EXHIBIT 10.1
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                                    AGREEMENT

     This Agreement dated the 1st day of September, 2005 is entered into among
CityFed Financial Corp., a Delaware corporation ("CityFed"), CFF Services Corp.,
a Delaware corporation ("Services"), Peter Kellogg, John W. Atherton, Jr. and
John Kean (collectively, the "Noteholders") and Stephen L. Ranzini ("Ranzini").

                                WITNESSETH THAT:

     WHEREAS, CityFed has outstanding promissory notes payable to the
Noteholders in the aggregate principal amount of $4,750,000.00 (the "Notes"),
which Notes are due on May 31, 2007 and bear interest at the prime rate as
posted in the Eastern Edition of THE WALL STREET JOURNAL (or equivalent source)
per annum; and

     WHEREAS, the parties acknowledge that, if CityFed were to be liquidated as
of the date of this Agreement, the consolidated assets of CityFed, after payment
of the principal and interest due on the Notes and other liabilities, would only
be sufficient to pay a small percentage of the liquidation preference and
accrued dividends on CityFed's $2.10 Cumulative Convertible Preferred Stock,
Series B, par value $0.01 per share (the "Series B Preferred"), and that after
such liquidation, no assets would remain available for distribution to holders
of CityFed's Series C Junior Preferred Stock, par value $0.01 per share (the
"Series C Preferred") or CityFed's common stock, par value $0.01 per share (the
"Common Stock"); and

     WHEREAS, Ranzini is a director of CityFed elected by and representing the
holders of the Series B Preferred; and

     WHEREAS, the parties acknowledge that CityFed will explore a restructuring
of CityFed's equity interests (the "Restructuring"); and

     WHEREAS, the Noteholders are willing to cooperate with the Restructuring in
consideration of the agreements set forth in this Agreement; and

     WHEREAS, the parties desire to increase the interest rate per annum upon
default to 18%, retroactively applied to December 19, 2003, and to add the
Events of Default (as hereinafter defined) referenced in Section 7 of this
Agreement as events of default under the Notes; and

     WHEREAS, the Noteholders have agreed to extend the maturity date of the
Notes to December 31, 2007; and

     WHEREAS, the parties desire to enter into this Agreement to provide for a
pledge of the stock of Services to the Noteholders as security for the payment
of the principal and interest on the Notes and the other obligations of CityFed
under this Agreement; and

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     WHEREAS, the parties agree that from and after June 1, 2005, the businesses
of CityFed and Services will be run as separate entities, and that the assets,
income and expenses of Services will be run for the benefit of the Noteholders
in the event the Noteholders foreclose on the pledge (subject to the claims of
creditors of Services in the ordinary course); and

     WHEREAS, Services will assist CityFed in its public company reporting
obligations for a period of five years from the date hereof in return for
payment by CityFed of $50,000 per year.

     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:

     SECTION 1. AMENDMENT OF NOTES. Effective the date hereof, the Notes are
hereby amended as follows:

     (a) The sentence in the Notes that reads: "Unpaid principal after May 31,
2007 (the "Due Date") shall accrue at a rate of 10.00% annually until paid."
shall be deleted and the following inserted in its place:

     "All unpaid principal and interest shall be due and owing on December 31,
2007 (the "Due Date"). Upon the occurrence of any event of default under this
Note (including as amended), the interest rate on this Note shall be increased
to 18% per annum, and such increase shall be retroactively applied to December
19, 2003 as if such rate were in effect on such date."

     (b) The maturity date on the Notes will be extended to December 31, 2007.

     (c) The Events of Default listed in Section 7 are added as events of
default under the Notes.

     Except as herein amended, the Notes shall remain in full force and effect
and are hereby ratified and confirmed in all respects.

     SECTION 2. DIVISION OF ASSETS. Effective June 1, 2005 (the "Separation
Date"), the assets of CityFed and Services will be divided such that Services
will have assets approximately equal to $5,083,000. The parties agree that
Services currently has real estate-related assets with a deemed value of
approximately $4,732,000 as shown on the attached Exhibit A and cash in an
amount equal to $414,000. CFF Services agrees to transfer $63,000 to CityFed so
that the total of Services assets will equal approximately $5,083,000. CityFed
will be entitled to retain all of its remaining assets, including the cash
transferred from Services, its own cash and all investment securities.

     SECTION 3. OPERATION OF COMPANIES FOLLOWING THE SEPARATION DATE. From and
after the Separation Date, the business of Services will be run for the benefit
of the Noteholders such that all income and expenses of Services will be charged
to, and accrue for the benefit of Services, and the business of CityFed will be
run for the benefit of the shareholders of CityFed such that all income and
expenses of CityFed will be charged to, and accrue for the benefit of

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CityFed (subject, in both cases, to the claims of creditors of each company in
the ordinary course), as follows:

     a. Interest due and payable on the Notes will be charged to Services after
the Separation Date.

     b. As of the Separation Date, all of the directors of CityFed will resign
other than Ranzini and John W. Atherton, Jr., and the Board of Directors of
CityFed will appoint new directors. As of the Separation Date, all of the
officers of CityFed will resign and the new Board of Directors of CityFed will
appoint new officers of CityFed. The new Board of Directors and the officers
together will be solely responsible for the management of the assets, including
the investment securities, of CityFed, and all gains and losses therefrom will
be solely for the benefit of the shareholders of CityFed (subject to the claims
of creditors of CityFed in the ordinary course) and not available to the
Noteholders to pay principal and interest on the Notes.

     c. As of the Separation Date, CityFed agrees not to appoint additional
directors of Services. The Board of Directors of Services, the new officers of
Services and the Noteholders will be solely responsible for the management of
the business of Services, including its current real estate assets, and all
gains and losses therefrom will be solely for the benefit of the Noteholders
(subject to the claims of creditors of Services in the ordinary course) and not
available to the shareholders of CityFed (other than in their capacity as
Noteholders).

     d. The salary and related employment taxes and benefits of Mr. Atherton
will be paid by Services.

     SECTION 4. TAX MATTERS.

     a. The parties acknowledge that CityFed and Services file federal and state
income tax returns on a consolidated basis and have approximately $24,938,000 of
net operating losses ("NOLs") as of December 31, 2004 of which $17,920,000
expires in 2005 and the remaining amounts expire in various years through 2022.
CityFed and Services agree that Services will continue to file consolidated
federal and state income tax returns and that the NOLs will be utilized by the
consolidated group as available under applicable tax law. In the event the
Noteholders foreclose on the pledge of the stock of Services, the remaining NOLs
will be allocated and transferred to each of CityFed and Services as permitted
pursuant to applicable tax law. After the Separation Date, to the extent that
any NOLs are used to offset any taxable income of Services, Services shall not
be required to distribute an amount equal to such offset to CityFed. Services
shall only be required to distribute to CityFed an amount for income taxes that
are incurred by Services and are actually paid to the appropriate tax authority
by CityFed.

         b. In the event there is a sale, merger or other transaction involving
CityFed in which there is value received for the NOLs, CityFed and Services
shall receive 10% and 90% of such value, respectively, upon consummation of such
transaction.

     SECTION 5. SEC REPORTING AND FINANCIAL SERVICES. From and after the
Separation Date for a period of five years from the Separation Date, Services
agrees to provide CityFed with (a)

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assistance in complying with CityFed's reporting requirements under the
Securities Exchange Act of Exchange, as amended (the "Exchange Act") and (b)
accounting, tax and other financial services. CityFed will pay Services $50,000
a year for such services (the "Services Fee"). The Services Fee will be payable
quarterly in arrears on the last day of each March, June, September and
December, commencing on June 30, 2005. Such services shall include the drafting
of all required Exchange Act reports, monitoring CityFed's compliance with SEC
requirements, supervising the accounting systems of CityFed, preparing and
filing of income tax returns of CityFed, supervising and managing CityFed's
payroll processes and cash disbursements to vendors (accounts payable) and
working with CityFed's Board of Directors and independent public accountants to
ensure SEC compliance. The Services Fee does not include any out-of-pocket
costs, such as the engagement of attorneys, accountants, investment bankers and
other outside advisors or consultants and any costs of filing with the
Securities and Exchange Commission (the "SEC"), all of which shall be borne by
CityFed.

     SECTION 6. PLEDGE OF STOCK OF SERVICES. In order to secure the payment of
the Notes, the payment by CityFed of the Services Fee and the other obligations
of CityFed under this Agreement (the "Obligations"), CityFed hereby pledges,
assigns, grants a security interest in, and delivers to John W. Atherton, Jr.,
for the benefit of the Noteholders (the "Agent"), all of the shares of capital
stock of Services of every class, more fully described on Exhibit B hereto (the
"Stock"), to be held by the Agent, for the benefit of the Noteholders, subject
to the terms and conditions hereinafter set forth. The certificates for the
Stock, accompanied by stock powers or other appropriate instruments of
assignment thereof duly executed in blank by CityFed, have been delivered to the
Agent.

          a. In the event CityFed shall acquire any additional shares of the
     capital stock of Services, or any corporation or other entity that is the
     successor to Services, or any securities exchangeable for or convertible
     into shares of such capital stock of any class of Services, whether by
     purchase, stock dividend, stock split or otherwise, then such shares or
     other securities shall be subject to the pledge, assignment and security
     interest granted to the Agent, for the benefit of the Noteholders, under
     this Agreement and CityFed shall deliver to the Agent forthwith any
     certificates therefor, accompanied by stock powers or other appropriate
     instruments of assignment duly executed by CityFed in blank. CityFed agrees
     that the Agent may from time to time attach as Exhibit B hereto an updated
     list of the shares of capital stock or securities at the time pledged with
     the Agent hereunder.

          b. Any sums or other property paid or distributed upon or with respect
     to any of the Stock, whether by dividend or redemption or upon the
     liquidation or dissolution of Services or otherwise, shall be paid over and
     delivered to the Agent to be held by the Agent, for the benefit of the
     Noteholders, as security for the payment and performance in full of all of
     the Obligations. In case, pursuant to the recapitalization or
     reclassification of the capital of Services or pursuant to the
     reorganization thereof, any distribution of capital shall be made on or in
     respect of any of the Stock or any property shall be distributed upon or
     with respect to any of the Stock, the property so distributed shall be
     delivered to the Agent, for the benefit of the Noteholders, to be held by
     him as security for the Obligations. All sums of money and property paid or
     distributed in respect of the

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     Stock, whether as a dividend or upon such a liquidation, dissolution,
     recapitalization or reclassification or otherwise, that are received by
     CityFed shall be immediately paid over to the Agent and shall, until paid
     or delivered to the Agent, be held in trust for the Agent, for the benefit
     of the Noteholders, as security for the payment and performance in full of
     all of the Obligations (the Stock and all of such property referred to in
     subsection (a) and this subsection (b) is hereinafter referred to as the
     "Stock Collateral").

          c. CityFed hereby represents and warrants that: (a) CityFed has good
     and marketable title to, and is the sole record and beneficial owner of,
     the Stock, subject to no pledges, liens, security interests, charges,
     options, restrictions or other encumbrances except the pledge and security
     interest created by this Agreement, (b) all of the Stock is validly issued,
     fully paid and non-assessable, (c) CityFed has full power, authority and
     legal right to execute, deliver and perform its obligations under this
     Agreement and to pledge and grant a security interest in all of the Stock
     pursuant to this Agreement, and the execution, delivery and performance
     hereof and the pledge of and granting of a security interest in the Stock
     Collateral hereunder have been duly authorized by all necessary corporate
     or other action and do not contravene any law, rule or regulation or any
     provision of CityFed's charter documents or by-laws or of any judgment,
     decree or order of any tribunal or of any agreement or instrument to which
     CityFed is a party or by which it or any of its property is bound or
     affected or constitute a default thereunder, and (d) the information set
     forth in Exhibit B hereto relating to the Stock is true, correct and
     complete in all respects. CityFed covenants that it will defend the rights
     of the Noteholders and security interest of the Agent, for the benefit of
     the Noteholders, in such Stock against the claims and demands of all other
     persons whomsoever. CityFed further covenants that it will have the like
     title to and right to pledge and grant a security interest in the Stock
     Collateral hereafter pledged or in which a security interest is granted to
     the the Agent hereunder and will likewise defend the rights, pledge and
     security interest thereof and therein of the Noteholders and the Agent.

          d. Until the indebtedness represented by the Notes is paid in full,
     the Noteholders shall be entitled to receive all cash dividends paid in
     respect of the Stock Collateral, to vote the Stock Collateral and to give
     consents, waivers and ratifications in respect of the Stock Collateral
     (CityFed hereby irrevocably constituting and appointing the Agent the proxy
     and attorney-in-fact of CityFed, with full power of substitution, to do
     so); provided, however, that the Noteholders shall not be entitled to vote
     for the liquidation of the assets of Services unless and until a Default or
     an Event of Default has occurred. All such amounts paid shall be applied to
     reduction of the principal and interest outstanding under the Notes.

          e. Without the prior written consent of the Agent, CityFed will not
     sell, assign, transfer or otherwise dispose of, grant any option with
     respect to, or pledge or grant any security interest in or otherwise
     encumber or restrict any of the Stock Collateral or any interest therein,
     except for the pledge thereof and security interest therein provided for in
     this Agreement.

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          f. CityFed will do all such acts, and will furnish to the Agent and
     the Noteholders all such financing statements, certificates, legal opinions
     and other documents and will obtain all such governmental consents and
     corporate approvals and will do or cause to be done all such other things
     as the Agent may reasonably request from time to time in order to give full
     effect to this Agreement and to secure the rights of the Noteholders and
     the Agent hereunder, all without any cost or expense to the Agent or the
     Noteholders. CityFed hereby irrevocably authorizes the Agent at any time
     and from time to time to file in any filing office in any Uniform
     Commercial Code jurisdiction any initial financing statements and
     amendments thereto that (a) indicate the Collateral as the Stock Collateral
     or words of similar effect, or as being of equal or lesser scope or in
     greater detail, and (b) contain any other information required by part 5 of
     Article 9 of the Uniform Commercial Code of the jurisdiction of the filing
     office for the sufficiency or filing office acceptance of any financing
     statement or amendment, including whether CityFed is an organization, the
     type of organization and any organization identification number issued to
     CityFed. CityFed agrees to furnish any such information to the Agent
     promptly upon request. CityFed also ratifies its authorization for the
     Agent to have filed in any Uniform Commercial Code jurisdiction any like
     initial financing statements or amendments thereto if filed prior to the
     date hereof.

          g. The obligations of CityFed hereunder shall remain in full force and
     effect without regard to, and shall not be impaired by (a) any exercise or
     nonexercise, or any waiver, by the the Agent or any Noteholder of any
     right, remedy, power or privilege under or in respect of any of the
     Obligations or any security thereof (including this Agreement); (b) any
     amendment to or modification of this Agreement, any of the Notes or any of
     the Obligations; or (c) the taking of additional security for, or any other
     assurances of payment of, any of the Obligations or the release or
     discharge or termination of any security or other assurances of payment or
     performance for any of the Obligations; whether or not CityFed shall have
     notice or knowledge of any of the foregoing, CityFed hereby generally
     waiving all suretyship defenses to the extent applicable.

          h. The Noteholders hereby appoint Mr. Atherton as their Agent for the
     purposes set forth in this Agreement. Under no circumstances shall the
     Agent be deemed to assume any responsibility for or obligation or duty with
     respect to any part or all of the Stock Collateral of any nature or kind or
     any matter or proceedings arising out of or relating thereto, other than
     (a) to exercise reasonable care in the physical custody of the Stock
     Collateral and (b) after a Default or an Event of Default shall have
     occurred and be continuing to act in a commercially reasonable manner.
     Neither the Agent nor any Noteholder shall be required to take any action
     of any kind to collect, preserve or protect its or CityFed's rights in the
     Stock Collateral or against other parties thereto. The Agent's prior
     recourse to any part or all of the Stock Collateral shall not constitute a
     condition of any demand, suit or proceeding for payment or collection of
     any of the Obligations.

     SECTION 7. EVENTS OF DEFAULT. In case of the occurrence of any one or more
of the following events (each of which event is herein and in the Notes
sometimes called an "Event of Default"):

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     a. the occurrence of any one or more of the events of default under the
Notes, as amended by this Agreement;

     b. default in the payment of the Services Fee when due and the continuation
of any such default described in this subsection (b) for five (5) days after
written notice thereof by the Agent to CityFed;

     c. any representation or warranty made herein shall prove to be false or
misleading in any material respect when made or deemed to have been made;

     d. default in the due observance or performance of any other covenant,
condition or agreement on the part of CityFed to be observed or performed
pursuant to the terms of this Agreement, and such default shall continue
unremedied for five (5) days after written notice thereof by the Agent to
CityFed;

     e. dissolution, liquidation, winding-up, or termination of existence of
CityFed;

     f. if CityFed shall (i) apply for or consent to the appointment of a
receiver, trustee, custodian or liquidator of it or any of its property, (ii)
admit in writing its inability to pay its debts as they mature, (iii) make a
general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt
or insolvent or be the subject of an order for relief under Title 11 of the
United States Code, or (v) file a voluntary petition in bankruptcy, or a
petition or an answer seeking reorganization or an arrangement with creditors or
to take advantage of any bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding under any
such law or if action shall be taken for the purpose of effecting any of the
foregoing;

     g. an order, judgment or decree shall be entered, without the application,
approval or consent of CityFed by any court of competent jurisdiction, approving
a petition seeking reorganization of CityFed or appointing a receiver, trustee,
custodian or liquidator of CityFed or of all or a substantial part of its
assets, and such order, judgment or decree shall continue unstayed and in effect
for any period of thirty (30) consecutive days;

     h. CityFed shall have entered into an agreement of merger, consolidation,
sale of assets or other similar agreement;

     i. CityFed shall not have effected the Restructuring by September 30, 2006;

     then and in every such Event of Default which shall be continuing, the
Noteholders may, by notice to CityFed, declare the entire unpaid principal
amount of the Notes and all fees and interest accrued and unpaid thereon and/or
under this Agreement and any and all other indebtedness of CityFed to the
Noteholders and/or to any holder of all or any portion of the Notes to be
forthwith due and payable, whereupon the Notes and all such accrued fees and
interest and other indebtedness shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by CityFed; provided, however that upon the
occurrence of an Event of Default under subsection (f) or (g) hereof, all of the
unpaid principal amount of the Notes, all fees and interest

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accrued and unpaid thereon and/or under this Agreement and any and all other
indebtedness of CityFed to the Noteholders shall thereupon become and be
forthwith due and payable in full without any need for the Noteholders to make
any such declaration or take any action. Upon the occurrence of any Event of
Default, the Noteholders, shall be entitled as a matter of right, if they so
elect, to the taking of the actions described below in Section 8. The remedies
specified herein are cumulative and not exclusive of any other remedy after any
particular Event of Default and shall not operate as a waiver of any remedy in
that or in any subsequent instance.

     SECTION 8. REMEDIES.

     If an Event of Default shall have occurred and be continuing, the Agent on
behalf of the Noteholders may take any of the following actions:

     (a) The Agent on behalf of the Noteholders may exercise all the rights and
remedies of a secured party under the Uniform Commercial Code ("UCC") (whether
or not the UCC is in effect in the jurisdiction where such rights and remedies
are exercised) and, in addition, the Agent may, without being required to give
any notice, except as herein provided or as may be required by mandatory
provisions of law, including provisions that require a secured party to act in a
commercially reasonable manner, (i) apply the cash, if any, then held by it as
collateral hereunder, for the purposes and in the manner specified in Section 8
hereof, and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Obligations in full, sell the Stock Collateral, or
any part or component thereof, at one or more public or private sales for cash,
upon credit or for future delivery, and at such price or prices as the Agent may
reasonably deem satisfactory.

     (b) Any such public sale shall be held at such time or times within
ordinary business hours and at such public or private place or places as the
Agent may fix in the notice of such sale. At any public or private sale, the
Stock Collateral may be sold in one lot as an entirety or in separate parcels,
as the Agent may reasonably determine. Neither the Agent nor the Noteholders
shall be obligated to make such sale pursuant to any such notice. The Agent may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and placed
fixed for the sale, and such sale may be made at any time or place to which the
same may be adjourned. In case of any sale of all or any part of the Stock
Collateral on credit or for future delivery, the Stock Collateral so sold may be
retained by the Agent until the selling price is paid by the purchaser thereof,
but the Agent and the Noteholders shall not incur any liability in case of the
failure of such purchaser to take up and pay for the Stock Collateral so sold
and, in case of any such failure, such Stock Collateral may again be sold upon
like notice.

     (c) The Agent and the Noteholders, instead of exercising the power of sale
herein conferred upon them, may proceed by a suit or suits at law or in equity
to foreclose the security interests and sell the Stock Collateral, or any
portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction.

     (d) All rights and remedies contained herein shall be separate and
cumulative and in addition to all other rights and remedies available to a
secured party under applicable law, and

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the exercise of one shall not in any way limit or prejudice the exercise of any
other such rights or remedies.

     (e) If at any time when the Agent shall determine to exercise its right to
sell all or any part of the Stock Collateral pursuant to subsection (a)(ii) of
this Section 7, CityFed recognizes that the Agent may be unable to effect a
public sale of the Stock Collateral by the reason of certain prohibitions
contained in the Securities Act, or other applicable state or federal laws, and
the Agent may therefore resort to one or more private arm's-length sales thereof
to a restricted group of purchasers. CityFed agrees that any such private sales
may be at prices and on other terms less favorable to the seller than if sold at
public sales and that such private arm's-length sales shall not by reason
thereof be deemed not to have been made in a commercially reasonable manner. The
Agent shall sell all or any part of the Stock Collateral at a price which it
deems commercially reasonable under the circumstances. The Agent shall be under
no obligation to delay a sale of any of the Stock Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act, or such other applicable
laws, even if the issuer would agree to do so. Subject to the foregoing, the
Agent agrees that any sale of the Stock Collateral shall be made in a
commercially reasonable manner, and CityFed agrees to execute and deliver, all
at CityFed's expense, all such instruments and documents, and to do or cause to
be done all such other acts and things as may be necessary or, in the reasonable
opinion of the Agent, advisable to exempt the Stock Collateral from registration
under the provisions of the Securities Act, and to make all amendments to such
instruments and documents which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the SEC applicable thereto, and other applicable law.
CityFed further agrees to use commercially reasonable efforts to cause the
issuer of the Stock Collateral to comply with the provisions of the securities
or "Blue Sky" laws of any jurisdiction which the Agent shall reasonably
designate.

     (f) The receipt by the Agent of the purchase money paid at any such sale
made by it shall be a sufficient discharge therefor to any purchaser (other than
the Agent) of the Stock Collateral, or any portion thereof, sold as aforesaid;
and no such purchaser (or his or its representatives or assigns) (other than the
Agent), after paying such purchase money and receiving such receipt, shall be
bound to see to the application of such purchase money or any part thereof or in
any manner whatsoever be answerable for any loss, misapplication or
nonapplication of any such purchase money, or any part thereof, or be bound to
inquire as to the authorization, necessity, expediency or regularity of any such
sale.

     (g) All rights and remedies contained herein shall be separate and
cumulative and in addition to all other rights and remedies available to a
secured party under Applicable Law, and the exercise of one shall not in any way
limit or prejudice the exercise of any other such rights or remedies.

     SECTION 9. APPLICATION OF COLLATERAL AND PROCEEDS. The proceeds of any sale
of, or other realization upon, all of any part of the Stock Collateral shall be
applied as follows:

     (a) first, to pay the reasonable expenses of such sale or other
realization, including reasonable commission to the Agent's agent, and all
reasonable expenses, liabilities and

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advances incurred or made by the Agent in connection therewith, and any other
unreimbursed expenses for which the Noteholders to be reimbursed under this
Agreement;

     (b) second, to the payment of the Obligations in such order and manner as
the Noteholders, in their sole discretion, shall determine; and

     (c) finally, unless applicable law otherwise provides, to pay to CityFed,
or its successors or assigns, or as a court of competent jurisdiction may
direct, any surplus then remaining from such proceeds.

     SECTION 10. LOAN FROM UNIVERSITY BANK TO SERVICES. Ranzini agrees to use
his best efforts to cause University Bank to loan Services an amount equal to
the assets of CityFed excluding the assets relating to Services (approximately
$550,000 as of the date hereof), secured by a first lien on all assets of
Services (the "Services Loan"). The Services Loan will bear interest at the
bank's prime rate, will be prepayable at any time with no penalty and will
mature five years from the date of the closing of the loan. CityFed agrees to
enter into an agreement subordinating its interest in Services to the Services
Loan.

     SECTION 11. ATHERTON PROFIT SHARING BONUS. In the event Mr. Atherton
forwards any investment opportunities to CityFed during the period commencing on
the date hereof and ending on the fifth anniversary of this Agreement, CityFed
agrees to pay Mr. Atherton a profit sharing bonus of 20% of any profit realized
by CityFed on such opportunity.

     SECTION 12. RESTRUCTURING. After the date of this Agreement, CityFed
intends to begin the process of restructuring its equity structure with the
goals of (i) reducing its equity structure to one class of common stock, (ii)
ceasing being an SEC reporting company and (iii) providing that 90% of the
equity of the restructured company would go to the holders of the Series B
Preferred and 10% of the equity of the restructured company would go to the
remaining holders of CityFed's Common Stock and Series C Preferred.

     SECTION 13. NOTICES. All notices, requests, demands and other
communications provided for hereunder shall be in writing and either mailed,
sent by nationally recognized overnight courier service, sent by facsimile
transmission confirmed the same day by a writing sent via another approved
method of notice hereunder, or delivered to the applicable party at the
addresses indicated below.

     If to the Noteholders or Services:

          Peter R. Kellogg
          c/o
          IAT Reinsurance Company, Ltd.
          48 Wall Street, 30th Floor
          New York, NY  10005

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          John W. Atherton, Jr.
          PO Box 3126
          Nantucket MA  02584

          (O) 508.228 2366

          John Kean
          Box 26
          Bedminster NJ  07921

     with a copy (which shall not constitute notice) to:

          Edwards & Angell, LLP
          2800 Financial Plaza
          Providence, Rhode Island  02903
          Attention:  Laura N. Wilkinson, Esq.
          Fax: (401) 276-6611

     If to CityFed or Ranzini:

          Stephen L. Ranzini
          c/o
          University Bank
          959 Maiden Lane
          Ann Arbor, MI  48105

     or, as to each party, at such other address as shall be designated by such
parties in a written notice to the other party complying as to delivery with the
terms of this Section. All such notices, requests, demands and other
communication shall be deemed given upon the earliest to occur of (a) the third
day following deposit thereof in the mail, (b) twelve noon local time on the
first business day following timely deposit thereof with a nationally recognized
overnight courier service with effective instructions to such courier to make
delivery on the next business day, or (c) receipt by the party to whom such
notice is directed.

     SECTION 14. GOVERNING LAW.

     This Guaranty shall be construed in accordance with the laws of the
Commonwealth of Massachusetts applicable to contracts made and performed in said
state.

     SECTION 15. SUCCESSORS.

     This Agreement shall inure to the benefit of, and be enforceable by, the
parties hereto and their respective successors and assigns, and shall be binding
upon, and enforceable against, the parties hereto and their respective
successors and assigns, provided that, none of the parties may assign their
obligations hereunder without the consent of all parties to this Agreement.

                                       11
<PAGE>

     SECTION 16. SEVERABILITY.

     Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

     SECTION 17. SECTION HEADINGS.

     The section headings in this Agreement are inserted for convenience of
reference only and shall not in any way affect the meaning or construction of
any provision of this Agreement.

     SECTION 18. COUNTERPARTS.

     This Agreement may be executed by the parties hereto in several
counterparts hereof and by different parties hereto on separate counterparts
hereof, each of which shall be an original and all of which counterparts shall
together constitute one and the same agreement. Delivery of an executed
signature page of this Agreement by facsimile transmission shall be effective as
an in-hand delivery of an original executed counterpart thereof.

                            *SIGNATURES ON NEXT PAGE*


















                                       12
<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement as an
instrument under seal as of the day and year first above written.


                                      CITYFED FINANCIAL CORP.


                                      By:   /s/Stephen L. Ranzini
                                            ------------------------------
                                            Name: Stephen L. Ranzini
                                            Title: Director


                                      CFF SERVICES CORP


                                      By:   /s/John W. Atherton, Jr.
                                            ------------------------------
                                            Name: John W. Atherton, Jr.
                                            Title:   President


                                            /s/Stephen L. Ranzini
                                            ------------------------------
                                            Stephen L. Ranzini


                                      NOTEHOLDERS:


                                            /s/Peter R. Kellogg
                                            ------------------------------
                                            Peter Kellogg



                                            /s/John W. Atherton, Jr.
                                            ------------------------------
                                            John W. Atherton, Jr.



                                            /s/John Kean
                                            ------------------------------
                                            John Kean



                                       13
<PAGE>

                                                                       EXHIBIT A


CFF Services Corp.
Assets at May 31, 2005
(dollars in thousands)

Cash                                                    $  414
Mortgage loans                                           4,555
Real Estate and Fixed Assets (at amortized cost)           177
                                                        ------
Total                                                    5,146






























                                       14
<PAGE>
                                                                       EXHIBIT B



CFF Services Corp.


Common Stock Issued and all shares are held by CityFed Financial Corp.

      510 Shares of no par vale common stock































                                       15