Exhibit 10.5


 


[Sandler O’Neill + Partners, L.P.
letterhead]


 


January 3, 2014


 


Mr. N. Alan Anthony


President and Chairman of the Board of
Directors


Midstate Community Bank


6810 York Road


Baltimore, MD 21212


 


Dear
Mr. Anthony:


 


We understand that
the Board of Directors of Midstate Community Bank (the “Bank”) is considering the adoption of a Plan of Conversion
(the “Plan”), pursuant to which the Bank will be converted from a mutual bank to full stock holding company form, and
shares of the common stock (the “Common Stock”) of the proposed new holding company for the Bank (the “Holding
Company”) will be offered and sold to the Bank’s eligible account holders in a Subscription Offering, to members of
the Bank’s community and the public in a Community Offering and, under certain circumstances, to the general public in a
Syndicated Community Offering (collectively, the “Offering”). The Bank and the Holding Company are collectively referred
to herein as the “Company.” Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”) is pleased
to act as records management agent for the Company in connection with the Offering. This letter is to confirm the terms and conditions
of our engagement.


 


SERVICES AND FEES


 


In our role as records
management agent, we anticipate that our services will include the services outlined below, each as may be necessary and as the
Company may reasonably request:


 


		I.	Consolidation of Accounts



 


		II.	Design and Preparation of Stock Order Forms



 


		III.	Organization and Supervision of the Conversion Center



 


		IV.	Subscription Services



 


Each of these services is further described
in Appendix A to this agreement.


 




    	 



    	 



    

Mr. N. Alan Anthony


January 3, 2014


Page 2


 


FEES


 


For its services hereunder,
the Company agrees to pay Sandler O’Neill a fee of $10,000. This fee is based upon the requirements of current regulations
and the Plan as currently contemplated. Any unusual or additional items or duplication of service required as a result of a material
change in the regulations or the Plan or a material delay or other similar events may result in extra charges that will be covered
in a separate agreement if and when they occur.


 


All fees under this
agreement shall be payable in cash, as follows: (a) $5,000 payable upon execution of this agreement; and (b) the balance upon completion
of the conversion.


 


COSTS AND EXPENSES


 


In addition to any
fees that may be payable to Sandler O’Neill hereunder, the Company agrees to reimburse Sandler O’Neill, upon request
made from time to time, for its reasonable out-of-pocket expenses incurred in connection with its engagement hereunder, regardless
of whether the Offering is consummated, including, without limitation, travel, lodging, meals, telephone, postage, listings, forms
and other similar expenses, up to a maximum of $30,000. It is understood that all expenses associated with the operation of the
Conversion Center (e.g., postage, telephones, supplies, temporary employees, etc.) will be borne by the Company. The provisions
of this paragraph are not intended to apply to or in any way impair the indemnification provisions of this agreement.


 


RELIANCE ON INFORMATION PROVIDED


 


The Company will provide
Sandler O’Neill with such information as Sandler O’Neill may reasonably require to carry out its duties hereunder.
The Company recognizes and confirms that Sandler O’Neill (a) will use and rely on such information in performing the services
contemplated by this agreement without having independently verified the same, and (b) does not assume responsibility for the accuracy
or completeness of the information. The Company will also inform Sandler O’Neill within a reasonable period of time of any
changes in the Plan that require changes in Sandler O’Neill’s services. If a substantial expense results from any such
change, the parties shall negotiate an equitable adjustment in the fee.


 


LIMITATIONS


 


Sandler O’Neill,
as records management agent hereunder, (a) shall have no duties or obligations other than those specifically set forth herein;
(b) will be regarded as making no representations and having no responsibilities as to the validity, sufficiency, value or genuineness
of any order form or any stock certificates or the shares represented thereby, and will not be required to and will make no representations
as to the validity, value or genuineness of the offer; (c) shall not be liable to any person or entity, including the Company,
by reason of any error of judgment or for any act done by it in good faith, or for any mistake of law or fact in connection with
this agreement and the performance hereof unless caused by or arising out of its own willful misconduct, bad faith or gross negligence;
(d) will not be obliged to take any legal action hereunder which might in its judgment involve any expense or liability, unless
it shall have been furnished with reasonable indemnity satisfactory to it; and (e) may rely on and shall be protected in acting
in reliance upon any certificate, instrument, opinion, notice, letter, telex, telegram, or other document or security delivered
to it and in good faith believed by it to be genuine and to have been signed by the proper party or parties.


 




    	 



    	 



    

Mr. N. Alan Anthony


January 3, 2014


Page 3


 


Anything in this agreement
to the contrary notwithstanding, in no event shall Sandler O’Neill be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits), even if Sandler O’Neill has been advised of
the likelihood of such loss or damage and regardless of the form of action.


 


INDEMNIFICATION


 


The Company agrees
to indemnify and hold Sandler O’Neill and its affiliates and their respective partners, directors, officers, employees, agents
and controlling persons (Sandler O’Neill and each such person being an “Indemnified Party”) harmless from and
against any and all losses, claims, damages and liabilities, joint or several, to which such Indemnified Party may become subject
under applicable federal or state law, or otherwise, related to or arising out of the engagement of Sandler O’Neill pursuant
to, and the performance by Sandler O’Neill of the services contemplated by, this letter, and will reimburse any Indemnified
Party for all expenses (including reasonable counsel fees and expenses) as they are incurred, including expenses incurred in connection
with the investigation of, preparation for or defense of any pending or threatened claim or any action or proceeding arising therefrom,
whether or not such Indemnified Party is a party. The Company will not be liable under the foregoing indemnification provision
to the extent that any loss, claim, damage, liability or expense is found in a final judgment by a court of competent jurisdiction
to have resulted primarily from Sandler O’Neill’s willful misconduct, bad faith or gross negligence.


 


MISCELLANEOUS


 


The following addresses
shall be sufficient for written notices to each other:


 


	 	If to you:	Midstate Community Bank
	 	 	6810 York Road
	 	 	Baltimore, MD  21212
	 	 	Attention:  Mr. N. Alan Anthony
	 	 	 
	 	If to us:	Sandler O’Neill & Partners, L.P.
	 	 	1251 Avenue of the Americas, 6th Floor
	 	 	New York, New York  10020
	 	 	Attention:  General Counsel


 




    	 



    	 



    

Mr. N. Alan Anthony


January 3, 2014


Page 4


 


The Agreement and appendix
hereto constitute the entire Agreement between the parties with respect to the subject matter hereof and can be altered only by
written consent signed by the parties. This Agreement is governed by the laws of the State of New York.


 


Please confirm that
the foregoing correctly sets forth our agreement by signing and returning to Sandler O’Neill the duplicate copy of this letter
enclosed herewith.


 


	 	 	 	Very truly yours,
	 	 	 	 
	 	 	 	SANDLER O’NEILL & PARTNERS, L.P.
	 	 	 	 
	 	 	 	By:	Sandler O’Neill & Partners Corp.,
	 	 	 	 	the sole general partner
	 	 	 	 	 
	 	 	 	By:	/s/ William L. Boyan III
	 	 	 	 	  William L. Boyan III
	 	 	 	 	  Authorized Signatory
	 	 	 	 	 
	Accepted and agreed to as of	 	 	 
	the date first above written:	 	 	 
	 	 	 	 
	MIDSTATE COMMUNITY BANK	 	 	 
	 	 	 	 	 
	By:	/s/ N. Alan Anthony	 	 	 
	 	  N. Alan Anthony	 	 	 
	 	  President and Chairman of the Board of Directors	 	 	 


 




    	 



    	 



    

 


APPENDIX A


 


OUTLINE OF RECORDS MANAGEMENT AGENT SERVICES


 


		I.	Management of the Offering and Customer Voting Processes



		1.	Assist in developing a Bank Customer proxy solicitation plan



		2.	Prepare procedures for processing Bank Customer proxy votes, stock orders, deposit account withdrawals and cash, and for handling
requests for Offering Materials.



 


		II.	Consolidation of Deposit Accounts/Vote Calculation



		1.	Consolidate files in accordance with regulatory guidelines and create central file.



		2.	Our EDP format will be provided to your IT representatives.



 


		III.	Design and Preparation of Stock Order Forms



		1.	Assist in designing stock order forms for ordering stock and related marketing materials.



		2.	Prepare deposit account holder data for stock order forms.



 


		IV.	Organization and Supervision of Conversion Center



		1.	Advising on physical organization of the Conversion Center, including materials requirements.



		2.	Assist in training of all Bank/temporary personnel who will staff the Conversion Center.



		3.	Establish processing/reporting procedures for order forms.



		4.	On-site supervision of the Conversion Center during the offering period.



 


		V.	Subscription Services



		1.	Produce list of depositors by state (Blue Sky report).



		2.	Production of subscription rights and research books.



		3.	Stock order form processing.



		4.	Acknowledgment letter to confirm receipt of stock order.



		5.	Daily reports and analysis.



		6.	Proration calculation and share allocation in the event of an oversubscription.



		7.	Produce charter shareholder list.



		8.	Interface with transfer agent for stock certificate issuance.



		9.	Refund and interest calculations.



		10.	Confirmation letter to confirm purchase of stock.



		11.	Notification of full/partial rejection of orders.



		12.	Production of 1099/Debit tape.



 






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