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EXHIBIT 10.16
[LETTERHEAD OF RP FINANCIAL, LC.]
February 3, 1999
Board of Managers
Xxxxxx City Savings Bank
W 00 Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000
Dear Members of the Board:
This letter sets forth the agreement between Xxxxxx City Savings Bank,
Paramus, New Jersey ("Xxxxxx City" or the "Bank"), and RP Financial, LC. ("RP
Financial"), whereby the Bank has engaged RP Financial to prepare the regulatory
business plan and financial projections to be adopted by the Bank's Board of
Managers in conjunction with the concurrent mutual holding company
reorganization and minority stock offering. These services are described in
greater detail below.
Description of Proposed Services
RP Financial's business planning services will include the following
areas: (1) evaluating Xxxxxx City's current financial and operating condition,
business strategies and anticipated strategies in the future; (2) analyzing and
quantifying the impact of business strategies, incorporating the use of net
offering proceeds both in the short and long term; (3) preparing detailed
financial projections on a quarterly basis for a period of at least three fiscal
years to reflect the impact of Board approved business strategies and use of
proceeds; (4) preparing the written business plan document which conforms with
applicable regulatory guidelines including a description of the use of proceeds
and how the convenience and needs of the community will be addressed; and (5)
preparing the detailed schedules of the capitalization of the Bank and mutual
holding company and related 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 can be filed with
the appropriate regulatory agencies prior to filing the appropriate
applications. RP Financial hereby represents and warrants to the Bank that it is
familiar with the applicable laws, statutes, rules, regulations, policies,
procedures and practices pertaining to the preparation of business plans for
converting savings banks in connection with mutual holding company
reorganizations and agrees to use its best efforts to comply therewith in
preparing the business plan for the Bank.
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Board of Managers
February 3, 1999
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Fee Structure and Payment Schedule
The Bank 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 Bank 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 appraisal engagement, subject to
written authorization from the Bank to exceed such level.
In the event the Bank shall, for any reason, discontinue this planning
engagement prior to delivery of the completed business plan and payment of the
progress payment fee, the Bank 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 Bank and RP Financial. Such unforeseen events
may include changes in regulatory requirements as it specifically relates to
Xxxxxx City or potential transactions which will dramatically impact the Bank
such as a pending acquisition or significant 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.
Sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President and Managing Director
Agreed To and Accepted By: Xxxxxx X. Xxxxxxxx, Xx.
President /s/ Xxxxxx X. Xxxxxxxx, Xx.
Upon Authorization by the Board of Managers For: Xxxxxx City Savings Bank
Paramus, New Jersey
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Board of Managers
February 3, 1999
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Date Executed: 2/4/99
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