underArticle IV to increase or decrease the number of, and appoint and remove,Trustees shall not be amended without the consent of the Holders of a Majorityin liquidation amount of the Capital Securities or Common Securities, asapplicable.

**(h)          **This Declaration maybe amended by the Institutional Trustee and the Holder of a Majority inliquidation amount of the Common Securities without the consent of the Holdersof the Capital Securities to:

**(i)           **cure any ambiguity;

 

**(ii)           correct or supplement any provisionin this Declaration that may be defective or inconsistent with any otherprovision of this Declaration;**

**(iii)          add to the covenants, restrictions orobligations of the Sponsor;**

**(iv)         **modify, eliminate or add to any provision of this Declaration to suchextent as may be necessary or desirable, including, without limitation, toensure that the Trust will be classified for United States federal income taxpurposes at all times as a grantor trust and will not be required to registeras an “investment company” under the Investment Company Act (including withoutlimitation to conform to any change in Rule 3a-5, Rule 3a-7 or any otherapplicable rule under the Investment Company Act or written change in interpretationor application thereof by any legislative body, court, government agency orregulatory authority) which amendment does not have a material adverse effecton the right, preferences or privileges of the Holders of Securities;

**provided**, however, thatno such modification, elimination or addition referred to in clauses (i), (ii),(iii) or (iv) shall adversely affect the powers, preferences or special rightsof Holders of Capital Securities.

**Section 11.2           Meetingsof the Holders of Securities; Action**by Written Consent.

**(a)          **Meetings of theHolders of any class of Securities may be called at any time by theAdministrators (or as provided in the terms of the Securities) to consider andact on any matter on which Holders of such class of Securities are entitled toact under the terms of this Declaration, the terms of the Securities or therules of any stock exchange on which the Capital Securities are listed oradmitted for trading, if any. The Administrators shall call a meeting of theHolders of such class if directed to do so by the Holders of at least 10% inliquidation amount of such class of Securities. Such direction shall be givenby delivering to the Administrators one or more calls in a writing stating thatthe signing Holders of the Securities wish to call a meeting and indicating thegeneral or specific purpose for which the meeting is to be called. Any Holdersof the Securities calling a meeting shall specify in writing the Certificatesheld by the Holders of the Securities exercising the right to call a meetingand only those Securities represented by such Certificates shall be counted forpurposes of determining whether the required percentage set forth in the secondsentence of this paragraph has been met.

**(b)          **Except to the extentotherwise provided in the terms of the Securities, the following provisionsshall apply to meetings of Holders of the Securities:

**(i)           **notice of any such meeting shall be given to all the Holders of theSecurities having a right to vote thereat at least 7 days and not more than 60days before the date of such meeting. Whenever a vote, consent or approval ofthe Holders of the Securities is permitted or required under this Declarationor the rules of any stock exchange on which the Capital Securities are listedor admitted for trading, if any, such vote, consent or approval may be given at a meeting of the Holders of the Securities. Any action that may betaken at a meeting of the Holders of the Securities may be taken without a meeting if a consent in writing setting forth the action sotaken is signed by the Holders of the Securities owning not less than theminimum amount of Securities that would be necessary to authorize or take suchaction at a meeting at which all Holders of the Securities having a right tovote thereon were present and voting. Prompt notice of the taking of actionwithout a meeting shall be given to the Holders of the Securities entitled tovote who have not consented in writing. The Administrators may specify that anywritten ballot submitted to the Holders of the Securities for the purpose oftaking any action without a meeting shall be returned to the Trust within thetime specified by the Administrators;

** **

**(ii)           each Holder of a Security mayauthorize any Person to act for it by proxy on all matters in which a Holder ofSecurities is entitled to participate, including waiving notice of any meeting,or voting or participating at a meeting. No proxy shall be valid after theexpiration of 11 months from the date thereof unless otherwise provided in theproxy. Every proxy shall be revocable at the pleasure of the Holder of theSecurities executing it. Except as otherwise provided herein, all mattersrelating to the giving, voting or validity of proxies shall be governed by theGeneral Corporation Law of the State of Delaware relating to proxies, andjudicial interpretations thereunder, as if the Trust were a Delawarecorporation and the Holders of the Securities were stockholders of a Delawarecorporation; each meeting of the Holders of the Securities shall be conductedby the Administrators or by such other Person that the Administrators maydesignate; and**

**(iii)          unless the Business Trust Act, thisDeclaration, the terms of the Securities, the Trust Indenture Act or thelisting rules of any stock exchange on which the Capital Securities are thenlisted for trading, if any, otherwise provides, the Administrators, in theirsole discretion, shall establish all other provisions relating to meetings ofHolders of Securities, including notice of the time, place or purpose of anymeeting at which any matter is to be voted on by any Holders of the Securities,waiver of any such notice, action by consent without a meeting, theestablishment of a record date, quorum requirements, voting in person or byproxy or any other matter with respect to the exercise of any such right tovote; provided, however, that each meeting shall be conducted in the UnitedStates (as that term is defined in Treasury regulations section 301.7701-7).**

**ARTICLE XII**

**REPRESENTATIONS OF INSTITUTIONAL TRUSTEE**

**AND DELAWARE TRUSTEE**

**Section 12.1           Representationsand Warranties of Institutional Trustee**. The Trustee that acts as initial Institutional Trustee represents andwarrants to the Trust and to the Sponsor at the date of this Declaration, andeach Successor Institutional Trustee represents and warrants to the Trust andthe Sponsor at the time of the Successor Institutional Trustee’s acceptance ofits appointment as Institutional Trustee, that:

**(a)          **the Institutional Trustee is a banking corporation with trust powers,duly organized, validlyexisting and in good standing under the laws of the United States with trust power and authority to execute and deliver, and to carry out andperform its obligations under the terms of, this Declaration; 

 

**(b)          **the execution,delivery and performance by the Institutional Trustee of this Declaration hasbeen duly authorized by all necessary corporate action on the part of theInstitutional Trustee. This Declaration has been duly executed and delivered bythe Institutional Trustee, and it constitutes a legal, valid and bindingobligation of the Institutional Trustee, enforceable against it in accordancewith its terms, subject to applicable bankruptcy, reorganization, moratorium,insolvency and other similar laws affecting creditors’ rights generally and togeneral principles of equity (regardless of whether considered in a proceedingin equity or at law);

**(c)          **the execution,delivery and performance of this Declaration by the Institutional Trustee doesnot conflict with or constitute a breach of the charter or by-laws of theInstitutional Trustee; and

**(d)          **no consent, approvalor authorization of, or registration with or notice to, any state or federalbanking authority is required for the execution, delivery or performance by theInstitutional Trustee of this Declaration.

**Section 12.2           Representationsand Warranties of Delaware Trustee**. The Trustee that acts as initial Delaware Trustee represents andwarrants to the Trust and to the Sponsor at the date of this Declaration, and eachSuccessor Delaware Trustee represents and warrants to the Trust and the Sponsorat the time of the Successor Delaware Trustee’s acceptance of its appointmentas Delaware Trustee that:

**(a)          **if it is not a naturalperson, the Delaware Trustee is duly organized, validly existing and in good standing under the laws of the State of Delaware;

**(b)          **if it is not a naturalperson, the execution, delivery and performance by the Delaware Trustee of thisDeclaration has been duly authorized by all necessary corporate action on thepart of the Delaware Trustee. This Declaration has been duly executed anddelivered by the Delaware Trustee, and it constitutes a legal, valid andbinding obligation of the Delaware Trustee, enforceable against it inaccordance with its terms, subject to applicable bankruptcy, reorganization,moratorium, insolvency and other similar laws affecting creditors’ rightsgenerally and to general principles of equity (regardless of whether consideredin a proceeding in equity or at law);

**(c)          **if it is not a naturalperson, the execution, delivery and performance of this Declaration by theDelaware Trustee does not conflict with or constitute a breach of the charteror by-laws of the Delaware Trustee;

**(d)          **it has trust power andauthority to execute and deliver, and to carry out and perform its obligationsunder the terms of, this Declaration;

**(e)          **no consent, approvalor authorization of, or registration with or notice to, any state or federal banking authority is required for the execution,delivery or performance by the Delaware Trustee of this Declaration; and

**(f)           **the Delaware Trustee is a natural person who is a resident of the Stateof Delaware or, if not a natural person, it is an entity which has itsprincipal place of business in the State of Delaware and, in either case, aPerson that satisfies for the Trust the requirements of Section 3807 of theBusiness Trust Act.

** **

**ARTICLE XIII**

**MISCELLANEOUS**

**Section 13.1           Notices**. All notices provided for in this Declaration shall be in writing,duly signed by the party giving such notice, and shall be delivered, telecopied(which telecopy shall be followed by notice delivered or mailed by first classmail) or mailed by first class mail, as follows:

**(a)          **if given to the Trust,in care of the Administrators at the Trust’s mailing address set forth below(or such other address as the Trust may give notice of to the Holders of theSecurities:

**National Mercantile Capital Trust I**

**c/o National Mercantile Bancorp**

**1840 Century Park East**

**Los Angeles, California 90067**

**Attention: Scott A. Montgomery**

**Telecopy: 3 1 O-20 l-0629**

** **

**(b)          **if given to theDelaware Trustee, at the mailing address set forth below (or such other addressas Delaware Trustee may give notice of to the Holders of the Securities):

**The Bank of New York (Delaware)**

**White Clay Center, Route 273**

**Newark, Delaware 197 11**

**Attention: Corporate Trust Administration**

**Telecopy: 302-283-8279**

** **

**(c)          **if given to theInstitutional Trustee, at the Institutional Trustee’s mailing address set forthbelow (or such other address as the Institutional Trustee may give notice of tothe Holders of the Securities):

**The Bank of New York**

**101 Barclay Street, Floor 21 W**

**New York, NY 10286**

**Attention: Corporate Trust Administration**

**Telecopy: 212-815-5915**

** **

**(d)          **if given to the Holder of the Common Securities, at the mailing addressof the Sponsor set forth below (or such other address as the Holder of theCommon Securities may give notice of to the Trust):

 

**National Mercantile Bancorp**

**1840 Century Park East**

**Los Angeles, California 90067**

**Attention: Scott A. Montgomery**

**Telecopy: 3 1 O-20 l-0629**

** **

**(e)          **if given to any otherHolder, at the address setforth on the books and records of the Trust.

**All such notices shall be deemed to have been given when received inperson, telecopied with receipt confirmed, or mailed by first class mail,postage prepaid except that if a notice or other document is refused deliveryor cannot be delivered because of a changed address of which no notice wasgiven, such notice or other document shall be deemed to have been delivered onthe date of such refusal or inability to deliver.**

**Section 13.2           GoverningLaw**. This Declaration andthe rights and obligations of the parties hereunder shall be governed by andinterpreted in accordance with the law of the State of Delaware and all rights,obligations and remedies shall be governed by such laws without regard to theprinciples of conflict of laws of the State of Delaware or any otherjurisdiction that would call for the application of the law of any jurisdictionother than the State of Delaware.

**Section 13.3           Submissionto Jurisdiction**. Each of the partieshereto agrees that any suit, action or proceeding arising out of or based uponthis Declaration, or the transactions contemplated hereby, may be instituted inany of the courts of the State of New York and the United State DistrictCourts, in each case located in the Borough of Manhattan, City and State of NewYork, and further agrees to submit to the jurisdiction of any competent courtin the place of its corporate domicile in respect of actions brought against itas a defendant. In addition, each such party irrevocably waives, to the fullestextent permitted by law, any objection which it may now or hereafter have tothe laying of the venue of such suit, action or proceeding brought in any suchcourt and irrevocably waives any claim that any such suit, action or proceedingbrought in any such court has been brought in an inconvenient forum andirrevocably waives any right to which it may be entitled on account of its placeof corporate domicile. Each such party hereby irrevocably waives any and allright to trial by jury in any legal proceeding arising out of or relating tothis Declaration or the transactions contemplated hereby. Each such partyagrees that final judgment in any proceedings brought in such a court shall beconclusive and binding upon it and may be enforced in any court to thejurisdiction of which it is subject by a suit upon such judgment.

**Each of the Sponsor and the Holder of theCommon Securities irrevocably consents to the service of process on it in anysuch suit, action or proceeding in any such court by the mailing thereof byregistered or certified mail, postage prepaid, to it at its address given in orpursuant to Section 13.1 hereof.**

**To the extent permitted by law, nothing herein contained shall precludeany party from effecting service of process in any lawful manner or frombringing any suit, action or proceeding in respect of this Declaration in anyother state, country or place.**

 

**Section 13.4           Intentionof the Parties**. It is the intentionof the parties hereto that the Trust be classified for United States federalincome tax purposes as a grantor trust. The provisions of this Declarationshall be interpreted to further this intention of the parties.

**Section 13.5           Headings**. Headings contained in this Declaration are inserted for convenienceof reference only and do not affect the interpretation of this Declaration orany provision hereof.

**Section 13.6           Successorsand Assigns**. Whenever in this Declarationany of the parties hereto is named or referred to, the successors and assignsof such party shall be deemed to be included, and all covenants and agreementsin this Declaration by the Sponsor and the Trustees shall bind and inure to thebenefit of their respective successors and assigns, whether or not soexpressed.

**Section 13.7           PartialEnforceability**. If any provision ofthis Declaration, or the application of such provision to any Person orcircumstance, shall be held invalid, the remainder of this Declaration, or theapplication of such provision to persons or circumstances other than those towhich it is held invalid, shall not be affected thereby.

**Section 13.8           Counterparts**. This Declaration may contain more than one counterpart of thesignature page and this Declaration may be executed by the affixing of thesignature of each of the Trustees and Administrators to any of such counterpartsignature pages. All of such counterpart signature pages shall be read asthough one, and they shall have the same force and effect as though all of thesigners had signed a single signature page.

 

**IN WITNESS WHEREOF, the undersigned have caused these presents to beexecuted as of the day and year first above written.**
|       | **THE BANK OF NEW  YORK (DELAWARE)**              |
|------------|---------------------------------------------------|
|       | **as Delaware Trustee**                           |
|       |                                              |
|       | **By:**                                           | **  /s/  James Longshaw** |
|       | **Name: JAMES LONGSHAW, SVP**                     |
|       | **Title:**                                        |
|       |                                              |
|       |                                              |
|       | **THE BANK OF NEW YORK**                          |
|       | **as Institutional Trustee**                      |
|       |                                              |
|       |                                              |
|       | **By:**                                           | **  /s/  Mary LaGumina** |
| ** ** | **Name: Mary  LaGUMINA**                          |
|       | **Title: Vice  President**                        |
|       |                                              |
|       |                                              |
|       | **NATIONAL  MERCANTILE BANCORP**                  |
|       | **as Sponsor**                                    |
|       |                                              |
|       |                                              |
|       | **By:**                                           | **  /s/   Scott A. Montgomery** |
|       | **Name: Scott A.  Montgomery**                    |
|       | **Title: President  and Chief Executive Officer** |
|       |                                              |
|       |                                              |
|       |                                              |
|       |                                              |
|       | **By:**                                           | **  /s/   ILLEGIBLE** |
|       | **Administrator**                                 |
|       |                                              |
|       | **By:**                                           | **  /s/   Scott A. Montgomery** |
|       | **Administrator**                                 |

** **

 

**ANNEX I**

**TERMS OF**

**FIXED RATE MMCapS**SM

# **FIXED RATE COMMON SECURITIES**

**Pursuant to Section 6.1 of the Amended and Restated Declaration ofTrust, dated as of July 16, 2001 (as amended from time to time, the“Declaration”), the designation, rights, privileges, restrictions, preferencesand other terms and provisions of the Capital Securities and the CommonSecurities are set out below (each capitalized term used but not defined hereinhas the meaning set forth in the Declaration):**

**1.             Designation andNumber.**

**(a)          **Capital Securities. 15,000 CapitalSecurities of National Mercantile Capital Trust I (the “Trust”), with anaggregate stated liquidation amount with respect to the assets of the Trust ofFifteen Million Dollars ($15,000,000) and a stated liquidation amount withrespect to the assets of the Trust of $1,000 per Capital Security, are herebydesignated for the purposes of identification only as the “Fixed Rate MMCapSSM” (the “Capital Securities”). The Capital Security Certificatesevidencing the Capital Securities shall be substantially in the form of ExhibitA-l to the Declaration, with such changes and additions thereto or deletionstherefrom as may be required by ordinary usage, custom or practice or toconform to the rules of any stock exchange on which the Capital Securities arelisted, if any.

**(b)          **Common Securities. 464 CommonSecurities of the Trust (the “Common Securities”) will be evidenced by CommonSecurity Certificates substantially in the form of Exhibit A-2 to theDeclaration, with such changes and additions thereto or deletions therefrom asmay be required by ordinary usage, custom or practice. In the absence of anEvent of Default, the Common Securities will have an aggregate statedliquidation amount with respect to the assets of the Trust of Four HundredSixty-Four Dollars ($464,000) and a stated liquidation amount with respect tothe assets of the Trust of $1,000 per Common Security.

**2.             Distributions.(a) Distributions payable on each Security will be payable at a fixed annualrate equal to 10.25% (the “Coupon Rate”) of the stated liquidation amount of$1,000 per Security, such rate being the rate of interest payable on theDebentures to be held by the Institutional Trustee. Except as set forth belowin respect of an Extension Period, Distributions in arrears for more than onesemi-annual period will bear interest thereon compounded semi-annually at theCoupon Rate (to the extent permitted by applicable law). The term“Distributions” as used herein includes cash distributions and any suchcompounded distributions payable unless otherwise stated. A Distribution ispayable only to the extent that payments are made in respect of the Debenturesheld by the Institutional Trustee and to the extent the Institutional Trusteehas funds available in the Property Account therefor. The amount ofDistributions payable for any period will be computed for any full semi-annualperiod on the basis of a 360-day year of twelve 30-day months.**

**(b)          **Distributions on the Securities will be cumulative, will accrue fromthe date of original issuance, and will be payable, subject to extension ofdistribution payment periods as described herein, semi-annually in arrears onJanuary 25th and July 25th of each year, commencing on January 25,2002 (each, a “DistributionPayment Date”). The Debenture Issuer has the right under the Indenture to deferpayments of interest on the Debentures by extending the interest payment periodfor up to 10 consecutive semi-annual periods (each, an “Extension Period”) atany time and from time to time on the Debentures, subject to the conditionsdescribed below, during which Extension Period no interest shall be due andpayable (except any Additional Interest that may be due and payable) althoughsuch interest would continue to accrue on the Debentures, and interest willaccrue on such Deferred Interest at an annual rate equal to 10.25%, compoundedsemi-annually to the extent permitted by law during any Extension Period. NoExtension Period may end on a date other than a Distribution Payment Date. Atthe end of any such Extension Period the Debenture Issuer shall pay allDeferred Interest; provided, however, that no Extension Period may extendbeyond the Maturity Date and provided further, that, during any such ExtensionPeriod, the Debenture Issuer may not (i) declare or pay any dividends ordistributions on, or redeem, purchase, acquire, or make a liquidation paymentwith respect to, any of the Debenture Issuer’s capital stock or (ii) make anypayment of principal of or interest or premium, if any, on or repay, repurchaseor redeem any debt securities of the Debenture Issuer that rank *pari passu*in all respects with or juniorin interest to the Debentures (other than (a) repurchases, redemptions or otheracquisitions of shares of capital stock of the Debenture Issuer in connectionwith any employment contract, benefit plan or other similar arrangement with orfor the benefit of one or more employees, officers, directors or consultants,in connection with a dividend reinvestment or stockholder stock purchase planor in connection with the issuance of capital stock of the Debenture Issuer (orsecurities convertible into or exercisable for such capital stock) asconsideration in an acquisition transaction entered into prior to theapplicable Extension Period, (b) as a result of any exchange or conversion ofany class or series of the Debenture Issuer’s capital stock (or any capitalstock of a subsidiary of the Debenture Issuer) for any class or series of theDebenture Issuer’s capital stock or of any class or series of the DebentureIssuer’s indebtedness for any class or series of the Debenture Issuer’s capitalstock, (c) the purchase of fractional interests in shares of the DebentureIssuer’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 or ranks*pari passu*with or junior to suchstock). Prior to the termination of any Extension Period, the Debenture Issuermay 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. Upon thetermination of any Extension Period and upon the payment of all DeferredInterest, the Debenture Issuer may commence a new Extension Period, subject tothe foregoing requirements. 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. If Distributions aredeferred, the Distributions due shall be paid on the date that the relatedExtension Period terminates, or, if such date is not a Distribution PaymentDate, on the immediately following Distribution Payment Date, to Holders of theSecurities as they appear on the books and records of the Trust on the recorddate immediately preceding such date. Distributions on the Securities must bepaid on the dates payable (after giving effect to any Extension Period) to theextent that the Trust has funds available for the payment of such distributionsin the Property Account of the Trust. The Trust’s funds available forDistribution to the Holders of the Securities will be limited to paymentsreceived from the Debenture Issuer. The payment of Distributions out of moneysheld by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

**(c)          **Distributions on the Securities will be payable to the Holders thereofas they appear on the books and records of the Trust on the relevant recorddates. The relevant record dates shall be selected by the Administrators, whichdates shall be 15 days before the relevant payment dates. Distributions payableon any Securities that are not punctually paid on any Distribution PaymentDate, as a result of the Debenture Issuer having failed to make a payment underthe Debentures, as the case may be, when due (taking into account any ExtensionPeriod), will cease to be payable to the Person in whose name such Securitiesare registered on the relevant record date, and such defaulted Distributionwill instead be payable to the Person in whose name such Securities areregistered on the special record date or other specified date determined inaccordance with the Indenture. If any date on which Distributions are payableon the Securities is not a Business Day, then payment of the Distributionpayable 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 payment date.

**(d)          **In the event that there is any money or other property held by or for theTrust that is not accounted for hereunder, such property shall be distributedpro rata (as defined herein) among the Holders of the Securities.

**3.            **Liquidation Distribution UponDissolution. In the event of thevoluntary or involuntary liquidation, dissolution, winding-up or termination ofthe Trust (each, a “Liquidation”) other than in connection with a redemption ofthe Debentures, the Holders of the Securities will be entitled to receive outof the assets of the Trust available for distribution to Holders of theSecurities, after satisfaction of liabilities to creditors of the Trust (to theextent not satisfied by the Debenture Issuer), distributions equal to theaggregate of the stated liquidation amount of $1,000 per Security plus accruedand unpaid Distributions thereon to the date of payment (such amount being the“Liquidation Distribution”), unless in connection with such Liquidation, theDebentures in an aggregate stated principal amount equal to the aggregatestated liquidation amount of such Securities, with an interest rate equal tothe Coupon Rate of, and bearing accrued and unpaid interest in an amount equalto the accrued and unpaid Distributions on, and having the same record date as, such Securities,after paying or making reasonable provision to pay allclaims and obligations of the Trust in accordance with Section 3808(e) of theBusiness Trust Act, shall be distributed on a Pro Rata basis to the Holders ofthe Securities in exchange for such Securities.

** **

**The Sponsor, as the Holder of all of the Common Securities, has theright at any time to dissolve the Trust (including without limitation upon theoccurrence of a Tax Event, an Investment Company Event or a Capital TreatmentEvent), subject to the receipt by the Debenture Issuer of prior approval fromthe Board of Governors of the Federal Reserve System (the “Federal Reserve”),if then required under applicable capital guidelines or policies of the FederalReserve and, after satisfaction of liabilities to creditors of the Trust, causethe Debentures to be distributed to the Holders of the Securities on a Pro Ratabasis in accordance with the aggregate stated liquidation amount thereof.**

**The Trust shall dissolve on the first to occur of (i) July 25, 2036,the expiration of the term of the Trust, (ii) a Bankruptcy Event with respectto the Sponsor, Trust or the Debenture Issuer, (iii) (other than in connectionwith a merger, consolidation or similar transaction not prohibited by theIndenture, this Declaration or the Guarantee, as the case may be) the filing ofa certificate of dissolution of the Sponsor or upon the revocation of thecharter of the Sponsor and the expiration of 90 days after the date ofrevocation without a reinstatement thereof, (iv) the distribution to theHolders of the Securities of the Debentures, upon exercise of the right of theHolder of all of the outstanding Common Securities to dissolve the Trust asdescribed above, (v) the entry of a decree of a judicial dissolution of theSponsor or the Trust, or (vi) when all of the Securities shall have been calledfor redemption and the amounts necessary for redemption thereof shall have beenpaid to the Holders in accordance with the terms of the Securities. As soon aspracticable after the dissolution of the Trust and upon completion of thewinding up of the Trust, the Trust shall terminate upon the filing of acertificate of cancellation with the Secretary of State of the State ofDelaware.**

**If a Liquidation of the Trust occurs as described in clause (i), (ii),(iii) or (v) in the immediately preceding paragraph, the Trust shall beliquidated by the Trustees of the Trust as expeditiously as such Trusteesdetermine to be possible by distributing, after satisfaction of liabilities tocreditors of the Trust, to the Holders of the Securities, the Debentures on aPro Rata basis to the extent not satisfied by the Debenture Issuer, unless suchdistribution is determined by the Institutional Trustee not to be practical, inwhich event such Holders will be entitled to receive out of the assets of theTrust available for distribution to the Holders, after satisfaction ofliabilities of creditors of the Trust to the extent not satisfied by theDebenture Issuer, an amount equal to the Liquidation Distribution. An earlyLiquidation of the Trust pursuant to clause (iv) above shall occur if theInstitutional Trustee determines that such Liquidation is possible bydistributing, after satisfaction of liabilities to creditors of Trust, to theHolders of the Securities on a Pro Rata basis, the Debentures, and suchdistribution occurs.**

**If, upon any such Liquidation the Liquidation Distribution can be paidonly in part because the Trust has insufficient assets available to pay in fullthe aggregate Liquidation Distribution, then the amounts payable directly bythe Trust on such Capital Securities shall be paid to the Holders of theSecurities on a pro rata basis, except that if an Event of Default has occurredand is continuing, the Capital Securities shall have a preference over theCommon Securities with regard to such distributions.**

** **

**Upon any such Liquidation of the Trust involving a distribution of theDebentures, if at the time of such Liquidation, the Capital Securities wererated by at least one nationally-recognized statistical rating organization,the Debenture Issuer will use its reasonable best efforts to obtain from atleast one such or other rating organization a rating for the Debentures.**

**After the date for any distribution of the Debentures upon dissolutionof the Trust, (i) the Securities of the Trust will be deemed to be no longeroutstanding, (ii) any certificates representing the Capital Securities will bedeemed to represent undivided beneficial interests in such of the Debentures ashave an aggregate principal amount equal to the aggregate stated liquidationamount of, with an interest rate identical to the distribution rate of, andbearing accrued and unpaid interest equal to accrued and unpaid distributionson, the Securities until such certificates are presented to the DebentureIssuer or its agent for transfer or reissuance (and until such certificates areso surrendered, no payments of interest or principal shall be made to Holdersof Securities in respect of any payments due and payable under the Debentures)and (iii) all rights of Holders of Securities under the Capital Securities orthe Common Securities, as applicable, shall cease, except the right of suchHolders to receive Debentures upon surrender of certificates representing suchSecurities.**

**4.             Redemption andDistribution.**

**(a)          **The Debentures will mature on July 25, 2031. The Debentures may beredeemed by the Debenture Issuer, in whole or in part, on any January 25th or July 25th on or after July 25,2006, at the Redemption Price, upon not less than 30 days nor more than 60day’s notice to Holders of such Debentures. In addition, upon the occurrenceand continuation of a Tax Event, an Investment Company Event or a CapitalTreatment Event, the Debentures may be redeemed by the Debenture Issuer inwhole but not in part, at any time within 90 days following the occurrence ofsuch Tax Event, Investment Company Event or Capital Treatment Event, as thecase may be (the “Special Redemption Date”), at the Special Redemption Price,upon not less than 30 nor more than 60 days’ notice to Holders of theDebentures so long as such Tax Event, Investment Company Event or CapitalTreatment Event, as the case may be, is continuing. In each case, the right ofthe Debenture Issuer to redeem the Debentures is subject to the DebentureIssuer having received prior approval from the Federal Reserve, if thenrequired under applicable capital guidelines or policies of the FederalReserve.

**“Tax Event” means the receipt by the Debenture Issuer and the Trust ofan opinion**of counsel experienced in such matters to the effect that, as a resultof any amendment to or change (including any announced prospective change) inthe laws or any regulations thereunder of theUnited States or any political subdivision or taxing authority thereof or therein,or as a result of any official administrative pronouncement (including anyprivate letter ruling, technical advice memorandum, regulatory procedure,notice or announcement (an “Administrative Action”)) or judicial decisioninterpreting or applying such laws or regulations, regardless of whether suchAdministrative Action or judicial decision is issued to or in connection with aproceeding involving the Debenture Issuer or the Trust and whether or notsubject to review or appeal, which amendment, clarification, change,Administrative Action or decision is enacted, promulgated or announced, in eachcase on or after the date of original issuance of the Debentures, there is morethan an insubstantial risk that: (i) the Trust is, or will be within 90 days ofthe date of such opinion, subject to United States federal income tax withrespect to income received or accrued on the Debentures; (ii) interest payableby the Debenture Issuer on the Debentures is not, or within 90 days of the dateof such opinion, will not be, deductible by the Debenture Issuer, in whole orin part, for United States federal income tax purposes; or (iii) the Trust is,or will be within 90 days of the date of such opinion, subject to more than ade minimis amount of other taxes, duties or other governmental charges.

** **

**“Investment Company Event” means the receipt by the Debenture Issuerand the Trust of an opinion of counsel experienced in such matters to theeffect that, as a result of the occurrence of a change in law or regulation orwritten change in interpretation or application of law or regulation by anylegislative body, court, governmental agency or regulatory authority, there ismore than an insubstantial risk that the Trust is or, within 90 days of thedate of such opinion will be, considered an “investment company” that isrequired to be registered under the Investment Company Act of 1940, as amended,which change or prospective change becomes effective or would become effective,as the case may be, on or after the date of the original issuance of theDebentures.**

**“Capital Treatment Event” means the receipt by the Debenture Issuer andthe Trust of an opinion of counsel experienced in such matters to the effectthat, as a result of the occurrence of any amendment to, or change in, thelaws, rules or regulations of the United States or any political subdivisionthereof or therein, or as the result of any official or administrativepronouncement or action or decision interpreting or applying such laws, rulesor regulations, which amendment or change is effective or which pronouncement,action or decision is announced on or after the date of original issuance ofthe Debentures, there is more than an insubstantial risk that the DebentureIssuer will not, within 90 days of the date of such opinion, be entitled totreat an amount equal to the aggregate Liquidation Amount of the CapitalSecurities as “Tier 1 Capital” (or the then equivalent thereof) for purposes ofthe capital adequacy guidelines of the Federal Reserve, as then in effect andapplicable to the Debenture Issuer; provided, however, that the distribution ofthe Debentures in connection with the Liquidation of the Trust by the DebentureIssuer shall not in and of itself constitute a Capital Treatment Event unlesssuch Liquidation shall have occurred in connection with a Tax Event or anInvestment Company Event.**

**“Special Event” means any of a Capital Treatment Event, a Tax Event oran Investment Company Event.**

**“Redemption Price” means the price set forth in the following table forany Redemption Date or Special Redemption Date that occurs within thetwelve-month period beginning in the relevant date indicated below, expressedin percentage of the principal amount of the Debentures 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, 201l and  after** |   | **100.0000**   | **%**  |

** **

**plus accrued andunpaid interest on such Debentures to the Redemption Date or, in the case of aredemption due to the occurrence of a Special Event, to the Special RedemptionDate.**

**“Special RedemptionPrice” means (1) if the Special Redemption Date is before July 25, 2006, thegreater of (a) 100% of the principal amount of the Debentures being redeemedpursuant to Section 10.02 of the Indenture or (b) as determined by a QuotationAgent, the sum of the present values of the principal amount and the premiumpayable as part of the Redemption Price with respect to a redemption as of July25, 2006 together with the present value of scheduled payments of interest overthe Remaining Life of such Debentures, discounted to the Special RedemptionDate on a semi-annual basis (assuming a 360-day year consisting of twelve30-day months) at the Treasury Rate plus 0.50%, plus, in the case of either (a)or (b), accrued and unpaid interest on such Debentures to the SpecialRedemption Date and (2) if the Special Redemption Date is on or after July 25,2006, the Redemption Price for such Special Redemption Date.**

**“ComparableTreasury Issue” 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 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 month using suchsecurities.**

**“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 Quotation Agentobtains fewer than five such Reference Treasury Dealer Quotations, the averageof all such Quotations.**

**“Primary Treasury Dealer” shall mean a primary United States Governmentsecurities dealer in New York City.**

**“Quotation Agent” means Salom**on Smith Barney Inc. and its successors; provided, however, that if theforegoing shall cease to be a Primary Treasury Dealer, the Debenture Issuershall substitute therefore another Primary Treasury Dealer.

**“Redemption Date”shall mean the date fixed for the redemption of Capital Securities, which shallbe any January 25**th or July 25th commencing on July25, 2006.

**“Reference TreasuryDealer” means (i) the Quotation Agent and (ii) any other Primary TreasuryDealer selected by the Debenture Trustee after consultation with the DebentureIssuer.**

**“Reference TreasuryDealer Quotations” means, with respect to each Reference Treasury Dealer andany Special Redemption Date, the average, as determined by the Quotation Agent,of the bid and asked prices for the Comparable Treasury Issue (expressed ineach case as a percentage of its principal amount) quoted in writing to theDebenture Trustee by such Reference Treasury Dealer at 5:00 p.m., New York Citytime, on the third Business Day preceding such Special Redemption Date.**

**“Remaining Life”means, with respect to any Debenture, the period from the Special RedemptionDate for such Debenture to July 25, 2006.**

**“Treasury Rate”means (i) the yield, under the heading which represents the average for theweek immediately prior to the date of calculation, appearing in the mostrecently published statistical release designated H.15 (519) or any successorpublication which is published weekly by the Federal Reserve and whichestablishes yields on actively traded United States Treasury securitiesadjusted to constant maturity under the caption “Treasury Constant Maturities”,for the maturity corresponding to the Remaining Life (if no maturity is withinthree months before or after the Remaining Life, yields for the two published maturitiesmost closely corresponding to the Remaining Life shall be determined and theTreasury Rate shall be interpolated or extrapolated from such yields on astraight-line basis, rounding to the nearest month) or (ii) if such release (orany successor release) is not published during the week preceding thecalculation date or does not contain such yields, the rate per annum equal tothe semi-annual equivalent yield to maturity of the Comparable Treasury Issue,calculated using a price for the Comparable Treasury Issue (expressed as apercentage of its principal amount) equal to the Comparable Treasury Price forsuch Special Redemption Date. The Treasury Rate shall be calculated on thethird Business Day preceding the Special Redemption Date.**

**(b)          **Upon the repayment in full at maturity or redemption in whole or inpart of the Debentures (other than following the distribution of the Debenturesto the Holders of the Securities), the proceeds from such repayment or paymentshall concurrently be applied to redeem Pro Rata at the applicable RedemptionPrice, Securities having an aggregate liquidation amount equal to the aggregateprincipal amount of the Debentures so repaid or redeemed; provided, however,that holders of such Securities shall be given not less than 30 nor more than60 days’ notice of such redemption (other than at the scheduled maturity of theDebentures).

** **

**(c)          **If fewer than all the outstanding Securities are to be so redeemed, theCommon Securities and the Capital Securities will be redeemed Pro Rata and theCapital Securities to be redeemed will be as described in Section 4(e)(ii)below.

**(d)          **The Trust may not redeem fewer than all the outstanding CapitalSecurities unless all accrued and unpaid Distributions have been paid on allCapital Securities for all semi-annual Distribution periods terminating on orbefore the date of redemption.

**(e)**           Redemption or DistributionProcedures.

**(i)           **Notice of any redemption of, or notice of distribution of theDebentures in exchange for, the Securities (a “Redemption/Distribution Notice”)will be given by the Trust by mail to each Holder of Securities to be redeemedor exchanged not fewer than 30 nor more than 60 days before the date fixed forredemption or exchange thereof which, in the case of a redemption, will be thedate fixed for redemption of the Debentures. For purposes of the calculation ofthe date of redemption or exchange and the dates on which notices are givenpursuant to this Section 4(e)(i), a Redemption/Distribution Notice shall bedeemed to be given on the day such notice is first mailed by first-class mail,postage prepaid, to Holders of such Securities. Each Redemption/DistributionNotice shall be addressed to the Holders of such Securities at the address ofeach such Holder appearing on the books and records of the Trust. No defect inthe Redemption/Distribution Notice or in the mailing thereof with respect toany Holder shall affect the validity of the redemption or exchange proceedingswith respect to any other Holder.

**(ii)           In the event thatfewer than all the outstanding Securities are to be redeemed, the Securities tobe redeemed shall be redeemed Pro Rata from each Holder of Capital Securities.**

**(iii)**           If the Securities are to be redeemedand the Trust gives a Redemption/Distribution Notice, which notice may only beissued if the Debentures are redeemed as set out in this Section 4 (whichnotice will be irrevocable), then, provided that the Institutional Trustee hasa sufficient amount of cash in connection with the related redemption ormaturity of the Debentures, the Institutional Trustee will pay the relevantRedemption Price to the Holders of such Securities by check mailed to theaddress of each such Holder appearing on the books and records of the Trust onthe redemption date. If a Redemption/Distribution Notice shall have been givenand funds deposited as required then immediately prior to the close of businesson the date of such deposit Distributions will cease to accrue on theSecurities so called for redemption and all rights of Holders of suchSecurities so called for redemption will cease, except the right of the Holders of such Securities to receive theapplicable Redemption Price specified in Section4(a), but without interest on such Redemption Price. If any date fixed forredemption of Securities is not a Business Day, then payment of any suchRedemption Price payable on such date will be made on the next succeeding daythat is a Business Day (and without any interest or other payment in respect ofany such delay) except that, if such Business Day falls in the next calendaryear, such payment will be made on the immediately preceding Business Day, ineach case with the same force and effect as if made on such date fixed forredemption. If payment of the Redemption Price in respect of any Securities isimproperly withheld or refused and not paid either by the Trust or by theDebenture Issuer as guarantor pursuant to the Guarantee, Distributions on suchSecurities will continue to accrue at the then applicable rate from theoriginal redemption date to the actual date of payment, in which case theactual payment date will be considered the date fixed for redemption forpurposes of calculating the Redemption Price. In the event of any redemption ofthe Capital Securities issued by the Trust in part, the Trust shall not berequired to (i) issue, register the transfer of or exchange any Security duringa period beginning at the opening of business 15 days before any selection forredemption of the Capital Securities and ending at the close of business on theearliest date on which the relevant notice of redemption is deemed to have beengiven to all Holders of the Capital Securities to be so redeemed or (ii)register the transfer of or exchange any Capital Securities so selected forredemption, in whole or in part, except for the unredeemed portion of anyCapital Securities being redeemed in part.

**(iv)         Redemption/Distribution Notices shallbe sent by the Administrators on behalf of the Trust (A) in respect of theCapital Securities, to the Holders thereof, and (B) in respect of the CommonSecurities, to the Holder thereof.**

**(v)         **Subject to the foregoing and applicable law (including, withoutlimitation, United States federal securities laws), and provided that theacquirer is not the Holder of the Common Securities or the obligor under theIndenture, the Sponsor or any of its subsidiaries may at any time and from timeto time purchase outstanding Capital Securities by tender, in the open marketor by private agreement.

**5.            Voting Rights - Capital Securities.(a) Except as provided under Sections 5(b) and 7 and as otherwise required bylaw and the Declaration, the Holders of the Capital Securities will have novoting rights. The Administrators are required to call a meeting of the Holdersof the Capital Securities if directed to do so by Holders of at least 10% inliquidation amount of the Capital Securities.**

**(b)         **Subject to the requirements of obtaining a tax opinion by theInstitutional Trustee in certain circumstances set forth in the last sentenceof this paragraph, the Holders of a Majority in liquidation amount of theCapital Securities, voting separately as a class, have the right to direct thetime, method, and place of conducting any proceeding for any remedy availableto the Institutional Trustee, or exercising any trust or power conferred uponthe Institutional Trustee under the Declaration, including the right to directthe Institutional Trustee, as holder of the Debentures, to (i) exercise theremedies available under the Indenture as the holder of the Debentures, (ii)waive any past default that is waivable under the Indenture, or (iii) exerciseany right to rescind or annul a declaration that the principal of all theDebentures shall be due and payable or (iv) consent on behalf of all the Holdersof the Capital Securities to any amendment, modification or termination of theIndenture or the Debentures where such consent shall be required; provided,however, that, where a consent or action under the Indenturewould require the consent or act of the holders of greater than asimple majority in principal amount of Debentures (a “Super Majority”) affectedthereby, the Institutional Trustee may only give such consent or take suchaction at the written direction of the Holders of at least the proportion inliquidation amount of the Capital Securities outstanding which the relevantSuper Majority represents of the aggregate principal amount of the Debenturesoutstanding. If the Institutional Trustee fails to enforce its rights under theDebentures after the Holders of a Majority in liquidation amount of suchCapital Securities have so directed the Institutional Trustee, to the fullestextent permitted by law, a Holder of the Capital Securities may institute alegal proceeding directly against the Debenture Issuer to enforce theInstitutional Trustee’s rights under the Debentures without first institutingany legal proceeding against the Institutional Trustee or any other person orentity. Notwithstanding the foregoing, if an Event of Default has occurred andis continuing and such event is attributable to the failure of the DebentureIssuer to pay interest or principal on the Debentures on the date the interestor principal is payable (or in the case of redemption, the redemption date),then a Holder of record of the Capital Securities may directly institute aproceeding for enforcement of payment, on or after the respective due datesspecified in the Debentures, to such Holder directly of the principal of orinterest on the Debentures having an aggregate principal amount equal to theaggregate liquidation amount of the Capital Securities of such Holder. TheInstitutional Trustee shall notify all Holders of the Capital Securities of anydefault actually known to the Institutional Trustee with respect to theDebentures unless (x) such default has been cured prior to the giving of suchnotice or (y) the Institutional Trustee determines in good faith that thewithholding of such notice is in the interest of the Holders of such CapitalSecurities, except where the default relates to the payment of principal of orinterest on any of the Debentures. Such notice shall state that such IndentureEvent of Default also constitutes an Event of Default hereunder. Except withrespect to directing the time, method and place of conducting a proceeding fora remedy, the Institutional Trustee shall not take any of the actions describedin clause (i), (ii) or (iii) above unless the Institutional Trustee hasobtained an opinion of tax counsel to the effect that, as a result of suchaction, the Trust will not be classified as other than a grantor trust forUnited States federal income tax purposes.

**In the event the consent of the Institutional Trustee, as the holder ofthe Debentures is required under the Indenture with respect to any amendment,modification or termination of the Indenture, the Institutional Trustee shallrequest the written direction of the Holders of the Securities with respect tosuch amendment, modification or termination and shall vote with respect to suchamendment, modification or termination as directed by a Majority in liquidationamount of the Securities voting together as a single class; provided, however,that where a consent under the Indenture would require the consent of a SuperMajority, the Institutional Trustee may only give such consent at the writtendirection of the Holders of at least the proportion in liquidation amount ofsuch Securities outstanding which the relevant Super Majority represents of theaggregate principal amount of the Debentures outstanding. The InstitutionalTrustee shall not take any such action in accordance with the writtendirections of the Holders of the Securities unless the Institutional Trusteehas obtained an opinion of tax counsel to the effect that, as a result of suchaction, the Trust will not be classified as other than a grantor trust forUnited States federal income tax purposes.**

**A waiver of an IndentureEvent of Default will constitute a waiver of the corresponding Event of Defaulthereunder. Any required approv**al or direction ofHolders of the Capital Securities may be given at a separate meeting of Holdersof the Capital Securities convened for such purpose, at a meeting of all of theHolders of the Securities in the Trust or pursuant to written consent. The InstitutionalTrustee will cause a notice of any meeting at which Holders of the CapitalSecurities are entitled to vote, or of any matter upon which action by writtenconsent of such Holders is to be taken, to be mailed to each Holder of recordof the Capital Securities. Each such notice will include a statement settingforth the following information (i) the date of such meeting or the date bywhich such action is to be taken, (ii) a description of any resolution proposedfor adoption at such meeting on which such Holders are entitled to vote or ofsuch matter upon which written consent is sought and (iii) instructions for thedelivery of proxies or consents. No vote or consent of the Holders of theCapital Securities will be required for the Trust to redeem and cancel CapitalSecurities or to distribute the Debentures in accordance with the Declarationand the terms of the Securities.

**Notwithstandingthat Holders of the Capital Securities are entitled to vote or consent underany of the circumstances described above, any of the Capital Securities thatare owned by the Sponsor or any Affiliate of the Sponsor shall not entitle theHolder thereof to vote or consent and shall, for purposes of such vote orconsent, be treated as if such Capital Securities were not outstanding.**

In no eventwill Holders of the Capital Securities have the right to vote to appoint,remove or replace the Administrators, which voting rights are vestedexclusively in the Sponsor as the Holder of all of the Common Securities of theTrust. Under certain circumstances as more fully described in the Declaration,Holders of Capital Securities have the right to vote to appoint, remove orreplace the Institutional Trustee and the Delaware Trustee.

**6.            Voting Rights - Common Securities.(a) Except as provided under Sections 6(b), 6(c) and 7 and as otherwiserequired by law and the Declaration, the Common Securities will have no votingrights.**

**(b)         **The Holders of the Common Securities are entitled, in accordance withArticle IV of the Declaration, to vote to appoint, remove or replace anyAdministrators.

**(c)          **Subject to Section 6.7 of the Declaration and only after each Event ofDefault (if any) with respect to the Capital Securities has been cured, waivedor otherwise eliminated and subject to the requirements of the second to lastsentence of this paragraph, the Holders of a Majority in liquidation amount ofthe Common Securities, voting separately as a class, may direct the time,method, and place of conducting any proceeding for any remedy available to theInstitutional Trustee, or exercising any trust or power conferred upon theInstitutional Trustee under the Declaration, including (i) directing the time,method, place of conducting any proceeding for any remedy available to theDebenture Trustee, or exercising any trust or power conferred on the DebentureTrustee with respect to the Debentures, (ii) waive any past default and itsconsequences that is waivable under the Indenture or (iii) exercise any rightto rescind or annul a declaration that the principal of all the Debenturesshall be due and payable, provided, however, that, where a consent or actionunder the Indenture would require a Super Majority, the Institutional Trusteemay only give such consent or take such action at the written direction of theHolders of at least the proportion in liquidation amount of the CommonSecurities which the relevant Super Majority represents of the aggregateprincipal amount of the Debentures outstanding. Notwithstanding this Section6(c), the Institutional Trustee shall not revoke any action previouslyauthorized or approved by a vote or consent of the Holders of the CapitalSecurities. Other than with respect to directing the time, method and place ofconducting any proceeding for any remedy available to the Institutional Trusteeor the Debenture Trustee as set forth above, the Institutional Trustee shallnot take any action described in clause (i), (ii) or (iii) above, unless theInstitutional Trustee has obtained an opinion of tax counsel to the effect thatfor the purposes of United States federal income tax the Trust will not beclassified as other than a grantor trust on account of such action. If theInstitutional Trustee fails to enforce its rights under the Declaration to thefullest extent permitted by law, any Holder of the Common Securities mayinstitute a legal proceeding directly against any Person to enforce theInstitutional Trustee’s rights under the Declaration, without first institutinga legal proceeding against the Institutional Trustee or any other Person.

**Any approval ordirection of Holders of the Common Securities may be given at a separatemeeting of Holders of the Common Securities convened for such purpose, at ameeting of all of the Holders of the Securities in the Trust or pursuant towritten consent. The Administrators will cause a notice of any meeting at whichHolders of the Common Securities are entitled to vote, or of any matter uponwhich action by written consent of such Holders is to be taken, to be mailed toeach Holder of the Common Securities. Each such notice will include a statementsetting forth (i) the date of such meeting or the date by which such action isto be taken, (ii) a description of any resolution proposed for adoption at suchmeeting on which such Holders are entitled to vote or of such matter upon whichwritten consent is sought and (iii) instructions for the delivery of proxies orconsents.**

**No vote or consentof the Holders of the Common Securities will be required for the Trust toredeem and cancel Common Securities or to distribute the Debentures inaccordance with the Declaration and the terms of the Securities.**

**7.            Amendments toDeclaration and Indenture. (a) In addition to any requirements underSection 11 .I of the Declaration, if any proposed amendment to the Declarationprovides for, or the Trustees otherwise propose to effect, (i) any action thatwould adversely affect the powers, preferences or special rights of theSecurities, whether by way of amendment to the Declaration or otherwise, or(ii) the Liquidation of the Trust, other than as described in Section 7.1 ofthe Declaration, then the Holders of outstanding Securities, voting together asa single class, will be entitled to vote on such amendment or proposal and suchamendment or proposal shall not be effective except with the approval of theHolders of at least a Majority in liquidation amount of the Securities,affected thereby; provided, however, if any amendment or proposal referred toin clause (i) above would adversely affect only the Capital Securities or onlythe Common Securities, then only the affected class will be entitled to vote onsuch amendment or proposal and such amendment or proposal shall not beeffective except with the approval of a Majority in liquidation amount of suchclass of Securities.**

**(b)         **In the event the consent of the Institutional Trustee as the holder ofthe Debentures is required under the Indenture with respect to any amendment,modification or termination of the Indenture or the Debentures, theInstitutional Trustee shall request the written direction of the Holders of theSecurities with respect to such amendment, modification or termination andshall vote with respect to such amendment, modification, or termination asdirected by a Majority in liquidation amount of the Securities voting togetheras a single class; provided, however, that where a consent under the Indenturewould require a Super Majority, the Institutional Trustee may only give suchconsent at the written direction of the Holders of at least the proportion inliquidation amount of the Securities which the relevant Super Majorityrepresents of the aggregate principal amount of the Debentures outstanding.

**(c)**          Notwithstanding the foregoing, no amendment or modification may be madeto a Declaration if such amendment or modification would (i) cause the Trust tobe classified for purposes of United States federal income taxation as otherthan a grantor trust, (ii) reduce or otherwise adversely affect the powers ofthe Institutional Trustee or (iii) cause the Trust to be deemed an “investmentcompany” which is required to be registered under the Investment Company Act.

**(d)         **Notwithstanding any provision of the Declaration, the right of anyHolder of the Capital Securities to receive payment of distributions and otherpayments upon redemption or otherwise, on or after their respective due dates,or to institute a suit for the enforcement of any such payment on or after suchrespective dates, shall not be impaired or affected without the consent of suchHolder. For the protection and enforcement of the foregoing provision, each andevery Holder of the Capital Securities shall be entitled to such relief as canbe given either at law or equity.

**8.            Pro Rata.  A reference in these terms of the Securitiesto any payment, distribution or treatment as being “Pro Rata” shall mean prorata to each Holder of the Securities according to the aggregate liquidationamount of the Securities held by the relevant Holder in relation to theaggregate liquidation amount of all Securities outstanding unless, in relationto a payment, an Event of Default has occurred and is continuing, in which caseany funds available to make such payment shall be paid first to each Holder ofthe Capital Securities Pro Rata according to the aggregate liquidation amountof the Capital Securities held by the relevant Holder relative to the aggregateliquidation amount of all Capital Securities outstanding, and only aftersatisfaction of all amounts owed to the Holders of the Capital Securities, toeach Holder of the Common Securities Pro Rata according to the aggregateliquidation amount of the Common Securities held by the relevant Holderrelative to the aggregate liquidation amount of all Common Securitiesoutstanding.**

**9.**            Ranking.  Capital Securities rank *pari passu* with and payment thereon shallbe made Pro Rata with the Common Securities except that, where an Event ofDefault has occurred and is continuing, the rights of Holders of the CommonSecurities to receive payment of Distributions and payments upon liquidation,redemption and otherwise are subordinated to the rights of the Holders of theCapital Securities with the result that no payment of any Distribution on, orRedemption Price of, any Common Security, and no other payment on account of redemption,liquidation or other acquisition of Common Securities, shall be made unlesspayment in full in cash of all accumulated and unpaid Distributions on alloutstanding Capital Securities for all distribution periods terminating on orprior thereto, or in the case of payment of the Redemption Price the fullamount of such Redemption Price on all outstanding Capital Securities thencalled for redemption, shall have been made or provided for, and all fundsimmediately available to the Institutional Trustee shall first be applied tothe payment in full in cash of all Distributions on, or the Redemption Priceof, the Capital Securities then due and payable.

**10.          Acceptance of Guarantee andIndenture.  Each Holder of theCapital Securities and the Common Securities, by the acceptance of suchSecurities, agrees to the provisions of the Guarantee, including thesubordination provisions therein and to the provisions of the Indenture.**

**11.          No Preemptive Rights.  The Holders of the Securities shall have nopreemptive or similar rights to subscribe for any additional securities.**

**12.          Miscellaneous.  These terms constitute a part of theDeclaration. The Sponsor will provide a copy of the Declaration, the Guarantee,and the Indenture to a Holder without charge on written request to the Sponsorat its principal place of business.**

 

# **EXHIBITA-l**

**FORM OF CAPITAL**SECURITYCERTIFICATE

**[FORM OF FACE OFSECURITY]**

**THIS SECURITY HASNOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE“SECURITIES ACT”), OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLESECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREINMAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISEDISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION ISEXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIESACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELLOR OTHERWISE TRANSFER SUCH SECURITY ONLY (A) TO THE DEBENTURE ISSUER OR THETRUST, (B) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO APERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINEDIN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AQUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER ISBEING MADE IN RELIANCE ON RULE 144A, (C) TO AN “ACCREDITED INVESTOR” WITHIN THEMEANING OF SUBPARAGRAPH (a) (l), (2), (3) OR (7) OF RULE 501 UNDER THESECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THEACCOUNT OF AN “ACCREDITED INVESTOR,” FOR INVESTMENT PURPOSES AND NOT WITH AVIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATIONOF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATIONREQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE DEBENTURE ISSUER’S AND THETRUST’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (C)OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OROTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THEDECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM THE DEBENTURE ISSUEROR THE TRUST. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THEFOREGOING 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 ACT OF 1974, AS AMENDED (“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUECODE OF 1986, AS AMENDED (THE “CODE”), (EACH A “PLAN”), OR AN ENTITY WHOSEUNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S INVESTMENT INTHE ENTITY AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE ORHOLD THIS SECURITY OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER ISELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABORPROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-l OR 84-14 ORANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY ISNOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECTTO SUCH PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANYINTEREST THEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDINGTHEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANINGOF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE ISAPPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFITPLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING THE ASSETS OF ANY EMPLOYEEBENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE, OR (ii) SUCH PURCHASE WILL NOTRESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVEEXEMPTION.

**IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TOTHE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATE AND OTHER INFORMATION AS MAYBE REQUIRED BY THE D**ECLARATION OF TRUST TOCONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

**THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKSHAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 AND MULTIPLES OF $1,000IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER OF THIS SECURITY IN A BLOCK HAVING ALIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NOLEGAL EFFECT WHATSOEVER. ANYSUCHPURPORTEDTRANSFEREESHALLBEDEEMEDNOTTOBETHEHOLDEROF THIS SECURITY FOR ANYPURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THISSECURITY, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTERESTWHATSOEVER IN THIS SECURITY.**

** **

 

| **Certificate  Number: ________** |   | **Number of Capital Securities: ________** |
|-----------------------------------|--------|--------------------------------------------|

** **

**CUSIP NO [________]**

**Certificate Evidencing Capital Securities ofNational Mercantile Capital Trust I**

**Fixed Rate MMCapS**SM

**(liquidation amount $1,000 per CapitalSecurity)**

**National MercantileCapital Trust I, a statutory business trust created under the laws of the Stateof Delaware (the “Trust”), hereby certifies that [____________] (the “ Holder ”) is the registered owner of securities of the Trust representing undividedbeneficial interests in the assets of the Trust, designated the Fixed RateMMCapS**SM (liquidation amount$1,000 per Capital Security) (the “Capital Securities”). Subject to theDeclaration (as defined below), the Capital Securities are transferable on thebooks and records of the Trust, in person or by a duly authorized attorney,upon surrender of this Certificate duly endorsed and in proper form fortransfer. The designation, rights, privileges, restrictions, preferences andother terms and provisions of the Capital Securities represented hereby areissued pursuant to, and shall in all respects be subject to, the provisions ofthe Amended and Restated Declaration of Trust of the Trust dated as of July 16,2001, among Scott A. Montgomery and David R. Brown, as Administrators, The Bankof New York (Delaware), as Delaware Trustee, The Bank of New York, as InstitutionalTrustee, National Mercantile Bancorp, as Sponsor, and the holders from time totime of undivided beneficial interests in the assets of the Trust, includingthe designation of the terms of the Capital Securities as set forth in Annex Ito the Declaration, as the same may be amended from time to time (the“Declaration”). Capitalized terms used herein but not defined shall have themeaning given them in the Declaration. The Holder is entitled to the benefitsof the Guarantee to the extent provided therein. The Sponsor will provide acopy of the Declaration, the Guarantee, and the Indenture to the Holder withoutcharge upon written request to the Trust at its principal place of business.

**Upon receipt ofthis Security, the Holder is bound by the Declaration and is entitled to thebenefits thereunder.**

**By acceptance ofthis Security, the Holder agrees to treat, for United States federal income taxpurposes, the Debentures as indebtedness and the Capital Securities as evidenceof beneficial ownership in the Debentures.**

This CapitalSecurity is governed by, and construed in accordance with, the laws of theState of Delaware, without regard to principles of conflict of laws.

** **

** **

**                IN WITNESS WHEREOF, the Trust has dulyexecuted this certificate.**

** **
|   | **NATIONAL MERCANTILE  CAPITAL TRUST I** |
|--------|------------------------------------------|
|   |                                     |   |
|   |                                     |   |
|   | **By:**                                  |   |
|   |                                     | **Name:** |
|   |                                     | **Title:  Administrator** |
|   |                                     |   |
|   |                                     |   |
|   | **Dated:**                               |   |
|   |

** **

#### CERTIFICATE OFAUTHENTICATION

** **

**                                This is one of the Capital Securitiesreferred to in the within-mentioned Declaration.**

** **

** **

** **
|   | **THE BANK OF NEW YORK,   as the Institutional Trustee** |
|--------|----------------------------------------------------------|
|   |                                                     |   |
|   |                                                     |   |
|   | **By:**                                                  |   |
|   |                                                     | **Authorized Officer** |
|   |                                                     |   |
|   | **Dated:**                                               |   |

** **

 

**[FORM OF REVERSE OF SECURITY]**

**Distributionspayable on each Capital Security will be payable at a fixed annual rate of10.25% (the “Coupon Rate”) of the stated liquidation amount of $1,000 perCapital Security, such rate being the rate of interest payable on theDebentures to be held by the Institutional Trustee. Except as set forth belowin respect of an Extension Period, Distributions in arrears for more than onesemi-annual period will bear interest thereon compounded semiannually at theCoupon Rate (to the extent permitted by applicable law).  The term “Distributions” as used hereinincludes cash distributions, any such compounded interest and any AdditionalInterest payable on the Debentures unless otherwise stated. A Distribution ispayable only to the extent that payments are made in respect of the Debenturesheld by the Institutional Trustee and to the extent the Institutional Trusteehas funds available in the Property Account therefor. The amount ofDistributions payable for any period will be computed for any full semiannualDistribution period on the basis of a 360-day year of twelve 30-day months.**

**Except as otherwise described below, Distributions on the CapitalSecurities will be cumulative, will accrue from the date of original issuanceand will be payable semi-annually in arrears on January 25**th and July 25th of each year,commencing on January 25, 2002 (each, a “Distribution Payment Date”). TheDebenture Issuer has the right under the Indenture to defer payments ofinterest on the Debentures by extending the interest payment period for up to10 consecutive semi-annual periods (each, an “Extension Period”) at any timeand from time to time on the Debentures, subject to the conditions describedbelow, during which Extension Period no interest shall be due and payable(except any Additional Interest that may be due and payable) although suchinterest would continue to accrue on the Debentures, and Interest will accrueon such Deferred Interest, at an annual rate equal to 10.25%, compoundedsemi-annually to the extent permitted by law during any Extension Period. NoExtension Period may end on a date other than a Distribution Payment Date. Atthe end of any such Extension Period the Debenture Issuer shall pay allDeferred Interest then accrued and unpaid on the Debentures; provided however,that no Extension Period may extend beyond the Maturity Date. Prior to thetermination of any Extension Period, the Debenture Issuer may further extendsuch period, provided that such period together with all such previous andfurther consecutive extensions thereof shall not exceed 10 consecutivesemi-annual periods, or extend beyond the Maturity Date. Upon the terminationof any Extension Period and upon the payment of all Deferred Interest, theDebenture Issuer 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. If Distributions are deferred, theDistributions due shall be paid on the date that the related Extension Periodterminates, or, if such date is not a Distribution Payment Date, on theimmediately following Distribution Payment Date, to Holders of the Securitiesas they appear on the books and records of the Trust on the record dateimmediately preceding such date. Distributions on the Securities must be paidon the dates payable (after giving effect to any Extension Period) to theextent that the Trust has funds available for the payment of such distributionsin the Property Account of the Trust. The Trust’s funds available forDistribution to the Holders of the Securities will be limited to paymentsreceived from the Debenture Issuer. The payment of Distributions out of moneysheld by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

**The CapitalSecurities shall be redeemable as provided in the Declaration.**

** **

**ASSIGNMENT**

FOR VALUERECEIVED, the undersigned assigns and transfers this Capital SecurityCertificate to:

 
|   |
|--------|
|   |
|   |

 

(Insertassignee’s social security or tax identification number)

 
|   |
|--------|
|   |
|   |

 

**(Insert address andzip code of assignee), and irrevocably appoints**

**as agent totransfer this Capital Security Certificate on the books of the Trust. The agentmay substitute another to act for him or her.**
| **Date:**      |   |
|----------------|--------|
| **Signature:** |   |

** **

**(Sign exactly asyour name appears on the other side of this Capital Security Certificate)**
| **Signature  Guarantee:**1 |   |
|----------------------------|--------|

** **

----

**1             Signature must be guaranteed by an“eligible guarantor institution” that is a bank, stockbroker, savings and loanassociation or credit union meeting the requirements of the Security registrar,which requirements include membership or participation in the SecuritiesTransfer Agents Medallion Program (“STAMP”) or such other “signature guaranteeprogram” as may be determined by the Security registrar in addition to, or insubstitution for, STAMP, all in accordance with the Securities Exchange Act of1934. as amended.**

 

**EXHIBITA-2**

# **FORM OF COMMONSECURITY CERTIFICATE**

**THIS COMMONSECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,OR ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAWS AND MAYNOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO ANEXEMPTION FROM REGISTRATION.**

**EXCEPT AS SET FORTH IN SECTION 8.1(b) OF THE DECLARATION (AS DEFINEDBELOW), THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISETRANSFERRED.**

** **

 

| **Certificate Number: ________** |   | **Number of Common Securities: ________** |
|----------------------------------|--------|-------------------------------------------|

** **

**Certificate Evidencing Common Securities**

**of**

**National Mercantile**Capital Trust I

**National MercantileCapital Trust I, a statutory business trust created under the laws of the Stateof Delaware (the “Trust”), hereby certifies that [____________] (the “ Holder”)is the registered owner of common securities of the Trust representingundivided beneficial interests in the assets of the Trust (the “CommonSecurities”). The designation, rights, privileges, restrictions, preferencesand other terms and provisions of the Common Securities represented hereby areissued pursuant to, and shall in all respects be subject to, the provisions ofthe Amended and Restated Declaration of Trust of the Trust dated as of July 16,2001, among Scott A. Montgomery and David R. Brown, as Administrators, The Bankof New York (Delaware), as Delaware Trustee, The Bank of New York, asInstitutional Trustee, National Mercantile Bancorp, as Sponsor, and the holdersfrom time to time of undivided beneficial interest in the assets of the Trustincluding the designation of the terms of the Common Securities as set forth inAnnex I to the Declaration, as the same may be amended from time to time (the“Declaration”). Capitalized terms used herein but not defined shall have themeaning given them in the Declaration. The Holder is entitled to the benefitsof the Guarantee to the extent provided therein. The Sponsor will provide acopy of the Declaration, the Guarantee and the Indenture to the Holder withoutcharge upon written request to the Sponsor at its principal place of business.**

**As set forth in theDeclaration, where an Event of Default has occurred and continuing, the rightsof Holders of Common securities to payment in respect of Distributions andpayments upon Liquidation, redemption or otherwise are subordinated to therights of payment of Holders of the Capital Securities.**

**Upon receipt ofthis Certificate, the Holder is bound by the Declaration and is entitled to thebenefits thereunder.**

**By acceptance ofthis Certificate, the Holder agrees to treat, for United States federal incometax purposes, the Debentures as indebtedness and the Common Securities asevidence of undivided beneficial ownership in the Debentures.**

**This Common Security is governed by, and construed in accordance with,the laws of the State of Delaware, without regard to principles of conflict oflaws.**

**IN WITNESS WHEREOF, the Trusthas executed this cer**tificate this [____]day of [____], _____.

** **
|   | **NATIONAL  MERCANTILE CAPITAL TRUST** |
|--------|----------------------------------------|
|   |                                   |   |
|   | **By:**                                |   |
|   |                                   | **Name:** |
|   |                                   | **Title:  Administrator** |

** **

**[FORM OF REVERSE OF SECURITY]**

**Distributionspayable on each Common Security will be identical in amount to theDistributions payable on each Capital Security, which is at a fixed annual rateof 10.25% (the “Coupon Rate”) of the stated liquidation amount of $1,000 perCapital Security, such rate being the rate of interest payable on theDebentures to be held by the Institutional Trustee. Except as set forth belowin respect of an Extension Period, Distributions in arrears for more than onesemi-annual period will bear interest thereon compounded semi-annually at theCoupon Rate (to the extent permitted by applicable law). The term “Distributions”as used herein includes cash distributions, any such compounded distributionand any Additional Interest payable on the Debentures unless otherwise stated.A Distribution is payable only to the extent that payments are made in respectof the Debentures held by the Institutional Trustee and to the extent theInstitutional Trustee has funds available in the Property Account therefor. Theamount of Distributions payable for any period will be computed for any fullsemi-annual Distribution period on 360-day year of twelve 30-day months.**

**Except as otherwise described below, Distributions on the CommonSecurities will be cumulative, will accrue from the date of original issuanceand will be payable semiannually in arrears on January 25**th and July 25th of each year,commencing on January 25, 2002 (each, a “Distribution Payment Date”). TheDebenture Issuer has the right under the Indenture to defer payments ofinterest on the Debentures by extending the interest payment period for up to10 consecutive semi-annual periods (each, an “Extension Period”) at any timeand from time to time on the Debentures, subject to the conditions describedbelow, during which Extension Period no interest shall be due and payable(except any Additional Interest that may be due and payable). No ExtensionPeriod may end on a date other than a Distribution Payment Date. During anExtension Period, interest would continue to accrue on the Debentures, andinterest on such accrued interest (such accrued interest and interest thereonreferred to herein as “Deferred Interest”) will accrue at an annual rate equalto 10.25%, compounded semi-annually from the date such Deferred Interest wouldhave been payable were it not for the Extension Period to the extent permittedby law during any Extension Period. At the end of any such Extension Period theDebenture Issuer shall pay all Deferred Interest then accrued and unpaid on theDebentures; provided, however, that no Extension Period may extend beyond theMaturity Date. Prior to the termination of any Extension Period, the DebentureIssuer may further extend such period, provided that such period together withall such previous and further consecutive extensions thereof shall not exceed10 consecutive semi-annual periods, or extend beyond the Maturity Date. Uponthe termination of any Extension Period and upon the payment of all DeferredInterest, the Debenture Issuer may commence a new Extension Period, subject tothe foregoing requirements. No interest or Deferred Interest shall be due and payableduring an 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. If Distributions are deferred, theDistributions due shall be paid on the date that the related Extension Periodterminates, or, if such date is not a Distribution Payment Date, on theimmediately following Distribution Payment Date, to Holders of the Securitiesas they appear on the books and records of the Trust on the record dateimmediately preceding such date. Distributions on the Securities must be paidon the dates payable (after giving effect to any Extension Period) to theextent that the Trust has funds available for the payment of such distributionsin the Property Account of the Trust. The Trust’s funds available forDistribution to the Holders of the Securities will be limited to paymentsreceived from the Debenture Issuer. The payment of Distributions out of moneysheld by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

**The Common Securities shall be redeemable as provided in theDeclaration.**

** **

# **ASSIGNMENT**

**FOR VALUE RECEIVED, the undersigned assigns and transfers this CommonSecurity Certificate to:**

** **
|   |
|--------|
|   |
|   |

** **

**(Insert assignee’s social security or tax identification number)**

** **
|   |
|--------|
|   |
|   |

** **

**(Insert address and zip code of assignee), and irrevocably appoints**

**as agent to transfer this Common Security Certificate on the books ofthe Trust. The agent may substitute another to act for him or her.**
| **Date:**      |   |
|----------------|--------|
| **Signature:** |   |

** **

**(Sign exactly as your name appears on the other side of this CommonSecurity Certificate)**
| **Signature  Guarantee:**1 |   |
|----------------------------|--------|

** **

----

**1              Signature must be guaranteed by an“eligible guarantor institution” that is a bank, stockbroker, savings and loanassociation or credit union, meeting the requirements of the Securityregistrar, which requirements include membership or participation in theSecurities Transfer Agents Medallion Program (“STAMP”) or such other “signatureguarantee program” as may be determined by the Security registrar in additionto, or in substitution for, STAMP, all in accordance with the SecuritiesExchange Act of 1934, as amended.**

** **

### **EXHIBIT B**

**FORM OF TRANSFEREE CERTIFICATE**

**TO BE EXECUTED BY TRANSFEREES OTHER THAN QIBS**

**_________, [     ]**

**National MercantileBancorp**

**National MercantileCapital Trust I**

**1840 Century ParkEast**

**Los Angeles, California 90067**

**Re:          Purchase of $1,000stated liquidation amount of Fixed Rate MMCapS**SM

**(the “CapitalSecurities”) of National Mercantile Capital Trust I**

**Ladies andGentlemen:**

**In connection withour purchase of the Capital Securities we confirm that:**

**1.            We understand thatthe Fixed Rate MMCapS**SM (the “Capital Securities”) of National Mercantile Capital Trust I (the“Trust”) (including the guarantee (the “Guarantee”) of National MercantileBancorp (the “Company”) executed in connection therewith) and the 10.25% FixedRate Junior Subordinated Deferrable Interest Debentures due July 25, 2031 ofthe Company (the “Subordinated Debt Securities”) (the Capital Securities, theGuarantee and the Subordinated Debt Securities together being referred toherein as “Offered Securities”), have not been registered under the SecuritiesAct of 1933, as amended (the “Securities Act”), and may not be offered or soldexcept as permitted in the following sentence. We agree on our own behalf andon behalf of any investor account for which we are purchasing the OfferedSecurities that, if, we decide to offer, sell or otherwise transfer any suchOffered Securities, such offer, sale or transfer will be made only (a) to theCompany or the Trust, (b) pursuant to Rule 144A under the Securities Act, to aperson we reasonably believe is a qualified institutional buyer under Rule 144A(a “QIB”) that purchases for its own account or for the account of a QIB and towhom notice is given that the transfer is being made in reliance on Rule 144A,(c) to an “accredited investor” with the meaning of subparagraph (a) (I), (2),(3) or (7) of Rule 501 under the Securities Act that is acquiring Offered Securitiesfor its own account or for the account of such an accredited investor forinvestment purposes and not with a view to, or for offer or sale in connectionwith, any distribution thereof in violation of the Securities Act, or (d)pursuant to another available exemption from the registration requirements ofthe Securities Act, and in each of the foregoing cases in accordance with anyapplicable state securities laws and any requirements of law that govern thedisposition of our property. The foregoing restrictions on resale will notapply subsequent to the date on which, in the written opinion of counsel, theCapital Securities are not “restricted securities” within the meaning of Rule144 under the Securities Act. If any resale or other transfer of the OfferedSecurities is proposed to be made pursuant to clause (c) or (d) above thetransferor shall deliver a letter from the transferee substantially in the formof this letter to The Bank of New York as Transfer Agent, which shall provideas applicable, among other things, that the transferee is an “accreditedinvestor” within the meaning of subparagraph (a) (l), (2), (3) or (7) of Rule501 under the Securities Act that is acquiring such Securities for investmentpurposes and not for distribution in violation of the Securities Act. Weacknowledge on our behalf and on behalf of any investor account for which weare purchasing Securities that the Trust and the Company reserve the rightprior to any offer, sale or other transfer pursuant to clause (c) or (d) torequire the delivery of any opinion of counsel, certifications and/or otherinformation satisfactory to the Trust and the Company. We understand that thecertificates for any Offered Security that we receive will bear a legendsubstantially to the effect of the foregoing.

**2.**            We are an “accreditedinvestor” with the meaning of subparagraph (a) (l), (2) (3) or (7) of Rule 501under the Securities Act purchasing for our own account or for the account ofsuch an “accredited investor,” and we are acquiring the Offered Securities forthe investment purposes and not with view to, or for offer or sale inconnection with, any distribution in violation of the Securities Act, and wehave such knowledge and experience in financial and business matters as to becapable of evaluating the merits and risks of our investment in the OfferedSecurities, and we and any account for which we are acting are each able tobear the economic risks of our or its investment.

**3.            We are acquiring the OfferedSecurities purchased by us for our own account (or for one or more accounts asto each of which we exercise sole investment discretion and have authority tomake, and do make, the statements contained in this letter) and not with a viewto any distribution of the Offered Securities, subject, nevertheless, to theunderstanding that the disposition of our property will at all times be andremain within our control.**

**4.            In the event that we purchase anyCapital Securities or any Subordinated Debt Securities, we will acquire suchCapital Securities having an aggregate stated liquidation amount of not lessthan $100,000 or such Subordinated Debt Securities having an aggregateprincipal amount not less than $100,000, for our own account and for eachseparate account for which we are acting.**

**5.             We acknowledge thatwe either (A) are not a fiduciary of a pension, profit-sharing or otheremployee benefit plan subject to the Employee Retirement Income Security Act of1974, as amended (“ERISA”) (a “Plan”), or an entity whose assets include “planassets” by reason of any Plan’s investment in the entity and are not purchasingthe Offered Securities on behalf of or with “plan assets” by reason of anyPlan’s investment in the entity and is not purchasing the Offered Securities onbehalf of or with “plan assets” of any Plan or (B) are eligible for theexemptive relief available under one ore more of the following prohibitedtransaction class exemptions (“PTCEs”) issued by the U.S. Department of Labor:PTCE 96-23, 95-60,91-38,90-l or 84-14.**

**6.             We acknowledge thatthe Trust and the Company and others will rely upon the truth and accuracy ofthe foregoing acknowledgments, representations, warranties and agreements andagree that if any of the acknowledgments, representations, warranties andagreements deemed to have been made by our purchase of the Offered Securitiesare no longer accurate, we shall promptly notify the Placement Agents. If weare acquiring any Offered Securities as a fiduciary or agent for one or moreinvestor accounts, we represent that we have sole discretion with respect toeach such investor account and that we have full power to make the foregoingacknowledgments, representations and agreement on behalf of each such investoraccount.**

** **

 
|   | **Very**truly yours,    |   |
|--------|-------------------------|--------|
|   |                    |   |
|   |                    |
|   | **(Name of Purchaser)** |   |
|   |                    |   |
|   | **By:**                 |   |
|   |                    |   |
|   | **Date:**               |   |
|        |                         |        |  |

** **

**Upon transfer of the Offered Securities would be registered in the nameof the new beneficial owner as follows.**

** **

** **
| **Name:**                |   |
|--------------------------|--------|
|                     |   |
| **Address:**             |   |
|                     |   |
| **Taxpayer ID  Number:** |   |
|                          |        |  |

** **

 

## **EXHIBIT C**

** **

**FORM OF TRANSFEROR CERTIFICATE**

**TO BE EXECUTED FOR QIBS**

**_________, [     ]**

**National MercantileBancorp**

**National MercantileCapital Trust I**

**1840 Century ParkEast**

**Los Angeles, California 90067**

**Re:         Purchase of $1,000stated liquidation amount of Fixed Rate MMCapS**SM

**(the “CapitalSecurities”) of National Mercantile Capital Trust I**

**Reference is herebymade to the Amended and Restated Declaration dated as of July 16, 2001 (the“Declaration”) among Scott A. Montgomery and David R. Brown, as Administrators;The Bank of New York (Delaware), as Delaware Trustee, The Bank of New York, asInstitutional Trustee, National Mercantile Bancorp, as Sponsor, and the holdersfrom time to time of undivided beneficial interest in the assets of NationalMercantile Capital Trust I. Capitalized terms used but not defined herein shallhave the meanings given them in the Declaration.**

**This letter relatesto $[__________________] aggregate liquidation amount of Capital Securitieswhich are held in the name of [name of transferor] (the “Transferor”).**

**In connection withsuch request, and in respect to such Capital Securities, the transferor doeshereby certify that such Capital Securities are being transferred in accordancewith (i) the transfer restrictions set forth in the Capital Securities and (ii)Rule 144A under the United States Securities Act of 1933, as amended (“Rule144A”), to a transferee that the Transferor reasonably believes is purchasingthe Capital Securities for its own account or an account with respect to whichthe transferee exercises sole investment discretion and the transferee and anysuch account is a “qualified institutional buyer” within the meaning of Rule144A, in a transaction meeting the requirements of Rule 144A and in accordancewith applicable securities laws of any state of the United States or any otherjurisdiction.**

**You are entitled to rely upon this letter and are irrevocablyauthorized to produce this letter or a copy hereof to any interested party inany administrative or legal proceeding or official inquiry with respect to thematters covered hereby.**

** **
|   | **(Name  of Transferor)** |       |
|--------|---------------------------|------------|
|   |                      |       |
|   | **By:**                   |       |
|   |                      | **Name:**  |   |
|   |                      | **Title:** |   |
|   |                      |       |
|   | **Date:**                 |       |
|        |                           |            |  |  |

** **