Exhibit 10.1

 

FORM OF SUBORDINATED NOTE DUES 2016

 

EAGLE BANCORP, INC.

 

SUBORDINATED NOTE DUE 2016

 

Certificate No.

 

 

 

 

 

$

 

, 20   

Initial Principal Amount

 

 

 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT OF ANY BANK OR OTHER INSURED
DEPOSITARY INSTITUTION, AND IT IS NOT INSURED BY THE UNITED STATES OR ANY AGENCY
OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL DEPOSIT INSURANCE
CORPORATION.

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW.  NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT.

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE COMPANY SUCH
CERTIFICATES AND OTHER INFORMATION AS MAY BE REASONABLY REQUIRED TO CONFIRM THAT
THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

 

THIS NOTE IS INELIGIBLE AS COLLATERAL FOR ANY LOAN OR OTHER EXTENSION OF CREDIT
BY THE COMPANY OR ANY OF ITS SUBSIDIARIES.

 

THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING
RESTRICTIONS.

 

FOR VALUE RECEIVED, Eagle Bancorp, Inc., a Maryland corporation (the “Company”
which term includes any successor to the Company), for value received promises
to pay to                                                     , or registered
assigns, the initial principal sum of
                                               dollars and no cents
($                  .00), or such lesser amount as shall result from the
cancellation of all or a portion of this Note at the Closing (as hereinafter
defined), or partial redemption of this Note, as shall be set forth on a duly
executed Schedule A hereto, on September 30, 2016, and to pay interest on said
outstanding principal sum from August 30, 2010, or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly provided
for, monthly in arrears on the 1st day of each month, or if such day is not a
Business Day (as hereinafter defined), then the next succeeding Business Day
(each such date, an “Interest Payment Date”) (it being understood that interest
accrues for any such non-Business Day), commencing on the Interest Payment Date
in September 2010, at a fixed annual rate equal to 10% (the “Interest Rate”)
applied to the principal amount hereof, until the principal hereof is paid or
duly provided for or made available for payment, and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the

 

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Interest Rate, compounded quarterly, from the dates such amounts are due until
they are paid or made available for payment.  The amount of interest payable for
any period will be computed on the basis of the actual number of days in the
Interest Payment Period concerned divided by 360.  The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the person in whose name this Note is registered at the close of
business on the regular record date for such interest installment (the
“Holder”), which shall be fifteen days prior to the day on which the relevant
Interest Payment Date occurs.  Any such interest installment not so punctually
paid or duly provided for shall forthwith cease to be payable to the Holder on
such regular record date and may be paid to the person in whose name this Note
is registered at the close of business on a special record date. “Business Day”
means any day other than a Saturday, Sunday or any other day on which banking
institutions in New York City or Bethesda, Maryland  are permitted or required
by any applicable law or executive order to close.

 

The principal of and interest on this Note shall be payable in any coin or
currency of the United States of America that at the time of payment is legal
tender for payment of public and private debts, by check mailed to the
registered holder at such address as shall appear in the Note register
maintained by the Company, or by wire transfer to an account appropriately
designated by the holder hereof.

 

Total Issuance. This Note is part of, and ranks pari passu and equal in right of
payment with other Notes constituting a part of, the issuance of up to $9.3
million of Subordinated Notes due 2016 authorized by the Board of Directors of
the Company on July 28, 2010 (collectively, the “Notes”).

 

Subordination.  The indebtedness evidenced by this Note is subordinate and
junior in right of payment to the prior payment in full of all claims of
(i) general creditors of the Company, (ii) holders of all secured indebtedness
of the Company, and (iii) holders of other claims which do not by their terms
expressly state that they are pari passu or junior in right of payment to this
Note, whether now existing or hereafter incurred, except that this Note shall
rank pari passu in right of payment with the Company’s Subordinated Notes due
September 30, 2014, authorized by the Board of Directors of the Company on
August 18, 2008, and this Note is issued subject to the foregoing. Each holder
of this Note, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Company on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Company his or her
attorney-in-fact for any and all such purposes. Each holder hereof, by his or
her acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein by each holder of claims or
indebtedness to which this Note is subordinate, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.  Payments of interest and principal on the Notes is senior to the
payment of dividends or amounts paid in liquidation on any class of capital
stock of the Company. Payment of interest and principal on the Notes is not an
obligation or liability of any insured depositary institution subsidiary of the
Company.

 

Optional Redemption.  The Company shall have the right to redeem the Notes, in
whole or in part, but in all cases in a principal amount with integral multiples
of $1,000.00, on any Interest Payment Date at a redemption price of 100% of the
principal amount of the Note to be redeemed on such date, plus interest accrued
and unpaid to the date of redemption. Any such redemption shall be subject to
receipt of the prior approval of the Federal Reserve Bank of Richmond, or other
appropriate regulatory authority, to the extent required.

 

If all, or less than all, of the Notes are to be redeemed, the Company will give
the Holders notice not less than 30 nor more than 45 days prior to the
redemption date as to the aggregate principal amount of Notes to be redeemed. 
The Company shall select, in such manner as in its sole discretion it shall deem
appropriate and fair, the Notes or portions thereof (in integral multiples of
$1,000.00) to be redeemed.

 

Events of Default; Acceleration; Default.  In case an Acceleration Event of
Default, as hereafter defined, shall have occurred and be continuing, upon
demand of the holders of a majority of the aggregate principal amount of the
outstanding Notes, the principal of all of the Notes shall become due and
payable, subject to the receipt of any and all required regulatory approvals. 
For purposes hereof, and subject to the provisions of “Capital Treatment;
Interpretation” hereunder, “Acceleration Event of Default” means:

 

(a)           a court of competent jurisdiction shall enter a decree or order
for relief in respect of the Company in an involuntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official)

 

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of the Company or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs and such decree or order shall remain
unstayed and in effect for a period of 90 consecutive days; or

 

(b)           the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency, reorganization or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or

 

(c)           a court or administrative or governmental agency or body shall
enter a decree or order for the appointment of a receiver of a Major Bank
Subsidiary (as hereafter defined) or all or substantially all of its property in
any liquidation, insolvency or similar proceeding with respect to such Major
Bank Subsidiary or all or substantially all of its property; or

 

(d)           a Major Bank Subsidiary shall consent to the appointment of a
receiver for it or all or substantially all of its property in any liquidation,
insolvency or similar proceeding with respect to it or all or substantially all
of its property.

 

For purposes hereof, “Major Bank Subsidiary” means any subsidiary of the Company
that is a “major bank subsidiary” as that term is used in SR 92-37 (FIS)
promulgated by the Division of Banking Supervision and Regulation of the Federal
Reserve, and as such term may subsequently be defined or interpreted in any
rule, regulation, written interpretation or other public issuance of the Federal
Reserve.

 

For purposes hereof, and subject to the provisions of “Capital Treatment;
Interpretation” hereunder, “Event of Default” means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

 

(a)           an Acceleration Event of Default;

 

(b)           the Company defaults in the payment of any interest upon any
Notes, and the continuation of such default for a period of thirty days; or

 

(c)           the Company defaults in the payment of all or any part of the
principal of (or premium, if any, on) any Notes as and when the same shall
become due and payable either at maturity, upon redemption, by declaration of
acceleration or otherwise; or

 

(d)           the Company defaults in the performance of, or breaches, any of
its covenants or agreements in the Notes (other than a covenant or agreement a
default in whose performance or whose breach is elsewhere in this Note
specifically dealt with), and continuance of such default or breach for a period
of 60 days after there has been given, by registered or certified mail, to the
Company by the holders of at least 25% in aggregate principal amount of the
outstanding Notes, a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a “Notice of
Default” hereunder.

 

If there shall have occurred and be continuing any Event of Default, then the
Company shall not, and shall not allow any subsidiary of the Company to,
(x) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company’s
capital stock or its subsidiaries’ capital stock (other than payments of
dividends or distributions to the Company) or make any guarantee payments with
respect to the foregoing or (y) make any payment of principal of or interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company or any subsidiary that rank pari passu in all respects with or junior in
interest to the Notes (other than, with respect to clauses (x) and (y) above:
(1) repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Company (or securities convertible into or exercisable for

 

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such capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Event of Default, if any, (2) as a result of any
exchange or conversion of any class or series of the Company’s capital stock (or
any capital stock of a subsidiary of the Company) for any class or series of the
Company’s capital stock or of any class or series of the Company’s indebtedness
for any class or series of the Company’s capital stock, (3) the purchase of
fractional interests in shares of the Company’s capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (4) any declaration of a dividend in connection with any
stockholders’ rights plan, or the issuance of rights, stock or other property
under any stockholders’ rights plan, or the redemption or repurchase of rights
pursuant thereto, or (5) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks pari passu with or junior to such stock and any
cash payments in lieu of fractional shares issued in connection therewith.

 

Certificates; Reliance on Register.  The Notes are issuable only in registered,
certificated form without coupons and in minimum denominations of $50,000.00 and
any multiple of $1,000.00 in excess thereof.  Subject to the provisions hereof,
upon due presentment for registration of transfer of any Note to the Company,
the Company shall execute and register and make available for delivery in the
name of the transferee or transferees a new Note for a like aggregate principal
amount.  All Notes presented for registration of transfer or for exchange or
payment shall (if so required by the Company) be duly endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to, the Company duly executed by the holder or his attorney duly
authorized in writing. No service charge shall be made for any exchange or
registration of transfer of Notes, but the Company may require payment of a sum
sufficient to cover any tax, fee or other governmental charge that may be
imposed in connection therewith, provided that nothing shall preclude the
Company from requiring the posting of a bond in connection with the replacement
of a Note certificate which has been lost, destroyed or stolen.

 

Prior to due presentment for registration of transfer of any Note, the Company,
any paying agent, any transfer agent and any Note registrar may deem the person
in whose name such Note shall be registered upon the Note register to be, and
may treat him as, the absolute owner of such Note (whether or not such Note
shall be overdue) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and interest on such Note and for all other
purposes; and neither the Company nor any paying agent nor any transfer agent
nor any Note registrar shall be affected by any notice to the contrary.  All
such payments so made to any holder for the time being or upon his order shall
be valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable upon any such Note.

 

No Recourse.  No recourse for the payment of the principal of or premium, if
any, or interest on any Note, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in any such Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, employee, officer or director, as such, past, present or future, of
the Company or of any successor of the Company, either directly or through the
Company or any successor of the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
issue of the Notes.

 

Capital Treatment; Interpretation.  This Note is intended to meet the criteria
for qualification of outstanding principal as Tier 2 capital under the
regulatory guidelines of the Federal Reserve. The terms of this Note shall be
interpreted in a manner consistent with and intended to satisfy such criteria
and applicable regulatory requirements.  Not in limitation of the foregoing, in
the event that an Acceleration Event of Default in subparagraph (c) or (d) of
the definition of Acceleration Event of Default shall not be a permitted
acceleration event under the provisions of Section 171 of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, then such subparagraphs shall be
deemed, ab initio,  to be removed from such definition (and shall not constitute
an Acceleration Event of Default) and to be included as subparagraphs (e) and
(f), respectively, of the definition of Event of Default

 

THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF MARYLAND WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.

 

[Signature appears on the following page]

 

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IN WITNESS WHEREOF, the Company has duly executed this certificate.

 

 

EAGLE BANCORP, INC.

 

 

 

 

 

 

 

By

 

 

 

Name:

 

 

Title:

 

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Schedule A

 

The initial principal amount of the obligation evidenced by the Note to which
this Schedule is attached is                                                 
Dollars ($                    ).  The notations in the following table evidence
decreases in the principal amount of the obligation evidenced by the Note.

 

Decrease in Principal

 

Principal after such
Decrease

 

Date

 

Signatures of Authorized Officer
of Company and Holder

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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