exv10w1



 






Exhibit 10.1




____________ 2006




Community Bankers Acquisition Corp.

717 King Street

Alexandria, Virginia 22314



I-Bankers Securities Incorporated

125 E. John Carpenter Freeway

Suite 260

Irving, TX 75062



          Re: Initial Public Offering



Gentlemen:




          The undersigned stockholder, officer and/or director of Community Bankers Acquisition Corp.
(the “Company”), in consideration of I-Bankers Securities Incorporated (the “Underwriter”) entering
into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the
securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows
(certain capitalized terms used herein are defined in paragraph 14 hereof):



          1. Until a Business Combination is consummated by the Company, the undersigned agrees to vote
(a) all Insider Shares beneficially owned by him in accordance with the majority of the votes cast by
the holders of the IPO Shares in connection with the vote by the Company’s stockholders relating to
the approval of any Business Combination and (b) vote all Insider Shares and IPO Shares, if any, in favor of the Company’s dissolution and liquidation.


          2. The
undersigned hereby waives his right to exercise conversion rights with respect
to any shares of the Company’s common stock owned by the
undersigned, directly or indirectly, and agrees that he will not seek
conversion with respect to such shares in connection with any vote to
approve a Business Combination.



          3. In the event that the Company fails to consummate a Business Combination within 18 months
from the date (the “Effective Date”) of the prospectus relating to the IPO (or 24 months from the
Effective Date under the circumstances described in the prospectus relating to the IPO), the
undersigned will take all reasonable actions within his power to
cause the Company to proceed to dissolve the Company in accordance with Delaware
General Corporation Law and agrees to vote all Insider Shares and IPO
Shares
beneficially owned by him in favor of the dissolution and liquidation
of the Company. The undersigned relinquishes and waives any and all
rights he may have to receive any distribution of cash, property or other assets as a result of
such liquidation with respect to any Insider Shares beneficially
owned by him upon the Company's liquidation prior to a Business
Combination.



          4. In
the event that the Company is unable to complete a Business
Combination and is required to
liquidate the Company, the undersigned agrees to be personally liable to ensure
that the proceeds in the trust fund are not reduced by the claims of
any vendor or service
provider that is owed money by the Company for services rendered or
products sold to the Company.




 









 





[Applies to Messrs. Simanson and Zalman only.]



          5. In order to minimize potential conflicts of interest which may arise from multiple
affiliations, the undersigned agrees to present to the Company for its consideration, prior to
presentation to any other person or entity, any suitable opportunity to acquire an operating
business in the banking industry within the Mid-Atlantic Region of the United States, until the
earlier of the consummation by the Company of a Business Combination, the liquidation of the
Company due to the Company's failure to consummate a Business
Combination within 18 months of the Effective Date (or
24 months from the Effective Date under the circumstances
described in the prospectus) or until such time as the undersigned ceases to be an officer or director of the Company,
subject to any pre-existing fiduciary obligations the undersigned has as of the date hereof.



          6. The undersigned acknowledges and agrees that the undersigned will not permit the Company to
consummate any Business Combination that involves a company which is directly or indirectly
affiliated with any of the Insiders, unless the Company obtains an opinion from an independent
investment banking firm reasonably acceptable to the Underwriter that the Business Combination is
fair to the then holders of the IPO Shares from a financial perspective.



          7. Neither the undersigned, any member of the family of the undersigned, nor any affiliate of
the undersigned will be entitled to receive and will not accept, directly or indirectly, any
compensation for services rendered to the Company prior to the consummation of a Business
Combination by the Company; provided that, commencing on the Effective Date, Community Bankers
Acquisition, LLC, a limited liability company (“Related Party”), shall be allowed to charge the
Company an allocable share of Related Party’s overhead, $7,500 per month, to compensate it for the
Company’s use of Related Party’s offices, utilities and personnel. The undersigned shall also be
entitled to reimbursement from the Company for his reasonable out-of-pocket expenses incurred in
connection with seeking and consummating a Business Combination.



          8. Neither the undersigned, any member of the family of the undersigned, nor any affiliate of
the undersigned will be entitled to receive or accept, directly or indirectly, a finder’s fee or
any other compensation in the event the undersigned, any member of the family of the undersigned or
any affiliate of the undersigned originates a Business Combination involving the Company.



          9. The undersigned will escrow his Insider Shares for the three year period commencing on the
Effective Date, subject to the terms of a Stock Escrow Agreement which the Company will enter into
with the undersigned and Continental Stock Transfer & Trust Company, as escrow agent.



          10. The undersigned agrees that, during the period terminating on the third anniversary of the
Effective Date, he will not become involved (whether as owner, manager, operator, creditor,
partner, shareholder, joint venturer, member, employee, officer, director, consultant or otherwise)
with any Acquisition Company, unless such Acquisition Company has agreed with the Underwriter in
writing to permit the Underwriter to be the managing underwriter of any initial public offering of
the



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Acquisition Company’s securities, during the period terminating on the third anniversary of
the Effective Date, by providing to the Underwriter at least 20 days prior written notice, which
notice will set forth the terms of such proposed initial public offering of the Acquisition
Company’s securities and the underwriting compensation to be paid in connection with such offering, provided, however, that nothing contained herein shall
override a person’s fiduciary obligations to any entity with which he is currently directly or indirectly
associated or affiliated or by whom he is currently employed.
The Underwriter will respond to the Acquisition Company’s notice and indicate whether it does or
does not plan to be the managing underwriter on compensation terms at least as favorable to the
Acquisition Company as those set forth in the notice within 15 days after receiving such notice.



          The Underwriter by its acceptance of this letter agreement agrees not to become involved
(whether as underwriter, selling group member, investor, purchaser or otherwise), without the prior
written consent of the Company and Gary A. Simanson, during the period terminating on the third
anniversary of the Effective Date in a public offering by an Acquisition Company whose primary
purpose is to effect a Business Combination in the banking industry within (a) the Mid-Atlantic
region (consisting of the states of Virginia, Pennsylvania, West Virginia, Maryland and New
Jersey), and/or (b) any state (except that California shall be divided into two states for purposes
of this restriction, one from Santa Barbara to the south and the other north of Santa Barbara) in
which the Company has acquired, entered into a definitive agreement to acquire, or is operating a
commercial bank or bank holding company. Notwithstanding the foregoing the Underwriter may
participate in any transaction involving the Underwriter and Coastal Bancshares Acquisition
Corporation, except in a transaction involving a commercial bank or bank holding company located in
the Mid-Atlantic region.



          The undersigned hereby agrees and acknowledges that (i) each of the Underwriter and the
Company would be irreparably injured in the event of a breach by the undersigned or the
Underwriter, as the case may be, of any of his or its obligations under this paragraph 9, (ii)
monetary damages would not be an adequate remedy for any such breach, and (iii) the non-breaching
party shall be entitled to injunctive relief, in addition to any other remedy such party may have,
in the event of such breach.


          [Applies only to executive officers and directors]


          11. The undersigned agrees to serve as [the ___________________and] a director of the Company
until the earlier of the consummation by the Company of a Business Combination or the liquidation
of the Company. The undersigned’s biographical information furnished to the Company and the
Underwriter included in the Registration Statement on Form S-1 is true and accurate in all
respects, does not omit any material information with respect to the undersigned’s background and
contains all of the information required to be disclosed pursuant to Section 401 of Regulation S-K
promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire for
Officers and Directors executed by the undersigned in connection with the IPO, including any
supplement or amendment thereto, furnished to the Company and the Underwriter is and shall be true
and accurate in all respects. The undersigned represents and warrants that:




	 	a.  	he is not subject to or a respondent in any legal action for, any
injunction, cease-and-desist order or order or stipulation to desist or refrain
from any act or practice relating to the offering of securities in any
jurisdiction;




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	 	b.  	he has never been convicted of or pleaded guilty to any crime (i)
involving any fraud or (ii) relating to any financial transaction or handling of
funds of another person, or (iii) pertaining to any dealings in any securities and
he is not currently a defendant in any such criminal proceeding; and
	 
	 	c.  	he has never been suspended or expelled from membership in any
securities or commodities exchange or association or had a securities or
commodities license or registration denied, suspended or revoked.





          12. The undersigned has full right and power, without violating any agreement by which he is
bound or pre-existing fiduciary obligation, to enter into this letter agreement and to serve as an
officer and/or director of the Company.



          13. The undersigned authorizes any employer, financial institution, or consumer credit
reporting agency to release to the Underwriter and its legal representatives or agents (including
any investigative search firm retained by the Underwriter) any information they may have about my
background, credit history and finances (the “Information”). Neither the Underwriter nor any of
its agents shall be violating my right of privacy in any manner in requesting and obtaining the
Information and the undersigned hereby releases them from liability for any damage whatsoever in
that connection.



          14. As used herein,




	 	i.  	“Acquisition Company” shall mean any company
formed with the intent to offer securities to the public and use the
proceeds to consummate one or more Business Combinations which are
unspecified at the time of the securities offering.
	 
	 	ii.  	“Business Combination” shall mean an acquisition
by merger, capital stock exchange, asset or stock acquisition,
reorganization or otherwise, of an operating business;
	 
	 	iii.  	“Insiders” shall mean all officers, directors and
stockholders of the Company immediately prior to the IPO;
	 
	 	iv.  	“Insider Shares” shall mean all of the shares of
Common Stock of the Company owned by all of the Insiders prior to the
IPO; and
	 
	 	v.  	“IPO Shares” shall mean the shares of Common
Stock issued in the Company’s IPO, whether held by the initial purchaser
or any subsequent transferee.
	 	  	_______________________
(Signature)










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