<PAGE>
Exhibit 10.14

                            GSB FINANCIAL CORPORATION
                       EMPLOYEE STOCK OWNERSHIP PLAN TRUST
                           LOAN AND SECURITY AGREEMENT

GSB Financial Corporation
One South Church Street
Goshen, New York 10924

Gentlemen:

         The undersigned, Marine Midland Bank ("Trustee"), not individually but
solely as trustee of the trust (the "Trust") related to the GSB Financial
Corporation Employee Stock Ownership Plan (the "ESOP"), effective as of the date
of conversion (the "Conversion") of Goshen Savings Bank (the "Bank") from mutual
to stock form (the "Trust" shall sometimes be referred to herein as the
"Borrower"), applies to you for your commitment, subject to all of the terms and
conditions of this Loan and Security Agreement (the "Agreement") and on the
basis of the representations hereinafter set forth, to make a loan available to
the Borrower as hereinafter set forth. GSB Financial Corporation is hereinafter
referred to as the "Lender". The Bank is an Employer participating in the ESOP.

SECTION ONE.  THE TERM LOAN.

1.1 Amount and Terms. By its acceptance hereof, the Lender agrees, subject to
all of the terms and conditions hereof and on the basis of the representations
hereinafter set forth, to make a loan (the "Loan") in an aggregate principal
amount sufficient to permit the Borrower to acquire a number of shares of the
Lender's common stock, par value $0.01 per share (the "Shares"), equal to, 8.0%
of the Shares issued in the Conversion (the "Loan Amount"). The Loan proceeds
shall be used by the Borrower entirely to acquire Shares.

The Loan is intended to be an "exempt loan" as described in Section 4975(d) of
the Internal Revenue Code of 1986, as amended (the "Code"), as defined in
Section 54.4975-7(b) of the Treasury Regulations (the "Regulations"), as
described in Section 408(b)(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and as described in Department of Labor Regulations
Section 2550.408b-3 (collectively, the "Exempt Loan Rules").

1.2 The Note. The disbursement of the Loan pursuant to Section 1. I hereof shall
be made against and evidenced by a promissory note of the Borrower in the form
annexed hereto as Exhibit A (the "Note "), which Note shall bear interest as
hereinafter provided, and be payable in forty (40) equal quarterly principal
installments commencing on the last Business Day (as defined below) in
September, 1997 and continuing on the last Business Day of each and every
calendar quarter thereafter, each such principal installment to be in an amount
equal to the principal amount outstanding on the due date of the installment
multiplied by a fraction, the numerator of which shall be one and the
denominator of which shall be the number of principal installments remaining on
the Note, including the installment due in the current calendar quarter, except
that the final installment in the amount of all principal and interest not
sooner paid shall be due on June 30, 2007, the final maturity thereof. For
purposes of this Section 1.2 and the other provisions of this Agreement, the
phrase "Business Day" shall mean any day on which savings institutions are
generally open for business in New York other than a Saturday or Sunday.


<PAGE>


Without regard to the principal amount of the Note stated on its face, the
actual principal amount at any time outstanding and owed by the Borrower on
account of the Note shall be the amount of the disbursement of the Loan made by
the Lender under Section 1.1 hereof less all payments of principal actually
received by the Lender. The amount of such disbursement made by the Lender and
any repayments of principal thereof shall be recorded by the Under on its books
or records or, at its option, endorsed on the reverse side of the Note by the
Lender and the unpaid principal balance at any time so recorded or endorsed by
the Lender shall be prima facie evidence in any court or other proceedings
brought to enforce the Note of the principal amount remaining unpaid thereon.

1.3 Exempt Rules. Notwithstanding anything to the contrary contained in this
Agreement or in the Note, the Borrower shall be obligated to make repayments of
the Loan only to the extent that such repayments when added to the repayments
theretofore made during the applicable plan year would not exceed an amount
which would cause the limitations of Section 415 of the Code to be exceeded for
any ESOP participant.

Except as set forth in the next succeeding sentence and to the extent permitted
by applicable law, including, without limitation, the Exempt Loan Rules, the
principal amount of the Loan and any interest thereon shall be payable solely
from contributions (other than contributions of employer securities) made to the
Trust in accordance with the ESOP, and cash dividends received on the Shares, to
enable the Borrower to pay its obligations -under the Loan and from earnings
attributable to the Shares and the investment of such contributions and
dividends.

The Lender acknowledges and agrees that it shall have no other recourse against
the Borrower for repayment of the Loan and that it shall have no recourse
against assets of the ESOP included in the Trust other than pursuant to Sections
3 and 8 hereof.

SECTION TWO.  INTEREST AND FEES.

2.1 Interest Rate. The Loan shall bear interest (which the Borrower hereby
promises to pay) prior to maturity (whether by lapse of time, acceleration or
otherwise) at a rate per annum. equal at all times to the Interest Rate. For
purposes of this Agreement, the phrase "Interest Rate" shall mean 7.75% per
annum.

2.2 Basis and Payment Dates. All interest accruing on the Note prior to maturity
shall be due and payable on a quarterly basis on the last Business Day of each
calendar quarter (commencing September 30, 1997) and at maturity (unless prepaid
in whole prior to such date, then on the date of such prepayment in whole) and
interest accruing after maturity shall be due and payable upon demand. All
interest on the Note shall be computed on the basis of a year of 360 days.

SECTION THREE.  COLLATERAL.

3.1 Grant of Security Interest-Pledged Shares. The Borrower hereby grants,
pledges and assigns to the Lender all issued and outstanding Shares which were
either (i) purchased by the Borrower from the proceeds of the disbursement of
the Loan; or (ii) acquired by the Borrower with the proceeds of a prior exempt
loan within the meaning of Section 54.4975-7(b) of the Regulations, and pledged
as collateral for such prior exempt loan, where the balance of such prior exempt
loan has been repaid with the proceeds of the disbursement of the Loan (the
"Pledged Shares", which shall sometimes be referred to herein as the
"Collateral"). The Pledged Shares shall be evidenced by a stock certificate. -
The assignment and pledge herein granted and provided for is made and given to
secure and shall secure the prompt payment of principal of and interest on the
Note as and when the same becomes due and payable and the payment,



<PAGE>


observance and performance of any and all obligations and liabilities arising 
under or provided for in this Agreement or the Note or any of them in each
instance as the same may be amended or modified and whether now existing or
hereafter arising.

3.2 Further Assurances. The Borrower covenants and agrees that it will at any
time and from time to time as requested by the Lender execute and deliver such
further instruments and do and perform such other acts as the Lender may
reasonably deem necessary or desirable to provide for or perfect the lien of the
Lender in the Collateral hereunder.

3.3 Voting. Upon the occurrence of a Default or an Event of Default (as defined
in Section 3.5 below), the Lender shall have the right to transfer the
Collateral or any part thereof into its name or into the name of its nominee.
The Lender shall not be entitled to vote the Pledged Shares unless and until an
Event of Default has occurred and so long as the same shall not have been waived
by the Lender.

3.4 Partial Releases. The Lender agrees, provided always that no Default or
Event of Default (as defined in Section 3.5 below) shall have occurred and be
continuing, as promptly as is practicable after December 31 of each year (the
period commencing with the effective date of the ESOP, specified above, and
ending December 31, 1997 and each subsequent 12-month period ending on December
31 being hereinafter referred to as a "Plan Year"), to release that number of
Pledged Shares then being held to secure the Loan which is equal to the number
of such Pledged Shares held as of the last day of the Plan Year multiplied by a
fraction, the numerator of which is the aggregate amount of all principal
payments made on the Note during the Plan Year and the denominator of which is
the sum of the numerator plus the unpaid principal of the Note as of the last
day of such Plan Year.

3.5 Default or Event of Default.  For purposes of this Agreement:

(a)The term "Default" shall mean any event or condition which. with the lapse of
time, the giving of notice, or both would constitute an Event of Default.

(b)The phrase "Event of Default" shall mean any event or condition specified as
such in Section 9.1 hereof.

SECTION FOUR.  PAYMENTS.

4.1 Place and Application. All payments of principal, interest, fees and all
other amounts payable hereunder shall be made to the Lender at One South Church
Street, Goshen, New York 10924, for the account of the Lender (or at such other
place for the account of the Lender as the Lender may from time to time in
writing specify to the Borrower) in immediately available and freely
transferable funds at the places of payment. All payments shall be paid in full
without setoff or counterclaim and without reduction for and free from any and
all taxes, levies, duties, fees, charges, deductions, withholdings, restrictions
or conditions of any nature imposed by any government or any political
subdivision or taxing authority thereof.

4.2 Prepayments. The Borrower shall have the privilege of prepaying in whole or
in part the Note at any time upon giving three (3) Business Days' prior, notice
to the Lender, each such prepayment to be made by the payment of the principal
amount to be prepaid and accrued interest thereon to the date fixed for
prepayment. All such prepayments shall be made without premium or penalty.
Prepayments shall first be applied to the several installments of the Note in
the inverse order of their respective maturities.


<PAGE>

SECTION FIVE.  REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Lender as follows:

5.1 The Trust is a duly organized, validly existing employee stock ownership
trust.

5.2 The proceeds of the disbursement of the Loan shall be applied in their
entirety to the payment of the purchase price for the Pledged Shares.

5.3 The Borrower has full right, power and authority to enter into this
Agreement, to make the borrowings hereunder provided for, to issue the Note in
evidence thereof and to perform each and all of the matters and things herein
and therein provided for and this Agreement does not, and the Note when issued
will not, nor will the performance or observance by the Borrower of any of the
matters or things herein or therein provided, contravene any provision of law or
the Trust or any other covenant or agreement affecting the Trust or any of its
assets. As of the date of tile disbursement of the Loan, the Pledged Shares will
be fully paid and non-assessable and the Pledged Shares will be owned by the
Borrower free and clear of all liens, charges and encumbrances whatsoever,
except for any lien of Lender provided for herein.

5.4 To the best knowledge of the Borrower, and except as disclosed to the
Lender in writing, there is no litigation or governmental proceeding pending,
nor to the knowledge of the Borrower threatened, against the ESOP or Trust.

5.5 The ESOP and Trust have no material liabilities, whether absolute or
contingent, except for those heretofore disclosed to the Lender.

SECTION SIX.  REPRESENTATIONS AND WARRANTIES OF THE LENDER.

The Lender represents and warrants that:

6.1 The Lender is a corporation duly organized under the laws of the State of
Delaware, and is validly existing and in good standing under the laws of the
State of Delaware. The Lender has full power and authority and legal right to
make and perform this Agreement.

6.2 The execution, delivery and performance by the Lender of this Agreement have
been duly authorized by all necessary action by the Lender and is not and will
not violate any provisions of law applicable to the Lender, any rules,
regulations or orders applicable to the Lender or any judgments or decrees
binding upon the Lender. This Agreement is a valid and legally binding
obligation of the Lender enforceable against the Lender in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
generally and the general principles of equity (regardless of whether considered
in a proceeding at law or in equity).

6.3 No authorizations, approvals or consents of, and no filings or registrations
with, any governmental regulatory authority or agency are required for the
execution, delivery or performance by the Lender of this Agreement, or any
transaction contemplated hereby, or for the validity or enforceability against
the Lender hereof except as have already been received or accomplished.

6.4 The execution, delivery and performance of the Agreement and the
consummation of the transactions contemplated hereby will not violate, conflict
with or constitute a default under (i) any of the provisions of the Lender's
Certificate of Incorporation or Bylaws, (h) any provision of 

<PAGE>

any agreement, instrument, order, arbitration award, judgment or decree to which
the Lender is a party or by which it is or its assets are bound, (iii) any
statute, rule or regulation of any federal, state or local government or agency
applicable to the Lender, except in any such case described in (i), (ii) (iii)
above, for any such violations, conflicts or defaults which either individually
or in the aggregate do not have a material adverse effect on the business
properties of the Lender and its subsidiaries, taken as a whole.

6.5 The Lender and the Bank have taken such actions as are required by
applicable law to be taken by it to establish the ESOP and the Trust. The ESOP
qualifies as an "employee stock ownership plan" as defined in Section 4975(e)(7)
of the Code. The ESOP provides that the Under and the "employer", as such term
is defined in the ESOP (the "Employer"), may make contributions to the Trust in
an amount necessary to enable the Trustee to amortize the Loan in accordance
with the terms of the Note and this Agreement, and the Employer shall make such
contributions; provided, however, that no such contributions shall be required
if they would adversely affect the qualification of the ESOP under Section
401(a) of the Code.

6.6 There is no action, suit, investigation or proceeding pending, or to the
best knowledge of the Lender, threatened against or affecting the ESOP before
any court or governmental department, agency or instrumentality.

6.7 The Loan will be an "exempt loan" as that term is defined under Section
54.49757(b)(1)(ii) of the Regulations, provided the "administrator" of the ESOP,
as such term is defined in the ESOP (the "Administrator"), determines that the
interest rate is not more than reasonable; and the transactions contemplated by
this Agreement are not "prohibited transactions" within the meaning of Section
4975 of the Code or Section 406(a) of ERISA. The Lender shall cause the
Administrator to provide the Trustee with an opinion of counsel to such effect,
in a form reasonably satisfactory to counsel for the Trustee, before any
disbursement is. made to the Borrower hereunder.

6.8 Except as otherwise provided in this Agreement, the Shares are not subject
to any restriction on transfer under applicable Federal securities law and may
be freely traded over-the-counter.

SECTION SEVEN.  CONDITIONS PRECEDENT.

The obligation of the Lender to make the Loan shall be subject to satisfaction
of the following conditions precedent:

7.1 The Lender shall have received executed originals of this Agreement and the
Note duly signed and properly completed.

7.2 The Under shall have received (i) either (A) the certificate(s) evidencing
all the Pledged Shares together with duly executed blank stock power(s)
therefore or (B) if such Pledged Shares are not yet available, a duly executed
assignment of all of Borrower's rights to and interest in the Pledged Shares in
the form attached hereto as Exhibit B and (ii) a duly executed irrevocable proxy
with respect to the Pledged Shares in the form attached hereto as Exhibit C.

7.3 The Under shall have received copies (executed or certified, as may be
appropriate) of all legal documents or proceedings taken in connection with the
execution and delivery of this Agreement and Note.

SECTION EIGHT.  COVENANTS.


<PAGE>


Borrower covenants and agrees that so long as any amount remains unpaid on the
Note or the commitment by the Lender to make the Loan hereunder is outstanding,
except to the extent compliance in any case or cases is waived in writing by the
Lender:

8.1 Compliance.

The Borrower will comply with all requirements of the Code, ERISA and any other
law, rule or regulation applicable to it as such laws, rules or regulations
affect the ESOP or the Trust.

8.2 Reports.

(a)The Borrower will maintain a system of accounting for the ESOP and the Trust
in accordance with sound accounting practice and will, from time to time,
furnish to the Lender and its duly authorized representatives, such information
and data with respect to the financial condition of the ESOP and the Trust as
the Lender may reasonably request.

(b)Without any request, the Borrower will furnish to the Lender promptly after
knowledge thereof shall have come to the attention of the Borrower, written
notice of the occurrence of any Default or Event of Default hereunder or of any
threatened or pending litigation or governmental proceeding against the Plan or
the Trust.

8.3 Determination Letter. The Lender shall apply for a determination letter from
the Internal Revenue Service that the Plan and the Trust, taken together,
qualify as an employee stock ownership plan for purposes of Section 4975(e)(7)
of the Code and the rules and regulations thereunder.

SECTION NINE.  EVENTS OF DEFAULT AND REMEDIES.

9.1 Event of Default. Any one or more of the following shall constitute an Event
of Default hereunder:

(a) The Borrower shall default in the payment of principal and/or interest in
respect of the Note or any amounts payable under this Agreement when due;

(b)Any representation, warranty or statement made by the Borrower herein or in
connection with the making of the Loan proves to be incorrect in any material
respect as of the date of the issuance or making thereof,

 (c)The Borrower shall default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in subsections (a) and
(b), inclusive, of this Section 9. 1) contained in this Agreement and such
default shall continue unremedied for a period of 30 days after notice to the
Borrower by the Lender or any other holder of the Note;

(d) The ESOP shall be terminated prior to the expiration of the term of this
Agreement.

9.2 Limitations on Use of Trust Assets. When any Event of Default described in
subsections (a) to (c) of Section 9.1 has occurred and is continuing, the Lender
or the holder of the Note shall have no rights to assets of the Trust other than
(i) contributions (other than contributions of employer securities) that are
made by the Employer to enable the. Borrower to meet its obligations pursuant to
the Loan, cash dividends received by the Borrower on the Shares


<PAGE>

and earnings attributable to the investment of such contributions and dividends
and (ii) the Pledged Stock; provided, however, that the value of Trust assets
transferred to the Lender as a result of an Event of Default shall not exceed
the amount of the repayment then in default, and, provided further, that so 
long as the Lender is a "party in interest" within the meaning of ERISA 
Section 3(14) or a "disqualified person" within the meaning of Section
4975(e)(2) of the Code, a transfer of Trust assets upon default shall be made
only if, and to the extent of, the Borrower's failure to meet the loan's payment
schedule.

9.3 Rights Upon an Event of Default. When any Event of Default has occurred and
is continuing, the Lender may, in addition to such other rights or remedies as
it may have, then or at any time or times thereafter exercise with respect to
the Collateral any, and all -of -the rights, options and remedies of a secured
party under the Uniform Commercial Code of New York (the "UCC"), including,
without limitation, the sale of all or any part of the Collateral at any
brokers' board or any public or private sale, provided, however, that the Lender
shall only be able to exercise such rights and remedies to the extent of all
interest and principal payments which are due and payable as of the date of the
Event of Default and, provided further, that prior to such exercise, the Lender
shall release from the Collateral so much thereof as it would have been required
to release under Section 3.4 hereof if the period from the previous December 31
to the date of such release constituted a Plan Year and no Event of Default had
occurred. The net proceeds of any such sale, after deducting all costs and
expenses incurred in the collection, protection, sale and delivery. of the
Collateral (which expenses Borrower promises to pay) shall be applied first to
the payment of any costs and expenses incurred by the Lender in selling or
otherwise disposing of the Collateral, second, to the payment of the principal
of and the interest on the Note, and, third, ratably as among any other terms of
the indebtedness hereby secured. Any surplus remaining after the full payment
and satisfaction of the foregoing shall be returned to the Borrower or to
whomsoever a court of competent jurisdiction shall determine to be entitled
thereto. Any requirement of said UCC as to reasonable notice shall be met by the
Lender personally delivering or mailing notice (by certified mail - return
receipt requested) to the Borrower at its address as provided in Section 11.6
hereof at least ten (10) days prior to the event giving rise to the requirement
of such notice. In connection with any offer, solicitation or sale of
Collateral, the Lender may restrict bidders and otherwise proceed in whatever
manner it reasonably believes appropriate in order to comply or assure
compliance with applicable legal requirements pertaining to the offer and sale
of securities of the same type as the Collateral.

9.4 ERISA Restrictions. The number of shares of Pledged Stock as to which the
Lender may exercise the rights set forth in this Section 9 may not exceed that
number of shares (then remaining subject to pledge hereunder) which is then
equal in current value to the amount in default under the Note. The remedies set
forth in this Section 9 may only be exercised to the extent consistent with the
restrictions on remedies set forth in Section 408(b)(3) of ERISA and the
regulations thereunder and Section 4975(d)(3) of the Code and the regulations
thereunder.

SECTION TEN.                   RESERVED.

SECTION ELEVEN.               MISCELLANEOUS

11.1 Holidays. If any principal of the Note shall fall due on Saturday, Sunday
or on another day which is a legal holiday for savings institutions in the State
of New York, interest at the rate the Note bears for the period prior to
maturity shall continue to accrue on such principal from the stated date thereof
to and including the next succeeding Business Day on which the same is payable.

11.2 No Waiver, Cumulative Remedies. No delay or failure on the part of the
Lender or the

<PAGE>

part of the holder of the Note in the exercise of any power or
right shall preclude any other or further exercise thereof, or the exercise of
any other power or right, and the rights and remedies hereunder of the Under and
of any holder of the Note are cumulative to, and not exclusive of, any rights or
remedies which any of them would otherwise have.

11.3 Amendments, Etc. No amendment, modification, termination or waiver of any
provision of this Agreement or of the Note nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Lender, and then such consent, modification or waiver
shall be effective only in the specific instance and for the specific purpose
for which given. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other further notice or demand in similar or other
circumstances.

11.4 Survival of Representations. All representations and warranties made herein
or in certificates given in connection with the Loan shall survive the execution
and delivery of this Agreement and of the Note, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.

11.5 Payments. So long as the Lender is the holder of the Note, the Borrower
will promptly and punctually pay the principal of and interest on the Note
without presentment of the Note and without any notation of any such payment
being made on the Note.

11.6  Addresses for Notices.  All communications provided for herein shall be in
writing and shall be deemed to have been given or made when served personally or
when deposited in the United States mail addressed, if to the Borrower at 250
Park Avenue, New York, New York 10177, Attn: James R. McDonald, Vice President,
with copy to Helm, Shapiro, Anito & McCale, P.C., 20 Corporate Woods Boulevard,
Albany, New York 1221 1, Attn: Brian P. Goldstein, Esq.; if to the Lender at One
South Church Street, Goshen, New York 10924, Attn: Clifford E. Kelsey, Jr.,
President, with copy to Serchuk & Zelermyer, LLP, 81 Main Street, White Plains,
New York 10601, Attn: Clifford S. Weber, Esq.; or at such other address as shall
be designated by any party hereto in a written notice to each other party
pursuant to this Section 11.6.

11.7 Headings. Article and Section headings used in this Agreement are for
convenience or reference only and are not a part of this Agreement for any other
purpose.

11.8 Severability of Provisions. Any provision of this Agreement which is
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such unenforceability without impairing the enforceability of
the remaining provisions hereof affecting the enforceability of such provision
in any other jurisdiction.

11.9 Counterparts. This Agreement may be executed in any number of counterparts,
and by different parties hereto on separate counterparts, and all such
counterparts taken together shall be deemed to constitute one and the same
instrument.

11.10 Binding Nature, Governing Law, Etc. This Agreement shall be binding upon
the Borrower and its successors and assigns and shall inure to the benefit of
the Lender and the benefit of its successors and assigns, including any
subsequent holder of the Note. To the extent not preempted by Federal law, this
Agreement and the rights and duties of the parties hereto shall be construed and
determined in accordance with the laws of the State of New York without regard
to principles of conflicts of laws. This Agreement constitutes the entire
understanding of the parties with respect to the subject matter hereof and any
prior agreements, whether written or oral, with respect thereto are superseded
hereby.


<PAGE>

11.11 Concerning the Borrower. The term "Borrower" as used herein shall mean and
include the undersigned as Trustee of the Trust and its successors in trust, not
individually but solely as Trustee under that certain agreement forming the
Trust. The undersigned Trustee assumes no personal or individual liability or
responsibility for payment of the -indebtedness evidenced by the Note or for
observance or performance of the covenants and agreements herein contained or
for the truthfulness of the representations and warranties herein contained, the
undersigned having executed this Agreement and the Note solely in its capacity
as trustee as aforesaid to bind the undersigned. its successors in trust and the
trust estates.

11.12 Limited Liability. Anything contained herein or in the Note to the
contrary notwithstanding, the sole and only recourse of the Under and any other
holder of the Note for payment of the obligations hereunder and under the Note,
as against the Borrower for the payment of the obligations hereunder and under
the Note shall be to (i) the Collateral, (ii) contributions, other than employer
securities not constituting Collateral hereunder, made to the ESOP and the Trust
by sponsoring employers to enable the Borrower to meet its obligations hereunder
and under the Note, and (iii) earnings attributable to the Pledged Shares and to
the investment of such employer contributions, but only to the extent of the
failure of the Borrower to meet the payment schedule of the Loan provided for
herein. The Trust assets may be transferred to Lender upon the occurrence of a
Default or an Event of Default hereunder only upon and to the extent of the
failure of the ESOP to meet the payment schedule of the Loan. In no event may
the value of the Trust assets so transferred exceed the amount of the default.

11.13 Lender's Duty of Care. It is agreed and understood that the Lender's duty
with respect to the Collateral shall be solely to use reasonable care in the
custody and preservation of the Collateral in the Lender's possession, which
shall not include any steps necessary to preserve rights against other parties.

All provisions in this Agreement shall be construed so as to maintain (i) the
ESOP as a qualified leveraged employee stock ownership plan under Sections
401(a) and 4975(e)(7) of the Code, (ii) the Trust as exempt from taxation under
Section 501 (a) of the Code, and (iii) the Loan as an "exempt loan" under the
Exempt Loan Rules.

Upon your acceptance hereof in the manner hereinafter set forth, this Agreement
shall constitute a contract between us for the uses and purposes hereinabove set
forth.

Dated as of this 12TH

day of June 1997.

MARINE MIDLAND BANK, and it successors in trust, as Trustee under the Trust
related to the GSB Financial Corporation Employee Stock Ownership Plan


By: /s/ James McDonald


Accepted and agreed to at Goshen, New York as of the date last above written.

GSB FINANCIAL CORPORATION

By: /s/ Clifford E. Kelsey, Jr.


<PAGE>


EXHIBIT A
PROMISSORY NOTE

Amount Sufficient to Satisfy Loan Amount
Goshen, New York                                                1997

For VALUE RECEIVED, the undersigned, MARINE MIDLAND BANK, not individually but
solely as Trustee under the trust related to the GSB Financial Corporation
Employee Stock Ownership Plan (which trust shall be referred to as the
"Borrower"), promises to pay to the order of GSB FINANCIAL CORPORATION, a
Delaware Corporation (the "Lender") at its office at One South Church Street,
Goshen, New York 10924, the aggregate principal amount of the loan made to the
Borrower under Section 1. 1 of the Loan and Security Agreement hereinafter
referred to in forty consecutive equal quarterly principal installments,
together with all accrued interest on the unpaid principal sum, payable
quarterly commencing on the last business day of September, 1997, and on the
last business day of each and every calendar quarter thereafter, except that the
final installment in the amount of all principal and interest not sooner paid
shall be due on June 30, 2007, the final maturity hereof. Each such principal
installment shall equal the unpaid principal balance on-the due date of the
installment multiplied by a fraction, the numerator of which shall be one and
the denominator of which shall be the number of installments remaining under
this Note, including the installment which is due in the current calendar
quarter.

The Borrower promises to pay interest (computed on the basis of a year of 360
days) at said office on the balance of principal from time to time remaining
outstanding and unpaid hereon at the rate per annum equal at all times to the
Interest Rate as defined in Section 2.1 of the Loan and Security Agreement (as
defined below) on the last business day of each and every calendar quarter,
commencing September, 1997, and on the final maturity date of this Note. On
demand, the Borrower promises to pay interest on any overdue principal hereof
(whether by lapse of time, acceleration, or otherwise) until paid at the stated
rate.

This Note is issued under and subject to the terms and provisions of that
certain GSB Financial Corporation Employee Stock Ownership Plan Trust Loan and
Security Agreement bearing even date herewith by and between the Borrower and
the Lender (the "Loan and Security Agreement") and this Note and the holder
hereof are entitled to all the benefits and security provided for thereby or
referred to therein to which Loan and Security Agreement reference is hereby
made for a statement thereof.

This Note may be declared due prior to its express maturity and voluntary
prepayments may be made hereon, all in the events, on the terms and in the
manner as provided in such Loan and Security Agreement.

Recourse for the payment of this Note has been limited by the provisions of the
Loan and Security Agreement and this Note is expressly made subject to such
provisions. This Note shall be governed by and construed in accordance with the
laws of New York without regard to principles of conflicts of laws.  The
Borrower hereby waives presentment for payment and demand.

Upon the occurrence of an Event of Default as such term is defined in the Loan
and Security Agreement, at the option of the Lender, all amounts payable by the
Borrower to the Lender under the terms of this Note may immediately become due
and payable by the Borrower to the Lender subject to the provisions of Section
9.2 of the Loan and Security Agreement, and the Lender shall have all of the
rights, powers, and remedies available under the terms of this Note, any of the


<PAGE>


other documents evidencing and securing this Loan and all applicable laws. The
Borrower and all endorsers, guarantors, and other parties who may now or in the
future be primarily or secondarily liable for the payment of indebtedness
evidenced by this Note hereby severally waive presentment, protest and demand,
notice of protest, notice of demand and of dishonor and non-payment of this Note
and expressly agree that this Note or any payment hereunder may be extended from
time to time without in any way affecting the liability of the Borrower,
guarantors and endorsers.



MARINE MIDLAND BANK, and it successors in trust, as Trustee under the Trust
related to the GSB Financial Corporation Employee Stock Ownership Plan


By:
As its:


<PAGE>



SCHEDULE B
FORM OF ASSIGNMENT

In consideration of the loan made by GSB Financial Corporation (the "Lender") to
the trust related to the GSB Financial Corporation Employee Stock Ownership Plan
(the "Trust") pursuant to the GSB Financial Corporation Employee Stock Ownership
Plan Trust Loan and Security Agreement (the "Loan Agreement") of even date
hereof between the Lender and the Trust, and subject to the terms and conditions
of the Loan Agreement, which are incorporated herein by this reference, the
undersigned Trust hereby transfers, assigns and conveys to the Under all its
right, title and interest in and to those certain shares of common stock of the
Lender which it shall purchase with the proceeds of the loan made pursuant to
the Loan Agreement, and agrees to transfer and endorse to the Lender the
certificates representing such shares promptly upon its receipt thereof.

Dated:                         1997

MARINE MIDLAND BANK, and it successors in trust, as Trustee under the Trust
related to the GSB Financial Corporation Employee Stock Ownership Plan


By:
As its


<PAGE>



SCHEDULE C
FORM OF IRREVOCABLE PROXY

In consideration of the loan made by GSB Financial Corporation (the "Lender") to
the trust related to the GSB Financial Corporation Employee Stock Ownership Plan
(the "Trust") pursuant to the GSB Financial Corporation Employee Stock Ownership
Plan Trust Loan and Security Agreement (the "Loan Agreement") of even date
hereof between the Lender and the Trust, and subject to the terms and conditions
of the Loan Agreement, which are incorporated herein by this reference,, the
undersigned Trust hereby appoints the Lender as its proxy, with power of
substitution, to represent and to vote those certain shares of common stock of
the Lender which it shall purchase with the proceeds of the loan made pursuant
to the Loan Agreement. This proxy, when properly executed, shall be irrevocable
and shall give the Lender full power and authority to vote on any and all
matters for which other holders of shares of common stock of the Lender are
entitled to vote.


Dated:                               1997


MARINE MIDLAND BANK, and it successors in trust, as Trustee under the Trust
related to the GSB Financial Corporation Employee Stock Ownership Plan

By:
As its: