Exhibit 10.1
SERVICE AGREEMENT
THIS AGREEMENT, made as of the 3rd day of February 1998, by and between
UNITED FINANCIAL CORP. ("United"), a Minnesota Corporation, and Central
Financial Services, Inc. ("CFS"), a Florida corporation.
WITNESSETH:
WHEREAS, CFS desires to sell and United desires to purchase certain
services more particularly described herein to be utilized by United in the
management and operation of its business as a savings bank holding company,
commercial bank holding company or other type of financial institution.
NOW, THEREFORE, in consideration of the foregoing premises, and further
in consideration of the mutual promises herein contained, the parties hereto
hereby agree as follows:
1. Services. United, on its own behalf agrees to purchase and CFS
agrees to sell, the following bank advisory and consulting services:
A. Advise management on income tax planning and provide assistance
in the preparation of federal and state income tax returns.
B. Coordinate directors' examinations and/or audits under the
direction of Banks and Banks' Board of Directors.
C. Conduct periodic audits of the loan portfolios (if any) in
order to advise bank management in its process of determining adequacy of
Reserve for Loan Losses, compliance with existing regulations and
adequacy of loan file documentation.
D. Under the direction of bank management, provide a review and
analysis of specific new loans or problem loans and make recommendations
as to how bank management should proceed.
E. Under the direction of management, provide periodic reviews of
internal controls and operations and prepare related reports on findings
to bank management.
F. Advice with respect to the development of operating policies
and marketing and advertising advice.
G. Regulatory relations and planning advice, which includes
updates of regulatory changes, advice in dealings with regulatory
agencies and advice with respect to evaluations of potential expansion or
change in facilities and services.
H. Loan policy advice, which includes advising officials in the
development of proposed loan policies and proposed amendments thereto,
providing information and advice on consumer compliance provisions, and
advice with respect to coordinating participation loan agreements with
management.
I. Advise and consult with management on asset and liability
management, including rate sensitivity, net interest margin, liquidity
and capital adequacy. Including investment portfolio management, which
will be separately calculated for billing purposes.
J. Personnel consulting, which includes advice on fringe benefit
programs, salary recommendations, and executive recruiting under the
direction of bank management
K. Payroll and 401K processing under the direction of management.
L. Accounting and reporting advice, which includes development of
proposed budgets and financial statement formats and review and analysis
of monthly statements, budgets and expense classification.
M. Insurance advisory services, which includes coordination and
central purchasing of all bank-related insurance needs under the
direction of management.
N. Such other advisory or consulting services as United may
request.
2. Basic Fees: Payment. United hereby agrees to pay CFS for the
above services as follows:
A. Professional employee services will be billed on a direct
hourly rate. The direct hourly rate is based upon a comparable market
rate for similar services; and
B. Any directly incurred "out-of-pocket" expenses incurred by CFS
for providing such services.
C. Management of the investment portfolio will be billed as a
component of the fee expressed as a number of basis points (BP), on a
sliding scale, as it relates to the size of the investment portfolio. The
first 10 million will be charged at 15 BP, the second 10 million will be
charged as 12 BP, the next 20 million will be charged at 9 BP, everything
over will be at 7 BP.
3. Cancellation. The service agreement will be in effect for one
year. Thereafter, it may be canceled by either CFS or Bank (I) as of the end of
any fiscal year hereof upon sixty (60) days prior written notice to the other
party or (ii) upon written notice thereof if no agreement as to the basic annual
fee is reached as required by Section 2 hereof. Until so canceled, the service
agreement will remain in full force and effect.
IN WITNESS WHEREOF, CFS and United have executed and delivered this
Service Agreement as of the day and year first above written.
CENTRAL FINANCIAL SERVICES, INC.
By: /s/ Xxxx X. Xxxxx
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Its: President
UNITED FINANCIAL CORP.
By: /s/ Xxxxx X Xxxxxxx
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Its: Chairman
WITNESS:
Xxxxx X. Xxxxx
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