[RP FINANCIAL, LC LETTERHEAD]
October 26, 1999
Board of Directors
Alamogordo Financial Corporation
000 00xx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000
Dear Members of the Board:
This letter sets forth the agreement between Alamogordo Financial
Corporation, Alamogordo, New Mexico (the "Company"), and RP Financial, LC. ("RP
Financial"), whereby the Company has engaged RP Financial to prepare the
regulatory business plan and financial projections to be adopted by the
Company's Board of Directors in conjunction with the Company's 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 the Company'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 Company and AF
Mutual Holding 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 can be filed with
the appropriate regulatory agencies prior to filing the appropriate
applications.
Fee Structure and Payment Schedule
The Company agrees to compensate RP Financial for preparation of the
business plan on a fixed fee basis of $7,500. 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
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 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 or potential transactions which will dramatically impact the
Company 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.
Very truly yours,
/s/Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Chief Executive Officer and
Managing Director
Agreed To and Accepted By: Xxxxx Xxxxxxxxxx /s/Xxxxx Xxxxxxxxxx
---------------------------
President and Chief Executive Officer
Upon Authorization by the Board of
Directors For: Alamogordo Financial Corporation
Alamogordo, New Mexico
Date Executed: 11-1-99
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