Document:

Employment Agreement 

For 

Mr. Thomas Bennett

December 13, 2004

December 13, 2004 

Mr. Thomas Bennett 
Seneca
933 Road 
Great Falls, VA 22066 

Dear Mr. Bennett: 

        On
behalf of Terabeam Wireless (the “Company”), and subject to Board of Director
approval, I am pleased to offer you (the “Executive”) a position of increased
scope and responsibility, as the Company’s President and Chief Operating Officer (the
“Offered Position”). In this position, you will report directly to me, the Chief
Executive Officer. After you have had the opportunity to review and consider this offer,
please indicate your intentions by responding in writing as indicated below as soon as
possible, but not later than December 15, 2004. Please be advised that the Company
reserves its right to withdrawn this offer prior to your acceptance, without prior notice. 

Offer Summary: 

	1)  	Duties: Subject
to the ultimate control and discretion of the Chief Executive Officer of
the Company, the Executive shall serve in the Offered Position and perform
all duties and services commensurate with that Offered Position. Examples
of, but not a complete list of, the type of duties to be performed by the
Executive follow; 

          	 	a) 	
               attain Company revenue and profit objectives by: i) the direct supervision of
               sales and marketing departments and their respective in-charge personnel, as
               well as direct customer and industry interaction; ii) the development and
               execution of an effective global distribution strategy; iii) the identification,
               articulation, business case analysis of new customer, product, service and
               market opportunities; iv) product life cycle management; v) the creation,
               increased awareness and customer loyalty to, the Company’s
               “Brand(s)"; and vi) product pricing to ensure maximum profitability
               and target market penetration levels. 

          	 	b) 	
               assist in the negotiate sales contracts, distributor agreements and recommend
               OEM supplier agreements for new products and services, and 

          	 	c) 	
               develop Company strategy regarding meeting customer requirements, based on
               competitive and market analysis, and 

          	 	d) 
e)
f)
g)
 h) 
i)	
               coordinate the periodic preparation of the Company’s business and operating
               plans, and 
 create, maintain and project a positive Company image to the
               public and 
create and maintain positive relations with investors, and 

               identify strategic business relationships that will enhance the Company’s
               performance, and
 improve the effectiveness of the Company’s engineering,
               manufacturing, production, quality departmentsand
improve their them both organizationally and with better communications and morale; and 

any other related duties that may be assigned by the CEO from time to time.

               

	2)  	Reporting
Location: The Executive’s reporting location shall be at Company
provided facilities located at 8000 Lee Highway, Falls Church, VA 22042
(the “Reporting Location”). Please be advised that since the
geographic scope of the Offered Position is global in nature, significant
travel will be required. 

Offer letter-Thomas Bennett (cont.)  

	3)  	Compensation:
For all considerations and services to be rendered by the Executive
hereunder: 

          	 	a) 	
               Base Salary: The Company shall pay the Executive an initial base salary
               that shall be calculated at the rate of $200,000 (Two Hundred thousand dollars),
               effective December 13, 2004, per year, payable in accordance with the
               company’s normal payroll practices. This initial base salary may be
               adjusted from time to time based on actual performance measured against
               personal, team and Company goals, consistent with Company policy, and treatment
               of other Company executives. 

          	 	b) 	
               Additional Compensation Eligibility: The Executive shall be eligible to
               receive additional compensation that will be comprised of an annual performance
               bonus ranging from 0% to 50% of your base salary. Any such bonus payout, if any,
               is at the sole discretion of the Company and requires Board of Director
               Approval. 

          	 	c) 	
               Equity Participation: Subject to approval of the Board of Directors of
               the Company, the Executive shall be granted options under a Stock Option Plan of
               the Company to purchase One Hundred Thousand (100,000) shares of common stock of
               the Company, vesting over a three-year period, at an exercise price equal to the
               actual market price of the Company’s stock on the Nasdaq OTCBB on the day
               of the actual grant. There will also be a change in control clause that will
               allow for full vesting of these options and a continued salary for up to six (6)
               months upon the change in control. 

          	 	d) 	
               Benefits: Upon employment, the Executive shall (a) be eligible to
               participate in the Company’s group health and dental insurance, disability
               insurance, life insurance, 401k Pension Plan, and other Company-wide benefits;
               (b) begin to accumulate fifteen (15) business days of paid vacation per year;
               (c) be paid for a reasonable number of sick days per year as defined in the
               Company’s Employee Handbook; (d) be entitled to the Company’s Nine (9)
               scheduled paid holidays plus a revenue recognition day, if applicable; and (e)
               participate in such other benefits that may become available to all employees of
               the Company in the future. 

          	 	e) 	
               Business Expenses: The Company shall promptly reimburse the Executive for
               all reasonable and customary expenses incurred by the Executive in connection
               with the performance of the Executive’s duties and responsibilities, that
               are consistent with Company travel and expense policy and upon presentation of
               completed expense reports with supporting receipts and/or other appropriate
               documentation. 

               

	4)  	Non-Competition: In
consideration of continued employment by the Company and the Executive’s
receipt of the salary and other benefits associated with the Executive’s
employment, and in acknowledgment that (i) the Company is engaged in a
business based upon the development and distribution of wireless
communication technology, (ii) maintains secret and confidential
information, (iii) during the course of the Executive’s employment by
the Company such secret or confidential information may become known to
the Executive, and (iv) full protection of the Company’s business
makes it essential that no employee appropriate for his or her own use, or
disclose such secret or confidential information, the Executive agrees to
the following: 

          	 	a) 	
               The Executive shall not use or disclose at any time during the Executive’s
               employment with the Company, or at any time thereafter, any trade secret or
               proprietary or confidential information of the Company or any of its affiliates. 

          	 	b) 	
               During the Executive’s employment with the Company the Executive shall not
               be engaged as an officer, director or executive of, or in any way be associated
               in a management or ownership capacity with, any corporation, partnership or
               other enterprise or venture which conducts a business which is in competition
               with the business of the Company provided, however, that the Executive may own
               not more than 3% of the outstanding securities, or equivalent equity interests,
               of any class of any corporation or firm which is in competition with the
               business of the Company, which securities are listed on a national securities
               exchange or traded in the over-the-counter market. 

               

	
	

Pg. 2 of 5

Offer letter-Thomas Bennett (cont.)  

          	 	c) 	
               The Executive agrees that during his employment to promptly disclose and assign
               to the Company the Executive’s entire right, title and interest in any and
               all inventions and copyrights (including intellectual properties) solely or
               jointly conceived and/or reduced to practice by the Executive during the term of
               his employment relating to the current or projected business of the Company. The
               Executive agrees that all of such inventions and copyrights are the property of
               said Company. 

          	 	d) 	
               The Executive agrees to receive confidential, proprietary and other information
               of the Company in confidence, and not, directly or indirectly, during the term
               of is employment or any time after his employment is terminated for any reason
               to disclose or furnish to others, assist others in the application of or use for
               the Executive’s own gain, such information, including, but not limited to,
               the Company’s customer lists and trade secrets, methods of conducting or
               obtaining business, the manner or process of manufacture, and the design and
               drawings of its products, or any part thereof, unless and until it has become
               public knowledge, or has come into the possession of such or others by legal and
               equitable means. Furthermore, whether or not such information comprises
               proprietary information, trade secrets, or confidential information, the
               Executive also agrees not to disclose, furnish to others, assist others in the
               application of, or use for the Executive s own gain, either any information
               within the categories of information herein above specifically listed, including
               the identity of any customers of the Company, or any other information relating
               to the Company s business not made available by the Company to the public or in
               the public domain. 

          	 	e) 	
               To assist in carrying out the intent of subparagraph (d) above, the Executive,
               during the term of his employment, agrees to refrain from engaging on his own
               behalf or on behalf of any third party in the design, manufacture, or sale of
               electronic equipment, accessories and components thereof, or to perform services
               or research work in this field of activity. 

               

	5)  	Termination:

          	 	a) 	
               The Executive acknowledge and agrees that, notwithstanding the foregoing, the
               Executive’s employment with the Company is “at will”, meaning
               that the Company may terminate the Executive’s employment with the Company
               at any time, with or without Cause. As used herein, “Cause” means the
               Executive’s commission of a felony, gross dereliction or abdication of
               duties, repeated refusal to perform duties assigned to the Executive by
               management that are consistent with the Executive’s titles, or the
               Executive’s intentional acts that cause material harm to the Company. 

               

	6)  	Definitive
Employment Agreement and Board Position: 

	 	        By
April 30, 2005, the Company will enter into an Executive Employment Agreement with you
having these same general terms and must be approved by the Board of Directors.  

	7)  	Other
Provisions: 

          	 	a) 	
               The Executive agrees to deliver to the Company, upon termination of his
               employment, all property and documents of the Company and all data relating to
               the Company s business then in his custody and not take with him any drawings,
               documents, or reproductions of confidential or trade secret information or of
               any other information of any kind not made available to the public by the
               Company. 

               

	
	

Pg. 3 of 5

Offer letter-Thomas Bennett (cont.)  

          	 	b) 	
               The Executive also agrees that the Company may use for any purpose, at any time
               during his employment or after such employment, all photographs of the Executive
               taken during the term of his employment. 

          	 	c) 	
               The Executive also agrees that he will not, directly or indirectly, during the
               term of his employment or within one year after termination of his employment
               for any reason, in any manner, encourage, persuade, or induce any other
               Executive of the Company to terminate his employment, or any person or entity
               engaged by the Company to represent it to terminate that relationship. 

          	 	d) 	
               The Executive also agrees to, and acknowledges that he has been informed that
               the Company reserves its right to require the Executive to submit to, and pass a
               drug-screening test as a condition of this employment offer. 

               

Please indicate your acceptance of
this offer by signing below and returning this original to Mr. Patrick Milton. If you have
any questions regarding this offer, please feel free to contact me directly by phone at
(703) 205-0600 or e-mail at RF@ydi.com. 

		
	Very Truly Yours,

/s/ Robert Fitzgerald

Robert Fitzgerald 

CEO
  
	 ACCEPTED AND AGREED:

By: /s/ Thomas C. Bennett

        Thomas Bennett

Date: December 22, 2004 

	
	

Pg. 4 of 5Stock Option Agreement

	

Execution Copy 

STOCK OPTION
AGREEMENT 

        
        THIS
STOCK OPTION AGREEMENT (“Agreement”) dated as of December 23, 2004, is by
and between Hudson Valley Holding Corp., a New York corporation and registered bank
holding company (“Hudson Valley”), and New York National Bank, a national
banking association (“NYNB”). 

BACKGROUND 

        
        WHEREAS,
Hudson Valley and NYNB, as of the date hereof, are prepared to execute a definitive
agreement and plan of consolidation (the “Consolidation Agreement”)
pursuant to which NYNB will be consolidated with a wholly-owned national bank of Hudson
Valley (the “Consolidation”) and the consolidated bank resulting from the
Consolidation will be merged with and into a wholly-owned New York state chartered bank of
Hudson Valley; and 

        
        WHEREAS,
Hudson Valley has advised NYNB that it will not execute the Consolidation Agreement unless
NYNB executes this Agreement; and 

        
        WHEREAS,
the Board of Directors of NYNB has determined that the Consolidation Agreement provides
substantial benefits to the shareholders of NYNB; and 

        
        WHEREAS,
as an inducement to Hudson Valley to enter into the Consolidation Agreement and in
consideration for such entry, NYNB desires to grant to Hudson Valley an option to purchase
authorized but unissued shares of common stock of NYNB in an amount and on the terms and
conditions hereinafter set forth. 

AGREEMENT 

        
        In
consideration of the foregoing and the mutual covenants and agreements set forth herein
and in the Consolidation Agreement, Hudson Valley and NYNB, intending to be legally bound
hereby, agree: 

                     1.        
          Grant of Option. NYNB hereby grants to Hudson Valley an option to
          purchase 135,000 shares of common stock, $5.00 par value per share, of NYNB (the
          “Common Stock”) at a price of $14.50 per share (the
          “Option Price”), on the terms and conditions set forth herein
          (the “Option”).

	

                     2.        
          Exercise of Option. This Option shall not be exercisable until the
          occurrence of a Triggering Event (as such term is hereinafter defined). Upon or
          after the occurrence of a Triggering Event (as such term is hereinafter
          defined), Hudson Valley may exercise the Option, in whole or in part, at any
          time or from time to time, subject to the terms and conditions set forth herein
          and the termination provisions of Section 19 of this Agreement.

        
        The
term “Triggering Event” means the occurrence of any of the following
events: 

                     a.        
          A person or group (as such terms are defined in the Securities Exchange Act of
          1934, as amended (the “Exchange Act”), and the rules and
          regulations thereunder) other than Hudson Valley or an affiliate of Hudson
          Valley (a “third party”) acquires beneficial ownership (as such
          term is defined in Rule 13d-3 as promulgated under the Exchange Act) of at least
          5% of the then outstanding shares of Common Stock, provided, however, that the
          continuing ownership by a person or group which as of the date hereof owns more
          than 5% of the outstanding Common Stock shall not constitute a Triggering Event;
          or

                     b.        
          A third party enters into a letter of intent or an agreement, whether oral or
          written, with NYNB pursuant to which such third party or any affiliate of such
          third party would (i) merge or consolidate, or enter into any similar
          transaction, with NYNB, (ii) acquire all or a significant portion of the assets
          or liabilities of NYNB, or (iii) acquire beneficial ownership of securities
          representing, or the right to acquire beneficial ownership or to vote securities
          representing, 5% or more of the then outstanding shares of Common Stock; or

                     c.        
          A third party makes a filing with any bank, thrift or financial holding company
          regulatory authorities with respect to or publicly announces a bona fide
          proposal (a “Proposal”) for (i) any merger with,
          consolidation with or acquisition of all or a significant portion of all the
          assets or liabilities of, NYNB or any other business combination involving NYNB,
          or (ii) a transaction involving the transfer of beneficial ownership of
          securities representing, or the right to acquire beneficial ownership or to vote
          securities representing, 5% or more of the outstanding shares of Common Stock,
          and in either case thereafter, if (i) such Proposal has not been Publicly
          Withdrawn (as such term is hereinafter defined) no later than the earlier of (A)
          10 days after the public announcement and (B) a date which is 10 days prior to
          the Closing Date (as such term is defined in the Consolidation Agreement), and
          (ii) the holders of a majority of the NYNB common stock do not vote to reject
          the Proposal no later than the earlier of (A) 30 days after the public
          announcement, and (B) a date which is 10 days prior to the Closing Date (as such
          term is defined in the Consolidation Agreement); or

                     d.        
          A third party makes a bona fide Proposal and thereafter, but before such
          Proposal has been Publicly Withdrawn, NYNB willfully or intentionally takes any
          action in any manner which would materially interfere with its ability to
          consummate the Consolidation or materially reduce the value of the transaction
          to Hudson Valley; or

                     e.        
          After the execution of this Agreement, NYNB, or any of its directors, senior
          executive officers, investment bankers or other person with actual or apparent
          authority to speak for the Board of Directors, willfully or intentionally takes
          any material direct or indirect action inviting, encouraging or soliciting any
          proposal (other than from Hudson Valley or an affiliate of Hudson Valley) which
          has as its purpose a tender offer for the shares of Common Stock, a merger,
          consolidation, plan of exchange, plan of acquisition or reorganization of NYNB,
          or a sale of a significant number of shares of Common Stock or any significant
          portion of its assets or liabilities.

        
        The
term “significant portion” means 10% of the assets or liabilities of
NYNB. The term “significant number” means 10% of the outstanding shares of
Common Stock. 

2 

	

        
        Solely
for purposes of Section 5b hereof, the date of a “Triggering Event” under
clause (a) above is the date the third party first acquires beneficial ownership of at
least 5% of the then outstanding shares of Common Stock; the date of a “Triggering
Event” under clause (b) above is the date of entry into the letter of intent or
agreement; the date of a “Triggering Event” under clause (c) above
is the earlier of the date of the filing (if any) with a bank, thrift or financial holding
company regulatory authority with respect to the Proposal or the date of public
announcement of the Proposal; the date of a “Triggering Event” under
clause (d) above is the date the third party first makes the Proposal; and the date of a
“Triggering Event” under clause (e) above is the first date on which a
material direct or indirect action referred to therein is taken. 

        
        “Publicly
Withdrawn”, for purposes of clauses (c) and (d) above, shall mean an
unconditional bona fide withdrawal of the Proposal coupled with a public announcement of
no further interest in pursuing such Proposal or in acquiring any controlling influence
over NYNB or in soliciting or inducing any other person (other than Hudson Valley or any
affiliate) to do so. 

        
        Notwithstanding
the foregoing, the Option may not be exercised at any time (i) in the absence of any
required governmental or regulatory approval or consent necessary for NYNB to issue the
shares of Common Stock covered by the Option (the “Option Shares”) or
Hudson Valley to exercise the Option or prior to the expiration or termination of any
waiting period required by law, or (ii) so long as any injunction or other order, decree
or ruling issued by any federal or state court of competent jurisdiction is in effect
which prohibits the sale or delivery of the Option Shares. 

        
        NYNB
shall notify Hudson Valley promptly in writing of the occurrence of any Triggering Event
known to it, it being understood that the giving of such notice by NYNB shall not be a
condition to the right of Hudson Valley to exercise the Option. NYNB will not take any
action which would have the effect of preventing or disabling NYNB from delivering the
Option Shares to Hudson Valley upon exercise of the Option or otherwise performing its
obligations under this Agreement, except to the extent required by applicable securities
and banking laws and regulations. 

        
        In
the event Hudson Valley wishes to exercise the Option, Hudson Valley shall send a written
notice to NYNB (the date of which is hereinafter referred to as the “Notice
Date”) specifying the total number of Option Shares it wishes to purchase and a
place and date between two and ten business days inclusive from the Notice Date for the
closing of such a purchase (a “Closing”); provided,
however, that a Closing shall not occur prior to two days after the later of
receipt of any necessary regulatory approvals and the expiration of any legally required
notice or waiting period, if any. 

                     3.        
          Payment and Delivery of Certificates. At any Closing hereunder
          (a) Hudson Valley will make payment to NYNB of the aggregate price for the
          Option Shares so purchased by wire transfer of immediately available funds to an
          account designated by NYNB; (b) NYNB will deliver to Hudson Valley a stock
          certificate or certificates representing the number of Option Shares so
          purchased, free and clear of all liens, claims, charges and encumbrances of any
          kind or nature whatsoever created by or through NYNB, registered in the name of
          Hudson Valley or its designee, in such denominations as were specified by Hudson
          Valley in its notice of exercise; and (c) Hudson Valley shall pay any transfer
          or other taxes required by reason of the issuance of the Option Shares so
          purchased.

3 

	

                     4.        
          Registration Rights. Upon or after the occurrence of a Triggering Event
          and upon receipt of a written request from Hudson Valley, NYNB shall, if
          necessary for the resale of the Option or the Option Shares by Hudson Valley,
          prepare and file a registration statement with the Securities and Exchange
          Commission and any state securities bureau covering the Option and such number
          of Option Shares as Hudson Valley shall specify in its request, and NYNB shall
          use its best efforts to cause such registration statement to be declared
          effective in order to permit the sale or other disposition of the Option and the
          Option Shares, provided that Hudson Valley shall in no event have the right to
          have more than one such registration statement become effective, and provided
          further that NYNB shall not be required to prepare and file any such
          registration statement in connection with any proposed sale with respect to
          which counsel to NYNB delivers to NYNB and to Hudson Valley (which is reasonably
          acceptable to Hudson Valley) its opinion to the effect that no such filing is
          required under applicable laws and regulations with respect to such sale or
          disposition or any subsequent sale or disposition; provided further, however,
          that NYNB may delay any registration of Option Shares above for a period not
          exceeding 90 days in the event that NYNB shall in good faith determine that any
          such registration would adversely effect an on-going offering of securities by
          NYNB for cash. Hudson Valley shall provide all information reasonable requested
          by NYNB for inclusion in any registration statement to be filed hereunder.

        
        In
connection with such filing, NYNB shall use its best efforts to cause to be delivered to
Hudson Valley such certificates, opinions, accountant’s letters and other documents
as Hudson Valley shall reasonably request and as are customarily provided in connection
with registrations of securities under the Securities Act of 1933, as amended. All
expenses incurred by NYNB in complying with the provisions of this Section 4, including
without limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for NYNB and blue sky fees and expenses shall be paid by NYNB.
Underwriting discounts and commissions to brokers and dealers relating to the Option or
Option Shares, fees and disbursements of counsel to Hudson Valley and any other expenses
incurred by Hudson Valley in connection with such registration shall be borne by Hudson
Valley. In connection with such filing, NYNB shall indemnify and hold harmless Hudson
Valley against any losses, claims, damages or liabilities, joint or several, to which
Hudson Valley may become subject, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any preliminary or final
registration statement or any amendment or supplement thereto, or arise out of a material
fact required to be stated therein or necessary to make the statements therein not
misleading; and NYNB will reimburse Hudson Valley for any legal or other expense
reasonably incurred by Hudson Valley in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that NYNB
will not be liable in any case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such preliminary or final registration statement
or such amendment or supplement thereto in reliance upon and in conformity with written
information furnished by or on behalf of Hudson Valley specifically for use in the
preparation thereof with respect to information about the selling stockholders or the plan
of distribution. Hudson Valley will indemnify and hold harmless NYNB to the same extent as
set forth in the immediately preceding sentence but only with reference to written
information specifically furnished by or on behalf of Hudson Valley for use in the
preparation of such preliminary or final registration statement or such amendment or
supplement thereto with respect to information about the selling stockholders or the plan
of distribution; and Hudson Valley will reimburse NYNB for any legal or other expense
reasonably incurred by NYNB in connection with investigating or defending any such loss,
claim, damage, liability or action. Notwithstanding anything to the contrary herein, no
indemnifying party shall be liable for any settlement effected without its prior written
consent. 

4 

	

                     5.        
          Adjustments Upon Changes in Capitalization. In the event of any change in
          the Common Stock by reason of stock dividends, split-ups, mergers,
          recapitalizations, combinations, conversions, exchanges of shares or the like,
          then the number and kind of Option Shares and the Option Price shall be
          appropriately adjusted.

        
        In
the event any capital reorganization or reclassification of the Common Stock, or any
consolidation, merger or similar transaction of NYNB with another entity, or any sale of
all or substantially all of the assets of NYNB, shall be effected in such a way that the
holders of Common Stock shall be entitled to receive stock, securities or assets with
respect to or in exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provisions (in form
reasonably satisfactory to the holder hereof) shall be made whereby the holder hereof
shall thereafter have the right to purchase and receive upon the basis and upon the terms
and conditions specified herein and in lieu of the Common Stock immediately theretofore
purchasable and receivable upon exercise of the rights represented by this Option, such
shares of stock, securities or assets as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore purchasable and
receivable upon exercise of the rights represented by this Option had such reorganization,
reclassification, consolidation, merger or sale not taken place; provided,
however, that, if such transaction results in the holders of Common Stock receiving
only cash, the holder hereof shall be paid the difference between the Option Price and
such cash consideration without the need to exercise the Option. 

                     6.        
          Filings and Consents. Each of Hudson Valley and NYNB will use its
          reasonable efforts to make all filings with, and to obtain consents of, all
          third parties and governmental authorities necessary to the consummation of the
          transactions contemplated by this Agreement.

        
        Exercise
of the Option herein provided shall be subject to compliance with all applicable laws
including, but not limited to, in the event Hudson Valley is the holder hereof, approval
of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the Office of the Comptroller of the Currency, the New York Banking
Department or the Securities and Exchange Commission, and NYNB agrees to cooperate with
and furnish to the holder hereof such information and documents as may be reasonably
required to secure such approvals. 

                     7.        
          Representations and Warranties of NYNB. NYNB hereby represents and
          warrants to Hudson Valley as follows:

                     a.        
          Due Authorization. NYNB has full corporate power and authority to
          execute, deliver and perform this Agreement and all corporate action necessary
          for execution, delivery and performance of this Agreement has been duly taken by
          NYNB.

5 

	

                     b.        
          Authorized Shares. NYNB has taken and, as long as the Option is
          outstanding, will take all necessary corporate action to authorize and reserve
          for issuance all shares of Common Stock that may be issued pursuant to any
          exercise of the Option.

                     c.        
          No Conflicts. Neither the execution and delivery of this Agreement nor
          consummation of the transactions contemplated hereby (assuming all appropriate
          regulatory approvals) will violate or result in any violation or default of or
          be in conflict with or constitute a default under any term of the Certificate of
          Incorporation or Bylaws of NYNB or any agreement, instrument, judgment, decree
          or order applicable to NYNB.

                     8.        
          Specific Performance. The parties hereto acknowledge that damages would
          be an inadequate remedy for a breach of this Agreement and that the obligations
          of the parties hereto shall be specifically enforceable. Notwithstanding the
          foregoing, Hudson Valley shall have the right to seek money damages against NYNB
          for a breach of this Agreement.

                     9.        
          Entire Agreement. This Agreement constitutes the entire agreement between
          the parties with respect to the subject matter hereof and supersedes all other
          prior agreements and understandings, both written and oral, among the parties or
          any of them with respect to the subject matter hereof.

                     10.        
          Assignment or Transfer. Hudson Valley may not sell, assign or otherwise
          transfer its rights and obligations hereunder, in whole or in part, to any
          person or group of persons other than to the Consolidation Bank or another
          affiliate of Hudson Valley, until the occurrence of a Triggering Event. Hudson
          Valley represents that it is acquiring the Option for Hudson Valley’s own
          account and not with a view to or for sale in connection with any distribution
          of the Option or the Option Shares. After the occurrence of a Triggering Event,
          Hudson Valley may sell, assign, pledge, or otherwise transfer its rights and
          obligations hereunder, in whole or in part, to any person, subject to compliance
          with applicable law.

                     11.        
          Amendment of Agreement. Upon mutual consent of the parties hereto, this
          Agreement may be amended in writing at any time, for the purpose of facilitating
          performance hereunder or to comply with any applicable regulation of any
          governmental authority or any applicable order of any court or for any other
          purpose.

                     12.        
          Validity. The invalidity or unenforceability of any provision of this
          Agreement shall not affect the validity or enforceability of any other
          provisions of this Agreement, which shall remain in full force and effect.

                     13.        
          Notices. All notices, requests, consents and other communications
          required or permitted hereunder shall be in writing and shall be deemed to have
          been duly given when delivered personally, or delivered by overnight delivery
          service, or by registered or certified mail (postage prepaid, return receipt
          requested) to the respective parties as follows:

			
			If to Hudson Valley, to:

Hudson Valley Holding Corp.
21 Scarsdale Road
Yonkers, New York 10707
Attn.:  James J. Landy

   President and Chief Executive Officer

	

6 

			
			Copies to:

Pitney Hardin LLP

Attn.:  Ronald H. Janis, Esq.
Delivery:

200 Campus Drive
Florham Park, New Jersey 07932
Mail:
P.O. Box 1945

Morristown, New Jersey 07962-1945
			 
			and

Griffin, Coogan &Venerusso, P.C.

51 Pondfield Road
Bronxville, New York 10708
Attn: James Blose, Esq.
			 
			If to NYNB, to:

New York National BAnk

369 East 149th Street
Bronx, New York 10455
Attn.:  Serafin Mariel,

                  President and Chief
Executive Officer
			 
			Copy to:

Windels, Marx, Lane & Mittendorf LLP

120 Albany Street Plaza
New Brunswick, NJ 08901
Attn.:  Robert A. Schwartz, Esq.
			 

	

or to such other address as the
person to whom notice is to be given may have previously furnished to the others in
writing in the manner set forth above (provided that notice of any change of address shall
be effective only upon receipt thereof). 

                     14.        
          Governing Law. This Agreement shall be governed by and construed in
          accordance with the laws of the State of New York.

7 

	

                     15.        
          Captions. The captions in the Agreement are inserted for convenience and
          reference purposes, and shall not limit or otherwise affect any of the terms or
          provisions hereof.

                     16.        
          Waivers and Extensions. The parties hereto may, by mutual consent, extend
          the time for performance of any of the obligations or acts of either party
          hereto. Each party may waive (a) compliance with any of the covenants of the
          other party contained in this Agreement and/or (b) the other party’s
          performance of any of its obligations set forth in this Agreement.

                     17.        
          Parties in Interest. This Agreement shall be binding upon and inure
          solely to the benefit of each party hereto, and nothing in this Agreement,
          express or implied, is intended to confer upon any other person any rights or
          remedies of any nature whatsoever under or by reason of this Agreement.

                     18.        
          Counterparts. This Agreement may be executed in two or more counterparts,
          each of which shall be deemed to be an original, but all of which shall
          constitute one and the same agreement.

                     19.        
          Termination. This Agreement shall terminate upon either the termination
          of the Consolidation Agreement as provided therein or the consummation of the
          transactions contemplated by the Consolidation Agreement; provided,
          however, that if termination of the Consolidation Agreement occurs after
          the occurrence of a Triggering Event (as defined in Section 2 hereof), this
          Agreement shall not terminate until the later of 18 months following the date of
          the termination of the Consolidation Agreement or the consummation of any
          proposed transactions which constitute the Triggering Event; provided
          further, that if the holder has given notice of exercise of the option and
          the exercise is awaiting any necessary regulatory approval after the holder has
          acted reasonably to obtain such approval this Agreement shall not terminate
          until the approvals have been granted and reasonable time to consummate has
          elapsed, or the approvals are denied.

8 

	

        
        IN
WITNESS WHEREOF, each of the parties hereto, pursuant to resolutions adopted by its Board
of Directors, has caused this Stock Option Agreement to be executed by its duly authorized
officer, all as of the day and year first above written. 

			HUDSON VALLEY HOLDING CORP.

By:  /s/ William E.Griffin
——————————————

            William E. Griffin, Chairman

			NEW YORK NATIONAL BANK

By:  /s/ Serafin Mariel
——————————————

            Serafin Mariel, President and

            Chief Executive Officer

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