Document:

IN THE UNITED STATES DISTRICT COURT
                 FOR THE EASTERN DISTRICT OF VIRGINIA
                          Alexandria Division

--------------------------------------------------------------------

                                  :   Civil Action No. 00-473-A
In re MICROSTRATEGY SECURITIES    :
LITIGATION                        :
                                  :
--------------------------------------------------------------------

                     MEMORANDUM OF UNDERSTANDING
      This Memorandum of Understanding ("MOU") contains the material
terms of a proposed partial settlement (the "Settlement") of the
above-captioned consolidated action (the "Action") by Lead Plaintiffs
Akiko Minami, Atsukuni Minami and Local 144 Pension Fund, on behalf
of themselves and the Certified Class and Settlement Subclass (as
defined below) and defendants MicroStrategy Incorporated
("MicroStrategy"), Michael J. Saylor, Sanju K. Bansal, Mark S. Lynch,
Stephen S. Trundle, Ralph S. Terkowitz and Frank A. Ingari (the
"Individual Defendants") (collectively the "Settling Defendants") by
and through their respective counsel. Nothing in this MOU shall be
deemed to release defendant PricewaterhouseCoopers LLP, including its
successors in interest ("PWC" or the "Non-Settling Defendant") from
any claims or liability in the Action or to otherwise affect or
extinguish any claims against PWC.  (The Settling Defendants and PWC
are collectively referred to as the "Defendants," and the Lead
Plaintiffs and members of the Certified Class and Settlement Subclass
are collectively referred to as the "Plaintiffs".)

      1.   This MOU is binding upon the parties hereto, subject to the
provisions of paragraph 10 hereof.  The Settling Defendants and Lead
Plaintiffs (collectively, with all other Plaintiffs, the "Settling
Parties") will cooperate expeditiously and in good faith to prepare a

                                       1
<PAGE>

Stipulation of Settlement and accompanying papers which shall embody
the terms set forth herein and such other and consistent terms as are
agreed upon by counsel for the Settling Parties.

      2.   Pursuant to this MOU, the Settling Parties have agreed to a
settlement of claims brought (as defined in more detail below) by
members of the Certified Class and Settlement Subclass as defined
below:
           (a)  The Certified Class shall consist of all persons and
                entities who, during the period June 11, 1998 through
                March 20, 2000, inclusive (the "Class Period"),
                purchased MicroStrategy common stock or call options
                or sold MicroStrategy put options, and who allegedly
                were damaged thereby.  The definition of the Certified
                Class is consistent with the Class defined in the
                Stipulation and Agreement Regarding Class
                Certification, entered into by the Parties on or about
                August 10, 2000, and subsequently approved by the
                Court on August 10, 2000.

           (b)  The Settlement Subclass shall consist of all persons
                and entities who, during the Class Period, purchased
                MicroStrategy common stock contemporaneously (to be
                defined in the Stipulation of Settlement) with sales
                of MicroStrategy common stock by any of the Individual
                Defendants. The definition of the Settlement Subclass
                represents a modification of the Subclass defined in
                the Stipulation and Agreement Regarding Class
                Certification, entered into by the Parties on or about
                August 10, 2000, and subsequently approved by the
                Court on August 10, 2000.  The Parties will request
                the Court to certify the Settlement Subclass, as
                modified from the

                                       2
<PAGE>

                Court's prior Order, solely for the
                purposes of the Settlement contemplated herein.

Excluded from the Certified Class and Settlement Subclass are
Defendants, any person, firm, trust, corporation or other individual
or entity in which any Defendant has a controlling interest or which
is related to or affiliated with any of the Defendants, the partners,
principals, officers, directors, employees, affiliates, legal
representatives, heirs, predecessors, successors and assigns of
Defendants, and the immediate family members of any such individual.

      3.   In exchange for a release by Plaintiffs in the Action, as
described in paragraph 7 below, the Settling Defendants agree to
deliver, at the direction of Milberg Weiss Bershad Hynes & Lerach LLP
and Wolf Haldenstein Adler Freeman & Herz LLP ("Plaintiffs' Co-Lead
Counsel"), the consideration in the form described in Exhibit A
hereto, which is incorporated by reference in this MOU.  The
consideration set forth in Exhibit A will have an estimated  fair
market value, as of the date of the Settlement Hearing (as described
in paragraph 17), of one hundred thirty seven million five hundred
thousand dollars ($137,500,000) (the "Settlement Consideration").

      4.   As soon as practicable after the Effective Date (as defined
below), the Settling Defendants shall deliver the Settlement
Consideration as directed by Plaintiffs' Co-Lead Counsel.  The
Effective Date shall be the date by which all of the following have
occurred: (1) the Settlement has been approved in all material
respects by the Court; (2) an Order and Final Judgment, reflecting
the terms of this MOU, has been entered by the Court and not vacated
or modified in any way that affects any party's rights or obligations
hereunder, upon appeal or otherwise; and (3) either (i) the time to
appeal or otherwise seek review of the Order and Final Judgment has
expired without any appeal having been taken or review sought, or
(ii) if an appeal

                                       3
<PAGE>

is taken or review sought, the expiration of five days after an appeal or review
shall have been finally determined by the highest court before which appeal or
review is sought which upholds the terms of the Stipulation and/or an Order and
Final Judgment and is not subject to further judicial review.

      5.   MicroStrategy shall pay in cash the costs of notice and
administration of the Settlement up to a maximum of seven hundred and
fifty thousand dollars ($750,000) as and when incurred (not including
any attorneys' fees or expenses, which fees and expenses shall be
payable from the Notes, Class A Shares and Warrants, as may be
approved by the Court).  If the costs of notice and administration of
the Settlement exceed seven hundred and fifty thousand dollars
($750,000) (such excess over seven hundred and fifty thousand dollars
($750,000) to be referred to as the "Excess Amount"), MicroStrategy
shall pay such costs as and when incurred and shall be entitled to a
credit equal to the Excess Amount against the installment of interest
on the Notes next due, to be applied against the Notes then
outstanding on a pro rata basis.  If the Excess Amount exceeds the
amount of interest next due, MicroStrategy may at its option either
reduce the principal of the balance of the Notes then outstanding on
a pro rata basis by the balance of the Excess Amount not previously
applied or apply such amount against subsequent installments of
interest.  MicroStrategy shall not be entitled to any refund or
reimbursement of the costs of notice and administration in the event
that the Settlement is not approved, terminated or does not become
final and effective for any reason.  The notice and administration
shall be performed by a Claims Administrator.  The Claims
Administrator shall be selected by Plaintiffs' Co-Lead Counsel.  The
Claims Administrator's performance shall be under the sole
supervision of Plaintiffs' Co-Lead Counsel.  MicroStrategy shall (i)
provide information from MicroStrategy's transfer records concerning
the identity of members of the Certified Class and Settlement

                                       4
<PAGE>

Subclass and their transactions, and (ii) issue the Notes, Class A
common stock, and Warrants, as directed by Plaintiffs' Co-Lead
Counsel, and, if applicable, cash or other consideration as provided
in Exhibit A hereto.

      6.   As soon as practicable after the Effective Date, the
Settlement Consideration (after deduction of plaintiffs' attorneys'
fees and litigation expenses as approved by the Court and any taxes
and related expenses) will be distributed to the Certified Class and
Settlement Subclass pursuant to a plan of distribution and allocation
to be set forth in the Stipulation of Settlement, subject to Court
approval at the Settlement Hearing.

      7.   In exchange for settlement of this Action against the
Settling Defendants, and conditioned upon the Settlement becoming
effective, the settlement documents, including, without limitation,
the Order and Final Judgment, shall provide for a release by
Plaintiffs (excluding any persons or entities who timely and properly
exclude themselves from the Certified Class and Settlement Subclass)
in the form described in Exhibit B hereto, which is incorporated by
reference in this MOU.  The Order and final Judgment shall also
provide a contribution bar order as provided in Exhibit B.   In
exchange for settlement of this Action against the Settling
Defendants, and conditioned upon the Settlement becoming effective,
the settlement documents, including without limitation, the Order and
Final Judgment, shall provide for a release by the Settling
Defendants of Plaintiffs and Plaintiffs' Counsel in the form as also
described in Exhibit B hereto.  If, prior to the execution of the
Stipulation of Settlement, any party to this MOU wishes to propose
any modification to the terms of, the parties to, or the form of the
releases attached as Exhibit B, the parties agree to negotiate in
good faith to attempt to resolve that issue.  In the absence of a
mutually agreeable modification of the release, the Settling Parties
agree to the forms of releases in Exhibit B.

                                       5
<PAGE>

      8.   As part of the Settlement, all claims against the Settling
Defendants by Plaintiffs (excluding any persons or entities who
timely and properly exclude themselves from the Certified Class and
Settlement Subclass) will be dismissed with prejudice in the Action
pursuant to an appropriate order under Fed. R. Civ. P. Rule 54(b) and
Plaintiffs (excluding any persons or entities who timely and properly
exclude themselves from the Certified Class and Settlement Subclass)
shall be deemed to have released such claims and will be enjoined
from any further prosecution thereof.

      9.   As part of the Settlement, the Settling Defendants shall
provide mutually agreeable confirmatory discovery as set forth, inter
alia, in a separate letter agreement.  As part of the Settlement, the
Settling Parties shall also execute a separate letter agreement
providing that MicroStrategy may, at its sole option, terminate the
Settlement if securities (common stock, calls and puts) representing
losses of more than an agreed dollar amount opt out of the Certified
Class and/or Settlement Subclass.

      10.  The following are express conditions precedent to the
effectiveness of the Settlement: (i) completion of Plaintiffs'
confirmatory discovery; (ii) negotiation and execution of the
Stipulation of Settlement and accompanying documents; (iii)
certification of the Settlement Subclass as defined herein, to which
the parties hereby stipulate, subject to Court approval; (iv)
approval of the Settlement and entry of an Order and Final Judgment
substantially in the form as will be annexed to the Stipulation of
Settlement; (v) the Settlement becomes final because of the
exhaustion of any and all appeals or the time to appeal from final
District Court approval; and (vi) the securities constituting the
Settlement Consideration are validly issued pursuant to Section
3(a)(10) or, in lieu thereof, there shall be filed an effective
registration statement covering the

                                       6
<PAGE>

securities (subject to the provisions of section 4 of Exhibit A), or a no-action
letter will be obtained from the Securities and Exchange Commission
covering such issuance.

      11.  Except as expressly provided in paragraph 5, above, with
respect to the payment of the costs of notice and administration and
the continuing obligations contained in this paragraph, if the
Settlement is terminated or is not approved by the Court, or for any
reason the Effective Date does not occur: (i) the Settlement shall be
without prejudice, and none of its terms (including the forms of
releases provided in paragraph 7) shall be effective or enforceable;
(ii) the Settling Parties shall revert to their litigation positions
immediately prior to the execution of this MOU; and (iii) the fact
and terms of this Settlement shall not be used for any purpose in
connection with the trial or prosecution of this Action or for any
purpose in any other action or proceeding not directly related to the
Settlement.

      12.  Plaintiffs' Co-Lead Counsel shall make an application for
an award of attorneys' fees and reimbursement of litigation expenses,
plus accruing interest thereon, to be paid solely from the Settlement
Consideration.

      13.  The Settling Defendants shall take no position on and shall
neither interfere with nor delay the efforts by Plaintiffs to pursue
any claims they may have against any actual or potential party to
this action or any other person or entity.  Nor shall the Settling
Defendants materially aid or assist any actual or potential party to
this action or any other person or entity in their or its defense of
this Action.  Notwithstanding anything to the contrary in this MOU or
accompanying exhibits, nothing herein shall prevent the Settling
Defendants from defending the rights or protecting the interests of
any Released Party (as defined in Exhibit B hereto).  If the
Settlement is approved and becomes final, the Settling Defendants,
shall, at the request of Plaintiffs' Co-Lead Counsel, be subject to
formal discovery and trial testimony in connection

                                       7
<PAGE>

with any remaining claims asserted in this Action as if they were parties to the
continuing action, such that non-party discovery procedures against them will
not be necessary. If requested by Plaintiffs' Co-Lead Counsel, the Settling
Defendants shall further direct their employees to provide discovery and trial
testimony in this Action as if the employees were parties to the continuing
action. Settling Defendants shall assist Plaintiffs' Co-Lead Counsel in locating
former employees and securing their testimony. Settling Defendants shall not
interpose the terms of any confidentiality agreements with such former employees
which might interfere with the former employees' candid discussions with
Plaintiffs' Co-Lead Counsel or their testimony. Settling Defendants shall
relieve former employees from the obligations of any confidentiality agreements
insofar as they would interfere with or obstruct those employees' discussions
with Plaintiffs' Co-Lead Counsel or their testimony. Any information provided
pursuant to this paragraph shall be subject to a mutually agreeable
confidentiality agreement or, in the absence of such an agreement, an order of
the Court.

      14.  Nothing contained in this MOU, the Stipulation of
Settlement, or other agreements executed in connection with the
Settlement shall be construed as an admission (i) by any Settling
Defendant of any alleged liability, fault or wrongdoing whatsoever of
the Settling Defendants or any of them, or (ii) by any member of the
Certified Class or Settlement Subclass that their claims are without
merit or lack validity.

      15.  Subject to MicroStrategy's obligations under the securities
laws, the Settling Parties agree to consult with each other prior to
issuing any public announcement or similar public statement
concerning the Settlement until the earlier of the filing of the Form
10-K or Form 10-Q following the Effective Date of the Settlement.

                                       8
<PAGE>

      16.  This MOU may be executed in counterparts, including by
signature transmitted by facsimile.  Each counterpart when so
executed shall be deemed to be an original, and all such counterparts
together shall constitute the same instrument. The terms of this MOU
and Settlement shall inure to and be binding upon the Settling
Parties, their insurer(s) and their successors in interest.

      17.  The Settlement shall be presented to the Court for a
settlement hearing (the "Settlement Hearing") as soon as practicable.

      18.  Each of the signatories hereto hereby represents and
confirms that he/she has the necessary authority to execute this MOU
on behalf of each and every one of his/her respective clients and
will use his, her or its best efforts to take such other steps as are
necessary to implement the proposed Settlement.

Dated: October 23, 2000

                                    MILBERG WEISS BERSHAD HYNES &
                                    LERACH LLP

                                    By  /s/ Melvyn I. Weiss
                                    -----------------------
                                          Melvyn I. Weiss
                                          Steven G. Schulman
                                    One Pennsylvania Plaza
                                    New York, NY 10119
                                    Tel:  (212) 594-5300

                                    WOLF HALDENSTEIN ADLER
                                    FREEMAN & HERZ LLP

                                    By /s/ Daniel Krasner
                                    ---------------------

                                       9
<PAGE>

                                          Daniel Krasner
                                          Fred Taylor Isquith
                                    270 Madison Avenue
                                    New York, NY 10016
                                    Tel:  (212) 545-4600

                                    Co-Lead Counsel for Plaintiffs

                                    WILLLAMS & CONNOLLY LLP

                                    By  /s/ John K. Villa
                                    ---------------------
                                          Brendan V. Sullivan, Jr.
                                          John K. Villa
                                          Steven M. Farina
                                          725 12th Street, N.W.
                                          Washington, D.C. 20005
                                          Tel: (202) 434-5000

                                    Counsel for Defendants
                                    MicroStrategy Incorporated,
                                    Michael J. Saylor, Sanju K. Bansal, Mark
                                    S. Lynch, Stephen S. Trundle, Ralph S.
                                    Terkowitz and Frank A. Ingari

                                       10
<PAGE>

                               Exhibit A

Settlement Amount
and Payment Method:  1.   Notes:   From  the  date  of   issuance   (as
                     defined in section 5 below)  five-year,  unsecured
                     promissory  Notes (face amounts in $100 multiples)
                     issued  by   MicroStrategy   having  an  aggregate
                     principal  amount of eighty  million  five hundred
                     thousand  dollars  ($80,500,000)  bearing interest
                     from the date of  commencement  of the  Settlement
                     Hearing  at a rate of seven and  one-half  percent
                     (7.5%) per  annum,  payable  solely in cash,  with
                     interest   originally   accruing  and  compounding
                     annually  until six (6)  months  after the date of
                     issuance   of  the   first   Notes  to  be  issued
                     hereunder  and  to  be  paid  on  that  date  and,
                     thereafter,  accruing  semi-annually  and  payable
                     semi-annually  in  arrears.  The  Notes  shall  be
                     issued   pursuant  to  Section   3(a)(10)  of  the
                     Securities    Act   and   shall   not   constitute
                     "restricted  securities."  In the  event  that the
                     Notes   cannot  be  issued   pursuant  to  Section
                     3(a)(10),  MicroStrategy  shall take such steps as
                     are  necessary  to permit  such  issuance,  or, in
                     lieu thereof,  shall file a registration statement
                     covering  the  issuance of the Notes or seek a "no
                     action"  letter from the  Securities  and Exchange
                     Commission  covering such issuance.  The Notes may
                     be  prepaid  at any time,  upon  thirty  (30) days
                     prior  written  notice,  in  whole or in part on a
                     pro rata basis,  without  premium or penalty,  and
                     may be  mandatorily  converted  at the  option  of
                     MicroStrategy  at any time,  upon thirty (30) days
                     prior  written  notice,  in  whole or in part on a
                     pro rata basis,  without premium or penalty except
                     as described herein,  into  MicroStrategy  Class A
                     common  stock.  The  combination  of  prepayments,
                     mandatory  conversions  and  purchases in the open
                     market  by  MicroStrategy  shall  not  reduce  the
                     total  original  issue by more than forty  percent
                     (40%)  unless the entire  issue  shall be prepaid,
                     converted  and/or   purchased
<PAGE>

                     by    MicroStrategy.    MicroStrategy  shall   not
                     mandatorily  convert the Notes while a petition in
                     bankruptcy  relating to MicroStrategy  is  pending
                     and not  discharged  or stayed.  If notice  of   a
                     mandatory  conversion  is given  during the thirty
                     (30) day period  prior to the  filing  date  of  a
                     petition  in bankruptcy relating to MicroStrategy,
                     then the conversion will take place  five (5) days
                     after the   petition  is  discharged  or stayed or
                     thirty (30) days after the  notice,  whichever  is
                     later.
                     If the Notes are converted  into  shares  of Class
                     A common stock, they shall be converted into  such
                     number of shares as would be determined by dividing
                     the principal and accrued but  unpaid  interest on
                     the Notes to be converted by an  amount  equal  to
                     eighty  percent  (80%)  of  the  dollar   weighted
                     average  trading price per share for all round lot
                     transactions  in the stock on the Nasdaq  National
                     Market for the ten (10)  trading  days  ending two
                     (2)  days  prior  to  the  date  of  the   written
                     notice.   MicroStrategy   shall  not   mandatorily
                     convert  the  Notes  if,  during  the ten (10) day
                     period used for calculating the conversion  price,
                     MicroStrategy,  any  member  of the  MicroStrategy
                     Board of  Directors or any  MicroStrategy  officer
                     subject to the  requirements  of Section 16 of the
                     Securities   and   Exchange   Act  of   1934   has
                     purchased   shares   of  Class  A   common   stock
                     (excluding  any  issuance  of stock to any officer
                     or  director  of  MicroStrategy  pursuant  to  any
                     MicroStrategy   stock   option,   employee   stock
                     purchase or similar  plan or rights plan in effect
                     on the date of the  commencement of the Settlement
                     Hearing    or     subsequently     approved     by
                     MicroStrategy's   Board  of   Directors,   or  any
                     exercises  of options or rights  issued under such
                     plans).  The  Notes  will be  subordinated  to all
                     present  and future (a) secured  indebtedness  and
                     (b)    unsecured    institutional     indebtedness
                     evidenced  by  promissory  notes.  The Notes  will
                     rank pari passu with all other  indebtedness.  The
                     Notes  will  contain  only  covenants  for  timely
                     payment  of   principal   and   interest  and  for
                     maintenance    of
<PAGE>

                     MicroStrategy's corporate existence. The Notes will
                     be  tenderable  in lieu of cash on the exercise  of
                     the  Warrants  provided herein,  at a  value  equal
                     to 133% of  the  sum  of  par value  plus  interest
                     accrued  to the date  of  the  tender  but  unpaid.
                     The Notes will be issued pursuant  to  an indenture
                     with  the  indenture   trustee  being  a  financial
                     institution  mutually satisfactory to MicroStrategy
                     and  Plaintiffs' Co-Lead Counsel. Events of default
                     under  the  indenture  will   be  a  failure to pay
                     principal or interest when  due  and  filing   of a
                     bankruptcy petition relating to MicroStrategy  that
                     remains undischarged or  unstayed  for a period  of
                     sixty (60) days. The  Notes  shall   also   contain
                     provisions  concerning  any  change  of  control or
                     sale  of  all or  substantially  all  MicroStrategy
                     assets  such  that any buyer must  assume the Notes
                     and the  stock  provisions  to be  translated  into
                     the acquirer's stock.
                     In  the  event  any Plaintiff  would  be  entitled
                     to a fractional share of a $100 Note (after adding
                     any increase  to the  principal  amount in lieu of
                     any fractional Class A share  and/or   Warrant  as
                     provided below)  MicroStrategy  shall be entitled,
                     in  lieu  thereof,   at  MicroStrategy's   option,
                     either to pay cash or to issue  additional  shares
                     of  Class A  common  stock  valued  at the  dollar
                     weighted  average  trading price per share for all
                     round lot  transactions in the stock on the Nasdaq
                     National  Market for the twenty (20)  trading days
                     ending  two (2)  days  prior  to the date on which
                     the shares are distributed to the Plaintiff.
      2.   Common Stock:  Five hundred fifty thousand  (550,000) shares
                     of  MicroStrategy  Class  A  common  stock  to  be
                     contributed  by  MicroStrategy  and,  directly  or
                     indirectly through MicroStrategy,  Michael Saylor,
                     Sanju  Bansal  and  Mark  Lynch.   The  respective
                     contributions of Messrs.  Saylor, Bansal and Lynch
                     shall be  limited  to those set out in a letter to
                     be  delivered  to  Plaintiffs'   Co-Lead   Counsel
                     concurrently  with the  execution  of the MOU. The
                     contribution   obligations   of  Messrs.   Saylor,
                     Bansal and Lynch set forth in the letter  shall be
                     several,  and
<PAGE>

                     not joint and several, obligations and shall  have
                     a total value of ten million dollars ($10,000,000)
                     with   the  total  number   of   shares   to    be
                     contributed to be determined by dividing  that ten
                     million  dollars  ($10,000,000)  by   the  Trading
                     Price  (defined  below).  All the shares shall  be
                     issued   pursuant  to  Section  3(a)(10)  of   the
                     Securities   Act    and   shall   not   constitute
                     "restricted  securities." In the event   that  the
                     shares  cannot  be  issued  pursuant   to  Section
                     3(a)(10),  MicroStrategy  shall take such steps as
                     are  necessary  to permit such  issuance,  or,  in
                     lieu thereof, shall file a registration  statement
                     covering  the issuance of the shares or seek a "no
                     action"  letter from the Securities and   Exchange
                     Commission covering such issuance. The shares will
                     be  valued at the  dollar weighted average trading
                     price per share for all round lot transactions  in
                     the stock on the Nasdaq  National  Market  for the
                     twenty  (20)  trading  days  ending two  (2)  days
                     prior to the  date  that  the Settlement   Hearing
                     commences (the "Trading Price").  If  the  Trading
                     Price is less than thirty dollars ($30) per share,
                     then MicroStrategy will issue   such   number   of
                     additional  Class  A  common  shares  which,  when
                     multiplied  by the  Trading  Price,  will  yield a
                     product  equal  to the  amount  by  which  sixteen
                     million    five    hundred     thousand    dollars
                     ($16,500,000)  exceeds the product of five hundred
                     fifty   thousand   (550,000)   multiplied  by  the
                     Trading  Price.   MicroStrategy  shall  issue  and
                     deliver such shares as instructed  by  Plaintiffs'
                     Co-Lead  Counsel,  in  whole  or in part  and from
                     time to time as instructed by Plaintiffs'  Co-Lead
                     Counsel  at  MicroStrategy's   sole  expense.   To
                     protect against dilution,  the number of shares to
                     be  issued  will be  increased  based  on a dollar
                     weighted  average  anti-dilution  formula  in  the
                     event  that  MicroStrategy  issues  or  sells  any
                     equity  securities or equity linked  securities to
                     any person,  for a price per Class A common  share
                     less than the lesser of thirty  dollars  ($30) per
                     share or the  Trading  Price,  provided,  however,
                     that   there   shall   be   excluded   from   such
                     anti-
<PAGE>

                     dilution protection (a) any issuance of options or
                     stock  to  any   employee,   officer, director  or
                     consultant  of  MicroStrategy   or   any   of  its
                     subsidiaries  pursuant to any  MicroStrategy stock
                     option, employee stock purchase or similar plan or
                     rights  plan in  effect  on  the   date   of   the
                     commencement   of  the   Settlement   Hearing   or
                     subsequently  approved by the MicroStrategy  Board
                     of  Directors,  or any  exercises  of  options  or
                     rights  issued  under  such  plans,  (b) shares of
                     stock  issuable  upon  conversion of any shares of
                     Series A Preferred  Stock  outstanding on the date
                     of commencement  of the Settlement  Hearing or any
                     issuance  of  common  stock  in lieu of  dividends
                     thereon,  (c)  shares of stock  issuable  upon the
                     conversion  of  shares  of  Class B  common  stock
                     outstanding as of the date of the  commencement of
                     the  Settlement  Hearing,   (d)  shares  of  stock
                     issuable  upon the exercise of any warrants  which
                     are   outstanding   as  of   the   date   of   the
                     commencement  of the Settlement  Hearing,  (e) any
                     shares    of   equity    securities    issued   as
                     consideration  in a merger,  combination  or other
                     acquisition  of  any  business  or the  assets  of
                     such  a   business,   (f)  any  shares  of  equity
                     securities  issued in connection  with any vendor,
                     lease or similar commercial  arrangement,  (g) any
                     shares of equity  securities  issued in connection
                     with any  strategic  alliance  to the extent  that
                     such  shares  constitute  less  than 5%  (unless a
                     greater  percentage  is  approved  by  Plaintiffs'
                     Co-Lead   Counsel)   of  the   common   stock   of
                     MicroStrategy  (including both Class A and Class B
                     shares)  issued  and  outstanding  prior  to  such
                     issuance.   The  anti-dilution   protection  shall
                     apply  only  during the  period  beginning  on the
                     date  of  the   commencement   of  the  Settlement
                     Hearing  and ending  sixty (60) days from the date
                     on  which  the  District  Court  enters  an  order
                     approving the settlement described herein.
                     In the event any Plaintiff would be entitled to a
                     fractional   share  of   Class  A  common   stock,
                     MicroStrategy  shall  be  entitled  to pay cash
<PAGE>

                     in lieu of the fractional share at the  lesser  of
                     thirty  dollars  ($30)  per  share or the  Trading
                     Price  or,  in lieu  thereof,  at  MicroStrategy's
                     option,  to increase the  principal  amount of the
                     Notes  distributable  to the shareholder  entitled
                     to the shares by the same amount.
      3.   Warrants:  Warrants issued by  MicroStrategy to purchase one
                     million nine hundred thousand  (1,900,000)  shares
                     of  MicroStrategy  Class  A  common  stock  at  an
                     exercise  price of fifty  dollars ($50) per share.
                     The  Warrants  shall  expire  five  years from the
                     date of issuance  (as defined in section 5 below).
                     The  Warrants  shall be  immediately  exercisable,
                     immediately   separable   from  the   Notes,   and
                     non-redeemable.   The  Warrants  shall  be  issued
                     pursuant  to Section  3(a)(10)  of the  Securities
                     Act   and   shall   not   constitute   "restricted
                     securities."   In  the  event  that  the  Warrants
                     cannot be issued  pursuant  to  Section  3(a)(10),
                     MicroStrategy   shall   take  such  steps  as  are
                     necessary  to permit  such  issuance,  or, in lieu
                     thereof,   shall  file  a  registration  statement
                     covering  the  issuance of the  Warrants or seek a
                     "no  action"   letter  from  the   Securities  and
                     Exchange  Commission  covering such issuance.  The
                     Warrants  shall be  exercisable  for  cash,  or in
                     lieu  thereof,  at the  option of the  holder,  in
                     Notes  provided   herein  valued  at  one  hundred
                     thirty  three  percent  (133%)  of the  sum of par
                     value  plus  interest  accrued  to the date of the
                     tender but unpaid.
                     The number and kind of securities purchasable upon
                     the exercise of  each  Warrant  and  the  exercise
                     price will be subject to  adjustment in  the event
                     of a stock split or stock dividends on  the  Class
                     A common stock, reorganizations, recapitalizations
                     and    reclassifications,     and    extraordinary
                     distributions  of other property to holders of the
                     Class  A   common   stock.   Notwithstanding   the
                     foregoing,  there  shall  be  no  adjustment  with
                     respect to any securities  issued by MicroStrategy
                     upon   conversion   of  any  shares  of  Series  A
                     Preferred  Stock  outstanding  on the  date of the
                     commencement  of  the  Settlement
<PAGE>

                     Hearing or any issuance of Class A common stock in
                     lieu of dividends on such Series A Preferred Stock.
                     In the event any Plaintiff would be entitled to  a
                     fractional   Warrant,   MicroStrategy   shall   be
                     entitled  to  issue  cash in  lieu  of  fractional
                     Warrants with each Warrant  valued at $21.0988 for
                     purposes of this calculation,  or in lieu thereof,
                     at   MicroStrategy's   option,   to  increase  the
                     principal amount of the Note  distributable to the
                     Plaintiff  entitled  to the  Warrants  by the same
                     amount.
      4.   Registration  and  Listing  Obligations:  During  the period
                     that any Warrants are  outstanding,  MicroStrategy
                     agrees  that it will,  at its sole  cost,  use its
                     best  efforts  to  keep a  registration  statement
                     relating  to the  issuance  of the  Class A common
                     shares  upon  exercise of the  Warrants  effective
                     under the Securities Act; provided,  however, that
                     MicroStrategy  shall  have  the  right in its sole
                     discretion  to  delay  the  effectiveness  of  any
                     registration   statement  or  suspend  offers  and
                     sales under any effective registration  statement,
                     at any  time  and  for  any  period,  if (a)  such
                     action is  required  by  applicable  law,  (b) the
                     effectiveness  of a registration  statement or the
                     continuation   of  offers   and   sales   under  a
                     registration   would  require   MicroStrategy   to
                     disclose  a  material  financing,  acquisition  or
                     other corporate  development  and  MicroStrategy's
                     Board of Directors  (or where due to the nature of
                     the  circumstances,  timely  consultation with the
                     Board  of  Directors  is not,  in the  good  faith
                     determination  of the  Chairman of the Board,  the
                     Chief  Executive  Officer  or the Chief  Financial
                     Officer  of  MicroStrategy,  possible,  then  such
                     person)  shall have  determined in good faith that
                     such  disclosure  is not in the best  interests of
                     MicroStrategy and its shareholders,  or (c) if the
                     Board of Directors  shall have  determined in good
                     faith  that there is a valid  business  purpose or
                     reason  for such delay or  suspension.  This right
                     to delay  the  effectiveness  of any  registration
                     statement  or suspend  offers and
<PAGE>

                     sales  under  any effective registration statement
                     may only  be  invoked for ninety (90) trading days
                     out of any three hundred sixty five (365) calendar
                     day period.
                     MicroStrategy  will  comply with all Blue Sky laws
                     applicable to  the  Warrants,  Notes  and  Class A
                     common stock.  MicroStrategy  will  use  its  best
                     efforts  to  effect  the  listing  of  the  Notes,
                     Warrants and  the underlying  shares on the Nasdaq
                     National  Market, the American  Stock  Exchange or
                     the   New  York  Stock  Exchange  (or  other  such
                     principal   market  as approved   by   Plaintiffs'
                     Co-Lead   Counsel) commencing on the date of their
                     issuance and will use its best efforts to maintain
                     such  listing  during the period that any Notes or
                     Warrants are outstanding. MicroStrategy shall have
                     no obligation to make a market in the Notes or the
                     Warrants.
      5.   Definition of Issuance and Term of Notes and Warrants:
                     Notwithstanding  anything in this Exhibit A to the
                     contrary,  there  shall be a single  date on which
                     all  Notes  and  Warrants   issued  as  Settlement
                     Consideration  shall mature or expire, as the case
                     may be.  That date  shall be the date that is five
                     (5) years from the date of  issuance  of the first
                     Note   or    Warrant    issued    as    Settlement
                     Consideration.   In   addition,   there  shall  be
                     common  semi-annual  dates  on which  interest  is
                     payable   on  all  Notes   issued  as   Settlement
                     Consideration.  Those  semi-annual  dates shall be
                     determined  on the  basis of the date of  issuance
                     of  the  first   Note  to  be  issued   hereunder.
                     MicroStrategy  shall  issue and  deliver the Notes
                     and Warrants as instructed by Plaintiffs'  Co-Lead
                     Counsel,  in whole  or in part  and  from  time to
                     time  as   instructed   by   Plaintiffs'   Co-Lead
                     Counsel, at MicroStrategy's sole expense.
      6.   Protection   Against   Contingencies:   The  Stipulation  of
                     Settlement  shall contain  formulas for the number
                     of shares to be issued  pursuant to the settlement
                     and/or exercise of the Warrants  consistent,  from
                     a   financial   standpoint,   with  the   formulas
                     contained  herein, in the event of any
<PAGE>

                     one or more of the following  contingencies:   (a)
                     MicroStrategy ceases to be a  public company;  (b)
                     MicroStrategy Class A common  shares  cease to  be
                     listed  on  the  Nasdaq   National   Market,   the
                     American  Stock Exchange  or the  New  York  Stock
                     Exchange;  (c)    there    is    a   MicroStrategy
                     recapitalization, corporate  merger,  acquisition,
                     combination  or   other  type  of   reorganization
                     which  results  in eliminating  the Class A common
                     stock; and/or (d) there  is a halt in  trading  of
                     Class  A  common stock   during  all  or  part  of
                     the   valuation period(s).  In  addition,  in  the
                     event of  any merger,  reorganization,   or  other
                     change  in control,  the  contractual  rights  and
                     obligations   created   in   connection  with this
                     Settlement shall not be diminished or impaired  in
                     any  way  and shall be assumed by the  acquirer or
                     successor as appropriate.
<PAGE>Exhibit 10.1

                           STOCK OPTION AGREEMENT

     Stock Option Agreement, dated as of November 1, 2000, between PBOC
Holdings, Inc., a Delaware corporation ("Grantee"), and BYL Bancorp, a
California corporation ("Issuer").

                            W I T N E S S E T H:

     WHEREAS, Grantee and Issuer have entered into an Agreement and Plan of
Reorganization of even date herewith (the "Merger Agreement"), providing for,
among other things, the merger of Issuer with and into a wholly-owned
subsidiary of Grantee (the "Merger");

     WHEREAS, as a condition and an inducement to Grantee to enter into the
Merger Agreement, Issuer has agreed to grant Grantee the Option (as
hereinafter defined); and

     NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:

     1.   (a) Issuer hereby grants to Grantee an unconditional, irrevocable
option (the "Option") to purchase, subject to the terms hereof, up to an
aggregate of 505,971 fully paid and nonassessable shares (the "Option Shares")
of common stock of Issuer (the "Common Stock") at a price per share equal to
$10.597 (the "Option Price"); provided, however, that in no event shall the
number of shares for which this Option is exercisable exceed 19.9% of the
issued and outstanding shares of Common Stock without giving effect to any
shares subject to or issued pursuant to the Option.  The number of shares of
Common Stock that may be received upon the exercise of the Option and the
Option Price are subject to adjustment as herein set forth.

     (b)  In the event that any additional shares of Common Stock are issued
or otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement and other than pursuant to an event described in
Section 5(a) hereof), including, without limitation, pursuant to stock option
or other employee plans or as a result of the exercise of conversion rights,
the number of shares of Common Stock subject to the Option shall be increased
so that, after such event, such number equals 19.9% of the number of shares of
Common Stock then issued and outstanding without giving effect to any shares
subject to or issued pursuant to the Option.  Nothing contained in this
Section l(b) or elsewhere in this Agreement shall be deemed to authorize
Issuer to issue shares in breach of any provision of the Merger Agreement.

     2.   (a) The Holder (as hereinafter defined) may exercise the Option,
in whole or part, and from time to time, if, but only if, both an Initial
Triggering Event (as hereinafter defined) and a Subsequent Triggering Event
(as hereinafter defined) shall have occurred prior to the occurrence of an
Exercise Termination Event (as hereinafter defined), provided that the Holder
shall have sent the written notice of the first exercise (as provided in
paragraph (e) of this Section 2) within 90 days following the first Subsequent
Triggering Event to occur (or such later period as provided in Section 7).
Each of the following shall be an Exercise Termination Event: (i) the
Effective Time (as defined

in the Merger Agreement); (ii) termination of the Merger
Agreement in accordance with the provisions thereof if such termination
occurs prior to the occurrence of an Initial Triggering Event, except a
termination by Grantee pursuant to Section 7.1(b) of the Merger Agreement
(unless the breach by Issuer giving rise to such right of termination was non-
volitional); or (iii) the passage of 15 months after termination of the Merger
Agreement if such termination follows the occurrence of an Initial Triggering
Event or is a termination by Grantee pursuant to Section 7.1(b) of the Merger
Agreement (unless the breach by Issuer giving rise to such right of
termination is non-volitional), provided that if an Initial Triggering Event
continues or occurs beyond such termination and prior to the passage of such
15-month-period, the Exercise Termination Event shall be 15 months from the
expiration of the Last Triggering Event but in no event more than 18 months
after such termination.  The term "Last Triggering Event" shall mean the last
"Initial Triggering Event" to expire, and the term "Holder" shall mean the
holder or holders of the Option pursuant to this Agreement.  Notwithstanding
anything to the contrary contained herein, the Option may not be exercised at
any time when Grantee shall be in willful material breach of any of its
covenants or agreements contained in the Merger Agreement such that Issuer
shall be entitled to terminate the Merger Agreement pursuant to Section 7.1(b)
thereof as a result of such a willful material breach.

     (b)  The term "Initial Triggering Event" shall mean any of the
following events or transactions occurring on or after the date hereof:

      (i)  Issuer or any Subsidiary of Issuer (an "Issuer Subsidiary"),
without having received Grantee's prior written consent, shall have entered
into an agreement to engage in an Acquisition Transaction (as hereinafter
defined) with any person (the term "person" for purposes of this Agreement
having the meaning assigned thereto in Sections 3(a)(9) and 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules
and regulations thereunder), other than Grantee or any Subsidiary of Grantee
(a "Grantee Subsidiary") or the Board of Directors of Issuer (the "Issuer
Board") shall have recommended that the shareholders of Issuer approve or
accept any Acquisition Transaction with any person other than Grantee or a
Grantee Subsidiary.  For purposes of this Agreement, (a) "Acquisition
Transaction" shall mean (w) a merger or consolidation, or any similar
transaction, involving Issuer or any Issuer Subsidiary (other than mergers,
consolidations or similar transactions (i) involving solely Issuer and/or one
or more wholly-owned Subsidiaries of Issuer, provided any such transaction is
not entered into in violation of the terms of the Merger Agreement, or (ii) in
which the shareholders of Issuer immediately prior to the completion of such
transaction own at least 50% of the Common Stock of Issuer (or the resulting
or surviving entity in such transaction) immediately after completion of such
transaction, provided any such transaction is not entered into in violation of
the terms of the Merger Agreement), (x) a purchase, lease or other acquisition
of all or any substantial part of the assets or deposits of Issuer or any
Issuer Subsidiary, (y) a purchase or other acquisition (including by way of
merger, consolidation, share exchange or otherwise) of securities representing
10% or more of the voting power of Issuer or any Issuer Subsidiary or (z) any
substantially similar transaction; and (b) "Subsidiary" shall have the meaning
set forth in Rule 12b-2 under the 1934 Act;

                                      2

      (ii)  Any person, other than Grantee or a Grantee Subsidiary, shall have
acquired beneficial ownership or the right to acquire beneficial ownership of
10% or more of the outstanding shares of Common Stock (the term "beneficial
ownership" for purposes of this Agreement having the meaning assigned thereto
in Section 13(d) of the 1934 Act, and the rules and regulations thereunder);

      (iii)  Any person, other than Grantee or a Grantee Subsidiary, shall have
made a bona fide proposal to Issuer or its stockholders by public announcement
or written communication that is or becomes the subject of public disclosure
to engage in an Acquisition Transaction;

      (iv)  The Issuer Board, without having received Grantee's prior written
consent, shall have withdrawn or modified, or publicly announced its interest
to withdraw or modify in any manner adverse in any respect to Grantee, its
recommendation that the stockholders of Issuer approve the transactions
contemplated by the Merger Agreement in anticipation of engaging in an
Acquisition Transaction, or Issuer or any Issuer Subsidiary shall have
authorized, recommended or proposed, or publicly announced its intention to
authorize, recommend or propose, an agreement to engage in an Acquisition
Transaction with any person other than Grantee or a Grantee Subsidiary;

      (v)  Any person other than Grantee or a Grantee Subsidiary shall have
filed with the Securities and Exchange Commission ("SEC") a registration
statement or tender offer materials with respect to a potential exchange or
tender offer that would constitute an Acquisition Transaction (or filed a
preliminary proxy statement with the SEC with respect to a potential vote by
its stockholders to approve the issuance of shares to be offered in such an
exchange offer);

      (vi)  After an overture is made by any person, other than Grantee or a
Grantee Subsidiary, to Issuer or its stockholders to engage in an Acquisition
Transaction, Issuer shall have breached any covenant or obligation contained
in the Merger Agreement and such breach (x) would entitle Grantee to terminate
the Merger Agreement (whether immediately or after the giving of notice or
passage of time or both) and (y) shall not have been cured prior to the Notice
Date (as defined below); or

      (vii) Any person other than Grantee or a Grantee Subsidiary shall have
filed an application or notice with any federal or state bank regulatory or
antitrust authority, which application or notice has been accepted for
processing, for approval to engage in an Acquisition Transaction.

     (c)  The term "Subsequent Triggering Event" shall mean any of the following
events or transactions occurring after the date hereof:

      (i)   The acquisition by any person (other than Grantee or any Grantee
Subsidiary) of beneficial ownership of 25% or more of the then outstanding
Common Stock; or

      (ii)  The occurrence of the Initial Triggering Event described in clause
(i) of subsection (b) of this Section 2, except that the percentage referred
to in clause (y) of the second sentence thereof shall be 20%.

                                     3

     (d)  Issuer shall notify Grantee promptly in writing of the occurrence of
any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering Event") of which it has notice, it being understood that the giving
of such notice by Issuer shall not be a condition to the right of the Holder to
exercise the Option.

     (e)  In the event the Holder is entitled to and wishes to exercise the
Option (or any portion thereof), it shall send to Issuer a written notice
(the date of which being herein referred to as the "Notice Date") specifying
(i) the total number of shares of Common Stock it will purchase pursuant to
such exercise and (ii) a place and date not earlier than three business days
nor later than 60 business days from the Notice Date for the closing of such
purchase (the "Closing"); provided that if prior notification to or approval
of any regulatory or antitrust agency is required in connection with such
purchase, the Holder shall promptly file the required notice or application for
approval, shall promptly notify Issuer of such filing and shall expeditiously
process the same and the period of time that otherwise would run pursuant to
this sentence shall run instead from the date on which any required
notification periods have expired or been terminated or such approvals have
been obtained and any requisite waiting period or periods shall have passed.
Any exercise of the Option shall be deemed to occur on the Notice Date
relating thereto.  The term "business day" for purposes of this Agreement
means any day, excluding Saturdays, Sundays and any other day that is a legal
holiday in the State of California or a day on which banking institutions in
the State of California are authorized by law or executive order to close.

     (f)  At a Closing, the Holder shall (i) pay to Issuer the aggregate
purchase price for the shares of Common Stock purchased pursuant to the
exercise of the Option in immediately available funds by wire transfer to a
bank account designated by Issuer, and (ii) present and surrender this
Agreement to Issuer at its principal executive offices, provided that the
failure or refusal of the Issuer to designate such a bank account or accept
surrender of this Agreement shall not preclude the Holder from exercising the
Option.

     (g)  At a Closing, simultaneously with the delivery of immediately
available funds as provided in subsection (f) of this Section 2, Issuer
shall deliver to the Holder a certificate or certificates representing the
number of shares of Common Stock purchased by the Holder and, if the
Option should be exercised in part only, a new Option evidencing the
rights of the Holder thereof to purchase the balance of the shares
purchasable hereunder, and the Holder shall deliver to Issuer a copy of
this Agreement and a letter agreeing that the Holder will not offer to sell
or otherwise dispose of such shares in violation of applicable law or the
provisions of this Agreement.

     (h)  Certificates for Common Stock delivered at a Closing hereunder
may be endorsed (in the sole discretion of Issuer) with a restrictive
legend that shall read substantially as follows:

         "The transfer of the shares represented by this certificate is
   subject to certain provisions of an agreement between the registered
   holder hereof and Issuer and to resale restrictions arising under the
   Securities Act of 1933, as amended.  A copy of such agreement is on
   file at

                                      4

   the principal office of Issuer and will be provided to the holder
   hereof without charge upon receipt by Issuer of a written request
   therefor."

It is understood and agreed that: (i) the reference to the resale restrictions
of the Securities Act of 1933, as amended (the "1933 Act"), in the above
legend shall be removed by delivery of substitute certificate(s) without
such reference if the Holder shall have delivered to Issuer a copy of a
letter from the staff of the SEC, or an opinion of counsel, in form and
substance reasonably satisfactory to Issuer, to the effect that such legend
is not required for purposes of the 1933 Act; (ii) the reference to the
provisions of this Agreement in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if the shares
have been sold or transferred in compliance with the provisions of this
Agreement and under circumstances that do not require the retention of
such reference in the reasonable opinion of counsel to the Holder; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied.  In addition, such
certificates shall bear any other legend as may be required by law.

     (i)  Upon the giving by the Holder to Issuer of the written notice of
exercise of the Option provided for under paragraph (e) of this Section 2,
the tender of the applicable purchase price in immediately available
funds and the tender of a copy of this Agreement to Issuer, the Holder
shall be deemed, subject to the receipt of any necessary regulatory
approvals, to be the holder of record of the shares of Common Stock
issuable upon such exercise, notwithstanding that the stock transfer
books of Issuer shall then be closed or that certificates representing such
shares of Common Stock shall not then be actually delivered to the
Holder.  Issuer shall pay all expenses, and any and all United States
federal, state and local taxes and other charges that may be payable in
connection with the preparation, issue and delivery of stock certificates
under this Section 2 in the name of the Holder or its assignee, transferee
or designee.

   3. Issuer agrees: (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares
of Common Stock so that the Option may be exercised without
additional authorization of Common Stock after giving effect to all other
options, warrants, convertible securities and other rights to purchase
Common Stock; (ii) that it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or sale of assets, or by
any other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be
observed or performed hereunder by Issuer; (iii) promptly to take all
action as may from time to time be required (including without
limitation (x) complying with all applicable premerger notification,
reporting and waiting period requirements specified in 15 U.S.C. Section
18a and regulations promulgated thereunder and (y) in the event, under
the Change in Bank Control Act of 1978, as amended, or any state or
other federal banking law, prior approval of or notice to any state or
federal regulatory authority is necessary before the Option may be
exercised, cooperate fully with the Holder in connection with the
preparation of such applications or notices and providing such
information to such state or federal regulatory authority as they may
require) in order to permit the Holder to exercise the Option and Issuer
duly and effectively to issue shares of Common Stock pursuant hereto;
and (iv) promptly to take all action provided herein to protect the rights
of the Holder against dilution.

                                      5

   4. This Agreement and the Option granted hereby are exchangeable,
without expense, at the option of the Holder, upon presentation and
surrender of this Agreement at the principal office of Issuer, for other
Agreements providing for Options of different denominations entitling
the holder thereof to purchase on the same terms and subject to the same
conditions as are set forth herein in the aggregate the same number of
shares of Common Stock purchasable hereunder.  The terms
"Agreement" and "Option" as used herein include any Stock Option
Agreements and related Options for which this Agreement (and the
Option granted hereby) may be exchanged.  Upon receipt by Issuer of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Agreement, if mutilated, Issuer will
execute and deliver a new Agreement of like tenor and date.  Any such
new Agreement executed and delivered shall constitute an additional
contractual obligation on the part of Issuer, subject to the
aforementioned indemnification, if applicable, whether or not the
Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.

   5. In addition to the adjustment in the number of shares of Common
Stock that are purchasable upon exercise of the Option pursuant to
Section 1 of this Agreement, the number of Option Shares purchasable
upon the exercise of the Option and the Option Price shall be subject to
adjustment from time to time as provided in this Section 5.

     (a)  In the event of any change in, or distributions in respect of, the
Common Stock by reason of stock dividend, split-up, merger,
recapitalization, combination, subdivision, conversion, exchange of
shares, distribution on or in respect of the Common Stock or similar
transaction, the type and number of Option Shares shall be adjusted
appropriately, and proper provision shall be made in the agreements
governing such transaction, so that Grantee shall receive upon exercise
of the Option the number and class of Option Shares that Grantee would
have held immediately after such event if the Option had been exercised
immediately prior to such event, or the record date therefor, as
applicable.

     (b)  Whenever the number of Option Shares is adjusted as provided
in this Section 5, the Option Price shall be adjusted by multiplying the
Option Price by a fraction, the numerator of which shall be equal to the
number of Option Shares purchasable prior to the adjustment and the
denominator of which shall be equal to the number of Option Shares
purchasable after the adjustment.

   6. Upon the occurrence of a Subsequent Triggering Event that
occurs prior to an Exercise Termination Event, Issuer shall, at the
request of Grantee delivered within six  months (or such later period as
provided in Section 10) following such Subsequent Triggering Event
(whether on its own behalf or on behalf of any subsequent holder of this
Option (or part thereof) or any of the Option Shares issued pursuant
hereto), promptly prepare, file and keep current, with respect to the
Option and the Option Shares, a registration statement under the 1933
Act and qualify such Option and Option Shares for  resale or other
disposition under applicable state securities laws, in each case in
accordance with any plan of disposition requested by Grantee.  Issuer
will use all reasonable efforts to cause such registration statement
promptly to become effective and then to remain effective for

                                      6

such period not in excess of 180 days from the day such registration statement
first becomes effective or such shorter time as may be reasonably
necessary to effect such sales or other dispositions.  Grantee shall have
the right to demand two such registrations.  The Issuer shall bear the
costs of such registrations (including, but not limited to, Issuer's
attorneys' fees, printing costs and filing fees, except for underwriting
discounts or commissions, brokers' fees and the fees and disbursements
of Grantee's counsel related thereto).  The foregoing notwithstanding, if,
at the time of any request by Grantee for registration of the Option or
Option Shares as provided above, Issuer is in registration with respect to
an underwritten public offering by Issuer of shares of Common Stock,
and if in the good faith judgment of the managing underwriter or
managing underwriters, or, if none, the sole underwriter or underwriters,
of such offering, the inclusion of the Option and/or Option Shares would
interfere with the successful marketing of the shares of Common Stock
offered by Issuer, the number of shares represented by the Option and/or
the number of Option Shares otherwise to be covered in the registration
statement contemplated hereby may be reduced; provided, however, that
after any such required reduction the number of shares represented by
the Option and/or the number of Option Shares to be included in such
offering for the account of the Holder shall constitute at least 25% of the
total number of shares to be sold by the Holder and Issuer in the
aggregate; and provided further, however, that if such reduction occurs,
then Issuer shall file a registration statement for the balance as promptly
as practicable thereafter as to which no reduction pursuant to this
Section 6 shall be permitted or occur.  Each such Holder shall provide all
information reasonably requested by Issuer for inclusion in any such
registration statement to be filed hereunder.  If requested by any such
Holder in connection with such registration, Issuer shall become a party
to any underwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect of representations,
warranties, indemnities and other agreements customarily included in
secondary offering underwriting agreements.  Upon receiving any
request under this Section 6 from any Holder, Issuer agrees to send a
copy thereof to any other person known to Issuer to be entitled to
registration rights under this Section 6, in each case by promptly mailing
the same, postage prepaid, to the address of record of the persons
entitled to receive such copies.  Notwithstanding anything to the
contrary contained herein, in no event shall the number of registrations
that Issuer is obligated to effect be increased by reason of the fact that
there shall be more than one Holder as a result of any assignment or
division of this Agreement.

   7. The 90-day or 6-month periods for exercise of certain rights
under Sections 2, 6, and 9 shall be extended: (i) to the extent necessary
to obtain all regulatory approvals for the exercise of such rights (for so
long as the Holder is using its reasonable best efforts to obtain such
regulatory approvals), and for the expiration of all statutory waiting
periods; (ii) during the pendency of any temporary restraining order,
injunction or other legal bar to exercise of such rights; and (iii) to the
extent necessary to avoid liability under Section 16(b) of the 1934 Act
by reason of such exercise.

   8. (a)  Issuer hereby represents and warrants to Grantee as follows:

   (i) Issuer has full corporate power and authority to execute and
deliver this Agreement and to consummate the transactions
contemplated hereby.  The execution and delivery of this Agreement

                                      7

and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the Issuer Board and no other corporate
proceedings on the part of Issuer are necessary to authorize this
Agreement or to consummate the transactions so contemplated.  This
Agreement has been duly and validly executed and delivered by Issuer
and is a valid and legally binding obligation of Issuer, enforceable
against Issuer in accordance with its terms, except that enforcement
thereof may be limited by the receivership, conservatorship and
supervisory powers of bank regulatory agencies generally as well as
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting enforcement of creditors rights generally and except that
enforcement thereof may be subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law) and the availability of equitable remedies.

     (ii)   Issuer has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms
will have reserved for issuance upon the exercise of the Option, that
number of shares of Common Stock equal to the maximum number of
shares of Common Stock at any time and from time to time issuable
hereunder, and all such shares, upon issuance pursuant thereto, will be
duly authorized, validly issued, fully paid, nonassessable, and will be
delivered free and clear of all claims, liens, encumbrances and security
interests and not subject to any preemptive rights.

     (b)   Grantee hereby represents and warrants to Issuer that:

     (i)   Grantee has full corporate power and authority to execute and
deliver this Agreement and, subject to any approvals or consents referred
to herein, to consummate the transactions contemplated hereby.  The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Grantee and no other corporate
proceedings on the part of Grantee are necessary to authorize this
Agreement or to consummate the transactions so contemplated.  This
Agreement has been duly executed and delivered by Grantee and is a
valid and legally binding obligation of Grantee.

     (ii)   The Option is not being, and any shares of Common Stock or
other securities acquired by Grantee upon exercise of the Option will not
be, acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.

   9. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any
other person, without the express written consent of the other party,
except that in the event a Subsequent Triggering Event shall have
occurred prior to an Exercise Termination Event, Grantee, subject to the
express provisions hereof, may assign in whole or in part its rights and
obligations hereunder within six months following such Subsequent
Triggering Event; provided, however, that until the date 15 days
following the date on which the applicable federal or state bank
regulatory authority approves an application by Grantee to acquire the
shares of Common Stock subject to the Option, Grantee may not assign
its rights under the Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one

                                     8

party acquires the right to purchase in excess of 2% of the voting shares of
Issuer, (iii) an assignment to a single party (e.g., a broker or investment
banker) for the sole purpose of conducting a widely dispersed public
distribution on Grantee's behalf or (iv) any other manner approved by the
applicable federal or state bank regulatory authority.

   10.Each of Grantee and Issuer will use all reasonable efforts to make all
filings with, and to obtain consents of, all third parties and governmental
authorities necessary to the consummation of the transactions contemplated by
this Agreement, including, without limitation, applying to the applicable
federal or state bank regulatory authority for approval to acquire the
shares issuable hereunder and applying for listing or quotation of such
shares on any exchange or quotation system on which the Common
Stock is then listed or quoted.

   11.The parties hereto acknowledge that damages would be an inadequate remedy
for a breach of this Agreement by either party hereto and that the obligations
of the parties hereto shall be enforceable by either party hereto through
injunctive or other equitable relief.

   12.If any term, provision, covenant or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated.  If for any reason such court or
regulatory agency determines that the Holder is not permitted to acquire
the full number of shares of Common Stock provided in Section l(a)
hereof (as adjusted pursuant to Section l(b) or Section 5 hereof), it is the
express intention of Issuer to allow the Holder to acquire such lesser
number of shares as may be permissible, without any amendment or
modification hereof.

   13.All notices, requests, claims, demands and other communications hereunder
shall be deemed to have been duly given when delivered in person, by fax,
telecopy or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in
the Merger Agreement.

   14.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflict of law principles thereof.

   15. This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original, but all of which shall constitute one
and the same agreement.

   16.Except as otherwise expressly provided herein, each of the parties hereto
shall bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated hereunder, including fees
and expenses of its own financial consultants, investment bankers,
accountants and counsel.

                                      9

   17.Except as otherwise expressly provided herein or in the Merger Agreement,
this Agreement contains the entire agreement between the parties with
respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereof, written or
oral.  The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.  Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties
hereto, and their respective successors and permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided herein.

   18.Capitalized terms used in this Agreement and not defined herein shall
have the meanings assigned thereto in the Merger Agreement.

                                     10

      IN WITNESS WHEREOF, Grantee and Issuer have caused this Agreement to
be executed by their duly authorized officers as of the day and year first
above written.

                                              PBOC HOLDINGS, INC.
Attest:

/s/ J. Michael Holmes                         By:  /s/ Rudolf P. Guenzel
----------------------------------                 ---------------------------
Name:  J. Michael Holmes                           Name:  Rudolf P. Guenzel
Title: Senior Executive Vice President,            Title: President and Chief
        Chief Financial Officer and                         Executive Officer
        Secretary

                                              BYL BANCORP
Attest:

/s/ John J. Myers                             By:  /s/ Robert Ucciferri
----------------------------------                 ---------------------------
Name:  John "Jack" Myers                           Name:  Robert Ucciferri
Title: Secretary                                   Title: President and Chief
                                                          Executive Officer

                                     11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00016-of-00352.parquet"}]]