Exhibit 10.2
[LETTERHEAD OF XXXXXXXX & COMPANY]
December 10, 1999
Board of Directors
Community Bank of Central Texas, SSB
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxx 00000
Dear Directors:
This letter sets forth the agreement between Community Bank of Central
Texas, SSB, ("Community Bank" or "Bank"), Smithville, Texas, and Xxxxxxxx &
Company ("F&C"), Hurst, Texas, under the terms of which Community Bank has
engaged F&C, in connection with its conversion from mutual to stock form, to (1)
determine the pro forma market value of the shares of common stock to be issued
and sold by Community Bank or its holding company; and (2) assist Community Bank
in preparing a business plan to be filed with the application for approval to
convert to stock.
F&C agrees to deliver the written valuation and business plan to Community
Bank at the above address on or before a mutually agreed upon date. Further, F&C
agrees to perform such other services as are necessary or required in connection
with comments from the applicable regulatory authorities relating to the
business plan and appraisal and the preparation of appraisal updates as
requested by Community Bank or its counsel. It is understood that the services
of F&C under this agreement shall be limited as herein described.
F&C's fee for the business plan and initial appraisal valuation report
shall be $17,500 and the fee for each required appraisal update shall be $2,500.
In addition, Community Bank shall reimburse F&C for all out-of-pocket expenses
(not to exceed $4,000). Payment under this agreement shall be made as follows:
1. Upon execution of this engagement letter--$5,000;
2. Upon delivery of the business plan--$5,000;
3. Upon delivery of the completed appraisal report--$7,500;
4. Upon delivery of each appraisal update--$2,500; and
5. Out-of-pocket expenses are to be paid monthly.
If, during the course of Community Bank's conversion, unforeseen events
occur so as to change materially the nature or the work content of the services
described in this contract, the terms of the contract shall be subject to
renegotiation. Such unforeseen events shall include, but not be limited to,
major changes in the conversion regulations, appraisal guidelines or processing
procedures as they relate to conversion appraisals, major changes in Community
Bank's management or operating policies, execution of a merger agreement with
another institution prior to completion of conversion, and excessive delays or
suspension of processing of conversions by the regulatory authorities such that
completion of Community Bank's conversion requires the preparation by F&C of a
new appraisal report or business plan.
To induce F&C to provide the services described above, Community Bank
hereby agrees as follows:
1. Community Bank shall supply to F&C such information, in a timely manner,
with respect to its business and financial condition as F&C reasonably may
request in order to make the aforesaid valuation. Such information made
available to F&C shall include, but not be limited to, annual financial
statements, periodic regulatory filings, material agreements, debt
instruments and corporate books and records.
2. Community Bank hereby represents and warrants, to the best of its
knowledge, that any information provided to F&C does not and will not, at
any time relevant hereto, contain any misstatement or untrue statement of a
material fact or omit any and all material facts required to be stated
therein or necessary to make the statements therein not false or misleading
in light of the circumstances under which they were made.
3. Community Bank shall indemnify and hold harmless F&C and any employees of
F&C who act for or on behalf of F&C in connection with the services called
for under this agreement, from and against any and all loss, cost, damage,
claim, liability or expense of any kind, including reasonable attorneys
fees and other expenses incurred in investigating, preparing to defend and
defending any claim or claims (specifically including, but not limited to,
claims under federal and state securities laws) arising out of any
misstatement or untrue statement of a material fact contained in the
information supplied by Community Bank to F&C or by an omission to state a
material fact in the information so provided which is required to be stated
therein in order to make the statement therein not false or misleading.
4. F&C shall not be entitled to indemnification pursuant to Paragraph 3 above
with regard to any claim arising where, with regard to the basis for such
claim, F&C had knowledge that a statement of a fact material to the
evaluation and contained in the information supplied by Community Bank was
untrue or had knowledge that a material fact was omitted from the
information so provided and that such material fact was necessary in order
to make the statement made to F&C not false or misleading.
5. F&C additionally shall not be entitled to indemnification pursuant to
Paragraph 3 above notwithstanding its lack of actual knowledge of an
intentional misstatement or omission of a material fact in the information
provided if F&C is determined to have been negligent or to have failed to
exercise due diligence in the preparation of its valuation.
Community Bank and F&C are not affiliated, and neither Community Bank nor
F&C has an economic interest in, or held in common with, the other and has not
derived a significant portion of its gross revenue, receipts or net income for
any period from transactions with the other.
In order for F&C to consider this proposal binding, please acknowledge your
consent to the foregoing by executing the enclosed copies of this letter and
returning one copy to us, together with a check payable to Xxxxxxxx & Company in
the amount of $5,000. The extra copy of this letter is for your conversion legal
counsel.
Yours very truly,
Xxxxxxx X. Xxxxxx
Principal
Agreed to ($5,000 check enclosed):
Community Bank of Central Texas, SSB
Smithville, Texas
By:
Date:_____________________________
