GREENE COUNTY BANCORP, INC. 814,249 to 1,101,631 Shares Common Stock (Par Value $0.10 Per Share) $10.00 Per Share SALES AGENCY AGREEMENT October ___, 1998 Friedman, Billings & Ramsey & Co., Inc. 1001 Nineteenth Street Arlington, VA 22209 Dear Sirs: Greene County Bancorp, Inc., a Delaware corporation (the "Company"), Green County Savings Bank, a New York chartered mutual savings bank (the "Bank") and Greene County Bancorp, MHC, a New York chartered mutual holding company ("MHC"), hereby confirm, as of ________ ___, 1998, their respective agreements with Friedman, Billings, Ramsey & Co., Inc. ("FBR"), a broker-dealer registered with the Securities and Exchange Commission ("Commission") and members of the National Association of Securities Dealers, Inc. ("NASD"), as follows: 1. Introductory. Under the Bank's plan of reorganization, adopted on July 1, 1998 (the "Plan"), the Company will be formed as a Delaware corporation, a New York chartered mutual holding company will be formed, and the Bank will be reorganized into the capital stock form of organization (together with the Offerings, as defined below, the "Reorganization"). In accordance with the Plan, the Company is offering shares of its common stock, par value $0.10 per share (the "Shares" and the "Common Stock"), pursuant to nontransferable subscription rights in a subscription offering (the "Subscription Offering") to certain depositors and borrowers of the Bank, to employees, officers and Trustees of the Bank, and to the Bank's tax-qualified employee benefit plans (i.e., the Bank's Employee Stock Ownership Plan (the "ESOP")). Concurrently with, during or promptly after the Subscription Offering, shares of the Common Stock not sold in the Subscription Offering may be offered to the general public in a community offering, with preference being given to natural persons residing in Greene County, New York (the "Community Offering") (the Subscription and Community Offerings are sometimes referred to collectively as the "Offerings"), subject to the right of the Company and the Bank, in their absolute discretion, to reject orders in the Community Offering in whole or in part. In the Offerings, the Company is offering between 814,249 and 1,101,631 Shares, with the possibility of offering up to 1,266,876 Shares without a resolicitation of subscribers, as contemplated by Title 12 of the Code of Federal Regulations, Part 303.15. Except for certain benefit plans, and certain larger depositors, no person may purchase more than $100,000 of the Shares issued in the Reorganization and no person, together with associates of and persons acting in concert with such person, may purchase in the aggregate more than $200,000 of the Shares issued in the Reorganization. In connection with the Reorganization and pursuant to the terms of the Plan as described in the Prospectus, immediately following the consummation of the Reorganization, subject to the approval of the members of Bank and compliance with certain conditions as may be imposed by regulatory authorities, the Company will contribute an amount of Common Stock equal to 1.96% of the shares sold in the Offerings to a charitable foundation (the "Foundation") such shares hereinafter being referred to as the ("Foundation Shares"). The Company, MHC and the Bank have been advised by FBR that it will utilize its best efforts in assisting the Company, MHC and the Bank with the sale of the Shares in the Offerings and, if deemed necessary by the Company in a syndicated public offering. Prior to the execution of this Agreement, the Company has delivered to FBR the Prospectus dated September 18, 1998 (as hereinafter defined) and all supplements thereto to be used in the Offerings. Such Prospectus contains information with respect to the Company, MHC, the Bank and the Shares. 2. Representations and Warranties. (a) The Company, MHC and the Bank jointly and severally represent and warrant to FBR that: (i) The Company has filed with the Securities and Exchange Commission (the "Commission") a registration statement, including exhibits and an amendment or amendments thereto, on Form SB-2 (No. 333-63681), including a Prospectus relating to the Offerings, for the registration of the Shares and the Foundation Shares under the Securities Act of 1933, as amended (the "Act"); and such registration statement has become effective under the Act and no stop order has been issued with respect thereto and no proceedings therefor have been initiated or, to the Company's best knowledge, threatened by the Commission. Except as the context may otherwise require, such registration statement, as amended or supplemented, on file with the Commission at the time the registration statement became effective, including the Prospectus, financial statements, schedules, exhibits and all other documents filed as part thereof, as amended and supplemented, is herein called the "Registration Statement," and the prospectus, as amended or supplemented, on file with the Commission at the time the Registration Statement became effective is herein called the "Prospectus," except that if the prospectus filed by the Company with the Commission pursuant to Rule 424(b) of the general rules and regulations of the Commission under the 2 Act (together with the enforceable published policies and actions of the Commission thereunder, the "SEC Regulations") differs from the form of prospectus on file at the time the Registration Statement became effective, the term "Prospectus" shall refer to the Rule 424(b) prospectus from and after the time it is filed with or mailed for filing to the Commission and shall include any amendments or supplements thereto from and after their dates of effectiveness or use, respectively. If any Shares remain unsubscribed following completion of the Subscription Offering and, if any, the Community Offering, the Company (i) will promptly file with the Commission a post-effective amendment to such Registration Statement relating to the results of the Subscription Offering and, if any, the Community Offering, any additional information with respect to the proposed plan of distribution and any revised pricing information or (ii) if no such post-effective amendment is required, will file with, or mail for filing to, the Commission a prospectus or prospectus supplement containing information relating to the results of the Subscription and the Community Offerings and pricing information pursuant to Rule 424(c) of the Regulations, in either case in a form reasonably acceptable to the Company, and FBR. (ii) The Bank has filed an application for approval to convert from the mutual form of ownership to the stock form of ownership with the New York State Bank Department (the "Department") and the Federal Deposit Insurance Corporation ("FDIC"). The Department and the FDIC have approved the Bank's application, including the waiver of certain provisions of regulations specified in such approval with respect to the establishment of and contribution to the Foundation. The Prospectus and the proxy statement for the solicitation of proxies from members for the special meeting to approve the Plan (the "Proxy Statement") included as part of the Bank's application to convert have been approved for use by the Department and the FDIC. No order has been issued by the Department or the FDIC preventing or suspending the use of the Prospectus or the Proxy Statement; and no action by or before the Department or the FDIC revoking such approvals is pending or, to the Bank's best knowledge, threatened. Additionally, the MHC and the Company have filed an application to register as a bank holding company with the Federal Reserve Bank of New York ("FRB") and has received approval from the FRB. (The Company, MHC and Bank applications are hereinafter called the "Applications.") (iii) At the date of the Prospectus and at all times subsequent thereto through and including the Closing Date (i) the Registration Statement and the Prospectus (as amended or supplemented, if amended or supplemented) complied with the Act and the SEC Regulations, (ii) the Registration Statement (as amended or supplemented, if amended or supplemented) did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and (iii) the Prospectus (as amended or supplemented, if amended or supplemented) did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light 3 of the circumstances under which they were made, not misleading. Representations or warranties in this subsection shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company or the Bank relating to FBR by or on behalf of FBR expressly for use in the Registration Statement or Prospectus. (iv) The Company has been duly incorporated and is in good standing as a Delaware corporation, MHC has been duly incorporated and is in good standing as a New York chartered mutual holding company, and the Bank has been duly organized and has a corporate existence as a New York chartered mutual savings bank, and each of them is validly existing under the laws of the jurisdiction of its organization with full power and authority to own its property and conduct its business as described in the Registration Statement and Prospectus; the Bank is a member in good standing of the Federal Home Loan Bank of New York; and the deposit accounts of the Bank are insured up to applicable limits by the Bank Insurance Fund ("BIF") of the Federal Deposit Insurance Corporation ("FDIC"). The Company, MHC and the Bank are not required to be qualified to do business as a foreign corporation in any jurisdiction except where non-qualification would have a material adverse effect on the Company, the MHC and the Bank, taken as a whole. The Bank does not own equity securities of or an equity interest in any business enterprise except as described in the Prospectus. Upon amendment of the Bank's mutual charter and bylaws to a stock charter and bylaws, and completion of the sale by the Company of the Shares as contemplated by the Prospectus, (i) the Bank will be converted pursuant to the Plan to a New York chartered capital stock savings bank with full power and authority to own its property and conduct its business as described in the Prospectus, (ii) all of the authorized and outstanding capital stock of the Bank will be owned of record and beneficially by the Company, (iii) the Company will issue common stock to MHC and the public and (iv) the Company will have no direct subsidiaries other than the Bank. (v) The Bank has good, marketable and insurable title to all assets material to its business and to those assets described in the Prospectus as owned by it, free and clear of all material liens, charges, encumbrances or restrictions, except for liens for taxes not yet due, except as described in the Prospectus and except as could not in the aggregate have a material adverse effect upon the operations or financial condition of the Bank; and all of the leases and subleases material to the operations or financial condition of the Bank, under which it holds properties, including those described in the Prospectus, are in full force and effect as described therein. (vi) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and all actions in connection with the contribution to the Foundation have been duly and validly authorized by all necessary actions on the part of each of the Company, MHC and the Bank, and this Agreement is a valid and binding obligation with valid 4 execution and delivery of each of the Company, MHC and the Bank, enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings and loan holding companies the accounts of whose subsidiaries are insured by the FDIC or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent that the provisions of Sections 8 and 9 hereof may be unenforceable as against public policy or pursuant to Sections 23A or 23B of the Federal Reserve Act, 12 U.S. C. Sections 371c ("Section 23A" or 371c-1 ("Section 23B")). (vii) There is no litigation or governmental proceeding pending or, to the best knowledge of the Company, MHC or the Bank, threatened against or involving the Company, MHC, the Bank, or any of their respective assets which individually or in the aggregate would reasonably be expected to have a material adverse effect on the condition (financial or otherwise), results of operations and business, including the assets and properties, of the Company, MHC and the Bank, taken as a whole. (viii) The Company, MHC and the Bank have received the opinions of Luse Lehman Gorman Pomerenk & Schick, P.C. with respect to federal and New York State income tax consequences of the Reorganization, to the effect that the Reorganization will constitute a tax-free reorganization under the Internal Revenue Code of 1986, as amended, and will not be a taxable transaction for the Bank or the Company under the laws of New York, and the facts relied upon in such opinion are accurate and complete. (ix) Each of the Company, MHC and the Bank has all such corporate power, authority, authorizations, approvals and orders as may be required to enter into this Agreement and to carry out the provisions and conditions hereof and to issue and sell the shares in the Offerings, and to issue and contribute the Foundation Shares, subject to the limitations set forth herein and subject to the satisfaction of certain conditions imposed by the Department, FDIC and the FRB in connection with its approvals of the Applications, and except as may be required under the securities, or "blue sky," laws of various jurisdictions, and in the case of the Company, as of the Closing Date, will have such approvals and orders to issue and sell the Shares to be sold by the Company as provided herein, and in the case of the Bank, as of the Closing Date, will have such approvals and orders to issue and sell the Shares of its Common Stock to be sold to the Company as provided in the Plan, subject to the issuance of an amended charter in the form required for New York State chartered stock savings banks (the "Stock Charter"), the form of which Stock Charter has been approved by the Department. (x) To the best of its knowledge, neither the Company, MHC nor the Bank is in violation of any rule or regulation of the Department or the FDIC that could reasonably be expected to result in any enforcement action against the 5 Company, MHC, the Bank, or their officers or directors that might have a material adverse effect on the financial condition, operations, businesses, assets or properties of the Company, MHC and the Bank, taken as a whole. (xi) The consolidated financial statements and any related notes or schedules which are included in the Registration Statement and the Prospectus fairly present the consolidated financial condition, income, retained earnings and cash flows of the Bank at the respective dates thereof and for the respective periods covered thereby and comply as to form with the applicable accounting requirements of the Regulations and the applicable accounting regulations of the Department. Such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved, except as set forth therein, and such financial statements are consistent with financial statements and other reports filed by the Bank with supervisory and regulatory authorities except as such generally accepted accounting principles may otherwise require. The tables in the Prospectus accurately present the information purported to be shown thereby at the respective dates thereof and for the respective periods therein. (xii) There has been no material change in the financial condition, results of operations or business, including assets and properties, of the Company, MHC and the Bank, taken as a whole, since the latest date as of which such condition is set forth in the Prospectus, except as set forth therein; and the capitalization, assets, properties and business of each of the Company, MHC and the Bank conform to the descriptions thereof contained in the Prospectus. None of the Company, MHC nor the Bank has any material liabilities of any kind, contingent or otherwise, except as set forth in the Prospectus. (xiii) There has been no breach or default (or the occurrence of any event which, with notice or lapse of time or both, would constitute a default) under, or creation or imposition of any lien, charge or other encumbrance upon any of the properties or assets of the Company, MHC and the Bank pursuant to any of the terms, provisions or conditions of, any agreement, contract, indenture, bond, debenture, note, instrument or obligation to which the Company, MHC or the Bank is a party or by which any of them or any of their respective assets or properties may be bound or is subject, or violation of any governmental license or permit or any enforceable published law, administrative regulation or order or court order, writ, injunction or decree, which breach, default, encumbrance or violation would have a material adverse effect on the financial condition, operations, business, assets or properties of the Company, MHC and the Bank taken as a whole; all agreements which are material to the financial condition, results of operations or business of the Company, MHC and the Bank taken as a whole are in full force and effect, and no party to any such agreement has instituted or, to the best knowledge of the Company, MHC and the Bank, threatened any action or proceeding wherein the Company, MHC or the Bank would be alleged to be in default thereunder. 6 (xiv) None of the Company, MHC or the Bank is in violation of its respective charter or bylaws. The execution and delivery hereof and the consummation of the transactions contemplated hereby by the Company, MHC and the Bank do not conflict with or result in a breach of the charter or bylaws of the Company, MHC or the Bank (in either mutual or stock form) or constitute a material breach of or default (or an event which, with notice or lapse of time or both, would constitute a default) under, give rise to any right of termination, cancellation or acceleration contained in, or result in the creation or imposition of any lien, charge or other encumbrance upon any of the properties or assets of the Company, MHC or the Bank pursuant to any of the terms, provisions or conditions of, any material agreement, contract, indenture, bond, debenture, note, instrument or obligation to which the Company, MHC or the Bank is a party or violate any governmental license or permit or any enforceable published law, administrative regulation, order or court order, writ, injunction or decree (subject to the satisfaction of certain conditions imposed by the Department in connection with its approval of the Reorganization Application), which breach, default, encumbrance or violation would have a material adverse effect on the financial condition, operations or business of the Company, MHC and the Bank taken as a whole. (xv) Subsequent to the respective dates as of which information is given in the Registration Statement and Prospectus and prior to the Closing Date (as hereinafter defined), except as otherwise may be indicated or contemplated therein, none of the Company, MHC or the Bank has issued any securities which will remain issued at the Closing Date or incurred any liability or obligation, direct or contingent, or borrowed money, except borrowings in the ordinary course of business, or entered into any other transaction not in the ordinary course of business and consistent with prior practices, which is material in light of the business of the Company, MHC and the Bank, taken as a whole. (xvi) Upon consummation of the Reorganization, the authorized, issued and outstanding equity capital of the Bank shall be within the range as set forth in the Prospectus under the caption "Capitalization," and no Common Stock of the Bank shall be outstanding immediately prior to the Closing Date; the issuance and the sale of the Shares of the Bank and the Foundation Shares have been duly authorized by all necessary action of the Bank and approved by the Department and, when issued in accordance with the terms of the Plan and paid for, shall be validly issued, fully paid and nonassessable and shall conform to the description thereof contained in the Prospectus; the issuance of the Shares or the Foundation Shares are not subject to preemptive rights, except as set forth in the Prospectus; and good title to the Shares will be transferred by the Company upon issuance thereof against payment therefor, free and clear of all claims, encumbrances, security interests and liens against the Company whatsoever. The certificates representing the Shares and the Foundation Shares will conform in all material respects with the requirements of applicable laws and regulations. The issuance 7 and sale of the capital stock of the Bank to the Company and from the Company to MHC and the public and the Foundation Shares has been duly authorized by all necessary action of the Bank and the Company and appropriate regulatory authorities (subject to the satisfaction of various conditions imposed by the Department in connection with its approval of the Reorganization Application), and such capital stock and Foundation Shares, when issued in accordance with the terms of the Plan, will be fully paid and nonassessable and will conform in all material respects to the description thereof contained in the Prospectus. (xvii) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement or the issuance of the Shares, except for the declaration of effectiveness of any required post-effective amendment by the Commission and approval thereof by the Department and the FDIC, and approval of MHC's and Company's applications by the FRB, the issuance of the Stock Charter by the Department and as may be required under the securities laws of various jurisdictions. (xiii) All material contracts and other documents required to be filed as exhibits to the Registration Statement or the Reorganization Application have been filed with the Commission and/or the Department or the FRB, as the case may be. (xix) Price Waterhouse Coopers LLP ("Pricewaterhouse"), which has certified the financial statements of the Bank included in the Prospectus as of June 30, 1998 and for each of the years in the two year period ended June 30, 1998, is an independent public accountant within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants and Title 12 of the Code of Federal Regulations, Section 303.15. (xx) For the past five years, the Company, MHC and the Bank have timely filed all required federal, state and local franchise tax returns, and no deficiency has been asserted with respect to such returns by any taxing authorities, and the Company, MHC and the Bank have paid all taxes that have become due and, to the best of their knowledge, have made adequate reserves for similar future tax liabilities, except where any failure to make such filings, payments and reserves, or the assertion of such a deficiency, would not have a material adverse effect on the condition of the Company, MHC and the Bank taken as a whole. (xxi) All of the loans represented as assets of the Bank on the most recent financial statements of the Bank included in the Prospectus meet or are exempt from all requirements of federal, state or local law pertaining to lending, including without limitation truth in lending (including the requirements of Regulation Z and 12 C.F.R. Part 226 and Section 563.99), real estate settlement procedures, consumer credit protection, equal credit opportunity and all disclosure 8 laws applicable to such loans, except for violations which, if asserted, would not have a material adverse effect on the Company, MHC and the Bank taken as a whole. (xxii) The records of account holders, depositors, borrowers and other members of the Bank delivered to FBR by the Bank or its agent for use during the Reorganization have been prepared or reviewed by the Bank and, to the best knowledge of the Company, MHC and the Bank, are reliable and accurate. (xxiii) To the knowledge of the Company, MHC and the Bank, none of the Company, the Bank nor directors or employees of the Company, MHC or the Bank have made any payment of funds of the Company, MHC or the Bank as a loan to any person other than the Employee Stock Ownership Plan Trust for the purchase of the Shares. (xxiv) To the best knowledge of the Company, MHC and the Bank, the Company, MHC and the Bank are in compliance with all laws, rules and regulations relating to the discharge, storage, handling and disposal of hazardous or toxic substances, pollutants or contaminants and neither the Company, MHC nor the Bank believes that the Company, MHC or the Bank is subject to liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or any similar law, except for violations which, if asserted, would not have a material adverse effect on the Company, MHC and the Bank, taken as a whole. There are no actions, suits, regulatory investigations or other proceedings pending or, to the best knowledge of the Company, MHC or the Bank, threatened against the Company or the Bank relating to the discharge, storage, handling and disposal of hazardous or toxic substances, pollutants or contaminants. To the best knowledge of the Company, MHC and the Bank, no disposal, release or discharge of hazardous or toxic substances, pollutants or contaminants, including petroleum and gas products, as any of such terms may be defined under federal, state or local law, has been caused by the Company, MHC or the Bank or, to the best knowledge of the Company, MHC or the Bank, has occurred on, in or at any of the facilities or properties of the Company, MHC or the Bank, except such disposal, release or discharge which would not have a material adverse effect on the Company, MHC and the Bank, taken as a whole. (xxv) At the Closing Date, the Company, MHC and the Bank will have completed the conditions precedent to, and shall have conducted the Reorganization in all material respects in accordance with, the Plan, the Department Regulations, FRB and all other applicable laws, regulations, published decisions and orders, including all terms, conditions, requirements and provisions precedent to the Reorganization imposed by the Department and FRB. (xxvi) The Foundation has been duly incorporated and is validly existing as a private charitable foundation in good standing under the laws of the State of Delaware with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; the 9 Foundation will not be a savings and loan holding company within the meaning of 12 C.F.R. Section 574.2(q) as a result of the issuance of the Foundation Shares to it in accordance with the terms of the Plan and in the amounts as described in the Prospectus to the knowledge of the Bank, MHC and the Company, all approvals required to establish the Foundation and to contribute the Foundation Shares thereto have been performed as described in the Prospectus; except as specifically disclosed in the Prospectus and the Proxy Statement, there are no agreements and/or understandings, written or oral or otherwise, between the Company, MHC and/or the Bank and the Foundation with respect to the control, directly or indirectly, over the voting and the acquisition or disposition of the shares of Common Stock to be contributed by the Company to the Foundation; the Foundation Shares to be issued to the Foundation in accordance with the Plan and as described in the Prospectus will have been duly authorized for issuance and, when issued and contributed by the Company pursuant to the Plan, will be duly and validly issued and fully paid and non-assessable. (b) FBR represents and warrants to the Company, MHC and the Bank that: (i) FBR is registered as a broker-dealer with the Commission, and is in good standing with the Commission and the NASD. (ii) FBR is validly existing as a corporation in good standing under the laws of Delaware, with full corporate power and authority to provide the services to be furnished to the Company and the Bank hereunder. (iii) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of FBR, and this Agreement is a legal, valid and binding obligation of FBR, enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of registered broker-dealers accounts of whose may be protected by the Securities Investor Protection Corporation or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent that the provisions of Sections 8 and 9 hereof may be unenforceable as against public policy or pursuant to Section 23A or Section 23B). (iv) To FBR's knowledge, its employees, agents and representatives who shall perform any of the services required hereunder to be performed by FBR shall be duly authorized and shall have all licenses, approvals and permits necessary to perform such services, and FBR is a registered selling agents in the jurisdictions listed in Exhibit A hereto and will remain registered in such jurisdictions in which the Company is relying on such registration for the sale of the Shares, until the Reorganization is consummated or terminated. 10 (v) The execution and delivery of this Agreement by FBR, the fulfillment of the terms set forth herein and the consummation of the transactions contemplated hereby shall not violate or conflict with the corporate charter or bylaws of FBR or violate, conflict with or constitute a breach of, or default (or an event which, with notice or lapse of time, or both, would constitute a default) under, any material agreement, indenture or other instrument by which FBR is bound or under any governmental license or permit or any law, administrative regulation, authorization, approval or order or court decree, injunction or order. (vi) Any funds received by FBR to purchase Common Stock will be handled in accordance with Rule 15c2-4 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (vii) There is not now pending or, to FBR's knowledge, threatened against FBR any action or proceeding before the Commission, the NASD, any state securities commission or any state or federal court concerning FBR's activities as broker-dealers. 3. Employment of FBR: Sale and Delivery of the Shares. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, the Company, MHC and the Bank hereby employ FBR as its agents to utilize their efforts in assisting the Company with the Company's sale of the Shares in the Subscription Offering and Community Offering. In the event the Company is unable to sell a minimum of 814,249 Shares (or such lesser amount as the Department may permit) within the period herein provided, this Agreement shall terminate, and the Company, MHC and the Bank shall refund promptly to any persons who have subscribed for any of the Shares, the full amount which it may have received from them, together with interest as provided in the Prospectus, and no party to this Agreement shall have any obligation to the other party hereunder, except as set forth in Sections 6, 8(a) and 9 hereof. Appropriate arrangements for placing the funds received from subscriptions for Shares in special interest-bearing accounts with the Bank until all Shares are sold and paid for were made prior to the commencement of the Subscription and Community Offering, with provision for prompt refund to the purchasers as set forth above, or for delivery to the Company if all Shares are sold. If all conditions precedent to the consummation of the Reorganization are satisfied, including the sale of all Shares required by the Plan to be sold, the Company agrees to issue or have issued such Shares and to release for delivery certificates to subscribers thereof for such Shares on the Closing Date against payment to the Company by any means authorized pursuant to the Prospectus, at the principal office of the Company at 425 Main and Church Streets, Catskill, New York 12414 or at such other place as shall be agreed upon between the parties hereto. The date upon which FBR is paid the compensation due hereunder is herein called the "Closing Date." FBR agrees either (a) upon receipt of an executed order form of a subscriber to forward the offering price of the Common Stock ordered on or before twelve noon on the next business day 11 following receipt or execution of an order form by FBR to the Bank for deposit in a segregated account or (b) to solicit indications of interest in which event (i) FBR will subsequently contact any potential subscriber indicating interest to confirm the interest and give instructions to execute and return an order form or to receive authorization to execute the order form on the subscribers behalf, (ii) FBR will mail acknowledgments of receipt of orders to each subscriber confirming interest on the business day following such confirmation, (iii) FBR will debit accounts of such subscribers on the third business day ("debit date") following receipt of the confirmation referred to in M, and (iv) FBR will forward completed order forms together with such funds to the Bank on or before twelve noon on the next business day following the debit date for deposit in a segregated account. FBR acknowledges that if the procedure in (b) is adopted, subscribers, funds are not required to be in their accounts until the debit date. In addition to the expenses specified in Section 6 hereof, FBR shall receive the following compensation for its services hereunder: (a) A management fee of $25,000 payable as follows; $12,500 upon signing of this letter and $25,000 upon receiving regulatory approval of the Plan Application. Should the Plan be terminated for any reason not attributable to the action or inaction of FBR, FBR shall have earned and be entitled to be paid fees accruing through the stage at which point the termination occured. (b) A fixed marketing fee of $110,000. The management fee of $25,000 will be subtracted from the marketing fee. (c) The balance of the foregoing commissions are to be payable to FBR at closing as defined in the agreement to be entered into between FBR and Green County (d) FBR shall be reimbursed for allowable expenses, incurred by them whether or not the Offerings are successfully completed; provided, however, that reimbursable legal fees (non "Blue Sky" related matters) will not exceed $40,000 exclusive of disbursements, that other reimbursable expenses will not exceed $25,000 and that neither the Company nor the Bank shall pay or reimburse FBR for any of the foregoing expenses accrued after FBR shall have notified the Company or the Bank of its election to terminate this Agreement pursuant to Section 11 hereof or after such time as the Company or the Bank shall have given notice in accordance with Section 12 hereof that FBR is in breach of this Agreement. Full payment to defray FBR's reimbursable expenses shall be made in next-day funds on the Closing Date or, if the Reorganization is not completed and is terminated for any reason, within ten (10) business days of receipt by the Company of a written request from FBR for reimbursement of its expenses. FBR acknowledges receipt of $12,500 advance payment from the Bank which shall be credited against the total reimbursement due FBR hereunder. (e) Notwithstanding the limitations on reimbursement of FBR for allocable expenses provided in the immediately preceding paragraph (d), in the event that a resolicitation or other event causes the Offerings to be extended beyond their original expiration date, FBR shall be reimbursed for their allocable expenses incurred during such extended period, provided that the 12 allowance for allowable expenses provided for in the immediately preceding paragraph (d) above have been exhausted and subject to the following. The Company shall pay any stock issue and transfer taxes which may be payable with respect to the sale of the Shares. The Company and the Bank shall also pay all expenses of the Reorganization incurred by them or on their prior approval including but not limited to their attorneys' fees, NASD filing fees, and attorneys' fees relating to any required state securities laws research and filings, telephone charges, air freight, rental equipment, supplies, transfer agent charges, fees relating to auditing and accounting and costs of printing all documents necessary in connection with the Reorganization. 4. Offering. Subject to the provisions of Section 7 hereof, FBR is assisting the Company on a best efforts basis in offering a minimum of 814,249 and a maximum of 1,101,631 Shares, with the possibility of offering up to 1,266,876 Shares (except as the Department and the FDIC may permit such amount to be decreased or increased) in the Subscription and Community Offerings. The Shares are to be offered to the public at the price set forth on the cover page of the Prospectus and the first page of this Agreement. 5. Further Agreements. The Company, MHC and the Bank jointly and severally covenant and agree that: (a) The Company shall deliver to FBR, from time to time, such number of copies of the Prospectus as FBR reasonably may request. The Company authorizes FBR to use the Prospectus in any lawful manner in connection with the offer and sale of the Shares. (b) The Company will notify FBR immediately upon discovery, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement becomes effective or any supplement to the Prospectus has been filed, (ii) of the issuance by the Commission of any stop order relating to the Registration Statement or of the initiation or the threat of any proceedings for that purpose, (iii) of the receipt of any notice with respect to the suspension of the qualification of the Shares for offering or sale in any jurisdiction, and Uv) of the receipt of any comments from the staff of the Commission relating to the Registration Statement. If the Commission enters a stop order relating to the Registration Statement at any time, the Company will make every reasonable effort to obtain the lifting of such order at the earliest possible moment. (c) During the time when a prospectus is required to be delivered under the Act, the Company will comply so far as it is able with all requirements imposed upon it by the Act, as now in effect and hereafter amended, and by the Regulations, as from time to time in force, so far as necessary to permit the continuance of offers and sales of or dealings in the Shares in accordance with the provisions hereof and the Prospectus. If during the period when the Prospectus is required to be delivered in connection with the offer and sale of the Shares any event relating to or affecting the Company, MHC and the Bank, taken as a whole, shall occur as a result of which it is necessary, in the opinion of counsel for FBR, with the concurrence of counsel to the Company, to amend or supplement the Prospectus in order to make the Prospectus not false or misleading in light of the circumstances existing at the time it is delivered to a 13 purchaser of the Shares, the Company forthwith shall prepare and furnish to FBR a reasonable number of copies of an amendment or amendments or of a supplement or supplements to the Prospectus (in form and substance satisfactory to counsel for FBR) which shall amend or supplement the Prospectus so that, as amended or supplemented, the Prospectus shall not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Prospectus is delivered to a purchaser of the Shares, not misleading. The Company will not file or use any amendment or supplement to the Registration Statement or the Prospectus of which FBR has not first been furnished a copy or to which FBR shall reasonably object after having been furnished such copy. For the purposes of this subsection the Company and the Bank shall furnish such information with respect to themselves as FBR from time to time may reasonably request. (d) The Company, MHC and the Bank have taken or will take all reasonably necessary action as may be required to qualify or register the Shares for offer and sale by the Company under the securities or blue sky laws of such jurisdictions as FBR and either the Company or its counsel may agree upon; provided, however, that the Company shall not be obligated to qualify as a foreign corporation to do business under the laws of any such jurisdiction. in each jurisdiction where such qualification or registration shall be effected, the Company, unless FBR agrees that such action is not necessary or advisable in connection with the distribution of the Shares, shall file and make such statements or reports as are, or reasonably may be, required by the laws of such jurisdiction. (e) Appropriate entries will be made in the financial records of the Bank sufficient to establish a liquidation account for the benefit of eligible account holders as of June 30, 1997 and supplemental eligible account holders as of September 30, 1998 in accordance with the requirements of the Department and the FDIC. (f) The Company will file a registration statement for the Common Stock under Section 12(g) of the Exchange Act, prior to completion of the stock offering pursuant to the Plan and shall request that such registration statement be effective upon completion of the Reorganization. The Company shall maintain the effectiveness of such registration for a minimum period of three years or for such shorter period as may be required by applicable law. (g) The Company will make generally available to its security holders as soon as practicable, but not later than 45 days after the close of the period covered thereby, an earnings statement (in form complying with the provisions of Rule 158 of the regulations promulgated under the Act) covering a twelve-month period beginning not later than the first day of the Company's fiscal quarter next following the effective date (as defined in said Rule 158) of the Registration Statement. (h) For a period of three (3) years from the date of this Agreement (unless the Common Stock shall have been deregistered under the Exchange Act), the Company will furnish to FBR, as soon as publicly available after the end of each fiscal year, a copy of its annual report to shareholders for such year; and the Company will furnish to FBR was soon as publicly available, a copy of each report or definitive proxy statement of the Company filed with the 14 Commission under the Exchange Act or mailed to shareholders, and (ii) from time to time, such other public information concerning the Company as FBR may reasonably request. (i) The Company shall use the net proceeds from the sale of the Shares consistently with the manner set forth in the Prospectus. (j) The Company shall not deliver the Shares until each and every condition set forth in Section 7 hereof has been satisfied, unless such condition is waived by FBR. (k) The Company shall advise FBR, if necessary, as to the allocation of deposits, in the case of eligible account holders and supplemental eligible account holders and votes, in the case of other members, and of the Shares in the event of an oversubscription and shall provide FBR final instructions as to the allocation of the Shares ("Allocation Instructions") in such event and such information shall be accurate and reliable. FBR shall be entitled to rely on such instructions and shall have no liability in respect of its reasonable reliance thereon, including without limitation, no liability for or related to any denial or grant of a subscription in whole or in part. (1) The Company, MHC and the Bank will take such actions and furnish such information as are reasonably requested by FBR in order for FBR to ensure compliance with the NASD's "Interpretation Relating to Free-Riding and withholding." (m) The Company, MHC and the Bank shall use their best efforts to ensure that the Foundation submits within the time frames required by applicable law a request to the Internal Revenue Service to be recognized as a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"); the Company, MHC and the Bank will take no action which will result in the possible loss of the Foundation's tax-exempt status; and neither the Company, MHC nor the Bank will contribute any additional assets to the Foundation until such time that such additional contributions will be deductible for federal and state income tax purposes. 6. Payment of Expenses. Whether or not the Reorganization is consummated, the Company, MHC and the Bank shall pay or reimburse FBR for (a) all filing fees paid or incurred by FBR in connection with all filings with the NASD with respect to the Subscription and Community Offerings and, (b) in addition, if the Company is unable to sell a minimum of 814,249 Shares or such lesser amount as the Department may permit or the Reorganization is otherwise terminated, the Company and the Bank shall reimburse FBR for allowable expenses incurred by FBR relating to the offering of the Shares as provided in Section 3 hereof; provided, however, that neither the Company nor the Bank shall pay or reimburse FBR for any of the foregoing expenses accrued after FBR shall have notified the Company or the Bank of its election to terminate this Agreement pursuant to Section 11 hereof or after such time as the Company or the Bank shall have given notice in accordance with Section 12 hereof that FBR are in breach of this Agreement. 7. Conditions of FBR Obligations. Except as may be waived by FBR, the obligations of FBR as provided herein shall be subject to the accuracy of the representations and 15 warranties contained in Section 2 hereof as of the date hereof and as of the Closing Date, to the performance by the Company, MHC and the Bank of their obligations hereunder and to the following conditions: (a) At the Closing Date, FBR shall receive the favorable opinion of Luse, Lehman, Gorman, Pomerenk & Schick, special counsel for the Company and the Bank, dated the Closing Date, addressed to FBR, in form and substance reasonably satisfactory to counsel for FBR substantially as set forth in Exhibit B hereto. In rendering such opinions, such counsel may rely as to matters of fact on certificates of officers and directors of the Company, MHC and the Bank and certificates of public officials delivered pursuant hereto. Such counsel may assume that any agreement is the valid and binding obligation of any parties to such agreement other than the Company, MHC and the Bank. Such opinions may be governed by, and interpreted in accordance with, the Legal Opinion Accord (the "Accord") of the ABA Section of Business Law (1991), and, as a consequence, references in such opinions to such counsel's "knowledge" may be limited to "actual knowledge" as defined in the Accord (or knowledge based on certificates). Such opinions may be limited to present statutes, regulations and judicial interpretations and to facts as they presently exist; in rendering such opinions, such counsel need assume no obligation to revise or supplement them should the present laws be changed by legislative or regulatory action, judicial decision or otherwise; and such counsel need express no view, opinion or belief with respect to whether any proposed or pending legislation, if enacted, or any regulations or any policy statements issued by any regulatory agency, whether or not promulgated pursuant to any such legislation, would affect the validity of the execution and delivery by the Company, MHC and the Bank of this Agreement or the issuance of the Shares. (b) At the Closing Date, FBR shall receive the letter of Luse, Lehman, Gorman, Pomerenk & Schick, dated the Closing Date, addressed to FBR, in form and substance reasonably satisfactory to counsel for FBR substantially as set forth in Exhibit C, hereto: (c) Counsel for FBR shall have been furnished such documents as they reasonably may require for the purpose of enabling them to review or pass upon the matters required by FBR, and for the purpose of evidencing the accuracy, completeness or satisfaction of any of the representations, warranties or conditions herein contained, including but not limited to, resolutions of the Board of Directors of the Company, MHC and the Bank regarding the authorization of this Agreement and the transactions contemplated hereby. (d) Prior to and at the Closing Date, in the reasonable opinion of FBR, (i) there shall have been no material change in the financial condition, business or results of operations of the Company, MHC and the Bank, taken as a whole, since the latest date as of which such condition is set forth in the Prospectus, except as referred to therein; (ii) there shall have been no transaction entered into by the Company, MHC and the Bank after the latest date as of which the financial condition of the Company, MHC or the Bank is set forth in the Prospectus other than transactions referred to or contemplated therein, transactions in the ordinary course of business, and transactions which are not material to the Company, MHC and the Bank, taken as a whole; (iii) none of the Company, MHC or the Bank shall have received from the Department, FRB or 16 Commission any direction (oral or written) to make any change in the method of conducting their respective businesses which is material to the business of the Company, MHC and the Bank, taken as a whole, with which they have not complied; (iv) no action, suit or proceeding, at law or in equity or before or by any federal or state commission, board or other administrative agency, shall be pending or threatened against the Company, MHC or the Bank or affecting any of their respective assets, wherein an unfavorable decision, ruling or finding would have a material adverse effect on the business, operations, financial condition or income of the Company, MHC and the Bank, taken as a whole; and (v) the Shares shall have been qualified or registered for offering and sale by the Company under the securities or blue sky laws of such jurisdictions as FBR and the Company shall have agreed upon. At the Closing Date, FBR shall receive a certificate of the principal executive officer and the principal financial officer of each of the Company, MHC and the Bank, dated the Closing Date, to the effect that: (i) they have examined the Prospectus and, at the time the Prospectus became authorized by the Company for use, the Prospectus did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading with respect to the Company, MHC or the Bank; (ii) since the date the Prospectus became authorized by the Company for use, no event has occurred which should have been set forth in an amendment or supplement to the Prospectus which has not been so set forth, including specifically, but without limitation, any material change in the business, financial condition or results of operations of the Company, MHC or the Bank and, the conditions set forth in clauses (ii) through (iv) inclusive of subsection (d) of this Section 7 have been satisfied; (iii) to the best knowledge of such officers, no order has been issued by the Commission, FRB, FDIC or the Department to suspend the Subscription Offering or the Community Offering or the effectiveness of the Prospectus, and no action for such purposes has been instituted or threatened by the Commission or the Department; (iv) to the best knowledge of such officers, no person has sought to obtain review of the final actions of the FDIC, Department or FRB approving the Plan; and (v) all of the representations and warranties contained in Section 2 of this Agreement are true and correct, with the same force and effect as though expressly made on the Closing Date. At the Closing Date, FBR shall receive, among other documents, (i) copies of the letters from the FDIC and the Department authorizing the use of the Prospectus and the Proxy Statement, (ii) a copy of the order of the Commission declaring the Registration Statement effective; (iii) copies of the letters from the Department evidencing the corporate existence of the Bank and MHC; (iv) a copy of the letter from the appropriate Delaware authority evidencing the incorporation (and, if generally available from such authority, good standing) of the Company; (v) a copy of the Company's corporate charter certified by the appropriate Delaware governmental authority; and, (vi) if available, a copy of the letter from the Department approving the Bank's Stock Charter. (g) As soon as available after the Closing Date, FBR shall receive a copy of the Bank's certified New York State Stock Charter executed by the appropriate state governmental authority. 17 (h) Concurrently with the execution of this Agreement, FBR acknowledges receipt of a letter from Pricewaterhouse LLP, independent certified public accountants, addressed to FBR and the Company, in substance and form satisfactory to counsel for FBR, with respect to the financial statements and certain financial information contained in the Prospectus. (i) At the Closing Date, FBR shall receive a letter in form and substance satisfactory to counsel for FBR from Pricewaterhouse, LLP, independent certified public accountants, dated the Closing Date and addressed to FBR and the .Company, confirming the statements made by them in the letter delivered by them pursuant to the preceding subsection as of a specified date not more than five (5) days prior to the Closing Date. All such opinions, certificates, letters and documents shall be in compliance with the provisions hereof only if they are, in the reasonable opinion of FBR and their counsel, satisfactory to FBR and their counsel. Any certificates signed by an officer or director of the Company or the Bank prepared for FBR's reliance and delivered to FBR or to counsel for FBR shall be deemed a representation and warranty by the Company, MHC and the Bank to FBR as to the statements made therein. If any condition to FBR's obligations hereunder to be fulfilled prior to or at the Closing Date is not so fulfilled, FBR may terminate this Agreement or, if FBR so elects, may waive any such conditions which have not been fulfilled, or may extend the time of their fulfillment. If FBR terminate this Agreement as aforesaid, the Company, MHC and the Bank shall reimburse FBR for their expenses as provided in Section 3(b) hereof. 8. Indemnification. (a) The Company, the MHC, and the Bank jointly and severally agree to indemnify and hold harmless the Agent, its officers, directors, agents, servants and employees and each person, if any, who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, that the Agent or any of them may suffer or to which the Agent and any such persons may become subject under all applicable federal or state laws or otherwise, and to promptly reimburse the Agent and any such persons upon written demand for any expense (including fees and disbursements of counsel) incurred by the Agent or any of them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the Conversion Application (or any amendment or supplement thereto), the Holding Company Application or any blue sky application or other instrument or document executed by the Company, or the Bank based upon written information supplied by the Company, the MHC, or the Bank filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom, or provided to any state or jurisdiction to exempt the Company as a broker-dealer or its officers, directors and employees as -broker-dealers-or agents, under the securities laws thereof (collectively, the "Blue Sky Application"), or any application or other document, advertisement, oral statement or communication ("Sales Information") prepared, made or executed by or on behalf of the Company, the MHC, or the 18 Bank with their consent or based upon written or oral information furnished by or on behalf of the Company, the MHC, or the Bank, whether or not filed in any jurisdiction, in order to qualify or register the Shares or to claim an exemption therefrom under the securities laws thereof, (ii) arise out of or based upon the omission or alleged omission to state in any of the foregoing documents or information, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the Conversion Application (or any amendment or supplement thereto), any Blue Sky Application or Sales Information or other documentation distributed in connection with the Conversion; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statement or alleged untrue material statements in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the Conversion Application, any Blue Sky Application or Sales Information made in reliance upon and in conformity with information furnished in writing to the Company or the Bank by the Agent regarding the Agent and provided further that such indemnification shall be to the extent permitted by the FRB and the FDIC. The Bank will not be liable to any indemnified party under the foregoing indemnification and reimbursement provisions, (i) for any settlement by an indemnified party effected without its prior written consent; or (ii) to the extent that any loss, claim, damage or liability is found in a final judgment by a court to have resulted primarily from the Agent's gross negligence or willful misconduct. The Agent shall repay to the Bank any amounts paid by the Bank for reimbursement of the Agent's and any indemnified party's expenses in the event that such expenses were incurred in relation to an act or omission with respect to which it is finally determined that the Agent has acted in gross negligence or with willful misconduct. The Bank also agrees that no indemnified party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Bank or its security holders or creditors related to or arising out of the engagement of the Agent pursuant to, or the performance by the Agent of the services contemplated by, this Agreement except to the extent that any loss, claim, damage or liability is found in a final judgment by a court to have resulted primarily from the Agent's gross negligence or willful misconduct. (b) The Agent agrees to indemnify and hold harmless the Company, the MHC, and the Bank, their directors and officers and each person, if any, who controls the Company, the MHC, or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but-not limited to settlement expenses), joint or several, which they, or any of them, may suffer or to which they, or any of them may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Company, the MHC, the Bank, and any such persons upon written demand for any expenses (including reasonable fees and disbursements of counsel) incurred by them, or any of them, in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any 19 amendment or supplement thereto), the Conversion Application (or any amendment or supplement thereto) or the preliminary or final Prospectus (or any amendment or supplement thereto), or are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Agent's obligations under this Section 8(b) shall exist only if and only to the extent (i) that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto) or the Conversion Application (or any amendment or supplement thereto), any Blue Sky Application or Sales Information in reliance upon and in conformity with information furnished in writing to the Company or the Bank by the Agent regarding the Agent. In no case shall the Agent be liable or responsible for any amount in excess of the fees received by the Agent pursuant to Section 2 of this Agreement. (c) Each indemnified party shall given prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 8 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume defense of such action with counsel chosen by it and approved by the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (and any special counsel that said firm may retain) for each indemnified party in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances. (d) The agreements contained in this Section 8 and in Section 9 hereof and the representations and warranties of the Company, the MHC, and the Bank set forth in this Agreement shall remain operative and in full force and effect regardless of: (i) any investigation made by or on behalf of the Agent or its officers, directors or controlling persons, agents or employees or by or on behalf of the Company, the MHC or the Bank or any officers, directors or controlling persons, agents or employees of the Company, the MHC, or the Bank; (ii) deliver of and payment hereunder for the Shares; or (iii) any termination of this Agreement. (e) To the extent required by law, this Section 8 is subject to and limited by the provisions of Sections 23A and 23B of the Federal Reserve Act, 12 U.S.C. Sections 371c and 371c-1 ("Sections 23A and 2313"). 20 9. Survival of Agreements, Representations and Indemnities. The respective indemnities of the Company, MHC and the Bank and FBR and the representation and warranties of the Company, MHC and the Bank and of FBR set forth in or made pursuant to this Agreement shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of FBR or the Company, MHC or the Bank or any controlling person or indemnified party referred to in Section 8 hereof, and shall survive any termination or consummation of this Agreement and/or the issuance of the Shares, and any legal representative of FBR, the Company, MHC, the Bank and any such controlling persons shall be entitled to the benefit of the respective agreements, indemnities, warranties and representations. 10. Termination. FBR may terminate this Agreement by giving the notice indicated below in this Section at any time after this Agreement becomes effective as follows: (a) If any domestic or international event or act or occurrence has materially disrupted the United States securities markets such as to make it, in FBR's reasonable opinion, impracticable to proceed with the offering of the Shares; or if trading on the New York Stock Exchange shall have suspended; or if the United States shall have become involved in a war or major hostilities; or if a general banking moratorium has been declared by a state or federal authority which has material effect on the Bank or the Reorganization; or if a moratorium in foreign exchange trading by major international associations or persons has been declared; or if there shall have been a material change in the capitalization, condition or business of the Company, MHC or if the Bank shall have sustained a material or substantial loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act, whether or not said loss shall have been insured; or if there shall have been a material change in the condition or prospects of the Company, MHC or the Bank. (b) If FBR elects to terminate this Agreement as provided in this Section, the Company, MHC and the Bank shall be notified promptly by FBR by telephone or telegram and confirmed by letter. (c) If this Agreement is terminated by FBR for any of the reasons set forth in subsection (a) above, and to fulfill its obligations, if any, pursuant to Sections 3, 6, 8(a) and 9 of this Agreement and upon demand, the Company, MHC and the Bank shall pay FBR the full amount so owing thereunder. (d) The Bank may terminate the Reorganization in accordance with the terms of the Plan. Such termination shall be without liability to any party, except that the Company, MHC and the Bank shall be required to fulfill their obligations, to the extent applicable, pursuant to Sections 3(b), 3(c), 6, 8(a) and 9 of this Agreement. 11. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be in writing and if sent to FBR shall be mailed, delivered or telegraphed and confirmed to Friedman Billings Ramsey & Co., Inc., 1001 Nineteenth Street, Arlington, VA 22209, Attn: David H. Neiswander (with a copy to: Patton Boggs LLP, 2550 M Street, 21 Washington, DC 20037, Attn: Mary M. Sjoquist and if sent to the Company or the Bank shall be mailed, delivered or telegraphed and confirmed to Greene County Bancorp, Inc., 425 Main & Church Streets, Catskill, New York 12414, Attention: J. Bruce Whittaker, President and Chief Executive Officer (with a copy to Luse, Lehman, Gorman, Pomerenk & Schick, 5335 Wisconsin Avenue, N.W., Suite 400, Washington, D.C. 20015, Attention: Eric Luse, Esq.). 12. Parties. This Agreement shall inure solely to the benefit of, and shall be binding upon, FBR, the Company, MHC, the Bank and the controlling and other persons referred to in Section 8 hereof, and their respective successors, legal representatives and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Agreement or any provision herein contained. 13. Construction. Unless governed by preemptive federal law, this Agreement shall be governed by and construed in accordance with the substantive laws of New York. 14. Counterparts. This Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument. 22 Please acknowledge your agreement to the foregoing by signing below and returning to the Company one copy of this letter. GREENE COUNTY GREENE COUNTY By:__________________________ By:________________________ J. Bruce Whittaker J. Bruce Whittaker President and Chief Executive President and Chief Executive Officer Officer Date:______________________ Date:____________________ GREENE COUNTY BANCORP, MHC By:__________________________ J. Bruce Whittaker President and Chief Executive Officer Date:______________________ Agreed to and accepted: FRIEDMAN BILLINGS RAMSEY & CO., INC. By:__________________________ Date:______________________ 23 Exhibit A Jurisdictions where Friedman Billings Ramsey & Co., Inc. is a Registered Selling Agent Friedman Billings Ramsey & Co., Inc. is a registered selling agent in the jurisdictions listed below. 24 Exhibit B [Luse, Lehman to insert introduction] (i) the Company and the MHC have each been duly incorporated, and are validly existing as corporations in good standing under the laws of their jurisdiction of incorporation, and the Bank is validly existing as a mutual savings association under the laws of the State of New York, each with full power and authority to own its properties and conduct its business as described in the Prospectus; (ii) the Bank is a member of the Federal Home Loan Bank of New York, and the deposit accounts of the Bank are insured by the BIF up to the applicable legal limits; (iii) to the best of our knowledge, the activities of the Bank as such activities are described in the Prospectus are permitted under laws of the State of New York State and the United States to subsidiaries of a Delaware business corporation and the Bank does not have any subsidiaries; (iv) The Plan complies with, and, to the best of our knowledge, the Reorganization of the Bank from a New York chartered mutual savings bank to a New York chartered stock savings bank and the creation of the Company and the MHC as the holding companies for the Bank have been effected in all material respects in accordance with, the Bank Holding Company Act of 1956, as amended and the regulations of the Department and the FDIC; to the best of our knowledge, all of the terms, conditions, requirements and provisions with respect to the Plan and the Reorganization imposed by the Department and the FDIC, except with respect to the filing or submission of certain required post-Reorganization reports or other materials by the Company, the MHC or the Bank, have been complied with by the Company, the MHC and the Bank; and, to the best of our knowledge, no person has sought to obtain regulatory or judicial review of the final action of the Department or the FDIC in approving the Plan; (v) The Foundation, has been effected in all material respects in accordance with the requirements of the Department and the FDIC; all the terms, conditions, requirements and provisions with respect to the organization and purpose of the Foundation imposed by the Department, except with respect to the filing or submission of any required reports after the Foundation is formed or other materials by the Foundation, have been complied with by the Foundation; and, to the best of our knowledge, no person has sought to obtain regulatory or judicial review of the final action of the Department or the FDIC in approving the formation of the Foundation; (vi) the Company has authorized Common Stock as set forth in the Registration Statement and the Prospectus, and the description of such Conunon. Stock in the Registration Statement and the Prospectus is accurate in all material respects; (vii) the issuance and sale of the Shares and contribution of Foundation Shares have been duly and validly authorized by all necessary corporate action on the part of the Company; 25 the Shares and Foundation Shares, upon receipt of payment and issuance in accordance with the terms of the Plan and this Agreement, will be validly issued, fully paid, nonassessable and, except as disclosed in the Prospectus, free of preemptive rights, and good title thereto shall be transferred by the Company free and clear of all claims, encumbrances, security interests and liens created by the Company; (viii) the form of certificate used to evidence the Shares is in proper form and complies in all material respects with applicable Delaware law; (ix) the issuance and sale of the capital stock of the Bank to the Company have been duly authorized by all necessary corporate action of the Bank and the Company and have received the approval of the FDIC and the Department, and such capital stock, upon receipt of payment and issuance in accordance with the terms of the Plan, will be validly issued, fully paid and nonassessable and owned of record and, to our actual knowledge, beneficially by the Company; (x) The Foundation has been duly incorporated and is validly existing as a non-stock corporation in good standing under the laws of the State of Delaware with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus; the Foundation is not a bank holding company within the meaning of 12 C.F.R. Part 225 as a result of the issuance of the Foundation Shares to it in accordance with the terms of the Plan and in the amounts as described in the Prospectus; no approvals are required to establish the Foundation and to contribute the Foundation Shares thereto as described in the Prospectus other than those set forth in the New York State Banking Department's approval order; the Foundation Shares to be issued to the Foundation in accordance with the Plan and as described in the Prospectus will have been duly authorized for issuance and, when issued and contributed by the Company pursuant to the Plan, will be duly and validly issued and fully paid and non-assessable. (xi) subject to the satisfaction of the conditions imposed by the FDIC, FRB and Department, no further approval, authorization, consent or other order of any federal government board or body is required in connection with the execution and delivery of this Agreement, and the consummation of the Reorganization, except with respect to the issuance to the Bank of the Stock Charter by the Department and as may be required under the "blue sky" laws of various jurisdictions; (xii) the execution and delivery of this Agreement and the consummation of the Reorganization (including the establishment of the Foundation and the contribution thereto of the Foundation Shares and cash) have been duly and validly authorized by all necessary corporate action on the part of each of the Company and the Bank; (xiii) the statements in the Prospectus and incorporated by reference in the Proxy Statement under the captions "Regulation," "Dividends," "Restrictions on Acquisitions of Stock and Related Takeover Defensive Provisions" and "Description of Capital Stock," insofar as they are, or refer to, statements of law or legal conclusions (excluding financial data included therein, as to which no opinion is expressed), have been prepared or reviewed by us and are correct in all material respects; 26 (xiv) the Application for a merger or other Transaction and the Form 86-AC (including the establishment of the Foundation and the contribution thereto of the Foundation Shares and cash) has been approved by the FDIC and the Department, respectively, and the Prospectus and the Proxy Statement have been authorized for use by the Department; the Registration Statement and any post-effective amendment thereto has been declared effective by the Commission; except as to any necessary qualifications or registration under the securities laws of the jurisdictions in which the Shares were offered, no further approval of any governmental authority is required for the issuance and Bale of the Shares (subject to the satisfaction of various conditions subsequent imposed by the FDIC and the Department in connection with its approval of the Reorganization Application), and, to the best of our knowledge, no proceedings are pending by or before the Commission or the Department seeking to revoke or rescind the orders declaring the Registration Statement effective or approving the Reorganization Application or, to the best of our knowledge, are contemplated or threatened (provided that for this purpose we do not regard any litigation or governmental procedure to be "threatened" unless the potential litigant or government authority has manifested to the management of the Company or the Bank, or to us, a present intention to initiate such litigation or proceeding); (xv) the execution and delivery of this Agreement and the consummation of the Reorganization by the MHC, the Company and the Bank do not conflict with or result in a breach of the charter or bylaws of the MHC, the Company or the Bank (in either mutual or stock form) (xvi) the Reorganization Application, the Registration Statement, the Prospectus and the Proxy Statement, in each case as amended, comply as to form in all material respects with the requirements of the Act, the Bank Holding Company Act of 1956, as amended, the SEC Regulations, the FDIC regulations and the Department Regulations, as the case may be (except as to information with respect to FBR included therein and financial statements, notes to financial statements, financial tables and other financial and statistical data, including the appraisal, included therein, as to which no opinion is expressed); to the best of our knowledge, all material documents and exhibits required to be filed with the Reorganization Application and the Registration Statement have been so filed and the descriptions in the Reorganization Application and the Registration Statement of such documents and exhibits are accurate in all material respects. (xvii) to our actual knowledge, the Bank has obtained all licenses, permits and other governmental authorizations currently required for the conduct of its business as such business is described in the Prospectus, all such licenses, permits and other governmental authorizations are in full force and effect and the Bank is in all material respects complying therewith, except where the failure to hold such licenses, permits or governmental authorizations or the failure to so comply would not have a material adverse effect on the Company and the Bank, taken as a whole; (xviii) there are no material legal or governmental proceedings pending or, to our actual knowledge, threatened against or involving the assets of the Company, the Bank or the Foundation (provided that for this purpose we do not regard any litigation or governmental 27 procedure to be "threatened" unless the potential litigant or government authority has manifested to the management of the Company or the Bank, or to us, a present intention to initiate such litigation or proceeding); (xix) to our actual knowledge, the execution and delivery of the Agreement and the consummation of the Reorganization by the Company and the Bank do not constitute a material breach of or default (or an event which, with notice or lapse of time or both, would constitute a default) under, give rise to any right of termination, cancellation or acceleration contained in, or result in the creation or imposition of any lien, charge or other encumbrance upon any of the properties or assets of the Company or the Bank pursuant to any of the terms, provisions or conditions of, any material agreement, contract, indenture, bond, debenture, note, instrument or obligation to which the Company or the Bank is a party or violate any governmental license or permit or any enforceable published law, administrative regulation or order or court order, writ, injunction or decree (subject to the satisfaction of certain conditions imposed by the Department in connection with Department's approval of the Reorganization Application), which breach, default, encumbrance or violation would have a material adverse effect on the financial condition, operations, business, assets or properties of the Company and the Bank taken as a whole; (xx) to our actual knowledge, there has been no material breach of any provision of the Company's or the Bank's charter or bylaws or breach or default (or the occurrence of any event which, with notice or lapse of time or both, would constitute a default) under any agreement, contract, indenture, bond, debenture, note, instrument or obligation to which the Company or the Bank is a party or by which any of them or any of their respective assets or properties may be bound, or any governmental license or permit, or a violation of any enforceable published law, administrative regulation or order, or court order, writ, injunction or decree which breach, default, encumbrance or violation would have a material adverse effect on the financial condition, operations, business, assets or properties of the Company and the Bank taken as a whole; and, (xxi) the Agreement is a legal, valid and binding obligation of each of the Company and the Bank, enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, receivership, conservatorship or similar laws relating to or affecting the enforcement of creditors, rights generally or the rights of creditors of depository institutions whose accounts are insured by the FDIC or savings and loan holding companies the accounts of whose subsidiaries are insured by the FDIC or by general equity principles, regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent that the provisions of Sections 8 and 9 hereof may be unenforceable as against public policy or pursuant to Section 23A or Section 23B, as to which we render no opinion); [Luse, Lehman to insert conclusion] 28 Exhibit C [Luse, Lehman to insert introduction] Based on such counsel's participation in conferences with representatives of the Company, the Bank, its counsel, the independent appraiser, the independent certified public accountants, FBR and its counsel, review of documents and understanding of applicable law (including the requirements of Form SB-2 and the character of the Registration Statement contemplated thereby) and the experience such counsel has gained in its practice under the Act, nothing has come to such counsel's attention that would lead it to believe that the Registration Statement, as amended (except as to information in respect of FBR contained therein and except as to the financial statements, notes to financial statements, financial tables and other financial and statistical data contained therein, as to which such counsel expresses no opinion), at the time it became effective contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading, or that the Prospectus, as amended (except as to information in respect of FBR contained therein and except as to financial statements, notes to financial statements, financial tables and other financial and statistical data contained therein as to which such counsel expresses no opinion), as of the date of the Prospectus and at the Closing Date, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (in making this statement such counsel may state that it has not undertaken to verify independently the information in the Registration Statement or Prospectus and, therefore, does not assume any responsibility for the accuracy or completeness thereof. [Luse, Lehman to insert conclusion] 29