Exhibit
10.4


 


December 5, 2008


 


United States Department
of the Treasury


1500 Pennsylvania Avenue,
NW


Washington, D.C.  20220


 


Manhattan
Bancorp


2141
Rosecrans Avenue, Suite 1160


El
Segundo, CA  90245


 


Ladies and Gentlemen:


 


Reference
is made to that certain Letter Agreement incorporating the Securities Purchase
Agreement – Standard Terms dated of even date herewith (the “Securities Purchase Agreement”) by and among United States
Department of Treasury (“Investor”) and Manhattan Bancorp (“Company”).  Investor
and Company desire to set forth herein certain additional agreements regarding
Company’s commitment to the holder of the Preferred Shares after the closing of
the transactions contemplated by the Securities Purchase Agreement.  Terms that are defined in the Securities
Purchase Agreement are used in this letter agreement as so defined.


 


In
order to comply with California Corporations Code §212(a), the Company has
modified section 7(b) of the Standard Provisions of the Certificate of
Designations attached as Exhibit A to the Securities Purchase
Agreement (the “Certificate of Designations”)
to provide in pertinent part as follows:


 


“Whenever, at any time or times, dividends
payable on the shares of Designated Preferred Stock have not been paid for an
aggregate of six quarterly Dividend Periods or more, whether or not
consecutive, the holders of the Designated Preferred Stock shall have the
right, with holders of shares of any one or more other classes or series of
Voting Parity Stock outstanding at the time, voting together as a class, to
elect two directors...”


 


By its
execution hereof, the Company hereby confirms and agrees that as of the date
hereof and at all times while any shares of the Designated Preferred Stock are
outstanding it shall maintain a range of directors of the Company that will
permit the holder of the Preferred Shares to elect two directors in accordance
with said section 7(b).  Currently Article IV,
Section 4.1 (the “Applicable Provision”)
of the Company’s bylaws (the “Bylaws”)
provides for a range of directors of no less than seven (7) and no more
than thirteen (13).  At all times while
any shares of the Designated Preferred Stock are outstanding, the Company shall
not fill more than eleven (11) director positions.  In the event the Company desires to increase
the number of directors 


 

















 


beyond eleven (11), then the Company shall be required
to amend the Bylaws to increase the maximum directors to always allow for at
least two open director seats for the holders of the Preferred Shares to elect
in accordance with Section 7(b) of the Standard Terms of the
Certificate of Determination of Preferences of Series A Fixed Rate
Cumulative Perpetual Preferred Stock of Manhattan
Bancorp (and to amend the bylaws to provide that such provision may not
be modified, amended or repealed by the Company’s board of directors (or any
committee thereof) or without the affirmative vote and approval of (x) the
stockholders and (y) the holders of at least a majority of the shares of
Designated Preferred Stock outstanding at the time of such vote and approval).


 


In
addition, by its execution hereof, the Company hereby confirms and agrees that
it will, within 15 days after the date of this letter agreement, amend the
Applicable Provision by adding the following sentence at the end thereof:


 


“Notwithstanding anything
in these bylaws to the contrary, for so long as the Corporation’s Fixed Rate
Cumulative Perpetual Preferred Stock, Series A (the “Designated Preferred Stock”) is
outstanding:  (i) whenever, at any
time or times, dividends payable on the shares of Designated Preferred Stock
have not been paid for an aggregate of six quarterly Dividend Periods (as
defined in the Certificate of Determination for the Designated Preferred Stock)
or more, whether or not consecutive, the authorized number of directors shall
automatically be increased by two (but shall in no event be increased to a
number of directors that is greater than the maximum number of directors set
forth in Article IV, Section 4.1 of these bylaws); and (ii) this
sentence may not be modified, amended or repealed by the Corporation’s board of
directors (or any committee thereof) or without the affirmative vote and
approval of (x) the shareholders and (y) the holders of at least a
majority of the shares of Designated Preferred Stock outstanding at the time of
such vote and approval.”


 


The
parties hereto acknowledge that there would be no adequate remedy at law if the
Company fails to perform any of its obligations under this letter agreement and
that the Investor may be irreparably harmed by any such failure, and
accordingly agree that the Investor, in addition to any other remedy to which
it may be entitled at law or in equity, to the fullest extent permitted and
enforceable under applicable law shall be entitled to compel specific
performance of the obligations of the Company under this letter agreement
without the necessity of proving the inadequacy of monetary damages as a remedy
or the posting of a bond.


 


This
letter agreement and the Certificate of Designations constitute the entire
agreement, and supersedes all other prior agreements, understandings,
representations and warranties, both written and oral, between the parties with
respect to the subject matter hereof.


 


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This
letter agreement may be executed in counterparts, each of which shall be deemed
an original and all of which shall together constitute one and the same
instrument.  This letter agreement shall
be governed in all respects, including as to validity, interpretation and
effect, by the internal laws of the State of California, without giving effect
to the conflict of laws rules thereof.


 


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left blank]


 


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In
witness whereof, this letter agreement has been duly executed by the authorized
representatives of the parties hereto as of the date first above written.


 


 


	
   

  	
  By:

  	
    /s/ Jeffrey
  Watson

  
	
   

  	
  Name:

  	
  Jeffrey Watson

  
	
   

  	
  Title:

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  
	
   

  	
  By:

  	
    /s/ Dean
  Fletcher

  
	
   

  	
  Name:

  	
  Dean Fletcher

  
	
   

  	
  Title:

  	
  Executive Vice
  President and

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UNITED STATES DEPARTMENT

  
	
   

  	
  OF THE TREASURY

  
	
   

  	
   

  	
   

  
	
   

  
	
   

  	
  By:

  	
    /s/ Neel
  Kashkari

  
	
   

  	
  Name:

  	
  Neel Kashkari

  
	
   

  	
  Title:

  	
  Interim Assistant
  Secretary for Financial

  
	
   

  	
  Stability

  
				



 


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