Redemption Letter Agreement


 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 







 
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








 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