Exhibit 10.2


 


STOCK
SECURITY AGREEMENT


 


THIS STOCK SECURITY AGREEMENT
(this “Security Agreement”) is made as of August 11, 2008, by and between (i) UNITED
BANK, a Virginia banking corporation, having offices at 2071 Chain Bridge Road,
Vienna, Virginia  22182 (the “Lender”),
and (ii) EAGLE BANCORP, INC., a Maryland corporation, having a mailing
address of 7815 Woodmont Avenue, Bethesda, Maryland  20814 (the “Pledgor” or the “Borrower”).


 


WITNESSETH:


 


(b)         DEFINITIONS. All capitalized
terms used but not otherwise defined herein shall have the meanings attributed
to such terms in that certain Loan Agreement dated the date hereof (as the same
may be modified or amended from time to time, the “Loan Agreement”), by and
between the Lender and the Borrower.


 


(c)          GRANT OF SECURITY.   To secure (i) the Obligations (as
defined in the Loan Agreement), and the payment and performance of the other
obligations of the Borrower with respect to a certain loan and other financial
accommodations (collectively, the “Loan”) made to the Borrower by the Lender
pursuant to the Loan Agreement in the original maximum principal amount of
Twenty Million and No/100 Dollar ($20,000,000.00), including all interest, fees
and other charges payable in connection with the Loan, which Loan is evidenced
by the Note in the maximum principal amount of Twenty Million and No/100
Dollars ($20,000,000.00); and (ii) any other indebtedness or liability of
the Borrower to the Lender whether direct or indirect, joint, several or joint
and several, absolute or contingent, due or to become due or now existing or
hereafter created or arising, including without limitation all future advances
or loans which may be made by any Lender in connection with the Loan or
otherwise (all of the foregoing being herein collectively referred to as the “Obligations”),
Pledgor hereby grants and conveys to the Lender a security interest in the
property described in Schedule A
hereto, together with all proceeds thereof (the “Collateral”).


 


(d)         LIEN PRIORITY.  As a result of the foregoing grant by Pledgor
to the Lender of a security interest in the Collateral, the Lender shall have a
first lien security interest in the Collateral, free and clear of any and all
liens, security interests, claims, charges and other encumbrances whatsoever.


 


(e)          REPRESENTATIONS AND WARRANTIES.  Pledgor hereby represents and warrants as
follows:


 


(i)    That Pledgor is the owner and holder of the
number of shares listed on Schedule A
hereto of the issued and outstanding common stock of each of the companies listed
on Schedule A hereto (collectively,
the “Companies”), and such shares represent the percentage of issued and
outstanding capital stock of such Companies shown on Schedule
A hereto;


 


(ii)   That the Collateral is legally and equitably
owned by Pledgor free and clear of any and all liens, security interests,
claims, charges and other encumbrances whatsoever;


 


(iii)  That all of the Collateral has been duly
authorized and validly issued and is fully paid and nonassessable;


 


(iv)  That this Security Agreement constitutes a
valid security interest in the Collateral, securing the Obligations for the
benefit of the Lender, that all of the Collateral (to the extent certificated)
has been delivered to the Lender, together with appropriate stock powers, and
that the Lender’s possession of the Collateral (to the extent certificated)
establishes a perfected first priority lien on and security interest in the
Collateral;


 


(v)   That Pledgor has the right to vote, pledge
and grant a security interest in the Collateral, as provided by this Security
Agreement; and


 


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(vi)  That each of the foregoing representations and
warranties shall be deemed remade and redated as of the date of each advance
made pursuant to the Loan Agreement.


 


(f)          COVENANTS.  So long as any of the Obligations remain
unpaid or any Lender has any obligation to make advances under the Loan,
Pledgor covenants and agrees that it will:


 


(i)    Pay and perform all of the Obligations
according to their terms;


 


(ii)   Defend all right and title to the Collateral
against any and all claims and demands whatsoever;


 


(iii)  Upon the reasonable request of the Lender do
the following: furnish further assurance of title, execute any written
agreement and do all other acts necessary to effectuate the intent, purposes
and provisions of this Security Agreement, execute any instrument or statement
required by law or otherwise in order to perfect, continue or terminate the
security interest of the Lender in the Collateral and pay all filing or other
costs incurred in connection therewith;


 


(iv)  Unless otherwise required by the Lender,
retain legal and beneficial ownership of the Collateral and not sell, exchange,
assign, loan, deliver, mortgage or otherwise encumber or dispose of the Collateral
or any portion thereof without the Lender’s prior written consent;


 


(v)   Keep the Collateral free and clear of all
liens, charges, encumbrances, restrictions on transfer, taxes and assessments
and pay when due all taxes, payments and/or assessments in any way relating to
the Collateral or any part thereof, except to the extent the validity or amount
thereof is being contested in good faith by appropriate proceedings and the
non-payment thereof during the pendency of such proceeding(s) will not
adversely affect the Lender’s security interest in the Collateral or the
priority thereof;


 


(vi)  Keep and maintain satisfactory, complete and
current records of the Collateral.  Upon
request of the Lender, Pledgor will provide the Lender with written reports of
the status of the Collateral, or any part thereof, as of the period specified,
in form and substance reasonably satisfactory to the Lender; and


 


(vii) Comply with all federal, state and local laws
and regulations applicable to the Collateral, whether now in effect or
hereafter enacted, and upon request of the Lender, furnish to the Lender
evidence of such compliance therewith.


 


(g)         EVENTS OF DEFAULT.  For purposes of this Security Agreement, each
of the following shall constitute an “Event of Default” hereunder:


 


(i)    An Event of Default under the Loan
Agreement; or


 


(ii)   If any representation or warranty made or
given by Pledgor in connection with this Security Agreement shall prove to have
been incorrect or misleading or breached in any material respect on or as of
the date when made or remade; or


 


(iii)  If Pledgor fails to observe or perform any of
the covenants and agreements set forth in this Security Agreement (other than
those covenants specifically addressed in the Loan Agreement), and such failure
continues unremedied for a period of thirty (30) days after written notice to
the Pledgor; or


 


(iv)  If all or any part of the Collateral is
subject to levy of execution or other judicial process.


 


(h)         REMEDIES UPON DEFAULT.  Upon the occurrence and during the
continuation of an Event of Default and at the option of the Lender:


 


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(i)    The Lender shall have all of the rights,
remedies and privileges with respect to repossession, retention and sale of the
Collateral and disposition of the proceeds thereof as are accorded to the
Lender by the applicable sections of the UCC and other applicable law.


 


(ii)   Without limiting the scope of the foregoing
clause (a), it is expressly understood and agreed that:


 


a.     The Lender shall have the right to sell,
resell, assign, and deliver all or any of the Collateral at any exchange or
broker’s board or at public or private sale. 
The Lender agrees that unless the Collateral is perishable or threatens
to decline speedily in value or is of a type customarily sold on a recognized
market, the Lender will give Pledgor at least 
ten (10) days’ prior written notice by registered or certified mail
(at the address of Pledgor set forth above) of the time and place of any public
sale of the Collateral or the time after which any private sale or any other
intended disposition of the Collateral is to be made.  Any such notice shall be deemed to meet any
requirement hereunder or under any applicable law (including the UCC) that
reasonable notification be given of the time and place of such sale or other
disposition.  Such notice may be given
without any demand for performance or other demand, all such demands being
hereby expressly waived by Pledgor.  All
sales of the Collateral shall be at such price or prices as the Lender shall
deem best and either for cash, on credit or for future delivery (without
assuming any responsibility for credit risk);


 


b.     At any such sale or sales, the Lender or
any affiliate, designee or agent of the Lender may purchase any or all of the
Collateral upon such terms as such purchaser may deem best, and the Collateral
so purchased shall be held by the purchaser absolutely free from any and all
claims or rights of Pledgor of every kind and nature whatsoever, including, without
limitation, any equity of redemption or similar rights, all such equity of
redemption and similar rights being hereby expressly waived and released by
Pledgor.  The proceeds of the sale of any
Collateral, together with any other additional collateral security at the time
received and held hereunder, shall be received and applied: first, to the
payment of all costs and expenses of sale, including reasonable attorneys’
fees; second, to the payment of the Obligations, in such order of priority as
the Lender shall determine; and third, any remaining proceeds shall be paid to
Pledgor, unless otherwise provided by law or directed by a court of competent
jurisdiction;


 


c.     Pledgor recognizes that the Lender may be
unable to effect a public sale of all or any part of the Collateral by reason
of certain prohibitions contained in the Securities Act of 1933, as amended
(the “Securities Act”), or other applicable laws, rules or regulations,
but may be compelled to resort to one or more private sales to a restricted group
of purchasers who will, among other things, be obliged to agree to acquire the
Collateral or any part thereof for their own account, for investment and not
with a view to the distribution or resale thereof.  Pledgor agrees that private sales so made may
be at prices and on terms less favorable than if the Collateral were sold at
public sales, and that the Lender has no obligation to delay the sale of any
Collateral for the period of time necessary to permit the Collateral to be
registered for public sale under the Securities Act or any other applicable
law, rule or regulation.  Pledgor
agrees that private sales made under the foregoing circumstances shall be
deemed to have been made in a commercially reasonable manner; and


 


d.     Pledgor shall remain liable for any
deficiency resulting from any sale of the Collateral, or any part thereof, and
shall pay any such deficiency forthwith on demand.


 


(iii)  Without limiting any of the rights granted to
the Lender elsewhere in this Security Agreement, upon the occurrence and during
the continuation of an Event of Default, the Lender shall be entitled to (i) exercise
the voting power appurtenant to the Collateral, (ii) receive and retain as
collateral security for the Obligations any and all dividends or other distributions
at any time or from time to time declared or made upon any of the Collateral
(all cash dividends or other distributions payable in respect of the Collateral
which are received by Pledgor after the occurrence of an Event of Default shall
be paid directly to the Lender and, if received by Pledgor, shall be received
in trust for the benefit of the Lender, shall be segregated from other funds of
Pledgor and shall be immediately paid over to the Lender as Collateral in the
same form as received, with any necessary endorsements), and (iii) exercise
any and all rights of payment, conversion, exchange, subscription or other
rights, privileges or options appurtenant to the Collateral, as if the Lender
were the absolute owner thereof, including without limitation the right to
exchange, at its discretion, any and all of the Collateral upon the merger,
consolidation, reorganization, 


 


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recapitalization
or other readjustment of Pledgor.  Upon
the exercise of any such right, privilege or option pertaining to the
Collateral, and in connection therewith, the Lender may deliver and deposit any
or all of the Collateral with any committee, depositary, transfer agent,
registrar or other designated agency upon such terms and conditions as the
Lender may determine, all without liability, except to account for property
actually received, but the Lender shall not have any duty to exercise any of
the aforesaid rights, privileges or options and shall not be responsible for
any failure to do so or delay in so doing.


 


(iv)  The Lender may cause all or any of the
Collateral to be transferred into its name or into the name of its nominee or
nominees; provided, however, that so long as no Event of Default has occurred
and is continuing, Pledgor shall be entitled to exercise as it shall think fit,
but in a manner not inconsistent with the terms of this Security Agreement, the
Loan Agreement, any other Loan Document or the Obligations, the voting power
appurtenant to the Collateral, and to receive cash dividends paid to Pledgor
(subject to any applicable prohibitions in the Loan Documents).


 


(i)    OTHER RIGHTS OF THE LENDER.


 


(i)    Notwithstanding anything contained herein to
the contrary, if upon any dissolution, winding up, liquidation or reorganization
of Pledgor, whether in bankruptcy, insolvency or receivership proceedings or
upon an assignment for the benefit of creditors or any other marshaling of the
assets and liabilities of Pledgor, any sum shall be paid or any property shall
be distributed upon or with respect to any of the Collateral, such sum shall be
paid or property distributed over to the Lender, to be held by the Lender or
applied against the Obligations, as the Lender determines in its sole
discretion.  Subject to Section 7
above, in case any stock dividend shall be declared on any of the Collateral,
or any share of stock or fraction thereof shall be issued pursuant to any stock
split involving any of the Collateral, or any distribution of capital shall be
made on any of the Collateral, or any property shall be distributed upon or
with respect to the Collateral pursuant to recapitalization or reclassification
of the capital of Pledgor, or otherwise, the shares or other property so
distributed shall constitute Collateral and be delivered immediately to the
Lender to be held as collateral security for the Obligations.


 


(ii)   Upon the occurrence and during the
continuation of an Event of Default , the Lender shall have the right, for and
in the name, place and stead of Pledgor, to execute endorsements, assignments
and other instruments of conveyance or transfer with respect to all or any of
the Collateral.


 


(j)    SECURITY INTEREST ABSOLUTE.  Except as otherwise provided herein, all
rights of the Lender and security interests hereunder, and all obligations of
Pledgor hereunder, shall be absolute and unconditional irrespective of, and
unaffected by:


 


(i)    Any lack of validity or enforceability of
the Loan Agreement or any other Loan Document; or


 


(ii)   Any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the Loan
Agreement and/or any other Loan Document; or


 


(iii)  Any exchange, surrender, release or
non-perfection of any Collateral for all or any of the Obligations; or


 


(iv)  Any other circumstance which might otherwise
constitute a defense available to, or a discharge of, Pledgor in respect of the
Obligations or this Security Agreement.


 


(k)   GENERAL PROVISIONS.


 


(i)    Except as otherwise provided herein, the
Lender may exercise its rights with respect to the Collateral held hereunder
without first or simultaneously resorting to any other collateral or sources of
repayment or reimbursement, and without being obligated to consider or take
notice of any right of contribution, reimbursement, subrogation or marshaling
of assets which Pledgor may have or claim to have against any person or 


 


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persons
or with respect to any other collateral. 
The Lender may release any and all other collateral it may now or
hereafter have to secure repayment of the Obligations, all without affecting or
impairing its rights with respect to the Collateral.  No delay or omission on the part of the Lender
in exercising any right hereunder shall operate as a waiver of such right or
any other right under this Security Agreement. 
A waiver on any one occasion shall not be construed as a bar to or
waiver of any right and/or remedy on any future occasion.


 


(ii)        If Pledgor shall default in the
performance of any provision of this Security Agreement on Pledgor’s part to be
performed, the Lender may perform the same for Pledgor’s account and any monies
expended in so doing shall be chargeable with interest at the Default Rate set
forth in the Note and added to the indebtedness secured hereby.


 


(iii)       If in connection with the exercise by the
Lender of any power, right, provision or remedy granted pursuant to this
Security Agreement, or in order to effectuate the purposes and intent of this
Security Agreement, any consent, approval, registration, filing, qualification
or authorization of any governmental authority is required, Pledgor will
execute and deliver all applications, certificates, instruments and other documents
and papers that the Lender may be required to obtain for such governmental
consent, approval, registration, filing, qualification or authorization.


 


(iv)  The rights and powers granted to the Lender
hereunder are being granted in order to preserve and protect the Lender’s
security interest in and to the Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Lender in connection
therewith.


 


(v)        The Lender shall not have any duty as to
the collection or protection of the Collateral held hereunder nor of any income
thereon, nor as to the preservation of any rights pertaining thereto, beyond
the safe custody of the Collateral.  The
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if it complies with Pledgor’s requests in such
regard made to the Lender in writing, but failure to comply with any such
request shall not in and of itself be deemed a failure to exercise reasonable
care in such custody and preservation of the Collateral.


 


(vi)       Without limiting the applicable
provisions of the Loan Agreement with respect to the obligation of Pledgor to
reimburse the Lender for its fees and expenses, upon enforcement of the Lender’s
rights hereunder, the Lender’s reasonable attorneys’ fees and the reasonable
legal and other expenses of pursuing, searching for, receiving, taking,
keeping, storing, advertising and selling the Collateral shall be chargeable to
Pledgor.


 


(vii)      The Lender may assign its interests in
this Security Agreement in connection with any assignment of such party’s
interest under the Loan Agreement and, if assigned and upon notice of such
assignment to Pledgor, the assignee shall be entitled (to the same extent as
the Lender) to performance of all of Pledgor’s obligations and agreements
hereunder, and the assignee shall also be entitled (to the same extent as the
Lender) to all of the rights and remedies of the Lender hereunder.  Pledgor will not assert a claim or defense
against the assignee which Pledgor may have against the Lender.


 


(viii)     WAIVER OF JURY TRIAL.  Each party hereby (a)  covenants and
agrees not to elect a trial by jury of any issue triable by a jury, and (b) waives
any right to trial by jury fully to the extent that any such right shall now or
hereafter exist.   This waiver of right
to trial by jury is separately given by each party, knowingly and voluntarily,
and this waiver is intended to encompass individually each instance and each
issue as to which the right to a jury trial would otherwise accrue.  Each party is hereby authorized and requested
to submit this Security Agreement to any court having jurisdiction over the
subject matter and the parties hereto, so as to serve as conclusive evidence of
each of the parties’ herein contained waiver of the right to jury trial.  Further, each party hereby certifies that no
representative or agent of the other parties 
(including their legal counsel) has represented, expressly or otherwise,
to such party that the other parties will not seek to enforce this provision
waiving the right to a trial by jury.


 


(ix)        VENUE; SERVICE OF PROCESS.  Any judicial proceeding brought against
Pledgor with respect to this Security Agreement or any other Loan Document may
be brought in any court of competent jurisdiction in Fairfax County, Virginia,
and by execution and delivery of this Security Agreement, Pledgor accepts for
itself and in connection with its properties, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid court, and irrevocably agrees
to be bound by any judgment rendered by such court in connection with this
Agreement.  A copy of any process served
shall be mailed by registered or certified mail to Pledgor at the address to
which notices are to be addressed in accordance with this Security Agreement,
such service 


 


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being
hereby acknowledged by Pledgor to be effective and binding on it in every
respect.  Pledgor hereby agrees that
service upon it by mail shall constitute sufficient notice.  Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
the Lender to bring proceedings against Pledgor in the courts of any other jurisdiction.


 


(x)         The terms, warranties and agreements
contained in this Security Agreement shall bind and inure to the benefit of the
parties hereto, and their respective successors and permitted assigns.


 


(xi)        This Security Agreement may not be
changed orally, but may be changed only by an agreement in writing signed by
the parties against whom enforcement of any waiver, change, modification or
discharge is sought.


 


(xii)       Captions are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
of this Security Agreement or the intent of any provision hereof.  The gender and number used in this Security
Agreement are used as reference terms only and shall apply with the same effect
whether the parties are of the masculine or feminine gender, corporate or other
form, and the singular shall likewise include the plural.  If there shall be more than one Pledgor,
their liability shall be joint and several.


 


(xiii)      Any provision in this Security Agreement
declared invalid under any law shall not invalidate any other provision of this
Security Agreement.  This Security
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia, without regard to conflicts of laws provisions.


 


(xiv)     This Security Agreement may be executed in
any number of counterparts, each of which shall be deemed an original and all
of which taken together shall be deemed one and the same instrument.


 


(xv)      Notices to either party shall be in
writing and shall be delivered personally or by mail addressed to the party at
the address and in the manner set forth in the Loan Agreement or as otherwise
designated in writing.


 


IN WITNESS WHEREOF,
the parties have respectively signed and sealed these presents on the day and
year first above written.


 


	
  ATTEST:

  	
   

  	
  Pledgor/Borrower:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EAGLE BANCORP, INC., a
  Maryland corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
  (SEAL)

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  UNITED BANK, a Virginia
  banking corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						



 


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SCHEDULE
A TO STOCK SECURITY AGREEMENT


 


All
of the right, title and interest of Pledgor in and to all of the capital stock
of the companies listed below (collectively, the “Companies”), whether common
and/or preferred, and whether now or hereafter issued or outstanding, and
whether now or hereafter acquired by Pledgor, together with all voting or other
rights appurtenant thereto, including, but not limited to, the right to receive
all dividends and/or other distributions payable to Pledgor by virtue of
Pledgor’s ownership of such capital stock, and all proceeds thereof, additions
thereto and substitutions thereof.


 


	
  Company

  	
   

  	
  Number of Shares

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EagleBank, a
  Maryland banking corporation

  	
   

  	
  46,250

  	
   

  	
  100

  	
  %

  



 


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