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                                                                    EXHIBIT 10.8

                         HAWTHORNE FINANCIAL CORPORATION
              BENEFIT CONTINUATION AGREEMENT FOR OUTSIDE DIRECTORS

         This Agreement is entered into by and between Hawthorne Financial
Corporation, a Delaware corporation (the "Company"), and ___________________
("Director"), an independent member of the Board of Directors of the Company.

                                    RECITALS

     A.  The Board of Directors of the Company (the "Board") has determined that
         it is in the best interests of the Company and its shareholders to
         assure that the Company is able to attract and retain as directors
         individuals of superior talent, ability, and achievement.

     B.  The Board has determined that it is in the best interests of the
         Company and its shareholders to assure that the Company will have the
         continued dedication of the Director, notwithstanding the possibility,
         threat or occurrence of a Change of Control (as defined below) of the
         Company.

         Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

         ARTICLE I. DEFINITIONS. When used in this document, the following terms
shall have the meaning assigned to them, unless the context clearly indicates
otherwise:

         Section 1.01 "Company" means Hawthorne Financial Corporation.

         Section 1.02 "Board" means the board of directors of the Company.

         Section 1.03 "Change of Control" means:

                  (a)      The acquisition by any individual, entity or group (a
         "Person") within the meaning of Section 13(d)(3) or 14(d)(2) of the
         Securities Exchange Act of 1934, as amended (the "Exchange Act") of
         beneficial ownership (within the meaning of Rule 13d-3 promulgated
         under the Exchange Act) of more than 24.9% of either (A) the then
         outstanding shares of common stock of the Company (the "Outstanding
         Company Common Stock") or (B) the combined voting power of the then
         outstanding voting securities of the Company entitled to vote generally
         in the election of directors (the "Outstanding Company Voting
         Securities"). For purposes of this Agreement, the exercise of
         outstanding Warrants to acquire shares of Outstanding Company Common
         Stock is specifically excluded from the determination of whether or not
         a Change of Control has occurred. In addition, the following
         acquisitions shall not constitute a Change of Control: (i) any
         acquisition directly from the Company, (ii) any acquisition by the
         Company, (iii) any acquisition by any employee benefit plan (or related
         trust) sponsored or maintained by the Company or any corporation
         controlled by the Company or (iv) any acquisition by any corporation
         pursuant to a transaction which complies with clauses (i), (ii) and
         (iii) of Section 1.03(c); or

                                      -1-

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                  (b)      Directors who, as of the date of this Agreement,
         constitute the Board (the "Incumbent Board") cease for any reason to
         constitute at least a majority of the Board; provided, however, that
         any individual becoming a director subsequent to the date of this
         Agreement whose election, or nomination for election by the Company's
         shareholders, was approved by a vote of at least a majority of the
         directors then comprising the Incumbent Board shall be considered as
         though such individual were a member of the Incumbent Board, but
         excluding, for this purpose, any such individual whose initial
         assumption of office occurs as a result of an actual or threatened
         election contest with respect to the election or removal of directors
         or other actual or threatened solicitation of proxies or consents by or
         on behalf of a Person other than the Board; or

                  (c)      Consummation by the Company of a reorganization,
         merger or consolidation or sale or other disposition of all or
         substantially all of the assets of the Company or the acquisition of
         assets or stock of another corporation (a "Business Combination"). This
         Section 1.03(c) shall not apply if, following such Business
         Combination:

                  (i)      all or substantially all of the individuals and
         entities who were the beneficial owners, respectively, of the
         Outstanding Company Common Stock and Outstanding Company Voting
         Securities immediately prior to such Business Combination beneficially
         own, directly or indirectly, more than 50% of, respectively, the then
         outstanding shares of common stock and the combined voting power of the
         then outstanding voting securities entitled to vote generally in the
         election of directors, as the case may be, of the corporation resulting
         from such Business Combination (including, without limitation, a
         corporation which as a result of such transaction owns the Company or
         all or substantially all of the Company's assets either directly or
         through one or more subsidiaries) in substantially the same proportions
         as their ownership of the Outstanding Company Common Stock and
         Outstanding Company Voting Securities, as the case may be, immediately
         prior to such Business Combination;

                  (ii)     A Person (excluding any corporation resulting from
         such Business Combination or any employee benefit plan (or related
         trust) of the Company who beneficially owns, directly or indirectly,
         20% or more of, respectively, the then outstanding shares of common
         stock of the corporation resulting from such Business Combination or
         the combined voting power of the then outstanding voting securities of
         such corporation, so long as such ownership existed prior to the
         Business Combination; and

                  (iii)    at least a majority of the members of the board of
         directors of the corporation resulting from such Business Combination
         were members of the Incumbent Board at the time of the execution of the
         initial agreement, or of the action of the Board, providing for such
         Business Combination; or

                  (d)      Approval by the shareholders of the Company of a
         complete liquidation or dissolution of the Company.

Section 1.04 "Retirement" means the Director's resignation or, removal from,
failure to be re-nominated or declination to stand for re-election to the Board.

                                      -2-

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         ARTICLE II. CONTINUATION OF BENEFITS.

         Section 2.01 Continuation of Benefits Upon Retirement. Subject to the
provisions of Section 2.04, upon Retirement and for the period specified in
Section 2.02, the Company covenants and agrees to provide the Director and/or
the Director's family, as the case may be, with all benefits under each welfare
benefit plan, practice, policy or program provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the Director and/or the Director's
family, at any time during the 120-day period immediately preceding the
Director's Retirement.

         Section 2.02 Period of Payments. The Director shall be entitled to
receive the benefits specified in Section 2.01 for the lesser of (a) five years
or (b) the number of years, rounded up to the nearest whole number, equal to the
number of years of service as a Director.

         Section 2.03 Continuation of Benefits Following Change of Control. For
a period of five (5) years following a Change in Control, the Company covenants
and agrees to provide the Director and/or the Director's family, as the case may
be, with all benefits under welfare benefit plans, practices, policies and
programs provided by the Company and its affiliated companies (including,
without limitation, medical, prescription, dental, disability, employee life,
group life, accidental death and travel accident insurance plans and programs)
that were provided to the Director and/or the Director's family, at any time
during the 120-day period immediately preceding the Change in Control.

         Section 2.04 Forfeiture of Benefits. All benefits not yet paid for
which Director would be otherwise eligible under this Agreement shall be
forfeited in the event that the Incumbent Board determines that any of the
following circumstances has occurred:

                  (a)      The Director has engaged in knowing and willful
         misconduct in connection with his or her service as a Director; or

                  (b)      The Director has willfully breached his or her
         fiduciary duties to the Company.

                  (c)      For purposes of this Section 2.04, no act or failure
         to act, on the part of the Director, shall be considered "willful"
         unless it is done, or omitted to be done, by the Director in bad faith
         or without reasonable belief that the Director's action or omission was
         in the best interests of the Company, determined by a resolution duly
         adopted by the affirmative vote of not less than three-quarters (3/4)
         of the independent members of the Board at a meeting of the Board
         called and held for such purpose (after reasonable notice is provided
         to the Director, and the Director is given an opportunity, together
         with counsel, to be heard before the Board), finding that, in the good
         faith opinion of the Board, the Director is guilty of the conduct
         described in Section 2.04(a) or (b) above, and specifying the
         particulars thereof in detail.. Any act, or failure to act, based upon
         authority given pursuant to a resolution duly adopted by the Board or
         based upon the advice of counsel for the Company shall be conclusively
         presumed to be done, or omitted to be done, by the Director in good
         faith and in the best interests of the Company.

                                      -3-

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         ARTICLE III. MISCELLANEOUS

         Section 3.01 Continued Board Service. Nothing in this Agreement or the
benefits payable hereunder shall confer upon the Director any right to continue
as a member of the Board.

         Section 3.02 Specific Performance. Without prejudice to any other
rights or remedies Director may have, the Company acknowledges and agrees that
damages would not be an adequate remedy for any breach of this Agreement and
Director shall be entitled to the remedies of injunction, specific performance
and other equitable relief for any threatened or actual breach of this
Agreement. The Company hereby consents to jurisdiction in the U.S. District
Court for the Central District of California (or at Director's option, the Los
Angeles County Superior Court Central District) so that such court may enter an
appropriate injunction order and such other relief as may be just and proper.

         Section 3.03 Agreement Binding on Successors. This Agreement shall be
binding upon all successors and assigns of the Company (including any transferee
of all or substantially all of its assets and any successor by merger or
operation of law) and shall inure to the benefit of the heirs, personal
representatives and estate of the Director.

         Section 3.04 Severability. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, all portions of any
paragraphs of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not by themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby, and (b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any paragraph of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent of the parties to the fullest enforceable extent.

         Section 3.05 Notices. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) three (3) days after having been sent by first class mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written or oral
verification of receipt. Until changed upon giving notice as provided herein,
notices shall be sent to:

If to the Company:

         Hawthorne Financial Corporation
         2381 Rosecrans Avenue
         El Segundo, CA 90245
         Attention: Simone Lagomarsino, Chief Executive Officer
         Fax: (310) 725-5831

If to the Director, at the address specified under his or her signature.

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                                      -4-

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Section 3.06 Amendments and Termination. This Agreement may be amended only by a
written instrument executed by the parties.

Section 3.07 Entire Agreement. This Agreement constitutes the whole agreement
between the parties with respect to the matters contained in the Agreement.

Section 3.08 Applicable Law. To the extent not preempted by federal law, this
Agreement shall be construed and governed in accordance with the internal laws
of the State of California.

Section 3.09 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one instrument.

         IN WITNESS WHEREOF, this Agreement is executed as of ________________,
2003.

                                           HAWTHORNE FINANCIAL CORPORATION

                                           By __________________________________
                                           Simone Lagomarsino,
                                           President and Chief Executive Officer

                                           DIRECTOR:

                                           _____________________________________

                                           Address for Notices:

                                           _____________________________________

                                           _____________________________________

                                           Fax No.: ____________________________

                                      -5-<PAGE>

                                                                    EXHIBIT 10.9

[SANDLER O'NEILL & PARTNERS,L.P. LOGO]

                                                        INVESTMENT BANKING GROUP
                                 919 THIRD AVENUE. 6TH  FL , NEW  YORK  NY 10022
                                                  TEL: 212.466.7700/800.635.6855
                                                                FAX 212.466 7711

January 20, 2004

Board of Directors
Hawthorne Financial Corporation
2381 Rosecrans Avenue
E1 Segundo, CA 90245

Attention:        Mr. Timothy R. Chrisman
                  Chairman of the Board

Ladies and Gentlemen:

         Sandler O'Neill & Partners, L.P. ("Sandler O'Neill") is pleased to act
as an independent financial advisor to the Board of Directors of Hawthorne
Financial Corporation and its subsidiaries (together, the "Company") in
connection with the Company's consideration of a possible Business Combination
involving the Company and a second party (whether an individual, partnership,
company or other entity, and together with its affiliates, the "Second Party").
This letter is to confirm the terms and conditions of our engagement.

SPECIFIC ADVISORY SERVICES

         As requested by the Company, Sandler O'Neill will assist the Company in
analyzing, structuring, negotiating and effecting a Business Combination or
other strategic alternative with a Second Party. In this regard, we anticipate
that our activities would include, as appropriate, the following:

         1.       Performing financial analyses of the Company and the Second
                  Party in the context of a possible Business Combination;

         2.       Assisting the Company in its determination of appropriate and
                  desirable values to be exchanged in a Business Combination;

         3.       Advising the Company as to the structure and form of any
                  proposed Business Combination;

         4.       Advising and assisting the Company's management in making
                  presentations to the Company's Board of Directors about any
                  proposed Business Combination;

  Sandler 0'Neill & Partnership, L.P. is a limited partnership, the sole general
             partner of which is Sandler O'Neill & Partners, Corp.,
                            a New York Corporation.

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Board of Directors                                               SANDLER O'NEILL
Hawthorne Financial Corporation                                 & PARTNERS, L.P.
January 20, 2004
Page 2

         5.       Counseling and participating with the Company in any
                  approaches to, or discussions or negotiations with, a Second
                  Party;

         6        Assuming an agreement in principle is reached for a Business
                  Combination, assisting the Company in negotiating the
                  financial terms of a definitive agreement;

         7.       If requested by the Company and agreed to by Sandler O'Neill,
                  rendering an opinion to the Board (the "Opinion") as to
                  whether the consideration to be exchanged in a proposed
                  Business Combination with the Second Party is fair, from a
                  financial point of view, to the Company's shareholders; and

         8.       Rendering such other financial advisory and investment banking
                  services as may from time to time be agreed upon by Sandler
                  O'Neill and the Company.

         The Company hereby acknowledges and agrees that the financial models
and presentations used by Sandler O'Neill in performing its services hereunder
have been developed by and are proprietary to Sandler O'Neill and are protected
under applicable copyright laws. The Company agrees that it will not reproduce
or distribute all or any portion of such models or presentations without the
prior written consent of Sandler O'Neill.

TRANSACTION RELATED FEES

         In connection with the Specific Advisory Services referred to above,
the Company agrees to pay Sandler O'Neill transaction related fees as set forth
below:

         1.       If during the period Sandler O'Neill is retained by the
                  Company hereunder or within 12 months thereafter (a) a
                  Business Combination is consummated with a Second Party (i) as
                  to which Sandler O'Neill provided the Company with material
                  financial advice as to a proposed or actual Business
                  Combination, or (ii) with which Sandler O'Neill had
                  substantive discussions with the prior consent of the Company
                  regarding a Business Combination, in each case during the term
                  of Sandler O'Neill's engagement hereunder, or (b) the Company
                  enters into a definitive agreement with any such Second Party
                  to engage in a Business Combination, a transaction fee shall
                  be paid in an amount equal to 1% of the Aggregate Purchase
                  Price. Such transaction fee shall become due and payable in
                  cash as follows: (x) 25% upon the signing of a definitive
                  agreement to effect a Business Combination, and (y) the
                  balance on the day of closing of the Business Combination.

<PAGE>

Board of Directors                                              SANDLER O'NEILL
Hawthorne Financial Corporation                                 & PARTNERS, L.P.
January 20, 2004
Page 3

         2.       If Sandler O'Neill is asked by the Company to render an
                  Opinion in connection with a Business Combination, the Company
                  agrees to pay Sandler O'Neill a fee of $200,000, payable in
                  cash at the time such Opinion is rendered, which shall be
                  credited against any fee that may become due and payable
                  pursuant to clause (y) of paragraph (1) above.

EXPENSE REIMBURSEMENT

         In addition to any fees that may be payable to Sandler O'Neill under
this letter, the Company agrees to reimburse Sandler O'Neill, upon request made
from time to time, for its reasonable out-of-pocket expenses incurred in
connection with Sandler O'Neill's activities under this letter, including the
reasonable fees and disbursements of its legal counsel.

FAIRNESS OPINIONS

         It is understood that any Opinion will be dated as of a date reasonably
proximate to the date of any definitive agreement entered into by the Company
and any Second Party and, at the request of the Company, shall be updated as of
a date reasonably proximate to the date of any proxy statement or any offer to
purchase to be mailed to the shareholders of the Company in connection with the
Business Combination. It is further understood that if the Opinion is included
in any such proxy statement or offer to purchase, the Opinion will be reproduced
in such proxy statement or offer to purchase in full, and any description of or
reference to Sandler O'Neill or the analyses performed by Sandler O'Neill or any
summary of the Opinion in such proxy statement or offer to purchase will be in a
form acceptable to Sandler O'Neill and its counsel in the exercise of their
reasonable judgment. Except as provided in this letter or as required by law,
neither the Opinion nor any other advice delivered to the Board of Directors or
senior management of the Company by Sandler O'Neill may be reproduced,
summarized, described or referred to without Sandler O'Neill's prior written
consent.

CONFIDENTIAL INFORMATION

         The Company will furnish Sandler O'Neill (and will request that any
Second Party furnish Sandler O'Neill) with such information as Sandler O'Neill
reasonably believes appropriate to its assignment (all such information so
furnished being the "Information"). The Company recognizes and confirms that
Sandler O'Neill (a) will use and rely primarily on the Information and on
information available from generally recognized public sources in performing the
services contemplated by this letter and in rendering the Opinion without having
independently verified the

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Board of Directors                                               SANDLER 0'NEILL
Hawthorne Financial Corporation                                 & PARTNERS, L.P.
January 20, 2004
Page 4

same, (b) does not assume responsibility for the accuracy or completeness of the
Information and such other information and (c) will not make an appraisal of any
assets, collateral securing assets or liabilities of the Company or the Second
Party. Sandler O'Neill agrees to use all reasonable efforts to keep confidential
Information confidential.

INDEMNIFICATION

         The Company agrees to indemnify and hold Sandler O'Neill and its
affiliates and their respective partners, directors, officers, employees, agents
and controlling persons (Sandler O'Neill and each such person being an
"Indemnified Party") harmless from and against any and all losses, claims,
damages and liabilities, joint or several, to which such Indemnified Party may
become subject under applicable federal or state law, or otherwise, related to
or arising out of any actual or proposed Business Combination or alternative
transaction or the engagement of Sandler O'Neill pursuant to, and the
performance by Sandler O'Neill of the services contemplated by, this letter, and
will reimburse any Indemnified Party for all expenses (including reasonable
counsel fees and expenses) as they are incurred, including expenses incurred in
connection with the investigation of, preparation for or defense of any pending
or threatened claim or any action or proceeding arising therefrom, whether or
not such Indemnified Party is a party. The Company will not be liable under the
foregoing indemnification provision to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by court of competent
jurisdiction to have resulted primarily from Sandler O'Neill's bad faith or
gross negligence.

         In the event Sandler O'Neill appears as a witness in any action brought
against the Company in which an Indemnified Party is not named as a defendant,
the Company agrees to reimburse Sandler O'Neill for all reasonable expenses
incurred and time expended by it in connection with its appearing as a witness.

         The Company agrees to notify Sandler O'Neill promptly of the assertion
against it or any other person of any claim or the commencement of any action or
proceeding relating to any transaction contemplated by this agreement.

CERTAIN DEFINITIONS

         As used in this letter, the term:

         1.       "Business Combination" means (a) any merger, consolidation,
                  reorganization or other business combination pursuant to which
                  the business of the Company is

<PAGE>

Board of Directors                                               SANDLER O'NEILL
Hawthorne Financial Corporation                                 & PARTNERS, L.P.
January 20, 2004
Page 5

                  combined with or comes under common control with that of a
                  Second Party, or (b) the acquisition, directly or indirectly,
                  by a Second Party or the Company of more than 24.9% of the
                  capital stock, or all or a substantial portion of the assets,
                  of the Company or the Second Party, as the case may be, by way
                  of tender or exchange offer, negotiated purchase or otherwise,
                  whether effected, in any such case, in one transaction or a
                  series of transactions.

         2.       "Aggregate Purchase Price" means an amount equal to the sum of
                  (a) the product of (1) the consideration agreed to be paid or
                  exchanged for each share of each class of stock of the Company
                  or the Second Party, as the case may be, and (2) the number of
                  such shares agreed to be acquired or exchanged and acquired or
                  exchanged by the Company or the Second Party, as the case may
                  be, plus (b) the product of (1) the number of such shares
                  issuable upon the exercise of any options, warrants or other
                  rights to purchase shares of any class of the Company's or the
                  Second Party's securities, as the case may be, all as
                  outstanding on or after the date of an agreement to effect a
                  Business Combination, and, without duplication, that are
                  cashed out or exchanged, as the case may be, as part of the
                  Business Combination and (2) the consideration to be paid with
                  respect to such underlying shares less any applicable exercise
                  or strike price. For the purpose of clause (a)(2) of the
                  foregoing sentence, all shares of any class of stock shall be
                  deemed to have been acquired if more than 75% of the
                  outstanding shares of that class, including in the total of
                  shares acquired shares that were acquired by the Company or
                  the Second Party, as the case may be, prior to or as an
                  integral part of, the Business Combination, are acquired. For
                  purposes of this agreement, the fair market value of any such
                  securities will be the value as the parties hereto shall
                  mutually agree on the day prior to the consummation of such
                  transaction; provided, however, that if such securities
                  consist of securities with an existing public trading market,
                  the value thereof shall be determined by the average of the
                  last sales prices for such securities on the five trading days
                  ending five days prior to such date. Solely for purposes of
                  calculating the amount of the partial payment referred to
                  under the caption "Transaction Related Fees" above, the
                  parties shall calculate the partial transaction fee as if the
                  date on which the partial payment is due were the date of
                  consummation. Any partial transaction fee paid shall then be
                  credited against the final transaction fee payable upon
                  consummation of the transaction. In the event a particular
                  transaction structure makes the calculation of the Aggregate
                  Purchase Price as set forth above impractical, the parties
                  hereto shall use their best efforts to determine an Aggregate
                  Purchase Price that would approximate the Aggregate Purchase
                  Price had the relevant Business Combination been structured as
                  a share purchase.

<PAGE>

Board of Directors                                               SANDLER O'NEILL
Hawthorne Financial Corporation                                 & PARTNERS. L.P.
January 20, 2004
Page 6

TERMINATION OF ENGAGEMENT

         Sandler O'Neill's engagement hereunder may be terminated by the Company
or by Sandler O'Neill at any time upon 30 days written notice to that effect, it
being understood that the provisions relating to the payment of fees and
expenses and indemnification will survive any such termination.

         Please confirm that the foregoing correctly sets forth our agreement by
signing and returning to Sandler O'Neill the duplicate copy of this letter
enclosed herewith.

                                Very truly yours,

                                Sandler O'Neill & Partners, L.P.
                                By: Sandler O'Neill & Partners Corp.,
                                    the sole general partner.

                                By:  /s/ WILLIAM F. HICKEY
                                    ----------------------
                                     William F. Hickey
                                     Vice President

Accepted and agreed to as of
the date first written above:

Hawthorne Financial Corporation

By: /s/ TIMOTHY R. CHRISMAN
   ------------------------
Its: CHAIRMAN
    ---------------------

Date: 1/27/04

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