Document:

Exhibit 10.6

 

SETTLEMENT AGREEMENT

 

THIS SETTLEMENT AGREEMENT
(the “Agreement”), dated May 4, 2020, is by and between The Seneca Falls Savings Bank, MHC (the “MHC”)
and Seneca-Cayuga Bancorp, Inc. (the “Company,” and together with the MHC, “Seneca”) and Stilwell
Activist Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Partners, L.P., Stilwell Value LLC, and Joseph Stilwell, an
individual (collectively, “The Stilwell Group,” and each individually, a “Stilwell Group Member”).

 

RECITALS

 

WHEREAS, certain parties of The Stilwell
Group are co-plaintiffs, and the Company is the defendant, in Case # 19-CV-6823-FPG docketed in the United States District Court
for the Western District of New York (the “Lawsuit”);

 

WHEREAS, the parties to this Agreement
have settled the Lawsuit through the execution of an agreement, dated May 4, 2020 (the “Lawsuit Settlement Agreement”)
which is attached hereto as Exhibit A and made a part hereof; and

 

WHEREAS, Seneca and The Stilwell
Group, have agreed that it is in their mutual interests to enter into this Agreement.

 

NOW THEREFORE,
in consideration of the Recitals and the representations, warranties, covenants and agreements contained herein and other good
and valuable consideration, and intending to be legally bound hereby, the parties hereto mutually agree as follows:

 

1.            Representations
and Warranties of The Stilwell Group. Each Stilwell Group Member represents and warrants to Seneca as follows:

 

(a)           The
Stilwell Group has fully disclosed in Exhibit B to this Agreement the total number of shares of common stock of the
Company, par value $0.01 per share (“Company Common Stock”), as to which it and its affiliates are the beneficial owner,
and neither The Stilwell Group nor any Stilwell Group Member nor any of their affiliates has (i) a right to acquire any beneficial
ownership interest in any capital stock of the Company (other than cross-trades in the open market that do not change the overall
percentage of The Stilwell Group’s total ownership), or (ii) a right to vote any shares of capital stock of the Company
other than as set forth in Exhibit B;

 

(b)           The
Stilwell Group and the Stilwell Group Members have full power and authority to enter into and perform their obligations under this
Agreement, and the execution and delivery of this Agreement by The Stilwell Group and Stilwell Group Members has been duly authorized
by The Stilwell Group and the Stilwell Group Members. This Agreement constitutes a valid and binding obligation of The Stilwell
Group and the Stilwell Group Members, and the performance of its terms will not constitute a violation of any limited partnership
agreement, operating agreement, bylaws, or any agreement or instrument to which The Stilwell Group or any Stilwell Group Member
is a party;

 

    

     

    

 

(c)           There
are no other persons who, by reason of their personal, business, professional or other arrangement with The Stilwell Group or any
Stilwell Group Member, have agreed, in writing or orally, explicitly or implicitly, to take any action on behalf of or in lieu
of The Stilwell Group or any Stilwell Group Member that would be prohibited by this Agreement; and

 

(d)          Other
than the Lawsuit Settlement Agreement and otherwise as set forth in this Agreement, there are no arrangements, agreements or understandings
concerning the subject matter of this Agreement between The Stilwell Group or any Stilwell Group Member and Seneca.

 

2.            Representations
and Warranties of Seneca. The MHC and the Company each hereby represents and warrants to The Stilwell Group as follows:

 

(a)          The
MHC and the Company have full power and authority to enter into and perform their respective obligations under this Agreement and
the execution and delivery of this Agreement by the MHC and the Company has been duly authorized by the Boards of Directors of
the MHC and the Company. This Agreement constitutes a valid and binding obligation of the MHC and the Company and the performance
of its terms will not constitute a violation of their respective charters or bylaws, or any agreement or instrument to which the
MHC or the Company is a party.

 

(b)          Other
than the Lawsuit Settlement Agreement and otherwise as set forth in this Agreement, there are no arrangements, agreements, or understandings
concerning the subject matter of this Agreement between The Stilwell Group or any Stilwell Group Member and Seneca.

 

3.            Covenants.

 

(a)           During
the term of this Agreement, Seneca covenants and agrees as follows:

 

(i)            Within
ten (10) business days of the execution of this Agreement, Seneca will publicly announce its intention to implement a second-step
stock conversion, pursuant to which the MHC would sell its majority ownership in the Company in a second-step stock offering and
simultaneously the Company will reorganize to a fully public stock holding company (the “second-step conversion”);

 

(ii)           Seneca
will adopt a Plan of Conversion and Reorganization (the “Plan of Conversion”) to effectuate the second-step conversion.
Seneca will use its best efforts to file, by September 14, 2020, (1) a registration statement with the Securities and
Exchange Commission (“SEC”), including a prospectus containing June 30, 2020 financial information and (2) an
application for conversion and related filings with the Board of Governors of the Federal Reserve System (“FRB”) and
the Office of the Comptroller of the Currency (“OCC”). If Seneca has not made the aforementioned filings with the SEC,
FRB and OCC by September 14, 2020, Seneca shall provide a written explanation to The Stilwell Group as to how it used its
best efforts to make such filings. Seneca will use its best efforts to secure regulatory clearance/approval of such registration
statement and applications no later than November 12, 2020. If a mailing for the second-step conversion, including a prospectus,
has not commenced by November 22, 2020, Seneca shall provide a detailed written explanation to The Stilwell Group as to how
it used its best efforts to secure regulatory clearance/approval and why the related mailing, including the prospectus, was not
printed and mailed by November 22, 2020. If the aforementioned deadlines are not met, Seneca will continue to use best efforts
to make the aforementioned filings, secure regulatory clearance/approval and commence the related mailing as soon as possible thereafter
in order to effectuate the second-step conversion.

 

    2

     

    

 

(iii)          Within
five (5) business days from the effective date of the consummation of the second-step conversion, the corporation which is
the successor to the Company as a result of the second-step conversion (“Newco”), will reimburse The Stilwell Group
for 100% of the fees and expenses of The Stilwell Group incurred from the Litigation as is set forth in Exhibit C.

 

(iv)          Beginning
one year after the completion of the second-step conversion, the board of directors of Newco will, at least annually, evaluate
the implementation of a stock repurchase plan for the common stock of Newco.

 

(v)           Following
its formation and organization, Newco, the Company and The Stilwell Group will enter into an agreement binding Newco to the terms
of this Agreement, substantially in the form attached as Exhibit D.

 

(b)          In
compliance with the Plan of Conversion and applicable banking and securities regulations and laws, The Stilwell Group, each Stilwell
Group Member and their affiliates will be entitled to purchase shares of common stock of Newco in the second-step conversion. Other
than any such change in ownership as set forth immediately above, during the term of this Agreement, The Stilwell Group and each
Stilwell Group Member covenant and agree not to do the following, and will secure the agreement of their affiliates not to do the
following, directly or indirectly, alone or in concert with any other person. For purposes of this Section 3(b), references
to the Company or Company Common Stock include Newco and Newco Common Stock:

 

(i)            own,
acquire, offer or propose to acquire or agree to acquire, whether by purchase, tender or exchange offer, or through the acquisition
of control of another person or entity (including by way of merger or consolidation) any additional shares of the outstanding Company
Common Stock, any rights to vote or direct the voting of any additional shares of Company Common Stock, or any securities convertible
into Company Common Stock (except by way of stock splits, stock dividends, stock reclassifications or other distributions or offerings
made available and, if applicable, exercised on a pro rata basis, to holders of the Company Common Stock generally);

 

(ii)           without
the Company’s prior written consent, directly or indirectly, sell, transfer or otherwise dispose of any interest in The Stilwell
Group’s shares of Company Common Stock to any person The Stilwell Group believes, after reasonable inquiry, would be beneficial
owner after any such sale or transfer of more than 5% of the outstanding shares of the Company Common Stock. However, if the Company
announces a merger, sale or a substantial disposition of its assets to a third-party, The Stilwell Group and each Stilwell Group
Member shall be entitled to sell their shares without limitation;

 

(iii)          (A) propose
or seek to effect a merger, consolidation, recapitalization, reorganization, sale, lease, exchange or other disposition of substantially
all the assets of, or other business combination involving, or a tender or exchange offer for securities of, the Company or its
wholly owned subsidiary, Generations Bank (the “Bank”) or any material portion of the Company’s or the Bank’s
business or assets or any other type of transaction that would result in a change in control of the Company (any such transaction
described in this clause (A) is a “Company Transaction” and any proposal or other action seeking to effect a Company
Transaction as described in this clause (A) is defined as a “Company Transaction Proposal”), (B) seek to
exercise any control or influence over the management of the Company or the Boards of Directors of the Company or the Bank or any
of the businesses, operations or policies of the Company or the Bank, (C) present to the Company, its stockholders or any
third party any proposal constituting or that could reasonably be expected to result in a Company Transaction, or (D) seek
to effect a change in control of the Company;

 

    3

     

    

 

(iv)         publicly
suggest or announce its willingness or desire to engage in a transaction or group of transactions or have another person engage
in a transaction or group of transactions that would constitute or could reasonably be expected to result in a Company Transaction
or take any action that might require the Company to make a public announcement regarding any such Company Transaction;

 

(v)           initiate,
request, induce, encourage or attempt to induce or give encouragement to any other person to initiate any Company Transaction Proposal,
or otherwise provide assistance to any person who has made or is contemplating making, or enter into discussions or negotiations
with respect to any proposal constituting or that can reasonably be expected to result in, any Company Transaction Proposal;

 

(vi)          form,
join in or in any other way (including by deposit of the Company’s capital stock) participate in a partnership, pooling agreement,
syndicate, voting trust or other group with respect to Company Common Stock, or enter into any agreement or arrangement or otherwise
act in concert with any other person, for the purpose of acquiring, holding, voting or disposing of Company Common Stock;

 

(vii)        solicit
proxies or written consents or assist or participate in any other way, directly or indirectly, in any solicitation of proxies or
written consents, or otherwise become a “participant” in a “solicitation,” or assist any “participant”
in a “solicitation” (as such terms are defined in Rule 14a-1 of Regulation 14A and Instruction 3 of Item 4 of
Schedule 14A, respectively, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in opposition
to any recommendation or proposal of the Company’s Board of Directors, or recommend or request or induce or attempt to induce
any other person to take any such actions, or seek to advise, encourage or influence any other person with respect to the voting
of (or the execution of a written consent in respect of) the Company Common Stock, or execute any written consent in lieu of a
meeting of the holders of the Company Common Stock or grant a proxy with respect to the voting of the capital stock of the Company
to any person or entity other than the Board of Directors of the Company;

 

(viii)        initiate,
propose, submit, encourage or otherwise solicit shareholders of the Company for the approval of one or more shareholder proposals
or the election of a person not supported by the Company’s Board of Directors to its Board of Directors or induce or attempt
to induce any other person to initiate any shareholder proposal, or seek election to, or seek to place a representative or other
affiliate or nominee on, the Company’s Board of Directors, or seek removal or resignation of any member of the Company’s
or the Bank’s Boards of Directors;

 

(ix)          (A) join
with or assist any person or entity, directly or indirectly, in opposing, or make any statement in opposition to, any proposal
or director nomination submitted by the Company’s Board of Directors to a vote of the Company’s shareholders, or (B) join
with or assist any person or entity, directly or indirectly, in supporting or endorsing (including supporting, requesting or joining
in any request for a meeting of shareholders in connection with), or make any statement in favor of, any proposal submitted to
a vote of the Company’s shareholders that is opposed by the Company’s Board of Directors;

 

    4

     

    

 

(x)           nominate
or encourage, directly or indirectly, for the election as director of the Company any person who is not approved for nomination
by the Company’s Board of Directors, or submit or encourage the submission of any stockholder proposal for business at a
meeting of the Company’s stockholders that is not supported by the Company’s Board of Directors;

 

(xi)          vote
for any nominee or nominees for election to the Board of Directors of the Company other than those nominated or supported by the
Company’s Board of Directors;

 

(xii)         except
in connection with the enforcement of this Agreement, initiate or participate, by encouragement or otherwise, in any litigation
against the Company or the Bank or their respective officers and directors, or in any derivative litigation on behalf of the Company
or the Bank, except for testimony which may be required by law;

 

(xiii)        request,
or induce or encourage any other person to request, that the Company amend or waive any of the provisions of this Agreement; and

 

(xiv)        advise,
assist, encourage or finance (or arrange, assist or facilitate financing to or for) any other person in connection with any of
the matters restricted by, or otherwise seek to circumvent the limitations of, this Agreement.

 

(c)           During
the term of this Agreement, each Stilwell Group Member agrees not to disparage the MHC, the Company, Newco, the Bank or any of
their directors, officers or employees in any public or quasi-public forum, and the MHC, the Company, Newco and the Bank agree
not to disparage The Stilwell Group or a Stilwell Group Member, as the case may be, in any public or quasi-public forum.

 

4.            Notice
of Breach and Remedies.

 

The parties expressly
agree that an actual or threatened breach of this Agreement by any party will give rise to irreparable injury that cannot adequately
be compensated by damages. Accordingly, in addition to any other remedy to which it may be entitled, each party shall be entitled
to seek a temporary restraining order or injunctive relief to prevent a breach of the provisions of this Agreement or to secure
specific enforcement of its terms and provisions.

 

The Stilwell Group
and each Stilwell Group Member expressly agree that they will not be excused or claim to be excused from performance under this
Agreement as a result of any material breach by Seneca unless and until Seneca is given written notice of such breach and thirty
(30) business days either to cure such breach or seek relief in court. If Seneca seeks relief in court, The Stilwell Group and
each Stilwell Group Member irrevocably stipulate that any failure to perform by The Stillwell Group and/or any Stilwell Group Member
or any assertion by The Stilwell Group and/or any Stilwell Group Member that they are excused from performing their obligations
under this Agreement would cause Seneca irreparable harm, that Seneca shall not be required to provide further proof of irreparable
harm in order to obtain equitable relief and that The Stilwell Group and each Stilwell Group Member shall not deny or contest that
such circumstances would cause Seneca irreparable harm. If, after such thirty (30) business day period, Seneca has not either reasonably
cured such material breach or obtained relief in court, The Stilwell Group or each Stilwell Group Member may terminate this Agreement
by delivery of written notice to Seneca.

 

    5

     

    

 

Seneca expressly agrees
that it will not be excused or claim to be excused from performance under this Agreement as a result of any material breach by
The Stilwell Group or any Stilwell Group Member unless and until The Stilwell Group and each Stilwell Group Member is given written
notice of such breach and thirty (30) business days either to cure such breach or seek relief in court. If The Stilwell Group or
any Stilwell Group Member seeks relief in court, Seneca irrevocably stipulates that any failure to perform by Seneca or any assertion
by Seneca that it is excused from performing its obligations under this Agreement would cause The Stilwell Group and each Stilwell
Group Member irreparable harm, that The Stilwell Group or any Stilwell Group Member shall not be required to provide further proof
of irreparable harm in order to obtain equitable relief and that Seneca shall not deny or contest that such circumstances would
cause The Stilwell Group and each Stilwell Group Member irreparable harm. If, after such thirty (30) business day period, The Stilwell
Group or the Stilwell Group Member has not either reasonably cured such material breach or obtained relief in court, Seneca may
terminate this Agreement by delivery of written notice to The Stilwell Group and each Stilwell Group Member.

 

5.            Term.
This Agreement shall be effective upon the execution of the Agreement and will remain in effect until the next business day following
the third annual meeting of shareholders of Newco following consummation of the second-step conversion.

 

6.            Notices.
All notices, communications and deliveries required or permitted by this Agreement shall be made in writing signed by the party
making the same, shall specify the Section of this Agreement pursuant to which it is given or being made and shall be deemed
given or made (a) on the date delivered if delivered in person, (b) on the date delivered by electronic transmission
if the recipient confirms to the sender delivery on such day, (c) on the third Business Day after it is mailed if mailed by
registered or certified mail (return receipt requested) (with postage and other fees prepaid) or (d) on the day after it is
delivered, prepaid, to an overnight express delivery service that confirms to the sender delivery on such day, as follows:

 

	 	The Stilwell Group:	Joseph Stilwell
	 	 	c/o The Stilwell
Group
	 	 	111 Broadway, 12th Floor
	 	 	New York, New York 10006
	 	 	joe@stilwellgroup.com

 

	 	With a copy to:	E. J. Borrack, Esq.
	 	 	c/o The Stilwell
Group
	 	 	111 Broadway, 12th Floor
	 	 	New York, New York 10006
	 	 	ejborrack@stilwellgroup.com

 

		Seneca:	Seneca-Cayuga Bancorp, Inc.
	 	 	20 East Bayard Street
	 	 	Seneca Falls, New York 13148
	 	 	Attention:
Menzo D. Case
	 	 	menzo.case@Mygenbank.com

 

    6

     

    

 

	 	With a copy to:	Kip Weissman, Esq.
	 	 	Luse Gorman,
PC
	 	 	5335 Wisconsin
Avenue, NW, Suite 780
	 	 	Washington, DC
20015
	 	 	kweissman@luselaw.com

 

8.            Governing
Law and Choice of Forum. Unless applicable federal law or regulation is deemed controlling, New York law shall govern the construction
and enforceability of this Agreement. Any and all actions concerning any dispute arising hereunder shall be filed in a state or
federal court, as appropriate, sitting in the State of New York.

 

9.            Severability.
If any term, provision, covenant or restriction of this Agreement is held by any governmental authority or a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

 

10.          Successors.
 This Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the successors by operation of
law, of the parties, specifically including Newco. Except as otherwise expressly provided, this Agreement shall not inure to the
benefit of, be enforceable by or create any right or cause of action in any person, including any stockholder of the Company, other
than the parties to the Agreement. Nothing contained herein shall prohibit any Stilwell Group Member from transferring any portion
or all of the shares of Company Common Stock owned thereby at any time to any affiliate of The Stilwell Group or any other Stilwell
Group Member but only if the transferee agrees in writing for the benefit of Seneca (with a copy thereof to be furnished to Seneca
prior to such transfer) to be bound by the terms of this Agreement (any such transferee shall be included in the terms “The
Stilwell Group” and “Stilwell Group Member”).

 

11.          Survival
of Representations, Warranties and Covenants. All representations, warranties and covenants shall survive the execution and
delivery of this Agreement and shall continue for the term of this Agreement unless otherwise provided.

 

12.          Amendments.
This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement
executed by all of the parties hereto.

 

13.          Definitions.
As used in this Agreement, the following terms shall have the meanings indicated, unless the context otherwise requires:

 

(a)           The
term “acquire” means every type of acquisition, whether effected by purchase, exchange, operation of law or otherwise.

 

(b)           The
term “acting in concert” means (i) knowing participation in a joint activity or conscious parallel action towards
a common goal, whether or not pursuant to an express agreement, or (ii) a combination or pooling of voting or other interests
in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement,
whether written or otherwise.

 

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(c)           The
term “affiliate” means, with respect to any person, a person or entity that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control with such other person.

 

(d)           The
term “beneficial owner” shall have the meaning ascribed to it, and be determined in accordance with, Rule 13d-3
of the Securities and Exchange Commission’s Rules and Regulations under the Securities Exchange Act of 1934.

 

(e)           The
term “change in control” denotes circumstances under which: (i) any person or group becomes the beneficial owner
of shares of capital stock of the Company, Newco or the Bank representing 25% or more of the total number of votes that may be
cast for the election of the Boards of Directors of the Company, Newco or the Bank, (ii) the persons who were directors of
the Company, Newco or the Bank cease to be a majority of the Board of Directors, in connection with any tender or exchange offer
(other than an offer by the Company, Newco or the Bank), merger or other business combination, sale of assets or contested election,
or combination of the foregoing, or (iii) stockholders of the Company, Newco or the Bank approve a transaction, other than
the second-step conversion, pursuant to which substantially all of the assets of the Company, Newco or the Bank will be sold.

 

(f)            The
term “control” (including the terms “controlling,” “controlled by,” and “under common
control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management,
activities or policies of a person or organization, whether through the ownership of capital stock, by contract, or otherwise.

 

(g)           The
term “group” has the meaning as defined in Section 13(d)(3) of the Securities Exchange Act of 1934.

 

(h)           The
term “person” includes an individual, group acting in concert, corporation, partnership, association, joint stock company,
trust, unincorporated organization or similar company, syndicate, or any other group formed for the purpose of acquiring, holding
or disposing of the equity securities of the Company or of Newco.

 

(i)            The
term “transfer” means, directly or indirectly, to sell, gift, assign, pledge, encumber, hypothecate or similarly dispose
of (by operation of law or otherwise), either voluntarily or involuntarily, or to enter into any contract, option or other arrangement
or understanding with respect to the sale, gift, assignment, pledge, encumbrance, hypothecation or similar disposition of (by operation
of law or otherwise), any common stock of the Company or of Newco or any interest in any common stock of the Company or of Newco;
provided, however, that a merger or consolidation, other than the second-step conversion, in which the Company or Newco is a constituent
corporation shall not be deemed to be the transfer of any common stock beneficially owned by The Stilwell Group or a Stilwell Group
Member.

 

(j)            The
term “vote” means to vote in person or by proxy, or to give or authorize the giving of any consent as a stockholder
on any matter.

 

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14.          Counterparts;
Electronic Transmission. This Agreement may be executed in any number of counterparts and by the parties in separate counterparts,
and signature pages may be delivered by PDF electronic transmission via e-mail, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the same agreement.

 

15.          Duty
to Execute. Each party agrees to execute any and all documents, and to do and perform any and all acts and things necessary
or proper to effectuate or further evidence the terms and provisions of this Agreement.

 

16.          Termination.
This Agreement shall cease, terminate and have no further force and effect upon the expiration of the term as set forth in Section 5,
unless earlier terminated pursuant to by mutual written agreement of the parties.

 

[Remainder of this page intentionally
left blank.]

 

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IN WITNESS WHEREOF,
this Agreement has been duly executed and delivered by the undersigned and is effective as of the day and year first above written.

 

	STILWELL ACTIVIST INVESTMENTS, L.P.	 	 
	By:	Stilwell Value LLC	 	JOSEPH STILWELL
	 	General Partner	 	 
	 	 	 	 
	By:		 	 
	 	Joseph Stilwell	 	Joseph Stilwell
	 	Managing Member	 	 

 

	STILWELL PARTNERS, L.P.	 	 
	 	 	 
	By:	 	 	 
	 	Joseph Stilwell	 	 
	 	General Partner	 	 
	 	 	 
	STILWELL ACTIVIST FUND, L.P.	 	 
	By:	Stilwell Value LLC	 	 
	 	General Partner	 	 
	 	 	 
	By:	 	 	 
	 	Joseph Stilwell	 	 
	 	Managing Member	 	 
	 	 	 
	STILWELL VALUE LLC	 	 
	 	 	 
	By:	 	 	 
	 	Joseph Stilwell	 	 
	 	Managing Member	 	 

 

    10

     

    

 

	 	THE SENECA FALLS SAVINGS BANK, MHC
	 	 
	 	By:	
	 	 	Menzo D. Case
	 	 	President and Chief Executive Officer
	 	 	 
	 	 	 
	 	SENECA-CAYUGA BANCORP, INC.
	 	 
	 	By:	
	 	 	Menzo D. Case
	 	 	President and Chief Executive Officer

 

    11Exhibit 10.7

 

LAWSUIT SETTLEMENT AGREEMENT AND GENERAL
RELEASE

 

This Lawsuit Settlement Agreement and General
Release (“Lawsuit Settlement Agreement”) is made and entered into as of this 4th day of May 2020 (“Agreement
Date”) by and among Stilwell Partners, L.P. and Stilwell Activist Investments, L.P. (together, “Stilwell”) and
Seneca-Cayuga Bancorp, Inc. (“SCAY”). This Lawsuit Settlement Agreement is Exhibit A to the Settlement Agreement
(“Settlement Agreement”) between The Seneca Falls Savings Bank, MHC (the “MHC”) and Seneca-Cayuga Bancorp, Inc.
and Stilwell Activist Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Partners, L.P., Stilwell Value LLC, and Joseph
Stilwell, an individual, by and among Stilwell Partners, L.P. and Stilwell Activist Investments, L.P., dated May 4, 2020.
Stilwell and SCAY will sometimes be collectively referred to as the “Parties” and individually as a “Party.”

 

RECITALS

 

WHEREAS, on or about September 4, 2019,
Stilwell sent a Demand for Inspection of Books and Records of SCAY pursuant to 12 C.F.R. 239.30 (the “Inspection Demand”).
Through the Inspection Demand, Stilwell sought:

 

		·	Any and all transcripts, notes, minutes and other records of meetings, written consents in lieu of meetings, and resolutions
of the board or any and all committees thereof, and all reports, analyses and documents provided to, or prepared by or on behalf
of, [SCAY] or any advisor or consultant to [SCAY] or the board (“Board Materials”), directly or indirectly relating
to the board’s deliberations and/or considerations, if any, of (a) Stilwell’s demands and the board’s decision
to refuse to initiate a second-step; (b) the adequacy of [SCAY’s] level of capital; and ( c) returns to the public shareholders.

 

		·	Any and all communications, including e-mail communications, with any third-parties concerning the board’s deliberations,
if any, and decision to refuse to initiate a second-step in response to Stilwell’s demands; and

 

		·	All Board Materials and any and all communications, including e-mail communications, with any third-parties, directly or indirectly
relating to the hiring of any consultants to study, determine or opine on the board’s deliberations, if any, and decision
to refuse to initiate a second-step in response to Stilwell’s demands and/or decision to take any other course of action
in lieu of a second-step in response to Stilwell’s demands.

 

WHEREAS, the Inspection Demand advised that
Stilwell was seeking the above materials and records to investigate the following questions:

 

		·	Whether [SCAY] and its board breached their fiduciary duties to the public shareholders by failing to use due and utmost care
in considering Stilwell’s demands to [SCAY] to second-step;

 

     

     

    

 

		·	Whether the board breached its fiduciary duties to the public shareholders by failing to eliminate sufficiently the conflicts
of interest in the board’s consideration of Stilwell’s demand for [SCAY] to second-step; and

 

		·	Whether, given the overwhelming overlap in the composition of [Seneca Falls’s] and [SCAY’s] boards, [SCAY’s]
refusal to second-step could and should be reviewed under the entire fairness doctrine.

 

WHEREAS, on or about October 18, 2019,
SCAY sent a letter to Stilwell informing it that the Inspection Demand did not meet the requirements of applicable law and declining
to provide Stilwell with access to the records.

 

WHEREAS, on November 7, 2019, Stilwell
commenced an action in the United States District Court for the Western District of New York (the “District Court”),
Case No. 19-cv-06823-FPG (the “Action”), against SCAY seeking an order compelling SCAY to allow Stilwell to examine
the documents requested in the Inspection Demand.

 

WHEREAS, on November 11, 2019, Stilwell
moved to compel SCAY to produce the documents requested by Stilwell in the Inspection Demand.

 

WHEREAS, on January 15, 2020, SCAY cross-moved
to dismiss the complaint.

 

WHEREAS, on April 7, 2020, the Court
issued a Decision and Order granting in part and denying in part Stilwell’s motion to compel and denying SCAY’s motion
to dismiss.

 

WHEREAS, to avoid further litigation, the Parties
now desire to settle the Action.

 

NOW THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is acknowledged, and based on the agreements, representations, warranties, releases, covenants,
consideration, and confidentiality obligations set forth below and in the Settlement Agreement, the Parties agree as follows:

 

1.            Whereas
Clauses. The above whereas clauses are incorporated herein by reference.

 

2.            Mutual
Representations and Warranties.

 

(a)            The
Parties acknowledge that each has read, understood and approved this Litigation Settlement Agreement and has consulted with independent
legal counsel regarding said Litigation Settlement Agreement. The Parties represent, warrant and agree that this Litigation Settlement
Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties. The Parties further
acknowledge that they enter this Litigation Settlement Agreement with the intent to be legally bound to the terms hereof.

 

     

     

    

 

(b)            The
Parties further represent and warrant that each Party has all necessary power and authority to enter into this Litigation Settlement
Agreement.

 

(c)            The
Parties further represent and warrant that they jointly participated in the drafting of this Litigation Settlement Agreement, with
the result that any ambiguity contained herein shall not be interpreted or construed against either Party as the drafter hereof.

 

3.            Production
of Requested Documents. The Parties agree, subject to Section 4 of this Litigation Settlement Agreement concerning conditions
necessary for Stilwell to reopen the Action, that SCAY will not produce any of the documents requested by Stilwell in the Inspection
Demand. Further, subject to those same conditions in Section 4, Stilwell shall not demand or request records or documents
from the Company, Newco or their successors (as those terms are defined in the Settlement Agreement) pursuant to any stockholder
access statute or regulation or otherwise initiate, propose, submit, encourage or otherwise solicit shareholders of the Company
to demand or request records or documents from the Company, Newco or their successors.

 

4.            Stipulation
of Discontinuance. Simultaneous with the execution of this Litigation Settlement Agreement by all Parties and execution of
the Settlement Agreement, the Parties’ attorneys shall execute a stipulation of discontinuance (“Stipulation”)
in the form attached as Exhibit 1, to discontinue the Action without prejudice. The Stipulation shall be held in escrow by
SCAY’s attorneys pending SCAY and The Seneca Falls Saving Bank, MHC’s public announcement of its intention to implement
a second-step stock conversion as contemplated by Section 3(a)(i) of the Settlement Agreement, at which time SCAY’s
attorneys shall file the Stipulation with the Court. Upon SCAY performing the covenants in Section 3(a) of the Settlement
Agreement, the discontinuance shall automatically convert from without prejudice to with prejudice. If SCAY breaches any of the
covenants in Section 3(a) of the Settlement Agreement, Stilwell may reopen the Action; provided, however, that Stilwell
has fully complied with the Settlement Agreement (including, without limitation, Sections 3(b) and 3(c) of the Settlement
Agreement), and has given SCAY written notice of such breach and thirty (30) business days either to cure such breach or seek relief
in court as contemplated in Section 4 of the Settlement Agreement. If Stilwell has not fully complied with these requirements,
it shall be prohibited from reopening the Action. If reopened, the Action will resume at the procedural posture in effect as of
the Agreement Date.

 

5.            Release
of SCAY by Stilwell. In consideration of the Settlement Agreement and Litigation Settlement Agreement, Stilwell hereby releases
and forever discharges SCAY and any and all of its respective affiliates, members, partners (limited or general), parents, subsidiaries,
shareholders, managers, current and former employees, officers, directors, agents, servants, attorneys, owners, investors, representatives,
administrators, joint ventures, executors, transferees, heirs, successors, assigns and other persons acting on its behalf from
any and all rights, claims, demands, costs, expenses, attorneys’ fees, causes of action, debts, obligations, appeals, and
liabilities which Stilwell ever had, now has and demands whatsoever from the beginning of the world to the day of the date of these
presents, whether in law, equity, or otherwise, whether known or unknown, suspected and unsuspected, disclosed and undisclosed.
This release shall not be effective if SCAY breaches any of the covenants in Section 3(a) of the Settlement Agreement.

 

     

     

    

 

6.            Covenant
Not to Sue. Stilwell agrees not to file, or cause to be filed, any suit, demand arbitration, or otherwise assert a claim against
SCAY and all of its respective affiliates, members, partners (limited or general), parents, subsidiaries, shareholders, managers,
current and former employees, officers, directors, agents, servants, attorneys, owners, investors, representatives, administrators,
joint ventures, executors, transferees, heirs, successors, assigns and other persons acting on its behalf on account of any released
claim. In the event of a breach of this covenant not to sue, this Litigation Settlement Agreement shall constitute a complete and
absolute defense to such claim.

 

7.            No
Admission of Liability. The Parties agree and acknowledge that this Litigation Settlement Agreement is entered into for the
sole purpose of resolving contested claims and disputes, without incurring the substantial costs, expenses, and uncertainties associated
with litigation. It is further expressly agreed and acknowledged that the negotiation, execution or performance of any of the terms
of this Litigation Settlement Agreement shall in no way constitute or be construed or deemed as an admission by any Party of any
liability or as a fact or indication that any of the claims, allegations, contentions or averments made by the Parties have any
merit or lack any merit. This Litigation Settlement Agreement shall not be construed or interpreted as an assumption of any liability
by any Party except with respect to the express terms and conditions set forth herein.

 

8.            Inurement.
The Parties agree that this Litigation Settlement Agreement shall inure to the benefit of, and be binding upon, each of the Parties
and their respective affiliates, predecessors and successors, including any company that succeeds to the interests of SCAY and
MHC by means of a second step conversion provided, however, that in no event shall any rights hereunder transfer to any non-affiliates
including by reason of a stock sale or merger.

 

9.            Severability.
Should any provision of this Litigation Settlement Agreement be found, held, declared, determined, or deemed by any court of competent
jurisdiction to be void, illegal, invalid or unenforceable under any applicable statute or controlling law, the legality, validity,
and enforceability of the remaining provisions will not be affected and the illegal, invalid, or unenforceable provision will be
deemed not to be part of this Litigation Settlement Agreement.

 

10.          Amendment.
No amendment, modification, or addition to this Litigation Settlement Agreement shall be valid unless it is in a writing executed
by the Parties.

 

11.          Governing
Law and Venue

 

(a)            This
Litigation Settlement Agreement shall be construed and governed in accordance with the substantive laws of the State of New York
without regard to its choice of law provisions.

 

(b)            The
District Court in the Action shall retain jurisdiction over any claim, dispute, or controversy arising out of or relating to this
Litigation Settlement Agreement or the reinitiated Action.

 

     

     

    

 

12.          Counterparts
and Electronic Transmission. This Litigation Settlement Agreement may be executed in any number of counterparts and by the
parties in separate counterparts, and signature pages may be delivered by PDF electronic transmission via e-mail, each of
which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

IN WITNESS WHEREOF, this Litigation Settlement
Agreement has been fully executed and delivered by the undersigned and is effective as of the day and year first above written.

 

	STILWELL PARTNERS, L.P.	 	SENECA-CAYUGA BANCORP, INC.
	By:	Stilwell Value LLC	 	 	 
	 	General Partner	 	By:	/s/ Menzo D. Case
	 	 	 	 	Menzo D. Case
	By:	/s/ Joseph Stilwell	 	 	President and Chief Executive Officer
	 	Joseph Stilwell	 	 	 
	 	Managing Member	 	 	 
	 	 	 	 	 
	STILWELL ACTIVIST INVESTMENTS, L.P.	 	 	 
	By:	Stilwell Value LLC	 	 	 
	 	General Partner	 	 	 
	 	 	 	 	 
	By:	/s/ Joseph Stilwell	 	 	 
	 	Joseph Stilwell	 	 	 
	 	Managing Member

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