Exhibit 99.5
RP FINANCIAL, LC.
-------------------------------------------------
Financial Services Industry Consultants
July 24, 2002
Xx. Xxxxxxx X. Xxxx
Chairman, President and Chief Executive Officer
First Niagara Financial Group, Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Xx. Xxxx:
This letter sets forth the agreement between First Niagara Financial Group,
Inc. ("First Niagara" or the "Company"), subsidiary of First Niagara Financial
Group, MHC, Lockport, New York (the "MHC"), and RP Financial, LC. ("RP
Financial"), whereby the Company has engaged RP Financial to prepare the written
document and financial projections reflecting the pro forma impact of the mutual
to stock conversion of the MHC, the simultaneous cash and stock acquisition of
Finger Lakes Bancorp, Inc., ("Finger Lakes") and the post-conversion activities
of the Company. 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 the Company'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 Finger Lakes;
(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.
Contents of the business plan will include: Philosophy/Goals; Economic
Environment and Background; Lending, Leasing and Investment Activities; Deposit,
Savings and Borrowing Activity; Asset and Liability Management; Operations;
Records, Systems and Controls; Growth, Profitability and Capital; Responsibility
for Monitoring this Plan.
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.
--------------------------------------------------------------------------------
Washington Headquarters
Rosslyn Center Telephone: (000) 000-0000
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 Fax No.: (000) 000-0000
Arlington, VA 22209 Toll-Free No.: (000) 000-0000
xxx.xxxxxxxxxxx.xxx E-Mail: xxxxxxxxxxxx@xxxxxxxxxxx.xxx
Xx. Xxxxxxx X. Xxxx
July 24, 2002
Page 2
Fee Structure and Payment Schedule
The Company agrees to compensate RP Financial for preparation of the
business plan on a fixed fee basis of $20,000. Payment of the professional fees
shall be made upon delivery of the completed business plan. The Company 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 to $7,500,
subject to written authorization from the Company to exceed such level.
In the event the Company shall, for any reason, discontinue this planning
engagement prior to delivery of the completed business plan and payment of the
progress payment fee, the Company 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 the Company and RP Financial. Such unforeseen events may
include changes in regulatory requirements as it specifically relates to the
Company.
Indemnifications
The provisions of paragraph 3 in that certain letter agreement dated July
24, 2002 between the Company 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/Xxxxxxx X. Xxxxxxxxxxx
Chief Executive Officer and
Managing Director
Xxxxxx Xx and Accepted By: /s/Xxxxxxx X. Xxxx
Chairman, President and Chief Executive Officer
Upon Authorization by the Board of Directors For: First Niagara Financial
Group, Inc.
Subsidiary of First Niagara
Financial Group, M.H.C.
Lockport, New York
Date Executed: July 24, 2002
