Document:

Exhibit
10.7

PROMISSORY NOTE

	
  $150,000

  	
  February 5, 2007

  

Arcade
Acquisition Corp. (the “Maker”) promises to pay to the order of Arcade Partners
LLC (the “Payee”) the principal sum of One Hundred Fifty Thousand Dollars and
No Cents ($150,000.00) in lawful money of the United States of America,
together with interest on the unpaid principal balance of this Note, on the
terms and conditions described below.

1.             Principal. 
The principal balance of this Note shall be repayable on the earlier of
(i) February 5, 2008 or (ii) the date on which Maker consummates an initial
public offering of its securities.

2.             Interest. 
Interest shall accrue at the rate of 4% annually (non-compounded) on the
unpaid principal balance of this Note.

3.             Application of Payments.  All payments shall be applied first to
payment in full of any costs incurred in the collection of any sum due under
this Note, including (without limitation) reasonable attorneys’ fees, then to
the payment of any accrued interest and finally to the reduction of the unpaid
principal balance of this Note.

4.             Events of Default. The following shall constitute
Events of Default:

(a)           Failure to Make Required Payments.  Failure by Maker to pay the principal of or
accrued interest on this Note within five (5) business days following the date
when due.

(b)           Voluntary Bankruptcy, Etc. The
commencement by Maker of a voluntary case under the Federal Bankruptcy Code, as
now constituted or hereafter amended, or any other applicable federal or state
bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or
the consent by it to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Maker or for any substantial part of its property, or the making
by it of any assignment for the benefit of creditors, or the failure of Maker
generally to pay its debts as such debts become due, or the taking of corporate
action by Maker in furtherance of any of the foregoing.

(c)           Involuntary Bankruptcy, Etc.  The entry of a decree or order for relief by
a court having jurisdiction in the premises in respect of maker in an
involuntary case under the Federal Bankruptcy Code, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of Maker or for any substantial
part of its property, or ordering the winding-up or liquidation of the affairs
of Maker, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days.

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5.             Remedies.

(a)           Upon the occurrence of an Event of
Default specified in Section 4(a), Payee may, by written notice to Maker,
declare this Note to be due and payable, whereupon the principal amount of this
Note, and all other amounts payable thereunder, shall become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in the
documents evidencing the same to the contrary notwithstanding.

(b)           Upon the occurrence of an Event of
Default specified in Sections 4(b) and 4(c), the unpaid principal balance of,
and all other sums payable with regard to, this Note shall automatically and
immediately become due and payable, in all cases without any action on the part
of Payee.

6.             Waivers. 
Maker and all endorsers and guarantors of, and sureties for, this Note
waive presentment for payment, demand, notice of dishonor, protest, and notice
of protest with regard to the Note, all errors, defects and imperfections in
any proceedings instituted by Payee under the terms of this Note, and all
benefits that might accrue to Maker by virtue of any present or future laws
exempting any property, real or personal, or any part of the proceeds arising
from any sale of any such property, from attachment, levy or sale under
execution, or providing for any stay of execution, exemption from civil
process, or extension of time for payment; and Maker agrees that any real
estate that may be levied upon pursuant to a judgment obtained by virtue
hereof, on any writ of execution issued hereon, may be sold upon any such writ
in whole or in part in any order desired by Payee.

7.             Unconditional Liability.  Maker hereby waives all notices in connection
with the delivery, acceptance, performance, default, or enforcement of the
payment of this Note, and agrees that its liability shall be unconditional,
without regard to the liability of any other party, and shall not be affected
in any manner by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by Payee, and consents to any and all
extensions of time, renewals, waivers, or modifications that may be granted by
Payee with respect to the payment or other provisions of this Note, and agrees
that additional makers, endorsers, guarantors, or sureties may become parties
hereto without notice to them or affecting their liability hereunder.

8.             Notices. 
Any notice called for hereunder shall be deemed properly given if (i)
sent by certified mail, return receipt requested, (ii) personally delivered,
(iii) dispatched by any form of private or governmental express mail or
delivery service providing receipted delivery, (iv) sent by telefacsimile or
(v) sent by e-mail, to the following addresses or to such other address as
either party may designate by notice in accordance with this Section:

If to Maker:

Arcade Acquisition Corp.

c/o Arcade Partners LLC

62 La Salle Road, Suite 304

West Hartford, CT 06107

Attn:  Jonathan Furer, Chief Executive
Officer

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If to Payee:

Arcade Partners LLC

62 La Salle Road, Suite 304

West Hartford, CT 06107

Attn:  John Chapman

Notice shall be
deemed given on the earlier of (i) actual receipt by the receiving party, (ii)
the date shown on a telefacsimile transmission confirmation, (iii) the date on
which an e-mail transmission was received by the receiving party’s on-line
access provider (iv) the date reflected on a signed delivery receipt, or (vi)
two (2) Business Days following tender of delivery or dispatch by express mail
or delivery service.

9.             Construction. 
This Note shall be construed and enforced in accordance with the
domestic, internal law, but not the law of conflict of laws, of the State of
Delaware.

10.           Severability.  Any provision contained in this Note which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

IN WITNESS WHEREOF,
Maker, intending to be legally bound hereby, has caused this Note to be duly
executed by its Chief Executive Officer the day and year first above written.

	
   

  	
  ARCADE ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Jonathan Furer

  
	
   

  	
  Name: Jonathan
  Furer

  
	
   

  	
  Title: Chief Executive
  Officer

  

 

 3EXHIBIT 4.1

SECOND AMENDED AND RESTATED

2000 STOCK OPTION PLAN

OF

1ST PACIFIC BANK OF CALIFORNIA

This Second Amended and
Restated 2000 Stock Option Plan (“Plan”) of 1st Pacific Bank of California, a
California corporation (the “Bank”), dated as of February 20, 2003, is made to
effectuate certain amendments to the Plan approved by the board of directors of
the Bank on February 20, 2003 and by the shareholders of the Bank on May 15,
2003.

1.     PURPOSES OF PLAN

The purposes of the 2000
Stock Option Plan of 1st Pacific Bank of California, a California corporation,
are to:

(a)           Encourage selected
Eligible Persons (as defined below) to improve operations and increase profits
of the Bank;

(b)           Encourage selected
Eligible Persons to accept or continue employment or association with the Bank
or its Affiliates; and

(c)           Increase the interest
of selected Eligible Persons in the Bank’s welfare through participation in the
growth in value of the common stock of the Bank (the “Common Stock”).

Options granted under
this Plan (“Options”)
may be “incentive stock options” (“ISOs”) intended to satisfy’ the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or “nonqualified
options” (“NQOs”).

2.     ELIGIBLE PERSONS

Every person who at the
date of grant of an Option is an employee of the Bank or of any Affiliate (as
defined below) of the Bank is eligible to receive NQOs or ISOs under this Plan,
except as provided in Section 5.4 of this Plan. Every person who at the
date of grant is a non-employee director or other incorporator (as that term is
defined collectively in the FDIC Statement of Policy on Applications for
Deposit Insurance) of the Bank or any Affiliate (as defined below) of the Bank
is eligible to receive NQOs under this Plan. As used in this Plan, the term “Eligible Persons”
refers collectively to employees, non-employee directors and incorporators of
the Bank. The term “Affiliate”
as used in this Plan means a parent or subsidiary corporation as defined in the
applicable provisions (currently Sections 424(e) and (f), respectively) of
the Code. The term “employee”
includes an officer or director who is an employee of the Bank.

3.     STOCK SUBJECT TO THIS PLAN

Subject to the provisions
of Section 6.1.1 of this Plan, the total number of shares of stock that
may be issued under options granted pursuant to this Plan, and the total number
of shares provided for issuance under this Plan, shall be 463,787.  The shares covered by the portion of any
grant made under this Plan that expires unexercised shall become available
again for grants under this Plan.

4.     ADMINISTRATION

4.1. General. This Plan shall be administered
by the Personnel Committee of the Board, either in its entirety or only insofar
as required pursuant to Section 4.2 hereof, (the “Committee”) which
shall be comprised

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of at least two Board
members to which administration of this Plan is delegated (the “Administrator”). If
the Committee is comprised of two Board members, both members comprising the
Committee shall be “non-employee directors” as that term is defined in
Rule 1 6b-3 promulgated by the Securities and Exchange Commission (“Rule 16b-3”), or
any successor rule thereto.

4.2. Public Company. From and after such time
as the Bank registers a class of equity securities under Section 12 of the
Securities Exchange Act of 1934 (the “Exchange Act”), it is intended that this Plan
shall be administered in accordance with the disinterested administration
requirements of Rule 16b-3.

4.3. Authority of Administrator. Subject to
the other provisions of this Plan, the Administrator shall have the authority,
in its discretion: (i) to grant Options; (ii) to determine the fair
market value of the Common Stock subject to Options; (iii) to determine
the exercise price of Options granted; (iv) to determine the persons (each
an “Optionee”)
to whom, and the time or times at which, Options shall be granted, and the
number of shares subject to each Option; (v) to interpret this Plan;
(vi) to prescribe, amend, and rescind rules and regulations relating to
this Plan; (vii) to determine the terms and provisions of each Option
granted (which need not be identical), including but not limited to, the time
or times at which Options shall be exercisable; (viii) with the consent of
the Optionee, to modify’ or amend any Option; (ix) to accelerate or to
defer (with the consent of the Optionee) the exercise date of any Option;
(x) to authorize any person to execute on behalf of the Bank any
instrument evidencing the grant of an Option; and (xi) to make all other
determinations deemed necessary or advisable for the administration of this
Plan. The Administrator may delegate nondiscretionary administrative duties to
such employees of the Bank as it deems proper.

4.4. Interpretation by Administrator. All
questions of interpretation, implementation, and application of this Plan shall
be determined by the Administrator. Such determinations shall be final and
binding on all persons.

4.5. Rule 16b-3. With respect to persons
subject to Section 16 of the Exchange Act, if any, transactions under this
Plan are intended to comply with the applicable conditions of Rule 16b-3,
or any successor rule thereto. To the extent any provision of this Plan or
action by the Administrator fails to so comply, it shall be deemed null and
void, to the extent permitted by law and deemed advisable by the Administrator.
Notwithstanding the above, it shall be the responsibility of such persons, not
of the Bank or the Administrator, to comply with the requirements of
Section 16 of the Exchange Act; and neither the Bank nor the Administrator
shall be liable if this Plan or any transaction under this Plan fails to comply
with the applicable conditions of Rule 16b-3 or any successor rule
thereto, or if any such person incurs any liability under Section 16 of
the Exchange Act.

5.     GRANTING OF OPTIONS; OPTION AGREEMENT

5.1. Termination of Plan. No options shall be
granted under this Plan after ten years from the date of adoption of the
original version of this Plan by the Board.

5.2. Stock Option Agreement. Each Option shall
be evidenced by a written stock option agreement (the “Option Agreement”),
in form satisfactory to the Bank, executed by the Bank and the person to whom
such Option is granted; provided, however, that the failure by the Bank, the
Optionee, or both, to execute the Option Agreement shall not invalidate the
granting of an Option, although the exercise of each option shall be subject to
Section 6.1.3.

5.3. Type of Option. The Option Agreement
shall specify whether each Option it evidences is an NQO or an ISO.

5.4. Early Approval of Grants. Subject to
Section 6.3.3 with respect to ISOs, the Administrator may approve the
grant of Options under this Plan to persons who are expected to become Eligible
Persons, but who are not Eligible Persons at the date of approval.

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6.     TERMS AND CONDITIONS OF OPTIONS

Each Option granted under
this Plan shall be subject to the terms and conditions set forth in
Section 6.1. NQOs shall be also subject to the terms and conditions set
forth in Section 6.2, but not those set forth in Section 6.3. ISOs
shall also be subject to the terms and conditions set forth in
Section 6.3, but not those set forth in Section 6.2.

6.1. Terms and Conditions to Which All Options Are
Subject.  Options granted
under this Plan shall be subject to the following terms and conditions:

6.1.1.      Changes in Capital Structure. Subject to
Section 6.1.2, if the stock of the Bank is changed by reason of a stock
split, reverse stock split, stock dividend, or recapitalization, combination or
reclassification, appropriate adjustments shall be made by the Board in
(a) the number and class of shares of stock subject to this Plan and each
Option outstanding under this Plan, and (b) the exercise price of each
outstanding Option; provided, however, that the Bank shall not be required to
issue fractional shares as a result of any such adjustments. Each such
adjustment shall be subject to approval by the Board in its absolute
discretion.

6.1.2.      Corporate Transactions.

(a)           Dissolution or Liquidation.
In the event of the proposed dissolution or liquidation of the Bank, the
Administrator shall notify each Optionee at least 30 days prior to such
proposed action. To the extent not previously exercised, all Options will
terminate immediately prior to the consummation of such proposed action.

(b)           In the event of a “change
in control” of the Bank, options granted pursuant to the Plan shall
automatically be accelerated in full so as to become fully exercisable. In such
event, the Administrator shall notify each optionee at least 30 days prior to
such proposed action that the options shall be fully exercisable for a period
of 30 days from the date of such notice, and all such options shall terminate
upon the expiration of such 30-day period.

For purposes of the
foregoing, a change in control means the occurrence of either of the following:

(i)            any “person” (as used
in Section 13(d) of the Securities Exchange Act of 1934 and the rules
promulgated thereunder) becomes the “beneficial owner” (as defined in
Rule 1 3d-3) of securities representing a majority of the voting
power of the then outstanding securities of the Bank; or

(ii)           a sale of assets
involving all or substantially all of the assets of the Bank, or a merger or
consolidation of the Bank in which the holders of securities of the Bank immediately
prior to such event hold in the aggregate less than a majority of the
securities of the Bank or any other surviving or resulting entity immediately
after such event.

6.1.3.      Time of Option Exercise. Subject to
Section 5 and Section 6.3.4, Options granted under this Plan shall be
exercisable commencing in accordance with a schedule related to the date of the
grant of the Option, the date of first employment, or such other date as may be
set by the Administrator or, in the case of an employee, as may be specified in
any employment agreement pursuant to which the employee is employed (in any
case, the “Vesting Base
Date”) and specified in the Option Agreement relating to such
Option; provided that the right to exercise an Option must vest at the rate of
(a) at least 20% per year over five years from the date the Option was
granted, except as may otherwise be agreed between the Bank and the Eligible
Person, and (b) not more than 33.33% per year over three years from the
date the Option was granted. In any case, no Option shall be exercisable until
a written Option Agreement in form satisfactory to the Bank is executed by the
Bank and the Optionee.

6.1.4.      Option Grant Date. Except in the case of
advance approvals described in Section 5.4, the date of grant of an Option
under this Plan shall be the date as of which the Administrator approves the
grant.

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6.1.5.      Nontransferability of Option Rights.

(a)           Incentive Stock Options. No
ISOs granted under this Plan may be sold, transferred, pledged, assigned,
encumbered or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution; provided that
the deceased Optionee’s beneficiary or the representative of the Optionee’s
estate acknowledges and agrees in writing, in a form reasonably acceptable to
the Bank, to be bound by the provisions of this Plan (including the exercise
procedures described in Section 7) and the Option Agreement covering such
Options as if such beneficiary or estate were the Optionee. All rights with
respect to ISOs granted to an Optionee under this Plan shall be exercisable
during the Optionee’s life-time by such Optionee only. Following an Optionee’s
death, all rights with respect to ISOs that were exercisable at the time of
such Optionee’s death and have not terminated shall be exercised by the
Optionee’s designated beneficiary or by the Optionee’s estate.

(b)           Non-Qualified Stock Options. No
NQO is assignable or transferable by Optionee except by will or by the laws of
descent and distribution. During the life of Optionee, the NQO is exercisable
only by the Optionee. Any attempt to assign, pledge, transfer, hypothecate or
otherwise dispose of this NQO in a manner not herein permitted, and any levy of
execution, attachment, or similar process on this NQO, shall be null and void.
All rights with respect to such NQO that were exercisable at the time of the
Optionee’s death and have not terminated shall be exercised by the Optionee’s
designated beneficiary or by the Optionee’s estate.

6.1.6.      Payment. Except as provided below,
payment in full, in cash, shall be made for all stock purchased at the time
written notice of exercise of an Option is given to the Bank, and proceeds of
any payment shall constitute general funds of the Bank. At the time an Option
is granted or exercised, the Administrator, in the exercise of its absolute
discretion after considering any tax or accounting consequences, may authorize
as an additional method of payment the delivery by the Optionee of Common Stock
already owned by the Optionee for all or part of the Option price, provided the
value (determined as set forth in Section 6.1.10) of such Common Stock is
equal on the date of exercise to the Option exercise price, or such portion
thereof as the Optionee is authorized to pay by delivery of such stock;
provided, however, that if an Optionee has exercised any portion of any Option
granted by the Bank by delivery of Common Stock, the Optionee may not, within
six months following such exercise, exercise any Option granted under this Plan
by delivery of Common Stock without the consent of the Administrator.

6.1.7.      Termination of Employment.

(a)           If, for any reason
other than death, disability or “cause” (as defined below), an Optionee ceases
to be employed by the Bank or any of its Affiliates (such event being called a “Termination”),
Options held at the date of Termination (to the extent then exercisable) may be
exercised in whole or in part at any time within three months of the date of
such Termination, or such other period of not less than 30 days after the date
of such Termination as is specified in the Option Agreement (but in no event
after the Expiration Date); provided, that if such exercise of the Option would
result in liability for the Optionee under Section 16(b) of the Exchange
Act, then such 90-day period automatically shall be extended until the tenth
day following the last date upon which Optionee has any liability under
Section 16(b) (but in no event after the Expiration Date).

(b)           If an Optionee dies
while employed by the Bank or an Affiliate or within the period that the Option
remains exercisable after Termination, Options then held (to the extent then
exercisable) may be exercised, in whole or in part, by the Optionee, by the
Optionee’s personal representative, or by the person to whom the Option is
transferred by devise or the laws of descent and distribution, at any time
within 12 months after the death of the Optionee, or such other period of not
less than six months from the date of Termination as is specified in the Option
Agreement (but in no event after the Expiration Date).

(c)           If an Optionee ceases
to be employed by the Bank as a result of his or her disability, the Optionee
may, but only within six months after the date of Termination (and in no event
after the Expiration Date), exercise the Option to the extent otherwise
entitled to exercise it at the date of Termination; provided, however, that if
such disability is not a “disability” as such term is defined in
Section 22(e)(3) of the Code, in the case of an ISO such ISO shall
automatically convert to a NQO on the day three months and one day following
such Termination. To the extent that the Optionee was not entitled to exercise
the Option at the date of Termination 

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or if the Optionee does not exercise such Option to
the extent so entitled within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to this Plan.

(d)           If an Optionee is
terminated for “cause” all Options then held by such Optionee shall terminate
and no longer be exercisable as of the date of Termination.

(e)           For purposes of this
Section 6.1.7, “employment”
includes service as an employee, a director or as an incorporator.

(f)            For purposes of this
Section 6.1.7, an Optionee’s employment shall not be deemed to terminate
by reason of sick leave, military leave or other leave of absence approved by
the Administrator, if the period of any such leave does not exceed three months
or, if longer, if the Optionee’s right to reemployment by the Bank or any
Affiliate is guaranteed either contractually or by statute.

(g)           For purposes of this
Section 6.1.7, “cause”
shall me an Termination (i) by reason of Optionee’s commission of a
felony, misdemeanor or other illegal conduct involving dishonesty, fraud or
personal injury to others, (ii) by reason of Optionee’s dishonesty
towards, fraud upon, or deliberate injury or attempted injury to the Bank or
any of its Affiliates, (iii) by reason of Optionee’s willfully engaging in
misconduct which is materially and demonstrably injurious to the Bank or any of
its Affiliates, or (iv) if the Optionee is employed pursuant to a written
employment agreement, for “cause” as defined in any such employment agreement.

6.1.8.      Withholding and Employment Taxes. At the
time of exercise of an Option or at such other time as the amount of such
obligations becomes determinable (the “Tax Date”), the Optionee shall remit to the
Bank in cash all applicable federal and state withholding and employment taxes.
If authorized by the Administrator in its absolute discretion, after
considering any tax or accounting consequences, an Optionee may elect to
(i) tender to the Bank previously owned shares of Stock or other
securities of the Bank, or (ii) have shares of Common Stock which are
acquired upon exercise of the Option withheld by the Bank to pay some or all of
the amount of tax that is required by law to be withheld by the Bank as a
result of the exercise of such Option, subject to the following limitations:

(a)           Any election pursuant
to clause (i) above by an Optionee subject to Section 16 of the Exchange
Act shall either (x) be made at least six months before the Tax Date and shall
be irrevocable; or (y) shall be made in (or made earlier to take effect in) any
ten-day period beginning on the third business day following the date of
release for publication of the Bank’s quarterly or annual summary statements of
earnings and shall be subject to approval by the Administrator, which approval
may be given at any time after such election has been made. In addition, in the
case of (y), the Option shall be held at least six months prior to the Tax
Date.

(b)           Any election pursuant
to clause (ii) above, where the Optionee is tendering Common Stock issued
pursuant to the exercise of an Option, shall require that such shares be held
at least six months prior to the Tax Date.

Any of the foregoing
limitations may be waived (or additional limitations may be imposed) by the
Administrator, in its absolute discretion, if the Administrator determines that
such foregoing limitations are not required (or that such additional
limitations are required) in order that the transaction shall be exempt from
Section 16(b) of the Exchange Act pursuant to Rule 16b-3, or any
successor rule thereto. In addition, any of the foregoing limitations may be
waived by the Administrator, in its sole discretion, if the Administrator
determines that Rule 16b-3, or any successor rule thereto, is not
applicable to the exercise of the Option by the Optionee or for any other
reason.

Any securities tendered
or withheld in accordance with this Section 6.1.8 shall be valued by the
Bank as of the Tax Date.

6.1.9.      Other Provisions. Each Option granted
under this Plan may contain such other terms, provisions, and conditions not
inconsistent with this Plan as may be determined by the Administrator, and each
ISO granted under this Plan shall include such provisions and conditions as are
necessary to qualify the Option

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as an “incentive stock
option” within the meaning of Section 422 of the Code. If Options provide
for a right of first refusal in favor of the Bank with respect to stock
acquired by employees, directors or incorporators, such Options shall provide
that the right of first refusal shall terminate upon the earlier of
(i) the closing of the Bank’s initial public offering of Common Stock, or
(ii) the date ten years after the grant date as set forth in
Section 6.1.4.

6.1.10.    Determination of Value. For purposes of
this Plan, the fair market value of Common Stock or other securities of the
Bank shall be determined as follows:

(a)           If the stock of the
Bank is listed on any established stock exchange or a national market system,
including without limitation the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System, its fair
market value shall be the closing sales price for such stock or the closing bid
if no sales were reported, as quoted on such system or exchange (or the largest
such exchange) for the date the value is to be determined (or if there are no
sales for such date, then for the last preceding business day on which there
were sales), as reported in the Wall Street Journal or similar publication.

(b)           If the stock of the
Bank is regularly quoted by a recognized securities dealer but selling prices
are not reported, its fair market value shall be the mean between the high bid
and low asked prices for the stock on the date the value is to be determined
(or if there are no quoted prices for such date, then for the last preceding
business day on which there were quoted prices).

(c)           In the absence of an
established market for the stock, the fair market value thereof shall be
determined in good faith by the Administrator, by consideration of such factors
as the Administrator in its discretion deems appropriate among the recent issue
price of other securities of the Bank, the Bank’s net worth, prospective
earning power, dividend-paying capacity, and other relevant factors, including
the goodwill of the Bank, the economic outlook in the Bank’s industry, the Bank’s
position in the industry and its management, and the values of stock of other
corporations in the same or a similar line of business.

6.1.11.    Option Term. Subject to
Section 6.3.5, no Option shall be exercisable more than ten years after
the date of grant, or such lesser period of time as is set forth in the Option
Agreement (the end of the maximum exercise period stated in the stock option
agreement is referred to in this Plan as the “Expiration Date”).

6.1.12.    Exercise Price. The exercise price of
any Option granted to any person who owns, directly or by attribution under the
Code (currently Section 424(d)), stock possessing more than ten percent of
the total combined voting power of all classes of stock of the Bank or of any
Affiliate (a “Ten
Percent Stockholder”) shall in no event be less than 110% of the
fair market value (determined in accordance with Section 6.1.10) of the
stock covered by the Option at the time the Option is granted.

6.1.13.    Capital Requirements of the Bank. The
Bank’s primary federal regulator may direct the Bank to require all Optionees
to exercise or forfeit their Options if the Bank’s capital falls below minimum
regulatory requirements, as determined by the Bank’s state or primary federal
regulator. If an Optionee fails to exercise any Options which such Optionee is
required to exercise pursuant to this Section 6.1.13, such Options shall
be cancelled and forfeited by the Optionee.

6.2. Exercise Price of NQOs. The exercise
price of any NQO granted under this Plan shall in no event be less than the
fair market value (determined in accordance with Section 6.1.10) of the
stock subject to the Option at the time the Option is granted.

6.3. Terms and Conditions to Which Only ISOs Are Subject.
Options granted under this Plan which are designated as ISOs shall be subject
to the following terms and conditions:

6.3.1.      Exercise Price. Except as set forth in
Section 6.1.12, the exercise price of an ISO shall be determined in
accordance with the applicable provisions of the Code and shall in no event be less
than the fair market value (determined in accordance with Section 6.1.10)
of the stock covered by the Option at the time the Option is granted.

 6
 

6.3.2.      Disqualjfying Dispositions. If stock
acquired by exercise of an ISO granted pursuant to this Plan is disposed of in
a “disqualifying disposition” within the meaning of Section 422 of the
Code, the holder of the stock immediately before the disposition shall promptly
notify the Bank in writing of the date and terms of the disposition and shall
provide such other information regarding the Option as the Bank may reasonably
require.

6.3.3.      Grant Date. If an ISO is granted in
anticipation of employment as provided in Section 5.4, the Option shall be
deemed granted, without further approval, on the date the grantee assumes the
employment or service relationship forming the basis for such grant, and, in
addition, satisfies all requirements of this Plan for Options granted on that
date.

6.3.4.      Vesting. Notwithstanding any other
provision of this Plan, ISOs granted to any single Optionee under all incentive
stock option plans of the Bank and any subsidiaries may not “vest” for more
than $100,000 in fair market value of stock (measured on the grant date(s)) in
any calendar year. For purposes of the preceding sentence, an option “vests”
when it first becomes exercisable. If, by their terms, such ISOs held by an
Optionee taken together would vest to a greater extent in a calendar year, and
unless otherwise provided by the Administrator, the vesting limitation
described above shall be applied by deferring the exercisability of those ISOs
or portions of ISOs which have the highest per share exercise prices; but in no
event shall more than $100,000 in fair market value of stock (measured on the
grant date(s)) vest in any calendar year. The ISOs or portions of ISOs whose
exercisability is so deferred shall become exercisable on the first day of the
first subsequent calendar year during which they may be exercised, as
determined by applying these same principles and all other provisions of this
Plan including those relating to the expiration and termination of ISOs. In no
event, however, will the operation of this Section 6.3.4 cause an ISO to
vest before its terms or, having vested, cease to be vested.

6.3.5.      Term. Notwithstanding
Section 6.1.11, no ISO granted to any Ten Percent Stockholder shall be
exercisable more than five years after the date of grant.

7.     MANNER OF EXERCISE

7.1. Written Notice; Payment. An Optionee
wishing to exercise an Option shall give written notice to the Bank at its
principal executive office, to the attention of the officer of the Bank
designated by the Administrator, accompanied by payment of the exercise price
as provided in Section 6.1.6. The date the Bank receives written notice of
an exercise hereunder accompanied by payment of the exercise price will be
considered as the date such Option was exercised.

7.2. Delivery of Stock. Promptly after
receipt of written notice of exercise of an Option, the Bank shall, without
stock issue or transfer taxes to the Optionee or other person entitled to
exercise the Option, deliver to the Optionee or such other person a certificate
or certificates for the requisite number of shares of stock. An Optionee or
permitted transferee of an Optionee shall not have any privileges as a
stockholder with respect to any shares of stock covered by the Option until the
date of issuance (as evidenced by the appropriate entry on the books of the
Bank or a duly authorized transfer agent) of such shares.

8.     EMPLOYMENT RELATIONSHIP

Nothing in this Plan or
any Option granted thereunder shall interfere with or limit in any way the
right of the Bank or of any of its Affiliates to terminate any Optionee’s
employment or service relationship at any time, nor confer upon any Optionee
any right to continue in the employ of, or consult with, the Bank or any of its
Affiliates, nor interfere in any way with provisions in the Bank’s charter
documents or applicable law relating to the election, appointment, terms of
office, and removal of members of the Board.

9.     FINANCIAL INFORMATION

The Bank shall provide to
each Optionee during the period such Optionee holds an outstanding Option, and
to each holder of Common Stock acquired upon exercise of Options granted under
this Plan for so long as such person is a holder of such Common Stock, annual
financial statements of the Bank as prepared either by the

 7
 

Bank or independent certified public accountants of
the Bank. Such financial statements shall include, at a minimum, a balance
sheet and an income statement, and shall be delivered as soon as practicable
following the end of the Bank’s fiscal year. The provisions of this
Section 9 shall not apply with respect to Optionees who are senior or key
employees or directors or are otherwise persons of the Bank whose duties in
connection with the Bank assures them access to information equivalent to the
information provided in the financial statements.

10.  CONDITIONS UPON ISSUANCE OF SHARES

Shares of Common Stock
shall not be issued pursuant to the exercise of an Option unless the exercise
of such Option and the issuance and delivery of such shares pursuant thereto
shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933 (the “Securities Act”).

11.  NONEXCLUSIVITY OF PLAN

The adoption of this Plan
shall not be construed as creating any limitations on the power of the Bank to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options other than under this Plan.
In the event an employee of the Bank is granted Options pursuant to the terms
of an employment agreement and such Options are granted or to be granted under
this Plan, the terms of this Plan shall govern such Options except to the
extent that the terms of this Plan are inconsistent with the terms relating to
stock options which are set forth in any such employment agreement. In such
event, the terms of the employment agreement shall supersede those set forth in
this Plan.

12.  MARKET STANDOFF

Each Optionee, if so
requested by the Bank or any representative of the underwriters in connection
with any registration of the offering of any securities of the Bank under the
Securities Act shall not sell or otherwise transfer any shares of Common Stock
acquired upon exercise of Options during a period not to exceed 180 days
following the effective date of a registration statement of the Bank filed
under the Securities Act; provided, however, that such restriction shall apply
only to the first two registration statements of the Bank to become effective
under the Securities Act which include securities to be sold on behalf of the
Bank to the public in an underwritten public offering under the Securities Act.
The Bank may impose stop-transfer instructions with respect to securities
subject to the foregoing restriction until the end of the above period.

13.  AMENDMENTS TO PLAN

The Board may at any time
amend, alter, suspend or discontinue this Plan. Without the consent of an
Optionee, no amendment, alteration, suspension or discontinuance may adversely
affect outstanding Options except to conform this Plan and ISOs granted under
this Plan to the requirements of federal or other tax laws relating to
incentive stock options. No amendment, alteration, suspension or discontinuance
shall require stockholder approval unless (a) stockholder approval is
required to preserve incentive stock option treatment for federal income tax
purposes, or (b) the Board otherwise concludes that stockholder approval
is advisable.

14.  EFFECTIVE DATE OF PLAN

This Plan shall become
effective upon adoption by the Board, provided, however, that no Option shall
be exercisable unless and until written consent of the stockholders of the
Bank, or approval of stockholders of the Bank voting at a validly called
stockholders’ meeting, is obtained within 12 months after adoption by the
Board. If such stockholder approval is not obtained within such time, Options
granted hereunder shall terminate and be of no force and effect from and after
expiration of such 12-month period. Options may be granted and exercised under
this Plan only after there has been compliance with all applicable federal and
state securities laws.

 8

AMENDMENT NUMBER 1 TO

THE
SECOND AMENDED AND RESTATED 2000 STOCK OPTION PLAN

OF 1ST PACIFIC BANK OF CALIFORNIA

Stock
Plan

The Board of Directors adopted the Second Amended and
Restated 2000 Stock Option Plan of 1st Pacific Bank of California (the “Plan”),
which was subsequently approved by the Bank’s shareholders.  The Plan provides for the grant of incentive
stock options to selected employees and nonstatutory stock options to directors
and selected employees and consultants. 
The Board of Directors realizes that it is vitally important to the
success of any bank to attract and retain highly qualified bankers.  The Bank established the Plan, in part, as an
incentive for such individuals to join, and to remain and prosper with, the
Bank.  The ability to grant options under
the Plan is considered important to encourage participants to improve the
operations, and increase the profits, of the Bank and to increase the interest
of such participants in the Bank’s welfare through participation in the growth
in value of its common stock.

Summary
of the Plan

Amount of Options.  The Plan permits the Bank to grant options to
purchase Common Stock.  Under the Plan,
without being amended by this Proposal 2, the total number of shares of Common
Stock that may be issued pursuant to the exercise of options granted under the
Plan is 463,787.  The Bank has reserved a
sufficient amount of its authorized but unissued Common Stock for issuance
under the Plan, as currently in effect and as proposed to be further amended as
discussed below.

Types of Stock Options and
Eligibility.  Options
issuable under the Plan may be either “incentive stock options,” within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the “Code”), or “non-qualified stock options.” 
Incentive stock options may be granted only to an individual who, at the
time the option is granted, is an employee of the Bank or its affiliate.  Non-qualified stock options may be granted to
any employee, non-employee director or other incorporator of the Bank or its
affiliate, whether an individual or an entity. 
Notwithstanding eligibility to participate in the Plan, options may be
issued under the Plan only in accordance with the terms of the Plan.

Plan Administration.  The Personnel/Compensation Committee of the
Board of Directors administers the Plan (in such capacity, the “Administrator”).  See “Committees of the Board of Directors,”
below.  As the Administrator, the
Personnel Committee has broad authority to administer and interpret the
Plan.  Among its powers are the powers to
grant stock options, to determine the fair market value of the Common Stock
subject to stock options, to determine the exercise price of options granted,
to determine the persons to whom, and the time or times at which, options shall
be granted and the number of shares subject to each option, to interpret the
Plan, to prescribe, amend and rescind rules relating to the Plan and to
determine the terms and provisions of each option granted, which need not be
identical for all optionees, including the time or times at which options may
be exercised.

Proposed
Amendment

On February 17, 2005, the Board of Directors adopted
Amendment Number 1 to the Plan (the “Amendment”), which, subject to
shareholder approval, (i) increases the maximum number of shares of common
stock that may be issued under the Plan to an aggregate of 572,988, and (ii)
specifically designates that 250,000 is the maximum number of shares of common
stock that may be issued under the Plan upon the exercise of incentive stock
options, such designation being required by the final Treasury Regulations
issued under § 422 of the Code.  The
total number of shares of common stock that may be issued under the Plan,
assuming the Amendment is approved by the shareholders, would be 572,988.  As of March 31, 2005, 185,686 and 232,336
incentive stock options and nonstatutory stock options, respectively, have been
granted which either remain outstanding or have been exercised, and 154,966
total options remain available for future grant assuming the Amendment is
approved.  Accordingly, assuming the
Amendment is approved, as of March 31, 2005, the maximum number of options that
may be granted as incentive stock options is 64,314.  The Amendment does not affect any options
currently outstanding.

If Proposal 2 is adopted by the shareholders, Section
3 of the Plan will be deleted in its entirety and replaced with the following:

 EX - 1
 

“3.   STOCK
SUBJECT TO THIS PLAN.  Subject to the
provisions of Section 6.1.1 of this Plan, the stock that may be issued pursuant
to Options shall equal in the aggregate 572,988 shares of the Bank’s Common
Stock, provided that the maximum number of shares that may be issued subject to
ISOs shall be 250,000 shares.  If any
Option shall for any reason expire or otherwise terminate, in whole or in part,
without having been exercised in full, the stock not acquired under such Option
shall revert to and again become available for issuance under the Plan.”

Other
Terms and Conditions of the Plan

The Plan contains other terms and conditions
applicable to the grant and exercise of options, some of which apply to both
incentive stock options and non-qualified stock options, and some of which
apply only to incentive stock options or non-qualified stock options.  The following summarizes the terms applicable
to both incentive stock options and non-qualified stock options:

Changes in Capital Structure.  In the event of a stock split, reverse stock
split, stock dividend, recapitalization or similar transaction, the number and
class of shares subject to the Plan and the exercise price of each outstanding
option issued under the Plan are adjusted proportionately, subject to approval
by the Board of Directors in its absolute discretion.

Change in Control.  In the event of a change of control of the
Bank, options granted will be accelerated so as to become fully
exercisable.  In the event of a proposed
dissolution or liquidation of the Bank, optionees must be granted a period of
at least thirty (30) days to exercise options, with all unexercised options
terminating upon the expiration of such period.

Exercise Price.  The maximum number of shares that may be
purchased pursuant to the exercise of each stock option and the price per share
at which the option may be exercised is established by the Administrator,
provided that the exercise price shall not be less than the fair market value
per share of the Common Stock at the time the option is granted, and further
provided that if incentive stock options are granted to a person holding 10% or
more of the Common Stock, the exercise price may not be less than 110% of the
fair market value of the Common Stock at the time the incentive stock option is
granted.

Time and Manner of Exercise.  Options may be exercised in accordance with a
schedule related to the date of the grant of the option, the date of first
employment, the date specified in an employment agreement, or such other date
specified by the Administrator; provided, however, that the right to exercise
options must vest at the rate of at least 20% per year over five years from the
date the option was granted unless otherwise agreed by the optionee and the
Administrator, and may not vest at a rate in excess of 33.33% per year over
three years from the date the option was granted (except for “Director Service
Options,” as described below under “–Director Service Options”).  To exercise stock options, the optionee must
deliver to the Administrator written notice of exercise in the form required
disclosing such information as may be required for exercise, together with
payment in full for the shares to be purchased pursuant to such exercise.

Transferability of Stock Options.  Stock options granted under the Plan may not
be sold, pledged, assigned, encumbered or otherwise transferred except by will
or the laws of descent and distribution. 
During the life of the optionee, the stock option is exercisable only by
the optionee.  At the time of the
optionee’s death, the estate or other beneficiary shall have all rights of the
optionee at the time of the death.

Consideration.  Upon written notice to the Bank of the
exercise of a stock option, payment in full, in cash, is required. The proceeds
of the purchase of Common Stock pursuant to the exercise of options constitute
general funds of the Bank.

Termination of Employment.  The disposition of options held by an
optionee whose employment is terminated depends on the reason for the
termination.  In the event of death, the
optionee’s personal representative or the person to whom the option is
transferred by the laws of descent and distribution has up to 12 months after
the death of the optionee to exercise the option.  If the optionee is terminated due to
disability, the optionee has six months within which to exercise the option, to
the extent the option was exercisable at the time of disability.  If the optionee is terminated for “cause”
(which is defined in the Plan and includes such reasons as commission of
crimes, engaging in conduct involving dishonesty, fraud or personal injury to
others, willful misconduct or being terminated

 EX - 2
 

“for cause” pursuant to
the terms of a written employment agreement), such optionee’s stock options are
terminated immediately without the opportunity for exercise.  If the optionee’s employment or other
relationship with the Bank is otherwise terminated, the optionee has up to 90
days to exercise stock options that are exercisable as of the date of
termination.  The Director Service
Options have different terms, as described under “–Director Service Options,”
below.

Determination of Market Value.  The Plan specifies the procedures to be
followed for determining the “fair market value” of Common Stock at the time of
the grant of options under the Plan, including determination of values if the
Bank is listed on stock exchanges, determination based upon quotations by
recognized securities dealers, and “good faith” determinations by the
Administrator in the absence of an established market for the stock.

Expiration Date.  Options may not be exercised more than 10
years after the date of grant or over a lesser period as set forth in the
relevant stock option agreement.

Capital Requirements of the Bank.  The Plan provides that if the Bank’s capital
falls below minimum regulatory requirements, as determined by either the Bank’s
state or federal regulators, the Bank may require all optionees to either
exercise their options or to forfeit their options.

Financial Information.  The Plan requires the Bank to provide to
optionees and the holders of Common Stock acquired upon exercise of such stock
options annual financial statements prepared by the Bank or its independent
accountants; however, this requirement does not apply to senior or key
employees or others whose duties in connection with the Bank assures them
access to information equivalent to the information provided in the financial
statements.

Limitation on Sale or Transfer of
Shares.  In the event
that the Bank files any registration statement under the Securities Act of
1933, as amended (the “Securities Act”) in order to register an offering of
securities, the Bank or its underwriters may require that any holder of shares
acquired upon the exercise of stock options refrain from selling or
transferring such shares during a period of up to 180 days after the effective
date of such registration statement. 
However, this restriction applies only to the first two registration
statements of the Bank under the Securities Act that include securities to be
sold on behalf of the Bank to the public in underwritten public offerings.

Amendment of the Plan.  The Board of Directors has the authority to
amend, alter, suspend or discontinue the Plan at any time, although any such
action could not, without the consent of the optionee, affect an option that
had already been granted.  No approval of
the shareholders is required for any amendment, alteration, suspension or
discontinuance of the Plan, unless such approval is necessary to preserve
incentive stock option treatment for income tax purposes or the Board of
Directors otherwise determines it advisable to seek shareholder approval.  On March 21, 2002, the Board of
Directors amended the Plan to create the Director Service Options, as described
under “–Director Service Options,” below.

Nonexclusivity of the Plan.  The adoption of the Plan does not prevent the
Bank from providing other incentive arrangements, including without limitation
stock options.  Stock options granted in
employment agreements may be granted under the Plan and subject to its terms,
except to the extent specifically provided in the employment agreement, in
which event the more specific terms of the employment agreement would supersede
the general terms of the Plan.

Federal Tax Consequences of Issuance
and Exercise of Options. 
An optionee will recognize no taxable income at the time an option is
granted or at the time of exercise of an incentive stock option.  If the optionee makes no disposition of the
acquired shares within two years after the date of grant of the incentive stock
option, or within one year after the exercise of such option, the employee will
recognize no taxable income and any gain or loss that is realized on a
subsequent disposition of such shares will be treated as long-term capital gain
or loss.  As to incentive stock options
exercised, the excess, if any, of the fair market value of the shares on the
date of exercise over the option price will be an item of tax preference for
purposes of computing the alternative minimum tax.

If the foregoing holding period requirements are not
satisfied, the optionee will realize (i) ordinary income for federal income tax
purposes in the year of disposition in an amount equal to the lesser of (a) the
excess, if any, of

 EX - 3
 

the fair market value of
the shares on the date of exercise over the option price thereof, or (b) the
excess, if any, of the selling price over the optionee’s adjusted basis of such
shares (provided that the disposition is a sale or exchange with respect to
which a loss (if sustained) would be recognized by such individual) and (ii)
capital gain equal to the excess, if any, 
of the amount realized upon the disposition of shares over the fair
market value of such shares on the date of exercise.  Optionees will be required to include in
their gross income in the year of exercise of a non-qualified stock option the
difference between the fair market value on the exercise date of the shares
transferred and the option price.

The Bank will be entitled (provided it complies with
certain reporting requirements with respect to the income received by the
employee) to a deduction for federal income tax purposes at the same time and
in the same amount as the optionee is considered to be in receipt of
compensation income in connection with the exercise of non-qualified stock
options or, in the case of an incentive stock option, a disqualifying
disposition (as defined below under “–Incentive Stock Options – Disqualifying
Dispositions”) of shares received upon exercise thereof.  If the holding period requirements outlined
above are met, no deduction will be available to the Bank in connection with an
incentive stock option.  Under the
Revenue Reconciliation Act of 1993, the Bank may not be able to deduct
compensation to certain employees to the extent compensation exceeds
$1,000,000, per employee, per tax year. 
Covered employees include the Bank’s chief executive officer and its
four other highest compensated officers for that tax year.  Certain performance-based compensation
including stock options are exempt provided that, among other things, the stock
options are granted by a Compensation Committee of the Board of Directors which
is comprised solely of two or more outside directors and the plan under which
the options are granted is approved by stockholders.  The Plan will not qualify as
performance-based compensation.

Incentive
Stock Options

The following terms apply only to incentive stock
options:

Vesting.  Incentive stock options granted to any single
person may not vest or become exercisable for more than $100,000 in fair market
value (determined as of the date of grant) of stock in any calendar year.  To the extent the aggregate fair market value
of the shares with respect to which incentive stock options are exercisable for
the first time by an optionee during any calendar year exceeds $100,000, such
options will be treated as non-qualified stock options.

Term.  Incentive stock options granted to a person
who holds 10% or more of Common Stock may not be exercised for more than five
years after the date of grant.

Disqualifying Dispositions.  If stock acquired through the exercise of an
incentive stock option is disposed of in a “disqualifying disposition,” as
defined in Section 422 of the Code, the holder of the stock before the
disposition is required to notify the Bank in writing of the date and term to
the disposition and shall provide other information to the Bank as the Bank may
require.  A “disqualifying disposition”
is defined in the Code as a disposition within two years of the granting of the
incentive stock option or within one year after the transfer of such shares to
the holder. The Code provides that in the event of such a disposition, and if
such a disposition is a sale or exchange with respect to which a loss (if
sustained) would be recognized to such individual, then the amount which is
includible in the gross income of such individual, and the amount which is
deductible from the income of such individual’s employer corporation, as
compensation attributable to the exercise of such option, shall not exceed the
excess (if any) of the amount realized on such sale or exchange over the
adjusted basis of such shares.

Director
Service Options

Pursuant to an amendment of the Plan adopted by
resolution of the Board of Directors on March 21, 2002, 78,000 shares of Common
Stock are specifically reserved for issuance to non-employee directors in the
form of “Director Service Options.”  In
May 2004, the Board of Directors approved an amendment extending the period
during which Director Service Options may be granted from December 31, 2003
through May 20, 2004, and increasing the number of shares reserved for Director
Service Options to the extent necessary to permit the granting of additional
options on that date to non-employee directors. 
The per share exercise price of each Director Service Option may not be
less than the greater of $10.00 per share or the fair market value per share at
the time the option is granted and may have terms of up to ten (10) years from
the date of the grant.  Director Service
Options may be granted only to non-employee directors of the Bank while they
are serving as directors.  Director
Service Options could not vest in full prior to November 17, 2003.  In the event that a holder of Director
Service Options ceases to

 EX - 4
 

serve as a director of
the Bank, the Director Service Options shall continue to vest in accordance with
its vesting schedule and its specific terms and shall be exercisable to the
extent vested, including vesting occurring after the date of cessation of
service, for a period of two years after the date service as a director of the
Bank ceases.  Each Director Service
Option may also contain such other terms, provisions and conditions not
inconsistent with the amendment as may be determined by the Administrator.

 EX - 5

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