Exhibit 4.1


 


WARRANT
TO PURCHASE COMMON STOCK


 


THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES PURCHASE
AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE INVESTOR REFERRED TO
THEREIN, A COPY OF WHICH IS ON FILE WITH THE ISSUER. THE SECURITIES REPRESENTED
BY THIS INSTRUMENT MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN
COMPLIANCE WITH SAID AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE
WITH SAID AGREEMENT WILL BE VOID.


 


WARRANT


to
purchase


2,696,203


Shares
of Common Stock


of
Virginia Commerce Bancorp, Inc.


 


Issue Date: December 12,
2008


 


1.             Definitions.
Unless the context otherwise requires, when used herein the following terms
shall have the meanings indicated.


 


“Affiliate”
has the meaning ascribed to it in the Purchase Agreement.


 


“Appraisal
Procedure” means a procedure whereby two independent appraisers, one
chosen by the Company and one by the Original Warrantholder, shall mutually
agree upon the determinations then the subject of appraisal. Each party shall
deliver a notice to the other appointing its appraiser within 15 days after the
Appraisal Procedure is invoked. If within 30 days after appointment of the two
appraisers they are unable to agree upon the amount in question, a third
independent appraiser shall be chosen within 10 days thereafter by the mutual
consent of such first two appraisers. The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the selection of such
third appraiser. If three appraisers shall be appointed and the determination
of one appraiser is disparate from the middle determination by more than twice
the amount by which the other determination is disparate from the middle
determination, then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average shall be
binding and conclusive upon the


 

















 


Company and the Original Warrantholder; otherwise, the average of all
three determinations shall be binding upon the Company and the Original
Warrantholder. The costs of conducting any Appraisal Procedure shall be borne
by the Company.


 


“Board of
Directors” means the board of directors of the Company, including
any duly authorized committee thereof.


 


“Business
Combination” means a merger, consolidation, statutory share exchange
or similar transaction that requires the approval of the Company’s
stockholders.


 


“business day” means any
day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.


 


“Capital
Stock” means (A) with respect to any Person that is a
corporation or company, any and all shares, interests, participations or other
equivalents (however designated) of capital or capital stock of such Person and
(B) with respect to any Person that is not a corporation or company, any
and all partnership or other equity interests of such Person.


 


“Charter”
means, with respect to any Person, its certificate or articles of
incorporation, articles of association, or similar organizational document.


 


“Common
Stock” has the meaning ascribed to it in the Purchase Agreement.


 


“Company”
means the Person whose name, corporate or other organizational form and
jurisdiction of organization is set forth in Item 1 of Schedule A hereto.


 


“conversion”
has the meaning set forth in Section 13(B).


 


“convertible
securities” has the meaning set forth in Section 13(B).


 


“CPP”
has the meaning ascribed to it in the Purchase Agreement.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.


 


“Exercise
Price” means the amount set forth in Item 2 of Schedule A hereto.


 


“Expiration
Time” has the meaning set forth in Section 3.


 


“Fair
Market Value” means, with respect to any security or other property,
the fair market value of such security or other property as determined by the
Board of Directors, acting in good faith or, with respect to Section 14,
as determined by the Original Warrantholder acting in good faith. For so long
as the Original Warrantholder holds this Warrant or any portion thereof, it may
object in writing to the Board of Director’s calculation of fair market value
within 10 days of receipt of written notice thereof. If the Original
Warrantholder and the Company are unable to agree on fair market value during
the 10-day period following the delivery of the Original Warrantholder’s
objection, the Appraisal Procedure may be invoked by either party to


 


2

















 


determine Fair Market Value by delivering
written notification thereof not later than the 30th day after delivery of the Original
Warrantholder’s objection.


 


“Governmental
Entities” has the meaning ascribed to it in the Purchase Agreement.


 


“Initial
Number” has the meaning set forth in Section 13(B).


 


“Issue Date” means
the date set forth in Item 3 of Schedule A hereto.


 


“Market
Price” means, with respect to a particular security, on any given
day, the last reported sale price regular way or, in case no such reported sale
takes place on such day, the average of the last closing bid and ask prices
regular way, in either case on the principal national securities exchange on
which the applicable securities are listed or admitted to trading, or if not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and ask prices as furnished by two members of the Financial
Industry Regulatory Authority, Inc. selected from time to time by the
Company for that purpose. “Market Price” shall be determined without reference
to after hours or extended hours trading. If such security is not listed and
traded in a manner that the quotations referred to above are available for the
period required hereunder, the Market Price per share of Common Stock shall be
deemed to be (i) in the event that any portion of the Warrant is held by
the Original Warrantholder, the fair market value per share of such security as
determined in good faith by the Original Warrantholder or (ii) in all
other circumstances, the fair market value per share of such security as
determined in good faith by the Board of Directors in reliance on an opinion of
a nationally recognized independent investment banking corporation retained by
the Company for this purpose and certified in a resolution to the Warrantholder.
For the purposes of determining the Market Price of the Common Stock on the “trading
day” preceding, on or following the occurrence of an event, (i) that
trading day shall be deemed to commence immediately after the regular scheduled
closing time of trading on the New York Stock Exchange or, if trading is closed
at an earlier time, such earlier time and (ii) that trading day shall end
at the next regular scheduled closing time, or if trading is closed at an
earlier time, such earlier time (for the avoidance of doubt, and as an example,
if the Market Price is to be determined as of the last trading day preceding a
specified event and the closing time of trading on a particular day is 4:00 p.m.
and the specified event occurs at 5:00 p.m. on that day, the Market Price
would be determined by reference to such 4:00 p.m. closing price).


 


“Ordinary
Cash Dividends” means a regular quarterly cash dividend on shares of
Common Stock out of surplus or net profits legally available therefor
(determined in accordance with generally accepted accounting principles in
effect from time to time), provided that
Ordinary Cash Dividends shall not include any cash dividends paid subsequent to
the Issue Date to the extent the aggregate per share dividends paid on the outstanding
Common Stock in any quarter exceed the amount set forth in Item 4 of Schedule A
hereto, as adjusted for any stock split, stock dividend, reverse stock split,
reclassification or similar transaction.


 


“Original
Warrantholder” means the United States Department of the Treasury.
Any actions specified to be taken by the Original Warrantholder hereunder may
only be taken by such Person and not by any other Warrantholder.


 


3

















 


“Permitted
Transactions” has the meaning set forth in Section 13(B).


 


“Person”
has the meaning given to it in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.


 


“Per Share
Fair Market Value” has the meaning set forth in Section 13(C).


 


“Preferred Shares”
means the perpetual preferred stock issued to the Original Warrantholder on the
Issue Date pursuant to the Purchase Agreement.


 


“Pro Rata
Repurchases” means any purchase of shares of Common Stock by the
Company or any Affiliate thereof pursuant to (A) any tender offer or
exchange offer subject to Section 13(e) or 14(e) of the Exchange
Act or Regulation 14E promulgated thereunder or (B) any other offer
available to substantially all holders of Common Stock, in the case of both (A) or
(B), whether for cash, shares of Capital Stock of the Company, other securities
of the Company, evidences of indebtedness of the Company or any other Person or
any other property (including, without limitation, shares of Capital Stock,
other securities or evidences of indebtedness of a subsidiary), or any
combination thereof, effected while this Warrant is outstanding. The “Effective Date” of a Pro Rata Repurchase
shall mean the date of acceptance of shares for purchase or exchange by the
Company under any tender or exchange offer which is a Pro Rata Repurchase or
the date of purchase with respect to any Pro Rata Repurchase that is not a
tender or exchange offer.


 


“Purchase
Agreement” means the Securities Purchase Agreement – Standard Terms
incorporated into the Letter Agreement, dated as of the date set forth in Item
5 of Schedule A hereto, as amended from time to time, between the Company and
the United States Department of the Treasury (the “Letter Agreement”), including all annexes and schedules
thereto.


 


“Qualified
Equity Offering” has the meaning ascribed to it in the Purchase
Agreement.


 


“Regulatory
Approvals” with respect to the Warrantholder, means, to the extent
applicable and required to permit the Warrantholder to exercise this Warrant
for shares of Common Stock and to own such Common Stock without the
Warrantholder being in violation of applicable law, rule or regulation,
the receipt of any necessary approvals and authorizations of, filings and
registrations with, notifications to, or expiration or termination of any
applicable waiting period under, the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder.


 


“SEC”
means the U.S. Securities and Exchange Commission.


 


“Securities
Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.


 


“Shares”
has the meaning set forth in Section 2.


 


“trading day” means (A) if
the shares of Common Stock are not traded on any national or regional securities
exchange or association or over-the-counter market, a business day or (B) if
the shares of Common Stock are traded on any national or regional securities
exchange or


 


4

















 


association or over-the-counter market, a business day on which such
relevant exchange or quotation system is scheduled to be open for business and
on which the shares of Common Stock (i) are not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market for any period or periods aggregating one half hour or longer; and (ii) have
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the shares of Common Stock.


 


“U.S. GAAP”
means United States generally accepted accounting principles.


 


“Warrantholder”
has the meaning set forth in Section 2.


 


“Warrant”
means this Warrant, issued pursuant to the Purchase Agreement.


 


2.             Number of Shares;
Exercise Price. This certifies that, for value received, the United States
Department of the Treasury or its permitted assigns (the “Warrantholder”) is entitled, upon the
terms and subject to the conditions hereinafter set forth, to acquire from the
Company, in whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid and
nonassessable shares of Common Stock set forth in Item 6 of Schedule A hereto,
at a purchase price per share of Common Stock equal to the Exercise Price. The
number of shares of Common Stock (the “Shares”)
and the Exercise Price are subject to adjustment as provided herein, and all
references to “Common Stock,” “Shares” and “Exercise Price” herein shall be
deemed to include any such adjustment or series of adjustments.


 


3.             Exercise of
Warrant; Term. Subject to Section 2, to the extent permitted by
applicable laws and regulations, the right to purchase the Shares represented
by this Warrant is exercisable, in whole or in part by the Warrantholder, at
any time or from time to time after the execution and delivery of this Warrant
by the Company on the date hereof, but in no event later than 5:00 p.m.,
New York City time on the tenth anniversary of the Issue Date (the “Expiration Time”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto, duly completed
and executed on behalf of the Warrantholder, at the principal executive office
of the Company located at the address set forth in Item 7 of Schedule A hereto
(or such other office or agency of the Company in the United States as it may
designate by notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B) payment of
the Exercise Price for the Shares thereby purchased:


 


(i) by having the Company withhold, from
the shares of Common Stock that would otherwise be delivered to the
Warrantholder upon such exercise, shares of Common stock issuable upon exercise
of the Warrant equal in value to the aggregate Exercise Price as to which this
Warrant is so exercised based on the Market Price of the Common Stock on the
trading day on which this Warrant is exercised and the Notice of Exercise is
delivered to the Company pursuant to this Section 3, or


 


(ii) with the consent of both the
Company and the Warrantholder, by tendering in cash, by certified or cashier’s
check payable to the order of the Company, or by wire transfer of immediately
available funds to an account designated by the Company.


 


5

















 


If the Warrantholder does not exercise this
Warrant in its entirety, the Warrantholder will be entitled to receive from the
Company within a reasonable time, and in any event not exceeding three business
days, a new warrant in substantially identical form for the purchase of that
number of Shares equal to the difference between the number of Shares subject
to this Warrant and the number of Shares as to which this Warrant is so
exercised. Notwithstanding anything in this Warrant to the contrary, the
Warrantholder hereby acknowledges and agrees that its exercise of this Warrant
for Shares is subject to the condition that the Warrantholder will have first
received any applicable Regulatory Approvals.


 


4.             Issuance
of Shares; Authorization; Listing. Certificates for Shares issued upon
exercise of this Warrant will be issued in such name or names as the
Warrantholder may designate and will be delivered to such named Person or
Persons within a reasonable time, not to exceed three business days after the
date on which this Warrant has been duly exercised in accordance with the terms
of this Warrant. The Company hereby represents and warrants that any Shares
issued upon the exercise of this Warrant in accordance with the provisions of Section 3
will be duly and validly authorized and issued, fully paid and nonassessable
and free from all taxes, liens and charges (other than liens or charges created
by the Warrantholder, income and franchise taxes incurred in connection with the
exercise of the Warrant or taxes in respect of any transfer occurring
contemporaneously therewith). The Company agrees that the Shares so issued will
be deemed to have been issued to the Warrantholder as of the close of business
on the date on which this Warrant and payment of the Exercise Price are
delivered to the Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may then be closed
or certificates representing such Shares may not be actually delivered on such
date. The Company will at all times reserve and keep available, out of its
authorized but unissued Common Stock, solely for the purpose of providing for
the exercise of this Warrant, the aggregate number of shares of Common Stock then
issuable upon exercise of this Warrant at any time. The Company will (A) procure,
at its sole expense, the listing of the Shares issuable upon exercise of this
Warrant at any time, subject to issuance or notice of issuance, on all
principal stock exchanges on which the Common Stock is then listed or traded
and (B) maintain such listings of such Shares at all times after issuance.
The Company will use reasonable best efforts to ensure that the Shares may be
issued without violation of any applicable law or regulation or of any
requirement of any securities exchange on which the Shares are listed or
traded.


 


5.             No
Fractional Shares or Scrip. No fractional Shares or scrip representing
fractional Shares shall be issued upon any exercise of this Warrant. In lieu of
any fractional Share to which the Warrantholder would otherwise be entitled,
the Warrantholder shall be entitled to receive a cash payment equal to the
Market Price of the Common Stock on the last trading day preceding the date of
exercise less the pro-rated Exercise Price for such fractional share.


 


6.             No
Rights as Stockholders; Transfer Books. This Warrant does not entitle the
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the date of exercise hereof. The Company will at no time close
its transfer books against transfer of this Warrant in any manner which
interferes with the timely exercise of this Warrant.


 


6

















 


7.             Charges,
Taxes and Expenses. Issuance of certificates for Shares to the
Warrantholder upon the exercise of this Warrant shall be made without charge to
the Warrantholder for any issue or transfer tax or other incidental expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company.


 


8.             Transfer/Assignment.


 


(A)          Subject
to compliance with clause (B) of this Section 8, this Warrant and all
rights hereunder are transferable, in whole or in part, upon the books of the
Company by the registered holder hereof in person or by duly authorized
attorney, and a new warrant shall be made and delivered by the Company, of the
same tenor and date as this Warrant but registered in the name of one or more
transferees, upon surrender of this Warrant, duly endorsed, to the office or
agency of the Company described in Section 3. All expenses (other than
stock transfer taxes) and other charges payable in connection with the
preparation, execution and delivery of the new warrants pursuant to this Section 8
shall be paid by the Company.


 


(B)           The
transfer of the Warrant and the Shares issued upon exercise of the Warrant are
subject to the restrictions set forth in Section 4.4 of the Purchase
Agreement. If and for so long as required by the Purchase Agreement, this
Warrant shall contain the legends as set forth in Sections 4.2(a) and 4.2(b) of
the Purchase Agreement.


 


9.             Exchange
and Registry of Warrant. This Warrant is exchangeable, upon the surrender
hereof by the Warrantholder to the Company, for a new warrant or warrants of
like tenor and representing the right to purchase the same aggregate number of
Shares. The Company shall maintain a registry showing the name and address of
the Warrantholder as the registered holder of this Warrant. This Warrant may be
surrendered for exchange or exercise in accordance with its terms, at the
office of the Company, and the Company shall be entitled to rely in all
respects, prior to written notice to the contrary, upon such registry.


 


10.           Loss,
Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and in the case of any such loss, theft or
destruction, upon receipt of a bond, indemnity or security reasonably satisfactory
to the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company shall make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor
and representing the right to purchase the same aggregate number of Shares as
provided for in such lost, stolen, destroyed or mutilated Warrant.


 


11.           Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a
business day, then such action may be taken or such right may be exercised on
the next succeeding day that is a business day.


 


12.           Rule 144
Information. The Company covenants that it will use its reasonable best
efforts to timely file all reports and other documents required to be filed by
it under the Securities Act and the Exchange Act and the rules and
regulations promulgated by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any


 


7

















 


Warrantholder, make publicly available such information as necessary to
permit sales pursuant to Rule 144 under the Securities Act), and it will
use reasonable best efforts to take such further action as any Warrantholder
may reasonably request, in each case to the extent required from time to time
to enable such holder to, if permitted by the terms of this Warrant and the
Purchase Agreement, sell this Warrant without registration under the Securities
Act within the limitation of the exemptions provided by (A) Rule 144
under the Securities Act, as such rule may be amended from time to time,
or (B) any successor rule or regulation hereafter adopted by the SEC.
Upon the written request of any Warrantholder, the Company will deliver to such
Warrantholder a written statement that it has complied with such requirements.


 


13.           Adjustments
and Other Rights. The Exercise Price and the number of Shares issuable upon
exercise of this Warrant shall be subject to adjustment from time to time as
follows; provided, that if more
than one subsection of this Section 13 is applicable to a single event,
the subsection shall be applied that produces the largest adjustment and no
single event shall cause an adjustment under more than one subsection of this Section 13
so as to result in duplication:


 


(A)          Stock
Splits, Subdivisions, Reclassifications or Combinations. If the Company
shall (i) declare and pay a dividend or make a distribution on its Common
Stock in shares of Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii) combine
or reclassify the outstanding shares of Common Stock into a smaller number of
shares, the number of Shares issuable upon exercise of this Warrant at the time
of the record date for such dividend or distribution or the effective date of
such subdivision, combination or reclassification shall be proportionately
adjusted so that the Warrantholder after such date shall be entitled to
purchase the number of shares of Common Stock which such holder would have
owned or been entitled to receive in respect of the shares of Common Stock
subject to this Warrant after such date had this Warrant been exercised
immediately prior to such date. In such event, the Exercise Price in effect at
the time of the record date for such dividend or distribution or the effective
date of such subdivision, combination or reclassification shall be adjusted to
the number obtained by dividing (x) the product of (1) the number of
Shares issuable upon the exercise of this Warrant before such adjustment and (2) the
Exercise Price in effect immediately prior to the record or effective date, as
the case may be, for the dividend, distribution, subdivision, combination or
reclassification giving rise to this adjustment by (y) the new number of
Shares issuable upon exercise of the Warrant determined pursuant to the
immediately preceding sentence.


 


(B)           Certain
Issuances of Common Shares or Convertible Securities. Until the earlier of (i) the
date on which the Original Warrantholder no longer holds this Warrant or any
portion thereof and (ii) the third anniversary of the Issue Date, if the
Company shall issue shares of Common Stock (or rights or warrants or other
securities exercisable or convertible into or exchangeable (collectively, a “conversion”) for shares of Common Stock)
(collectively, “convertible securities”)
(other than in Permitted Transactions (as defined below) or a transaction to
which subsection (A) of this Section 13 is applicable) without
consideration or at a consideration per share (or having a conversion price per
share) that is less than 90% of the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities) then, in such event:


 


8

















 


(A) the number of Shares issuable upon
the exercise of this Warrant immediately prior to the date of the agreement on
pricing of such shares (or of such convertible securities) (the “Initial Number”) shall be increased to the
number obtained by multiplying the Initial Number by a fraction (A) the
numerator of which shall be the sum of (x) the number of shares of Common
Stock of the Company outstanding on such date and (y) the number of
additional shares of Common Stock issued (or into which convertible securities
may be exercised or convert) and (B) the denominator of which shall be the
sum of (I) the number of shares of Common Stock outstanding on such date
and (II) the number of shares of Common Stock which the aggregate
consideration receivable by the Company for the total number of shares of
Common Stock so issued (or into which convertible securities may be exercised
or convert) would purchase at the Market Price on the last trading day
preceding the date of the agreement on pricing such shares (or such convertible
securities); and


 


(B) the Exercise Price payable upon
exercise of the Warrant shall be adjusted by multiplying such Exercise Price in
effect immediately prior to the date of the agreement on pricing of such shares
(or of such convertible securities) by a fraction, the numerator of which shall
be the number of shares of Common Stock issuable upon exercise of this Warrant
prior to such date and the denominator of which shall be the number of shares
of Common Stock issuable upon exercise of this Warrant immediately after the
adjustment described in clause (A) above.


 


For purposes of the foregoing, the aggregate
consideration receivable by the Company in connection with the issuance of such
shares of Common Stock or convertible securities shall be deemed to be equal to
the sum of the net offering price (including the Fair Market Value of any
non-cash consideration and after deduction of any related expenses payable to
third parties) of all such securities plus the minimum aggregate amount, if
any, payable upon exercise or conversion of any such convertible securities
into shares of Common Stock; and “Permitted
Transactions” shall mean issuances (i) as consideration for or
to fund the acquisition of businesses and/or related assets, (ii) in
connection with employee benefit plans and compensation related arrangements in
the ordinary course and consistent with past practice approved by the Board of
Directors, (iii) in connection with a public or broadly marketed offering
and sale of Common Stock or convertible securities for cash conducted by the
Company or its affiliates pursuant to registration under the Securities Act or Rule 144A
thereunder on a basis consistent with capital raising transactions by
comparable financial institutions and (iv) in connection with the exercise
of preemptive rights on terms existing as of the Issue Date. Any adjustment
made pursuant to this Section 13(B) shall become effective
immediately upon the date of such issuance.


 


(C)           Other
Distributions. In case the Company shall fix a record date for the making
of a distribution to all holders of shares of its Common Stock of securities,
evidences of indebtedness, assets, cash, rights or warrants (excluding Ordinary
Cash Dividends, dividends of its Common Stock and other dividends or
distributions referred to in Section 13(A)), in each such case, the
Exercise Price in effect prior to such record date shall be reduced immediately
thereafter to the price determined by multiplying the Exercise Price in effect
immediately prior to the reduction by the quotient of (x) the Market Price
of the Common Stock on the last trading day preceding the first date on which
the Common Stock trades regular way on the principal


 


9

















 


national securities exchange on which the Common Stock is listed or
admitted to trading without the right to receive such distribution, minus the
amount of cash and/or the Fair Market Value of the securities, evidences of
indebtedness, assets, rights or warrants to be so distributed in respect of one
share of Common Stock (such amount and/or Fair Market Value, the “Per Share Fair Market Value”) divided by (y) such
Market Price on such date specified in clause (x); such adjustment shall be
made successively whenever such a record date is fixed. In such event, the
number of Shares issuable upon the exercise of this Warrant shall be increased
to the number obtained by dividing (x) the product of (1) the number
of Shares issuable upon the exercise of this Warrant before such adjustment,
and (2) the Exercise Price in effect immediately prior to the distribution
giving rise to this adjustment by (y) the new Exercise Price determined in
accordance with the immediately preceding sentence. In the case of adjustment
for a cash dividend that is, or is coincident with, a regular quarterly cash
dividend, the Per Share Fair Market Value would be reduced by the per share
amount of the portion of the cash dividend that would constitute an Ordinary
Cash Dividend. In the event that such distribution is not so made, the Exercise
Price and the number of Shares issuable upon exercise of this Warrant then in
effect shall be readjusted, effective as of the date when the Board of
Directors determines not to distribute such shares, evidences of indebtedness,
assets, rights, cash or warrants, as the case may be, to the Exercise Price
that would then be in effect and the number of Shares that would then be issuable
upon exercise of this Warrant if such record date had not been fixed.


 


(D)          Certain
Repurchases of Common Stock. In case the Company effects a Pro Rata
Repurchase of Common Stock, then the Exercise Price shall be reduced to the
price determined by multiplying the Exercise Price in effect immediately prior
to the Effective Date of such Pro Rata Repurchase by a fraction of which the
numerator shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Pro Rata Repurchase and (y) the
Market Price of a share of Common Stock on the trading day immediately
preceding the first public announcement by the Company or any of its Affiliates
of the intent to effect such Pro Rata Repurchase, minus (ii) the aggregate
purchase price of the Pro Rata Repurchase, and of which the denominator shall
be the product of (i) the number of shares of Common Stock outstanding
immediately prior to such Pro Rata Repurchase minus the number of shares of
Common Stock so repurchased and (ii) the Market Price per share of Common
Stock on the trading day immediately preceding the first public announcement by
the Company or any of its Affiliates of the intent to effect such Pro Rata
Repurchase. In such event, the number of shares of Common Stock issuable upon
the exercise of this Warrant shall be increased to the number obtained by
dividing (x) the product of (1) the number of Shares issuable upon
the exercise of this Warrant before such adjustment, and (2) the Exercise
Price in effect immediately prior to the Pro Rata Repurchase giving rise to
this adjustment by (y) the new Exercise Price determined in accordance
with the immediately preceding sentence. For the avoidance of doubt, no
increase to the Exercise Price or decrease in the number of Shares issuable
upon exercise of this Warrant shall be made pursuant to this Section 13(D).


 


(E)           Business
Combinations. In case of any Business Combination or reclassification of
Common Stock (other than a reclassification of Common Stock referred to in Section 13(A)),
the Warrantholder’s right to receive Shares upon exercise of this Warrant shall
be converted into the right to exercise this Warrant to acquire the number of
shares of stock or other securities or property (including cash) which the
Common Stock issuable (at the time of such Business Combination or
reclassification) upon exercise of this Warrant immediately prior to such


 


10
















 


Business Combination or reclassification
would have been entitled to receive upon consummation of such Business
Combination or reclassification; and in any such case, if necessary, the
provisions set forth herein with respect to the rights and interests thereafter
of the Warrantholder shall be appropriately adjusted so as to be applicable, as
nearly as may reasonably be, to the Warrantholder’s right to exercise this
Warrant in exchange for any shares of stock or other securities or property
pursuant to this paragraph. In determining the kind and amount of stock,
securities or the property receivable upon exercise of this Warrant following
the consummation of such Business Combination, if the holders of Common Stock
have the right to elect the kind or amount of consideration receivable upon
consummation of such Business Combination, then the consideration that the
Warrantholder shall be entitled to receive upon exercise shall be deemed to be
the types and amounts of consideration received by the majority of all holders
of the shares of common stock that affirmatively make an election (or of all
such holders if none make an election).


 


(F)           Rounding of Calculations; Minimum
Adjustments. All calculations under this Section 13 shall be made to
the nearest one-tenth (1/10th) of a cent or to the nearest one-hundredth
(1/100th) of a share, as the case may be. Any provision of this Section 13
to the contrary notwithstanding, no adjustment in the Exercise Price or the
number of Shares into which this Warrant is exercisable shall be made if the
amount of such adjustment would be less than $0.01 or one-tenth (1/10th) of a
share of Common Stock, but any such amount shall be carried forward and an
adjustment with respect thereto shall be made at the time of and together with
any subsequent adjustment which, together with such amount and any other amount
or amounts so carried forward, shall aggregate $0.01 or 1/10th of a share of
Common Stock, or more.


 


(G)           Timing of Issuance of Additional Common
Stock Upon Certain Adjustments. In any case in which the provisions of this
Section 13 shall require that an adjustment shall become effective
immediately after a record date for an event, the Company may defer until the
occurrence of such event (i) issuing to the Warrantholder of this Warrant
exercised after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such exercise by reason of the
adjustment required by such event over and above the shares of Common Stock
issuable upon such exercise before giving effect to such adjustment and (ii) paying
to such Warrantholder any amount of cash in lieu of a fractional share of
Common Stock; provided, however, that the Company upon request
shall deliver to such Warrantholder a due bill or other appropriate instrument
evidencing such Warrantholder’s right to receive such additional shares, and
such cash, upon the occurrence of the event requiring such adjustment.


 


(H)          Completion of Qualified Equity Offering.
In the event the Company (or any successor by Business Combination) completes
one or more Qualified Equity Offerings on or prior to December 31, 2009
that result in the Company (or any such successor ) receiving aggregate
gross proceeds of not less than 100% of the aggregate liquidation preference of
the Preferred Shares (and any preferred stock issued by any such successor to
the Original Warrantholder under the CPP), the number of shares of Common Stock
underlying the portion of this Warrant then held by the Original Warrantholder
shall be thereafter reduced by a number of shares of Common Stock equal to the
product of (i) 0.5 and (ii) the number of shares underlying the
Warrant on the Issue Date (adjusted to take into account all other theretofore
made adjustments pursuant to this Section 13).


 


11

















 


(I)            Other Events. For so long as the
Original Warrantholder holds this Warrant or any portion thereof, if any event
occurs as to which the provisions of this Section 13 are not strictly
applicable or, if strictly applicable, would not, in the good faith judgment of
the Board of Directors of the Company, fairly and adequately protect the
purchase rights of the Warrants in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make such
adjustments in the application of such provisions, in accordance with such
essential intent and principles, as shall be reasonably necessary, in the good
faith opinion of the Board of Directors, to protect such purchase rights as
aforesaid. The Exercise Price or the number of Shares into which this Warrant
is exercisable shall not be adjusted in the event of a change in the par value
of the Common Stock or a change in the jurisdiction of incorporation of the
Company.


 


(J)            Statement Regarding Adjustments.
Whenever the Exercise Price or the number of Shares into which this Warrant is
exercisable shall be adjusted as provided in Section 13, the Company shall
forthwith file at the principal office of the Company a statement showing in
reasonable detail the facts requiring such adjustment and the Exercise Price
that shall be in effect and the number of Shares into which this Warrant shall
be exercisable after such adjustment, and the Company shall also cause a copy
of such statement to be sent by mail, first class postage prepaid, to each
Warrantholder at the address appearing in the Company’s records.


 


(K)          Notice of Adjustment Event. In the
event that the Company shall propose to take any action of the type described
in this Section 13 (but only if the action of the type described in this Section 13
would result in an adjustment in the Exercise Price or the number of Shares
into which this Warrant is exercisable or a change in the type of securities or
property to be delivered upon exercise of this Warrant), the Company shall give
notice to the Warrantholder, in the manner set forth in Section 13(J),
which notice shall specify the record date, if any, with respect to any such
action and the approximate date on which such action is to take place. Such
notice shall also set forth the facts with respect thereto as shall be
reasonably necessary to indicate the effect on the Exercise Price and the
number, kind or class of shares or other securities or property which shall be
deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed, and in case of all other action, such
notice shall be given at least 15 days prior to the taking of such proposed
action. Failure to give such notice, or any defect therein, shall not affect
the legality or validity of any such action.


 


(L)           Proceedings Prior to Any Action Requiring
Adjustment. As a condition precedent to the taking of any action which
would require an adjustment pursuant to this Section 13, the Company shall
take any action which may be necessary, including obtaining regulatory, New
York Stock Exchange, NASDAQ Stock Market or other applicable national securities
exchange or stockholder approvals or exemptions, in order that the Company may
thereafter validly and legally issue as fully paid and nonassessable all shares
of Common Stock that the Warrantholder is entitled to receive upon exercise of
this Warrant pursuant to this Section 13.


 


12

















 


(M)         Adjustment Rules. Any adjustments
pursuant to this Section 13 shall be made successively whenever an event
referred to herein shall occur. If an adjustment in Exercise Price made
hereunder would reduce the Exercise Price to an amount below par value of the
Common Stock, then such adjustment in Exercise Price made hereunder shall
reduce the Exercise Price to the par value of the Common Stock.


 


14.           Exchange. At any time following the
date on which the shares of Common Stock of the Company are no longer listed or
admitted to trading on a national securities exchange (other than in connection
with any Business Combination), the Original Warrantholder may cause the
Company to exchange all or a portion of this Warrant for an economic interest
(to be determined by the Original Warrantholder after consultation with the
Company) of the Company classified as permanent equity under U.S. GAAP having a
value equal to the Fair Market Value of the portion of the Warrant so
exchanged. The Original Warrantholder shall calculate any Fair Market Value
required to be calculated pursuant to this Section 14, which shall not be
subject to the Appraisal Procedure.


 


15.           No Impairment. The Company will not,
by amendment of its Charter or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Company, but will at
all times in good faith assist in the carrying out of all the provisions of
this Warrant and in taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrantholder.


 


16.           Governing Law. This Warrant 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. Each of the Company and the Warrantholder agrees (a) to submit to
the exclusive jurisdiction and venue of the United States District Court for
the District of Columbia for any civil action, suit or proceeding arising out
of or relating to this Warrant or the transactions contemplated hereby, and (b) that
notice may be served upon the Company at the address in Section 20 below
and upon the Warrantholder at the address for the Warrantholder set forth in
the registry maintained by the Company pursuant to Section 9 hereof. To
the extent permitted by applicable law, each of the Company and the
Warrantholder hereby unconditionally waives trial by jury in any civil legal
action or proceeding relating to the Warrant or the transactions contemplated
hereby or thereby.


 


17.           Binding Effect. This Warrant shall be
binding upon any successors or assigns of the Company.


 


18.           Amendments. This Warrant may be
amended and the observance of any term of this Warrant may be waived only with
the written consent of the Company and the Warrantholder.


 


19.           Prohibited Actions.
The Company agrees that it will not take any action which would entitle the
Warrantholder to an adjustment of the Exercise Price if the total number of
shares of Common Stock issuable after such action upon exercise of this
Warrant, together with


 


13

















 


all shares of Common Stock then outstanding and all shares of Common
Stock then issuable upon the exercise of all outstanding options, warrants,
conversion and other rights, would exceed the total number of shares of Common
Stock then authorized by its Charter.


 


20.           Notices. Any notice, request,
instruction or other document to be given hereunder by any party to the other
will be in writing and will be deemed to have been duly given (a) on the
date of delivery if delivered personally, or by facsimile, upon confirmation of
receipt, or (b) on the second business day following the date of dispatch
if delivered by a recognized next day courier service. All notices hereunder
shall be delivered as set forth in Item 8 of Schedule A hereto, or pursuant to
such other instructions as may be designated in writing by the party to receive
such notice.


 


21.           Entire Agreement. This Warrant, the
forms attached hereto and Schedule A hereto (the terms of which are
incorporated by reference herein), and the Letter Agreement (including all
documents incorporated therein), contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or undertakings with respect thereto.


 


[Remainder of page intentionally left blank]


 


14

















 


[Form of
Notice of Exercise]


 


Date:________________________________


 


TO: Virginia Commerce Bancorp, Inc.


 


RE: Election to Purchase Common Stock


 


The undersigned, pursuant to the provisions
set forth in the attached Warrant, hereby agrees to subscribe for and purchase
the number of shares of the Common Stock set forth below covered by such
Warrant. The undersigned, in accordance with Section 3 of the Warrant,
hereby agrees to pay the aggregate Exercise Price for such shares of Common
Stock in the manner set forth below. A new warrant evidencing the remaining
shares of Common Stock covered by such Warrant, but not yet subscribed for and
purchased, if any, should be issued in the name set forth below.


 


Number of Shares of Common Stock ____________________________


 


Method of Payment of Exercise Price (note if cashless exercise pursuant
to Section 3(i) of the Warrant or cash exercise pursuant to Section 3(ii) of
the Warrant, with consent of the Company and the Warrantholder)
____________________________


 


Aggregate Exercise Price: ____________________________


 


	
   

  	
  Holder:

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


15

















 


IN WITNESS WHEREOF, the Company has caused
this Warrant to be duly executed by a duly authorized officer.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VIRGINIA COMMERCE BANCORP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Peter A. Converse

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  Attest:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Robert H. L’Hommedieu

  
	
   

  	
  Title: Secretary

  
	
   

  	
   

  
	
   

  
	
  [Signature Page to Warrant]

  
						



 


16

















 


SCHEDULE A


 


Item 1


 


Name:  Virginia Commerce Bancorp, Inc.


Corporate or other organizational form: Corporation


Jurisdiction of organization: Virginia


 


Item 2


 


Exercise Price: $3.95(1)


 


Item 3


 


Issue Date: December 12, 2008


 


Item 4


 


Amount of last dividend declared prior to the Issue Date: $0.00


 


Item 5


 


Date of Letter Agreement between the Company and the United States
Department of the


 


Treasury: December 12, 2008


 


Item 6


 


Number of shares of Common Stock: 2,696,203


 


Item 7


 


Company’s address:  5350 Lee
Highway, Arlington, Virginia 22207


 


Item 8


 


	
  Notice Information:

  	
   

  	
  William K. Beauchesne

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
  Virginia Commerce Bancorp, Inc.

  
	
   

  	
   

  	
  14201 Sullyfield Circle, #500

  
	
   

  	
   

  	
  Chantilly, Virginia 20151

  
	
   

  	
   

  	
  703.633.6149 (phone); 703.633.6150 (fax)

  
	
   

  	
   

  	
  wbeauchesne@vcbonline.com

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Noel M. Gruber, Esquire

  
	
   

  	
   

  	
  Kennedy & Baris, LLP

  
	
   

  	
   

  	
  4701 Sangamore Road, Suite P-15

  
	
   

  	
   

  	
  Bethesda, Maryland 20816

  
	
   

  	
   

  	
  301.229.3400 (x18); 301.229.2443 (fax)

  
	
   

  	
   

  	
  nmgruber@kennedybaris.com

  



 






	
  (1)

  	
   

  	
  Initial
  exercise price to be calculated based on the average of closing prices of the
  Common Stock on the 20 trading days ending on the last trading day prior to
  the date the Company’s application for participation in the Capital Purchase
  Program was approved by the United States Department of the Treasury.