Exhibit 10.7

Executed Version

June 30, 2010

CapGen Capital Group VI LP
280 Park Avenue
40th Floor West, Suite 401
New York, New York 10017

Ladies and Gentlemen:

Reference is made to the Investment Agreement dated as of June 30, 2010 (as
amended, supplemented or otherwise modified from time to time, the “Investment
Agreement”) by and between CapGen Capital Group VI LP (“CapGen”) and Hampton
Roads Bankshares, Inc. (the “Company”). Capitalized terms used herein and not
otherwise defined shall have the meanings given to them in the Investment
Agreement.

The Company and CapGen hereby agree as follows:

On the First Closing Date, the Company will issue to CapGen:

 
(i)
A warrant in substantially the form attached hereto as Exhibit A-1 (the “1.0%
Warrant”) to purchase Common Shares at an exercise or strike price of $0.43 per
Common Share aggregating 7,296,175 Common Shares or such greater number of
shares, which in all cases, shall equal 1.0% of the outstanding Common Stock of
the Company, on a fully diluted basis, immediately after giving effect to the
transactions contemplated by the Transaction Documents, including, without
limitation, giving effect to the issuance of all shares of Common Stock offered
pursuant to the Rights Offering and regardless of whether purchased in the
Rights Offering or pursuant to the backstop thereto, the issuance of Common
Stock and warrants through the “Second Closing Date” (as defined in the as
defined in the Amended and Restated Investment Agreement, by and among Carlyle
Global Financial Services Partners, L.P., ACMO-HR, L.L.C. and the Company) and
assuming the issuance of all Common Stock issuable pursuant to all outstanding
warrants, which shall be exercisable beginning immediately upon issuance; and

 
(ii)
A warrant in substantially the form attached hereto as Exhibit A-2 (the “0.5%
Warrant”) to purchase Common Shares at an exercise or strike price of $0.43 per
Common Share aggregating 3,648,087 Common Shares or such greater number of
shares, which in all cases shall equal 0.5% of the outstanding Common Stock of
the Company, on a fully diluted basis, immediately after giving effect to the
transactions contemplated by the Transaction Documents, including, without
limitation, giving effect to the issuance of all shares of Common Stock offered
pursuant to the Rights Offering and regardless of whether purchased in the
Rights Offering or pursuant to the backstop thereto, the issuance of Common
Stock and warrants through the Second Closing Date, and assuming

ATI-2428098v7
 
 

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the issuance of all Common Stock issuable pursuant to all outstanding warrants,
which shall be exercisable upon the earlier of (a) the written stay,
modification, termination, or suspension by the Federal Reserve Bank of Richmond
or another responsible official of the Board of Governors of the Federal Reserve
System or its delegee and the Virginia Bureau of Financial Institutions of the
Written Agreement and (b) the sale of the Company or the Bank.

Herein, the 1.0% Warrant and the 0.5% Warrant are sometimes collectively
referred to as the “CapGen Warrants”). The CapGen Warrants will be issued as an
inducement to, and in consideration of, CapGen’s participation pursuant to the
Investment Agreement, as an investor in the transactions contemplated by the
Transaction Documents.

The issuance of the CapGen Warrants shall not have any effect on the amount of
the expenses of CapGen and its Affiliates to be payable by the Company in cash
pursuant to the Investment Agreement.

The Company hereby agrees and acknowledges that the registration rights set
forth in the Investment Agreement are applicable to the CapGen Warrants and the
Common Shares issuable upon exercise of the CapGen Warrants, each of which shall
be deemed to be “Registrable Securities” thereunder.

The Company and CapGen hereby agree to make, no later than the Effectiveness
Deadline, any revisions to the CapGen Warrants acceptable to CapGen and
necessary in order to permit a public distribution thereof, including entering
into a customary warrant agreement, appointing a warrant agent and taking such
other steps as will be needed to facilitate such a public distribution.

For the convenience of the parties hereto, this letter agreement may be executed
in any number of separate counterparts, each such counterpart being deemed to be
an original instrument, and all such counterparts will together constitute the
same agreement. Executed signature pages to this letter agreement may be
delivered by facsimile or electronic copy and such facsimiles or electronic copy
will be deemed as sufficient and legally binding as if actual signature pages
had been delivered.

This letter agreement will be governed by and construed in accordance with the
Laws of the State of New York applicable to contracts made and to be performed
entirely within such State.

[Signature page follows]

 
 
 

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If you agree with the foregoing, please sign and return a copy of this letter,
which will constitute our agreement with respect to the subject matter of this
letter.
 

                                  Very truly yours,
 
          HAMPTON ROADS BANKSHARES, INC.

 
By:
 _____________________

 
Name:

 
Title:

CONFIRMED AND AGREED
as of the date first above written:

CAPGEN CAPITAL GROUP VI LP

 
By:
CAPGEN CAPITAL GROUP VI, LLC,

 
ITS GENERAL PARTNER

 
By:
   

 
Name:

 
Title:

[Signature Page to CapGen Investment Letter]
 
 
 

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Exhibit A-1

 
Form of 1.0% Warrant

 
 
 

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Exhibit A-2

 
Form of 0.5% Warrant