RESIGNATION AGREEMENT

     THIS RESIGNATION AGREEMENT (this "Agreement"), is entered into as of July
14, 2000 by and among Hudson United Bancorp ("HUB"), and William Lamb
(hereinafter referred to as "Lamb").

                                   BACKGROUND

     WHEREAS, Lamb is currently a member of the Board of Directors of HUB; and

     WHEREAS, Lamb is resigning, effective today, as a Director of HUB and will
not be a nominee for election as a Director of HUB at the 2000 Annual Meeting of
HUB; and

     WHEREAS, Lamb desires to sell, and desires to have certain persons and
entities affiliated with him and listed on Exhibit A hereto (the "Lamb
Affiliates") sell, an aggregate of 524,252.406 shares of HUB common stock, which
shares are listed on Exhibit A hereto (the "Shares") to HUB at a price which is
a premium above the current market price of HUB common stock, desires to sell
options to acquire an aggregate of 15,827.38 shares of his HUB common stock,
which options are listed on Exhibit B hereto (the "Options") to HUB at a price
equal to the spread between the exercise price therefor (the "Strike Price") and
an amount which is a premium above the current market price of HUB common stock,
and desires to receive a retainer from HUB as described herein (the "Retainer");
and

     WHEREAS, in consideration of HUB's agreement to purchase the Shares and the
Options as set forth herein and the additional benefits being given to Lamb with
respect to the Retainer, Lamb has agreed to be subject to the terms and
conditions of this Agreement and, on or before the Closing Date referred to
herein at which their Shares are purchased, the Lamb Affiliates will execute


<PAGE>


and deliver to HUB a copy of this Agreement agreeing to be bound by the
provisions of Article III hereof.

     NOW, THEREFORE, for good and valuable consideration, HUB and Lamb (and with
respect to Article III the Lamb Affiliates who execute and deliver to HUB a copy
of this Agreement), each intending to be legally bound hereby, agree as follows:

                                    ARTICLE I

                                TERM OF AGREEMENT

     The term of the covenants under this Agreement shall commence on the date
hereof, and shall continue in effect for a period of five (5) years (hereinafter
the "Term").

                                   ARTICLE II

                                 STOCK PURCHASE

     2.1 PURCHASE AND SALE OF SHARES AND OPTIONS. Subject to the terms and
conditions of this Agreement, HUB agrees to purchase and acquire from Lamb and
the Lamb Affiliates, and Lamb agrees to sell, assign, transfer and deliver to
HUB (or cause the Lamb Affiliates to sell, assign, transfer and deliver to HUB,
as the case may be) the Shares and the Options, free and clear of all liens or
encumbrances. Lamb represents and warrants that all the Shares were beneficially
owned by him or his immediate family for a period of more than six (6) months
and that the Shares listed on Exhibit A hereto represent all of the Shares
beneficially owned by him and all of the Shares beneficially owned by his
family. Lamb represents and warrants that the information with respect to the
Options shown on Exhibit B hereto, including the Strike Price per Option, is
correct. The purchase and sale of the Shares and the Options shall occur on a
date mutually agreed by HUB and Lamb, but not later than July 17, 2000 (the
"Closing Date").


                                      -2-
<PAGE>


     2.2 PURCHASE PRICE FOR SHARES AND OPTIONS. As consideration for the Shares,
HUB shall pay to Lamb (or to Lamb and one or more of the Lamb Affiliates if so
directed by Lamb in writing), on the Closing Date, against delivery of the
Shares, $25.625 per Share. Based on all 524,252.406 Shares being purchased and
sold, the total consideration for the Shares would be $13,433,967.90. As
consideration for the Options, HUB shall pay to Lamb, on the Closing Date,
against delivery of the Options, the excess of $25.625 over the Strike Price for
each Option. Based on all 15,827.38 Options being purchased and sold, the total
consideration for the Options would be $ 88,690.63. Payment shall be made by
wire transfer in immediately available funds to an account specified by Lamb in
writing (or divided among multiple accounts as specified by Lamb in writing).
Purchase and sale of the Shares and Options on the Closing Date is referred to
herein as the "Closing".

     2.3 POST-CLOSING PURCHASE PRICE ADJUSTMENT. The parties shall consult the
Wall Street Journal to determine the closing price of HUB common stock on each
trading day during the period (the "Measurement Period") beginning on July 14,
2000 and ending on (and including) September 8, 2000. At the conclusion of the
Measurement Period, the parties shall determine the average of the five highest
closing prices during the Measurement Period (the "Five High Day Average"). If
the Five High Day Average exceeds $25.625, then on September 11, 2000, HUB shall
pay to Lamb (or to Lamb and one or more of the Lamb Affiliates if so directed by
Lamb in writing) as additional consideration for the Shares (by wire transfer in
immediately available funds to the account, or divided among the accounts, as
previously specified by Lamb in writing) an amount equal to such excess
multiplied by the number of Shares which HUB had purchased at the Closing. If
the Five High Day Average exceeds $25.625, then on September 11, 2000, HUB shall
pay to Lamb as additional consideration for the Options (by wire transfer in
immediately available funds to the account, or divided among the accounts, as
previously specified by Lamb in writing) an


                                      -3-
<PAGE>


amount equal to such excess multiplied by the number of Options which HUB had
purchased at the Closing.

                                   ARTICLE III

                                   STANDSTILL

     Lamb agrees that he will not, and he will cause his immediate family not
to, alone or in concert with others, directly or indirectly, during the Term, do
any of the things listed in clauses (i) through (vii) below. Each Lamb Affiliate
who has executed and delivered to HUB a copy of this Agreement agrees that he,
she or it will not, will cause his or her spouse (if any) not to, and will urge
the rest of his or her immediate family (if any) not to, alone or in concert
with others, directly or indirectly, during the Term, do any of the things
listed in clauses (i) through (vii) below:

          (i) beneficially own any voting securities of HUB,

          (ii) propose to HUB or any other person any transaction between any
     person or entity with whom Lamb is affiliated, whether directly or
     indirectly, as shareholder, employee, director, officer, principal or
     agent, or in any other capacity, and HUB and/or its security holders or
     involving any of its securities or security holders,

          (iii) assist, advise or encourage any other persons in acquiring,
     directly or indirectly, control of HUB or any of HUB's securities,
     businesses or assets,

          (iv) solicit proxies or initiate, propose or become a "participant" in
     a "solicitation" (as such terms are defined in Regulation 14A under the
     Exchange Act) in opposition to any matter which has been recommended by the
     majority of members of the Board of Directors of HUB or in favor of any
     matter which has not been approved by a majority of the Directors of HUB,


                                      -4-
<PAGE>


          (v) act to seek to affect or influence the control of the management
     or Board of Directors of HUB or its business operations or affairs, or make
     any public statements with respect thereto,

          (vi) act for the purpose of acquiring, holding, voting or disposing of
     voting securities of the Company, or otherwise become a "person" or a
     member of a "group" within the meaning of Section 13(d) of the Securities
     Exchange Act of 1934, or

          (vii) aid or abet or otherwise induce any person to take any of the
     actions enumerated in (i) through (vi) of this Article III.

     Lamb agrees that he will, and he will cause his immediate family to, vote
all shares held of record as of the record date for HUB's 2000 Annual Meeting in
accordance with the recommendations of HUB management. Each Lamb Affiliate who
has executed and delivered to HUB a copy of this Agreement agrees that he, she
or it will, will cause his or her spouse (if any) to, and will urge the rest of
his or her immediate family (if any) to, vote all shares held of record as of
the record date for HUB's 2000 Annual Meeting in accordance with the
recommendations of HUB management.

                                   ARTICLE IV

                                NON-DISPARAGEMENT

     During the Term, Lamb shall not directly or indirectly himself or through
his immediate family make or cause to be made any written or oral statement
disseminated outside his immediate family which does, is intended to, or which a
reasonable person hearing or reading the statement would assume is intended to,
disparage HUB or a subsidiary of HUB, or any director, officer or employee of
HUB or of any of its subsidiaries with respect to any matter relating to or
reflecting on their business or the conduct of their business.


                                      -5-
<PAGE>


     Lamb understands and agrees that the promises made by him and contained in
this Article IV are essential to HUB, and agrees that any breach of his
obligations under this Article IV will immediately render Lamb obligated to
repay the Retainer to HUB. This forfeiture provision is intended to provide for
a complete forfeiture of Lamb's rights to the retainer benefits in the event of
the breach of his obligations under this Article IV, and the terms of any letter
or retainer agreement which the parties may enter into in connection with the
Retainer will reflect the requirement of this forfeiture agreement.

     During the Term, HUB shall not, and shall cause its subsidiaries or other
entities over which it exercises control not to, directly or indirectly itself
or through its directors or officers make or cause to be made any written or
oral statement disseminated outside of HUB or such subsidiaries or other
entities which does, is intended to, or which a reasonable person hearing or
reading the statement would assume is intended to, disparage Lamb with respect
to any matter relating to or reflecting on Lamb's service as a director of HUB
or its predecessors or affiliates, or on the businesses conducted by Lamb or his
conduct with respect to those businesses.

                                    ARTICLE V

                                    RETAINER

     On January 2, 2001, HUB shall pay to Lamb the sum of $800,000 (the
"Retainer"), which amount is a retainer for legal services to be performed and
business advice to be provided by Lamb (collectively the "Services") during the
Term. During the Term Lamb shall make himself available at mutually agreeable
times and places, and as reasonably requested by HUB, to perform the Services,
for which Lamb shall credit the Retainer at his regular billing rates then in
effect for providing similar services. Provided that Lamb has made himself
reasonably available to perform the Services during the Term, Lamb shall have no
obligation to perform further services after the


                                      -6-

<PAGE>

Term even if the Retainer has not been fully applied as set forth above and HUB
shall in no event be obligated to pay Lamb amounts in excess of the Retainer.
The amount of the Retainer shall be placed in escrow by HUB, subject to an
escrow agreement to be entered into and funded by July 21, 2000 in substantially
the form of Exhibit C hereto.

                                   ARTICLE VI

                                  MISCELLANEOUS

     6.1 SPECIFIC PERFORMANCE. In the event of an actual or threatened breach by
Lamb of any of the covenants contained in this Agreement, it is agreed that HUB
and its respective successors shall be entitled, in addition to any other
remedies at law, to injunctive relief restraining Lamb from committing or
attempting such breach.

     6.2 CHANGES. This Agreement may not be modified, changed, amended, or
altered except in a writing signed by Lamb and HUB.

     6.3 NOTICES. All notices given or required to be given herein shall be in
writing and be hand-delivered or sent by United States first-class certified or
registered mail, return receipt requested, postage prepaid, to Lamb at the
last-known residence or business address for Lamb, and to HUB at the principal
executive office for HUB (or any successor thereto), to the attention of the
Chief Executive Officer. All such notices shall be effective when received or
open refusal of the addressee to accept delivery. Either party by a notice in
writing to the other party may change or designate the place for receipt of such
notices.

     6.4 NON-ASSIGNABILITY. This Agreement is personal to each of the parties
and none of the parties may assign or delegate any of its rights or obligations
under this Agreement without the prior written consent of the other party.


                                      -7-
<PAGE>


     6.5 ENTIRE AGREEMENT. This Agreement contains the entire agreement between
the parties hereto with respect to the matters contemplated hereby, and
supersedes all prior negotiations, arrangements or understandings, written or
oral, with respect thereto.

     6.6 GOVERNING LAW. This Agreement shall be governed in all respects and be
interpreted by and under the laws of the State of New Jersey.

     6.7 JURISDICTION; SERVICE. The federal and state courts located within the
State of New Jersey shall have exclusive jurisdiction with respect to any legal
proceeding brought to enforce any aspect of this Agreement. Service of process
may be effected by regular mail to the corporate headquarters of HUB and to the
last known residence or business address of Lamb.

     6.8 LEGAL FEES. HUB shall reimburse Lamb for the reasonable legal fees and
expenses incurred by Lamb in connection with the negotiation of this Agreement
not to exceed $5,000 ($10,000 when combined with fees and expenses for Betsy
Cohen).

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                      -8-
<PAGE>


     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the date and year first written above.

                                                 HUDSON UNITED BANCORP


                                                 By: ___________________________
                                                        Kenneth T. Neilson
                                                        Chairman, President and
                                                        Chief Executive Officer




                                                 -------------------------------
                                                 WILLIAM LAMB



The undersigned "Lamb Affiliates" have executed and delivered to HUB a copy of
this Agreement, thereby evidencing our intent to be bound by Article III hereof:




                                                --------------------------------



                                                --------------------------------



                                                --------------------------------



                                                --------------------------------



                                                --------------------------------



                                      -9-