Document:

Exhibit 10.1

 

	
   

  	
   

  	
  UBS Financial Services Inc.

  
	
  UBS

  	
   

  	
  1200 Harbor Boulevard

  
	
   

  	
   

  	
  Weehawken, NJ 07086

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James M. Pierce

  
	
   

  	
   

  	
  Co-Head

  
	
   

  	
   

  	
  Wealth Management Advisor Group US

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James D. Price

  
	
   

  	
   

  	
  Co-Head

  
	
  CITI TRENDS, INC.

  	
   

  	
  Wealth Management Advisor Group US

  
	
  102 FAHM STREET

  	
   

  	
   

  
	
  SAVANNAH GA 31401-2392

  	
   

  	
  www.ubs.com

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  October 8, 2008

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Branch Telephone Number

  
	
   

  	
   

  	
  +1-312-525-4500

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Account Number: CP
  73472

  

 

We are pleased to offer you a way to liquidate certain of your auction
rate securities (ARS). UBS has designed a solution that gives you the option to
hold your ARS or sell the securities back to UBS. This solution is available
for ARS that were held in a UBS account on February 13, 2008, and that are
not successfully clearing at auction (Eligible ARS).

 

UBS is offering you “Auction Rate Securities Rights”
(Rights) to sell Eligible ARS at par value to UBS at any time during a two-year
time period. These Rights are nontransferable securities registered with the
U.S. Securities and Exchange Commission (SEC). This is a limited time offer
that will expire on November 14, 2008. Accepting this offer may impact
your legal rights. Not accepting this offer may have repercussions on
outstanding loans secured by Eligible ARS. As a result, it is important that you
review the prospectus carefully.

 

The key features and terms of the offer are summarized below. For
complete details, please see the enclosed prospectus.

 

·        UBS is offering you nontransferable Rights to sell Eligible ARS, held
in the UBS account identified above, at par value to UBS at any time during the
period of June 30, 2010, through July 2, 2012.

 

·         You may instruct your UBS Financial Advisor to exercise these Rights at
any time during this time period;

·         If you do not exercise your Rights, the Eligible ARS will continue to
accrue interest or dividends as determined by the auction process;

·         If you do not exercise your Rights before July 2, 2012, they will
expire and UBS will have no further obligation to buy your Eligible ARS.

 

·        Clients who accept this offer give UBS the discretion to purchase or
sell their Eligible ARS at any time after accepting the firm’s offer and
without other prior notice.

 

·         UBS will purchase tax-exempt Auction Preferred Stock (a specific type
of ARS also known as APS) at any time after clients accept the firm’s Rights
offer;

·         UBS will only exercise its discretion to purchase or sell Eligible ARS
for the purpose of restructurings, dispositions or other solutions that will
provide clients with par value for their Eligible ARS;

·         In purchasing Eligible ARS or selling Eligible ARS on behalf of
clients, including tax-exempt APS, UBS will act in its capacity as
broker-dealer and will execute these transactions on a principal basis
regardless of the type of client accounts in which the Eligible ARS are held.
Please see pages 27-28 in the enclosed prospectus for more information;

·         UBS will pay clients par value for their Eligible ARS within one day of
settlement of the transaction;

·         Eligible ARS are subject to issuer redemptions at any time.

 

UBS AG has filed a registration statement (including a prospectus) with
the SEC for the offering to which this communication relates. Before you make
an investment decision, you should read the prospectus in that registration
statement and other documents that UBS has filed with the SEC for more complete
information about UBS and this offering. You may get these documents for free
by visiting EDGAR on the SEC Web site at www.sec.gov
or by calling UBS’s
ARS Client Service Center at +1-800-253-1974.

 

	
  UBS Financial Services Inc. and
  UBS International Inc. are subsidiaries of UBS AG.

  	
   

  	
  1C-ARSO

  

 

 

UBS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  UBS Financial Services Inc.

 

·        Clients who accept this offer release UBS and
its employees/agents from all claims except claims for consequential damages directly or indirectly relating to its
marketing and sale of ARS and expressly agree not to seek any damages or costs
(punitive damages, attorney fees, etc.) other than consequential damages.
Clients also will not serve as a class representative or receive benefits under
any class action settlement or investor fund.

 

·        UBS will provide clients who accept the offer “no net cost” loans up to
the par value of Eligible ARS until June 30, 2010. Please see pages 36-39
in the enclosed prospectus for more information.

 

·        UBS will reimburse all clients who participated in prior UBS ARS loan
programs after February 13, 2008, for the difference between the
cost of the loan and the applicable interest paid on the Eligible ARS.

 

THIS OFFER EXPIRES ON NOVEMBER 14, 2008. Please
complete, sign and date the enclosed form and return it in the postage-paid
envelope if you wish to accept this offer. We must receive your signed acceptance form no
later than November 14, 2008.

 

You may receive multiple letters from us depending on
the type of ARS you own or if you have ARS in multiple accounts. Please note
you must return a form for each letter you receive to accept all
available offers relating to your ARS holdings. Please read each response form
carefully as the terms may vary.

 

A list of your
Eligible ARS in the account identified on the first page of this letter is
attached. Additional information about your Eligible ARS, including the most
recent interest rates and dividend yields, is available at www.ubs.com/auctionratesecurities.

 

If you have any
questions about your Eligible ARS or this offer, please contact your UBS
Financial Advisor or Branch Manager at the telephone number listed at the top
of this letter. Please note that UBS Financial Advisors and Branch Managers
cannot provide legal or tax advice regarding this offer. Instructions to
exercise your Rights should be directed to your UBS Financial Advisor or Branch
Manager.

 

We regret any
hardship that the failure of the ARS markets may have caused you. We hope that
the offer described above and discussed in detail in the prospectus provides
resolution for you regarding this matter. We look forward to continuing our
relationship with you and to serving your future investment needs.

 

Thank you for your
business and for maintaining your relationship with UBS.

 

	
  Sincerely,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ James M. Pierce

  	
   

  	
  /s/ James D. Price

  
	
  James M. Pierce

  	
  James D. Price

  
			

 

UBS Financial Services Inc. serves as the clearing firm for UBS
International Inc. Accordingly, the information and terms contained in this
letter and the accompanying materials are directed to clients of both UBS
Financial Services Inc and UBS International Inc.

 

 

Current rate and dividend information

 

To
allow you to view the current interest rates and/or dividends your holdings are
earning, we have created an online tool available at www.ubs.com/auctionratesecurities.

 

Simply
enter the nine-digit CUSIP number(s) shown below to obtain the most
current information about your securities.

 

Percentages
displayed in the descriptions below are as of September 30, 2008.

 

	
  CUSIP

  	
   

  	
  Description

  	
   

  	
  CUSIP

  	
   

  	
  Description

  	
   

  	
  CUSIP

  	
   

  	
  Description

  
	
  155488BV0

  	
   

  	
  CENTRAL TEXAS HGHR ED AU

  	
   

  	
  429825AT9

  	
   

  	
  NEW JERSEY HGR ED STU-LN

  	
   

  	
  462590FR6

  	
   

  	
  IOWA STUD LN LIQ SER A

  
	
   

  	
   

  	
  SER 2002A REV AMT B/E/R/

  	
   

  	
   

  	
   

  	
  SER C REV MBIA AMT BE/R/

  	
   

  	
   

  	
   

  	
  REV AMBAC AMT B/E /R/

  
	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  
	
   

  	
   

  	
  RATE 12.000% MATURES 12/01/36

  	
   

  	
   

  	
   

  	
  RATE 08.540% MATURES
  06/01/37

  	
   

  	
   

  	
   

  	
  RATE 08.540% MATURES
  12/01/38

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  462590GA2

  	
   

  	
  IA STDT LN LIQ 35DAY ARC

  	
   

  	
  462590GB0

  	
   

  	
  IOWA STUD LN LIQ ARC

  	
   

  	
  49130NAV1

  	
   

  	
  KENTUCKY HIGHER ED STUD

  
	
   

  	
   

  	
  AMBAC SR C-II AMT BE/R/

  	
   

  	
   

  	
   

  	
  (WED) 06 SER 1 AMT BE/R/

  	
   

  	
   

  	
   

  	
  LN ARC REV AMT B/E /R/

  
	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  
	
   

  	
   

  	
  RATE 08.540% MATURES 12/01/40

  	
   

  	
   

  	
   

  	
  RATE 08.540% MATURES
  12/01/30

  	
   

  	
   

  	
   

  	
  RATE 08.540% MATURES
  06/01/34

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  49130NAX7

  	
   

  	
  KENTUCKY HIGHER ED STUD

  	
   

  	
  49130NBK4

  	
   

  	
  KENTUCKY HGHR ED STUD LN

  	
   

  	
  57563REE5

  	
   

  	
  MA ED FIN AU ISS 2002 RV

  
	
   

  	
   

  	
  REV ARC A AMT B/E /R/

  	
   

  	
   

  	
   

  	
  A1 35D T/E ARC AMT BE/R/

  	
   

  	
   

  	
   

  	
  ISSUE SER D AMBAC BE/R/

  
	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  
	
   

  	
   

  	
  RATE 12.000% MATURES 06/01/34

  	
   

  	
   

  	
   

  	
  RATE 12.000% MATURES
  06/01/36

  	
   

  	
   

  	
   

  	
  RATE 08.540% MATURES
  01/01/37

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  57563REZ8

  	
   

  	
  MASS EDL FING AUTH ED LN

  	
   

  	
  594520KC 1

  	
   

  	
  MICHIGAN HGR ED STU-LOAN

  	
   

  	
  594520KL1

  	
   

  	
  MICHIGAN HIGHER ED STUD

  
	
   

  	
   

  	
  RV SER A REV AMBAC /R/

  	
   

  	
   

  	
   

  	
  RFDG RV XVIIL AMT BER/R/

  	
   

  	
   

  	
   

  	
  LN AU RF AMT BE/R/

  
	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  
	
   

  	
   

  	
  RATE 10.028% MATURES 01/01/38

  	
   

  	
   

  	
   

  	
  RATE 08.540% MATURES
  03/01/39

  	
   

  	
   

  	
   

  	
  RATE 06.878% MATURES
  03/01/40

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  594520KM9

  	
   

  	
  MICHIGAN HIGHER ED S/L

  	
   

  	
  606072DF0

  	
   

  	
  MISSOURI HIGHER ED LN AU

  	
   

  	
  644614HH5

  	
   

  	
  NEW HAMPSHIRE HLTH &
  EDU

  
	
   

  	
   

  	
  AU RF XVII RV AMT B/E/R/ 

  	
   

  	
   

  	
   

  	
  S/L RV AMT B AMBAC BE/R/

  	
   

  	
   

  	
   

  	
  35 DAY A-2 RV AMT B/E/R/

  
	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  
	
   

  	
   

  	
  RATE 08.540% MATURES 03/01/40

  	
   

  	
   

  	
   

  	
  RATE 10.203% MATURES
  02/15/25

  	
   

  	
   

  	
   

  	
  RATE 12.000% MATURES
  12/01/38

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  709163CX5

  	
   

  	
  PA ST H/E ASST AGY REV

  	
   

  	
  813659AM1

  	
   

  	
  HAWAII SECOND MKT SERV

  	
   

  	
  917546ES8

  	
   

  	
  UTAH ST BRD OF REGT

  
	
   

  	
   

  	
  S/L ARCS P2 AMT B/E /R/

  	
   

  	
   

  	
   

  	
  T/E 35 DAY ARC AMT BE/R/

  	
   

  	
   

  	
   

  	
  SER G REV AMT B/E /R/ 

  
	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  
	
   

  	
   

  	
  RATE 14.000% MATURES 03/01/22

  	
   

  	
   

  	
   

  	
  RATE 06.615% MATURES
  03/01/40

  	
   

  	
   

  	
   

  	
  RATE 08.540% MATURES 05/01/33

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  917546FV0

  	
   

  	
  UTAH ST BRD OF REGT

  	
   

  	
  917546FX6

  	
   

  	
  UTAH ST BRD OF REGT ARC

  	
   

  	
  92428CDW1

  	
   

  	
  VERMONT ST STUD ASST CRP

  
	
   

  	
   

  	
  SER Y-1-C REV AMT B/E/R/

  	
   

  	
   

  	
   

  	
  CL V SER T REV AMT BE/R/

  	
   

  	
   

  	
   

  	
  SER 2000R REV AMBAC /R/

  
	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  	
   

  	
   

  	
   

  	
  VARIABLE RATE

  
	
   

  	
   

  	
  RATE 13.738% MATURES 11/01/37

  	
   

  	
   

  	
   

  	
  RATE 13.738% MATURES
  05/01/10

  	
   

  	
   

  	
   

  	
  RATE 13.300% MATURES
  12/15/34

  

 

	
   

  	
   

  	
  1C-ARSO

  

 

 

	
  UBS

  	
   

  	
  UBS Financial Services Inc.

  

 

Please complete and sign this form.

We must receive it by November 14, 2008.

 

Acceptance of UBS's offer relating to auction rate securities

 

By signing below and returning this form, I accept UBS’s offer of Rights
relating to my Eligible ARS in the account listed below. I understand and
acknowledge the following:

 

·        All Eligible ARS must remain in my UBS account listed below until I
exercise my Rights to sell my Eligible ARS to UBS or they are redeemed by the issuer or purchased or
sold on my behalf by UBS;

·        I will instruct my UBS Financial Advisor or Branch Manager if and when
I want to exercise my Rights and sell my Eligible ARS to UBS during the period
of June 30, 2010, through July 2, 2012;

·        The acceptance of UBS’s offer constitutes consent (to the extent
legally required) for UBS, acting as principal, to purchase my Eligible ARS or
to sell them on my behalf at any time in its sole discretion and without other
prior notice to me, from the date that I accept this offer through July 2,
2012;

·        If UBS purchases, sells or otherwise disposes of my Eligible ARS, it
will deposit the par value in my account within one business day of settlement
of the transaction;

·        I release UBS and its employees/agents from all claims except claims
for consequential damages directly or indirectly relating to its marketing and
sale of ARS and expressly agree that I will not seek any damages or costs
(punitive damages, attorney fees, etc.) other than consequential damages. I
also will not serve as a class representative or receive benefits under any
class action settlement or investor fund;

·        If the account named
below is in the name of a corporation, partnership, trust or other entity, I
represent and warrant that I have the power and authority to accept this offer
on behalf of that entity.

 

	
   

  	
   

  	
  Please complete and sign this form.

  
	
   

  	
   

  	
  We must receive
  it by November 14, 2008.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mail

  	
  UBS Financial Services Inc.

  
	
  CITI TRENDS, INC.

  	
   

  	
   

  	
  ATTN: ARS Group

  
	
  104 COLEMAN BLVD.

  	
   

  	
   

  	
  1000
  Harbor Boulevard

  
	
  SAVANNAH GA 31408

  	
   

  	
   

  	
  Weehawken, NJ 07086

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fax

  	
  +1-201-442-7766

  

 

Account Number: CP 73472

 

	
  Account owner signature

  	
   

  	
  /s/ Bruce D. Smith, CFO

  	
   

  	
  Date

  	
   

  	
  10/21/08

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Additional party signature

  	
   

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Daytime telephone number

  	
   

  	
  912-443-2075

  	
   

  	
   

  	
   

  	
   

  

 

If you have questions, please contact your UBS
Financial Advisor or Branch Manager at +1-312-525-4500. Clients outside the
U.S. may call +1-201-352-0105 collect.

 

We kindly request that you do not include comments or
questions on this form as it could delay processing of your instructions.

 

UBS AG has filed a registration statement (including
a prospectus) with the SEC for the offering to which this communication
relates. Before you make an investment decision, you should read the prospectus
in that registration statement and other documents that UBS has filed with the
SEC for more complete information about UBS and this offering. You may get
these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov or by calling UBS’s ARS Client Service Center at
+1-800-253-1974.

 

UBS Financial Services Inc. serves as the clearing
firm for UBS International Inc. Accordingly, the information and terms
contained in this letter and the accompanying materials are directed to clients
of both UBS Financial Services Inc and UBS International Inc.

 

©2008 UBS Financial Services Inc. All rights reserved.
Member SIPC.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

770,867

Shares of Common Stock

of Eagle Bancorp, Inc.

 

Issue Date: December 5, 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: Eagle
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:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EAGLE BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Ronald D. Paul

  
	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Jane E. Cornett

  
	
   

  	
   

  	
  Title: Corporate Secretary

  

 

 

[Signature Page to Warrant]

 

16

 

SCHEDULE A

 

Item 1

Name:  Eagle Bancorp, Inc.

Corporate or
other organizational form: Corporation

Jurisdiction
of organization: Maryland

 

Item 2

Exercise
Price: $7.44(1)

 

Item 3

Issue Date: December 5,
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 5, 2008

 

Item 6

Number of
shares of Common Stock: 770,867

 

Item 7

Company’s
address: 7815 Woodmont Avenue, Bethesda, Maryland 20814

 

Item 8

	
  Notice
  information:

  	
   

  	
  Michael T.
  Flynn

  
	
   

  	
   

  	
  Chief
  Operating Officer

  
	
   

  	
   

  	
  Eagle
  Bancorp, Inc.

  
	
   

  	
   

  	
  7815
  Woodmont Avenue

  
	
   

  	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
   

  	
  240.497.2040
  (phone)

  
	
   

  	
   

  	
  mflynn@eaglebankcorp.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.

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