RESIDENTIAL MORTGAGE PROGRAM AGREEMENT

            This Residential Mortgage Program Agreement ("this Agreement") is
entered into as of November 18, 2004 between Homestead Funding Corp., a New York
business corporation having its chief executive office at 8 Airline Drive,
Albany, NY 12205, ("Homestead") and First Niagara Bank, a federal savings
association having its chief executive office at 6950 South Transit Road, P.O.
Box 514, Lockport, NY 14095-0514, ("First Niagara").

                                   Background

            1. Homestead is a mortgage banker engaged in the business of
extending to consumers credit that, in the case of any consumer, is a mortgage
loan secured by a first lien on a one-to-four family dwelling occupied by that
consumer or is a home equity loan or line of credit secured by a second lien on
that dwelling created at the same time as that first lien (any mortgage loan
secured by a first lien of that type together with any home equity loan or line
of credit secured by a second lien of that type on the dwelling covered by the
first lien being "Residential Mortgage Credit").

            2. First Niagara is engaged in the business of extending or
purchasing Residential Mortgage Credit.

            3. Homestead and First Niagara (together "the Parties" and each a
"Party") wish to undertake a program under which in the counties of the State of
New York identified on Exhibit A attached to this Agreement (together "the
Program Counties") Homestead will identify itself as conducting business under

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the name First Niagara Mortgage as a representative of First Niagara and will
extend Residential Mortgage Credit to be purchased by First Niagara ("First
Niagara Portfolio Residential Mortgage Credit") and Residential Mortgage Credit
to be purchased by parties other than First Niagara (the "Program").

                                    Agreement

            Homestead and First Niagara agree as follows:

            1. Use of Name First Niagara Mortgage and Logo of First Niagara.
Subject to the provisions of a Service Mark License Agreement to be entered into
between the Parties in the form of Exhibit B attached to this Agreement,
Homestead will, except to the extent prohibited by applicable law or First
Niagara and subject to Homestead's first obtaining the consent of First Niagara,
(a) conduct business under the name First Niagara Mortgage in the Program
Counties and (b) cause the name First Niagara Mortgage and the logo of First
Niagara to appear on (i) all signage at offices of Homestead located in the
Program Counties, (ii) all stationery used by Homestead at those offices or
otherwise in the conduct of the Program ("Program Stationery"), (iii) all
advertising and other promotional material in any medium used by Homestead in
the conduct of the Program or otherwise in the Program Counties ("Marketing")
and (iv) all forms of applications, rate sheets and other documents used by
Homestead in the conduct of the Program or otherwise in the Program Counties
("Program Documentation"). For example, Homestead will (a) cause telephones at
offices of Homestead located in the Program Counties other than the principal


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office of Homestead to be answered with the name First Niagara Mortgage, (b)
cause telephones at the principal office of Homestead to be answered, to the
extent practicable, with the name First Niagara Mortgage or a variation of that
name and (c) cause officers and employees of Homestead to identify themselves as
employees of First Niagara Mortgage in their dealings with potential applicants
and applicants for and recipients of Residential Mortgage Credit.

            2. Identification of Homestead as Representative of First Niagara.
Whenever Homestead uses the name First Niagara Mortgage or the logo of First
Niagara (for example, on (a) any signage at any office of Homestead located in
the Program Counties, (b) any Program Stationery, (c) any Marketing or (d) any
Program Documentation), Homestead will conspicuously identify itself as a
representative of First Niagara.

            3. Availability of Homestead Employees at First Niagara Banking
Offices. Homestead will, at times and otherwise as agreed upon by the Parties,
cause qualified employees of Homestead to be located at or otherwise be
available to customers and potential customers of banking offices of First
Niagara located in the Program Counties for the purpose of promoting and
originating applications for Residential Mortgage Credit.

            4. Underwriting. Underwriting of applications for First Niagara
Portfolio Residential Mortgage Credit taken by Homestead in the conduct of the
Program or otherwise in the Program Counties, whether taken at offices of
Homestead or banking offices of First Niagara or otherwise, will be underwritten
by employees of First Niagara, who may be located at offices of Homestead. If
located at offices of Homestead, those employees will be under the control of
First Niagara at all times but may be under day-to-day operational supervision
of Homestead.


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            5. Promotion and Development of Types of Residential Mortgage
Credit. In the conduct of the Program, Homestead (a) will use commercially
reasonable efforts to promote, through Marketing and otherwise, in the Program
Counties all types of Residential Mortgage Credit offered by First Niagara,
whether or not constituting First Niagara Portfolio Residential Mortgage Credit,
and (b) may promote, through Marketing and otherwise, in the Program Counties
other types of Residential Mortgage Credit. Homestead will cooperate with First
Niagara in developing new types of Residential Mortgage Credit to be offered by
First Niagara.

            6. Offering and Promotion of Other Products and Services. In the
conduct of the Program, Homestead will use commercially reasonable efforts to
promote, through Marketing and otherwise, products and services offered by First
Niagara other than Residential Mortgage Credit (for example, deposit accounts,
commercial mortgage loans and home equity loans and lines of credit not
constituting Residential Mortgage Credit) as agreed upon by the Parties and for
compensation agreed upon by the Parties. Except for Residential Mortgage Credit
and products and services directly related to Residential Mortgage Credit (for
example, title insurance), Homestead will not, without first obtaining the
consent of First Niagara in writing (which will not be unreasonably withheld by
First Niagara), offer or promote, through Marketing or otherwise, in the conduct
of the Program or otherwise in the Program Counties any product or service (for
example, a home equity loan or line of credit) offered by any party other than
First Niagara.


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            7. Cooperation by Parties. The Parties will cooperate in (a)
obtaining, making, giving or doing, and maintaining in full force and effect,
each authorization, approval, permit, consent, franchise and license from,
registration and filing with, declaration, report and notice to and other act by
or relating to any court, agency or other governmental body necessary for the
execution, delivery and performance by the Parties of this Agreement or the
conduct of the Program and (b) to the fullest extent allowed by and in
accordance with applicable law, sharing information about potential applicants
and applicants for and recipients of Residential Mortgage Credit.

            8. Approval of Marketing. All Marketing used at banking offices of
First Niagara located in the Program Counties must be approved by First Niagara
before being undertaken by Homestead. All other Marketing must be approved in
concept by First Niagara before being undertaken by Homestead.

            9. Payment for Signage, Program Stationery, Marketing and Program
Documentation. Homestead will pay for (a) all signage at offices of Homestead
located in the Program Counties not deemed necessary by First Niagara, (b) all
Program Stationery other than Program Stationery initially ordered for the
conduct of the Program, (c) all Marketing other than Marketing consisting of
free-standing newspaper inserts that are approved by First Niagara and advertise
or otherwise promote both Residential Mortgage Credit and other products and
services offered by First Niagara (together "Newspaper Inserts") and (d) all
Program Documentation. First Niagara will pay for (a) all signage at offices of


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Homestead located in the Program Counties other than signage not deemed
necessary by First Niagara, (b) all Program Stationery initially ordered for the
conduct of the Program and (c) all Newspaper Inserts.

            10. Sale and Purchase of Residential Mortgage Credit. If, in the
judgment of First Niagara, any Residential Mortgage Credit extended by
Homestead, whether or not extended in the conduct of the Program and whether or
not originated in the Program Counties, (a) is of a type identified on Exhibit C
attached to this Agreement, (b) is of a type offered by First Niagara at the
time that Residential Mortgage Credit is extended, (c) provides for credit terms
(for example, terms relating to interest and other charges) offered by First
Niagara at the time that Residential Mortgage Credit is extended and (d) meets
underwriting standards of FNMA or FHLMC or any other prudent investor that
provides Residential Mortgage Credit like that Residential Mortgage Credit,
Homestead will sell that Residential Mortgage Credit to First Niagara, and First
Niagara will buy that Residential Mortgage Credit from Homestead, for a purchase
price determined as provided in that Exhibit C, with that purchase and sale to
be consummated and the purchase price to be paid consistent with industry
practices (usually 20 to 40 days after the closing for that Residential Mortgage
Credit). That purchase and sale will be subject to the provisions of the
Correspondent Lending Agreement to be entered into between the Parties in the
form of Exhibit D attached to this Agreement.

            11. [CONFIDENTIAL TREATMENT REQUESTED FROM THE SECURITIES AND
EXCHANGE COMMISSION AND FILED SEPARATELY THEREWITH]


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            12. [CONFIDENTIAL TREATMENT REQUESTED FROM THE SECURITIES AND
EXCHANGE COMMISSION AND FILED SEPARATELY THEREWITH]

            13. [CONFIDENTIAL TREATMENT REQUESTED FROM THE SECURITIES AND
EXCHANGE COMMISSION AND FILED SEPARATELY THEREWITH]

            14. [CONFIDENTIAL TREATMENT REQUESTED FROM THE SECURITIES AND
EXCHANGE COMMISSION AND FILED SEPARATELY THEREWITH]

            15. Compliance with Applicable Law. In the conduct of the Program
and otherwise in the conduct of its business, each Party will comply with
applicable law (for example, to the extent applicable to that Party, any statute
or regulation relating to doing business under an assumed name, licensing,
disclosure or fair lending, such as (a) the federal Equal Credit Opportunity Act
and its implementing regulation, Regulation B of the Board of Governors of the
Federal Reserve System, (b) the federal Truth in Lending Act and its
implementing regulation, Regulation Z of the Board of Governors of the Federal
Reserve System, (c) the federal Real Estate Settlement Procedures Act and its
implementing regulation, Regulation X of the Department of Housing and Urban
Development, (d) Section 130 of the General Business Law of the State of New
York, (e) Article 12-D of the Banking Law of the State of New York, (f) Section
296-a of the Executive Law of the State of New York, (g) Part 38 of the General
Regulations of the Banking Board of the State of New York, (h) Part 41 of the
General Regulations of the Banking Board of the State of New York and (i) Part


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410 of the Superintendent's Regulations of the Superintendent of Banks of the
State of New York). For example, Homestead will comply with applicable law in
connection with its dealings with potential applicants and applicants for and
recipients of Residential Mortgage Credit, such as (a) the provision of services
or information, whether as to the availability of Residential Mortgage Credit,
application procedures or credit standards or otherwise, and the encouragement
or discouragement of inquiries about or applications for Residential Mortgage
Credit, (b) the making of disclosures, (c) the charging of fees and (d) the
retention of records. Homestead will, at its own expense, take all steps
required, whether by First Niagara or otherwise, to correct any violation of
applicable law in the conduct of the Program or otherwise in the conduct of its
business, whether discovered in an audit or quality control procedure conducted
by First Niagara, an examination conducted by the Banking Department of the
State of New York, the Office of Thrift Supervision or any other federal or
state agency or other governmental body or otherwise.

            16. Audit and Quality Control. Homestead will allow First Niagara,
in accordance with First Niagara's usual auditing and quality control procedures
and schedules, at times agreed upon by the Parties and, unless requested by
Homestead, at First Niagara's expense, to audit the compliance of Homestead with
applicable law in the conduct of the Program or otherwise in the conduct of its
business and to conduct quality control procedures with respect to (a)
applications for Residential Mortgage Credit originated by Homestead in the
conduct of the Program or otherwise and (b) Residential Mortgage Credit extended
by Homestead in the conduct of the Program or otherwise.


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            17. Privacy and Customer Information Security. In the conduct of the
Program, Homestead will be bound by the provisions of the form of letter
attached to this Agreement as Exhibit E.

            18. Offers of Employment. Homestead will make bona fide offers of
employment to employees of First Niagara or Hudson River Mortgage Corp. who are
engaged primarily in the origination but not the underwriting or other
processing of applications for Residential Mortgage Credit at offices of First
Niagara or Hudson River Mortgage Corp. located in the Program Counties and whose
employment by First Niagara or Hudson River Mortgage Corp. is terminated as a
result of the commencement of the Program.

            19. Effectiveness of Agreement. This Agreement will take effect only
upon (a) the consummation of the merger of Hudson River Bankcorp, Inc. into
First Niagara Financial Group, Inc., (b) the obtaining by Homestead of any
approval from the Banking Department of the State of New York required for the
execution, delivery and performance by Homestead of this Agreement and the
conduct by Homestead of the Program and (c) the obtaining by First Niagara of
any approval from the Office of Thrift Supervision required for the execution,
delivery and performance by First Niagara of this Agreement and the conduct by
First Niagara of the Program.

            20. Representations and Warranties of Homestead. Homestead
represents and warrants to First Niagara that (a) Homestead is and will remain
duly organized, validly existing and in good standing under the law of the State
of New York, duly authorized to do business and in good standing under the law
of each other jurisdiction in which Homestead conducts business and a registered


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seller and servicer in good standing with the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation, (b) the execution,
delivery and performance by Homestead of this Agreement and the conduct by
Homestead of the Program and other business of Homestead (i) are within the
power and authority of Homestead, (ii) do not and will not violate the
certificate of incorporation or the by-laws of Homestead, applicable law, any
judgment or order of any court, agency or other governmental body or any
agreement or instrument to which Homestead is a party or by which Homestead is
bound and (iii) have been duly authorized by all necessary corporate action of
Homestead and (c) except for any approval by the Banking Department of the State
of New York contemplated by clause (b) of Section 19 of this Agreement, each
authorization, approval, permit, consent, franchise and license from,
registration and filing with, declaration, report and notice to and other act by
or relating to any court, agency or other governmental body necessary for the
execution, delivery and performance by Homestead of this Agreement or the
conduct by Homestead of the Program or other business of Homestead has been duly
obtained, made, given or done and is in full force and effect.

            21. Representations and Warranties of First Niagara. First Niagara
represents and warrants to Homestead that (a) First Niagara is and will remain
duly organized, validly existing and in good standing under the federal law of
the United States, (b) the execution, delivery and performance by First Niagara
of this Agreement and the conduct by First Niagara of the Program and other
business of First Niagara relating to Residential Mortgage Credit (i) are within
the power and authority of First Niagara, (ii) do not and will not violate the
federal stock charter or the by-laws of First Niagara, applicable law, any


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judgment or order of any court, agency or other governmental body or any
agreement or instrument to which First Niagara is a party or by which First
Niagara is bound and (iii) have been duly authorized by all necessary corporate
action of First Niagara and (c) except for any approval by the Office of Thrift
Supervision contemplated by clause (c) of Section 19 of this Agreement, each
authorization, approval, permit, consent, franchise and license from,
registration and filing with, declaration, report and notice to and other act by
or relating to any court, agency or other governmental body necessary for the
execution, delivery and performance by First Niagara of this Agreement or the
conduct by First Niagara of the Program or other business of First Niagara
relating to Residential Mortgage Credit has been duly obtained, made, given or
done and is in full force and effect.

            22. Indemnification. Each Party (the "Indemnifying Party") will
indemnify the other Party against each liability, cost and expense (for example,
attorney's fees and disbursements) imposed on, incurred by or asserted against
the other Party as a direct or indirect result of (a) the breach of any
representation or warranty made by the Indemnifying Party in Section 20 or 21 of
this Agreement, (b) any failure of the Indemnifying Party to perform any
obligation of the Indemnifying Party under this Agreement or (c) any act or
omission of the Indemnifying Party or any officer, employee or other agent of
the Indemnifying Party in the conduct of the Program. The obligations of each
Party under the preceding sentence will survive the end of the Program.


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            23. End of Program. The Program will continue until ended in
accordance with this section. Either Party may at any time with or without any
cause give to the other Party a notice of intention to end the Program (a
"Notice of Intention"). After a Notice of Intention is given by either Party to
the other Party, there will be a period during which the Parties will cooperate
to wind down and end the Program (the "Transition Period"). [CONFIDENTIAL
TREATMENT REQUESTED FROM THE SECURITIES AND EXCHANGE COMMISSION AND FILED
SEPARATELY THEREWITH] During the Transition Period, the Parties will cooperate
to, by the end of the Transition Period unless an earlier date is agreed upon by
the Parties, (a) end the conduct of business by Homestead under the name First
Niagara Mortgage, (b) end the use of the name First Niagara Mortgage and the
logo of First Niagara on (i) signage at offices of Homestead located in the
Program Counties, (ii) Program Stationery, (iii) Marketing and (iv) Program
Documentation, (c) end the presence of employees of Homestead at and their other
availability to customers and potential customers of banking offices of First
Niagara located in the Program Counties, (d) end the linkage of technological
services (for example, electronic mail, website linking and other online
computer services) used by the Parties in the conduct of the Program, (e) end
the identification of telephone numbers used by Homestead in the conduct of the
Program or otherwise in the Program Counties using the name First Niagara
Mortgage and (f) otherwise end the Program. Each Party will pay its own expenses
in connection with the winding down and ending of the Program, except that (a)
if the Transition Period is triggered by a Notice of Intention given by First
Niagara, First Niagara will pay the cost of changing signage at offices of


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Homestead located in the Program Counties to eliminate the name First Niagara
Mortgage and the logo of First Niagara unless that Notice of Intention specifies
that it is given because of a breach of any representation or warranty made by
Homestead in Section 20 of this Agreement or any failure of Homestead to perform
any obligation of Homestead under this Agreement, identifies that breach or
failure and is accompanied by an affidavit of an officer of First Niagara
specifying evidence of that breach or failure, in which case Homestead will pay
that cost, or (b) if the Transition Period is triggered by a Notice of Intention
given by Homestead, Homestead will pay that cost unless that Notice of Intention
is a Special Notice of Intention or it specifies that it is given because of a
breach of any representation or warranty made by First Niagara in Section 21 of
this Agreement or any failure of First Niagara to perform any obligation of
First Niagara under this Agreement and identifies that breach or failure and is
accompanied by an affidavit of an officer of Homestead specifying evidence of
that breach or failure, in which case First Niagara will pay that cost. During
the Transition Period, neither Party will (a) solicit any officer or employee of
the other Party for employment or make any offer of employment to any officer or
employee of the other Party or (b) solicit any person it knows or should know is
a customer of the other Party for any Residential Mortgage Credit. Whether
before or after the end of the Transition Period, Homestead will not solicit for
any Residential Mortgage Credit any person who is obligated on any Residential
Mortgage Credit for which First Niagara provides servicing.

            24. Notices. Each notice relating to this Agreement given by either
Party to the other Party (a) must be in writing, (b) must be sent by
first-class, certified or registered mail or a nationally recognized overnight
courier service, (c) must be addressed to the address of the other Party for
purposes of this Agreement, (d) will be considered to have been given when
deposited in the mail with proper postage or accepted by the post office or


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overnight courier service for delivery and (e) will be considered to have been
received upon the earlier of its actual receipt by the Party to which it is
being sent or three days after being deposited or accepted as described in this
sentence. The address of each Party for purposes of notices under this Agreement
will be the address for that Party shown at the beginning of this Agreement,
except that, if the other Party receives from that Party a notice specifying
another address as the address of that Party for those purposes, the address of
that Party for those purposes will be the address specified in the most recent
notice received by the other Party from that Party specifying an address for
purposes of this Agreement.

            25. Relationship Between Parties. Neither this Agreement nor the
conduct of the Program will create any fiduciary or agency relationship or the
relationship of joint venturers, partners or similar entities between the
Parties. Neither Party will be (a) liable for any indebtedness or other
obligation of the other Party or (b) authorized to make any contract,
representation or warranty, or to create any indebtedness or other obligation,
on behalf of the other Party. No officer, employee or other agent of either
Party will be considered to be an officer, employee or other agent of the other
Party.

            26. Benefit. This Agreement is for the benefit of, is and will be
binding on and will be enforceable by each Party and each successor and assignee
of each Party.

            27. Assignments. Neither Party may assign any obligation under or
right or remedy under or arising as a result of this Agreement without first
obtaining the written consent of the other Party. Any assignment of any
obligation under or right or remedy arising under or as a result of this


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Agreement made by either Party without first obtaining the written consent of
the other Party will be ineffective.

            28. Entire Agreement. This Agreement contains the entire agreement
between the Parties with respect to its subject matter and supersedes each
action that has been taken, each course of conduct that has been pursued and
each oral, written or other agreement and representation that has been made by
or on behalf of either Party with respect to its subject matter.

            29. Modifications and Waivers. No action that has been or is taken,
no course of conduct that has been or is pursued and no agreement or
representation that has been or is made other than in writing by or on behalf of
either Party will modify or terminate this Agreement, impair any obligation of
either Party under this Agreement or impair or waive any right or remedy of
either Party under or arising as a result of this Agreement. Any modification of
this Agreement or waiver of any right or remedy of either Party under or arising
as a result of this Agreement will be effective only if it is made in a writing
that is signed by the Parties and specifically refers to that modification or
waiver, except that First Niagara may unilaterally change Exhibit C attached to
this Agreement at any time as to applications for Residential Mortgage Credit
accepted by Homestead more than seven days after the date First Niagara gives
notice of that change to Homestead.


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            30. Exercise of Rights and Remedies. No exercise by either Party of
any right or remedy under or arising as a result of this Agreement will prevent
the exercise by that Party of any other right or remedy under or arising as a
result of this Agreement.

            31. Ineffectiveness. Whenever possible, each provision of this
Agreement will be interpreted to be effective under applicable law. But, if any
provision of this Agreement is ineffective under applicable law, it will be
treated as changed to meet the minimum requirements of that law, or, if it is
not treated as changed to do so, it will be ineffective only to the extent that
it does not meet those minimum requirements, and the rest of it will remain
effective.

            32. Governing Law. This Agreement is governed by and will be
interpreted in accordance with the law of the State of New York with regard to
conflicts of law principles that would require the application of any other law.

            33. Headings. Headings are used in this Agreement for convenience
only and will not affect its interpretation.

            34. WAIVER OF TRIAL BY JURY. EACH PARTY GIVES UP ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LAWSUIT BY EITHER PARTY AGAINST THE OTHER PARTY
INVOLVING THIS AGREEMENT, THE PROGRAM OR ANY MATTER RELATING TO THIS AGREEMENT
OR THE PROGRAM.


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                                        HOMESTEAD FUNDING CORP.

                                        By
                                           -------------------------------------
                                                                           Title


                                        FIRST NIAGARA BANK

                                        By
                                           -------------------------------------
                                                                           Title


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