PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July
10, 2019 by and among HomeStreet, Inc., a Washington corporation (the
“Company”), on the one hand, and Blue Lion Opportunity Master Fund, L.P., a
limited partnership formed under the laws of the Cayman Islands (“Blue Lion”),
Roaring Blue Lion Capital Management, L.P., a Delaware limited partnership,
Roaring Blue Lion, LLC, a Texas limited liability company, BLOF II LP, a
Delaware limited partnership (“BLOF”), Charles W. Griege, Jr., an individual,
and Ronald K. Tanemura, an individual (the foregoing, together with Blue Lion,
and collectively with each of their respective Affiliates, the “Investor
Group”), on the other hand.
WHEREAS, the Company and the Investor Group have determined to come to an
agreement with respect to certain matters, as provided for in this Agreement;
WHEREAS, the Investor Group directly and/or beneficially owns 1,692,401 shares
of the issued and outstanding common stock of the Company (“Company Shares”);
and
WHEREAS, the Investor Group desires to sell, and the Company desires to
purchase, free and clear of any and all Liens, all of the Company Shares
beneficially owned by the Investor Group.
NOW, THEREFORE, in consideration of the foregoing premises and the covenants,
agreements and representations and warranties contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I

PURCHASE AND SALE; CLOSING

Section 1.1    Purchase and Sale. On the date of Closing (the “Closing Date”),
upon the terms and subject to the conditions of this Agreement, the Investor
Group agrees to sell, convey, assign, transfer and deliver to the Company, and
the Company agrees to purchase from the Investor Group, 1,692,401 Company
Shares, representing all of the Company Shares beneficially owned by the
Investor Group, (the “Purchased Shares”), free and clear of any and all
mortgages, pledges, encumbrances, liens, security interests, options, charges,
claims, deeds of trust, deeds to secure debt, title retention agreements, rights
of first refusal or offer, limitations on voting rights, proxies, voting
agreements, limitations on transfer or other agreements or claims of any kind or
nature whatsoever (collectively, “Liens”).

Section 1.2    Per Share Purchase Price; Escrow. Upon the terms and subject to
the conditions of this Agreement, in consideration of the sale, conveyance,
assignment, transfer and delivery to the Company of the Purchased Shares, the
Company shall, on the Closing Date, pay to the Investor Group a cash purchase
price of $31.16, without interest (the “Per Share Purchase Price”), for each
Company Share purchased by the Company from the Investor Group under this
Agreement.

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Section 1.3    Closing Matters.

(a)Closing.

(i)The closing of the purchase and sale of the Purchased Shares (the “Closing”)
and the Company’s and the Investor Group’s respective obligations under
Section 1.1 and Section 1.2, as applicable, shall be conditioned on the
satisfaction or written waiver of the following conditions (collectively, the
“Closing Conditions”): (A) the Company shall have received an approval or
non-objection (which does not contain any material conditions) in respect of the
purchase of the Purchased Shares from the Federal Reserve Bank of San Francisco
or the Board of Governors of the Federal Reserve System (collectively, the
“Federal Reserve”); (B) no injunction or other order, judgment, law, regulation,
decree or ruling or other legal restraint or prohibition shall have been issued,
enacted or promulgated by a court or other governmental or regulatory authority
of competent jurisdiction that would have the effect of prohibiting or
preventing the consummation of the transactions contemplated hereunder; (C) the
representations and warranties of the other party set forth in this Agreement
shall be true and correct as of the date of this Agreement and as of the Closing
Date; and (D) timely performance by the other party in all material respects of
all of its obligations under this Agreement required to be performed prior to or
at the Closing.

(ii)In the event the Closing does not occur by July 12, 2019, either the Company
or the Investor Group shall be permitted to terminate this Agreement by giving
written notice to the other party in accordance with Section 5.2. If this
Agreement is terminated in accordance with this Section 1.3, this Agreement
shall forthwith become null and void, but no termination shall relieve either
party from liability for any breach of this Agreement prior to such termination.

(b)Closing Deliveries.

(i)On the Closing Date, in accordance with Section 1.2, the Company shall
deliver or cause to be delivered to the Investor Group (A) documentary evidence
of an approval or non-objection (which does not contain any material conditions)
in respect of the purchase of the Purchased Shares from the Federal Reserve and
(B) an amount equal to the total of the Per Share Purchase Price multiplied by
the number of Purchased Shares (as set forth in Sections 1.1 and 1.2 hereof) by
wire transfer of immediately available funds to such accounts as Blue Lion, on
behalf of the members of the Investor Group, has specified in writing on or
prior to the Closing Date.

(ii)On the Closing Date, the Investor Group shall (A) deliver or cause to be
delivered to the Company the certificates, if any, representing the Purchased
Shares, duly and validly endorsed or accompanied by stock powers duly and
validly executed, or (B) in lieu of any such certificates, the Investor Group
may arrange for an appropriate electronic transfer (including through Deposit
and Withdrawal at Custodian (“DWAC”)) of the Purchased Shares to one or more
accounts designated by the Company, in the case of each of (A) and (B),
sufficient to convey to the Company good, valid and marketable title in and to
the Purchased Shares, free and clear of any and all Liens.

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ARTICLE II

COVENANTS

Section 2.1    Standstill. Effective from the date hereof and continuing until
the date that is three years after the date hereof (the “Restrictive Period”),
except as otherwise provided in this Agreement, without the prior written
consent of the board of directors of the Company (the “Board”), no member of the
Investor Group shall, and they shall instruct their Affiliates not to, directly
or indirectly (in each case, except as permitted or required by this Agreement):

(a)    (i) acquire, offer or seek to acquire, agree to acquire or acquire rights
to acquire (except by way of stock dividends or other distributions or offerings
made available to holders of voting securities of the Company generally on a pro
rata basis), directly or indirectly, whether by purchase, tender or exchange
offer, through the acquisition of control of another person, by joining a group,
through swap or hedging transactions or otherwise, any voting securities of the
Company (other than through a broad-based market basket or index) or any voting
rights decoupled from the underlying voting securities which would result in the
ownership or control of, or other beneficial ownership interest in, 2.0% or more
than of the then-outstanding Company Shares in the aggregate (the “Ownership
Cap”); or (ii) sell its Company Shares, other than in open market sale
transactions where the identity of the purchaser is not known and in
underwritten widely dispersed public offerings, to any Third Party that, to the
Investor Group’s knowledge (after reasonable due inquiry in connection with a
private, non-open market transaction, it being understood that such knowledge
shall be deemed to exist with respect to any publicly available information,
including information in documents filed with the U.S. Securities and Exchange
Commission (the “SEC”)), would result in such Third Party, together with its
Affiliates and Associates, owning, controlling or otherwise having any
beneficial or other ownership interest in the aggregate of 5.0% or more of the
Company Shares outstanding at such time or would increase the beneficial
ownership interest of any Third Party who, together with its Affiliates and
Associates, has a beneficial or other ownership interest in the aggregate of
5.0% or more of the Company Shares outstanding at such time;
        
(b)    (i) nominate, recommend for nomination or give notice of an intent to
nominate or recommend for nomination a person for election at any shareholder
meeting at which the Company’s directors are to be elected; (ii) knowingly
initiate, encourage or participate in any solicitation of proxies in respect of
any election contest or removal contest with respect to the Company’s directors;
(iii) submit, initiate, make or be a proponent of any shareholder proposal for
consideration at, or bring any other business before, any shareholder meeting;
(iv) knowingly initiate, encourage or participate in any solicitation of proxies
in respect of any shareholder proposal for consideration at, or other business
brought before, any shareholder meeting; or (v) knowingly initiate, encourage or
participate in any “withhold”, “vote no” or similar campaign with respect to any
shareholder meeting;

(c)    form, join or in any way knowingly or intentionally participate in any
group or agreement of any kind with respect to any voting securities of the
Company, including in connection with any election or removal contest with
respect to the Company’s directors or any shareholder proposal or other business
brought before any shareholder meeting (other than with the members of the
Investor Group or one or more of their Affiliates and Associates who are
instructed to comply by the terms and conditions of this Agreement);

(d)    deposit any voting securities of the Company in any voting trust or
subject any Company voting securities to any arrangement or agreement with
respect to the voting thereof (other

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than any such voting trust, arrangement or agreement solely among members of the
Investor Group and otherwise in accordance with this Agreement);

(e)    seek publicly, alone or in concert with others, to amend any provision of
(i) the Company’s Second Amended and Restated Articles of Incorporation (as
amended and as may be further amended from time to time), or (ii) the Company’s
Amended and Restated Bylaws (as amended and as may be further amended from time
to time);

(f)    demand an inspection of the Company’s books and records;

(g)    engage or continue to engage or use any private investigations firm or
other person to investigate any of the Company’s directors, officers or
employees or any of the Company’s Representatives, or use any report or findings
from such firm or person;

(h)    (i) make any public or private proposal with respect to or (ii) make any
public statement or otherwise seek to encourage, advise or assist any person in
so encouraging or advising with respect to: (A) any change in the number or term
of directors serving on the Board or the filling of any vacancies on the Board,
(B) any change in the capitalization or dividend policy of the Company, (C) any
other change in the Company’s management, governance, corporate structure,
affairs or policies, (D) any Extraordinary Transaction, (E) causing a class of
securities of the Company to be delisted from, or to cease to be authorized to
be quoted on, any securities exchange or (F) causing a class of equity
securities of the Company to become eligible for termination of registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”);

(i)    knowingly initiate, make or in any way participate, directly or
indirectly, in any Extraordinary Transaction or make, directly or indirectly,
any proposal, either alone or in concert with others, to the Company or the
Board that would reasonably be expected to require a public announcement or
disclosure regarding any such matter;

(j)    effect or seek to effect, offer or propose to effect, cause or
participate in, or in any way knowingly assist or facilitate any other person to
effect or seek, offer or propose to effect or participate in, any (i) material
acquisition of any assets or businesses of the Company or any of its
subsidiaries; (ii) tender offer or exchange offer, merger, acquisition, share
exchange or other business combination involving any of the voting securities or
any of the material assets or businesses of the Company or any of its
subsidiaries; (iii) recapitalization, restructuring, liquidation, dissolution or
other material transaction with respect to the Company or any of its
subsidiaries or any material portion of its or their businesses or (iv)
preparation, filing or submission of any notice of change in control application
under federal or state law;

(k)    enter into any negotiations, agreements or understandings with any Third
Party with respect to the foregoing, or advise, assist, encourage or seek to
persuade any Third Party to take any action with respect to any of the
foregoing, or otherwise take or cause any action inconsistent with any of the
foregoing;

(l)    publicly make or in any way advance publicly any request or proposal that
the Company or the Board amend, modify or waive any provision of this Agreement;
or

(m)    take any action challenging the validity or enforceability of this
Section 2.1 or this Agreement unless the Company is challenging the validity or
enforceability of this Agreement.

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For the avoidance of doubt, in the event any member of the Investor Group
acquires Company Shares subsequent to the Closing Date and in accordance with
the terms of this Agreement, nothing herein shall restrict, in and of itself,
members of the Investor Group or its Representatives from having access to any
or meeting with the Company or its Representatives at any brokerage, financial
services, or any similar industry conferences or public events sponsored by the
Company.
Section 2.2    Mutual Non-Disparagement. During the Restrictive Period, without
the prior written consent of the other party, neither party shall, nor shall it
permit any of its Representatives to make any public statement about the other
party, the other party’s current or former Representatives (in their capacity as
such), the other party’s subsidiaries, or the business of the other party’s
subsidiaries or any of its or its subsidiaries’ or controlled Affiliates’
current or former Representatives (in their capacity as such) including the
business. The restrictions in this Section 2.2 shall not (a) apply (i) in any
compelled testimony or production of information, whether by legal process,
subpoena or as part of a response to a request for information from any
governmental or regulatory authority with jurisdiction over the party from whom
information is sought, in each case, to the extent required, or (ii) to any
disclosure that such party reasonably believes, after consultation with outside
counsel, to be legally required by applicable law, rules or regulations; or (b)
prohibit any party from reporting what it reasonably believes, after
consultation with outside counsel, to be violations of federal law or regulation
to any governmental authority pursuant to Section 21F of the Exchange Act or
Rule 21F promulgated thereunder.

Section 2.3    Public Announcement; Public Filings.

(a)No later than two (2) Business Days following the date of this Agreement, the
Company shall issue a press release (the “Press Release”) announcing this
Agreement, in the form attached hereto as Exhibit A. Prior to the issuance of
the Press Release, neither the Company nor the members of the Investor Group
shall issue any press release or public announcement regarding this Agreement or
take any action that would require public disclosure thereof without the prior
written consent of the other party.

(b)No later than two (2) Business Days following the date of this Agreement, the
Company shall file with the SEC a Current Report on Form 8-K reporting its entry
into this Agreement, disclosing applicable items to conform to its obligations
hereunder and appending this Agreement as an exhibit thereto (the “Form 8-K”).
The Form 8-K shall be consistent with the terms of this Agreement and the Press
Release. The Company shall provide the members of the Investor Group and their
Representatives with a reasonable opportunity to review and comment on the Form
8-K prior to the filing with the SEC and consider in good faith any comments of
the members of the Investor Group and their Representatives.

(c)No later than two (2) Business Days following the date of this Agreement, the
Investor Group shall file with the SEC an amendment to its Schedule 13D in
compliance with Section 13 of the Exchange Act reporting its entry into this
Agreement, disclosing applicable items to conform to its obligations hereunder
and including the terms of this Agreement and including this Agreement as an
exhibit thereto (the “Schedule 13D Amendment”). The Schedule 13D Amendment shall
be consistent with the terms of this Agreement and the Press Release. The
Investor Group shall provide the Company and its Representatives with a
reasonable opportunity to review the Schedule 13D Amendment prior to it being
filed with the SEC and consider in good faith any comments of the Company and
its Representatives.

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Section 2.4    Dividends. The Company shall, with respect to any dividends
having a record date on or following the date hereof in respect of the Purchased
Shares, be entitled to receive, when paid by the Company, any such dividends.

Section 2.5    Mutual Releases.

(a)In exchange for the valuable consideration set forth above, each member of
the Investor Group, hereby unconditionally and irrevocably releases, acquits and
forever discharges each of the Company Parties of and from any and all manner of
action or actions, causes or causes of action, in law or in equity, suits,
debts, liens, contracts, agreements, promises, liabilities, claims, demands,
damages, losses, costs and expenses, of any nature whatsoever, including but not
limited to False Claims Act claims, Qui Tam claims, breaches of fiduciary duty,
violations of securities laws and regulations; violations of banking laws and
regulations, derivative shareholder claims, private attorney general claims,
known or unknown, fixed or contingent, liquidated or unliquidated, direct or
indirect, from the beginning of time to the date of this Agreement; provided,
however, that the foregoing release shall not release (i) any rights or duties
of any Investor Group Party under this Agreement or (ii) any claims or causes of
action that any Investor Group Party may have for the breach or enforcement of
any provision of this Agreement. “Investor Group Parties” means each member of
the Investor Group and their respective former and current principals (in their
capacities as such), former and current employees (in their capacities as such),
former and current partners (in their capacities as such), heirs, estates,
trustees, beneficiaries, successors, assigns, insurers and Representatives (in
their capacities as such), and “Company Parties” means the Company and its
predecessors, successors, former and current officers (in their capacities as
such), former and current directors (in their capacities as such), former and
current employees (in their capacities as such), stockholders (in their
capacities as such), insurers, assigns and Representatives (in their capacities
as such).

(b)In exchange for the valuable consideration set forth above, the Company, on
behalf of itself and the Company Parties, hereby unconditionally and irrevocably
releases, acquits and forever discharges each of the Investor Group Parties of
and from any and all manner of action or actions, causes or causes of action, in
law or in equity, suits, debts, liens, contracts, agreements, promises,
liabilities, claims, demands, damages, losses, costs and expenses, of any nature
whatsoever, known or unknown, fixed or contingent, liquidated or unliquidated,
direct or indirect, from the beginning of time to the date of this Agreement;
provided, however, that the foregoing release shall not release (i) any rights
or duties of any Company Party under this Agreement or (ii) any claims or causes
of action that any Company Party may have for the breach or enforcement of any
provision of this Agreement.

(c)Each party represents and warrants that such party has not heretofore
transferred or assigned, or purported to transfer or assign, to any Person any
claims, demands, obligations, losses, causes of action, damages, penalties,
costs, expenses, attorneys’ fees, liabilities or indemnities herein released.
Each of the parties represents and warrants that neither such party nor any
assignee of such party has filed any lawsuit or other action against the other
party that is currently pending.

(d)Each party waives any and all rights (to the extent permitted by state law,
federal law, principles of common law or any other law) that may have the effect
of limiting the releases in this Section 2.5. Without limiting the generality of
the foregoing, each party acknowledges that there is a risk that the damages and
costs that such party believes such party has suffered or will suffer may turn
out to be other than or greater than those now known, suspected or believed to
be true. Facts on which each party has been relying in entering into this
Agreement may later turn out to be other than or different from those now known,
suspected or believed to be true. Each party acknowledges that in entering into
this Agreement, such party

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has expressed that such party agrees to accept the risk of any such possible
unknown damages, claims, facts, demands, actions and causes of action. Each
party acknowledges and agrees that the releases and covenants provided for in
this Section 2.5 are binding, unconditional and final as of the date hereof.
Section 2.6    No Litigation. During the Restrictive Period, each party hereby
covenants and agrees that it shall not, and shall not permit any of its
Representatives (in their capacities as such), to, directly or indirectly, alone
or in concert with others, encourage, pursue or assist any other person to
threaten or initiate, any lawsuit, claim or proceeding before any court (each, a
“Legal Proceeding”) against the other party or any of its Representatives,
except for (a) any Legal Proceeding initiated primarily to remedy a breach of or
to enforce this Agreement and (b) counterclaims with respect to any proceeding
initiated by, or on behalf of one party or its Affiliates against the other
party or its Affiliates; provided, however, that the foregoing shall not prevent
any party or any of its Representatives from responding to oral questions,
interrogatories, requests for information or documents, subpoenas, civil
investigative demands or similar processes (each, a “Legal Requirement”) in
connection with any Legal Proceeding if such Legal Proceeding has not been
initiated by, on behalf of or at the direct or indirect suggestion of such party
or any of its Representatives; provided, further, that in the event any party or
any of its Representatives receives such Legal Requirement, such party shall
give prompt written notice of such Legal Requirement to the other party (except
where such notice would be legally prohibited or not practicable).
ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE INVESTOR GROUP

Each member of the Investor Group (other than Ronald K. Tanemura, who hereby
makes the following representations and warranties to the Company solely for
himself) hereby, jointly and severally with respect to each other member of the
Investor Group (other than Ronald K. Tanemura), makes, the following
representations and warranties to the Company:
Section 3.1    Existence; Authority. Each member of the Investor Group that is
not a natural person is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization. Each member of the
Investor Group has all requisite competence, power and authority to execute and
deliver this Agreement to which such member is or will be a party, to perform
its or his obligations hereunder and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement to which such member is or will be a party.

Section 3.2    Enforceability. This Agreement has been duly and validly executed
and delivered by each member of the Investor Group and, assuming due and valid
authorization, execution and delivery by the Company, this Agreement constitutes
a legal, valid and binding agreement of each member of the Investor Group
hereto, enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally (including, without
limitation, fraudulent conveyance laws) and by general principles of equity,
regardless of whether considered in a proceeding in equity or at law.

Section 3.3    Ownership. Each of the members of the Investor Group set forth on
Schedule I hereto is the sole record and/or beneficial owner, as applicable, of
the Purchased Shares set forth opposite its or his name, free and clear of any
and all Liens other than general pledge agreements that may be applicable in
connection with prime brokerage or similar arrangements entered into by a member
of the

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Investor Group, which shall not restrict obligations of the Investor Group under
this Agreement, including, but not limited to, selling the Purchased Shares to
the Company in accordance with this Agreement. Other than the Purchased Shares
set forth opposite such members’ name on Schedule I hereto, no member of the
Investor Group is the record or beneficial owner of any Company Shares. Each
member of the Investor Group set forth on Schedule I hereto has full power and
authority to transfer full legal ownership of its respective Purchased Shares to
the Company, and no member of the Investor Group is required to obtain the
approval of any person or governmental or regulatory authority or organization
to effect the sale of the Purchased Shares. The entire direct or indirect
beneficial ownership of the Investor Group in the Company is 1,692,401 Company
Shares. Schedule I is true, correct and complete with respect to the direct and
indirect beneficial ownership of each member of the Investor Group set forth
therein.

Section 3.4    Good Title Conveyed. The stock certificates and stock powers, if
any, executed and delivered by, or DWAC transfer in lieu of such stock
certificates made by, the Investor Group at the Closing will be valid and
binding obligations of the Investor Group, enforceable in accordance with their
respective terms, and vest in the Company good, valid and marketable title to
all Purchased Shares purchased by the Company, free and clear of any and all
Liens.

Section 3.5    No Conflict. The execution and delivery by each member of the
Investor Group and the performance by each member of the Investor Group of its
or his obligations hereunder and compliance by each member of the Investor Group
with all of the provisions hereof and the consummation by each member of the
Investor Group of the transactions described herein (a) shall not conflict with,
or result in a breach or violation of, or default under, any contract to which
any member of the Investor Group is a party, (b) if such member is an entity,
shall not result in any violation or breach of any provision of the
organizational documents of such member and (c) shall not conflict with or
result in any violation of any law applicable to such member or any of such
member’s properties or assets, except with respect to each of (a) and (c), such
conflicts, breaches, violations or defaults as would not reasonably be expected
to materially and adversely affect the ability of such member to perform its or
his obligations under this Agreement.

Section 3.6    Absence of Litigation. As of the date hereof, there is no suit,
action, investigation or proceeding pending or, to the knowledge of any member
of the Investor Group, threatened against such member that could impair the
ability of any member of the Investor Group to perform its or his obligations
hereunder or to consummate the transactions contemplated hereby to which it or
he is a party, except with respect to such suits, actions, investigations or
proceedings as would not reasonably be expected to materially and adversely
affect the ability of such member to perform its or his obligations under this
Agreement.

Section 3.7    Consents and Approvals. No consent, approval, order,
authorization, registration or qualification of or with any governmental or
regulatory authority or organization having jurisdiction over any member of the
Investor Group is required in connection with the execution, delivery and
performance by such member of this Agreement or the consummation by such member
of any transactions contemplated hereby to which such member is a party.

Section 3.8    Other Acknowledgments.

(a)    Each member of the Investor Group hereby represents, warrants and
acknowledges that it or he is a sophisticated investor and that it or he knows
that the Company may have material non-public information concerning the Company
and its condition (financial and otherwise),

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results of operations, businesses, properties, plans and prospects and that such
information could be material to the Investor Group’s decision to sell the
Purchased Shares or otherwise materially adverse to the Investor Group’s
interests. Each member of the Investor Group acknowledges and agrees that the
Company shall have no obligation to disclose to it or him any such information
and hereby waives and releases, to the fullest extent permitted by applicable
law, any and all claims and causes of action it or he has or may have against
Company and its Affiliates, officers, partners, directors, employees, agents and
Representatives based upon, relating to or arising out of nondisclosure of such
information or the sale of the Purchased Shares hereunder.

(b)    Each member of the Investor Group further represents that it or he has
adequate information concerning the business and financial condition of the
Company to make an informed decision regarding the sale of the Purchased Shares
and has, independently and without reliance upon the Company, made its or his
own analysis and decision to sell the Purchased Shares. With respect to legal,
tax, accounting, financial and other considerations involved in the transactions
contemplated by this Agreement, including the sale of the Purchased Shares, none
of the members of the Investor Group are relying on the Company (or any agent or
Representative thereof). Each member of the Investor Group has carefully
considered and, to the extent it or he believes such discussion is necessary,
discussed with professional legal, tax, accounting, financial and other advisors
the suitability of the transactions contemplated by this Agreement, including
the sale of the Purchased Shares. Each member of the Investor Group acknowledges
that none of the Company or any of its partners, directors, officers,
subsidiaries or Affiliates has made or makes any representations or warranties,
whether express or implied, of any kind except as expressly set forth in this
Agreement.

(c)    The members of the Investor Group are “accredited investors” as defined
in Rule 501 promulgated under the Securities Act of 1933, as amended. The sale
of the Purchased Shares by the Investor Group (i) was privately negotiated in an
independent transaction and (ii) does not violate any rules or regulations
applicable to the Investor Group.

(d)    The Company is relying on the representations, warranties and
acknowledgments made by each member of the Investor Group in this Section 3, and
the Company would not have entered into this Agreement in the absence of such
representations, warranties and acknowledgments.
ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF BUYERS AND THE COMPANY

The Company hereby makes the following representations and warranties to the
Investor Group:
Section 4.1    Existence; Authority. The Company is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Washington. The Company, has all requisite organizational power and authority,
subject to the Company’s receipt of an approval or non-objection (which does not
contain any material conditions) in respect of the purchase of the Purchased
Shares from the Federal Reserve, to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby and has taken all necessary organizational action to
authorize the execution, delivery and performance of this Agreement.

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Section 4.2    Enforceability. This Agreement has been duly and validly executed
and delivered by the Company and, assuming due and valid authorization,
execution and delivery by the Investor Group, this Agreement constitutes a
legal, valid and binding agreement of the Company, enforceable in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally (including, without limitation, fraudulent
conveyance laws) and by general principles of equity, regardless of whether
considered in a proceeding in equity or at law.

Section 4.3    Absence of Litigation. As of the date hereof, other than as
described in the Company’s public filings with the SEC, there is no suit,
action, investigation or proceeding pending or, to the knowledge of the Company,
threatened against the Company that could impair the ability of the Company to
perform its obligations hereunder or to consummate the transactions contemplated
hereby, except with respect to such suits, actions, investigations or
proceedings as would not reasonably be expected to materially and adversely
affect the ability of the Company to perform its obligations under this
Agreement.

Section 4.4    No Conflict. The execution and delivery by the Company and the
performance by the Company of its obligations hereunder and compliance by the
Company with all of the provisions hereof and the consummation by the Company of
the transactions described herein (a) shall not conflict with, or result in a
breach or violation of, or default under, any contract to which the Company is a
party, (b) shall not result in any violation or breach of any provision of the
organizational documents of the Company and (c) shall not conflict with or
result in any violation of any law applicable to the Company or any of its
properties or assets, except with respect to each of (a) and (c), such
conflicts, breaches, violations or defaults as would not reasonably be expected
to materially and adversely affect the ability of the Company to perform its
obligations under this Agreement.

Section 4.5    Consents and Approvals. Subject to the Company’s receipt of an
approval or non-objection (which does not contain any material conditions) in
respect of the purchase of the Purchased Shares from the Federal Reserve, no
consent, approval, order, authorization, registration or qualification of or
with any governmental or regulatory authority or organization having
jurisdiction over the Company is required in connection with the execution,
delivery and performance by the Company of this Agreement or the consummation by
the Company of any transactions contemplated hereby to which it is a party.

ARTICLE V

MISCELLANEOUS

Section 5.1    Survival. Each of the representations, warranties, covenants and
agreements contained in this Agreement shall survive the Closing.
Notwithstanding any knowledge of facts determined or determinable by any party
by investigation, each party shall have the right to fully rely on the
representations, warranties, covenants and agreements of the other parties
contained in this Agreement. Each representation, warranty, covenant and
agreement contained in this Agreement is independent of each other
representation, warranty, covenant and agreement contained in this Agreement.
Except as expressly set forth in this Agreement, no party has made any
representation, warranty, covenant or agreement and the parties expressly
disclaim reliance on any extra contractual statement or omissions.

Section 5.2    Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given if so given)

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by hand delivery, email, facsimile, cable, telecopy or mail (registered or
certified, postage prepaid, return receipt requested) to the respective parties
hereto addressed as follows:
If to the Company:
HomeStreet, Inc.
601 Union Street, Suite 2000
Seattle, WA 98101
Attn: Godfrey B. Evans
Facsimile: (206) 389-7703
Email: godfrey.evans@homestreet.com

With a copy to (which shall not constitute notice):
Sidley Austin LLP
787 Seventh Avenue
New York, New York 10019
Attn: Kai H. E. Liekefett
Beth E. Berg
Facsimile: (212) 839-5599
Email: kliekefett@sidley.com
bberg@sidley.com

If to any member of the Investor Group:
c/o Roaring Blue Lion Capital Management, L.P.
8115 Preston Road, Suite 550
Dallas, TX 75225
Attn: Charles W. Griege, Jr.
Email: chuck@bluelioncap.com

With a copy to (which shall not constitute notice):
Schulte Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Attn: Eleazer Klein
Facsimile: (212) 593-5955
Email: eleazer.klein@srz.com

Section 5.3    Certain Definitions. As used in this Agreement: (a) the terms
“Affiliate” and “Associate” (and any plurals thereof) have the meanings ascribed
to such terms under Rule 12b-2 promulgated by the SEC under the Exchange Act and
shall include all persons or entities that at any during the Restrictive Period
become Affiliates or Associates of any applicable person or entity referred to
in this Agreement; provided, however, that the term “Associate” shall refer only
to Associates controlled by the Company or the members of the Investor Group, as
applicable; provided, further, that, for purposes of this Agreement, the members
of the Investor Group shall not be Affiliates or Associates of the Company and
the Company shall not be an Affiliate or Associate of the members of the
Investor Group;

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(b) the terms “beneficial ownership” or “beneficially owned” shall have the
meanings set forth in Rule 13d-3 under the Exchange Act; (c) the term “Business
Day” shall mean any day other than a Saturday, Sunday or other day on which
commercial banks in the State of New York are authorized or obligated to be
closed by applicable law; (d) the term “Extraordinary Transaction” means any
tender offer, exchange offer, merger, consolidation, acquisition, business
combination, sale, recapitalization, restructuring, or other transaction with a
third party that, in each case, that results in a change in control of the
Company or the sale of substantially all of its assets; (e) the term
“Representatives” means: (i) a person’s Affiliates and Associates and (ii) its
and their respective directors, officers, employees, partners, members,
managers, consultants, financial, legal or other advisors, insurance carriers,
agents and other representatives acting in a capacity on behalf of, in concert
with or at the direction of such person or its Affiliates or Associates; (e) the
term “Third Party” refers to any person that is not a party, a member of the
Board, a director or officer of the Company, or legal counsel to either party;
and (f) the Company and the Investor Group will be referred to herein
individually as a “party” and collectively as “parties.”

Section 5.4    Specific Performance. The Company, on the one hand, and each
member of the Investor Group, on the other hand, acknowledge and agree that the
other would be irreparably injured by a breach of this Agreement and that money
damages are an inadequate remedy for an actual or threatened breach of this
Agreement. Accordingly, the parties agree to the granting of specific
performance of this Agreement and injunctive or other equitable relief as a
remedy for any such breach or threatened breach, without proof of actual
damages, and further agree to waive any requirement for the securing or posting
of any bond in connection with any such remedy. Such remedy shall not be deemed
to be the exclusive remedy for a breach of this Agreement, but shall be in
addition to all other remedies available at law or equity.

Section 5.5    Expenses. All fees and expenses incurred by a party hereto in
connection with the matters contemplated by this Agreement shall be borne by the
party incurring such fee or expense, including without limitation the fees and
expenses of any investment banks, attorneys, accountants or other experts or
advisors retained by such party.

Section 5.6    Attorneys’ Fees. If any legal action or other legal proceeding
relating to this Agreement or the enforcement of any provision of this Agreement
is brought against any party to this Agreement, the prevailing party shall be
entitled to recover its reasonable attorneys’ fees, costs and disbursements (in
addition to any other relief to which the prevailing party may be entitled).

Section 5.7    Waiver. Any waiver of any term or condition of this Agreement
must be in writing and signed by the party to be charged. Any waiver by any
party hereto of a breach of any provision of this Agreement shall not operate as
or be construed to be a waiver of any other breach of such provision or of any
breach of any other provision of this Agreement. The failure of a party hereto
to insist upon strict adherence to any term of this Agreement on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.

Section 5.8    Severability. If any term, provision, covenant or restriction of
this Agreement is held by a Washington Court to be invalid or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated by such holding.

Section 5.9    Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; provided, that, this Agreement

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(and any of the rights, interests or obligations of any party hereunder) may not
be assigned by any party without the prior written consent of the other parties
hereto, such consent not to be unreasonably withheld. Any purported assignment
of a party’s rights under this Agreement in violation of the preceding sentence
shall be null and void.

Section 5.10    Entire Agreement; Amendments; Third Party Beneficiaries. This
Agreement (including any Schedules and any Exhibits hereto) constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof and, except as
expressly set forth in the following sentence, is not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder. The
parties hereby designate: (a) each Company Party that is not a party to this
Agreement as a third party beneficiary of Section 2.5(a) and Article V; and
(b) each Investor Group Party that is not a party to this Agreement as a third
party beneficiary of Section 2.5(b) and Article V. This Agreement may be amended
only by a written instrument duly executed by the parties hereto or their
respective permitted successors or assigns.

Section 5.11    Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

Section 5.12    Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Washington
without regard to its choice of law principles to the extent that the
application of the laws of another jurisdiction would be required thereby.

Section 5.13    Submission to Jurisdiction; Waiver of Jury Trial. Each party
hereby irrevocably and unconditionally (a) submits, for itself and its property,
to the exclusive jurisdiction and venue of the courts of Washington State
located in King County (including but not limited to the federal or state courts
located in King County in the State of Washington) (as applicable, the
“Washington Courts”), and any appellate court from any decision thereof, in any
Legal Proceeding with respect to the subject matter of this Agreement, including
the negotiation, execution or performance of this Agreement and agrees that all
claims in respect of any such Legal Proceeding shall be heard and determined in
the Washington Courts, (b) waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any Legal Proceeding with respect to the subject matter of
this Agreement or the negotiation, execution or performance of this Agreement in
the Washington Courts, including any objection based on its place of
incorporation or domicile, (c) waives, to the fullest extent permitted by
applicable law, the defense of an inconvenient forum to the maintenance of such
Legal Proceeding in any such court and (d) agrees that a final non-appealable
judgment in any such Legal Proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
applicable law. The parties waive any right to a trial by jury with respect to
any Legal Proceeding.

Section 5.14    Counterparts; Facsimile. This Agreement may be executed in
counterparts, including by facsimile or PDF electronic transmission, each of
which shall be deemed an original, but all of which together shall constitute
one and the same Agreement.

Section 5.15    Further Assurances. Upon the terms and subject to the conditions
of this Agreement, each of the parties hereto agrees to execute such additional
documents, to use commercially reasonable efforts to take, or cause to be taken,
all actions, and to do, or cause to be done, and to assist and cooperate with
the other parties in doing, all things necessary, proper or advisable to
consummate or make effective, in the most expeditious manner practicable, the
transactions contemplated by this Agreement.

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Section 5.16    Interpretation. The parties acknowledge and agree that this
Agreement has been negotiated at arm’s length and among parties equally
sophisticated and knowledgeable in the matters covered hereby. Accordingly, any
rule of law or legal decision that would require interpretation of any
ambiguities in this Agreement against the party that has drafted it is not
applicable and is hereby waived.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first written above.

COMPANY
HOMESTREET, INC.
By:
/s/ Mark K. Mason        

Name: Mark K. Mason
Title: Chairman, President & CEO
  

[Signature Page to Purchase Agreement]

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INVESTOR GROUP
BLUE LION OPPORTUNITY MASTER FUND, L.P.

By: Roaring Blue Lion Capital Management,
       L.P., its investment manager

By:   /s/ Charles W. Griege                 
       Name: Charles W. Griege, Jr.
       Title: Managing Partner
 

BLOF II LP

By: Roaring Blue Lion Capital Management,
       L.P., its investment manager

By:   /s/ Charles W. Griege                
       Name: Charles W. Griege, Jr.
       Title: Managing Partner
 

ROARING BLUE LION CAPITAL MANAGEMENT, L.P.

By:   /s/ Charles W. Griege                
       Name: Charles W. Griege, Jr.
       Title: Managing Partner
 

ROARING BLUE LION, LLC

By:   /s/ Charles W. Griege               
       Name: Charles W. Griege, Jr.
       Title: Managing Partner
 

   /s/ Charles W. Griege           
Charles W. Griege, Jr.

   /s/ Ronald K. Tanemura        
Ronald K. Tanemura

 

[Signature Page to Purchase Agreement]

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Schedule I

SHARE OWNERSHIP

Member of the Investor Group
Purchased Shares
Blue Lion Opportunity Master Fund, L.P.
301,886 (including 1,000 Purchased Shares held in record name)
BLOF II LP
1,375,515
Ronald K. Tanemura
15,000

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Exhibit A

PRESS RELEASE