Document:

Exhibit
10.2

 

AMENDED AND RESTATED DECLARATION

OF TRUST

by and
among

WILMINGTON TRUST COMPANY,

as
Delaware Trustee,

WILMINGTON TRUST COMPANY,

as
Institutional Trustee,

NATIONAL MERCANTILE BANCORP,

as
Sponsor,

and

SCOTT A. MONTGOMERY and
DAVID R. BROWN,

as Administrators,

 

Dated as of January 25, 2007

 

TABLE OF
CONTENTS

	
  

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I INTERPRETATION AND DEFINITIONS

  	
  1

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II ORGANIZATION

  	
  8

  
	
  Section 2.1.

  	
  Name

  	
  8

  
	
  Section 2.2.

  	
  Office

  	
  8

  
	
  Section 2.3.

  	
  Purpose

  	
  8

  
	
  Section 2.4.

  	
  Authority

  	
  9

  
	
  Section 2.5.

  	
  Title to Property of the Trust

  	
  9

  
	
  Section 2.6.

  	
  Powers and Duties of the Trustees and the
  Administrators

  	
  9

  
	
  Section 2.7.

  	
  Prohibition of Actions by the Trust and the
  Institutional Trustee

  	
  12

  
	
  Section 2.8.

  	
  Powers and Duties of the Institutional Trustee

  	
  13

  
	
  Section 2.9.

  	
  Certain Duties and Responsibilities of the Trustees
  and Administrators

  	
  14

  
	
  Section 2.10.

  	
  Certain Rights of Institutional Trustee

  	
  15

  
	
  Section 2.11.

  	
  Delaware Trustee

  	
  17

  
	
  Section 2.12.

  	
  Execution of Documents

  	
  18

  
	
  Section 2.13.

  	
  Not Responsible for Recitals or Issuance of
  Securities

  	
  18

  
	
  Section 2.14.

  	
  Duration of Trust

  	
  18

  
	
  Section 2.15.

  	
  Mergers

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE III SPONSOR

  	
  19

  
	
  Section 3.1.

  	
  Sponsor’s Purchase of Common Securities

  	
  19

  
	
  Section 3.2.

  	
  Responsibilities of the Sponsor

  	
  19

  
	
  Section 3.3.

  	
  Expenses

  	
  20

  
	
  Section 3.4.

  	
  Right to Proceed

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV INSTITUTIONAL TRUSTEE AND ADMINISTRATORS

  	
  20

  
	
  Section 4.1.

  	
  Number of Trustees

  	
  20

  
	
  Section 4.2.

  	
  Delaware Trustee; Eligibility

  	
  21

  
	
  Section 4.3.

  	
  Institutional Trustee; Eligibility

  	
  21

  
	
  Section 4.4.

  	
  Administrators

  	
  21

  
	
  Section 4.5.

  	
  Appointment, Removal and Resignation of Trustees and
  Administrators

  	
  22

  
	
  Section 4.6.

  	
  Vacancies Among Trustees

  	
  23

  
	
  Section 4.7.

  	
  Effect of Vacancies

  	
  23

  
	
  Section 4.8.

  	
  Meetings of the Trustees and the Administrators

  	
  23

  
	
  Section 4.9.

  	
  Delegation of Power

  	
  24

  
	
  Section 4.10.

  	
  Conversion, Consolidation or Succession to Business

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE V DISTRIBUTIONS

  	
  24

  
	
  Section 5.1.

  	
  Distributions

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI ISSUANCE OF SECURITIES

  	
  24

  
	
  Section 6.1.

  	
  General Provisions Regarding Securities

  	
  24

  
	
  Section 6.2.

  	
  Paying Agent, Transfer Agent and Registrar

  	
  25

  
	
  Section 6.3.

  	
  Form and Dating

  	
  26

  
	
  Section 6.4.

  	
  Book-Entry Capital Securities

  	
  26

  
	
  Section 6.5.

  	
  Mutilated, Destroyed, Lost or Stolen Certificates

  	
  28

  
				

 

 i
 

 

	
  Section 6.6.

  	
  Temporary Securities

  	
  28

  
	
  Section 6.7.

  	
  Cancellation

  	
  28

  
	
  Section 6.8.

  	
  CUSIP Numbers

  	
  28

  
	
  Section 6.9.

  	
  Rights of Holders; Waivers of Past Defaults

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST

  	
  30

  
	
  Section 7.1.

  	
  Dissolution and Termination of Trust

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII TRANSFER OF INTERESTS

  	
  31

  
	
  Section 8.1.

  	
  General

  	
  31

  
	
  Section 8.2.

  	
  Transfer Procedures and Restrictions

  	
  32

  
	
  Section 8.3.

  	
  Deemed Security Holders

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX
  LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR
  OTHERS

  	
  34

  
	
  Section 9.1.

  	
  Liability

  	
  34

  
	
  Section 9.2.

  	
  Exculpation

  	
  35

  
	
  Section 9.3.

  	
  Fiduciary Duty

  	
  35

  
	
  Section 9.4.

  	
  Indemnification

  	
  36

  
	
  Section 9.5.

  	
  Outside Businesses

  	
  38

  
	
  Section 9.6.

  	
  Compensation; Fee

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE X ACCOUNTING

  	
  38

  
	
  Section 10.1.

  	
  Fiscal Year

  	
  38

  
	
  Section 10.2.

  	
  Certain Accounting Matters

  	
  38

  
	
  Section 10.3.

  	
  Banking

  	
  39

  
	
  Section 10.4.

  	
  Withholding

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI AMENDMENTS AND MEETINGS

  	
  39

  
	
  Section 11.1.

  	
  Amendments

  	
  39

  
	
  Section 11.2.

  	
  Meetings of the Holders of Securities; Action by
  Written Consent

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
  AND THE DELAWARE TRUSTEE

  	
  42

  
	
  Section 12.1.

  	
  Representations and Warranties of Institutional
  Trustee

  	
  42

  
	
  Section 12.2.

  	
  Representations of the Delaware Trustee

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
  43

  
	
  Section 13.1.

  	
  Notices

  	
  43

  
	
  Section 13.2.

  	
  Governing Law

  	
  44

  
	
  Section 13.3.

  	
  Intention of the Parties

  	
  44

  
	
  Section 13.4.

  	
  Headings

  	
  44

  
	
  Section 13.5.

  	
  Successors and Assigns

  	
  45

  
	
  Section 13.6.

  	
  Partial Enforceability

  	
  45

  
	
  Section 13.7.

  	
  Counterparts

  	
  45

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex I

  	
  Terms of Securities

  	
   

  
	
  Exhibit A-1

  	
  Form of Capital Security Certificate

  	
   

  
	
  Exhibit A-2

  	
  Form of Common Security Certificate

  	
   

  
	
  Exhibit B

  	
  Specimen of Initial Debenture

  	
   

  
	
  Exhibit C

  	
  Placement Agreement

  	
   

  

 

 ii

AMENDED
AND RESTATED

DECLARATION
OF TRUST

OF

FIRST
CALIFORNIA CAPITAL TRUST I

January 25,
2007

AMENDED AND RESTATED
DECLARATION OF TRUST (“Declaration”) dated and effective as of
January 25, 2007, by the Trustees (as defined herein), the Administrators
(as defined herein), the Sponsor (as defined herein) and by the holders, from
time to time, of undivided beneficial interests in the Trust (as defined
herein) to be issued pursuant to this Declaration;

WHEREAS, the Trustees,
the Administrators and the Sponsor established First California Capital
Trust I (the “Trust”), a statutory trust under the Statutory Trust
Act (as defined herein) pursuant to a Declaration of Trust dated as of
January 16, 2007 (the “Original Declaration”), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on
January 16, 2007, for the sole purpose of issuing and selling certain
securities representing undivided beneficial interests in the assets of the
Trust and investing the proceeds thereof in certain debentures of the Debenture
Issuer (as defined herein);

WHEREAS, as of the date
hereof, no interests in the Trust have been issued; and

WHEREAS, the Trustees,
the Administrators and the Sponsor, by this Declaration, amend and restate each
and every term and provision of the Original Declaration;

NOW, THEREFORE, it being
the intention of the parties hereto to continue the Trust as a statutory trust
under the Statutory Trust Act and that this Declaration constitutes the
governing instrument of such statutory trust, the Trustees declare that all
assets contributed to the Trust will be held in trust for the benefit of the
holders, from time to time, of the securities representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.  The
parties hereto hereby agree as follows:

ARTICLE I

INTERPRETATION
AND DEFINITIONS

Section 1.1.           Definitions.

Unless the context
otherwise requires:

(a)           Capitalized terms used in this
Declaration but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;

(b)           a term defined anywhere in this
Declaration has the same meaning throughout;

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

(d)           all references in this Declaration to
Articles and Sections and Annexes and Exhibits are to Articles and Sections of
and Annexes and Exhibits to this Declaration unless otherwise specified; and

 1
 

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

“Acceleration Event of
Default” has the meaning set forth in the Indenture.

“Additional Interest”
has the meaning set forth in the Indenture.

“Administrative Action”
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’s capacity as Administrator of the Trust created and continued hereunder
and not in such Person’s individual capacity, or such Administrator’s successor
in interest 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.

“Applicable Depositary
Procedures” means, with respect to any transfer or transaction involving a
Book-Entry Capital Security, the rules and procedures of the Depositary for
such Book-Entry Capital Security, in each case to the extent applicable to such
transaction and as in effect from time to time.

“Authorized Officer”
of a Person means any Person that is authorized to bind such Person.

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

(a)           a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of such Person in
an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its property, or ordering the winding-up or
liquidation of its affairs and such decree or order shall remain unstayed and
in effect for a period of 90 consecutive days; or

(b)           such Person shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent 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, or shall make any general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due.

“Book-Entry Capital
Securities” means a Capital Security, the ownership and transfer of which
shall be made through book entries by a Depositary.

“Business Day”
means any day other than Saturday, Sunday or any other day on which banking
institutions in New York City or Wilmington, Delaware are permitted or required
by any applicable law or executive order to close.

“Capital Securities”
has the meaning set forth in paragraph 1(a) of Annex I.

“Capital Security
Certificate” means a definitive Certificate in fully registered form
representing a Capital Security substantially in the form of Exhibit A-1.

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

“Certificate”
means any certificate evidencing Securities.

 2
 

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

“Code” means the
Internal Revenue Code of 1986, as amended from time to time, or any successor
legislation.

“Common Securities”
has the meaning set forth in paragraph 1(b) of Annex I.

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

“Company Indemnified
Person” means (a) any Administrator; (b) any Affiliate of any
Administrator; (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.

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

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

“Corporate Trust
Office” means the office of the Institutional Trustee at which the
corporate trust business of the Institutional Trustee shall, at any particular
time, be principally administered, which office at the date of execution of
this Declaration is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware  19890-1600, Attn:
Corporate Trust Administration.

“Coupon Rate” has
the meaning set forth in paragraph 2(a) of Annex I.

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

“Creditor” has the
meaning set forth in Section 3.3.

“Debenture Issuer”
means National Mercantile Bancorp, a California corporation, in its capacity as
issuer of the Debentures under the Indenture.

“Debenture Trustee”
means Wilmington Trust Company, as trustee under the Indenture until a
successor is appointed thereunder, and thereafter means such successor trustee.

“Debentures” means
the Fixed/Floating Rate Junior Subordinated Deferrable Interest Debentures due
2037 to be issued by the Debenture Issuer under the Indenture.

“Defaulted Interest”
has the meaning set forth in the Indenture.

“Definitive Capital
Securities Certificates” means Capital Securities issued in certificated,
fully registered form that are not Global Capital Securities.

“Delaware Trustee”
has the meaning set forth in Section 4.2.

“Depositary” means
an organization registered as a clearing agency under the Exchange Act that is
designated as Depositary by the Administrators or any successor thereto.  DTC will be the initial Depositary.

 3
 

“Depositary
Participant” means a broker, dealer, bank, other financial institution or
other Person for whom from time to time the Depositary effects book-entry
transfers and pledges of securities deposited with the Depositary.

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

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

“Distribution”
means a distribution payable to Holders of Securities in accordance with
Section 5.1.

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

“Distribution Period”
means (i) with respect to the Distribution paid on the first Distribution
Payment Date, the period beginning on (and including) the date of original
issuance and ending on (but excluding) the Distribution Payment Date in March
2007 and (ii) thereafter, with respect to a Distribution paid on each
successive Distribution Payment Date, the period beginning on (and including)
the preceding Distribution Payment Date and ending on (but excluding) such current
Distribution Payment Date.

“Distribution Rate”
means, for the Distribution Period beginning on (and including) the date of
original issuance and ending on (but excluding) the Distribution Payment Date
in March 2012, the rate per annum of 6.80%, and for each Distribution
Period beginning on or after the Distribution Payment Date in March 2012,
the Coupon Rate for such Distribution Period.

“DTC” means The
Depository Trust Company or any successor thereto.

“Event of Default”
means any one of the following events (whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):

(a)           the occurrence of an Indenture Event
of Default; or

(b)           default by the Trust in the payment
of any Redemption Price or Special Redemption Price of any Security when it
becomes due and payable; or

(c)           default in the performance, or
breach, in any material respect, of any covenant or warranty of the
Institutional Trustee in this Declaration (other than those specified in
clause (a) or (b) above) and continuation of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail to the Institutional Trustee and to the Sponsor by the Holders of at least
25% in aggregate liquidation amount of the outstanding Capital Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder; or

(d)           the occurrence of a Bankruptcy Event
with respect to the Institutional Trustee if a successor Institutional Trustee
has not been appointed within 90 days thereof.

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

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

 4
 

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

“Fiduciary Indemnified
Person” shall mean each of the Institutional Trustee (including in its
individual capacity), the Delaware Trustee (including in its individual
capacity), any Affiliate of the Institutional Trustee or Delaware Trustee and
any officers, directors, shareholders, members, partners, employees,
representatives, custodians, nominees or agents of the Institutional Trustee or
Delaware Trustee.

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

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

“Global Capital
Security” means a Capital Securities Certificate evidencing ownership of
Book-Entry Capital Securities.

“Guarantee” means
the guarantee agreement to be dated as of the Closing Date, of the Sponsor in
respect of the Capital Securities.

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

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

“Indenture” means
the Indenture dated as of the Closing Date, between the Debenture Issuer and
the Debenture Trustee, and any indenture supplemental thereto pursuant to which
the Debentures are to be issued, as such Indenture and any supplemental
indenture may be amended, supplemented or otherwise modified from time to time.

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

“Institutional Trustee”
means the Trustee meeting the eligibility requirements set forth in Section
4.3.

“Interest” means
any interest due on the Debentures including any Additional Interest and
Defaulted Interest.

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

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

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

“Liquidation” has
the meaning set forth in paragraph 3 of Annex I.

“Liquidation
Distribution” has the meaning set forth in paragraph 3 of
Annex I.

“Majority in
liquidation amount of the Securities” means Holder(s) of outstanding
Securities voting together as a single class or, as the context may require,
Holders of outstanding Capital Securities or Holders of outstanding Common
Securities voting separately as a class, who are the record owners of more than
50% of the aggregate liquidation amount (including the stated amount that would
be paid on

 5
 

redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the
relevant class.

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

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

(a)           a statement that each officer signing
the Certificate has read the covenant or condition and the definitions relating
thereto;

(b)           a brief statement of the nature and
scope of the examination or investigation undertaken by each officer in
rendering the Certificate;

(c)           a statement that each such officer
has made such examination or investigation as, in such officer’s opinion, is
necessary to enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and

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

“OTS” has the
meaning set forth in paragraph 3 of Annex I.

“Owner” means each
Person who is the beneficial owner of Book-Entry Capital Securities as
reflected in the records of the Depositary or, if a Depositary Participant is
not the beneficial owner, then the beneficial owner as reflected in the records
of the Depositary Participant.

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

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

“Placement Agreement”
means the Placement Agreement relating to the offering and sale of Capital
Securities in the form of Exhibit C.

“Primary Treasury
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 the
meaning set forth in paragraph 8 of Annex I.

“QIB” means a “qualified
institutional buyer” as defined in Rule 144A under the Securities Act.

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

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

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

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

 6
 

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

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

“Reference Treasury Dealer
Quotations” has the meaning set forth in paragraph 4(a) of
Annex I.

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

“Relevant Trustee”
has the meaning set forth in Section 4.5(a).

“Responsible Officer”
means, with respect to the Institutional Trustee, any officer within the
Corporate Trust Office of the Institutional Trustee, including any
vice-president, any assistant vice-president, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer’s knowledge of
and familiarity with the particular subject.

“Restricted Securities
Legend” has the meaning set forth in Section 8.2(b).

“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 from time to time, or any
successor legislation.

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

“Special Redemption
Date” has the meaning set forth in paragraph 4(a) of Annex I.

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

“Sponsor” means
National Mercantile Bancorp, a California corporation, or any successor entity
in a merger, consolidation or amalgamation, in its capacity as sponsor of the
Trust.

“Statutory Trust Act”
means Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. §§ 3801, et seq. as may be amended from time to time.

“Successor Entity”
has the meaning set forth in Section 2.15(b).

“Successor Delaware
Trustee” has the meaning set forth in Section 4.5(e).

“Successor
Institutional Trustee” has the meaning set forth in Section 4.5(b).

“Successor Securities”
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
the meaning set forth in paragraph 4(a) of Annex I.

 7
 

“10% in liquidation
amount of the Securities” means Holder(s) of outstanding Securities voting
together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.

“3-Month LIBOR”
has the meaning set forth in paragraph 4(a) of Annex I.

“Transfer Agent”
has the meaning set forth in Section 6.2.

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

“Treasury Regulations”
means the income tax regulations, including temporary and proposed regulations,
promulgated under the Code by the United States Treasury, as such regulations
may be amended from time to time (including corresponding provisions of
succeeding regulations).

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

“Trustee” or “Trustees”
means each Person who has signed this Declaration as a trustee, so long as such
Person shall continue in office in accordance with the terms 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, and references
herein to a Trustee or the Trustees shall refer to such Person or Persons
solely in their capacity as trustees hereunder.

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

ARTICLE
II

ORGANIZATION

Section 2.1.           Name.
The Trust is named “First California Capital Trust I,” as such name may be
modified from time to time by the Administrators following written notice to the
Holders of the Securities.  The Trust’s
activities may be conducted under the name of the Trust or any other name
deemed advisable by the Administrators.

Section 2.2.           Office.
The address of the principal office of the Trust is
c/o Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware  19890-1600.  On at least 10 Business Days written
notice to the Holders of the Securities, the Administrators may designate
another principal office, which shall be in a state of the United States or in
the District of Columbia.

Section 2.3.           Purpose.
The exclusive purposes and functions of the Trust are
(a) to issue and sell the Securities representing undivided beneficial
interests in the assets of the Trust, (b) to invest the gross proceeds
from such sale to acquire the Debentures, (c) to facilitate direct
investment in the assets of the Trust through issuance of the Common Securities
and the Capital Securities and (d) except as otherwise limited herein, to
engage in only those other activities necessary or incidental thereto.  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 would cause
the Trust not to be classified for United States federal income tax purposes as
a grantor trust.

 8
 

Section 2.4.           Authority.
Except as specifically provided in this Declaration,
the Institutional Trustee shall have exclusive and complete authority to carry
out the purposes of the Trust.  An action
taken by a Trustee in accordance with its powers shall constitute the act of
and serve to bind the Trust.  In dealing
with the Trustees acting on behalf of the Trust, no Person shall be required to
inquire into the authority of the Trustees to bind the Trust.  Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.  The Administrators
shall have only those ministerial duties set forth herein with respect to
accomplishing the purposes of the Trust and are not intended to be trustees or
fiduciaries with respect to the Trust or the Holders.  The Institutional Trustee shall have the
right, but shall not be obligated except as provided in Section 2.6, to perform
those duties assigned to the Administrators.

Section 2.5.           Title
to Property of the Trust. Except as provided in
Section 2.8 with respect to the Debentures and the Property Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust.  The
Holders shall not have legal title to any part of the assets of the Trust, but
shall have an undivided beneficial interest in the assets of the Trust.

Section 2.6.           Powers
and Duties of the Trustees and the Administrators.

(a)           The
Trustees and the Administrators shall conduct the affairs of the Trust in
accordance with the terms of this Declaration. 
Subject to the limitations set forth in paragraph (b) of this
Section, and in accordance with the following provisions (i) and (ii), the
Trustees and the Administrators shall have the authority to enter into all
transactions and agreements determined by the Institutional Trustee to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Trustees or the Administrators, as the case may 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 behalf of the Trust with respect
to the following matters:

(A)  the issuance and sale of the Securities;

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

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

(D)  the sending of notices (other than notices of default),
and other information regarding the Securities and the Debentures to the
Holders in accordance with this Declaration;

(E)  the consent to the appointment of a Paying Agent,
Transfer Agent and Registrar in accordance with this Declaration, which consent
shall not be unreasonably withheld or delayed;

(F)  execution and delivery of the Securities in accordance
with this Declaration;

(G)  execution and delivery of closing certificates pursuant
to the Placement Agreement and the application for a taxpayer identification
number;

 9
 

(H)  unless
otherwise determined by the Holders of a Majority in liquidation amount of the
Securities or as otherwise required by the Statutory Trust Act, to execute on
behalf of the Trust (either acting alone or together with any or all of the
Administrators) any documents that the Administrators have the power to execute
pursuant to this Declaration;

(I)  the taking of any action
incidental to the foregoing as the Institutional Trustee may from time to time
determine is necessary or advisable to 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 particular Holder);

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

(K)  to duly prepare and file all
applicable tax returns and tax information reports that are required to be
filed with respect to the Trust on behalf of the Trust.

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

(A)  the establishment of the
Property Account;

(B)  the receipt of the Debentures;

(C)  the collection of interest,
principal and any other payments made in respect of the Debentures in the
Property Account;

(D)  the distribution through the
Paying Agent 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 the Securities and the Debentures to
the Holders in accordance with this Declaration;

(G)  the distribution of the Trust
Property in accordance with the terms of this Declaration;

(H)  to the extent provided in this
Declaration, the winding up of the affairs of and liquidation of the Trust and
the preparation, execution and filing of the certificate of cancellation with
the Secretary of State of the State of Delaware;

(I)  after any Event of Default (provided
that such Event of Default is not by or with respect to the Institutional
Trustee) the taking of any action incidental to the foregoing as the
Institutional Trustee may from time to time determine is necessary or advisable
to give effect to the terms of this Declaration and protect and conserve the
Trust Property for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder); and

 10

(J)  to take all action that may
be necessary for the preservation and the continuation of the Trust’s valid
existence, rights, franchises and privileges as a statutory trust under the
laws of the State of Delaware.

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

(b)           So long as this Declaration remains
in effect, the Trust (or the Trustees or Administrators acting on behalf of the
Trust) shall not undertake any business, activities or transaction except as
expressly provided herein or contemplated hereby. In particular, neither the
Trustees nor the Administrators may cause the Trust to (i) acquire any
investments or engage in any activities not authorized by this Declaration,
(ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Holders, except as expressly provided herein, (iii) take any action
that would reasonably be expected (x) to cause the Trust to fail or cease to
qualify as a “grantor trust” for United States federal income tax purposes or
(y) to require the trust to register as an Investment Company under the
Investment Company Act, (iv) incur any indebtedness for borrowed money or
issue any other debt or (v) take or consent to any action that would
result in the placement of a lien on any of the Trust Property.  The Institutional Trustee shall, at the sole
cost and expense of the Trust, defend all claims and demands of all Persons at
any time claiming any lien on any of the Trust Property adverse to the interest
of the Trust or the Holders in their capacity as Holders.

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

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

(ii)           the determination
of the States in which to take appropriate action to qualify or register for
sale all or part of the Capital Securities and the determination of any and all
such acts, other than actions which must be taken by or on behalf of the Trust,
and the advice to the Administrators of actions they must take on behalf of the
Trust, and the preparation for execution and filing of any documents to be
executed and filed by the Trust or on behalf of the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States in connection with the sale of the Capital Securities;

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

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

(d)           Notwithstanding anything herein to
the contrary, the Administrators and the Holders of a Majority in liquidation
amount of the Common Securities are authorized and directed to conduct the
affairs of the Trust and to operate the Trust so that the Trust will not (i) be
deemed to be an Investment

 11
 

Company required to be
registered under the Investment Company Act, and (ii) fail to be
classified as a “grantor trust” for United States federal income tax
purposes.  The Administrators and the
Holders of a Majority in liquidation amount of the Common Securities shall not
take any action inconsistent with the treatment of the Debentures as
indebtedness of the Debenture Issuer for United States federal income tax
purposes.  In this connection, the
Administrators and the Holders of a Majority in liquidation amount of the
Common Securities are authorized to take any action, not inconsistent with
applicable laws, the Certificate of Trust or this Declaration, as amended from
time to time, that each of the Administrators and the Holders of a Majority in
liquidation amount of the Common Securities determines in their discretion to
be necessary or desirable for such purposes.

(e)           All expenses incurred by the
Administrators or the Trustees pursuant to this Section 2.6 shall be reimbursed
by the Sponsor, and the Trustees and the Administrators shall have no
obligations with respect to such expenses (for purposes of clarification, this
Section 2.6(e) does not contemplate the payment by the Sponsor of
acceptance or annual administration fees owing to the Trustees under this
Declaration or the fees and expenses of the Trustees’ counsel in connection
with the closing of the transactions contemplated by this Declaration).

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

(g)           Legal title to all Trust Property
shall be vested at all times in the Institutional Trustee (in its capacity as
such) and shall be held and administered by the Institutional Trustee and the
Administrators for the benefit of the Trust in accordance with this
Declaration.

(h)           If the Institutional Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Declaration and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Institutional Trustee or to
such Holder, then and in every such case the Sponsor, the Institutional Trustee
and the Holders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Institutional Trustee and the Holders
shall continue as though no such proceeding had been instituted.

Section 2.7.           Prohibition
of Actions by the Trust and the Institutional Trustee.

(a)           The Trust shall not, and the
Institutional Trustee shall cause the Trust not to, engage in any activity
other than as required or authorized by this Declaration.  In particular, the Trust shall not and the
Institutional Trustee shall cause the Trust not 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 to the terms of this
Declaration and of the Securities;

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

(iii)          possess Trust
Property for other than a Trust purpose;

(iv)          make any loans or
incur any indebtedness other than loans represented by the Debentures;

(v)           possess any power or
otherwise act in such a way as to vary the Trust assets or the terms of the
Securities in any way whatsoever other than as expressly provided herein;

 12
 

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

(vii)         carry on any “trade
or business” as that phrase is used in the Code; or

(viii)        other than as
provided in this Declaration (including Annex I), (A) direct the
time, method and place of exercising any trust or power conferred upon the
Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required unless the Trust shall have received a written opinion of counsel to
the effect that such modification will not cause the Trust to cease to be
classified as a “grantor trust” for United States federal income tax purposes.

Section 2.8.           Powers
and Duties of the Institutional Trustee.

(a)           The legal title to the Debentures
shall be owned by and held of record in the name of the Institutional Trustee
in trust for the benefit of the Trust and the Holders of the Securities.  The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 4.5.  Such vesting and cessation
of title shall be effective whether or not conveyancing documents with regard
to the Debentures have been executed and delivered.

(b)           The Institutional Trustee shall not
transfer its right, title and interest 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 name of and under the exclusive control of the
Institutional Trustee, and maintained in the Institutional Trustee’s trust
department, on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Property Account and make payments, or
cause the Paying Agent to make payments, to the Holders of the Capital
Securities and Holders of the Common Securities from the Property Account in
accordance with Section 5.1.  Funds in
the Property Account shall be held uninvested until disbursed in accordance
with this Declaration;

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

(iii)          upon written notice
of distribution issued by the Administrators in accordance with the terms of
the Securities, engage in such ministerial activities as shall be necessary or
appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain circumstances pursuant to the terms of
the Securities.

(d)           The Institutional Trustee may bring
or defend, pay, collect, compromise, arbitrate, resort to legal action with
respect to, or otherwise adjust claims or demands of or against, the Trust
which arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or arises
out of the Institutional Trustee’s duties and obligations under this
Declaration; provided, however, that if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the

 13
 

date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of the Capital Securities may directly institute a
proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Capital Securities of such Holder (a “Direct
Action”) on or after the respective due date specified in the
Debentures.  In connection with such
Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of the Capital Securities to the extent
of any payment made by the Debenture Issuer to such Holder of the Capital
Securities in such Direct Action; provided, however, that no
Holder of the Common Securities may exercise such right of subrogation so long
as an Event of Default with respect to the Capital Securities has occurred and
is continuing.

(e)           The Institutional Trustee shall
continue to serve as a Trustee until either:

(i)            the Trust has been
completely liquidated and the proceeds of the liquidation distributed to the
Holders of the Securities pursuant to the terms of the Securities and this
Declaration; or

(ii)           a Successor
Institutional Trustee has been appointed and has accepted that appointment in
accordance with Section 4.5.

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

The Institutional Trustee
must exercise the powers set forth in this Section 2.8 in a manner that is consistent
with the purposes and functions of the Trust set out in Section 2.3, and the
Institutional Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 2.3.

Section 2.9.           Certain
Duties and Responsibilities of the Trustees and Administrators.

(a)           The Institutional Trustee, before the
occurrence of any Event of Default and after the curing or waiving of all such
Events of Default that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Declaration and no implied
covenants shall be read into this Declaration against the Institutional
Trustee.  In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 6.8), the Institutional
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

(b)           The duties and responsibilities of
the Trustees and the Administrators shall be as provided by this
Declaration.  Notwithstanding the
foregoing, no provision of this Declaration shall require any Trustee or
Administrator to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers if it shall have reasonable
grounds to believe that repayment of such funds or adequate protection against
such risk of liability is not reasonably assured to it.  Whether or not therein expressly so provided,
every provision of this Declaration relating to the conduct or affecting the
liability of or affording protection to the Trustees or Administrators shall be
subject to the provisions of this Article. 
Nothing in this Declaration shall be construed to relieve an
Administrator or a Trustee from liability for its own negligent act, its own
negligent failure to act, or its own willful misconduct.  To the extent that, at law or in equity, a
Trustee or an Administrator has duties and liabilities relating to the Trust or
to the Holders,

 14
 

such Trustee or such
Administrator shall not be liable to the Trust or to any Holder for such
Trustee’s or such Administrator’s good faith reliance on the provisions of this
Declaration.  The provisions of this
Declaration, to the extent that they restrict the duties and liabilities of the
Administrators or the Trustee otherwise existing at law or in equity, are agreed
by the Sponsor and the Holders to replace such other duties and liabilities of
the Administrators or the Trustees.

(c)           All payments made by the
Institutional Trustee or a Paying Agent in respect of the Securities shall be
made only from the revenue and proceeds from the Trust Property and only to the
extent that there shall be sufficient revenue or proceeds from the Trust
Property to enable the Institutional Trustee or a Paying Agent to make payments
in accordance with the terms hereof. 
Each Holder, by its acceptance of a Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees and the Administrators are not personally liable to it for any amount
distributable in respect 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 set forth elsewhere in
this Declaration.

(d)           The Institutional Trustee shall not
be liable for its own acts or omissions hereunder except as a result of its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

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

(ii)           the Institutional
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of
not less than a Majority in liquidation amount of the Capital Securities or the
Common Securities, as applicable, relating to the time, method and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;

(iii)          the Institutional
Trustee’s sole duty with respect to the custody, safekeeping and physical
preservation of the Debentures and the Property Account shall be to deal with
such property in a similar manner as the Institutional Trustee deals with
similar property for its fiduciary accounts generally, subject to the
protections and limitations on liability afforded to the Institutional Trustee
under this Declaration;

(iv)          the Institutional
Trustee shall not be liable for any interest on any money received by it except
as it may otherwise agree in writing with the Sponsor; and money held by the
Institutional Trustee need not be segregated from other funds held by it except
in relation to the Property Account maintained by the Institutional Trustee
pursuant to Section 2.8(c)(i) and except to the extent otherwise required by
law; and

(v)           the Institutional
Trustee shall not be responsible for monitoring the compliance by the
Administrators or the Sponsor with their respective duties under this
Declaration, nor shall the Institutional Trustee be liable for any default or
misconduct of the Administrators or the Sponsor.

 15
 

Section 2.10.        Certain
Rights of Institutional Trustee. Subject to the
provisions of Section 2.9:

(a)           the Institutional Trustee may
conclusively rely and shall fully be protected in acting or refraining from
acting in good faith upon any resolution, opinion of counsel, certificate,
written representation of a Holder or 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 paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;

(b)           if (i) in performing its duties
under this Declaration, the Institutional Trustee is required to decide between
alternative courses of action, (ii) in construing any of the provisions of
this Declaration, the Institutional Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein, or (iii) the
Institutional Trustee is unsure of the application of any provision of this
Declaration, then, except as to any matter as to which the Holders of Capital
Securities are entitled to vote under the terms of this Declaration, the Institutional
Trustee may deliver a notice to the Sponsor requesting the Sponsor’s written
instructions as to the course of action to be taken and the Institutional
Trustee shall take such action, or refrain from taking such action, as the
Institutional Trustee shall be instructed in writing, in which event the
Institutional Trustee shall have no liability except for its own negligence or
willful misconduct;

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

(d)           whenever in the administration of
this Declaration, the Institutional Trustee shall deem it desirable that a
matter be proved or established before undertaking, suffering or omitting any
action hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may request and conclusively rely upon an Officers’
Certificate as to factual matters which, upon receipt of such request, 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 or continuation statement or any filing under tax or
securities laws) or any rerecording, 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 the advice of such counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon and
in accordance with such advice; the Institutional Trustee shall have the right
at any time to seek instructions concerning the administration of this
Declaration from any court of competent jurisdiction;

(g)           the Institutional Trustee shall be
under no obligation to exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any of the Holders pursuant to
this Declaration, unless such Holders shall have offered to the Institutional
Trustee security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which might 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 the Institutional Trustee, subject to Section
2.9(b), upon the occurrence of an Event of Default (that has not been cured or
waived pursuant to Section 6.9), to exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs;

(h)           the Institutional Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or

 16
 

document, unless
requested in writing to do so by one or more Holders, but the Institutional
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;

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

(j)            whenever in the administration of
this Declaration the Institutional Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder the Institutional Trustee (i) may request instructions
from the Holders of the Capital Securities which instructions may only be given
by the Holders of the same proportion in liquidation amount of the Capital
Securities as would be entitled to direct the Institutional Trustee under the
terms of the Capital Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right 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 any action that is discretionary under the provisions of
this Declaration;

(l)            when the Institutional Trustee
incurs expenses or renders services in connection with a Bankruptcy Event, such
expenses (including the fees and expenses of its counsel) and the compensation
for such services are intended to constitute expenses of administration under
any bankruptcy law or law relating to creditors rights generally;

(m)          the Institutional Trustee shall not be
charged with knowledge of an Event of Default unless a Responsible Officer of
the Institutional Trustee obtains actual knowledge of such event or the
Institutional Trustee receives written notice of such event from any Holder,
the Sponsor or the Debenture Trustee;

(n)           any action taken by the Institutional
Trustee or its agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its agents alone
shall be sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional Trustee
to so act or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Institutional
Trustee’s or its agent’s taking such action; and

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

Section 2.11.        Delaware
Trustee. Notwithstanding any other provision of this
Declaration other than Section 4.1, the Delaware Trustee shall not be entitled
to exercise any powers, nor shall the Delaware Trustee have any of the duties
and responsibilities of any of the Trustees or the Administrators described in
this Declaration (except as may be required under the Statutory Trust
Act).  Except as set forth in Section
4.1, the Delaware Trustee shall be a Trustee for the sole and limited purpose
of fulfilling the requirements of § 3807 of the Statutory Trust Act.

 17
 

Section 2.12.        Execution
of Documents. Unless otherwise determined in
writing by the Institutional Trustee, and except as otherwise required by the
Statutory Trust Act, the Institutional Trustee, or any one or more of the
Administrators, as the case may be, is authorized to execute on behalf of the
Trust any documents that the Trustees or the Administrators, as the case may
be, have the power and authority to execute pursuant to Section 2.6.

Section 2.13.        Not
Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. 
The Trustees make no representations as to the value or condition of the
property of the Trust or any part thereof. 
The Trustees make no representations as to the validity or sufficiency
of this Declaration, the Debentures or the Securities.

Section 2.14.        Duration
of Trust. The Trust, unless earlier dissolved
pursuant to the provisions of Article VII hereof, shall be in existence
for 35 years from the Closing Date.

Section 2.15.        Mergers.

(a)           The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except as described in Section 2.15(b) and (c) and except in
connection with the liquidation of the Trust and the distribution of the
Debentures to Holders of Securities pursuant to Section 7.1(a)(iv) of the
Declaration or Section 4 of Annex I.

(b)           The Trust may, with the consent of
the Institutional Trustee and without the consent of the Holders 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 surviving entity, such successor entity (the “Successor Entity”)
either:

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

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

(ii)           the Sponsor
expressly appoints a trustee of the Successor Entity that possesses
substantially the same powers and duties as the Institutional Trustee as the
Holder of the Debentures;

(iii)          such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the Holders of the Securities (including
any Successor Securities) in any material respect;

(iv)          the Institutional
Trustee receives written confirmation from Moody’s Investor Services, Inc. and
any other nationally recognized statistical rating organization that rates
securities issued by the initial purchaser of the Capital Securities that it
will not reduce or withdraw the rating of any such securities because of such
merger, conversion, consolidation, amalgamation or replacement;

(v)           such Successor
Entity has a purpose substantially identical to that of the Trust;

 18
 

(vi)          prior to such merger,
consolidation, amalgamation or replacement, the Trust has received an opinion
of a nationally recognized independent counsel to the Trust experienced in such
matters to the effect that:

(A)          such merger,
consolidation, amalgamation or replacement does not adversely affect the
rights, preferences and privileges of the Holders of the Securities (including
any Successor Securities) in any material respect;

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

(C)           following such
merger, consolidation, amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a “grantor trust” for United States
federal income tax purposes;

(vii)         the Sponsor
guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Guarantee;

(viii)        the Sponsor owns
100% of the common securities of any Successor Entity; and

(ix)           prior to such
merger, consolidation, amalgamation or replacement, the Institutional Trustee
shall have received an Officers’ Certificate of the Administrators and an
opinion of counsel, each to the effect that all conditions precedent under this
Section 2.15(b) to such transaction have been satisfied.

(c)           Notwithstanding Section 2.15(b), the
Trust shall not, except with the consent of Holders of 100% in aggregate
liquidation amount of the Securities, consolidate, amalgamate, merge with or
into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger or replacement would cause the Trust or
Successor Entity to be classified as other than a grantor trust for United
States federal income tax purposes.

ARTICLE
III

SPONSOR

Section 3.1.           Sponsor’s
Purchase of Common Securities.On the Closing
Date, the Sponsor will purchase all of the Common Securities issued by the
Trust in an amount at least equal to 3% of the capital of the Trust, at the
same time as the 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 exclusive right and
responsibility to engage in, or direct the Administrators to engage in, the
following activities:

(a)           to determine the States in which to
take appropriate action to qualify the Trust or to qualify or register for sale
all or part of the Capital Securities and to do any and all such acts, other
than actions which must be taken by the Trust, and advise the Trust of actions
it must take, and prepare for execution and filing any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such States, to protect the limited
liability of the Holders of the Capital Securities or to enable the Trust to
effect the purposes for which it was created; and

 19
 

(b)           to negotiate the terms of and/or
execute on behalf of the Trust, the Placement Agreement and other related
agreements providing for the sale of the Capital Securities.

Section 3.3.           Expenses.
In connection with the offering, sale and issuance of the Debentures to the
Trust and in connection with the sale of the Securities by the Trust, the
Sponsor, in its capacity as Debenture Issuer, shall:

(a)           pay all reasonable
costs and expenses owing to the Debenture Trustee pursuant to Section 6.7
of the Indenture;

(b)           be responsible for
and shall pay all debts and obligations (other than with respect to the
Securities) and all costs and expenses of the Trust, the offering, sale and
issuance of the Securities (including fees to the placement agents in
connection therewith), the costs and expenses (including reasonable counsel
fees and expenses) of the Institutional Trustee and the Administrators, the
costs and expenses relating to the operation of the Trust, including, without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, Paying Agents, Registrars, Transfer Agents, duplicating,
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets and the enforcement by the Institutional Trustee of
the rights of the Holders (for purposes of clarification, this Section 3.3(b)
does not contemplate the payment by the Sponsor of acceptance or annual
administration fees owing to the Trustees pursuant to the services to be
provided by the Trustees under this Declaration or the fees and expenses of the
Trustees’ counsel in connection with the closing of the transactions
contemplated by this Declaration); and

(c)           pay any and all taxes (other than
United States withholding taxes attributable to the Trust or its assets) and
all liabilities, costs and expenses with respect to such taxes of the Trust.

The Sponsor’s obligations
under this Section 3.3 shall be for the benefit of, and shall be
enforceable by, any Person to whom such debts, obligations, costs, expenses and
taxes are owed (a “Creditor”) whether or not such Creditor has received
notice hereof.  Any such Creditor may
enforce the Sponsor’s obligations under this Section 3.3 directly against
the Sponsor and the Sponsor irrevocably waives any right or remedy to require
that any such Creditor take any action against the Trust or any other Person
before proceeding against the Sponsor. 
The Sponsor agrees to execute such additional agreements as may be
necessary or desirable in order to give full effect to the provisions of this
Section 3.3.

Section 3.4.           Right
to Proceed. The Sponsor acknowledges the rights of
Holders to institute a Direct Action as set forth in Section 2.8(d) hereto.

ARTICLE
IV

INSTITUTIONAL
TRUSTEE AND ADMINISTRATORS

Section 4.1.           Number
of Trustees. The number of Trustees shall initially be
two, and;

(a)           at any time before
the issuance of any Securities, the Sponsor may, by written instrument,
increase or decrease the number of Trustees; and

(b)           after the issuance
of any Securities, the number of Trustees may be increased or decreased by vote
of the Holder of a Majority in liquidation amount of the Common Securities
voting as 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; and there shall always be one Trustee who shall be the Institutional
Trustee, and such Trustee may also serve as Delaware Trustee if it meets the
applicable

 20

requirements,
in which case Section 2.11 shall have no application to such entity in its
capacity as Institutional Trustee.

Section 4.2.           Delaware
Trustee; Eligibility.

(a)           If required by the Statutory Trust
Act, one Trustee (the “Delaware Trustee”) shall be:

(i)            a natural person at
least 21 years of age who is a resident of the State of Delaware; or

(ii)           if not a natural
person, an entity which is organized under the laws of the United States or any
state thereof or the District of Columbia, has its principal place of business
in the State of Delaware, and otherwise meets the requirements of applicable
law, including § 3807 of the Statutory Trust Act.

(b)           The initial Delaware Trustee shall be
Wilmington Trust Company.

Section 4.3.           Institutional
Trustee; Eligibility.

(a)           There shall at all times be one
Trustee which shall:

(i)            not be an Affiliate
of the Sponsor;

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

(iii)          be a banking
corporation or trust company organized and doing business under the laws of the
United States of America or any state thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000.00), and subject to supervision or examination by Federal, state,
or District of Columbia authority.  If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 4.3(a)(iii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.

(b)           If at any time the Institutional
Trustee shall cease to be eligible to so act under Section 4.3(a), the
Institutional Trustee shall immediately resign in the manner and with the
effect set forth in Section 4.5.

(c)           If the Institutional Trustee has or
shall acquire any “conflicting interest” within the meaning of Section 310(b)
of the Trust Indenture Act of 1939, as amended, the Institutional Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to this Declaration.

(d)           The initial Institutional Trustee
shall be Wilmington Trust Company.

Section 4.4.           Administrators.
Each Administrator shall be a U.S. Person, 21 years of
age or older and authorized to bind the Sponsor.  The initial Administrators shall be
Scott A. Montgomery and David R. Brown.  There shall at all times be at least one
Administrator.  Except where a
requirement for action by a specific number of Administrators is expressly set
forth in this Declaration and except with respect to any action the taking of
which is the subject of a meeting of the Administrators, any action required or
permitted to be taken by the Administrators may be taken by, and any power of
the Administrators may be exercised by, or with the consent of, any one such
Administrator.

 21
 

Section 4.5.           Appointment,
Removal and Resignation of Trustees and Administrators.

(a)           No resignation or removal of any
Trustee (the “Relevant Trustee”) and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of this Section 4.5.

(b)           Subject to Section 4.5(a), a Relevant
Trustee may resign at any time by giving written notice thereof to the Holders
of the Securities and by appointing a successor Relevant Trustee.  Upon the resignation of the Institutional
Trustee, the Institutional Trustee shall appoint a successor by requesting from
at least three Persons meeting the eligibility requirements their expenses and
charges to serve as the successor Institutional Trustee on a form provided by
the Administrators, and selecting the Person who agrees to the lowest expense
and charges (the “Successor Institutional Trustee”).  If the instrument of acceptance by the
successor Relevant Trustee required by this Section 4.5 shall not have been
delivered to the Relevant Trustee within 60 days after the giving of such
notice of resignation or delivery of the instrument of removal, the Relevant
Trustee may petition, at the expense of the Trust, any federal, state or
District of Columbia court of competent jurisdiction for the appointment of a
successor Relevant Trustee.  Such court
may thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Relevant Trustee. The Institutional Trustee shall have no liability
for the selection of such successor pursuant to this Section 4.5.

(c)           Unless an Event of Default shall have
occurred and be continuing, any Trustee may be removed at any time by an act of
the Holders of a Majority in liquidation amount of the Common Securities.  If any Trustee shall be so removed, the
Holders of the Common Securities, by act of the Holders of a Majority in
liquidation amount of the Common Securities delivered to the Relevant Trustee,
shall promptly appoint a successor Relevant Trustee, and such successor Trustee
shall comply with the applicable requirements of this Section 4.5.  If an Event of Default shall have occurred
and be continuing, the Institutional Trustee or the Delaware Trustee, or both
of them, may be removed by the act of the Holders of a Majority in liquidation
amount of the Capital Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust).  If any Trustee shall be so removed, the
Holders of Capital Securities, by act of the Holders of a Majority in
liquidation amount of the Capital Securities then outstanding delivered to the
Relevant Trustee, shall promptly appoint a successor Relevant Trustee or
Trustees, and such successor Trustee shall comply with the applicable
requirements of this Section 4.5.  If no
successor Relevant Trustee shall have been so appointed by the Holders of a
Majority in liquidation amount of the Capital Securities and accepted appointment
in the manner required by this Section 4.5 within 30 days after delivery of an
instrument of removal, the Relevant Trustee or any Holder who has been a Holder
of the Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any federal, state or District of Columbia
court of competent jurisdiction for the appointment of a successor Relevant
Trustee.  Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a successor Relevant
Trustee or Trustees.

(d)           The Institutional Trustee shall give
notice of each resignation and each removal of a Trustee and each appointment
of a successor Trustee to all Holders and to the Sponsor.  Each notice shall include the name of the
successor Relevant Trustee and the address of its Corporate Trust Office if it
is the Institutional Trustee.

(e)           Notwithstanding the foregoing or any
other provision of this Declaration, in the event a Delaware Trustee who is a
natural person dies or is adjudged by a court to have become incompetent or
incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by the Institutional Trustee following the procedures in this
Section 4.5 (with the successor being a Person who satisfies the eligibility
requirement for a Delaware Trustee set forth in this Declaration) (the “Successor
Delaware Trustee”).

 22
 

(f)            In case of the appointment hereunder
of a successor Relevant Trustee, the retiring Relevant Trustee and each
successor Relevant Trustee with respect to the Securities shall execute and
deliver an amendment hereto wherein each successor Relevant Trustee shall
accept such appointment and which (a) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in,
each successor Relevant Trustee all the rights, powers, trusts and duties of
the retiring Relevant Trustee with respect to the Securities and the Trust and
(b) shall add to or change any of the provisions of this Declaration as
shall be necessary to provide for or facilitate the administration of the Trust
by more than one Relevant Trustee, it being understood that nothing herein or
in such amendment shall constitute such Relevant Trustees co-trustees and upon
the execution and delivery of such amendment the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee; but, on request of the Trust or any successor
Relevant Trustee, such retiring Relevant Trustee shall duly assign, transfer
and deliver to such successor Relevant Trustee all Trust Property, all proceeds
thereof and money held by such retiring Relevant Trustee hereunder with respect
to the Securities and the Trust subject to the payment of all unpaid fees,
expenses and indemnities of such retiring Relevant Trustee.

(g)           No Institutional Trustee or Delaware
Trustee shall be liable for the acts or omissions to act of any Successor
Institutional Trustee or Successor Delaware Trustee, as the case may be.

(h)           The Holders of the Capital Securities
will have no right to vote to appoint, remove or replace the Administrators,
which voting rights are vested exclusively in the Holders of the Common
Securities.

(i)            Any successor Delaware Trustee shall
file an amendment to the Certificate of Trust with the Secretary of State of
the State of Delaware identifying the name and principal place of business of
such Delaware Trustee in the State of Delaware.

Section 4.6.           Vacancies
Among Trustees. If a Trustee ceases to hold office
for any reason and the number of Trustees is not reduced pursuant to Section
4.1, a vacancy shall occur.  A resolution
certifying the existence of such vacancy by the Trustees or, if there are more
than two, a majority of the Trustees, shall be conclusive evidence of the
existence of such vacancy.  The vacancy
shall be filled with a Trustee appointed in accordance with Section 4.5.

Section 4.7.           Effect
of Vacancies. The death, resignation, retirement,
removal, bankruptcy, dissolution, liquidation, incompetence or incapacity to
perform the duties of a Trustee shall not operate to dissolve, terminate or
annul the Trust or terminate this Declaration. 
Whenever a vacancy in the number of Trustees shall occur, until such
vacancy is filled by the appointment of a Trustee in accordance with Section
4.5, the Institutional Trustee shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration.

Section 4.8.           Meetings
of the Trustees and the Administrators. Meetings
of the Administrators shall be held from time to time upon the call of an
Administrator.  Regular meetings of the
Administrators may be held in person in the United States or by telephone, at a
place (if applicable) and time fixed by resolution of the Administrators.  Notice of any in-person meetings of the
Trustees with the Administrators or meetings of the Administrators shall be
hand delivered or otherwise delivered in writing (including by facsimile, with
a hard copy by overnight courier) not less than 48 hours before such
meeting.  Notice of any telephonic
meetings of the Trustees with the Administrators or meetings of the
Administrators or any committee thereof shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting.  Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting.  The presence (whether in person or by
telephone) of a Trustee or an Administrator, as the case may be, at a

 23
 

meeting shall
constitute a waiver of notice of such meeting except where the Trustee or an
Administrator, as the case may be, attends a meeting for the express purpose of
objecting to the transaction of any activity on the grounds that the meeting
has not been lawfully called or convened. 
Unless provided otherwise in this Declaration, any action of the
Trustees or the Administrators, as the case may be, may be taken at a meeting
by vote of a majority of the Trustees or the Administrators present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Trustees or the Administrators.  Meetings of the Trustees and the
Administrators together shall be held from time to time upon the call of any
Trustee or an Administrator.

Section 4.9.           Delegation
of Power.

(a)           Any Administrator may, by power of
attorney consistent with applicable law, delegate to any other natural person
over the age of 21 that is a U.S. Person his or her power for the purpose of
executing any documents contemplated in Section 2.6; and

(b)           the Administrators shall have power
to delegate from time to time to such of their number the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Administrators or otherwise as the Administrators may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.

Section 4.10.        Conversion,
Consolidation or Succession to Business.  Any Person into which the Institutional
Trustee or the Delaware Trustee may be merged or converted or with which it may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Institutional Trustee or the Delaware Trustee shall be
the successor of the Institutional Trustee or the Delaware Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article and, provided, further, that such Person shall file an
amendment to the Certificate of Trust with the Secretary of State of the State
of Delaware as contemplated in Section 4.5(i).

ARTICLE V

DISTRIBUTIONS

Section 5.1.           Distributions.
Holders shall receive Distributions in accordance with the applicable terms of
the relevant Holder’s Securities. Distributions shall be made on the Capital
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms.  If and
to the extent that the Debenture Issuer makes a payment of Interest or any
principal on the Debentures held by the Institutional Trustee, the
Institutional Trustee shall and is directed, to the extent funds are available
for that purpose, to make a distribution (a “Distribution”) of such
amounts to Holders.

ARTICLE
VI

ISSUANCE
OF SECURITIES

Section 6.1.           General
Provisions Regarding Securities.

(a)           The Administrators shall, on behalf
of the Trust, issue one series of capital securities substantially in the form
of Exhibit A-1 representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I and one series
of common securities representing

 24
 

undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Annex I.  The Trust shall issue no
securities or other interests in the assets of the Trust other than the Capital
Securities and the Common Securities. 
The Capital Securities rank pari passu to,
and payment 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
Holders of the Common Securities to payment in respect of Distributions and payments
upon liquidation, redemption and otherwise are subordinated to the rights to
payment of the Holders of the Capital Securities as set forth in Annex I.

(b)           The Certificates shall be signed on
behalf of the Trust by one or more Administrators. Such signature shall be the
facsimile or manual signature of any Administrator.  In case any Administrator of the Trust who
shall have signed any of the Securities shall cease to be such Administrator
before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Administrator, and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be an Administrator of the Trust, although at
the date of the execution and delivery of the Declaration any such person was
not such an Administrator.  A Capital
Security shall not be valid until authenticated by the facsimile or manual
signature of an Authorized Officer of the Institutional Trustee.  Such signature shall be conclusive evidence
that the Capital Security has been authenticated under this Declaration.  Upon written order of the Trust signed by one
Administrator, the Institutional Trustee shall authenticate the Capital
Securities for original issue.  The
Institutional Trustee may appoint an authenticating agent that is a U.S. Person
acceptable to the Trust to authenticate the Capital Securities.  A Common Security need not be so
authenticated.

(c)           The Capital Securities issued to QIBs
shall be, except as provided in Section 6.4, Book-Entry Capital Securities
issued in the form of one or more Global Capital Securities registered in the
name of the Depositary or its nominee and deposited with the Depositary or a
custodian for the Depositary for credit by the Depositary to the respective
accounts of the Depositary Participants thereof (or such other accounts as they
may direct).  The Capital Securities
issued to a Person other than a QIB shall be issued in the form of a Definitive
Capital Securities Certificate.

(d)           The consideration received by the
Trust for the issuance of the Securities shall constitute a contribution to the
capital of the Trust and shall not constitute a loan to the Trust.

(e)           Upon issuance of the Securities as
provided in this Declaration, the Securities so issued shall be deemed to be
validly issued, fully paid and, except as provided in Section 9.1(b) with
respect to the Common Securities, non-assessable.

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

Section 6.2.           Paying
Agent, Transfer Agent and Registrar. The Trust
shall maintain in Wilmington, Delaware, an office or agency where the Capital
Securities may be presented for payment (“Paying Agent”), and an office
or agency where Securities may be presented for registration of transfer or
exchange (the “Transfer Agent”). 
The Trust shall keep or cause to be kept at such office or agency a
register for the purpose of registering Securities, transfers and exchanges of
Securities, such register to be held by a registrar (the “Registrar”).  The Administrators may appoint the Paying
Agent, the Registrar and the Transfer Agent and may appoint one or more
additional Paying Agents or one or more co-Registrars, or one or more
co-Transfer Agents in such other locations as it shall determine.  The term “Paying Agent” includes any
additional paying agent, the term “Registrar” includes any additional
registrar or co-Registrar and the term “Transfer Agent” includes any
additional transfer agent.  The
Administrators may change any Paying Agent, Transfer Agent or Registrar at any
time without prior notice to any Holder.

 25
 

The
Administrators shall notify the Institutional Trustee of the name and address
of any Paying Agent, Transfer Agent and Registrar not a party to this
Declaration.  The Administrators hereby
initially appoint the Institutional Trustee to act as Paying Agent, Transfer
Agent and Registrar for the Capital Securities and the Common Securities.  The Institutional Trustee or any of its
Affiliates in the United States may act as Paying Agent, Transfer Agent or
Registrar.

Section 6.3.           Form
and Dating. The Capital Securities and the
Institutional Trustee’s certificate of authentication thereon shall be
substantially in the form of Exhibit A-1, and the Common Securities shall
be substantially in the form of Exhibit A-2, each of which is hereby
incorporated in and expressly made a part of this Declaration.  Certificates may be typed, printed,
lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrators, as conclusively evidenced by their
execution thereof.  The Securities may
have letters, numbers, notations or other marks of identification or
designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Sponsor).  The Trust at the direction of
the Sponsor shall furnish any such legend not contained in Exhibit A-1 to
the Institutional Trustee in writing. 
Each Capital Security shall be dated on or before the date of its
authentication.  The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the
extent applicable, the Institutional Trustee, the Delaware Trustee, the
Administrators and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound thereby.  Capital Securities will be issued only in
blocks having a stated liquidation amount of not less than $100,000.00 and any
multiple of $1,000.00 in excess thereof.

The Capital Securities
are being offered and sold by the Trust pursuant to the Placement Agreement in
definitive, registered form without coupons and with the Restricted Securities
Legend.

Section 6.4.           Book-Entry
Capital Securities.

(a)           A Global Capital Security may be
exchanged, in whole or in part, for Definitive Capital Securities Certificates
registered in the names of Owners only if such exchange complies with Article
VIII and (i) the Depositary advises the Administrators and the Institutional
Trustee in writing that the Depositary is no longer willing or able to properly
discharge its responsibilities with respect to the Global Capital Security, and
no qualified successor is appointed by the Administrators within ninety (90)
days of receipt of such notice, (ii) the Depositary ceases to be a clearing
agency registered under the Exchange Act and the Administrators fail to appoint
a qualified successor within ninety (90) days of obtaining knowledge of such
event, (iii) the Administrators at their option advise the Institutional
Trustee in writing that the Trust elects to terminate the book-entry system
through the Depositary, or (iv) an Indenture Event of Default has occurred and
is continuing.  Upon the occurrence of
any event specified in clause (i), (ii), (iii) or (iv) above, the
Administrators shall notify the Depositary and instruct the Depositary to
notify all Owners of Book-Entry Capital Securities and the Institutional
Trustee of the occurrence of such event and of the availability of Definitive
Capital Securities Certificates to Owners of the Capital Securities requesting
the same.  Upon the issuance of
Definitive Capital Securities Certificates, the Administrators and the
Institutional Trustee shall recognize the Holders of the Definitive Capital
Securities Certificates as Holders. 
Notwithstanding the foregoing, if an Owner of a beneficial interest in a
Global Capital Security wishes at any time to transfer an interest in such
Global Capital Security to a Person other than a QIB, such transfer shall be
effected, subject to the Applicable Depositary Procedures, in accordance with the
provisions of this Section 6.4 and Article VIII, and the transferee shall
receive a Definitive Capital Securities Certificate in connection with such
transfer.  A holder of a Definitive
Capital Securities Certificate that is a QIB may upon request, and in
accordance with the provisions of this Section 6.4 and

 26
 

Article VIII, exchange
such Definitive Capital Securities Certificate for a beneficial interest in a
Global Capital Security.

(b)           If any Global Capital Security is to
be exchanged for Definitive Capital Securities Certificates or canceled in
part, or if any Definitive Capital Securities Certificate is to be exchanged in
whole or in part for any Global Capital Security, then either (i) such Global
Capital Security shall be so surrendered for exchange or cancellation as
provided in this Section 6.4 and Article VIII or (ii) the aggregate liquidation
amount represented by such Global Capital Security shall be reduced, subject to
Section 6.3, or increased by an amount equal to the liquidation amount represented
by that portion of the Global Capital Security to be so exchanged or canceled,
or equal to the liquidation amount represented by such Definitive Capital
Securities Certificates to be so exchanged for any Global Capital Security, as
the case may be, by means of an appropriate adjustment made on the records of
the Registrar, whereupon the Institutional Trustee, in accordance with the
Applicable Depositary Procedures, shall instruct the Depositary or its
authorized representative to make a corresponding adjustment to its records.
Upon any such surrender to the Administrators or the Registrar of any Global
Capital Security or Securities by the Depositary, accompanied by registration
instructions, the Administrators, or any one of them, shall execute the Definitive
Capital Securities Certificates in accordance with the instructions of the
Depositary.  None of the Registrar,
Administrators, or the Institutional Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be fully
protected in relying on, such instructions.

(c)           Every Definitive Capital Securities
Certificate executed and delivered upon registration or transfer of, or in
exchange for or in lieu of, a Global Capital Security or any portion thereof shall
be executed and delivered in the form of, and shall be, a Global Capital
Security, unless such Definitive Capital Securities Certificate is registered
in the name of a Person other than the Depositary for such Global Capital
Security or a nominee thereof.

(d)           The Depositary or its nominee, as
registered owner of a Global Capital Security, shall be the Holder of such
Global Capital Security for all purposes under this Declaration and the Global
Capital Security, and Owners with respect to a Global Capital Security shall
hold such interests pursuant to the Applicable Depositary Procedures.  The Registrar, the Administrators and the
Institutional Trustee shall be entitled to deal with the Depositary for all
purposes of this Declaration relating to the Global Capital Securities
(including the payment of the liquidation amount of and Distributions on the
Book-Entry Capital Securities represented thereby and the giving of
instructions or directions by Owners of Book-Entry Capital Securities
represented thereby and the giving of notices) as the sole Holder of the
Book-Entry Capital Securities represented thereby and shall have no obligations
to the Owners thereof.  None of the
Administrators, the Institutional Trustee nor the Registrar shall have any
liability in respect of any transfers effected by the Depositary.

(e)           The rights of the Owners of the
Book-Entry Capital Securities shall be exercised only through the Depositary
and shall be limited to those established by law, the Applicable Depositary
Procedures and agreements between such Owners and the Depositary and/or the
Depositary Participants; provided, however, solely for the purpose of
determining whether the Holders of the requisite amount of Capital Securities
have voted on any matter provided for in this Declaration, to the extent that
Capital Securities are represented by a Global Capital Security, the
Administrators and the Institutional Trustee may conclusively rely on, and
shall be fully protected in relying on, any written instrument (including a proxy)
delivered to the Institutional Trustee by the Depositary setting forth the
Owners’ votes or assigning the right to vote on any matter to any other Persons
either in whole or in part.  To the
extent that Capital Securities are represented by a Global Capital Security,
the initial Depositary will make book-entry transfers among the Depositary
Participants and receive and transmit payments on the Capital Securities that
are represented by a Global Capital Security to such Depositary Participants,
and none of

 27
 

the Sponsor, the
Administrators or the Institutional Trustee shall have any responsibility or
obligation with respect thereto.

(f)            To the extent that a notice or other
communication to the Holders is required under this Declaration, for so long as
Capital Securities are represented by a Global Capital Security, the
Administrator and the Institutional Trustee shall give all such notices and
communications to the Depositary, and shall have no obligations to the Owners.

Section 6.5.           Mutilated,
Destroyed, Lost or Stolen Certificates.

If:

(a)           any mutilated Certificates should be
surrendered to the Registrar, or if the Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate; and

(b)           there shall be delivered to the
Registrar, the Administrators and the Institutional Trustee such security or
indemnity as may be required by them to keep each of them harmless;

then, in the absence of
notice that such Certificate shall have been acquired by a protected purchaser,
an Administrator on behalf of the Trust shall execute (and in the case of a
Capital Security Certificate, the Institutional Trustee shall authenticate) and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination.  In connection with the issuance of any new
Certificate under this Section 6.4, the Registrar or the Administrators may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.  Any duplicate Certificate issued pursuant to
this Section shall constitute conclusive evidence of an ownership interest in
the relevant Securities, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.

Section 6.6.           Temporary
Securities. Until definitive Securities are ready
for delivery, the Administrators may prepare and, in the case of the Capital
Securities, the Institutional Trustee shall authenticate, temporary Securities.  Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the
Administrators consider appropriate for temporary Securities.  Without unreasonable delay, the
Administrators shall prepare and, in the case of the Capital Securities, the
Institutional Trustee shall authenticate, definitive Securities in exchange for
temporary Securities.

Section 6.7.           Cancellation.
The Administrators at any time may deliver Securities to the Institutional
Trustee for cancellation.  The Registrar
shall forward to the Institutional Trustee any Securities surrendered to it for
registration of transfer, redemption or payment.  The Institutional Trustee shall promptly
cancel all Securities surrendered for registration of transfer, payment,
replacement or cancellation and shall dispose of such canceled Securities as
the Administrators direct.  The
Administrators may not issue new Securities to replace Securities that have
been paid or that have been delivered to the Institutional Trustee for
cancellation.

Section 6.8.           CUSIP
Numbers. The Trust in issuing the Securities may
use “CUSIP” numbers (if then generally in use), and, if so, the Institutional
Trustee shall use CUSIP numbers in notice of redemption as a convenience to Holders;
provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption and that
identification numbers printed on the Securities and any such redemption shall
not be affected by any defect in or omission of such numbers.  The Trust shall promptly notify the
Institutional Trustee in writing of any change in the CUSIP numbers.

 28
 

Section 6.9.           Rights
of Holders; Waivers of Past Defaults. 

(a)           The
legal title to the Trust Property is vested exclusively in the Institutional
Trustee (in its capacity as such) in accordance with Section 2.5, and the
Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Trust conferred by their Securities
and they shall have no right to call for any partition or division of property,
profits or rights of the Trust except as described below.  The Securities shall be personal property
giving only the rights specifically set forth therein and in this
Declaration.  The Securities shall have
no preemptive or similar rights.

(b)           For so long as any Capital Securities
remain outstanding, if upon an Acceleration Event of Default, the Debenture
Trustee fails or the holders of not less than 25% in principal amount of the
outstanding Debentures fail to declare the principal of all of the Debentures
to be immediately due and payable, the Holders of a Majority in liquidation
amount of the Capital Securities then outstanding shall have the right to make
such declaration by a notice in writing to the Institutional Trustee, the
Sponsor and the Debenture Trustee.

At any time after a
declaration of acceleration with respect to the Debentures has been made and
before a judgment or decree for payment of the money due has been obtained by
the Debenture Trustee as provided in the Indenture, if the Institutional
Trustee, subject to the provisions hereof, fails to annul any such declaration
and waive such default, the Holders of a Majority in liquidation amount of the
Capital Securities, by written notice to the Institutional Trustee, the Sponsor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:

(i)            the Debenture
Issuer has paid or deposited with the Debenture Trustee a sum sufficient to pay

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

(B)           any accrued
Additional Interest on all of the Debentures,

(C)           the principal of
(and premium, if any, on) any Debentures that have become due otherwise than by
such declaration of acceleration and interest and Additional Interest thereon
at the rate borne by the Debentures, and

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

(ii)           all Events of
Default with respect to the Debentures, other than the non-payment of the
principal of the Debentures that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.7 of the Indenture.

The Holders of at least a
Majority in liquidation amount of the Capital Securities may, on behalf of the
Holders of all the Capital Securities, waive any past default under the
Indenture or any Indenture Event of Default, except a default or Indenture
Event of Default in the payment of principal or interest on the Debentures
(unless such default or Indenture Event of Default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee)
or a default under the Indenture or an Indenture Event of Default in respect of
a covenant or provision that under the Indenture cannot 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 right consequent thereon.

 29
 

Upon receipt by the
Institutional Trustee of written notice declaring such an acceleration, or
rescission and annulment thereof, by Holders of any part of the Capital
Securities, a record date shall be established for determining Holders of
outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Institutional Trustee
receives such notice.  The Holders on
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 remain Holders
after such record date; provided, that unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day that is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be
canceled and of no further effect. 
Nothing in this paragraph shall prevent a Holder, or a proxy of a
Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice that has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 6.8.

(c)           Except as otherwise provided in
paragraphs (a) and (b) of this Section 6.8, the Holders of at least a
Majority in liquidation amount of the Capital Securities may, on behalf of the
Holders of all the Capital Securities, waive any past default or Event of
Default and its consequences.  Upon such
waiver, any such default or Event of Default shall cease to exist, and any
default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.

ARTICLE
VII

DISSOLUTION
AND TERMINATION OF TRUST

Section 7.1.           Dissolution
and Termination of Trust.

(a)           The Trust shall dissolve on the first
to occur of:

(i)            unless earlier
dissolved, on March 15, 2042, the expiration of the term of the Trust;

(ii)           upon a Bankruptcy
Event with respect to the Sponsor, the Trust or the Debenture Issuer;

(iii)          upon the filing of
a certificate of dissolution or its equivalent with respect to the Sponsor
(other than in connection with a merger, consolidation or similar transaction
not prohibited by the Indenture, this Declaration or the Guarantee, as the case
may be) or upon the revocation of the charter of the Sponsor and the expiration
of 90 days after the date of revocation without a reinstatement thereof;

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

(v)           upon the entry of a
decree of judicial dissolution of the Holder of the Common Securities, the
Sponsor, the Trust or the Debenture Issuer;

 30

(vi)                              when
all of the Securities shall have been called for redemption and the amounts
necessary for redemption thereof shall have been paid to the Holders in
accordance with the terms of the Securities; or

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

(b)                                 As
soon as is practicable after the occurrence of an event referred to in Section
7.1(a), and after satisfaction of liabilities to creditors of the Trust as
required by applicable law, including of the Statutory Trust Act, and subject
to the terms set forth in Annex I, the Institutional Trustee shall
terminate the Trust by filing a certificate of cancellation with the Secretary
of State of the State of Delaware.

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

ARTICLE
VIII

TRANSFER OF INTERESTS

Section 8.1.                                General.

(a)                                  Subject
to Section 8.1(c), where Capital Securities are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal number of Capital Securities represented by different certificates, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met.  To permit
registrations of transfer and exchanges, the Trust shall issue and the
Institutional Trustee shall authenticate Capital Securities at the Registrar’s
request.

(b)                                 Upon
issuance of the Common Securities, the Sponsor shall acquire and retain
beneficial and record ownership of the Common Securities and for so long as the
Securities remain outstanding, and to the fullest extent permitted by
applicable law, the Sponsor shall maintain 100% ownership of the Common
Securities; provided, however, that any permitted successor of
the Sponsor, in its capacity as Debenture Issuer, under the Indenture that is a
U.S. Person may succeed to the Sponsor’s ownership of the Common Securities.

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

(d)                                 The
Registrar shall provide for the registration of Securities and of transfers of
Securities, which will be effected without charge but only upon payment (with
such indemnity as the Registrar may require) in respect of any tax or other
governmental charges that may be imposed in relation to it.  Upon surrender for registration of transfer
of any Securities, the Registrar shall cause one or more new Securities of the
same tenor to be issued in the name of the designated transferee or
transferees.  Every Security surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder’s attorney duly authorized in writing.  Each Security surrendered for registration of
transfer shall be canceled by the Institutional Trustee pursuant to Section
6.7.  A transferee of a Security shall be
entitled to the rights and

 31
 

subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Security.  By acceptance of a Security,
each transferee shall be deemed to have agreed to be bound by this Declaration.

(e)                                  The
Trust shall not be required (i) to issue, register the transfer of, or
exchange any Securities during a period beginning at the opening of business
fifteen days before the day of any selection of Securities for redemption
and ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all Holders of the
Securities to be redeemed, or (ii) to register the transfer or exchange of
any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.

Section 8.2.                                Transfer
Procedures and Restrictions.

(a)                                  The
Capital Securities shall bear the Restricted Securities Legend, which shall not
be removed unless there is delivered to the Trust such satisfactory evidence,
which may include an opinion of counsel satisfactory to the Institutional
Trustee, as may be reasonably required by the Trust, that neither the legend
nor the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of the Securities Act.  Upon provision of such satisfactory evidence,
the Institutional Trustee, at the written direction of the Trust, shall
authenticate and deliver Capital Securities that do not bear the legend.

(b)                                 Except
as permitted by Section 8.2(a), each Capital Security shall bear a legend (the “Restricted
Securities Legend”) in substantially the following form and a Capital
Security shall not be transferred except in compliance with such legend, unless
otherwise determined by the Sponsor, upon the advice of counsel expert in
securities law, in accordance with applicable law:

[If the Capital Security is
to be Global Capital Security- THIS CAPITAL SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”) OR A NOMINEE OF
DTC.  THIS CAPITAL SECURITY IS
EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER
THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
DECLARATION, AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF
THIS CAPITAL SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF
DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.

UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC TO FIRST CALIFORNIA CAPITAL TRUST I OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE
& CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY

 32
 

STATE SECURITIES LAWS OR ANY OTHER APPLICABLE
SECURITIES LAW.  NEITHER THIS SECURITY
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.  THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
THIS SECURITY ONLY (A) TO THE SPONSOR OR THE TRUST, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE)
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM
THE SPONSOR OR THE TRUST.  HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF 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” BY
REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN
ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE SECURITIES OR ANY INTEREST THEREIN,
UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE
UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION 96-23,
95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND
HOLDING OF THIS SECURITY IS NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE WITH RESPECT TO SUCH PURCHASE OR HOLDING.  ANY PURCHASER OR HOLDER OF THE SECURITIES OR
ANY INTEREST THEREIN WILL BE DEEMED

 33
 

TO HAVE REPRESENTED BY ITS PURCHASE AND HOLDING
THEREOF THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN WITHIN THE MEANING
OF SECTION 3(3) OF ERISA, OR A PLAN TO WHICH SECTION 4975 OF THE CODE IS
APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY USING 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 SECTION 406 OF ERISA OR SECTION 4975
OF THE CODE FOR WHICH THERE IS NO APPLICABLE STATUTORY OR ADMINISTRATIVE
EXEMPTION.

THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED
ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000.00 (100
SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS THEREOF.  ANY ATTEMPTED TRANSFER OF SECURITIES IN A
BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00 SHALL BE DEEMED TO
BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

(c)                                  To
permit registrations of transfers and exchanges, the Trust shall execute and
the Institutional Trustee shall authenticate Capital Securities at the
Registrar’s request.

(d)                                 Registrations
of transfers or exchanges will be effected without charge, but only upon
payment (with such indemnity as the Registrar or the Sponsor may require) in
respect of any tax or other governmental charge that may be imposed in relation
to it.

(e)                                  All
Capital Securities issued upon any registration of transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Capital
Securities surrendered upon such registration of transfer or exchange.

Section 8.3.                                Deemed
Security Holders. The Trust, the Administrators, the Trustees, the
Paying Agent, the Transfer Agent or the Registrar may treat the Person in whose
name any Certificate shall be registered on the books and records of the Trust
as the sole holder of such Certificate and of the Securities represented by
such Certificate for purposes of receiving Distributions and for all other
purposes whatsoever and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any Person, whether
or not the Trust, the Administrators, the Trustees, the Paying Agent, the
Transfer Agent or the Registrar shall have actual or other notice thereof.

ARTICLE
IX

LIMITATION
OF LIABILITY OF

HOLDERS OF SECURITIES, INSTITUTIONAL TRUSTEE OR OTHERS

Section 9.1.                                Liability.

(a)                                  Except
as expressly set forth in this Declaration, the Guarantee and the terms of the
Securities, the Sponsor shall not be:

 34
 

(i)                                     personally
liable for the return of any portion of the capital contributions (or any
return thereon) of the Holders of the Securities which shall be made solely
from assets of the Trust; or

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

(b)                                 The
Holder of the Common Securities shall be liable for all of the debts 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 the Statutory Trust Act, the Holders of the Capital Securities shall be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.

Section 9.2.                                Exculpation.

(a)                                  No
Indemnified Person shall be liable, responsible or accountable in damages or
otherwise to the Trust or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person’s negligence or willful
misconduct with respect to such acts or omissions.

(b)                                 An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Trust and upon such information, opinions, reports or statements
presented to the Trust by any Person as to matters the Indemnified Person
reasonably believes are within such other Person’s professional or expert
competence and, if selected by such Indemnified Person, has been selected by
such Indemnified Person with reasonable 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 of assets from which Distributions to
Holders of Securities might properly be paid.

Section 9.3.                                Fiduciary
Duty.

(a)                                  To
the extent that, at law or in equity, an Indemnified Person has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or
to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration.  The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of the Indemnified Person.

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

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

 35
 

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

Section 9.4.                                Indemnification.

(a)                                  The
Sponsor shall indemnify, to the full extent permitted by law, any Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Trust) arising out of or in connection with the acceptance or
administration of this Declaration by reason of the fact that he is or was an
Indemnified Person against expenses (including reasonable attorneys’ fees and
expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct was
unlawful.  The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

(b)                                 The
Sponsor shall indemnify, to the full extent permitted by law, any Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the Trust
to procure a judgment in its favor arising out of or in connection with the
acceptance or administration of this Declaration by reason of the fact that he
is or was an Indemnified Person against expenses (including reasonable
attorneys’ fees and expenses) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust; provided, however, that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such Indemnified Person shall have been adjudged to be liable to the
Trust unless and only to the extent that the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such court
shall deem proper.

(c)                                  To
the extent that an Indemnified Person shall be successful on the merits or
otherwise (including dismissal of an action without prejudice or the settlement
of an action without admission of liability) in defense of any action, suit or
proceeding referred to in paragraphs (a) and (b) of this Section 9.4, or
in defense of any claim, issue or matter therein, he shall be indemnified, to
the full extent permitted by law, against expenses (including attorneys’ fees
and expenses) actually and reasonably incurred by him in connection therewith.

(d)                                 Any
indemnification of an Administrator under paragraphs (a) and (b) of this
Section 9.4 (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of
the Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (a) and (b).  Such determination shall be made (i) by
the Administrators by a majority vote of a Quorum consisting of such Administrators
who were not parties to such action, suit or proceeding, (ii) if such a
Quorum is not obtainable, or, even if obtainable, if a Quorum of disinterested
Administrators so directs, by independent legal counsel in a written opinion,
or (iii) by the Common Security Holder of the Trust.

(e)                                  To
the fullest extent permitted by law, expenses (including reasonable attorneys’
fees and expenses) incurred by an Indemnified Person in defending a civil,
criminal, administrative or

 36
 

investigative
action, suit or proceeding referred to in paragraphs (a) and (b) of this
Section 9.4 shall be paid by the Sponsor in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on behalf
of such Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 9.4. 
Notwithstanding the foregoing, no advance shall be made by the Sponsor
if a determination is reasonably and promptly made (i) by the
Administrators by a majority vote of a Quorum of disinterested Administrators,
(ii) if such a Quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Administrators so directs, by independent legal counsel
in a written opinion or (iii) by the Common Security Holder of the Trust,
that, based upon the facts known to the Administrators, counsel or the Common
Security Holder at the time such determination is made, such Indemnified Person
acted in bad faith or in a manner that such Indemnified Person did not believe
to be in the best interests of the Trust, or, with respect to any criminal
proceeding, that such Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful.  In no
event shall any advance be made in instances where the Administrators,
independent legal counsel or the Common Security Holder reasonably determine
that such Indemnified Person deliberately breached his duty to the Trust or its
Common or Capital Security Holders.

(f)                                    The
Trustees, at the sole cost and expense of the Sponsor, retain the right to
representation by counsel of their own choosing in any action, suit or any
other proceeding for which they are indemnified under paragraphs (a) and
(b) of this Section 9.4, without affecting their right to indemnification hereunder
or waiving any rights afforded to it under this Declaration or applicable law.

(g)                                 The
indemnification and advancement of expenses provided by, or granted pursuant
to, the other paragraphs of this Section 9.4 shall not be deemed exclusive of
any other rights to which those seeking indemnification and advancement of
expenses may be entitled under any agreement, vote of stockholders or
disinterested directors of the Sponsor or Capital Security Holders of the Trust
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. 
All rights to indemnification under this Section 9.4 shall be
deemed to be provided by a contract between the Sponsor and each Indemnified
Person who serves in such capacity at any time while this Section 9.4 is in
effect.  Any repeal or modification of
this Section 9.4 shall not affect any rights or obligations then existing.

(h)                                 The
Sponsor or the Trust may purchase and maintain insurance on behalf of any
Person who is or was an Indemnified Person against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Sponsor would have the power to indemnify
him against such liability under the provisions of this Section 9.4.

(i)                                     For
purposes of this Section 9.4, references to “the Trust” shall include, in
addition to the resulting or surviving entity, any constituent entity
(including any constituent of a constituent) absorbed in a consolidation or
merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of
such constituent entity as a director, trustee, officer, employee or agent of
another entity, shall stand in the same position under the provisions of this
Section 9.4 with respect to the resulting or surviving entity as he would have
with respect to such constituent entity if its separate existence had
continued.

(j)                                     The
indemnification and advancement of expenses provided by, or granted pursuant
to, this Section 9.4 shall, unless otherwise provided when authorized or
ratified, (i) continue as to a Person who has ceased to be an Indemnified
Person and shall inure to the benefit of the heirs, executors and administrators
of such a Person; and (ii) survive the termination or expiration of this
Declaration or the earlier removal or resignation of an Indemnified Person.

 37
 

Section 9.5.                                Outside
Businesses. Any Covered Person, the Sponsor, the Delaware Trustee and
the Institutional Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom, and
the pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper.  None of any Covered Person, the Sponsor, the
Delaware Trustee or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such
opportunity is 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
Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. 
Any Covered Person, the Delaware Trustee and the Institutional Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders 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 all services
rendered by them hereunder as the parties shall agree from time to time (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust); and

(b)                                 except
as otherwise expressly provided herein, to reimburse the Trustees upon request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustees in accordance with any provision of this Declaration (including the
reasonable compensation and the expenses and disbursements of their respective
agents and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, bad faith or willful misconduct.

For purposes of
clarification, this Section 9.6 does not contemplate the payment by the
Sponsor of acceptance or annual administration fees owing to the Trustees under
this Declaration or the fees and expenses of the Trustees’ counsel in
connection with the closing of the transactions contemplated by this
Declaration.

The provisions of this
Section 9.6 shall survive the dissolution of the Trust and the termination of
this Declaration and the removal or resignation of any Trustee.

No Trustee may claim any
lien or charge on any property of the Trust as a result of any amount due
pursuant to this Section 9.6.

ARTICLE X

ACCOUNTING

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

Section 10.2.                         Certain
Accounting Matters.

(a)                                  At
all times during the existence of the Trust, the Administrators shall keep, or
cause to be kept at the principal office of the Trust in the United States, as
defined for purposes of Treasury Regulations section 301.7701-7, full books of
account, records and supporting documents, which shall reflect in reasonable
detail each transaction of the Trust. 
The books of account shall be maintained, at the

 38
 

Sponsor’s
expense, in accordance with generally accepted accounting principles,
consistently applied.  The books of
account and the records of the Trust shall be examined by and reported upon
(either separately or as part of the Sponsor’s regularly prepared consolidated
financial report) as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrators.

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

(c)                                  The
Administrators, at the Sponsor’s expense, shall cause to be duly prepared at
the principal office of the Sponsor in the United States, as ‘United States’ is
defined in Section 7701(a)(9) of the Code (or at the principal office of
the Trust if the Sponsor has no such principal office in the United States),
and filed an annual United States federal income tax return on a Form 1041 or
such other form required by United States federal income tax law, and any other
annual income tax returns required to be filed by the Administrators on behalf
of the Trust with any state or local taxing authority.

Section 10.3.                         Banking.
The Trust shall maintain in the United States, as defined for purposes of
Treasury Regulations section 301.7701-7, one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that
all payments of funds in respect of the Debentures held by the Institutional
Trustee shall be made directly to the Property Account and no other funds of
the Trust shall be deposited in the Property Account.  The sole signatories for such accounts
(including the Property Account) shall be designated by the Institutional Trustee.

Section 10.4.                         Withholding.
The Institutional Trustee or any Paying Agent and the Administrators shall
comply with all withholding requirements under United States federal, state and
local law.  The Institutional Trustee or
any Paying Agent shall request, and each Holder shall provide to the
Institutional Trustee or any Paying Agent, such forms or certificates as are
necessary to establish an exemption from withholding with respect to the
Holder, and any representations and forms as shall reasonably be requested by
the Institutional Trustee or any Paying Agent to assist it in determining the
extent of, and in fulfilling, its withholding obligations.  The Administrators shall file required forms
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
the Holder to applicable jurisdictions. 
To the extent that the Institutional Trustee or any Paying Agent is
required to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder, the amount withheld shall be deemed
to be a Distribution in the amount of the withholding to the Holder.  In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction.  If the amount required to be withheld was not
withheld from actual Distributions made, the Institutional Trustee or any
Paying Agent may reduce subsequent Distributions 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 any applicable terms of the
Securities, this Declaration may only be amended by a written instrument
approved and executed (i) by

 39
 

the
Institutional Trustee, or (ii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Delaware Trustee, by the
Delaware Trustee.

(b)                                 Notwithstanding
any other provision of this Article XI, an amendment may be made, and any
such purported amendment shall be valid and effective only if:

(i)                                     the Institutional
Trustee shall have first received

(A) an
Officers’ Certificate from each of the Trust and the Sponsor that such
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 this Declaration (including the
terms of the Securities); and

(ii)                                  the result of such
amendment would not be to

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

(B) cause the
Trust to be deemed to be an Investment Company required to be registered under
the Investment Company Act.

(c)                                  Except
as provided in Section 11.1(d), (e) or (h), no amendment shall be made, and any
such purported amendment shall be void and ineffective, unless the Holders of a
Majority in liquidation amount of the Capital Securities shall have consented
to such amendment.

(d)                                 In
addition to and notwithstanding any other provision in this Declaration,
without the consent of each affected Holder, this Declaration may not be
amended to (i) change the amount or timing of any Distribution on the
Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Securities as of a specified date or
change any conversion or exchange provisions or (ii) restrict the right of
a Holder to institute suit for the enforcement of any such payment on or after
such date.

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

(f)                                    Article III
shall not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities.

(g)                                 The
rights of the Holders of the Capital Securities under Article IV to
appoint and remove Trustees shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Capital Securities.

(h)                                 This
Declaration may be amended by the Institutional Trustee and the Holders of a
Majority in liquidation amount of the Common Securities without the consent of
the Holders of the Capital Securities to:

(i)                                     cure any
ambiguity;

(ii)                                  correct
or supplement any provision in this Declaration that may be defective or
inconsistent with any other provision of this Declaration;

 40

(iii)          add to the
covenants, restrictions or obligations of the Sponsor; or

(iv)          modify, eliminate or
add to any provision of this Declaration to such extent as may be necessary to
ensure that the Trust will be classified for United States federal income tax
purposes at all times as a grantor trust and will not be required to register
as an Investment Company (including without limitation to conform to any change
in Rule 3a-5, Rule 3a-7 or any other applicable rule under the
Investment Company Act or written change in interpretation or application
thereof by any legislative body, court, government agency or regulatory
authority) which amendment does not have a material adverse effect on the
rights, preferences or privileges of the Holders of Securities;

provided,
however, that no such modification, elimination or addition referred to
in clauses (i), (ii), (iii) or (iv) shall adversely affect in any material
respect the powers, preferences or special rights of Holders of Capital
Securities.

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

(a)           Meetings of the Holders of any class
of Securities may be called at any time by the Administrators (or as provided
in the terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration or the terms of the Securities. 
The Administrators shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in liquidation amount of such
class of Securities.  Such direction
shall be given by delivering to the Administrators one or more calls in a
writing stating that the signing Holders of the Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called.  Any Holders of the
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of the Securities exercising the right to call a meeting and only
those Securities represented by such Certificates shall be counted for purposes
of determining whether the required percentage set forth in the second sentence
of this paragraph has been met.

(b)           Except to the extent otherwise
provided in the terms of the Securities, the following provisions shall apply
to meetings of Holders of the Securities:

(i)            notice of any such
meeting shall be given to all the Holders of the Securities having a right to
vote thereat at least 7 days and not more than 60 days before the
date of such meeting.  Whenever a vote,
consent or approval of the Holders of the Securities is permitted or required
under this Declaration, such vote, consent or approval may be given at a
meeting of the Holders of the Securities. 
Any action that may be taken at a meeting of the Holders of the
Securities may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by the Holders of the Securities owning not less
than the minimum amount of Securities in liquidation amount that would be
necessary to authorize or take such action at a meeting at which all Holders of
the Securities having a right to vote thereon were present and voting.  Prompt notice of the taking of action without
a meeting shall be given to the Holders of the Securities entitled to vote who
have not consented in writing.  The
Administrators may specify that any written ballot submitted to the Holders of
the Securities for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Administrators;

(ii)           each Holder of a
Security may authorize any Person to act for it by proxy on all matters in
which a Holder of Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy shall
be valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy.  Every
proxy shall be revocable at the pleasure of the Holder of the Securities
executing it.  Except as otherwise

 41
 

provided herein, all matters relating to the giving,
voting or validity of proxies shall be governed by the General Corporation Law
of the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders of the
Securities were stockholders of a Delaware corporation; each meeting of the
Holders of the Securities shall be conducted by the Administrators or by such
other Person that the Administrators may designate; and

(iii)          unless the
Statutory Trust Act, this Declaration, or the terms of the Securities otherwise
provides, the Administrators, in their sole discretion, shall establish all
other provisions relating to meetings of Holders of Securities, including
notice of the time, place or purpose of any meeting 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, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with respect to
the exercise of any such right to vote; provided, however, that
each meeting shall be conducted in the United States (as that term is defined
in Treasury Regulations section 301.7701-7).

ARTICLE
XII

REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND THE DELAWARE TRUSTEE

Section 12.1.        Representations
and Warranties of Institutional Trustee.  The initial Institutional Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Institutional Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Institutional Trustee’s acceptance
of its appointment as Institutional Trustee, that:

(a)           the Institutional Trustee is a
Delaware banking corporation with trust powers, duly organized and validly
existing under the laws of the State of Delaware with trust power and authority
to execute and deliver, and to carry out and perform its obligations under the
terms of, this Declaration;

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

(c)           the execution, delivery and
performance of this Declaration by the Institutional Trustee does not conflict
with or constitute a breach of the charter or by-laws of the Institutional
Trustee; and

(d)           no consent, approval or authorization
of, or registration with or notice to, any state or federal banking authority
is required for the execution, delivery or performance by the Institutional
Trustee of this Declaration.

Section 12.2.        Representations
of the Delaware Trustee.  The Trustee that acts as initial Delaware
Trustee represents and warrants to the Trust and to the Sponsor at the date of
this Declaration, and each Successor Delaware Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Delaware Trustee’s
acceptance of its appointment as Delaware Trustee that:

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

 42
 

(b)           if it is not a natural person, the
execution, delivery and performance by the Delaware Trustee of this Declaration
has been duly authorized by all necessary corporate action on the part of the
Delaware Trustee.  This Declaration has
been duly executed and delivered by the Delaware Trustee, and under Delaware
law (excluding any securities laws) constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency and other similar laws affecting creditors’ rights generally and to
general principles of equity and the discretion of the court (regardless of
whether considered in a proceeding in equity or at law);

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

(d)           it has trust power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, this Declaration;

(e)           no consent, approval or authorization
of, or registration with or notice to, any state or federal banking authority
governing the trust powers of the Delaware Trustee 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 State of Delaware or, if not a natural person,
it is an entity which has its principal place of business in the State of
Delaware and, in either case, a Person that satisfies for the Trust the
requirements of Section 3807 of the Statutory 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 class mail)
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 the Securities):

First California
Capital Trust I

c/o National
Mercantile Bancorp

1880 Century Park
East, Suite 800

Los Angeles,
California  90067

Attention:  David R. Brown

Telecopy:  310-201-0629

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

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 
19890-1600

Attention: 
Corporate Trust Administration

Telecopy:  302-636-4140

 43
 

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

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 
19890-1600

Attention: 
Corporate Trust Administration

Telecopy:  302-636-4140

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

National
Mercantile Bancorp

1880 Century Park
East, Suite 800

Los Angeles,
California  90067

Attention:  David R. Brown

Telecopy:  310-201-0629

(e)           if given to any other Holder, at the
address set forth on the books and records of the Trust.

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

Section 13.2.        Governing
Law. This Declaration and the rights of the
parties hereunder shall be governed by and interpreted in accordance with the
law of the State of Delaware and all rights and remedies shall be governed by
such laws without regard to the principles of conflict of laws of the State of
Delaware or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Delaware; provided, however,
that there shall not be applicable to the Trust, the Trustees or this
Declaration any provision of the laws (statutory or common) of the State of
Delaware pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (a) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees
and charges, (b) affirmative requirements to post bonds for trustees,
officers, agents or employees of a trust, (c) the necessity for obtaining
court or other governmental approval concerning the acquisition, holding or
disposition of real or personal property, (d) fees or other sums payable
to trustees, officers, agents or employees of a trust, (e) the allocation
of receipts and expenditures to income or principal, or (f) restrictions
or limitations on the permissible nature, amount or concentration of trust
investments or requirements relating to the titling, storage or other manner of
holding or investing trust assets.

Section 13.3.        Intention
of the Parties. It is the intention of the parties
hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.

Section 13.4.        Headings.Headings contained in this Declaration are inserted
for convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.

 44
 

Section 13.5.        Successors
and Assigns. Whenever in this Declaration any of
the parties hereto is named or referred to, the successors and assigns of such
party shall be deemed to be included, and all covenants and agreements in this
Declaration by the Sponsor and the Trustees shall bind and inure to the benefit
of their respective successors and assigns, whether or not so expressed.

Section 13.6.        Partial
Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.

Section 13.7.        Counterparts.
This Declaration may contain more than one counterpart of the signature page
and this Declaration may be executed by the affixing of the signature of each
of the Trustees and Administrators to any of such counterpart signature
pages.  All of such counterpart signature
pages shall be read as though one, and they shall have the same force and
effect as though all of the signers had signed a single signature page.

Signatures appear on the following page

 45
 

IN WITNESS WHEREOF, the
undersigned have caused these presents to be executed as of the day and year
first above written.

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Delaware
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  
	
   

  	
  as Institutional
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL
  MERCANTILE BANCORP, as Sponsor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Scott A.
  Montgomery

  
	
   

  	
   

  	
  Title:

  	
  President/Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  ADMINISTRATORS
  OF FIRST CALIFORNIA

  CAPITAL TRUST I

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Scott A.
  Montgomery, Administrator

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  David R. Brown,
  Administrator

  
						

 

 46

ANNEX I

TERMS OF
SECURITIES

Pursuant to
Section 6.1 of the Amended and Restated Declaration of Trust, dated as of
January 25, 2007 (as amended from time to time, the “Declaration”), the
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities and the Common Securities are set out
below (each capitalized term used but not defined herein has the meaning set
forth in the Declaration):

1.                                       Designation
and Number.

(a)                                  16,000
Fixed/Floating Rate Capital Securities of First California Capital Trust I
(the “Trust”), with an aggregate stated liquidation amount with respect to the
assets of the Trust of sixteen million dollars ($16,000,000.00) and a stated
liquidation amount with respect to the assets of the Trust of $1,000.00 per
Capital Security, are hereby designated for the purposes of identification only
as the “Capital Securities”.  The
Capital Security Certificates evidencing the Capital Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.

(b)                                 495
Fixed/Floating Rate Common Securities of the Trust (the “Common Securities”)
will be evidenced by Common Security Certificates substantially in the form of
Exhibit A-2 to the Declaration, with such changes and additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice.

2.                                       Distributions.

(a)                                  Distributions
will be payable on each Security for the Distribution Period beginning on (and
including) the date of original issuance and ending on (but excluding) the
Distribution Payment Date in March 2012 at a rate per annum of 6.80% and
shall bear interest for each successive Distribution Period beginning on (and
including) the Distribution Payment Date in March 2012, and each
succeeding Distribution Payment Date, and ending on (but excluding) the next
succeeding Distribution Payment Date at a rate per annum equal to the 3-Month
LIBOR, determined as described below, plus 1.60% (the “Coupon Rate”),
applied to the stated liquidation amount thereof, such rate being the rate of
interest payable on the Debentures to be held by the Institutional
Trustee.  Distributions in arrears will
bear interest thereon compounded quarterly at the applicable Distribution Rate
(to the extent permitted by law). 
Distributions, as used herein, include cash distributions and any such
compounded distributions unless otherwise noted.  A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor.  The amount of the Distribution
payable (i) for any Distribution Period commencing on or after the date of
original issuance but before the Distribution Payment Date in March 2012
will be computed on the basis of a 360-day year of twelve 30-day months, and
(ii) for the Distribution Period commencing on the Distribution Payment Date
in March 2012 and each succeeding Distribution Period will be calculated
by applying the Distribution Rate to the stated liquidation amount outstanding
at the commencement of the Distribution Period on the basis of the actual
number of days in the Distribution Period concerned divided by 360.  All percentages resulting from any
calculations on the Capital Securities will be rounded, if necessary, to the
nearest one hundred-thousandth of a percentage point, with five one-millionths
of a percentage point rounded upward (e.g., 9.876545% (or .09876545) being
rounded to 9.87655% (or .0987655), and all dollar amounts used in or resulting
from such calculation will be rounded to the nearest cent (with one-half cent
being rounded upward)).

 I-1
 

(b)                                 Distributions
on the Securities will be cumulative, will accrue from the date of original
issuance, and will be payable, subject to extension of distribution payment
periods as described herein, quarterly in arrears on March 15,
June 15, September 15 and December 15 of each year, or if such
day is not a Business Day, then the next succeeding Business Day (each a “Distribution
Payment Date”) (it being understood that interest accrues for any such
non-Business Day during the applicable Distribution Period, beginning on or
after March 15, 2012), commencing on the Distribution Payment Date in
March 2007 when, as and if available for payment.  The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no
Acceleration Event of Default has occurred and is continuing, by deferring the
payment of interest on the Debentures for up to 20 consecutive quarterly
periods (each an “Extension Period”) at any time and from time to time,
subject to the conditions described below, during which Extension Period no
interest shall be due and payable. 
During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest will accrue at an annual rate
equal to the Distribution Rate in effect for each such Extension Period,
compounded quarterly from the date such interest would have been payable were
it not for the Extension Period, to the extent permitted by law (such interest
referred to herein as “Additional Interest”).  No Extension Period may end on a date other
than a Distribution Payment Date.  At the
end of any such Extension Period, the Debenture Issuer shall pay all interest
then accrued and unpaid on the Debentures (together with Additional Interest
thereon); provided, however, that no Extension Period may extend
beyond the Maturity Date and provided further, however,
that during any such Extension Period, the Debenture Issuer and its Affiliates
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Debenture Issuer’s or its Affiliates’ capital stock (other than payments of
dividends or distributions to the Debenture Issuer) or make any guarantee
payments with respect to the foregoing, or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Debenture Issuer or any Affiliate that rank pari passu in all respects with or junior in interest
to the Debentures (other than, with respect to clauses (i) and (ii) above,
(a) repurchases, redemptions or other acquisitions of shares of capital
stock of the Debenture Issuer in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Debenture Issuer (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to the applicable Extension Period,
(b) as a result of any exchange or conversion of any class or series of
the Debenture Issuer’s capital stock (or any capital stock of a subsidiary of
the Debenture Issuer) for any class or series of the Debenture Issuer’s capital
stock or of any class or series of the Debenture Issuer’s indebtedness for any
class or series of the Debenture Issuer’s capital stock, (c) the purchase
of fractional interests in shares of the Debenture Issuer’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend
in connection with any stockholders’ rights plan, or the issuance of rights,
stock or other property under any stockholders’ rights plan, or the redemption
or repurchase of rights pursuant thereto, (e) any dividend in the form of
stock, warrants, options or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu
with or junior to such stock and any cash payments in lieu of fractional shares
issued in connection therewith, or (f)  payments under the Capital
Securities Guarantee).  Prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such period, provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20 consecutive
quarterly periods, or extend beyond the Maturity Date.  Upon the termination of any Extension Period
and upon the payment of all accrued and unpaid interest and Additional
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the foregoing requirements.  No interest
or Additional Interest shall be due and payable during an Extension Period,
except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest.  During any
Extension Period, Distributions

 I-2
 

on the Securities shall
be deferred for a period equal to the Extension Period.  If Distributions are deferred, the
Distributions due shall be paid on the date that the related Extension Period
terminates to Holders of the Securities as they appear on the books and records
of the Trust on the record date immediately preceding such date.  Distributions on the Securities must be paid
on the dates payable (after giving effect to any Extension Period) to the
extent that the Trust has funds available for the payment of such distributions
in the Property Account of the Trust. 
The Trust’s funds available for Distribution to the Holders of the Securities
will be limited to payments received from the Debenture Issuer.  The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.

(c)                                  Distributions
on the Securities will be payable to the Holders thereof as they appear on the
books and records of the Trust on the relevant record dates.  The relevant record dates shall be fifteen
days before the relevant Distribution Payment Date.  Distributions payable on any Securities that
are not punctually paid on any Distribution Payment Date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures, as the
case may be, when due (taking into account any Extension Period), will cease to
be payable to the Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will instead be payable
to the Person in whose name such Securities are registered on the special
record date or other specified date determined in accordance with the
Indenture.

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

3.                                       Liquidation
Distribution Upon Dissolution.  In
the event of the voluntary or involuntary liquidation, dissolution, winding-up
or termination of the Trust (each a “Liquidation”) other than in
connection with a redemption of the Debentures, the Holders of the Securities
will be entitled to receive out of the assets of the Trust available for
distribution to Holders of the Securities, after satisfaction of liabilities to
creditors of the Trust (to the extent not satisfied by the Debenture Issuer),
distributions equal to the aggregate of the stated liquidation amount of
$1,000.00 per Security plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the “Liquidation Distribution”),
unless in connection with such Liquidation, the Debentures in an aggregate
stated principal amount equal to the aggregate stated liquidation amount of
such Securities, with an interest rate equal to the Distribution Rate of, and
bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, and having the same record date as, such Securities,
after paying or making reasonable provision to pay all claims and obligations
of the Trust in accordance with the Statutory Trust Act, shall be distributed
on a Pro Rata basis to the Holders of the Securities in exchange for such
Securities.

The Sponsor, as the
Holder of all of the Common Securities, has the right at any time to dissolve
the Trust (including, without limitation, upon the occurrence of a Special
Event), subject to the receipt by the Debenture Issuer of prior approval from
the Board of Governors of the Federal Reserve System, or its designated
district bank, as applicable, and any successor federal agency that is
primarily responsible for regulating the activities of the Sponsor (the “Federal
Reserve”), if the Sponsor is a bank holding company, or from the Office of
Thrift Supervision and any successor federal agency that is primarily
responsible for regulating the activities of Sponsor, (the “OTS”) if the
Sponsor is a savings and loan holding company, in either case if then required
under applicable capital guidelines or policies of the Federal Reserve or OTS,
as applicable, and, after satisfaction of liabilities to creditors of the
Trust, cause the Debentures to be distributed to the Holders of the Securities
on a Pro Rata basis in accordance with the aggregate stated liquidation amount
thereof.

 I-3
 

If a Liquidation of the
Trust occurs as described in clause (i), (ii), (iii) or (v) in Section
7.1(a) of the Declaration, the Trust shall be liquidated by the Institutional
Trustee as expeditiously as it determines to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust, to the Holders of the
Securities, the Debentures on a Pro Rata basis to the extent not satisfied by
the Debenture Issuer, unless such distribution is determined by the
Institutional Trustee not to be practical, in which event such Holders will be
entitled to receive out of the assets of the Trust available for distribution
to the Holders, after satisfaction of liabilities of creditors of the Trust to
the extent not satisfied by the Debenture Issuer, an amount equal to the
Liquidation Distribution.  An early
Liquidation of the Trust pursuant to clause (iv) of Section 7.1(a) of the
Declaration shall occur if the Institutional Trustee determines that such
Liquidation is possible by distributing, after satisfaction of liabilities to
creditors of the Trust, to the Holders of the Securities on a Pro Rata basis,
the Debentures, and such distribution occurs.

If, upon any such
Liquidation the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on
such Capital Securities shall be paid to the Holders of the Trust Securities on
a Pro Rata basis, except that if an Event of Default has occurred and is
continuing, the Capital Securities shall have a preference over the Common
Securities with regard to such distributions.

After the date for any
distribution of the Debentures upon dissolution of the Trust (i) the
Securities of the Trust will be deemed to be no longer outstanding,
(ii) upon surrender of a Holder’s Securities certificate, such Holder of
the Securities will receive a certificate representing the Debentures to be
delivered upon such distribution, (iii) any certificates representing the
Securities still outstanding will be deemed to represent undivided beneficial
interests in such of the Debentures as have an aggregate principal amount equal
to the aggregate stated liquidation amount with an interest rate identical to
the Distribution Rate of, and bearing accrued and unpaid interest equal to
accrued and unpaid distributions on, the Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissuance (and
until such certificates are so surrendered, no payments of interest or
principal shall be made to Holders of Securities in respect of any payments due
and payable under the Debentures; provided, however that such
failure to pay shall not be deemed to be an Event of Default and shall not
entitle the Holder to the benefits of the Guarantee), and (iv) all rights
of Holders of Securities under the Declaration shall cease, except the right of
such Holders to receive Debentures upon surrender of certificates representing
such Securities.

4.                                       Redemption
and Distribution.

(a)                                  The
Debentures will mature on March 15, 2037. 
The Debentures may be redeemed by the Debenture Issuer, in whole or in
part, at any Distribution Payment Date on or after the Distribution Payment
Date in March 2012, at the Redemption Price. In addition, the Debentures
may be redeemed by the Debenture Issuer at the Special Redemption Price, in
whole but not in part, at any Distribution Payment Date, upon the occurrence
and continuation of a Special Event within 120 days following the
occurrence of such Special Event at the Special Redemption Price, upon not less
than 30 nor more than 60 days’ notice to holders of such Debentures
so long as such Special Event is continuing. In each case, the right of the
Debenture Issuer to redeem the Debentures is subject to the Debenture Issuer
having received prior approval from the Federal Reserve (if the Debenture
Issuer is a bank holding company) or prior approval from the OTS (if the
Debenture Issuer is a savings and loan holding company), in each case if then
required under applicable capital guidelines or policies of the applicable
federal agency.  The Sponsor shall appoint
a Quotation Agent, which shall be a designee of the Institutional Trustee, for
the purpose of performing the services contemplated in or by reference in, the
definition of Special Redemption Price. 
Any error in the calculation of the Special Redemption Price by the
Quotation Agent or the Debenture Trustee may be corrected at any time by notice
delivered to the Sponsor and the holders of the Capital Securities.  Subject to the corrective rights set forth
above, all

 I-4
 

certificates,
communications, opinions, determinations, calculations, quotations and
decisions given, expressed, made or obtained for the purposes of the provisions
relating to the payment and calculation of the Special Redemption Price on the
Debentures or the Capital Securities by the Debenture Trustee, the Quotation
Agent or the Institutional Trustee, as the case may be, shall (in the absence
of willful default, bad faith or manifest error) be final, conclusive and
binding on the holders of the Debentures and the Capital Securities, the Trust
and the Sponsor, and no liability shall attach (except as provided above) to
the Debenture Trustee, the Quotation Agent or the Institutional Trustee in
connection with the exercise or non-exercise by any of them of their respective
powers, duties and discretion.

“3-Month LIBOR”
means the London interbank offered interest rate for three-month, U.S. dollar
deposits determined by the Debenture Trustee in the following order of
priority:

(1)                                  the
rate (expressed as a percentage per annum) for U.S. dollar deposits having a
three-month maturity that appears on Telerate Page 3750 as of
11:00 a.m. (London time) on the related Determination Date (as defined
below).  “Telerate Page 3750” means
the display designated as “Page 3750” on the Moneyline Telerate Service or
such other page as may replace Page 3750 on that service or such other
service or services as may be nominated by the British Bankers’ Association as
the information vendor for the purpose of displaying London interbank offered
rates for U.S. dollar deposits;

(2)                                  if
such rate cannot be identified on the related Determination Date, the Debenture
Trustee will request the principal London offices of four leading banks in the
London interbank market to provide such banks’ offered quotations (expressed as
percentages per annum) to prime banks in the London interbank market for U.S.
dollar deposits having a three-month maturity as of 11:00 a.m. (London
time) on such Determination Date.  If at
least two quotations are provided, 3-Month LIBOR will be the arithmetic mean of
such quotations;

(3)                                  if
fewer than two such quotations are provided as requested in clause (2)
above, the Debenture Trustee will request four major New York City banks to
provide such banks’ offered quotations (expressed as percentages per annum) to
leading European banks for loans in U.S. dollars as of 11:00 a.m. (London
time) on such Determination Date.  If at
least two such quotations are provided, 3-Month LIBOR will be the arithmetic
mean of such quotations; and

(4)                                  if
fewer than two such quotations are provided as requested in clause (3)
above, 3-Month LIBOR will be a 3-Month LIBOR determined with respect to the
Distribution Period immediately preceding such current Distribution Period.

If the rate for U.S.
dollar deposits having a three-month maturity that initially appears on
Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date is superseded on the Telerate Page 3750 by a corrected
rate by 12:00 noon (London time) on such Determination Date, then the
corrected rate as so substituted on the applicable page will be the applicable
3-Month LIBOR for such Determination Date.

The Distribution Rate for
any Distribution Period will at no time be higher than the maximum rate then
permitted by New York law as the same may be modified by United States law.

“Capital Treatment
Event” means the receipt by the Debenture Issuer and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of any amendment to, or change (including any announced
prospective change) in, the laws, rules or regulations of the United States or
any political subdivision thereof or therein, or as the result of any official
or administrative pronouncement or action or decision interpreting or applying
such laws, rules or regulations, which amendment or change is effective or
which pronouncement, action or decision is

 I-5
 

announced on or after the
date of original issuance of the Debentures, there is more than an
insubstantial risk that the Sponsor will not, within 90 days of the date of
such opinion, be entitled to treat an amount equal to the aggregate liquidation
amount of the Capital Securities as “Tier 1 Capital” (or its then
equivalent) for purposes of the capital adequacy guidelines of the Federal Reserve,
as then in effect and applicable to the Sponsor (or if the Sponsor is not a
bank holding company or otherwise is not subject to the Federal Reserve’s
risk-based capital adequacy guidelines, such guidelines applied to the Sponsor
as if the Sponsor were subject to such guidelines); provided, however,
that the inability of the Sponsor to treat all or any portion of the
liquidation amount of the Capital Securities as Tier l Capital shall not
constitute the basis for a Capital Treatment Event, if such inability results
from the Sponsor having cumulative preferred stock, minority interests in
consolidated subsidiaries, or any other class of security or interest which the
Federal Reserve or OTS, as applicable, may now or hereafter accord Tier 1
Capital treatment in excess of the amount which may now or hereafter qualify
for treatment as Tier 1 Capital under applicable capital adequacy
guidelines; provided further, however, that the
distribution of Debentures in connection with the Liquidation of the Trust shall
not in and of itself constitute a Capital Treatment Event unless such
Liquidation shall have occurred in connection with a Tax Event or an Investment
Company Event.

“Comparable Treasury
Issue” means with respect to any Special Redemption Date the United States
Treasury security selected by the Quotation Agent as having a maturity
comparable to the Fixed Rate Period Remaining Life that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Fixed Rate Period Remaining Life.  If no
United States Treasury security has a maturity which is within a period from 3
months before to 3 months after the Distribution Payment Date in
March 2012, the two most closely corresponding United States Treasury
securities as selected by the Quotation Agent shall be used as the Comparable
Treasury Issue, and the Treasury Rate shall be interpolated and extrapolated on
a straight-line basis, rounding to the nearest month using such securities.

“Comparable Treasury
Price” means (a) the average of 5 Reference Treasury Dealer Quotations
for such Special Redemption Date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (b) if the Quotation Agent
obtains fewer than 5 such Reference Treasury Dealer Quotations, the average of
all such Quotations.

“Determination Date”
means the date that is two London Banking Days (i.e., a business day in which
dealings in deposits in U.S. dollars are transacted in the London interbank
market) preceding the particular Distribution Period for which a Coupon Rate is
being determined.

“Fixed Rate Period
Remaining Life” means, with respect to any Debenture, the period from the
Special Redemption Date for such Debenture to the Distribution Payment Date in
March 2012.

“Investment Company
Event” means the receipt by the Debenture Issuer and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or written change (including
any announced prospective change) in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, there is more than an insubstantial risk that the Trust is or,
within 90 days of the date of such opinion, will be considered an Investment
Company that is required to be registered under the Investment Company Act
which change or prospective change becomes effective or would become effective,
as the case may be, on or after the date of the issuance of the Debentures.

“Maturity Date”
means March 15, 2037.

“Primary Treasury
Dealer” shall mean either a primary United States Government securities
dealer or an entity of nationally recognized standing in matters pertaining to
the quotation of treasury securities that is reasonably acceptable to the
Sponsor and the Institutional Trustee.

 I-6
 

“Quotation Agent”
means a designee of the Institutional Trustee who shall be a Primary Treasury
Dealer.

“Redemption Date”
shall mean the date fixed for the redemption of Capital Securities, which shall
be any Distribution Payment Date on or after the Distribution Payment Date in
March 2012.

“Redemption
Price” means 100% of the principal amount of the Debentures being redeemed,
plus accrued and unpaid Interest on such Debentures to the Redemption Date.

“Reference
Treasury Dealer” means (i) the Quotation Agent and (ii) any other
Primary Treasury Dealer selected by the Debenture Trustee after consultation
with the Debenture Issuer.

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

“Special Event”
means a Tax Event, an Investment Company Event or a Capital Treatment Event.

“Special Redemption
Date” means a date on which a Special Event redemption occurs, which shall
be a Distribution Payment Date.

“Special Redemption
Price” means (a) if the Special Redemption Date occurs before the
Distribution Payment Date in March 2012, the greater of (i) 107.5% of
the principal amount of the Debentures, plus accrued and unpaid Interest on the
Debentures to the Special Redemption Date, or (ii) as determined by the
Quotation Agent, (A) the sum of the present values of the scheduled
payments of principal and Interest on the Debentures during the Fixed Rate
Period Remaining Life of the Debentures (assuming the Debentures matured on
March 15, 2012) discounted to the Special Redemption Date on a quarterly
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate, plus (B) accrued and unpaid Interest on the Debentures to
such Special Redemption Date, or (b) if the Special Redemption Date occurs
on or after the Distribution Payment Date in March 2012, 100% of the
principal amount of the Debentures being redeemed, plus accrued and unpaid
Interest on such Debentures to the Special Redemption Date.

“Tax Event” means
the receipt by the Debenture Issuer and the Trust of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment to
or change (including any announced prospective change) in the laws or any
regulations thereunder of the United States or any political subdivision or
taxing authority thereof or therein, or as a result of any official
administrative pronouncement (including any private letter ruling, technical
advice memorandum, field service advice, regulatory procedure, notice or
announcement including any notice or announcement of intent to adopt such
procedures or regulations) (an “Administrative Action”) or judicial
decision interpreting or applying such laws or regulations, regardless of
whether such Administrative Action or judicial decision is issued to or in
connection with a proceeding involving the Debenture Issuer or the Trust and
whether or not subject to review or appeal, which amendment, clarification,
change, Administrative Action or decision is enacted, promulgated or announced,
in each case on or after the date of original issuance of the Debentures, there
is more than an insubstantial risk that: (i) the Trust is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Debentures;
(ii) interest payable by the Debenture Issuer on the Debentures is not, or
within 90 days of the date of such opinion, will not be, deductible by the
Debenture Issuer, in whole or in part, for United States federal income tax purposes;
or (iii) the Trust is, or will be within 90 days of the

 I-7
 

date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.

“Treasury Rate”
means (i) the yield, under the heading which represents the average for
the week immediately prior to the date of calculation, appearing in the most
recently published statistical release designated H.15 (519) or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption “Treasury Constant Maturities,”
for the maturity corresponding to the Fixed Rate Period Remaining Life (if no
maturity is within three months before or after the Fixed Rate Period Remaining
Life, yields for the two published maturities most closely corresponding to the
Fixed Rate Period Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line
basis, rounding to the nearest month) or (ii) if such release (or any
successor release) is not published during the week preceding the calculation
date or does not contain such yields, the rate per annum equal to the
semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Special Redemption Date.  The
Treasury Rate shall be calculated by the Quotation Agent on the third Business
Day preceding the Special Redemption Date.

(b)                                 Upon
the repayment in full at maturity or redemption in whole or in part of the
Debentures (other than following the distribution of the Debentures to the
Holders of the Securities), the proceeds from such repayment or payment shall
concurrently be applied to redeem Pro Rata at the applicable Redemption Price
or Special Redemption Price, as applicable, Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Debentures so
repaid or redeemed; provided, however, that holders of such
Securities shall be given not less than 30 nor more than 60 days’ notice of
such redemption (other than at the scheduled maturity of the Debentures).

(c)                                  If
fewer than all the outstanding Securities are to be so redeemed, the Common
Securities and the Capital Securities will be redeemed Pro Rata and the Capital
Securities to be redeemed will be redeemed Pro Rata from each Holder of Capital
Securities.

(d)                                 The
Trust may not redeem fewer than all the outstanding Capital Securities unless
all accrued and unpaid Distributions have been paid on all Capital Securities
for all quarterly Distribution periods terminating on or before the date of
redemption.

(e)                                  Redemption
or Distribution Procedures.

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

 I-8
 

(ii)                                  If
the Securities are to be redeemed and the Trust gives a Redemption/
Distribution Notice, which notice may only be issued if the Debentures are
redeemed as set out in this paragraph 4 (which notice will be
irrevocable), then, provided that the Institutional Trustee has a
sufficient amount of cash in connection with the related redemption or maturity
of the Debentures, the Institutional Trustee will pay the relevant Redemption
Price or Special Redemption Price, as applicable, to the Holders of such
Securities by check mailed to the address of each such Holder appearing on the
books and records of the Trust on the Redemption Date.  If a Redemption/Distribution Notice shall
have been given and funds deposited as required then immediately prior to the
close of business on the date of such deposit Distributions will cease to accrue
on the Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of the Holders
of such Securities to receive the applicable Redemption Price or Special
Redemption Price specified in paragraph 4(a), but without interest on such
Redemption Price or Special Redemption Price. 
If payment of the Redemption Price or Special Redemption Price in
respect of any Securities is improperly withheld or refused and not paid either
by the Trust or by the Debenture Issuer as guarantor pursuant to the Guarantee,
Distributions on such Securities will continue to accrue at the Distribution
Rate from the original Redemption Date to the actual date of payment, in which
case the actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price or Special Redemption
Price.  In the event of any redemption of
the Capital Securities issued by the Trust in part, the Trust shall not be
required to (i) issue, register the transfer of or exchange any Security
during a period beginning at the opening of business fifteen days before any
selection for redemption of the Capital Securities and ending at the close of
business on the earliest date on which the relevant notice of redemption is
deemed to have been given to all Holders of the Capital Securities to be so
redeemed or (ii) register the transfer of or exchange any Capital
Securities so selected for redemption, in whole or in part, except for the
unredeemed portion of any Capital Securities being redeemed in part.

(iii)                               Redemption/Distribution
Notices shall be sent by the Administrators on behalf of the Trust to
(A) in respect of the Capital Securities, the Holders thereof and
(B) in respect of the Common Securities, the Holder thereof.

(iv)                              Subject
to the foregoing and applicable law (including, without limitation, United
States federal securities laws), and provided that the acquiror is not the
Holder of the Common Securities or the obligor under the Indenture, the Sponsor
or any of its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.

5.                                       Voting
Rights - Capital Securities.

(a)                                  Except
as provided under paragraphs 5(b) and 7 and as otherwise required by law
and the Declaration, the Holders of the Capital Securities will have no voting
rights. The Administrators are required to call a meeting of the Holders of the
Capital Securities if directed to do so by Holders of at least 10% in
liquidation amount of the Capital Securities.

(b)                                 Subject
to the requirements of obtaining a tax opinion by the Institutional Trustee in
certain circumstances set forth in the last sentence of this paragraph, the
Holders of a Majority in liquidation amount of the Capital Securities, voting
separately as a class, have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture as the holder of the Debentures, (ii) waive
any past default that is waivable under the

 I-9
 

Indenture,
(iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable or (iv) consent
on behalf of all the Holders of the Capital Securities to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required; provided, however, that, where a
consent or action under the Indenture would require the consent or act of the
holders of greater than a simple majority in aggregate principal amount of
Debentures (a “Super Majority”) affected thereby, the Institutional
Trustee may only give such consent or take such action at the written direction
of the Holders of at least the proportion in liquidation amount of the Capital
Securities outstanding which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. If the Institutional
Trustee fails to enforce its rights under the Debentures after the Holders of a
Majority in liquidation amount of such Capital Securities have so directed the
Institutional Trustee, to the fullest extent permitted by law, a Holder of the
Capital Securities may institute a legal proceeding directly against the
Debenture Issuer to enforce the Institutional Trustee’s rights under the
Debentures without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date the interest or principal is payable
(or in the case of redemption, the Redemption Date or the Special Redemption
Date, as applicable), then a Holder of record of the Capital Securities may
directly institute a proceeding for enforcement of payment, on or after the
respective due dates specified in the Debentures, to such Holder directly of
the principal of or interest on the Debentures having an aggregate principal
amount equal to the aggregate liquidation amount of the Capital Securities of
such Holder. The Institutional Trustee shall notify all Holders of the Capital
Securities of any default actually known to the Institutional Trustee with
respect to the Debentures unless (x) such default has been cured prior to
the giving of such notice or (y) the Institutional Trustee determines in
good faith that the withholding of such notice is in the interest of the
Holders of such Capital Securities, except where the default relates to the
payment of principal of or interest on any of the Debentures. Such notice shall
state that such Indenture Event of Default also constitutes an Event of Default
hereunder. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy, the Institutional Trustee shall not take
any of the actions described in clauses (i), (ii) or (iii) above unless
the Institutional Trustee has obtained an opinion of tax counsel to the effect
that, as a result of such action, the Trust will not be classified as other
than a grantor trust for United States federal income tax purposes.

In the event the consent
of the Institutional Trustee, as the holder of the Debentures, is required
under the Indenture with respect to any amendment, modification or termination
of the Indenture, the Institutional Trustee shall request the direction of the
Holders of the Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; provided, however, that where
a consent under the Indenture would require the consent of a Super-Majority,
the Institutional Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Securities
outstanding which the relevant Super-Majority represents of the aggregate
principal amount of the Debentures outstanding. The Institutional Trustee shall
not take any such action in accordance with the directions of the Holders of
the Securities unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that, as a result of such action, the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes.

A waiver of an Indenture
Event of Default will constitute a waiver of the corresponding Event of Default
hereunder. Any required approval or direction of Holders of the Capital
Securities may be given at a separate meeting of Holders of the Capital
Securities convened for such purpose, at a meeting of all of the Holders of the
Securities in the Trust or pursuant to written consent. The Institutional
Trustee will cause a notice of any meeting at which Holders of the Capital
Securities are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record
of the Capital Securities. Each such notice will include a statement setting
forth the following

 I-10
 

information (i) the
date of such meeting or the date by which such action is to be taken,
(ii) a description of any resolution proposed for adoption at such meeting
on which such Holders are entitled to vote or of such matter upon which written
consent is sought and (iii) instructions for the delivery of proxies or
consents. No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.

Notwithstanding that
Holders of the Capital Securities are entitled to vote or consent under any of
the circumstances described above, any of the Capital Securities that are owned
by the Sponsor or any Affiliate of the Sponsor shall not entitle the Holder
thereof to vote or consent and shall, for purposes of such vote or consent, be
treated as if such Capital Securities were not outstanding.

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

6.                                       Voting
Rights - Common Securities.

(a)                                  Except
as provided under paragraphs 6(b), 6(c) and 7 and as otherwise required by
law and the Declaration, the Common Securities will have no voting rights.

(b)                                 The
Holders of the Common Securities are entitled, in accordance with
Article IV of the Declaration, to vote to appoint, remove or replace any
Administrators.

(c)                                  Subject
to Section 6.8 of the Declaration and only after each Event of Default (if any)
with respect to the Capital Securities has been cured, waived, or otherwise
eliminated and subject to the requirements of the second to last sentence of
this paragraph, the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time, method, and
place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the
time, method, place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waiving any past default and
its consequences that is waivable under the Indenture, or (iii) exercising
any right to rescind or annul a declaration that the principal of all the
Debentures shall be due and payable; provided, however, that,
where a consent or action under the Indenture would require a Super Majority,
the Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Notwithstanding
this paragraph 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote or consent of the Holders of the
Capital Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the
Institutional Trustee or the Debenture Trustee as set forth above, the
Institutional Trustee shall not take any action described in (i), (ii) or
(iii) above, unless the Institutional Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action. If the Institutional Trustee fails to enforce its rights, to the
fullest extent permitted by law, under the Declaration, any Holder of the
Common Securities may institute a legal proceeding directly against any Person
to enforce the Institutional Trustee’s rights under the Declaration, without
first instituting a legal proceeding against the Institutional Trustee or any
other Person.

 I-11
 

Any approval or direction
of Holders of the Common Securities may be given at a separate meeting of
Holders of the Common Securities convened for such purpose, at a meeting of all
of the Holders of the Securities in the Trust or pursuant to written consent.  The Administrators will cause a notice of any
meeting at which Holders of the Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of the Common Securities. Each such notice will include
a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.

No vote or consent of the
Holders of the Common Securities will be required for the Trust to redeem and
cancel Common Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.

7.                                       Amendments
to Declaration and Indenture.

(a)                                  In
addition to any requirements under Section 11.1 of the Declaration, if any
proposed amendment to the Declaration provides for, or the Trustees, Sponsor or
Administrators otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
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 of the
Declaration, then the Holders of outstanding Securities, voting together as a
single class, will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in liquidation amount of the Securities,
affected thereby; provided, however, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Capital
Securities or only the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Securities.

(b)                                 In
the event the consent of the Institutional Trustee as the holder of the
Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under
the Indenture would require a Super Majority, the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding.

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

(d)                                 Notwithstanding
any provision of the Declaration, the right of any Holder of the Capital
Securities to receive payment of distributions and other payments 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 such respective dates,
shall not be impaired or affected without the consent of such Holder. For the
protection and enforcement of the foregoing provision, each and every Holder of
the Capital Securities shall be entitled to such relief as can be given either
at law or equity.

 I-12
 

8.                                       Pro
Rata.  A reference in these terms of
the Securities to any payment, distribution or treatment as being “Pro Rata”
shall mean pro rata to each Holder of the Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities then outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Capital Securities Pro Rata according to the aggregate
liquidation amount of the Capital Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Capital Securities
outstanding, and only after satisfaction of all amounts owed to the Holders of
the Capital Securities, to each Holder of the Common Securities Pro Rata
according to the aggregate liquidation amount of the Common Securities held by
the relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.

9.                                       Ranking.  The Capital Securities rank pari passu with and payment 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 Holders of the Common Securities to receive
payment of Distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of the Holders of the Capital
Securities with the result that no payment of any Distribution on, or
Redemption Price (or Special Redemption Price) of, any Common Security, and no
other payment on account of redemption, liquidation or other acquisition of
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all outstanding Capital Securities for
all distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price (or Special Redemption Price) the full amount
of such Redemption Price (or Special Redemption Price) on all outstanding
Capital Securities then called for redemption, shall have been made or provided
for, and all funds immediately available to the Institutional Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price (or Special Redemption Price) of, the Capital Securities then
due and payable.

10.                                 Acceptance
of Guarantee and Indenture. Each Holder of the Capital Securities and the
Common Securities, by the acceptance of such Securities, agrees to the
provisions of the Guarantee, including the subordination provisions therein and
to the provisions of the Indenture.

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

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

 I-13

EXHIBIT A-1

FORM OF CAPITAL SECURITY CERTIFICATE

[FORM OF FACE OF SECURITY]

THIS CAPITAL
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY (“DTC”)
OR A NOMINEE OF DTC.  THIS CAPITAL
SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE DECLARATION, AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER THAN
A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY
A NOMINEE OF DTC TO DTC OR ANOTHER NOMINEE OF DTC) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.

UNLESS THIS
CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC TO FIRST CALIFORNIA CAPITAL TRUST I
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CAPITAL
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.  NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.  THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
ONLY (A) TO THE SPONSOR OR THE TRUST, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN
ACCORDANCE WITH RULE 144A, (D) TO A NON-U.S. PERSON IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE)
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED
INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A) OF RULE 501 UNDER
THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE SPONSOR’S AND THE TRUST’S RIGHT PRIOR TO ANY SUCH OFFER,
SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE

 A-1-1
 

OBTAINED
FROM THE SPONSOR OR THE TRUST.  HEDGING
TRANSACTIONS INVOLVING THIS SECURITY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE
WITH THE SECURITIES ACT.

THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IT
IS NOT AN EMPLOYEE BENEFIT, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER PLAN OR
ARRANGEMENT SUBJECT TO TITLE I OF 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” BY REASON OF ANY PLAN’S INVESTMENT IN THE ENTITY,
AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THE
SECURITIES OR ANY INTEREST THEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE
FOR EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED
TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER
APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING OF THIS SECURITY IS NOT
PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO
SUCH PURCHASE OR HOLDING.  ANY PURCHASER
OR HOLDER OF THE SECURITIES OR ANY INTEREST THEREIN WILL BE DEEMED TO HAVE
REPRESENTED BY ITS PURCHASE AND HOLDING THEREOF THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN WITHIN THE MEANING OF SECTION 3(3) OF ERISA, OR A PLAN TO
WHICH SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING
ON BEHALF OF AN EMPLOYEE BENEFIT PLAN OR PLAN, OR ANY OTHER PERSON OR ENTITY
USING 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 SECTION
406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH THERE IS NO APPLICABLE
STATUTORY OR ADMINISTRATIVE EXEMPTION.

THIS SECURITY WILL
BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF
NOT LESS THAN $100,000.00 (100 SECURITIES) AND MULTIPLES OF $1,000.00 IN EXCESS
THEREOF.  ANY ATTEMPTED TRANSFER OF
SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF LESS THAN $100,000.00
SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.

THE HOLDER OF THIS
SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.

IN CONNECTION WITH
ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS MAY BE REQUIRED BY THE DECLARATION TO
CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

	
  Certificate Number P-1

  	
   

  	
  16,000 Capital
  Securities

  
	
  [CUSIP
  NO. [       ] **To be inserted at
  the request of a subsequent transferee]

  	
   

  	
   

  

 

January 25, 2007

Certificate Evidencing Fixed/Floating Rate Capital
Securities

of

First California Capital Trust I

(liquidation amount $1,000.00 per Capital Security)

 A-1-2
 

First California
Capital Trust I, a statutory trust created under the laws of the State of
Delaware (the “Trust”), hereby certifies that Cede & Co. (the “Holder”)
is the registered owner of capital securities of the Trust representing
undivided beneficial interests in the assets of the Trust, (liquidation amount
$1,000.00 per capital security) (the “Capital Securities”).  Subject to the Declaration (as defined below),
the Capital Securities are transferable on the books and records of the Trust
in person or by a duly authorized attorney, upon surrender of this Certificate
duly endorsed and in proper form for transfer.  The Capital Securities represented hereby are
issued pursuant to, and the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities shall in
all respects be subject to, the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of January 25, 2007, among
Scott A.  Montgomery and
David R. Brown, as Administrators, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Institutional Trustee, National
Mercantile Bancorp, as Sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Trust, including the designation of
the terms of the Capital Securities as set forth in Annex I to such
amended and restated declaration as the same may be amended from time to time
(the “Declaration”).  Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration.  The Holder is entitled to
the benefits of the Guarantee to the extent provided therein.  The Sponsor will provide a copy of the
Declaration, the Guarantee, and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.

Upon receipt of
this Security, the Holder is bound by the Declaration and is entitled to the
benefits thereunder.

By acceptance of
this Security, the Holder agrees to treat, for United States federal income tax
purposes, the Debentures as indebtedness and the Capital Securities as evidence
of beneficial ownership in the Debentures.

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

Signatures appear on following page

 A-1-3
 

IN WITNESS
WHEREOF, the Trust has duly executed this certificate.

	
  

  	
   

  	
  FIRST CALIFORNIA
  CAPITAL TRUST I

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:
  Administrator

  

 

CERTIFICATE OF AUTHENTICATION

This
is one of the Capital Securities referred to in the within-mentioned
Declaration.

	
  

  	
   

  	
  WILMINGTON TRUST
  COMPANY,

  as the Institutional Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Officer

  

 

 A-1-4
 

[FORM OF REVERSE OF CAPITAL SECURITY]

Distributions
payable on each Capital Security will be payable at an annual rate equal to
6.80% beginning on (and including) the date of original issuance and ending on
(but excluding) the Distribution Payment Date in March 2012 and at an
annual rate for each successive period beginning on (and including) the
Distribution Payment Date in March 2012, and each succeeding Distribution
Payment Date, and ending on (but excluding) the next succeeding Distribution
Payment Date (each a “Distribution Period”), equal to 3-Month LIBOR,
determined as described below, plus 1.60% (the “Coupon Rate”), applied to the
stated liquidation amount of $1,000.00 per Capital Security, such rate being
the rate of interest payable on the Debentures to be held by the Institutional
Trustee.  Distributions in arrears will
bear interest thereon compounded quarterly at the Distribution Rate (to the
extent permitted by applicable law).  The
term “Distributions” as used herein includes cash distributions and any such
compounded distributions unless otherwise noted.  A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the Institutional
Trustee and to the extent the Institutional Trustee has funds available
therefor.  As used herein, “Determination
Date” means the date that is two London Banking Days (i.e., a business day in
which dealings in deposits in U.S. dollars are transacted in the London
interbank market) preceding the commencement of the relevant Distribution
Period.  The amount of the Distribution
payable (i) for any Distribution Period commencing on or after the date of
original issuance but before the Distribution Payment Date in March 2012
will be computed on the basis of a 360-day year of twelve 30-day months, and
(ii) for the Distribution Period commencing on the Distribution Payment
Date in March 2012 and each succeeding Distribution Period will be
calculated by applying the Distribution Rate to the stated liquidation amount
outstanding at the commencement of the Distribution Period on the basis of the
actual number of days in the Distribution Period concerned divided by 360.

“3-Month LIBOR” as
used herein, means the London interbank offered interest rate for three-month
U.S. dollar deposits determined by the Debenture Trustee in the following order
of priority:  (i) the rate (expressed as
a percentage per annum) for U.S. dollar deposits having a three-month maturity
that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on the
related Determination Date (“Telerate Page 3750” means the display designated
as “Page 3750” on the Moneyline Telerate Service or such other page as may
replace Page 3750 on that service or such other service or services as may be
nominated by the British Bankers’ Association as the information vendor for the
purpose of displaying London interbank offered rates for U.S. dollar deposits);
(ii) if such rate cannot be identified on the related Determination Date, the
Debenture Trustee will request the principal London offices of four leading
banks in the London interbank market to provide such banks’ offered quotations
(expressed as percentages per annum) to prime banks in the London interbank
market for U.S. dollar deposits having a three-month maturity as of 11:00 a.m.
(London time) on such Determination Date. 
If at least two quotations are provided, 3-Month LIBOR will be the
arithmetic mean of such quotations; (iii) if fewer than two such
quotations are provided as requested in clause (ii) above, the Debenture
Trustee will request four major New York City banks to provide such banks’
offered quotations (expressed as percentages per annum) to leading European
banks for loans in U.S. dollars as of 11:00 a.m. (London time) on such
Determination Date.  If at least two such
quotations are provided, 3-Month LIBOR will be the arithmetic mean of such
quotations; and (iv) if fewer than two such quotations are provided as
requested in clause (iii) above, 3-Month LIBOR will be a 3-Month LIBOR
determined with respect to the Distribution Period immediately preceding such
current Distribution Period.  If the rate
for U.S. dollar deposits having a three-month maturity that initially appears
on Telerate Page 3750 as of 11:00 a.m. (London time) on the related
Determination Date is superseded on the Telerate Page 3750 by a corrected rate
by 12:00 noon (London time) on such Determination Date, then the corrected rate
as so substituted on the applicable page will be the applicable 3-Month LIBOR
for such Determination Date.

The Distribution
Rate for any Distribution Period will at no time be higher than the maximum
rate then permitted by New York law as the same may be modified by United
States law.

 A-1-5
 

All percentages
resulting from any calculations on the Capital Securities will be rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point, with
five one-millionths of a percentage point rounded upward (e.g., 9.876545% (or
..09876545) being rounded to 9.87655% (or .0987655), and all dollar amounts used
in or resulting from such calculation will be rounded to the nearest cent (with
one-half cent being rounded upward)).

Except as
otherwise described below, Distributions on the Capital Securities will be
cumulative, will accrue from the date of original issuance and will be payable
quarterly in arrears on March 15, June 15, September 15 and
December 15 of each year or if any such day is not a Business Day, then
the next succeeding Business Day (each such day, a “Distribution Payment Date”)
(it being understood that interest accrues for any such non-Business Day during
the applicable Distribution Period, beginning on or after March 15, 2012),
commencing on the Distribution Payment Date in March 2007.  The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no
Acceleration Event of Default has occurred and is continuing, by extending the
interest payment period for up to 20 consecutive quarterly periods (each an “Extension
Period”) at any time and from time to time on the Debentures, subject to the
conditions described below, during which Extension Period no interest shall be
due and payable.  During any Extension
Period, interest will continue to accrue on the Debentures, and interest on
such accrued interest will accrue at an annual rate equal to the Distribution
Rate in effect for each such Extension Period, compounded quarterly from the
date such interest would have been payable were it not for the Extension
Period, to the extent permitted by law (such interest referred to herein as “Additional
Interest”).  No Extension Period may end
on a date other than a Distribution Payment Date.  At the end of any such Extension Period, the
Debenture Issuer shall pay all interest then accrued and unpaid on the
Debentures (together with Additional Interest thereon); provided, however,
that no Extension Period may extend beyond the Maturity Date.  Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 20 consecutive quarterly periods, or extend beyond the
Maturity Date.  Upon the termination of
any Extension Period and upon the payment of all accrued and unpaid interest
and Additional Interest, the Debenture Issuer may commence a new Extension
Period, subject to the foregoing requirements. 
No interest or Additional Interest shall be due and payable during an
Extension Period, except at the end thereof, but each installment of interest
that would otherwise have been due and payable during such Extension Period
shall bear Additional Interest.  During
any Extension Period, Distributions on the Capital Securities shall be deferred
for a period equal to the Extension Period. 
If Distributions are deferred, the Distributions due shall be paid on
the date that the related Extension Period terminates, to Holders of the
Securities as they appear on the books and records of the Trust on the record
date immediately preceding such date.  Distributions
on the Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such distributions in the Property Account of the Trust.  The Trust’s funds available for Distribution
to the Holders of the Securities will be limited to payments received from the
Debenture Issuer.  The payment of
Distributions out of moneys held by the Trust is guaranteed by the Guarantor
pursuant to the Guarantee.

The Capital
Securities shall be redeemable as provided in the Declaration.

 A-1-6
 

ASSIGNMENT

FOR VALUE
RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:

 

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

 

 

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

 

agent to transfer
this Capital Security Certificate on the books of the 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 Capital Security
Certificate)

Signature
Guarantee:(1)

(1)
Signature must be guaranteed by an “eligible guarantor institution” that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Security registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

 A-1-7

EXHIBIT A-2

FORM OF COMMON SECURITY CERTIFICATE

THIS COMMON SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EXEMPTION FROM REGISTRATION.

THIS CERTIFICATE IS NOT
TRANSFERABLE EXCEPT IN COMPLIANCE WITH SECTION 8.1 OF THE DECLARATION.

	
  Certificate Number C-1

  	
   

  	
  495 Common Securities

  

 

January 25, 2007

Certificate Evidencing Fixed/Floating Rate Common Securities

of

First California Capital Trust I

First California Capital
Trust I, a statutory trust created under the laws of the State of Delaware
(the “Trust”), hereby certifies that National Mercantile Bancorp (the “Holder”)
is the registered owner of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust (the “Common
Securities”).  The Common Securities
represented hereby are issued pursuant to, and the designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities shall in all respects be subject to, the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of
January 25, 2007, among Scott A. Montgomery and David R. Brown,
as Administrators, Wilmington Trust Company, as Delaware Trustee, Wilmington
Trust Company, as Institutional Trustee, National Mercantile Bancorp, as
Sponsor, and the holders from time to time of undivided beneficial interest in
the assets of the Trust including the designation of the terms of the Common
Securities as set forth in Annex I to such amended and restated declaration, as
the same may be amended from time to time (the “Declaration”).  Capitalized terms used herein but not defined
shall have the meaning given them in the Declaration.  The Holder is entitled to the benefits of the
Guarantee to the extent provided therein. 
The Sponsor will provide a copy of the Declaration, the Guarantee and
the Indenture to the Holder without charge upon written request to the Sponsor
at its principal place of business.

As set forth in the
Declaration, when an Event of Default has occurred and is continuing, the
rights of Holders of Common Securities to payment in respect of Distributions
and payments upon Liquidation, redemption or otherwise are subordinated to the
rights of payment of Holders of the Capital Securities.

Upon receipt of this
Certificate, the Holder is bound by the Declaration and is entitled to the
benefits thereunder.

By acceptance of this
Certificate, the Holder agrees to treat, for United States federal income tax
purposes, the Debentures as indebtedness and the Common Securities as evidence
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 of laws.

 A-2-1
 

IN WITNESS WHEREOF, the
Trust has duly executed this certificate.

	
  

  	
   

  	
  FIRST CALIFORNIA CAPITAL TRUST I

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title: Administrator

  

 

 A-2-2
 

[FORM OF REVERSE OF COMMON SECURITY]

Distributions payable on
each Common Security will be payable at an annual rate equal to 6.80% beginning
on (and including) the date of original issuance and ending on (but excluding)
the Distribution Payment Date in March 2012 and at an annual rate for each
successive period beginning on (and including) the Distribution Payment Date in
March 2012, and each succeeding Distribution Payment Date, and ending on
(but excluding) the next succeeding Distribution Payment Date (each a “Distribution
Period”), equal to 3-Month LIBOR, determined as described below, plus
1.60% (the “Coupon Rate”), applied to the stated liquidation amount of
$1,000.00 per Common Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in
arrears will bear interest thereon compounded quarterly at the Distribution
Rate (to the extent permitted by applicable law).  The term “Distributions” as used herein
includes cash distributions and any such compounded distributions unless
otherwise noted.  A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor.  As used
herein, “Determination Date” means the date that is two London Banking Days
(i.e., a business day in which dealings in deposits in U.S. dollars are
transacted in the London interbank market) preceding the commencement of the
relevant Distribution Period.  The amount
of the Distribution payable (i) for any Distribution Period commencing on
or after the date of original issuance but before the Distribution Payment Date
in March 2012 will be computed on the basis of a 360-day year of twelve
30-day months, and (ii) for the Distribution Period commencing on the
Distribution Payment Date in March 2012 and each succeeding Distribution
Period will be calculated by applying the Distribution Rate to the stated
liquidation amount outstanding at the commencement of the Distribution Period
on the basis of the actual number of days in the Distribution Period concerned
divided by 360.

“3-Month
LIBOR” as used herein, means the London interbank offered interest rate for
three-month U.S. dollar deposits determined
by the Debenture Trustee in the following order of priority:  (i) the rate (expressed as a percentage per
annum) for U.S. dollar deposits having a three-month
maturity that appears on Telerate Page 3750 as of 11:00 a.m. (London time) on
the related Determination Date (“Telerate Page 3750” means the display
designated as “Page 3750” on the Moneyline Telerate Service or such other page
as may replace Page 3750 on that service or such other service or services as
may be nominated by the British Bankers’ Association as the information vendor
for the purpose of displaying London interbank offered rates for U.S. dollar
deposits); (ii) if such rate cannot be identified on the related Determination
Date, the Debenture Trustee will request the principal London offices of four
leading banks in the London interbank market to provide such banks’ offered
quotations (expressed as percentages per annum) to prime banks in the London
interbank market for U.S. dollar deposits having a three-month
maturity as of 11:00 a.m. (London time) on such Determination Date.  If at least two quotations are provided, 3-Month LIBOR will be the arithmetic mean of such quotations;
(iii) if fewer than two such quotations are provided as requested in clause
(ii) above, the Debenture Trustee will request four major New York City banks
to provide such banks’ offered quotations (expressed as percentages per annum)
to leading European banks for loans in U.S. dollars as of 11:00 a.m. (London
time) on such Determination Date.  If at
least two such quotations are provided, 3-Month LIBOR
will be the arithmetic mean of such quotations; and (iv) if fewer than two such
quotations are provided as requested in clause (iii) above, 3-Month LIBOR will be a 3-Month LIBOR
determined with respect to the Distribution Period immediately preceding such
current Distribution Period.  If the rate
for U.S. dollar deposits having a three-month maturity
that initially appears on Telerate Page 3750 as of 11:00 a.m. (London time) on
the related Determination Date is superseded on the Telerate Page 3750 by a
corrected rate by 12:00 noon (London time) on such Determination Date, then the
corrected rate as so substituted on the applicable page will be the applicable
3-Month LIBOR for such Determination
Date.

The Distribution Rate for
any Distribution Period will at no time be higher than the maximum rate then
permitted by New York law as the same may be modified by United States law.

 A-2-3
 

All percentages resulting
from any calculations on the Common Securities will be rounded, if necessary,
to the nearest one hundred-thousandth of
a percentage point, with five one-millionths of
a percentage point rounded upward (e.g., 9.876545% (or .09876545) being rounded
to 9.87655% (or .0987655), and all dollar amounts used in or resulting from
such calculation will be rounded to the nearest cent (with one-half cent being rounded upward)).

Except as otherwise
described below, Distributions on the Common Securities will be cumulative,
will accrue from the date of original issuance and will be payable quarterly in
arrears on March 15, June 15, September 15 and December 15
of each year or if any such day is not a Business Day, then the next succeeding
Business Day (each such day, a “Distribution Payment Date”) (it being
understood that interest accrues for any such non-Business Day during the
applicable Distribution Period, beginning on or after March 15, 2012),
commencing on the Distribution Payment Date in March 2007.  The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures, so long as no
Acceleration Event of Default has occurred and is continuing, by extending the
interest payment period for up to 20 consecutive quarterly periods (each
an “Extension Period”) at any time and from time to time on the Debentures,
subject to the conditions described below, during which Extension Period no
interest shall be due and payable. 
During any Extension Period, interest will continue to accrue on the
Debentures, and interest on such accrued interest will accrue at an annual rate
equal to the Distribution Rate in effect for each such Extension Period,
compounded quarterly from the date such interest would have been payable were
it not for the Extension Period, to the extent permitted by law (such interest
referred to herein as “Additional Interest”).  No Extension Period may end on a date other
than a Distribution Payment Date.  At the
end of any such Extension Period, the Debenture Issuer shall pay all interest
then accrued and unpaid on the Debentures (together with Additional Interest
thereon); provided, however, that no Extension Period may extend
beyond the Maturity Date.  Prior to the
termination of any Extension Period, the Debenture Issuer may further extend
such period, provided that such period together with all such previous and
further consecutive extensions thereof shall not exceed 20 consecutive
quarterly periods, or extend beyond the Maturity Date.  Upon the termination of any Extension Period
and upon the payment of all accrued and unpaid interest and Additional
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the foregoing requirements.  No interest
or Additional Interest shall be due and payable during an Extension Period,
except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest.  During any
Extension Period, Distributions on the Common Securities shall be deferred for
a period equal to the Extension Period. 
If Distributions are deferred, the Distributions due shall be paid on
the date that the related Extension Period terminates, to Holders of the
Securities as they appear on the books and records of the Trust on the record
date immediately preceding such date.  Distributions
on the Securities must be paid on the dates payable (after giving effect to any
Extension Period) to the extent that the Trust has funds available for the
payment of such distributions in the Property Account of the Trust.  The Trust’s funds available for Distribution
to the Holders of the Securities will be limited to payments received from the
Debenture Issuer.

The Common Securities
shall be redeemable as provided in the Declaration.

 A-2-4
 

ASSIGNMENT

FOR VALUE RECEIVED, the
undersigned assigns and transfers this Common Security Certificate to:

 

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

 

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

 

	
  

  	
   

  	
                                                                                              agent
  to transfer this Common Security Certificate on the books of the 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 Common Security Certificate)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign exactly as your name appears on the other side
  of this Common Security Certificate)

  
						

 

Signature Guarantee(2)

(2) Signature must
be guaranteed by an “eligible guarantor institution” that is a bank,
stockbroker, savings and loan association or credit union, meeting the
requirements of the Security registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.

 A-2-5

EXHIBIT B

SPECIMEN OF INITIAL DEBENTURE

(See Document No. 17)

 B-1

EXHIBIT C

PLACEMENT AGREEMENT

(See Document No. 1)

 C-1Exhibit
10.3 

 

 

 

 

 

 

 

 

 

GUARANTEE
AGREEMENT

by and
between

NATIONAL
MERCANTILE BANCORP

and

WILMINGTON
TRUST COMPANY

Dated as
of January 25, 2007

 

 

 

 

 

 

 

 

GUARANTEE
AGREEMENT

This GUARANTEE
AGREEMENT (this “Guarantee”), dated as of January 25, 2007, is executed
and delivered by National Mercantile Bancorp, a California corporation (the “Guarantor”),
and Wilmington Trust Company, a Delaware banking corporation, as trustee (the “Guarantee
Trustee”), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of First California Capital
Trust I, a Delaware statutory trust (the “Issuer”).

WHEREAS, pursuant
to an Amended and Restated Declaration of Trust (the “Declaration”), dated as
of the date hereof among Wilmington Trust Company, not in its individual
capacity but solely as institutional trustee, the administrators of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof those undivided beneficial interests, having an
aggregate liquidation amount of $16,000,000.00 (the “Capital Securities”); and

WHEREAS, as
incentive for the Holders to purchase the Capital Securities, the Guarantor
desires irrevocably and unconditionally to agree, to the extent set forth in
this Guarantee, to pay to the Holders of Capital Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and conditions set forth herein;

NOW, THEREFORE, in
consideration of the purchase by each Holder of the Capital Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee for the benefit of the Holders.

ARTICLE I

 

DEFINITIONS AND INTERPRETATION

 

Section 1.1            Definitions
and Interpretation.  In
this Guarantee, unless the context otherwise requires:

(a)           capitalized terms
used in this Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;

(b)           a term defined
anywhere in this Guarantee has the same meaning throughout;

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

(d)           all references in
this Guarantee to “Articles” or “Sections” are to Articles or Sections of this
Guarantee, unless otherwise specified;

(e)           terms defined in the
Declaration as at the date of execution of this Guarantee have the same
meanings when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires; and

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

“Affiliate” has
the same meaning as given to that term in Rule 405 of the Securities Act
of 1933, as amended, or any successor rule thereunder.

“Beneficiaries”
means any Person to whom the Issuer is or hereafter becomes indebted or liable.

 

“Capital Securities”
has the meaning set forth in the recitals to this Guarantee.

“Common Securities”
means the common securities issued by the Issuer to the Guarantor pursuant to
the Declaration.

“Corporate Trust
Office” means the office of the Guarantee Trustee at which the corporate
trust business of the Guarantee Trustee shall, at any particular time, be
principally administered, which office at the date of execution of this
Guarantee is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware  19890-1600,
Attention:  Corporate Trust
Administration.

“Covered Person”
means any Holder of Capital Securities.

“Debentures” means
the debt securities of the Guarantor designated the Fixed/Floating Rate Junior
Subordinated Deferrable Interest Debentures due 2037 held by the Institutional
Trustee (as defined in the Declaration) of the Issuer.

“Declaration Event of
Default” means an “Event of Default” as defined in the Declaration.

“Event of Default”
has the meaning set forth in Section 2.4(a).

“Guarantee Payments”
means the following payments or distributions, without duplication, with
respect to the Capital Securities, to the extent not paid or made by the
Issuer:  (i) any accrued and unpaid
Distributions (as defined in the Declaration) which are required to be
paid on such Capital Securities to the extent the Issuer shall have funds
available therefor, (ii) the Redemption Price to the extent the Issuer has
funds available therefor, with respect to any Capital Securities called for redemption
by the Issuer, (iii) the Special Redemption Price to the extent the Issuer
has funds available therefor, with respect to Capital Securities redeemed upon
the occurrence of a Special Event, and (iv) upon a voluntary or
involuntary liquidation, dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to the Holders of
the Capital Securities in exchange therefor as provided in the Declaration),
the lesser of (a) the aggregate of the liquidation amount and all accrued
and unpaid Distributions on the Capital Securities to the date of payment, to
the extent the Issuer shall have funds available therefor, and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
in liquidation of the Issuer (in either case, the “Liquidation Distribution”).

“Guarantee Trustee”
means Wilmington Trust Company, until a Successor Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Guarantee and thereafter means each such Successor Guarantee Trustee.

“Guarantor” means
National Mercantile Bancorp and each of its successors and assigns.

“Holder” means any
holder, as registered on the books and records of the Issuer, of any Capital
Securities; provided, however, that, in determining whether the
Holders of the requisite percentage of Capital Securities have given any
request, notice, consent or waiver hereunder, “Holder” shall not include the
Guarantor or any Affiliate of the Guarantor.

“Indemnified Person”
means the Guarantee Trustee, any Affiliate of the Guarantee Trustee, or any
officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Guarantee Trustee.

“Indenture” means
the Indenture dated as of the date hereof between the Guarantor and Wilmington
Trust Company, not in its individual capacity but solely as trustee, and any
indenture 

 2
 

 

supplemental thereto pursuant to which the Debentures are to be issued
to the institutional trustee of the Issuer.

 

“Issuer” has the
meaning set forth in the opening paragraph to this Guarantee.

“Liquidation
Distribution” has the meaning set forth in the definition of “Guarantee
Payments” herein.

“Majority in
liquidation amount of the Capital Securities” means Holder(s) of
outstanding Capital Securities, voting together as a class, but separately from
the holders of Common Securities, of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption, liquidation
or otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all Capital Securities then outstanding.

“Obligations”
means any costs, expenses or liabilities (but not including liabilities related
to taxes) of the Issuer other than obligations of the Issuer to pay to holders
of any Trust Securities the amounts due such holders pursuant to the terms of
the Trust Securities.

“Officer’s Certificate”
means, with respect to any Person, a certificate signed by one Authorized
Officer of such Person. Any Officer’s Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee shall
include:

(a)           a statement that the
officer signing the Officer’s Certificate has read the covenant or condition
and the definitions relating thereto;

(b)           a brief statement of
the nature and scope of the examination or investigation undertaken by the
officer in rendering the Officer’s Certificate;

(c)           a statement that the
officer has made such examination or investigation as, in such officer’s
opinion, is necessary to enable such officer to express an informed opinion as
to whether or not such covenant or condition has been complied with; and

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

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

“Redemption Price”
has the meaning set forth in the Indenture.

“Responsible Officer”
means, with respect to the Guarantee Trustee, any officer within the Corporate
Trust Office of the Guarantee Trustee including any Vice President, Assistant
Vice President, Secretary, Assistant Secretary or any other officer of the
Guarantee Trustee customarily performing functions similar to those performed by
any of the above designated officers and also, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer’s knowledge of and familiarity with the particular
subject.

“Special Event”
has the meaning set forth in the Indenture.

“Special Redemption
Price” has the meaning set forth in the Indenture.

 3
 

 

“Successor Guarantee
Trustee” means a successor Guarantee Trustee possessing the qualifications
to act as Guarantee Trustee under Section 3.1.

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

ARTICLE
II

 

POWERS, DUTIES AND RIGHTS OF

GUARANTEE TRUSTEE

 

Section
2.1.           Powers and Duties of the
Guarantee Trustee.

 

(a)           This
Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders
of the Capital Securities, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder of Capital Securities exercising his or
her rights pursuant to Section 4.4(b) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee.  The right,
title and interest of the Guarantee Trustee shall automatically vest in any
Successor Guarantee Trustee, and such vesting and cessation of title shall be
effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.

(b)           If
an Event of Default actually known to a Responsible Officer of the Guarantee
Trustee has occurred and is continuing, the Guarantee Trustee shall enforce
this Guarantee for the benefit of the Holders of the Capital Securities.

(c)           The
Guarantee Trustee, before the occurrence of any Event of Default and after
curing all Events of Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this Guarantee, and no
implied covenants shall be read into this Guarantee against the Guarantee
Trustee.  In case an Event of Default has
occurred (that has not been waived pursuant to Section 2.4) and is
actually known to a Responsible Officer of the Guarantee Trustee, the Guarantee
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee, and use the same degree of care and skill in its exercise thereof,
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs.

(d)           No
provision of this Guarantee shall be construed to relieve the Guarantee Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:

(i)            prior to the
occurrence of any Event of Default and after the curing or waiving of all such
Events of Default that may have occurred:

(A)          the duties and
obligations of the Guarantee Trustee shall be determined solely by the express
provisions of this Guarantee, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Guarantee, and no implied covenants or obligations shall be
read into this Guarantee against the Guarantee Trustee; and

(B)           in the absence of
bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Guarantee Trustee and conforming to the requirements of this Guarantee; but in
the 

 4
 

 

case of any
such certificates or opinions that by any provision hereof are specifically
required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they conform to
the requirements of this Guarantee;

(ii)           the
Guarantee Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Guarantee Trustee, unless it shall be
proved that such Responsible Officer of the Guarantee Trustee or the Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;

(iii)          the
Guarantee Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written
direction of the Holders of not less than a Majority in liquidation amount of
the Capital Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee, or relating to
the exercise of any trust or power conferred upon the Guarantee Trustee under
this Guarantee; and

(iv)          no
provision of this Guarantee shall require the Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds is not reasonably assured to it under the
terms of this Guarantee or security and indemnity, reasonably satisfactory to
the Guarantee Trustee, against such risk or liability is not reasonably assured
to it.

Section 2.2.           Certain
Rights of Guarantee Trustee.

(a)           Subject
to the provisions of Section 2.1:

(i)            The
Guarantee Trustee may conclusively rely, and shall be fully protected in acting
or refraining from acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.

(ii)           Any
direction or act of the Guarantor contemplated by this Guarantee shall be
sufficiently evidenced by an Officer’s Certificate.

(iii)          Whenever,
in the administration of this Guarantee, the Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officer’s Certificate of the Guarantor
which, upon receipt of such request, shall be promptly delivered by the
Guarantor.

(iv)          The
Guarantee Trustee shall have no duty to see to any recording, filing or
registration of any instrument (or any re-recording, refiling or
re-registration thereof).

(v)           The
Guarantee Trustee may consult with counsel of its selection, and the advice or
opinion of such counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any 

 5
 

 

of its Affiliates and may include any of its employees.  The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this Guarantee
from any court of competent jurisdiction.

(vi)          The
Guarantee Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Guarantee Trustee,
against the costs, expenses (including attorneys’ fees and expenses and the
expenses of the Guarantee Trustee’s agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided, however, that nothing contained in
this Section 2.2(a)(vi) shall relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights and
powers vested in it by this Guarantee.

(vii)         The
Guarantee Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit.

(viii)        The
Guarantee Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys, and the Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.

(ix)           Any
action taken by the Guarantee Trustee or its agents hereunder shall bind the
Holders of the Capital Securities, and the signature of the Guarantee Trustee
or its agents alone shall be sufficient and effective to perform any such
action.  No third party shall be required
to inquire as to the authority of the Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Guarantee, both of which
shall be conclusively evidenced by the Guarantee Trustee’s or its agent’s
taking such action.

(x)            Whenever
in the administration of this Guarantee the Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount of
the Capital Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in
accordance with such instructions.

(xi)           The
Guarantee Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith, without negligence, and reasonably
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Guarantee.

(b)           No
provision of this Guarantee shall be deemed to impose any duty or obligation on
the Guarantee Trustee to perform any act or acts or exercise any right, power,
duty or obligation conferred or imposed on it, in any jurisdiction in which it
shall be illegal or in which the Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law to perform any such act or acts
or to exercise any such right, power, duty or obligation.  No permissive power or authority available to
the Guarantee Trustee shall be construed to be a duty.

 6
 

 

Section 2.3            Not
Responsible for Recitals or Issuance of Guarantee.  The
recitals contained in this Guarantee shall be taken as the statements of the
Guarantor, and the Guarantee Trustee does not assume any responsibility for
their correctness.  The Guarantee Trustee
makes no representation as to the validity or sufficiency of this Guarantee.

Section 2.4.           Events
of Default; Waiver.

(a)           An
Event of Default under this Guarantee will occur upon the failure of the
Guarantor to perform any of its payment or other obligations hereunder.

(b)           The
Holders of a Majority in liquidation amount of the Capital Securities may,
voting or consenting as a class, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default and its consequences.  Upon such waiver, any such Event of Default
shall cease to exist, and shall be deemed to have been cured, for every purpose
of this Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

Section 2.5.           Events
of Default; Notice.

(a)           The
Guarantee Trustee shall, within 90 days after the occurrence of an Event of
Default, transmit by mail, first class postage prepaid, to the Holders of the
Capital Securities and the Guarantor, notices of all Events of Default actually
known to a Responsible Officer of the Guarantee Trustee, unless such defaults
have been cured before the giving of such notice, provided, however,
that the Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Capital Securities.

(b)           The
Guarantee Trustee shall not be deemed to have knowledge of any Event of Default
unless the Guarantee Trustee shall have received written notice from the
Guarantor or a Holder of the Capital Securities (except in the case of a
payment default), or a Responsible Officer of the Guarantee Trustee charged
with the administration of this Guarantee shall have obtained actual knowledge
thereof.

ARTICLE III

GUARANTEE
TRUSTEE

Section 3.1.           Guarantee
Trustee; Eligibility.

(a)           There
shall at all times be a Guarantee Trustee which shall:

(i)            not
be an Affiliate of the Guarantor, and

(ii)           be
a corporation organized and doing business under the laws of the United States
of America or any State or Territory thereof or of the District of Columbia, or
Person authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. 
If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then, for the purposes of this Section 3.1(a)(ii),
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.

 7
 

 

(b)           If
at any time the Guarantee Trustee shall cease to be eligible to so act under
Section 3.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 3.2(c).

(c)           If
the Guarantee Trustee has or shall acquire any “conflicting interest” within
the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee
shall either eliminate such interest or resign to the extent and in the manner
provided by, and subject to this Guarantee.

Section 3.2.           Appointment,
Removal and Resignation of Guarantee Trustee.

(a)           Subject
to Section 3.2(b), the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of Default.

(b)           The
Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until
a Successor Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Guarantee Trustee
and delivered to the Guarantor.

(c)           The
Guarantee Trustee appointed to office shall hold office until a Successor
Guarantee Trustee shall have been appointed or until its removal or
resignation.  The Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by an instrument
in writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.

(d)           If
no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 3.2 within 60 days after
delivery of an instrument of removal or resignation, the Guarantee Trustee
resigning or being removed may petition any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. 
Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.

(e)           No
Guarantee Trustee shall be liable for the acts or omissions to act of any
Successor Guarantee Trustee.

(f)            Upon
termination of this Guarantee or removal or resignation of the Guarantee
Trustee pursuant to this Section 3.2, the Guarantor shall pay to the Guarantee
Trustee all amounts owing to the Guarantee Trustee under Sections 7.2 and
7.3 accrued to the date of such termination, removal or resignation.

 8
 

 

ARTICLE
IV

GUARANTEE

Section 4.1.           Guarantee.

(a)           The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by the
Issuer), as and when due, regardless of any defense (except the defense of
payment by the Issuer), right of set-off or counterclaim that the Issuer may
have or assert.  The Guarantor’s
obligation to make a Guarantee Payment may be satisfied by direct payment of
the required amounts by the Guarantor to the Holders or by causing the Issuer
to pay such amounts to the Holders.

(b)           The
Guarantor hereby also agrees to assume any and all Obligations of the Issuer
and in the event any such Obligation is not so assumed, subject to the terms
and conditions hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due, of any and
all Obligations to such Beneficiaries. 
This Guarantee is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries have
received notice hereof.

Section 4.2            Waiver
of Notice and Demand.  The
Guarantor hereby waives notice of acceptance of this Guarantee and of any
liability to which it applies or may apply, presentment, demand for payment,
any right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.

Section 4.3            Obligations
Not Affected.  The
obligations, covenants, agreements and duties of the Guarantor under this
Guarantee shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:

(a)           the
release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term or
condition relating to the Capital Securities to be performed or observed by the
Issuer;

(b)           the
extension of time for the payment by the Issuer of all or any portion of the
Distributions, Redemption Price, Special Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Capital
Securities or the extension of time for the performance of any other obligation
under, arising out of or in connection with, the Capital Securities (other than
an extension of time for payment of Distributions, Redemption Price, Special
Redemption Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the Debentures or any
extension of the maturity date of the Debentures permitted by the Indenture);

(c)           any
failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Capital Securities, or any action on
the part of the Issuer granting indulgence or extension of any kind;

(d)           the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the Issuer;

 9

 

(e)           any invalidity of,
or defect or deficiency in, the Capital Securities;

(f)            the settlement or
compromise of any obligation guaranteed hereby or hereby incurred; or

(g)           any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a guarantor, it being the intent of this
Section 4.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.

There shall be no
obligation of the Holders to give notice to, or obtain consent of, the
Guarantor with respect to the happening of any of the foregoing.

Section 4.4.           Rights
of Holders.

(a)           The Holders of a
Majority in liquidation amount of the Capital Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee or to direct
the exercise of any trust or power conferred upon the Guarantee Trustee under
this Guarantee; provided, however, that (subject to Section 2.1)
the Guarantee Trustee shall have the right to decline to follow any such
direction if the Guarantee Trustee being advised by counsel determines that the
action or proceeding so directed may not lawfully be taken or if the Guarantee
Trustee in good faith by its board of directors or trustees, executive
committees or a trust committee of directors or trustees and/or Responsible
Officers shall determine that the action or proceedings so directed would
involve the Guarantee Trustee in personal liability.

(b)           Any Holder of
Capital Securities may institute a legal proceeding directly against the
Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person.  The
Guarantor waives any right or remedy to require that any such action be brought
first against the Issuer, the Guarantee Trustee or any other Person before so
proceeding directly against the Guarantor.

Section 4.5            Guarantee
of Payment.  This Guarantee
creates a guarantee of payment and not of collection.

Section 4.6            Subrogation.  The Guarantor shall be
subrogated to all (if any) rights of the Holders of Capital Securities against
the Issuer in respect of any amounts paid to such Holders by the Guarantor
under this Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of law) be entitled
to enforce or exercise any right that it may acquire by way of subrogation or
any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee, if, after giving effect to any such payment, any
amounts are due and unpaid under this Guarantee.  If any amount shall be paid to the Guarantor
in violation of the preceding sentence, the Guarantor agrees to hold such
amount in trust for the Holders and to pay over such amount to the Holders.

Section 4.7            Independent
Obligations.  The
Guarantor acknowledges that its obligations hereunder are independent of the
obligations of the Issuer with respect to the Capital Securities and that the
Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (g), inclusive,
of Section 4.3 hereof.

Section 4.8            Enforcement
by a Beneficiary.  A Beneficiary
may enforce the obligations of the Guarantor contained in Section 4.1(b)
directly against the Guarantor and the Guarantor waives any right or remedy to
require that any action be brought against the Issuer or any other person or
entity 

 10
 

 

before
proceeding against the Guarantor.  The
Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
the Issuer in respect of any amounts paid to the Beneficiaries by the Guarantor
under this Guarantee; provided, however, that the Guarantor shall
not (except to the extent required by mandatory provisions of law) be entitled
to enforce or exercise any rights that it may acquire by way of subrogation or
any indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Guarantee, if at the time of any such payment, and after
giving effect to such payment, any amounts are due and unpaid under this Guarantee.

ARTICLE V

LIMITATION OF TRANSACTIONS; SUBORDINATION

Section 5.1            Limitation
of Transactions.  So
long as any Capital Securities remain outstanding, if (a) there shall have
occurred and be continuing an Event of Default or a Declaration Event of Default
or (b) the Guarantor shall have selected an Extension Period as provided
in the Declaration and such period, or any extension thereof, shall have
commenced and be continuing, then the Guarantor shall not and shall not permit
any Affiliate to (x) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any
of the Guarantor’s or such Affiliate’s capital stock (other than payments of
dividends or distributions to the Guarantor) or make any guarantee payments
with respect to the foregoing or (y) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Guarantor or any Affiliate that rank pari passu in all respects with or junior
in interest to the Debentures (other than, with respect to clauses (x) and (y)
above, (i) repurchases, redemptions or other acquisitions of shares of
capital stock of the Guarantor in connection with any employment contract,
benefit plan or other similar arrangement with or for the benefit of one or
more employees, officers, directors or consultants, in connection with a
dividend reinvestment or stockholder stock purchase plan or in connection with
the issuance of capital stock of the Guarantor (or securities convertible into
or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the occurrence of the Event of Default,
Declaration Event of Default or Extension Period, as applicable, (ii) as a
result of any exchange or conversion of any class or series of the Guarantor’s
capital stock (or any capital stock of a subsidiary of the Guarantor) for any
class or series of the Guarantor’s capital stock or of any class or series of
the Guarantor’s indebtedness for any class or series of the Guarantor’s capital
stock, (iii) the purchase of fractional interests in shares of the
Guarantor’s capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) any
declaration of a dividend in connection with any stockholders’ rights plan, or
the issuance of rights, stock or other property under any stockholders’ rights
plan, or the redemption or repurchase of rights pursuant thereto, (v) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior
to such stock and any cash payments in lieu of fractional shares issued in
connection therewith, or (vi) payments under this Guarantee).

Section 5.2            Ranking.  This
Guarantee will constitute an unsecured obligation of the Guarantor and will
rank subordinate and junior in right of payment to all present and future
Senior Indebtedness (as defined in the Indenture) of the Guarantor.  By their acceptance thereof, each Holder of
Capital Securities agrees to the foregoing provisions of this Guarantee and the
other terms set forth herein.

The right of the
Guarantor to participate in any distribution of assets of any of its
subsidiaries upon any such subsidiary’s liquidation or reorganization or
otherwise is subject to the prior claims of creditors of that subsidiary,
except to the extent the Guarantor may itself be recognized as a creditor of
that subsidiary.  Accordingly, the
Guarantor’s obligations under this Guarantee will be effectively 

 11
 

 

subordinated to all
existing and future liabilities of the Guarantor’s subsidiaries, and claimants
should look only to the assets of the Guarantor for payments hereunder.  This Guarantee does not limit the incurrence
or issuance of other secured or unsecured debt of the Guarantor, including
Senior Indebtedness of the Guarantor, under any indenture that the Guarantor
may enter into in the future or otherwise.

ARTICLE
VI

TERMINATION

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

ARTICLE
VII

INDEMNIFICATION

Section 7.1.           Exculpation.

(a)           No
Indemnified Person shall be liable, responsible or accountable in damages or
otherwise to the Guarantor or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Guarantee and in a
manner that such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Guarantee or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person’s negligence or
willful misconduct with respect to such acts or omissions.

(b)           An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Issuer or the Guarantor and upon such information, opinions,
reports or statements presented to the Issuer or the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person’s professional or expert competence and who, if selected by such
Indemnified Person, has been selected with reasonable care by such Indemnified
Person, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Capital Securities might properly be paid.

Section 7.2.           Indemnification.

(a)           The
Guarantor agrees to indemnify each Indemnified Person for, and to hold each
Indemnified Person harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence or willful misconduct on the part of the
Indemnified Person, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including, but not limited to,
the costs and expenses (including reasonable legal fees and expenses) of the
Indemnified Person defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of the
Indemnified Person’s powers or duties hereunder.  The obligation to indemnify as set forth in
this Section 7.2 shall survive the resignation or removal of the Guarantee
Trustee and the termination of this Guarantee.

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(b)           Promptly
after receipt by an Indemnified Person under this Section 7.2 of notice of
the commencement of any action, such Indemnified Person will, if a claim in
respect thereof is to be made against the Guarantor under this
Section 7.2, notify the Guarantor in writing of the commencement thereof;
but the failure so to notify the Guarantor (i) will not relieve the
Guarantor from liability under paragraph (a) above unless and to the
extent that the Guarantor did not otherwise learn of such action and such
failure results in the forfeiture by the Guarantor of substantial rights and
defenses and (ii) will not, in any event, relieve the Guarantor from any
obligations to any Indemnified Person other than the indemnification obligation
provided in paragraph (a) above. 
The Guarantor shall be entitled to appoint counsel of the Guarantor’s
choice at the Guarantor’s expense to represent the Indemnified Person in any
action for which indemnification is sought (in which case the Guarantor shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the Indemnified Person or Persons except as set forth below); provided,
however, that such counsel shall be reasonably satisfactory to the Indemnified
Person.  Notwithstanding the Guarantor’s
election to appoint counsel to represent the Guarantor in an action, the
Indemnified Person shall have the right to employ separate counsel (including
local counsel), and the Guarantor shall bear the reasonable fees, costs and
expenses of such separate counsel if (i) the use of counsel chosen by the
Guarantor to represent the Indemnified Person would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or targets
of, any such action include both the Indemnified Person and the Guarantor and
the Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it and/or other Indemnified Person(s) which are different
from or additional to those available to the Guarantor, (iii) the
Guarantor shall not have employed counsel satisfactory to the Indemnified
Person to represent the Indemnified Person within a reasonable time after
notice of the institution of such action or (iv) the Guarantor shall
authorize the Indemnified Person to employ separate counsel at the expense of
the Guarantor.  The Guarantor will not,
without the prior written consent of the Indemnified Persons, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
Indemnified Persons are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Person from all liability arising out of such claim,
action, suit or proceeding.

Section 7.3            Compensation;
Reimbursement of Expenses.  The
Guarantor agrees:

(a)           to
pay to the Guarantee Trustee from time to time such compensation for all
services rendered by it hereunder as the parties shall agree to from time to
time (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust); and

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

For purposes of
clarification, this Section 7.3 does not contemplate the payment by the
Guarantor of acceptance or annual administration fees owing to the Guarantee
Trustee for services to be provided by the Guarantee Trustee under this
Guarantee or the fees and expenses of the Guarantee Trustee’s counsel in
connection with the closing of the transactions contemplated by this
Guarantee.  The provisions of this
Section 7.3 shall survive the resignation or removal of the Guarantee
Trustee and the termination of this Guarantee.

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ARTICLE
VIII

MISCELLANEOUS

Section 8.1            Successors
and Assigns.  All
guarantees and agreements contained in this Guarantee shall bind the
successors, assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders of the Capital Securities then
outstanding.  Except in connection with
any merger or consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of the Guarantor’s assets to another entity, in each
case, to the extent permitted under the Indenture, the Guarantor may not assign
its rights or delegate its obligations under this Guarantee without the prior
approval of the Holders of at least a Majority in liquidation amount of the
Capital Securities.

Section 832          Amendments.  Except
with respect to any changes that do not adversely affect the rights of Holders
of the Capital Securities in any material respect (in which case no consent of
Holders will be required), this Guarantee may be amended only with the prior
approval of the Holders of not less than a Majority in liquidation amount of
the Capital Securities.  The provisions
of the Declaration with respect to amendments thereof apply to the giving of
such approval.

Section 8.3            Notices.  All
notices provided for in this Guarantee shall be in writing, duly signed by the
party giving such notice, and shall be delivered, telecopied or mailed by first
class mail, as follows:

(a)           If
given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set
forth below (or such other address as the Guarantee Trustee may give notice of
to the Holders of the Capital Securities and the Guarantor):

Wilmington Trust
Company

Rodney Square
North

1100 North Market
Street

Wilmington,
Delaware  19890-1600

Attention:  Corporate Trust Administration

Telecopy:  302-636-4140

(b)           If
given to the Guarantor, at the Guarantor’s mailing address set forth below (or
such other address as the Guarantor may give notice of to the Holders of the
Capital Securities and to the Guarantee Trustee):

National
Mercantile Bancorp

1880 Century Park
East, Suite 800

Los Angeles,
California  90067

Attention:  David R. Brown

Telecopy:  310-201-0629

(c)           If
given to any Holder of the Capital Securities, at the address set forth on the
books and records of the Issuer.

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

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Section 8.4            Benefit.  This
Guarantee is solely for the benefit of the Beneficiaries and, subject to
Section 2.1(a), is not separately transferable from the Capital Securities.

Section 8.5            Governing
Law.  THIS
GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).

Section 8.6            Counterparts.  This
Guarantee may be executed in one or more counterparts, each of which shall be
an original, but all of which taken together shall constitute one and the same
instrument.

Section
8.7            Separability.  In case one or more of
the provisions contained in this Guarantee shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provisions of this Guarantee,
but this Guarantee shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein.

Signatures appear on the following page

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THIS GUARANTEE is
executed as of the day and year first above written.

	
  

  	
  NATIONAL MERCANTILE BANCORP,

  as Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST
  COMPANY,

  as Guarantee Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 16

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