EXHIBIT 10.1


 


SHAREHOLDER AGREEMENT


 


SHAREHOLDER AGREEMENT (the “Agreement”), dated as of December
8, 2004, by and between _______________________________, a shareholder (“Shareholder”)
of Northeast Pennsylvania Financial Corp. (the “Company”), a Delaware corporation,
and KNBT Bancorp, Inc. (“Parent”), a Pennsylvania corporation.  All capitalized terms used herein and not
defined herein shall have the meanings assigned thereto in the Merger Agreement
(defined below).


 


WHEREAS, Parent and the
Company are simultaneously entering into an Agreement and Plan of Merger, dated
as of the date hereof (as may be amended from time to time pursuant to its
terms, the “Merger Agreement”), pursuant to which the Company will merge with
and into Parent on the terms and conditions set forth therein (the “Merger”)
and, in connection therewith, each outstanding share of Company Common Stock
will be converted into the right to receive the Per Share Stock Consideration
or the Per Share Cash Consideration, subject to the terms, limitations and
conditions of the Merger Agreement; and


 


WHEREAS, Shareholder owns the shares of Company Common
Stock identified on Annex I hereto (such shares, together with all shares of
Company Common Stock subsequently acquired by Shareholder during the term of
this Agreement, being referred to as the “Shares”); and


 


WHEREAS, in order to induce Parent to enter into the
Merger Agreement, Shareholder, solely in such Shareholder’s capacity as a
shareholder of the Company and not in any other capacity, has agreed to enter
into and perform this Agreement;


 


NOW, THEREFORE, for good and valuable consideration,
the receipt, sufficiency and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:


 


1.  Agreement to Vote Shares.  Shareholder agrees that at any meeting of the
shareholders of the Company, or in connection with any written consent of the
shareholders of the Company at which a proposal of the type set forth in clause
(ii) below is presented for consideration by the shareholders of the Company,
Shareholder shall:


 


(i)            appear at each such meeting or
otherwise cause the Shares to be counted as present thereat for purposes of
calculating a quorum; and


 


(ii)           vote (or cause to be voted), in
person or by proxy, all the Shares (whether acquired heretofore or hereafter)
that are beneficially owned by Shareholder or as to which Shareholder has,
directly or indirectly, the right to vote or direct the voting, (x) in favor of
adoption and approval of the Merger Agreement and the Merger; (y) against any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
contained in the Merger Agreement or of Shareholder contained in this
Agreement; and (z) against any Acquisition Proposal or any other action,
agreement or transaction that is intended, or could reasonably be expected, to
materially impede, interfere or be inconsistent with, delay, postpone,
discourage or materially and adversely affect consummation of the Merger or
this Agreement.


 





















 


 


2.  No Transfers.  After the date hereof and prior to the
special meeting of the Company shareholders held to consider and vote upon
approval of the Merger Agreement, Shareholder agrees not to, directly or
indirectly, sell, transfer, pledge, assign or otherwise dispose of, or enter
into any contract, option, commitment or other arrangement or understanding
with respect to the sale, transfer, pledge, assignment or other disposition of,
any of the Shares if such sale, transfer, pledge, assignment or disposition
could occur prior to such meeting, except the following transfers shall be
permitted: (i) transfers by will or operation of law, in which case this
Agreement shall bind the transferee, subject to applicable law, (ii) transfers
pursuant to any pledge agreement, subject to the pledgee agreeing in writing to
be bound by the terms of this Agreement, (iii) transfers in connection with
estate and tax planning purposes, including transfers to relatives, trusts and
charitable organizations, subject to the transferee agreeing in writing to be
bound by the terms of this Agreement, (iv) transfers to any other shareholder
of the Company who has executed a copy of this Agreement on the date hereof
with respect to some or all of the Shares held by such shareholder,  (v)  
transfers or dispositions to the Company for the surrender or delivery
of Shares for the payment of the exercise price of outstanding stock options,
the payment or withholding of applicable taxes in connection with the exercise
of outstanding stock options or any other surrender or deemed surrender of
Shares in connection with the exercise of outstanding stock options to purchase
shares of Company Common Stock and (vi) such transfers as Parent may otherwise
permit in its sole discretion.  Any
transfer or other disposition in violation of the terms of this Section 2 shall
be null and void.


 


3.  Representations and Warranties of
Shareholder.  Shareholder represents
and warrants to and agrees with Parent as follows:


 


A.  Capacity.  Shareholder has all requisite capacity and
authority to enter into and perform his, her or its obligations under this
Agreement.


 


B.  Binding Agreement.  This Agreement constitutes the valid and
legally binding obligation of Shareholder, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and to general equity
principles.


 


C.  Non-Contravention.  The execution and delivery of this Agreement
by Shareholder does not, and the performance by Shareholder of his, her or its
obligations hereunder and the consummation by Shareholder of the transactions
contemplated  hereby will not, violate or
conflict with, or constitute a default under, any agreement, instrument,
contract or other obligation or any order, arbitration award, judgment or
decree to which Shareholder is a party or by which Shareholder is bound, or any
statute, rule or regulation to which Shareholder is subject or, in the event
that Shareholder is a corporation, partnership, trust or other entity, any
charter, bylaw or other organizational document of Shareholder.


 


D.  Ownership of Shares.  Shareholder has good title to all of the
Shares as of the date hereof, and, except as set forth on Annex I hereto, the
Shares are so owned free and clear of any liens, security interests, charges or
other encumbrances.


 


 


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4.  Specific Performance and Remedies.  Shareholder acknowledges that it will be
impossible to measure in money the damage to Parent if Shareholder fails to
comply with the obligations imposed by this Agreement and that, in the event of
any such failure, Parent will not have an adequate remedy at law or in equity.  Accordingly, Shareholder agrees that
injunctive relief or other equitable remedy, in addition to remedies at law or
in damages, is the appropriate remedy for any such failure and will not oppose
the granting of such relief on the basis that Parent has an adequate remedy at
law.  Shareholder agrees that Shareholder
will not seek, and agrees to waive any requirement for, the securing or posting
of a bond in connection with Parent’s seeking or obtaining such equitable
relief.  In addition, after discussing
the matter with Shareholder, Parent shall have the right to inform any third
party that Parent reasonably believes to be, or to be contemplating,
participating with Shareholder or receiving from Shareholder assistance in
violation of this Agreement, of the terms of this Agreement and of the rights
of Parent hereunder, and that participation by any such persons with
Shareholder in activities in violation of Shareholder’s agreement with Parent
set forth in this Agreement may give rise to claims by Parent against such
third party.


 


5.  Term of
Agreement; Termination.


 


A.  The term of this Agreement shall commence on
the date hereof.


 


B.  This Agreement shall terminate at the
Effective Time of the Merger or the earlier of (i) at any time prior to
consummation of the Merger by the written consent of the parties hereto and
(ii) termination of the Merger Agreement in accordance with its terms.  Upon such termination, no party shall have
any further obligations or liabilities hereunder; provided, however, such
termination shall not relieve any party from liability for any willful breach
of this Agreement prior to such termination.


 


6.  Entire Agreement.  This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties with
respect to the subject matter hereof. 
This Agreement may not be amended, supplemented or modified, and no
provisions hereof may be modified or waived, except by an instrument in writing
signed by each party hereto.  No waiver
of any provisions hereof by either party shall be deemed a waiver of any other
provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.  No party hereto may assign any rights or
obligations hereunder to any other person, except as required by Section 2 or
upon the prior written consent of each other party.  Nothing in this Agreement, expressed or
implied, is intended to or shall confer upon any other person or entity, other
than the parties hereto or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.


 


7.  Notices.  Notices may be provided to Parent and
Shareholder in the manner specified in the Merger Agreement, with all notices
to Shareholder being provided to him or her at the address set forth in Annex I
hereto.


 


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8.  Miscellaneous.


 


A.  Severability.  If any provision of this Agreement or the application
of such provision to any person or circumstances shall be held invalid or
unenforceable by a court of competent jurisdiction, such provision or
application shall be unenforceable only to the extent of such invalidity or
unenforceability, and the remainder of the provision held invalid or
unenforceable and the application of such provision to persons or
circumstances, other than the party as to which it is held invalid, and the
remainder of this Agreement, shall not be affected.


 


B.  Capacity.  The covenants contained herein shall apply to
Shareholder solely in his or her capacity as a shareholder of the Company, and
no covenant contained herein shall apply to Shareholder in his or her capacity
as a director, officer or employee of the Company or in any other fiduciary
capacity.  Nothing contained in this
Agreement shall be deemed to apply to, or limit in any manner, the obligations
of Shareholder to comply with his or her fiduciary duties as a director of the
Company.


 


C.  Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.


 


D.  Headings.  All Section headings herein are for
convenience of reference only and are not part of this Agreement, and no
construction or reference shall be derived therefrom.


 


E.  Choice of Law.  This Agreement shall be deemed a contract
made under, and for all purposes shall be construed in accordance with, the
laws of the Commonwealth of Pennsylvania, without reference to its conflicts of
law principles.


 


                IN WITNESS
WHEREOF, the parties hereto have executed and delivered this Agreement as of
the date first written above.


 


	
   

  	
   

  	
  KNBT BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name: SCOTT
  V. FAINOR

  
	
   

  	
   

  	
   

  	
  Title: President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SHAREHOLDER:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  



 


 


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ANNEX I


SHAREHOLDER AGREEMENT


 


 


	
  Name and Address of

  Shareholder

  	
   

  	
  Shares of Company

  Common Stock

  Beneficially Owned

  (exclusive of unexercised

  stock options)

  	
   

  	
  Options on Company

  Common Stock