[LETTERHEAD OF FERGUSON & CO., LLP]
April 12, 1996
Board of Directors
First Federal Savings and Loan Association
of Allen Parish
222 S. 10th Street
Oakdale, Louisiana 71463
Dear Directors:
This letter sets forth the agreement between First Federal Savings and Loan
Association of Allen Parish ("First Federal"), Oakdale, Louisiana, and Ferguson
& Co., LLP, ("F&C"), Irving, Texas, under the terms of which First Federal 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 First Federal or its holding company; and (2) assist First Federal
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 First
Federal 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 updated as
requested by First Federal 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 and
any required updated shall be $22,500. In addition, First Federal shall
reimburse F&C for all out-of-pocket expenses. Payment under this agreement shall
be made as follows:
1. Seven thousand, five hundred dollars ($7,500) upon execution of this
engagement letter.
2. The balance of the fee upon delivery of the completed appraisal report
and business plan.
3. Out-of-pocket expenses are to be paid monthly.
If, during the course of First Federal'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
Board of Directors
April 12, 1996
Page 2
include, but not to be limited to, major changes in the conversion regulations,
appraisal guidelines or processing procedures as they relate to conversion
appraisals, major changes in First Federal'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 First Federal's conversion
requires the preparation by F&C of a new appraisal report or business plan,
excluding appraisal updates during the course of the engagement.
To induce F&C to provide the services described above, First Federal hereby
agrees as follows:
1. First Federal shall supply to F&C such information 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. First Federal 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 unture
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. (a) First Federal 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
First Federal 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.
(b) F&C shall not be entitled to indemnification pursuant to Paragraph
3(a) 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
Board of Directors
April 12, 1996
Page 3
evaluation and contained in the information supplied by First Federal
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.
(c) F&C additionally shall not be entitled to indemnification pursuant
to Paragraph 3(a) 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.
First Federal and F&C are not affiliated, and neither First Federal 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 Ferguson & Co., in
the amount of $7,500. The extra copy of this letter is for your conversion
counsel.
Yours very truly,
/s/ Robin L. Fussell
Robin L. Fussell
Principal
Agreed to ($7,500 check enclosed):
First Federal Savings and Loan Association
of Allen Parish
Oakdale, Louisiana
By: _______________________________