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                                                                 Exhibit 4.1

                        THE TRANSFER OF THIS AGREEMENT IS
                     SUBJECT TO CERTAIN PROVISIONS CONTAINED
                      HEREIN AND MAY BE SUBJECT TO TRANSFER
                               RESTRICTIONS UNDER
                              FEDERAL AND STATE LAW

                             STOCK OPTION AGREEMENT

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

         STOCK OPTION AGREEMENT, dated as of November 13, 2001 (this
"Agreement"), by and between Atlantic Bank of New York, a New York State
chartered commercial bank ("Grantee"), and Yonkers Financial Corporation, a
Delaware corporation ("Issuer").

                                    RECITALS

         A. THE PLAN. Grantee and Issuer have entered into an Agreement and Plan
of Merger, dated as of November 13, 2001 (the "Plan"), which Plan has been
executed by the parties hereto prior to this Agreement.

         B. CONDITION TO THE PLAN. As a condition and an inducement to Grantee's
execution and delivery of the Plan, Issuer has agreed to grant Grantee the
Option (as hereinafter defined).

         NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, Issuer and Grantee agree as
follows:

         1. DEFINED TERMS. Capitalized terms which are used but not defined
herein shall have the meanings ascribed to such terms in the Plan.

         2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an unconditional, irrevocable option
(the "Option") to purchase up to 443,519 shares of common stock, par value $0.01
per share ("Issuer Common Stock"), of Issuer (as adjusted as set forth herein,
the "Option Shares," which shall include the Option Shares before and after any
transfer of such Option Shares, but in no event shall the number of Option
Shares for which this Option is exercised exceed 19.9% of the issued and
outstanding shares of Issuer Common Stock), at a purchase price per Option Share
(as adjusted as set forth herein, the "Purchase Price") equal to $24.45.

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         3. EXERCISE OF OPTION.

         (a) Provided that (i) Grantee or Holder (as hereinafter defined), as
applicable, shall not be in material breach of any representation, warranty,
covenant or agreement contained in this Agreement or the Plan, and (ii) no
preliminary or permanent injunction or other order against the delivery of
Option Shares issued by any court of competent jurisdiction in the United States
shall be in effect, Holder may exercise the Option, in whole or in part, at any
time and from time to time, following the occurrence of a Purchase Event (as
hereinafter defined) which occurs prior to the occurrence of an Exercise
Termination Event (as hereinafter defined); provided, that Holder shall have
sent written notice of such exercise (as provided in subsection (e) of this
Section 3) within six (6) months after the later to occur of (i) the occurrence
of a Purchase Event or (ii) notice by Issuer to Grantee of a Purchase Event. The
Option shall terminate and be of no further force or effect upon the earliest to
occur of the following (each an "Exercise Termination Event"): (A) the Effective
Time, (B) termination of the Plan in accordance with the terms thereof prior to
the occurrence of a Purchase Event or a Preliminary Purchase Event other than a
termination thereof by Grantee pursuant to Section 6.01(b)(ii) of the Plan (a
termination of the Plan by Grantee pursuant to such Section of the Plan, being
referred to herein as a "Default Termination"), (C) 15 months after a Default
Termination, or (D) 15 months after termination of the Plan (other than a
Default Termination) following the occurrence of a Purchase Event or a
Preliminary Purchase Event; provided, however, that any purchase of the Option
Shares shall be subject to compliance with applicable law; provided further,
however, that if the Option cannot be exercised on any day because of an
injunction, order or similar restraint issued by a court of competent
jurisdiction, the period during which the Option may be exercised shall be
extended so that the Option shall expire no earlier than the tenth business day
after such injunction, order or restraint shall have been dissolved or when such
injunction, order or restraint shall have become permanent and no longer subject
to appeal, as the case may be. The term "Holder" shall mean the holder or
holders of the Option from time to time, and which initially is Grantee. The
rights set forth in Sections 8 and 9 of this Agreement shall terminate when the
right to exercise the Option and Substitute Option (as hereinafter defined)
terminate (other than as a result of a complete exercise of the Option or
Substitute Option) as set forth herein.

         (b) As used herein, a "Purchase Event" means any of the following
events occurring after the date hereof:

                  (i) without Grantee's prior written consent, Issuer shall have
         authorized, recommended, publicly proposed or publicly announced an
         intention to authorize, recommend or propose, or Issuer shall have
         entered into an agreement with any person (other than Grantee or any
         subsidiary of Grantee) to effect (A) a merger, consolidation or similar
         transaction involving Issuer or any of its significant subsidiaries,
         (B) the disposition, by sale, lease, exchange or otherwise, of assets
         or deposits of Issuer or any of its significant subsidiaries
         representing in either case 25% or more of the consolidated assets or
         deposits of Issuer and its subsidiaries or (C) the issuance, sale or
         other disposition by Issuer of (including by way of merger,
         consolidation, share exchange or any similar transaction) securities
         representing 25% or more of the voting power of Issuer or any of its
         significant

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         subsidiaries (each of (A), (B) or (C), an "Acquisition Transaction");
         provided, however, that in no event shall any merger, consolidation,
         purchase or similar transaction involving only Issuer and one or more
         of its subsidiaries, or involving only any two or more of such
         subsidiaries be deemed to be an Acquisition Transaction, provided that
         any such transaction is not entered into in violation of the terms of
         the Plan; or

                  (ii) any person (other than Grantee or any subsidiary of
         Grantee) shall have acquired beneficial ownership (as such term is
         defined in Rule 13d-3 promulgated under the Securities Exchange Act of
         1934, as amended (the "Exchange Act")) of, or the right to acquire
         beneficial ownership of, or any "group" (as such term is defined in
         Section 13(d)(3) of the Exchange Act), other than a group of which
         Grantee or any subsidiary of Grantee is a member, shall have been
         formed which beneficially owns, or has the right to acquire beneficial
         ownership of, 25% or more of the voting power of Issuer or any of its
         significant subsidiaries.

         (c) As used herein, a "Preliminary Purchase Event" means any of the
following events occurring after the date hereof:

                  (i) any person (other than Grantee, any subsidiary of Grantee
         or any transferee of the Option) shall have commenced (as such term is
         defined in Rule 14d-2, promulgated under the Exchange Act) or shall
         have filed a registration statement under the Securities Act of 1933,
         as amended (the "Securities Act"), with respect to, a tender offer or
         exchange offer to purchase any shares of Issuer Common Stock such that,
         upon consummation of such offer, such person would own or control 20%
         or more of the then outstanding shares of Issuer Common Stock (such an
         offer being referred to herein as a "Tender Offer" or an "Exchange
         Offer," respectively); or

                  (ii) the stockholders of Issuer shall not have approved the
         Plan by the requisite vote at the meeting of the stockholders of Issuer
         called for that purpose ("Issuer Meeting"), the Issuer Meeting shall
         not have been held or shall have been canceled prior to termination of
         the Plan, or Issuer's Board of Directors shall have publicly withdrawn
         or modified in a manner adverse to Grantee the recommendation of
         Issuer's Board of Directors with respect to the Plan, in each case
         after it shall have been publicly announced that any person (other than
         Grantee or any subsidiary of Grantee) shall have (A) made, or disclosed
         an intention to make, a bona fide proposal to engage in an Acquisition
         Transaction, (B) commenced a Tender Offer or filed a registration
         statement under the Securities Act with respect to an Exchange Offer or
         (C) filed an application (or given a notice), whether in draft or final
         form, under the Home Owners' Loan Act of 1933, as amended, the Bank
         Holding Company Act, as amended, the Bank Merger Act, as amended, or
         the Change in Bank Control Act of 1978, as amended, for approval to
         engage in an Acquisition Transaction; or

                  (iii) any person (other than Grantee or any subsidiary of
         Grantee) shall have made a bona fide proposal to Issuer or its
         stockholders by public announcement, or written

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         communication that is or becomes the subject of public disclosure, to
         engage in an Acquisition Transaction; or

                  (iv) after a proposal is made by a third party to Issuer or
         its stockholders to engage in an Acquisition Transaction, or such third
         party states its intention to Issuer to make such a proposal if the
         Plan terminates, Issuer shall breach any covenant or agreement
         contained in the Plan and such breach would entitle Grantee to
         terminate the Plan under Section 6.01(b)(ii) thereof (without regard to
         the cure period provided for therein unless such cure is promptly
         effected without jeopardizing consummation of the transactions
         contemplated in the Plan).

         As used in this Agreement, the term "person" shall have the meaning
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.

         (d) Issuer shall notify Grantee promptly in writing of the occurrence
of any Preliminary Purchase Event or Purchase Event of which it has knowledge,
it being understood that the giving of such notice by Issuer shall not be a
condition to the right of Holder to exercise the Option.

         (e) In the event Holder wishes to exercise the Option (in whole or in
part), it shall send to Issuer a written notice (the "Option Exercise Notice,"
the date of which being herein referred to as the "Notice Date") specifying (i)
the total number of Option Shares it intends to purchase pursuant to such
exercise and (ii) a place and date not earlier than three business days nor
later than 15 business days from the Notice Date for the closing (the "Closing")
of such purchase (such date as it may be extended pursuant to the next sentence,
the "Closing Date"). If prior notification to or approval of any federal or
state regulatory authority having jurisdiction over insured depositary
institutions or their holding companies, the Securities and Exchange Commission
(the "SEC"), the NASD or any other self-regulatory organization (each, a
"Regulatory Authority") is required in connection with any such purchase, Issuer
shall cooperate with Holder in the filing of the required notice or application
for approval and the obtaining of such approval, and, in the event that such
regulatory approvals must be obtained or mandatory waiting periods must expire
prior to Closing, the Closing shall occur promptly following receipt of any such
required regulatory approvals and the expiration of any such mandatory waiting
periods. Any exercise of the Option shall be deemed to occur on the Notice Date
relating thereto.

         4. PAYMENT AND DELIVERY OF CERTIFICATES.

         (a) On each Closing Date, Holder shall (i) pay to Issuer, in
immediately available funds by wire transfer to a bank account designated by
Issuer, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date and (ii) present and surrender this
Agreement to Issuer at the address of Issuer specified in Section 14(f) of this
Agreement; provided that failure or refusal of Issuer to designate a bank
account shall not preclude Holder from exercising the Option.

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         (b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a) of
this Agreement, (i) Issuer shall deliver to Holder (A) a certificate or
certificates representing the Option Shares to be purchased at such Closing,
which Option Shares shall be free and clear of all Liens (as defined in the
Plan) and subject to no preemptive rights, and (B) if the Option is exercised in
part only, an executed new agreement with the same terms as this Agreement
evidencing the right to purchase the balance of the shares of Issuer Common
Stock purchasable hereunder, and (ii) Holder shall deliver to Issuer a letter
agreeing that Holder shall not offer to sell or otherwise dispose of such Option
Shares in violation of applicable federal and state law or of the provisions of
this Agreement.

         (c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:

THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF NOVEMBER 13, 2001. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.

It is understood and agreed that the portion of the above legend relating to the
Securities Act shall be removed by delivery of substitute certificate(s) without
such legend if Holder shall have delivered to Issuer a copy of a letter from the
staff of the SEC, or an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such legend is not
required for purposes of the Securities Act.

         (d) Upon the giving by Holder to Issuer of the Option Exercise Notice,
the tender of the applicable purchase price in immediately available funds and
the tender of this Agreement to Issuer, Holder shall be deemed to be the holder
of record of the shares of Issuer Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of Issuer shall then be closed or
that certificates representing such shares of Issuer Common Stock shall not then
be actually delivered to Holder. Issuer shall pay all expenses, and any and all
United States federal, state and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section 4 in the name of Holder or its assignee,
transferee or designee.

         (e) Issuer agrees (i) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Issuer Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock, (ii) that it will not, by charter amendment or through reorganization,
consolidation, merger, dissolution or sale of assets, or by any other voluntary
act, avoid or seek to avoid the observance or performance of any of the
covenants, stipulations or  to be observed or performed hereunder by
Issuer,

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(iii) promptly to take all action as may from time to time be required
(including (A) complying with all premerger notification, reporting and waiting
period requirements and (B) in the event, under any applicable federal or state
banking law, prior approval of or notice to any Regulatory Authority is
necessary before the Option may be exercised, cooperating fully with Holder in
preparing such applications or notices and providing such information to such
Regulatory Authority as it may require) in order to permit Holder to exercise
the Option and Issuer to duly and effectively issue shares of Issuer Common
Stock pursuant hereto, and (iv) promptly to take all action provided herein to
protect the rights of Holder against dilution.

         5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby represents
and warrants to Grantee (and Holder, if different than Grantee) as follows:

         (a) CORPORATE AUTHORITY. Issuer has full corporate power and authority
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby; the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by the Board of Directors of Issuer, and no other corporate
proceedings on the part of Issuer are necessary to authorize this Agreement or
to consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by Issuer.

         (b) BENEFICIAL OWNERSHIP. To the best knowledge of Issuer, as of the
date of this Agreement, no person or group, except Gould Investors, L.P. and
members of the group identified in the Schedule 13D, as amended, dated
December 13, 2000, filed by Gould Investors, L.P. with the Securities and
Exchange Commission (the "SEC") and the Yonkers Financial Corporation
Employee Stock Ownership Plan, has beneficial ownership of more than 10% of
the issued and outstanding shares of Issuer Common Stock.

         (c) SHARES RESERVED FOR ISSUANCE; CAPITAL STOCK. Issuer has taken all
necessary corporate action to authorize and reserve and permit it to issue, and
at all times from the date hereof through the termination of this Agreement in
accordance with its terms, will have reserved for issuance upon the exercise of
the Option, that number of shares of Issuer Common Stock equal to the maximum
number of Option Shares at any time, and from time to time, purchasable upon
exercise of the Option, and all such Option Shares, upon issuance pursuant to
the Option, will be duly authorized, validly issued, fully paid and
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests (other than those created by this Agreement)
and not subject to any preemptive rights.

         (d) NO VIOLATIONS. The execution, delivery and performance of this
Agreement does not and will not, and the consummation by Issuer of any of the
transactions contemplated hereby will not, constitute or result in (i) a breach
or violation of, or a default under, its certificate of incorporation or bylaws,
or the comparable governing instruments of any of its subsidiaries, or (ii) a
breach or violation of, or a default under, any agreement, lease, contract,
note, mortgage, indenture, arrangement or other obligation of it or any of its
subsidiaries (with or without the giving of notice, the lapse of time or both)
or under any law, rule, ordinance, regulation, judgment, decree, order, award or
governmental or non-governmental permit or license to which it or any of its
subsidiaries

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is subject, that would, in the case of (ii), give any other person the ability
to prevent or enjoin Issuer's performance under this Agreement.

         6. REPRESENTATIONS AND WARRANTIES OF GRANTEE.

         (a) Grantee hereby represents and warrants to Issuer that Grantee has
full corporate power and authority to enter into this Agreement and, subject to
obtaining the approvals referred to in this Agreement, to consummate the
transactions contemplated by this Agreement; the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Grantee; and
this Agreement has been duly executed and delivered by Grantee.

         (b) The Option is being acquired for investment and is not being, and
any shares of Issuer Common Stock or other securities acquired by Grantee upon
exercise of the Option are being acquired for investment and will not be,
acquired with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered, or
exempt from registration, under the Securities Act.

         7. ADJUSTMENT UPON CHANGES IN ISSUER CAPITALIZATION, ETC.

         (a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, stock split, split-up, recapitalization, combination,
conversion, subdivision, exchange of shares or similar transaction, the type and
number of shares or securities subject to the Option, and the Purchase Price
therefor, shall be adjusted appropriately, and proper provision shall be made in
the agreement or instrument governing any such transaction so that Holder shall
receive, upon exercise of the Option, the number and class of shares or other
securities or property that Holder would have received in respect of Issuer
Common Stock if the Option had been exercised immediately prior to such event,
or the record date therefor, as applicable. If any additional shares of Issuer
Common Stock are issued after the date of this Agreement (other than pursuant to
an event described in the first sentence of this Section 7(a), upon exercise of
any option to purchase Issuer Common Stock outstanding on the date hereof or
upon conversion into Issuer Common Stock of any convertible security of Issuer
outstanding on the date hereof), the number of shares of Issuer Common Stock
subject to the Option shall be adjusted so that, after such issuance, exercise
or conversion, the Option, together with any shares of Issuer Common Stock
previously issued pursuant hereto, equals 19.9% of the number of shares of
Issuer Common Stock then issued and outstanding, without giving effect to any
shares subject to or issued pursuant to the Option. No provision of this Section
7 shall be deemed to affect or change, or constitute authorization for any
violation of, any of the covenants or representations in the Plan.

         (b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
subsidiaries, and Issuer shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Grantee or
one of its subsidiaries, to merge into Issuer and Issuer shall be the continuing
or surviving corporation, but, in connection with such merger, the then
outstanding shares of Issuer Common

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Stock shall be changed into or exchanged for stock or other securities of Issuer
or any other person or cash or any other property, or the outstanding shares of
Issuer Common Stock immediately prior to such merger shall, after such merger,
represent less than 50% of the outstanding shares and share equivalents of the
merged company, or (iii) to sell or otherwise transfer all or substantially all
of its assets or deposits to any person, other than Grantee or one of its
subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Holder, to purchase shares of either (A) the
Acquiring Corporation (as hereinafter defined), (B) any person that controls the
Acquiring Corporation or (C) in the case of a merger described in clause (ii),
Issuer (such person being referred to as "Substitute Option Issuer").

         (c) The Substitute Option shall have the same terms as the Option;
provided, that, if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to Holder. Substitute Option Issuer shall also enter
into an agreement with Holder in substantially the same form as this Agreement,
which shall be applicable to the Substitute Option.

         (d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock (as hereinafter defined) as is equal to the
Assigned Value (as hereinafter defined) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided by
the Average Price (as hereinafter defined). The exercise price of the Substitute
Option per share of Substitute Common Stock (the "Substitute Option Price")
shall be equal to the Purchase Price multiplied by a fraction in which the
numerator is the number of shares of Issuer Common Stock for which the Option
was theretofore exercisable and the denominator is the number of shares of the
Substitute Common Stock for which the Substitute Option is exercisable.

         (e) The following terms have the meanings indicated:

                  (i) "Acquiring Corporation" shall mean (A) the continuing or
         surviving corporation of a consolidation or merger with Issuer (if
         other than Issuer), (B) Issuer in a merger in which Issuer is the
         continuing or surviving person or (C) the transferee of all or
         substantially all of Issuer's assets (or a substantial part of the
         assets of its subsidiaries taken as a whole).

                  (ii) "Substitute Common Stock" shall mean the shares of
         capital stock (or similar equity interest) with the greatest voting
         power in respect of the election of directors (or persons similarly
         responsible for the direction of the business and affairs) of the
         Substitute Option Issuer.

                  (iii) "Assigned Value" shall mean the highest of (A) the price
         per share of Issuer Common Stock at which a Tender Offer or an Exchange
         Offer therefor has been made, (B) the price per share of Issuer Common
         Stock to be paid by any third party pursuant to an agreement with
         Issuer, (C) the highest closing price for shares of Issuer Common Stock

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         within the 60-day period immediately preceding the consolidation,
         merger or sale in question and (D) in the event of a sale of all or
         substantially all of Issuer's assets or deposits, an amount equal to
         (x) the sum of the price paid in such sale for such assets (and/or
         deposits) and the current market value of the remaining assets of
         Issuer, as determined by a nationally recognized investment banking
         firm selected by Holder, divided by (y) the number of shares of Issuer
         Common Stock outstanding at such time. In the event that a Tender Offer
         or an Exchange Offer is made for Issuer Common Stock or an agreement is
         entered into for a merger or consolidation involving consideration
         other than cash, the value of the securities or other property issuable
         or deliverable in exchange for Issuer Common Stock shall be determined
         by a nationally recognized investment banking firm selected by Holder.

                  (iv) "Average Price" shall mean the average closing price of a
         share of Substitute Common Stock for the one year period immediately
         preceding the consolidation, merger or sale in question, but in no
         event higher than the closing price of the shares of Substitute Common
         Stock on the day preceding such consolidation, merger or sale;
         provided, that, if Issuer is the issuer of the Substitute Option, the
         Average Price shall be computed with respect to a share of common stock
         issued by Issuer, the person merging into Issuer or by any company
         which controls such person, as Holder may elect.

         (f) In no event, pursuant to any of the foregoing paragraphs, shall the
number of shares of Substitute Common Stock for which the Substitute Option is
exercisable exceed 19.9% of the issued and outstanding shares of Substitute
Common Stock immediately prior to exercise of the Substitute Option. In the
event that the Substitute Option would be exercisable for more than 19.9% of the
issued and outstanding shares of Substitute Common Stock but for the limitation
in the first sentence of this Section 7(f), Substitute Option Issuer shall make
a cash payment to Holder equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in the first sentence of this
Section 7(f) over (ii) the value of the Substitute Option after giving effect to
the limitation in the first sentence of this Section 7(f). This difference in
value shall be determined by a nationally recognized investment banking firm
selected by Holder.

         (g) Issuer shall not enter into any transaction described in Section
7(b) of this Agreement unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assume in writing all the obligations of
Issuer hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation, any action that may be necessary so that the holders of the other
shares of common stock issued by Substitute Option Issuer are not entitled to
exercise any rights by reason of the issuance or exercise of the Substitute
Option and the shares of Substitute Common Stock do not have lesser economic
value (other than any diminution in value resulting from the fact that the
shares of Substitute Common Stock may be restricted securities, as defined in
Rule 144, promulgated under the Securities Act ("Rule 144"), or any successor
provision) than other shares of common stock issued by Substitute Option
Issuer).

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         8. REPURCHASE AT THE OPTION OF HOLDER.

         (a) Subject to the last sentence of Section 3(a) of this Agreement, at
the request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d) hereof) and ending 12 months
immediately thereafter, Issuer shall repurchase from Holder (i) the Option and
(ii) all shares of Issuer Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which Holder
exercises its rights under this Section 8 is referred to as the "Section 8
Request Date." Such repurchase shall be at an aggregate price (the "Section 8
Repurchase Consideration") equal to the sum of:

                  (i)   the aggregate Purchase Price paid by Holder for any
         shares of Issuer Common Stock acquired pursuant to the Option with
         respect to which Holder then has beneficial ownership;

                  (ii)  the excess, if any, of (A) the Applicable Price (as
         defined below) for each share of Issuer Common Stock over (B) the
         Purchase Price (subject to adjustment pursuant to Section 7 of this
         Agreement), multiplied by the number of shares of Issuer Common Stock
         with respect to which the Option has not been exercised; and

                  (iii) the excess, if any, of the Applicable Price over the
         Purchase Price (subject to adjustment pursuant to Section 7 of this
         Agreement) paid (or, in the case of Option Shares with respect to which
         the Option has been exercised but the Closing Date has not occurred,
         payable) by Holder for each share of Issuer Common Stock with respect
         to which the Option has been exercised and with respect to which Holder
         then has beneficial ownership, multiplied by the number of such shares.

         (b) If Holder exercises its rights under this Section 8, Issuer shall,
within 10 business days after the Section 8 Request Date, pay the Section 8
Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment, Holder shall surrender to Issuer the Option
and the certificates evidencing the Option Shares purchased thereunder with
respect to which Holder then has beneficial ownership, and Holder shall warrant
that it has sole record and beneficial ownership of such shares and that the
same are then free and clear of all Liens. Notwithstanding the foregoing, to the
extent that prior notification to or approval of any Regulatory Authority is or
becomes required for any reason in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, Holder shall have the ongoing
option to revoke its request for repurchase pursuant to this Section 8, in whole
or in part, or to require that Issuer deliver from time to time that portion of
the Section 8 Repurchase Consideration that it is not then so prohibited from
paying and promptly file the required notice or application for approval and
expeditiously process the same (and each party shall cooperate with the other in
the filing of any such notice or application and the obtaining of any such
approval). If any Regulatory Authority disapproves of any part of Issuer's
proposed repurchase pursuant to this Section 8, Issuer shall promptly give
notice of such fact to Holder, and Holder shall have the right (i) to revoke the
repurchase request or (ii) to the extent permitted by such Regulatory Authority,
determine whether the repurchase should apply to the Option and/or Option Shares
and to what extent to each, and

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Holder shall thereupon have the right to exercise the Option as to the number of
Option Shares for which the Option was exercisable at the Section 8 Request Date
less the number of shares covered by the Option in respect of which payment has
been made pursuant to Section 8(a)(ii) of this Agreement. Holder shall notify
Issuer of its determination under the preceding sentence within five business
days of receipt of notice of disapproval of the repurchase. Notwithstanding
anything herein to the contrary, in the event that Issuer delivers to Holder
written notice accompanied by a certification of Issuer's independent auditor
each stating that a requested repurchase of Issuer Common Stock would result in
the recapture of Issuer's bad debt reserves under the Internal Revenue Code of
1986, as amended (the "Code"), Holder's repurchase request shall be deemed to be
automatically revoked. Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date of termination
of this Option pursuant to Section 3(a) of this Agreement.

         (c) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i) hereof, (ii) the
price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger, sale or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement, or (iii) the highest closing sales price per share of Issuer Common
Stock quoted on The Nasdaq Stock Market ("Nasdaq") (or if Issuer Common Stock is
not quoted on Nasdaq, the highest bid price per share as quoted on the principal
trading market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Holder) during the 40 business days
preceding the Section 8 Request Date; provided, however that in the event of a
sale of less than all of Issuer's assets, the Applicable Price shall be the sum
of the price paid in such sale for such assets and the current market value of
the remaining assets of Issuer as determined by a nationally recognized
investment banking firm selected by Holder, divided by the number of shares of
the Issuer Common Stock outstanding at the time of such sale; provided further,
that in no event shall the Applicable Price be greater than the Market Price (as
defined in, and determined at the time specified in, Article Tenth, Section B of
Issuer's certificate of incorporation). If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking firm selected
by Holder and reasonably acceptable to Issuer, which determination shall be
conclusive for all purposes of this Agreement.

         (d) As used herein, "Repurchase Event" shall occur if (i) any person
(other than Grantee or any subsidiary of Grantee) shall have acquired beneficial
ownership of (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), or the right to acquire beneficial ownership of, or any "group"
(as such term is defined under the Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, 50% or
more of the then outstanding shares of Issuer Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement shall be consummated.

                                      -11-
<Page>

         9. REPURCHASE OF SUBSTITUTE OPTION.

         (a) Subject to the last sentence of Section 3(a) of this Agreement, at
the request of Holder at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d) hereof) and ending 12 months
immediately thereafter, Substitute Option Issuer (or any successor entity
thereof) shall repurchase from Holder (i) the Substitute Option and (ii) all
shares of Substitute Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which Holder
exercises its rights under this Section 9 is referred to as the "Section 9
Request Date." Such repurchase shall be at an aggregate price (the "Section 9
Repurchase Consideration") equal to the sum of:

                  (i) the aggregate Purchase Price paid by Holder for any shares
         of Substitute Common Stock acquired pursuant to the Substitute Option
         with respect to which Holder then has beneficial ownership;

                  (ii) the excess, if any, of (A) the Highest Closing Price (as
         defined below) for each share of Substitute Common Stock over (B) the
         Purchase Price (subject to adjustment pursuant to Section 7 of this
         Agreement), multiplied by the number of shares of Substitute Common
         Stock with respect to which the Substitute Option has not been
         exercised; and

                  (iii) the excess, if any, of the Highest Closing Price over
         the Purchase Price (subject to adjustment pursuant to Section 7 of this
         Agreement) paid (or, in the case of Substitute Option Shares with
         respect to which the Substitute Option has been exercised but the
         Closing Date has not occurred, payable) by Holder for each share of
         Substitute Common Stock with respect to which the Substitute Option has
         been exercised and with respect to which Holder then has beneficial
         ownership, multiplied by the number of such shares.

         (b) If Holder exercises its rights under this Section 9, Substitute
Option Issuer shall, within 10 business days after the Section 9 Request Date,
pay the Section 9 Repurchase Consideration to Holder in immediately available
funds, and contemporaneously with such payment, Holder shall surrender to
Substitute Option Issuer the Substitute Option and the certificates evidencing
the shares of Substitute Common Stock purchased thereunder with respect to which
Holder then has beneficial ownership, and Holder shall warrant that it has sole
record and beneficial ownership of such shares and that the same are then free
and clear of all Liens. Notwithstanding the foregoing, to the extent that prior
notification to or approval of any Regulatory Authority is required in
connection with the payment of all or any portion of the Section 9 Repurchase
Consideration, Holder shall have the ongoing option to revoke its request for
repurchase pursuant to this Section 9, in whole or in part, or to require that
Substitute Option Issuer deliver from time to time that portion of the Section 9
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval). If any
Regulatory Authority disapproves of any part of Substitute Option Issuer's
proposed repurchase pursuant to this Section 9, Substitute Option Issuer shall
promptly give notice of such fact to Holder, and Holder shall have the right (i)
to revoke the repurchase request or (ii) to the extent permitted by such
Regulatory Authority, determine whether the repurchase should

                                      -12-
<Page>

apply to the Substitute Option and/or Substitute Option Shares and to what
extent to each, and Holder shall thereupon have the right to exercise the
Substitute Option as to the number of Substitute Option Shares for which the
Substitute Option was exercisable at the Section 9 Request Date less the number
of shares covered by the Substitute Option in respect of which payment has been
made pursuant to Section 9(a)(ii) of this Agreement. Holder shall notify
Substitute Option Issuer of its determination under the preceding sentence
within five business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, in the event that Substitute
Option Issuer delivers to Holder written notice accompanied by a certification
of Substitute Option Issuer's independent auditor each stating that a requested
repurchase of Issuer Common Stock would result in the recapture of Substitute
Option Issuer's bad debt reserves under the Code, Holder's repurchase request
shall be deemed to be automatically revoked.

         Notwithstanding anything herein to the contrary, all of Holder's rights
under this Section 9 shall terminate on the date of termination of this
Substitute Option pursuant to Section 3(a) of this Agreement.

         (c) For purposes of this Agreement, the "Highest Closing Price" means
the highest of closing sales price for shares of Substitute Common Stock quoted
on Nasdaq (or if the Substitute Common Stock is not quoted on Nasdaq, on the
principal trading market on which such shares are traded as reported by a
recognized source) during the six-month period preceding the Section 9 Request
Date.

         10. REGISTRATION RIGHTS.

         (a) DEMAND REGISTRATION RIGHT. Issuer shall, subject to the conditions
of Section 10(c) of this Agreement, if requested by any Holder, including
Grantee and any permitted transferee ("Selling Shareholder"), promptly prepare
and file a registration statement under applicable laws and regulations, if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities that have been
acquired by or are issuable to the Selling Shareholder upon exercise of the
Option in accordance with the intended method of sale or other disposition
stated by the Selling Shareholder in such request, including without limitation
a "shelf" registration statement under applicable laws and regulations, and
Issuer shall use its best efforts to qualify such shares or other securities for
sale under any applicable state securities laws.

         (b) ADDITIONAL REGISTRATION RIGHTS. If Issuer, at any time after the
exercise of the Option, proposes to register any shares of Issuer Common Stock
under applicable laws and regulations in connection with an underwritten public
offering of such Issuer Common Stock, Issuer will promptly give written notice
to the Selling Shareholders of its intention to do so and, upon the written
request of any Selling Shareholder given within 30 days after receipt of any
such notice (which request shall specify the number of shares of Issuer Common
Stock intended to be included in such underwritten public offering by the
Selling Shareholder), Issuer will cause all such shares for which a Selling
Shareholder requests participation in such registration, to be so registered and
included in such underwritten public offering; provided, however, that Issuer
may elect to not cause any such shares to be so registered (i) if the
underwriters in good faith object for valid business reasons, or (ii) in the

                                      -13-
<Page>

case of a registration solely to implement an employee benefit plan or a
registration filed on Form S-4 of the Securities Act or any equivalent or
successor Form. If some, but not all the shares of Issuer Common Stock, with
respect to which Issuer shall have received requests for registration pursuant
to this Section 10(b), shall be excluded from such registration, Issuer shall
make appropriate allocation of shares to be registered among the Selling
Shareholders desiring to register their shares pro rata in the proportion that
the number of shares requested to be registered by each such Selling Shareholder
bears to the total number of shares requested to be registered by all such
Selling Shareholders then desiring to have Issuer Common Stock registered for
sale.

         (c) CONDITIONS TO REQUIRED REGISTRATION. Issuer shall use reasonable
best efforts to cause each registration statement referred to in Section 10(a)
of this Agreement to become effective and to obtain all consents or waivers of
other parties which are required therefor and to keep such registration
statement effective, provided, however, that Issuer may delay any registration
of Option Shares required pursuant to Section 10(a) of this Agreement for a
period not exceeding 90 days provided Issuer shall in good faith determine that
any such registration would adversely affect an offering or contemplated
offering of other securities by Issuer, and Issuer shall not be required to
register Option Shares under the Securities Act pursuant to Section 10(a)
hereof:

                  (i)   prior to a Purchase Event;

                  (ii)  on more than three occasions;

                  (iii) within 180 days after the effective date of a
         registration referred to in Section 10(b) of this Agreement pursuant to
         which the Selling Shareholder or Selling Shareholders concerned were
         afforded the opportunity to register such shares under the Securities
         Act and such shares were registered as requested; and

                  (iv) unless a request therefor is made to Issuer by Selling
         Shareholders that hold at least 25% or more of the aggregate number of
         Option Shares (including shares of Issuer Common Stock issuable upon
         exercise of the Option) then outstanding.

         In addition to the foregoing, Issuer shall not be required to maintain
the effectiveness of any registration statement after the expiration of nine
months from the effective date of such registration statement. Issuer shall use
all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares; provided, however, that Issuer
shall not be required to consent to general jurisdiction or qualify to do
business in any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.

         (d) EXPENSES. Except where applicable state law prohibits such
payments, Issuer shall pay all expenses (including, without limitation,
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters,

                                      -14-
<Page>

excluding discounts and commissions directly relating to the sale of the Option
Shares, but including liability insurance if Issuer so desires or the
underwriters so require, and the reasonable fees and expenses of any necessary
special experts) in connection with each registration pursuant to Section 10(a)
or 10(b) of this Agreement (including the related offerings and sales by holders
of Option Shares) and all other qualifications, notifications or exemptions
pursuant to Section 10(a) or 10(b) of this Agreement.

         (e) INDEMNIFICATION. In connection with any registration under Section
10(a) or 10(b) of this Agreement, Issuer hereby indemnifies the Selling
Shareholders, and each underwriter thereof, including each person, if any, who
controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement of a material fact contained
in any registration statement or prospectus (including any amendments or
supplements thereto) or any preliminary prospectus or notification or offering
circular, or caused by any omission, or alleged omission, to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such expenses, losses, claims, damages
or liabilities of such indemnified party are caused by any untrue statement or
alleged untrue statement that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon and in conformity with,
information furnished in writing to Issuer by such indemnified party expressly
for use therein, and Issuer and each officer, director and controlling person of
Issuer shall be indemnified by such Selling Shareholders, or by such
underwriter, as the case may be, for all such expenses, losses, claims, damages
and liabilities caused by any untrue, or alleged untrue, statement, that was
included by Issuer in any such registration statement or prospectus or
notification or offering circular (including any amendments or supplements
thereto) in reliance upon, and in conformity with, information furnished in
writing to Issuer by such holder or such underwriter, as the case may be,
expressly for such use.

         Promptly upon receipt by a party indemnified under this Section 10(e)
of notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this Section 10(e), such indemnified party shall notify
the indemnifying party in writing of the commencement of such action, but the
failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
Section 10(e). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party agrees
to pay the same, (ii) the indemnifying party fails to assume the defense of such
action with counsel reasonably satisfactory to the indemnified party, or (iii)
the indemnified party has been advised by counsel that one or more legal
defenses may be available to the indemnifying party that may be contrary to the
interest of the indemnified party, in which case the indemnifying party shall be
entitled to assume the defense of such action notwithstanding its obligation to
bear fees and expenses of such counsel. No

                                      -15-
<Page>

indemnifying party shall be liable for any settlement entered into without its
consent, which consent may not be unreasonably withheld.

         If the indemnification provided for in this Section 10(e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by Issuer, the Selling Shareholders and the underwriters from the offering of
the securities and also the relative fault of Issuer, the Selling Shareholders
and the underwriters in connection with the statements or omissions which
resulted in such expenses, losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The amount paid or payable by a
party as a result of the expenses, losses, claims, damages and liabilities
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim; provided, however, that in no case shall any Selling
Shareholder be responsible, in the aggregate, for any amount in excess of the
net offering proceeds attributable to its Option Shares included in the
offering. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. Any
obligation by any holder to indemnify shall be several and not joint with other
holders.

         In connection with any registration pursuant to Section 10(a) or 10(b)
of this Agreement, Issuer and each Selling Shareholder (other than Grantee)
shall enter into an agreement containing the indemnification provisions of
Section 10(e) of this Agreement.

         (f) MISCELLANEOUS REPORTING. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit the
expeditious sale at any time of any Option Shares by the Selling Shareholders
thereof in accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time, including, without limitation, Rule
144. Issuer shall at its expense provide the Selling Shareholders with any
information necessary in connection with the completion and filing of any
reports or forms required to be filed by them under the Securities Act or the
Exchange Act, or required pursuant to any state securities laws or the rules of
any stock exchange.

         (g) ISSUE TAXES. Issuer shall pay all stamp taxes in connection with
the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save the Selling Shareholders harmless, without
limitation as to time, against any and all liabilities, with respect to all such
taxes.

         11. QUOTATION; LISTING. If Issuer Common Stock or any other securities
to be acquired in connection with the exercise of the Option are then authorized
for quotation or trading or listing on Nasdaq or any securities exchange,
Issuer, upon the request of Holder, shall promptly file an application, if
required, to authorize for quotation or trading or listing the shares of Issuer
Common Stock or other securities to be acquired upon exercise of the Option on
Nasdaq or such other

                                      -16-
<Page>

securities exchange and shall use its reasonable best efforts to obtain
approval, if required, of such quotation or listing as soon as practicable.

         12. DIVISION OF OPTION. This Agreement (and the Option granted hereby)
are exchangeable, without expense, at the option of Holder, upon presentation
and surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the holder
thereof to purchase in the aggregate the same number of shares of Issuer Common
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related Options for which this Agreement (and
the Option granted hereby) may be exchanged. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer shall execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of Issuer, whether
or not this Agreement so lost, stolen, destroyed or mutilated shall at any time
be enforceable by anyone.

         13. PROFIT LIMITATION.

         (a) Notwithstanding any other provision of this Agreement, in no event
shall Grantee's Total Profit (as hereinafter defined) exceed $4.0 million, and,
if it otherwise would exceed such amount, Grantee, at its sole election, shall
either (i) deliver to Issuer for cancellation Option Shares previously purchased
by Grantee, (ii) pay cash or other consideration to Issuer or (iii) undertake
any combination thereof, so that Grantee's Total Profit shall not exceed $4.0
million after taking into account the foregoing actions. Notwithstanding
anything in the foregoing to the contrary, in the event that Grantee receives a
Total Profit of $4.0 million (as hereinafter defined), Grantee shall deliver (x)
to Issuer for cancellation all Option Shares previously purchased by Grantee and
Issuer shall pay Grantee the exercise price paid by Grantee for such Option
Shares, and (y) deliver for cancellation the Option or any remaining portion
thereof.

         (b) Notwithstanding any other provision of this Agreement, this Option
may not be exercised for a number of Option Shares as would, as of the Notice
Date, result in a Notional Total Profit (as defined below) of more than $4.0
million, and, if exercise of the Option otherwise would exceed such amount,
Grantee, at its discretion, may increase the Purchase Price for that number of
Shares set forth in the Option Exercise Notice so that the Notional Total Profit
shall not exceed $4.0 million; provided, that nothing in this sentence shall
restrict any exercise of the Option permitted hereby on any subsequent date at
the Purchase Price set forth in Section 2 hereof.

         (c) As used herein, the term "Total Profit" shall mean the aggregate
amount (before taxes) of the following: (i) the amount of cash received by
Grantee pursuant to Section 6.03 of the Plan, (ii) the amount received by
Grantee in connection with the repurchase of Option Shares or the Option or
Substitute Option pursuant to Section 8(a)(ii) or (iii) or Section 9(a)(ii) or
(iii), and (iii) (x) the net cash amounts received by Grantee pursuant to the
sale of Option Shares (or any other securities into which such Option Shares are
converted or exchanged), the Option or Substitute Option to any unaffiliated
party, less (y) Grantee's purchase price for such Option Shares.

                                      -17-
<Page>

         (d) As used herein, the term "Notional Total Profit" with respect to
any number of Option Shares as to which Grantee may propose to exercise this
Option shall be the Total Profit determined as of the date of the Option
Exercise Notice assuming that this Option were exercised on such date for such
number of Option Shares and assuming that such Option Shares, together with all
other Option Shares held by Grantee and its affiliates as of such date, were
sold for cash at the closing market price for the Common Stock as of the close
of business on the preceding trading day (less customary brokerage commissions).

         14. LIMITATION ON TRANSFER OF OPTION.

         (a) Grantee agrees that the Option may not be sold, transferred or
otherwise disposed of, in whole or in part, by it except after the occurrence of
a Purchase Event, and then only as follows. If the Grantee shall determine to
accept a bona fide offer to purchase any portion of the Option then held by it
or to sell any such portion of the Option, the Grantee shall give written notice
thereof to the Issuer specifying (i) the portion of the Option to be sold and
(ii) the purchase price therefor and any other significant terms of the proposed
transaction. Upon receipt of such notice, the Issuer shall, for a period of five
business days immediately following such receipt, have the right of first
refusal to cancel the portion of the Option then held by Grantee that is
proposed to be sold upon the payment of a cancellation fee equal to the purchase
price set forth in such notice. Payment for such portion of the Option to be
cancelled shall be made to the Grantee in immediately available funds within
five business days immediately following receipt of the notice of the proposed
sale.

         15. MISCELLANEOUS.

         (a) EXPENSES. Except to the extent expressly provided for herein, each
of the parties hereto shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.

         (b) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived
at any time by the party that is entitled to the benefits of such provision.
This Agreement may not be modified, amended, altered or supplemented except upon
the execution and delivery of a written agreement executed by the parties
hereto.

         (c) ENTIRE AGREEMENT. NO THIRD-PARTY BENEFICIARIES; SEVERABILITY. This
Agreement, together with the Plan and the other documents and instruments
referred to herein and therein, between Grantee and Issuer (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and (ii) is not intended to confer upon any person other than the parties hereto
(other than the indemnified parties under Section 10(e) of this Agreement and
any transferees of the Option Shares or any permitted transferee of this
Agreement pursuant to Section 14(h) of this Agreement) any rights or remedies
hereunder. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or Regulatory Authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this

                                      -18-
<Page>

Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated. If for any reason such court or Regulatory Authority
determines that the Option does not permit Holder to acquire, or does not
require Issuer to repurchase, the full number of shares of Issuer Common Stock
as provided in Section 3 of this Agreement (as may be adjusted herein), it is
the express intention of Issuer to allow Holder to acquire or to require Issuer
to repurchase such lesser number of shares as may be permissible without any
amendment or modification hereof.

         (d) GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of New York without regard to any
applicable conflicts of law rules.

         (e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.

         (f) NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the addresses set forth in the Plan (or at such
other address for a party as shall be specified by like notice).

         (g) COUNTERPARTS. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed, it
being understood that both parties need not sign the same counterpart.

         (h) ASSIGNMENT. Neither this Agreement nor any of the rights, interests
or obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Holder may assign this Agreement
to a wholly-owned subsidiary of Holder, and Holder may assign its rights
hereunder in whole or in part after the occurrence of a Purchase Event. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.

         (i) FURTHER ASSURANCES. In the event of any exercise of the Option by
Holder, Issuer, and Holder shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.

         (j) SPECIFIC PERFORMANCE. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive relief
and other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.

                                      -19-
<Page>

         IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first written above.

                               ATLANTIC BANK OF NEW YORK

                               By: /s/ THOMAS M. O'BRIEN
                                  ----------------------------------------------
                                   Name:  Thomas M. O'Brien
                                   Title:  President and Chief Executive Officer

                               YONKERS FINANCIAL CORPORATION

                               By: /s/ RICHARD F. KOMOSINSKI
                                  ----------------------------------------------
                                  Name:  Richard F. Komosinski
                                  Title:  President and Chief Executive Officer

                                      -20-<PAGE>

--------------------------------------------------------------------------------
          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.
--------------------------------------------------------------------------------

                                                                    Exhibit 10.1

                                ROYALTY AGREEMENT

      THIS ROYALTY AGREEMENT made this 19th day of October, 2001 by and among
C.R. Bard, Inc., a New Jersey corporation ("Bard"), NMT Medical, Inc., a
Delaware corporation ("NMT"). Capitalized terms used but not defined herein
shall have the meaning set forth in the Asset Purchase Agreement of even date
herewith between Bard and NMT (the "Purchase Agreement").

      WHEREAS, pursuant to the Purchase Agreement, Bard has agreed to purchase
from NMT, and NMT has agreed to sell to Bard, certain Assets, consisting of
NMT's vena cava filter Product Line and substantially all of the business,
assets and properties that the vena cava filter Business comprises; and

      WHEREAS, as a portion of the consideration payable for the Assets, Bard
has agreed to pay certain royalties to NMT, as more fully set forth herein; and

      WHEREAS, for a transitional period following the Closing Date under the
Purchase Agreement, Seller has agreed to continue to manufacture vena cava
filter Products for Buyer pursuant to a Transitional Manufacturing Agreement
dated as of the date hereof.

      NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Parties agree as follows:

                                   Article I.
                             BARD'S ROYALTY PAYMENTS

      1.1. Royalties with respect to RNF and RC. For a period of [**] years
after the date of Bard's first commercial sale in the United States of the
Recovery Filter ("RNF"), Bard shall pay to NMT an amount equal to (x) [**]% of
Bard's Net Sales of the RNF and the Recovery Cone ("RC") in the United States
and (y) [**]% of Bard's Net Sales of the RNF and the RC outside the United
States. Thereafter, Bard shall pay to NMT an amount equal to (x) [**]% of Bard's
Net Sales of the RNF and the RC in the United States and (y) [**]% of Buyer's
Net Sales of the RNF and the RC outside the United States.

      1.2. Royalties with respect to SNF. Commencing on the Manufacturing
Transition Date, Bard shall pay to NMT royalties on all Simon Nitinol Filter
("SNF") Products that Bard or its designee manufactures and sells to end users
at the following royalty rates: (x) [**]% of Bard's Net Sales of the SNF in the
United States and (y) [**]% of Bard's Net Sales of the SNF outside the United
States.

      1.3. Payment of Royalties. Bard shall pay all royalties in United States
Dollars and shall calculate and pay such royalties quarterly within [**] days
following the last day of each calendar quarter. If Bard is required to pay any
withholding tax in respect of any royalties or payments due to NMT, the amount
of the actual payment to NMT may be reduced by the amount of the withholding tax
paid by Bard.
<PAGE>

      1.4. Net Sales Defined. For purposes of this Agreement, "Net Sales" with
respect to a Product shall mean, for any fiscal quarter, the gross invoiced
sales of such Product by Bard or any Affiliate of Bard to all non-affiliated
third parties, less the following offsets and deductions: (i) sales, use or
value-added taxes, to the extent included in the gross invoiced sales; and (ii)
freight and handling charges, to the extent included in the gross invoiced
sales; and (iii) relevant customary cash, trade and quantity discounts and
rebates actually granted and given by Bard or an Affiliate to customers,
including but not limited to administrative fees paid to any group purchasing
organization of which the customer is a member; and (iv) allowances, credits and
payments for returned Products. In the event the Product is sold in kit or in
combination with any item which is not covered by the Intellectual Property
Rights ("Kit"), the Net Sales of such Product shall be determined for each
quarter by application of the following formula:

  [**]

      o     "Average Retail Price" means (a) with respect to each component in a
            Kit that is not manufactured by Bard or its designee, the average
            retail sales price to hospitals of such component during such
            quarter, and (b) with respect to each component in a Kit that is
            manufactured by Bard or its designee, Bard's or its Affiliate's
            Average Sale Price for such component, as such component is sold
            separately.

      o     "Average Sale Price," for either a Kit or a component sold
            separately by Bard, shall be calculated by dividing (A) Bard's or
            its Affiliate's gross invoiced selling price during such fiscal
            quarter for all such Kits or separately-sold components, as the case
            may be, less applicable deductions and offsets set forth above,
            divided by (B) the total number of such Kits or separately-sold
            components, as the case may be, sold by Bard or its Affiliate during
            such fiscal quarter.

                                   Article II.
                                     REPORTS

      2.1. Reports by Bard. At the time of Bard's remittance of each royalty
payment pursuant to Section 1.3, Bard shall furnish to NMT a report showing the
type and total number of the Products sold and or licensed to others by Bard or
any Affiliate of Bard during the quarter to which the royalty payment relates,
the aggregate Net Sales during such quarter and sufficient information from
which the royalties payable may be determined

      2.2. Confidentiality. All reports and information delivered by Bard under
this Article II shall be considered confidential information ("Confidential
Information").

      2.3. Audit Rights. Bard shall keep complete and accurate records of the
underlying Product sales and expense data relating to the reports and payments
required under this Royalty Agreement. NMT shall have the right once annually at
its own expense to have an independent public accountant, selected by NMT and
reasonably acceptable to Bard (the "Auditor"), review any such records of Bard
in the locations where such records are maintained by Bard upon reasonable
notice and during normal business hours and under obligations of strict
confidence, for the sole purposes of verifying the basis and accuracy of the
royalty payments payable

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<PAGE>

hereunder. If the review of such record reveals that Bard has failed to
accurately (i) calculate and pay royalties under Article I or (ii) report
information pursuant to Section 2.1, then Bard shall promptly pay NMT any
resulting royalty amounts, together with interest thereon at a rate equal to 1%
per month. In the event that the royalty amounts determined to be due as a
result of any annual audit are greater than 10% of the amounts actually paid
without regard to such audit, Bard shall pay NMT's reasonable out-of-pocket
expenses incurred in conducting such audit. If Bard disputes in good faith the
conclusions of the Auditor under this Section 2.3, then Bard shall notify NMT of
its dispute and any such dispute shall be resolved in accordance with the
provisions of Section 9.5 of the Purchase Agreement.

                                  Article III.
                                 CONFIDENTIALITY

      NMT shall keep confidential, and shall not disclose to any third party or
use, any Confidential Information, as defined in Section 2.2 hereof, except to
the extent such information (i) is published by, or with the written consent of,
Bard or by a third party having no obligation of confidentiality to Bard, (ii)
is already known to such third party, (iii) is otherwise made publicly available
(other than by a person who made such disclosure in breach of a confidentiality
obligation), or (iv) as is required by law.

                                  Article IV.
                                 MISCELLANEOUS

      4.1. Waivers and Amendments.

            (a) This Agreement may be amended, modified or supplemented only by
      a written instrument executed by the parties hereto.

            (b) No waiver of any provision of this Agreement, or consent to any
      departure from the terms hereof, shall be effective unless the same shall
      be in writing and signed by the party waiving or consenting thereto. No
      failure on the part of any party to exercise, and no delay in exercising,
      any right or remedy hereunder shall operate as a waiver thereof, nor shall
      any single or partial exercise of any such right or remedy by such party
      preclude any other or further exercise thereof or the exercise of any
      other right or remedy. The waiver by any party hereto of a breach of any
      provision of this Agreement shall not operate as a waiver of any
      subsequent breach. All rights and remedies hereunder are cumulative and
      are in addition to and not exclusive of any other rights and remedies
      provided by law.

      4.2. Entire Agreement. This Agreement and the Related Documents (as such
term is defined in the Purchase Agreement) constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, whether written or oral, among the parties,
or any of them, in connection with such subject matter.

      4.3. Set Off. Buyer's obligations to make payments to Seller hereunder may
be applied or set off by Buyer or any Affiliate against any liabilities of
Seller due and payable to Buyer or any such Affiliate pursuant to Section 9.1(b)
of the Purchase Agreement hereof at any time, whether or not other collateral is
then available and without regard to the adequacy of any such

                                      - 3 -
<PAGE>

other collateral.

      4.4. Indemnification. NMT will indemnify Bard pursuant to Section
9.1(b)(v) of the Purchase Agreement.

      4.5. Dispute Resolution; Arbitration. All differences, disputes or claims
arising in connection with this Agreement or any transaction or occurrence
contemplated hereby shall be settled in the manner set forth in Section 9.5 of
the Purchase Agreement.

      4.6. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the substantive laws of The Commonwealth of
Massachusetts, without giving effect to its conflicts of laws rules.

      4.7. No Election of Remedies. The rights and remedies accorded herein to
NMT and Bard are cumulative and in addition to those provided by law, and may be
exercised separately, concurrently, or successively.

      4.8. Notices. Any notice or other communication in connection with this
Agreement shall be in writing and shall be sufficiently given if sent in
accordance with Section 10.9 of the Purchase Agreement.

      4.9. Termination. If the Purchase Agreement shall terminate prior to the
Closing Date thereunder, this Agreement shall terminate simultaneously
therewith.

                                    * * * * *

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<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Royalty Agreement
to be executed in their names by their properly and duly authorized officers or
representatives as of the date first above written.

NMT MEDICAL, INC.                        C.R. BARD, INC.

By:  John E. Ahern                       By:  Timothy M. Ring
   ---------------------------------          --------------------------

Its: President & Chief Executive Officer Its: Group President
     -----------------------------------      --------------------------

                                     - 5 -

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