<PAGE>
Exhibit 10.1
AMENDMENT TO LOAN AGREEMENT
THIS AMENDMENT TO LOAN AGREEMENT is made as of September 16, 2008,
by
and between COMMUNITY SHORES BANK CORPORATION, a Michigan
corporation, 1030 West
Norton Avenue, Muskegon, Michigan 49441 ("BORROWER") and FIFTH
THIRD BANK, a
Michigan banking corporation, 111 Lyon N.W., Grand Rapids, Michigan
49503
("LENDER").
Borrower and Lender are parties to a Loan Agreement dated September
7,
2007, ("AGREEMENT"). They want to amend the Agreement.
Borrower and Lender agree as follows:
1. Each capitalized term that this Amendment uses but does not
define
has the meaning that the Agreement gives it.
2. Simultaneously with the execution and delivery of this
Amendment,
Borrower shall execute and deliver to Lender a Revolving Credit
Note in the form
attached to this Amendment as SCHEDULE A ("NEW NOTE"). Effective
immediately,
the term "Revolving Credit Note" as used in the Agreement means the
New Note,
and from and after the date of this Amendment, all Revolving Credit
Loans shall
be evidenced by and payable with interest in accordance with the
terms of the
New Note.
3. Section 3.6 of the Agreement is amended, effective immediately,
by
changing the date set forth in the first sentence of that section
to September
1, 2009.
4. The Agreement is amended, effective immediately, by adding a
new
Section 3A reading as follows:
"SECTION 3A. SECURITY.
To secure payment and performance of all Lender Indebtedness:
3.1 Borrower shall execute and deliver to Lender an agreement, in
form
and
substance satisfactory to Lender, under which Borrower shall grant
to
Lender a first-priority, perfected security interest in all of the
shares
of
the capital stock of Bank that Borrower now owns or acquires in
the
future.
3.2 Borrower shall sign and deliver to Lender, and shall cause
third
parties to sign and deliver, all financing statements, assignments,
and
other documents, agreements and instruments, and shall take all
further
actions, and shall cause third parties to take all further actions,
that
Lender reasonably requests in connection with the perfection or
priority of
the
security provided for above."
1
<PAGE>
5. Borrower represents and warrants to Lender that (a) Borrower
owns
all of the issued and outstanding shares of the capital stock of
Bank and (b)
Borrower represents and warrants to Lender that Borrower is not
obligated to any
Person, including, without limitation, Bank, on or with respect to
any
Indebtedness other than Lender Indebtedness.
6. Simultaneously with the execution and delivery of this
Agreement,
Borrower shall pay to Lender a processing fee in the amount of
$500.
7. Borrower represents and warrants to Lender that Event of
Default
has not occurred.
8. Except as
expressly amended by this Amendment, all of the
provisions of the Agreement are ratified and confirmed.
Borrower and Lender have signed this Amendment as of the date
stated
above.
COMMUNITY SHORES BANK CORPORATION
By /s/ Heather D. Brolick
-------------------------------------
Heather D. Brolick
Its President and Chief Executive
Officer
And by /s/ Tracey A. Welsh
---------------------------------
Tracey A. Welsh
Its Chief Financial officer
FIFTH THIRD BANK
By /s/ Dennis S. Schichtel
-------------------------------------
Dennis S. Schichtel
Its Vice President
2
<PAGE>
SCHEDULE A
REVOLVING CREDIT NOTE
Grand Rapids, Michigan
$5,000,000
September 16, 2008
FOR VALUE RECEIVED, the undersigned COMMUNITY SHORES BANK
CORPORATION,
a Michigan corporation of Muskegon, Michigan ("BORROWER"), promises
to pay to
the order of FIFTH THIRD BANK, a Michigan banking corporation
("LENDER"), at
Lender's main office in Grand Rapids, Michigan, or at any other
place that the
holder of this Note designates in writing, the sum of Five Million
Dollars
($5,000,000) or any lesser amount that Lender shall have loaned to
Borrower
under Section 3 of a certain Loan Agreement dated September 7,
2007, between
Borrower and Lender ("LOAN AGREEMENT"), together with interest
(computed on the
basis of a three hundred sixty (360) day year for the actual number
of days
elapsed) on the unpaid balance at an annual rate equal to the Index
Rate plus 1%
(100 basis points) until maturity and after maturity at an annual
rate equal to
the Index Rate plus 3% (300 basis points). Any change in the
interest rate on
this Note that is occasioned by a change in the Index Rate shall be
effective on
the day of the change in the Index Rate.
"INDEX RATE" means the interest rate that Lender designates from
time
to time as its "prime" interest rate. Borrower acknowledges that
the rate that
Lender designates as its "prime" interest rate at any given time is
not the
lowest rate of interest that is available to Lender's commercial
customers at
that time.
The interest on this Note shall be payable quarterly beginning
November 1, 2008, and continuing on the first day of each
succeeding February,
May, August and November until the principal is paid in full. The
principal of
this Note shall be payable as provided in Section 3 of the Loan
Agreement.
If Borrower does not make a payment of interest within ten days
after
it is due, then Borrower shall immediately pay to Lender a late
charge in an
amount equal to the greater of Fifty Dollars ($50) or 1/10 of 1% of
the unpaid
principal balance of this Note on the date the late charge is
assessed. This is
in addition to Lender's other rights and remedies for default in
payment of
interest when due.
This Note evidences Borrower's indebtedness to Lender by reason
of
loans made and to be made from time to time under Section 3 of the
Loan
Agreement ("LOANS"). Lender's records shall be prima facie evidence
of all loans
and prepayments and of the indebtedness outstanding under this Note
at any time.
The holder of this Note shall have all of the rights and powers set
forth in the
Loan Agreement as though they were fully set forth in this Note
Reference is
made to the Loan Agreement for a statement of the conditions under
which the
principal of this Note and accrued interest may become immediately
due and
payable without
3
<PAGE>
demand. Subject to the preceding sentence, the maturity date of
this Note and of
all Loans is September 1, 2009, unless Lender extends it under
Section 3 of the
Loan Agreement.
In this Note, "MATURITY" means the time when the entire
remaining
unpaid principal balance of this Note is or becomes immediately due
and payable.
Except as otherwise provided in the Loan Agreement, the
undersigned
waives protest, presentment, demand and notice of nonpayment.
COMMUNITY SHORES BANK
CORPORATION
By
-------------------------------------
Heather D. Brolick
Its President and Chief Executive
Officer
And by
---------------------------------
Tracey A. Welsh
Its Chief Financial Officer
ATTEST:
-------------------------------------
Ralph R. Berggren
Its Secretary
4
<PAGE>
REVOLVING CREDIT NOTE
Grand Rapids, Michigan
$5,000,000
September 16, 2008
FOR VALUE RECEIVED, the undersigned COMMUNITY SHORES BANK
CORPORATION,
a Michigan corporation of Muskegon, Michigan ("BORROWER"), promises
to pay to
the order of FIFTH THIRD BANK, a Michigan banking corporation
("LENDER"), at
Lender's main office in Grand Rapids, Michigan, or at any other
place that the
holder of this Note designates in writing, the sum of Five Million
Dollars
($5,000,000) or any lesser amount that Lender shall have loaned to
Borrower
under Section 3 of a certain Loan Agreement dated September 7,
2007, between
Borrower and Lender ("LOAN AGREEMENT"), together with interest
(computed on the
basis of a three hundred sixty (360) day year for the actual number
of days
elapsed) on the unpaid balance at an annual rate equal to the Index
Rate plus 1%
(100 basis points) until maturity and after maturity at an annual
rate equal to
the Index Rate plus 3% (300 basis points). Any change in the
interest rate on
this Note that is occasioned by a change in the Index Rate shall be
effective on
the day of the change in the Index Rate.
"INDEX RATE" means the interest rate that Lender designates from
time
to time as its "prime" interest rate. Borrower acknowledges that
the rate that
Lender designates as its "prime" interest rate at any given time is
not the
lowest rate of interest that is available to Lender's commercial
customers at
that time.
The interest on this Note shall be payable quarterly beginning
November 1, 2008, and continuing on the first day of each
succeeding February,
May, August and November until the principal is paid in full. The
principal of
this Note shall be payable as provided in Section 3 of the Loan
Agreement.
If Borrower does not make a payment of interest within ten days
after
it is due, then Borrower shall immediately pay to Lender a late
charge in an
amount equal to the greater of Fifty Dollars ($50) or 1/10 of 1% of
the unpaid
principal balance of this Note on the date the late charge is
assessed. This is
in addition to Lender's other rights and remedies for default in
payment of
interest when due.
This
Note evidences Borrower's indebtedness to Lender by reason of
loans made and to be made from time to time under Section 3 of the
Loan
Agreement ("LOANS"). Lender's records shall be prima facie evidence
of all loans
and prepayments and of the indebtedness outstanding under this Note
at any time.
The holder of this Note shall have all of the rights and powers set
forth in the
Loan Agreement as though they were fully set forth in this Note
Reference is
made to the Loan Agreement for a statement of the conditions under
which the
principal of this Note and accrued interest may become immediately
due and
payable without
<PAGE>
demand. Subject to the preceding sentence, the maturity date of
this Note and of
all Loans is September 1, 2009, unless Lender extends it under
Section 3 of the
Loan Agreement.
In this Note, "MATURITY" means the time when the entire
remaining
unpaid principal balance of this Note is or becomes imme
