Document:

ex4-2.htm

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES OR BLUE SKY LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR
LAWS.

     

    WARRANT

     

    to
Purchase Common Stock of

     

    FIRST
PACTRUST BANCORP, INC.

     

    Date:
______, 2010

     

    This
certifies that, for value received, COR Advisors LLC (“Cor Advisors”), a
limited liability company organized under the laws of the State of Delaware (the
“Holder”), is
entitled to purchase, in the aggregate, up to 1,560,000.00 fully paid and
nonassessable shares (the “Warrant Shares”) of
Class B Non-Voting Common Stock, par value $0.01 per share (the “Class B Common
Stock”) of First PacTrust Bancorp, Inc. a Maryland corporation (the
“Company”),
during the Warrant Exercise Period, at the Exercise
Price.  Notwithstanding the foregoing, this Warrant shall be
exercisable for, in lieu of shares of Class B Common Stock, shares of common
stock, par value $0.01 per share (the “Voting Common Stock”,
and collectively, with the Class B Common Stock, the “Common Stock”) in
accordance with terms of Section 7 hereof,
and, in such event, the term “Warrant Shares” shall be deemed to include such
shares of Voting Common Stock for all purposes hereunder.  This
Warrant is being granted in connection with the Amended and Restated Consulting
and Expense Agreement, dated as of July 19, 2010 between Cor Advisors, the
Company and Pacific Trust Bank (the “Consulting
Agreement”).  This Warrant is entitled to the benefits of the
registration rights set forth in Annex III of the Consulting Agreement (the
“Registration Rights
Agreement”).

     

    This
Warrant is subject to the following terms and conditions:

     

    1.           Vesting; Exercisability of
Warrant. Subject to the terms of this Warrant, the Holder hereof shall be
entitled to exercise the Warrant, in whole or in part, at any time and from time
to time during the Warrant Exercise Period; provided, however that the total number
of Warrant Shares to which the Holder will be entitled to upon exercise of this
Warrant on any date will be equal to (a) the aggregate of the Warrant Shares
issuable upon exercise of this Warrant as of such date pursuant to the Vesting
Schedule set forth on Exhibit A hereto (the “Vesting Schedule”)
minus (b) the sum of
(i) the total number of Warrant Shares previously issued upon exercise of this
Warrant, and (ii) the total number of Warrant Shares with respect to which this
Warrant shall have expired pursuant to the final sentence of this Section 1; provided, further, that,
notwithstanding the foregoing, in the event of the consummation of a transaction
or series of related transactions that constitutes a Change of Control of the
Company, this Warrant shall immediately prior to such consummation (and
thereafter) become exercisable for a total number of Warrant Shares equal to (a)
1,560,000.00 Warrant Shares minus (b) the sum of (i) the
total number of Warrant Shares previously issued upon exercise of this Warrant,
and (ii) the total

     

    
      
         

      

      
         

         

      

      
         

      

    

    number of
Warrant Shares with respect to which this Warrant shall have expired pursuant to
the final sentence of this Section 1; and provided, further, that at
any time prior to the Final Expiration Date, the Board of Directors of the
Company may elect to accelerate the Vesting Schedule in whole or in
part.  This Warrant shall expire and no longer be exercisable as to
any Warrant Share for which the Warrant has not been exercised on or prior to
5:00 p.m., New York time, on the Expiration Date in respect of such Warrant
Shares, and all rights hereunder with respect to such Warrant Share shall
thereupon cease.

     

    2.           Method of
Exercise.

     

    (a)           Subject
to Section 1
hereof, this Warrant may be exercised by the Holder, in whole or in part, during
the Warrant Exercise Period by (i) the payment in cash, wire transfer or
certified or bank cashier’s check to the Company of the Exercise Price in
respect of the Warrant Shares being purchased (which payment may also take the
form of a “cashless exercise” in accordance with Section 2(e) below if
so indicated on the Form of Subscription) and (ii) delivery (via facsimile or
otherwise) to the Company of the Form of Subscription attached
hereto.   If the original Warrant is not surrendered, properly
endorsed, at the principal office of the Company concurrent with the delivery of
the Form of Subscription attached hereto, the Holder will, as promptly as
reasonably practicable (and in any event within five (5) business days following
such date of delivery), deliver, or cause to be delivered, the original Warrant,
properly endorsed, to the Company.

     

    (b)           Each
exercise of this Warrant shall be deemed to have been effected immediately prior
to the close of business on the business day on which (i) the Company shall have
received payment of the Exercise Price in respect of the Warrant Shares being
purchased (other than payment in the form of a “cashless exercise” in accordance
with Section
2(e) below) and (ii) the Company shall have received the Form of
Subscription attached hereto, all as provided in this Section 2, and the
person entitled to receive the Warrant Shares being purchased shall be treated
for all purposes as the holder of record of such shares as of the close of
business on such date.

     

    (c)           In
the event of any exercise of this Warrant, Warrant Shares so purchased shall be
delivered in book-entry form through the facilities of The Depositary Trust
Company at the Company’s expense to the Holder or its designee promptly after
the Warrant shall have been so exercised, and such shares shall be free of
restrictive legends unless (i) a registration statement covering the resale of
the Warrant Shares by the Holder is not then effective and (ii) the Warrant
Shares are not eligible for resale pursuant to Rule 144 under the Securities Act
of 1933, as amended (the “Securities Act”),
without regard to the requirement for the Company to be in compliance with the
current public information required under Rule 144 as to such shares and without
regard to volume or manner-of-sale restrictions.

     

    (d)           Upon
surrender of this Warrant following one or more partial exercises, unless this
Warrant has expired, a new Warrant of like tenor representing the number of
Warrant Shares, if any, with respect to which this Warrant shall not then have
been exercised, shall be issued to the Holder promptly
thereafter.  Any such new Warrant shall have an issuance date, as
indicated on the face of such new Warrant, which is the same as the date set
forth above.

     

    
      
         

      

      
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    (e)           Notwithstanding
anything contained herein to the contrary, the Holder may satisfy its obligation
to pay the Exercise Price through a “cashless exercise,” in which event the
Company shall issue to the Holder the number of Warrant Shares determined as
follows:

     

    

    
      	 
      	
              X =
      Y [(A-B)/A]

            
	
              where:

            	 
      
	 
      	
              X =
      the number of Warrant Shares to be issued to the
Holder.

            
	 
      	 
      
	 
      	
              Y =
      the number of Warrant Shares with respect to which this Warrant is being
      exercised.

            
	 
      	 
      
	 
      	
              A =
      the Fair Market Value (as defined herein) of a share of Voting Common
      Stock as of the Exercise Date.

            
	 
      	 
      
	 
      	
              B =
      the Exercise Price.

            

    

    

    For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued (provided that such treatment is
proper under Rule 144 and any related interpretive positions of the Securities
and Exchange Commission, each as in effect at the time of such
exercise).

    

    3.           Due Authorization and
Issuance; Reservation of Shares. The Company covenants and agrees that
any and all of the Warrant Shares issued to the Holder in accordance with the
terms hereof will, upon issuance, be duly authorized, validly issued, fully paid
and nonassessable, free from all preemptive rights of any Person and free and
clear of all taxes, liens and charges with respect to such issuance. The Company
will take all such action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any applicable law or
regulation. The Company further covenants and agrees that during the Warrant
Exercise Period, the Company will at all times have authorized and reserved for
the purpose of the issue upon the exercise of this Warrant, at least the maximum
number of Warrant Shares as are then issuable upon the exercise of this
Warrant.

     

    4.           Anti-Dilution
Adjustments.

     

    The Exercise Price and the number of
Warrant Shares as to which this Warrant may be exercised (for the avoidance of
doubt, including with respect to Warrant Shares that are not yet exercisable
pursuant to the Vesting Schedule) are subject to adjustment from time to time
upon the occurrence of the events set forth in this Section
4.  For purposes of this Section 4, “Common
Stock” means shares now or hereafter authorized of any class of common stock of
the Company and any other stock of the Company, however designated, that has the
right (subject to any prior rights of any class or series of preferred stock) to
participate in any distribution of the assets or earnings of the Company without
limit as to per share amount.

    

     

    
      
         

      

      
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           (a)   Stock Dividends —
Split-Ups.  If after the date hereof, and subject to the
provisions of Section
4(f) hereof, the number of outstanding shares of Common Stock is
increased by a stock dividend payable in shares of Common Stock, or by a
split-up of shares of Common Stock, or other similar event, then, on the
effective date of such stock dividend, split-up or similar event, the number of
shares of Common Stock issuable on exercise of this Warrant (for the avoidance
of doubt, including with respect to Warrant Shares that are not yet exercisable
pursuant to the Vesting Schedule)  shall be increased in proportion to
such increase in outstanding shares of Common Stock.

     

    (b)            Aggregation of
Shares.  If after the date hereof, and subject to the
provisions of Section
4(f) hereof, the number of outstanding shares of Common Stock is
decreased by a consolidation, combination, reverse stock split or
reclassification of shares of Common Stock or other similar event, then, on the
effective date of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of Common Stock issuable
on exercise of each Warrant (for the avoidance of doubt, including with respect
to Warrant Shares that are not yet exercisable pursuant to the Vesting Schedule)
shall be decreased in proportion to such decrease in outstanding shares of
Common Stock.

     

    (c)           Adjustments for Other
Distributions.  If the Company distributes to all holders of
its Common Stock any of its assets (including cash, and including ordinary cash
dividends) or debt securities or any rights, options or warrants to purchase
debt securities, assets or other securities of the Company (other than Common
Stock), the Exercise Price shall be adjusted in accordance with the following
formula:

     

    
      	 
      	
              P’
      = P ÷ M/(M-F)

            
	
              where:

            	 
      
	 
      	
              P’
      = the Exercise Price immediately following the adjustment to the Exercise
      Price pursuant to this Section 4(c).

            
	 
      	 
      
	 
      	
              P =
      the Exercise Price immediately preceding the adjustment to the Exercise
      Price pursuant to this Section 4(c).

            
	 
      	 
      
	 
      	
              M =
      the Last Reported Sales Price (as defined herein) per share of Voting
      Common Stock on the business day immediately preceding the Announcement
      Date.

            
	 
      	 
      
	 
      	
              F = the
      fair market value (as determined in good faith by the Board of Directors
      and evidenced by a board resolution) on the Announcement Date for such
      distribution of the assets, securities, options, rights or warrants
      distributable to one share of Common Stock after taking into account, in
      the case of any rights, options or warrants, the consideration required to
      be paid upon exercise thereof.

            

    

    

     

     

    
      
         

      

      
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    The
adjustment shall be made successively whenever any such distribution is made and
shall become effective immediately prior to the ex-dividend date for such
distribution.

    This
subsection (c) does not apply to any dividends or distributions made in
connection with, or as part of any of the actions contemplated by Section 4(a),
4(b) or 4(d). If any
adjustment is made pursuant to this subsection (c) as a result of the
issuance of rights, options or warrants and at the end of the period during
which any such rights, options or warrants are exercisable, not all such rights,
options or warrants shall have been exercised, the Warrant shall be immediately
readjusted as if “F” in the above formula was the fair market value (as
determined in good faith by the Board of Directors and evidenced by a board
resolution) on the dividend date for such distribution of the indebtedness or
assets actually distributed upon exercise of such rights, options or warrants
divided by the number of shares of Common Stock outstanding on the dividend date
for such distribution.  Notwithstanding anything to the contrary
contained in this subsection (c), but subject to any other agreements between
the Company and Holder, if “M-F” in the above formula is less than $1.00, the
Company shall, in lieu of the adjustment otherwise required by this subsection
(c), distribute to the Holder, upon exercise of the Warrant, the evidences of
indebtedness, assets, rights, options or warrants (or the proceeds thereof)
which would have been distributed to the Holder had the Warrant been exercisable
and exercised immediately prior to the record date for such
distribution.

     

    (d)           Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets.  In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is any change whatsoever in, or distribution with respect to, the outstanding
Common Stock of the Company), or sell, transfer or otherwise dispose of all or
substantially all of its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, (i) shares of common stock of the
successor or acquiring corporation or of the Company (if it is the surviving
corporation) or (ii) any cash, shares of stock or other securities, assets,
property or indebtedness of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock of
the successor or acquiring corporation (“Other Property”) are
to be received by or distributed to the holders of Common Stock of the Company
who are holders immediately prior to such transaction, then the Holder of this
Warrant shall have the right thereafter to receive, upon exercise of this
Warrant the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event (for the avoidance of doubt, including with
respect to Warrant Shares that are not yet exercisable pursuant to the Vesting
Schedule).  In the event of receipt of shares of common stock of the
successor or acquiring corporation or of the Company and Other Property, the
aggregate Exercise Price otherwise payable for the shares of Common Stock
issuable upon exercise of this Warrant shall be allocated among the shares of
common stock and Other Property receivable as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets in proportion
to the respective fair market values of such shares of common stock and Other
Property as determined in good faith by the Board of Directors and evidenced by
a board resolution.  In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or 

     

     

    
      
         

      

      
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    acquiring
corporation (if other than the Company) shall expressly assume the due and
punctual observance and performance of each and every covenant and condition of
this Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such
modifications as may be reasonably deemed appropriate (as determined in good
faith by the Board of Directors and evidenced by a board resolution) in order to
provide for adjustments of any shares of the common stock of such successor or
acquiring corporation for which this Warrant thus becomes exercisable, with
modifications which shall be as equivalent as practicable to the adjustments
provided for in this Section
4.  For purposes of this Section 4(d),
“common stock of the successor or acquiring corporation” shall include stock of
such corporation of any class that is not preferred as to dividends or assets
over any other class of stock of such corporation and that is not subject to
redemption and shall also include any evidences of indebtedness, shares of stock
or other securities that are convertible into or exchangeable for any such
stock, either immediately or upon the arrival of a specified date or the
happening of a specified event and any warrants or other rights to subscribe for
or purchase any such stock.  The foregoing provisions of this Section 4(d)
shall similarly apply to successive reorganizations, reclassification, mergers,
consolidations or disposition of assets and shall apply to any securities to be
received as a result of the foregoing.

     

    (e)           Adjustments To Exercise
Price.  Whenever the
number of Warrant Shares is adjusted, as provided in this Section 4, the
Exercise Price shall be adjusted (to the nearest cent) by multiplying such
Exercise Price immediately prior to such adjustment by a fraction (i) the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise of this Warrant immediately prior to such adjustment, and
(ii) the denominator of which shall be the number of shares of Common Stock
so purchasable immediately thereafter.

     

    (f)           Fractional
Interests.  Notwithstanding any provision contained in this
Warrant, the Company shall not issue fractional shares upon exercise of this
Warrant. If, by reason of any adjustment made pursuant to this Section 4, the
Holder would be entitled, upon the exercise of this Warrant, to receive a
fractional interest in a share, the Company shall, upon such exercise, round up
or down to the nearest whole number of the shares of Common Stock to be issued
to the Holder.

     

    (g)           When De Minimis Adjustment
May be Deferred. No adjustment of the Exercise Price need be made unless
the adjustment would require an increase or decrease of at least 1.0% in the
Exercise Price. Any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 4 shall
be made to the nearest cent or to the nearest 1/100th of a share, as the case
may be.

     

    (h)           Notice of Adjustment.
Whenever any Exercise Price is adjusted, the Company, at its own expense, shall
as promptly as reasonably practicable cause its Chief Financial Officer (or
similar officer) to compute such adjustment and prepare a certificate setting
forth such adjustment (including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant, as applicable), setting forth in reasonable detail the
acts requiring such adjustment, and stating such other facts as shall be
necessary to show the manner and figures used to compute such
adjustment.  As promptly as reasonably practicable (but in no event
more than 10 days) after 

     

     

    
      
         

      

      
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    each such
adjustment, the Company shall give a copy of such certificate by certified mail
to the Holder.

    (i)           Notice of Certain
Transactions. If the Company proposes to take any action that would
require an adjustment in the Exercise Price pursuant to subsections (a), (b),
(c) or (d) of this Section 4, or there
is a proposal for any liquidation or dissolution of the Company, then, in each
case, the Company shall deliver to the Holder a notice stating the proposed
record date for a dividend or distribution or the proposed effective or
consummation date of a subdivision, combination, reclassification,
consolidation, merger, transfer, lease, liquidation or dissolution. The Company
shall deliver the notice at least 10 days before such
date.  Notwithstanding the foregoing, the Company shall only be
required to deliver such notice if and to the extent the delivery of such notice
would not result in the dissemination of material, non-public information to the
Holder.  Failure to give such notice, or any defect therein, shall not
affect the legality or validity of any such action.

     

    (j)           When Adjustment Not
Required. If the Company shall take a record of the holders of its Shares
for the purpose of entitling them to receive a dividend or distribution or
subscription or purchase rights and shall, thereafter and before the
distribution to shareholders thereof, legally abandon its plan to pay or deliver
such dividend, distribution, subscription or purchase rights, then thereafter no
adjustment shall be required by reason of the taking of such record and any such
adjustment previously made in respect thereof shall be rescinded and
annulled.

     

    5.           No Shareholder
Rights. Nothing contained in this Warrant shall be construed as
conferring upon the Holder any rights as a shareholder of the Company (except to
the extent that this Warrant has been duly exercised or such Holder otherwise
owns any Warrant Shares) or as imposing any liabilities on such Holder to
purchase any securities or as a shareholder of the Company, whether such
liabilities are asserted by the Company or by creditors or shareholders of the
Company or otherwise.

     

    6.           Transferability. The
Holder understands, acknowledges and agrees that this Warrant and the Warrant
Shares into which they are exercisable have not been, and the Warrant and the
Warrant Shares into which they are exercisable (except as may be set forth in
the Registration Rights Agreement with respect to the Warrant Shares) will not
be, registered under the Securities Act or any state securities laws, and may
only be sold, offered for sale, pledged, hypothecated, transferred, assigned or
otherwise disposed of in compliance with the then applicable resale requirements
of the Securities Act.  Subject to the provisions of this Section 6, this
Warrant is transferable, in whole or in part, when the Holder shall surrender
this Warrant with a properly executed assignment, in the form attached hereto,
to the Company at its principal office (or any other such office or agency as
identified by the Company) whereupon the Company will forthwith issue and
deliver, upon the order of the Holder, a new Warrant, registered as the Holder
may request, representing the right to purchase the number of Warrant Shares
being transferred by the Holder and, if less than the total number of Warrant
Shares then underlying this Warrant is being transferred, a new Warrant to the
Holder representing the right to purchase the number of Warrant Shares not being
transferred.

     

     

    
      
         

      

      
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    7.           Exercise for Shares of
Voting Common Stock.  This Warrant shall in no event be
exercisable by the initial Holder hereof, Cor Advisors, for shares of Voting
Common Stock.  This Warrant shall become exercisable for shares of
Voting Common Stock in lieu of shares of Class B Common Stock if, and to the
extent, this Warrant (or any portion hereof) is transferred
by the initial Holder hereof, Cor Advisors, in a Widely Dispersed
Offering.  A “Widely Dispersed
Offering” is (a) a widespread public distribution, including pursuant to
Rule 144 under the Securities Act; (b) a transfer in which no transferee (or
group of associated transferees) would receive more than two percent (2%) of any
class of securities of the Company then entitled to vote generally in the
election of directors (“Voting Securities”)
(including for this purpose the Warrant Shares on an as-exercised basis) or (c)
a transfer to a transferee that would control more than fifty percent (50%) of
the Voting Securities of the Company without any transfer by the Holder
hereof.  Notwithstanding anything to the contrary contained herein,
this Warrant shall only be exercisable into that number of shares of Voting
Common Stock in lieu of shares of Class B Common Stock such that, upon exercise,
the registered holder, acting alone or together with any other Person that might
be affiliated with such registered holder, or that may be deemed to be acting in
concert with such registered holder pursuant to 12 C.F.R. Part 574 would not
beneficially own more than 4.9% of the aggregate outstanding shares of Voting
Common Stock.

     

    8.           Modification and
Waiver. This Warrant and any provision hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of the same is sought.

     

    9.           Notices. Any notice,
request or other document required or permitted to be given or delivered to the
Holder or the Company shall be delivered, or shall be sent by certified or
registered mail, postage prepaid, to the Holder at COR Advisors LLC c/o COR
Capital LLC, 233 Wilshire Blvd., Suite 830, Santa Monica, California 09401,
Attn: Steven Sugarman, or, if different, its address as shown on the books of
the Company, or to the Company at 610 Bay Blvd., Chula Vista, California 91910,
Attn: Hans R. Ganz, President and Chief Executive Officer, or at such other
address as the Company may hereafter designate.

     

    10.           Descriptive Headings and
Governing Law. The descriptive headings of the several paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant. This Warrant shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the laws of the State of New
York.

     

    11.           Lost Warrant. Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of any such loss,
theft or destruction upon receipt of reasonable and customary indemnity, or in
the case of any such mutilation upon surrender and cancellation of such Warrant,
the Company will make and deliver a new Warrant in lieu of the lost, stolen,
destroyed or mutilated Warrant.  Any such new Warrant shall have an
issuance date, as indicated on the face of such new Warrant, which is the same
as the date set forth above.

     

    12.           Obligations and
Remedies.  The Company’s obligations to issue and deliver
Warrant Shares in accordance with the terms of this Warrant are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any 

     

     

    
      
         

      

      
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    waiver or
consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company (other
than the obligation under Section 2(a) to pay
or otherwise satisfy the total Exercise
Price) or any violation or alleged violation of law by the Holder or any other
Person, and irrespective of any other circumstance which might otherwise limit
such obligation of the Company to the Holder in connection with the issuance of
Warrant Shares.  Nothing herein shall limit a Holder’s right to pursue
any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver shares of Common Stock
(whether via physical certificates or electronically, as appropriate) upon
exercise of the Warrant.

     

    13.           Charges, Taxes and
Expenses.  Issuance and delivery of certificates for shares of
Common Stock upon exercise of this Warrant shall be made without charge to the
Holder for any issue or transfer tax, transfer agent fee or other incidental tax
or expense in respect of the issuance of such certificates, all of which taxes
and expenses shall be paid by the Company; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the registration of any certificates for Warrant Shares or
Warrants in a name other than that of the Holder.  The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise of this
Warrant, or reselling or otherwise transferring the Warrant Shares to third
parties.

     

    14.           Dispute
Resolution.  In the case of a dispute as to the determination
of the Exercise Price, the Fair Market Value or the Last Reported Sale Price or
the arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two
business days of receipt of the Form of Subscription giving rise to such
dispute, as the case may be, to the Holder.  If the Holder and the
Company are unable to agree upon such determination or calculation of the
Exercise Price, Fair Market Value, the Last Reported Sale Price or the Warrant
Shares within three business days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two
business days submit via facsimile (a) the disputed determination of the
Exercise Price, the Fair Market Value or the Last Reported Sale Price to an
independent, reputable investment bank selected by the Company and approved by
the Holder or (b) the disputed arithmetic calculation of the Warrant Shares to
the Company’s independent, outside accountant.  The Company shall
cause at its expense the investment bank or the accountant, as the case may be,
to perform the determinations or calculations and notify the Company and the
Holder of the results no later than ten business says from the time it receives
the disputed determinations or calculations.  Such investment bank’s
or accountant’s determination or calculation, as the case may be, shall be
binding upon all parties absent demonstrable error.

     

    15.           Definitions. The
following terms shall have the meanings given to them below:

     

    “Announcement Date”
shall mean the day on which a distribution described in Section 4(c) is
announced to the general public.

     

     

    
      
         

      

      
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     “Change of Control”
shall mean, other than, for the avoidance of doubt, the Transaction (as defined
in the Consulting Agreement), (A) the acquisition by any person or group (within
the meaning given in Sections 13(d)(3) and 14(d)(2) of Securities Exchange Act
or 1934, as amended the “Exchange Act”) of
beneficial ownership (within the meaning of the Exchange
Act) of two-thirds or more (on a fully diluted basis) of (x) the then
outstanding shares of Common Stock taking into account as outstanding for this
purpose such Common Stock issuable upon the exercise of options or warrants, the
conversion of convertible stock or debt, and the exercise or settlement of any
similar right to acquire such Common Stock or (y) the combined voting power of
the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the “Outstanding Bancorp Voting
Securities”), in each case other than (I) any acquisition by the Company
or any of its affiliates, (II) any acquisition directly from the Company, (III)
any acquisition by any employee benefit plan sponsored or maintained by the
Company or any affiliate or (IV) any acquisition by any person that complies
with clauses (I), (II) and (III) of subsection (B) of this paragraph; or (B) the
consummation of a merger, consolidation, statutory share exchange, a sale or
other disposition of all or substantially all of the assets of the Company or
similar form of corporate transaction involving the Company that requires the
approval of the Company’s stockholders, whether for such transaction or the
issuance of securities in the transaction (a “Business
Combination”), in each case, unless immediately following such Business
Combination, (I) more than two-thirds of the total voting power of the entity
resulting from such Business Combination  (the “Surviving Company”)
or the parent corporation that directly or indirectly has beneficial ownership
of sufficient voting securities that has beneficial ownership of sufficient
voting securities eligible elect a majority of the directors of the Surviving
Company (the “Parent
Company”) is represented by Outstanding Bancorp Voting Securities that
were outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which the Outstanding Bancorp Voting
Securities were converted pursuant to such Business Combination) and such voting
power among the holders thereof is in substantially the same proportion as the
voting power of the Outstanding Bancorp Voting Securities among the holders
thereof immediately prior to the Business Combination, (II) no person (other
than any employee benefit plan sponsored or maintained by the Surviving
Company), is or becomes the beneficial owner, directly or indirectly, of
two-thirds or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Company (or, if there is no
Parent Company, the Surviving Company) and (III) at least two-thirds of the
members of the board of directors of the Parent Company (or, if there is no
Parent Company, the Surviving Company) following the consummation of the
Business Combination were members of the board of directors of the Company at
the time of the at the time of the board’s approval of the execution of the
initial agreement providing for such business combination..

     

    “Exercise Price” shall
mean $11.00 per Warrant Share, subject to adjustment as provided in Section
4.

     

    “Expiration Date”
shall mean with respect to any Warrant Share, the fifth anniversary of the
Vesting Date of the Warrant in respect of such Warrant Share.

     

    “Fair Market Value”
means the fair market value of a share of Voting Common Stock as of a particular
date, as determined in accordance with the following:

     

     

    
      
         

      

      
        10

         

      

      
         

      

    

     

     

    (i)           if
the Voting Common Stock is listed or admitted for trading on a national
securities exchange, the average of the closing prices of the Voting Common
Stock for the five consecutive trading days immediately prior to (but excluding)
the date in question; or

    (ii)           if
the foregoing clause (i) does not apply and the Voting Common Stock is traded on
the OTC Bulletin Board, the average of the closing prices of the Voting Common
Stock for the five consecutive trading days immediately prior to (but excluding)
the date in question; or

     

    (iii)           if
the foregoing clauses (i) and (ii) do not apply and the Voting Common Stock is
quoted in the over-the-counter market as reported in the “pink sheets”, the
average of the closing prices of the Voting Common Stock for the five
consecutive trading days immediately prior to (but excluding) the date in
question; or

     

    (iv)           if
the foregoing clauses (i), (ii) and (iii) do not apply and actual transactions
in the Voting Common Stock are reported through The PORTAL Market, which is
operated by the Nasdaq Stock Market, Inc., the last sale price of the Voting
Common Stock on such system immediately prior to (but excluding) the date in
question (provided such last sale price was not on a trading day in excess of 10
trading days prior to the date in question); or

     

    (v)           if
the Fair Market Value cannot be calculated on a particular date on any of the
foregoing bases, the Fair Market Value on such date shall be the fair market
value of a share of Voting Common Stock as mutually determined by the Company
and the Holder.  If the Company and the Holder are unable to agree
upon the fair market value of a share of Voting Common Stock under this clause
(v), then such dispute shall be resolved pursuant to Section
14.

     

    All such
determinations to be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during the applicable calculation
period.

     

    “Final Expiration
Date” shall mean the five-year anniversary of the final Vesting Date
pursuant to the Vesting Schedule.

     

    “Last Reported Sales
Price” of the Voting Common Stock on any particular date
means:

     

    (i)           if
the Voting Common Stock is listed or admitted for trading on a national
securities exchange, the last reported sale price reported on the date in
question in the composite transactions for the exchange on which the Voting
Common Stock is so listed; or

     

    (ii)           if
the foregoing clause (i) does not apply and the Voting Common Stock is traded on
the OTC Bulletin Board, the last quoted bid price on the date in question in the
over-the-counter market as reported by the OTC Bulletin Board; or

     

    (iii)           if
the foregoing clauses (i) and (ii) do not apply and the Voting Common Stock is
quoted in the over-the-counter market as reported in the “pink sheets”, the last
quoted bid price on the date in question; or

     

     

    
      
         

      

      
        11

         

      

      
         

      

    

     

     

    (iv)           if
the foregoing clauses (i), (ii) and (iii) do not apply and actual transactions
in the Voting Common Stock are reported through The PORTAL Market, which is
operated by the Nasdaq Stock Market, Inc., the last sale price of the Voting
Common Stock that is so reported on the date in question; or

    (v)           if
the Last Reported Sales Price cannot be calculated for the Voting Common Stock
on a particular date on any of the foregoing bases, the Last Reported Sales
Price of the Voting Common Stock on such date shall be as mutually determined by
the Company and the Holder.  If the Company and the Holder are unable
to agree upon the Last Reported Sales Price of the Voting Common Stock under
this clause (v), then such dispute shall be resolved pursuant to Section
14.

     

     “Person” shall be
construed broadly and shall include, without limitation, an individual, a
partnership, a limited liability company, a corporation, an association, a joint
stock company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision
thereof.

     

    “Shares” means shares
of Common Stock.

     

     “Vesting Date” shall
mean, with respect to any Warrant Share, the date on which this Warrant becomes
immediately exercisable for such Warrant Share in accordance with the Vesting
Schedule.

     

    “Warrant Exercise
Period” shall mean the period beginning on the date hereof and ending on
the Final Expiration Date.

     

    

     

    
      
         

      

      
        12

         

      

      
         

      

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and
issued by its officers thereunto duly authorized as of the date first written
above.

     

    
      	 
      	 
      	 
      	
              FIRST
      PACTRUST BANCORP, INC.

            
	 	 	 	 
	 
      	 
      	
              By:

            	 
      
	 
      	 
      	 
      	
              Hans
      R. Ganz

            
	 
      	 
      	 
      	
              President
      and Chief Executive Officer

            

    

    

     

    
      
         

      

      
        13

         

      

      
         

      

    

    FORM OF
SUBSCRIPTION

     

    (to be
signed only upon payment of the Exercise Price

     

    pursuant
to the Warrant)

     

    To the
Company:

    1.           The
undersigned, the holder of the within Warrant, hereby irrevocably elects to
purchase ___ shares of Common Stock pursuant to the terms of the
Warrant.

     

    2.           Form of Exercise
Price.  The Holder intends that payment of the Exercise Price
shall be made as (check applicable ones):

     

    
      	 
      	
              ____________

            	
              a
      “Cash Exercise” with respect to
      _________________ Warrant Shares; and/or

            
	 
      	
              ____________

            	
              a
      “Cashless Exercise” with respect to
      _______________ Warrant Shares.

            

    

     

        3.           Payment of Exercise
Price. In the event that the Holder has elected a Cash Exercise with
respect to some or all of the Warrant Shares to be issued pursuant hereto, the
Holder shall pay the aggregate Exercise Price in the sum of $___________________
to the Company in accordance with the terms of the Warrant.

     

    4.           Delivery of Warrant
Shares.  The Company shall deliver to Holder, or its designee
or agent as specified below, __________ Warrant Shares (__________ shares of
Voting Common Stock and __________ shares of Class B Common Stock) in book-entry
form through the facilities of The Depositary Trust Company in accordance with
the terms of the Warrant.

     

    _______________________

    _______________________

    _______________________

    

    The
undersigned represents (i) that it has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of its investment in the Common Stock; and (ii) that it can bear the
economic risk of its investment in the Common Stock and can afford to lose its
entire investment in the Common Stock. The undersigned agrees that the Common
Stock may not be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act, except
pursuant to an exemption from such act.

     

    The
undersigned represents that it has tendered payment for such shares of Common
Stock to the Company in the form indicated above.

     

    If the
number of shares of Common Stock purchased is less than all of the Warrant
Shares evidenced hereby, and the undersigned is surrendering the Warrant in
connection with the exercise hereof, the undersigned requests that a new Warrant
representing the remaining shares of Common Stock subject to the Warrant be
issued and delivered to the undersigned.

     

     

    
      
         

      

      
         

         

      

      
         

      

    

     

     

    If the
original Warrant is not surrendered in connection with the exercise
hereof:  (i) the undersigned represents that it has not sold,
assigned, pledged, transferred, hypothecated, or otherwise disposed of
the original Warrant or any interest therein or represented thereby and
hereby agrees to fully and forever indemnify and hold harmless the Company and
each of its successors, assigns and affiliates from any loss, cost, damages or
expense (including reasonable attorneys’ fees) of any kind or nature whatsoever
it may hereinafter suffer or incur in connection with or as a result of
the undersigned’s failure to surrender the original Warrant in connection
with such exercise; and (ii) the undersigned will as promptly as reasonably
practicable after the delivery of this Subscription to the Company (and in any
event within five (5) business days),  deliver, or cause to be delivered,
the original Warrant to the Company.

     

    

     

    
      	
              DATED:
      ________________________

            	 
      
	 
      	
              (Signature
      must conform in all

            
	 
      	
              respects
      to name of holder as

            
	 
      	
              specified
      on the face of the Warrant)

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              (Address)

            

    

    

     

    
      
         

      

      
         

         

      

      
         

      

    

    FORM OF
ASSIGNMENT

     

    FOR VALUE
RECEIVED, the undersigned, the holder of the attached Warrant, hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant unto:

     

    Name of
Assignee                                                                                    Address

     

    
      	
              ___________________________________ 
      

            	
              ________________________

            

    

     

    
      	
               
      

            	
              (Signature
      must conform in all

                    
                respects
      to name of holder as

                
                  specified
      on the face of the
Warrant)

                

              

            

    

     

     

    
      	
               
      

            	
              [_____________________]

            

    

     

    
      	 
      	 
      	
              By:

            	 
      
	 
      	 
      	 
      	
              Name:

            
	 
      	 
      	 
      	
              Title:

            

    

    

     

    
      
         

      

      
         

         

      

      
         

      

    

    Exhibit
A

     

    Vesting
Schedule

     

    Subject
to adjustment pursuant to Section 4 of this Warrant, this Warrant shall be
exercisable for One Hundred Fifty Thousand (130,000) Warrant Shares from and
after the date hereof.

    

    Subject
to adjustment pursuant to Section 4 of this Warrant, this Warrant shall become
exercisable for an additional One Million Four Hundred Thirty Thousand
(1,430,000) Warrant Shares in the aggregate, in eleven (11) equal increments, on
the last day of each of the first eleven (11) calendar quarterly periods ending
subsequent to the date hereof.ex10-1.htm

    

    FIRST
PACTRUST BANCORP, INC.

    COMMON
STOCK

    

     

    SUBSCRIPTION
AGREEMENT

     

     

    THIS SUBSCRIPTION AGREEMENT (this “Subscription
Agreement”) dated as of _______, 2010 is made by and among the
undersigned subscriber or subscribers (the “Subscriber”),
and First PacTrust Bancorp, Inc., a Maryland
corporation (the “Company”) that owns all of the issued and outstanding capital
stock of Pacific Trust Bank, a federally-chartered stock  savings
association (the “Bank”).

    

     

    RECITALS:

     

     

    WHEREAS,
in connection with a contemplated recapitalization of the Company (the “Transaction”)
the Company intends to conduct a private placement (the “Offering”)
of newly issued shares of its common stock (as further described herein) to
certain accredited investors;

     

    WHEREAS,
in order permit Subscriber and other subscribers in the Offering to structure
their respective investments in the Company to ensure compliance with regulatory
requirements and policies applicable to such Subscriber, the board of directors
of the Company (the “Board of
Directors”) intends to reclassify, pursuant to the Company’s Articles of
Incorporation, as amended, such number of  shares of its common stock,
par value $.01 per share (the “Voting Common
Stock”) into a new class of common stock as necessary to carry out the
purposes of this Agreement (the “Class B
Non-Voting Common Stock” and, with the Voting Common Stock, the “Common
Stock”), such Class B Non-Voting Common Stock to possess identical
rights, preferences and privileges as the Voting Common Stock, except with
respect to voting rights and conversion;

     

    WHEREAS,
the Company has engaged Hovde Securities, LLC as placement agent (the “Placement
Agent”) (and the Placement Agent has engaged Cappello Capital Corp. to
assist it in its role as Placement Agent) in the Offering; and

     

    WHEREAS,
Subscriber wishes to purchase, and the Company wishes to sell, upon the terms
and conditions stated in this
Agreement, shares of Voting Common Stock (the “Voting
Shares”) and Class B Non-Voting Common Stock (the “Class B
Shares”) in the aggregate numbers indicated below such Subscriber’s name
on the signature page of this agreement (and subject to Section 1 hereof);
and

     

    NOW THEREFORE, in consideration of the
representations, warranties, covenants and agreements contained in this
Agreement, and intending to be legally bound hereby, the parties hereto agree as
follows:

     

    
      ARTICLE
I

    

     

    PURCHASE
AND SALE OF SECURITIES

     

    1.1           Sale of Securities. Subject to
the terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth, the Company hereby agrees to issue and sell to
the Subscriber and the Subscriber agrees to purchase from the Company, upon
Closing (as such term is

    
      
         

      

      
         

         

      

      
         

      

    

    defined
in Section 3 of this Article I), the Common Stock as described herein for the
for an aggregate purchase price (the “Purchase
Price”) all
as set forth by the Subscriber on the signature page hereto. To the extent that
the gross proceeds from the Offering are less than $60,000,000.00, or that the
Company has received executed counterparts to subscription agreements
representing subscriptions from subscribers in the Offering to purchase shares
of the Common Stock having an aggregate purchase price greater than
$60,000,000.00, the actual number of shares of Common Stock purchased and
received by the Subscriber may be different from the number subscribed for and,
in such event, the Company may amend this Agreement to reflect the actual number
so purchased and received by the Subscriber. This Offering is only being made to
the Subscriber on the condition that the Subscriber qualifies as an “accredited
investor” (as defined in Rule 501 under the Securities Act of 1933, as amended
(the “Securities
Act”)). To the extent that, as of and giving effect to the consummation
of the Offering on the terms described herein, Subscriber would own, control or
have the power to vote shares of Voting Stock (as such term is defined under the
Bank Holding Company Act of 1956, as amended (and any rules and regulations
promulgated thereunder, the “BHC Act”),
the Change in Bank Control Act of 1978, as amended (and any rules and
regulations promulgated thereunder, the “CIBC
Act”), or the Home Owners Loan Act, as amended (and any rules and
regulations promulgated thereunder, “HOLA”))
equal to or more than 5.0% of the aggregate number of outstanding shares of
Voting Stock (the “Voting Ownership
Limit”), Subscriber’s Subscription for Voting Shares in excess of the
Voting Ownership Limit, unless otherwise instructed by Subscriber, shall be
deemed to be, automatically and without further action on the part of Subscriber
or the Company, a Subscription for Class B Shares in an amount equal to such
excess.  Notwithstanding anything contained in this Agreement to the
contrary, in no event shall the Company be obligated to issue and sell to
Subscriber any shares of Common Stock to the extent that, as of and giving
effect to the issuance and sale of such shares of Common Stock and the issuance
of the shares of Common Stock to all other investors in the Offering, Subscriber
would own or control 10.0% or more of the Company’s total stockholder’s
equity.  Subscriber understands that, subject only to the provisions
of Articles 7 and 8 of this Agreement, Subscriber (i) is not entitled to cancel,
terminate or revoke this Agreement or any of the agreements, representations or
warranties of Subscriber hereunder, and (ii) acknowledges that this subscription
is irrevocable. The purchase of the Common Stock is referred to in this
Agreement as the “Purchase.”

    

    1.2           Escrow of Deposit Pending Closing;
Disposition of Deposit Upon Closing. The Subscriber has provided or
immediately following the execution of this Agreement will provide to the
Company by wire transfer immediately available funds representing ten percent
(10%) of the aggregate Purchase Price (the “Deposit”).
The Deposit, when received by the Company, shall be held by the Company in
escrow in a segregated deposit account maintained by an independent third-party
escrow agent to be designated by the Company (the “Escrow
Account”), which shall bear interest from the date of deposit until the
date of withdrawal at the Escrow Agent’s standard statement account savings rate
as in effect from time to time. At the Closing, upon receipt from Subscriber of
the Authorization pursuant to Section 1.3(a), the Company shall direct the
Escrow Agent to release the Deposit and any allocable interest earned thereon
from the Escrow Account to the Company. Except as otherwise provided in Sections
8.1(c) of this Agreement, if this Agreement is terminated without Closing
hereunder, the Company shall repay the Deposit to the Subscriber with all
interest earned thereon.

     

    1.3           Closing. Subject to receipt of
any required regulatory approvals and the other conditions to closing set forth
in Article VII of this Agreement, the closing of the transactions contemplated
hereunder (the “Closing”)
shall occur at such date and place as shall be designated by the Company by
reasonable prior written notice to the Subscriber (the “Closing
Date”). Closing may be conditioned upon Subscriber’s receipt of
regulatory approvals as more fully set forth in this Agreement. At the
Closing:

     

    
      	
               
      

            	
              (a)

            	
              Subscriber
      shall have delivered an amount equal to the Purchase Price but without
      duplication of the Deposit withdrawn from the Escrow Account by the
      Company upon

            

    

    
      
         

      

      
        2

         

      

      
         

      

    

     

    
      	
               
      

            	
              the
      Closing, in immediately available United States funds, to an account or
      accounts designated in writing by the Company; provided that such
      delivery shall constitute Subscriber’s agreement and acknowledgement that
      all of the conditions specified in Section 7.2 hereof shall have been
      satisfied or waived by Subscriber and shall constitute authorization to
      the Company to direct the Escrow Agent to release the Deposit as provided
      in Section 1.2 hereof (the “Authorization”);

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Company shall deliver one or more Voting Common Stock certificates and,
      where applicable, Class B Non-Voting Common Stock certificates, as the
      case may be, representing the Common Stock subscribed for by Subscriber;
      and

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      representations and warranties of the Company and Subscriber set forth in
      this Agreement shall be true and correct as though made on and as of the
      Closing Date, except to the extent that failure of such representations
      and warranties to be so true and correct, individually or in the
      aggregate, does not and would not reasonably be expected to have a
      Material Adverse Effect (as defined
below).

            

    

     

    1.4           Acceptance. This Agreement
shall be effective immediately upon acceptance by the Company of the
Subscriber’s fully completed and executed version
of the Investor Questionnaire attached hereto as Exhibit B (the “Investor
Questionnaire”) and executed
counterpart of this Agreement and shall thereupon be binding upon the Company
and thereupon Subscriber’s firm offer herein shall be deemed accepted. Such
acceptance by the Company shall be evidenced only by counter-execution and
delivery of this Agreement by the Company, and the Company shall have no
obligation hereunder until the Company shall have executed and delivered to the
Subscriber an executed counterpart of this Agreement.

     

    1.5           Termination.  Other
than pursuant to Article VIII hereof, this Agreement may not be terminated by
the Subscriber at any time following the Subscriber’s delivery of an executed
counterpart of this Agreement to the Company. Subscriber understands that,
subject only to the provisions of Articles VII and VIII of this Agreement,
Subscriber (i) is not entitled to cancel, terminate or revoke this Agreement or
any of the agreements, representations or warranties of Subscriber hereunder,
and (ii) acknowledges that this subscription is irrevocable.

     

    

    
      ARTICLE
II

    

     

    REPRESENTATIONS
AND WARRANTIES

     

    2.1           Disclosure.

     

    (a)           “Material Adverse
Effect” means a material adverse effect on (1) the business, results
of operation or financial condition of the Company and the Bank taken as a
whole; provided that
Material Adverse Effect shall not be deemed to include the effects, to the
extent such effects do not have a disproportionate impact on the Company as
compared to other depository institution holding companies, of (A) any
facts, circumstances, events, changes or occurrences generally affecting
businesses and industries in which the Company operates, companies engaged in
such businesses or industries or the economy, or the financial or securities
markets and credit markets in the United States or elsewhere in the world,
including effects on such businesses, industries, economy or markets resulting
from any regulatory or political conditions or developments, or any outbreak or
escalation of hostilities, declared or undeclared acts of war, terrorism, or
work stoppages, (B) changes or proposed changes in generally accepted
accounting principles in the United States (“GAAP”) or
regulatory accounting requirements

    
      
         

      

      
        3

         

      

      
         

      

    

    applicable
to depository institutions and their holding companies generally (or
authoritative interpretations thereof), (C) changes or proposed changes in
banking and other laws of general applicability or related policies or
interpretations of all United States governmental or regulatory authorities
(collectively, “Governmental
Entities”), or (D) changes in the market price or trading volume of
Common Stock (it being understood and agreed that the exception set forth in
this clause (D) does not apply to the underlying reason giving rise to or
contributing to any such change), or (2) a material and adverse effect on
the legality, validity or enforceability of this Subscription Agreement, or (3)
the ability of the Company or a Subscriber to consummate timely the Purchase and
the other transactions contemplated by this Subscription Agreement and any other
documents, agreements and instruments delivered in connection herewith,
(collectively, the “Transaction
Documents”).

    

    (b)           “Previously
Disclosed” information means (1) information contained in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2009, or its other reports and forms filed with the Securities
and Exchange Commission (the “SEC”)
under Sections 13(a), 14(a) or 15(d) of the Securities Exchange Act of 1934
(the “Exchange
Act”) on or after January 1, 2010 (the “SEC
Reports”) and prior to the execution and delivery of this Agreement, and
if applicable, (2) information provided pursuant to this
Agreement or any confidentiality agreement between the Company and the
Subscriber.

    

    (c)           Each
party acknowledges that it is not relying upon any representation or warranty
not set forth in the Transaction Documents. The Subscriber is aware that it will
bear the economic risk of an investment in the Common Stock.

    

               2.2           Representations
and Warranties of the Company. Except as Previously
Disclosed, the Company represents and warrants to the Subscriber that as of the
date hereof (or such other date specified herein):

    

    (a)           Organization, Authority and
Significant Subsidiary. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of the State
of Maryland, with corporate power and authority to own its properties and
conduct its business in all material respects as currently conducted, and,
except as has not had or would not reasonably be expected to have a Material
Adverse Effect, has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification; and the Bank, the only
subsidiary  of the Company has been duly organized as a federally
chartered stock savings institution, and its deposit accounts are insured up to
applicable limits by the Federal Deposit Insurance Corporation (the “FDIC”).

    

    (b)           Authorization of Common
Stock.  The Common Stock to be issued has been duly authorized
for issuance by the Company and, when duly issued and delivered by the Company
against payment therefor in accordance with this Agreement, will be duly and
validly issued, fully paid and nonassessable, and the issuance thereof will not
be subject to any preemptive or other similar rights.

    

    (c)           Company Stock
Options.   As of the date of this Agreement, 482,396
shares of  Common Stock are subject to outstanding options to acquire
shares of Common Stock from the Company (such options, together with any similar
options granted after the date hereof, “Company Stock
Options”).

    
      
         

      

      
        4

         

      

      
         

      

    

    (d)           Securities Laws.
Assuming the accuracy of the representations and warranties made by Subscriber
contained herein and similar representations by the other investors in the
Offering, the offer and sale of the Common Stock to Subscriber in the manner
contemplated by this Agreement, are exempt from the registration requirements of
the Securities Act and any other applicable laws.

    

    (e)           Authorization of this
Agreement.  This Agreement has been duly authorized, executed
and delivered by the Company, and assuming due authorization, execution and
delivery of this Agreement by the Subscriber, this Agreement will constitute a
valid, legal and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except to the extent that enforceability
may be limited by (a) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect relating
to creditors’ rights generally or the rights of creditors of financial
institutions, the accounts of whose subsidiaries are insured by the FDIC and (b)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity) (collectively, the “Enforceability
Exceptions”).

    

    (f)           No Material Adverse
Effect. Since December 31, 2009, no fact, circumstance, event, change,
occurrence, condition or development has occurred that, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect.

    

    (g)           Reports.

    

    (1)           Since
December 31, 2009, the Company has timely filed all SEC Reports and, as of
their respective filing dates, such reports did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein in light of the
circumstances in which they were made not misleading.

    

     (2)           Since
December 31, 2009, the Company and the Bank have filed all reports,
registrations and statements, together with any required amendments thereto,
that was required to be filed with the Office of Thrift Supervision (the “OTS”) and
any other applicable federal or state banking authorities, except where the
failure to file any such report, registration or statement, individually or in
the aggregate, has not had and would not reasonably be expected to have a
Material Adverse Effect. As of their respective dates, each of the foregoing
reports complied with all applicable rules and regulations promulgated by the
OTS and any other applicable foreign, federal or state securities or banking
authorities, as the case may be, except for any failures that, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect.

    

    (h)           No General Solicitation or
General Advertising. Neither the Company nor any person acting on its
behalf has engaged or will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Securities Act)
in connection with any offer or sale of the Common Stock.

    

    (i)           Non-contravention.  The
Company is not in violation of (i) any term of its Articles of Incorporation, as
amended, or its Amended and Restated Bylaws, (ii) any agreement or instrument to
which it is a party or by which it or any of its properties or assets is bound;
or (iii) of any applicable law, ordinance, rule or regulation or any applicable
order, judgment or decree of any court or governmental authority, except, in the
case of (ii) or (iii) above, for any violations that would not, individually or
in the aggregate, have a Material Adverse Effect.

    

    (j)           Brokers.  Except
as Previously Disclosed there are no contracts, agreements or understandings
between the Company and any person that would give rise to a valid claim against
the

    
      
         

      

      
        5

         

      

      
         

      

    

    Company
for a brokerage commission, finder’s fee or other like payment as a result of
the transactions contemplated by this Agreement.

    

    (k)           No Other
Agreements.   Except as Previously Disclosed or with
respect to the investors designated on Schedule I hereto, none of the terms of subscription in the Offering offered
to another investor therein is more favorable than any provision of this
Agreement, and no such other investor has been offered any rights under any
“side letter” which have not also been offered to
Subscriber.

    

               2.3           Representations
And Warranties Of The Subscriber. The Subscriber hereby
represents and warrants to the Company that as of the date hereof (and, as
applicable, agrees):

     

    (a)           The
Subscriber understands and acknowledges that (i) the offering and sale of the
Common Stock is intended to be exempt from registration under the Securities
Act, (ii) the Common Stock has not been registered under the Securities
Act,  and (iii) the Company has represented to the Subscriber that the
Common Stock has been offered and sold by the Company in reliance upon the
foregoing exemption from registration as well as corresponding exemptions from
registration under any applicable state securities laws and that the reliance on
such exemptions is predicated upon the accuracy of Subscriber’s representations
and warranties in this Agreement and the Investor
Questionnaire.  Subscriber further understands that the shares of
Common Stock to be acquired hereunder are characterized as “restricted
securities” under the federal securities laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited
circumstances and in accordance with the terms and conditions set forth in the
legends described below.  In this connection, Subscriber represents
that Subscriber is familiar with Securities and Exchange Commission Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act.

     

    (b)           Subscriber
understands and acknowledges that the certificates evidencing the Common Stock
to be purchased hereunder will bear substantially the following
legend:

     

    

    THE
SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  NO SUCH TRANSFER MAY BE AFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED.

    

    

    (c)           The
Subscriber is purchasing the Common Stock for its own account, for investment,
and not with a view to, or for offer or sale in connection with, any
distribution thereof in violation of the Securities Act or other applicable
securities laws, subject to any requirement of law that the disposition of its
property be at all times within its control and subject to its ability to resell
such Common Stock pursuant to an exemption from registration available under the
Securities Act or any other applicable securities law.

     

    (d)           The
Subscriber represents and warrants that neither the Company nor the Placement
Agent is acting as a fiduciary or financial or investment adviser for the
Subscriber.

     

    
      
         

      

      
        6

         

      

      
         

      

    

    (e)           The
Subscriber represents and warrants that it is not relying (for purposes of
making any investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the Company, the Placement Agent or
their respective legal counsel, advisors and agents and no independent counsel
has been retained to represent Subscriber or any other Subscriber.

     

    (f)           The
Subscriber acknowledges that it has conducted a review and analysis of the
business, assets, condition, operations and prospects of the Company, together
with the representations and warranties of the Company set forth in this
Agreement that the Subscriber considers sufficient for purposes of the
Purchase.  The Subscriber represents and warrants that (i) it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisers in connection herewith to the extent it has deemed
necessary, (ii) it has had a reasonable opportunity to ask questions of and
receive answers from officers of the Company concerning the Company’s financial
condition and results of operations and the purchase of the Common Stock, and
any such questions have been answered to its satisfaction, (iii) it has had
the opportunity to review all publicly available records and filings concerning
the Company and the Bank and it has carefully reviewed such records and filings
that it considers relevant to making an investment decision, and (iv) it
has made its own investment decisions based upon its own judgment, due diligence
and advice from such advisers as it has deemed necessary. The Subscriber further
represents and warrants that, except for the Company’s management, no person has
been authorized by the Company to make any representations or warranties
concerning the Company, including as to the accuracy or completeness of the
information contained in this Agreement or any Transaction
Document.

     

    (g)           The
Subscriber represents and warrants that it is an “accredited investor” within
the meaning of Rule 501 under Regulation D promulgated under the Securities Act,
and that:

     

    (1)           the
information contained in the Investor Questionnaire is complete, accurate, and
true in all respects, and agrees to notify and supply corrective information
promptly to the Company if any such information becomes inaccurate or
incomplete.

     

    (2)           the
Subscriber has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of an investment in the
Common Stock.

     

    (3)           the
Subscriber understands that neither the SEC, OTS, FDIC nor any securities
administrator of any state has made any finding or determination relating to the
fairness of this investment or recommended or endorsed, or will recommend or
endorse, the offering of the securities purchased hereby.

     

    (4)           the
Subscriber acknowledges that no general solicitation or general advertising
(including communications published in any newspaper, magazine or other
broadcast) has been received by it and that no public solicitation or
advertisement with respect to the offering of the securities purchased hereby
has been made to it.

     

    (5)           no
person has made any direct or indirect representation or warranty of any kind to
the Subscriber with respect to the economic return which may accrue to the
Subscriber.

     

    (6)           the
Subscriber is not a participant-directed employee plan, such as a 401(k) plan,
or any other type of plan referred to in paragraph (a)(1)(i)(D) or
(a)(1)(i)(E) of Rule 144A promulgated under the Securities Act, or a trust
fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the
assets of such a plan, unless investment decisions with respect to the plan are
made solely by the fiduciary, trustee or sponsor of such plan.

     

    
      
         

      

      
        7

         

      

      
         

      

    

    (7)           In
connection with the purchase of the Common Stock, Subscriber meets all
suitability standards imposed on him or her by any applicable state securities
or “blue sky” laws.

     

    (h)           The
Subscriber represents and warrants that on each day from the date on which it
acquires any Common Stock through and including the date on which it disposes of
all such interests, either (i) it is not (a) an “employee benefit
plan” (as defined in Section 3(3) of the United States Employee Retirement
Income Security Act of 1974, as amended (“ERISA”))
which is subject to the provisions of Part 4 of Subtitle B of
Title I of ERISA, or any entity whose underlying assets include the assets
of any such plan (an “ERISA
Plan”), (b) any other “plan” (as defined in Section 4975(e)(1)
of the United States Internal Revenue Code of 1986, as amended (the “Code”))
which is subject to the provisions of Section 4975 of the Code or any
entity whose underlying assets include the assets of any such plan (a “Plan”),
(c) an entity whose underlying assets include the assets of any such ERISA
Plan or other Plan by reason of Department of Labor regulation
section 2510.3-101 or otherwise, or (d) a governmental or church plan
that is subject to any federal, state or local law which is substantially
similar to the provisions of Section 406 of ERISA or Section 4975 of
the Code (a “Similar
Law”); or (ii) the purchase, holding and disposition of any such
Common Stock by it will satisfy the requirements for exemptive relief under
Prohibited Transaction Class Exemption (“PTCE”)
84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60, PTCE 96-23 or a similar exemption, or,
in the case of a plan subject to a Similar Law, will not result in a non-exempt
violation of such Similar Law.

     

    (i)           The
Subscriber represents and warrants that the execution, delivery, and performance
by the Subscriber of this Agreement are within the powers of the Subscriber,
have been duly authorized by all necessary action on the part of the Subscriber,
and will not constitute or result in a breach or default under, or conflict
with, any order, ruling or regulation of any court or other tribunal or of any
governmental commission or agency, or any agreement or other undertaking, to
which the Subscriber is a party or by which the Subscriber is bound; and, if the
Subscriber is not an individual, will not violate any provision of the charter
documents, bylaws, indenture of trust, or partnership agreement, as applicable,
of the Subscriber. The signatures on the Agreement are genuine, and the
signatory, if the Subscriber is an individual, has legal competence and capacity
to execute the same, or, if the Subscriber is not an individual, the signatory
has been duly authorized to execute the same; and the Agreement constitutes the
legal, valid and binding obligations of the Subscriber, enforceable in
accordance with its terms (subject to applicable bankruptcy, insolvency and
similar laws affecting creditors’ rights generally and subject, as to
enforceability, to general principles of equity (whether applied in a proceeding
in equity or at law)).  To the Subscriber’s Knowledge no notice to,
filing with, exemption or review by, or authorization, consent or approval of,
any Governmental Entity is required to be made or obtained by the Subscriber in
connection with the consummation by the Subscriber of the Purchase and the other
transactions contemplated by the Transaction Documents.

     

    (j)           Except
as set forth on Schedule II hereto, Subscriber hold no shares of Common Stock as
of the date hereof.  The Subscriber certifies that, after giving
effect to the Purchase, as of the date hereof, the Subscriber and all of its
affiliates on an aggregate basis will not beneficially own, control or have the
power to vote 5.0% or more of the outstanding Common Stock.  The
Subscriber does not have any agreement, arrangement or understanding with any
person (other than the Company) to acquire, dispose of or vote any securities of
the Company.

     

    (k)           The
Subscriber acknowledges and agrees that the Offering involves securities for
which only a limited trading market exists, thereby requiring any investment to
be maintained for an indefinite period of time. The purchase of the Common Stock
involves risks which the Subscriber has evaluated, and the Subscriber is able to
bear the substantial economic risk of the investment for an indefinite period of
time, has no need for liquidity in such investment and can afford a complete
loss of such investment. The Subscriber’s overall commitment to investments that
are not readily marketable is not, and its

     

    
      
         

      

      
        8

         

      

      
         

      

    

    acquisition
of the Common Stock will not cause such overall commitment to become,
disproportionate to its net worth and the Subscriber has adequate means of
providing for its current needs and contingencies.

     

    (l)           The
Subscriber acknowledges and agrees that once funds are transferred in payment of
the Purchase Price and the other conditions to Closing are satisfied or, if
waivable, waived by the Company or the Subscriber, as applicable, the Company
may schedule Closing in its sole discretion and such will be immediately
released to the Company upon completion of Closing.

     

    (m)           The
Subscriber acknowledges and agrees that it never has been represented,
guaranteed or warranted by the Company, any of the officers, directors,
stockholders, partners, employees or agents of the Company, or any other
persons, whether expressly or by implication, that: (a) the Company or the
Subscriber will realize any given percentage of profits and/or amount or type of
consideration, profit or loss as a result of the Company’s activities or the
Subscriber’s investment in the Company; or (b) the past performance or
experience of the management of the Company, or of any other person, will in any
way indicate the predictable results of the ownership of the Common Stock or of
the Company’s activities.

     

    (n)           The
Subscriber acknowledges and agrees that it has received the Transaction
Documents, has read the Transaction Documents carefully, is fully familiar with
and understands the contents of the Transaction Documents and has not relied on
any representation or warranty in connection with the Offering other than those
contained in the Transaction Documents and this Agreement.

     

    (o)           The
Subscriber represents and warrants that it has been given access to information
regarding the Company (including the opportunity to meet with officers of the
Company) and have utilized such access to its satisfaction for the purpose of
obtaining such information concerning the Company and the Common Stock as the
Subscriber has deemed necessary to make an investment decision.

     

    (p)           The
Subscriber acknowledges, represents and warrants that Subscriber has been
informed of the FDIC Final Statement of Policy on Qualifications for Failed Bank
Acquisitions (the “Statement”)
and Subscriber has been advised to, and has had the opportunity to, review and
understand the Statement and to determine and evaluate its prospective effect on
the Purchase.  Subscriber understands and acknowledges the terms of
the Statement, including the possible restrictions on transfer referred to in
Article IV, below, and the other restrictions and limitations set forth
therein.  Subscriber represents and warrants that Subscriber is
purchasing the Common Stock subject to the effect of the Statement as it may be
interpreted and applied to the Common Stock after the date of purchase and to
cooperate with the Company in connection with providing such information and
undertakings as may be required in order to comply with any requirements
imposed.

     

    (q)           Subscriber
acknowledges and agrees that any dividends or other distributions paid to
Subscriber by the Company will be paid to, and any contributions made by it to
the Company will be made from, an account in Subscriber’s name unless the
Company, in its sole discretion, agrees otherwise.

    

    (r)           Subscriber
agrees to provide any information requested by the Company which the Company
reasonably believes will enable the Company to (i) comply with all applicable
laws, rules and regulations, including without limitation any anti-money
laundering and any other laws, rules and regulations applicable to the Company
or to any investment held or proposed to be held by the Company, and (ii) determine whether or not Subscriber is, or will
be as of Closing, an “accredited investor” as defined in Regulation D,
promulgated under the Securities Act.

    
      
         

      

      
        9

         

      

      
         

      

    

    

    (s)           Subscriber
acknowledges and agrees that: (i) neither the Company nor the Placement Agent
has provided legal or tax advice or acted as or is an agent or employee of or
has advised Subscriber in connection with the investment in the Company by
Subscriber; (ii) no federal, state, local or foreign agency has passed upon the
Common Stock or made any finding or determination as to the fairness of this
investment and (iii) the Common Stock is not a savings account, deposit or other
obligation of a depository institution and is not insured by the FDIC or any
other Governmental Entity (as defined herein).

    

    (t)           SUBSCRIBER
SHOULD CHECK THE OFFICE OF FOREIGN ASSETS CONTROL WEBSITE AT WWW.TREAS.GOV/OFAC
BEFORE MAKING THE FOLLOWING REPRESENTATIONS:

    

    (i)           Subscriber
understands that federal regulations and executive orders administered by the
United States Department of the Treasury’s Office of Foreign Assets Control
(“OFAC”)
prohibit, among other things, the engagement in transactions with, and the
provision of services to, certain foreign countries, territories, entities and
individuals.

    

    (ii)           Subscriber
represents that no portion of the Purchase Price is, or will be, directly or
indirectly derived from activities that contravene federal, state or
international laws and regulations, including anti-money laundering laws and
regulations. Federal regulations and Executive Orders administered by OFAC
prohibit, among other things, the engagement in transactions with, and the
provision of services to, certain foreign countries, territories, entities and
individuals.  The lists of OFAC prohibited countries, territories,
persons and entities can be found on the OFAC website at
www.treas.gov/ofac.  In addition, the programs administered by OFAC
(the "OFAC Program") prohibit
dealing with individuals1 or entities in
certain countries regardless of whether such individuals or entities appear on
the OFAC lists.

    

    (iii)           To
the best of Subscriber’s knowledge, none of: (1) Subscriber; (2) any person
controlling or controlled by Subscriber; (3) if Subscriber is a privately-held
entity, any person having a beneficial interest in Subscriber; or (4) any person
for whom Subscriber is acting as agent or nominee in connection with this
investment is a country, territory, individual or entity named on an OFAC list,
or a person or entity prohibited under the OFAC Programs. Please be advised that
the Company may not accept any amounts from a prospective Subscriber if such
prospective Subscriber cannot make the representation set forth in the preceding
paragraph. Subscriber agrees to promptly notify the Company should Subscriber
become aware of any change in the information set forth in these
representations. Subscriber understands and acknowledges that, by law, the
Company may be obligated to “freeze the account” of Subscriber, by segregating
the assets in the account in compliance with governmental regulations, and may
also be required to report such action and to disclose Subscriber’s identity to
OFAC.

    

    (iv)           To
the best of Subscriber’s knowledge, none of: (A) Subscriber; (B) any person
controlling or controlled by Subscriber; (C) if Subscriber is a privately-held
entity, any person having a beneficial interest in Subscriber; or (D) any person
for whom Subscriber is acting as agent or nominee in connection with this
investment is a
senior foreign political figure2, or any immediate
family3
member

    

      

    

      
      1 These
individuals include specially designated nationals, specially designated
narcotics traffickers and other parties subject to OFAC sanctions and embargo
programs.

    

    
 

      2 A
“senior foreign political figure” is defined as a senior official in the
executive, legislative, administrative, military or judicial branches of a
foreign government (whether elected or not), a senior official of a major
foreign political party, or a senior executive of a foreign government-owned
corporation. In addition, a “senior foreign political figure” includes any
corporation, business or other entity that has been formed by, or for the
benefit of, a senior foreign political figure.

    

    
 

      3 “Immediate
family” of a senior foreign political figure typically includes the figure’s
parents, siblings, spouse, children and in-laws.

    

    
      
         

      

      
        10

         

      

      
         

      

    

    or close
associate4 of a senior
foreign political figure, as such terms are defined in the footnotes below;
and

    

    (v)           If
Subscriber is affiliated with a non-U.S. banking institution (a “Foreign
Bank”), or if Subscriber receives deposits from, makes payments on behalf
of, or handles other financial transactions related to a Foreign Bank,
Subscriber represents and warrants to the Company that: (1) the Foreign Bank has
a fixed address, other than solely an electronic address, in a country in which
the Foreign Bank is authorized to conduct banking activities; (2) the Foreign
Bank maintains operating records related to its banking activities; (3) the
Foreign Bank is subject to inspection by the banking authority that licensed the
Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not
provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.

    

    (u)           Subscriber
has reviewed the merits of investing in the Company and has reached its decision
to invest in the Company independently from any other investors in the
Company.

    

    (v)           Except
as disclosed in writing to the Company, Subscriber is not affiliated with any
other investor in the Company.

    

    (w)           Other
than this Agreement, Subscriber has no
agreement, arrangement or understanding with any other person for the purpose of
acquiring, holding, controlling, voting, distributing or disposing of any
securities of the Company.  Any such agreement, arrangement or
understanding shall be subject to the prior written approval of the Company and
compliance with any applicable regulatory requirements.

    

    (x)           Subscriber
(i) has no present intention of acquiring control of the Company, as “control”
is defined in 12 C.F.R. Part 303, Subpart E, or 12 C.F.R. Part 574 (or
any other applicable banking regulation); (ii) will not acquire control in the
future without the prior approval of all applicable Government Entities; and
(iii) is not participating, has not participated with, and has no current
intention to participate in the future with any other investor in the Offering
in any joint activity or parallel action towards a common goal between or among
such investors of acquiring control of, or exerting control over, the
Company.

    

    (y)           No
other person holding Common Stock or that, to the knowledge of Subscriber,
presently proposes to acquire shares of Common Stock is (i) under common
control with Subscriber, (ii) a controlling shareholder, partner, trustee,
officer, or director of Subscriber or has policy-making functions with respect
to Subscriber or (ii) advised by any investment advisor or manager who performs
substantially the same services to such person as provided to Subscriber,
unless, with regard to this clause (y), all such persons together with
Subscriber would (A) own, control or power to vote shares of Voting Common Stock
not in excess of the Voting Ownership Limit or (B) own or control no more than
24.9% of the Company’s total equity outstanding, in each case, determined
immediately after giving effect to the issuance of the shares of Common Stock to
all investors in the Offering.

    

    

      

    

      
      4
A “close associate” of a
senior foreign political figure is a person who is widely and publicly known to
maintain an unusually close relationship with the senior foreign political
figure, and includes a person who is in a position to conduct substantial
domestic and international financial transactions on behalf of the senior
foreign political figure.

    

    
      
         

      

      
        11

         

      

      
         

      

    

    
      (z)           Subscriber
will not, without first determining whether the prior approval of any
Governmental Entity is required and, if such approval is required, obtaining
such approval, directly or indirectly seek to appoint any director or executive
officer to the Company or otherwise attempt to direct the management or policies
of the Company.  Subscriber also represents that neither it nor any
Account has discussed the Purchase or the Private Placement or the
contents of this Agreement with any other party or potential investors,
except as expressly permitted under the terms of this Agreement.

    

    

    (aa)           Subscriber
has not engaged, and will not engage, as part of a group consisting of
substantially the same persons as the investors in the Company, in substantially
the same combination of interests, in any other banking or nonbanking activities
or business ventures in the United States.

    

    (bb)           Subscriber
has not employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder’s fees, and no
broker or finder has acted directly or indirectly for Subscriber, in connection
with the Purchase.

    

    Subscriber
acknowledges and agrees that the executed Investor Questionnaire is an integral
part of this Agreement and shall be deemed incorporated by reference
herein.

    

    Subscriber
agrees to promptly notify the Company should Subscriber become aware of any
change in the information set forth in this Section 2.3 which may make any such
representation contained therein to be untrue or incorrect in any material
respect.

    

    Subscriber
authorizes the Placement Agent to rely on Subscriber’s representations and
warranties above and in the Investor Questionnaire.

    

    
      ARTICLE
III

    

     

    SURVIVAL

     

    3.1           All
representations, warranties, and covenants contained in this Agreement shall
survive the delivery of the Common Stock to the Subscriber.

     

    
      ARTICLE
IV

    

     

    FDIC
POLICY STATEMENT RESTRICTION ON TRANSFER

     

    4.1           The
Company has been advised that the FDIC may require certain of the Company’s
shareholders to agree to restrictions on the transfer of the Common Stock they
own or acquire as a condition to the Company’s participation in FDIC-assisted
transactions, on terms and conditions that may be comparable to those set forth
in the Statement (the “FDIC
Approvals”). In anticipation of that potential requirement, Subscriber
agrees, intending to be legally bound, to be bound by such restriction on
transfer as the FDIC may require, not to exceed three (3) years from the date of
the latest of any FDIC-assisted transactions in which the Company participates
(herein, the “FDIC
Restriction”).

    

    4.2           In
the event that one or more FDIC Restrictions are imposed, Subscriber agrees (i)
that the transfer of any shares of Common Stock then owned by Subscriber may be
restricted by the Company in accordance with the terms of the FDIC Restriction,
(ii) that the Company may notify its transfer agent to refuse any attempted
transfer that would be inconsistent with the FDIC Restriction, (iii) that any
share certificates issued to Subscriber may be legended to reflect the FDIC
Restriction, and that Subscriber, on request, will surrender any share
certificates held by or for the benefit of Subscriber for purposes of addition
of such a legend to the certificate or certificates.

     

     

    
      
        
        

      

      
        12

         

      

      
        
        

      

    

     

     

    4.3           Legend.   In
the event that one or more FDIC Restrictions are imposed, in addition to any
other legend required by applicable law or provisions of the Company’s Articles
of Incorporation or any agreement, each certificate for Common Stock shall bear
substantially the following legend:

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER SET FORTH IN ARTICLE IV OF THE CONFIDENTIAL SUBSCRIPTION AGREEMENT
BETWEEN THE COMPANY AND THE ORIGINAL SUBSCRIBER FOR SUCH SECURITIES
(“SUBSCRIPTION AGREEMENT ARTICLE IV”), RELATING TO RESTRICTIONS ON TRANSFER IN
CONNECTION WITH THE ISSUER’S PARTICIPATION IN FDIC-ASSISTED TRANSACTIONS. NO
TRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS PERMITTED WITHOUT
RECEIPT BY THE ISSUER OF AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT
SUCH TRANSFER IS PERMITTED PURSUANT TO THE PROVISIONS OF SUBSCRIPTION AGREEMENT
ARTICLE IV AND ANY REQUIREMENTS OR CONDITIONS THEN IMPOSED BY THE FDIC. THE
ISSUER SHALL MAKE AVAILABLE UPON REQUEST, AT NO COST TO THE HOLDER OF THIS
CERTIFICATE, A COPY OF THE PROVISIONS OF SUBSCRIPTION AGREEMENT ARTICLE
IV.

     

    4.4           The
provisions of this Article IV and any FDIC Restrictions shall be binding upon
any transferee of any of the Common Stock or any other shares of common stock
now or hereafter owned by Subscriber.

     

    4.5           Subscriber
acknowledges and agrees that in connection with any FDIC Approvals the Company
may be obligated to obtain from the FDIC, to cooperate reasonably and in good
faith with the Company to provide the information required to obtain such FDIC
Approvals.

    

     

    ARTICLE
V

     

    COVENANTS

     

    5.1           Subscriber
hereby agrees that Section 6 of the letter agreement by and between Subscriber
and the Placement Agent, dated as of _________, 2010 shall be incorporated by
reference into this Agreement and shall remain in effect from the date hereof
until the earlier of (i) the Closing and (ii) such date that is one year from
the date hereof .  This Section 5.1 shall survive any termination of
this Agreement.

     

    5.2           From
and after the Closing, the Company shall not redeem or repurchase any shares of
its capital stock, or take or cause to be taken any action, nor shall the Board
of Directors authorize any of the foregoing, to the extent such action would, or
would be reasonably likely to, result in any Subscriber or any group of
Subscribers related to any Subscriber or persons acting in concert with any
Subscriber to control or be deemed to control (as “control” is defined in 12
C.F.R. Part 303, Subpart E, or 12 C.F.R. Part 574) the Company or the Bank unless the Company
shall have given Subscriber sixty (60) days’ prior written notice of such
action, during which time Subscriber may transfer to a third party its Common
Stock or otherwise restructure its investment as may be mutually agreed with the
Company, in each case to the extent necessary to ensure that such Subscriber or
any group of persons related to such Subscriber or persons acting in concert
with such Subscriber do not control or would not be deemed to control the
Company or the Bank.

     

     

    
      
        
        

      

      
        13

         

      

      
        
        

      

    

     

     

    5.3           As
promptly as practicable following the Closing, the Company shall use its
reasonable best efforts to redeem in full all of the issued and outstanding
shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock Series A
sold to the U.S. Treasury on November 21, 2008 (the “TARP
Redemption”).

    

    5.4           From
the date of this Agreement until the earlier of (a) the Closing and (b) a
termination of this Agreement in accordance with Article VIII hereof, the
Company shall not and shall cause the Bank and
their respective representatives not to, directly or indirectly, (i) solicit,
initiate or knowingly encourage (including by way of providing information) the
submission of any inquiries, proposals or offers that constitute or may
reasonably be expected to lead to any Competing Transaction, (ii) engage in any
discussions or negotiations, or provide or cause to be provided any non-public
information or data relating to the Company or any the Bank in connection with,
or have any discussions with any person relating to, an actual or proposed
Competing Transaction, (iii) otherwise cooperate with or assist or participate
in, or facilitate any such inquiries, proposals, offers, discussions or
negotiations to make or implement any Competing Transaction or (iv) execute or
enter into, any letter of intent, agreement in principle, merger agreement,
acquisition agreement, option agreement or other similar agreement relating to
any Competing Transaction.  As used here, the term “Competing
Transaction” means any inquiry, proposal or offer, filing of any
regulatory application or notice (whether in draft or final form) or disclosure
of an intention to do any of the foregoing from any person relating to any
(v) direct or indirect acquisition or purchase of a business that
constitutes ten percent (10%) or more of the total revenues, net income, assets
or deposits of the Company and the Bank taken as a whole, (w) direct or
indirect acquisition or purchase of any class of debt or equity securities
representing five percent (5%) or more of the voting power of the Company or the
Bank, (x) issuance of any equity or debt securities by the Company or the Bank
to any person or group other than pursuant to Previously Disclosed benefit plans
as in effect as of the date hereof, (y) tender offer or exchange offer that
if consummated would result in any person beneficially owning ten percent (10%)
or more of any class of equity securities of the Company or (z) merger,
consolidation, business combination, recapitalization, liquidation, dissolution
or similar transaction involving the Company or the Bank, other than the
Offering and the transactions contemplated by this Agreement.

    

    5.5           The
Company shall provide for the registration, offering and sale of the shares of
Common Stock purchased by Subscriber hereunder in accordance with the terms of
Schedule III to
this Agreement.

    

    5.6           As
promptly as practicable following the TARP Redemption, the Bank shall use
reasonable best efforts to enter into an agreement with each of Messrs Ganz and
Sheehy, Ms. Yaptangco, Ms. Lauer, Ms. Carrillo and Ms. Goodwin (each, an “Executive”)
providing for the Bank, immediately following the execution thereof, to pay to
such Executive one half of the amount that would have been due to such Executive
pursuant to the severance agreement by and between such Executive and the Bank
(each, a “Change of Control
Agreement”) had the Offering constituted a “change of control” (as
defined in the applicable Change of Control Agreement) and the employment of
such Executive ceased (other than as a result of a “Termination for Cause,” as
defined in the applicable Change in Control Agreement), with the balance of such
amount payable if the employment of such Executive actually ceases (other than
as a result of a “Termination for Cause,” as defined in the applicable Change in
Control Agreement), in each case during the period beginning upon the Closing
and ending on the three (3) year anniversary thereof; provided that any such
Executive receiving payment pursuant to this Section 5.6 shall have executed a
customary waiver and release that, among other matters, provides for a waiver of
any right of payment, any claim or any other compensation relating to such
Executive’s Change of Control Agreement or similar agreement and with regard to
the Offering.

     

     

    
      
        
        

      

      
        14

         

      

      
        
        

      

    

     

     

    5.7           Subject
to regulatory approval, the Company shall use its reasonable best efforts to
enter into an employment agreement with Gregory Mitchell (“Mitchell”),
providing for Mitchell to be appointed Chief Executive Officer or President of
the Company, and to appoint Mitchell to the office of Chief Executive Officer or
President of the Company upon or promptly following the Closing.

     

    5.8           If
at anytime prior to the Closing, the Company becomes aware that any one or more
of the other subscribers in the Offering shall fail or refuse to purchase and
pay for any of shares of Common Stock which it or they have agreed to purchase
in the Offering (the “Defaulted
Shares”), and the failure or
refusal of such subscriber or subscribers, as the case may be, to purchase and
pay for the Defaulted Shares would result in aggregate gross proceeds from the
sale of shares of Common Stock in the Offering of less than $60,000,000.00, the
Company shall promptly notify (the “Default
Notification”) Subscriber and each other non-defaulting subscriber in the
Offering (the “Remaining
Subscribers”).  In such event, subject to the remainder of this
Section 5.8, each Remaining Subscriber shall have the right to purchase and pay
for at the Closing any or all of the Defaulted Shares at a purchase price of
$11.00 per Defaulted Share.  Each Remaining Subscriber may elect (an
“Election”) to exercise the right to
purchase and pay for Defaulted Shares by delivering written notice (each, an
“Election
Notice”), specifying the number of Defaulted Shares such Remaining
Subscriber elects to purchase and pay for, to the Company within 24 hours after
receipt of the Default Notification (the “Election
Period”).  Unless otherwise agreed by the Company, failure to
deliver in a timely manner an Election Notice to the Company shall be deemed to
be a waiver of any right to purchase any pay for Defaulted Shares.  In
the event that the Remaining Subscribers timely deliver Election Notices
representing a number of shares of Common Stock greater than the number of
Defaulted Shares, the number of Defaulted Shares that shall be purchased and
paid for at the Closing by each Remaining Subscriber shall be reduced pro rata,
based on the number of shares sought to be purchased pursuant to each such
Remaining Subscriber’s Election Notice; provided, that the Company may
determine, in its sole discretion, to give complete or partial preference in
connection with any such pro ration to Elections made by Remaining Subscribers
who would not, after giving effect to the Offering (including, for the avoidance
of doubt, any purchases of Defaulted Shares), (i) own, control or have the power
to vote shares of Voting Stock in excess of the Voting Ownership Limit or (ii)
own or control 10.0% or more of the Company’s total stockholder’s equity;
provided, further, that the Company may determine, in its sole discretion, to
reject any Elections made by Remaining Subscribers who would, after giving
effect to the Offering (including, for the avoidance of doubt, any purchases of
Defaulted Shares), (x) own, control or have the power to vote shares of Voting
Stock in excess of the Voting Ownership Limit or (y) own or control 10.0% or
more of the Company’s total stockholder’s equity.  In the event that
Subscriber shall purchase any Defaulted Shares pursuant to the foregoing,
Subscriber’s subscription and Purchase (and related Purchase Price) shall be
deemed to be, automatically and without further action on the part of Subscriber
or the Company, amended accordingly for all purposes under this
Agreement   Any action taken under this paragraph shall not
relieve any defaulting subscriber from liability in respect of any default or
breach of any such subscriber under its respective subscription
agreement.

     

    

    

    ARTICLE
VI

     

    [RESERVED]

     

    

    
      
        
        

      

      
        15

         

      

      
        
        

      

    

     

     

    ARTICLE
VII

     

    CLOSING
CONDITIONS

     

    7.1           The
obligation of the Company to consummate the Purchase is subject to the following
conditions:

    (a)           the
representations and warranties of Subscriber contained in Section 2.3 of this
Agreement shall be true and correct on and as of Closing in all material
respects (except for those representations and warranties which are qualified by
materiality, which shall be true and correct in all respects) with the same
effect as though such representations and warranties had been made on and as of
Closing (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specified date);

     

    (b)           at
or simultaneously with the Closing, the Company shall have raised gross proceeds
from the sale of shares of its Common Stock in the Offering at least equal to
$60,000,000.00 in the aggregate;

     

    (c)           requisite
shareholder approval required, if any, in connection with the shares of Common
Stock to be sold in the Offering, including without limitation the Common Stock,
for the purposes of Nasdaq Rule 5635 or any successor rule thereto shall have
been obtained;

    

    (d)           the
Company shall have received all approvals, consents or non-objections of all
applicable governmental agencies, authorities or instrumentalities having
supervisory or regulatory authority with respect to the Company or the Bank
(each, a “Governmental
Entity”), including but not limited to the Board of Governors of the
Federal Reserve System, the OTS and the FDIC, as applicable, that are required
prior to the Closing Date for the consummation of the Offering;

     

    (e)           the
full Purchase Price shall have been received by the Company;

     

    (f)           Subscriber
shall have duly executed the Investor Questionnaire;

    

    (g)           no
proceedings shall have been initiated or threatened by any Governmental Entity
or other governmental authority seeking to enjoin or otherwise restrain or to
obtain an award for damages in connection with the consummation of Transaction,
including without limitation the Offering and the Purchase contemplated hereby,
or which would reasonably be expected to result in a Material Adverse Effect;
and

    

    (h)           no
Governmental Entity shall have imposed any conditions or restrictions on the
Company or the Bank that would materially adversely impact the business
activities of the Company or the Bank or materially impair, impede or delay
certification by the FDIC of the Bank as being eligible to bid in connection
with the sale of failed depository institutions by the FDIC; and

    

    (i)           any
Interagency Notice of Change in Control with respect to the Company or the Bank
required to be submitted by Subscriber or any affiliate of Subscriber pursuant
to 12 U.S.C. § 1817(j) and 12 C.F.R. Part 303 required to consummate the
Offering shall have received the approval or non-objection of the Bank
Regulators and/or FDIC and the OTS, as applicable, to the reasonable
satisfaction of the Company.

    

    7.2           The
obligation of Subscriber to deliver the Authorization and the balance of the
Purchase Price to the Company pursuant to Section 1.3(a) hereof is subject to
the following conditions:

     

     

    
      
        
        

      

      
        16

         

      

      
        
        

      

    

     

    
 

    (a)           the
representations and warranties of the Company contained in Section 2.2 of this
Agreement shall be true and correct on and as of Closing in all material
respects except for those representations and warranties which are qualified by
materiality, which shall be true and correct in all respects) with the same
effect as though such representations and warranties had been made on and as of
Closing (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specified date);

     

    
      
         

      

      
        17

         

      

      
         

      

    

        (b)    requisite
shareholder approval required, if any, in connection with the shares of Common
Stock to be sold in the Offering, including without limitation the Common Stock,
for the purposes of Nasdaq Rule 5635 or any successor rule thereto shall have
been obtained;

     

    (c)           The
Class B Non-Voting Common Stock shall have been authorized under the Articles of
Incorporation, as amended, of the Company prior to the Closing;

     

    (d)           As
of and giving effect to the Closing and the consummation of the Offering on the
terms described herein, and assuming that no person or entity affiliated with
Subscriber or deemed to be acting in concert with Subscriber pursuant to 12
C.F.R. Part 303, Subpart E, or 12 C.F.R. Part 574 (or any other applicable
banking regulation) has subscribed for any shares of Common Stock in the
Offering (except to the extent that Subscriber has previously provided notice of
such subscription to the Company in writing), (i) Subscriber shall not own,
control or have the power to vote, shares of Voting Stock equal to 10.0% or more
of the aggregate number of outstanding shares of Voting Stock; and (ii)
Subscriber shall not own or control  in excess of 24.99% of the total
stockholder’s equity  of the Company;

     

    (e)           the
consummation of the Offering would not result in Subscriber or any of its
affiliates being deemed to have a direct or indirect controlling interest in the
Company or the Bank or otherwise require any of them to register as a savings
and loan holding company under the Savings and Loan Holding Company provisions
of the Home Owners’ Loan Act, as amended, and Subscriber shall have received a
written non-control determination from the Office of Thrift Supervision in form
and substance reasonably satisfactory to Subscriber to such effect;

     

    (f)           no
proceedings shall have been initiated or threatened by any Governmental Entity
or other governmental authority seeking to enjoin or otherwise restrain or to
obtain an award for damages in connection with the consummation of Transaction,
including without limitation the Offering and the Purchase contemplated
hereby;

     

    (g)           at
or simultaneously with the Closing, the Company shall have raised gross proceeds
from the sale of shares of its Common Stock in the Offering at least equal to
$40,000,000.00 in the aggregate;

     

     (h)           since
the date of this Agreement, there shall not have been any Material Adverse
Effect; and

     

    (i)           no
Governmental Entity shall have imposed any conditions or restrictions on the
Company or the Bank that would materially adversely impact the business
activities of the Company or the Bank or materially impair, impede or delay
certification by the FDIC of the Bank as being eligible to bid in connection
with the sale of failed depository institutions by the FDIC; and

     

    (j)           since
the date of this Agreement, there shall have been no grants or awards of Company
Stock Options by the Company and the Company shall have cancelled or otherwise
terminated (or shall, as soon as permitted under applicable law following the
Closing Date, cancel or otherwise terminate) all 

     

     

    
      
        
        

      

      
        18

         

      

      
        
        

      

    

     

     

    Company
Stock Options and the consideration paid by the Company in respect of such
cancellation and/or termination shall be equal to $3.00 per Company Stock
Option.

     

     

    ARTICLE
VIII

     

    TERMINATION

     

        8.1   Termination;
Certain Fees.

     

    (a)    This
Agreement may be terminated prior to the Closing:

     

           (i)    By mutual written agreement of the Company and
Subscriber;

     

        (ii)    by the
Company or Subscriber, upon 15 days’ written notice to the other party, in the
event that the Closing Date does not occur on or before December 31, 2010 or
such later date, if any, as Subscriber and the Company agree upon in writing (as
such date may be extended, the “Outside
Date”); provided, however, that the right to terminate this Agreement
pursuant to this Section 8.1(a)(ii) shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the cause
of, or shall have resulted in, the failure of the Closing Date to occur on or
prior to the Outside Date; or

     

    (iii)           by
the Company or Subscriber, upon written notice to the other party, in the event
that any Governmental Entity shall have issued any order, decree or injunction
or taken any other action restraining, enjoining or prohibiting any of the
transactions contemplated by this Agreement, and such order, decree, injunction
or other action shall have become final and nonappealable; or

     

    (iv)           by
the Company, in its sole discretion, if on June 17, 2010 (the “Measurement
Date”), other than as a result, directly or indirectly, of any actions or
failures to act of the Company, the Company has not received executed
counterparts to subscription agreements representing subscriptions from
subscribers in the Offering to purchase shares of the Common Stock having an
aggregate purchase price of at least $25,000,000.00; provided that if the Company
has not provided the Subscriber with written notice of such termination within
five (5) business days of the Measurement Date, the Company shall be deemed to
have irrevocably waived its termination right pursuant to this clause (iv); and
provided, further that upon any
termination by the Company pursuant to this clause (iv), the Company must also
so terminate the subscription agreements of all other subscribers with respect
to the Offering concurrently with such termination.

     

    (b)           In
the event of any termination of this Agreement by the Company pursuant to clause
(iv) of Section 8.1(a), the Escrow Agent shall, in accordance with the terms of
the Escrow Agreement, promptly release to the Subscriber the full amount of the
Deposit and any interest earned thereon as of such date.

     

    (c)           In
the event that the Offering is not consummated as a result, directly or
indirectly, of a breach of this Agreement by the Company that causes or results
in a failure of any of the conditions specified in Article VII hereof to be
satisfied as of the Outside Date, and Subscriber has terminated this Agreement
pursuant to Section 8.1(a)(ii) hereof, the Company shall pay Subscriber an
aggregate fee equal to the Company Termination Fee by wire transfer of same-day
funds on the first business day 

     

     

    
      
        
        

      

      
        19

         

      

      
        
        

      

    

     

     

    following
the date of such termination.  For the purposes of this agreement, the
term “Company
Termination Fee” shall mean an amount equal to the product of (i)
$1,000,000.00 and (ii) (a) the Purchase Price divided by (b) the aggregate
purchase price for all shares of Common Stock subscribed for by all of the
investors in the Offering.

     

    (d)           In
the event that the Offering is not consummated as a result, directly or
indirectly, of a breach of this Agreement by Subscriber that causes or results
in a failure of any of the conditions specified in Article VII hereof to be
satisfied as of the Outside Date, and the Company has terminated this Agreement
pursuant to Section 8.1(a)(ii) hereof, the Escrow Agent shall, in accordance
with the terms of
the Escrow Agreement, release to the Company from the Subscriber’s Deposit, an
amount (the “Investor
Liquidated Damages Amount”) equal to the lesser of (i) the full amount of
the Deposit and (ii) the product of (A) $1,500,000.00 and (B) (I) the Purchase
Price divided by (II)
the aggregate purchase price for all shares of Common Stock subscribed for by
all of the investors in the Offering.  The parties hereto acknowledge
and agree that the Investor Liquidated Damages Amount shall constitute the
Company’s sole remedy in the event that any of the provisions of this Agreement
are not performed in accordance with their specific terms or are otherwise
breached by Subscriber.

     

    (e)           In
the event of any termination of this Agreement as provided in Section 8.1(a),
this Agreement (other than Sections 8.1(b), 8.1(c), 8.1(d), 8.1(e) and Article
IX and Article X, which shall remain in full force and effect) shall forthwith
become wholly void and of no further force and effect; provided that nothing
herein shall relieve any party from liability for breach of this Agreement prior
to such termination.

     

    ARTICLE
IX

     

    CONFIDENTIALITY

     

    9.1           Each
party agrees to keep all information furnished by another party pursuant to this
Agreement confidential (“Confidential
Information”) except such information that (i) is or becomes generally
available to the public (other than as a result of a disclosure by the receiving
party in violation of this Agreement), (ii) was available to the receiving
party on a non-confidential basis prior to its disclosure by the disclosing
party, (iii) becomes available to the receiving party on a non-confidential
basis from a person other than the disclosing party who is not known by the
receiving party to be otherwise bound by a confidentiality agreement with the
disclosing party, or is not known by the receiving party to be otherwise
prohibited from transmitting the information to the receiving party, (iv) the
disclosing party agrees may be disclosed or (v) the receiving party is requested
pursuant to, or required by, law, regulation, legal process or regulatory
authority to disclose, and neither party hereto shall release or disclose such
information to any other person, except its auditors, attorneys, financial
advisors, or other consultants and advisors. In the event that any party is
requested pursuant to, or required by, law, regulation, legal process or
regulatory authority to disclose any Confidential Information, such party agrees
that it will provide the other party with prompt notice of such request(s) or
requirement(s) (to the extent legally permitted) to enable the non-disclosing
party to seek an appropriate protective order (at the non-disclosing party’s
sole cost and expense), waive compliance with the provisions of this Agreement
or take other appropriate action.  Each party agrees to use its good
faith efforts to assist the other party in obtaining such a protective
order.  If, in the absence of a protective order or the receipt of a
waiver hereunder, the disclosing party is nonetheless, in the opinion of its
counsel, compelled to disclose the Confidential Information or else stand liable
for contempt or suffer other censure or significant penalty, such party, after
notice to the non-disclosing party (to the extent legally permitted), may
disclose such Confidential Information that the disclosing party is compelled to
disclose and shall exercise all reasonable efforts to obtain reasonable
assurances that confidential treatment will be accorded to such disclosed
Confidential Information.  For the avoidance of doubt, the

     

     

    
      
        
        

      

      
        20

         

      

      
        
        

      

    

     

     

    Company
may present this Agreement and the information provided in the Investor
Questionnaire to such parties as it deems advisable if compelled by law or
called upon to establish the availability under any Federal or state securities
laws of an exemption from registration of the Offering.

    ARTICLE
X

     

    MISCELLANEOUS

     

    10.1           Any
notice or other communication given hereunder shall be deemed sufficient if in
writing and sent by registered or certified mail, return receipt requested,
international courier or delivered by hand against written receipt therefor, or
by confirmed facsimile transmission, to the following addresses, or such other
address as may be furnished to the other parties as herein
provided:

     

    

    

    To the
Bank:               First
PacTrust Bancorp, Inc.

    610 Bay Boulevard

    Chula Vista, California
91910

    

    Attention:    Hans
Ganz

    President
and Chief Executive Officer

    Fax:  (619)
446-6200

     

    To the
Subscriber:        At the address set
forth on the signature page hereto.

     

    Unless
otherwise expressly provided herein, notices shall be deemed to have been given
on the date of mailing, except notice of change of address, which shall be
deemed to have been given when received.

     

    10.2           This
Agreement shall not be changed, modified or amended except in writing and signed
by the parties to be charged, and this Agreement may not be discharged except by
performance in accordance with its terms or by a writing signed by the party
to be
charged.

     

    10.3           Except
as otherwise provided herein, this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and assigns. If the Subscriber is more than
one person, the obligation of such Subscriber shall be joint and several and the
agreements, representations, warranties, covenants and acknowledgments herein
contained shall be deemed to be made by and be binding upon each such person and
his or her heirs, executors, administrators, successors and legal
representatives.  The obligations of the parties may not be assigned
except in the event of a merger, consolidation or other reorganization
undertaken for a reason other than to assign a party’s obligation, under this
Agreement.

     

    10.4           This
Agreement contains the entire agreement of the parties with respect to the
matters set forth herein and there are no representations, covenants or other
agreements except as stated or referred to herein; provided, however, that, if
applicable, any confidentiality agreement between the Company and the Subscriber
shall remain in full force and effect except to the extent inconsistent with
this Agreement.

     

    10.5           [Reserved.]

     

     

    
      
        
        

      

      
        21

         

      

      
        
        

      

    

     

     

     

    10.6           In
the event of a dispute regarding this Agreement that results in litigation or
arbitration, the prevailing party, as determined by the finder of facts, shall
be entitled to an award of reasonable attorneys’ fees.

     

    10.7           Except
to the extent governed by federal law applicable to national savings
associations, all questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York.  Each
party hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in New York County, New York, of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any
right to service process in any manner permitted by law.

     

    10.8           The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.

     

    10.9           This
Agreement may be executed in one or more counterparts each of which shall be
deemed an original, but all of which shall together constitute one and the same
instrument.  Electronic transmissions of
signature pages, whether via email, facsimile or other means, shall be effective
as original signatures for all purposes.

    

    10.10          In
the event that any one or more of the provisions contained herein, or the
application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired or affected, it being
intended that the Company’s and the Subscriber’s rights and privileges shall be
enforceable to the fullest extent permitted by law.

     

    10.11         Except
as may be required by applicable law, the Company shall not issue or make, or
cause to have issued or made, any public release or announcement concerning this
Agreement, including Subscriber’s identity, or the transactions contemplated
hereby, including but not limited to the offering of Common Stock to any other
subscriber, unless Subscriber shall have previously consented to such public
release or announcement in writing, which consent may be granted or withheld in
Subscriber’s sole discretion. Any such press release or public statement
required by applicable law naming Subscriber shall only be made by the Company
after reasonable notice and opportunity for review by Subscriber.

     

    10.12         Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, including, with respect to the Company
to the extent shareholder approvals are required (including by virtue of Nasdaq
Rule 5635 or any successor rule thereto) to consummate the Offering, taking all
actions (including making all necessary filings in connection therewith)
necessary, in accordance with applicable law, regulation and its certificate of
incorporation and bylaws, to call and hold a shareholders meeting as promptly as
reasonably practicable following the date hereof, recommending that its
shareholders vote to approve the transactions contemplated by the offering at
such 

     

     

    
      
        
        

      

      
        22

         

      

      
        
        

      

    

     

     

    meeting,
and using its reasonable best efforts to obtain such approvals, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement.

    

    10.13         The
parties agree that irreparable damage would occur and that the parties would not
have any adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached by the Company.  It is accordingly agreed that
Subscriber shall be entitled to an injunction or injunctions to prevent breaches
of this
Agreement by the Company and to enforce specifically the terms and provisions of
this Agreement against the Company, in addition to any other remedy to which it
is entitled at law or in equity.

    

     

    NOTE:
YOU MUST COMPLETE AND SIGN THE INVESTOR QUESTIONNAIRE ATTACHED
HERETO.

     

    Signatures
appear on the following page

     

    
      
         

      

      
        23

         

      

      
         

      

    

     

    

     

    IN WITNESS WHEREOF, the
undersigned has caused this Agreement to be executed by its duly authorized
representative as of the date set forth below.

     

     

    
      	 
      	 
      	 
      
	
              Signature
      of Subscriber

            	 
      	
              Signature
      of Joint Subscriber, if applicable

            
	
               

               

               
      

            	 
      	 
      
	
              Name
      of Subscriber (please print)

            	 
      	
              Name
      of Joint Subscriber, if applicable (please print)

            
	 
      	 
      	 
      
	
              Please
      indicate name and capacity of person signing above, if the Subscriber is
      not a natural person

            	 
      	
              Please
      indicate name and capacity of person signing above, if the joint
      Subscriber is not a natural person

            
	 
      	 
      	 
      
	
               

               
      

            	 
      	 
      
	
              Name
      in which shares are to be registered (if different)

            	 
      	
              Name
      of Joint Subscriber, if applicable (please print)

            
	 
      	 
      	 
      
	 
      	 
      	
              Date:  ___________________________,
      2010

            

    

     

    If the
Subscriber is a natural person, the Subscriber’s State of residence
is:

     

    If there
are Joint Subscribers, please check one:

    
      	
               
      

            	
              £

            	
              Joint
      Tenants with Rights of Survivorship

            

    

    
      	
               
      

            	
              £

            	
              Tenants-in-Common

            

    

    
      	
               
      

            	
              £

            	
              Community
      Property

            

    

    If the
Subscriber is not a natural person, it:

     

    ·      is
the following type of
organization:                                                                                                                         

     

    ·      is
organized under the laws
of:                                                                                                                         

     

    ·      has
its principal place of business
in:                                                                                                                         

     

    ·      was
formed for the purpose
of:                                                                                                                         

     

    Subscriber’s
Social Security Number or
EIN:                                                                                                                                    

     

    
      	
                                                                              

              Business
      Address - Street

                                                                              

              City                  State                 Zip
      Code

              Attn:
                                                            

              Telephone
      No.:                                       

              Facsimile
      No.:                                        

              Email
      Address:                                      
      

            	
                                                                              

              Mailing
      Address - Street (if different)

                                                                              

              City                  State                 Zip
      Code

              Attn:
                                                            

              Telephone
      No.:                                       

              Facsimile
      No.:                                        

              Email
      Address:                                       

            

    

     

    

    
      
         

      

      
        24

         

      

      
         

      

    

     

    Number
of shares subscribed for:                                                                                                                                   

    Purchase
Price:                                                                                                                                   

     

    You must
pay the Purchase Price pursuant to the instructions to be provided by
lender.  THE
SUBSCRIBER IS RESPONSIBLE FOR ALL WIRE TRANSFER FEES IMPOSED BY THE SUBSCRIBER’S
BANK.  Wire funds to:

    

    Bank: The Bank of New York
Mellon

    ABA Number: 021-000-018

    Account name to credit:
445171

    Account number to credit: First
PacTrust Bancorp Subscription

    

    

    NOTE:
THE FOLLOWING MUST BE COMPLETED

    Name of
DTC Participant:                                                                                                                                   

    DTC
Participant Number:                                                                                                                                   

     

    Subscriber’s
Account Number with DTC Participant:                                                                                                                                   

     

    
      
         

      

      
        25

         

      

      
         

      

    

    Accepted
as of the ___ day of ___________, 2010.

     

     
 

     

    FIRST
PACTRUST BANCORP, INC.

     

    

     

    By:        _________________________________________________________

    Hans
Ganz

    President
and Chief Executive Officer

    
      
         

      

      
         

         

      

      
         

      

    

    ACCREDITED
INVESTOR QUESTIONNAIRE

    

    (ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)

    

    To:           FirstPactrust
Bancorp, Inc.:

    

    This
Accredited Investor Questionnaire (“Questionnaire”)
must be completed by each potential investor in connection with the private
offering by First PacTrust Bancorp, Inc., a
Maryland corporation (the “Company”), of up to _____ shares of the
Company’s common stock, par value $.01 per share,
including, to the extent required to be issued to permit an investor to with
regulatory requirements and policies applicable to such investor, an
indeterminate amount of Class B non-voting common stock, par value $.01 per
share, (collectively the “Common Stock”).  The Common Stock is being
offered and sold by the Company without registration under the Securities Act of
1933, as amended (the “Securities Act”), and
the securities laws of certain states, in reliance on the exemptions contained
in Section 4(2) of the Securities Act and on Regulation D promulgated thereunder
and in reliance on similar exemptions under applicable state laws. The Company
must determine that a potential investor meets certain suitability requirements
before offering or selling the Common Stock to such investor. The purpose of
this Questionnaire is to assure the Company that each investor will meet the
applicable suitability requirements. The information supplied by you will be
used in determining whether you meet such criteria, and reliance upon the
private offering exemptions from registration is based in part on the
information herein supplied.

     

    

     

    This
Questionnaire does not constitute an offer to sell or a solicitation of an offer
to buy any security. Your answers will be kept strictly confidential. However,
by signing this Questionnaire, you will be authorizing the Company to provide a
completed copy of this Questionnaire to such parties as the Company deems
appropriate in order to ensure that the offer and sale of the Common Stock will
not result in a violation of the Securities Act or the securities laws of any
state and that you otherwise satisfy the suitability standards applicable to
purchasers of the Common Stock. All potential investors must answer all
applicable questions and complete, date and sign this Questionnaire. Please
print or type your responses and attach additional sheets of paper if necessary
to complete your answers to any item. Please attach to this Questionnaire, if
applicable, a copy of your (A) Operating or Partnership Agreement, (B) Trust
Document or (C) Articles of Incorporation.

    

    
      
         

      

      
         

         

      

      
         

      

    

    

    1.  Background
Information.

    

    (a) Name of Individual or Investing
Entity:  _______________________________________

    

    (b)
Address:       ______________________________

    ______________________________

    

    Address for correspondence, if
different: ______________________________

    ______________________________

    

    (c) Telephone
Number:  __________________

    

    If a corporation,
partnership, limited liability company, trust or other
entity:

    

    

    (d) Description of
Business:        ___________________________________________

    ___________________________________________

    ___________________________________________

    

    (e) Federal Tax I.D. Number:
___________________

    

    (f) Individual(s) authorized to execute
documents on behalf of the investing entity in connection with this
investment:

    

    Name:                   ______________________________

    Position or
Title:     ______________________________

    

    Name:                    ______________________________

    Position or
Title:      ______________________________

    

    Comment:  A
power of attorney is required if the partnership agreement or trust agreement
does not specifically authorize the above-named individual(s) to make this
investment for the partnership or trust.  In the case of a corporate
investor, corporate resolutions authorizing this investment and specifying the
individuals authorized to execute investment documents on behalf of the
corporation are required to be delivered herewith.

    

    (g) Type of Investing
Entity:

    

    Corporation                                                                           _____

    Limited Liability
Company                                                      _____

    General
Partnership                                                                _____

    Limited Partnership                _____

       Revocable
Trust                                                                     _____

    Irrevocable
Trust                                                                    _____

    Pension or Profit Sharing Plan
or

         Trust
(Indicate Type of Plan or
Trust)                                 _____

    Individual Retirement
Account                                                  _____

    

    Comment:  The
beneficiary of an Individual Retirement Account also must provide a completed
Questionnaire (Natural Persons).

    
      
         

      

      
         

         

      

      
         

      

    

    

    Estate                                                                           _____

    Other                                                                           _____

    

    (h) Place of
Organization:        ________________________

    

    (i) Date of
Organization:          ________________________

    

    (j) Was
the entity organized for the specific purpose of investing in the
Company?

    

               Yes____     No____

    

    (k) Number of Equity
Owners:   ___________________

    

    Comment:  An
“equity owner,” for the purposes of this Questionnaire, means (1) the
stockholders in the case of a corporation, (2) the limited partners only in the
case of a limited partnership, (3) the general partner in the case of a general
partnership, (4) the grantor(s) in the case of a trust revocable at the sole
option of the grantor(s), (5) the members in the case of a limited liability
company, or (6) the beneficiaries in the case of other trusts or of
estates.

    

    2.  Suitable
Purchasers.

    

    All purchasers will be required to
represent that they meet at least one of the following
requirements.  Please indicate which of the
following you meet by initialing in the space(s) provided:

    

    (a) The individual purchaser (if a
natural person) or all of the equity
owners of the investing entity meet (i), (ii), (iii) or (iv) below:

    

    
      	
               
      

            	
              ___

            	
              (i)

            	
              Have
      an individual net worth (or joint net worth with spouse) in excess of
      $1,000,000;

            

    

    

    
      	
               
      

            	
              ___

            	
              (ii)

            	
              Had
      an individual income (not including any amounts attributable to spouse or
      to property owned by spouse) of more than $200,000 in each of the previous
      two (2) calendar years and a reasonable expectation to reach the same
      income level in the current year;

            

    

    

    
      	
               
      

            	
              ___

            	
              (iii)

            	
              Had
      a joint income with a spouse in excess of $300,000 in each of the previous
      two (2) calendar years and a reasonable expectation to reach the same
      income level in the current year;
or

            

    

    

    
      	
               
      

            	
              ___

            	
              (iv)

            	
              Is
      an executive officer or director of the
Company.

            

    

    

    

    (b) The purchaser is any of the
following entities (indicate by initialing the appropriate
line(s)):

    

    
      	
               
      

            	
              ___

            	
              (i)

            	
              A
      bank or savings and loan association, whether acting in its individual or
      fiduciary capacity.

            

    

    

    
      	
               
      

            	
              ___

            	
              (ii)

            	
              A
      broker-dealer registered pursuant to Section 15 of the Securities Exchange
      Act of 1934.

            

    

    
      
         

      

      
         

         

      

      
         

      

    

    
       

      
 

      
        	
                 
      

              	
                ___

              	
                (iii)

              	
                An
      insurance company.

              

      

       

    

    
      	
               
      

            	
              ___

            	
              (iv)

            	
              An
      investment company registered under the Investment Company Act of 1940 or
      a business development company as defined in said
  Act.

            

    

    

    
      	
               
      

            	
              ___

            	
              (v)

            	
              A
      Small Business Investment Company licensed by the U.S. Small Business
      Administration.

            

    

    

    
      	
               
      

            	
              ___

            	
              (vi)

            	
              A
      plan established and maintained by a state, its political subdivisions or
      any agency or instrumentality thereof, for the benefit of its employees,
      if such plan has total assets in excess of
  $5,000,000.

            

    

    

    
      	
               
      

            	
              ___

            	
              (vii)

            	
              An
      employee benefit plan within the meaning of Title I of the Employee
      Retirement Income Security Act of 1974 (“ERISA”), if the investment
      decision with respect to this investment is made by a plan fiduciary which
      is either a bank, savings and loan association, insurance company or
      registered investment adviser, or if the employee benefit plan has total
      assets in excess of $5,000,000, or if a self-directed plan, its investment
      decisions are made solely by persons who are accredited
      investors.

            

    

    

    
      	
               
      

            	
              ___

            	
              (viii)

            	
              A
      private business development company as defined in the Investment Company
      Act of 1940.

            

    

    

    
      	
               
      

            	
              ___

            	
              (ix)

            	
              A
      corporation, Massachusetts or similar business trust or partnership, or
      any tax exempt organization as defined in Section 501(c)(3) of the
      Internal Revenue Code, not formed for the specific purpose of acquiring
      the Common Stock of the Company, with total assets in excess of
      $5,000,000.

            

    

    

    
      	
               
      

            	
              ___

            	
              (x)

            	
              A
      trust with total assets in excess of $5,000,000, not formed for the
      specific purpose of acquiring securities being acquired hereby, whose
      purchase is directed by a person who has such knowledge and experience in
      financial and business matters that such person is capable of evaluating
      the merits and risks of an investment in the Common
  Stock.

            

    

    

    3.  Additional
Information.

    

    (a) If for a
Trust:

    

    A trust
must attach a copy of its Declaration of Trust or other governing instrument, as
amended, as well as all other documents that authorize the trust to invest in
the Common Stock.  All documentation must be complete and
correct.

    

    (b) If for a Retirement
Plan:

    

    The
retirement plan must attach copies of all documents governing the retirement
plan as well as all other documents authorizing the retirement plan to invest in
the Common Stock.  Include, as necessary, documents defining permitted
investments by the retirement plan and demonstrating the authority of the
signing individual to act on behalf of the retirement plan.  All
documentation must be complete and correct.

    

    
      
         

      

      
         

         

      

      
         

      

    

    4.  Other
Certification.

    

    (a) If by a
Corporation:

    

    By signing the Signature Page to this
Questionnaire, the undersigned certifies the following:

    

    
      	
               
      

            	
              (i)

            	
              That
      the corporation’s purchase of the Common Stock will be solely for the
      corporation’s own account and not for the account of any other person or
      entity; and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              That
      the corporation’s name, address of principal office, place of
      incorporation and Federal taxpayer identification number, as set forth in
      this Questionnaire, are true, correct and
  complete.

            

    

    

    (b) If by a
Partnership:

    

    By signing the Signature Page to this
Questionnaire, the undersigned certifies on behalf of the subscribing
partnership the following:

    

    
      	
               
      

            	
              (i)

            	
              That
      the subscribing partnership’s purchase of the Common Stock will be solely
      for the subscribing partnership’s own account and not for the account of
      any other person or entity; and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              That
      the subscribing partnership’s name, address of principal office, place of
      formation and Federal taxpayer identification number as set forth in this
      Questionnaire are true, correct and
complete.

            

    

    

    

    (c) If by a Trust (Other than a
Retirement-Related Trust) or Estate:

    

    By signing the Signature Page to this
Questionnaire, the undersigned certifies the following:

    

    
      	
               
      

            	
              (i)

            	
              That
      the trust’s or estate’s purchase of the Common Stock will be solely for
      the trust’s or estate’s own account and not for the account of any other
      person or entity;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              That
      the trust’s or estate’s purchase of the Common Stock is within the
      investment powers and authority of the trust or estate (as set forth in
      the declaration of trust or other governing instrument) and that all
      necessary consents, approvals and authorizations for such purchase have
      been obtained and that each person who signs the Signature Page has all
      requisite power and authority as trustee or executor or administrator to
      execute this Questionnaire and the Subscription Agreement on behalf of the
      trust or estate;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              That
      the trust has not been established in connection with either (aa) an
      employee benefit plan (as defined in Section 3(3) of ERISA), whether or
      not subject to the provisions of Title I of ERISA, or (bb) a plan
      described in Section 4975(e)(1) of the Internal Revenue
    Code;

            

    

    
      
         

      

      
         

         

      

      
         

      

    

    
      

      
        	
                 
      

              	
                (iv)

              	
                That
      the trust’s name, address of principal office, place of formation and
      Federal taxpayer identification number as set forth in this Questionnaire
      are true, correct and
complete.

              

      

    

     

    

    (d) If by a Retirement
Plan:

    

    By signing the Signature Page to this
Questionnaire, the undersigned certifies the following:

    

    
      	
               
      

            	
              (i)

            	
              That
      the retirement plan’s purchase of the Common Stock will be solely for the
      retirement plan’s own account and not for the account of any other person
      or entity; and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              That
      the retirement plan’s governing documents duly authorize the type of
      investment contemplated herein and the undersigned is authorized and
      empowered to make such investment on behalf of the retirement
      plan.

            

    

    

    (e) If by a Limited Liability
Company:

    

    By
signing the Signature Page to this Questionnaire, the undersigned certifies the
following:

    

    
      	
               
      

            	
              (i)

            	
              That
      the limited liability company’s purchase of the Common Stock will be
      solely for its own account and not for the account of any other person or
      entity; and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              That
      the limited liability company’s name, address of principal office, place
      of organization and Federal taxpayer identification number, as set forth
      in this Questionnaire, are true, correct and
  complete.

            

    

    

    

    5.  Reliance by the
Company.

    

    (a) The answers to the above questions
are complete and correct and may be relied upon by the Company and its
affiliates in determining whether the offering in connection with which the
undersigned has executed this Questionnaire is exempt from registration under
the Securities Act;

    

    (b) The undersigned will notify the
Company and its affiliates immediately of any material change in any statement
made herein or any event resulting in the omission of any statement required to
be made herein that occurs prior to the acceptance of the Subscription
Agreement;

    

    (c) The person signing this
Questionnaire on behalf of the investing entity has been duly authorized to
acquire the Common Stock and sign the Subscription Agreement on behalf of the
entity and, further, that the undersigned entity has all requisite authority to
purchase the Common Stock and enter into the Subscription Agreement;
and

    

    (d) The undersigned hereby certifies
that they have read the entire Subscription Agreement and understand the
contents thereof.

    

    [Signature
page follows]

    
      
         

      

      
         

         

      

      
         

      

    

    

    
      	
              A.

            	
              FOR
      EXECUTION BY AN INDIVIDUAL

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      
	 
      	
              Date

            	
              Print Name:

            	 
      
	 
      	 
      	 
      	 
      
	
              B.

            	
              FOR
      EXECUTION BY AN ENTITY:

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
                          Entity
      Name:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      
	 
      	
              Date

            	
              Print Name:

            	 
      
	 
      	 
      	 
      	 
      
	
              C.

            	
              ADDITIONAL
      SIGNATURES (if required by partnership, corporation or trust
      document):

            
	 
      	 
      	 
      	 
      
	 
      	 
      	
                          Entity
      Name:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      
	 
      	
              Date

            	
              Print Name:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                          Entity
      Name:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
              By:

            	 
      
	 
      	
              Date

            	
              Print Name:

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

    

    

    

    *UNLESS
(i) the trust has total assets in excess of $5,000,000; (ii) the trust was not
formed for the specific purpose of acquiring the Common Stock; and (iii) the
purchase by the trust is directed by a person who has such knowledge and
experience in financial and business matters that such person is capable of
evaluating the merits and risks of an investment in the Common Stock, the grantor(s) of the trust
also must provide a completed Questionnaire (Natural
Persons).

    

    **For
purposes of this Questionnaire, a purchaser’s “net worth” is equal to the excess
of total assets at fair market value over total liabilities.

    

    ***For
purposes of this Questionnaire, “income” means adjusted gross income, as
reported for Federal income tax purposes, less any income attributable to a
spouse or property owned by a spouse, increased by the following amounts (but
not in­cluding any amounts attributable to a spouse or to property owned by
a spouse): (i) the amount of any tax-exempt interest income under Section 103 of
the Internal Revenue Code of 1986, as amended (the “Code”) received, (ii) the
amount of losses claimed as a limited partner in a limited partnership as
reported on Schedule E of Form 1040, and (iii) any deduction claimed for
depletion under Section 611 et. seq. of the Code.

    
      
         

      

      
         

         

      

      
         

      

    

     

     

    SCHEDULE
III

    REGISTRATION
RIGHTS

    

    

    Defined
terms used but not defined in this Schedule III shall have the meaning ascribed
to such terms in the agreement (including all schedules, annexes and exhibits
thereto, the “Agreement”) to which this Schedule III is attached.

    

    (a)           The
Company shall use its reasonable best efforts to, as soon as practicable
following the Closing Date, but in no event later than  the 30th
business day following the Closing Date, but subject to delay as set forth in
paragraph (c) below (in which case as soon as possible after the lapse of such
postponement or suspension in accordance with the terms thereof) (the
“Registration Deadline’), file with the Securities and Exchange Commission
(“SEC”) a Shelf Registration Statement relating to the offer and sale from time
to time of all of the Registrable Securities by Subscriber and the other
subscribers in the Offering, and the direct and indirect transferees of
Subscriber and such other subscribers (Subscriber, such other subscribers and
such direct and indirect transferees, collectively, the “Holders”), and shall,
if such Shelf Registration Statement is not automatically effective, use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act as soon as possible after
filing.  Notwithstanding anything to the contrary in this paragraph
(a), the Company shall not be required to register any Registrable Securities
pursuant to this paragraph (a) during any period (not to exceed 180 days)
following the closing of the completion of a distribution of securities offered
by the Company that would cause the Company to breach a lock-up provision
contained in the underwriting agreement for such distribution, and in such event
the “Registration Deadline” shall be deemed automatically extended for such
period.

    

    (b)           The
Company shall use its reasonable best efforts to keep such Shelf Registration
Statement continuously effective under the Securities Act in order to permit the
Shelf Prospectus forming a part thereof to be usable by Subscriber (including by
filing post-effective amendments to such Shelf Registration Statement (or a new
Shelf Registration Statement if the initial Shelf Registration Statement
expires)) until the earlier of (i) the date as of which all of Subscriber’s
Registrable Securities have been sold (A) pursuant to the Shelf Registration
Statement or another Registration Statement filed under the Securities Act (but
in no event prior to any applicable period referred to in Section 4(3) of the
Securities Act and Rule 174 thereunder) and/or (B) to the public in compliance
with Rule 144 under the Securities Act and (ii) the first anniversary of the
Closing (or, if Subscriber is or becomes an officer or member of the Board of
Directors of the Company, the fifth anniversary of the Closing)  (such
period of effectiveness, the “Shelf Period”).  The Company shall not
be deemed to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the Shelf Period if the Company
voluntarily takes any action or omits to take any action that would result in
Subscriber thereby not being able to offer and sell any Registrable Securities
pursuant to such Shelf Registration Statement during the Shelf Period, unless
such action or omission is required by applicable law and except as set forth in
paragraph (c) below.  The Company shall use its reasonable best
efforts to meet (and continue to meet) the registrant eligibility requirements
of Form S-3 during the Shelf Period.

    

    (c)           The
Company shall  not be required to effect a registration pursuant to
Schedule III with respect to securities that are not Registrable Securities
and shall be entitled to postpone  the filing or initial effectiveness
of, or suspend the use of, a Shelf Registration Statement if the Company
notifies  Subscriber in writing that in the good faith judgment of
the  Chief Executive Officer or the Chief Financial Officer of the
Company such registration, offering or use would be  materially
detrimental  to  the Company or any material transaction
under consideration by the Company or would require the disclosure of
information that has not been, and is not otherwise required to be, disclosed to
the public, the premature disclosure of which would materially
detrimental  to the Company.  No such postponement or
suspension shall exceed 

     

     

    
      
        
        

      

      
        
        

         

      

      
        
        

      

    

     

     

    60 consecutive
days, no subsequent such postponement or suspension shall commence fewer than 15
days following the expiration of any preceding period, and the aggregate of all
such postponements or suspensions shall not exceed 150 days in any 360-day
period. Notwithstanding any other provision of this Schedule III, but subject to
the obligations of the Company in paragraphs (a) and (b) above, the Registration
Deadline shall be extended if, for reasons beyond the reasonable control of the
Company, any of the following (an “Interruption Event”) shall occur: (i) the SEC
refuses to declare the applicable Registration Statement effective; (ii) if
after it has become effective, such Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC such that
the Registration Statement shall not be effective; or (iii) if the conditions to
closing specified in the underwriting agreement, if any, entered into in
connection with such Registration Statement are not satisfied and are not
otherwise waived. If an Interruption Event occurs, the Registration Deadline
shall automatically be extended until thirty (30) days after all Interruption
Events shall have ceased.

    

    (d)           The
Company shall use its reasonable best efforts so long as a Holder owns any
Registrable Securities to file the reports required to be filed by it under the
Securities Act and the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and the rules and regulations adopted by the SEC thereunder,
and it will take such further action as Subscriber may reasonably request, all
to the extent required from time to time to enable Subscriber to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (i) Rule 144 or 144A or Regulation
S under the Securities Act, as such Rules may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the
SEC.  Upon the written request of Subscriber, the Company will deliver
to Subscriber a written statement as to whether it has complied with such
requirements and, if not, the specifics thereof.

    

    (e)           Subscriber
shall, promptly on the Company’s request, (i) furnish to the Company such
information regarding Subscriber, the Registrable Securities held by Subscriber,
the manner of holding any interests therein, and distribution of such
Registrable Securities, as the Company may from time to time reasonably request
in writing, and (ii) provide such consents as the Company may reasonably require
with respect to disclosure of the content of the disclosures and any
identification of Subscriber or its Registrable Securities or the circumstances
in which they are held. Subscriber shall, upon receipt of any notice from the
Company if  (i) the SEC requests any amendment or supplement to, or
any additional information in respect of, any Registration Statement or related
prospectus, (ii) the SEC issues any stop order suspending the effectiveness of a
Registration Statement or initiates any proceedings for that purpose, (iii) the
Company receives any notice that the qualification of any Registrable Securities
for sale in any jurisdiction has been suspended or that any proceeding has been
initiated for the purpose of suspending such qualification, or (iv) upon the
discovery, or upon the occurrence of any event, which requires that any changes
be made in such Registration Statement or any related prospectus so that such
Registration Statement or prospectus will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in light of the
circumstances under which they were made (provided, however, that in the case of
this subclause (iv), such notice need only state that an event of such nature
has occurred, without describing such event), suspend the disposition of any
Registrable Securities covered by such Registration Statement or prospectus
until Subscriber’s receipt of the copies of a supplemented or amended prospectus
or until it is advised in writing by the Company  that the use of the
applicable prospectus may be resumed, and, if so directed by the Company
Subscriber will deliver to the Company all copies, other than permanent file
copies, then in Subscriber’s possession of any prospectus covering such
Registrable Securities. If the Company shall have given any such notice during a
period when a Registration Statement is effective, the Registration Deadline
shall be extended by the number of days of such suspension period.

     

     

    
      
        
        

      

      
        
        

         

      

      
        
        

      

    

    
 

    (f)           All
Registration Expenses incurred in connection with any registration,
qualification or compliance under this Schedule III shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations of
its Registrable Securities hereunder, shall be borne by Subscriber. Subscriber
shall not use any free writing prospectus (as defined in Rule 405 under the
Securities Act) in connection with the sale of Registrable Securities without
the prior written consent of the Company.

    

    (g)                      (i)           Notwithstanding
anything to the contrary in the Agreement, in connection with any registration
under this Schedule III, the Company shall, without limitation as to time,
indemnify and hold harmless, to the fullest extent permitted by law, Subscriber
(and its officers, directors, agents, partners and employees, each person who
controls Subscriber (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act), the officers, directors, agents, partners and
employees of each such controlling person and any financial or investment
adviser) (each, an “Registration Indemnified Party”), to the fullest extent
lawful, from and against any and all losses, claims, damages, liabilities,
actions or proceedings (whether commenced or threatened), reasonable
out-of-pocket costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys’ fees) and reasonable out-of-pocket
expenses (including reasonable expenses of investigation) (collectively,
“Registration Losses”), as incurred, arising out of or based upon  any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, prospectus (including the Shelf Prospectus) or form of
prospectus or in any amendment or supplements thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except to the extent that the same arise out
of or are based upon information furnished in writing to the Company by or on
behalf such Registration Indemnified Party or Subscriber expressly for use
therein; provided, that
the foregoing indemnity agreement contained in this paragraph (g) with respect
to such  Registration Statement or any preliminary, final or summary
prospectus contained therein or furnished by the Company, or any amendment or
supplement thereto, shall not inure to the benefit of any Registration
Indemnified Party from whom the person asserting any such losses, claims,
damages or liabilities purchased Registrable Securities, where (A) prior to the
written confirmation of the sale of Registrable Securities to such person (the
“Applicable Time”), the Company shall have notified such Registration
Indemnified Party in writing that such  Registration Statement or
prospectus contains an untrue statement of a material fact or omits to state
therein a material fact necessary in order to make the statements therein not
misleading, (B) such untrue statement or omission of a material fact was
corrected in a further amendment or supplement to such Registration Statement or
prospectus and such Registration Statement or prospectus was provided to such
Registration Indemnified Party prior to the Applicable Time, (C) such corrected
Registration Statement or prospectus (excluding any document incorporated by
reference therein) was not conveyed by the Registration Indemnified Party to
such person at or prior to the Applicable Time and (D) such loss, claim, damage
or liability would not have occurred had such corrected Registration Statement
or prospectus (excluding any document incorporated by reference therein) been
conveyed to such person as provided for in clause (C) above. Each indemnity and
reimbursement of costs and expenses shall remain in full force and effect
regardless of any investigation made by or on behalf of such Registration
Indemnified Party.

    

    (ii)           Subscriber
agrees to, and the Company may require, as a condition to including any
Registrable Securities of Subscriber in any Registration Statement filed
pursuant to this Schedule III or to entering into any underwriting agreement
with respect thereto, that the Company shall have received an undertaking
reasonably satisfactory to it from Subscriber and each underwriter named in any
such underwriting agreement (each a “Company Indemnifying Party”), severally and
not jointly, to indemnify and hold harmless the Company, each of its directors,
each of its officers who have signed any Registration Statement and each person,
if any, who controls the Company within the meaning of the Securities Act and
all other Holders of Registrable Securities (each, a “Company Indemnitee”),
against any and all Registration Losses, insofar as such Registration Losses
arise out of or are based upon an 

     

     

    
      
        
        

      

      
        
        

         

      

      
        
        

      

    

     

     

    untrue
statement or alleged untrue statement of a material fact contained in such
Registration Statement, or any preliminary, final or summary prospectus
contained therein or furnished by the Company to Company Indemnifying Party, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company or its
representative by or on behalf the Company Indemnifying Party expressly for use
therein.

    

    (iii)           Promptly
after receipt by a Registration Indemnified Party or Company Indemnitee (each,
an “Indemnified Party”) of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may be made
pursuant to this Section, such Indemnified Party will, if a claim in respect
thereof is to be made against, respectively, Company, on the one hand, or
Subscriber, on the other hand (such person, the “Indemnifying Party”), give
written notice to the Indemnifying Party of the commencement of such action;
provided, however, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its or their
obligations under this Section, except to the extent that the Indemnifying Party
is actually materially prejudiced by such failure to give notice, and in no
event shall such failure relieve the Indemnifying Party from any other liability
which it may have to such Indemnified Party. If any such claim or action shall
be brought against an Indemnified Party, and it shall notify the Indemnifying
Party thereof, the Indemnifying Party shall be entitled to participate therein,
and, to the extent that it wishes, to assume the defense thereof with counsel
reasonably satisfactory to the Indemnified Party, and after notice from the
Indemnifying Party to such Indemnified Party of its election to assume the
defense thereof, the Indemnifying Party shall not be liable to such Indemnified
Party under this Section for any legal or other expenses subsequently incurred
by such Indemnified Party in connection with the defense thereof, other than
reasonable cost of investigation; provided, further, that if, in the Indemnified
Party’s reasonable judgment, a conflict of interest between the Indemnified
Party and the Indemnifying Party exists in respect of such claim, then such
Indemnified Party shall have the right to participate in the defense of such
claim and to employ one firm of attorneys at the Indemnifying Party’s expense to
represent such Indemnified Party. No Indemnified Party will consent to entry of
any judgment or enter into any settlement without the Indemnifying Party’s
written consent to such judgment or settlement, which shall not be unreasonably
withheld. No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, consent to entry of any judgment or enter into any settlement
in respect of which the Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such claim or proceeding.

    

    (iv)           If
the indemnification provided for in this Schedule III is unavailable to an
Indemnified Party with respect to any Registration Losses or is insufficient to
hold such Indemnified Party harmless as contemplated therein, then the
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Registration Losses in such proportion as
is appropriate to reflect the relative fault of the Indemnifying Party and the
Indemnified Party in connection with the statements or omissions that resulted
in such Registration Losses, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and Indemnified
Party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Indemnifying Party or by such Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Schedule III  were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in this Schedule
III.  Notwithstanding the provisions of this Schedule III ,
Subscriber shall not be required to contribute any amount in excess of the
amount by which the dollar 

     

     

    
      
        
        

      

      
        
        

         

      

      
        
        

      

    

     

     

    amount of
the proceeds received by it from the sale of any Registrable Securities (after
deducting Selling Expenses)  exceeds the amount of any damages which
it has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. Subscriber’s obligations in this
Schedule III to contribute shall be several in proportion to the principal
amount of Registrable Securities registered or underwritten, as the case may be,
by or on behalf of it, and not joint.

    

    (h)           The
agreements set forth in this Schedule III shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties to the Agreement,
including, without limitation and without the need for an express assignment or
assumption, direct and indirect transferees of Subscriber’s Registrable
Securities to whom the Registrable Securities have been validly transferred
under the terms of the Agreement.  In furtherance, and not in
limitation, of the foregoing, the Company agrees that such direct and indirect
transferees shall be third party beneficiaries of the agreements set forth in
this Schedule III, and each such direct or indirect transferee shall have the
right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights hereunder; provided,
however, that such direct or indirect transferee fulfills all of its obligations
hereunder.

    

    (i)           The
agreements set forth in this Schedule III shall survive any post-Closing
termination of the Agreement until the earlier of (i) three years from the
Closing Date and (ii) the date on which Subscriber no longer owns any
Registrable Securities.  The indemnification obligations under
paragraph (f) above shall survive any post-Closing termination of the Agreement
and/or this Schedule III.

    

    

    As used
herein, the following terms have the following meanings:

    

    “Registrable
Securities” means all shares of Voting Common Stock and Class B Non-Voting Stock
(including the shares of Voting Common Stock into which shares of Class B
Non-Voting Stock are convertible in the event of a Widely Disbursed Offering)
issued by the Company in the Offering and any securities which may be issued or
distributed in respect thereof by way of stock dividend or stock split or other
distribution, recapitalization or reclassification.  As to any
particular Registrable Securities, such Registrable Securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale by a Holder thereof shall be or have been declared effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) such securities shall have been sold to
the public in compliance with Rule 144 under the Securities Act or (iii) such
securities shall have ceased to be outstanding.

    

    “Registration
Expenses” means all expenses incurred by the Company in effecting any
registration pursuant to this Schedule III (whether or not any registration or
prospectus becomes effective or final) including all registration, filing and
listing fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses, and expenses of the Company’s independent accountants (including a
commercially reasonable comfort letter to the extent the Registrable Securities
are sold in an underwritten public offering), but shall not include Selling
Expenses.

    

     “Registration
Statement” means any registration statement of the Company under the Securities
Act that permits the public offering of any of the Registrable Securities and
the Shelf Prospectus, amendments and supplements to such registration statement,
including post-effective amendments, all exhibits and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement. No Registrable Securities may be registered under more than one
Registration Statement at any one time.

     

     

    
      
        
        

      

      
        
        

         

      

      
        
        

      

    

    
 

    “Selling
Expenses” means all discounts, selling commissions, stock transfer taxes and
fees and disbursements of counsel for the Subscriber and/or any underwriter
applicable to the sale of Registrable Securities.

    

    “Shelf
Prospectus” means the prospectus included in any Shelf Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Shelf Registration Statement and all other amendments and supplements to
such prospectus, including post-effective amendments, and all materials
incorporated by reference in such prospectus.

    

    “Shelf
Registration Statement” means a Registration Statement of the Company filed with
the SEC on either (a) Form S-3 (or any successor form or other appropriate form
under the Securities Act) or (b) if the Company is not permitted to file a
Registration Statement on Form S-3, an evergreen Registration Statement on Form
S-1 (or any successor form or other appropriate form under the Securities Act),
in each case for an offering to be made on a continuous or delayed basis
pursuant to Rule 415 under the Securities Act covering Registrable
Securities.  To the extent that the Company is a “well-known seasoned
issuer” (as defined in Rule 405 under the Securities Act), a “Shelf Registration
Statement” shall be deemed to refer to an automatic shelf registration statement
(as defined in Rule 405 under the Securities Act) on Form S-3.

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