ECONOMIC AND APPLICATION AGREEMENT
Exhibit
10.2
This
agreement made and entered into this 1st
day of`
August, 2004, by and between Birmingham Bloomfield Bancorp (hereinafter referred
to as “Client”), whose mailing address is 0000 X. Xxxxx Xxxxxxxxxx Xxxxx,
Xxxxxxxx and Xxx Xxxxxx dba Bankmark (hereinafter referred to as “Consultant”),
whose principle office is located at 00000 Xxxxx Xxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxx, XX 00000.
IN
CONSIDERATION of the mutual agreement herein contained, it is mutually
understood and agreed by and between the parties as follows:
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I.
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NATURE
OF SERVICES
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A. The
consultant is hereby authorized to proceed with the engagement as detailed
in
EXHIBIT
A,
which
is considered an integral part of this Consulting Agreement, a copy of which
is
attached.
The
exact
scheduling and extent of any additional actions relating to the project will
be
determined by mutual agreement between client and consultant.
In
addition, the consultant may from time to time be requested to participate
in
other related activities. In such cases, the consultant and client will mutually
agree as to whether they are included or stand outside this agreement.
B. Any
direct business expenses incurred by Consultant, including, but not limited
to
telephone, travel and the like, must be pre-approved by the client in order
to
qualify for reimbursement by them.
C. Consultant
agrees to use his best efforts in conducting all of the activities related
to in
this Agreement.
D. The
client agrees to supply the Consultant with all necessary data and required
computations in
the specific formats that may be requested by the
Consultant
at
various points during the term of this agreement.
E. Nothing
contained herein shall be construed to create the relationship of Employer
and
Employee or Agent and Principal between the Client and Consultant. Consultant
shall conduct his business as an Independent Contractor and shall have no
authority to create, alter or amend any agreements or representations on
behalf
of the Client or to incur any liabilities for the Client. Consultant
acknowledges that he is not an employee of the Client, and said Client is
not
obligated nor charged with the responsibility of withholding income taxes
from
any commissions due the Consultant, nor is the Client obligated to pay Social
Security, Taxes, nor FICA taxes upon or for the Consultant.
F. Consultant
agrees to adhere to fair business principles and comply with all Federal,
State
and local laws and regulations either existing or pending. Consultant further
agrees to file applications for licensing, bonding or other permits, and
to pay
all fees pertaining thereto as maybe required by any regulatory body.
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II.
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SOLICITATION
AND TERMINATION
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A. Consultant
agrees that he will not issue, distribute or circulate any advertising or
promotional material, circulars or pamphlets relating to the Client unless
and
until it has been authorized and approved in writing by the Client. The
Consultant shall withdraw any said material and discontinue its use immediately
upon the Client’s written request to do so.
B. This
Agreement may terminated by either party upon written notice. Upon the giving
of
said notice, the Client shall cause to be paid to Consultant any monies due
Consultant, as herein provided, and Consultant, in turn, shall reimburse
the
Client for any monies, if any, by it advanced and not earned.
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III.
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COMPENSATION
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In
consideration of the services performed hereunder by Consultant, Client will
pay
Consultant an amount based upon the work outlined in EXHIBIT A
(attached)
not to exceed that amount listed in EXHIBIT A.
The
terms and conditions listed in EXHIBIT A
are
considered an integral part o f this Consulting Agreement.
During
the course of the engagement, invoices may be submitted representing progress
payments for work completed. Such invoices and any balances thereof, are
due
within ten (10) days after presentation.
The
above
referred to fees shall constitute the only source of compensation to Consultant
by Client.
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IV.
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CONTRACT
ENFORCEMENT
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A. This
agreement constitutes the entire agreement about understandings between the
parties and supersedes any and all other agreements between the parties.
B. No
remedy
granted to the parties by virtue of the Agreement shall be exclusive of any
other legal or equitable remedy available to the parties existing by laws
of
statute.
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V.
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MISCELLANEOUS
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A. The
parties agree and intend that all questions concerning this Agreement, including
the validity, capacity of parties, effect, interpretation and performance
shall
be governed by the laws of the State where the Application is
filed.
EXHIBIT
A
OVERVIEW
OF ENGAGEMENT:
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·
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The
basic components of the assignment include the following main elements:
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General
Consulting (Strategy development)
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·
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Prepare
materials for, and attend, pre-filing meeting(s) with Regulators
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·
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Meet
with proposed Directors to assist in completing their interagency
financial and biographical application forms
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·
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Interview
individual Organizers to discuss their duties, responsibilities,
etc.
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·
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Develop
the Business Plan (in concert with Management) including the pro-forma
projections
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·
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Prepare
the complete new Joint Agency application (revised
March 2002)
for a Commercial Banking Charter, with the appropriate State Department
of
Banking, Office of the Comptroller of the Currency (OCC) and
FDIC
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·
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Assistance
in the preparation of other required materials including, but not
limited
to:
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o
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CRA
Statement
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o
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State
historical/environmental determination of sites selected for bank
facilities
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o
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Salient
published legal notices
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o
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Monitor
regulator processing of applications
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o
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Comply
with all requests by Regulators for clarification and/or additional
data
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TERMS
OF ENGAGEMENT:
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1)
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Provide
Management/Directors with a course of action required to complete
the
regulatory applications.
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2)
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Provide
Management with a specific outline of information required for
the
appropriate State Department of Banking, OCC and
FDIC.
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3)
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Prepare
Director/Organizer Interagency Financial and Biographical Forms
and other
required materials.
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a.
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Distribute
and collect all required regulatory “forms” with appropriate supplemental
instructions
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b.
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Conduct
a meeting with Directors/Organizers to review the required information
needed to complete all forms
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c.
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Answer
individual Director/Organizer CONFIDENTIAL questions and consult
with
their legal counsel if necessary on selected matters
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d.
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Review
and edit completed Director/Organizer forms for accuracy and completeness
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e.
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Follow
up with Directors/Organizers for form content clarification and
additional
information
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f.
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Prepare
finalized biographical and financial forms for Director/Organizer
final
review.
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g.
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Ensure
that all fingerprint cards are correctly prepared for both agencies.
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h.
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Prepare
and review all regulatory release forms
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i.
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Examine
Director Qualifications and Related Experience
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j.
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Prepare
Director Job Description and Responsibilities
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k.
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Conduct
individual Director/Organizers Interviews to review and
clarify:
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i.
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Prior
financial institution experience
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ii.
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Other
financial field related experience
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iii.
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Other
organization Board experience
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iv.
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Community/Professional
involvement
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v.
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Individual
contribution as a potential board member
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vi.
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Other
relevant experience/contacts, etc.
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4)
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Prepare
Management Section
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a.
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Assist
Management (“team” if applicable) in presenting his/their separate and
combined qualifications
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i.
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Review
resumes for review, update and revision
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ii.
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Banking
Experience (specifics re: lending, operational, and/or administration
background, etc.)
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iii.
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Direct
and Indirect Board Experience
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iv.
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Independent
Bank and Marketing Experience
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v.
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Prepare
Job Description and Vitae for Senior Management candidates
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5)
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Prepare
Facilities Information relating to:
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a.
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Physical
Location
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b.
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Site
and floor plans
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c.
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Tentative
purchase/lease agreement(s)
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d.
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Tenant
improvements
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e.
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Purchase/lease
of Furniture, Fixtures and Equipment
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f.
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Related
parties involvement with the premises and/or FF&E
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g.
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State-National
Historical determination
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h.
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Zoning
and environmental effect
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6)
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Develop,
with Management, the Business Plan
including:
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a.
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Reflection
of Director/Management Philosophy and marketing strategy
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b.
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Management
expertise and utilization
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c.
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Director
expertise and utilization
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d.
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Market
analysis
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i.
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An
overview of the market and opportunities
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ii.
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Current
demographics
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iii.
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Specific
Goals and Objectives
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iv.
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Market
growth and composition of “target” sectors
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e.
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Proforma
Financials (3 years, by quarters) in concert with
Management
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i.
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All
supporting schedules
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f.
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Peer
Group Comparisons
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g.
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Assumptions
and Footnotes
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7)
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Prepare
Capital Adequacy Analysis
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8)
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Prepare
the Required Proposed Market and Economic
Information
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a.
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Develop
supportive market information relative to the Strategic Market
Plan
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b.
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Information
in support of regulatory “Convenience and Needs” requirements
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c.
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Current
area development and projected economic growth data
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d.
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Statistics
and other information regarding lending needs of the new bank’s market(s)
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9)
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Prepare
Competitor data and analysis:
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a.
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Prepare
competitor/peer group data and trends
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10)
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Prepare
Miscellaneous Information
Regarding:
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a.
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Correspondent
banking relationships
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b.
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Guidance
in preparing, and review of, regulatory mandated policies manuals
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c.
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Director
Board and Committee duties and assignments
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d.
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Risk
Management Coverage (insurance)
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e.
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Data
Processing plans: vendor, in-house, etc.
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f.
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Other
relevant information
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11)
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Summary
and Conclusions Regarding the Application’s Merit, Strengths, and Market
Position
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12)
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Miscellaneous
and Related Consultant
Responsibilities
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a.
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“Packaging”
of the applications (printing, proper format, required number of
copies,
etc.)
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b.
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Interface
with Office of Historic Preservation regarding historical determination
of
sites
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c.
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Address
zoning and environmental concerns
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d.
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Provide
required Legal Notices for Newspaper publication
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e.
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Coordination
with regulatory agencies and other consultants
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f.
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Follow-tip
and monitoring of regulatory agencies
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g.
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Provide
regulators with clarification of critical issues when requested
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h.
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Provide
Organizers with regular updates and status reports regarding the
application progress.
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TIMING
TIME
IS
OF THE ESSENCE. THEREFORE, DUE DATES RELATING TO THE PROJECT TIMELINE ARE
DEPENDENT UPON THE TIMELY COMPLETION AND SUBMISSION OF ALL MATERIALS REQUESTED
BY THE CONSULTANT. This being the case, the application could be ready to
submit
to the regulators within 75 days from the signing of this agreement,
the
tendering of the initial payment and the completion of ALL requested
Organizer/management data, information and responsibilities. Any delay in
the
receipt of necessary information or the submission of incomplete or inaccurate
data by the client will cause a delay in the above described application
process. It is therefore imperative that all Organizers meet their obligations
and respective deadlines.
FEE
SCHEDULE:
The
fee,
for performing the above detailed consulting service is based upon the placement
of a head office in Birmingham, Michigan plus a separate banking office in
another location within the state of Michigan to be mutually agreed upon
by the
client and consultant, is $85,000.
This
includes processing a maximum of twenty (20) organizers, excluding
management. Additional organizers can be included in the application at a
cost
of $300.00 each.
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·
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Payment
#1 ($35,500)
is
due and payable upon signing this agreement.
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·
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Payment
#2 ($32,750)
($36,750 - $4,000 paid prior to execution of contract) is due and
payable
within 10 days of the date the consultant files the Joint
Interagency
application with the regulatory
agencies.
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·
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Payment
#3 of $12,750
is
due and payable upon the funding of the organizational loan, or
five
(5) calendar months following the date of this contract,
whichever
occurs first.
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Let
it be clearly,
understood that the consulting service rendered, is not a guarantee that
the
regulators will approve the application. Therefore, any payment to the
Consultant is not based upon whether the application is accepted or approved
by
either the State Department of Banking for which the application is filed,
the
OCC, or the FDIC.
Out-of-pocket
expenses:
Client
will pay for the cost of the postage/delivery, copying and binding of all
documents required by the regulators and any additional copies the Client
may
wish. The consultant will provide, at no cost to the Client, one copy of
each
Director/Organizer’s personalized and confidential data and one complete copy of
the application for the corporate files.
Travel
expense:
The
Consultant
will
absorb the full cost of travel and lodging for up to nine (9) necessary on-site
visits during the process of completing the required application. The
Client and Consultant
will
equally share in the cost of the next two (2) on-site visits, if necessary,
all additional visits will be borne wholly by the
Client.
Let
it be
further understood that if for any reason the client chooses to or causes
the
project to abort, fees will be charged on an hourly basis. Such fees will
only
be charged on that work performed BEFORE the date of receipt of official
notification (verbal, followed by written confirmation) in lieu of the fee
schedule described above. Expenses incurred to-date of discontinuance of
work
also will be billed. The fee charged under such a condition will be based
as
follows:
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·
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Analysis
and preparation of applications, Regulator meetings/Tele-conferences,
development of the Business Plan and, economic research/analysis,
and
Management consultation, @ $150/hour
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·
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Preparation
of Director biographical and Financial forms @ $100/hour
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·
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Coordination,
auditing and validating materials for the application @ $75/hour;
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·
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Computer
input, proof reading, etc. @ $35/hour.
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·
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As
motivation for BOTH parties to fulfill their duties and responsibilities
and ensure that the project will proceed expeditiously, the following
terms and conditions are therefore incorporated into this agreement.
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·
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The
Organizers will return completed biographical and financial forms
to
consultant within 15 days of receipt of such forms.
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·
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The
Organizers will respond to requests for information-in
a timely manner and will review, sign and return the final submission
copies of all documents within 7 days after the consultant’s review
and preparation
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Site
(location) information and tentative lease(s) will be available by the 70th
day
from signing this agreement (the FDIC, in particular, reviews the location
leases very closely.)
The
work
will be performed by Bankmark’s Internal Research Department and possibly (in
total or in part) by the following consultants:
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·
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Xxxxxx
Xxxxxxx, Xxxxxxx & Associates
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·
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Xxxxx
Xxxxxx, Management Consultant
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·
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Xxxx
Childs, Xxxxx Xxxxxx & Co., LLP
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·
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Xxxxx
Xxxxxxx, Management Consultant
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·
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Xxxxxx
Xxxxxxxxx, DFC Consulting
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·
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Xxxxx
Xxxxx, Management Consultant
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All
those
listed above are either current or former bankers with experience in executive
banking positions, and have all been part of the application
process.
To
expedite, facilitate and enhance the application process, Bankmark reserves
the
right, based on the project’s needs and complexities, to assign said specialists
as aforetomentioned, all of which have in-depth experience in the preparation
of
de nova bank applications and are currently working with Bankmark on other
projects. Bankmark, from time to time, may add other specialists as deemed
necessary to complete the work in a timely manner. Bankmark warrants that
these
individuals will have comparable experience to the associates listed above
and
will have the ability to complete the task at hand.
The
details of this Exhibit are hereby acknowledged and agreed to by both parties
and are thus an integral part of the foregoing Economic and Application
Agreement.
By: /S/ Xxx
Xxxxxx Date: 8/1/04
Xxx
Xxxxxx
By: /S/
Xxxxxx X. Xxxx Date: 8/22/04
Xxxxxx
X.
Xxxx
