Exhibit 10.1

STANDBY PURCHASE AGREEMENT

This STANDBY PURCHASE AGREEMENT (this “Agreement”), dated as of May
            , 2008, is by and between Federal Trust Corporation, a Florida
corporation (the “Company”), and                              (a “Standby
Purchaser”).

WITNESSETH:

WHEREAS, the Company proposes pursuant to the Registration Statement (as defined
herein), to commence an offering to holders of its common stock, par value $0.01
per share, (the “Common Stock”) of record as of the close of business on May 6,
2008 (the “Record Date”), of non-transferable rights (the “Rights”) to subscribe
for and purchase additional shares of Common Stock (the “New Shares”) at a
subscription price of $0.95 per share for an aggregate offering amount of up to
$15,000,000.00 (the “Subscription Price” and, such offering, the “Rights
Offering”); and

WHEREAS, pursuant to the Rights Offering, the Company will distribute to each of
its shareholders of record, at no charge, one Right for each share of Common
Stock held by them as of the Record Date, and each Right will entitle the holder
to purchase, for each share of Common Stock owned as of the Record Date, 1.6732
New Shares at the Subscription Price (the “Basic Subscription Privilege”); and

WHEREAS, each holder of Rights who exercises in full its Basic Subscription
Privilege will be entitled to subscribe for additional shares of Common Stock of
the Unsubscribed Shares (as defined herein), at the Subscription Price, to the
extent that other holders of Rights do not exercise all of their respective
Basic Subscription Privileges (the “Over-Subscription Privilege”); and

WHEREAS, in order to facilitate the Rights Offering, the Company has requested
the Standby Purchaser to agree, and the Standby Purchaser has agreed, (a) to
exercise his Basic Subscription Privilege in full for              shares of
Common Stock, (b) not to exercise his respective Over-Subscription Privilege, if
applicable and (c) to purchase an additional              Unsubscribed Shares
from the Company at the Subscription Price (the “Standby Shares”), and (d) to
the extent the Standby Purchaser is unable to purchase              Standby
Shares, then Purchaser shall be entitled to purchase at least             
additional shares of Common Stock (the “Additional Shares”) from the Company at
the Subscription Price (the “Standby Offering” and, together with the Rights
Offering, the “Stock Offerings”); and

WHEREAS, the Company has agreed to issue warrants to the Standby Purchaser (the
“Warrants”), where each warrant would entitle the Standby Purchaser to purchase
one share of Common Stock at a price of $0.95 per share; and

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained and other good and valuable consideration, the parties hereto,
intending to be legally bound hereby, agree as follows:

Section 1. Certain Other Definitions. The following terms used herein shall have
the meanings set forth below:

“Additional Shares” shall have the meaning set forth in the recitals hereof.

“Affiliate” shall mean an affiliate (as defined in Rule 12b-2 under the Exchange
Act) of such Standby Purchaser; provided that such Standby Purchaser or any of
its affiliates exercises investment authority, including, without limitation,
with respect to voting and dispositive rights with respect to such affiliate.

“Agreement” shall have the meaning set forth in the preamble hereof.

“Bank” means Federal Trust Bank, a federal savings bank with its executive
offices located at 312 West 1st Street, Sanford, Florida 32771.

“Basic Subscription Privilege” shall have the meaning set forth in the recitals
hereof.

“Board” shall mean the Board of Directors of the Company.

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“Business Day” shall mean any day that is not a Saturday, a Sunday or a day on
which banks are generally closed in the State of Florida.

“Closing” shall mean the closing of the purchases described in Section 2 hereof,
which shall be held at 10:00 a.m. on the Closing Date at the offices of Luse
Gorman Pomerenk & Schick, PC, located at 5335 Wisconsin Ave., NW, Suite 400,
Washington, DC, or such other time and place as may be agreed to by the parties
hereto.

“Closing Date” shall mean the date that is three (3) Business Days after the
Rights Offering Expiration Date, or such other date as may be agreed to by the
parties hereto.

“Commission” shall mean the United States Securities and Exchange Commission, or
any successor agency thereto.

“Common Stock” shall have the meaning set forth in the recitals hereof.

“Company” shall have the meaning set forth in the preamble hereof.

“Cure Period” shall have the meaning set forth in Section 9(a) hereof.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.

“Market Adverse Effect” shall have the meaning set forth in Section 8(a)(iii)
hereof.

“Material Adverse Effect” shall mean a material adverse effect on the financial
condition, or on the financial position, operations, assets, results of
operations or business of the Company and its subsidiaries taken as a whole;
provided that the meaning shall exclude any changes in general economic,
industry, market or competitive conditions generally affecting Persons in the
Company’s industry, unless any such changes shall be deemed to have a
disproportionate impact on the Company.

“New Shares” shall have the meaning set forth in the recitals hereof.

“Over-Subscription Privilege” shall have the meaning set forth in the recitals
hereof.

“Person” shall mean an individual, corporation, partnership, association, joint
stock company, limited liability company, joint venture, trust, governmental
entity, unincorporated organization or other legal entity.

“Prospectus” shall mean the final Prospectus, including any prospectus
supplement relating to the Rights and the underlying shares of Common Stock, and
the additional shares of Common Stock to be offered and sold in the Standby
Offering, that is filed with the Commission and deemed by virtue of Rule 430B of
the Securities Act to be part of such registration statement, each as amended,
for use in connection with the issuance of the Rights or the sale of shares in
the Standby Offering.

“Pro Rata Share” shall mean, with respect to each shareholder of the Company as
of the Record Date, such shareholder’s ownership percentage of all issued and
outstanding Common Stock as of the Record Date.

“Record Date” shall have the meaning set forth in the recitals hereof.

“Rights” shall have the meaning set forth in the recitals hereof.

“Rights Offering” shall have the meaning set forth in the recitals hereof.

“Rights Offering Expiration Date” shall mean June 12, 2008, provided that the
Company shall have the option to extend the Rights Offering, for any reason,
until June 27, 2008.

“Registration Statement” shall mean the Company’s Registration Statement on Form
S-1 (Commission File No. 333-150051) initially filed with the Commission on
April 2, 2008, together with all exhibits thereto and any Prospectus relating to
the Rights, the New Shares and Additional Shares, that is filed with the
Commission and deemed by virtue of Rule 430B of the Securities Act to be part of
such registration statement, each as amended, pursuant to which the Rights and
underlying shares of Common Stock have been registered pursuant to the
Securities Act.

 

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“Securities” shall mean the Standby Shares together with the Additional Shares
and the Warrants.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the Commission thereunder.

“Standby Offering” shall have the meaning set forth in the recitals hereof.

“Standby Purchaser” shall have the meaning set forth in the preamble hereof.

“Standby Purchasers” shall mean the Standby Purchaser and certain other parties
with whom the Company has entered into Standby Purchase Agreements that are
substantially similar to this Agreement, except as described herein.

“Standby Shares” shall have the meaning set forth in the recitals hereof.

“Stock Offering” shall have the meaning set forth in the recitals hereof.

“Subscription Agent” shall have the meaning set forth in Section 7(a)(iv)
hereof.

“Subscription Price” shall have the meaning set forth in the recitals hereof.

“Termination Notice” shall mean a notice from the Company indicating that the
Board, in the exercise of its good faith judgment, has determined to terminate
or suspend indefinitely the Rights Offering contemplated hereby.

“Unsubscribed Shares” shall have the meaning set forth in Section 2(b) hereof.

“Warrants” shall have the meaning set forth in the recitals hereof.

Section 2. Standby Purchase and Warrant Commitment.

(a) The Standby Purchaser hereby agrees to purchase from the Company, and the
Company hereby agrees to sell to the Standby Purchaser, at the Subscription
Price              New Shares that will be available for purchase by the Standby
Purchaser pursuant to its Basic Subscription Privilege. The Standby Purchaser
agrees not to exercise, and to cause its Affiliates not to exercise, the
Over-Subscription Privilege to which such Standby Purchaser and its Affiliates
may otherwise be entitled in the Rights Offering.

(b) The Standby Purchaser hereby agrees to purchase from the Company, and the
Company hereby agrees to sell to the Standby Purchaser, at the Subscription
Price, up to              Standby Shares that remain available in the Rights
Offering after the issuance of all shares of Common Stock validly subscribed for
through the exercise of Rights, including the exercise of all Over-Subscription
Privileges (other than by Standby Purchasers), in the Rights Offering (such
remaining shares being hereinafter referred to as the “Unsubscribed Shares”).

(c) In the event there is not a sufficient number of Unsubscribed Shares
remaining upon completion of the Rights Offering (including the exercise of all
Over-Subscription Privileges, other than by Standby Purchasers) to allow the
Standby Purchaser to purchase              Standby Shares, subject to the
maximum number of shares of Common Stock being offered for sale in the Rights
Offering as set forth in the Registration Statement, Standby Purchaser hereby
agrees to purchase from the Company, and the Company hereby agrees to sell to
the Standby Purchaser, at the Subscription Price and otherwise in accordance
with this Agreement, sufficient Additional Shares so that the Standby Purchaser
shall have purchased at least              Standby Shares.

(d) Payment of the Subscription Price for the Securities shall be made to the
Company by the Standby Purchaser, on the Closing Date, against delivery of the
Securities to the Standby Purchaser, in United States dollars by means of a
certified or cashier’s check, bank draft, money order or wire transfer.

(e) The Company hereby agrees to issue to the Standby Purchaser 5,000,000
Warrants on the Closing Date. The Warrants shall be exercisable immediately upon
completion of the Stock Offering, subject to receipt of any required regulatory
approvals in connection with such exercise, The Company agrees to file, and to
use its best

 

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efforts to have the Commission declare effective, a registration statement with
respect to the Warrants and the underlying Common Stock. Such registration
statement will be filed by the Company with the Commission as soon as is
reasonably practicable following the completion of the Stock Offering , but in
no event later than 20 calendar days following such completion. The Warrants
shall expire upon the later of (i) seven (7) years from the date of
effectiveness of the registration statement filed with respect to such exercise
or (ii) nine (9) years from the completion of the Stock Offering, and shall be
adjusted to reflect any a stock split, stock dividend or similar
recapitalization with respect to the Common Stock. The Warrants, and all other
registration and other rights relating thereto hereunder, shall be fully
transferable and assignable at the sole option of the Standby Purchaser upon
written notification to the Company of the Standby Purchaser’s intent to cause
such transfer or assignment. Standby Purchasers shall not have voting rights
with respect to the Warrants except to the extent Warrants are exercised for
shares of Common Stock.

(f) The Standby Purchaser and the Company acknowledge and agree that the Company
has entered into, or contemplates entering into, one or more other Standby
Purchase Agreements with certain other parties on terms substantially similar to
this Agreement, except that they may provide for the purchase of a different
maximum number of Standby Shares and a different minimum number of Standby
Shares as set forth in Section 2(c), and a different number of Warrants as set
forth in Section 2(e). The Unsubscribed Shares available for issuance to Standby
Purchasers and any Additional Shares that the Company shall have elected to
issue shall be allocated (to the extent any allocation thereof is necessary) as
nearly as possible on a pro rata basis among the Standby Purchasers based upon
the number of Standby Shares subscribed for by each such Standby Purchaser,
after giving effect to the limitation set forth in Section 2(c).

(g) Following completion of the Stock Offering, and subject to the receipt of
approval or non-objection from the Office of Thrift Supervision, each of the
Company and the Bank shall each increase the size of its respective board of
directors by two members to a maximum of nine (9) members, and the Standby
Purchaser shall have the right to select one individual for appointment to the
Board of the Company and the board of directors of the Bank. In addition, the
Standby Purchaser shall have the right to select one (1) other individual with
the right to act as an observer at meetings of each of the Board of the Company
and the board of directors of the Bank.

(h) The Board of Directors shall adopt resolutions (by at least two-thirds of
the directors) determining that the Stock Offering shall not constitute a
“Change in Control” under the 1999 Key Employee Stock Compensation Plan, the
1998 Directors’ Stock Option Plan and the 2005 Director Stock Plan, it being
understood that such resolutions shall only have effect to the extent the
adoption of such resolutions is the only action required under such plans so
that the Stock Offering shall not constitute a “Change in Control” under such
plans.

Section 3. Right of First Refusal. In the event that the Company issues
additional Shares of Common Stock (or securities convertible into Common Stock)
following the Closing Date, except for the issuances of Common Stock pursuant to
its stock benefit plans, provided that the Standby Purchaser beneficially owns
10% or more of the outstanding Shares of Common Stock, the Standby Purchaser
shall have the right to purchase directly from the Company, subject to the
approval or nonobjection of the Office of Thrift Supervision, if required,
additional shares of Common Stock (or securities convertible into Common Stock)
in an amount necessary to maintain its then-current ownership percentage of the
Common Stock, at the same price and on the same terms as the new shares of
Common Stock (or securities convertible into Common Stock) are issued, subject
to the approval or non-objection of the Office of Thrift Supervision, or other
applicable federal and/or state banking agency, if required. The Company agrees
to file, and to use its best efforts to have the Commission declare effective, a
registration statement with respect to such Common Stock. Such registration
statement will be filed by the Company with the Commission as soon as is
reasonably practicable following the completion of the related issuance, but in
no event later than 20 calendar days following such completion.

Section 4. Representations and Warranties of the Company. The Company represents
and warrants to the Standby Purchaser as follows:

(a) The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida and has all requisite corporate
power and authority to carry on its business as now conducted.

 

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(b) This Agreement has been duly and validly authorized, executed and delivered
by the Company and constitutes a binding obligation of the Company enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).

(c) The Registration Statement has been filed with, and declared effective by,
the Commission. On the effective date, the Registration Statement complied in
all material respects with the requirements of the Securities Act and did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. On the Closing Date, the Registration Statement and the Prospectus
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations and warranties
in this subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with the information furnished to the Company in writing by the Standby
Purchaser for use in the Registration Statement or in the Prospectus.

(d) All of the Securities and New Shares will have been duly authorized for
issuance prior to the Closing, and, when issued and distributed as set forth in
the Prospectus, will be validly issued, fully paid and non-assessable; and none
of the Securities or New Shares will have been issued in violation of the
preemptive rights of any security holders of the Company arising as a matter of
law or under or pursuant to the Company’s Restated Articles of Incorporation, as
amended, the Company’s Bylaws, as amended, or any material agreement or
instrument to which the Company is a party or by which it is bound.

(e) The Board of Directors has specifically approved this Agreement for purposes
of Section 607.0902 of the Florida Business Corporation Act.

(f) The minimum gross offering proceeds for the Stock Offering will be at least
$30,000,000.00.

(g) Neither the Company nor any of its direct or indirect subsidiaries
(“Subsidiaries”) is in violation of its charter, certificate of trust or by-laws
or in default under any agreement, indenture or instrument to which the Company
or any of its Subsidiaries is a party, the effect of which violation or default
could reasonably be expected to have a Material Adverse Effect on the Company,
and the execution, delivery and performance of this Agreement by the Company and
the consummation of the transactions contemplated hereby will not conflict with,
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of the
Company or its Subsidiaries pursuant to the terms of any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party which
lien, charge or incumbrance could reasonably be expected to have a Material
Adverse Effect on the Company, or result in a violation of the charter,
certificate of trust or by-laws of the Company or any of its Subsidiaries or any
order, rule or regulation of any court or governmental agency having
jurisdiction over the Company, any of its Subsidiaries or any of their property;
and, except as required by the Securities Act, the Exchange Act, and applicable
state securities law, no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance of this Agreement.

(h) The Company has disclosed to each Standby Purchaser the identities of the
other Standby Purchasers.

Section 5. Representations and Warranties of the Standby Purchaser. The Standby
Purchaser represents and warrants to the Company as follows:

(a)(i) If the Standby Purchaser is an individual, he or she has full power and
authority to perform his or her obligations under this Agreement.

(ii) If the Standby Purchaser is a corporation, the Standby Purchaser is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, with corporate power and authority to
perform its obligations under this Agreement.

 

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(iii) If the Standby Purchaser is a trust, the trustee has been duly appointed
as trustee of the Standby Purchaser with full power and authority to act on
behalf of the Standby Purchaser and to perform the obligations of the Standby
Purchaser under this Agreement.

(iv) If the Standby Purchaser is a partnership or limited liability company, the
Standby Purchaser is a partnership or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, with full power and authority to perform its
obligations under this Agreement.

(b) As of the Record Date, Standby Purchaser and its Affiliates owned no shares
of Common Stock.

(c) The Standby Purchaser is acquiring his Securities for his own account, with
the intention of holding the Securities for investment and with no present
intention of participating, directly or indirectly, in a distribution of the
Securities; and he will not make any sale, transfer or other disposition of the
Securities for a period of six (6) months from the Closing Date.

(d) The Standby Purchaser is familiar with the business in which the Company is
engaged, and based upon his knowledge and experience in financial and business
matters, he is familiar with the investments of the type that he is undertaking
to purchase; he is fully aware of the problems and risks involved in making an
investment of this type; and he is capable of evaluating the merits and risks of
this investment. The Standby Purchaser acknowledges that, prior to executing
this Agreement, he has had the opportunity to ask questions of and receive
answers or obtain additional information from a representative of the Company
concerning the financial and other affairs of the Company.

(e) This Agreement has been duly and validly authorized, executed and delivered
by such Standby Purchaser and constitutes a binding obligation of such Standby
Purchaser enforceable against the Standby Purchaser in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).

(f) None of the Standby Purchasers are “affiliates” (within the meaning of
Rule 405 of the Securities Act) of one another, are not acting in concert and
are not members of a “group” (within the meaning of Section 13(d)(3) of the
Exchange Act) and have no current intention to act in the future in a manner
that would make them members of such a group.

(g) The Standby Purchaser has no reason to believe that it will not receive any
approvals or non-objections contemplated by Section 7(e) of this Agreement.

Section 6. Deliveries at Closing.

(a) At the Closing, if the Standby Purchaser holds his shares in certificated
form, the Company shall deliver to the Standby Purchaser a certificate or
certificates representing the number of shares of Common Stock issued to the
Standby Purchaser pursuant to Section 2 hereof. At the Closing, if the Standby
Purchaser holds his shares in uncertificated form, the Standby Purchaser’s
account with his custodian bank, broker, dealer or other nominee will be
credited with the shares of Common Stock issued to the Standby Purchaser
pursuant to Section 2 hereof. to the Standby Purchaser pursuant to Section 2
hereof.

(b) At the Closing, the Company shall issue and deliver to the Standby Purchaser
5,000,000 Warrants.

(c) At the Closing, the Standby Purchaser shall deliver to the Company payment
in an amount equal to the Subscription Price multiplied by the Securities
purchased by such Standby Purchaser, as set forth in Section 2(d) hereof.

 

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Section 7. Covenants.

(a) Covenants. The Company agrees as follows between the date hereof and the
earlier of the Closing Date or the effective date of any termination pursuant to
Section 9 hereof:

(i) To use commercially reasonable efforts to effectuate the Rights Offering;

(ii) As soon as reasonably practicable after the Company is advised or obtains
knowledge thereof, to advise the Standby Purchaser with a confirmation in
writing, of (A) the time when any amendment or supplement to the Prospectus has
been filed, (B) the issuance by the Commission of any stop order, or of the
initiation or threatening of any proceeding, suspending the effectiveness of the
Registration Statement or any amendment thereto or any order preventing or
suspending the use of any preliminary prospectus or the Prospectus or any
amendment or supplement thereto, (C) the issuance by any state securities
commission of any notice of any proceedings for the suspension of the
qualification of the New Shares or the Securities for offering or sale in any
jurisdiction or of the initiation, or the threatening, of any proceeding for
such purpose, (D) the receipt of any comments from the Commission directed
toward the Registration Statement or any document incorporated therein by
reference, and (E) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information. The Company will use its commercially reasonable efforts
to prevent the issuance of any such order or the imposition of any such
suspension and, if any such order is issued or suspension is imposed, to obtain
the withdrawal thereof as promptly as possible;

(iii) To operate the Company’s business in the ordinary course of business
consistent with past practice;

(iv) To notify, or to cause the subscription agent for the Rights Offering (the
“Subscription Agent”) to notify, on each Friday during the exercise period of
the Rights, or more frequently if reasonably requested by the Standby Purchaser,
the Standby Purchaser of the aggregate number of Rights known by the Company or
the Subscription Agent to have been exercised pursuant to the Rights Offering as
of the close of business on the preceding Business Day or the most recent
practicable time before such request, as the case may be;

(v) Not to issue any shares of capital stock of the Company, or options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, securities convertible into or exchangeable for capital stock of the
Company, or other agreements or rights to purchase or otherwise acquire capital
stock of the Company, except for (A) shares of Common Stock issuable upon
exercise of the Company’s presently outstanding stock options, and (B) new stock
options and other awards granted to employees of the Company after the date
hereof covering not more than 420,000 shares of Common Stock under the Company’s
incentive plans (“Equity Incentive Plans”);

(vi) Not to authorize any stock split, stock dividend, stock combination or
similar transaction affecting the number of issued and outstanding shares of
Common Stock; and

(vii) Not to declare or pay any dividends on its Common Stock or repurchase any
shares of Common Stock.

(b) Certain Acquisitions. Between the date hereof and the Closing Date, the
Standby Purchaser and its respective Affiliates shall not acquire any shares of
Common Stock; provided, however, that the foregoing shall not restrict the
acquisition of shares of Common Stock by the Standby Purchaser or its Affiliates
(i) from the Company pursuant to Section 2 of this Agreement or (ii) from the
Standby Purchaser or any of its respective Affiliates.

(c) Information. The Standby Purchaser agrees to furnish to the Company all
information with respect to the Standby Purchaser that may be necessary or
appropriate and will make any information furnished to the Company for the
Prospectus by the Standby Purchaser not contain any untrue statement of material
fact or omit to state a material fact required to be stated in the Prospectus or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

(d) Public Statements. Neither the Company nor the Standby Purchaser shall issue
any public announcement, statement or other disclosure with respect to this
Agreement or the transactions contemplated hereby without the prior consent of
the other parties hereto, which consent shall not be unreasonably withheld or
delayed, except (i) if such public announcement, statement or other disclosure
is required by applicable law or applicable

 

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stock market regulations, in which case the disclosing party shall consult in
advance with respect to such disclosure with the other parties to the extent
reasonably practicable, or (ii) the filing of any Schedule 13D or Schedule 13G,
to which a copy of this Agreement may be attached as an exhibit thereto.

(e) Regulatory Filing. If the Company or the Standby Purchaser determines a
filing is or may be required under applicable law in connection with the
transactions contemplated hereunder, the Company and the Standby Purchaser shall
use commercially reasonable efforts to prepare and file, as soon as reasonably
practicable following the execution of this Agreement, all necessary
documentation and to effect all applications or other filings that are necessary
or advisable under applicable law with respect to the transactions contemplated
hereunder so that any applicable waiting period shall have expired or been
terminated or any rebuttal of control determination shall have been accepted by
the applicable federal banking agency, as applicable, as soon as practicable
after the date hereof.

(f) National Securities Exchange. The Company will cause the shares of Common
Stock issued to the Standby Purchasers upon the exercise of the Warrants to be
listed on AMEX or on another national securities exchange.

Section 8. Conditions to Closing.

(a) The obligations of the Standby Purchaser to consummate the transactions
contemplated hereunder are subject to the fulfillment, prior to or on the
Closing Date, of the following conditions:

(i) The representations and warranties of the Company in Section 3 shall be true
and correct in all material respects as of the date hereof and at and as of the
Closing Date as if made on such date (except for representations and warranties
made as of a specified date, which shall be true and correct in all material
respects as of such specified date;

(ii) The Company shall have performed all covenants and agreements herein
required to be performed on its part at or prior to the Closing Date;

(ii) Subsequent to the execution and delivery of this Agreement and prior to the
Closing Date, there shall not have been any Material Adverse Effect and no event
shall have occurred or circumstance shall exist that could reasonably likely
result in a Material Adverse Effect;

(iii) As of the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or American Stock Exchange or trading in securities
generally on the American Stock Exchange shall not have been suspended or
limited or minimum prices shall not have been established on either exchange (a
“Market Adverse Effect”);

(iv) The Company shall have received shareholder approval of the issuance of
shares in a non-public offering to permit consummation of the Standby Offering
or a waiver of the requirement that such approval be obtained from the AMEX;

(v) The Company shall have received shareholder approval of an amendment to its
Restated Articles of Incorporation to increase the number of authorized shares
to permit consummation of the Stock Offerings;

(vi) The Company shall have delivered to the Standby Purchaser a certificate and
such other documents, dated the Closing Date, and signed, without personal
liability, by its President and Chief Executive Officer and its Chief Financial
Officer, to the effect that the conditions set forth in subsections (i) through
(v) of this Section 8 have been satisfied, to the best knowledge of the officer
executing the same;

(vii) The Company shall have amended the Employee Severance Agreements entered
into with Dennis Ward, Gregory Smith, Jennifer B. Brodnax, Mark McRae and Edward
J. Walker, and the Bank shall have amended the Salary Continuation Agreements
entered into with Gregory E. Smith and Jennifer Brodnax, to provide that the
Stock Offering will not constitute a “Change in Control” for purposes of such
agreements, or the executives shall have executed irrevocable written waivers
that the Stock Offering does not constitute a “Change in Control” for purposes
of the agreements, each to the reasonable satisfaction of the Standby Purchaser;
and

(viii) Subject to the receipt of any required approval or non-objection from the
Office of Thrift Supervision and the Federal Deposit Insurance Corporation (the
failure of which to receive shall make this

 

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Section 8(a)(vii) null and void and of no effect on this Agreement), the Company
shall have entered into an employment agreement with its President and Chief
Executive Officer, Dennis T. Ward, with terms and conditions reasonably
acceptable to Mr. Ward, the Company and the Standby Purchaser, which shall be
effective at the Closing Date or such later date in connection with the receipt
of any required approval or non-objection from the Office of Thrift Supervision,
which employment agreement shall contain a “non-compete” provision that provides
that in the event that Mr. Ward’s employment with the Company is terminated he
agrees not to compete with or solicit the business of the Company and the Bank
in the Company’s market area for a period of one year from such termination, in
consideration for a cash payment equal to one year of Mr. Ward’s base salary.

(b) The obligations of the Company to consummate the transactions contemplated
hereunder are subject to the fulfillment, prior to or on the Closing Date, of
the condition that the representations and warranties of the Standby Purchaser
in Section 4 shall be true and correct in all material respects as of the date
hereof and at and as of the Closing Date as if made as of such date (except for
representations and warranties made as of a specified date, which shall be true
and correct in all material respects as of such specified date).

(c) The obligations of the Company and the Standby Purchaser to consummate the
transactions contemplated hereunder in connection with the Rights Offering are
subject to the fulfillment, prior to or on the Closing Date, of the following
conditions:

(i) No judgment, injunction, decree or other legal restraint shall prohibit, or
have the effect of rendering unachievable, the consummation of the Rights
Offering or the material transactions contemplated by this Agreement;

(ii) No stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration Statement
or otherwise shall have been complied with;

(iii) The New Shares and the Securities shall have been authorized for listing
on the American Stock Exchange;

(iv) Any applicable waiting period under applicable law shall have expired or
been terminated thereunder or any rebuttal of control determination shall have
been accepted by the applicable federal banking agency, as applicable, with
respect to such purchase, under the terms and conditions set forth herein,
including without limitations Section 2(g), except with respect to the failure
to obtain approval or non-objection from the applicable federal banking agency
with respect to the provision of Section 2(g) providing for an individual with
the right to act as an observer at meetings of each of the Board of the Company
and the board of directors of the Bank.

Section 9. Termination.

(a) This Agreement may be terminated at any time prior to the Closing Date, by
the Standby Purchaser by written notice to the Company if there is (i) a Market
Adverse Effect or (ii) a Material Adverse Effect that is not cured within
twenty-one (21) days after the occurrence thereof (the “Cure Period”), provided
that the right to terminate this Agreement after the occurrence of a Material
Adverse Effect which has not been cured within the Cure Period, shall expire
seven (7) days after the expiration of such Cure Period, and provided further
that the right to terminate this Agreement after the occurrence of a Market
Adverse Effect expires seven (7) days after such Market Adverse Effect.

(b) This Agreement may be terminated by the Company on one hand or by the
Standby Purchaser on the other hand, by written notice to the other party
hereto:

(i) At any time prior to the Closing Date, if there is a material breach of this
Agreement by the other party that is not cured within fifteen (15) days after
the non-breaching party has delivered written notice to the breaching party of
such breach; or

(ii) At any time after September 30, 2008, unless the Closing has occurred prior
to such date.

 

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(c) This Agreement may be terminated by the Company in the event that:

(i) The Company determines, in the exercise of the fiduciary duties of its Board
of Directors, that it is not in the best interests of the Company and its
shareholders to go forward with the Stock Offerings; or

(ii) Consummation of the Standby Offering is prohibited by law, rule or
regulation.

(d) Except as set forth in Section 17(g), the Company and the Standby Purchaser
hereby agree that any termination of this Agreement pursuant to Section 9(a),
9(b)(ii) or 9(c) shall be without liability of the Company or the Standby
Purchaser.

Section 10. Survival. The representations and warranties of the Company and the
Standby Purchaser contained in this Agreement or in any certificate delivered
hereunder shall survive the Closing hereunder.

Section 11. Notices. All notices, communications and deliveries required or
permitted by this Agreement shall be made in writing signed by the party making
the same, shall specify the Section of this Agreement pursuant to which it is
given or being made and shall be deemed given or made (a) on the date delivered
if delivered by telecopy or in person, (b) on the third (3rd) Business Day after
it is mailed if mailed by registered or certified mail (return receipt
requested) (with postage and other fees prepaid) or (c) on the day after it is
delivered, prepaid, to an overnight express delivery service that confirms to
the sender delivery on such day, as follows:

If to the Company:

 

Federal Trust Corporation

312 West First Street

Sanford, Florida 32771

Attention:    Dennis T. Ward President and Chief Executive Officer Telephone:   
(407) 323-1833 Facsimile:    (407) 302-4595

With a copy to:

 

Luse Gorman Pomerenk & Schick, PC

5335 Wisconsin Ave., NW

Suite 400

Washington, DC 20015

Attention:    Eric Luse, Esq.    Ned Quint, Esq. Telephone:    (202) 274-2000
Facsimile:    (202) 362-2902

If to the Standby Purchaser:

Attention:

Telephone

Facsimile:

or to such other representative or at such other address of a party as such
party hereto may furnish to the other parties in writing in accordance with this
Section 11.

Section 12. Assignment. This Agreement will be binding upon, and will inure to
the benefit of and be enforceable by, the parties hereto and their respective
successors and assigns, including any person to whom Securities are transferred
in accordance herewith.

 

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Section 13. Entire Agreement. Except as specifically set forth herein, the
Company and the Standby Purchaser mutually agree to be bound by the terms of the
non-disclosure agreement dated                      (the “Non-Disclosure
Agreement”) previously executed by the Company and the Standby Purchaser, which
such Non-Disclosure Agreement is hereby incorporated herein by reference, and
all information furnished by either party to the other party or its
representatives pursuant hereto shall be subject to, and the parties shall hold
such information in confidence in accordance with, the provisions of the
Non-Disclosure Agreement. The Company and the Standby Purchaser agree that such
Non-Disclosure Agreement shall continue in accordance with their respective
terms, notwithstanding the termination of this Agreement. The Non-Disclosure
Agreement and this Agreement embody the entire agreement and understanding
between the parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein or in the Non-Disclosure Agreement, with
respect to the standby purchase commitments with respect to the Securities and
the New Shares. Other than with respect to matters set forth or referred to in
the Non-Disclosure Agreement, this Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter of this
Agreement.

Section 14. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Florida (other than its rules
of conflict of laws to the extent the application of the laws of another
jurisdiction would be required thereby).

Section 15. Severability. If any provision of this Agreement or the application
thereof to any person or circumstances is determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remaining provisions
hereof, or the application of such provision to persons or circumstances other
than those as to which it has been held invalid, void or unenforceable, shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination, the parties shall negotiate in good faith in an
effort to agree upon a suitable and equitable substitute provision to affect the
original intent of the parties.

Section 16. Extension or Modification of Rights Offering. The Company may
(a) waive irregularities in the manner of exercise of the Rights, and (b) waive
conditions relating to the method (but not the timing) of the exercise of the
Rights to the extent that such waiver does not materially adversely affect the
interests of the Standby Purchaser.

Section 17. Miscellaneous.

(a) The Company shall not after the date of this Agreement enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the Standby Purchaser in this Agreement.

(b) The headings in this Agreement are for purposes of reference only and shall
not limit or otherwise affect the meaning of this Agreement.

(c) Words used herein regardless of the number and gender specifically used,
shall be deemed and construed to include any other number, singular or plural,
and any other gender, masculine, feminine or neuter, as the context requires.

(d) This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which, when taken together, shall
constitute one and the same instrument.

(e) The Company will reimburse the Standby Purchaser for its accountable
expenses associated with the Standby Purchaser’s investment, in an amount not to
exceed $            .

(f) Subject to the receipt of any required approval or non-objection of the
Office of Thrift Supervision or other applicable federal banking agency, if
requested by the Standby Purchaser, the Company will retain an independent
third-party consultant to monitor the Company’s and the Bank’s compliance with
the cease and desist order entered into with the OTS. Such consultant shall be
selected by management of the Company and approved by the Board of Directors.

 

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(g) Should the Company terminate this Agreement in accordance with Section
(9)(c)(i), the Company will pay the Standby Purchaser liquidated damages in the
amount of              ($            ). Such payment shall be made within three
(3) business days of such termination.

[Remainder of this page intentionally left blank.]

 

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

 

COMPANY:

Federal Trust Corporation By:  

 

Name:   Dennis T. Ward Title:   President and Chief Executive Officer

STANDBY PURCHASER

 

By:  

 

Name:   Title:  

 

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