Exhibit 10.1

UNITED STATES DEPARTMENT OF THE TREASURY

1500 PENNSYLVANIA AVENUE, NW

WASHINGTON, D.C. 20220

May 5, 2009

Ladies and Gentlemen:

Reference is made to that certain Letter Agreement incorporating the Securities
Purchase Agreement – Standard Terms (the “Securities Purchase Agreement”), dated
as of the date set forth on Schedule A hereto, between the United States
Department of the Treasury (the “Investor”) and the company set forth on
Schedule A hereto (the “Company”). Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Securities Purchase Agreement.
Pursuant to the Securities Purchase Agreement, at the Closing, the Company
issued to the Investor the number of shares of the series of its preferred stock
set forth on Schedule A hereto (the “Preferred Shares”) and a warrant to
purchase the number of shares of its common stock set forth on Schedule A hereto
(the “Warrant”).

In connection with the consummation of the repurchase (the “Repurchase”) by the
Company from the Investor, on the date hereof, of the number of Preferred Shares
listed on Schedule A hereto (the “Repurchased Preferred Shares”), as permitted
by the Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009:

(a) The Company hereby acknowledges receipt from the Investor of the share
certificate(s) set forth on Schedule A hereto representing the Preferred Shares;
and

(b) The Investor hereby acknowledges receipt from the Company of a wire transfer
to the account of the Investor set forth on Schedule A hereto in immediately
available funds of the aggregate purchase price set forth on Schedule A hereto,
representing payment in full for the Repurchased Preferred Shares at a price per
share equal to the Liquidation Amount per share, together with any accrued and
unpaid dividends to, but excluding, the date hereof.

The Investor and the Company hereby agree that, notwithstanding Section 4.4 of
the Securities Purchase Agreement, immediately following consummation of the
Repurchase, but subject to compliance with applicable securities laws, the
Investor shall be permitted to Transfer all or a portion of the Warrant or
Substitute Warrant (as defined below) with respect to, and/or exercise the
Warrant or Substitute Warrant for, all or a portion of the number of shares of
Common Stock issuable thereunder, at any time and without limitation, and
Section 4.4 of the Securities Purchase Agreement shall be deemed to be amended
in order to permit the foregoing. The Company shall take all steps as may be
reasonably requested by the Investor to facilitate any such Transfer.

In addition, the Company agrees that within 15 calendar days of the date hereof
the Company shall either (a) deliver to the Investor a notice of intent to
repurchase the Warrant in accordance with Section 4.9(b) of the Securities
Purchase Agreement (the “Warrant Repurchase

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Notice”), or (b) issue and deliver to the Investor a new warrant, in
substantially the form of the Warrant, except with the deletion of Section 13(H)
thereof, to purchase the number of shares of Common Stock into which the Warrant
is then exercisable (the “Substitute Warrant”), which Substitute Warrant shall
be deemed the “Warrant” for all purposes under the Securities Purchase
Agreement.

In the event that the Company delivers a Warrant Repurchase Notice and the
Company and the Investor fail to agree on the Fair Market Value of the Warrant
pursuant to the procedures (including the Appraisal Procedure), and in
accordance with the time periods, set forth in Section 4.9(c) of the Securities
Purchase Agreement or the Company revokes the delivery of such Warrant
Repurchase Notice, then the Company shall deliver a Substitute Warrant to the
Investor within 5 calendar days of the earlier of the failure to agree on the
Fair Market Value and the revocation of the Warrant Repurchase Notice.

Effective as of the date of receipt of the Substitute Warrant, if applicable,
the Investor hereby provides notice, pursuant to Section 4.5(p) of the
Securities Purchase Agreement, of its intention to sell the Substitute Warrant.

This letter agreement will be governed by and construed in accordance with the
federal law of the United States if and to the extent such law is applicable,
and otherwise in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

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 and such facsimiles
will be deemed sufficient as if actual signature pages had been delivered.

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In witness whereof, the parties have duly executed this letter agreement as of
the date first written above.

 

UNITED STATES DEPARTMENT OF THE TREASURY By:  

/s/ Duane Morse

Name:   Duane Morse Title:   Chief Compliance and Risk Officer STERLING
BANCSHARES, INC. By:  

/s/ J. Downey Bridgwater

Name:   J. Downey Bridgwater Title:   Chairman, President and Chief Executive
Officer

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SCHEDULE A

General Information:

 

Date of the Letter Agreement incorporating the Securities Purchase Agreement:
     December 12, 2008 Name of the Company:      Sterling Bancshares, Inc.
Corporate or other organizational form of the Company:      Corporation
Jurisdiction of organization of the Company:      Texas Number and series of
preferred stock issued to the Investor at the Closing:     
125,198 shares of Series J Preferred Number of Initial Warrant Shares:     
2,615,557

Terms of the Repurchase:

 

Number of Preferred Shares repurchased by the Company:      125,198 Share
certificate number (representing the Preferred Shares previously issued to the
Investor at the Company:      J-1 Per share Liquidation Amount of Preferred
Shares:      $1,000 Accrued and unpaid dividends on Preferred Shares:     
$1,391,088.89 Aggregate purchase price for Repurchased Preferred Shares:     
$126,589,088.89

 

Investor wire information for payment of purchase price:   

The Bank of New York Mellon

ABA # 021000018

GLA/111567

Ref : a/c #629904

Ref: acct name: BETA EESA Preferred Account