[letterhead of RP Financial, LC.]
July 9, 2003
Xx. Xxxxxx Xxxxxxxx
President and Chief Executive Officer
Provident Bancorp, Inc.
000 Xxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000-0000
Dear Xx. Xxxxxxxx:
This letter sets forth the agreement between Provident Bancorp, Inc.,
Montebello, New York ("Provident"), subsidiary of Provident Bancorp, MHC, and RP
Financial, LC. ("RP Financial"), whereby Provident has engaged RP Financial to
prepare the written business plan document and financial projections reflecting
the pro forma impact of the mutual to stock conversion of Provident, the
simultaneous cash and stock acquisition of E.N.B. Holding Company, Inc.,
Ellenville, New York ("ENB"), the banking holding company for Ellenville
National Bank and the post-conversion and merger activities of Provident. These
services are described in greater detail below.
Description of Proposed Services
--------------------------------
RP Financial's business planning services will include the following
areas: (1) determining Provident's current financial and operating condition,
business strategies and anticipated future strategies, both currently and on a
pro forma basis; (2) quantifying the impact of business strategies,
incorporating the use of offering proceeds and the acquisition of Provident; (3)
preparing detailed financial projections on a quarterly basis for a period of at
least three fiscal years to reflect the impact of selected business strategies
and the use of offering proceeds; (4) preparing the written business plan
document which conforms with applicable regulatory guidelines, including a
description of the use of offering proceeds and how the convenience and needs of
the community will be addressed; and (5) preparing the detailed schedules of the
capitalization and inter-company cash flows.
The contents of the business plan will include: Executive Summary;
Description of Business; Marketing Plan; Management Plan; Records, Systems and
Controls; Financial Management Plan; Monitoring and Revising the Plan; and
Alternative Business Strategy
RP Financial agrees to prepare the business plan and accompanying
financial projections in writing such that the business plan conforming to
regulatory guidelines can be filed with the appropriate federal and state
regulatory agencies in conjunction with the filing of the stock offering
application.
Xx. Xxxxxx Xxxxxxxx
July 9, 2003
Page 2
Fee Structure and Payment Schedule
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Provident agrees to compensate RP Financial for preparation of the
business plan on a fixed fee basis of $30,000. Payment of the professional fees
shall be made upon delivery of the completed business plan. Provident also
agrees to reimburse RP Financial for those direct reasonable out-of-pocket
expenses necessary and incidental to providing the business planning services.
Reimbursable expenses will likely include shipping, telephone/facsimile
printing, computer and data services, and shall be paid to RP Financial as
incurred and billed. RP Financial will agree to limit reimbursable expenses in
conjunction with the business planning and appraisal engagements, subject to
written authorization from Provident to exceed such level.
In the event Provident shall, for any reason, discontinue this planning
engagement prior to delivery of the completed business plan and payment of the
progress payment fee, Provident agrees to compensate RP Financial according to
RP Financial's standard billing rates for consulting services based on
accumulated and verifiable time expenses, not to exceed the fixed fee described
above, plus reimbursable expenses incurred.
If during the course of the planning engagement, unforeseen events
occur so as to materially change the nature or the work content of the business
planning services described in this contract, the terms of said contract shall
be subject to renegotiation by Provident and RP Financial. Such unforeseen
events may include changes in regulatory requirements as it specifically relates
to Provident.
Indemnifications
----------------
The provisions of paragraph 3 in that certain letter agreement dated
July 9, 2003 between Provident and RP Financial are incorporated herein by
reference.
Please acknowledge your agreement to the foregoing by signing as
indicated below and returning to RP Financial a signed copy of this letter.
Sincerely,
/s/ XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
President and Managing Director
Agreed To and Accepted By: Xxxxxx Xxxxxxxx /s/ XXXXXX XXXXXXXX
-----------------------------
President and Chief Executive Officer
Upon Authorization by the Board of Directors For: Provident Bancorp, Inc.
Subsidiary of Provident
Bancorp, MHC
Montebello, New York
Date Executed: 7-25-03
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