[LETTERHEAD OF BAXTER FENTRISS AND COMPANY APPEARS HERE]
March 28, 1996
Mr. R. Larry Campbell
Chief Executive Officer
Richmond Savings Bank, SSB
115 S. Lawrence
Rockingham, NC 28379-3649
Dear Mr. Campbell:
Baxter Fentriss and Company ("Baxter Fentriss") proposes to act as appraiser to
Richmond Savings Bank, SSB of Rockingham, North Carolina ("Richmond Savings") in
connection with its possible conversion from mutual to stock form of
organization. In this connection, Baxter Fentriss and Richmond Savings agree to
the following terms and conditions:
1. Appointment as Financial Advisor. In the event Richmond Savings shall, on
--------------------------------
or before July 1, 1996, adopt a plan of conversion contemplating a
conversion to the stock form of ownership. Richmond Savings appoints Baxter
Fentriss as its appraiser with respect to such conversion from mutual stock
form of organization.
2. Duties: Baxter Fentriss will (a) prepare a business plan for Richmond
-------
Savings with respect to the conversion based on discussions with management
and the board and its due diligence review of the institution; (b) prepare
an appraisal of Richmond Savings; (c) prepare any required appraisal
updates through the conversion process; (d) performs such other services as
are necessary or required of the appraiser in connection with comments from
regulatory authorities; and (e) meet with the board of directors of
Richmond Savings to discuss and review the business plan and the appraisal.
3. Accuracy of Information. Richmond Savings is responsible for all
-----------------------
information and representations concerning its financial condition which
may be provided to Baxter Fentriss. Richmond Savings shall provide Baxter
Fentriss all information and other materials reasonably requested by Baxter
Fentriss in connection with the business plan and appraisal to assure
compliance with applicable federal, state, securities and similar laws or
otherwise reasonably requested by Baxter Fentriss to carry out its
responsibilities.
4. Confidentiality. Richmond Savings and Baxter Fentriss recognize an
---------------
obligation to keep confidential all information and other work product
provided by each to the other and shall not, without prior written consent
of the other, provide copies of such information to any other party.
5. Fees and Expenses.
-----------------
A. Business Plan Fee. Richmond Savings will pay Baxter Fentriss a
-----------------
$10,000 fee for preparation of the business plan.
B. Appraisal Fee. Richmond Savings will pay Baxter Fentriss a $15,000
-------------
fee for preparation of the appraisal and one update. If more than one
appraisal update is requested there will be a fee of $2,500 for each
additional update.
C. Expenses. Baxter Fentriss will be reimbursed for all reasonable out-
--------
of-pocket expenses it incurs in connection with acting as appraiser to
Richmond Savings limited to $3,000 without prior written approval.
6. Payment. Upon execution of this agreement $5,000 of the appraisal fee will
-------
be due and is non-refundable. The remaining $10,000 Business Plan and
$10,000 Appraisal Fees will be due upon their completion. The first
appraisal update will be completed upon request at no additional charge. In
the event that Richmond Savings does not adopt a plan of conversion prior
to the completion of the business plan and/or appraisal then Baxter
Fentriss will be due a portion of their fee based on the percentage
completion of the business plan and appraisal.
7. Effective Date; Termination. This agreement shall be effective upon
---------------------------
acceptance by you and will terminate upon completion of the stock
conversion, unless extended by mutual agreement or canceled as hereinafter
provided. Either party may cancel this agreement at any time on written
notice except for conditions related to confidentiality, fees, expenses,
and indemnification which cannot be terminated unless mutually agreed. This
agreement shall be governed under the laws of the State of North Carolina.
Richmond Savings and Baxter Fentriss are not affiliated, and neither Richmond
Savings nor Baxter Fentriss has an economic interest in, or are held in common
with, the other and has not derived a significant portion of its gross revenues,
receipts or net income for any period from transactions with the other.
If the foregoing is in accord with your understanding of our proposed
relationship, please sign and return one copy of this letter and retain one copy
for your files.
Sincerely,
BAXTER FENTRISS AND COMPANY
By /s/ James E. Baxter
------------------------
Title President
---------------------
Accepted and agreed to as of April 9, 1996.
RICHMOND SAVINGS BANK, SSB
By /s/ R. Larry Campell
------------------------
Title President
---------------------