Exhibit 4.3


 


WARRANT
TO PURCHASE COMMON STOCK


 


THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO
THE RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE
AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED
BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE
WITH SAID AGREEMENT WILL BE VOID.


 


WARRANT
to purchase

29,480

Shares of Common Stock

of Manhattan Bancorp

Issue Date:  December 5, 2008


 


1.                                       Definitions.  Unless
the context otherwise requires, when used herein the following terms shall have
the meanings indicated.


 


“Affiliate”
has the meaning ascribed to it in the Purchase Agreement.


 


“Appraisal
Procedure” means a procedure whereby two independent appraisers, one
chosen by the Company and one by the Original Warrantholder, shall mutually
agree upon the determinations then the subject of appraisal. Each party shall
deliver a notice to the other appointing its appraiser within 15 days after the
Appraisal Procedure is invoked. If within 30 days after appointment of the two
appraisers they are unable to agree upon the amount in question, a third
independent appraiser shall be chosen within 10 days thereafter by the mutual
consent of such first two appraisers.  The
decision of the third appraiser so appointed and chosen shall be given within
30 days after the selection of such third appraiser. If three appraisers shall
be appointed and the determination of one appraiser is disparate from the
middle determination by more than twice the amount by which the other
determination is disparate from the middle determination, then the
determination of such appraiser shall be excluded, the remaining two
determinations shall be averaged and such average shall be binding and conclusive
upon the Company and the Original Warrantholder; otherwise, the average of all
three determinations shall be binding upon the Company and the Original
Warrantholder.  The costs of conducting
any Appraisal Procedure shall be borne by the Company.


 


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“Board of Directors”
means the board of directors of the Company, including any duly authorized
committee thereof.


 


“Business
Combination” means a merger, consolidation, statutory share exchange
or similar transaction that requires the approval of the Company’s
stockholders.


 


“business day”
means any day except Saturday, Sunday and any day on which banking institutions
in the State of New York generally are authorized or required by law or other
governmental actions to close.


 


“Capital Stock”
means (A) with respect to any Person that is a corporation or company, any
and all shares, interests, participations or other equivalents (however
designated) of capital or capital stock of such Person and (B) with respect
to any Person that is not a corporation or company, any and all partnership or
other equity interests of such Person.


 


“Charter”
means, with respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational document.


 


“Common Stock”
has the meaning ascribed to it in the Purchase Agreement.


 


“Company”
means the Person whose name, corporate or other organizational form and
jurisdiction of organization is set forth in Item 1 of Schedule A hereto.


 


“conversion”
has the meaning set forth in Section 13(B).


 


“convertible
securities” has the meaning set forth in Section 13(B).


 


“CPP”
has the meaning ascribed to it in the Purchase Agreement.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.


 


“Exercise Price”
means the amount set forth in Item 2 of Schedule A hereto.


 


“Expiration Time”
has the meaning set forth in Section 3.


 


“Fair Market Value”
means, with respect to any security or other property, the fair market value of
such security or other property as determined by the Board of Directors, acting
in good faith or, with respect to Section 14, as determined by the
Original Warrantholder acting in good faith. For so long as the Original
Warrantholder holds this Warrant or any portion thereof, it may object in
writing to the Board of Director’s calculation of fair market value within 10
days of receipt of written notice thereof. If the Original Warrantholder and
the Company are unable to agree on fair market value during the 10-day period
following the delivery of the Original Warrantholder’s objection, the Appraisal
Procedure may be invoked by either party to determine Fair Market Value by
delivering written notification thereof not later than the 30th day after
delivery of the Original Warrantholder’s objection.


 


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“Governmental
Entities” has the meaning ascribed to it in the Purchase Agreement. “Initial Number” has the meaning set forth
in Section 13(B).


 


“Issue Date” means the date set forth in Item 3 of
Schedule A hereto.


 


“Market Price”
means, with respect to a particular security, on any given day, the last
reported sale price regular way or, in case no such reported sale takes place
on such day, the average of the last closing bid and ask prices regular way, in
either case on the principal national securities exchange on which the
applicable securities are listed or admitted to trading, or if not listed or admitted
to trading on any national securities exchange, the average of the closing bid
and ask prices as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that
purpose. “Market Price” shall be determined without reference to after hours or
extended hours trading. If such security is not listed and traded in a manner
that the quotations referred to above are available for the period required
hereunder, the Market Price per share of Common Stock shall be deemed to be (i) in
the event that any portion of the Warrant is held by the Original
Warrantholder, the fair market value per share of such security as determined
in good faith by the Original Warrantholder or (ii) in all other circumstances,
the fair market value per share of such security as determined in good faith by
the Board of Directors in reliance on an opinion of a nationally recognized
independent investment banking corporation retained by the Company for this
purpose and certified in are solution to the Warrantholder. For the purposes of
determining the Market Price of the Common Stock on the “trading day”
preceding, on or following the occurrence of an event, (i)that trading day
shall be deemed to commence immediately after the regular scheduled closing
time of trading on the New York Stock Exchange or, if trading is closed at an
earlier time, such earlier time and (ii) that trading day shall end at the
next regular scheduled closing time, or if trading is closed at an earlier time,
such earlier time (for the avoidance of doubt, and as an example, if the Market
Price is to be determined as of the last trading day preceding a specified
event and the closing time of trading on a particular day is 4:00 p.m. and
the specified event occurs at 5:00 p.m. on that day, the Market Price
would be determined by reference to such 4:00 p.m. closing price).


 


“Ordinary Cash
Dividends” means a regular quarterly cash dividend on shares of
Common Stock out of surplus or net profits legally available therefor
(determined in accordance with generally accepted accounting principles in
effect from time to time), provided that
Ordinary Cash Dividends shall not include any cash dividends paid subsequent to
the Issue Date to the extent the aggregate per share dividends paid on the
outstanding Common Stock in any quarter exceed the amount set forth in Item 4
of Schedule A hereto, as adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction.


 


“Original Warrantholder”
means the United States Department of the Treasury. Any actions specified to be
taken by the Original Warrantholder hereunder may only be taken by such Person
and not by any other Warrantholder.


 


“Permitted
Transactions” has the meaning set forth in Section 13(B).


 


3

















 


“Person”
has the meaning given to it in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.


 


“Per Share Fair
Market Value” has the meaning set forth in Section 13(C).


 


“Preferred Shares” means the perpetual preferred stock
issued to the Original Warrantholder on the Issue Date pursuant to the Purchase
Agreement.


 


“Pro Rata
Repurchases” means any purchase of shares of Common Stock by the Company
or any Affiliate thereof pursuant to (A) any tender offer or exchange
offer subject to Section 13(e) or 14(e) of the Exchange Act or
Regulation 14E promulgated thereunder or (B)any other offer available to
substantially all holders of Common Stock, in the case of both (A) or(B),
whether for cash, shares of Capital Stock of the Company, other securities of
the Company, evidences of indebtedness of the Company or any other Person or
any other property (including, without limitation, shares of Capital Stock,
other securities or evidences of indebtedness of a subsidiary), or any
combination thereof, effected while this Warrant is outstanding. The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the
Company under any tender or exchange offer which is a Pro Rata Repurchase or
the date of purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.


 


“Purchase Agreement”
means the Securities Purchase Agreement – Standard Terms incorporated into the
Letter Agreement, dated as of the date set forth in Item 5 of Schedule A
hereto, as amended from time to time, between the Company and the United States
Department of the Treasury (the “Letter
Agreement”), including all annexes and schedules thereto.


 


“Qualified Equity
Offering” has the meaning ascribed to it in the Purchase Agreement.


 


“Regulatory
Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant
for shares of Common Stock and to own such Common Stock without the
Warrantholder being in violation of applicable law, rule or regulation,
the receipt of any necessary approvals and authorizations of, filings and
registrations with, notifications to, or expiration or termination of any
applicable waiting period under, the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.


 


“SEC”
means the U.S. Securities and Exchange Commission.


 


“Securities Act”
means the Securities Act of 1933, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.


 


“Shares”
has the meaning set forth in Section 2.


 


“trading day” means (A) if the shares of Common
Stock are not traded on any national or regional securities exchange or
association or over-the-counter market, a business day or (B)if the shares of
Common Stock are traded on any national or regional securities exchange or


 


4

















 


association or over-the-counter market, a business day
on which such relevant exchange or quotation system is scheduled to be open for
business and on which the shares of Common Stock (i) are not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market for any period or periods aggregating one half hour or
longer; and (ii) have traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the primary
market for the trading of the shares of Common Stock.


 


“U.S. GAAP”
means United States generally accepted accounting principles.


 


“Warrantholder”
has the meaning set forth in Section 2.


 


“Warrant”
means this Warrant, issued pursuant to the Purchase Agreement.


 


2.                                       Number of Shares; Exercise Price. 
This certifies that, for value received, the United States Department of
the Treasury or its permitted assigns (the “Warrantholder”)
is entitled, upon the terms and subject to the conditions hereinafter set forth,
to acquire from the Company, in whole or in part, after the receipt of all
applicable Regulatory Approvals, if any, up to an aggregate of the number of
fully paid and nonassessable shares of Common Stock set forth in Item 6 of
Schedule A hereto, at a purchase price per share of Common Stock equal to the
Exercise Price. The number of shares of Common Stock (the “Shares”) and the Exercise Price are
subject to adjustment as provided herein, and all references to “Common Stock,”
“Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments.


 


3.                                       Exercise of Warrant; Term. 
Subject to Section 2, to the extent permitted by applicable laws
and regulations, the right to purchase the Shares represented by this Warrant
is exercisable, in whole or in part by the Warrantholder, at any time or from
time to time after the execution and delivery of this Warrant by the Company on
the date hereof, but in no event later than 5:00 p.m., New York City time
on the tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the surrender of this Warrant
and Notice of Exercise annexed hereto, duly completed and executed on behalf of
the Warrantholder, at the principal executive office of the Company located at
the address set forth in Item 7 of Schedule A hereto (or such other office or
agency of the Company in the United States as it may designate by notice in
writing to the Warrantholder at the address of the Warrantholder appearing on
the books of the Company), and(B) payment of the Exercise Price for the
Shares thereby purchased:


 


(i) by having the Company withhold, from the
shares of Common Stock that would otherwise be delivered to the Warrantholder
upon such exercise, shares of Common stock issuable upon exercise of the
Warrant equal in value to the aggregate Exercise Price as to which this Warrant
is so exercised based on the Market Price of the Common Stock on the trading
day on which this Warrant is exercised and the Notice of Exercise is delivered
to the Company pursuant to this Section 3, or


 


(ii) with the consent of both the Company and the
Warrantholder, by tendering in cash, by certified or cashier’s check payable to
the order of the Company, or by wire transfer of immediately available funds to
an account designated by the Company.


 


5

















 


If the Warrantholder does not exercise this Warrant in
its entirety, the Warrantholder will be entitled to receive from the Company
within a reasonable time, and in any event not exceeding three business days, a
new warrant in substantially identical form for the purchase of that number of
Shares equal to the difference between the number of Shares subject to this
Warrant and the number of Shares as to which this Warrant is so exercised.  Notwithstanding anything in this Warrant to
the contrary, the Warrantholder hereby acknowledges and agrees that its
exercise of this Warrant for Shares is subject to the condition that the
Warrantholder will have first received any applicable Regulatory Approvals.


 


4.                                       Issuance of Shares; Authorization;
Listing.  Certificates for Shares issued upon exercise
of this Warrant will be issued in such name or names as the Warrantholder may
designate and will be delivered to such named Person or Persons within a
reasonable time, not to exceed three business days after the date on which this
Warrant has been duly exercised in accordance with the terms of this
Warrant.  The Company hereby represents
and warrants that any Shares issued upon the exercise of this Warrant in
accordance with the provisions of Section 3 will be duly and validly
authorized and issued, fully paid and nonassessable and free from all taxes,
liens and charges (other than liens or charges created by the Warrantholder,
income and franchise taxes incurred in connection with the exercise of the
Warrant or taxes in respect of any transfer occurring contemporaneously
therewith).  The Company agrees that the
Shares so issued will be deemed to have been issued to the Warrantholder as of
the close of business on the date on which this Warrant and payment of the
Exercise Price are delivered to the Company in accordance with the terms of
this Warrant, notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be actually
delivered on such date.  The Company will
at all times reserve and keep available, out of its authorized but unissued
Common Stock, solely for the purpose of providing for the exercise of this
Warrant, the aggregate number of shares of Common Stock then issuable upon
exercise of this Warrant at any time. 
The Company will (A) procure, at its sole expense, the listing of
the Shares issuable upon exercise of this Warrant at any time, subject to
issuance or notice of issuance, on all principal stock exchanges on which the
Common Stock is then listed or traded and (B) maintain such listings of
such Shares at all times after issuance. 
The Company will use reasonable best efforts to ensure that the Shares
may be issued without violation of any applicable law or regulation or of any
requirement of any securities exchange on which the Shares are listed or
traded.


 


5.                                       No Fractional Shares or Scrip. 
No fractional Shares or scrip representing fractional Shares shall be
issued upon any exercise of this Warrant. In lieu of any fractional Share to
which the Warrantholder would otherwise be entitled, the Warrantholder shall be
entitled to receive a cash payment equal to the Market Price of the Common
Stock on the last trading day preceding the date of exercise less the pro-rated
Exercise Price for such fractional share.


 


6.                                       No Rights as Stockholders; Transfer Books. 
This Warrant does not entitle the Warrantholder to any voting rights or
other rights as a stockholder of the Company prior to the date of exercise
hereof.  The Company will at no time
close its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.


 


6
















 


7.                                       Charges,
Taxes and Expenses.  Issuance of
certificates for Shares to the Warrantholder upon the exercise of this Warrant
shall be made without charge to the Warrantholder for any issue or transfer tax
or other incidental expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Company.


 


8.                                       Transfer/Assignment.


 


(A)                              Subject
to compliance with clause (B) of this Section 8, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the books of the
Company by the registered holder hereof in person or by duly authorized
attorney, and a new warrant shall be made and delivered by the Company, of the
same tenor and date as this Warrant but registered in the name of one or more
transferees, upon surrender of this Warrant, duly endorsed, to the office or
agency of the Company described in Section 3. All expenses (other than
stock transfer taxes) and other charges payable in connection with the
preparation, execution and delivery of the new warrants pursuant to this Section 8
shall be paid by the Company.


 


(B)                                The
transfer of the Warrant and the Shares issued upon exercise of the Warrant are
subject to the restrictions set forth in Section 4.4 of the Purchase
Agreement. If and for so long as required by the Purchase Agreement, this
Warrant shall contain the legends as set forth in Sections 4.2(a) and 4.2(b) of
the Purchase Agreement.


 


9.                                       Exchange
and Registry of Warrant.  This
Warrant is exchangeable, upon the surrender hereof by the Warrantholder to the
Company, for a new warrant or warrants of like tenor and representing the right
to purchase the same aggregate number of Shares. The Company shall maintain a
registry showing the name and address of the Warrantholder as the registered
holder of this Warrant. This Warrant may be surrendered for exchange or
exercise in accordance with its terms, at the office of the Company, and the
Company shall be entitled to rely in all respects, prior to written notice to
the contrary, upon such registry.


 


10.                                 Loss,
Theft, Destruction or Mutilation of Warrant.  Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and in the case of any such loss, theft or destruction, upon
receipt of a bond, indemnity or security reasonably satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company shall make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same aggregate number of Shares as
provided for in such lost, stolen, destroyed or mutilated Warrant.


 


11.                                 Saturdays,
Sundays, Holidays, etc.  If the last
or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a business day, then such action may be
taken or such right may be exercised on the next succeeding day that is a
business day.


 


12.                                 Rule 144
Information.  The Company covenants
that it will use its reasonable best efforts to timely file all reports and
other documents required to be filed by it under the


 


7

















 


Securities Act and the Exchange
Act and the rules and regulations promulgated by the SEC thereunder (or,
if the Company is not required to file such reports, it will, upon the request
of any Warrantholder, make publicly available such information as necessary to
permit sales pursuant to Rule 144 under the Securities Act), and it will
use reasonable best efforts to take such further action as any Warrantholder
may reasonably request, in each case to the extent required from time to time
to enable such holder to, if permitted by the terms of this Warrant and the Purchase
Agreement, sell this Warrant without registration under the Securities Act
within the limitation of the exemptions provided by (A) Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (B) any successor rule or regulation hereafter adopted by the SEC.
Upon the written request of any Warrantholder, the Company will deliver to such
Warrantholder a written statement that it has complied with such requirements.


 


13.                                 Adjustments
and Other Rights.  The Exercise Price
and the number of Shares issuable upon exercise of this Warrant shall be
subject to adjustment from time to time as follows; provided, that if more than one subsection of this Section 13
is applicable to a single event, the subsection shall be applied that produces the
largest adjustment and no single event shall cause an adjustment under more
than one subsection of this Section 13 so as to result induplication:


 


(A)                              Stock
Splits, Subdivisions, Reclassifications or Combinations.  If the Company shall (i) declare and pay
a dividend or make a distribution on its Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock
into a greater number of shares, or (iii) combine or reclassify the
outstanding shares of Common Stock into a smaller number of shares, the number
of Shares issuable upon exercise of this Warrant at the time of the record date
for such dividend or distribution or the effective date of such subdivision,
combination or reclassification shall be proportionately adjusted so that the
Warrantholder after such date shall be entitled to purchase the number of
shares of Common Stock which such holder would have owned or been entitled to
receive in respect of the shares of Common Stock subject to this Warrant after such
date had this Warrant been exercised immediately prior to such date. In such
event, the Exercise Price in effect at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be adjusted to the number obtained by dividing (x) the
product of (1) the number of Shares issuable upon the exercise of this
Warrant before such adjustment and (2) the Exercise Price in effect
immediately prior to the record or effective date, as the case may be, for the
dividend, distribution, subdivision, combination or reclassification giving
rise to this adjustment by (y) the new number of Shares issuable upon
exercise of the Warrant determined pursuant to the immediately preceding
sentence.


 


(B)                                Certain
Issuances of Common Shares or Convertible Securities.  Until the earlier of (i) the date on
which the Original Warrantholder no longer holds this Warrant or any portion
thereof and (ii) the third anniversary of the Issue Date, if the Company
shall issue shares of Common Stock (or rights or warrants or other securities
exercisable or convertible into or exchangeable (collectively, a “conversion”) for shares of Common Stock)
(collectively, “convertible securities”)
(other than in Permitted Transactions (as defined below) or a transaction to
which subsection (A) of this Section 13 is applicable) without
consideration or at a consideration per share (or having a conversion price per
share) that is less than 90% of the


 


8

















 


Market Price on the last
trading day preceding the date of the agreement on pricing such shares(or such
convertible securities) then, in such event:


 


(A)                              the
number of Shares issuable upon the exercise of this Warrant immediately prior
to the date of the agreement on pricing of such shares (or of such convertible
securities) (the “Initial Number”)
shall be increased to the number obtained by multiplying the Initial Number by
a fraction (A) the numerator of which shall be the sum of (x) the number
of shares of Common Stock of the Company outstanding on such date and (y) the
number of additional shares of Common Stock issued (or into which convertible
securities may be exercised or convert)and (B) the denominator of which
shall be the sum of (I) the number of shares of Common Stock outstanding
on such date and (II) the number of shares of Common Stock which the
aggregate consideration receivable by the Company for the total number of
shares of Common Stock so issued (or into which convertible securities may be
exercised or convert) would purchase at the Market Price on the last trading
day preceding the date of the agreement on pricing such shares (or such
convertible securities); and


 


(B)                                the
Exercise Price payable upon exercise of the Warrant shall be adjusted by
multiplying such Exercise Price in effect immediately prior to the date of the
agreement on pricing of such shares (or of such convertible securities) by a
fraction, the numerator of which shall be the number of shares of Common Stock issuable
upon exercise of this Warrant prior to such date and the denominator of which
shall be the number of shares of Common Stock issuable upon exercise of this
Warrant immediately after the adjustment described in clause (A) above.


 


For purposes
of the foregoing, the aggregate consideration receivable by the Company in
connection with the issuance of such shares of Common Stock or convertible
securities shall be deemed to be equal to the sum of the net offering price
(including the Fair Market Value of any non-cash consideration and after
deduction of any related expenses payable to third parties) of all such
securities plus the minimum aggregate amount, if any, payable upon exercise or
conversion of any such convertible securities into shares of Common Stock; and “Permitted Transactions” shall mean
issuances (i) as consideration for or to fund the acquisition of
businesses and/or related assets, (ii) in connection with employee benefit
plans and compensation related arrangements in the ordinary course and
consistent with past practice approved by the Board of Directors, (iii) in
connection with a public or broadly marketed offering and sale of Common Stock
or convertible securities for cash conducted by the Company or its affiliates
pursuant to registration under the Securities Act or Rule 144A thereunder
on a basis consistent with capital raising transactions by comparable financial
institutions and (iv) in connection with the exercise of preemptive rights
on terms existing as of the Issue Date. Any adjustment made pursuant to this Section 13(B) shall
become effective immediately upon the date of such issuance.


 


(C)                                Other
Distributions.  In case the Company
shall fix a record date for the making of a distribution to all holders of
shares of its Common Stock of securities, evidences of indebtedness, assets,
cash, rights or warrants (excluding Ordinary Cash Dividends, dividends of its
Common Stock and other dividends or distributions referred to in Section 13(A)),
in each such case, the Exercise Price in effect prior to such record date shall
be reduced immediately thereafter to the price determined by multiplying the
Exercise Price in effect immediately prior to the reduction by the quotient of (x) the
Market Price of the Common Stock on the last trading


 


9

















 


day preceding the first date on
which the Common Stock trades regular way on the principal national securities
exchange on which the Common Stock is listed or admitted to trading without the
right to receive such distribution, minus the amount of cash and/or the Fair
Market Value of the securities, evidences of indebtedness, assets, rights or
warrants to be so distributed in respect of one share of Common Stock (such
amount and/or Fair Market Value, the “Per Share
Fair Market Value”) divided by (y) such Market Price on such
date specified in clause (x); such adjustment shall be made successively
whenever such a record date is fixed. In such event, the number of Shares
issuable upon the exercise of this Warrant shall be increased to the number
obtained by dividing (x) the product of (1) the number of Shares
issuable upon the exercise of this Warrant before such adjustment, and (2) the
Exercise Price in effect immediately prior to the distribution giving rise to this
adjustment by (y) the new Exercise Price determined in accordance with the
immediately preceding sentence.  In the
case of adjustment for a cash dividend that is, or is coincident with, a
regular quarterly cash dividend, the Per Share Fair Market Value would be
reduced by the per share amount of the portion of the cash dividend that would
constitute an Ordinary Cash Dividend. In the event that such distribution is
not so made, the Exercise Price and the number of Shares issuable upon exercise
of this Warrant then in effect shall be readjusted, effective as of the date
when the Board of Directors determines not to distribute such shares, evidences
of indebtedness, assets, rights, cash or warrants, as the case maybe, to the
Exercise Price that would then be in effect and the number of Shares that would
then be issuable upon exercise of this Warrant if such record date had not been
fixed.


 


(D)                               Certain
Repurchases of Common Stock.  In case
the Company effects a Pro Rata Repurchase of Common Stock, then the Exercise
Price shall be reduced to the price determined by multiplying the Exercise
Price in effect immediately prior to the Effective Date of such Pro Rata
Repurchase by a fraction of which the numerator shall be (i) the product
of (x) the number of shares of Common Stock outstanding immediately before
such Pro Rata Repurchase and (y) the Market Price of a share of Common
Stock on the trading day immediately preceding the first public announcement by
the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase, minus (ii) the aggregate purchase price of the Pro Rata
Repurchase, and of which the denominator shall be the product of (i) the
number of shares of Common Stock outstanding immediately prior to such Pro Rata
Repurchase minus the number of shares of Common Stock sore purchased and (ii) the
Market Price per share of Common Stock on the trading day immediately preceding
the first public announcement by the Company or any of its Affiliates of the
intent to effect such Pro Rata Repurchase. In such event, the number of shares
of Common Stock issuable upon the exercise of this Warrant shall be increased
to the number obtained by dividing (x) the product of (1) the number
of Shares issuable upon the exercise of this Warrant before such adjustment,
and (2) the Exercise Price in effect immediately prior to the Pro Rata
Repurchase giving rise to this adjustment by (y) the new Exercise Price
determined in accordance with the immediately preceding sentence. For the
avoidance of doubt, no increase to the Exercise Price or decrease in the number
of Shares issuable upon exercise of this Warrant shall be made pursuant to this



Section 13(D).


 


(E)                                 Business
Combinations.  In case of any
Business Combination or reclassification of Common Stock (other than a
reclassification of Common Stock referred to in Section 13(A)), the
Warrantholder’s right to receive Shares upon exercise of this Warrant shall be
converted into the right to exercise this Warrant to acquire the number of
shares of stock or other securities or


 


10

















 


property (including cash) which
the Common Stock issuable (at the time of such Business Combination or
reclassification) upon exercise of this Warrant immediately prior to such
Business Combination or reclassification would have been entitled to receive
upon consummation of such Business Combination or reclassification; and in any
such case, if necessary, the provisions set forth herein with respect to the
rights and interests thereafter of the Warrantholder shall be appropriately
adjusted so as to be applicable, as nearly as may reasonably be, to the
Warrantholder’s right to exercise this Warrant in exchange for any shares of
stock or other securities or property pursuant to this paragraph. In
determining the kind and amount of stock, securities or the property receivable
upon exercise of this Warrant following the consummation of such Business
Combination, if the holders of Common Stock have the right to elect the kind or
amount of consideration receivable upon consummation of such Business
Combination, then the consideration that the Warrantholder shall be entitled to
receive upon exercise shall be deemed to be the types and amounts of
consideration received by the majority of all holders of the shares of common
stock that affirmatively make an election (or of all such holders if none make
an election).


 


(F)                                 Rounding
of Calculations; Minimum Adjustments. 
All calculations under this Section 13 shall be made to the nearest
one-tenth (1/10th) of a cent or to the nearest one hundredth(1/100th) of a
share, as the case may be. Any provision of this Section 13 to the
contrary notwithstanding, no adjustment in the Exercise Price or the number of
Shares into which this Warrant is exercisable shall be made if the amount of
such adjustment would be less than $0.01 or one-tenth (1/10th) of a share of
Common Stock, but any such amount shall be carried forward and an adjustment
with respect thereto shall be made at the time of and together with any subsequent
adjustment which, together with such amount and any other amount or amounts so
carried forward, shall aggregate $0.01 or 1/10th of a share of Common Stock, or
more.


 


(G)                                Timing
of Issuance of Additional Common Stock Upon Certain Adjustments.  In any case in which the provisions of this Section 13
shall require that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the occurrence of such
event (i) issuing to the Warrantholder of this Warrant exercised after
such record date and before the occurrence of such event the additional shares
of Common Stock issuable upon such exercise by reason of the adjustment
required by such event over and above the shares of Common Stock issuable upon
such exercise before giving effect to such adjustment and (ii) paying to
such Warrantholder any amount of cash in lieu of a fractional share of Common
Stock; provided, however, that the Company upon request
shall deliver to such Warrantholder a due bill or other appropriate instrument
evidencing such Warrantholder’s right to receive such additional shares, and
such cash, upon the occurrence of the event requiring such adjustment.


 


(H)                               Completion
of Qualified Equity Offering.  In the
event the Company (or any successor by Business Combination) completes one or
more Qualified Equity Offerings on or prior to December 31, 2009 that
result in the Company (or any such successor ) receiving aggregate gross
proceeds of not less than 100% of the aggregate liquidation preference of the
Preferred Shares (and any preferred stock issued by any such successor to the
Original Warrantholder under the CPP), the number of shares of Common Stock
underlying the portion of


 


11

















 


his Warrant then held by the
Original Warrantholder shall be thereafter reduced by a number of shares of
Common Stock equal to the product of (i) 0.5 and (ii) the number of
shares underlying the Warrant on the Issue Date (adjusted to take into account
all other theretofore made adjustments pursuant to this Section 13).


 


(I)                                    Other
Events.  For so long as the Original
Warrantholder holds this Warrant or any portion thereof, if any event occurs as
to which the provisions of this Section 13 are not strictly applicable or,
if strictly applicable, would not, in the good faith judgment of the Board of
Directors of the Company, fairly and adequately protect the purchase rights of
the Warrants in accordance with the essential intent and principles of such
provisions, then the Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of the
Board of Directors, to protect such purchase rights as aforesaid.  The Exercise Price or the number of Shares
into which this Warrant is exercisable shall not be adjusted in the event of a
change in the par value of the Common Stock or a change in the jurisdiction of
incorporation of the Company.


 


(J)                                   Statement
Regarding Adjustments.  Whenever the
Exercise Price or the number of Shares into which this Warrant is exercisable
shall be adjusted as provided in Section 13, the Company shall forthwith
file at the principal office of the Company a statement showing in reasonable
detail the facts requiring such adjustment and the Exercise Price that shall be
in effect and the number of Shares into which this Warrant shall be exercisable
after such adjustment, and the Company shall also cause a copy of such
statement to be sent by mail, first class postage prepaid, to each
Warrantholder at the address appearing in the Company’s records.


 


(K)                               Notice
of Adjustment Event.  In the event
that the Company shall propose to take any action of the type described in this
Section 13 (but only if the action of the type described in this Section 13
would result in an adjustment in the Exercise Price or the number of Shares
into which this Warrant is exercisable or a change in the type of securities or
property to be delivered upon exercise of this Warrant), the Company shall give
notice to the Warrantholder, in the manner set forth in Section 13(J),
which notice shall specify the record date, if any, with respect to any such
action and the approximate date on which such action is to take place. Such
notice shall also set forth the facts with respect thereto as shall be
reasonably necessary to indicate the effect on the Exercise Price and the
number, kind or class of shares or other securities or property which shall be
deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed, and in case of all other action, such
notice shall be given at least 15 days prior to the taking of such proposed
action. Failure to give such notice, or any defect therein, shall not affect
the legality or validity of any such action.


 


(L)                                 Proceedings
Prior to Any Action Requiring Adjustment. 
As a condition precedent to the taking of any action which would require
an adjustment pursuant to this Section 13, the Company shall take any
action which may be necessary, including obtaining regulatory, New York Stock
Exchange, NASDAQ Stock Market or other applicable national securities exchange
or stockholder approvals or exemptions, in order that the Company may
thereafter validly and


 


12

















 


legally issue as fully paid and
nonassessable all shares of Common Stock that the Warrantholder is entitled to
receive upon exercise of this Warrant pursuant to this Section 13.


 


(M)                            Adjustment
Rules.  Any adjustments pursuant to
this Section 13 shall be made successively whenever an event referred to
herein shall occur. If an adjustment in Exercise Price made hereunder would
reduce the Exercise Price to an amount below par value of the Common Stock,
then such adjustment in Exercise Price made hereunder shall reduce the Exercise
Price to the par value of the Common Stock.


 


14.                                 Exchange.  At any time following the date on which the
shares of Common Stock of the Company are no longer listed or admitted to
trading on a national securities exchange(other than in connection with any
Business Combination), the Original Warrantholder may cause the Company to
exchange all or a portion of this Warrant for an economic interest (to be
determined by the Original Warrantholder after consultation with the Company)
of the Company classified as permanent equity under U.S. GAAP having a value
equal to the Fair Market Value of the portion of the Warrant so exchanged.  The Original Warrantholder shall calculate
any Fair Market Value required to be calculated pursuant to this Section 14,
which shall not be subject to the Appraisal Procedure.


 


15.                                 No
Impairment.  The Company will not, by
amendment of its Charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the provisions of
this Warrant and in taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrantholder.


 


16.                                 Governing
Law.  This Warrant will be governed by and construed in accordance with the
federal law of the United States if and to the extent such law is applicable,
and otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State. Each of the
Company and the Warrantholder agrees (a) to submit to the exclusive
jurisdiction and venue of the United States District Court for the District of
Columbia for any civil action, suit or proceeding arising out of or relating to
this Warrant or the transactions contemplated hereby, and (b) that notice
may be served upon the Company at the address in Section 20 below and upon
the Warrantholder at the address for the Warrantholder set forth in the
registry maintained by the Company pursuant to Section 9 hereof.  To the extent permitted by applicable law,
each of the Company and the Warrantholder hereby unconditionally waives trial
by jury in any civil legal action or proceeding relating to the Warrant or the
transactions contemplated hereby or thereby.


 


17.                                 Binding
Effect.  This Warrant shall be
binding upon any successors or assigns of the Company.


 


18.                                 Amendments.  This Warrant may be amended and the
observance of any term of this Warrant may be waived only with the written
consent of the Company and the Warrantholder.


 


13

















 


19.                               Prohibited
Actions.  The Company agrees that it
will not take any action which would entitle the Warrantholder to an adjustment
of the Exercise Price if the total number of shares of Common Stock issuable
after such action upon exercise of this Warrant, together with all shares of
Common Stock then outstanding and all shares of Common Stock then issuable upon
the exercise of all outstanding options, warrants, conversion and other rights,
would exceed the total number of shares of Common Stock then authorized by its
Charter.


 


20.                                 Notices.  Any notice, request, instruction or other
document to be given hereunder by any party to the other will be in writing and
will be deemed to have been duly given (a) on the date of delivery if
delivered personally, or by facsimile, upon confirmation of receipt, or (b) on
the second business day following the date of dispatch if delivered by a
recognized next day courier service. All notices hereunder shall be delivered
as set forth in Item 8 of Schedule A hereto, or pursuant to such other
instructions as may be designated in writing by the party to receive such
notice.


 


21.                                 Entire
Agreement.  This Warrant, the forms
attached hereto and Schedule A hereto (the terms of which are incorporated by
reference herein), and the Letter Agreement (including all documents
incorporated therein), contain the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or undertakings with respect thereto.


 


[Remainder of page intentionally left blank]


 


14

















 


[Form of Notice of Exercise]


Date:              


 


TO:                            Manhattan
Bancorp


 


RE:                              Election
to Purchase Common Stock


 


The
undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant. The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise
Price for such shares of Common Stock in the manner set forth below. A new
warrant evidencing the remaining shares of Common Stock covered by such
Warrant, but not yet subscribed for and purchased, if any, should be issued in
the name set forth below.


 


Number of
Shares of Common Stock                                  


 


Method of
Payment of Exercise Price (note if cashless exercise pursuant to Section 3(i) of
the Warrant or cash exercise pursuant to Section 3(ii) of the
Warrant, with consent of the Company and the Warrantholder)                                  


 


 


Aggregate
Exercise Price:                                 


 


	
   

  	
  Holder:

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title

  	
   

  



 


15

















 


IN WITNESS
WHEREOF, the Company has caused this Warrant to be duly executed by a duly
authorized officer.


 


Dated:  December 5, 2008


 


	
   

  	
  COMPANY: MANHATTAN BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Jeffrey M. Watson

  
	
   

  	
   

  	
  Name:

  	
  Jeffrey M. Watson

  
	
   

  	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Dean Fletcher

  
	
   

  	
   

  	
  Name:

  	
  Dean Fletcher

  
	
   

  	
   

  	
  Title:

  	
  Secretary

  
						



 


 


[Signature Page to Warrant]


 


16

















 


SCHEDULE A


 


	
  Item 1

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Manhattan Bancorp

  
	
  Corporate or other organizational form:

  	
   

  	
  Corporation

  
	
  Jurisdiction of organization:

  	
   

  	
  California

  
	
   

  	
   

  	
   

  
	
  Item 2

  	
   

  	
   

  
	
  Exercise Price:(1)

  	
   

  	
  $8.65

  
	
   

  	
   

  	
   

  
	
  Item 3

  	
   

  	
   

  
	
  Issue Date:

  	
   

  	
  December 5, 2008

  
	
   

  	
   

  	
   

  
	
  Item 4

  	
   

  	
   

  
	
  Amount of last dividend declared prior to the Issue Date:

  	
   

  	
  No dividends paid since inception

  
	
   

  	
   

  	
   

  
	
  Item 5

  	
   

  	
   

  
	
  Date of Letter Agreement between the Company and the United States
  Department of the Treasury:

  	
   

  	
  December 5, 2008

  
	
   

  	
   

  	
   

  
	
  Item 6

  	
   

  	
   

  
	
  Number of shares of Common Stock:

  	
   

  	
  29,480

  
	
   

  	
   

  	
   

  
	
  Item 7

  	
   

  	
   

  
	
  Company’s address:

  	
   

  	
  2141 Rosecrans Avenue, Suite 1160

  
	
   

  	
   

  	
  El Segundo, CA 90245

  
	
  Item 8

  	
   

  	
   

  
	
  Notice information:

  	
   

  	
  Jeffrey M. Watson

  President and Chief Executive Officer

  Manhattan Bancorp

  2141 Rosecrans Avenue, Suite 1160

  El Segundo, CA 90245

  (310) 606-8000

  



 






(1)                                  Initial
exercise price to be calculated based on the average of closing prices of the
Common Stock on the 20 trading days ending on the last trading day prior to the
date the Company’s application for participation in the Capital Purchase
Program was approved by the United States Department of the Treasury.


 


17