EXHIBIT 99.2
(RP(R) FINANCIAL, LC. LOGO)
January 24, 2006
Xx. Xxxxxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
Monadnock Community Bancorp, Inc.
0 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxx Xxxxxxxxx 00000
Dear Xx. Xxxxxx:
This letter sets forth the agreement between Monadnock Community Bancorp,
Inc. ("Bancorp"), the majority owned subsidiary of Monadnock Mutual Holding
Company, Peterborough, New Hampshire (the "MHC"), and RP(R) Financial, LC. ("RP
Financial"), whereby Bancorp has engaged RP Financial to prepare the written
business plan document and three year financial projections reflecting the pro
forma impact of the second step mutual-to-stock conversion of the MHC to a 100%
publicly-held company and the post-conversion activities, organization and
financial targets of Bancorp, and its wholly-owned subsidiary, Monadnock
Community Bank. These services are described in greater detail below, and will
be directed by the undersigned.
DESCRIPTION OF PROPOSED SERVICES
In this regard, RP Financial's planning services will be comprised of: (1)
evaluating Bancorp's current financial and operating condition, current business
strategies and anticipated future strategies on a pro forma basis; (2)
quantifying the impact of Bancorp's anticipated business strategies,
incorporating the use of offering proceeds, both at the holding company and
subsidiary levels; (3) preparing detailed financial projections on a quarterly
basis for a period of at least three fiscal years after the anticipated
completion of the second step conversion, to reflect the impact of anticipated
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
financial schedules of the capitalization and inter-company cash flows over the
projection period. The financial projections will reflection subsidiary, holding
company and consolidated levels.
The principal sections of the business plan, consistent with the
regulatory requirements, 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. The financial projections will be prepared on a quarterly
basis.
RP Financial will prepare the business plan for Board approval in advance
of filing the plan with the regulators. In accordance with regulations, this
filing will precede the filing of the second step conversion application. In
addition, RP Financial will provide related assistance to the Board and
management in advance of Bancorp's meeting with the regulators to review the
business plan.
WASHINGTON HEADQUARTERS
Rosslyn Center Direct: (000) 000-0000
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Telephone: (000) 000-0000
Xxxxxxxxx, XX 00000 Fax No.: (000) 000-0000
E-Mail: xxxxxxxx@xxxxxxxxxxx.xxx Toll-Free No.: (000) 000-0000
Xx Xxxxxxx X. Xxxxxx, Xx.
January 24, 2006
Page 2
FEE STRUCTURE AND PAYMENT SCHEDULE
Bancorp agrees to compensate RP Financial for preparation of the business
plan on a fixed fee basis of $25,000, payable as follows: $5,000 upon execution
of this engagement letter; and, $20,000 payable upon delivery of the completed
plan. In the event that an update to the plan is required by the regulators as a
condition to gaining regulatory approval of the business plan, Bancorp will pay
RP Financial a $5,000 fee per update to the plan. Payment of the business plan
update fee shall be made upon delivery of the completed business plan update.
Bancorp also agrees to reimburse RP Financial for those direct
out-of-pocket expenses necessary and incidental to providing the business
planning services. Reimbursable expenses will likely include travel, 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 to $7,500, subject to written authorization from Bancorp
to exceed such level.
In the event Bancorp shall, for any reason, discontinue this planning
engagement prior to delivery of the completed business plan and payment of the
progress payment fee, Bancorp 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 fees described above, plus
reimbursable expenses incurred. RP Financial's standard hourly billing rates
range from $300 for managing directors to $75 for research associates.
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 Bancorp and RP Financial. Such unforeseen events
may include changes in regulatory requirements as it specifically relates to
Bancorp or potential transactions that will dramatically impact Bancorp, such as
a pending acquisition or branch transaction.
Please acknowledge your agreement to the foregoing by signing as indicated
below and returning to RP Financial a signed copy of this letter, along with the
initial retainer fee of $5,000.
Sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President and Managing Director
Agreed To and Accepted By: /s/ Xxxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
Upon Authorization by the Board of Directors For: Monadnock Community Bancorp, Inc.,
subsidiary of Monadnock Mutual Holding Company,
Peterborough, NH
Date Executed: February 1, 2006
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