0001026081-01-500006.txt : 20011009 0001026081-01-500006.hdr.sgml : 20011009 ACCESSION NUMBER: 0001026081-01-500006 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 20010928 GROUP MEMBERS: SEIDMAN AND ASSOCIATES LLC ET AL SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: WARWICK COMMUNITY BANCORP INC CENTRAL INDEX KEY: 0001046209 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 061497903 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-53491 FILM NUMBER: 1747947 BUSINESS ADDRESS: STREET 1: 18 OAKLAND AVE STREET 2: PO BOX 591 CITY: WARWICK STATE: NY ZIP: 10990-0591 BUSINESS PHONE: 9149862206 MAIL ADDRESS: STREET 1: 18 OAKLAND AVE STREET 2: PO BOX 591 CITY: WARWICK STATE: NY ZIP: 10990-0591 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SEIDMAN LAWRENCE B CENTRAL INDEX KEY: 0001026081 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: NJ FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: LANIDEX CENTER STREET 2: 100 MISTY LANE P O BOX 5430 CITY: PARSIPPANY STATE: NJ ZIP: 07054 BUSINESS PHONE: 2015601400 MAIL ADDRESS: STREET 1: LANIDEX CENTER STREET 2: 100 MISTY LANE P O BOX 5430 CITY: PARSIPPANY STATE: NJ ZIP: 07054 SC 13D 1 w13d.txt INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OMB APPROVAL OMB Number:3235-0145 Expires: October 31, 1997 Estimated average burden hours per response....14.9 SECURlTIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities and Exchange Act of 1934 (Amendment No. )* Warwick Community Bancorp, Inc. ------------------------------------------------------------------------------- Common Stock ------------------------------------------------------------------------------- 0003622631 ----------------------------------------------------------------------------- (CUSIP Number) Lawrence B. Seidman, 100 Misty Lane, Parsippany, NJ 07054, (973) 560-1400, Ext.108 ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 20, 2001 ---------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] Note:Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP NO.0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Seidman and Associates, L.L.C. 22-3343079 -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey -------------------------------------------------------------------------------- 7 SOLE VOTING POWER 67,900 NUMBER OF ------------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 67,900 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 67,900 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 1.317 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP NO.0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Seidman Investment Partnership, L.P. 22-3360395 -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 31,200 -------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 31,200 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,200 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .605 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP NO. 0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Seidman Investment Partnership II, L.P. 22-3603662 -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 31,200 -------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 31,200 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,200 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .605 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP NO.0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Kerrimatt, L.P. 22-3583179 -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 31,200 -------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 31,200 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,200 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .605 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP NO.0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Federal Holdings, L.L.C. 13-3838083 -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 31,200 -------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 31,200 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 31,200 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .605 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* OO -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP NO. 0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Lawrence B. Seidman ###-##-#### -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS PF WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 218,100 -------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER 32,700 -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 218,100 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 32,700 -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 250,800 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 4.86 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D CUSIP NO. 0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Dennis Pollack ###-##-#### -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS PF WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S.A. -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 16,620 -------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER 32,700 -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 16,620 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 49,320 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .956 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. CUSIP NO.0003622631 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 1 Pollack Investment Partnership, L.P. 22-3736367 -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/ (b) / / -------------------------------------------------------------------------------- 3 SEC USE ONLY -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS WC -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / / -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 32,700 -------------------------------------------------------------- SHARES BENFICIALLY 8 SHARED VOTING POWER -------------------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER 32,700 PERSON ----------------------------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER -------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 32,700 -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* / / -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) .634 -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* PN -------------------------------------------------------------------------------- *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. 1. Security and Issuer The class of equity securities to which this Statement relates is the common stock (the "Common Stock") of Warwick Community Bancorp, Inc., a Delaware corporation (the "Issuer"). The Issuer's principal executive offices are located at 18 Oakland Avenue, Warwick, NY 10990-0591. 2. Identity and Background (a-c) This statement is being filed by Seidman and Associates L.L.C. ("SAL"), a New Jersey limited liability company, organized to invest in securities, whose principal and executive offices are located at 19 Veteri Place, Wayne, New Jersey 07470. Lawrence Seidman is the Manager of SAL and has sole investment discretion and voting authority with respect to such securities. This statement is also being filed by Seidman Investment Partnership, L.P. ("SIP"), a New Jersey limited partnership, whose principal and executive offices are located at 19 Veteri Place, Wayne, NJ 07470. Veteri Place Corporation is the sole General Partner of SIP and Lawrence Seidman is the only shareholder director and officer of Veteri Place Corporation. Seidman has sole investment discretion and voting authority with respect to such securities. This statement is also being filed by Seidman Investment Partnership II, L.P. ("SIPII"), a New Jersey limited partnership, whose principal and executive offices are located at 19 Veteri Place, Wayne, NJ 07470. Veteri Place Corporation is the sole General Partner of SIPII and Lawrence Seidman is the only shareholder, director and officer of Veteri Place Corporation. Seidman has sole investment discretion and voting authority with respect to such securities. This statement is also being filed by Kerrimatt, LP (Kerrimatt), a limited partnership formed, in part, to invest in stock of public companies whose principal and executive offices are located at 80 Main Street, West Orange, New Jersey 07052. Pursuant to the Kerrimatt Letter Agreement, Lawrence Seidman has the sole investment discretion and voting authority with respect to such securities until May 2002. This statement is also being filed by Federal Holdings L.L.C. ("Federal"), a New York limited liability company, organized to invest in securities, whose principal and executive offices are located at One Rockefeller Plaza, 31st Floor, New York, NY 10020. Lawrence B. Seidman is the Manager of Federal and has sole investment discretion and voting authority with respect to such securities. Kevin Moore is the Administrative Manager of Federal. This statement is also being filed by Pollack Investment Partnership, L.P. ("PIP"), a New Jersey limited partnership, whose principal and executive offices are located at 47 Blueberry Drive, Woodcliff Lake, NJ 07677. Dennis Pollack ("Pollack") and Lawrence B. Seidman ("Seidman") are the General Partners of PIP. Pollack and Seidman share investment discretion and voting authority with respect to such securities. This statement is also being filed by Lawrence Seidman whose principal office is located at 100 Misty Lane, Parsippany, NJ 07054. Mr. Seidman has sole investment discretion and voting authority for SAL, SIP, SIPII, Kerrimatt, and Federal and for Sonia Seidman ("SS"), his wife and Richard and Melissa Baer ("RMB"), Mr. Seidman's clients. Mr. Seidman shares such authority with Pollack for PIP. This statement is also being filed by Dennis Pollack ("Pollack"), whose principal office is located at 47 Blueberry Drive, Woodcliff Lake, NJ 07677. Mr. Pollack has sole investment discretion and voting authority for his wife and children and shares such authority with Mr. Seidman for PIP. The name, residence or business address, and the principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each executive officer and director and each controlling person, if any, of Seidman, Pollack, SAL, SIP, SIPII, Kerrimatt, PIP and Federal, is set forth in Exhibit A hereto. Seidman, Pollack, Federal, Kerrimatt, SAL, SIP, PIP and SIPII, shall hereinafter be referred to as "Reporting Persons". The Reporting Persons have formed a group with respect to the securities of the Issuer within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (d-e) During the last five years none of SAL, SIP, SIPII, Federal, Kerrimatt, SS, RMB, PIP, Pollack and Seidman, or, to the best of their knowledge, any person listed in Exhibit A attached hereto (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to, a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Each of the individuals listed on Exhibit A attached hereto is a citizen of the United States. 3. Source and Amount of Funds or Other Consideration The aggregate purchase price of the stock covered by this statement is 3,996,988.18. The purchases of Common Stock by some of the above entities were in margin accounts carried by Bear Stearns Securities Corp. This extension of credit was extended in the ordinary course of business. As of September 26, 2001, there was no margin loan balance outstanding. 4. Purpose of Transaction The securities covered by this Statement were acquired for the purpose of investment. The Reporting Persons filing this Statement may decide, jointly or individually, to purchase additional shares of the Common Stock or other securities of the Issuer. In addition the Reporting Persons, jointly or individually, may dispose of any or all securities of the Issuer in any manner permitted by applicable securities laws. Mr. Seidman is a representative of the Reporting Persons and will attempt to meet with the Board of Directors of the Issuer and the Issuer's management to review ways to maximize shareholder value. The review includes conducting a comprehensive review and analysis of the value that could be achieved as an independent institution versus its value from a sale to a larger institution. Certain of the Reporting Persons were involved in a proxy contest seeking the election of directors to the Board of Directors of IBSF. These Reporting Persons conducted two proxy contests and during litigation with respect to the results of the second proxy contest, the management of IBSF agreed to sell the institution in a stock for stock transaction to Hubco Inc. In addition certain of the Reporting Persons were involved in two proxy contests involving Wayne Bancorp, Inc. The first proxy contest involved the approval of certain stock plans and option plans for the directors and senior management of Wayne. This proxy contest was resolved prior to a shareholder vote because the respective Reporting Persons agreed to vote for the stock plans and option plans and the Board of Directors of Wayne Bancorp, Inc. agreed to place a representative of the Reporting Persons on the Board. The second proxy contest involved election of directors. During this proxy contest the management of Wayne Bancorp, Inc. announced that Wayne, Bancorp, Inc. would be sold and therefore the Reporting Persons' representative withdrew from seeking election to the Board of Wayne Bancorp, Inc. In addition certain of the Reporting Persons have filed a Schedule 13D in connection with the common stock of 1st Bergen Bancorp, Inc. which company has been acquired by Kearney Federal Savings Bank. In addition certain of the Reporting Persons have filed a Schedule 13D in connection with the Common Stock of Eagle BancGroup, Inc.("EGLB") and informally notified the Company that they intended to solicit proxies for two director nominees in opposition to the two management director nominees at the 1999 annual meeting. On June 30, 1999, EGLB announced the sale of the Company to Busey Corporation. In addition the Reporting Persons have filed a Schedule 13D in connection with the Common Stock of Yonkers Financial Corp. ("YFCB") seeking representation on the Board of Directors of YFCB. In January 2000 certain of the Reporting Persons were involved in a proxy contest seeking to elect two directors to the YFCB Board in opposition to the three management directors. These Reporting Persons were not successful in connection with the proxy contest and the slate proposed by the YFCB management was re-elected. In addition, some of the Reporting Persons filed a Schedule 13D in connection with the Common Stock of CNY Financial Corporation ("CNYF") requesting (i) Board representation and (ii) that CNYF maximize shareholder value. On February 25, 1999, Seidman and certain of the Reporting Persons entered into an Agreement with CNYF, wherein CNYF agreed to increase the size of its Board of Directors by one and add Seidman as a Director. Seidman and the Members of the Committee involved agreed to certain restrictions. The material restrictions in this Agreement established the following undertakings: (i) to not acquire more than 9.9% of the outstanding CNYF stock before its year 2,000 Annual Meeting; (ii) to vote for the CNY stock option and restricted stock plan and amendments thereto; (iii) to not solicit proxies or submit proposals prior to the year 2000 Annual Meeting; (iv) to vote all shares in favor of Seidman and the two (2) Board Nominees at the 1999 Annual Meeting; and (v) not to do anything indirectly that it could not do directly. Seidman voted his shares in support of CNYF stock based compensation plans and he became a director of CNYF. On December 29, 1999, CNYF agreed to be acquired by Niagara Bancorp, Inc. for $18.75 cash for each CNYF share. The transaction closed on July 7, 2000. In addition some of the Reporting Persons have filed a Schedule 13D in connection with the Common Stock of South Jersey Financial Corporation, Inc. ("SJFC") seeking representation on the Board of Directors of SJFC. Certain of the Reporting Persons were involved in a proxy contest seeking to elect two directors to the SJFC Board in opposition to the three management directors. On August 12, 1999, an Agreement was reached between SJFC and certain of the Reporting Persons which permitted Seidman and a second proposed Nominee to become directors of SJFC and for Seidman to become a director of South Jersey Savings and Loan Association, the banking subsidiary of SJFC. In addition the Reporting Persons agreed to support the stock option and restricted option plan to be proposed by SJFC at a Special Meeting. On March 15, 2000, SJFC agreed to be acquired by Richmond County Financial Corp. for $20.00 cash for each SFJC share. The transaction closed on July 31, 2000. In addition some of the Reporting Persons have filed a Schedule 13D in connection with the Common Stock of Jade Financial Corporation ("IGAF"). On May 30, 2000, Mr. Seidman and certain of the Reporting Persons entered into a stock Option Agreement with PSB Bancorp, Inc. ("PSB") whereby PSB was given the right to purchase all of Mr. Seidman's controlled IGAF stock so long as PSB made an offer to buy all of the IGAF outstanding shares at the same price. On November 2, 2000, PSB announced the execution of the Definitive Agreement and Plan of Merger to acquire IGAF at $13.50 per share. On July 2, 2001 the merger by and between PSB and IGAF was completed. Prior thereto PSB consummated the purchase of Mr. Seidman's stock in accordance with the Option Agreement In addition, certain of the Reporting Persons were involved in a proxy contest seeking election of two directors to the Board of Directors of Citizens First Financial Corp. ("CBK"). These Reporting Persons were not successful in connection with the proxy contest and the slate proposed by the CBK management was re-elected. However, Mr. Seidman was successful in having CBK conduct a Dutch Auction for 15% of its outstanding shares. Mr. Seidman had proposed this Dutch Auction and, in an Agreement with CBK, agreed to tender all the shares he controlled into the auction and to execute a Standstill Agreement. The Dutch Auction was oversubscribed and Mr. Seidman's shares were prorated in the same manner as the other CBK shareholders. In addition, Mr. Seidman and certian of the Reporting Persons requested in connection with the Common Stock of Vista Bancorp, Inc. ("VBNJ") that the Board be increased by one, a Seidman representative be placed on the Board, and that VBNJ maximize shareholder value. The request was rejeacted by VBNJ. Mr. Seidman and certain of the Reporting Persons conducted a proxy contest at the Annual Meeting of Stockholders on April 26, 2001, seeking to elect three directors in opposition to the three directors proposed by the management of VBNJ. The reporting persons were not successful and the slate proposed by management was elected. In addition certain of the Reporting Persons conducted a proxy contest to (i) revoke an amendment to the By-Laws of First Federal Savings and Loan of East Hartford ("FFES"), and (ii) to amend two present provisions of the By-Laws of FFES. The Reporting Persons were successful with respect to both issues. The changes to the By-Laws were approved by the Office of Thrift Supervision on August 11, 2000. In the latter part of 2000, Mr. Seidman requested that FFES convene a Special Meeting of Shareholders to modify the By-Laws so that the Board of Directors could be enlarged from ten to thirteen members. On November 27, 2000, Mr. Seidman and certain of the Reporting Persons entered into an Agreement with FFES, whereby Mr. Seidman withdrew his request for a Special Shareholders' Meeting and FFES agreed to enlarge its Board by one, and add Mr. Seidman to the Board. In addition, there were other procedural requirements of the Agreement which were complied with by FFES and Mr. Seidman. On February 8, 2001, FFES was sold to Connecticut Bancshares, Inc. for cash at $37.50 per share for each FFES share. The transaction closed on August 31, 2001. In addition, after Mr. Seidman in early March 2000 made a formal request to the Board of Directors of Ambanc Holding Co., Inc. ("AHCI") to be added to the Board, the size of the Board was increased and Mr. Seidman was added to the Board. Mr. Seidman agreed to and did support the re-election of AHCI's slate of directors at the Annual Meeting held on May 26, 2000. On September 4, 2001, AHCI agreed to be sold to Hudson River Bancorp for $21.50 per share for all of AHCI's outstanding shares. In addition, the Reporting Persons' reserve the right to exercise any and all of their respective rights as stockholders of the Issuer in a manner consistent with their equity interests. Except as set forth above, neither the Reporting Persons nor, to the best of the Reporting Persons' knowledge, any executive officer or director of the Reporting Persons, has any present plans or intentions which would result in or relate to any of the transactions described in subparagraphs (b) through (j) of Item 4 of Schedule 13D. 5. Interest in Securities of the Issuer (a)(b)(c) As of the close of business on September 26, 2001, the Reporting Persons owned beneficially an aggregate of 267,920 shares of Common Stock, which constituted approximately 5.19% of the 5,154,576 shares of Common Stock outstanding as of August 17, 2001, as disclosed in the Issuer's Form 10Q for the period ended June 30, 2001. Seidman, individually, in his capacity as the sole shareholder and officer of the corporate general partner of SIP, SIPII, and as the Manager of Federal and SAL, and as the general partner in PIP, and as the person with investment and voting authority for SS, RMB and Kerrimatt, may be deemed to own beneficially (as defined in Rule 13d-3 promulgated under the Exchange Act) the 251,300 shares of Common Stock which constituted approximately 4.87% of the Issuer's outstanding Common Stock owned individually, and by SS, RMB, SIP, SIPII, SAL, PIP, Kerrimatt, and Federal. Mr. Pollack individually and as the person with the investment and voting authority for his wife and children, and as a general partner of PIP, may be deemed to own beneficially (as defined in Rule 13d-3 promulgated under the Exchange Act) 49,320 shares of Common Stock which constituted approximately .956% of the Issuer's outstanding Common Stock. In total the Reporting Persons have the right to vote and dispose of 267,920 shares of Common Stock of the Issuer. The schedule attached as Exhibit B describes transactions in the Common Stock effected by the Reporting Persons. Except as set forth in this Item 5, none of the Reporting Persons owns beneficially or has a right to acquire beneficial ownership of any Common Stock, and except as set forth in this Item 5, none of the Reporting Persons has effected transactions in the Common Stock during the past sixty (60) days. (d) N/A (e) N/A 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Except as described herein neither the Reporting Persons nor to the best of their knowledge, any of the persons named in Exhibit "A" attached hereto , has any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any securities, finders' fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. A. The General Partner of SIP is: Veteri Place Corp; a New Jersey Corporation (Seidman is the sole officer and shareholder). Seidman through Veteri Place Corp. is entitled to 20% of the profits through Veteri Place Corp. (See Exhibit C for Amended and Restated Agreement of Limited Partnership of Seidman Investment Partnership, L.P.) B. The General Partner of SIPII is: Veteri Place Corp; a New Jersey Corporation (Seidman is the sole officer and shareholder). Seidman through Veteri Place Corp. is entitled to 25% of the profits through Veteri Place Corp. (See Exhibit D for Amended and Restated Agreement of Limited Partnership of Seidman Investment Partnership II, L.P.) C. Seidman is the Managing Member of SAL and Brant Cali is the Managing Member of Seidcal Associates which owns a majority interest in SAL. Seidman is entitled to a 5% of the profits earned by SAL (See Exhibit E for the Operating Agreement for Seidman and Associates, L.L.C.) D. Mr. Seidman has an agreement with Kerrimatt, L.P., which gives him the complete discretion to vote and dispose of securities of the Issuer owned by Kerrimatt, L.P. (Kerrimatt, L.P. presently owns 31,200 shares of the Issuer.) Mr. Seidman is entitled to a percentage of the profits derived from these securities, which is calculated after allowing a return to Kerrimatt, L.P.. (See Exhibit F for the Letter Agreement.) E. Mr. Seidman has an agreement with Federal which gives him the complete discretion to vote and dispose of securities of the Issuer owned by Federal (Federal presently owns 31,200 shares of the Issuer). Mr. Seidman is entitled to a percentage of the profits derived from these securities which is calculated after allowing a return to Federal. (See Exhibit G for the Operating Agreement for Federal Holdings, LLC and the First and Second Amendment.) F. Messrs. Seidman and Pollack are the General Partners of PIP and share the investment and voting authority with respect to the shares owned by said entity. They are entitled to receive an administrative fee equal to a quarter of 1% of PIP's assets. (See Section 16 of the Partnership Agreemnt, Exhibit H attached hereto and incorporated herein by reference.) G. None of the partners of SIP, SIPII, PIP, Kerrimatt, affiliates of or members of SAL, or SS, Pollack, Seidman, RMB or Federal, own any shares of Issuer except as disclosed herein. The following are certain provisions concerning the division of profits or losses or guarantees of profits with reference to SAL, SIP, SIPII, PIP and Federal. In Section 8.1(d) of the operating agreement for SAL, Mr. Seidman is entitled to 5% of the net profits each year and his wife is entitled to 15% of the net profits. In addition Section 11.3(b) in SAL's operating agreement entitles Mr. Seidman to annual compensation of $300,000. Mr. Seidman is also entitled to 20% of the net profits under the agreements with SIP [Section 9(a)(i)],and 25% of the net profits under the agreement with SIP II. [Section 9 (b)]]. Messrs. Seidman and Pollack are also entitled to 20% of the net profits under the Agreement with PIP and they receive a management or administrative fee based upon the total assets of PIP. Mr. Seidman also gets management or administrative fees based upon the total assets of SIP, Federal and Kerrimatt. In addition Mr. Seidman is also entitled to 25% of the Net Profits under the Agreement with Federal (Second Amendment of the Operating Agreement). Mr. Seidman is the Manager of Federal and SAL, and is the President of the corporate general partner of SIP and SIPII, and investment manager for Kerrimatt and, in that capacity, Mr. Seidman has the authority to cause those entities to acquire, hold, trade and vote these securities. Messrs. Seidman and Pollack share this responsibility with PIP. SAL, Federal, PIP, Kerrimatt, SIP and SIPII were all created to acquire, hold and sell publicly traded securities. None of the entities disclosed herein were formed to solely acquire, hold and sell the Issuer's securities. Each of these entities owns securities issued by one or more companies other than Issuer. The members and limited partners in Kerrimatt, Federal, SAL, SIPII, SIP and PIP are all passive investors, who do not - and can not - directly or indirectly participate in the management of these entities, including without limitation proxy contests conducted by such entities. Seidman's compensation is, in part, dependent upon the profitability of the operations of these entities, but no provision is made to compensate Seidman solely based upon the profits resulting from transactions from the Issuer's securities. The voting power over the Issuer's securities is not subject to any contingencies beyond standard provisions for entities of this nature, (i.e., limited partnerships and limited liability companies) which govern the replacement of a manager or a general partner. Pursuant to Section 16 of the Amended and Restated Agreement of Limited Partnership (Partnership Agreement), Veteri Place Corporation, as of the end of each fiscal quarter shall be entitled to receive an administrative fee equal to a quarter of 1% of SIP's assets. (See Section 16 of the Partnership Agreement Exhibit C, attached hereto and incorporated herein by reference.) The scheduled term of SIP is until December 1, 2014 unless sooner terminated as provided in the Partnership Agreement. (See Term of Partnership, page 16 of the Partnership Agreement, Exhibit C, attached hereto and incorporated herein by reference.) The scheduled term of SIPII is until December 31, 2014 unless sooner terminated as provided in the Partnership Agreement. (See Term of Partnership, page 3 of the Partnership Agreement, Exhibit D, attached hereto and incorporated herein by reference.) SAL's term shall continue in full force and effect until May 1, 2024 unless terminated as provided for in its operating agreement. (See Article 4 - Term and Duration, Exhibit E, attached hereto and incorporated herein by reference.) Kerrimatt's term shall continue in full force and effect as provided in Letter Agreement attached in Exhibit F. Pursuant to Paragraph 7 of the Letter Agreement, Mr. Seidman is entitled to a quarterly administration fee equal to a .25% of 1% of Kerrimatt assets. Federal's term shall continue in full force and effect until April 30, 2045 as provided for in its operating agreement. (See Article 4 - Term and Duration, Exhibit G, attached hereto and incorporated herein by reference.) Pursuant to Article 10.1 of the operating agreement, Mr. Seidman's management term expired on June 30, 2000, but has continued pursuant to mutual agreement of the parties. (See Article 10 and the Second Amendment to Operating Agreement, Exhibit G, attached hereto and incorporated herein by reference.) Pursuant to Article 10.2 of the Operating Agreement, Mr. Seidman is entitled to a quarterly administration fee equal to .25% of 1% of Federal's assets. PIP's term shall continue in full force and effect until June 31, 2020, as provided for in its Partnership Agreement. (See Article 5, Exhibit H, attached hereto and incorporated herein by reference.) 7. Material to be filed as Exhibits Exhibit A Executive Officers and Director of Reporting Persons Exhibit B Stock Purchase Transactions Exhibit C Amended and Restated Agreement of Limited Partnership of Seidman Investment Partnership, L.P. and Amendment #1, #2, and #3. Exhibit D Amended and Restated Agreement of Limited Partnership of Seidman Investment Partnership II, L.P. and Amendment #1 and #2. Exhibit E Operating Agreement for Seidman and Associates, L.L.C.with First Amendment and Letter Agreement. Exhibit F Letter Agreement with Kerrimatt, L.P. Exhibit G Operating Agreement for Federal Holdings L.L.C. First Amendment to Operating Agreement and Second Amendment to Operating Agreement. Exhibit H Operating Agreement for Pollack Investment Partnership, L.P. First Amendment to Operating Agreement. Exhibit I Joint Filing Agreement. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Manager Seidman and Associates, L.L.C. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, President of the Corporate General Partner Seidman Investment Partnership,L.P. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, President of the Corporate General Partner Seidman Investment Partnership II, L.P. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Individually 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Investment Manager, Kerrimatt, L.P. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Investment Manager Federal Holdings, L.L.C. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Co-General Partner, Pollack Investment Partnership, L.P. 9/28/01 /ss/Dennis Pollack ------ ------------------------------ Date Dennis Pollack, Individually 9/28/01 /ss/Dennis Pollack ------ ------------------------------ Date Dennis Pollack, Co-General Partner, Pollack Investment Partnership, L.P. EX-10.1 3 exhibita.txt EXECUTIVE OFFICERS & DIRECTORS OF REPORT. PERSONS EXHIBIT A LAWRENCE B. SEIDMAN, INDIVIDUALLY 100 Misty Lane Parsippany, New Jersey 07054 Principal occupation: Attorney and Consultant. President, General Counsel and Director of Menlo Acquisition Corporation Investment Employment principally conducted through Seidman & Associates, L.L.C. (Manager), Seidman Investment Partnership, L.P.and Seidman Investment Partnership II, LP (President of Corporate General Partner), Kerrimatt, LP (Investment Manager), Pollack Investment Partnership, L.P. (Co-General Partner) and Federal Holdings, LLC (Investment Manager)and Lawrence B. Seidman, Esq. KEVIN S. MOORE Clark Estates, Inc. One Rockefeller Plaza New York, NY 10020 Principal Occupation: Senior Vice President Employment conducted through: Clark Estates,Inc. ANGELA CALI KLOBY 11 Commerce Drive Cranford, New Jersey 07016 Principal Occupation: Unemployed Member of Seidcal & Associates, LLC Seidcal & Associates, LLC is a Member of SAL BRANT CALI 11 Commerce Drive Cranford, New Jersey 07016 Principal Occupation: Private Real Estate Investor and Businessman Member of Seidcal & Associates, LLC Seidcal & Associates, LLC is a Member of SAL CHRISTOPHER CALI 11 Commerce Drive Cranford, New Jersey 07016 Principal Occupation: Part-Time Musician Member of Seidcal & Associates, LLC Seidcal & Associates, LLC is a Member of SAL JOHN R. CALI 11 Commerce Drive Cranford, New Jersey 07016 Principal Occupation:Private Real Estate Investor and Businessman Member of Seidcal & Associates, LLC Seidcal & Associates, LLC is a Member of SAL JONNA CALI 11 Commerce Drive Cranford, New Jersey 07016 Principal Occupation: Unemployed Member of Seidcal & Associates, LLC Seidcal & Associates, LLC is a Member of SAL ROSE CALI 11 Commerce Drive Cranford, New Jersey 07016 Principal Occupation: Unemployed Member of Seidcal & Associates, LLC Seidcal & Associates, LLC is a Member of SAL DENNIS POLLACK 47 Blueberry Drive Woodcliff Lake, NJ 07677 Principal Occupation: Businessman and private investor President of MCB Mortgage Company, a division of Mohawk Community Bank and President and CEO of Pegasus Funding Group, LLC Co-General Partner of Pollack Investment Partnership, L.P. Director of Menlo Acquisition Corp. EX-10.2 4 insb.txt STOCK PURCHASE TRANSACTIONS SCHEDULE B DATE PRICE PROCEEDS SHARES Seidman & Assoc 12/1/99 10.3750 103,750.00 10,000 Seidman & Assoc 3/31/00 10.1250 75,937.50 7,500 Seidman & Assoc 10/25/00 12.4375 31,093.75 2,500 Seidman & Assoc 5/14/01 15.1000 30,200.00 2,000 Seidman & Assoc 5/24/01 14.9500 299,000.00 20,000 Seidman & Assoc 7/27/01 17.2000 51,600.00 3,000 Seidman & Assoc 9/20/01 17.9600 411,284.00 22,900 Sub-total 1,002,865.25 67,900 Seidman Inv. Partnership 12/22/99 10.0625 90,562.50 9,000 Seidman Inv. Partnership 8/18/00 11.9375 59,687.50 5,000 Seidman Inv. Partnership 8/28/00 12.0625 30,156.25 2,500 Seidman Inv. Partnership 10/25/00 12.4375 37,312.50 3,000 Seidman Inv. Partnership 5/24/01 14.9500 7,475.00 500 Seidman Inv. Partnership 9/20/01 17.9600 201,152.00 11,200 Sub-total 426,345.75 31,200 Seidman Inv. Partnership 12/7/99 10.0625 50,312.50 5,000 II Seidman Inv. Partnership 12/22/99 10.0625 90,562.50 9,000 II Seidman Inv. Partnership 5/24/01 14.9500 89,700.00 6,000 II Seidman Inv. Partnership 9/20/01 17.9600 201,152.00 11,200 II Sub-total 431,727.00 31,200 Federal Holdings 3/31/00 10.0000 11,000.00 1,100 Federal Holdings 11/3/00 12.6875 38,062.50 3,000 Federal Holdings 5/24/01 14.9500 237,705.00 15,900 Federal Holdings 9/20/01 17.9600 201,152.00 11,200 Sub-total 487,919.50 31,200 Kerri-Matt 12/9/99 10.0625 50,312.50 5,000 Kerri-Matt 12/22/99 10.0625 70,437.50 7,000 Kerri-Matt 1/12/00 10.4375 52,187.50 5,000 Kerri-Matt 5/24/01 14.9500 44,850.00 3,000 Kerri-Matt 9/20/01 17.9600 201,152.00 11,200 Sub-total 418,939.50 31,200 Pollack Invest Prtshp 1/18/01 13.3125 33,281.25 2,500 Pollack Invest Prtshp 5/18/01 15.5500 38,875.00 2,500 Pollack Invest Prtshp 5/24/01 14.9500 246,675.00 16,500 Pollack Invest Prtshp 9/20/01 17.9600 201,152.00 11,200 Sub-total 519,983.25 32,700 Seidman 1/19/00 10.4375 20,875.00 2,000 Seidman 5/24/01 14.9500 152,490.00 10,200 Seidman 9/20/01 17.9600 201,152.00 11,200 Seidman 9/26/01 17.81 18,073.93 1,000 Seidman 9/26/01 17.81 9,048.94 500 Seidman 9/26/01 17.81 18,077.93 1,000 Sub-total 419,717.80 25,900 Dennis Pollack 2/8/01 14.3750 28,875.00 2,000 Dennis Pollack 5/24/01 15.7500 15,810.00 1,000 Dennis Pollack 5/24/01 15.7500 6,329.25 400 Dennis Pollack 5/29/01 15.9500 16,010.00 1,000 Dennis Pollack 5/29/01 16.0000 25,701.25 1,600 Dennis Pollack 7/31/01 17.8900 17,950.00 1,000 Dennis Pollack 7/31/01 18.0000 5,423.25 300 Dennis Pollack 8/1/01 18.0500 38,031.00 2,100 Dennis Pollack 8/1/01 18.0200 18,085.25 1,000 Dennis Pollack 8/28/01 18.7000 5,628.00 300 Dennis Pollack 8/28/01 18.7500 18,810.00 1,000 Dennis Pollack 8/28/01 18.8000 13,207.25 700 Dennis Pollack 8/28/01 18.7000 11,295.00 600 Dennis Pollack 8/28/01 18.7500 1,892.75 100 Dennis Pollack 8/28/01 18.7000 6,605.25 350 Dennis Pollack 8/28/01 18.7000 7,446.75 395 Dennis Pollack 9/5/01 18.7500 28,220.25 1,500 Dennis Pollack 9/5/01 18.7000 7,064.63 375 Dennis Pollack 9/6/01 18.9000 17,105.25 900 Sub-total 289,490.13 16,620 TOTALS 3,996,988.18 267,920 EX-10.3 5 exc.txt SEIDMAN INVESTMENT PARTNERSHIP, L.P. AGREEMENT Exhibit C AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SEIDMAN INVESTMENT PARTNERSHIP, L.P. JANUARY 5, 1995 AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP Table of Contents 1. Definitions............................................................ (a) "Act"................................................. (b) "Affiliate"........................................... (c) "Agreement"........................................... (d) "Capital Account".................................... (e) "Certificate"......................................... (f) "Code"................................................ (g) "Fiscal Period"............................................... (h) "Fiscal Quarter"...................................... (i) "Fiscal Year"......................................... (j) "General Partner Percentage"......................... (k) "Net Profit"......................................... (l) "Net Loss"........................................ (m) "Partnership Percentage"............................. 2. Organization................................................. 3. Name of Partnership................................................... 4. Principal Office, Resident Agent, Registered Office............................................. 5. Term of the Partnerships...................................... 6. Purposes...................................................... 7. Contributions of the Partners; New Partners..................................... 8. Capital Accounts...................................................... 9. Adjustments to Capital Accounts............................... 10. Hot Issues................................................... 11. Valuation..................................................... 12. Determination by General Partners of Certain Matters............................................... 13. Liability of Partners......................................... 14. Rights and Duties of General Partner.......................... 15. Expensess..................................................... 16. Administrative Fee............................................ 17. Limitation on Power of Limited Partners....................... 18. Other Business Ventures...................................................... 19. Limitation on Assignability of Interests of Limited Partners...................................................... 20. Withdrawals by the Limited Partners........................... 21. Withdrawal by the General Partner and Affiliates.................................................... 22. Dissolution and Winding Up of the Partnership................................................... 23. Accounting and Reports....................................................... 24. Books and Records....................................................... 25. Indemnification............................................... 26. Amendment of Partnership Agreement............................ 27. Notices....................................................... 28. Agreement Binding on Successors and Assigns................................................... 29. Governing Law................................................. 30. Consents...................................................... 31. Miscellaneous................................................. AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SEIDMAN INVESTMENT PARTNERSHIP, L.P. THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Seidman Investment Partnership, L.P. (the "Partnership"), dated as of January 5, 1995, by and between Veteri Place Corporation, as the General Partner (the "General Partner") and the persons and entities, referred to in schedule A on file at the offices of the Partnership, who have executed, either directly or indirectly by an attorney-in-fact, as limited partners (the "Limited Partners"). PREMISES: A. The Partnership was organized in accordance with the New Jersey revised Uniform Limited Partnership act by the filing by the General Partner of a certificate of Limited Partnership with the office of the Secretary of State of the State of New Jersey on----------------, 1995. B. The General Partner, pursuant to the authority granted to him under section 26 of the Agreement, desires to amend the Agreement and to restate the same. NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, effective as of February 15, 1995, it is hereby agreed as follows: The following terms shall have the following meaning when used in this Agreement: (a) "Act" shall mean the New Jersey Revised Uniform Limited Partnership Act, amended from time to time. (b) "Affiliate" shall mean any person performing services on behalf of the Partnership who (i) directly or indirectly controls, is controlled by, or is under common control with a General Partner; (ii) is any company of which a General Partner or its controlling shareholder is an officer, director, partner or trustee; (iii) a member of the family of the controlling shareholder of the General Partner; or (iv) an Individual Retirement account or similar trust for the benefit of one or more General Partner or its affiliates. (c) "Agreement" shall mean this agreement of Limited Partnership, as originally executed and as amended, modified, supplemented or restated from time to time. (d) "Capital account" shall mean the account described in Section 8 of this Agreement. (e) "Certificate" shall mean the Partnership's certificate of Limited Partnership as defined in section 2 of this Agreement. (f) "Code" shall mean the Internal Revenue code of 1986, or successor provision of law, and the regulations issued thereunder. (g) "Fiscal Period" shall mean the period beginning on the day immediately succeeding the last day of the immediately preceding fiscal Period and ending on the earliest occurring of the following: (i) The last day of the Fiscal Year; (ii) The day immediately preceding the day on which a new Partner is admitted to the Partnership; (iii) the day immediately preceding the date on which a Partner makes an additional capital contribution to the Partner's capital account; (iv) The day on which a Partner withdraws, in whole or in part, the amount of his or its Capital account; (v) The date of dissolution of the Partnership in accordance with Section 5 of this Agreement. (h) "Fiscal "Quarter" shall mean a fiscal quarter of the Partnership. (i) "Fiscal Year" shall mean the fiscal year of the Partnership, which shall be the calendar year. (j) "General Partner Percentage" shall mean a percentage established by the General Partner for each General Partner on the Partnership's books as of the first day of each Fiscal Period. The sum of the General Partners Percentages for each Fiscal Period shall equal one hundred percent (100%). (k) "Net Profit" of the Partnership shall mean, with respect to any Fiscal Period, the excess of the aggregate revenue, income and gains (realized and unrealized) earned on an accrual basis during the fiscal Period by the Partnership from all sources over the expenses and losses (realized and unrealized) incurred on an accrual basis during the fiscal Period by the Partnership. (l) "Net Loss" of the Partnership shall mean, with respect to any fiscal Period, the excess of all expenses and losses (realized and unrealized) incurred on an accrual basis during the fiscal Period by the Partnership over the aggregate revenue, income and gains (realized and unrealized) earned on the accrual basis during the fiscal period by the Partnership from all sources. (m) "Partnership Percentage" shall mean a percentage established for each partner on the Partnership' books as of the first day of each Fiscal Period. The Partnership Percentage of a Partner for a Fiscal Period shall be determined by dividing the amount of the Partner's capital account as of the beginning of the Fiscal Period by the sum of the capital accounts of all of the Partners as of the beginning of the fiscal Period. The sum of the Partnership Percentage for each fiscal Period shall equal one hundred percent (100%). 2. Organization. The General Partner has executed a Certificate of Limited Partnership pursuant to the provisions of the Act (the "Certificate") and has cause the certificate to be filed as required by the Act. The General Partner shall also execute and record all amendments to the Certificate or additional certificates as may be required by this Agreement or by law. 3. Name of Partnership. The name of the Partnership shall be Seidman Investment Partnership, L.P. or such other name as the General Partner may from time to time designate. 4. Principal Office, Resident Agent, Registered Office. The principal office of the Partnership is 1235A Route 23 South, Wayne, New Jersey or any other place determined by the General Partner. The Partnership's phone number is (201) 633-7900. The name and address of the registered agent for service of process in the State of New Jersey is Lawrence B. Seidman, 1235A Route 23 South, Wayne, NJ 07470. The address of the registered office of the Partnership in the State of New Jersey is c/o Lawrence B. Seidman, 1235A Route 23 South, Wayne, New Jersey 07470. 5. Term of the Partnership. (a) The term of the Partnership, having commenced on the date the Certificate was filed shall continue until the first of the following events occurs: (i) December 31, 2014; (ii) a written consent to dissolution of the Partnership by all Partners; (iii) upon all of the General Partners ceasing to be general partners as a result of doing or being subject to one or more of the following: (A) withdrawing from the Partnership in accordance with Section 21 of this Agreement; (B) assigning all of its interest in the Partnership; (C) making an assignment for the benefit of its creditors; (D) filing a voluntary petition in bankruptcy; (E) being adjudged bankrupt or insolvent or having entered against it an order of relief in any bankruptcy or insolvency proceeding; (F) filing a petition or answer seeking for itself any reorganization, arrangement,composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation; (G) filling an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (H) seeking consenting to, or acquiescing in the appointment of a trustee or receiver, or liquidator of all or any substantial part of its properties; (I) being the subject of any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation, which proceeding shall have continued for one hundred and twenty (120) days after the commencement thereof; or the appointment of a trustee, receiver, or liquidator for such General Partner or all or any substantial part of it properties without its consent or acquiescence, which appointment is not vacated or stayed for ninety (90) days after the expiration of the stay during which period the appointment is not vacated; (J) the death of a General Partner; or (K) the entry by a court of competent jurisdiction adjudicating such General Partner incompetent to manage his person or his property; or (iv) upon issuance of a non-appealable decree of dissolution of the Partnership by a New Jersey Court of competent jurisdiction. (b) In the event a General Partner does or becomes subject to any of the provisions of subsection (a)(iii) of this Section 5, the remaining General Partner shall be permitted to carry on the business of the Partnership upon written notice provided to all Partners of the decision to continue the Partnership's business. Each Limited Partner shall have the right for a period of thirty (30) days from the date of the written notice (the "Election Period") to elect to withdraw from the Partnership as of ten (10) days after the last day of the Election Period. The Limited Partner will receive the proceeds of a withdrawal made pursuant to this subsection (b) within ninety (90) days of the date of withdrawal. The amount of such proceeds will be calculated after the adjustments to his capital account provided for in Section 9 hereof, made as if the withdrawal date were the end of a Fiscal Year. (c) If any one or more of the termination events listed in this Section 5 occurs, and if the remaining General Partner chooses not to carry on the business of the Partnership in accordance with the provisions of subsection (b) of this Section 5, the Partnership shall be dissolved and its affairs wound up as provided in Section 22 of this Agreement. 6. Purposes The Partnership is organized for the following purposes: (a) to invest and trade, on margin or otherwise, in "Securities," as that term is defined in Section 2(1) of the Securities Act of 1933, as amended (the "1933 Act"); (b) to sell Securities short and cover short sales; (c) to lend funds or properties of the Partnership, either with or without security; and (d) to execute, deliver and perform all contracts and other undertakings, and engage in all activities and transactions, that the General Partner believes is necessary or advisable in carrying out the purposes specified all subsections (a), (b), and (c) of this Section 6, including without limitation: (i) to purchase, transfer or acquire in any manner and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to the investments described in subsection (a) of this Section 6; and (ii) to register or qualify the Partnership under any applicable Federal or state laws, or to obtain exemptions under those laws, if registration qualification or exemption is deemed necessary by the General Partner. 7. Contributions of the Partners; New Partners. (a) Each Partner shall make a contribution to the Partnership's capital ("Capital Contribution") in the amount set out opposite the Limited Partner's name in Schedule A attached to this Agreement. (b) Any Partner may elect, with the consent of the General Partner to make an additional Capital Contribution, as of the first day of any fiscal Quarter. The General Partner may, in its sole discretion, permit additional Capital Contributions to be made more frequently than quarterly. (c) No Partner shall be required to make any additional Capital Contributions. (d) Capital Contributions made by Limited Partners must be in cash. (e) The General Partner shall have the right, but not the obligation, to admit new Partners to the Partnership as of the first day of any Fiscal quarter. The General Partner may, however, in its sole discretion, admit new Partners more frequently than quarterly. 8. Capital Accounts. A Capital account shall be established for each Partner. For the Fiscal Period during which a Partner is admitted to the Partnership, his or its capital account shall equal the amount of his or its initial Capital Contribution. For each subsequent Fiscal Period, the Partner's Capital account will equal the sum of the amount of his or its Capital account as finally adjusted for the immediately preceding fiscal Period and the amount of any additional Capital Contribution made by the Partner as of the first day of the current Fiscal Period. 9. Adjustments to Capital Accounts. At the end of each Fiscal Period, the Capital Accounts of the Partners shall be adjusted in the following manner: (a) Subject to the provisions of subsections (c) and (d) and (f) of this Section 9, Net Profit of the Partnership for the Fiscal Year shall be credited as follows: (i) Twenty percent (20%) of the Net Profit shall be reallocated to the General Partner for each Fiscal Year as a "Incentive Allocation". (ii) The remaining Net Profit shall be allocated to the Partners in proportion to their Capital Accounts. (b) Net Loss of the Partnership for the Fiscal Year shall be debited against the Capital Account of each Partner in proportion to and in accordance with the balance in the Capital Account of the Partner until the value of any Partners' Capital account becomes zero. Thereafter, any remaining Net Loss for the Fiscal Year shall be debited to Partners having positive balances in their Capital accounts in proportion to those balances, until the value of each Partner's Capital Account becomes zero. Thereafter, any remaining Net Loss for the Fiscal Year shall be debited to the General Partner in accordance with each General Partner's General Partner Percentage for the Fiscal Period. (c) In the event that the Capital Account of one or more General Partner has a negative balance, one hundred percent (100%) of the Net Profit of the Partnership for the Fiscal Period shall be credited to those General Partners whose Capital Accounts have negative balances in accordance with their respective General Partner Percentages until no General Partner shall have a negative Capital Account balance. (d) Anything in this Section 9 to the contrary notwithstanding, if any Net Losses are allocated to the account of any Limited Partner, each such Limited Partner shall be entitled to a "Recoupment Allocation" of subsequent Net Profits of the Partnership, in an amount in proportion to his Partnership Percentage, until such Net Loss shall have been eliminated. The amount of Net Profits allocated as a Recoupment Allocation shall not exceed, but shall reduce, the amount of Net Profits otherwise allocable to the General Partners as the Incentive Allocation pursuant to Section 9(a) (ii) hereof. If a Limited Partner who is entitled to a Recoupment Allocation shall withdraw any portion of his Capital Account, the amount of Recoupment Allocation to which he is entitled shall be reduced in proportion to the amount of capital withdrawn. (e) The amount of any withdrawal made by the Partner pursuant to Section 21 or Section 22 of this Agreement shall be debited against the Capital Account of that Partner. (f) Allocations of Net Profit or Net Loss for a Fiscal Period, if necessary, shall be made in accordance with each Partner's Partnership percentage, adjusted as provided in paragraph (a) of this Section 9 at the end of the Fiscal Year, provided that the "Incentive Allocation" may not exceed twenty percent (20%) of the Net Profit for the Fiscal Year. 10. Hot Issues. In the event the General Partner decides to invest in securities which are the subject of a public distribution and which the General Partner, in his sole discretion, believes may become a "hot issue" as that term is defined in Article III, Section 1 of the Rules of Fair Practice of the National Association of Securities Dealers, Inc. (the "Association"), such investment shall be made in accordance with the following provisions: (a) any such investment made in a particular Fiscal Period shall be made in a special account (the "Hot Issues account"); (b) only those Partners who do not fall within the proscription of Article III, section 1 of said Rules of Fair Practice ("Unrestricted Partners") shall have any beneficial interest in the Hot Issues Account; (c) each Unrestricted Partner shall have a beneficial interest in the Hot Issues Account for any Fiscal Period in the proportion which (i)a such Unrestricted Partner's Capital account as of the beginning of the Fiscal Period bore to (ii) the sum of the Capital Accounts of all Unrestricted Partners as of the beginning of such fiscal Period. (d) Funds required to make a particular investment shall be transferred to the Hot Issues account from the regular account of the Partnership; securities involved in the public distribution shall be purchased in the Hot Issues Account, held in the Hot Issues Account and eventually sold from the Hot Issues Account or transferred to the regular account at fair market value as of the day of transfer as determined by the General Partner with such transfer being treated as a sale; if such securities are sold from the Hot Issues account, the proceeds of the sale shall be transferred from the Hot Issues account to the regular account of the Partnership. (e) as of the last day of each Fiscal Period in which a particular investment or investments are held in the Hot Issues Account: (A) interest shall be debited to the Capital Accounts of the Unrestricted Partners in accordance with their beneficial interest in the Hot Issues Account at the interest rate being paid by the Partnership from time to time for borrowed funds during the period in that Fiscal Period that funds from the regular account have been held in or made available to the particular Hot Issues Account or, if no such funds are being borrowed during such period, the interest rate that the General Partner determines would have been paid if funds had been borrowed by the Partnership during such period; and such interest shall be credited to the Capital Accounts of all the Partners, both General and Limited, in the proportions which (i) each Partner's Capital Account as of the beginning of such Fiscal Period bore to (iii) the sum of the Capital accounts of all Partners as of the beginning of such Fiscal Period and (B) any Net Profits or Net Losses during such Fiscal Period with respect to the Hot Issues Account shall be allocated to the Capital accounts of the Unrestricted Partners in accordance with their beneficial interest in the Hot Issues Account during such Fiscal Period; provided, however, that the amount of such interest shall not exceed the amount of profit accrued in the Hot Issues Account; and (f) the determination of the General Partners as to whether a particular Partner falls within the proscription of Article III, Section I of said Rules of Fair Practice shall be final. 11. Valuation. The Partnership's assets shall be valued in accordance with the following principles: (a) Any Security that is listed on a national securities exchange will be valued at its last sale price on the date of determination as recorded by the composite tape system, or if no sales occurred on that day, at the mean between the closing "bid" and "asked" prices on that day as recorded by the system or the exchange, as the case may be; (b) Any Security that is a National Market Security will be valued at its last sale price on the date of determination as reported by the National Association of Securities dealers automated quotations system ("NASDAQ") or if no sale occurred on that day, at the mean between the closing "bid" and "asked" prices on that day as reported by NASDAQ: (c) Any Security not listed on a national securities exchange and not a National Market Security will be valued at the mean between the closing "bid" and "asked" prices on the date of determination as reported by NASDAQ or, if not so reported, as reported in the over-the-counter market in the United States; (d) An option shall be valued at the last sales price or, in the absence of a last sales price, the last offer price; and (e) All other Securities shall be assigned the value that the General Partner in good faith determine. 12. Determination by General Partner of Certain Matters. (a) All matters concerning the valuation of Securities, the allocation of profits, gains and losses among the Partners, including the taxes on them and accounting procedures, not specifically and expressly provided for by the terms of this Agreement, shall be determined in good faith by the General Partner, whose determination shall be final, binding and conclusive upon all of the Partners. (b) gains, losses, and expenses of the Partnership for each Fiscal Period shall be allocated among the Partners for income tax purposes in a manner so as to reflect, as nearly as possible, the amounts credited or charged to each Partner's Capital Account pursuant to Section 9 of this Agreement. (c) The General Partner shall have the power to make all tax elections and determinations for the Partnership, and to take any and all action necessary under the Code or other applicable law to effect those elections and determinations. All such elections and determinations by the General Partner shall be final, binding and conclusive upon all Partners. 13. Liability of Partners. (a) The General Partner shall not be obligated to contribute cash or other assets to the Partnership to make up deficits in their Capital accounts or in the Capital Accounts of the Limited Partners either during the term of the Partnership or upon liquidation. The General Partner shall be liable for all debts and obligations of the partnership to the extent that the Partnership is unable to pay such debts and obligations up to the extent of Veteri's capital. (b) The doing of any act or the failure to do any act by a General Partner, the effect of which may cause or result in loss, liability, damage or expense to the Partnership or any Partner shall not subject a General Partner to any liability to the Partnership or to any Partner, except that a General Partner may be so liable if it has not acted in good faith, or has committed gross misconduct or was grossly negligent. (c) A Limited Partner will not be liable for any debts or bound by any obligations of the Partnership except to the extent set forth in subsections (d), (e) and (f) of this Section 13. (d) A Limited Partner who has received the return of any part of his or its Capital contribution without violation of this Agreement or the Act shall not therefore be labile to the Partnership or its creditors. (e) A Limited Partner receiving a return of any portion of his or its Capital Contribution in violation the Act or this Agreement will be Liable to the Partnership for a period of six (6) years thereafter for the amount of the contribution wrongfully returned. (f) A Limited Partner may be liable to the Partnership or creditors of the Partnership for any amounts distributed if, and to the extent that, at the time of the distribution, he actually knew that, after giving effect to the distribution, all liabilities of the Partnership, other than liabilities to Partners on account of their interest in the Partnership, exceeded the fair value of the Partnership's assets. 14. Rights and Duties of the General Partner (a) The General Partner shall have the exclusive right to manage and control the affairs of the Partnership, and shall have the power and authority to do all things necessary or proper to carry out the purposes of the Partnership. The General Partner shall devote an amount of time and attention that the General Partner in its sole discretion deems necessary or appropriate. (b) Without limiting the generality of the foregoing, the General Partner shall have full power and authority: (i) to engage independent agents, investment advisors, attorneys, accountants and custodians as the General Partner deems necessary or advisable for the affairs of the Partnership; (ii) to receive, buy sell, exchange, trade, and otherwise deal in and with Securities and other property of the Partnership; (iii) to open, conduct and close accounts with brokers on behalf of the Partnership and to pay the customary fees and charges applicable to transactions in those accounts; (iv) to open, maintain and close accounts, including margin accounts, with brokers and banks, and to draw checks and other orders for the payment of money by the Partnership; (v) to file, on behalf of the Partnership, all required local, state and Federal tax and other returns relating to the Partnership; (vi) to cause the Partnership to purchase or bear the cost of any insurance covering the potential liabilities of the General Partner and any associate, employee or agent of the General Partner arising out of the General Partner's actions as General Partner under this Agreement; (vii) to cause the Partnership to purchase or bear the cost of any insurance covering the potential liabilities of any person serving as a director, officer or employee of an entity in which the Partnership has an investment or of which the Partnership is a creditor; (viii) to commence or defend litigation or submit to arbitration any claim or cause of action that pertains to the Partnership or any Partnership assets; (ix) to enter into, make and perform contracts, agreements and other undertakings, and to do any other acts, as the General Partner deems necessary or advisable for, or as may be incidental to, the conduct of the business of the Partnership, including, without limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any Partner or with any other person, firm or corporation having any business, financial or other relationship with any Partner or Partners: (x) to make or revoke elections pursuant to Section 754 of the Code to adjust the basis of the Partnership's property as permitted by Sections 734(b) and 743(b) of the Code; and (xi) to designate a Tax Matters Partner for all purposes under the Code. 15. Expenses. The Partnership shall bear all expenses relating to its organization. The Partnership will bear the expenses of its administration, accountant, its legal counsel, and expenses of investments. 16. Administrative Fee. The Partnership shall pay the General Partner as of the end of each Fiscal Quarter of the Partnerhship an administrative fee at an annual rate equal to 1% of the value of the Partnership's assets. 17. Limitation on Powers of Limited Partners. No Limited Partner shall participate in the control of the Partnership's business, transact any business in the Partnership's name or have the power to sign documents for the Partnership or to bind the Partnership in any other way. 18. Other Business ventures. Each Partner agrees that each General Partner and its affiliates and associates may engage in other business activities or possess interest in other business activities of every kind and description, independently or with others. These activities may include, without limitation, establishing a broker-dealer and investing in real estate and real estate related partnerships, or in investing, in financing, acquiring and disposing of interest in securities in which the Partnership may from time to time invest, or in which the Partnership is able to invest or otherwise have any interest. The Limited Partners agree that the General Partner and its affiliates may act as general partner of other partnerships, including investment partnerships. 19. Limitation on Assignability of Interest of Limited Partners. (a) No Limited Partner may assign or otherwise transfer or encumber his or its interest in the Partnership, in whole or in part, without the consent of the General Partner and without a written opinion of counsel to or approved by the General Partner that the proposed transfer (i) is consistent with all applicable provisions of the 1933 Act, and the rules and regulations thereunder, as from time to time in effect, as well as any applicable provisions of any state "blue sky" law; and (ii) would not result in the Partnership's having to register as an investment company under the Investment Company Act of 1940, as amended. (b) Notwithstanding any other provision of this Agreement, any successor to any Limited Partner shall be bound by the provisions of this Agreement. Prior to recognizing any assignment of an interest in the Partnership that has been transferred in accordance with this Section 19, the General Partner may require the transferring Limited Partner to execute and acknowledge an instrument of assignment in form and substance satisfactory to the General Partner, and may require the assignee to agree in writing to be bound by all the terms and provisions of this Agreement, to assume all of the obligations of the assigning Limited Partner and to execute whatever other instruments or documents the General Partner deems necessary or desirable in connection with the assignment. (c) No Limited Partner shall have the right to have his or its assignee admitted as a substitute Limited Partner, except upon the written consent of the General Partner, which consent may be withheld in the sole discretion of the General Partner. (d) Each Limited Partner hereby approves of the admission to the Partnership as a Limited Partner of any assignee who succeed to the interest in the Partnership of a Limited Partner in accordance with the provisions of this Section 19. 20. Withdrawals by a Limited Partner. (a) (i) A Limited Partner who shall have been a Limited Partner for at least eight full Fiscal Quarters shall have the right, as of the end of any Fiscal Year, or at other times at the discretion of the General Partner, to withdraw all or a portion of the amount of his or its Capital Account, so long as the General Partner receives written notice of the intended withdrawal not less than one hundred eighty (180) days prior to the withdrawal, stating the amount to be withdrawn. In no event, however, shall a Limited Partner be permitted to withdraw any amounts from his or its Capital Account in excess of the positive balance of his or its Capital Account. If the amount of a Limited Partner's withdrawal represents less than seventy-five (75%) of the Limited Partner's Capital Account, the Limited Partner will receive the proceeds of the withdrawal within thirty (30) days after the date of withdrawal. If the amount of a Limited Partner's withdrawal represents seventy-five (75%) or more of the Limited Partner's Capital Account, the Limited Partner will receive seventy-five percent (75%) of his Capital account within thirty (30) days after the date of withdrawal and the remainder of the amount withdrawn within ten (10) days after the Partnership has received financial statements from its independent certified public accountants pursuant to Section 23(c) of this Agreement. If a Limited Partner requests withdrawal of capital which would reduce his Capital Account below the amount of his initial Capital Contribution, the General Partner may treat such request as a request for withdrawal of all of such Partner's Capital Account. The distribution of any amount withdrawn by a Limited Partner may take the form of cash and/or marketable securities as determined by the General Partner in his sole discretion. (ii) In the event of a proposed withdrawal of capital by one or more General Partner or Affiliates pursuant to Section 21(a)(ii) of this Agreement, as a result of which the aggregate of the Capital Accounts of the General Partner and Affiliates will be less than $50,000 (fifty thousand dollars), a Limited Partner shall have the right to withdraw all or a portion of the amount of his or its Capital Account, so long as the General Partner receives written notice of the intended withdrawal not more than fifteen (15) days after the date of the notice of withdrawal by such General Partner or General Partner or Affiliate or Affiliates pursuant to said Section 21(a)(ii), stating the amount to be withdrawn. In such event the withdrawal by such Limited Partner shall be effective as of the effective date of the withdrawal by the General Partner or General Partners pursuant to said Section 21(a)(ii). The amount available for withdrawal shall be calculated in the same manner as provided for in the last sentence of paragraph (b) of Section 5 hereof. (b) Any Limited Partner's interest in the Partnership may be terminated by the Partnership as of the end of any Fiscal Year upon prior written notice, so long as the General Partner determines the termination to be in the best interest of the Partnership. In the event that a Limited Partner's interest in the Partnership is terminated pursuant to this Section 20, the Limited Partner shall receive ninety percent (90%) of the value of his Capital Account within one hundred eighty (180) days after written notice of termination is given by the Partnership and the remaining ten percent (10%) within ten (10) business days after receipt by the Partnership of financial statements with respect to the Fiscal Year in which his or its interest in the Partnership is terminated. 21. Withdrawals by the General Partners and Affiliates. (a) (i) Each General Partner shall have the right to withdraw any amount of cash from his Capital Account as of the end of any Fiscal Year, without prior notification to the Limited Partners, provided that, after giving effect to such withdrawal, the aggregate Capital accounts of the General Partners and their Affiliates are not less than $50,000 (fifty thousand dollars). (ii) Upon forty-five (45) days ' prior notice to the Limited Partners, a General Partner or an Affiliate may withdraw any amount from his Capital Account contributed to the Partnership as a result of which withdrawal the aggregate Capital Accounts of the General Partner and their Affiliates would be reduced below $50,000. (fifty thousand dollars). (b) Any or all of the General Partners may voluntarily resign or withdraw from the Partnership as of the end of any Fiscal Year upon sixty (60) days' written notice sent to all Partners. 22. Dissolution and Winding Up of the Partnership. On dissolution of the Partnership, the General Partners or if there is no General Partner, one or more persons approved by Limited Partners holding a majority in interest of the Capital Accounts of the Limited Partners) shall wind up the Partnership's affairs and shall distribute the Partnership's assets in the following manner and order: (a) in satisfaction of the claims of all creditors of the Partnership, other than the General Partners; (b) in satisfaction of the claims of the General Partners as creditors of the Partnership; and (c) any balance to the Partners in the relative proportions that their respective Capital Accounts bear to each other, those Capital Accounts to be determined as if the Fiscal Year ended on the date of the dissolution. 23. Accounting and Reports. (a) The records and books of account of the Partnership shall be reviewed as of the end of each fiscal Year by independent certified public accountants selected by the General Partner in his sole discretion. (b) As soon as practicable after the end of each Fiscal Year, the General Partner shall cause to be delivered to each person who was a Partner at any time during that Fiscal Year all information deemed necessary by the General Partner in his sole discretion for the preparation of the Partner's income tax returns, including a Form 1065/Schedule K-1 statement showing the Partner's share of Net Profit or Net Loss, deductions and credits for the year Federal income tax purposes, and the amount of any distributions made to or for the account of the Partner pursuant to this Agreement. (c) The independent certified public accounts selected by the General Partner in accordance with subsection (a) of this Section 23 shall prepare and mail to each Partner, within ninety (90) days after the end of each fiscal Year, an income statement for the Fiscal Year and a balance sheet as of the end of the Fiscal Year. (d) The Partnership shall cause to be prepared and mailed to each Partner a report setting out as of the end of each fiscal quarter information determined by the General Partner to be appropriate. (e) The General Partner shall cause tax returns for the Partnership to be prepared and timely filed with the appropriate authorities. 24. Books and Records. The General Partner shall keep at the Partnership's principal office: (a) books and records pertaining to the Partnership's business showing all of its assets and liabilities, receipts and disbursements, realized profits and losses, Partners' Capital Accounts and all transactions enter into by the Partnership; (b) a current list of the full name and last known home, business or mailing address of each Partner set out in alphabetical order; (c) a copy of the Certificate and all amendments to it, together with executed copies of any powers of attorney pursuant to which the Certificate and any amendments to it have been executed; (d) copies of the Partnership's Federal, state and local income tax returns and reports, if any, for the three (3) most recent years; and (e) copies of this Agreement as may be amended from time to time. All books and records of the Partnership required to be kept under this Section 24 shall be available for inspection by a Partner of the Partnership at the offices of the Partnership during ordinary business hours for any purpose reasonably related to the Partner's interest as a Partner in the Partnership. 25. Indemnification. (a) The Partnership shall indemnify each General Partner and any of his Affiliates (each an "Indemnitee") to the fullest extent permitted by law and will hold each harmless from and with respect to (i) all fees, costs and expenses incurred in connection with, or resulting from, any claim, action or demand against any indemnitee that arises out of or in any way relates to the Partnership, its properties, business or affairs, and (ii) any losses or damages resulting from any such claim, action or demand, including amounts paid in settlement or compromise of the claim, action or demand. (b) No Indemnitee shall be indemnified by the Partnership with respect to any action or failure to act that does not constitute good faith, or that constitutes willful misfeasance. (c) The Partnership may pay the expenses incurred by an Indemnitee in defending a civil or criminal action, suit or proceeding brought by a party against the Indemnitee that arises out of or is in any way related to the Partnership, its properties, business or affairs, upon receipt of an undertaking by the Indemnitee to repay the amount advanced by the Partnership if an adjudication or determination is subsequently made by a court of competent jurisdiction that the Indemnitee is not entitled to indemnification as provided in this Agreement. (d) The right of indemnification provided in this Section 25 shall be in addition to any rights to which an Indemnitee may otherwise be entitled and shall inure to the benefit of the executors, administrators, personal representatives, successors or assigns of each Indemnitee. (e) The rights to indemnification and reimbursement provided for in this Section 25 may be satisfied only out of the assets of the Partnership. No Partner shall be personally liable for any claim for indemnification or reimbursement under this Section 25. 26. Amendment of Partnership Agreement. This Agreement may be amended, in whole or in part, by the written consent of (a) the General Partner, and (b) Partners the value of whose Capital Account constitute not less than fifty percent (50%) of the total value of all Capital Accounts of the Partnership, provided that no such amendment shall affect the allocation of Net Profit or Net Loss to any Partner who has not consented to such amendment. In addition, any provision of this Agreement, other than Section 9, may be amended by the General Partner in any manner that does not, in the sole discretion of the General Partner, adversely affect any Limited Partner. 27. Notices. Notices that may or are required to be given under this Agreement by any part to another shall be in writing and deposited in the United States mail, certified or registered, postage prepaid, addressed to the respective parties at their addresses set out in Schedule A to this Agreement or to any other addressee designated by any Partner by notice addressed to the Partnership in the case of any Limited Partner and to the General Partner in the case of the General Partners. Notices shall be deemed to have been given when deposited in the United States mail within the continental United States. 28. Agreement Binding Upon Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the heirs, executors, administrators or other representatives, successors and assigns of the Partners. 29. Governing Law. This Agreement, and the rights of the Partners under it, shall be governed by and construed in accordance with the law of the State of New Jersey. 30. Consents. Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and signed copies of them shall be filed and kept with the books of the Partnership. 31. Miscellaneous. (a) This Agreement, including Schedule A appended to it, constitutes the entire understanding and Agreement of the Partners as to the operation of the Partnership. (b) This agreement may be executed in counterparts, each of which shall be deemed to be an original. (c) Each provision of this Agreement is intended to be severable. A determination that a particular provision of this Agreement is illegal or invalid shall not affect the validity of the remainder of the Agreement. (d) Nothing contained in this Agreement shall be construed to constitute any Partner the agent of another Partner, except as specifically provided in this Agreement, or in any manner to limit the partners in the carrying on of their own respective business or activities. (e) If there is a conflict between the terms and conditions of the Partnership Agreement and Offering Memorandum, the Partnership Agreement shall be controlling. IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first above written. GENERAL PARTNER VETERI PLACE CORPORATION By:/s/Lawrence B. Seidman, President LIMITED PARTNERS: All Limited Partners now and hereafter admitted as Limited Partners of the Partnership, pursuant to Powers of Attorney now and hereafter executed in favor of, and delivered to the General Partner. LAWRENCE B. SEIDMAN Attorney-in-Fact /s/Lawrence B. Seidman AMENDMENT #1 TO LIMITED PARTNERSHIP CERTIFICATE OF SEIDMAN INVESTMENT PARTNERSHIP, L.P. Section 1 The Name of the Partnership is Seidman Investment Partnership, L.P., which was filed with the Secretary of State on January 17, 1995. Section 6 Section 6 is hereby amended to add the following people and entities as limited partners: NAME CAPITAL CONTRIBUTION James J. Gallagher, Ph.D, TTEE Gallagher Living Trust DTD 11/30/92 3636 Paradise dr. Tiburon, CA 94920 $200,000.00 Robert Kaplus, G.P. Kaplus Hanover Associates 4 Pewter Lane New Providence, NJ 07974 $125,000.00 Russ Ketron, TTEE The Ketron Family Trust DTD 10/20/89 33 San Miguel Way Novato, CA 94945 $50,000.00 Louis M. Rogow, M.D. & Enid Z. Rogow P. O. Box 57 211 Post Rd. Bernardsville, NJ 07924 $100,000.00 Seidman and Associates, L.L.C. $100,000.00 100 Misty Lane Parsippany, NJ 07054 VETERI PLACE CORPORATION Dated: November 21, 1996 By: /s/Lawrence B. Seidman, President STATE OF NEW JERSEY ) )ss: COUNTY OF MORRIS ) On the 21 day of November, 1996, before me personally came Lawrence B. Seidman, to me known, who, being by me sworn, did depose and say that he resides at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President of Veteri Place Corporation described in and which executed the above instrument; and that he signed such instrument by order of the Board of Directors of said Corporation. /s/ Ruth W. Rivkind A Notary Public of the State of New Jersey My Commission Expires February 14, 2001 AMENDMENT #2 TO LIMITED PARTNERSHIP CERTIFICATE OF SEIDMAN INVESTMENT PARTNERSHIP, L.P. FILED JANUARY 17, 1995 Section 1 The Name of the Partnership is Seidman Investment Partnership, L.P., which was filed with the Secretary of State on January 17, 1995 and Amendment #1 was filed on November 25, 1996. Section 6 Section 6 is hereby amended to add the following people and entities as limited partners: NAME CAPITAL CONTRIBUTION Richard Greenberg 100 Misty Lane Parsippany, NJ 07054 $250,000.00 Robert Kessler 40 Warren St. Paterson, NJ 07524 $100,000.00 Marci Parejo Irrevocable Trust $125,000.00 Sharon E. Sigesmund Trustee U/A/D9/10/92 2859 Queens Courtyard Dr. Las Vegas,NV 89109 Ross Zeltzer Irrevocable Trust $125,000.00 Sharon E. Sigesmund Trustee U/A/D9/10/92 2859 Queens Courtyard Dr. Las Vegas,NV 89109 SECTION 6 Section 6 is hereby amended to revise the amount of Capital Contribution for the following people and entities as limited partners: James J. Gallagher, Ph.D. $300,000.00 Gallagher Family Limited Partnership #1 3636 Paradise Dr Tiburon, CA 94920 Robert Kaplus, G.P. $150,000.00 Kaplus Hanover Associates 4 Pewter Lane New Providence, NJ 07974 Russ Ketron, TTEE $120,000.00 The Ketron Family Trust DTD 10/20/89 33 San Miguel Way Novato, CA 94945 Louis M. Rogow, M.D. & $200,000.00 Enid Z. Rogow P. O. Box 57 211 Post Rd. Bernardsville, NJ 07924 VETERI PLACE CORPORATION Dated: September 8, 1998 By: /s/Lawrence B. Seidman, President Veteri Place Corporation Certificate of Incorporation filed January 6, 1995 STATE OF NEW JERSEY ) )ss: COUNTY OF MORRIS ) On the 8th day of September, 1998, before me personally came Lawrence B. Seidman, to me known, who, being by me sworn, did depose and say that he resides at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President of Veteri Place Corporation, the General Partner of Seidman Investment Partnership,L.P. described in and which executed the above instrument; and that he signed such instrument by order of the Board of Directors of said Corporation. /s/ Ruth W. Rivkind A Notary Public of the State of New Jersey My Commission Expires February 14, 2001 AMENDMENT #3 Filed Mar 5 1999 TO LIMITED PARTNERSHIP CERTIFICATE OF SEIDMAN INVESTMENT PARTNERSHIP, L.P. FILED JANUARY 17, 1995 Section 1 The name of the Partnership is Seidman Investment Partnership, L.P. Seidman Investment Partnership, L.P. was filed with the Secretary of State on January 17, 1995, Amendment #1 was filed on November 25, 1996 and Amendment #2 was filed on September 10, 1998. Section 6 Section 6 is hereby amended to add the following people and entities as limited partners: NAME CAPITAL CONTRIBUTION Debra Rolandelli $100,000.00 60 Camilla Dr. Wayne, NJ 07470 M.C.P./Schatten Investment $100,000.00 Partnership 12 Vreeland Avenue Totowa, NJ 07512 VETERI PLACE CORPORATION, G.P. By: Lawrence B. Seidman, President Veteri Place Corporation, Certificate of Incorporation filed January 6, 1995 General Partner of Seidman Investment Partnership, L.P. Dated:March 4, 1999 STATE OF NEW JERSEY ) ) ss: COUNTY OF MORRIS ) On the day of , before me personally came Lawrence B. Seidman, to me known, who being by me sworn, did depose and say that he resides at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President of Veteri Place Corporation, the General Partner of Seidman Investment Partnership, L.P. described in and which executed the above instrument; and that he signed such instrument by order of the Board of Directors of said Corporation. EX-10.4 6 exd.txt AMENDED & RESTATED AGREEMENT OF LIMITED PART. II Exhibit D AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SEIDMAN INVESTMENT PARTNERSHIP II, L.P. THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Seidman Investment Partnership II, L.P. (the "Partnership"), dated as of August __, 1998, by and between Veteri Place Corporation, as the General Partner (the "General Partner") and the persons and entities, referred to in schedule A on file at the offices of the Partnership, who have executed, either directly or indirectly by an attorney-in-fact, as limited partners (the "Limited Partners"). PREMISES: A. The Partnership was organized in accordance with the New Jersey revised Uniform Limited Partnership Act by the filing by the General Partner of a Certificate of Limited Partnership with the office of the Secretary of State of the State of New Jersey on August __ , 1998. B. The General Partner, pursuant to the authority granted to him under section 26 of the Agreement, desires to amend the Agreement and to restate the same. NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, effective as of August __, 1998, it is hereby agreed as follows: The following terms shall have the following meaning when used in this Agreement: (a) "Act" shall mean the New Jersey Revised Uniform Limited Partnership Act, amended from time to time. (b) "Affiliate" shall mean any person performing services on behalf of the Partnership who (i) directly or indirectly controls, is controlled by, or is under common control with a General Partner; (ii) is any company of which a General Partner or its controlling shareholder is an officer, director, partner or trustee; (iii) a member of the family of the controlling shareholder of the General Partner; or (iv) an Individual Retirement account or similar trust for the benefit of one or more General Partner or its affiliates. (c) "Agreement" shall mean this agreement of Limited Partnership, as originally executed and as amended, modified, supplemented or restated from time to time. (d) "Capital account" shall mean the account described in Section 8 of this Agreement. (e) "Certificate" shall mean the Partnership's certificate of Limited Partnership as defined in section 2 of this Agreement. (f) "Code" shall mean the Internal Revenue code of 1986, or successor provision of law, and the regulations issued thereunder. (g) "Fiscal Period" shall mean the period beginning on the day immediately succeeding the last day of the immediately preceding fiscal Period and ending on the earliest occurring of the following: (i) The last day of the Fiscal Year; (ii) The day immediately preceding the day on which a new Partner is admitted to the Partnership; (iii) the day immediately preceding the date on which a Partner makes an additional capital contribution to the Partner's capital account; (iv) The day on which a Partner withdraws, in whole or in part, the amount of his or its Capital account; (v) The date of dissolution of the Partnership in accordance with Section 5 of this Agreement. (h) "Fiscal "Quarter" shall mean a fiscal quarter of the Partnership. (i) "Fiscal Year" shall mean the fiscal year of the Partnership, which shall be the calendar year. (j) "General Partner Percentage" shall mean a percentage established by the General Partner for each General Partner on the Partnership's books as of the first day of each Fiscal Period. The sum of the General Partner's Percentages for each Fiscal Period shall equal one hundred percent (100%). (k) "Net Profit" of the Partnership shall mean, with respect to any Fiscal Period, the excess of the aggregate revenue, income and gains (realized and unrealized) earned on an accrual basis during the fiscal Period by the Partnership from all sources over the expenses and losses (realized and unrealized) incurred on an accrual basis during the fiscal Period by the Partnership. (l) "Net Loss" of the Partnership shall mean, with respect to any fiscal Period, the excess of all expenses and losses (realized and unrealized) incurred on an accrual basis during the fiscal Period by the Partnership over the aggregate revenue, income and gains (realized and unrealized) earned on the accrual basis during the fisca period by the Partnership from all sources. (m) "Partnership Percentage" shall mean a percentage established for each partner on the Partnership'books as of the first day of each Fiscal Period. The Partnership Percentage of a Partner for a Fiscal Period shall be determined by dividing the amount of the Partner's capital account as of the beginning of the Fiscal Period by the sum of the capital accounts of all of the Partners as of the beginning of the fiscal Period. The sum of the Partnership Percentage for each fiscal Period shall equal one hundred percent (100%). 2. Organization. The General Partner has executed a Certificate of Limited Partnership pursuant to the provisions of the Act (the "Certificate") and has caused the certificate to be filed as required by the Act. The General Partner shall also execute and record all amendments to the Certificate or additional certificates as may be required by this Agreement or by law. 3. Name of Partnership. The name of the Partnership shall be Seidman Investment Partnership II, L.P. or such other name as the General Partner may from time to time designate. 4. Principal Office, Resident Agent, Registered Office. The principal office of the Partnership is 100 Misty Lane, Parsippany, New Jersey 07054 or any other place determined by the General Partner. The Partnership's phone number is (973) 560-1400, Ext. 108. The name and address of the registered agent for service of process in the State of New Jersey is Lawrence B. Seidman, 100 Misty Lane, Parsippany, NJ 07054. The address of the registered office of the Partnership in the State of New Jersey is c/o Lawrence B. Seidman,100 Misty Lane, Parsippany, NJ 07054. 5. Term of the Partnership. (a) The term of the Partnership, having commenced on the date the Certificate was filed shall continue until the first of the following events occurs: (i) December 31, 2014; (ii) a written consent to dissolution of the Partnership by all Partners; (iii) upon the General Partner ceasing to be a general partner as a result of doing or being subject to one or more of the following: (A) withdrawing from the Partnership in accordance with Section 21 of this Agreement; (B) assigning all of its interest in the Partnership; (C) making an assignment for the benefit of its creditors; (D) filing a voluntary petition in bankruptcy; (E) being adjudged bankrupt or insolvent or having entered against it an order of relief in any bankruptcy or insolvency proceeding; (F) filing a petition or answer seeking for itself any reorganization, arrangement,composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation; (G) filling an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding seeking reorganization, arrangement,composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (H) seeking, consenting to, or acquiescing in the appointment of a trustee or receiver, or liquidator of all or any substantial part of its properties; (I) being the subject of any proceeding seeking reorganization, arrangement,composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation,which proceeding shall have continued for one hundred and twenty (120) days after the commencement thereof; or the appointment of a trustee, receiver, or liquidator for such General Partner or all or any substantial part of its properties without its consent or acquiescence, which appointment is not vacated or stayed for ninety (90) days after the expiration of the stay during which period the appointment is not vacated; (J) the death of the General Partner; or (K) the entry by a court of competent jurisdictio adjudicating such General Partner incompetent to manage his person or his property; or (iv) upon issuance of a non-appealable decree of dissolution of the Partnership by a New Jersey Court of competent jurisdiction. (b) In the event a General Partner does or becomes subject to any of the provisions of subsection (a)(iii) of this Section 5, the Partnership shall be dissolved and its affairs wound up as provided in Section 22 of this Agreement. 6. Purposes The Partnership is organized for the following purposes: (a) to invest and trade, on margin or otherwise, in "Securities," as that term is defined in Section 2(1) of the Securities Act of 1933, as amended (the "1933 Act"); (b) to sell Securities short and cover short sales; (c) to lend funds or properties of the Partnership, either with or without security; and (d) to execute, deliver and perform all contracts and other undertakings, and engage in all activities and transactions, that the General Partner believes are necessary or advisable in carrying out the purposes specified all subsections (a), (b), and (c) of this Section 6, including without limitation: (i) to purchase, transfer or acquire in any manner and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to the investments described in subsection (a) of this Section 6; and (ii) to register or qualify the Partnership under any applicable Federal or state laws, or to obtain exemptions under those laws, if registration, qualification, or exemption is deemed necessary by the General Partner. 7. Contributions of the Partners; New Partners. (a) Each Partner shall make a contribution to the Partnership's capital ("Capital Contribution") in the amount set out opposite the Limited Partner's name in Schedule A attached to this Agreement. (b) Any Partner may elect, with the consent of the General Partner to make an additional Capital Contribution, as of the first day of any fiscal Quarter. The General Partner may, in its sole discretion, permit additional Capital Contributions to be made more frequently than quarterly. (c) No Partner shall be required to make any additional Capital Contributions. (d) Capital Contributions made by Limited Partners must be in cash. (e) The General Partner shall have the right, but not the obligation, to admit new Partners to the Partnership as of the first day of any Fiscal quarter. The General Partner may, however, in its sole discretion, admit new Partners more frequently than quarterly. 8. Capital Accounts. A Capital account shall be established for each Partner. For the Fiscal Period during which a Partner is admitted to the Partnership, his or its capital account shall equal the amount of his or its initial Capital Contribution. For each subsequent Fiscal Period, the Partner's Capital account will equal the sum of the amount of his or its Capital account as finally adjusted for the immediately preceding fiscal Period and the amount of any additional Capital Contribution made by the Partner as of the first day of the current Fiscal Period. 9. Adjustments to Capital Accounts. At the end of each Fiscal Period, the Capital Accounts of the Partners shall be adjusted in the following manner: Net Profits for each year (as defined below) shall be allocated as follows: (a) First, to the extent of any net losses allocated to the Limited Partners, ninety-nine (99%) percent of the Net Profits shall be allocated to the Limited Partners, and one percent (1%) to the General Partner until the Limited Partners have recouped any Net Losses previously allocated to them. (b) Thereafter, any remaining Net Profit shall be allocated seventy-five (75%) percent to the Limited Partners and twenty-five (25%) percent to the General Partner (the "Incentive Allocation"). Net Losses for each calendar year shall be allocated as follows: (a) First, to the extent that the General Partner's capital account is positive, seventy-five (75%) percent of the Net Losses shall be allocated to the Limited Partner and twenty-five (25%) percent to the General Partner. (b) From and after the General Partner's capital account is zero, the Net Losses shall be allocated ninety-nine (99%) percent to the Limited Partner and one percent (1%) to the General Partner. The portion of the Net Profit and Net Losses allocated to the Limited Partner shall be allocated between the Limited Partners based on the proportion that such Limited Partner's capital account bears to the capital account of all limited partners. Notwithstanding the preceding provisions of this Article 4: (a) Except as provided in sub-section (e) below, no allocation of loss or deduction shall be made to a Partner if such allocation would cause at the end of any taxable year a deficit in such Partner's Adjusted Capital Account to exceed his or its allocable share of Minimum Gain (as defined in Treasury Regulation Section 1.704-1(b)(iv)(e); and any such loss or deduction not allocated to a Partner by reason of this Section shall be allocated pro-rata to each other Partner if and to the extent that such allocation shall not create a deficit in such other Partner's Adjusted Capital Account in excess of his allocable share of Minimum Gain; provided, however, that if such allocation would create such deficit in all Partner' Adjusted Capital Accounts in excess of their share of Minimum Gain, then such allocation shall be made in accordance with the principles of Treasury Regulation Section 1.704-1(b). (b) If, during any taxable year, there is a net decrease in Minimum Gain then each Partner shall, before any other allocations are made for such year, be allocated in a manner so as to satisfy the requirements of Treasury Regulation Section 1.704-2(f), items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to each Partner's share of the net decrease in Partnership Minimum Gain (within the meaning of Treasury Regulation Section 1.704-2(g)(2). (c) If, during any taxable year, there is a net decrease in Partnership Minimum Gain Attributable to Partner Nonrecourse Debt, then each Partner with a share of the Partnership Minimum Gain Attributable to Partner Nonrecourse debt at the beginning of the year shall , before any other allocations are made for such year other than those pursuant to Section (b) above, be allocated in a manner so as to satisfy the requirements of Treasury Regulation Section 1.704-2(i)(4), items of Partnership income and gain for such year (and, if necessary, for subsequent years) in an amount equal to each Partner's share of the net decrease in Minimum Gain Attributable to Partner Nonrecourse Debt as determined in accordance with Treasury Regulation Section 1.704-2(i)(4). (d) If during any taxable year a Partner unexpectedly receives (i) a distribution of cash or property from the Partnership or (ii) an adjustment or allocation described in Treasury Regulation Section 1.704-1(b)(2)(ii) (d) (5) as in effect on the date hereof (concerning allocations of loss and deduction if Partners' interests change during the year, if a Partnership interest is acquired by gift or if a Partner receives certain Partnership property in redemption of part or all of his or its interest in the Company), and if such adjustment , allocation or distribution would cause at the end of the taxable year a deficit balance in such Partner's Adjusted Capital Account in excess of his allocable share of Minimum Gain, then a pro-rata portion of each item of partnership income, including gross income, and gain for such taxable year (and, if necessary, subsequent taxable years) shall be allocated to such Partner in an amount and in a manner sufficient to eliminate such excess balance as quickly as possible before any other allocation is made for such year other than pursuant to Subsection (b) hereof so as to satisfy the requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) (qualified income offset). (e) To the extent required by Treasury Regulation Section 1.704-2(i)(1), Partner Nonrecourse Debt Deductions for any taxable year shall be allocated to the Partner (or Partners) who bear(s) the economic risk of loss of such Partner Nonrecourse Debt. (f) In the event that any allocation is or has been made to a Partner pursuant to Subsections (a), (b), (c) (d) or (e) above, subsequent items of income, deduction, gain and loss shall be allocated before any other allocations are made (subject to the provisions of Subsections (a), (b), (c) (d) or (e)) to the Partners in the manner which would result in each Partner having a Capital Account balance equal to what it would have been had the allocation pursuant to subsections (a), (b), (c) (d) or (e) not occurred. (g) For purposes of this Article, each Partners "Adjusted Capital Account" shall equal the Capital Account of each Partner (1) reduced at the end of each taxable year by the sum of (x) the excess of distributions reasonably expected to be made to such Partner over the offsetting increases to such Partner's Capital Account reasonably expected to be made in the same taxable year as the aforesaid distributions, and (y) allocations expected to be made described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(5) as in effect on the date hereof (concerning allocations of loss and deduction if Partners' interests change during the year, if a Partnership interest is acquired by gift or if a Partner receives certain Partnership property in redemption of part or all of his interest in the Partnership), and (2) increased by the sum of (i) the amount, if any, which the Partner is obligated to restore to the Partnership upon liquidation of his interest therein if a deficit balance exists in his Capital Account at such time, (ii) the outstanding principal balance of any promissory note made by such Partner and contributed to the Partnership if such note is not readily tradable on an established securities market and if such note must be satisfied within 90 days after the date said Partner's interest is liquidated, (iii) the amount of any unconditional obligation of such Partner to make subsequent contributions to the Partnership (whether imposed by this Agreement or by law), and (iv) the sum of (a) the amount the Partner would be personally liable for either as a Partner or in his individual capacity as a guarantor or otherwise, and (b) the economic risk of loss the Partner would bear attributable to any Partnership liability (as determined in accordance with Treasury Regulation Section 1.752-2). (h) In accordance with Section 704(b) and (c) of the Code and Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Partnership (including all or part of any deemed capital contribution under Section 708 of the Code) shall, solely for tax purposes, be allocated among the Partners so as to take account of any variation between the adjusted basis of such property to the Partnership and its agreed value. In the event that Capital Accounts are ever adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2) to reflect the fair market value of any Partnership property, subsequent allocations of income gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset and its value as adjusted in the same manner as required under Section 704(c) of the Code and the Regulations thereunder. (i) The allocations provided in Sections 4.5(a)-(h) are intended to comply with the provisions of Section 704(b) of the Code and the Regulations thereunder. However, If any such allocation causes a distortion in the Partner's Partnership Interest in contravention of the Partners' economic arrangement as reflected in Article 4, the General Partner has the authority to make curative allocations to bring such allocations in accordance with such Partner' Partnership Interest, as if such allocations which caused the distortion had not occurred. (j) The allocations provided in this Section are intended to comply with the provisions of Section 704(b) of the Code and the Regulations thereunder. If any such allocation under this Section is inconsistent therewith, the General Partner has the authority to make a curative allocation to bring such allocations in compliance with Section 704(b) of the Code and Regulations thereunder. For purposes of this Agreement, the following terms shall have the definitions set forth below: "Nonrecourse Liability." Any debt of the Partnership for which no Partner has any economic risk of loss, determined in accordance with Internal Revenue Regulation Section 1.704-2(b)(3). "Partner Nonrecourse Debt." Any nonrecourse debt of the Partnership for which a Partner bears the economic risk of loss, determined in accordance with Treasury Regulation Section 1.704-2(b)(4). "Partner Nonrecourse Debt Deductions." With regard to any Partner Nonrecouse Debt, the amount of the net increase during any Partnership taxable year in the amount of Minimum Gain Attributable to Partner Nonrecourse Debt, over the aggregate amount of any distributions during such year to the Partner who bears the economic risk of loss for such debt that are allocable to an increase in the Minimum Gain Attributable to such Partner Nonrecourse Debt. Such amounts shall be determined in accordance with Treasury Regulation Section 1.704-2(I) (2). "Recourse Debt." All Partnership debt other than Nonrecourse Liability. 10. Hot Issues. In the event the General Partner decides to invest in securities which are the subject of a public distribution and which the General Partner, in his sole discretion, believes may become a "hot issue" as that term is defined in Article III, Section 1 of the Rules of Fair Practice of the National Association of Securities Dealers, Inc. (the "Association"), such investment shall be made in accordance with the following provisions: (a) any such investment made in a particular Fiscal Period shall be made in a special account (the "Hot Issues account"); (b) only those Partners who do not fall within the proscription of Article III, section 1 of said Rules of Fair Practice ("Unrestricted Partners") shall have any beneficial interest in the Hot Issues Account; (c) each Unrestricted Partner shall have a beneficial interest in the Hot Issues Account for any Fiscal Period in the proportion which (i) such Unrestricted Partner's Capital account as of the beginning of the Fiscal Period bore to (ii) the sum of the Capital Accounts of all Unrestricted Partners as of the beginning of such fiscal Period. (d) Funds required to make a particular investment shall be transferred to the Hot Issues account from the regular account of the Partnership; securities involved in the public distribution shall be purchased in the Hot Issues Account, held in the Hot Issues Account and eventually sold from the Hot Issues Account or transferred to the regular account at fair market value as of the day of transfer as determined by the General Partner with such transfer being treated as a sale; if such securities are sold from the Hot Issues account, the proceeds of the sale shall be transferred from the Hot Issues account to the regular account of the Partnership. (e) as of the last day of each Fiscal Period in which a particular investment or investments are held in the Hot Issues Account: (A) interest shall be debited to the Capital Accounts of the Unrestricted Partners in accordance with their beneficial interest in the Hot Issues Account at the interest rate being paid by the Partnership from time to time for borrowed funds during the period in that Fiscal Period that funds from the regular account have been held in or made available to the particular Hot Issues Account or, if no such funds are being borrowed during such period, the interest rate that the General Partner determines would have been paid if funds had been borrowed by the Partnership during such period; and such interest shall be credited to the Capital Accounts of all the Partners, both General and Limited, in the proportions which (i) each Partner's Capital Account as of the beginning of such Fiscal Period bore to (iii) the sum of the Capital Accounts of all Partners as of the beginning of such Fiscal Period and (B) any Net Profits or Net Losses during such Fiscal Period with respect to the Hot Issues Account shall be allocated to the Capital accounts of the Unrestricted Partners in accordance with their beneficial interest in the Hot Issues Account during such Fiscal Period; provided, however, that the amount of such interest shall not exceed the amount of profit accrued in the Hot Issues Account; and (f) the determination of the General Partners as to whether a particular Partner falls within the proscription of Article III, Section I of said Rules of Fair Practice shall be final. 11. Valuation. The Partnership's assets shall be valued in accordance with the following principles: (a) Any Security that is listed on a national securities exchange will be valued at its last sale price on the date of determination as recorded by the composite tape system, or if no sales occurred on that day, at the mean between the closing "bid" and "asked" prices on that day as recorded by the system or the exchange, as the case may be; (b) Any Security that is a National Market Security will be valued at its last sale price on the date of determination as reported by the National Association of Securities dealers automated quotations system ("NASDAQ") or if no sale occurred on that day, at the mean between the closing "bid" and "asked" prices on that day as reported by NASDAQ: (c) Any Security not listed on a national securities exchange and not a National Market Security will be valued at the mean between the closing "bid" and "asked" prices on the date of determination as reported by NASDAQ or, if not so reported, as reported in the over-the-counter market in the United States; (d) An option shall be valued at the last sales price or, in the absence of a last sales price, the last offer price; and (e) All other Securities shall be assigned the value that the General Partner in good faith determine. 12. Determination by General Partner of Certain Matters. (a) All matters concerning the valuation of Securities, the allocation of profits, gains and losses among the Partners, including the taxes on them and accounting procedures, not specifically and expressly provided for by the terms of this Agreement, shall be determined in good faith by the General Partner, whose determination shall be final, binding and conclusive upon all of the Partners. (b) gains, losses, and expenses of the Partnership for each Fiscal Period shall be allocated among the Partners for income tax purposes in a manner so as to reflect, as nearly as possible, the amounts credited or charged to each Partner's Capital Account pursuant to Section 9 of this Agreement. (c) The General Partner shall have the power to make all tax elections and determinations for the Partnership, and to take any and all action necessary under the Code or other applicable law to effect those elections and determinations. All such elections and determinations by the General Partner shall be final, binding and conclusive upon all Partners. 13. Liability of Partners. (a) The General Partner shall not be obligated to contribute cash or other assets to the Partnership to make up deficits in their Capital accounts or in the Capital Accounts of the Limited Partners either during the term of the Partnership or upon liquidation. The General Partner shall be liable for all debts and obligations of the partnership to the extent that the Partnership is unable to pay such debts and obligations up to the extent of Veteri's capital. (b) The doing of any act or the failure to do any act by a General Partner, the effect of which may cause or result in loss, liability, damage or expense to the Partnership or any Partner shall not subject a General Partner to any liability to the Partnership or to any Partner, except that a General Partner may be so liable if it has not acted in good faith, or has committed gross misconduct or was grossly negligent. (c) A Limited Partner will not be liable for any debts or bound by any obligations of the Partnership except to the extent set forth in subsections (d), (e) and (f) of this Section 13. (d) A Limited Partner who has received the return of any part of his or its Capital contribution without violation of this Agreement or the Act shall not therefore be labile to the Partnership or its creditors. (e) A Limited Partner receiving a return of any portion of his or its Capital Contribution in violation the Act or this Agreement will be Liable to the Partnership for a period of six (6) years thereafter for the amount of the contribution wrongfully returned. (f) A Limited Partner may be liable to the Partnership or creditors of the Partnership for any amounts distributed if, and to the extent that, at the time of the distribution, he actually knew that, after giving effect to the distribution, all liabilities of the Partnership, other than liabilities to Partners on account of their interest in the Partnership, exceeded the fair value of the Partnership's assets. 14. Rights and Duties of the General Partner (a) The General Partner shall have the exclusive right to manage and control the affairs of the Partnership, and shall have the power and authority to do all things necessary or proper to carry out the purposes of the Partnership. The General Partner shall devote an amount of time and attention that the General Partner in its sole discretion deems necessary or appropriate. (b) Without limiting the generality of the foregoing, the General Partner shall have full power and authority: (i) to engage independent agents, investment advisors, attorneys, accountants and custodians as the General Partner deems necessary or advisable for the affairs of the Partnership; (ii) to receive, buy sell, exchange, trade, and otherwise deal in and with Securities and other property of the Partnership; (iii) to open, conduct and close accounts with brokers on behalf of the Partnership and to pay the customary fees and charges applicable to transactions in those accounts; (iv) to open, maintain and close accounts, including margin accounts, with brokers and banks, and to draw checks and other orders for the payment of money by the Partnership; (v) to file, on behalf of the Partnership, all required local, state and Federal tax and other returns relating to the Partnership; (vi) to cause the Partnership to purchase or bear the cost of any insurance covering the potential liabilities of the General Partner and any associate, employee or agent of the General Partner arising out of the General Partner's actions as General Partner under this Agreement; (vii) to cause the Partnership to purchase or bear the cost of any insurance covering the potential liabilities of any person serving as a director, officer or employee of an entity in which the Partnership has an investment or of which the Partnership is a creditor; (viii) to commence or defend litigation or submit to arbitration any claim or cause of action that pertains to the Partnership or any Partnership assets; (ix) to enter into, make and perform contracts, agreements and other undertakings, and to do any other acts, as the General Partner deems necessary or advisable for, or as may be incidental to, the conduct of the business of the Partnership, including, without limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any Partner or with any other person, firm or corporation having any business, financial or other relationship with any Partner or Partners: (x) to make or revoke elections pursuant to Section 754 of the Code to adjust the basis of the Partnership's property as permitted by Sections 734(b) and 743(b) of the Code; and (xi) to designate a Tax Matters Partner for all purposes under the Code 15. Expenses. The Partnership shall bear all expenses relating to its organization. The Partnership will bear the expenses of its administration, accountant, its legal counsel, and expenses of investments. 16. Administrative Fee. The General Partner will not charge an administrative fee. 17. Limitation on Powers of Limited Partners. No Limited Partner shall participate in the control of the Partnership's business, transact any business in the Partnership's name or have the power to sign documents for the Partnership or to bind the Partnership in any other way. 18. Other Business ventures. Each Partner agrees that each General Partner and its affiliates and associates may engage in other business activities or possess interest in other business activities of every kind and description, independently or with others. These activities may include, without limitation, establishing a broker-dealer and investing in real estate and real estate related partnerships, or in investing, in financing, acquiring and disposing of interest in securities in which the Partnership may from time to time invest, or in which the Partnership is able to invest or otherwise have any interest. The Limited Partners agree that the General Partner and its affiliates may act as general partner of other partnerships, including investment partnerships. 19. Limitation on Assignability of Interest of Limited Partners. (a) No Limited Partner may assign or otherwise transfer or encumber his or its interest in the Partnership, in whole or in part, without the consent of the General Partner and without a written opinion of counsel to or approved by the General Partner that the proposed transfer (i) is consistent with all applicable provisions of the 1933 Act, and the rules and regulations thereunder, as from time to time in effect, as well as any applicable provisions of any state "blue sky" law; and (ii) would not result in the Partnership's having to register as an investment company under the Investment Company Act of 1940, as amended. (b) Notwithstanding any other provision of this Agreement, any successor to any Limited Partner shall be bound by the provisions of this Agreement. Prior to recognizing any assignment of an interest in the Partnership that has been transferred in accordance with this Section 19, the General Partner may require the transferring Limited Partner to execute and acknowledge an instrument of assignment in form and substance satisfactory to the General Partner, and may require the assignee to agree in writing to be bound by all the terms and provisions of this Agreement, to assume all of the obligations of the assigning Limited Partner and to execute whatever other instruments or documents the General Partner deems necessary or desirable in connection with the assignment. (c) No Limited Partner shall have the right to have his or its assignee admitted as a substitute Limited Partner, except upon the written consent of the General Partner, which consent may be withheld in the sole discretion of the General Partner. (d) Each Limited Partner hereby approves of the admission to the Partnership as a Limited Partner of any assignee who succeed to the interest in the Partnership of a Limited Partner in accordance with the provisions of this Section 19. 20. Withdrawals by a Limited Partner. (a) (i) A Limited Partner who shall have been a Limited Partner for at least eight full Fiscal Quarters shall have the right, as of the end of any Fiscal Year, or at other times at the discretion of the General Partner, to withdraw all or a portion of the amount of his or its Capital Account, so long as the General Partner receives written notice of the intended withdrawal not less than ninety (90) days prior to the withdrawal, stating the amount to be withdrawn. In no event, however, shall a Limited Partner be permitted to withdraw any amounts from his or its Capital Account in excess of the positive balance of his or its Capital Account. If the amount of a Limited Partner's withdrawal represents less than seventy-five (75%) of the Limited Partner's Capital Account, the Limited Partner will receive the proceeds of the withdrawal within thirty (30) days after the date of withdrawal. If the amount of a Limited Partner's withdrawal represents seventy-five (75%) or more of the Limited Partner's Capital Account, the Limited Partner will receive seventy-five percent (75%) of his Capital account within thirty (30) days after the date of withdrawal and the remainder of the amount withdrawn within ten (10) days after the Partnership has received financial statements from its independent certified public accountants pursuant to Section 23(c) of this Agreement. If a Limited Partner requests withdrawal of capital which would reduce his Capital Account below the amount of his initial Capital Contribution, the General Partner may treat such request as a request for withdrawal of all of such Partner's Capital Account. The distribution of any amount withdrawn by a Limited Partner may take the form of cash and/or marketable securities as determined by the General Partner in his sole discretion. (ii) In the event of a proposed withdrawal of capital by one or more General Partner or Affiliates pursuant to Section 21(a)(ii) of this Agreement, as a result of which the aggregate of the Capital Accounts of the General Partner and Affiliates will be less than $50,000 (fifty thousand dollars), a Limited Partner shall have the right to withdraw all or a portion of the amount of his or its Capital Account, so long as the General Partner receives written notice of the intended withdrawal not more than fifteen (15) days after the date of the notice of withdrawal by such General Partner or General Partner or Affiliate or Affiliates pursuant to said Section 21(a)(ii), stating the amount to be withdrawn. In such event the withdrawal by such Limited Partner shall be effective as of the effective date of the withdrawal by the General Partner or General Partners pursuant to said Section 21(a)(ii). The amount available for withdrawal shall be calculated in the same manner as provided for in the last sentence of paragraph (b) of Section 5 hereof. (b) Any Limited Partner's interest in the Partnership may be terminated by the Partnership as of the end of any Fiscal Year upon prior written notice, so long as the General Partner determines the termination to be in the best interest of the Partnership. In the event that a Limited Partner's interest in the Partnership is terminated pursuant to this Section 20, the Limited Partner shall receive ninety percent (90%) of the value of his Capital Account within ninety (90) days after written notice of termination is given by the Partnership and the remaining ten percent (10%) within ten (10) business days after receipt by the Partnership of financial statements with respect to the Fiscal Year in which his or its interest in the Partnership is terminated. 21. Withdrawals by the General Partners and Affiliates. (a) (i) The General Partner shall have the right to withdraw any amount of cash from his Capital Account as of the end of any Fiscal Year, without prior notification to the Limited Partners, provided that, after giving effect to such withdrawal, the aggregate Capital accounts of the General Partner and his Affiliates are not less than $50,000 (fifty thousand dollars). (ii) Upon forty-five (45) days' prior notice to the Limited Partners, a General Partner or an Affiliate may withdraw any amount from his Capital Account contributed to the Partnership as a result of which withdrawal the aggregate Capital Accounts of the General Partner and their Affiliates would be reduced below $50,000. (fifty thousand dollars). (b) The General Partner may voluntarily resign or withdraw from the Partnership as of the end of any Fiscal Year upon sixty (60) days' written notice sent to all Partners. 22. Dissolution and Winding Up of the Partnership. On dissolution of the Partnership, the General Partner or if there is no General Partner, one or more persons approved by Limited Partners holding a majority in interest of the Capital Accounts of the Limited Partners) shall wind up the Partnership's affairs and shall distribute the Partnership's assets in the following manner and order: (a) in satisfaction of the claims of all creditors of the Partnership, other than the General Partners; (b) in satisfaction of the claims of the General Partners as creditors of the Partnership; and (c) any balance to the Partners in the relative proportions that their respective Capital Accounts bear to each other, those Capital Accounts to be determined as if the Fiscal Year ended on the date of the dissolution. 23. Accounting and Reports. (a) The records and books of account of the Partnership shall be reviewed as of the end of each fiscal Year by independent certified public accountants selected by the General Partner in his sole discretion. (b) As soon as practicable after the end of each Fiscal Year, the General Partner shall cause to be delivered to each person who was a Partner at any time during that Fiscal Year all information deemed necessary by the General Partner in his sole discretion for the preparation of the Partner's income tax returns, including a Form 1065/Schedule K-1 statement showing the Partner's share of Net Profit or Net Loss, deductions and credits for the year Federal income tax purposes, and the amount of any distributions made to or for the account of the Partner pursuant to this Agreement. (c) The independent certified public accounts selected by the General Partner in accordance with subsection (a) of this Section 23 shall prepare and mail to each Partner, within ninety (90) days after the end of each fiscal Year, an income statement for the Fiscal Year and a balance sheet as of the end of the Fiscal Year. (d) The Partnership shall cause to be prepared and mailed to each Partner a report setting out as of the end of each fiscal quarter information determined by the General Partner to be appropriate. (e) The General Partner shall cause tax returns for the Partnership to be prepared and timely filed with the appropriate authorities. 24. Books and Records. The General Partner shall keep at the Partnership's principal office: (a) books and records pertaining to the Partnership's business showing all of its assets and liabilities, receipts and disbursements, realized profits and losses, Partners' Capital Accounts and all transactions enter into by the Partnership; (b) a current list of the full name and last known home, business or mailing address of each Partner set out in alphabetical order; (c) a copy of the Certificate and all amendments to it, together with executed copies of any powers of attorney pursuant to which the Certificate and any amendments to it have been executed; (d) copies of the Partnership's Federal, state and local income tax returns and reports, if any, for the three (3) most recent years; and (e) copies of this Agreement as may be amended from time to time. All books and records of the Partnership required to be kept under this Section 24 shall be available for inspection by a Partner of the Partnership at the offices of the Partnership during ordinary business hours for any purpose reasonably related to the Partner's interest as a Partner in the Partnership. 25. Indemnification. (a) The Partnership shall indemnify each General Partner and any of his Affiliates (each an "Indemnitee") to the fullest extent permitted by law and will hold each harmless from and with respect to (i) all fees, costs and expenses incurred in connection with, or resulting from, any claim, action or demand against any indemnitee that arises out of or in any way relates to the Partnership, its properties, business or affairs, and (ii) any losses or damages resulting from any such claim, action or demand, including amounts paid in settlement or compromise of the claim, action or demand. (b) No Indemnitee shall be indemnified by the Partnership with respect to any action or failure to act that does not constitute good faith, or that constitutes willful misfeasance. (c) The Partnership may pay the expenses incurred by an Indemnitee in defending a civil or criminal action, suit or proceeding brought by a party against the Indemnitee that arises out of or is in any way related to the Partnership, its properties, business or affairs, upon receipt of an undertaking by the Indemnitee to repay the amount advanced by the Partnership if an adjudication or determination is subsequently made by a court of competent jurisdiction that the Indemnitee is not entitled to indemnification as provided in this Agreement. (d) The right of indemnification provided in this Section 25 shall be in addition to any rights to which an Indemnitee may otherwise be entitled and shall inure to the benefit of the executors, administrators, personal representatives, successors or assigns of each Indemnitee. (e) The rights to indemnification and reimbursement provided for in this Section 25 may be satisfied only out of the assets of the Partnership. No Partner shall be personally liable for any claim for indemnification or reimbursement under this Section 25. 26. Amendment of Partnership Agreement. This Agreement may be amended, in whole or in part, by the written consent of (a) the General Partner, and (b) Partners the value of whose Capital Account constitute not less than fifty percent (50%) of the total value of all Capital Accounts of the Partnership, provided that no such amendment shall affect the allocation of Net Profit or Net Loss to any Partner who has not consented to such amendment. In addition, any provision of this Agreement, other than Section 9, may be amended by the General Partner in any manner that does not, in the sole discretion of the General Partner, adversely affect any Limited Partner. 27. Notices. Notices that may or are required to be given under this Agreement by any part to another shall be in writing and deposited in the United States mail, certified or registered, postage prepaid, addressed to the respective parties at their addresses set out in Schedule A to this Agreement or to any other addressee designated by any Partner by notice addressed to the Partnership in the case of any Limited Partner and to the General Partner in the case of the General Partners. Notices shall be deemed to have been given when deposited in the United States mail within the continental United States. 28. Agreement Binding Upon Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the heirs, executors, administrators or other representatives, successors and assigns of the Partners. 29. Governing Law. This Agreement, and the rights of the Partners under it, shall be governed by and construed in accordance with the law of the State of New Jersey. 30. Consents. Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and signed copies of them shall be filed and kept with the books of the Partnership. 31. Miscellaneous. (a) This Agreement, including Schedule A appended to it, constitutes the entire understanding and Agreement of the Partners as to the operation of the Partnership. (b) This agreement may be executed in counterparts, each of which shall be deemed to be an original. (c) Each provision of this Agreement is intended to be severable. A determination that a particular provision of this Agreement is illegal or invalid shall not affect the validity of the remainder of the Agreement. (d) Nothing contained in this Agreement shall be construed to constitute any Partner the agent of another Partner, except as specifically provided in this Agreement, or in any manner to limit the partners in the carrying on of their own respective business or activities. (e) If there is a conflict between the terms and conditions of the Partnership Agreement and Offering Memorandum, the Partnership Agreement shall be controlling. IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first above written. GENERAL PARTNER VETERI PLACE CORPORATION By: Lawrence B. Seidman, President LIMITED PARTNERS: All Limited Partners now and hereafter admitted as Limited Partners of the Partnership, pursuant to Powers of Attorney now and hereafter executed in favor of, and delivered to the General Partner. LAWRENCE B. SEIDMAN Attorney-in-Fact Lawrence B. Seidman AMENDMENT #1 TO LIMITED PARTNERSHIP CERTIFICATE OF SEIDMAN INVESTMENT PARTNERSHIP II, L.P. FILED AUGUST 13, 1998 Section 1 The name of the Partnership is Seidman Investment Partnership II, L.P. Section 6 Section 6 is hereby amended to add the following people and entities as limited partners: NAME CAPITAL CONTRIBUTION Dr. John Tafel $150,000.00 2604 South Hayden Amarillo, Texas 79109 Hawthorne Financial $179,284.87 c/o Eric Nettere 560 West Hawthorne Place Chicago, Illinois 60657 Eric & Julie Nettere JTWROS $ 70,715.13 560 West Hawthorne Place Chicago, Illinois 60657 Stephen Chaleff $100,000.00 20 Norman Drive Rye, New York 10580 Chaleff Family Irrevocable Trust $ 150,000.00 20 Norman Drive Rye, New York 10580 Urban West Capital Partners,L.P. $ 250,000.00 Att: Stephen Gunther 520 Broadway, Suite 100 Santa Monica, California 90401 Cordell Consultants, Inc. $ 22,000.00 Money Purchase Plan 5540 Laurel Ridge Road Ruckersville, Virginia 22968 Amalgamated Sludge LLC $ 178,000.00 5540 Laurel Ridge Road Ruckersville, Virginia 22968 VETERI PLACE CORPORATION, G.P. By: Lawrence B. Seidman, President Veteri Place Corporation Certificate of Incorporation filed January 6, 1995 Dated: September 4, 1998 STATE OF NEW JERSEY) ) ss: COUNTY OF MORRIS ) On the 4th day of September, 1998, before me personally came Lawrence B. Seidman, to me known, who being by me sworn, did depose and say that he resides at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President of Veteri Place Corporation, the General Partner of Seidman Investment Partnership II, L.P. described in and which executed the above instrument; and that he signed such instrument by order of the Board of Directors of said Corporation. AMENDMENT #2 Filed Mar 5 19999 TO LIMITED PARTNERSHIP CERTIFICATE OF SEIDMAN INVESTMENT PARTNERSHIP II, L.P. FILED AUGUST 13, 1998 Section 1 The name of the Partnership is Seidman Investment Partnership, LP Seidman Investment Partnership II, LP was filed on August 13, 1998, Amendment #1 to Seidman Investment Partnership II, LP was filed on was filed on September 8, 1998. Section 6 Section 6 is hereby amended to add the following people and entities as limited partners: NAME CAPITAL CONTRIBUTION Valerie Westheimer $200,000. 840 Park Avenue New York, NY 10021 Dr. Thomas Kalman $100,000 11 East 87th Street, Apt. 1B New York, NY 10128 Mr. David F. Halvorsen $100,000 Halvorsen Family Partnership, Ltd. 276 Old Kingston Rd. New Paltz, NY 12561 Jacques Pomeranz $200,000 Pound Hollow Rd. Old Brookville, NY 11545 Chicago, Illinois 60657 Ellen Rosenberg $100,000 550 Chestnut Street #202 Winnetka, IL 60093 Tom Blew $100,000 1409 H South Prairie Ave. Chicago, IL 60605 Metalle & Weiche Rohstoffe $1,300,000 Guioliettstrasse 54 Frankfurt D60325 Stephen Sherwin, Living $100,000 Trust dtd 8/5/91 2295 Gulf of Mexico Drive Apt. 102S Longboat Key, FL 342228-3258 Section 6 Section 6 is hereby amended to revise the amount of Capital Contribution for the following people and entities as limited partners: Eric & Julie Nettere JTWROS $250,000.00 36987 Mountville Road Middleburg, VA VETERI PLACE CORPORATION, G.P. By: Lawrence B. Seidman, President Veteri Place Corporation, Certificate of Incorporation filed January 6, 1995, General Partner of Seidman Investment Partnership II, L.P. Dated:March 4, 1999 STATE OF NEW JERSEY ) ) ss: COUNTY OF MORRIS ) On the day of March, before me personally came Lawrence B. Seidman, to me known, who being by me sworn, did depose and say that he resides at 19 Veteri Place, Wayne, New Jersey 07470, that he is the President of Veteri Place Corporation, the General Partner of Seidman Investment Partnership II, L.P. described in, and which executed the above instrument; and that he signed such instrument by order of the Board of Directors of said Corporation. EX-10.5 7 e.txt OPERAT. AGREEMENT FOR SEIDMAN ASSOC. Exhibit E OPERATING AGREEMENT FOR SEIDMAN AND ASSOCIATES, LLC. Dated: November 9, 1994 INDEX Page No. Article 1 - Definitions 1 Article 2 - Formation 5 Article 3 - Principal Office 5 Article 4 - Term and Duration 6 Article 5 - Purpose 7 Article 6 - Capital Contributions by the Member7 Article 7 - Additional Capital Contributions 9 Article 8 - Cash Contributions 10 Article 9 - Tax Allocations 11 Article 10 - Rights, Powers and Representation of the Members 15 Article 11 - Managing Member 17 Article 12 - Books, Records and Reports 19 Article13 - Bank Accounts 20 Article 14 - Rights and Duties of Members 20 Article 15 - Tax Matters 21 Article 16 - Bankruptcy 21 Article 17 - Assignability or Transfer of Int 22 Article 18 - Admission of Substituted Members; Death or Incapacity; Further Conditions 24 Article 19 - Liquidation 25 Article 20 - Gender 26 Article 21 - Further Assurances 26 Article 22 - Covenant Against Partition 26 Article 23 - Notices 26 Article 24 - Applicable Law 27 Article 25 - Captions 27 Article 26 - Counterparts 27 Article 27 - Binding Effect 27 Article 28 - Partial Invalidity 27 Article 29 - Integration 28 Exhibit A - Property Description Exhibit B - Contract of Sale Schedule A - Members' Percentage Interests Schedule B - Example of the Operation of Section 8.3 OPERATING AGREEMENT FOR SEIDMAN AND ASSOCIATES, LLC. AGREEMENT made November 9, 1994 by and between LAWRENCE SEIDMAN ("Lawrence Seidman"), having an address at 19 Veteri Place, Wayne, New Jersey 07470; SONIA SEIDMAN ("Sonia Seidman"), having an address at 19 Veteri Place, Wayne, New Jersey 07470; SEIDCAL Associates ("Seidcal"), a New Jersey general partnership having an address c/o Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016; PAUL SCHIMDT ("Schimdt"), having an address at 159 Clinton Place, Hackensack, New Jersey 07601; and RICHARD GREENBERG ("Greenberg"), having an address at 1235A Route 23 South, Wayne, New Jersey 07474 (hereinafter Lawrence Seidman, Sonia Seidman, Seidcal, Schimdt and Greenberg may sometimes be referred to individually as a "Member" and collectively as the "Members"). WITNESSETH: WHEREAS, the Members desire to form a limited liability company (the "Company") pursuant to the New Jersey Limited Liability Company Act (the"Act") and adopt this Operating Agreement in connection therewith; and WHEREAS, the purpose of the Company shall be to purchase stock in private and public companies and manage and invest the funds of others for these purposes and for any and all other purposes permitted pursuant to the Act; and WHEREAS, the Members wish to set forth the terms and conditions as to the manner in which the Company shall be operated and to set forth the rights, obligations and duties of the Members to each other and to the Company; and WHEREAS, by executing this Operating Agreement, each Member represents that he has sufficient right and authority to execute this Operating Agreement and not acting on behalf of any undisclosed or partially disclosed principal. NOW, THEREFORE, in consideration of ten ($10) dollars and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows effective as of the date first written above. ARTICLE 1 DEFINITIONS 1.1 For purposes of this Agreement, the following terms shall have the definitions set forth below: "Additional Contribution": Each Member's pro-rata portion of a Required Amount, determined by multiplying the Required Amount by each Member's Interest. "Additional Member": Any person or entity who acquires an additional interest in the Company. "Adjusted Capital Account": As defined in Section 9.4(h). "Capital Account" or "Capital Accounts": As defined in Section 6.4. "Capital Contributions": The respective capital contributions, including any Additional Contribution,of each of Member to the Company. "Capital Transaction" or "Capital Transactions": Sale, transfer, assignment or exchange of stock purchases or other investment made by the Company or other similar transactions which, in accordance with generally accepted principles, are treated as a capital transaction. "Certificate of Formation": The Certificate of Formation of the Company filed with the Secretary of State of the State of New Jersey, pursuant to the Act to form the Company, as originally executed and as amended, modified, supplemented or restated from time to time, as the context requires. "Code": The Internal Revenue Code of 1986, as amended, and any reference to a particular section of the Code shall be deemed to include any successor section to such section. "Company": Seidman and Associates, LLC. "Contributing Member": A Member which has made its Additional Contribution. "Default Loan": A loan to the Company of an amount equal to the Additional Contribution not made by a Defaulting Member. "Defaulting Member": A Member which fails to make his Additional Contribution as required herein. "Default Rate": A floating rate equal to the lesser of (a) ten (10%) percent per annum in excess of the rate of interest announced from time to time in The Wall Street Journal as the "prime rate" or "base rate" charged by institutional commercial lenders, from time to time or (b) the maximum rate of interest then permitted according to the laws of the State of New Jersey or according to Federal law, to the extent applicable. "Gain from a Capital Transaction": The gain recognized by the Company attributable to a Capital Transaction, determined in accordance with the method of accounting used by the Company for federal income tax purposes. In the event there is a revaluation of Company property and the Capital Accounts are adjusted pursuant to Section 6.4(c), Gain from a Capital Transaction shall be computed by reference to the "book items" and not the corresponding "tax items". "Income": Net Proceeds and all other income or amounts, however characterized, received by the Company. "Interest": The respective percentage interest of each Member as set forth on Schedule A. "Loss from a Capital Transaction": The loss recognized by the Company attributable to a Capital Transaction, determined in accordance with the method of accounting used by the Company for federal income tax purposes. In the event there is a revaluation of the Company property and the Capital Accounts are adjusted pursuant to Section 6.4(c), Loss from a Capital Transaction shall be computed by reference to the "book items" and not the corresponding "tax items". "Managing Member": Lawrence Seidman, or such successor appointed by a majority in interest of the remaining Members. "Member": Each of the parties who has executed this Operating Agreement and any party who may hereafter become an Additional Member or a Substitute Member pursuant to this Operating Agreement. "Member Nonrecourse Debt": Any nonrecourse debt of the Company for which a Member bears the economic risk of loss, determined in accordance with Treasury Regulation Section 1.704-2(b) (4). "Member Nonrecourse Debt Deductions": With regard to any Member Nonrecourse Debt, the amount of the net increase during any taxable year to the Company in the amount of Minimum Gain Attributable to Member Nonrecourse Debt, over the aggregate amount of any distributions during such year to the Member who bears the economic risk of loss for such debt of proceeds of such debt that are allocable to an increase in the Minimum Gain Attributable to such Member Nonrecourse Debt. Such amounts shall be determined in accordance with Treasury Regulation Section 1.704-2(i) (2). "Minimum Gain": The amount of gain which would be recognized to the Company for federal income tax purposes if all Company property secured by Nonrecourse Liability were transferred to the creditor of such debt in satisfaction thereof (and for no other consideration) in a taxable transaction. The amount of such gain shall be determined and calculated in accordance with Treasury Regulation Section 1.704--2(g) (i). "Minimum Gain Attributable to Member Nonrecourse Debt": The amount of gain which would be recognized by the Company for federal income tax purposes if all Company property secured by Member Nonrecourse Debt were transferred to the creditor of such debt in satisfaction thereof (and for no other consideration) in a taxable transaction. The amount of such gain shall be determined and calculated in accordance with Treasury Regulation Section 1.704-2(f) (i) (4). "Net Proceeds": The net proceeds available to the Company from a Capital Transaction after deducting (i) all costs and expenses incurred in connection therewith, (ii) any liens or other indebtedness which is satisfied or refinanced as a result of such Capital Transaction, and (iii) reasonable reserves established by the Company from time to time for working capital and other purposes. "Net Profit" and "Net Loss": The net income (including income exempt from tax) and net loss (including expenditures that can neither be capitalized nor deducted), respectively, of the Company, determined in accordance with the method of accounting used by the Company for federal income tax purposes, but computed without regard for Gain from Capital Transactions, Loss from Capital Transactions and items of income or loss, if any, that are specifically allocated to Members. In the event there is a revaluation of Company property and the Capital Accounts are adjusted pursuant to Section 6.4(c), Net Profits and Net Losses shall be computed by reference to the "book items" and not corresponding "tax items". "Nonrecourse Liability": Any Company debt for which no Member has any economic risk of loss, determined in accordance with Treasury Regulation Section 1.704-2(b) (3). "Operating Agreement": This Operating Agreement as originally executed and as amended, modified,supplemented or restated from time to time. "Required Amount": The amount of cash required by the Company as determined by a majority in interestof the Members. "Substitute Member": Any transferee of a Member's Interests who is admitted as a Member in the Company pursuant to Article 17 or 18. "Unrecovered Additional Contributions": The aggregate amount of Additional Contribution made by a Member pursuant to Section 7.1 hereof less prior distributions to such Member of Income which is distributed to repay outstanding Additional Contributions and any interest on any Default Loan specially allocated to such Member. ARTICLE 2 FORMATION 2.1 The parties hereto do hereby form the Company under the name of SEIDMAN AND ASSOCIATES, LLC.pursuant to the Act. Pursuant to the provisions of the Act, the formation of the Company shall be effective upon the filing of the Certificate of Formation. In order to maintain the Company as a limited liability company under the laws of the State of New Jersey, the Company shall from time to time take appropriate action, including the preparation and filing of such amendments to the Certificate of Formation and such other assumed name certificates, documents, instruments and publications as may be required by law, including, without limitation, action to reflect: (i) a change in the Company name; (ii) a correction of a defectively or erroneously executed Certificate of Formation; (iii) a correction of false or erroneous statements in the Certificate of Formation or the desire of the Members to make a change in any statement therein in order that it shall accurately represent the agreement among the Members; or (iv) a change in the time for dissolution of the Company as stated in the Certificate of Formation and in this Agreement. Section 2.2 Other Instruments. Each Member hereby agrees to execute and deliver to the Company within five (5) days after receipt of a written request therefor, such other and further documents and instruments, statements of interest and holdings, designations, powers of attorney and other instruments and to take such other action as the Company deems necessary, useful or appropriate to comply with any laws, rules or regulations as may be necessary to enable the Company to fulfill its responsibilities under this Operating Agreement, to preserve the Company as a limited liability company under the Act and to enable the Company to be taxed as a partnership for federal and state income tax purposes. ARTICLE 3 PRINCIPAL OFFICE 3.1 The Company's registered office in New Jersey shall be at 19 Veteri Place, Wayne, New Jersey 07470. The Company's registered agent who is a resident of New Jersey is Lawrence Seidman, whose business address 19 Veteri Place, Wayne, New Jersey 07470. At any time, the Company may designate another registered agent and/or office. 3.2 The principal place of business of the Company shall be at 19 Veteri Place, Wayne, New Jersey 07470. At any time, the Company may change the location of its principal place of business and may establish additional offices. ARTICLE 4 TERM AND DURATION 4.1 The Company shall commence upon the filing of the Certificate of Formation, and shall continue in full force and effect until May 1, 2024, provided, however, that the Company shall be dissolved prior to such date upon the happening of any of the following events: (a) The mutual written consent of the Members to dissolve the Company. (b) The sale or other divestiture of all or substantially all of the assets of the Company and the distribution of the proceeds thereof to the Members, including real estate or interests held or owned by the Company (other than a transfer to a nominee of the Company for any Company purpose, which event shall not be construed as an event of termination); provided, however, that (i) if the Company receives a purchase money mortgage or other collateral security in connection with such sale, the Company shall continue (A) until such mortgage or security interest is paid in full or otherwise disposed of, or (B) in the event of foreclosure of such mortgage, or security interest provided the Company retains title therein; and (ii) the Company shall continue if the assets of the Company are exchanged under Section 1031 of the Code. (c) Upon the death, retirement, expulsion, bankruptcy or dissolution of a Member or occurrence of any other event that terminates the continued membership of a Member in the Company (a "Dissolution Event") unless the business of the Company is continued by the unanimous consent of the remaining Members within ninety (90) days following the Dissolution Event. (d) The entry of a decree of judicial dissolution under Section 49 of the Act. (e) The happening of any other prior event which pursuant to the terms and provisions of this Operating Agreement shall cause a dissolution or termination of the Company. 4.2 Upon any dissolution of the Company, the distribution of the Company's assets and the winding up of its affairs shall be concluded in accordance with Article 19 of this Operating Agreement. ARTICLE 5 PURPOSE 5.1 The business of the Company shall be for the purpose of: (a) Purchasing stock in private and public companies and managing and investing funds of others for these purposes. (b) Such other activities incident or appropriate to the foregoing, including acting directly or in conjunction with others through joint ventures, partnerships or otherwise. 5.2 The business of the Company shall also be for any lawful purpose. ARTICLE 6 CAPITAL CONTRIBUTIONS BY THE MEMBERS 6.1 (a) Upon execution hereof, or at such other times as determined by the Managing Member, each Member shall contribute in cash to the capital of the Company an amount in the aggregate equal to that set forth opposite his/her/its name on Schedule A attached hereto. (b) A Member's interest in the Company shall be represented by the percentage interest held by such Member. Each Member's respective initial interest in the Company is set forth opposite his/her name on Exhibit B attached hereto. 6.2 No Member shall have the right to withdraw any part of his Capital Contribution or receive any distribution, except in accordance with the provisions of this Operating Agreement. No interest shall be paid on any Capital Contribution. 6.3 No Member shall have any priority over any other Member with respect to the return of Capital Contributions. 6.4 The Company shall maintain a capital account (a "Capital Account") for each Member within the provisions of Treasury Regulation Section 1.704-1 (b) (2) (iv) as such regulation may be amended from time to time. Without limiting the foregoing, the Member's Capital Accounts shall be adjusted as follows: (a) Subject to the last sentence of Section 6.4 (c), the Capital Account of each Member shall be credited with (i) an amount equal to such Member's initial cash contribution and any additional cash contributions to the Company and the fair market value of property or securities contributed to the Company (net of liabilities secured by such property) if a contribution of property or securities shall be permitted by the Company and (ii) such Member's share of the Company's Net Profits and Gain from Capital Transactions (including income and gain exempt from tax). (b) Subject to the last sentence of Section 6.4 (c), the Capital Account of each Member shall be debited by (i) the amount of cash distributions to such Member and the fair market value of property and/or securities distributed to the Member (net of liabilities secured by such property and/or securities) and (ii) such Member's share of the Company's Net Loss and Net Loss from Capital Transactions (including expenditures which are not permitted to be capitalized or deducted for tax purposes). (c) Upon the transfer of an interest in the Company, the Capital Account of the transfer Member (as adjusted, if at all, as required by this Section 6.4) that is attributable to the transferred interest will be carried over to the transferee Member. The Capital Account will not be adjusted to reflect any adjustment under Section 743 of the Code except as specifically provided in Treasury Regulation Section 1.704-1 (b) (2) (iv) (m). Upon (i) the "liquidation of the Company" (as hereinafter defined), (ii) the "liquidation of a Member's interest in the Company" (as hereinafter defined), (iii) the distribution of money, property or securities to a Member as consideration for an interest in the Company, or (iv) the contribution of money or (if permitted pursuant to (a) above) property and/or securities to the Company by a new or existing Member as consideration for an interest in the Company, or upon any transfer causing a termination of the Company for tax purposes within the meaning of Section 708(b) (1) (B) of the Code, then adjustments shall be made to the Members' Capital Accounts in the following manner: all property and securities of the Company which are not sold in connection with such event shall be valued at their then fair market value; such fair market value shall be used to determine both the amount of gain or loss which would have been recognized by the Company if the property and securities had been sold for its fair market value (subject to any debt secured by the property and securities) at such time, and the amount of Income, which would have been distributable by the Company pursuant to Article 9 if the property and securities had been sold at such time for said fair market value, less the amount of any debt secured by the property; the Capital Accounts of the Members shall be adjusted to reflect the deemed allocation of such hypothetical gain or loss in accordance with Article 10; and the Capital Accounts of the Members (or of a transferee of a Member) shall thereafter be adjusted to reflect "book items" and not "tax items" in accordance with Treasury Regulation Sections 1.704-1 (b) (2) (iv) (g) and 1.704-1 (b) (4) (i). (d) For purposes of this Article 6, (i) the term "liquidation of the Company" shall mean (A) a termination of the Company effected in accordance with this Operating Agreement, which shall be deemed to occur, for purposes of Article 6, on the date upon which the Company ceases to be a going concern and is continued in existence solely to wind-up its affairs, or (B) a termination of the Company pursuant to Section 708(b)(1) of the Code; and (ii) the term "liquidation of a Member's interest in the Company" shall mean the termination of the Member's entire interest in the Company effected by a distribution, or a series of distributions, by the Company to the Member. ARTICLE 7 ADDITIONAL CAPITAL CONTRIBUTIONS 7.1 No Member shall be obligated to make additional capital contributions to the Company. If the Managing Member, with the concurrence of Members holding a majority in interest of the Company, shall determine there shall be a Required Amount for any Company purpose, including, without limitation, those purposes set forth in Article 5, then within fifteen (15) days of notice of such requirement, each Member may, but shall not be obligated to, contribute to the Company his Additional Contribution. 7.2 If a Member fails to make his Additional Contribution, in whole or in part, as required in Section 7.1 above (the "Noncontributing Member"), then, so long as any other Member shall make his Additional Contribution as provided herein (each such Member making his Additional Contribution being hereinafter referred to as "Contributing Member"), any Contributing Member shall have the option (a) with the consent of a majority in interest of the Contributing Members (i) to make a capital contribution equal to the Additional Contribution not made by the Noncontributing Member or (ii) to make a Default Loan equal to the Additional Contribution not made by the Noncontributing Member or (b) with the unanimous written consent of each Contributing Member, to declare the Company terminated as a result of the Noncontributing Member's default. In the event that more than one Contributing Member desires to make an Additional Contribution, or is permitted to make a Default Loan, on account of the Noncontributing Member, each such Contributing Member shall be permitted to participate in proportion to their respective Interests. All loans made pursuant to this Section 7.2 shall bear interest at the Default Rate. 7.3 Upon the making of a capital contribution to the Company pursuant to Section 7.2, the Interest of the Noncontributing Member and the Contributing Members shall be adjusted as follows: (a) the Noncontributing Member's Interest shall be decreased (but not below zero) by subtracting therefrom an amount equal to the percentage equivalent of the quotient of (i) the Additional Contribution not made by the Noncontributing Member giving rise to application of this Section 7.3 multiplied by (A) 200% upon the first failure of the Noncontributing Member to make an Additional Contribution, (B) 300% upon the second such failure and (C) 400% upon the third such failure, divided by (ii) the aggregate amount of all Capital Contributions made by the Members (including the Additional Contributions received by the Company), and (b) the Contributing Members' Interest shall be increased by adding thereto an amount equal to the percentage by which the Noncontributing Member's Interest was decreased pursuant to clause (a) above. Upon the fourth and each subsequent failure of the Noncontributing Member to make an Additional Contribution giving rise to the application of this Section 7.3, a majority-in-interest of the Contributing Members shall have the option, exercisable in their sole discretion, to cause the remaining Interest of the Noncontributing Member to be forfeited and allocated to the Contributing Members or to continue re-allocating the Interests of the Noncontributing Member and Contributing Members as provided in the preceding sentence except that the percentage multiple set forth in clause (i) (C) shall be increased 100% for each failure of the Noncontributing Member to make an Additional Contribution. An example of the operation of this Section 7.3 with respect to a re-allocation of Interests upon the first failure of a Noncontributing Member to make an Additional Contribution, is set forth in Schedule B attached hereto. 7.4 The obligations of the Members contained in this Section 7 are personal and run only to the benefit of the Company and the Members and may not be enforced by any third parties. No creditor of the Company may rely on the foregoing provisions of this Article 7 or any other provision of this Operating Agreement to make any contributions or returns to the Company, notwithstanding any agreement, representation, intention, indication or otherwise to the contrary. ARTICLE 8 CASH DISTRIBUTIONS 8.1 The Company shall distribute Income to the Members at such times as the Company shall determine (but not less often than quarterly), in the following order of priority: (a) first, to any Member who made a Default Loan, to the payment of accrued and unpaid interest, and the then outstanding principal balance of, any Default Loan, such distribution to be proportion to the aggregate amount of interest, and the principal, owed. If more than one Member participates in the making of a Default Loan, then distributions to such Members on account of this Section 8.1(a) shall be made in proportion to the amounts so loaned. If there shall be more than one instance in which a Default Loan has been made, then Default Loans shall be repaid in the order in which they shall have been outstanding the longest; (b) second, to the Members in an amount equal to and in proportion to their Unrecovered Additional Contributions; (c) next, to the Members in an amount sufficient to give them a ten percent (10%) return compounded annually on the aggregate of their Capital Contributions and Additional Contributions; (d) next, to Sonia Seidman and the Managing Member in an amount sufficient to pay to them, in the aggregate, up to twenty percent (20%) of the net annual profits of the Company for each year calendar that the Company is in existence to be paid 5% to the Managing Member and 15% to Sonia Seidman; and (e) the balance, if any, shall be distributed to the Members in proportion to their Interests. 8.2 Notwithstanding Section 8.1, Net Proceeds from a Capital Transaction which constitutes a liquidation of the Company, together with other funds remaining to be distributed, shall be distributed to the Members no later than the later of (a) the end of the taxable year of the Company in which such liquidation occurs; or (b) within ninety (90) days after the date of such liquidation event, after payment of all Company liabilities and expenses (or adequate provision therefor), in accordance with Section 9.1, except that in no event shall (x) a distribution be made to any Member if, after giving effect to such distribution, all liabilities of the Company, other than liabilities to Members on account of their Interests and liabilities for which the recourse of creditors of the Company is limited to specified property of the Company, exceed the fair value of the assets of the Company, except that the fair value of property that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the Company only to the extent that the fair value of the property exceeds that liability and (y) the distribution to a Member exceed the positive balance in such Member's Capital Account after giving effect to all allocations to such Member under Article 9 of Net Profits, Net Losses, and Gain and Loss from Capital Transactions so that liquidation proceeds shall be distributed in accordance with each Member's positive Capital Account balance (within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(b) as in effect on the date hereof). If a members shall receive a distribution that should not have been made based upon the provisions of Section 8.2 (x), the provisions of Section 42:2B-42 (b) of the act shall apply . Section 42:2B-42(c) of the Act shall apply to all distributions made to the Members. ARTICLE 9 TAX ALLOCATIONS 10.1 Net Profits, Net Losses and any investment tax credit for each fiscal year or part thereof shall be allocated to the Members in proportion to their Interests. 10.2 Gain from a Capital Transaction shall be allocated in the following order: (a) There shall first be allocated to those Members, if any, who have deficit balances in their Capital Accounts immediately prior to such Capital Transaction an amount of such gain equal to the aggregate amount of such deficit balances, which amount shall be allocated in the same proportion as such deficit balances. (b) There shall next be allocated to each of the Members gain in proportion to (but not greater than) the amount by which (x) the amount of Net Losses theretofore allocated to each Member and not theretofore taken into account under this Section 9.2(b), exceeds (y) the gain allocated to such Member under Section 9.2(a). (c) There shall next be allocated to each of the Members gain equal to the amount by which (x) the aggregate proceeds derived from a Capital Transaction distributable to each Member in accordance with the provisions of Section 8.1 or 8.2 other than with respect to Default Loans, as the case may be, exceeds (y) the positive balance, if any, in such Member's Capital Account after such Member's Capital Account has been adjusted to reflect the gain allocated to such Member pursuant to Sections 9.2(a) and 9.2(b); provided, however, that if there shall be an insufficient amount of gain determined by this Section 9.2(c), then the gain shall be allocated to the Members in proportion to the respective amounts determined pursuant to this Section 9.2(c). (d) Any remaining gain shall be allocated among the Members in proportion to their Interests. (e) If the Company shall realize, upon a Capital Transaction, gain which is treated as ordinary income under Sections 1245 or 1250 of the Code, such ordinary income shall be allocated to the Members who receive the allocation of the depreciation or cost recovery deduction that generated the ordinary income in the same proportions as such deductions. (f) Notwithstanding the foregoing, distributions of Income made to a Member for interest and in repayment of the principal on any Default Loan shall not be treated as Income for the purpose of allocating gain pursuant to this Section 9.2 or for any other purpose. Any interest on a Default Loan shall be treated as a "guaranteed payment" for purposes of Section 707(c) of the Code. 10.3 Losses from Capital Transactions shall be allocated in the following order: (a) There shall first be allocated to those Members, if any, whose positive balances in their Capital Accounts exceed their Unrecovered Additional Contributions, an amount of such loss equal to such excess amount, which amount shall be allocated in the same proportion as such excess amounts. (b) There shall next be allocated to those Members, if any, that have positive balances in their Capital Accounts, an amount of such loss equal to the aggregate amount of such positive balances, which amount shall be allocated in the same proportion as such positive balances. (c) The balance of such loss shall be allocated to the Members in proportion to their Percentage Interests. 10.4 Notwithstanding the preceding provisions of this Article 10: (a) Except as provided in sub-section (e) below, no allocation of loss or deduction shall be made to a Member if such allocation would cause at the end of any taxable year a deficit in such Member's Adjusted Capital Account to exceed his allocable share of Minimum Gain; and any such loss or deduction not allocated to a Member by reason of this Section 9.4 shall be allocated pro-rata to each other Member if and to the extent that such allocation shall not create a deficit in such other Member's Adjusted Capital Account in excess of his allocable share of Minimum Gain; provided, however, that if such allocation would create such deficit in all Members' Adjusted Capital Accounts in excess of their share of Minimum Gain, then such allocation shall be made in accordance with the principles of Treasury Regulation Section 1.704-1(b). (b) If, during any taxable year, there is a net decrease in Minimum Gain then, before any other allocations are made for such year, each Member shall be allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to each Member's share of the net decrease in Company Minimum Gain (within the meaning of Treasury Regulation Section 1.704-2(g)(2)) in a manner so as to satisfy the requirements of Treasury Regulation Section 1.704-2(f). (c) If, during any taxable year, there is a net decrease in Company Minimum Gain Attributable to Member to Member Nonrecourse Debt, then, before any other allocations are made for such year other than those pursuant to Section 9.4(b) above, each Member with a share of the Company Minimum Gain Attributable to Member Nonrecourse Debt at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in an amount equal to each Member's share of the net decrease in Minimum Gain Attributable to Member Nonrecourse Debt as determined in accordance with Treasury Regulation Section 1.704-2(i)(4) in a manner so as to satisfy the requirements of said Treasury Regulation. (d) If during any taxable year a Member unexpectedly receives (i) a distribution of cash or property from the Company or (ii) an adjustment or allocation described in either Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4) as in effect on the date hereof (concerning depletion allowances with respect to oil and gas properties) or Treasury Regulation Section 1.704-1 (b) (2) (ii) (d) (5) as in effect on the date hereof (concerning allocations of loss and deduction in interests change during the year, if an interest is acquired by gift or if a Member receives certain Company property in redemption of part or all his interest), and if such adjustment, allocation or distribution would cause at the end of the taxable year a deficit balance in such Member's adjusted capital account in excess of his allocable share of Minimum Gain, then a pro-rata portion of each item of Company income, including gross income, and gain for such taxable year (and, if necessary, subsequent taxable years) shall be allocated to such Member in an amount and in a manner sufficient to eliminate such excess balance as quickly as possible before any other allocation is made for such year other than pursuant to Section 9.4(b) above so as to satisfy the requirements of Treasury Regulation Section 1.704-1(b) (2) (ii) (d) (qualified income offset). (e) To the extent required by Treasury Regulation Section 1.704-2(i) (1), Member Nonrecourse Debt Deductions for any taxable year shall be allocated to the Member (or Members) who bear(s) the economic risk of loss of such Member Nonrecourse Debt. (f) In the event that any allocation is or has been made to a Member pursuant to Sections 9.4(a), (b), (c), (d) or (e) above, subsequent items of income, deduction, gain and loss shall be allocated before any other allocations are made (subject to the provisions of said Sections) to the Members in the manner which would result in each Member having a Capital Account balance equal to what it would have been had the allocation pursuant to said Sections. (g) Upon the occurrence of an event described in Section 6.4(c), all Company property shall be revalued on the Company's books at fair market value, Capital Accounts will be adjusted in accordance with Section 6.4 (c), and subsequent allocations of taxable income, gain, loss and deductions shall, solely for tax purposes, be made necessary so as to take account of the variation between the adjusted tax basis and the fair market value of such property in accordance with Section 704 of the Code and the Treasury Regulations thereunder. (h) For the purposes of this Article, each Member's "Adjusted Capital Account" shall equal the Capital Account of each Member (1) reduced at the end of each taxable year by the sum of (x) the excess of distributions reasonable expected to be made to such Member over the offsetting increases to such Member's Member's Capital Account reasonably expected to be made in the same taxable year as the aforesaid distributions, (y) adjustments expected to be made to such Member's Capital Account described in Treasury Regulation Section 1.704-1(b) (2) (ii) (d) (4) as in effect on the date hereof (concerning depletion allowances with respect to oil and gas properties), and (z) allocations expected to be made described in Treasury Regulation Section 1.704-1 (b) (2) (ii) (d) (5) as in effect on the date hereof (concerning allocations of loss and deduction if Interests change during the year, if an Interest is acquired by gift or if a Member receives certain Company property in redemption of part or all of his Interest in the Company), and (2) increased by the sum of (i) the amount, if any, which the Member is obligated to restore the Company upon liquidation of his Interest if a deficit balance exists in his Capital Account at such time, (ii) the outstanding principal balance of any promissory note made by such Member and contributed to the company if such note is not readily tradable on an established securities market and if such note must be satisfied within ninety (90) days after the date said Member's Interest is liquidated and (iii) the sum of (a) the amount the Member would be personally liable for either as a Member or in his individual capacity as a guarantor or otherwise, and (b) the economic risk of loss the Member would bear attributable to any Company liability (as determined in accordance with Treasury Regulation Section 1.752-2). (i) In accordance with Section 704(b) and (c) of the Code and Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Company (including all or part of any deemed capital contribution under Section 708 of the Code) shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company and its agreed value. In the event that Capital Accounts are ever adjusted pursuant to Treasury Regulation Section 1.704-1(b) (2) to reflect the fair market value of any Company property, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset and its value as adjusted in the same manner as required under Section 704(c) of the Code and the Regulations thereunder. (j) The allocations provided in this Section 10.4 are intended to comply with the provisions of Section 704(b) of the Code and the regulations thereunder. However, if any such allocation causes a distortion in the Members' Interest in contravention of the Members' economic arrangement as reflected in Article 6, the Company has the authority to make curative allocations to bring such allocations in accordance with such Member's Interest, as if such allocations which caused the distortion had not occurred and to bring such allocations in compliance with Section 794(b) of the Code and regulations thereunder. ARTICLE 10 RIGHTS, POWERS AND REPRESENTATIONS OF THE MEMBERS 10.1 All decisions, consents, authorizations and rights in connection with the business and affairs the company shall be carried on and managed by a majority in interest of the Members, which shall have full, exclusive and complete discretion with respect thereto. Any Member or person acting pursuant to any authority granted to him in writing by a majority in interest of the Members shall have all necessary and appropriate powers to carry out the authority so granted, and no other Member or person without such authority so granted shall have the right to take any action or give any consent, by affirmative act or acquiescence, to any matter or thing, affecting the Company, Premises or Project. In furtherance of the foregoing, any Member or person so authorized as provided above may: (a) negotiate, execute, deliver and perform on behalf of, and in the name of, and in the name of, the Company any and all contracts, deeds, assignments, deeds of trust, leases, subleases, promissory notes and other evidences of indebtedness, mortgages, bills of sale, financing statements, security agreements, easements, stock powers, and any and all other instruments necessary or incidental to the business of the Company and the financing thereof, (b) borrow money, without limit as to amount, and to secure the payment thereof by mortgage, pledge, or assignment of, or security interest in, all or any part of the assets then owned or thereafter acquired by the Company, (c) effectuate the purpose of the Company as provided in Article 5 hereof, (d) establish, maintain and draw upon checking and other accounts of the Company, (e) execute any notifications, statements, reports, returns or other filings that are necessary or desirable to be filed with any state or Federal agency, commission or authority, (f) enter into contracts in connection with the business of the Company, (g) arrange for facsimile signatures for the Members in executing and all documents, papers, checks or other writings or legal instruments which may be necessary or desirable in the Company business, and (h) execute, ackowledge and deliver any and all contracts, documents and instruments deemed appropriate to carry out any of the foregoing purposes and intent of this Operating Agreement. 10.2 In the management of the Company, and with respect to any and all decisions with respect to the Company and its business and the conduct of its operations, the Members of the Company shall have a cumulative total of one hundred (100) votes, and each Member shall have the number of votes equal to his/her Interest. Wherever and whenever the word "majority" appears in this Operating Agreement, either as a noun or as an adjective, it shall mean for all purposes that number of Members whose votes when considered or added together constitute more than fifty (50) of the total one hundred (100) votes of all the Members. Any act or decision of any of the Members may be confirmed, overruled or precluded by the majority of the Members. 10.3 Each of the Members, on their own behalf and on behalf of anyone who shall represent their Interests, hereby waives notice of the time, place or purpose of any meeting at which any matter is to be voted on by the Members or anyone acting by or for them, waives any requirement that there be such a meeting and agrees that any action may be taken by consent without a meeting. 10.4 The fact that the Members are directly or indirectly interested in or connected with any person, firm or corporation employed by the Company to render or perform a service, or from which or whom the Company may buy merchandise, material or other property shall not prohibit the Company from employing such persons, firms or corporations, or from otherwise dealing with him under such reasonable terms and conditions as the Company may determine. ARTICLE 11 MANAGING MEMBER 11.1 Notwithstanding any provision contained in Article 10 to the contrary, the daily affairs of the Company shall be conducted by the Managing Member who shall the power and authority to make ordinary and usual decisions concerning the business and affairs of the Company. The Managing Member shall have the power and authority, on behalf of the Company, to do the following: (a) open one or more depository accounts and make deposits into and checks and withdrawals against such accounts; (b) invest the capital resources of the Company, in amounts not to exceed one hundred and twenty-five percent (125%) of the capital of the Company without the prior consent of a majority in interest of the Members, in stocks, bonds and other securities of publically traded companies (collectively "Permitted Investments"), including the ability to buy, sell, exchange, swap or transfer such securities; (c) open one or more cash or margin brokerage accounts in the name of the Company for purposes of making Permitted Investments; (d) obtain insurance covering the business and affairs of the Company; (e) commence, prosecute or defend any proceeding in the Company's name; and (f) enter into any and all agreements and execute any and all contracts, documents and instruments necessary or required to effectuate the foregoing. 11.2 Notwithstanding any provision contained in this Operating Agreement to the contrary, it is specifically agreed between the Members that the Company shall make no investment in Cali Realty Corporation without the unanimous prior consent of all Members. 11.3 (a) The Managing Member shall perform and discharge his duties as a manager in good faith, with the care an ordinary prudent person in a like position would exercise under similar circumstances, and in a manner he reasonably believes to be in the best interests of the Company. The Managing Member shall not be liable for any monetary damages to the Company for any breach of such duties except for: receipt of a financial benefit to which the Manager is not entitled; voting for or assenting to a distribution to Members in violation of this Operating Agreement or the Act; a knowing violation of the Law; fraud; or a willful breach of fiduciary obligations owed to the Members. (b) The Managing Member shall devote a significant amount of his time and efforts to furthering the business and investments of the Company and any other corporations and partnerships formed to invest in the stock in private and public companies or real estate assets and mortgages. The Managing Member shall also be permitted to perform consulting and legal services for Environmental Waste Management Associates, Inc., its principal shareholders, Richard Greenberg, and for Glenn Woo and other real estate related clients. In compensation equal to $125,000, payable quarterly. 11.4 Unless otherwise provided by law or expressly assumed, a person who is a Member or manager, or both, shall not be liable for the acts, debts or liabilities of the Company. 11.5 The Company shall indemnify the Managing Member and each other Member and may indemnify and employee or agent of the Company who was or is a party or is threatened to be made a party to threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative, and whether formal or informal, other than action by or in the right of the Company, by reason of the fact that such person is or was a manager, employee or agent of the Company against expenses, including attorneys fees, judgements, penalties, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with the action, suit or proceeding, if the person acted in good faith, with the care an ordinary prudent person in a like position would exercise under similar circumstances, and in a manner that such person reasonably believed to be in the best interests of the Company and with respect to a criminal action or proceeding, if such person had no reasonable cause to believe such person's conduct was unlawful. To the extent that a Member, employee or agent of the Company has been successful on the merits or otherwise in defense of an action, suit or proceeding or in defense of any claim, issue or other matter in the action, suit or proceeding, such person shall be indemnified against actual and reasonable expenses, including attorneys fees incurred by such person in connection with the action, suit or proceeding and any action, suit or proceeding brought to enforce the mandatory indemnification provided herein. Any indemnification permitted under this Article, unless ordered by a court, shall be made by the Company only as authorized in the specific case upon a determination that the indemnification is proper under the circumstances because the person to be indemnified has met the applicable standard of conduct and upon an evaluation of the reasonableness of expenses and amount paid in settlement. This determination and evaluation shall be made by a majority vote of the Members who are not parties or threatened to be made parties to the action, suit or proceeding. Notwithstanding the foregoing to the contrary, no indemnification shall be provided to the Managing Member or any other Member, employee or agent of the Company for or in connection with the receipt of a financial benefit to which such person is not entitled, voting for or assenting to a distribution to Members in violation of this Operating Agreement of the Act, or a knowing violation of law. ARTICLE 12 BOOKS, RECORDS AND REPORTS 12.1 At all times during the continuance of the Company, the Company shall keep or cause to be kept full and true books of account, in which shall be entered fully and accurately each transaction of the Company. The books of account, together with an executed copy of the Certificate of Formation of the Company and any amendments thereto, shall at all times be maintained at the principal office of the Company and shall be open to inspection and examination by the members or their representatives at reasonable hours and upon reasonable notice. For purpose hereof, the Company shall keep its books and records on the same method of accounting employed for tax purposes. 12.2 The fiscal year of the Company shall be the calendar year. Within a reasonable time after the end of each fiscal year and in any event on or before thirty (30) days prior to the filing date for individual tax returns (including extensions), the accountants for the Company shall deliver to each Member (a) upon request of a Member, an annual statement of the Company's accountants, and (b) a report or a tax return setting forth such Member's share of the Company's profit or loss for such year and such Member's allocable share of all items of income, gain, loss, deduction and credit for Federal income tax purposes. 12.3 The Company shall also cause to be prepared and filed all Federal, state and local tax returns required of the Company. All books, records, balance sheets, statements, reports and tax returns required pursuant to Section 12.1 and 12.2 hereof shall be prepared at the expense of the Company. ARTICLE 13 BANK ACCOUNTS 13.1 All funds and income of the Company (a) shall be deposited in the name of the Company in such bank account or accounts as shall be designated by the Managing Member, (b) shall be invested in such Permitted Investments as Managing Member shall determine and (c) shall be kept separate and apart from the funds of any other individual or entity. 13.2 Withdrawals from any such bank account or accounts shall be made upon the signature of any person so designated by the Company in writing. ARTICLE 14 RIGHTS AND DUTIES OF MEMBERS 14.1 Subject to duties and obligations of the Managing Member, it is expressly understood that each Member may engage in any other business or investment, whether or not in direct competition with the business of the Company, and neither the Company nor any other Member shall have any rights in and to said businesses or investments, or the income or profits derived therefrom. 14.2 The Managing Member may employ, on behalf of the Company, such persons, firms or corporations, including those firms or corporations in which any Member has an interest, and on such terms as the Managing Member shall deem advisable in the operation and management of the business of the Company, including, without limitation, such accountants, attorneys, architects, engineers, contractors, appraisers and experts. 14.3 No Member shall be personally liable to the Company or any of the other Members for any act or omission performed or omitted by him, except if such act or omission was attributable to willful misconduct or gross negligence. 14.4 Each Member (and each former Member) shall be indemnified and saved harmless by the Company from any loss, damage or expense incurred by him by reason of any act or omission performed or omitted by him, except if such act or omission was attributable to willful misconduct or gross negligence. ARTICLE 15 TAX MATTERS 15.1 (a) Notwithstanding any provisions hereof to the contrary, each of the Members hereby recognizes that the Company will be a partnership for United States federal income tax purposes and that the Company will be subject to all provisions of Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, that the filing of U.S. Partnership Returns of Income shall not be construed to extend the purposes of the company or expand the obligations or liabilities of the Members. At the request of any Member, the Company shall file an election under Section 754 of the Code. (b) The Company shall engage an accountant (the "Accountant") to prepare at the expense of the company all tax returns and statements, if any, which must be filed on behalf of the Company regarding the Premises and the operation, dissolution and liquidation of the Company with any taxing authority. (c) Lawrence Seidman is designated Tax Matters Member (herein "TMM") for purposes of Chapter 63 of the Code and the Members will take such actions as may be necessary, appropriate, or convenient to effect the designation of Lawrence Seidman as TMM. The TMM shall attempt to comply with the responsibilities outlined in this Section 15.1 and in Sections 6222 through 6231 of the Code (including any Treasury Regulations promulgated thereunder). ARTICLE 16 BANKRUPTCY OF A MEMBER 16.1 Unless a majority in interest of the Members shall elect otherwise, a Member shall cease to be a Member of the Company: (a) if he/she/it: (i) Makes an assignment for the benefit of creditors; (ii) Files a voluntary petition in bankruptcy; (iii) Is adjudged bankrupt or insolvent, or has entered against him an order for relief, in any bankruptcy or insolvency proceeding; (iv) Files a petition or answer seeking for himself/herself/itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation; (v) Files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him/ her/it in any proceeding of this nature; or (vi) Seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Member or of all or any substantial part of his/her/its properties; or (b) One hundred twenty (120) days after the commencement of any proceeding against the Member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or within ninety (90) days after the appointment without his consent or acquiescence of a trustee, receiver or liquidator of the Member or of all or any substantial part of his/her properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the appointment is not vacated. ARTICLE 17 ASSIGNABILITY, TRANSFER OR PLEDGE OF INTERESTS; RESIGNATION OF MEMBER 17.1 (a) No Member shall have the right to assign, convey, sell or otherwise transfer or dispose of, or pledge, mortgage, hypothecate or otherwise encumber his/her/its Interest, whether record or beneficial interest thereof, without the prior written consent of the Company. Notwithstanding the preceding sentence, but subject to the restrictions on transferability required by law, or set forth in any instrument or agreement by which the Company may be bound, or which may be contained in this Operating Agreement, an individual Member, if any, may, without any consent, assign, convey, sell or otherwise transfer or dispose of all or any portion of his interest in the Company to any one or more of the members of his/her immediate family or families (defined for the purposes of this Operating Agreement as a mother, father, sister, brother, son, daughter, stepson, stepdaughter or spouse (in each instance whether by marriage or otherwise)) and/or a trust or other entity for the benefit thereof or themselves, by a written instrument of assignment and assumption, provided that the instrument of transfer provides for the assumption of the assignor's liabilities and obligations hereunder and has been duly executed by the assignor of such interest and by the transferee. The Member shall notify the Company of any assignment, transfer or disposition of a beneficial interest in any interest of the Member which occurs without a transfer of record ownership, although such notification, or the absence of a response thereto, shall not be deemed a consent thereof. (b) An assignee or transferee of any portion of the interest of the Member shall be entitled to receive allocations and distributions attributable to the interest acquired by reason of such assignment from and after the effective date of the assignment of such interest to such assignee; however. anything herein to the contrary notwithstanding, the Company shall be entitled to treat the assignor of such interest of the Member as the absolute owner thereof in all respects, and shall incur no liability for allocations of net income, net losses, or gain or loss on sale of Company property, or transmittal of reports and notices required to be given to Members hereunder which are made in good faith to such assignor until such time as the written assignment has been received by the Company, approved and recorded on its books and the effective date of the assignment has passed. Provided that the Company has actual notice of any assignment of the interest of the Member, the effective date of such assignment on which the assignee shall be deemed an assignee of record shall be the date set forth on the written instrument of assignment. (c) Any assignment, sale, exchange, transfer or other disposition in contravention of any of the provisions of this Article 17 and Article 18 hereof shall be void and ineffective and shall not bind or be recognized by the Company. (d) In the event that there shall be more than one assignee, transferee, representative or other successor in interest as permitted herein (collectively, the "Transferees") and the Member as of the date of this Operating Agreement shall remain a Member, then the Member shall be authorized to act, and shall so act, on behalf of the Member and all of the Transferees acting as such by, through or under the Member. In the event that there shall be more than one Transferee, and the Member as of the date of this Operating Agreement shall no longer be a Member, then the Company must be advised by the Member whose interest is the subject of such event or failing which by a two-thirds (2/3) majority in interest of those holding any portion of the interests of the Member, of one person to act on behalf of all the Transferees. The Member, if the first sentence of this paragraph shall be applicable, or the person so noted to the Company, if the second sentence of this paragraph shall be applicable, shall be authorized to act, and shall so act, for all of the Transferees, all of whom shall be bound by any decision or action taken by such person, and the Company, the Company and all of the other Members, shall be entitled to rely on the decisions or actions taken by such person. Until the Company shall be advised as to the identity of such person, (i) the Transferees shall be entitled only to distributions and tax allocations as provided in Article 8 and 9 hereof, but shall have no right, power or authority with respect to any decision making reserved herein to the Members or any of them and (ii) wherever in this Operating Agreement provision shall be made for the Members to make decisions with respect to Company matters, the interests of the Member, as transferred to the Transferees, shall not be included in determining whether the requisite interest of members have consented to or approved of such decision. 17.2 Without the prior written consent of all Members and other than as provided in Section 6.1(b) above, a Member may not resign from the Company prior to the dissolution and winding up of the Company. ARTICLE 18 ADMISSION OF SUBSTITUTED MEMBERS; DEATH OR INCAPACITY; FURTHER CONDITIONS 18.1 No assignment or transfer of all or any part of the interest of a Member permitted to be made under this Operating Agreement shall be binding upon the Company unless and until a duplicate original of such assignment or instrument of transfer, duly executed and acknowledged by the assignor and the transferee, has been delivered to the Company. 18.2 As a condition to the admission of any substituted Member, as provided in Article 17 hereof, the person so to be admitted shall execute and acknowledge such instruments, in form and substance reasonably satisfactory to the Company, as a majority in interest of the Members may deem necessary or desirable to effectuate such admission and to confirm the agreement of the person to be admitted as a Member to be bound by all of the covenants, terms and conditions of this Operating Agreement, as the same may have been amended. 18.3 Any person to be admitted as a member pursuant to the provisions of this Operating Agreement shall, as a condition to such admission as a Member, pay all reasonable expenses in connection with such admission as a Member, including, but not limited to, the cost of the preparation, filing and publication of any amendment to this Operating Agreement and/or Certificate of Formation. 18.4 In the event of the death or adjudication of incompetency of a Member, or upon the happening of any event described in Article 16, the executor, administrator, committee or other legal representative of such Member, or the successor in interest of such Member, shall succeed only to be right of such Member to receive allocations and distributions hereunder, and may be admitted to the Company as a Member in the place and stead of the deceases, incompetent, or bankrupt Member in accordance with this Article 18, but shall not be deemed to be a substituted Member unless so admitted. Such event, however, shall cause a termination or dissolution of the Company within one hundred twenty (120) days of such event unless a majority in interest of the Members shall elect to continue the Company within said one hundred twenty (120) day period. 18.5 Notwithstanding anything to the contrary contained in this Operating Agreement, no sale or exchange of an interest in the Company may be made if the interest sought to be sold or exchanged, when added to the total of all other interests sold or exchanged within the period of twelve (12) consecutive months prior thereto, results in the termination of the Company under Section 708 of the Code without the prior written consent of a majority in interest of the Members. 18.6 In the event of a permitted transfer of all or part of the interest of a Member, the Company shall, if requested, file an election in accordance with Section 754 of the Code or a similar provision enacted in lieu thereof, to adjust the basis of the Property of the Company. The Member requesting said election shall pay all costs and expenses incurred by the Company in connection therewith. ARTICLE 19 LIQUIDATION 19.1 Upon the dissolution of the Company, the Company shall be liquidated and its assets distributed as required by Section 42:2B-51 of the Act. 19.2 The assets of the Company shall be liquidated as promptly as possible, but in an orderly and businesslike manner so as not to involve undue sacrifice. 19.3 In the event that any proceeds are to be distributed to the Members same shall be distributed, if practicable, no later than the later of (i) the end of the taxable year of the Company in which such liquidation occurs; or (ii) within ninety (90) days after the date of such liquidation event. 19.4 In any liquidation, the Company's assets shall be used first to pay the costs and expenses of the dissolution and liquidation. The liquidation trustee (which may be a Member) shall be entitled to establish reserves to provide for any contingent or unforeseen liabilities or obligations of the Company. 19.5 With respect to distributions to Members, said distributions shall be made: (a) first, to the repayment of any accrued and unpaid interest on, and the then outstanding principal balance of, any Default Loan, in proportion to the aggregate amount of interest, and then principal, owed, and if more than one Member shall have made a Default Loan, then in proportion to the amounts so loaned. If there shall be more than one instance in which a Default loan has been made, the Default loans shall be repaid in the order in which they shall have been outstanding the longest; (b) second, to the payment of an obligation owed pursuant to Section 11.3 (c). (c) third, to all Members in proportion to and to the extent of any remaining positive balances in such Member's Capital Account after giving effect to all locations to such Member under Article 10 of this Operating Agreement so that liquidation proceeds shall be distributed in accordance with each Member's positive Capital Account balance (within the meaning of Treasury Regulation Section 1.704-1(b) (2) (ii) (b) as in effect on the date hereof); and (d) last, to all Members pro rata in accordance with their Company Interests. ARTICLE 20 GENDER 20.1 All terms and words used in this Operating Agreement, regardless of the sense or gender in which they are used, shall be deemed to include each other sense and gender unless the context requires otherwise. ARTICLE 21 FURTHER ASSURANCES 21.1 The Members agree immediately and from time to time to execute, acknowledge, deliver, file, record and publish such further certificates, amendments to certificates, instruments and documents, and to do all such other acts and things as may be required by law, or as may, in the opinion of a majority in interest of the Members, be necessary or advisable to carry out the intent and purposes of this Operating Agreement. ARTICLE 22 COVENANT AGAINST PARTITION 22.1 The Members, on behalf of themselves, their legal representatives, heirs, successors and assigns, hereby specifically renounce, waive and fofeit all rights whether arising under contract, statute, or by operation of law, to seek, bring, or maintain any action for partition in any court of law or equity pertaining to any real property which the Company may now or in the future own, regardless of the manner in which title to any such property may be held. ARTICLE 23 NOTICES 23.1 Unless otherwise specified in this Operating Agreement, all notices, demands, requests or other communications which any of the parties to this Operating Agreement may desire or be required to give hereunder (hereinafter referred to collectively as "Notices") shall be in writing and shall be given by mailing the same by postage prepaid certified or registered mail, return receipt requested, or by nationally recognized overnight courier to the appropriate Member at the address set forth in this Operating Agreement. Notices given in compliance with the provisions of this Article shall be deemed given one (1) business day after delivery to a nationally recognized overnight courier or four (4) business days after mailing in a repository of the United States Postal Service. ARTICLE 24 APPLICABLE LAW 24.1 The parties agree that the parties shall be governed by, and this Operating Agreement construed in accordance with, the laws of the State of New Jersey applicable to agreements made and to be performed in such state and that all claims and suits shall be heard in the courts located in the State of New Jersey. ARTICLE 25 CAPTIONS 25.1 All section titles or captions contained in this Operating Agreement are for convenience only and shall not be deemed a part of this Operating Agreement. ARTICLE 26 COUNTERPARTS 26.1 This Operating Agreement may be executed in counterparts and each counterpart so executed by each Member shall constitute and original, all of which when taken together shall constitute one agreement, notwithstanding that all the parties are not signatories to the same counterpart. ARTICLE 27 BINDING EFFECT 27.1 This Operating Agreement may not be changed, modified, waived or discharged, in whole or in part, unless in writing and signed by all of the Members. This Operating Agreement shall be binding upon the Members and their respective executors, administrators, legal representatives, heirs, successor and assigns. The singular of any defined term or term used herein shall be deemed to include the plural. ARTICLE 28 PARTIAL INVALIDITY 28.1 If any term or provision of this Operating Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the reminder of this Operating Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and each term and provision of this Operating Agreement shall be valid and enforced to the fullest extent permitted by law. ARTICLE 29 INTEGRATION 29.1 This Operating Agreement is the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements relative to such subject matter. IN WITNESS WHEREOF, the parties hereto have executed this Operating Agreement as of the day and year first above written. /S/ Lawrence Seidman /S/ Sonia Seidman /S/ SEIDCAL ASSOCIATES By: /S/ Angelo R. Cali, Partner /S/ Paul Schmidt /S/ Richard Greenberg SCHEDULE A Required Contributions Lawrence Seidman $50,000 Sonia Seidman $200,000 SEIDCAL Associates $1,500,000 Paul Schmidt $100,000 Richard Greenberg $250,000 SCHEDULE B PERCENTAGE INTEREST Lawrence Seidman: % Sonia Seidman: % SEIDCAL Associates: % Paul Schmidt: % Richard Greenberg: % SCHEDULE B EXAMPLE OF THE OPERATION OF SECTION 7.3 Assume the following facts: (a) The interests are as follows: A 10% B 30% C 60% (b) The aggregate capital contributions made by the Members in proportion to their respective interests is $2,000,000. (c) The Company requires additional funds of $1,000,000. (d) A and B each contribute their Additional Contributions to the Company ($100,000 and $300,000, respectively) and C fails to contribute his Additional Contribution ($600,000). (e) B contributes C's Additional Contribution to Company. The amount that C's Interest is decreased and the amount that B's Interest is increased is computed as follows: (i) Multiply the amount of the contribution not made by C ($600,000) by 200% resulting in a product of $1,200,000; (ii) Divide the result of (i) above ($1,200,000) by the aggregate amount of all capital contributions made by the Members ($3,000,000), resulting in a product of .40; (iii) Convert the product arrived at in computation (ii) above (.40) to a percentage (by multiplying the same by 100) resulting in 40%. Subtract such percentage from the Company Interest of C (40%) resulting in a new Interest for C of 20%; and (iv) Increase the Interest of B (30%) by adding thereto the same Percentage that was subtracted from Member C (40%) resulting in a new Interest for B of 70%. FIRST AMENDMENT TO OPERATING AGREEMENT FOR SEIDMAN & ASSOCIATES, L.L.C. THIS AMENDMENT is made on July , 1998, by and between LAWRENCE SEIDMAN, having an address at 19 Veteri Place, Wayne, New Jersey 07470, SONIA SEIDMAN, having an address at 19 Veteri Place, Wayne, New Jersey 07470; SEIDCAL ASSOCIATES, L.L.C., a New Jersey limited liability company, having an address c/o Mack-Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016; PAUL SCHMIDT, having an address at 159 Clinton Place, Hackensack, New Jersey 07601; and RICHARD GREENBERG, having an address at 1235A Route 23 South, Wayne, New Jersey 07474 (hereinafter referred to collectively as the "Members"). W I T N E S S E T H: WHEREAS, the Members previously formed a limited liability company known as Seidman & Associates, L.L.C. (the "Company") pursuant to the New Jersey Limited Liability Company Act; and WHEREAS, the Members entered into an Operating Agreement for the Company, dated November 1994; and WHEREAS, the Members desire to amend the Operating Agreement, pursuant to Article 27 thereof, in accordance with the terms and provisions set forth below. NOW, THEREFORE, the Members do hereby agree as follows: 1. INCORPORATION BY REFERENCE Subject to the provisions of this Amendment, the definitions, terms and conditions of the Operating Agreement are incorporated in this Amendment by reference in the same manner and to the same extent as if such definitions, terms and conditions were fully set forth in this Amendment. 2. AMENDMENT OF OPERATING AGREEMENT 2.1 Subparagraph 4.1(a) of the Operating Agreement be and the same is hereby amended to read as follows: 4.1 The Company shall commence upon the filing of the Certificate of Formation, and shall continue in full force and effect until May 1, 2024, provided, however, that the Company shall be dissolved prior to such date upon the happening of any of the following events: (a) The mutual written consent of the Members to dissolve the Company; provided, however, that the Company may not be dissolved by mutual consent prior to December 31, 2000. 2.2 Subparagraph 11.3(c) of the Operating Agreement be and the same is hereby amended to read as follows: The Managing Member may be removed or replaced any any time after December 31, 2000 by a majority in interest of the Members, but if the Managing Member is removed, he shall be entitled to receive $315,000.00 reduced by the payments already received pursuant to Section 11.3(b), together with any other fees earned prior to his removal. 2.3 Except as modified by Subparagraphs 2.1 and 2.2 of this Agreement, all of the terms and conditions of the Operating Agreement shall remain in full force and effect. 3. COVENANT OF FURTHER ASSURANCES The Members agree that they shall execute and deliver any and all additional writings, instruments, and other documents and take such further action as shall reasonably be required in order to effectuate the provisions of this Amendment. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Operating Agreement as of the day and year first above written. ----------------------- LAWRENCE SEIDMAN ----------------------- SONIA SEIDMAN [SIGNATURES CONTINUED ON NEXT PAGE] SEIDCAL ASSOCIATES, L.L.C. By:---------------------- ----------------------- Brant B. Cali, Member ----------------------- PAUL SCHMIDT ----------------------- RICHARD GREENBERG LAWRENCE B. SEIDMAN, ESQ. Lanidex Executive Center 100 Misty Lane P. O. BOX 5430 Parsippany, New Jersey 07054 (973) 560-1400 March 30, 1999 Mr. Brant Cali, Executive Vice President Mack-Cali Real Estate Corporation 11 Commerce Drive Cranford, NJ 07016 Dear Brant: This will confirm the agreement reached last week with Angelo and John whereby my annual management fee from Seidman & Associates, LLC, provided for in 11.3(b) of the Operating Agreement, shall be increased from $125,000 to $250,000. Very truly yours, LAWRENCE B. SEIDMAN LS:rr EX-10.6 8 exf.txt LETTER AGREEMENT WITH KERRIMATT, L.P. EXHIBIT F Lawrence B. Seidman, Esq. Koll Executive Center 100 Misty Lane P. O. Box 5430 Parsippany, NJ 07054 April 17, 1998 David M. Mandelbaum, Esq. Mandelbaum & Mandelbaum 80 Main Street West Orange, NJ 07052 Dear David: The following are the terms and conditions in reference to the investment account for the prchase of publicly traded bank and thrift stocks: 1. A brokerage account will be opened at Bear Stearns & Company in the name of Kerrimatt L.P. 2. The account will be a discretionary account with Larry Seidman having a revocable Power of Attorney to buy and sell stock in said account provided all funds deposited into the account are for Kerrimatt L.P. and all stock purchased in the account is in the name of Kerrimatt L.P. 3. The account will be funded with a maximum of $2,000,000 and will not be margined. 4. Only shares of publicly traded bank and thrift stocks with their principal operations located in New Jersey may be purchased. I will notify David Mandelbaum, in writing, when I commence the purchase of the stock of any individual entity. 5. Kerrimatt L.P. shall have the right to terminate the relationship twenty-four months after the account is initially funded or in the event of a breach by Larry Seidman of this Agreement. 6. Upon such termination, my discretion shall be terminated automatically 7. My compensation shall be 1/4 of 1% of the value of the assets in the account computed as of the last day of each calendar quarter, but not to exceed $5,000 per quarter. An incentive fee will be paid me equal to 20% of the net profits earned in the account as of the termination date whether same shall be Michael J. Mandelbaum, Esq. April 17, 1998 Page 2 the two year anniversary date or later if agreed to between the parties. 100% of all funds shall go to Kerrimatt L.P. until 100% of the capital plus a 8% annual noncumulative return (the "Hurdle") is returned, and then the division shall be 80% to Kerrimatt L.P. and 20% to Larry Seidman. 8. Net profits, if any in excess of the hurdle, shall be defined to be the amount earned in the account without regard to a "Hurdle" or without regard to cash dividends. Cash dividends shall be the property of Kerrimatt L.P. and shall not be included in net profits 9. I shall have the sole right to vote the shares in the account until termination of my Power of Attorney. 10. In the event any portion of this agreement is not in compliance with law, then Kerrimatt L.P. shall have the sole right to terminate this letter, and an accounting shall be done based upon the above quoted administrative fee and profit participation to the date of the termination. Very truly yours, LAWRENCE B. SEIDMAN AGREED AND ACCEPTED: KERRIMATT L.P. By: David Mandelbaum, General Partner EX-10.7 9 exg.txt OPERATING AGREEMENT FOR FEDERAL HOLDINGS L.L.C. EXHIBIT G OPERATING AGREEMENT FOR FEDERAL HOLDINGS L.L.C. Dated: June 12,1995 INDEX Page No. Article 1 Definitions Article 2 Formation Article 3 Principal Office Article 4 Term and Duration Article 5 Purpose Article 6 Capital Contributions by the Members Article 7 Additional Capital Contributions Article 8 Distributions of Net Proceeds Article 9 Tax Allocations and Distributions Article 10 Rights, Powers and Representations of the Investment Manager and Administrative Manager; Management Fee Article 11 Books, Records and Reports Article 12 Indemnification Article 13- Tax Matters Article 14- Death, Dissolution or Bankruptcy of A Member Article 15- Assignability, Transfer or Pledge of Interests; Resignation of A Member Article 16- Admission of Substituted Members; Incapacity; Further Condition Article 17 Liquidation Article 18 Miscellaneous Schedule A - Members' Percentage Interests and Capital Contributions OPERATING AGREEMENT FOR FEDERAL HOLDINGS L.L.C. AGREEMENT made June 12,1995 by and among the members listed on Schedule A annexed hereto (individually, a "Member" and collectively, the "Members"). W I T N E S S E T H: WHEREAS, the Members desire to form a limited liability company pursuant to the New York Limited Liability Company Law (the "Law") and adopt this Agreement in connection therewith; and WHEREAS, by executing this Agreement, each Member represents that it has sufficient right and authority to execute this Agreement and is not acting on behalf of any undisclosed or partially disclosed principal. NOW, THEREFORE, in consideration of ten ($10) dollars and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows effective as of the date first written above. ARTICLE 1 DEFINITIONS 1.1 For purposes of this Agreement, the following terms shall have the definitions set forth below: "Account": As defined in Section 10.4 "Additional Member": Means any person or entity other than the Members of the Company as of the date hereof who acquires an interest in the Company. "Administrative Manager': Kevin Moore. "Advance": As defined in Section 7.2. "Agreement": This Operating Agreement as originally executed and as amended, modified, supplemented or restated from time to time. "Articles of Organization": The Articles of Organization of the Company filed with the Secretary of State of the State of New York, pursuant to the Law to form the Company, as originally executed and as amended, modified, supplemented or restated from time to time. "Capital Account" or "Capital Accounts": As defined in Section 6.4. "Capital Contributions": The respective capital contributions, including any additional Capital Contribution,of each Member to the Company. "Capital Transaction" or "Capital Transactions": Any transaction which, in accordance with generally accepted accounting principles consistently applied, is treated as a capital transaction including, without limitation, any sale of all or substantially all of the assets of the Company. "Closing Price": As defined in Section 16.4 "Code": The Internal Revenue Code of 1986, as amended, and any reference to a particular section of the Code shall be deemed to include any successor section to such section. "Company": FEDERAL HOLDINGS L.L.C., a New York limited liability company. "Contributing Member": A Member which has made its additional Capital Contribution. "Current Market Value": As defined in Section 16.4. "Fair Market Value": As defined in Section 16.4. "Gain from a Capital Transaction": The gain recognized by the Company attributable to a Capital Transaction, determined in accordance with the method of accounting used by the Company for federal income tax purposes. "Interest": The respective percentage interest of each Member as set forth on Schedule A. "Investment Manager": Shall mean Lawrence Seidman, subject to the provisions of Section 10.5. "Loss from a Capital Transaction": The loss recognized by the Company attributable to a Capital Transaction, determined in accordance with the method of accounting used by the Company for federal income tax purposes. "Management Fee": As defined in Section 10.2. "Member": Means each of the parties who has executed this Agreement and any party who may hereafter become an Additional Member or a Substitute Member pursuant to this Agreement. "Net Proceeds": As defined in Section 8.1. "Net Profit" and "Net Loss": The net income (including income exempt from tax) and net loss (including expenditures that can neither be capitalized nor deducted), respectively, of the Company, determined in accordance with the method of accounting used by the Company for federal income tax purposes, but computed without regard for Gain from Capital Transactions, Loss from Capital Transactions and items of income or loss, if any, that are specially allocated to Members. In the event there is a revaluation of Company assets and the Capital Accounts are adjusted pursuant to Section 704(b) of the Code and applicable regulations promulgated thereunder, Net Profits and Net Losses shall be computed by reference to the "book items" and not corresponding "tax items". "Preferred Return": With respect to a Member, an amount equal to 7.5% per annum simple interest (prorated for any partial year) on the amount of such Member's Unrecovered Capital Contribution, from time to time, calculated from the date a Capital Contribution is made. "Substitute Member": Any transferee of a Member's Interests who is admitted as a Member in the Company pursuant to Article 15 or 16. "Trading Day": As defined in Section 16.4. "Unrecovered Capital Contribution": For any Member, the aggregate amount of capital contributed by such Member reduced by the aggregate amount of capital theretofore distributed to such Member pursuant to Articles 16 and 17. "Unrecovered Preferred Return": For any Member an amount equal to the Preferred Return reduced by the aggregate amount of distributions theretofore made to such Member pursuant to Section 8.1(b)(i). "Unrecovered 20% IM Fee": An amount equal to 20% of the aggregate annual Preferred Return for all Members divided by .8, reduced by the aggregate amount of distributions of Net Proceeds theretofore made pursuant to Section 8.1(b) (ii). ARTICLE 2 FORMATION 2.1 The parties hereto do hereby form the Company under the name of FEDERAL HOLDINGS L.L.C. pursuant to the Law. In order to maintain the Company as a limited liability company under the laws of the State of New York, the Company shall from time to time take appropriate action, including the preparation and filing of such amendments to the Articles of Organization and such other assumed name certificates, documents, instruments and publications as may be required by law, including, without limitation, action to reflect: (i) a change in the Company name; (ii) a correction of a defectively or erroneously executed Articles of Organization; (iii) a correction of false or erroneous statements in the Articles of Organization or the desire of the Members to make a change in any statement therein in order that it shall accurately represent the agreement among the Members; or (iv) a change in the time for dissolution of the Company as stated in the Articles of Organization and in this Agreement. 2.2 Each Member hereby agrees to execute and deliver to the Company within five (5) days after receipt of a written request therefor, such other and further documents and instruments, statements of interest and holdings, designations, powers of attorney and other instruments and to take such other action as the Company deems necessary, useful or appropriate to comply with any laws, rules or regulations as may be necessary to enable the Company to fulfill its responsibilities under this Agreement, to preserve the Company as a limited liability company under the Law and to enable the Company to be taxed as a partnership for federal and state income tax purposes. ARTICLE 3 PRINCIPAL OFFICE 3.1 The Company's registered office in New York shall be at 30 Wall Street, Ninth Floor, New York, New York. The Company's registered agent who is a resident of New York is Jonathan A. Bernstein, Esq. whose business address is Pryor, Cashman, Sherman & Flynn, 410 Park Avenue, New York, New York 10022. At any time, the Company may designate another registered agent and/or office. 3.2 The principal place of business of the Company shall be at 30 Wall Street, Ninth Floor, New York, New York. At any time, the Company may change the location of its principal place of business and may establish additional offices. ARTICLE 4 TERM AND DURATION 4.1 The Company shall commence upon the filing of the Articles of Organization, and shall continue in full force and effect until April 30, 2045; provided, however, that the Company shall be dissolved prior to such date upon the happening of any of the following events: (a) The mutual written consent of all of the Members to dissolve the Company; (b) The divestiture or distribution of all or substantially all of the assets of the Company, (other than a transfer to a nominee of the Company for any Company purpose, which event shall not be construed as an event of termination); (c) The entry of a decree of judicial dissolution under Section 702 of the Law; or (d) The happening of any other prior event which pursuant to the terms and provisions of this Agreement shall cause a dissolution or termination of the Company. 4.2 Upon any dissolution of the Company, the liquidation of the Company's assets and the winding up of its affairs shall be concluded in accordance with Article 17 of this Agreement. ARTICLE 5 PURPOSE 5.1 The purpose of the Company is to legally or beneficially acquire, own, sell, transfer, hold and vote shares of common stock, preferred stock, convertible or exchangeable securities of any bank, bank holding company, savings and loan association or trust company (hereinafter referred to as "Stock") and to enter into any contracts or commitments, assume any obligation, execute any documents and do any and all other acts and things, either directly or in conjunction with others through corporations, joint ventures, partnerships, trusts, limited liability companies or otherwise, which may be necessary, incidental or convenient to carry on the business of the Company as contemplated by this Agreement. The Company may also sell covered calls, repurchase such calls and buy puts, but the Company shall not sell uncovered calls or puts. 5.2 The purpose of the Company shall also be for any other lawful purpose for which the Members shall herewith agree in writing by amendment to this Agreement. ARTICLE 6 CAPITAL CONTRIBUTIONS BY THE MEMBERS 6.1 Each Member shall contribute to the capital of the Company the amounts set forth on Schedule A. 6.2 No Member shall have the right to withdraw any part of his Capital Contribution or receive any distribution, except in accordance with the provisions of this Agreement. No interest shall be paid on any Capital Contribution other than the Preferred Return. 6.3 No Member shall have any priority over any other Member with respect to the return of Capital Contributions. 6.4 The Company shall maintain a capital account (a "Capital Account") for each Member within the provisions of Treasury Regulation Section 1.704-1(b) (2) (iv) as such regulation may be amended from time to time. 6.5 To the extent not inconsistent with the foregoing, the following shall apply: (a) The Capital Account of each Member shall be credited with (1) an amount equal to such Member's cash contributions and the fair market value of property contributed to the Company by such Member (net of liabilities securing such contributed property that the Company is considered to assume or take subject to under Section 752 of the Code) and (2) such Member's share of the Company's Net Proceeds (or items thereof) and Gain from a Capital Transaction. The Capital Account of each Member shall be debited by (1) the amount of cash distributions to such Member and the fair market value of property distributed to such Member (net of liabilities assumed by such Member and liabilities to which such distributed property is subject) and (2) such Member's share of the Company's Net Losses (or items thereof) and Loss from a Capital Transaction. (b) Upon the transfer of an Interest in the Company after the date of this Agreement, (x) if such transfer does not cause a termination of the Company within the meaning of Section 708 (b) (1) (B) of the Code, the Capital Account of the transferor Member that is attributable to the transferred Interest will be carried over to the transferee Member but, if the Company has a Section 754 election in effect, the Capital Account will not be adjusted to reflect any adjustment under Section 743 of the Code, or (y) if such transfer causes a termination of the Company within the meaning of Section 708 (b) (1) (B) of the Code, the income tax consequences of the deemed distribution of the property and of the deemed immediate contribution of the property to a new Company (which for all other purposes continues to be the Company) shall be governed by the relevant provisions of Subchapter K of Chapter 1 of the Code and the regulations promulgated thereunder, and the initial Capital Accounts of the Members in the new Company shall be determined in accordance with Treasury Regulation Sections 1.704-1(b) (2) (iv) (d, (e), (f), (g), and (i) and thereafter in accordance with Section 6.5 (a). (c) Upon (i) the "liquidation of the Company" (as hereinafter defined), (ii) the "liquidation of a Member's Interest in the Company" (as hereinafter defined), (iii) the distribution of money or property to a Member as consideration for an Interest in the Company , or (iv) the contribution of money or (if permitted pursuant to (a) above) property to the Company by a new or existing Member as consideration for an Interest in the Company, or upon any transfer causing a termination of the Company for tax purposes within the meaning of Section 708 (b) (1) (B) of the Code, then adjustments shall be made to the Members' Capital Accounts in the following manner: All property of the Company which is not sold in connection with such event shall be valued at its then "agreed value". Such "agreed value" shall be used to determine both the amount of gain or loss which would have been recognized by the Company if the property had been sold for its agreed value (subject to any debt secured by the property) at such time, and the amount of Net Proceeds, as the case may be, which would have been distributable by the Company pursuant to Section 9.2 if the property had been sold at such time for said value, less the amount of any debt secured by the property. The Capital Accounts of the Members shall be adjusted to reflect the deemed allocation of such hypothetical gain or loss in accordance with Section 9.1. The Capital Accounts of the Members (or of a transferee of a Member) shall thereafter be adjusted to reflect "book items" and not tax items in accordance with Treasury Regulation Section 1.704 1(b) (2) (iv) (g) and 1.704-1(b) (4) (i). (d) For purposes of this Section 6.5, (i) the term "liquidation of the Company" shall mean (A) a termination of the Company effected in accordance with this Agreement, which shall be deemed to occur, for purposes of this Article 6, on the date upon which the Company ceases to be a going concern and is continued in existence solely to wind-up its affairs, or (B) a termination of the Company pursuant to Section 708 (b) (1) of the Code; and (ii) the term "liquidation of a Member's Interest in the Company" shall mean the termination of the Member's entire Interest in the Company effected by a distribution, or a series of distributions, by the Company to the Member. ARTICLE 7 ADDITIONAL CAPITAL CONTRIBUTIONS 7.1 No Member shall be obligated to make additional Capital Contributions to the Company. If the Administrative Manager determines that the Company shall need additional funds for any Company purpose, including, without limitation, (a) those purposes set forth in Article 5, or (b) cash in excess of Net Proceeds in order to satisfy any obligations and liabilities of the Company, then within fifteen (15) days of notice of such requirement, each Member may, but shall not be obligated to, contribute to the Company his pro rata share. If a Member elects to make an additional Capital Contribution and another Member forgoes contributing additional capital, the Company shall, for purposes of distributions and allocations, recompute each Member's percentage Interest in the Company in proportion to the total capital contributed to the Company such that thereafter each Member's Interest shall be equal to the percentage that such Member's aggregate Capital Contribution theretofore made to the Company bears to the total Capital Contributions theretofore made by all the Members. 7.2 A Member may from time to time, upon the consent of the Administrative Manager but without the consent of a majority in interest of the Members, advance additional monies (an "Advance") to or for the benefit of the Company, and such advances shall not be treated as Capital Contributions but shall be considered as loans to be repaid upon demand together with annual interest at a rate not less than the lowest applicable federal rate of interest which allows for the avoidance of imputed or unstated interest, for federal income tax purposes. Such loans shall be evidenced by a promissory note executed and delivered by the Company to the Member making such Advance. ARTICLE 8 DISTRIBUTIONS OF NET PROCEEDS 8.1 (a) Net Proceeds shall be computed and distributed by the Company once, on an aggregated basis of all stocks in which the Company has traded, at the earlier of (i) a determination by the Investment Manager in his sole discretion, (ii) the resignation or other termination of the Investment Manager, (iii) the liquidation or winding up of the Company or (iv) the end of the Management Term. "Net Proceeds" shall be defined as dividends received, interest income, all net trading profits (i.e. proceeds from the sale of Stock less the Company's basis in the Stock) less all expenses (including but not limited to brokerage commissions, the Management Fee and other applicable accounting or professional fees but not including the Unrecovered 20% IM Fee) all as computed in accordance with generally accepted accounting principles. (b) Net Proceeds shall be distributed as follows: (i) first, to the Members, pro rata, an amount equal to each Member's cumulative Unrecovered Preferred Return in proportion to their Unrecovered Preferred Return until the Preferred Return shall be paid in full; (ii) second, to the Investment Manager an amount equal to the Unrecovered 20% IM Fee; and (iii) the balance, if any, shall be paid 80% to the Members in proportion to their Interests and 20% to the Investment Manager. (c) If Stock cannot be readily sold because of the lack of its liquidity in the market or if the Administrative Manager elects not to sell the Stock at the time of a distribution of Net Proceeds, the Company shall calculate the fair market value of the Stock by averaging the closing sale prices (or if there is no sale on a particular day, the average closing bid and ask prices) for the five consecutive trading days preceding the date of computation. Thereafter, based upon its valuation, the Company shall calculate the amount of Net Proceeds that would be distributed if the Stock had actually been sold for its fair market value (including all applicable commissions). The Company shall then distribute the Stock in kind in accordance with Section 8.1(b) as if the Stock were Net Proceeds. (d) Notwithstanding Section 8.1(c), if the Investment Manager makes a determination to distribute Net Proceeds in accordance with Section 8.1(a)(i) and the Stock cannot be readily sold because of its lack of liquidity in the market, the Investment Manager shall liquidate the Stock in an orderly fashion over a six (6) month period. Thereafter, Net Proceeds shall be distributed in accordance with Section 8.1(b). 8.2 Notwithstanding Section 8.1, Net Proceeds from a Capital Transaction which constitutes a liquidation of the Company, together with other funds remaining to be distributed, shall be distributed to the Members no later than the later of (a) the end of the taxable year of the Company in which such liquidation occurs or (b) within ninety (90) days after the date of such liquidation event, after payment of all Company liabilities and expenses (or adequate provision therefor) including the Management Fee, except that in no event shall (x) a distribution be made to any Member if, after giving effect to such distribution, all liabilities of the Company, other than liabilities to Members on account of their Interests and liabilities for which the recourse of creditors of the Company is limited to specified property of the Company, exceed the Fair Market Value (as defined in Section 16.4(c)) of the assets of the Company, except that the Fair Market Value of assets that is subject to a liability for which the recourse of creditors is limited shall be included in the assets of the Company only to the extent that the Fair Market Value of those assets exceeds that liability and (y) the distribution to a Member exceed the positive balance in such Member's Capital Account after giving effect to all allocations to such Member under Article 9 50 that liquidation proceeds shall be distributed in accordance with each Member's positive Capital Account balance (within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(~ as in effect on the date hereof). If a Member shall receive a distribution that should not have been made based upon the provisions of Section 8.2(x), the provisions of Section 508(b) of the Act shall apply. Section 508(c) of the Law shall apply to all distributions made to the Members. ARTICLE 9 TAX ALLOCATIONS AND DISTRIBUTIONS 9.1 The Net Profits of the Company for each fiscal year shall be allocated among the Members as follows: (a) First to the Members in an amount equal to, and in proportion to, the aggregate amount of Net Losses theretofore allocated to each Member; and (b) Thereafter, in proportion to their respective Interests in the Company Any credit available for income tax purposes shall be allocated among the Members in proportion to their respective Interests in the Company. 9.2 Gain from a Capital Transaction shall be allocated in the following order: (a) There shall first be allocated to those Members, if any, who have deficit balances in their Capital Accounts immediately prior to such transaction, an amount of such gain equal to the aggregate amount of such deficit balances, which amount shall be allocated in the same proportion as such deficit balances. (b) There shall next be allocated to each of the Members, gain equal to the amount by which (x) the aggregate Net Proceeds derived from such transaction distributable to each Member in accordance with the provisions of Section 8.1(b) (i) and (iii), assuming such amounts are distributable, exceeds (y) the positive balance, if any, in such Member's Capital Account after such Member's Capital Account has been adjusted to reflect the gain allocated to such Member pursuant to paragraph (a) above; provided, however, that if there shall be an insufficient amount of gain determined by this paragraph, then the gain shall be allocated to the Members in proportion to the respective amounts determined pursuant to this paragraph. (c) Any remaining gain shall be allocated among the Members in proportion to their respective Interests in the Company. (d) If the Company shall realize, upon such transaction, gain which is treated as ordinary income under Section 1245 or 1250 of the Code, such ordinary income shall be allocated to the Members who receive the allocation of the depreciation or cost recovery deduction that generated the ordinary income, which amount shall be allocated in the same proportions as such deductions. 9.3 Net Losses of the Company shall be allocated among the Members as follows: (a) First, to the Members in proportion to their respective positive Capital Account balances until such balances are reduced to zero; and (b) The balance shall be allocated to the Members in proportion to their respective Interests in the Company. 9.4 Loss from a Capital Transaction from the sale or other disposition of all or substantially all of the assets shall be allocated in the following order: (a) First, to those Members, if any, who have positive balances in their Capital Accounts, an amount of such loss equal to the aggregate amount of such positive balances, which amount shall be allocated in the same proportion as such positive balances; and (b) The balance of such loss shall be allocated to the Members in proportion to their respective Interests in the Company 9.5 Notwithstanding the foregoing provisions of Article 9: (a) In accordance with Sections 704 (b) and (c) of the Code and the Treasury Regulations thereunder, income, gain, loss and deduction with respect to any property contributed to the capital of the Company (including all or part of any deemed Capital Contribution under Section 708 of the Code) shall, solely for tax purposes, be allocated among the Members so as to take into account any variation between the adjusted basis of such property to the Company and its agreed value. In the event that Capital Accounts are ever adjusted pursuant to Treasury Regulation Section 1.704-1(b) (2) to reflect the fair market value of any Company property, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset and its value as adjusted in the same manner as required under Section 704 (c) of the Code and the Treasury Regulations thereunder. (b) At no time shall any allocation of losses be made to a Member if such allocation would cause the deficit in the Member's adjusted Capital Account, if any, to exceed his allocable share of "Company Minimum Gain" or "Minimum Gain Attributable to Member Nonrecourse Debt" (as defined in Treasury Regulation Sections 1.704-2 (g) (1) and (i) (5), respectively), and any losses not allocated to a Member by reason of this clause (b) shall be allocated to each Member whose deficit, if any, in the Member's adjusted Capital Account of such Member shall not exceed his allocable share of such minimum gain by reason of such allocation. (c) If there is a net decrease in the Company's minimum gain (within the meaning of Treasury Regulation Section 1.704-2 (g) (2)) for a Company taxable year and, at the end of such taxable year, the deficit, if any, in a Member's Capital Account exceeds his allocable share of such minimum gain, gross income of the Company shall be allocated to such Member in an amount equal to such excess so as to satisfy the requirements of Treasury Regulation Section 1.704-2 (f) (minimum gain chargeback). (d) If, during any taxable year, there is a net decrease in Company Minimum Gain Attributable to Member Nonrecourse Debt, then, before any other allocations are made for such year other than those pursuant to clause (b) above, each Member with a share of the Company Minimum Gain Attributable to Member Nonrecourse Debt at the beginning of the year shall be allocated items of Company income and gain for such year (and, if necessary, for subsequent years) in an amount equal to each Member's share of the net decrease in Minimum Gain Attributable to Member Nonrecourse Debt as determined in accordance with Treasury Regulation Section 1.704-2 (i) (4) in a manner so as to satisfy the requirements of said Treasury Regulation. (e) If, during any taxable year, a Member unexpectedly receives an adjustment, allocation or distribution described in paragraph (4), (5) or (6) of Treasury Regulation Section 1.704-1(b) (2) (ii) (~, and if such adjustment, allocation or distribution would cause at the end of the taxable year a deficit balance in such Member's Capital Account in excess of his allocable share of minimum gain as described above, then such Member shall be allocated items of income and gain for such taxable year (and, if necessary, subsequent taxable years) in an amount and in a manner sufficient to eliminate such excess balance as quickly as possible before any other allocation is made for such year, other than pursuant to Sections 9.5(b) and (c), so as to satisfy the requirements of Treasury Regulation Section 1.704-1(b) (2) (ii) (~ (qualified income offset). (f) In the event any Member has a deficit balance in his Capital Account at the end of the fiscal year which is in excess of the sum of (i) the amount such Member is obligated to restore pursuant to any provision of this Agreement, if any, and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Treasury Regulations Sections 1.704-2 (g) (1) and 1.704-2 (i) (5), each Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible. ARTICLE 10 RIGHTS, POWERS AND REPRESENTATIONS OF THE INVESTMENT MANAGER AND ADMINISTRATIVE MANAGER: MANAGEMENT FEE 10.1 The Investment Manager shall have the full, exclusive and complete power and authority to buy, sell and vote the Stock. The Investment Manager shall have all necessary and appropriate powers to carry out the authority so granted, and no other party, including any Member, shall have the right to take any action with respect to the acquisition, sale or voting of the Stock. "Management Term" shall mean a term of two (2) years commencing on the date hereof, unless sooner terminated by the Administrative Manager for cause. The Administrative Manager may terminate the Investment Manager for cause upon 30 days written notice to the Investment Manager setting forth with specificity the grounds for termination. For purposes of this Section, "cause" means any willful (i) dissemination of genuine trade secrets or other confidences of the Company or any of its affiliates by the Investment Manager; (ii) dishonesty of the Investment Manager as punishable by criminal law or for which the Investment Manager would be liable to the Company or its affiliates under civil law; (iii) deliberate activity of the Investment Manager which is prejudicial to the interests of the Company or its affiliates; and (iv) deliberate failure by the Investment Manager to perform any of his material obligations hereunder which is not cured by the Investment Manager within 30 days after ~ from the Company of such failure. In the event of a termination of the Investment Manager under this Section, or upon the death or adjudication of incompetency of the Investment Manager, the Company shall, within 30 days, make a distribution of Net Proceeds in accordance with Section 8.1 above. 10.2 The Company shall pay the Investment Manager a Management Fee. The "Management Fee" shall be equal to .25% of the Fair Market Value (as defined Section 16.4(c)) of the assets of the Company, payable quarterly, on the last day of March, June, September and December of each calendar year of the Management Term. The Management Fee shall be prorated as to the first such quarter and upon the termination, resignation, death or adjudication of incompetency of the Investment Manager 10.3 Except for the matters set forth in Section 10.1, all other decisions, consents, authorizations and rights in connection with the management of the Company shall be made, given or performed, as the case may be, by the Administrative Manager. In furtherance of the foregoing, the Administrative Manager may: i (a) negotiate, execute, deliver and perform on behalf of, and in the name of, the Company any, wire transfer instructions, disbursement authorizations, agreements, contracts, promissory notes and other evidences of indebtedness, and any and all other instruments necessary or incidental to the business of the Company and the financing thereof; (b) to secure the payment thereof by all or any part of the assets then owned or thereafter acquired by the Company; (c) effectuate the purpose of the Company as provided in Article 5 hereof; (d) establish, maintain and draw upon any brokerage, money market, demand deposit, checking and other accounts of the Company; (e) execute any notifications, statements, reports, returns or other filings that are necessary or desirable to be filed with any state or federal agency, commission or authority; (f) enter into contracts in connection with the business of the Company; (g) retain professionals, accountants, lawyers, consultants as the case may be to further the purpose and business of the Company; (h) arrange for facsimile signatures for the Members in executing any and all documents, papers, checks or other writings or legal instruments which may be necessary or desirable in the Company's business; (i) execute, acknowledge and deliver any and all contracts, documents and instruments deemed appropriate to carry out any of the foregoing purposes and intent of this Agreement; (j) establish reserves for anticipated expenses, debts and obligations incident to the operation of the Company's business; and (k) perform all other duties and make all other decisions in furtherance of the management and operation of the Company's business in accordance with the Law except as otherwise set forth in this Agreement. 10.4 The Administrative Manager, on behalf of the Company, shall establish a brokerage account (the "Account") at Spear, Leeds and Kellogg or any other brokerage company (the "Broker") approved by the Administrative Manager through which the Investment Manager shall have the exclusive power and authority to direct the Broker to disburse the funds necessary to acquire Stock and to sell Stock. The Investment Manager shall have no power or authority to cause funds to be disbursed from the Account other than for the purpose of acquiring Stock. Any withdrawals of any kind from the Account shall be made by the Administrative Manager. 10.5 Upon the expiration of the Management Term, the Administrative Manager shall, upon the concurrence of the Investment Manager, have the right to extend the Management Term or, in his sole discretion, select a successor Investment Manager. The duties of a successor Investment Manager shall commence upon the date so designated by the Administrative Manager, and from and after such date, the prior existing Investment Manager shall be relieved of all duties and obligations with respect to the Company, shall no longer hold himself or herself out to any other person or entity as the Investment Manager of the Company, shall turn over to the Administrative Manager any and all books and records of the Company, and shall take such action as the Company shall request in order to effectuate such discharge and termination. No such discharge shall affect any obligations of the Company to the Investment Manager, including reimbursement and indemnity obligations as set forth herein or in the Law. 10.6 The fact that the Members, the Investment Manager or the Administrative Manager are directly or indirectly interested in or connected with any person, firm or corporation employed by the Company to render or perform a service, or from which or whom the Company may buy merchandise, material, services or other property shall not prohibit the Company from employing such persons, firms or corporations, or from otherwise dealing with such persons, firms or corporations so long as such terms and conditions are equivalent to those available at the Company and the transaction was on an arms-length basis. ARTICLE 11 BOOKS, RECORDS AND REPORTS 11.1 At all times during the continuance of the Company, the Administrative Manager shall keep or cause to be kept full and true books of account, in which shall be entered fully and accurately each transaction of the Company. The books of account, together with an executed copy of the Articles of Organization of the Company and any amendments thereto, shall at all times be maintained at the principal office of the Company and shall be open to inspection and examination by the Members or their representatives at reasonable hours and upon reasonable notice. For purposes hereof, the Company shall keep its books and records on the same method of accounting employed for tax purposes. 11.2 The fiscal year of the Company shall be the calendar year. Within a reasonable time after the end of each fiscal year and in any event on or before thirty (30) days prior to the filing date for individual tax returns (including extensions), the accountants for the Company shall deliver to each Member (a) an annual statement of the Company's receipts and expenses for such year and the Capital Account of such Member as of the end of each such year, prepared by the Company's accountants, and (b) a report or a tax return setting forth such Member's share of the Company's profit or loss for such year and such Member's allocable share of all items of income, gain, loss, deduction and credit for federal income tax purposes. 11.3 The Company shall also cause to be prepared and filed all federal, state and local tax returns required of the Company. All books, records, balance sheets, statements, reports and tax returns required pursuant to this Section 11 shall be prepared at the expense of the Company. 11.4 In accordance with Section 301(e) of the Law,. the Administrative Manager shall cause to be prepared and filed biennially the requisite statements for which service of process shall be accepted by the Secretary of State on behalf of the Company. ARTICLE 12 INDEMNIFICATION 12.1 Subject to the limitations and conditions provided in this Article 12 and in the Law, each person ("Indemnified Person") who was or is made a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative or investigative ("Proceeding"), or any appeal in such a Proceeding or any action or investigation that could lead to such a Proceeding, by reason of the fact that any manager or member was or is a Member, a Manager or an officer of the Company or was or is the legal representative of or a manager, director, officer, member, venturer, proprietor, trustee, employee, agent or similar functionary of a Member, shall be indemnified by the Company against judgments, penalties (including excise and similar taxes and punitive damages), fines, settlements and reasonable costs and expenses (including, without limitation, attorneys' fees) actually incurred by such Indemnified Person in connection with such Proceeding if such Indemnified Person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Indemnified Person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal action or proceeding, that the Indemnified Person had reasonable cause to believe that such conduct was unlawful. 12.2 Subject to the limitations and conditions provided in this Article 12 and in the Law, the Company shall and does hereby indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that such person is or was a Member, a Manager or an officer of the Company, the legal representative of a Member or officer, or manager, director, officer, member, venturer, proprietor, trustee, employee, agent or similar functionary of a Member against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit, if such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Company, provided that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the Company unless, and only to the extent that, the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as the court shall deem proper. 12.3 To the extent that a person has been successful, on the merits or otherwise, in the defense of any action, suit or proceeding referred to in Sections 12.1 or 12.2, or in defense of any claim, issue or matter there;-' such person shall be indemnified against expenses (including attorneys' fee3) actually and reasonably incurred by such person in connection therewith. 12.4 Any indemnification under Sections 12.1 or 12.2 (unless ordered by a court) shall be made by the Company except upon a reasonable determination that indemnification is proper in the circumstances because such person has not met the applicable standard of conduct set forth therein; and if such standard is met indemnification shall be mandatory. Such determination shall be made (i) by the holders of a majority of the Interests held by Members who were not parties to such action, suit or proceedings, or (ii) if such a quorum is not obtainable, or even if obtainable, if a quorum of disinterested Members so directs, by the Company's independent legal counsel in a written opinion. 12.5 Indemnification under this Article 12 shall continue as to a person who has ceased to serve in the capacity which initially entitled such person to indemnity hereunder. The rights granted pursuant to this Article 12 shall be deemed contract rights, and no amendment, modification or repeal of this Article 12 shall have the effect of limiting or denying any such rights with respect to actions taken or Proceedings arising prior to any such amendment, modification or repeal. 12.6 The right to indemnification conferred by this Article 12 shall include the right to be paid or reimbursed by the Company for the reasonable expenses incurred in advance of the final disposition of the Proceeding and without any determination as to the person's ultimate entitlement to indemnification; provided, however, that the payment of such expenses incurred in advance of the final disposition of a Proceeding shall be made only upon delivery to the Company of a written affirmation by such person of his good faith belief that he has met the standard of conduct necessary for indemnification under this Article 12 and a written undertaking, by or on behalf of such person, to repay all amounts so advanced if it shall ultimately be determined that such person is not entitled to be indemnified under this Article 12 or otherwise. 12.7 The right to indemnification and the advancement and payment of expenses conferred by this Article 12 shall not be exclusive of any other right which a person may have or hereafter acquire under any law (common or statutory), provision of the Articles of Organization or this Agreement, agreements, vote of Members or otherwise. 12.8 Insurance. The Company may purchase and maintain insurance, at its expense, to protect itself and any Indemnified Person against any expense, liability or loss, whether or not the Company would have the power to indemnify such person against such expense, liability or loss under this Article 12. 12.9 Savings Clause. If Sections 12.1,12.2 or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Indemnified Person as to costs, charges and expenses (including attorneys' fees), judgments, fines and accounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative to the full extent permitted by any applicable portion of this Article 12 that shall not have been invalidated and to the fullest extent permitted by applicable law. ARTICLE 13 TAX MATTERS 13.1 (a) Notwithstanding any provisions hereof to the contrary, each of the Members hereby recognizes that the Company will be a Company for United States federal income tax purposes and that the Company will be subject to all provisions of Subchapter K of Chapter 1 of Subtitle A of the Code; provided, however, that the filing of United States Company Returns of Income shall not be construed to extend the purposes of the Company or expand the obligations or liabilities of the Members. At the request of any Member, the Company shall file an election under Section 754 of the Code. (b) The Company shall engage an accountant (the "Accountant") to prepare at the expense of the Company all tax returns and statements, if any, which must be filed on behalf of the Company regarding the operation, dissolution and liquidation of the Company with any taxing authority. (c) The Administrative Manager is designated the Tax Matters Member (herein "TMM") for purposes of Chapter 63 of the Code and the Members will take such actions as may be necessary, appropriate, or convenient to effect the designation of the Administrative Manager as TMM. The TMM shall attempt to comply with the responsibilities outlined in this Section 13.1 and in Sections 6222' through 6231 of the Code (including any Treasury Regulations promulgated thereunder. ARTICLE 14 DEATH, DISSOLUTION OR BANKRUPTCY OF A MEMBER 14.1 Upon the death, dissolution, resignation, retirement, expulsion, adjudication of bankruptcy or adjudication of incompetency of a Member, the Company shall be dissolved and its affairs shall be wound up unless within 180 days after such event, the Company is continued by the vote of the majority in Interest of the Members (which approval may be granted or withheld in such Member's sole discretion). In the event the Company is continued, such Member (a) making an assignment for the benefit of creditors; (b) filing a voluntary petition in bankruptcy; (c) being adjudged bankrupt or insolvent, or having entered against him an order for relief, in any bankruptcy or insolvency proceeding; (d) filing a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation; (e) filing an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him in any proceeding of this nature; or (f) seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of the Member or of all or any substantial part of its assets, shall not be entitled to vote on any matters regarding the operation of the Company except for matters described in Articles 14 and 15. ARTICLE 15 ASSIGNABILITY, TRANSFER OR PLEDGE OF INTERESTS RESIGNATION OF MEMBER 15.1 (a) No Member shall have the right to assign, convey, sell or otherwise transfer or dispose of, or pledge, mortgage, hypothecate or otherwise encumber his Interest, whether record or beneficial interest thereof, without the prior written consent of the Administrative Manager and a majority in Interest of the Members, which consent may be withheld or delayed in each Member's sole discretion. Notwithstanding the preceding sentence, but subject to the restrictions on transferability required by law, or set forth in any instrument or agreement by which the Company may be bound, or which may be contained in this Agreement, an individual Member may, with the consent of a majority in interest of the other Members, assign, convey, sell or otherwise transfer or dispose of all or any portion of his Interest in the Company to any one or more of the members of his immediate family or families (defined for the purposes of this Agreement as a mother, father, sister, brother, son, daughter, stepson, stepdaughter or spouse (in each instance whether by marriage or otherwise)) and/or to a trust or other entity for the benefit thereof or themselves, by a written instrument of assignment and assumption, provided that the instrument of transfer provides for the assumption of the assignor's liabilities and obligations hereunder and has been duly executed by the assignor of such Interest and by the transferee. Upon consent of the Administrative Manager, such assignee shall become a Member and shall thereafter have the rights, powers, preferences and limitations and be subject to the restrictions and limitations of a Member under this Agreement. The Member shall notify the Company of any assignment, transfer or disposition of a beneficial interest in any Interest of the Member which occurs without a transfer of record ownership, although such notification, or the absence of a response thereto, shall not be deemed a consent thereof. (b) An assignee or transferee of any portion of the Interest of a Member shall be entitled to receive allocations and distributions attributable to the Interest acquired by reason of such assignment, from and after the effective date of the assignment of such Interest to such assignee; however, anything herein to the contrary notwithstanding, the Company shall be entitled to treat the assignor of such Interest of the Member as the absolute owner thereof in all respects, and shall incur no liability for allocations of net profits, net losses, or gain or loss on sale of Company assets or property, or transmittal of reports and notices required to be given to Members hereunder which are made in good faith to such assignor until such time as the written assignment has been received by the Company, approved and recorded on its books and the effective date of the assignment has passed. Provided that the Company has actual notice of any assignment of the Interest of the Member, the effective date of such assignment on which the assignee shall be deemed an assignee of record shall be the date set forth on the written instrument of assignment. (c) Any assignment, sale, exchange, transfer or other disposition in contravention of any of the provisions of this Article 15 and Article 16 hereof shall be void and ineffective and shall not bind or be recognized by the Company. (d) In the event that there shall be more than one assignee, transferee, representative or other successor-in-interest as permitted herein (collectively, the "Transferees") and the Member as of the date of this Agreement shall remain a Member, then the Member shall be authorized to act, and shall so act, on behalf of the Member and all of the Transferees acting as such by, through or under the Member. In the event that there shall be more than one Transferee, and the Member as of the date of this Agreement shall no longer be a Member, then the Company must be advised by the Member whose Interest is the subject of such event or failing which by a two-thirds (2/3) majority in interest of those holding any portion of the Interests of the Member, of one person to act on behalf of all of the Transferees. The Member, if the first sentence of this paragraph shall be applicable, or the person so noted to the Company, if the second sentence of this paragraph shall be applicable, shall be authorized to act, and shall so act, for all of the Transferees, all of whom shall be bound by any decision or action taken by such person, and the Company and all of the other Members shall be entitled to rely on the decisions or actions taken by such person. Until the Company shall be advised as to the identity of such person, (i) the Transferees shall be entitled only to distributions and tax allocations as provided in Article 8 and 9 hereof, but shall have no right, power or authority with respect to any decision making reserved herein to the Members or any of them and (ii) wherever in this Agreement provision shall be made for the Members to make decisions with respect to. Company matters, the Interest of the Member, as transferred to the Transferees, shall not be included in determining whether the requisite Interest of Members have consented to or approved of such decision. 15.2 Without the prior written consent of all Members, a Member may not resign from the Company prior to the dissolution and winding up of the Company. ARTICLE 16 ADMISSION OF SUBSTITUTED MEMBERS; INCAPACITY FURTHER CONDITIONS 16.1 No assignment or transfer of all or any part of the Interest of a Member permitted to be made under this Agreement shall be binding upon the Company unless and until a duplicate original of such assignment or instrument of transfer, duly executed and acknowledged by the assignor and the transferee, has been delivered to the Company. 16.2 As a condition to the admission of any Substituted Member, as provided in Article 16 hereof, the person so to be admitted shall execute and acknowledge such instruments, in form and substance as the Administrative Manager may deem necessary or desirable to effectuate such admission and to confirm the agreement of the person to be admitted as a Member to be bound by all of the covenants, terms and conditions of this Agreement, as the same may have been amended. 16.3 Any person to be admitted as a Member pursuant to the provisions of this Agreement shall, as a condition to such admission as a Member, pay all reasonable expenses in connection with such admission as a Member, including, but not limited to, the cost of the preparation, filing and publication of any amendment to this Agreement and/or Articles of Organization. 16.4 (a) In the event of the death or adjudication of incompetency of a Member, or upon the happening of any event described in Article 14, the executor, administrator, committee or other legal representative of such Member, or the successor-in-interest of such Member, shall succeed to the rights of such Member to receive allocations and distributions hereunder, and at such party's election may be admitted to the Company as a Member in the place and stead of the deceased, incompetent, or bankrupt Member (as defined in Article 14), but shall not be deemed to be a Substituted Member until admitted in accordance with the procedures of this Article 16. (b) Upon the death of a Member, the estate of a deceased Member or his heirs or legatees thereunder, as the case may be, shall have the option to continue in the Company, or, alternatively, may elect within ninety (90) days of the deceased Member's death, to offer in writing, within nine (9) months of such deceased Member's death, to sell the deceased Member's Interest to the Company at a price equal to the then Fair Market Value thereof, and upon such additional terms and conditions as may be agreed upon. If the Company does not elect to purchase the deceased Member's Interest within thirty (30) days of said written offer, then the remaining Member or Members, as the case may be, shall have the option, for a period of thirty (30) days thereafter, to purchase the deceased Member's entire Interest, either in proportion to their respective Interests in the Company or in such other proportions as they may agree, at a price equal to the Fair Market Value thereof and upon such additional terms and conditions as may be agreed upon. (c) For purposes of this Agreement, "Fair Market Value" shall be the then aggregate value of the Company's assets including cash or cash equivalents and Stock as determined by the Current Market Value, computed as of the Trading Day immediately preceding the valuation date. "Current Market Value" on any date shall mean the average of the Closing Price for a share of Stock for five (5) consecutive Trading Days ending on such date. "Closing Price" shall mean, on any date, with respect to a share of Stock, the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, for one share of Stock in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on its national securities exchange. "Trading Day" shall mean a day on which the principal national securities exchange on which the Stock is listed or admitted to trading is open for the transaction of business or, if the Stock is not listed or admitted to trading on any national securities exchange, any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. 16.5 Notwithstanding anything to the contrary contained in this Agreement, no sale or exchange of an Interest in the Company may be made if the Interest sought to be sold or exchanged, when added to the total of all other Interests sold or exchanged within the period of twelve (12) consecutive months prior thereto, results in the termination of the Company under Section 708 of the Code without the prior written consent of a majority in Interest of the Members. 16.6 In the event of a permitted transfer of all or part of the Interest of a Member, the Company shall, if requested, file an election in accordance with Section 754 of the Code or a similar provision enacted in lieu thereof, to adjust the basis of the assets of the Company. The Member requesting said election shall pay all costs and expenses incurred by the Company in connection therewith. ARTICLE 17 LIQUIDATION 17.1 Upon the dissolution of the Company, the Company shall be liquidated and its assets distributed as required by Article VII of the Law. 17.2 The assets of the Company shall be liquidated as promptly as possible, but in an orderly and businesslike manner so as not to involve undue sacrifice. 17.3 In the event that any proceeds are to be distributed to the Members, same shall be distributed, if practicable, no later than the later of (i) the end of the taxable year of the Company in which such liquidation occurs; or (ii) within ninety (90) days after the date of such liquidating event. 17.4 In any liquidation, the Company's assets shall be used first to pay the costs and expenses of the dissolution and liquidation. In connection with any liquidation, the Members may establish any reserves they deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company or of the Members arising out of or in connection with the Company. Such reserves shall be paid over by the Members to an attorney-at-law of the State of New York as escrowee designated by the Members, to be held by him for the purpose of disbursing such reserves in payment of any of the aforementioned contingencies. At the expiration of such period as the Members shall deem advisable, said escrowee shall distribute the balance remaining in the manner hereinafter provided. No reserves shall be held for longer than two (2) years. 17.5 Any remaining proceeds shall be distributed as follows: (a) first, to all Members in proportion to and to the extent of any remaining positive balances in such Member's Capital Account after giving effect to all allocations to such Member under Article 9 of this Agreement so that liquidation proceeds shall be distributed in accordance with each Member's positive Capital Account balance (within the meaning of Treasury Regulation Section 1.704-1(b) (2) (ii) (~ as in effect on the date hereof); and (b) second, in accordance with Section 8.1 hereof. 17.6 Each of the Members shall be furnished with a statement prepared by the Company's then Accountants, which shall set forth the assets and liabilities of the Company as at the date of completion of liquidation. Upon the Company's compliance with the provisions of Section 17.4 (including payment over to the Attorney-Escrowee if there are sufficient funds therefor), the Members shall cease to be such under this Agreement, and shall execute, acknowledge and cause to be filed the Articles of Dissolution of the Company. ARTICLE 18 MISCELLANEOUS 18.1 All terms and words used in this Agreement, regardless of the sense or gender in which they are used, shall be deemed to include each other sense and gender unless the context requires otherwise. 18.2 The Members agree immediately and from time to time to execute, acknowledge, deliver, file, record and publish such further certificates, amendments to certificates, instruments and documents, and to do all such other acts and things as may be required by law, or as may, in the opinion of a majority in Interest of the Members, be necessary or advisable to carry out the intent and purposes of this Agreement. 18.3 The Members, on behalf of themselves, their legal representatives, heirs, successors and assigns, hereby specifically renounce, waive and forfeit all rights whether arising under contract, statute, or by operation of law, to seek, bring, or maintain any action for partition in any court of law or equity pertaining to any property which the Company may now or in the future own, regardless of the manner in which title to any such real property may be held. 18.4 Unless otherwise specified in this Agreement, all notices, demands, requests or other communications which any of the parties to this Agreement may desire or be required to give hereunder (hereinafter referred to collectively as "Notices") shall be in writing and shall be delivered by personal delivery against receipt or by any nationally recognized overnight courier to the appropriate Member at the address first set forth above, with a copy of any Notice being sent simultaneously to Pryor, Cashman, Sherman & Flynn, Attention: Jonathan A. Bernstein, Esq., 410 Park Avenue, New York, New York 10022. Notice may also be sent to such other addresses or substitute addresses of which a Member advises the Company by notice given in the manner set forth herein. Notices given in compliance with the provisions of this Article shall be deemed given on the day received or attempted delivery. 18.5 The parties agree that the parties shall be governed by, and this Agreement construed in accordance with, the laws of the State of New York applicable to agreements made and to be performed in such State and that all claims and suits shall be heard in the courts located in the State of New York. 18.6 All section titles or captions contained in this Agreement are for convenience only and shall not be deemed a part of this Agreement. 18.7 This Agreement may be executed in counterparts and each counterpart so executed by each Member shall constitute an original, all of which when taken together shall constitute one agreement, notwithstanding that all the parties are not signatories to the same counterpart. 18.8 This Agreement may not be changed, modified, amended waived or discharged, in whole or in part, unless in writing and signed by a majority in Interest of the Members. This Agreement shall be binding upon the Members and their respective executors, administrators, legal representatives, heirs, successors and assigns. The singular of any defined term or term used herein shall be deemed to include the plural. 18.9 If any term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 18.10 This Agreement is the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior agreements relative to such subject matter. 18.11 It is expressly understood that the Investment Manager, the Administrative Manager and each Member may engage in any other business or investment, including the ownership of or investment in stocks, options, bonds, funds, and other investment vehicles, whether or not in direct competition with the business of the Company and neither the Company nor any other Member shall have any rights in and to said businesses or investments, or the income or profits derived therefrom. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. CHARISMA PARTNERS, L.P., a New York limited Partnership By: 8th Floor Realty Corp., its sole general partner By: Name: /S/ Kevin S. Moore Title: Vice President --------------------------- /S/Anne L. Peretz --------------------------- /S/Jesse W. Peretz --------------------------- /S/Eugenia Peretz --------------------------- /S/David L. Farnsworth --------------------------- /S/ Anne Farnsworth --------------------------- /S/ Edmund S. Twining III --------------------------- /S/Taylor Twining --------------------------- /S/ Edmund S. Twining IV FIRST AMENDMENT TO OPERATING AGREEMENT This First Amendment to Operating Agreement -dated August 1, 1995 by and among the parties who are Members in Federal Holdings L.L.C. prior to the date hereof (the "Original Members*) and Jonathan A. Bernstein ('JAB'). STATEMENT OF FACTS By execution of that certain Operating Agreement (the "Agreementm) for Federal Holdings L.L.C. (the OLLC") dated June 12, 1995, the Original Members formed the LLC. The Original Members have agreed to amend the Agreement to provide for the inclusion of JAB as an Additional Member and to permit the Administrative Manager (a) to admit such other persons as he shall deem proper as Additional Members and (b) provide for and accept Substitute Members as he shall deem proper, all in his sole and exclusive discretion. NOW, THEREFORE, the parties hereto hereby agree as follows: 1. All terms used in this First Amendment and not defined hereinshall be as defined in the Agreement. 2. JAB is hereby admitted into the LLC as an Additional Member as of the date hereof, with all of the rights and obligations of a Member, and fromand after the date hereof, JAB shall be considered a Member for all purposes under the Agreement, as the same may be modified or amended from time to time. 3. On the date hereof, JAB is making an Initial Capital Contribution to the LLC of $100,000. As a result of JAB becoming a Member and making his Initial Capital Contribution, the Interests of each Member in the LLC is as set forth on Schedule A annexed hereto and by this reference made a part hereof. 4. The Administrative Manager shall have the sole and exclusive right to admit Additional Members and provide for and accept Substitute Members. 5. Except as modified by this First Amendment, the Agreement remains unmodified and in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of the day and year first above written. CHARISMA PARTNERS, L.P., a New York limited Partnership By: 8th Floor Realty Corp., its sole general partner By: Name: /S/ Kevin S. Moore Title: Vice President /s/ Attorney in fact Anne L. Peretz /s/ Attorney in fact Jesse W. Peretz /s/ Attorney in fact Eugenia Peretz /s/ Attorney in fact Anne Farnsworth /s/ Attorney in fact Edmund S. Twining III /s/ Attorney in fact Taylor Twining /s/ Attorney in fact Edmund S. Twining IV /s/ Attorney in fact Jonathan A. Bernstein SCHEDULE A INITIAL CAPITAL CONTRIBUTION CHARISMA PARTNERS, LP $600,000.00 ANNE PERETZ $100,000.00 JESSE W. PERETZ $50,000.00 EUGENIA PERETZ $50,000.00 DAVID L. FARNSWORTH $50,000.00 ANNE FARNSWORTH $50,000.00 EDMUND TWINING III $50,000.00 TAYLOR TWINING $25,000.00 EDMUND S. TWINING IV $25,000.00 JONATHAN A. BERNSTEIN $100,000.00 SECOND AMENDMENT TO OPERATING AGREEMENT THIS Second Amendment to Operating Agreement dated as of July 1, 1998 by and among the parties who are Members in Federal Holdings L.L.C. STATEMENT OF FACTS This Second Amendment to Operating Agreement dated as of July 1, 1998 by and among the parties who are Members in Federal Holdings L.L.C. By execution of that certain Operating Agreement (the "Original Agreement") for Federal Holdings L.L.C. (the "LLC") dated June 12, 1995, the LLC was formed. The Original Agreement was amended by a First Amendment to Operating Agreement dated August 1, 1995 To admit an additional member. The original Agreement, As modified by the First Amendment To Operating Agreement, is hereinafter referred to as the "Agreement". The Members have agreed to amend the Agreement on the Terms and conditions set forth below. NOW, THEREFORE the parties hereto herby agree as follows: 1. All terms used in this Amendment and not defined herein shall be as defined in the Agreement. 2. The definition of "Preferred Return" in Section 1.1 of the Original Agreement is deleted in its entirety and the following is substituted in its place and stead: "Preferred Return": with respect to a Member, an amount equal to the Bank Index Percentage on a per annum interest basis (prorated for any partial year) on the amount of such Member's Unrecovered Capital Contribution, from time to time, calculated from the date a Capital Contribution is made. 3. The following definitions are hereby inserted into section 1.1; "Bank Index Percentage": A percentage determined by subtracting 2,123 from the Current Index Value, and dividing the resulting number 2,123. "Current Index Value": the value of the NASDAQ Bank Index as reported by NASDAQ at the close of trading on any trading day, as provided in rule 2871(e) in the NASDQ Manual and published in The Wall Street Journal under the NASDAQ Market Indices. If The Wall Street Journal shall no longer publish such value, then the Administrative Manger shall select another publication whether in print or electronic form. As of the close of business on June 30, 1998, the Current Index Value was 2,123. "NASDAQ Bank Index": The index commonly known as the NASDAQ Bank Index as reported by NASDAQ. In the event that the NASDAQ Bank Index is no longer reported by NASDAQ, the administrative Manager shall select another index in substitution thereof. 4. Modifying section 3.1 of the Original Agreement, the Company's registered office in New York shall be at One Rockefeller Plaza, 31st Floor, New York, New York 10120. 5. The reference to "20%" in the defined term of "Unrecovered 20% IM Fee", and in the definition thereof, shall be and hereby is changed to "25%." 6. Section 8.1 (b)(iv) is hereby deleted in its entirety and the following is substituted in its place and stead: "the balance,if any, shall be paid 75% of the Members in proportion to their Interest and 25% to the Investment Manager." 7. The Management Term shall mean a term of (2) years commencing as of the date hereof and continuing through and including June 30, 2000. 8. Modifying Sections 10.4, the "Account" is currently at Bear Stearns & Co., Inc. 9. Except as modified by this Second Amendment, the Agreement remains unmodified and in full force and effect. IN WITHNESS WHEREOF, the parties hereto have executed this Second Amendment as of the day and year first above written. CHARISMA PARTNERS, L.P., a New York limited Partnership By: 8th Floor Realty Corp., its sole general partner By: Name: /S/ Kevin S. Moore Title: Vice President /s/ Attorney in fact Anne L. Peretz /s/ Attorney in fact Jesse W. Peretz /s/ Attorney in fact Eugenia Peretz /s/ Attorney in fact Anne Farnsworth /s/ Attorney in fact Edmund S. Twining III /s/ Attorney in fact Taylor Twining /s/ Attorney in fact Edmund S. Twining IV /s/ Attorney in fact Jonathan A. Bernstein The undersigned, as Investment Manager, is executing this Second Amendment to evidence its acknowledgment and agreement to the terms and conditions set forth above. Lawrence Seidman EX-10.8 10 pollackkk.txt POLLACK INVESTMENT PARTNERSHIP, L.P. AGREEMENT CONFIDENTIAL - NOT TO BE REPRODUCED OR CIRCULATED POLLACK INVESTMENT PARTNERSHIP, L.P. A NEW JERSEY LIMITED PARTNERSHIP PRIVATE PLACEMENT MEMORANDUM LIMITED PARTNERSHIP INTEREST JUNE 2000 THIS PRIVATE PLACEMENT MEMORANDUM HAS BEEN SUBMITTED TO YOU CONFIDENTIALLY IN CONNECTION WITH THE PRIVATE PLACEMENT OF LIMITED PARTNERSHIP INTERESTS AND DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE INTERESTS IN ANY STATE OR JURISDICTION IN WHICH THE OFFER OR SALE OF THE INTERESTS WOULD BE PROHIBITED OR TO ANY ENTITY OR INDIVIDUAL NOT POSSESSING THE QUALIFICATIONS DESCRIBED IN THIS MEMORANDUM. For the information of: _________________Number _________ PRIVATE OFFERING TO QUALIFIED INVESTORS AND A LIMITED NUMBER OF NON-QUALIFIED INVESTORS THE LIMITED PARTNERSHIP INTERESTS REFERRED TO IN THIS PRIVATE PLACEMENT MEMORANDUM HAVE NOT BEEN REGISTERED UNDER EITHER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF CERTAIN STATES AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND THOSE LAWS. THE INTERESTS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE 1933 ACT AND THE SECURITIES LAWS OF CERTAIN STATES PURSUANT TO REGISTRATION OR EXEMPTION FROM REGISTRATION. THE INTERESTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAS ANY OF THOSE AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. IN NO EVENT SHOULD THIS PRIVATE PLACEMENT MEMORANDUM BE DUPLICATED OR TRANSMITTED TO ANYONE OTHER THAN THE PROSPECTIVE INVESTOR TO WHOM IT WAS DIRECTED BY WRITTEN COMMUNICATION OF THE OFFEROR. CALIFORNIA THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE CALIFORNIA CORPORATION CODE BY REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE CALIFORNIA CORPORATIONS CODE, IF SUCH REGISTRATION IS REQUIRED. CONNECTICUT THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE BANKING COMMISSIONER OF THE STATE OF CONNECTICUT NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. FLORIDA PURSUANT TO SECTION 517.061(11) OF THE FLORIDA SECURITIES AND INVESTOR PROTECTION ACT, AN OFFEREE WHO IS A RESIDENT OF FLORIDA MAY, AT THE OFFEREE'S OPTION, VOID ANY PURCHASE HEREUNDER WITHIN A PERIOD OF THREE (3) DAYS AFTER HE (A) FIRST TENDERS OR PAYS THE CONSIDERATION TO THE PARTNERSHIP REQUIRED HEREUNDER OR (B) DELIVERS HIS EXECUTED SUBSCRIPTION AGREEMENT WHICHEVER OCCURS LATER, TO ACCOMPLISH THIS, IT IS SUFFICIENT FOR A FLORIDA OFFEREE TO SEND A LETTER OR TELEGRAM TO THE PARTNERSHIP WITHIN THE THREE (3) DAY PERIOD, STATING THAT HE IS VOIDING AND RESCINDING THE PURCHASE. IF AN OFFEREE SENDS A LETTER, IT IS PRUDENT TO DO SO BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND TO EVIDENCE THE TIME OF MAILING. ILLINOIS THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECRETARY OF STATE OF ILLINOIS OR THE STATE OF ILLINOIS, NOR HAS THE SECRETARY OF STATE OF ILLINOIS OR THE STATE OF ILLINOIS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IOWA IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. NORTH CAROLINA IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. PENNSYLVANIA EACH SUBSCRIBER WHO IS A PENNSYLVANIA RESIDENT HAS THE RIGHT TO WITHDRAW HIS ACCEPTANCE WITHOUT INCURRING ANY LIABILITY TO THE PARTNERSHIP OR ANY OTHER PERSON WITHIN TWO BUSINESS DAYS FROM THE DATE OF RECEIPT BY THE PARTNERSHIP OF HIS DULY EXECUTED SUBSCRIPTION AGREEMENT OR THE INITIAL PAYMENT FOR THE PURCHASE OF HIS LIMITED PARTNERSHIP INTEREST, WHICHEVER IS LATER. ANY NOTICE OF WITHDRAWAL SHOULD BE MADE BY TELEGRAM OR CERTIFIED OR REGISTERED MAIL AND WILL BE EFFECTIVE UPON DELIVERY TO WESTERN UNION OR DEPOSIT IN THE UNITED STATES MAILS, TRANSMITTAL OR POSTAGE FEES PAID. UPON SUCH WITHDRAWAL, THE SUBSCRIBER WILL HAVE NO OBLIGATION OR DUTY UNDER THE SUBSCRIBER AGREEMENT TO THE PARTNERSHIP, THE GENERAL PARTNERS, OR ANY OTHER PERSON, AND WILL BE ENTITLED TO THE FULL RETURN OF ANY AMOUNT PAID BY HIM, WITHOUT INTEREST. NEITHER THE PENNSYLVANIA SECURITIES COMMISSION NOR ANY OTHER AGENCY HAS PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING AND ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL. PENNSYLVANIA SUBSCRIBERS MAY NOT SELL THEIR PARTNERSHIP INTEREST FROM THE DATE OF PURCHASE IF SUCH A SALE WOULD VIOLATE SECTION 203(d) OF THE PENNSYLVANIA SECURITIES ACT. TEXAS THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER APPLICABLE LAWS OF TEXAS AND THEREFORE CANNOT BE RESOLD OR TRANSFERRED UNLESS SUBSEQUENTLY REGISTERED UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. TABLE OF CONTENTS Introduction.................................................................8 Summary Description of thePartnership and the Offering.......................8 Investment Objective................................................8 Investment Approach and Policies....................................8 Special Techniques..................................................9 Scheduled Term of Partnership.......................................9 Minimum Initial Investment by Limited Partners......................9 Expenses 9 Administrative Fee..................................................9 Allocation of Profit or Loss........................................9 Additional Contributions...........................................10 Admission of Limited Partners......................................10 Withdrawals by Limited Partners....................................10 Eligibility Standards for Investors................................10 Compensation to Third Parties......................................11 Evaluating The Partnership..................................................11 Investment Techniques..............................................11 Special Techniques.................................................12 Short-Term Trading........................................12 Leverage. ...............................................13 Option Strategies.........................................13 Derivatives. ............................................13 Publicly Distributed Securities....................................13 Portfolio Transactions and Brokerage...............................14 Use of Cash and Cash Equivalents...................................15 Management..................................................................16 The General Partners...............................................16 Lawrence Seidman...................................................16 Prior Investment Experience of Seidman Entities...........17 Dennis Pollack.....................................................18 Certain Risks...............................................................18 Dependence on the General Partners.................................18 Risks of Special Techniques and Short Sales........................18 Short-Term Trading........................................18 Leverage. ...............................................18 Short Sales...............................................19 Options. 19 Small Cap Stocks...................................................19 Derivative Instruments.............................................19 High Risk Investments..............................................19 Extraordinary Expenses.............................................20 Lack of Liquidity of Partnership Assets............................20 Illiquidity........................................................20 Changes in Applicable Law..........................................20 Conflicts of Interest.......................................................21 Service of the General Partners....................................21 Allocation of Investment Opportunities.............................21 Co-Investment by the General Partners..............................21 General Partners' Share of Profits.................................21 Resolution of Conflicts............................................22 Tax Consequences............................................................22 Federal Income Tax Considerations in General.......................22 Federal Income Tax Rules Applicableto Options and Hedging Transactions.......................................................23 Options in General........................................23 Section 1256 Contracts....................................24 Straddles. ..............................................24 Allocation of Taxable Income.......................................25 State and Local Tax Consequences...................................25 Tax Information....................................................25 ERISA Considerations...............................................25 Unrelated Business Taxable Income ("UBTI").........................27 The Partnership Agreement...................................................27 Control............................................................27 Liability of the General Partner...................................27 Liability of the Limited Partners..................................27 Additional Contributions; New Limited Partners.....................28 Form of Contributions..............................................28 Allocations........................................................28 Expenses 28 Withdrawals by Limited Partners....................................30 Withdrawals by the General Partner and Limited Partners that are Affiliates of General Partner......................................31 Term of Partnership................................................31 Dissolution........................................................31 Reports 31 Amendments.........................................................32 Indemnification....................................................32 Rights of Transfer.................................................32 Investing in The Partnership................................................33 Minimum Subscription...............................................33 Investor Suitability Standards.....................................33 Access to Information..............................................35 Method of Subscription.............................................35 Miscellaneous Securities Matters............................................36 Registration Under the Investment Act..............................36 Exemption from the Investment Company Act .........................36 Additional Information......................................................36 Professional Assistance.....................................................36 Exhibit A...................................................................37 Exhibit B...................................................................56 Exhibit C...................................................................62 INTRODUCTION Pollack Investment Partnership, L.P. (The "Partnership"), formed in June 2000, is a New Jersey limited partnership which will seek to maximize capital appreciation in the securities markets through analysis of individual securities, not markets. Securities will be selected on the basis of perceived pricing inefficiencies in stocks based on their comparison to other stocks in the same industry segment, growth rate in either earnings or assets and cash flow. The partnership will primarily focus upon the purchase of shares of publicly traded thrifts and banks, but may expand this investment approach depending upon market factors. The General Partners believe the majority of these opportunities occur in companies not well followed by Wall Street research. Market risk may be hedged through the use of short sales and various option strategies. SUMMARY DESCRIPTION OF THE PARTNERSHIP AND THE OFFERING The Partnership offers limited partnership interests (an "Interest" or the "Interests", as appropriate), privately, to no more than 35 "non accredited" investors and to "accredited" investors who, upon admission to the Partnership, become its limited partners (a "Limited Partner" or the "Limited Partners", as appropriate). The following is a summary description of the Partnership and certain of the major terms of the offering and is qualified in its entirety by information appearing elsewhere in this Private Placement Memorandum and in the Partnership's Agreement of Limited Partnership (the "Partnership Agreement"), which is annexed hereto. MANAGEMENT Dennis Pollack ("Pollack") and Lawrence B. Seidman ("Seidman") shall serve as the General Partners and have complete and exclusive control of the management of the Partnership. Pollack has over 12 years experience in the banking business. Seidman has over 16 years experience in the investment business. The General Partners will be permitted to share fees and other financial benefits with third parties. INVESTMENT OBJECTIVE The Partnership's investment objective is to maximize capital appreciation by long and short-term investments in, and the short sale of, securities. See "EVALUATING THE PARTNERSHIP". INVESTMENT APPROACH AND POLICIES The Partnership will seek to meet its objectives through investment in what are deemed to be inefficiently priced stocks based on estimates of future growth rate in earnings or assets and cash flow. The Partnership will primarily focus upon the purchase of shares of publicly traded thrifts and banks, but may expand this investment approach depending upon market factors. The Partnership may affect short sales of securities, which the General Partners consider to be overpriced, or subject to adverse business conditions not currently reflected in their price. SPECIAL TECHNIQUES The Partnership May attempt to enhance its performance by engaging in short-term trading and by using leverage and certain hedging techniques. See "EVALUATING THE PARTNERSHIP-Special Techniques". SCHEDULED TERM OF PARTNERSHIP 20 years. See "THE PARTNERSHIP AGREEMENT-Term of Partnership". MINIMUM INITIAL INVESTMENT BY LIMITED PARTNERS $100,000, subject to waiver by the General Partners under appropriate circumstances. See "INVESTING IN THE PARTNERSHIP-General Information". EXPENSES Organizational, administrative, legal, proxy, audit and investment expenses will be paid by the Partnership. See "THE PARTNERSHIP AGREEMENT-Expenses". ADMINISTRATIVE FEE The Partnership will pay the General Partners, as of the end of each fiscal quarter of the Partnership, an administrative fee at an annual rate equal to 1% of the value of the Partnership's assets. See "THE PARTNERSHIP AGREEMENT-Expenses". ALLOCATION OF PROFIT OR LOSS Net Profit for each year (as defined below) will be allocated to the Partners, on the basis of the proportion that each Partner's capital accounts bear to the capital accounts of all the Partners. At the end of the fiscal year, 20% of the Net Profit allocated to the accounts of the Limited Partners will be re-allocated to the General Partners (the "Incentive Allocation"). The General Partners may reallocate to special Limited Partners and other third parties all or a portion of the Incentive Allocation. Net loss for each fiscal year (as defined below) generally will be allocated to each Partner in proportion to and in accordance with the capital account of the Partner. To the extent losses have been allocated to the account of a Partner, 100% of Net Profits attributable to such Partner will be allocated to the account of that Partner until all such losses have been recouped. Only after such losses have been recouped will the General Partners be entitled to the 20% Incentive Allocation on subsequent profits. See"THE PARTNERSHIP AGREEMENT-Allocations". ADDITIONAL CONTRIBUTIONS At the discretion of the General Partners, additional contributions to the Partnership may be made by a Partner. See "THE PARTNERSHIP AGREEMENT-Additional Contributions; New Limited Partners". ADMISSION OF LIMITED PARTNERS New Limited Partners May be admitted to the Partnership at the discretion of the General Partners. See "THE PARTNERSHIP AGREEMENT-Additional Contributions; New Limited Partners". WITHDRAWALS BY LIMITED PARTNERS Withdrawals by Limited Partners of all or a portion of a Capital Account are permitted annually as of the last day of the Fiscal Year on 90 days written notice to the General Partners provided the Limited Partner has been a Partner of the Partnership for eight full fiscal quarters, unless otherwise permitted at the discretion of the General Partners. The withdrawing Limited Partner shall pay for any costs incurred by the Partnership to effectuate the withdrawal. At the discretion of the General Partners, distributions upon withdrawal may be in cash or in kind or both. See "THE PARTNERSHIP AGREEMENT-Withdrawals by Limited Partners". ELIGIBILITY STANDARDS FOR INVESTORS Interests described in this Private Placement Memorandum are not registered under the Securities Act of 1933, as amended (the "1933 Act"), in reliance upon the exemption contained in Section 4(2) of the 1933 Act and Regulation D thereunder for transactions not involving a public offering. An offer and sale of Interests is made only to a prospective investor who satisfies, in the judgment of the General Partners, certain suitability standards. See "INVESTING IN THE PARTNERSHIP-Investor Suitability Standards". COMPENSATION TO THIRD PARTIES Interests in the Partnership may be offered with the assistance of registered broker dealers and others who are not affiliated with the Partnership. Subject to applicable state securities laws, such persons may receive compensation for their services based on the percentage of the amount invested as a result of their services. The identity and amount of compensation to be paid will be disclosed to the prospective Limited Partner prior to the acceptance of his Subscription Agreement by the Partnership. EVALUATING THE PARTNERSHIP The Partnership is a New Jersey limited partnership formed in June 2000 which will seek to maximize capital appreciation in the securities markets through the purchase and short sale of securities, while hedging its risks through the use of various techniques such as short selling, and purchase and sale of stock and index options, convertible securities and fixed income securities. While the primary goal of the Partnership is long term capital gain through the purchase of publicly traded thrift and bank stocks, it will not overlook opportunities to identify short term aberrations in the pricing of certain securities and to take advantage of the resulting price movement. Such opportunities may arise when, for example, stock of a historically successful company suffers a large percentage loss as a result of a non-recurring event such as a sudden catastrophic loss or an unanticipated dividend cut. The Partnership may also take advantage of opportunities in time arbitrage when it believes the risk reward ratio is strongly in its favor. Time arbitrage is the purchase of securities of companies involved in takeovers, restructuring, stock buy-backs, etc. The Partnership may buy the stock of such companies if it believes the "spread" between the market price and eventual price on the completion of the transaction is great enough on a percentage basis to merit investment. While the Partnership will invest primarily in publicly traded common stocks, investments may, from time to time, include stock warrants, rights, preferred stocks, securities purchased in private placements or other restricted securities, bonds and other debt instruments, convertible securities, put and call options, swaps, forward contracts and other financial instruments and short sales of the foregoing. Investment Techniques The Partnership will attempt to maximize capital gains through analysis of individual securities, not markets. The General Partners believe that over extended periods of time stock selection, not market timing, is the key ingredient of investment success. Therefore, the Partnership will concentrate its efforts in a "bottoms-up" stock selection process as opposed to a "top-down" macro-economic approach. Securities will be selected primarily on the basis of what the General Partners deem to be inefficiencies in the pricing of the stock at any given time. These inefficiencies can occur when the market is overlooking the potential of a company's assets, cash flow, brand names or market niche, and securities with these characteristics are often referred to as "value" stocks. Underevaluation can also occur when a company's current or future growth in earnings is not attracting a price/earning ratio in line with that growth or its assets are not being properly allocated to maximize the return on said assets. Generally, the Partnership will avoid investing in companies, which are widely followed by Wall Street analysts, as the opportunities for pricing inefficiencies in those companies are rare. The Partnership may take concentrated positions in those companies where it believes extraordinary capital gain potential exists. When the Partnership acquires more than 5% of a company's stock, it will be required to file a Form 13D disclosing its position and other data. The Partnership may attempt to acquire control of companies, which attempts may entail the Partnership's involvement in a proxy contest or other take-over litigation. Other partnerships in which Mr. Seidman was a general partner have been involved in seven proxy contests involving five separate companies in the past. If the General Partners are elected to serve on the Board of Directors of a company in which the Partnership has taken a position or serve as an officer of such company, the compensation for such service will not be shared with the Partnership. To hedge its position and with a view to enhancing its performance, the Partnership may sell securities short. If the Partnership believes a company has poor business prospects or its stock price has been inflated by overly optimistic Wall Street assessments, it may sell short expecting the stock price to decline substantially. Selling securities short involves selling securities that the Partnership does not own. To make delivery to the purchaser of the securities, the Partnership borrows securities from a third party lender. The Partnership typically fulfills its obligation to the lender by purchasing securities in the market. The Partnership generally is required to pledge cash with the lender equal to the market price of the borrowed securities. This deposit may be increased or decreased in accordance with changes in the market price of the borrowed securities. During the period in which the securities are borrowed, the lender typically retains its right to receive interest and dividends accruing to the securities, but pays the Partnership a fee for the use of the Partnership's cash. This fee is based on prevailing interest rates, the availability of the particular security for borrowing, and other market factors. Special Techniques The Partnership may attempt to enhance its performance by engaging in short-term trading and by using leverage and attempt to hedge its portfolio by the use of options, warrants, convertible securities, and similar strategies. These special investment techniques are described below. Short-Term Trading.The Partnership will typically seek to invest and hold for the long term a "core" of equity securities. The extent of this core of equity positions will depend on market conditions, but typically will represent more than 50% of the Partnership's assets at any one time. From time to time, the Partnership may make frequent changes in that part of its portfolio that does not fall within the Partnership's core positions to take advantage of opportunities in the market. Leverage. The Partnership expects to borrow funds for the purpose of purchasing securities. Loans to the Partnership will be arranged through broker-dealers with which the Partnership maintains customer accounts. The amount of borrowings that the Partnership may have outstanding at any time may be large in comparison to its capital. Option Strategies. The Partnership may purchase and sell put and call options on both securities and stock indexes for the purpose of hedging its portfolio positions. A stock index measures the movement of a certain group of stocks by assigning relative values to the common stocks included in the index. Examples of well-known stock indexes on which the Partnership may purchase put and call options are the Standard & Poor's composite Index of 500 Stocks, the Standard & Poor's 100 Index, the American Stock Exchange Major Market Index and the New York Stock Exchange Composite Index. Derivatives. The Partnership may use derivative securities to augment returns or reduce risk. Derivatives are securities products developed by banks and brokerage firms that are not traded on securities exchanges or in over-the-counter markets, but which mirror individual securities or "baskets" of securities. The Partnership does not presently intend to have derivatives represent a significant amount of its equity but, rather, may use them in the same manner as conventional option strategies. Publicly Distributed Securities From time to time, the Partnership may purchase securities, which are part of a public distribution. If such securities trade at a premium in the secondary market immediately after the distribution process has commenced, the National Association of Securities Dealers, Inc. ("NASD") has taken the position in its Rules of Fair Practice that such securities are part of a "hot issue" and, accordingly members of the NASD may not sell such securities to an account in which a member, or a person having specified relationships with a member, of the NASD has an interest. In addition, in the case of senior bank officers and certain other persons, participation is permitted in hot issues only in certain circumstances. In view of this restriction, the Partnership Agreement provides a mechanism for the purchase of securities in a public distribution without presenting problems to any Limited Partner who would or might be deemed to come within the NASD prohibition or to the Partnership. In essence, the mechanism provided for in the Partnership Agreement for "hot issues" is for the Partnership to have, in addition to its regular accounts, a special account (the "Hot Issues Account"), the sole purpose of which is to purchase securities which are part of a public distribution and are considered a "hot issue". Only those Limited Partners who do not fall within the prohibition of the NASD will have a beneficial interest in the Hot Issues Account (as compared to the Partnership's regular accounts in which all Partners have an interest). A General Partner may not have a beneficial interest in the Hot Issues Account if he is affiliated with a member of the NASD, and accordingly, will not receive any of the net profits attributable to such investments. Portfolio Transactions and BrokeragePortfolio Transactions and BrokeragePortfolio Transactions and Brokerage The General Partners are responsible for arranging for the execution of the Partnership's portfolio transactions and the allocation of brokerage. Transactions on United States stock exchanges and on some foreign stock exchanges involve the payment of negotiated brokerage commissions. On the great majority of foreign stock exchanges, commissions are fixed. No stated commission is generally applicable to securities traded in the over-the-counter markets, but the prices of those securities may include undisclosed commissions or markups. In arranging for execution of transactions on behalf of the Partnership, the General Partners seek to obtain the best price and execution for the Partnership, taking into account many factors including price, size of order, difficulty of execution, operational facilities of a brokerage firm, availability of particular securities from the executing broker-dealer, and the firm's risk in positioning a block of securities. Although the General Partners generally seek reasonably competitive commission rates, the Partnership may not necessarily pay the lowest commission available. The Partnership has no obligation to deal with any broker or group of brokers in executing transactions in portfolio securities. The General Partners may place brokerage business on behalf of the Partnership with brokers that provide supplemental research, market and statistical information to the General Partners. The phase "research, market and statistical information" includes advice as to the value of securities, the availability of investing in, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities, and furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and the performance of accounts. The expenses of the Partnership are not necessarily reduced as a result of the receipt of this supplemental information, which may also be useful to other entities controlled by a General Partner in providing services to his clients. In addition, not all of the supplemental information may be used by the General Partners in connection with the Partnership. The Partnership will not consider turnover rate a limiting factor in making investment decisions consistent with its investment objective and policies. Use of Cash and Cash Equivalents Pending investment of the proceeds of this offering in accordance with the Partnership's investment objective and policies, or when the General Partners believe the Partnership should follow a temporary defensive posture, or when the General Partners determine that opportunities for capital growth are unattractive, the Partnership may, without limitation, hold cash or invest in cash equivalents. Among the cash equivalents in which the Partnership may invest are: obligations of the United States Government, its agencies or instrumentalities ("U.S. government securities"); commercial paper; and certificates of deposit and bankers' acceptances issued by domestic branches of United States banks that are members of the Federal Deposit Insurance Corporation. The Partnership may also engage in repurchase agreements, may purchase shares of money market mutual funds and may receive interest paid on its credit balances. MANAGEMENT The General Partners Lawrence Seidman ("Seidman") is a Co-General Partner of the Partnership. Seidman is an attorney admitted to practice law in the States of New Jersey and New York and the District of Columbia. For the past sixteen years he has been involved as a general partner and/or counsel, in the organization of real estate and stock investment limited partnerships. Mr. Seidman, since approximately March 1999, has been a director of CNY Financial Corporation and its wholly owned subsidiary, Cortland Savings Bank; since August 1999, has been a director of South Jersey Financial Corporation and its wholly owned subsidiary, South Jersey Savings and Loan Association; and since March 2000 has been a director of Ambanc Holding Co., Inc. Since March 1999, Mr. Seidman has been the President, General Counsel and a director of Menlo Acquisition Corporation. Mr. Seidman is also Manager of Seidman & Associates, L.L.C., President of Veteri Place Corp., the sole General Partner of Seidman Investment Partnership, LP, Seidman Investment II LP, Manager of Federal Holdings, L.L.C. and business consultant to certain partnerships and individuals, including, but not limited to, Kerrimatt, LP. He has been a director of the Savings Bank of Rockland County and a director and Chairman of the Board of Crestmont Financial Corp., the holding company for Crestmont Federal Savings & Loan Association. He has also been an officer and director of Seidman & Rappaport, P.A., a law firm he organized and prior thereto was an associate at two separate law firms. On November 8, 1995, the acting Director of the Office of Thrift Supervision (OTS) issued a Cease and Desist Order against Seidman ("C&D") after finding that Seidman recklessly engaged in unsafe and unsound practices in the business of an insured institution. The C&D actions complained of were due to Seidman having allegedly obstructed an OTS investigation. The C&D ordered him to cease and desist from (i) any attempts to hinder the OTS in the discharge of its regulatory responsibilities, including the conduct of any OTS examination or investigation; and (ii) any attempt to induce any person to withhold material information from the OTS related to the performance of its regulatory responsibilities. The C&D also provided that, for a period of no less than three (3) years, if Seidman became an institution-affiliated party of any insured depository institution subject to the jurisdiction of the OTS, to the extent that his responsibilities included the preparation or review of any reports, documents, or other information to be submitted to or reviewed by the OTS in the discharge of its regulatory functions, all such reports, documents, and other information, prior to submission to, or review by the OTS, were to be independently reviewed by the Board of Directors or a duly appointed committee of the Board to ensure that all material information and facts had been fully and adequately disclosed. In addition, a civil money penalty in the amount of $20,812 was assessed under the C&D. A copy of the entire opinion of the United States Court of Appeals for the Third Circuit, which reversed the OTS Director's first Decision and Order in connection with this matter, and copies of the decisions of the OTS Administrative Law Judge and OTS Director are available upon request. Prior Investment Experience of Seidman In the past, Mr. Seidman has principally invested in bank and thrift stocks through two limited liability companies and three limited partnerships. The following table recites the date of inception for each such entity and its performance through September 30, 1999: Annualized % Return on Period Inception Capital from to Entity Date Inception(1) 9/30/99 ------ ---- ------------ ------- Seidman & Associates, LLC (2) 12/94 22.80 58 Mos. Federal Holdings, LLC 7/98 34.70 15 Mos. Seidman Investment Partnership, LP 1/95 27.80 57 Mos. Seidman Investment Partnership II, LP 8/98 28.00 13 Mos. Kerrimatt, LP 10/98 50.40 11 Mos. (1) Return based upon initial investment of $1 at inception without consideration for additional capital contribution. (2) This entity and Seidman & Associates II, LLC were merged together in or about April 1, 1999. The return set forth is for the merged entity. Mr. Seidman has filed a Schedule 13D in connection with ten companies. As of September 30, 1999, five of those companies had been sold. Each company was sold for cash and/or stock or a combination of both, at a price that provided Mr. Seidman's entities a significant profit on their purchased shares. As of September 30, 1999, five companies had not been sold, but their share price has significantly increased over the average price paid for said shares. Prior to June 1, 2000, once Mr. Seidman filed a Schedule 13D, he did not sell his share position with respect to any of said companies until a sale of the company was publicly announced. Most of the banks and thrifts in which Mr. Seidman invests are very thinly traded and therefore a sale of a substantial block could be very difficult. Furthermore, with respect to the companies for which Schedule 13D's have been filed, Mr. Seidman has not recognized a loss. Mr. Seidman does purchase less than 4.9% of companies for which no Schedule 13D is required. Mr. Seidman has sold some of these positions at a loss. Mr. Seidman's past performance is no guarantee of future success or profitability. Furthermore, Mr. Seidman, in the future, could suffer a loss on the sale of a stock in a company in which he has a Schedule 130 filed or could sell the stock before a sale of the company is announced. Dennis Pollack. ("Pollack") is a Co-General Partner of the Partnership. Since December 1, 1996, Pollack has been the Managing Director of Pegasus Funding Group based in Newton Square, Pennsylvania, an asset based lender. From April 1996 to December 1998 he was President, Chief Executive Officer and a member of the Board of Directors of the Connecticut Bank of Commerce. Since October 1998, Pollack has been a consultant to Valley National Bank of Wayne, New Jersey and, since December 1998, has been a consultant to the Connecticut Bank of Commerce. From January 1995 to March 1996, he was Regional Vice President and National Director of Bank Consulting of Axiom Management Consulting, a management-consulting firm that provides specialized business processing reengineering services. From April 1995 to December 1995, he was Regional President of First Fidelity Bank, New York. From March 1988 to April 1995, Mr. Pollack was the President, Chief Executive Officer and a member of the Board of Directors of the Savings Bank of Rockland County. First Fidelity Bank purchased the Savings Bank of Rockland County. Mr. Pollack is the Chairman of the Salvation Army Board-Rockland County, New York and was previously on the Executive Committee for Good Samaritan Hospital and the Citizens Advisory Committee for the Helen Hayes Hospital. CERTAIN RISKS Purchasing Interests involves certain risks to an investor. Careful attention should be given to the significant risks discussed in the following summary. Dependence on the General Partners Either Seidman or Pollack will make all decisions with respect to the management of the Partnership. Either General Partner will have the authority to bind the Partnership. Limited Partners have no right or power to take part in the management of the Partnership. As a result, the success of the Partnership for the foreseeable future depends largely upon the ability and continuing availability of the General Partners. Risks of Special Techniques and Short Sales. Each of the special investment techniques that the Partnership may use is subject to certain risks that are summarized below. Short-Term Trading. Engaging in short-term trading may result in the Partnership's experiencing significant turnover and transactions costs. Leverage. Borrowing money to purchase securities will provide the Partnership with the opportunity for greater capital appreciation but, at the same time, may increase the Partnership's exposure to capital risk and higher current expenses. Moreover, if the Partnership's revenue's were not sufficient to pay the principal of and interest on the Partnership's debt when due, Partners could sustain a total loss of their investment. Short Sales. The possible losses to the Partnership from a short sale of a security differ from losses that could be incurred from a cash investment in the security; the former may be unlimited, whereas the latter can only equal the total amount of the cash investment. Short-selling activities are subject to restrictions imposed by the federal securities laws and the various securities exchanges. Options. Purchasing and selling call and put options entail risks. Although an option buyer's risk is limited to the amount of the purchase price of the option, an investment in an option may be subject to greater fluctuation than an investment in the underlying securities. In theory, an uncovered call writer's loss is potentially unlimited, but in practice the loss is limited by the duration of the call. The risk for a writer of a put option is that the price of the underlying security may fall below the exercise price. The effectiveness of purchasing or selling stock index options as a hedging technique depends upon the extent to which price movements in the portion of the Partnership's hedged portfolio correlate with the price movements of the stock index selected. Because the value of an index option depends upon movements in the levels of the index rather that the price of a particular stock, whether the Partnership realizes a gain or loss from the purchase or writing of options on an index depends upon movements in the level of stock prices in the stock market generally, rather than movements in the price of a particular stock. Successful use by the Partnership of options on stock indexes will depend upon the ability of the General Partners to predict correctly movements in the stock market generally. This ability requires skills and techniques different from those used in predicting changes in the price of individual stocks. Small Cap Stocks At any given time, the Partnership may have significant investments in smaller-to-medium sized companies of a less seasoned nature whose securities are traded in the over-the-counter market. These "secondary" securities often involve significantly greater risks than the securities of larger, better-known companies and may be more subject than large cap stocks to the market's assessment of industry prospects as opposed to the company's financial performance. Derivative Instruments Swaps, derivative and certain options and other custom derivative or synthetic instruments are subject to the risk of nonperformance by the counterparty to such instrument, including risks relating to the financial soundness and creditworthiness of the counterparty. From time to time, the Partnership may have limited exposure to such transactions. High Risk Investments The Partnership may invest in companies involved in (or the target of) acquisition attempts or tender offers or companies involved in workouts, liquidations, spin-offs, reorganizations, bankruptcies and similar transactions. In any investment opportunity involving any such type of business enterprise, there exists the risk that the transaction in which such business enterprise is involved either will be unsuccessful, take considerable time or result in a distribution of cash or a new security the value of which will be less than the purchase price to the Partnership of the security or other financial instrument in respect of which such distribution is received. Similarly, if an anticipated transaction does not in fact occur, the Partnership may be required to sell its investment at a loss. Because there is a substantial uncertainty concerning the outcome of transactions involving financially troubled companies in which the Partnership may invest, there is a potential risk of loss by the Partnership of its entire investment in such companies. Extraordinary Expenses To the extent that the General Partners decide to aggressively seek to convince management of a company in which the Partnership has taken a position of the correctness of their vision regarding the company's prospects, abnormal expenses may be incurred if management is resistant. Lack of Liquidity of Partnership Assets Partnership assets may, at any given time, include securities, partnership interest or obligations for which no market exists and/or which are thinly traded. The sale of any such investments may be possible only at substantial discounts and such investment may be difficult to value accurately. Illiquidity The Interests are being offered without registration under the 1933 Act in reliance upon an exemption contained in Section 4(2) of the 1933 Act and Regulation D thereunder. Certain restrictions on transferability preclude disposition and transfer of Interests other than pursuant to an effective registration statement (which is not expected to exist) or in accordance with an exemption from registration contained in the 1933 Act. In addition, the Partnership Agreement requires that the consent of the General Partners be obtained prior to the transfer of an Interest. In light of the restrictions imposed on a transfer of an Interest, and in light of the limitations imposed on a Partner's ability to withdraw all or part of his or its capital contribution from the Partnership, an investment in the Partnership should be viewed as illiquid and subject to high risk. Changes in Applicable Law The Partnership must comply with various legal requirements, including requirements imposed by the federal securities laws and tax laws. Should any of those laws change over the scheduled term of the Partnership, the legal requirements to which the Partnership and the Partners may be subject could differ materially from current requirements. CONFLICTS OF INTEREST The Partnership is subject to various conflicts of interest arising out of its relationship to the General Partners. Conflicts of interest involving the Partnership include, but are not limited to, the following: Service of the General Partners The Partnership depends on the General Partners for the day-to-day operation of the Partnership. Messrs. Seidman and Pollack will devote as much of their time to the business of the General Partners and Partnership as, in their judgment, is reasonably required, but they are involved in other business activities, and Mr. Seidman has organized and operates several limited liability companies and partnerships that have the same investment purpose as the Partnership. In addition, Mr. Seidman is paid a fee to advise certain individual clients with respect to their purchase of publically traded securities, principally thrift and bank stocks. As a result of their other activities, the General Partners may have a conflict of interest in allocating management time, services and functions among the Partnership and other business ventures. Allocation of Investment Opportunities The General Partners are responsible for the investment decisions made on behalf of the Partnership. Either General Partner has the authority and is responsible for the investment decisions of the Partnership. Mr. Seidman is also responsible directly or indirectly for investment decisions made on behalf of other potential clients, limited liability companies and partnerships. If a determination is made that the Partnership and any other client should purchase or sell the same securities at the same time, the securities will be allocated in a manner believed to be equitable to each. Circumstances may occur, however, in which an allocation could have adverse effects on the Partnership or the other client with respect to the price or size of securities positions obtainable or saleable. Co-Investment by the General Partners From time to time, Pollack or Seidman, in their individual capacity, may invest in securities in which the Partnership invests. Pollack and Seidman will not, however, purchase or sell any securities on terms more favorable than those received by the Partnership. General Partners' Share of Profits The General Partners will receive a performance fee equal to 20% of the Annual Net Profit of the Partnership. Because their compensation is performance driven, the General Partners could be incentivized to make riskier investments in the hope of maximizing profits. Resolution of Conflicts Under the terms of the Partnership Agreement, the General Partners, in resolving a conflict of interest between the General Partners and their affiliates and the Partnership or Limited Partners, will consider the relative interests of the parties involved in the conflict, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. TAX CONSEQUENCES A description of all of the aspects of Federal, state and local laws that may affect the tax consequences of investing in the Partnership is beyond the scope of this Private Placement Memorandum. The discussion that follows is intended to be only a summary of certain tax considerations generally affecting the Partnership and the Limited Partners. Prospective Limited Partners should satisfy themselves as to the tax consequences of investing in the Partnership by obtaining advice from their own tax advisor. Federal Income Tax Considerations in General The Partnership has been advised that the Partnership should be treated as a partnership, and not as a corporation, for federal income tax purposes under current regulations, rulings and decisions. Each Limited Partner generally will be required to report on his federal income tax return his distributive share of the Partnership's income, gains, losses, deductions and credits, if any, for the tax year of the Partnership ending within or with the Limited Partner's tax year. Because the Partnership's income is taxable to the Partners when realized by the Partnership, it is not usually taxed again when distributed to Partners. If the Partnership were taxed as a corporation (1) the Partnership's income would be subject to corporate tax rates; (2) Partnership items of income, gains, losses, deductions or credits would not flow through to the Limited Partners; and (3) distributions to Limited Partners, if any, would be taxed when distributed as dividends to the extent of current earnings and profits. It is uncertain as to whether, for Federal income tax purposes, the Partnership will be considered to be engaged in an investment activity or in a trade or business. If the Partnership is considered to be engaged in an investment activity, an individual Limited Partner will be able to deduct his share of the Partnership's expenses, including administrative fees, only to the extent that those expenses (together with his other miscellaneous itemized deductions) exceed 2% of his adjusted gross income. If the Partnership were not considered to be engaged in an investment activity but were considered to be engaged in a trade or business, then its partners would not be subject to the 2% rule. However, such trade or business would not be considered a passive activity and, therefore, losses and income of the Partnership from that trade or business would be characterized as "non-passive" income or loss and could not be used by a Limited Partner to offset other passive income or loss. Whether the Partnership will be held to be engaged in a trade or business or in an investment activity will depend on the extent and nature of the Partnership's trading activity in any taxable year. This issue is largely resolved on an analysis of facts, many of which will be known only in the future. Moreover, it is unclear what legal standards would be applied to those facts. Therefore, no clear guidance can be given whether the Partnership will be considered to be engaged in a trade or business or an investment activity for federal income tax purposes. Under the Internal Revenue Code of 1986 (the "Code"), the deduction of interest on funds borrowed to acquire or carry investment assets is limited. This limit would apply to the interest expense of those Limited Partners, if any, who borrow to purchase their Interests. In general, a deduction would be disallowed to a noncorporate taxpayer to the extent his investment interest expense exceeds his net investment income (i.e., the excess of non-trade or business income from interest, dividends, rents and royalties, over expenses incurred in earning the income). The deduction of investment interest that is disallowed under these rules is not lost permanently, but may be claimed as an investment interest deduction in succeeding taxable years subject to the limitation described above. A taxpayer may not, under the Code, deduct interest paid on indebtedness incurred or continued for the purpose of purchasing or carrying obligations, the income on which is exempt from tax. The Service will infer a purpose to carry tax-exempt obligations whenever a taxpayer owns tax-exempt obligations and has outstanding indebtedness that is neither directly connected with his personal expenditures nor incurred in connection with his active conduct of a trade or business. Ownership of an Interest should not constitute either a personal expenditure or the active conduct by the taxpayer of a trade or business within the meaning of the Code. Therefore, in the case of a Limited Partner owning tax-exempt obligations, the Service might take the position that the Limited Partner's allocable portion of any interest expense of the Partnership should be viewed in whole or in part as incurred to enable the Limited Partner to continue carrying the tax-exempt obligations and that the deduction of any interest by the Limited Partner should be denied in whole or in part. Federal Income Tax Rules Applicable to Options and Hedging Transactions The Federal income tax consequences of the Partnership's options and hedging transactions depend upon the nature of any underlying security, whether the option is written or purchased and whether the "1256 Contract" (which addresses futures and foreign currency contracts and nonequity and dealer equity options) or "straddle" rules apply to the transaction. Options in General. When the Partnership writes a call or a put option it receives a premium. If the option expires unexercised or is closed out, the Partnership realizes a gain (or loss if the cost of closing out exceeds the amount of the premium) without regard to any unrealized gain or loss on any underlying security. Generally, any such gain or loss is a short-term capital gain or loss. If a call option written by the Partnership is exercised, the Partnership recognizes a capital gain or loss from the sale of the underlying security, and treats the premium as additional sales proceeds. Whether the gain or loss is long-term or short-term depends on the holding period of the underlying security. If a put option written by the Partnership is exercised, the amount of the premium reduces the tax basis of the security that the Partnership then purchases. If a purchased put or call option expires unexercised, the Partnership realizes a capital loss equal to the cost of the option. If the Partnership enters into a closing transaction with respect to the option, it realizes a capital gain or loss (depending on whether the proceeds from the closing transaction are greater or less than the cost of the option). The gain or loss is short-term or long-term, depending on the Partnership's holding period in the option. If the Partnership exercises a put option, it realizes a capital gain or loss (short or long-term depending on its holding period for the underlying security at the time it purchases the put) from the date of the underlying security measured by the sales proceeds decreased by the premium paid. If the Partnership exercised a call option, the premium paid for the option is added to the tax basis of the security purchased. Certain options which could be purchased by the Partnership that remain unexpired and unexercised at the end of the Partnership's taxable year are treated as sold at their year-end fair market value under the Section 1256 Contract rules and the corresponding gain or loss is recognized for Federal income tax purposes. Section 1256 Contracts. Gain or loss on Section 1256 Contracts are taken into account for Federal Income tax purposes when actually realized. In addition, Section 1256 Contracts remaining unexercised at the end of the Partnership's taxable year are treated as sold and then repurchased at their year-end fair Market value (i.e., "marked-to-market"), with the corresponding gain or loss recognized for Federal income tax purposes. Generally, both the realized and unrealized year-end gains or losses from these investment positions are treated as 60% long-term and 40% short-term capital gain or loss, regardless of the Partnership's actual holding period for the investments. Straddles. The Partnership is generally authorized to enter into put, call, covered call and other investments that may constitute one position in a "straddle" when considered in conjunction with the other investments of the Partnership. If two (or more) positions constitute a straddle, recognition of a realized loss from one position (including a marked-to-market loss) must be deferred to the extent of unrecognized gain in an offsetting position. In addition, long-term capital gain may be recharacterized as short-term capital gain, or short-term capital loss as long-term capital loss. Interest and other carrying charges allocable to personal property that is part of a straddle must also be capitalized. The Partnership may identify particular offsetting positions as being components of a straddle, and a realized loss is recognized no earlier than upon the liquidation of all of the components of the identified straddle. If the Partnership makes certain elections, the Section 1256 Contract components of a straddle are not subject to the 60% long-term and 40% short-term marked-to-market rules. Instead, the amount, the nature (as long-term or short-term) and the timing of the recognition of the Partnership's gains or losses from the affected straddle positions are determined under rules that vary according to the type of election made. A prospective investor in the Partnership should review the application of these rules to his own particular tax situation with special regard to the potential interaction between Partnership's operations and transactions entered into by the investor in his own capacity. Allocation of Taxable Income As a consequence of new Limited Partners joining the Partnership and existing Partners adding capital to or withdrawing capital from the Partnership during a fiscal period of the Partnership, the allocation of taxable income for tax purposes by the Partnership may differ from the way in which the benefits of the income have been allocated among the Partners for financial purposes in any one period. State and Local Tax Consequences Prospective investors in the Partnership should consider not only federal income tax consequences, but also the potential state and local tax implications of an investment in the Partnership. State and local taxation of Limited Partners differ, depending largely upon place of residence. Tax InformationTax The General Partners provide the Limited Partners with such statements and reports with respect to the Partnership's activities as are required to enable the Limited Partners to file their annual tax returns. ERISA Considerations The Partnership may accept contributions from individual retirement accounts, pension, profit-sharing or stock bonus plans, and governmental plans (all such entities are herein referred to as "Retirement Trusts"). The Partnership may accept capital contributions by Retirement Trusts that cause the value of limited partnership interests in the Partnership held by Retirement Trusts to constitute 25% or more of the value of the total limited partnership interests in the Partnership, excluding Partnership interests held by the General Partners or their affiliates. In such event, the Partnership's assets would be considered "plan assets" under the Employee Retirement Income Security Act of 1975, as amended ("ERISA"). A capital contribution by a Retirement Trust that is subject to ERISA would in such event be an appointment of the General Partners as an "investment manager" under such a Retirement Trust, and the contribution must therefore be authorized by a person who had the authority under the Retirement Trust's governing documents to appoint an "investment manager", as well as the person responsible under the Retirement Trust documents for making investment decisions for the portion of the Retirement Trust's assets to be invested in the Partnership. Prior to investing in the Partnership, prospective Retirement Trust investors should consult with legal counsel to ensure that the governing instruments of the prospective investor provide for appropriate provisions with respect to the appointment of the General Partners as an "investment manager". One of the consequences of the Partnership's assets being deemed "plan assets" under ERISA would be applicability of the prohibited transaction provision ERISA and Section 4975 of the Code. The prohibited transaction provisions of ERISA prohibit may routine business transactions (such as sales, leases, extensions of credit, and the provision of services) between a plan and persons who are "parties in interest" to a plan. "Parties in interest" is a term broadly defined to include numerous persons, including most importantly, any person who provides services to a plan (such as a broker-dealer), as well as fiduciaries. The prohibited transaction provisions of ERISA and Section 4975 of the Code apply, unless a specific exemption is available, regardless of motive and regardless of whether the transaction is beneficial to the plan. The penalties for violation of the prohibited transaction rules include an excise tax of 5 percent on the "amount involved" in the prohibited transaction for each year the transaction is outstanding and not corrected, and the 5 percent excise tax can escalate to 100 percent if the amount involved in the plan is not put back in at least as good a position as it would have been if the prohibited transaction had not occurred within a specified period of time. The latter requirement usually requires the transaction to be rescinded and may require payment to the plan for a loss of earnings from the date of the transaction to the date of the recission, and/or the disgorgement of profits. There are, however, numerous statutory and administrative exemptions from the prohibited transaction rules that may cover the Partnership's activities. It is expected that these rules will not pose any significant restrictions on investments because the Partnership engages primarily in open market transactions on national securities exchanges and, with respect to off-exchange transactions, the General Partners should qualify as a so-called "qualified professional asset manager" as defined in one of the United States Department of Labor's class exemptions from the prohibited transaction rules. If the Partnership's assets are considered the assets of an investing Retirement Trust that is subject to ERISA, each such investing Retirement Trust will be required to reflect the assets and liabilities of the Partnership, and in some cases the Partnership's income and expenses as well as certain transactions engaged in by the Partnership, on its annual return/report files with the Internal Revenue Service. To ease the burden of preparing such filings, the Partnership intends to utilize the alternative method of compliance described in DOL Regulation Section 2510.103-12 with respect to ERISA Plans that file Form 5500 or Form 5500 C/R. As a condition to admission to the Partnership, a Retirement Trust will be required to make certain representations in the Agreement for Admission including a representation that the investment in the Partnership by the Retirement Trust has been authorized by the appropriate person or person and that the Retirement Trust has consulted its counsel with respect to such investment. Unrelated Business Taxable Income ("UBTI") The Partnership may use leverage in connection with its investment. In this connection it should be noted that a tax-exempt entity (including a Retirement Trust), which invests in the Partnership, would generally be subject to tax on the portion of its share of Partnership profits attributable to the use of leverage. This is because such portion of its share of profits will be considered "debt-financed income" and will be taxable as "unrelated business taxable income" under the Federal income tax law. The law is not entirely clear as to the proper way to determine what portion of a tax-exempt partner's share of Partnership profits is attributable to the use of leverage by the Partnership and therefore is "debt-financed income". Accordingly, while the Partnership will compute each tax-exempt partner's share of "debt-financed income" from the Partnership in a manner, which the Partnership determines, is reasonable, there can be no assurance that the Internal Revenue Service will accept the method of computation utilized by the Partnership. THE PARTNERSHIP AGREEMENT The following is a brief discussion of certain provisions of the Partnership Agreement, some of which are also described elsewhere in this Private Placement Memorandum. To obtain more detailed information, reference should be made to the Partnership Agreement, which is attached as Exhibit A. Control The General Partners have the exclusive right to manage and control the affairs of the Partnership and either General Partner can bind the Partnership. No Limited Partner is permitted to participate in the control of the Partnership's business, transact any business in the Partnership's name or have the power to sign documents for the Partnership or bind the Partnership in any other way. Liability of the General Partnerr The doing of any act or the failure to do any act by the General Partners, the effect of which may cause or result in loss, liability, damage or expense to the Partnership or any Partner, does not subject the General Partners to any liability to the Partnership or to any Partner, except that the General Partners may be so liable if they act fraudulently or in bad faith, are grossly negligent or guilty of willful misfeasance. Liability of the Limited Partners A Limited Partner is not liable for any debts or bound by any obligations of the Partnership, except to the extent of his capital contribution. A Limited Partner receiving a return of any part of the capital he contributed to the Partnership is not liable to the Partnership for the amount of the return unless he knew, at the time of the distribution that, after giving effect to the distribution, all liabilities of the Partnership, other than liabilities to Partners on account of their interests in the Partnership, exceeded the fair value of the Partnership's assets. Additional Contributions; New Limited Partners Any Partner may elect, with the consent of the General Partners, to make additional contributions to the Partnership's capital as of the first day of any fiscal quarter of the Partnership and more frequently than quarterly. New Limited Partners may be admitted to the Partnership. The General Partners may, in their discretion, admit new Limited Partners as of the first day of any fiscal quarter of the Partnership and more frequently than quarterly. Form of Contributions Contributions to the Partnership's capital must be made in cash. Allocations Except as otherwise provided in the Partnership Agreement regarding the treatment of the "Hot Issues Account", allocation of Net Profits (as defined below) is a two-step process. First, all Net Profits are provisionally allocated to all Partners in proportion to their respective Capital Accounts. Then, 20% of the Net Profits provisionally allocated to Limited Partners (except certain Limited Partners affiliated with the General Partners) is reallocated to the General Partners. This 20% reallocation is the "Incentive Allocation". Notwithstanding the preceding, if a Net Loss has previously been allocated to any Partner, no part of the Net Profits provisionally allocated to such Partner's account are reallocated to the General Partners as an Incentive Allocation until the amount of the loss has been recouped. This is referred to in the Partnership Agreement as the "Recoupment Allocation". If a Limited Partner who is entitled to a Recoupment Allocation withdraws any portion of his Capital Account, the amount of Recoupment Allocation to which he is entitled is reduced in proportion to the amount of capital withdrawn. Net Losses (as defined below) are allocated to all Partners in proportion to their respective Capital Accounts. The General Partners have unlimited liability for the obligations of the Partnership. This means that if the Partnership were unable to pay its obligations, creditors of the Partnership would have claims against the General Partners. Accordingly, if the Partnership were to have a negative net worth, which could be reflected as negative balances in the General Partners' Capital Accounts, profits would be allocated to the General Partners until the negative balances were eliminated. Thereafter, allocation of profits would return to the normal basis described above. For purposes of the allocation procedures described above, Net Profit of the Partnership means, with respect to a particular fiscal period of the Partnership, the excess of the aggregate revenue, income and gains (realized and unrealized) earned on an accrual basis by the Partnership during the fiscal period from all sources over the expenses and losses (realized and unrealized) incurred on an accrual basis during the fiscal period. Net Loss, for purposes of the allocation procedures described above, means, with respect to a fiscal period of the Partnership, the excess of all expenses and losses (realized and unrealized) incurred on an accrual basis during the fiscal period over the aggregate revenue, income and gains (realized and unrealized) earned on an accrual basis by the Partnership during the fiscal period from all sources. Gains, losses and expenses are allocated by the Partnership for income tax purposes in a manner so as to reflect as nearly as possible the amounts credited or charges to each Partner's Capital Account under the financial allocation procedures described above. All matters concerning the valuation of securities, the allocation of profits, gains and losses among the Partners, including the taxes on them, and accounting procedures, not specifically and expressly provided for by the terms of the Partnership Agreement, are determined in good faith by the General Partners, whose determinations are final, binding and conclusive upon all of the Partners. At such times as the General Partners wish to effect a transaction in the Hot Issues Account (as described in Section 10 of the Partnership Agreement), the requisite funds would be transferred to the Hot Issues Account from one or more of the regular accounts. Securities involved in the distribution are purchased in the Hot Issues Account. If sold, the proceeds of sale are transferred from the Hot Issues Account to the regular account. If securities are to be held, such securities are purchased by the regular account from the Hot Issues Account at fair market value. At the end of the particular Fiscal Period, if the Hot Issues Account has been in existence in that Fiscal Period: (A) interest is charged to the Limited Partners having a beneficial interest in the Hot Issues Account on the monies paid to purchase the securities in the Hot Issues Account. Such interest is charges to the Limited Partners in accordance with their interests in the Hot Issues Account (being based on the relationship between their Capital accounts as of the beginning of the Fiscal Period) at the rate from time to time being paid, or which would have been paid, by the Partnership for borrowed funds during the various period that funds from regular accounts have been held in or made available to the Hot Issues Account, and such interest is credited to all of the Limited Partners in the Partnership in accordance with their Capital accounts as of the beginning of the Fiscal Period; and (B) the gains or losses resulting from the various transactions in the Hot Issues Account is credited or debited to the Limited Partners having an interest in the Hot Issues Account in accordance with their interest therein. Expenses The Partnership Agreement provides that the organizational expenses be borne by the Partnership. The Partnership pays its own administrative, legal, proxy and audit expenses and investment expenses such as commissions, research fees, interest on margin accounts and other indebtedness, borrowing charges on securities sold short, custodial fees, bank service fees and other reasonable expenses related to the purchase, sale or transmittal of Partnership assets as determined by the General Partners in their sole discretion. The Partnership pays an administrative fee to the General Partners as of the end of each fiscal quarter at an annual rate equal to 1% of the Partnership's Assets. Withdrawals by Limited Partnersrs After a Limited Partner has been a Partner of the Partnership for eight full fiscal quarters, such Limited Partner may, as of the end of any fiscal year of the Partnership, or at other times at the discretion of the General Partners, withdraw all or any part of his Capital Account with the Partnership, so long as the General Partners receive written notice of the intended withdrawal not less than 90 days prior to the withdrawal date, stating the amount to be withdrawn. A Partner requesting a withdrawal will be subject to such charge, as the General Partners may determine, to cover the costs of selling securities and other costs incurred in order to effect payment of such withdrawal. If the amount of a withdrawal by a Limited Partner represents less than 75% of the Limited Partner's Capital Account, the Limited Partner receives the proceeds of the withdrawal within 30 days after the withdrawal date. If the amount of a Limited Partner's withdrawal represents 75% or more of the Limited Partner's Capital Account, the Limited Partner receives 75% of his Capital Account within 30 days after the withdrawal date and the remainder of the amount withdrawn within 10 business days after the availability of the Partnership's financial statement for the period including the withdrawal date. If a Limited Partner requests withdrawal of capital, which would reduce the amount of his Capital Account below the amount of his initial Capital Contribution, the General Partners may treat such request as a request for withdrawal of all of such Limited Partner's capital. Any Limited Partner's Interest may be terminated by the Partnership as of the end of any fiscal year of the Partnership upon 90 days prior written notice, so long as the General Partners determine the termination to be in the best interest of the Partnership. In the event that a Limited Partner's Interest is terminated by the Partnership, the Limited Partner receives 90% of his Capital Account within 100 days after notice of termination and the remaining 10% within 10 business days after the availability of the Partnership's financial statements for the fiscal year in which his or its Interest is terminated. The distribution of any amount withdrawn under any circumstances by a Limited Partner or paid to him upon termination of his interest may take the form of cash and or securities as determined by the General Partners in their sole discretion. Withdrawals by the General Partner and Limited Partners that are Affiliates of General Partner Each General Partner and each Limited Partner that is an affiliate of a General Partner, has the right to withdraw an amount from his Capital Account as of the end of any fiscal year of the Partnership, without prior notification to the Limited Partners, if, giving effect to such withdrawal, the total amount of the Capital Accounts of the General Partners and their affiliates is as least $50,000. Although the General Partners do not intend to effect or permit any withdrawals of capital which would reduce the aggregate of the Capital accounts of the General Partners and their affiliates that are Limited Partners, to less than $50,000, a General Partner may do so on 45 days prior notice to the Limited Partners. In that event, if a Limited Partner gives notice to the General Partners not later than 15 days after the date of such notice by the General Partners, the Limited Partner may withdraw his capital as of the same date as the withdrawal by the General Partners or Affiliates. The General Partners may voluntarily resign or withdraw from the Partnership as of the end of any fiscal year of the Partnership upon 60 days written notice sent to all Partners. As noted below under "Term of Partnership", the Partnership's business may be continued by the remaining General Partner in the event of the withdrawal of a General Partner. Term of PartnershipTerm of PartnershipTerm of Partnership The scheduled term of the Partnership is until June 31, 2020. The Partnership will terminate prior to the end of its scheduled term upon the written consent of all Partners, upon the entry of a decree of judicial dissolution, or upon an event of withdrawal or disqualification of all of the General Partners. Dissolution On dissolution of the Partnership, the General Partner (or if there are no General Partners remaining, one or more person selected by Limited Partners holding a majority in interest of the Capital Accounts of Limited Partners) will wind up the Partnership's affairs and will distribute the Partnership's assets in the following manner and order: (1) in satisfaction of the claims of all creditors of the Partnership, other than the General Partners; (2) in satisfaction of the claims of the General Partners as creditors of the Partnership; and (3)any balance to the Partners in the relative proportions that their respective Capital Accounts bear to each other, those Capital Accounts to be determined as if the fiscal year of the Partnership ended on the date of the dissolution. Reports Limited Partners will receive interim information reports quarterly and annual financial statements. Amendments The Partnership Agreement may be amended in whole or in part by the written consent of the General Partners, and of Partners whose Capital Accounts constitute a majority in interest of the total Partnership Capital Accounts at that time. In addition, any provisions of the Partnership Agreement, other than Section 9, which established the amount of profit and loss allocated to Partners, may be amended by the General Partners in any manner that does not, in the discretion of the General Partners, adversely affect any Limited Partner. Indemnification The Partnership indemnifies each General Partner and his associates, employees and agents to the fullest extent permitted by law and holds each harmless from and with respect to all (1) fees, costs and expenses incurred in connection with, or resulting from, any claim, action or demand against the General Partner, or any of his associates, employees or agents that arises out of or in any way related to the Partnership, its properties, business or affairs; and (2) any losses or damages resulting from any such claim, action or demand, including amounts paid in settlement or compromise of the claim, action or demand. This indemnification applies, however, only so long as the action or failure to act by the General Partner or by his associates, employees or agents does not constitute bad faith or willful misfeasance. Advances by the Partnership to cover the cost of defense against such claims may be made to a General Partner prior to the adjudication or other resolution thereof. If it is subsequently determined by a court of competent jurisdiction that the General Partner was not entitled to indemnification against liability arising from a particular claim, action or demand, such General Partner will be required to reimburse the Partnership for any advances made to cover the cost of the defense against such claim, action or demand. Rights of Transfer No Limited Partner may assign or otherwise transfer his or its Interest, in whole or in part, without the consent of the General Partners and without a written opinion of counsel that the transfer is consistent with the 1933 Act and applicable provisions of any state's "Blue Sky" law, and would not result in the Partnership's having to register as an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). In addition, no Limited Partner has the right to have his or its assignee admitted as a substitute Limited Partner, except upon the written consent of the General Partners, which consent may be withheld in the discretion of the General Partners. INVESTING IN THE PARTNERSHIP Minimum Subscription Each potential Limited Partner must subscribe for a minimum of $100,000. The General Partners in their discretion may waive this minimum subscription. Investor Suitability Standards The Interests offered pursuant to this Private Placement Memorandum are not registered under the 1933 Act and must be acquired for investment and not with a view to distributing them within the meaning of the 1933 Act. As a result, offers and sales of the Interests are made by the Partnership only to affiliates of the General Partners and to other prospective investors who, in the judgment of the General Partners, satisfy the following suitability standards: (1) The investor, if an individual, qualifies as an "accredited investor" because he or she (a) has a net worth, or joint net worth with his or her spouse, of at least $1,000,000, or (b) had an individual income in excess of $200,000 in each of the two most recent years, or joint income together with his or her spouse in excess of $300,000 in each of those two years, and reasonably expects to reach the same income level in the current year. (2) The investor, if an entity, qualifies as an "accredited investor" because it is: (a) a bank as defined in Section 3(a)(2) of the 1933 Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the 1933 Act, whether acting in its individual capacity or in a fiduciary capacity; (b) a registered-broker-dealer; (c) an insurance company as defined in Section 2(13) of the 1933 Act; (d) an investment company registered under the 1940 Act or a business development company as defined in Section 2(a)(48) of the 1940 Act1; (e) a Small Business Investment Company licensed by the Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; (f) any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5 million; (g) a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940 (the "Advisers Act"); (h) an organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business Trust, or a partnership, not formed for the specific purpose of investing in the Partnership, with total assets in excess of $5 million; or (i) a trust with total assets in excess of $5 million, not formed for the specific purpose of investing in the Partnership, whose purchase is directly by a person who the General Partner has no reason to believe has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of investment in the Partnership; (j) any other entity all of the equity owners of which are "accredited investors". (3) The investor must have the ability to bear the economic risks of his investment in the Partnership. (4) The investor must have sufficient knowledge and experience in financial, business or investment matters to evaluate the merits and risks of his investment, (5) The investor must confirm and represent that his Interest in the Partnership is being acquired for investment and not with a view to distribution. (6) The investor must not be a non-resident alien or foreign corporation, foreign trust or foreign estate. (7) The investor must be an individual or a "company" which either has assets of at least $1 million or has invested at least $100,000 in the Partnership. However, the General Partners may sell Limited Partnership interest to 35 investors who do not meet the above criteria. Each investor is required to make certain other representations to the Partnership, including (but not limited to) representations as to his access to information concerning the Partnership. Access to Information The General Partners will make available to prospective investors any non-propriety materials available to the General Partners relating to the Partnership, and will answer all inquiries from prospective investors concerning the Partnership, the General Partners, the business of the Partnership, and any other matters relating to the formation of the Partnership and the offer and sale of the Interests. The General Partners will also afford prospective investors the opportunity to obtain any additional non-propriety information (to the extent the General Partners possess that information or can acquire it without unreasonable effort or expenses) necessary to verify the accuracy of any representations or information contained in this Private Placement Memorandum. Prospective investors are invited to communicate directly with Messrs. Seidman or Pollack, as the representatives of the General Partner should be directed to the Partnership's office located at 47 Blueberry Drive, Woodcliff Lake, New Jersey 07675. Mr. Seidman's phone number is (973) 560-1400, Ext. 108 Mr. Pollack's phone number is (610) 892-8162. Method of Subscription An investor may subscribe to purchase an Interest by (1) completing, dating and signing two copies of the Subscription Agreement accompanying this Private Placement memorandum, (2) signing and having notarized the Limited Power of Attorney delivered with this Private Placement Memorandum, and (3)delivering the signed copies of the foregoing documents to a General Partner together with a check in an amount equal to the Dollar amount of the Interest to be purchased. The General Partners reserve the right to accept or reject any subscription in their discretion for any reason whatsoever. Amounts paid by any subscriber whose subscription is rejected will be promptly returned. MISCELLANEOUS SECURITIES Registration Under the Investment Act The General Partners do not intend to register as an investment adviser under the Investment Advisers Act of 1940, as amended. If the General Partners were registered as investment adviser, they would be subject to various requirements, including restrictions relating to the manner in which their compensation for investment advisory services could be computed. Prospective investors should understand that the compensation arrangements of the Partnership Agreement may create an incentive for the General Partners to cause the Partnership to make investments that are riskier or more speculative than if their compensation did not depend on the Net Profit of the Partnership. See "CONFLICTS OF INTEREST-General Partners' Share of Profits". Exemption from the Investment Company Act To ensure that the Partnership is exempt from registration under the Investment Company Act, the General Partners may limit the number of Limited Partners and the percentage interest in the Partnership that may be held by certain investors. ADDITIONAL INFORMATION This Private Placement Memorandum is intended only to be a summary of the more significant features of investing in the Partnership and is qualified by the provisions of the Partnership Agreement. PROFESSIONAL ASSISTANCE Mr. Dennis Pollack prepared the Offering Memorandum and Partnership Agreement and no independent counsel passed upon the legal matters on behalf of the Partnership. The Partnership intends to retain Schonbraun Sapris McCann Bekritsky & Co., LLC of Roseland, New Jersey, as the independent accountant firm for the Partnership. EXHIBIT A AGREEMENT OF LIMITED PARTNERSHIP OF POLLACK INVESTMENT PARTNERSHIP, L.P. THIS AGREEMENT OF LIMITED PARTNERSHIP of Pollack Investment Partnership, L.P. (The "Partnership"), dated as of June 2000, by and between Lawrence B. Seidman and Dennis Pollack, as the General Partners (the "General Partners") and the persons and entities, referred to in schedule A on file at the offices of the Partnership, who have executed this Agreement, either directly or indirectly by an attorney-in-fact, as limited partners (the "Limited Partners"). PREMISES: The Partnership was organized in accordance with the New Jersey revised Uniform Limited Partnership Act by the filing by the General Partners of a Certificate of Limited Partnership with the office of the Secretary of State of the State of New Jersey on ----------------, NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter contained, effective as of June , 2000, it is hereby agreed as follows: 1. Definitions The following terms shall have the following meaning when used in this Agreement: (a) "Act" shall mean the New Jersey Revised Uniform Limited Partnership Act, as amended from time to time. (b) "Affiliate" shall mean any person performing services on behalf of the Partnership who (i) directly or indirectly controls, is controlled by, or is under common control with a General Partner; (ii) is a company of which either or both of the General Partners are a controlling shareholder or an officer, director, partner or trustee; (iii) a member of the family of either of the General Partners; or (iv) an Individual Retirement Account or similar trust for the benefit of either or both of the General Partners. (c) "Agreement" shall mean this Agreement of Limited Partnership of the Partnership, as originally executed and as amended, modified, supplemented or restated from time to time. (d) "Capital Account" shall mean the account described in Section 8 of this Agreement. (e) "Certificate" shall mean the Partnership's Certificate of Limited Partnership as defined in Section 2 of this Agreement. (f) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations issued thereunder. (g) "Fiscal Period" shall mean the period beginning on the day immediately succeeding the last day of the immediately preceding Fiscal Period and ending on the earliest occurring of the following: (i) The last day of the Fiscal Year; (ii) The day immediately preceding the day on which a new Partner is admitted to the Partnership; iii) The day immediately preceding the date on which a Partner makes an additional capital contribution to the Partner's capital account; (iv) The day on which a Partner withdraws, in whole or in part, the amount of his Capital Account; (v) The date of dissolution of the Partnership in accordance with Section 5 of this Agreement. (h) "Fiscal Quarter" shall mean a fiscal quarter of the Partnership. (i) "Fiscal Year" shall mean the fiscal year of the Partnership, which shall correspond to the calendar year. (j) "General Partners Percentage" shall mean a percentage established by the General Partners for each General Partner on the Partnership's books as of the first day of each Fiscal Period. The sum of the Percentages for each Fiscal Period shall equal one hundred percent (100%). (k) "Net Profit" of the Partnership shall mean, with respect to any Fiscal Period, theexcess of the aggregate revenue, income and gains (realized and unrealized) earned on an accrual basis during the Fiscal Period by the Partnership from all sources over the expenses and losses (realized and unrealized) incurred on an accrual basis during the Fiscal Period by the Partnership. (l) "Net Loss" of the Partnership shall mean, with respect to any Fiscal Period, the excess of all expenses and losses (realized and unrealized) incurred on an accrual basis, during the Fiscal Period by the Partnership over the aggregate revenue, income and gains (realized and unrealized) earned on the accrual basis during the Fiscal Period by the Partnership from all sources. (m) "Partnership Percentage" shall mean a percentage established for each partner on the Partnership books as of the first day of each Fiscal Period. The Partnership Percentage of a Partner for a Fiscal Period shall be determined by dividing the amount of the Partner's Capital Account as of the beginning of the Fiscal Period by the sum of the capital accounts of all of the Partners as of the beginning of the Fiscal Period. The sum of the Partnership Percentage for each Fiscal Period shall equal one hundred percent (100%). 2. Organization. The General Partners have executed a Certificate of Limited Partnership pursuant to the provisions of the Act (the "Certificate") and have caused the Certificate to be filed as required by the Act. The General Partners shall also execute and record all amendments to the Certificate or additional certificates as may be required by this Agreement or by law. 3. Name of Partnership. The name of the Partnership shall be Pollack Investment Partnership, L.P., or such other name as the General Partners may from time to time designate. 4. Principal Office, Resident Agent, Registered Office The principal office of the Partnership is 47 Blueberry Lane, Woodcliff Lake, NJ 07675 or any other place determined by the General Partners. The Partnership's phone number is (973) 560 -1400 ext. 108. The name and address of the registered agent for service of process in the State of New Jersey is Dennis Pollack, 47 Blueberry Lane, Woodcliff Lake, NJ 07675. The address of the registered office of the Partnership in the State of New Jersey is c/o Dennis Pollack, 47 Blueberry Lane, Woodcliff Lake, NJ 07675. 5. Term of the Partnership. (a) The term of the Partnership, having commenced on the date the Certificate was filed, shall continue until the first of the following events occurs: (i) June 31, 2020; (ii) a written consent to dissolution of the Partnership by all Partners; (iii) all of the General Partners ceasing to be General Partners as a result of doing or being subject to one or more of the following: (A) withdrawing from the Partnership in accordance with Section 21 of this Agreement; (B) assigning all of his interest in the Partnership; (C) making an assignment for the benefit of his creditors; (D) filing a voluntary petition in bankruptcy; (E) being adjudged bankrupt or insolvent or having entered against him an order of relief in any bankruptcy or insolvency proceeding; (F) filing a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation; (G) filing an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him in any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation; (H) seeking consenting to, or acquiescing in the appointment of a trustee or receiver, or liquidator of all or any substantial part of his properties; (I) being the subject of any proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation, which proceeding shall have continued for one hundred and twenty (120) days after the commencement thereof; or the appointment of a trustee, receiver, or liquidator for him or all or any substantial part of his properties without his consent or acquiescence, which appointment is not vacated or stayed within ninety (90) days after the appointment; (J) the death of a General Partner; or (K) the entry by a court of competent jurisdiction adjudicating him incompetent to manage his person or his property; or (iv) issuance of a non-appealable decree of dissolution of the Partnership by a New Jersey court of competent jurisdiction. (b) In the event a General Partner does or becomes subject to any of the provisions of subsection (a)(iii) of this Section 5, the remaining General Partner shall be permitted to carry on the business of the Partnership upon written notice provided to all Partners of the decision to continue the Partnership's business. (c) If any one or more of the termination events listed in this Section 5 occurs, and if the remaining General Partner chooses not to carry on the business of the Partnership in accordance with the provisions of subsection (b) of this Section 5, the Partnership shall be dissolved and its affairs wound up as provided in Section 22 of this Agreement. 6. Purposes. The Partnership is organized for the following purposes: (a) to invest and trade, on margin or otherwise, in "Securities", as that term is defined in Section 2(1) of the Securities Act of 1933, as amended (the "1933 Act"); (b) to sell Securities short and cover short sales; (c) to lend funds or properties of the Partnership; either with or without security; and (d) to execute, deliver and perform all contracts and other undertakings, and engage in all activities and transactions, that the General Partners believe are necessary or advisable in carrying out the purposes specified subsections (a), (b), and (c) of this Section 6, including without limitation: (i) to purchase, transfer or acquire in any manner and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to the investments described in subsection (a) of this Section 6; and (ii) to register or qualify the Partnership under any applicable Federal or state laws, or to obtain exemptions under those laws, if registration, qualification or exemption is deemed necessary by the General Partners. 7. Contributions of the Partners; New Partners. (a) Each Partner shall make a contribution to the Partnership's capital ("Capital Contribution") in the amount set out opposite the Limited Partner's name in Schedule A attached to this Agreement. (b) Any Partner may elect, with the consent of the General Partners, to make an additional Capital Contribution, as of the first day of any Fiscal Quarter. The General Partners may, in their sole discretion, permit additional Capital Contributions to be made more frequently than quarterly. (c) No Partner shall be required to make any additional Capital Contributions. (d) Capital Contributions made by Limited Partners must be in cash. (e) The General Partners shall have the right, but not the obligation, to admit new Partners to the Partnership as of the first day of any Fiscal Quarter. The General Partners may, however, in their sole discretion, admit new Partners more frequently than quarterly. 8. Capital Accounts. A Capital Account shall be established for each Partner. For the Fiscal Period during which a Partner is admitted to the Partnership, his Capital Account shall equal the amount of his initial Capital Contribution. For each subsequent Fiscal Period, the Partner's Capital Account will equal the sum of the amount of his Capital Account as finally adjusted for the immediately preceding Fiscal Period and the amount of any additional Capital Contributions made by the Partner as of the first day of the current Fiscal Period. 9. Adjustments to Capital Accounts. At the end of the Fiscal Period, the Capital Accounts of the Partners shall be adjusted in the following manner: (a) Subject to the provisions of subsections (c) and (d) and (f) of this Section 9, Net Profit of the Partnership for the Fiscal Year shall be credited as follows: (i) Twenty percent (20%) of the Net Profit shall be reallocated to the General Partners for each Fiscal Year as an "Incentive Allocation" to be divided equally between the General Partners. (ii) The remaining Net Profit shall be allocated to the Partners in proportion to their Capital Accounts. (b) Net Loss of the Partnership for the Fiscal Year shall be debited against the Capital Account of each Partner in proportion to an in accordance with the balance in the Capital Account of the Partner until the value of any Partners' Capital Account becomes zero. Thereafter, any remaining Net Loss for the Fiscal Year shall be debited to Partners having positive balances in their Capital Accounts in proportion to those balances, until the value of each Partner's Capital Account becomes zero. Thereafter, any remaining Net Loss for the Fiscal Year shall be debited to the General Partners in accordance with each General Partner's General Partners' Percentage for the Fiscal Period. (c) In the event that the Capital Account of one or more General Partners has a negative balance, one hundred percent (100%) of the Net Profit of the Partnership for the Fiscal Period shall be credited to the General Partner(s) whose Capital Accounts have negative balances in accordance with their respective General Partners' Percentages until no General Partner shall have a negative Capital Account balance. (d) Anything in this Section 9 to the contrary notwithstanding, if any Net Losses are allocated to the account of any Limited Partner, each such Limited Partner shall be entitled to a "Recoupment Allocation" of subsequent Net Profits of the Partnership, in an amount in proportion to his Partnership Percentage, until such Net Loss shall have been eliminated. The amount of Net Profits allocated as a Recoupment Allocation shall not exceed, but shall reduce, the amount of Net Profits otherwise allocable to the General Partners as the Incentive Allocation pursuant to Section 9(a)(ii) hereof. If a Limited Partner who is entitled to a Recoupment Allocation shall withdraw any portion of his Capital Account, the amount of Recoupment Allocation to which he is entitled shall be reduced in proportion to the amount of capital withdrawn. (e) The amount of any withdrawal made by the Partner pursuant to Section 21 or Section 22 of this Agreement shall be debited against the Capital Account of that Partner. (f) Allocations of Net Profit or Net Loss for a Fiscal Period, if necessary, shall be made in accordance with each Partner's Partnership percentage, adjusted as provided in paragraph (a) of this Section 9 at the end of the Fiscal Year, provided that the "Incentive Allocation" may not exceed twenty percent (20%) of the Net Profit for the Fiscal Year. 10. Hot Issues. In the event the General Partners decide to invest in securities which are the subject of a public distribution and which the General Partners, in their sole discretion, believe may become a "hot issue" as that term is defined in Article III, Section 1 of the Rules of Fair Practice of the National Association of Securities Dealers, Inc. (the "NASD"), such investment shall be made in accordance with the following provisions: (a) any such investment made in a particular Fiscal Period shall be made in a special account (the "Hot Issue Account"); (b) only those Partners who do not fall within the proscription of Article III, Section I of said NASD Rules of Fair Practice ("Unrestricted Partners") shall have any beneficial interest in the Hot Issues Account; (c) each Unrestricted Partner shall have a beneficial interest in the Hot Issues Account for any Fiscal Period in the proportion which such Unrestricted Partner's Capital Account, as of the beginning of the Fiscal Period, bore to the sum of the Capital Accounts of all Unrestricted Partners as of the beginning of such Fiscal Period. (d) funds required to make a particular investment shall be transferred to the Hot Issues Account from the regular account of the Partnership; securities involved in the public distribution shall be purchased in the Hot Issues Account, held in the Hot Issues Account and eventually sold from the Hot Issues Account or transferred to the regular account at fair market value as of the day of transfer as determined by the General Partners with such transfer being treated as a sale; if such securities are sold from the Hot Issues Account, the proceeds of the sale shall be transferred from the Hot Issues Account to the regular account of the Partnership. (e) as of the last day of each Fiscal Period in which a particular investment or investments are held in the Hot Issues Account: (A) interest shall be debited to the Capital Accounts of the Unrestricted Partners in accordance with their beneficial interest in the Hot Issues Account at the interest rate being paid by the Partnership from time to time for borrowed funds during the period in that Fiscal Period that funds from the regular account have been held in or made available to the particular Hot Issues Account or, if no such funds are being borrowed during such period, the interest rate that the General Partners determine would have been paid if funds had been borrowed by the Partnership during such period; and such interest shall be credited to the Capital Accounts of all the Partners, both General and Limited, in the proportions which (i) each Partner's Capital Account as of the beginning of such Fiscal Period bore to (ii) the sum of the Capital Accounts of all Partners as of the beginning of such Fiscal Period and (B) any Net Profits or Net Losses during such Fiscal Period with respect to the Hot Issues Account shall be allocated to the Capital Accounts of the Unrestricted Partners in accordance with their beneficial interest in the Hot Issues Account during such Fiscal Period; provided, however, that the amount of such interest shall not exceed the amount of profit accrued in the Hot Issues Account; and (f) the determination of the General Partners as to whether a particular Partner falls within the proscription of Article III, Section I of the NASD Rules of Fair Practice shall be final. 11. Valuation. The Partnership's assets shall be valued in accordance with the following principles: (a) Any Security that is listed on a national securities exchange will be valued at its last sale price on the date of determination as recorded by the composite tape system, or if no sales occurred on that day, at the mean between the closing "bid" and "asked" prices on that day as recorded by the system or the exchange, as the case may be; (b) Any Security that is a National Market Security will be valued at its last sale price on the date of determination as reported by the National Association of Securities Dealers Automated Quotations System ("NASDAQ") or if no sale occurred on that day, at the mean between the closing "bid" and "asked" prices on that day as reported by NASDAQ; (c) Any Security not listed on a national securities exchange and not a National Market Security will be valued at the mean between the closing "bid" and "asked" prices on the date of determination as reported by NASDAQ or, if not so reported, as reported in the over-the-counter market in the United States; (d) An option shall be valued at the last sales price or, in the absence of a last sales price, the last offer price; and (e) All other Securities shall be assigned the value that the General Partners in good faith determine. 12. Determination by General Partners of Certain Matters. (a) All matters concerning the valuation of Securities, the allocation of profits, gains and losses among the Partners, including the taxes on them and accounting procedures, not specifically and expressly provided for by the terms of this Agreement, shall be determined in good faith by the General Partners, whose determination shall be final, binding and conclusive upon all of the Partners. (b) Gains, losses, and expenses of the Partnership for each Fiscal Period shall be allocated among the Partners for income tax purposes in a manner so as to reflect, as nearly as possible, the amounts credited or charged to each Partner's Capital Account pursuant to Section 9 of this Agreement. (c) The General Partners shall have the power to make all tax elections and determination for the Partnership, and to take any and all action necessary under the Code or other applicable law to effect those elections and determinations. All such elections and determinations by the General Partners shall be final, binding and conclusive upon all Partners. 13. Liability of Partners. (a) The General Partners shall not be obligated to contribute cash or other assets to the Partnership to make up deficits in their Capital Accounts or in the Capital Accounts of the Limited Partners either during the term of the Partnership or upon liquidation. The General Partners shall be liable for all debts and obligations of the Partnership to the extent that the Partnership is unable to pay such debts and obligations. (b) The doing of any act or the failure to do any act by a General Partner, the effect of which may cause or result in loss, liability, damage or expense to the Partnership or any Partner shall not subject a General Partner to any liability to the Partnership or to any Partner, except that a General Partner may also be liable if he has not acted in good faith, was guilty of willful misfeasance or was grossly negligent. (c) A Limited Partner will not be liable for any debts or bound by any obligations of the Partnership except to the extent set forth in subsections (d), (e) and (f) of this Section 13. (d) A Limited Partner who has received the return of any part of his Capital Contribution without violation of this Agreement or the Act shall not be liable therefore to the Partnership or its creditors. (e) A Limited Partner receiving a return of any portion of his Capital Contribution in violation the Act or this Agreement will be liable to the Partnership for a period of six (6) years thereafter for the amount of the contribution wrongfully returned. (f) A Limited Partner may be liable to the Partnership or creditors of the Partnership for any amounts distributed if, and to the extent that, at the time of the distribution, he actually knew that, after giving effect to the distribution, all liabilities of the Partnership, other than liabilities to Partners on account of their interest in the Partnership, exceeded the fair value of the Partnership's assets. 14. Rights and Duties of the General Partners. (a) The General Partners shall have the exclusive right to manage and control the affairs of the Partnership, and shall have the power and authority to do all things necessary or proper to carry out the purposes of the Partnership. The General Partners shall devote an amount of time and attention that the General Partners in their sole discretion deems necessary or appropriate. (b) Without limiting the generality of the foregoing, the General Partners shall have full power and authority to: (i) engage independent agents, investment advisors, attorneys, accountants and custodians as the General Partners deem necessary or advisable for the affairs of the Partnership; (ii) receive, buy, sell, exchange, trade, and otherwise deal in and with Securities and other property of the Partnership; (iii) open, conduct and close accounts with brokers on behalf of the Partnership and to pay the customary fees and charges applicable to transactions in those accounts; (iv) open, maintain and close accounts, including margin accounts, with brokers and banks, and to draw checks and other orders for the payment of money by the Partnership; (v) file, on behalf of the Partnership, all required local, state and Federal tax and other returns relating to the Partnership; (vi) cause the Partnership to purchase or bear the cost of any insurance covering the potential liabilities of the General Partners and any associate, employee or agent of the General Partners arising out of the General Partner's actions as General Partner under this Agreement; (vii) cause the Partnership to purchase or bear the cost of any insurance covering the potential liabilities of any person serving as a director, officer or employee of an entity in which the Partnership has an investment or of which the Partnership is a creditor; (viii) commence or defend litigation or submit to arbitration any claim or cause of action that pertains to the Partnership or any Partnership assets; (ix) enter into, make and perform contracts, agreements and other undertakings, and to do any other acts, as the General Partners deems necessary or advisable for, or as may be incidental to, the conduct of the business of the Partnership, including, without limiting the generality of the foregoing, contracts, agreements, undertakings and transactions with any Partner or with any other person, firm or corporation having any business, financial or other relationship with any Partner or Partners; (x) make or revoke elections pursuant to Section 754 of the Code and adjust the basis of the Partnership's property as permitted by Sections 734(b) and 743(b) of the Code; (xi) designate a Tax Matters Partner for all purposes under the Code; and (xii) resolve conflicts of interest between themselves and/or their Affiliates and the Partnership and/or the Limited Partners. 15. Expenses. The Partnership shall bear all expenses relating to its organization. The Partnership will also bear administration, accountant, legal counsel, and proxy expenses, as well as expenses of investments including, without limitation, commissions, research fees, interest on debt and bank service fees. 16. Administrative Fee. The Partnership shall pay the General Partners, as of the end of each Fiscal Quarter of the Partnership, an administrative fee at an annual rate equal to1% of the value of the Partnership's assets. 17. Limitation on Powers of Limited Partners. No Limited Partner shall participate in the control of the Partnership's business, transact any business in the Partnership's name or have the power to sign documents for the Partnership or bind the Partnership in any other way. 18. Other Business Ventures. Each Partner agrees that each General Partner and his affiliates and associates may engage in other business activities or possess interest in other business activities of every kind and description, independently or with others. These activities may include, without limitation, establishing a broker-dealership and investing in real estate and real estate related partnerships, or investing, financing, acquiring and disposing of interests in securities in which the Partnership may from time to time invest, or in which the partnership is able to invest or otherwise have any interest. The Limited Partners agree that the General Partners and their affiliates may act as General Partners of other partnerships, including investment partnerships and may sit on the Boards of Directors or hold operating officer positions with companies in which the Partnership has an interest and may retain for their own personal accounts any financial compensation or benefits derived therefrom. 19. Limitation on Assignability of Interest of Limited Partners. (a) No Limited Partner may assign or otherwise transfer or encumber his interest in the Partnership, in whole or in part, without the consent of the General Partners and without a written opinion of counsel to or approved by the General Partners that the proposed transfer (i) is consistent with all applicable provisions of the 1933 Act, and the rules and regulations thereunder, as from time to time in effect, as well as any applicable provisions of any state "blue sky" law; and (ii) would not result in the Partnership's having to register as an investment company under the Investment Company Act of 1940, as amended. (b) Notwithstanding any other provision of this Agreement, any successor to any Limited Partner shall be bound by the provisions of this Agreement. Prior to recognizing any assignment of an interest in the Partnership that has been transferred in accordance with this Section 19, the General Partners may require the transferring Limited Partner to execute and acknowledge an instrument of assignment in form and substance satisfactory to the General Partners, and may require the assignee to agree in writing to be bound by all the terms and provisions of this Agreement, to assume all of the obligations of the assigning Limited Partner and to execute whatever other instruments or documents the General Partners deems necessary or desirable in connection with the assignment. (c) No Limited Partner shall have the right to have his assignee admitted as a substitute Limited Partner, except upon the written consent of the General Partners, which consent may be withheld in the sole discretion of the General Partners. (d) Each Limited Partner hereby approves the admission to the Partnership as a Limited Partner of any assignee who succeed to the interest in the Partnership of a Limited Partner in accordance with the provisions of this Section 19. 20. Withdrawals by a Limited Partner (a) (i) A Limited Partner who shall have been a Limited Partner for at least eight full Fiscal Quarters shall have the right, as of the end of any Fiscal Year, or at other times at the discretion of the General Partners to withdraw all or a portion of the amount of his Capital Account, so long as the General Partners receives written notice of the intended withdrawal not less than ninety (90) days prior to the withdrawal, stating the amount to be withdrawn. In no event, however, shall a Limited Partner be permitted to withdraw any amounts from his Capital Account in excess of the positive balance of his Capital Account. If the amount of a Limited Partner's withdrawal represents less than seventy-five percent (75%) of the Limited Partner's Capital Account, the Limited Partner will receive the proceeds of the withdrawal within thirty (30) days after the date of withdrawal. If the amount of a Limited Partner's withdrawal represents seventy-five percent (75%) or more of the Limited Partner's Capital Account, the Limited Partner will receive seventy-five percent (75%) of his Capital Account within thirty (30) days after the date of withdrawal and the remainder of the amount withdrawn within ten (10) days after the Partnership has received financial statements from its independent certified public accountants pursuant to Section 23(c) of this Agreement. If a Limited Partner requests withdrawal of capital, which would reduce his Capital Account below the amount of his initial Capital Contribution, the General Partners may treat such request as a request for withdrawal of all of such Partner's Capital Account. The distribution of any amount withdrawn by a Limited Partner may take the form of cash and/or marketable securities as determined by the General Partners in their sole discretion. A Limited Partner who requests a withdrawal shall be subject to a charge determined by the General Partners, in their sole discretion, to cover the costs related to such transaction. (ii) In the event of a proposed withdrawal of capital by one or more General Partners or Affiliates pursuant to Section 21(a)(ii) of this Agreement, as a result of which the aggregate of the Capital Accounts of the General Partners and Affiliates will be less than $50,000, a Limited Partner shall have the right to withdraw all or a portion of the amount of his Capital Account, so long as the General Partners receive written notice of the intended withdrawal not more than fifteen (15) days after the date of the notice of withdrawal by such General Partner or General Partners or Affiliate or Affiliates pursuant to Section 21(a)(ii), stating the amount to be withdrawn. In such event the withdrawal by such Limited Partner shall be effective as of the effective date of the withdrawal by the General Partners pursuant to said Section 21(a)(ii). The amount available for withdrawal shall be calculated in the same manner as provided for in the last sentence of paragraph (b) of Section 5 hereof. (b) Any Limited Partner's interest in the Partnership may be terminated by the Partnership as of the end of any Fiscal Year upon prior written notice, so long as the General Partners determine the termination to be in the best interest of the Partnership. In the event that a Limited Partner's interest in the Partnership is terminated pursuant to this Section 20, the Limited Partner shall receive ninety percent (90%) of the value of his Capital Account within one hundred (100) days after written notice of termination is given by the Partnership and the remaining ten percent (10%) within ten (10) business days after receipt of the Partnership of financial statements with respect to the Fiscal Year in which his interest in the Partnership is terminated. 21. Withdrawals by the General Partners and Their Affiliates. (a) (i) Each General Partner and each Affiliate of a General Partner shall have the right to withdraw any amount of cash from his Capital Account as of the end of any Fiscal Year, without prior notification to the Limited Partners, provided that, after giving effect to such withdrawal, the aggregate Capital Accounts of the General Partners and their Affiliates are not less than $50,000. (ii) Upon forty-five (45) days' prior notice to the Limited Partners, a General Partner or an Affiliate may withdraw any amount from his Capital Account contributed to the Partnership as a result of which withdrawal the aggregate Capital Accounts of the General Partner and their Affiliates would be reduced below $50,000. (b) Any or all of the General Partners may voluntarily resign or withdraw from the Partnership as of the end of any Fiscal Year upon sixty (60) days' written notice sent to all Partners. 22. Dissolution and Winding Up of the Partnership. On dissolution of the Partnership, the General Partners or if there is no General Partner, one or more persons approved by the Limited Partners holding a majority in interest of the Capital Accounts of the Limited Partners shall wind up the Partnership's affairs and shall distribute the Partnership's assets in the following manner and order: (a) in satisfaction of the claims of all creditors of the Partnership, other than the General Partners; (b) in satisfaction of the claims of the General Partners as creditors of the Partnership; and (c) any balance to the Partners in the relative proportions that their respective Capital Accounts bear to each other, those Capital Accounts to be determined as if the Fiscal Year ended on the date of the dissolution. 23. Accounting and Reports. (a) The records and books of account of the Partnership shall be reviewed as of the end of each Fiscal Year by independent certified public accountants selected by the General Partners in their sole discretion. (b) As soon as practicable after the end of each Fiscal Year, the General Partners shall cause to be delivered to each person who was a Partner at any time during the Fiscal Year all information deemed necessary by the General Partners in their sole discretion for the preparation of the Partner's income tax returns, including a Form 1065/Schedule K-1 statement showing the Partner's share of Net Profit or Net Loss, deductions and credits for the year for Federal income tax purposes, and the amount of any distributions made to or for the account of the Partner pursuant to this Agreement. (c) The independent certified public accountants selected by the General Partners in accordance with subsection (a) of this Section 23 shall prepare and mail to each Partner, within ninety (90) days after the end of each Fiscal Year, an income statement for the Fiscal Year and a balance sheet as of the end of the Fiscal Year. (d) The Partnership shall cause to be prepared and mailed to each Partner a report setting out as of the end of each Fiscal Quarter information determined by the General Partners to be appropriate. (e) The General Partners shall cause tax returns for the Partnership to be prepared and timely filed with the appropriate authorities. 24. Books and Records. The General Partners shall keep at the Partnership's principal office: (a) books and records pertaining to the Partnership's business showing all of its assets and liabilities, receipts and disbursements, realized profits and losses, Partners' Capital Accounts and all transactions entered into by the Partnership; (b) a current list of the full name and last known home, business or mailing address of each Partner set out in alphabetical order; (c) a copy of the Certificate and all amendments to it, together with executed copies of any powers of attorney pursuant to which the Certificate and any amendments to it have been executed; (d) copies of the Partnership's Federal, state and local income tax returns and reports, if any, for the three (3) most recent years; and (e) copies of this Agreement as amended from time to time. All books and records of the Partnership required to be kept under this Section 24 shall be available for inspection by a Partner of the Partnership on reasonable notice at the offices of the Partnership during ordinary business hours for any purpose reasonably related to the Partner's interest as a Partner in the Partnership. 25. Indemnification. (a) The Partnership shall indemnify each General Partners and any of his Affiliates (each an "Indemnitee") to the fullest extent permitted by law and will hold each harmless from and with respect to (i) all fees, costs and expenses incurred in connection with, or resulting from, any claim, action or demand against any Indemnitee that arises out of or in any way relates to the Partnership, its properties, business or affairs, and (ii) any losses or damages resulting from any such claim, action or demand, including amounts paid in settlement or compromise of the claim, action or demand. (b) No Indemnitee shall be indemnified by the Partnership with respect to any action or failure to act that does not constitute good faith, or that constitutes willful misfeasance. (c) The Partnership may pay the expenses incurred by an Indemnitee in defending a civil or criminal action, suit or proceeding brought by a party against the Indemnitee that arises out of or is in any way related to the Partnership, its properties, business or affairs, upon receipt of an undertaking by the Indemnitee to repay the amount advanced by the Partnership if an adjudication or determination is subsequently made by a court of competent jurisdiction that the Indemnitee is not entitled to indemnification as provided in this Agreement. (d) The right of indemnification provided in this Section 25 shall be in addition to any rights to which an Indemnitee may otherwise be entitled and shall inure to the benefit of the executors, administrators, personal representatives, successors or assigns of each Indemnitee. (e) The rights to indemnification and reimbursement provided for in this Section 25 may be satisfied only out of the assets of the Partnership. No Partner shall be personally liable for any claim for indemnification or reimbursement under this Section 25. 26. Amendment of Partnership Agreement. This Agreement may be amended, in whole or in part, by the written consent of (a) the General Partners, and (b) Partners the value of whose aggregate Capital Accounts constitute not less than fifty percent (50%) of the total value of all Capital Accounts of the Partnership, provided that no such amendment shall affect the allocation of Net Profit or Net Loss to any Partner who has not consented to such amendment. In addition, any provision of this Agreement, other than Section 9, may be amended by the General Partners in any manner that does not, in the sole discretion of the General Partners, adversely affect any Limited Partner. 27. Notices. Notices that may or are required to be given under this Agreement by any party to another shall be in writing and deposited in the United States mail, certified or registered, postage prepaid addressed to the respective parties at their addresses set out in Schedule A to this Agreement or to any other address designated by any Partner by notice addressed to the Partnership in the case of any Limited Partner and to the General Partners in the case of the General Partners. Notices shall be deemed to have been given when deposited in the United States mail within the continental United States. 28. Agreement Binding Upon Successors and Assign. This Agreement shall inure to the benefit of and shall be binding upon the heirs, executors, administrators or other representatives, successors and assigns of the Partners. 29. Governing Law. This Agreement, and the rights of the Partners under it, shall be governed by and construed in accordance with the law of the State of New Jersey. 30. Consents. Any and all consents, agreements or approvals provided for or permitted by this Agreement shall be in writing and signed copies of them shall be filed and kept with the books of the Partnership. 31. Miscellaneous. (a) This Agreement, including Schedule A appended to it, constitutes the entire understanding and Agreement of the Partners as to the operation of the Partnership. (b) This Agreement may be executed in counterparts, each of which shall be deemed to be an original. (c) Each provision of this Agreement is intended to be severable. A determination that a particular provision of this Agreement is illegal or invalid shall not affect the validity of the remainder of the Agreement. (d) Nothing contained in this Agreement shall be construed to constitute any Partner the agent of another Partner, except as specifically provided in this Agreement, or in any manner to limit the Partners in the carrying on of their own respective business or activities. (e) If there is a conflict between the terms and conditions of the Partnership Agreement and Offering Memorandum, the Partnership Agreement shall be controlling. IN WITNESS WHEREOF, the Partners have executed this Agreement as of the date first above written. GENERAL PARTNER POLLACK INVESTMENT PARTNERSHIP, L.P. By: ________________________________ Dennis Pollack LIMITED PARTNERS: All Limited Partners now and hereafter admitted as Limited Partners of the Partnership, pursuant to Powers of Attorney now and hereafter executed in favor of, and delivered to the General Partners. DENNIS POLLACK Attorney-in-Fact -------------------- Dennis Pollack EXHIBIT B POLLACK INVESTMENT PARTNERSHIP, L.P. OFFEREE QUESTIONNAIRE INSTRUCTIONS: All prospective Limited Partners of Pollack Investment Partnership L.P. (the "Partnership") must complete this Questionnaire. If you have any questions about this form please telephone Dennis Pollack, the representative of the General Partner, at (201) 930-1428, or Lawrence B. Seidman at (973) 560-1400, Extension 108. This questionnaire is required to insure that the offering of the Partnership's Limited Partnership Interests complies with SEC rules on private placements. All information will be kept confidential. PART I TO BE COMPLETED BY ALL SUBSCRIBERS 1. Name ----------------------------------------------------- 2. Home Address -------------------------------------------------- Home Telephone Number ( ) --------------------------------- 3. Business Address ------------------------------------- Business Telephone Number ( ) --------------------------- 4. Social Security Number or Employer I.D. Number ----------------------------- 5. If subscriber is a corporation, partnership, trust or other entity, attach a copy of the Articles of Incorporation, By-Laws, Partnership Agreement, Trust Instrument, or other documents showing that the entity is authorized to invest in the Interests and that the individual(s) signing the Subscription Agreement are authorized to take such action on behalf of the entity. PART II 1. Please indicate the basis on which you qualify as an "accredited investor" for purposes of SEC Regulation D. See Annex B-1 for the types of "accredited investors " eligible to invest in the Partnership 2. Educational Background - List all schools, beginning with the last high school attended and indicate years attended, whether graduated, and degrees received: 3. Business Background - List your principal business occupations during the past 10 years, indicating name of company, nature of business, and your title and responsibilities: 4. Investment Background - Indicate whether you have ever invested in any of the following (give details where possible); include investments for your own account, as trustee or other fiduciary, or in any business or professional capacity: a. Investment partnerships b. Other limited partnerships -------------------------- c. Venture capital companies ------------------------- d. Restricted securities e. Any other business involving investments ---------------------------------------- f. Any other activity which you believe contributes to your -------------------------------------------------------- ability to understand and evaluate the merits and risks of an -------------------------------------------------------------- investment in the Partnership ----------------------------- PART III THE FOLLOWING QUESTIONS ARE BEING ASKED TO ASSIST THE PARTNERSHIP TO DETERMINE AND DOCUMENT ITS ELIGIBILITY TO PURCHASE SECURITIES THAT ARE PART OF A PUBLIC OFFERING AND THAT MAY TRADE AT A PREMIUM IN THE SECONDARY MARKET AFTER THE OFFERING. A. TO BE COMPLETED BY "INSTITUTIONAL INVESTORS" THE FOLLOWING QUESTIONS SHOULD BE ANSWERED TO THE BEST KNOWLEDGE AND BELIEF OF THE PERSON AUTHORIZED TO ACT FOR THE SUBSCRIBER. Except as specified below, the Subscriber is not, and, upon information and belief, all persons having a beneficial interest in the Subscriber are not: 1. a broker/dealer or an officer, director, general partner, employee, agent, or associated person of any broker/dealer. 2. a senior officer of, or a person in the securities department of, or an employee or other person who may influence or whose activities directly or indirectly involve or are related to the function of buying or selling of securities for: a. a bank, b. a savings and loan institution, c. an insurance company, d. a registered investment company, e. a registered investment advisory firm, or f. any other institutional-type account. 3. a person who acts in a fiduciary capacity (including attorney, accountant or financial consultant) to any firm which is a managing underwriter of public offerings. 4. an immediate family member of any person listed above. B. TO BE COMPLETED BY INDIVIDUAL INVESTORS Except as specified below, to the best of my knowledge and belief: 1. I am not an officer, director, general partner, employee, agent, or associated person of any broker/dealer. 2. I am not a senior officer of, or a person in the securities department of, or an employee or other person who may influence or whose activities directly or indirectly involve or are related to the function of buying or selling of securities for: a. a bank, b. a savings and loan institution, c. an insurance company, d. a registered investment company, e. a registered investment advisory firm, or f. any other institutional-type account. 3. I do not act as a finder in connection with public offerings of securities. 4. I do not act in a fiduciary capacity (including attorney, accountant or financial consultant) to any firm which is a managing underwriter of public offerings. 5. I am not an immediate family member of any person listed above. C. TO BE COMPLETED BY BOTH "INSTITUTIONAL" AND INDIVIDUAL INVESTORS PLEASE GIVE AN EXPLANATION OF EACH EXCEPTION TO THE STATEMENTS LISTED ABOVE. IF YOU ARE, OR ANY BENEFICIAL OWNER OF THE SUBSCRIBER IS KNOWN TO BE, AN IMMEDIATE FAMILY MEMBER OF A PERSON LISTED IN CATEGORY 1 ABOVE, PLEASE STATE WHETHER SUCH PERSON CONTRIBUTES DIRECTLY OR INDIRECTLY TO YOUR OR SUCH BENEFICIAL OWNER'S SUPPORT. Signature of Subscriber Date: , 2000 EXHIBIT C SUBSCRIPTION AGREEMENT Pollack Investment Partnership, L.P. 44 Blueberry Lane Woodcliff Lake, NJ 07675 Gentlemen: 1. Subscription. The undersigned ("Subscriber") hereby irrevocably subscribes for and agrees to acquire a Limited Partnership Interest ("Interest") in Pollack Investment Partnership, L.P. (the "Partnership") and agrees to make a contribution to the capital of the Partnership in the amount of $______________________ in cash, all in accordance with the terms and conditions of the Agreement of Limited Partnership dated ______ __, 2000 (the "Partnership Agreement") attached as Exhibit A to the Confidential Private Placement Memorandum dated June 2000 relating to the Partnership (the "Memorandum"). This subscription may be rejected by the Partnership in whole or in part. 2. Adoption of Partnership Agreement. The Subscriber hereby adopts, accepts and agrees to be bound by all terms and provisions of the Partnership Agreement and to perform all obligations therein imposed upon a Limited Partner. Upon acceptance of this Subscription by a General Partner on behalf of the Partnership and payment in full of the subscription price, the Subscriber shall become a Limited Partner for all purposes of the Partnership Agreement. 3. Representations and Warranties. The Subscriber hereby represents and warrants to the Partnership that: (a) if the Subscriber is an individual he or she, is not less than twenty-one (21) years of age; if the Subscriber is an entity this Subscription Agreement is signed on behalf of the Subscriber by an authorized person who is not less than twenty-one (21) years of age; (b) the Interest subscribed for hereby is being acquired by the Subscriber for investment purposes only, for the account of the subscriber and not with the view to any resale or distribution thereof, and the Subscriber is not participating, directly or indirectly, in an underwriting of such Interest and will not take, or cause to be taken, any action that would cause the Subscriber to be deemed an "underwriter" of such Interest as defined in Section 2(11) of the Securities Act of 1933, as amended; (c) the Subscriber has received and has carefully read a copy of the Memorandum, including the Partnership Agreement and other Exhibits thereto, and, in connection therewith, has had access to all other materials, books, records, documents and information relating to the Partnership, and has been able to verify the accuracy of and supplement the information contained therein; (d) the Subscriber acknowledges that he or it has been offered an opportunity to ask questions of, and receive answers from Lawrence B. Seidman, the representatives of the General Partner, concerning the Partnership and Dennis Pollack and/or its proposed business, and that any request for such information has been fully complied with by them; (e) the Subscriber (if an individual) or the person signing this Subscription Agreement on behalf of the Subscriber (if it is an entity) has such knowledge and experience in financial and business matters that the Subscriber is capable of evaluating the merits and risks of an investment in the Partnership, and the Subscriber is able to bear the economic risks of an investment in the Partnership; (f) the Subscriber has adequate means of providing for the current needs of the Subscriber and possible personal contingencies, and the Subscriber has no need for liquidity with respect to the investment of the Subscriber in the Partnership; (g) the Subscriber has been advised that an investment in the Partnership is highly speculative, and the Subscriber is able to bear the economic risk of an investment in the Partnership; (h) the Offeree Questionnaire furnished by the Subscriber to the Partnership is true and accurate as of the date hereof; and (i) if the Subscriber is an entity, it is authorized and otherwise duly qualified to acquire an Interest in the Partnership. 4. Restrictions on Transferability of Interests. The Subscriber realizes that the Interests are not, and will not be, registered under the Securities Act of 1933, as amended (the "Act"), and that the Partnership does not file and does not intend to file periodic reports with the Securities and Exchange Commission pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, as amended. The Subscriber also understands that the Partnership has not agreed to register the Interests for distribution in accordance with the provisions of the Act or any applicable state securities laws, and that the Partnership has not agreed to comply with any exemption under the Act or any such laws for the resale of the Interests. Hence, the Subscriber understands that by virtue of the provisions of certain rules relating to "restricted securities" promulgated under the act, the Interest which the Subscriber has subscribed for hereby must be held indefinitely, unless and until subsequently registered under the Act and/or applicable state securities laws or unless an exemption from registration is available, in which case the Subscriber may still be limited with respect to the extent to which such Interest may be transferred. 5. Power of Attorney. The Subscriber hereby makes, constitutes and appoints Dennis Pollack and Lawrence B. Seidman, and each of them, with power of substitution, as the true and lawful Attorney-in-Fact of the Subscriber, in whose name, place and stead to make, execute, sign, acknowledge and file with respect to the Partnership: (a) the Partnership Agreement; (b) a Certificate or amended Certificate of Limited Partnership under the laws of the State of New Jersey, including therein all information therein all information required by the laws of such state; (c) all instruments which said Attorney-in-Fact deems appropriate to reflect any amendment, change or modification of the Partnership in accordance with the terms of the Partnership Agreement; (d) all such other instruments, documents and certificates which may from time to time be required by the laws of the State of New Jersey, the United States of America, or any other jurisdiction in which the Partnership shall determine to do business, or any political subdivision or agency thereof, to effectuate, implement, continue and defend the valid and subsisting existence of the Partnership as a Limited Partnership. (e) all applications, certificates, certifications, reports or similar instruments or documents required to be submitted by or on behalf of the Partnership to any governmental or administrative agency or body or to any securities or commodities, exchange, board of trade, clearing corporation or association or similar institution or to any other self-regulatory organization or trade association; and (f) all papers which may be deemed necessary or desirable by said Attorney-in-Fact to effect the dissolution and liquidation of the Partnership; provided, however, that such Attorney-in-Fact shall not have any right, power or authority to amend or modify the Partnership Agreement when acting in such capacity. The admission or termination of the interest of any Partner in accordance with the terms of the Partnership Agreement shall not constitute an amendment thereof. The foregoing Power of Attorney is hereby declared to be irrevocable and to constitute a power coupled with an interest, and it shall survive the death or adjudicated incompetence of the Subscriber and extend to the Subscriber's heirs, legal representatives, successors and assignees. The Subscriber hereby agrees to be bound by any representation made by such Attorney-in-Fact acting in good faith pursuant to such Power of Attorney, and the Subscriber hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of such Attorney-in-Fact taken in good faith pursuant to such Power of Attorney. 6. Payment of Subscription. Enclosed herewith is a certified or official bank check payable to the order of the Partnership for the full amount of this subscription. The Subscriber recognizes that if this subscription is rejected, in whole or in part, the funds and instruments delivered herewith, to the extent this subscription has been rejected, will be returned to the Subscriber without interest as soon as practicable. 7. Non-Revocability. The Subscriber agrees that this Subscription Agreement may not be canceled, terminated or revoked, and that this Subscription Agreement and the Power of Attorney granted hereby are coupled with an interest and shall survive the death or disability of the Subscriber and shall be binding upon the heirs, executors, administrators, successors, and assignees of the Subscriber. 8. Notice. Any notices or other communications in connection herewith shall be sufficiently given if sent by registered or certified mail, postage prepaid, and (i) if to the Partnership, at the address at the head of this Subscription Agreement, and (ii) if to the Subscriber, at the address set forth below, or (iii) at such other address as either the Subscriber or the Partnership shall designate to the other by notice in writing. 9. Successors and Assignees. This Subscription Agreement shall be binding upon and shall inure to the benefit of the parties hereto and to the successors and assignees of the Partnership and to the personal and legal representatives, heirs, guardians, successors and permitted assignees of the Subscriber. 10. Applicable Law. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey and, to the extent it involves any United States statute, in accordance with the laws of the United States. IN WITNESS WHEREOF, the undersigned has executed and sealed this Subscription Agreement, this __ day of _______, 2000 ------------------------ Name of Subscriber ------------------------ Signature of Subscriber ------------------------ Residence Address ------------------------ City, State and Zip Code ------------------------ Social Security or Tax Identification Number Accepted: Pollack Investment Partnership, L.P. By: ------------------------ Dennis Pollack [Individual Acknowledgment] State of ) )SS: County of ) On the day of , 2000, before me personally came to me known and known to me to be the individual described in and who executed the foregoing instrument, and (s)he duly acknowledged to me that (s)he executed the same. ------------------------ Notary Public [Corporate Acknowledgment State of ) )SS: County of ) On the day of , 2000, before me personally came , to me known, who, being by me sworn, did depose and say that (s)he resides in , that (s)he is the of , the corporation described in and which executed the above instrument; and that (s)he signed such instrument by order of the board of directors of said corporation. ------------------------ Notary Public [Partnership Acknowledgment] State of ) )SS: County of ) On the day of , 1999, before me personally came , who, being by me sworn, did depose and say that (s)he resides in , that (s)he is a general partner of , the partnership described in and who executed the above instrument, and (s)he is duly authorized to do so in the name of, and on behalf of, said partnership. ------------------------ Notary Public [Trust Acknowledgment] State of ) )SS: County of ) On the day of , 1999, before me personally came , trustee under , to me personally known and known to me to be the individual described in and who executed the foregoing instrument, and (s)he duly acknowledged to me that (s)he executed the same. ------------------------ Notary Public AMENDMENT #1 TO LIMITED PARTNERSHIP AMENDMENT #1 TO LIMITED PARTNERSHIP CERTIFICATE OF POLLACK INVESTMENT PARTNERSHIP, L.P. FILED DECEMBER 6, 2000 Section 1 The name of the Partnership is Pollack Investment Partnership, L.P. Statutory Authority for Amendment: 42:2A Section 12 Section 12 of the Certificate of formation of the above-referenced business is hereby amended to add the following people and entities as limited partners: NAME CAPITAL CONTRIBUTION William C. Kockler IRA $100,000.00 22291 Westchester Blvd. Unit 506H Orangewood Commons Port Charlotte, FL 33952 Thomas D. Cunningham IRA $100,000.00 8 Nearwater Rd. Rowayton, CT 06853 Amos Linenberg IRA $115,000.00 9 Powder Horn Green Sparta, NJ 07657 Elaine Berkley $100,000.00 89 Woodmont Dr. 10580 Woodcliff Lake, NJ 07675 Howard Silston $ 100,000.00 2030 So. Ocean Drive Apt. 1808 Hallandale, FL 33009 Pamela Jones $ 100,000.00 8 Nearwater Rd. Rowayton, CT 06853 George Saunders $ 100,000.00 c/o Frank Boffa, CPA 383 Ridgedale Avenue East Hanover, NJ 07936 Dorothy Sheppard $ 200,000.00 23 East 10th Street Suite 615 New York, NY 10003 James Rotundo $ 200,000.00 65 West Edsall Blvd. Palisades Park, NJ 07650 POLLACK INVESTMENT PARTNERSHIP, L.P. By: Dennis Pollack, General Partner POLLACK INVESTMENT PARTNERSHIP, L.P. By: Lawrence B. Seidman, General Partner Dated: January 25, 2001 STATE OF NEW JERSEY ) ) ss: COUNTY OF MORRIS ) On the 25th day of January 2001, before me personally came Dennis Pollack and Lawrence B. Seidman, to me known, who being by me sworn, did depose and say that they reside at 47 Blueberry Drive, Woodcliff Lake, NJ 07675 and 19 Veteri Place, Wayne, New Jersey 07470, respectively, that they are the General Partners of Pollack Investment Partnership, L.P. described in and which executed the above instrument. //Ruth W. Rivkind// Ruth W. Rivkind A Notary Public of New Jersey My Commission Expires Feb. 14, 2001 EX-10.9 11 exiii.txt JOINT FILING AGREEMENT EXHIBIT I JOINT FILING AGREEMENT In accordance with Rule 13d-1(f) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with each other of the attached statement on Schedule 13D and to all amendments to such statement and that such Statement and all amendments to such statement is made on behalf of each of them. In addition the undersigned hereby appoints Lawrence B. Seidman as attorney-in-fact for the undersigned with authority to execute and deliver on behalf of the undersigned any and all documents (including any amendments thereto) required to be filed by the undersigned or otherwise executed and delivered by the undersigned pursuant to the Securities Exchange Act of 1934, as amended, all other federal, state and local securities and corporation laws, and all regulations promulgated thereunder. IN WITNESS WHEREOF, the undersigned hereby execute this agreement on September 28, 2001. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Manager Seidman and Associates, L.L.C. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, President of the Corporate General Partner Seidman Investment Partnership,L.P. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, President of the Corporate General Partner Seidman Investment Partnership II, L.P. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Individually 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Investment Manager, Kerrimatt, L.P. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Investment Manager Federal Holdings, L.L.C. 9/28/01 /ss/Lawrence B. Seidman ------ ------------------------------ Date Lawrence B. Seidman, Co-General Partner, Pollack Investment Partnership, L.P. 9/28/01 /ss/Dennis Pollack ------ ------------------------------ Date Dennis Pollack, Individually 9/28/01 /ss/Dennis Pollack ------ ------------------------------ Date Dennis Pollack, Co-General Partner, Pollack Investment Partnership, L.P.