Document:

Form of Rights Certificate

 EXHIBIT 4.2 
  

									
		 	No.	  	 THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH
 IN THE COMPANY’S PROSPECTUS DATED MAY 8, 2008
 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE.
 COPIES OF THE PROSPECTUS ARE
AVAILABLE UPON REQUEST FROM
 REGISTRAR AND TRANSFER COMPANY, THE SUBSCRIPTION AGENT.
	  	 Rights
  
 X
	 	

 FEDERAL TRUST CORPORATION 
 Incorporated under the laws of the State of Florida 
 RIGHTS CERTIFICATE

 Evidencing Non-Transferable Rights to Purchase Shares of Common Stock 
 Subscription Price $ XX Per Share 
 VOID IF NOT EXERCISED ON OR BEFORE THE DATE
AND TIME STATED IN THE PROSPECTUS 
 AND INSTRUCTIONS AS TO THE USE OF RIGHTS CERTIFICATES 
 REGISTERED OWNER: X 
  

	
	THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of Rights set forth above, each of which entitles the owner to subscribe for and purchase
             shares of the common stock, $0.01 par value per share, of Federal Trust Corporation, a Florida corporation, on the terms and subject to the conditions set forth in the
Prospectus and instructions relating hereto on the reverse side hereof and in the Instructions as to the Use of Rights Certificates included in this mailing. The non-transferable Rights represented by this Rights Certificate may be exercised by duly
completing Section 1 on the reverse side hereof and returning the full payment of the subscription price for each share of common stock, as described on the reverse side hereof. Special delivery instructions may be specified by completing Section 2
on the reverse side hereof. THE RIGHTS EVIDENCED BY THIS RIGHTS CERTIFICATE ARE NOT TRANSFERABLE AND MAY NOT BE EXERCISED UNLESS THE REVERSE SIDE HEREOF IS COMPLETED AND SIGNED (INCLUDING A SIGNATURE GUARANTEE, IF APPLICABLE.) This certificate is
governed by the law of the State of Florida.

							
				
	Dated:	 		 		 	
				
	  
	 		 		 	  

	President and Chief Executive Officer	 		 		 	Corporate Secretary

 DELIVERY OPTIONS FOR RIGHTS CERTIFICATE 
  

			
	By Mail:	 	By Hand or Overnight Courier:
	Registrar and Transfer Company	 	Registrar and Transfer Company
	P.O. Box 645, Cranford, NJ 07016-0645	 	10 Commerce Drive, Cranford, NJ 07016
	Attn: Reorg/Exchange Department	 	Attn: Reorg/Exchange Department
	Phone: (800) 368-5948	 	Phone: (800) 368-5948

 Delivery to an address other than the address listed above will not constitute valid delivery.

 Delivery by facsimile will not constitute valid delivery. 
 PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY. 
 SECTION 1 
 IF YOU WISH TO SUBSCRIBE FOR YOUR FULL SUBSCRIPTION PRIVILEGE OR A PORTION THEREOF: 
 Basic Subscription Privilege 
  

																	
	I exercise	 	          
	 	          
	 	rights	 	x	 	 XX
	 	=	 	                  
	 	
		 	 (no. of rights)
	 		 		 	(ratio)	 		 	 (number of new shares)
 (round down to nearest whole share)
	 	

 I subscribe for
                        x    $        XX  
      
    =    $                               
      
             (number of new shares)      (subscription price)      (amount enclosed) 

Over-Subscription Privilege 
 If you fully exercise your Basic
Subscription Privilege and wish to subscribe for additional shares, you may exercise your Over-Subscription Privilege. 
 STEP 1: Determine the
maximum number of available unsubscribed shares: 
  

											
	         XX        

	 	  –  	 	                      
	 	  =  	 	                      
	 	shares
	 (total no. of shares offered less shares
 to be owned by
 standby purchasers)
	 	 	(no. of new shares subscribed above)	 	 	 (maximum available no. of
 unsubscribed
shares)

 STEP 2: Exercise Over-Subscription Privilege (up to the above maximum): 
  

													
	                  

	 	  x  	 	         XX        

	 	  =  	 	  $  	 	                                        
  
	 	
	 (no. of your over-
 subscription shares
 subscribed)
	 		 	(subscription price)	 		 		 	 (additional amount enclosed)

  

									
	Total Shares	  	                                        
                                      
	  		  		  	
		  	(sum of Basic plus Over-Subscription Amounts)	  		  	

 Please refer to the Prospectus for purchase and ownership limitations. 
  

											
	Total Amount Enclosed	 	$	  	                                        
                                      
	  		  		  	
		 		  	(sum of Basic plus Over-Subscription amounts)	  		  	

 Check the one applicable box: 
  

	 ̈	Bank check or bank draft drawn on a U.S. bank, or postal telegraphic or express money order payable to “Registrar and Transfer Company.” 

 -or- 
  

	 ̈	Wire transfer directly to the escrow account maintained by Registrar and Transfer Company, personal checks will not be accepted. See the Instructions. 

 TO SUBSCRIBE: I acknowledge that I have received the Prospectus for this offer and I hereby irrevocably subscribe for the total number of shares indicated above on the
terms and conditions specified in the Prospectus. I hereby agree that if I fail to pay for the shares of Common Stock for which I have subscribed, Federal Trust Corporation may exercise its legal remedies against me. 
  

	
	  
	Signature(s) of Subscriber(s)

 IMPORTANT: THE SIGNATURE(S) MUST CORRESPOND IN EVERY PARTICULAR, WITHOUT ALTERATION, WITH THE NAME(S) AS
PRINTED ON THE REVERSE OF THIS RIGHTS CERTIFICATE. 
 If signature is by trustee(s), executor(s), administrator(s), guardian(s), attorney(s)-in-fact,
agent(s), officer(s) of a corporation or another acting in a fiduciary or representative capacity, please provide the following information (please print). See the Instructions. 
  

			
	Name(s):	 	  

			
		
	 Capacity (Full Title):
	 	  

			
		
	Taxpayer ID # or Social Security #:	 	  

			
		
	Telephone #	 	  

 SECTION 2 
 SPECIAL ISSUANCE OR DELIVERY INSTRUCTIONS FOR SUBSCRIPTION RIGHTS HOLDERS: 
 (a) To be completed ONLY if the certificate representing the Common
Stock is to be issued in a name other than that of the registered holder. (See the Instructions.) DO NOT FORGET TO COMPLETE THE GUARANTEE OR SIGNATURE(S) SECTION BELOW: 
 ISSUE COMMON STOCK TO: 
  

			
	  
	 	
	(Please Print Name)	 	
		
	  
	 	
	(Print Full Address)	 	
		
	  
	 	
	(Social Security # or Tax ID #)	 	

 (b) To be completed ONLY if the certificate representing the Common Stock is to be sent to an address other than
that shown on the reverse of this certificate. (See the Instructions.) DO NOT FORGET TO COMPLETE THE GUARANTEE OF SIGNATURE(S) SECTION BELOW. 
 SEND COMMON
STOCK TO: 
  

			
	  
	 	
	(Please Print Name)	 	
		
	  
	 	
	(Print Full Address)	 	
		
	  
	 	
	(Social Security # or Tax ID #)	 	

 SECTION 3 
 GUARANTEE OF SIGNATURE(S) 
 YOU MUST HAVE YOUR SIGNATURE GUARANTEED IF YOU WISH TO HAVE SHARES DELIVERED TO ANY ADDRESS
OTHER THAN THE REGISTERED HOLDER OR ISSUED IN THE NAME OF ANYONE OTHER THAN THE REGISTERED HOLDER. 
 Your signature must be guaranteed by an Eligible
Guarantor Institution, as defined in Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended. These generally include (a) a commercial bank or trust company, (b) a member firm of a domestic stock exchange, or (c) a credit
union. 
  

			
		
	Signature:	 	 
		 	(Name of Bank or Firm)

			
		
	By:	 	  

		 	(Signature of Officer)

 FULL PAYMENT FOR THE SHARES MUST ACCOMPANY THIS FORM AND MUST BE MADE IN UNITED STATES DOLLARS
BY (1) BANK CHECK OR BANK DRAFT DRAWN UPON A UNITED STATES BANK OR POSTAL, TELEGRAPHIC OR EXPRESS MONEY ORDER PAYABLE TO REGISTRAR AND TRANSFER COMPANY, THE SUBSCRIPTION AGENT.Form of Standby Purchaser Agreement

 Exhibit 10.12 
 STANDBY PURCHASE AGREEMENT 
 This STANDBY PURCHASE AGREEMENT (this
“Agreement”), dated as of                     , 2008, is by and among Federal Trust Corporation, a Florida corporation
(the “Company”), and                                 (a
“Standby Purchaser”). 
 WITNESSETH: 
 WHEREAS, the Company proposes pursuant to the Registration Statement (as defined herein), to commence an offering to holders of its common stock, par
value $0.01 per share, (the “Common Stock”) of record as of the close of business on                     , 2008 (the
“Record Date”), of non-transferable rights (the “Rights”) to subscribe for and purchase additional shares of Common Stock (the “New Shares”) at a subscription price of
$                    per share for an aggregate offering amount of up to
$                    million (the “Subscription Price” and, such offering, the “Rights
Offering”); and 
 WHEREAS, pursuant to the Rights Offering, the Company will distribute to each of its shareholders of record,
at no charge, one Right for each share of Common Stock held by them as of the Record Date, and each Right will entitle the holder to purchase, for each share of Common Stock owned as of the Record Date,
                    New Shares at the Subscription Price (the “Basic Subscription Privilege”); and 
 WHEREAS, each holder of Rights who exercises in full its Basic Subscription Privilege will be entitled to subscribe for additional shares of Common Stock
of the Unsubscribed Shares (as defined herein), at the Subscription Price, to the extent that other holders of Rights do not exercise all of their respective Basic Subscription Privileges (the “Over-Subscription Privilege”);
and 
 WHEREAS, in order to facilitate the Rights Offering, the Company has requested the Standby Purchaser to agree, and the Standby
Purchaser has agreed, (a) to exercise his Basic Subscription Privilege in full for             shares of Common Stock, (b) not to exercise his respective Over-Subscription
Privilege, if applicable and (c) to purchase up to [Maximum Amount] Unsubscribed Shares from the Company at the Subscription Price pursuant to the exercise of such Rights (the “Standby Shares”), and (d) to the
extent the Standby Purchaser is unable to purchase [Maximum Amount] Standby Shares (the “Minimum Shares”), then Purchaser shall be entitled to purchase a sufficient number of additional shares of Common Stock (the
“Additional Shares”) from the Company to equal the Minimum Shares at the Subscription Price (the “Standby Offering” and, together with the Rights Offering, the “Stock Offerings”); and

 NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained and other good and valuable consideration, the
parties hereto, intending to be legally bound hereby, agree as follows: 
 Section 1. Certain Other Definitions. The
following terms used herein shall have the meanings set forth below: 
 “Additional Shares” shall have the meaning set
forth in the recitals hereof. 
 “Affiliate” shall mean an affiliate (as defined in Rule 12b-2 under the
Exchange Act) of such Standby Purchaser; provided that such Standby Purchaser or any of its affiliates exercises investment authority, including, without limitation, with respect to voting and dispositive rights with respect to such
affiliate. 
 “Agreement” shall have the meaning set forth in the preamble hereof. 
 “Basic Subscription Privilege” shall have the meaning set forth in the recitals hereof. 
 “Board” shall mean the Board of Directors of the Company. 
 “Business Day” shall mean any day that is not a Saturday, a Sunday or a day on which banks are generally closed in the State of
Florida. 
 “Closing” shall mean the closing of the purchases described in Section 2 hereof, which shall be held
at 10:00 a.m. on the Closing Date at the offices of Luse Gorman Pomerenk & Schick, PC, located at 5335 Wisconsin Ave., NW, Suite 400, Washington, DC, or such other time and place as may be agreed to by the parties hereto. 

 “Closing Date” shall mean the date that is three (3) Business Days after the
Rights Offering Expiration Date, or such other date as may be agreed to by the parties hereto. 
 “Commission” shall
mean the United States Securities and Exchange Commission, or any successor agency thereto. 
 “Common Stock” shall
have the meaning set forth in the recitals hereof. 
 “Company” shall have the meaning set forth in the preamble
hereof. 
 “Cure Period” shall have the meaning set forth in Section 8(a) hereof. 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the
Commission thereunder. 
 “Market Adverse Effect” shall have the meaning set forth in Section 7(a)(iii) hereof.

 “Material Adverse Effect” shall mean a material adverse effect on the financial condition, or on the earnings,
financial position, operations, assets, results of operations or business of the Company and its subsidiaries taken as a whole; provided that the meaning shall exclude any changes from general economic, industry, market or competitive conditions or
changes in laws, rules or regulations generally affecting Persons in the Company’s industry. 
 “Minimum Shares”
shall have the meaning set forth in the recitals hereof. 
 “New Shares” shall have the meaning set forth in the
recitals hereof. 
 “Over-Subscription Privilege” shall have the meaning set forth in the recitals hereof.

 “Person” shall mean an individual, corporation, partnership, association, joint stock company, limited liability
company, joint venture, trust, governmental entity, unincorporated organization or other legal entity. 
 “Prospectus” shall mean the final Prospectus, including any prospectus supplement relating to the Rights and the underlying shares of Common Stock, and the additional shares of Common Stock to be offered and sold in
the Standby Offering, that is filed with the Commission and deemed by virtue of Rule 430B of the Securities Act to be part of such registration statement, each as amended, for use in connection with the issuance of the Rights or the sale of
shares in the Standby Offering. 
 “Pro Rata Share” shall mean, with respect to each shareholder of the Company as of
the Record Date, such shareholder’s ownership percentage of all issued and outstanding Common Stock as of the Record Date. 
 “Record Date” shall have the meaning set forth in the recitals hereof. 
 “Rights”
shall have the meaning set forth in the recitals hereof. 
 “Rights Offering” shall have the meaning set forth in the
recitals hereof. 
 “Rights Offering Expiration Date” shall mean
                    , 2008, provided that the Company shall have the option to extend the Rights Offering, for any reason, until
                    , 2008. 
 “Registration Statement” shall mean the Company’s Registration Statement on Form S-1 (Commission File No. 333-150051) initially filed with the Commission on April 2, 2008, together with all exhibits
thereto and any Prospectus relating to the Rights, the New Shares and Additional Shares, that is filed with the Commission and deemed by virtue of Rule 430B of the Securities Act to be part of such registration statement, each as amended,
pursuant to which the Rights and underlying shares of Common Stock have been registered pursuant to the Securities Act. 
 “Securities” shall mean the Standby Shares together with the Additional Shares. 
  

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 “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules
and regulations promulgated by the Commission thereunder. 
 “Standby Offering” shall have the meaning set forth in
the recitals hereof. 
 “Standby Purchaser” shall have the meaning set forth in the preamble hereof. 
 “Standby Purchasers” shall mean the Standby Purchaser and certain other parties with whom the Company has entered into Standby
Purchase Agreements that are substantially similar to this Agreement, except as described herein. 
 “Standby Shares”
shall have the meaning set forth in the recitals hereof. 
 “Stock Offering” shall have the meaning set forth in the
recitals hereof. 
 “Subscription Agent” shall have the meaning set forth in Section 6(a)(iv) hereof.

 “Subscription Price” shall have the meaning set forth in the recitals hereof. 
 “Termination Notice” shall mean a notice from the Company indicating that the Board, in the exercise of its good faith judgment,
has determined to terminate or suspend indefinitely the Rights Offering contemplated hereby. 
 “Unsubscribed Shares”
shall have the meaning set forth in Section 2(b) hereof. 
 Section 2. Standby Purchase Commitment. 
 (a) The Standby Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to the Standby Purchaser, at the Subscription
Price            New Shares that will be available for purchase by the Standby Purchaser pursuant to its Basic Subscription Privilege. The Standby Purchaser agrees not to exercise,
and to cause its Affiliates not to exercise, the Over-Subscription Privilege to which such Standby Purchaser and its Affiliates would otherwise be entitled in the Rights Offering. 
 (b) The Standby Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to the Standby Purchaser, at the Subscription
Price, up to [Maximum Amount] Standby Shares that remain available in the Rights Offering after the issuance of all shares of Common Stock validly subscribed for through the exercise of Rights, including the exercise of all Over-Subscription
Privileges (other than Standby Purchasers), in the Rights Offering (such remaining shares being hereinafter referred to as the “Unsubscribed Shares”). 
 (c) In the event there is not a sufficient number of Unsubscribed Shares remaining upon completion of the Rights Offering (including the exercise of all
Over-Subscription Privileges, other than Standby Purchasers) to allow the Standby Purchaser to purchase the Minimum Shares, subject to the maximum number of shares of Common Stock being offered for sale in the Rights Offering as set forth in the
Registration Statement, Standby Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to the Standby Purchaser, at the Subscription Price and otherwise in accordance with this Agreement, sufficient Additional
Shares so that the Standby Purchaser shall have purchased the Minimum Shares. Provided, however, that in no event shall the Standby Purchaser be entitled to purchase Additional Shares in excess of the number of shares of Common Stock
that would result in the Standby Purchaser becoming a beneficial owner (within the meaning of Section 13(d)(3) of the Exchange Act) of             % of the issued and
outstanding shares of Common Stock after giving effect to the Stock Offerings. 
 (d) Payment of the Subscription Price for the Securities
shall be made to the Company by the Standby Purchaser, on the Closing Date, against delivery of the Securities to the Standby Purchaser, in United States dollars by means of a certified or cashier’s check, bank draft, money order or wire
transfer. 
 (e) The Standby Purchaser and the Company acknowledge and agree that the Company has entered into, or contemplates entering
into, one or more other Standby Purchase Agreements with certain other parties on terms substantially similar to this Agreement, except that they may provide for the purchase of a different maximum number of Standby Shares and a different number of
Minimum Shares as set forth in Section 2(c). The Unsubscribed Shares available for issuance to Standby Purchasers and any Additional Shares that the Company shall have elected 

  

 3 

 
to issue shall be allocated (to the extent any allocation thereof is necessary) as nearly as possible on a pro rata basis among the Standby Purchasers based
upon the number of Standby Shares subscribed for by each such Standby Purchaser, after giving effect to the limitation set forth in Section 2(c). 
 Section 3. Representations and Warranties of the Company. The Company represents and warrants to the Standby Purchaser as follows: 
 (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida and has all requisite
corporate power and authority to carry on its business as now conducted. 
 (b) This Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes a binding obligation of the Company enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought
in a proceeding at law or in equity). 
 (c) The Registration Statement has been filed with, and declared effective by, the Commission. On
the effective date, the Registration Statement complied in all material respects with the requirements of the Securities Act and 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 not misleading. On the Closing Date, the Registration Statement and the Prospectus will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the Prospectus made in reliance upon and in conformity with the information furnished to the Company in writing by the Standby Purchaser for use in the Registration Statement or in the
Prospectus. 
 (d) All of the Securities and New Shares will have been duly authorized for issuance prior to the Closing, and, when issued
and distributed as set forth in the Prospectus, will be validly issued, fully paid and non-assessable; and none of the Securities or New Shares will have been issued in violation of the preemptive rights of any security holders of the Company
arising as a matter of law or under or pursuant to the Company’s Restated Articles of Incorporation, as amended, the Company’s Bylaws, as amended, or any material agreement or instrument to which the Company is a party or by which it is
bound. 
 Section 4. Representations and Warranties of the Standby Purchaser. The Standby Purchaser represents and
warrants to the Company as follows: 
 (a)(i) If the Standby Purchaser is an individual, he or she has full power and authority to perform his
or her obligations under this Agreement. 
 (ii) If the Standby Purchaser is a corporation, the Standby Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, with corporate power and authority to perform its obligations under this Agreement. 
 (iii) If the Standby Purchaser is a trust, the trustee has been duly appointed as trustee of the Standby Purchaser with full power and authority to act
on behalf of the Standby Purchaser and to perform the obligations of the Standby Purchaser under this Agreement. 
 (iv) If the Standby
Purchaser is a partnership or limited liability company, the Standby Purchaser is a partnership or limited liability company duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization,
with full power and authority to perform its obligations under this Agreement. 
 (b) As of the Record Date, Standby Purchaser owned
            shares of Common Stock. 
  

 4 

 (c) The Standby Purchaser is acquiring his Securities for his own account, with the intention of holding
the Securities for investment and with no present intention of participating, directly or indirectly, in a distribution of the Securities; and he will not make any sale, transfer or other disposition of the Securities for a period of six
(6) months from the Closing Date. 
 (d) The Standby Purchaser is familiar with the business in which the Company is engaged, and based
upon his knowledge and experience in financial and business matters, he is familiar with the investments of the type that he is undertaking to purchase; he is fully aware of the problems and risks involved in making an investment of this type; and
he is capable of evaluating the merits and risks of this investment. The Standby Purchaser acknowledges that, prior to executing this Agreement, he has had the opportunity to ask questions of and receive answers or obtain additional information from
a representative of the Company concerning the financial and other affairs of the Company. 
 (e) This Agreement has been duly and validly
authorized, executed and delivered by such Standby Purchaser and constitutes a binding obligation of such Standby Purchaser enforceable against him in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding at law or in equity). 
 (f) None of the Standby Purchasers are
“affiliates” (within the meaning of Rule 405 of the Securities Act) of one another, are not acting in concert and are not members of a “group” (within the meaning of Section 13(d)(3) of the
Exchange Act) and have no current intention to act in the future in a manner that would make them members of such a group. 
 Section 5. Deliveries at Closing. 
 (a) At the Closing, if the Standby Purchaser holds his shares in certificated
form, the Company shall deliver to the Standby Purchaser a certificate or certificates representing the number of shares of Common Stock issued to the Standby Purchaser pursuant to Section 2 hereof. At the Closing, if the Standby Purchaser
holds his shares in uncertificated form, the Standby Purchaser’s account with his custodian bank, broker, dealer or other nominee will be credited with the shares of Common Stock issued to the Standby Purchaser pursuant to Section 2
hereof. 
 (b) At the Closing, the Standby Purchaser shall deliver to the Company payment in an amount equal to the Subscription Price
multiplied by the Securities purchased by such Standby Purchaser, as set forth in Section 2(d) hereof. 
 Section 6.
Covenants. 
 (a) Covenants. The Company agrees as follows between the date hereof and the earlier of the Closing Date or
the effective date of any termination pursuant to Section 8 hereof: 
 (i) To use commercially reasonable efforts to
effectuate the Rights Offering; 
 (ii) As soon as reasonably practicable after the Company is advised or obtains knowledge
thereof, to advise the Standby Purchaser with a confirmation in writing, of (A) the time when any amendment or supplement to the Prospectus has been filed, (B) the issuance by the Commission of any stop order, or of the initiation or
threatening of any proceeding, suspending the effectiveness of the Registration Statement or any amendment thereto or any order preventing or suspending the use of any preliminary prospectus or the Prospectus or any amendment or supplement thereto,
(C) the issuance by any state securities commission of any notice of any proceedings for the suspension of the qualification of the New Shares or the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening,
of any proceeding for such purpose, (D) the receipt of any comments from the Commission directed toward the Registration Statement or any document incorporated therein by reference, and (E) any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the Prospectus or for additional information. The Company will use its commercially reasonable efforts to prevent the issuance of any such order or the imposition of any such suspension
and, if any such order is issued or suspension is imposed, to obtain the withdrawal thereof as promptly as possible; 
  

 5 

 (iii) To operate the Company’s business in the ordinary course of business
consistent with past practice; 
 (iv) To notify, or to cause the subscription agent for the Rights Offering (the
“Subscription Agent”) to notify, on each Friday during the exercise period of the Rights, or more frequently if reasonably requested by the Standby Purchaser, the Standby Purchaser of the aggregate number of Rights known by
the Company or the Subscription Agent to have been exercised pursuant to the Rights Offering as of the close of business on the preceding Business Day or the most recent practicable time before such request, as the case may be; 
 (v) Not to issue any shares of capital stock of the Company, or options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, securities convertible into or exchangeable for capital stock of the Company, or other agreements or rights to purchase or otherwise acquire capital stock of the Company, except for (A) shares of Common Stock issuable
upon exercise of the Company’s presently outstanding stock options, and (B) new stock options and other awards granted to employees of the Company after the date hereof covering not more than
                     shares of Common Stock under the Company’s incentive plans; 
 (vi) Not to authorize any stock split, stock dividend, stock combination or similar transaction affecting the number of issued and
outstanding shares of Common Stock; and 
 (vii) Not to declare or pay any dividends on its Common Stock or repurchase any
shares of Common Stock, other than ordinary quarterly dividends, regularly declared and paid in accordance with past practice. 
 (b)
Certain Acquisitions. Between the date hereof and the Closing Date, the Standby Purchaser and its respective Affiliates shall not acquire any shares of Common Stock; provided, however, that the foregoing shall not restrict the
acquisition of shares of Common Stock by the Standby Purchaser or its Affiliates (i) from the Company pursuant to Section 2 of this Agreement or (ii) from the Standby Purchaser or any of its respective Affiliates. 
 (c) Information. The Standby Purchaser agrees to furnish to the Company all information with respect to the Standby Purchaser that may be
necessary or appropriate and will make any information furnished to the Company for the Prospectus by the Standby Purchaser not contain any untrue statement of material fact or omit to state a material fact required to be stated in the Prospectus or
necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
 (d)
Public Statements. Neither the Company nor the Standby Purchaser shall issue any public announcement, statement or other disclosure with respect to this Agreement or the transactions contemplated hereby without the prior consent of the other
parties hereto, which consent shall not be unreasonably withheld or delayed, except (i) if such public announcement, statement or other disclosure is required by applicable law or applicable stock market regulations, in which case the
disclosing party shall consult in advance with respect to such disclosure with the other parties to the extent reasonably practicable, or (ii) the filing of any Schedule 13D or Schedule 13G, to which a copy of this Agreement may be
attached as an exhibit thereto. 
 (e) Regulatory Filing. If the Company or the Standby Purchaser determines a filing is or may be
required under applicable law in connection with the transactions contemplated hereunder, the Company and the Standby Purchaser shall use commercially reasonable efforts to promptly prepare and file all necessary documentation and to effect all
applications that are necessary or advisable under applicable law with respect to the transactions contemplated hereunder so that any applicable waiting period shall have expired or been terminated as soon as practicable after the date hereof.

 Section 7. Conditions to Closing. 
 (a) The obligations of the Standby Purchaser to consummate the transactions contemplated hereunder are subject to the fulfillment, prior to or on the Closing Date, of the following conditions: 
 (i) The representations and warranties of the Company in Section 3 shall be true and correct in all material respects as of the date
hereof and at and as of the Closing Date as if made on such date (except for representations and warranties made as of a specified date, which shall be true and correct in all material respects as of such specified date); 
  

 6 

 (ii) Subsequent to the execution and delivery of this Agreement and prior to the Closing
Date, there shall not have been any Material Adverse Effect and no event shall have occurred or circumstance shall exist that would reasonably likely result in a Material Adverse Effect; 
 (iii) As of the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or American Stock Exchange or
trading in securities generally on the American Stock Exchange shall not have been suspended or limited or minimum prices shall not have been established on either exchange (a “Market Adverse Effect”); 
 (iv) The Company shall have received shareholder approval of the issuance of shares in a non-public offering to permit consummation of the
Standby Offering; and 
 (v) The Company shall have received shareholder approval of an amendment to its Restated Articles of
Incorporation to increase the number of authorized shares to permit consummation of the Stock Offerings. 
 (b) The obligations of the
Company to consummate the transactions contemplated hereunder are subject to the fulfillment, prior to or on the Closing Date, of the condition that the representations and warranties of the Standby Purchaser in Section 4 shall be true and
correct in all material respects as of the date hereof and at and as of the Closing Date as if made as of such date (except for representations and warranties made as of a specified date, which shall be true and correct in all material respects as
of such specified date). 
 (c) The obligations of the Company and the Standby Purchaser to consummate the transactions contemplated
hereunder in connection with the Rights Offering are subject to the fulfillment, prior to or on the Closing Date, of the following conditions: 
 (i) No judgment, injunction, decree or other legal restraint shall prohibit, or have the effect of rendering unachievable, the consummation of the Rights Offering or the material transactions contemplated by this
Agreement; 
 (ii) No stop order suspending the effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and any request of the Commission for inclusion of additional information in the Registration Statement or otherwise shall have been complied
with; 
 (iii) The New Shares and the Securities shall have been authorized for listing on the American Stock Exchange; and

 (iv) Any applicable waiting period shall have expired or been terminated thereunder with respect to such purchase.

 Section 8. Termination. 
 (a) This Agreement may be terminated at any time prior to the Closing Date, by the Standby Purchaser by written notice to the Company if there is (i) a Material Adverse Effect or (ii) a Market Adverse Effect
that is not cured within twenty-one (21) days after the occurrence thereof (the “Cure Period”), provided that the right to terminate this Agreement after the occurrence of each Material Adverse Effect or a Market
Adverse Effect, which has not been cured within the Cure Period, shall expire seven (7) days after the expiration of such Cure Period. 
 (b) This Agreement may be terminated by the Company on one hand or by the Standby Purchaser on the other hand, by written notice to the other party hereto: 
 (i) At any time prior to the Closing Date, if there is a material breach of this Agreement by the other party that is not cured within
fifteen (15) days after the non-breaching party has delivered written notice to the breaching party of such breach; or 
 (ii) At any time after September 30, 2008, unless the Closing has occurred prior to such date. 
 (c) This Agreement may be
terminated by the Company in the event: 
 (i) The Company determines that it is not in the best interests of the Company and
its shareholders to go forward with the Stock Offerings; or 
 (ii) Consummation of the Standby Offering is prohibited by law,
rule or regulation. 
  

 7 

 (d) The Company and the Standby Purchaser hereby agree that any termination of this Agreement pursuant to
Section 8(a), 8(b)(ii) or 8(c) shall be without liability of the Company or the Standby Purchaser. 
 Section 9.
Survival. The representations and warranties of the Company and the Standby Purchaser contained in this Agreement or in any certificate delivered hereunder shall survive the Closing hereunder. 
 Section 10. Notices. All notices, communications and deliveries required or permitted by this Agreement shall be made in writing
signed by the party making the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed given or made (a) on the date delivered if delivered by telecopy or in person, (b) on the
third (3rd) Business Day after it is mailed if mailed by registered or certified mail (return receipt requested) (with postage and other fees prepaid) or (c) on the day after it is delivered, prepaid, to an overnight express delivery
service that confirms to the sender delivery on such day, as follows: 
 If to the Company: 
 Federal Trust Corporation 
 312 West First
Street 
 Sanford, Florida 32771 
 Attention: Dennis T. Ward 
 President and Chief Executive Officer 
 Telephone: (407) 323-1833 
 Facsimile:
(407) 302-4595 
 With a copy to: 
 Luse Gorman Pomerenk & Schick, PC 
 5335 Wisconsin Ave., NW 
 Suite 400 
 Washington, DC 20015 

Attention:             Eric Luse, Esq. 
            Ned Quint, Esq. 
 Telephone: (202) 274-2000 
 Facsimile:
(202) 362-2902 
 If to the Standby Purchaser: 
                                       
           
                                       
           
                                       
           
 Attention: 
 Telephone: 
 Facsimile: 
 or to such other representative or at such other address of a party as such party hereto may furnish to the other parties in writing in accordance with this
Section 10. 
 Section 11. Assignment. This Agreement will be binding upon, and will inure to the benefit of and be
enforceable by, the parties hereto and their respective successors and assigns, including any person to whom Securities are transferred in accordance herewith. 
 Section 12. Entire Agreement. Except as specifically set forth herein, the Company and the Standby Purchaser mutually agree to be bound by the terms of the non-disclosure agreement dated
                    (the “Non-Disclosure Agreement”) previously executed by the Company and the Standby Purchaser,
which such Non-Disclosure Agreement is hereby incorporated herein by reference, and all information furnished by either party to the other party or its representatives pursuant hereto shall be subject to, and the parties shall hold such information
in confidence in accordance with, the provisions of the Non-Disclosure Agreement. The Company and the Standby Purchaser agree that such Non-Disclosure Agreement shall continue in accordance with their respective terms, 

  

 8 

 
notwithstanding the termination of this Agreement. The Non-Disclosure Agreement and this Agreement embody the entire agreement and understanding between the
parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or in the Non-Disclosure Agreement, with respect to the standby
purchase commitments with respect to the Securities and the New Shares. Other than with respect to matters set forth or referred to in the Non-Disclosure Agreement, this Agreement supersedes all prior agreements and understandings between the
parties with respect to the subject matter of this Agreement. 
 Section 13. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of Florida (other than its rules of conflict of laws to the extent the application of the laws of another jurisdiction would be required thereby). 
 Section 14. Severability. If any provision of this Agreement or the application thereof to any person or circumstances is determined
by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid, void or
unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to affect the original intent of the parties. 
 Section 15. Extension or Modification of Rights Offering. The Company may (a) waive irregularities in the manner of exercise of
the Rights, and (b) waive conditions relating to the method (but not the timing) of the exercise of the Rights to the extent that such waiver does not materially adversely affect the interests of the Standby Purchaser. 
 Section 16. Miscellaneous. 
 (a) The Company shall not after the date of this Agreement enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Standby Purchaser in this Agreement. 
 (b) The headings in this Agreement are for purposes of reference only and shall not limit or otherwise affect the meaning of this Agreement. 

(c) Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context requires. 
 (d) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which, when taken together, shall constitute one and the same instrument. 
 [Remainder of this page intentionally left blank.] 
  

 9 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the
date first above written. 
  

			
	COMPANY:
	
	Federal Trust Corporation
		
	By:	 	  

	Name:	 	Dennis T. Ward
	Title:	 	President and Chief Executive Officer
	
	STANDBY PURCHASER
	
	                                      
          
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 10

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