Exhibit 10.5

                               OPERATING AGREEMENT

                                       FOR

                          SEIDMAN AND ASSOCIATES, LLC.










                                              Dated: November 9, 1994

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                                      INDEX


                                                                   Page No.
Article 1         -        Definitions                                 1
Article 2         -        Formation                                   5
Article 3         -        Principal Office                            5
Article 4         -        Term and Duration                           6
Article 5         -        Purpose                                     7
Article 6         -        Capital Contributions by the Member7
Article 7         -        Additional Capital Contributions            9
Article 8         -        Cash Contributions                          10
Article 9         -        Tax Allocations                             11
Article 10        -        Rights, Powers and Representation of
                           the Members                                 15
Article 11        -        Managing Member                             17
Article 12        -        Books, Records and Reports                  19
Article13         -        Bank Accounts                               20
Article 14        -        Rights and Duties of Members                20
Article 15        -        Tax Matters                                 21
Article 16        -        Bankruptcy                                  21
Article 17        -        Assignability or Transfer of Int            22
Article 18        -        Admission of Substituted Members; Death
                           or Incapacity; Further Conditions           24
Article 19        -        Liquidation                                 25
Article 20        -        Gender                                      26
Article 21        -        Further Assurances                          26
Article 22        -        Covenant Against Partition                  26
Article 23        -        Notices                                     26
Article 24        -        Applicable Law                              27
Article 25        -        Captions                                    27
Article 26        -        Counterparts                                27
Article 27        -        Binding Effect                              27
Article 28        -        Partial Invalidity                          27
Article 29        -        Integration                                 28

Exhibit A         -        Property Description
Exhibit B         -        Contract of Sale
Schedule A        -        Members' Percentage Interests
Schedule B        -        Example of the Operation of Section 8.3

<PAGE>


                               OPERATING AGREEMENT

                                       FOR

                          SEIDMAN AND ASSOCIATES, LLC.

         AGREEMENT  made  November  9,  1994  by and  between  LAWRENCE  SEIDMAN
("Lawrence  Seidman"),  having an address at 19 Veteri Place,  Wayne, New Jersey
07470;  SONIA SEIDMAN ("Sonia  Seidman"),  having an address at 19 Veteri Place,
Wayne, New Jersey 07470;  SEIDCAL Associates  ("Seidcal"),  a New Jersey general
partnership  having an address c/o Cali Realty  Corporation,  11 Commerce Drive,
Cranford,  New Jersey 07016; PAUL SCHIMDT ("Schimdt"),  having an address at 159
Clinton   Place,   Hackensack,   New  Jersey   07601;   and  RICHARD   GREENBERG
("Greenberg"),  having an address  at 1235A  Route 23 South,  Wayne,  New Jersey
07474  (hereinafter  Lawrence  Seidman,  Sonia  Seidman,  Seidcal,  Schimdt  and
Greenberg  may  sometimes  be  referred  to   individually  as  a  "Member"  and
collectively as the "Members").

                                   WITNESSETH:

         WHEREAS,  the Members desire to form a limited  liability  company (the
"Company")  pursuant to the New Jersey Limited  Liability Company Act (the"Act")
and adopt this Operating Agreement in connection therewith; and

         WHEREAS,  the  purpose of the  Company  shall be to  purchase  stock in
private and public companies and manage and invest the funds of others for these
purposes and for any and all other purposes permitted pursuant to the Act; and

         WHEREAS,  the Members wish to set forth the terms and  conditions as to
the manner in which the Company  shall be operated  and to set forth the rights,
obligations and duties of the Members to each other and to the Company; and

         WHEREAS, by executing this Operating Agreement,  each Member represents
that he has sufficient  right and authority to execute this Operating  Agreement
and not acting on behalf of any undisclosed or partially disclosed principal.

         NOW,  THEREFORE,  in  consideration  of ten ($10) dollars and for other
good and valuable consideration,  the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows effective as of the date first
written above.

                                    ARTICLE 1
                                   DEFINITIONS

         1.1      For purposes of this Agreement, the following terms shall have
the definitions set forth below:

<PAGE>

         "Additional Contribution":  Each Member's pro-rata portion of a
Required Amount, determined by multiplying the Required Amount by each Member's
Interest.

         "Additional Member":  Any person or entity who acquires an additional
 interest in the Company.

         "Adjusted Capital Account":  As defined in Section 9.4(h).

         "Capital Account" or "Capital Accounts":  As defined in Section 6.4.

         "Capital Contributions":  The respective capital contributions,
 including any Additional Contribution,of each of Member to the Company.

         "Capital  Transaction"  or  "Capital  Transactions":   Sale,  transfer,
assignment  or  exchange  of stock  purchases  or other  investment  made by the
Company or other  similar  transactions  which,  in  accordance  with  generally
accepted principles, are treated as a capital transaction.

         "Certificate of Formation": The Certificate of Formation of the Company
filed with the  Secretary  of State of the State of New Jersey,  pursuant to the
Act to form the  Company,  as  originally  executed  and as  amended,  modified,
supplemented or restated from time to time, as the context requires.

         "Code":  The Internal Revenue Code of 1986, as amended, and any
reference to a particular section of the Code shall be deemed to include any
successor section to such section.

         "Company":  Seidman and Associates, LLC.

         "Contributing Member":  A Member which has made its Additional
Contribution.

         "Default Loan":  A loan to the Company of an amount equal to the
Additional Contribution not made by a Defaulting Member.

         "Defaulting Member":  A Member which fails to make his Additional
Contribution as required herein.

         "Default  Rate":  A floating  rate equal to the lesser of (a) ten (10%)
percent per annum in excess of the rate of interest  announced from time to time
in The Wall  Street  Journal  as the  "prime  rate" or "base  rate"  charged  by
institutional  commercial lenders,  from time to time or (b) the maximum rate of
interest  then  permitted  according  to the laws of the State of New  Jersey or
according to Federal law, to the extent applicable.

<PAGE>

        "Gain from a Capital  Transaction":  The gain recognized by the Company
attributable to a Capital Transaction,  determined in accordance with the method
of accounting used by the Company for federal income tax purposes.  In the event
there is a revaluation of Company property and the Capital Accounts are adjusted
pursuant to Section 6.4(c), Gain from a Capital Transaction shall be computed by
reference to the "book items" and not the corresponding "tax items".

         "Income":  Net Proceeds and all other income or amounts, however
 characterized, received by the Company.

         "Interest":  The respective percentage interest of  each Member as set
 forth on Schedule A.

         "Loss from a Capital  Transaction":  The loss recognized by the Company
attributable to a Capital Transaction,  determined in accordance with the method
of accounting used by the Company for federal income tax purposes.  In the event
there is a  revaluation  of the Company  property  and the Capital  Accounts are
adjusted  pursuant to Section 6.4(c),  Loss from a Capital  Transaction shall be
computed by reference to the "book items" and not the corresponding "tax items".

         "Managing Member":  Lawrence Seidman, or such successor appointed by a
 majority in interest of the remaining Members.

         "Member":  Each of the parties who has executed this Operating
Agreement and any party who may hereafter become an Additional Member or a
Substitute Member pursuant to this Operating Agreement.

         "Member Nonrecourse Debt":  Any nonrecourse debt of the Company for
which a Member bears the economic risk of loss, determined in accordance with
Treasury Regulation Section 1.704-2(b) (4).

         "Member  Nonrecourse  Debt  Deductions":  With  regard  to  any  Member
Nonrecourse  Debt, the amount of the net increase during any taxable year to the
Company in the amount of Minimum Gain  Attributable to Member  Nonrecourse Debt,
over the aggregate  amount of any  distributions  during such year to the Member
who bears the economic  risk of loss for such debt of proceeds of such debt that
are  allocable  to an increase in the Minimum Gain  Attributable  to such Member
Nonrecourse  Debt.  Such amounts shall be determined in accordance with Treasury
Regulation Section 1.704-2(i) (2).

         "Minimum  Gain":  The amount of gain which would be  recognized  to the
Company for federal  income tax  purposes  if all  Company  property  secured by
Nonrecourse  Liability  were  transferred  to  the  creditor  of  such  debt  in
satisfaction  thereof (and for no other consideration) in a taxable transaction.

<PAGE>

The amount of such gain shall be determined  and  calculated in accordance  with
Treasury Regulation Section 1.704--2(g) (i).
         "Minimum Gain Attributable to Member  Nonrecourse  Debt": The amount of
gain which would be recognized by the Company for federal income tax purposes if
all Company property secured by Member  Nonrecourse Debt were transferred to the
creditor of such debt in satisfaction  thereof (and for no other  consideration)
in a  taxable  transaction.  The  amount of such gain  shall be  determined  and
calculated in accordance with Treasury Regulation Section 1.704-2(f) (i) (4).

         "Net  Proceeds":  The net  proceeds  available  to the  Company  from a
Capital  Transaction  after  deducting  (i) all costs and  expenses  incurred in
connection therewith, (ii) any liens or other indebtedness which is satisfied or
refinanced  as a  result  of such  Capital  Transaction,  and  (iii)  reasonable
reserves  established  by the Company from time to time for working  capital and
other purposes.

         "Net Profit" and "Net Loss":  The net income  (including  income exempt
from tax) and net loss (including  expenditures  that can neither be capitalized
nor deducted),  respectively,  of the Company, determined in accordance with the
method of accounting  used by the Company for federal  income tax purposes,  but
computed  without regard for Gain from Capital  Transactions,  Loss from Capital
Transactions  and  items of  income  or  loss,  if any,  that  are  specifically
allocated to Members.  In the event there is a revaluation  of Company  property
and the Capital  Accounts are adjusted  pursuant to Section 6.4(c),  Net Profits
and Net  Losses  shall be  computed  by  reference  to the "book  items" and not
corresponding "tax items".

         "Nonrecourse Liability":  Any Company debt for which no Member has any
 economic risk of loss, determined in accordance with Treasury Regulation
 Section 1.704-2(b) (3).

         "Operating Agreement":  This Operating Agreement as originally
 executed and as amended, modified,supplemented or restated from time to time.

         "Required Amount":  The amount of cash required by the Company as
determined by a majority in interestof the Members.

         "Substitute Member":  Any transferee of a Member's Interests who is
admitted as a Member in the Company pursuant to Article 17 or 18.

         "Unrecovered  Additional   Contributions":   The  aggregate  amount  of
Additional  Contribution  made by a Member  pursuant  to Section 7.1 hereof less
prior  distributions  to such  Member of Income  which is  distributed  to repay
outstanding  Additional  Contributions  and any  interest  on any  Default  Loan
specially allocated to such Member.



<PAGE>


                                    ARTICLE 2
                                    FORMATION

         2.1      The parties hereto do hereby form the Company under the name
 of SEIDMAN AND ASSOCIATES, LLC.pursuant to the Act.  Pursuant to the provisions
 of the Act, the formation of the Company shall be effective upon the filing of
 the Certificate of Formation.

         In order to maintain the Company as a limited  liability  company under
the laws of the State of New Jersey,  the  Company  shall from time to time take
appropriate  action,  including the preparation and filing of such amendments to
the  Certificate  of  Formation  and  such  other  assumed  name   certificates,
documents,  instruments and  publications as may be required by law,  including,
without limitation, action to reflect:

                  (i)      a change in the Company name;

                  (ii)     a correction of a defectively or erroneously executed
 Certificate of Formation;

                  (iii)    a correction of false or erroneous  statements in the
                           Certificate of Formation or the desire of the Members
                           to make a change in any  statement  therein  in order
                           that it  shall  accurately  represent  the  agreement
                           among the Members; or

                  (iv)     a change in the time for dissolution of the Company
 as stated in the Certificate of
                           Formation and in this Agreement.

         Section 2.2 Other Instruments. Each Member hereby agrees to execute and
deliver to the Company  within five (5) days after receipt of a written  request
therefor,  such other and  further  documents  and  instruments,  statements  of
interest and holdings,  designations,  powers of attorney and other  instruments
and to take  such  other  action  as the  Company  deems  necessary,  useful  or
appropriate to comply with any laws, rules or regulations as may be necessary to
enable  the  Company  to  fulfill  its  responsibilities  under  this  Operating
Agreement,  to preserve the Company as a limited liability company under the Act
and to enable the  Company to be taxed as a  partnership  for  federal and state
income tax purposes.

                                    ARTICLE 3
                                PRINCIPAL OFFICE

         3.1 The Company's registered office in New Jersey shall be at 19 Veteri
Place, Wayne, New Jersey 07470. The Company's registered agent who is a resident
of New Jersey is  Lawrence  Seidman,  whose  business  address 19 Veteri  Place,
Wayne,  New  Jersey  07470.  At any time,  the  Company  may  designate  another
registered agent and/or office.

<PAGE>

         3.2 The  principal  place of  business  of the  Company  shall be at 19
Veteri Place,  Wayne,  New Jersey 07470. At any time, the Company may change the
location  of its  principal  place  of  business  and may  establish  additional
offices.

                                    ARTICLE 4
                                TERM AND DURATION

         4.1 The Company shall  commence upon the filing of the  Certificate  of
Formation,  and shall  continue  in full  force and  effect  until May 1,  2024,
provided,  however,  that the Company shall be dissolved prior to such date upon
the happening of any of the following events:

         (a)      The mutual written consent of the Members to dissolve the
Company.

         (b) The sale or other  divestiture of all or  substantially  all of the
assets of the  Company  and the  distribution  of the  proceeds  thereof  to the
Members,  including real estate or interests held or owned by the Company (other
than a transfer to a nominee of the Company for any Company purpose, which event
shall not be construed as an event of termination);  provided, however, that (i)
if the Company receives a purchase money mortgage or other  collateral  security
in connection with such sale, the Company shall continue (A) until such mortgage
or security  interest is paid in full or  otherwise  disposed  of, or (B) in the
event of foreclosure of such mortgage, or security interest provided the Company
retains title therein;  and (ii) the Company shall continue if the assets of the
Company are exchanged under Section 1031 of the Code.

         (c) Upon the death, retirement, expulsion, bankruptcy or dissolution of
a Member  or  occurrence  of any  other  event  that  terminates  the  continued
membership  of a Member  in the  Company  (a  "Dissolution  Event")  unless  the
business of the Company is continued by the  unanimous  consent of the remaining
Members within ninety (90) days following the Dissolution Event.

         (d)      The entry of a decree of judicial dissolution under Section
 49 of the Act.

         (e) The happening of any other prior event which  pursuant to the terms
and  provisions  of  this  Operating  Agreement  shall  cause a  dissolution  or
termination of the Company.

<PAGE>

4.2 Upon any  dissolution  of the Company,  the  distribution  of the  Company's
assets and the winding up of its affairs shall be concluded in  accordance  with
Article 19 of this Operating Agreement.

                                          ARTICLE 5
                                           PURPOSE

5.1      The business of the Company shall be for the purpose of:

         (a)      Purchasing stock in private and public companies and managing
 and investing funds of others for
these purposes.

         (b) Such other  activities  incident or  appropriate  to the foregoing,
including  acting directly or in conjunction with others through joint ventures,
partnerships or otherwise.

         5.2      The business of the Company shall also be for any lawful
purpose.

                                    ARTICLE 6
                      CAPITAL CONTRIBUTIONS BY THE MEMBERS

         6.1 (a) Upon execution  hereof, or at such other times as determined by
the Managing Member,  each Member shall contribute in cash to the capital of the
Company an amount in the aggregate equal to that set forth opposite  his/her/its
name on Schedule A attached hereto.

         (b) A Member's  interest in the  Company  shall be  represented  by the
percentage  interest  held by such  Member.  Each  Member's  respective  initial
interest in the Company is set forth opposite his/her name on Exhibit B attached
hereto.

         6.2 No Member  shall have the right to withdraw any part of his Capital
Contribution  or  receive  any  distribution,  except  in  accordance  with  the
provisions of this Operating Agreement. No interest shall be paid on any Capital
Contribution.

         6.3 No  Member  shall  have any  priority  over any other  Member  with
respect to the return of Capital Contributions.

         6.4 The Company shall maintain a capital account (a "Capital  Account")
for each Member within the provisions of Treasury Regulation Section 1.704-1 (b)
(2) (iv) as such regulation may be amended from time to time.  Without  limiting
the foregoing, the Member's Capital Accounts shall be adjusted as follows:

         (a)  Subject to the last  sentence  of  Section  6.4 (c),  the  Capital
Account  of each  Member  shall be  credited  with (i) an  amount  equal to such

<PAGE>

Member's initial cash contribution and any additional cash  contributions to the
Company and the fair market value of property or securities  contributed  to the
Company  (net of  liabilities  secured by such  property) if a  contribution  of
property or securities  shall be permitted by the Company and (ii) such Member's
share of the Company's Net Profits and Gain from Capital Transactions (including
income and gain exempt from tax).

         (b)  Subject to the last  sentence  of  Section  6.4 (c),  the  Capital
Account of each Member shall be debited by (i) the amount of cash  distributions
to such  Member  and  the  fair  market  value  of  property  and/or  securities
distributed  to the Member (net of liabilities  secured by such property  and/or
securities)  and (ii) such Member's share of the Company's Net Loss and Net Loss
from Capital Transactions  (including expenditures which are not permitted to be
capitalized or deducted for tax purposes).

         (c) Upon the  transfer  of an  interest  in the  Company,  the  Capital
Account of the  transfer  Member (as  adjusted,  if at all,  as required by this
Section 6.4) that is attributable  to the  transferred  interest will be carried
over to the  transferee  Member.  The  Capital  Account  will not be adjusted to
reflect any  adjustment  under  Section  743 of the Code except as  specifically
provided in Treasury  Regulation  Section 1.704-1 (b) (2) (iv) (m). Upon (i) the
"liquidation of the Company" (as hereinafter defined),  (ii) the "liquidation of
a  Member's  interest  in the  Company"  (as  hereinafter  defined),  (iii)  the
distribution of money,  property or securities to a Member as consideration  for
an interest in the Company,  or (iv) the  contribution of money or (if permitted
pursuant to (a) above)  property  and/or  securities  to the Company by a new or
existing  Member as  consideration  for an interest in the Company,  or upon any
transfer  causing a  termination  of the  Company  for tax  purposes  within the
meaning of Section 708(b) (1) (B) of the Code, then adjustments shall be made to
the  Members'  Capital  Accounts  in the  following  manner:  all  property  and
securities of the Company which are not sold in connection with such event shall
be valued at their then fair market value;  such fair market value shall be used
to determine both the amount of gain or loss which would have been recognized by
the Company if the  property  and  securities  had been sold for its fair market
value (subject to any debt secured by the property and securities) at such time,
and the amount of Income,  which  would have been  distributable  by the Company
pursuant to Article 9 if the property and  securities had been sold at such time
for said fair market value, less the amount of any debt secured by the property;
the  Capital  Accounts  of the  Members  shall be adjusted to reflect the deemed
allocation of such  hypothetical gain or loss in accordance with Article 10; and
the  Capital  Accounts of the Members  (or of a  transferee  of a Member)  shall
thereafter be adjusted to reflect "book items" and not "tax items" in accordance
with Treasury  Regulation  Sections 1.704-1 (b) (2) (iv) (g) and 1.704-1 (b) (4)
(i).

         (d) For  purposes of this Article 6, (i) the term  "liquidation  of the
Company" shall mean (A) a termination of the Company effected in accordance with
this  Operating  Agreement,  which  shall be deemed to occur,  for  purposes  of

<PAGE>

Article 6, on the date upon which the Company  ceases to be a going  concern and
is continued in existence solely to wind-up its affairs, or (B) a termination of
the  Company  pursuant  to  Section  708(b)(1)  of the  Code;  and (ii) the term
"liquidation  of a Member's  interest in the Company" shall mean the termination
of the Member's entire interest in the Company effected by a distribution,  or a
series of distributions, by the Company to the Member.

                                    ARTICLE 7
                        ADDITIONAL CAPITAL CONTRIBUTIONS

         7.1  No  Member  shall  be  obligated to  make additional capital
contributions to the Company.  If the Managing  Member,  with the concurrence of
Members  holding a majority in interest of the Company,  shall  determine  there
shall  be  a  Required  Amount  for  any  Company  purpose,  including,  without
limitation, those purposes set forth in Article 5, then within fifteen (15) days
of notice of such  requirement,  each Member may, but shall not be obligated to,
contribute to the Company his Additional Contribution.

         7.2 If a Member fails to make his Additional Contribution,  in whole or
in part, as required in Section 7.1 above (the "Noncontributing  Member"), then,
so long as any other Member shall make his Additional  Contribution  as provided
herein (each such Member making his Additional  Contribution  being  hereinafter
referred to as "Contributing  Member"),  any Contributing  Member shall have the
option (a) with the  consent  of a  majority  in  interest  of the  Contributing
Members (i) to make a capital contribution equal to the Additional  Contribution
not made by the  Noncontributing  Member or (ii) to make a Default Loan equal to
the Additional  Contribution not made by the Noncontributing  Member or (b) with
the  unanimous  written  consent of each  Contributing  Member,  to declare  the
Company terminated as a result of the  Noncontributing  Member's default. In the
event  that more than one  Contributing  Member  desires  to make an  Additional
Contribution,  or is  permitted  to  make a  Default  Loan,  on  account  of the
Noncontributing  Member,  each such  Contributing  Member  shall be permitted to
participate in proportion to their respective Interests. All loans made pursuant
to this Section 7.2 shall bear interest at the Default Rate.

         7.3 Upon the making of a capital  contribution to the Company  pursuant
to Section 7.2, the Interest of the Noncontributing  Member and the Contributing
Members shall be adjusted as follows: (a) the Noncontributing  Member's Interest
shall be decreased (but not below zero) by subtracting therefrom an amount equal
to the percentage equivalent of the quotient of (i) the Additional  Contribution
not  made by the  Noncontributing  Member  giving  rise to  application  of this
Section 7.3 multiplied by (A) 200% upon the first failure of the Noncontributing
Member to make an Additional Contribution, (B) 300% upon the second such failure
and (C) 400% upon the third such failure,  divided by (ii) the aggregate  amount
of all Capital  Contributions  made by the  Members  (including  the  Additional
Contributions  received  by the  Company),  and  (b) the  Contributing  Members'

<PAGE>

Interest  shall be increased by adding thereto an amount equal to the percentage
by which the Noncontributing  Member's Interest was decreased pursuant to clause
(a) above.  Upon the fourth and each subsequent  failure of the  Noncontributing
Member to make an Additional Contribution giving rise to the application of this
Section 7.3, a  majority-in-interest  of the Contributing Members shall have the
option, exercisable in their sole discretion, to cause the remaining Interest of
the  Noncontributing  Member to be forfeited and  allocated to the  Contributing
Members or to continue re-allocating the Interests of the Noncontributing Member
and Contributing  Members as provided in the preceding  sentence except that the
percentage multiple set forth in clause (i) (C) shall be increased 100% for each
failure of the  Noncontributing  Member to make an Additional  Contribution.  An
example of the operation of this Section 7.3 with respect to a re-allocation  of
Interests  upon  the  first  failure  of a  Noncontributing  Member  to  make an
Additional Contribution, is set forth in Schedule B attached hereto.

         7.4 The  obligations  of the Members  contained  in this  Section 7 are
personal  and run only to the benefit of the Company and the Members and may not
be  enforced  by any third  parties.  No creditor of the Company may rely on the
foregoing  provisions of this Article 7 or any other provision of this Operating
Agreement to make any  contributions or returns to the Company,  notwithstanding
any  agreement,  representation,  intention,  indication  or  otherwise  to  the
contrary.

                                    ARTICLE 8
                               CASH DISTRIBUTIONS

         8.1 The Company shall distribute Income to the Members at such times as
the  Company  shall  determine  (but  not less  often  than  quarterly),  in the
following order of priority:

                  (a)  first,  to any  Member  who made a Default  Loan,  to the
payment  of accrued  and unpaid  interest,  and the then  outstanding  principal
balance  of,  any  Default  Loan,  such  distribution  to be  proportion  to the
aggregate amount of interest,  and the principal,  owed. If more than one Member
participates in the making of a Default Loan, then distributions to such Members
on account of this Section  8.1(a) shall be made in proportion to the amounts so
loaned.  If there shall be more than one  instance  in which a Default  Loan has
been made,  then Default  Loans shall be repaid in the order in which they shall
have been outstanding the longest;

                  (b)      second, to the Members in an amount equal to and in
 proportion to their Unrecovered Additional Contributions;

                  (c) next, to the Members in an amount  sufficient to give them
a ten percent (10%) return compounded annually on the aggregate of their Capital
Contributions and Additional Contributions;

<PAGE>

                  (d)  next,  to Sonia  Seidman  and the  Managing  Member in an
amount  sufficient to pay to them, in the aggregate,  up to twenty percent (20%)
of the net annual profits of the Company for each year calendar that the Company
is in existence to be paid 5% to the Managing  Member and 15% to Sonia  Seidman;
and

                  (e)      the balance, if any, shall be distributed to the
 Members in proportion to their Interests.

         8.2   Notwithstanding   Section  8.1,  Net  Proceeds   from  a  Capital
Transaction which constitutes a liquidation of the Company,  together with other
funds remaining to be distributed,  shall be distributed to the Members no later
than the later of (a) the end of the  taxable  year of the Company in which such
liquidation  occurs;  or (b)  within  ninety  (90)  days  after the date of such
liquidation  event,  after payment of all Company  liabilities  and expenses (or
adequate provision therefor),  in accordance with Section 9.1, except that in no
event shall (x) a distribution  be made to any Member if, after giving effect to
such  distribution,  all liabilities of the Company,  other than  liabilities to
Members on account of their  Interests and liabilities for which the recourse of
creditors of the Company is limited to specified property of the Company, exceed
the fair  value of the  assets of the  Company,  except  that the fair  value of
property  that is subject to a liability  for which the recourse of creditors is
limited  shall be included in the assets of the Company  only to the extent that
the fair value of the property  exceeds that liability and (y) the  distribution
to a Member exceed the positive  balance in such Member's  Capital Account after
giving effect to all  allocations to such Member under Article 9 of Net Profits,
Net Losses,  and Gain and Loss from  Capital  Transactions  so that  liquidation
proceeds shall be distributed in accordance with each Member's  positive Capital
Account   balance   (within   the  meaning  of   Treasury   Regulation   Section
1.704-1(b)(2)(ii)(b)  as in  effect  on the date  hereof).  If a  members  shall
receive a distribution  that should not have been made based upon the provisions
of Section 8.2 (x),  the  provisions  of Section  42:2B-42  (b) of the act shall
apply . Section  42:2B-42(c) of the Act shall apply to all distributions made to
the Members.

                                    ARTICLE 9
                                 TAX ALLOCATIONS

         10.1 Net  Profits,  Net Losses and any  investment  tax credit for each
fiscal year or part thereof  shall be allocated to the Members in  proportion to
their Interests.

         10.2     Gain from a Capital Transaction shall be allocated in the
 following order:

                  (a) There shall first be allocated to those  Members,  if any,
who have deficit  balances in their Capital Accounts  immediately  prior to such
Capital Transaction an amount of such gain equal to the aggregate amount of such
deficit balances, which amount shall be allocated in the same proportion as such
deficit balances.

<PAGE>
                 (b) There shall next be  allocated to each of the Members gain
in  proportion  to (but not greater  than) the amount by which (x) the amount of
Net Losses  theretofore  allocated to each Member and not theretofore taken into
account under this Section 9.2(b), exceeds (y) the gain allocated to such Member
under Section 9.2(a).

                  (c) There shall next be  allocated to each of the Members gain
equal to the amount by which (x) the aggregate  proceeds  derived from a Capital
Transaction  distributable  to each Member in accordance  with the provisions of
Section 8.1 or 8.2 other than with respect to Default Loans, as the case may be,
exceeds (y) the positive balance, if any, in such Member's Capital Account after
such Member's Capital Account has been adjusted to reflect the gain allocated to
such Member pursuant to Sections 9.2(a) and 9.2(b);  provided,  however, that if
there shall be an insufficient amount of gain determined by this Section 9.2(c),
then the gain shall be allocated to the Members in proportion to the  respective
amounts determined pursuant to this Section 9.2(c).

                  (d)      Any remaining gain shall be allocated among the
 Members in proportion to their
Interests.

                  (e) If the Company shall realize,  upon a Capital Transaction,
gain which is treated as  ordinary  income  under  Sections  1245 or 1250 of the
Code,  such  ordinary  income  shall be allocated to the Members who receive the
allocation of the  depreciation  or cost recovery  deduction  that generated the
ordinary income in the same proportions as such deductions.

                  (f)  Notwithstanding  the foregoing,  distributions  of Income
made to a Member for interest  and in repayment of the  principal on any Default
Loan shall not be treated as Income for the purpose of allocating  gain pursuant
to this  Section 9.2 or for any other  purpose.  Any  interest on a Default Loan
shall be treated as a "guaranteed payment" for purposes of Section 707(c) of the
Code.

         10.3     Losses from Capital Transactions shall be allocated in the
following order:

                  (a) There shall first be allocated to those  Members,  if any,
whose  positive  balances in their  Capital  Accounts  exceed their  Unrecovered
Additional  Contributions,  an amount of such loss equal to such excess  amount,
which amount shall be allocated in the same proportion as such excess amounts.

                  (b) There shall next be  allocated to those  Members,  if any,
that have positive  balances in their Capital  Accounts,  an amount of such loss
equal to the aggregate amount of such positive  balances,  which amount shall be
allocated in the same proportion as such positive balances.

<PAGE>

                  (c)      The balance of such loss shall be allocated to the
Members in proportion to their Percentage Interests.

         10.4     Notwithstanding the preceding provisions of this Article 10:

                  (a) Except as provided in sub-section (e) below, no allocation
of loss or deduction shall be made to a Member if such allocation would cause at
the end of any taxable year a deficit in such Member's  Adjusted Capital Account
to exceed his allocable  share of Minimum  Gain;  and any such loss or deduction
not  allocated  to a Member  by reason of this  Section  9.4 shall be  allocated
pro-rata to each other  Member if and to the extent that such  allocation  shall
not create a deficit in such other Member's  Adjusted  Capital Account in excess
of his  allocable  share  of  Minimum  Gain;  provided,  however,  that  if such
allocation  would create such deficit in all Members'  Adjusted Capital Accounts
in excess of their share of Minimum Gain, then such allocation  shall be made in
accordance with the principles of Treasury Regulation Section 1.704-1(b).

                  (b) If,  during any taxable  year,  there is a net decrease in
Minimum Gain then,  before any other  allocations  are made for such year,  each
Member shall be allocated  items of Company  income and gain for such year (and,
if necessary, subsequent years) in an amount equal to each Member's share of the
net decrease in Company Minimum Gain (within the meaning of Treasury  Regulation
Section 1.704-2(g)(2)) in a manner so as to satisfy the requirements of Treasury
Regulation Section 1.704-2(f).

                  (c) If,  during any taxable  year,  there is a net decrease in
Company Minimum Gain  Attributable to Member to Member  Nonrecourse  Debt, then,
before any other allocations are made for such year other than those pursuant to
Section  9.4(b)  above,  each Member with a share of the  Company  Minimum  Gain
Attributable  to Member  Nonrecourse  Debt at the beginning of the year shall be
allocated items of Company income and gain for such year (and, if necessary, for
subsequent  years) in an amount equal to each Member's share of the net decrease
in  Minimum  Gain  Attributable  to Member  Nonrecourse  Debt as  determined  in
accordance with Treasury  Regulation Section  1.704-2(i)(4) in a manner so as to
satisfy the requirements of said Treasury Regulation.

                  (d) If during any taxable year a Member unexpectedly  receives
(i) a distribution of cash or property from the Company or (ii) an adjustment or
allocation     described    in    either     Treasury     Regulation     Section
1.704-1(b)(2)(ii)(d)(4)  as in effect on the date hereof  (concerning  depletion
allowances  with  respect  to oil and gas  properties)  or  Treasury  Regulation
Section 1.704-1 (b) (2) (ii) (d) (5) as in effect on the date hereof (concerning
allocations  of loss and  deduction in interests  change  during the year, if an
interest is acquired by gift or if a Member receives certain Company property in
redemption of part or all his interest),  and if such adjustment,  allocation or

<PAGE>

distribution  would  cause at the end of the taxable  year a deficit  balance in
such  Member's  adjusted  capital  account in excess of his  allocable  share of
Minimum Gain, then a pro-rata portion of each item of Company income,  including
gross  income,  and gain for such taxable year (and,  if  necessary,  subsequent
taxable  years)  shall be  allocated to such Member in an amount and in a manner
sufficient to eliminate  such excess  balance as quickly as possible  before any
other  allocation  is made for such year other than  pursuant to Section  9.4(b)
above  so  as  to  satisfy  the  requirements  of  Treasury  Regulation  Section
1.704-1(b) (2) (ii) (d) (qualified income offset).

                  (e) To the extent  required  by  Treasury  Regulation  Section
1.704-2(i) (1), Member Nonrecourse Debt Deductions for any taxable year shall be
allocated to the Member (or  Members)  who bear(s) the economic  risk of loss of
such Member Nonrecourse Debt.

                  (f) In the event that any  allocation is or has been made to a
Member pursuant to Sections 9.4(a), (b), (c), (d) or (e) above, subsequent items
of  income,  deduction,  gain  and loss  shall be  allocated  before  any  other
allocations are made (subject to the provisions of said Sections) to the Members
in the manner which would result in each Member having a Capital Account balance
equal to what it would have been had the allocation pursuant to said Sections.

                  (g)  Upon the  occurrence  of an event  described  in  Section
6.4(c),  all Company  property shall be revalued on the Company's  books at fair
market value,  Capital  Accounts will be adjusted in accordance with Section 6.4
(c), and subsequent  allocations of taxable  income,  gain,  loss and deductions
shall,  solely for tax purposes,  be made necessary so as to take account of the
variation  between  the  adjusted  tax basis and the fair  market  value of such
property in accordance with Section 704 of the Code and the Treasury Regulations
thereunder.

                  (h) For the purposes of this Article,  each Member's "Adjusted
Capital  Account" shall equal the Capital  Account of each Member (1) reduced at
the end of each  taxable  year by the  sum of (x) the  excess  of  distributions
reasonable  expected to be made to such Member over the offsetting  increases to
such Member's  Member's  Capital Account  reasonably  expected to be made in the
same taxable year as the aforesaid distributions, (y) adjustments expected to be
made to such Member's Capital Account described in Treasury  Regulation  Section
1.704-1(b)  (2)  (ii)  (d)  (4) as in  effect  on the  date  hereof  (concerning
depletion  allowances  with  respect  to  oil  and  gas  properties),   and  (z)
allocations expected to be made described in Treasury Regulation Section 1.704-1
(b) (2) (ii) (d) (5) as in effect on the date hereof (concerning  allocations of
loss and  deduction  if  Interests  change  during the year,  if an  Interest is
acquired by gift or if a Member receives  certain Company property in redemption
of part or all of his Interest in the Company),  and (2) increased by the sum of
(i) the amount,  if any,  which the Member is  obligated  to restore the Company
upon  liquidation  of his  Interest if a deficit  balance  exists in his Capital
Account at such time, (ii) the outstanding  principal  balance of any promissory



<PAGE>

note made by such  Member  and  contributed  to the  company if such note is not
readily  tradable on an established  securities  market and if such note must be
satisfied  within  ninety  (90) days after the date said  Member's  Interest  is
liquidated  and (iii) the sum of (a) the amount the Member  would be  personally
liable for either as a Member or in his  individual  capacity as a guarantor  or
otherwise,  and (b) the economic risk of loss the Member would bear attributable
to any Company  liability (as determined in accordance with Treasury  Regulation
Section 1.752-2).

                  (i) In accordance  with Section 704(b) and (c) of the Code and
Regulations  thereunder,  income,  gain,  loss and deduction with respect to any
property contributed to the capital of the Company (including all or part of any
deemed capital contribution under Section 708 of the Code) shall, solely for tax
purposes,  be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company and its agreed value.
In the event that  Capital  Accounts  are ever  adjusted  pursuant  to  Treasury
Regulation  Section  1.704-1(b)  (2) to  reflect  the fair  market  value of any
Company  property,  subsequent  allocations of income,  gain, loss and deduction
with  respect to such asset  shall take  account of any  variation  between  the
adjusted  basis of such asset and its value as  adjusted  in the same  manner as
required under Section 704(c) of the Code and the Regulations thereunder.

                  (j) The allocations provided in this Section 10.4 are intended
to comply with the provisions of Section 704(b) of the Code and the  regulations
thereunder.  However, if any such allocation causes a distortion in the Members'
Interest in contravention of the Members'  economic  arrangement as reflected in
Article 6, the Company has the authority to make curative  allocations  to bring
such  allocations  in  accordance  with  such  Member's  Interest,  as  if  such
allocations  which  caused the  distortion  had not  occurred  and to bring such
allocations  in  compliance  with  Section  794(b)  of the Code and  regulations
thereunder.

                                   ARTICLE 10
                RIGHTS, POWERS AND REPRESENTATIONS OF THE MEMBERS


         10.1 All decisions,  consents,  authorizations and rights in connection
with the business  and affairs the company  shall be carried on and managed by a
majority in  interest  of the  Members,  which  shall have full,  exclusive  and
complete  discretion with respect thereto.  Any Member or person acting pursuant
to any  authority  granted to him in writing by a majority  in  interest  of the
Members  shall  have all  necessary  and  appropriate  powers  to carry  out the
authority so granted,  and no other Member or person  without such  authority so
granted  shall  have the  right  to take any  action  or give  any  consent,  by
affirmative act or acquiescence,  to any matter or thing, affecting the Company,
Premises or Project.  In furtherance  of the foregoing,  any Member or person so
authorized as provided above may:

<PAGE>

                  (a) negotiate,  execute, deliver and perform on behalf of, and
in the name of, and in the name of, the  Company any and all  contracts,  deeds,
assignments,  deeds of  trust,  leases,  subleases,  promissory  notes and other
evidences  of  indebtedness,  mortgages,  bills of sale,  financing  statements,
security agreements,  easements, stock powers, and any and all other instruments
necessary  or  incidental  to the  business  of the  Company  and the  financing
thereof,

                  (b) borrow money,  without  limit as to amount,  and to secure
the payment thereof by mortgage,  pledge, or assignment of, or security interest
in,  all or any part of the  assets  then owned or  thereafter  acquired  by the
Company,

                  (c)      effectuate the purpose of the Company as provided in
 Article 5 hereof,

                  (d)      establish, maintain and draw upon checking and other
 accounts of the Company,

                  (e) execute any notifications, statements, reports, returns or
other  filings  that are  necessary  or  desirable to be filed with any state or
Federal agency, commission or authority,

                  (f)      enter into contracts in connection with the business
 of the Company,

                  (g)  arrange  for  facsimile  signatures  for the  Members  in
executing  and  all  documents,  papers,  checks  or  other  writings  or  legal
instruments which may be necessary or desirable in the Company business, and

                  (h)  execute,  ackowledge  and deliver any and all  contracts,
documents and instruments  deemed  appropriate to carry out any of the foregoing
purposes and intent of this Operating Agreement.

         10.2 In the management of the Company,  and with respect to any and all
decisions  with  respect to the Company and its  business and the conduct of its
operations,  the Members of the  Company  shall have a  cumulative  total of one
hundred  (100)  votes,  and each Member  shall have the number of votes equal to
his/her  Interest.  Wherever and whenever  the word  "majority"  appears in this
Operating Agreement,  either as a noun or as an adjective, it shall mean for all
purposes  that number of Members whose votes when  considered or added  together
constitute  more than fifty (50) of the total one hundred (100) votes of all the
Members.  Any act or decision of any of the Members may be confirmed,  overruled
or precluded by the majority of the Members.

<PAGE>

         10.3 Each of the  Members,  on their own behalf and on behalf of anyone
who shall represent their Interests,  hereby waives notice of the time, place or
purpose of any  meeting at which any matter is to be voted on by the  Members or
anyone  acting by or for  them,  waives  any  requirement  that  there be such a
meeting and agrees that any action may be taken by consent without a meeting.

         10.4 The fact that the Members are directly or indirectly interested in
or connected  with any person,  firm or  corporation  employed by the Company to
render  or  perform  a  service,  or from  which  or whom  the  Company  may buy
merchandise,  material or other  property  shall not  prohibit  the Company from
employing such persons,  firms or corporations,  or from otherwise  dealing with
him under such reasonable terms and conditions as the Company may determine.

                                   ARTICLE 11
                                 MANAGING MEMBER

         11.1  Notwithstanding  any  provision  contained  in  Article 10 to the
contrary,  the daily  affairs of the Company  shall be conducted by the Managing
Member who shall the power and  authority to make  ordinary and usual  decisions
concerning  the business and affairs of the Company.  The Managing  Member shall
have the power and authority, on behalf of the Company, to do the following:

                  (a)      open one or more depository accounts and make
deposits into and checks and withdrawals against such accounts;

                  (b) invest the capital  resources of the  Company,  in amounts
not to exceed one hundred and  twenty-five  percent (125%) of the capital of the
Company  without the prior consent of a majority in interest of the Members,  in
stocks, bonds and other securities of publically traded companies  (collectively
"Permitted Investments"),  including the ability to buy, sell, exchange, swap or
transfer such securities;

                  (c)      open one or more cash or margin brokerage accounts in
 the name of the Company for purposes of making Permitted Investments;

                  (d)      obtain insurance covering the business and affairs
of the Company;

                  (e)      commence, prosecute or defend any proceeding in the
 Company's name; and

                  (f)      enter into any and all agreements and execute any
and all contracts, documents and instruments necessary or required to
effectuate the foregoing.

<PAGE>

         11.2   Notwithstanding   any  provision  contained  in  this  Operating
Agreement to the contrary,  it is  specifically  agreed between the Members that
the Company  shall make no  investment  in Cali Realty  Corporation  without the
unanimous prior consent of all Members.

         11.3 (a) The Managing  Member shall perform and discharge his duties as
a manager in good  faith,  with the care an  ordinary  prudent  person in a like
position  would  exercise  under  similar  circumstances,  and  in a  manner  he
reasonably  believes to be in the best  interests of the  Company.  The Managing
Member  shall not be liable  for any  monetary  damages to the  Company  for any
breach of such duties  except for:  receipt of a financial  benefit to which the
Manager is not entitled; voting for or assenting to a distribution to Members in
violation of this  Operating  Agreement  or the Act; a knowing  violation of the
Law; fraud; or a willful breach of fiduciary obligations owed to the Members.

                  (b) The Managing  Member shall devote a significant  amount of
his time and efforts to furthering  the business and  investments of the Company
and any other  corporations  and  partnerships  formed to invest in the stock in
private and public  companies or real estate assets and mortgages.  The Managing
Member  shall also be  permitted to perform  consulting  and legal  services for
Environmental  Waste Management  Associates,  Inc., its principal  shareholders,
Richard Greenberg,  and for Glenn Woo and other real estate related clients.  In
compensation equal to $125,000, payable quarterly.

         11.4 Unless otherwise  provided by law or expressly  assumed,  a person
who is a Member or manager,  or both, shall not be liable for the acts, debts or
liabilities of the Company.

         11.5 The Company  shall  indemnify  the Managing  Member and each other
Member and may  indemnify  and  employee or agent of the Company who was or is a
party or is  threatened to be made a party to  threatened,  pending or completed
action,  suit  or  proceeding,  whether  civil,  criminal,   administrative,  or
investigative,  and whether  formal or informal,  other than action by or in the
right of the  Company,  by  reason  of the fact  that  such  person  is or was a
manager, employee or agent of the Company against expenses,  including attorneys
fees, judgements,  penalties,  fines and amounts paid in settlement actually and
reasonably  incurred  by such  person in  connection  with the  action,  suit or
proceeding, if the person acted in good faith, with the care an ordinary prudent
person in a like position would exercise under similar  circumstances,  and in a
manner that such person  reasonably  believed to be in the best interests of the
Company and with respect to a criminal action or proceeding,  if such person had

<PAGE>

no reasonable cause to believe such person's conduct was unlawful. To the extent
that a Member,  employee  or agent of the  Company  has been  successful  on the
merits or otherwise in defense of an action, suit or proceeding or in defense of
any claim, issue or other matter in the action, suit or proceeding,  such person
shall be indemnified against actual and reasonable expenses, including attorneys
fees incurred by such person in connection  with the action,  suit or proceeding
and  any  action,   suit  or   proceeding   brought  to  enforce  the  mandatory
indemnification  provided  herein.  Any  indemnification  permitted  under  this
Article,  unless  ordered  by a  court,  shall  be made by the  Company  only as
authorized in the specific case upon a determination that the indemnification is
proper under the circumstances  because the person to be indemnified has met the
applicable  standard of conduct and upon an evaluation of the  reasonableness of
expenses and amount paid in settlement.  This determination and evaluation shall
be made by a majority  vote of the Members who are not parties or  threatened to
be made parties to the action, suit or proceeding. Notwithstanding the foregoing
to the contrary,  no indemnification shall be provided to the Managing Member or
any other Member, employee or agent of the Company for or in connection with the
receipt of a financial benefit to which such person is not entitled,  voting for
or  assenting  to a  distribution  to Members  in  violation  of this  Operating
Agreement of the Act, or a knowing violation of law.

                                         ARTICLE 12
                                 BOOKS, RECORDS AND REPORTS

         12.1 At all times during the  continuance  of the Company,  the Company
shall keep or cause to be kept full and true books of account, in which shall be
entered  fully and  accurately  each  transaction  of the Company.  The books of
account,  together with an executed copy of the  Certificate of Formation of the
Company and any  amendments  thereto,  shall at all times be  maintained  at the
principal  office of the Company and shall be open to inspection and examination
by the members or their  representatives at reasonable hours and upon reasonable
notice.  For purpose hereof, the Company shall keep its books and records on the
same method of accounting employed for tax purposes.

         12.2 The fiscal year of the Company shall be the calendar year.  Within
a  reasonable  time  after  the end of each  fiscal  year and in any event on or
before  thirty  (30) days prior to the filing  date for  individual  tax returns
(including  extensions),  the  accountants for the Company shall deliver to each
Member  (a) upon  request  of a Member,  an annual  statement  of the  Company's
accountants,  and (b) a report or a tax return setting forth such Member's share
of the Company's profit or loss for such year and such Member's  allocable share
of all items of income,  gain, loss, deduction and credit for Federal income tax
purposes.

<PAGE>

         12.3 The Company shall also cause to be prepared and filed all Federal,
state and local tax returns required of the Company. All books, records, balance
sheets,  statements,  reports and tax returns required  pursuant to Section 12.1
and 12.2 hereof shall be prepared at the expense of the Company.

                                   ARTICLE 13
                                  BANK ACCOUNTS

         13.1 All funds and income of the Company (a) shall be  deposited in the
name of the Company in such bank account or accounts as shall be  designated  by
the Managing  Member,  (b) shall be invested in such  Permitted  Investments  as
Managing  Member shall  determine  and (c) shall be kept separate and apart from
the funds of any other individual or entity.

         13.2  Withdrawals  from any such bank account or accounts shall be made
upon the signature of any person so designated by the Company in writing.

                                   ARTICLE 14
                          RIGHTS AND DUTIES OF MEMBERS

         14.1 Subject to duties and  obligations of the Managing  Member,  it is
expressly  understood  that each  Member  may  engage in any other  business  or
investment,  whether  or not in  direct  competition  with the  business  of the
Company,  and neither the Company nor any other  Member shall have any rights in
and to  said  businesses  or  investments,  or the  income  or  profits  derived
therefrom.

         14.2 The Managing  Member may employ,  on behalf of the  Company,  such
persons,  firms or corporations,  including those firms or corporations in which
any Member has an interest,  and on such terms as the Managing Member shall deem
advisable  in the  operation  and  management  of the  business of the  Company,
including,   without  limitation,  such  accountants,   attorneys,   architects,
engineers, contractors, appraisers and experts.

         14.3 No Member shall be personally  liable to the Company or any of the
other  Members for any act or omission  performed  or omitted by him,  except if
such act or omission was attributable to willful misconduct or gross negligence.

         14.4 Each Member  (and each former  Member)  shall be  indemnified  and
saved harmless by the Company from any loss,  damage or expense  incurred by him
by reason of any act or omission performed or omitted by him, except if such act
or omission was attributable to willful misconduct or gross negligence.

<PAGE>

                                   ARTICLE 15
                                   TAX MATTERS

         15.1 (a) Notwithstanding any provisions hereof to the contrary, each of
the Members hereby  recognizes that the Company will be a partnership for United
States  federal  income tax purposes and that the Company will be subject to all
provisions  of  Subchapter  K of Chapter 1 of Subtitle A of the Code;  provided,
however,  that the filing of U.S.  Partnership  Returns  of Income  shall not be
construed  to extend the  purposes of the company or expand the  obligations  or
liabilities of the Members. At the request of any Member, the Company shall file
an election under Section 754 of the Code.

                  (b) The Company shall engage an accountant (the  "Accountant")
to prepare at the expense of the company all tax returns and statements, if any,
which must be filed on behalf of the  Company  regarding  the  Premises  and the
operation, dissolution and liquidation of the Company with any taxing authority.

                  (c) Lawrence  Seidman is designated Tax Matters Member (herein
"TMM") for  purposes  of Chapter 63 of the Code and the  Members  will take such
actions  as  may  be  necessary,   appropriate,  or  convenient  to  effect  the
designation of Lawrence Seidman as TMM. The TMM shall attempt to comply with the
responsibilities outlined in this Section 15.1 and in Sections 6222 through 6231
of the Code (including any Treasury Regulations promulgated thereunder).

                                   ARTICLE 16
                             BANKRUPTCY OF A MEMBER

         16.1  Unless  a  majority  in  interest  of  the  Members  shall  elect
otherwise, a Member shall cease to be a Member of the Company:

                  (a)      if he/she/it:

                           (i)      Makes an assignment for the benefit of
creditors;

                           (ii)     Files a voluntary petition in bankruptcy;

                           (iii)    Is adjudged bankrupt or insolvent, or has
 entered against him an order for relief, in any bankruptcy or insolvency
 proceeding;
                           (iv)     Files  a  petition  or  answer
                           seeking  for  himself/herself/itself   any
                           reorganization, arrangement, composition,
                           readjustment,  liquidation,  dissolution  or  similar
                           relief under any statute, law or regulation;

<PAGE>

                          (v)     Files an answer or other pleading
                           admitting or failing to contest the
                           material allegations of a petition filed against him/
                           her/it in any proceeding of this nature; or

                          (vi)    Seeks, consents to or acquiesces in
                           the appointment of a trustee,
                           receiver or liquidator of the Member or of all or
                           any substantial part of his/her/its
                           properties; or

                  (b) One hundred  twenty (120) days after the  commencement  of
any  proceeding   against  the  Member  seeking   reorganization,   arrangement,
composition, readjustment,  liquidation, dissolution or similar relief under any
statute, law or regulation,  if the proceeding has not been dismissed, or within
ninety (90) days after the appointment  without his consent or acquiescence of a
trustee,  receiver or liquidator of the Member or of all or any substantial part
of his/her  properties,  the  appointment  is not  vacated or stayed,  or within
ninety (90) days after the expiration of any such stay,  the  appointment is not
vacated.

                                   ARTICLE 17
                      ASSIGNABILITY, TRANSFER OR PLEDGE OF
                        INTERESTS; RESIGNATION OF MEMBER

         17.1 (a) No Member  shall  have the right to  assign,  convey,  sell or
otherwise transfer or dispose of, or pledge, mortgage,  hypothecate or otherwise
encumber  his/her/its  Interest,  whether record or beneficial interest thereof,
without the prior written consent of the Company.  Notwithstanding the preceding
sentence, but subject to the restrictions on transferability required by law, or
set forth in any  instrument or agreement by which the Company may be bound,  or
which may be contained in this Operating  Agreement,  an individual  Member,  if
any, may, without any consent,  assign,  convey,  sell or otherwise  transfer or
dispose of all or any portion of his  interest in the Company to any one or more
of the members of his/her immediate family or families (defined for the purposes
of this Operating Agreement as a mother, father, sister, brother, son, daughter,
stepson,  stepdaughter  or spouse  (in each  instance  whether  by  marriage  or
otherwise))  and/or  a  trust  or  other  entity  for  the  benefit  thereof  or
themselves, by a written instrument of assignment and assumption,  provided that
the  instrument  of  transfer  provides  for the  assumption  of the  assignor's
liabilities and obligations hereunder and has been duly executed by the assignor
of such interest and by the  transferee.  The Member shall notify the Company of
any assignment, transfer or disposition of a beneficial interest in any interest
of the Member which occurs without a transfer of record ownership, although such
notification,  or the  absence  of a  response  thereto,  shall  not be deemed a
consent thereof.

                  (b) An assignee or  transferee  of any portion of the interest
of the  Member  shall be  entitled  to  receive  allocations  and  distributions

<PAGE>

attributable  to the  interest  acquired by reason of such  assignment  from and
after the effective  date of the  assignment of such interest to such  assignee;
however. anything herein to the contrary  notwithstanding,  the Company shall be
entitled to treat the  assignor of such  interest of the Member as the  absolute
owner thereof in all respects,  and shall incur no liability for  allocations of
net  income,  net  losses,  or gain or loss  on  sale of  Company  property,  or
transmittal  of reports  and notices  required to be given to Members  hereunder
which are made in good faith to such  assignor  until  such time as the  written
assignment has been received by the Company,  approved and recorded on its books
and the effective date of the  assignment has passed.  Provided that the Company
has actual notice of any assignment of the interest of the Member, the effective
date of such  assignment  on which the  assignee  shall be deemed an assignee of
record shall be the date set forth on the written instrument of assignment.

                  (c)  Any  assignment,   sale,  exchange,   transfer  or  other
disposition  in  contravention  of any of the  provisions of this Article 17 and
Article  18  hereof  shall  be void and  ineffective  and  shall  not bind or be
recognized by the Company.

                  (d) In the event that there  shall be more than one  assignee,
transferee,  representative  or other successor in interest as permitted  herein
(collectively,  the  "Transferees")  and  the  Member  as of the  date  of  this
Operating  Agreement shall remain a Member,  then the Member shall be authorized
to act,  and shall so act,  on behalf of the Member  and all of the  Transferees
acting as such by, through or under the Member. In the event that there shall be
more  than one  Transferee,  and the  Member  as of the  date of this  Operating
Agreement  shall no longer be a Member,  then the Company must be advised by the
Member  whose  interest  is the  subject  of such  event or  failing  which by a
two-thirds  (2/3)  majority  in  interest  of those  holding  any portion of the
interests of the Member,  of one person to act on behalf of all the Transferees.
The Member, if the first sentence of this paragraph shall be applicable,  or the
person so noted to the Company,  if the second  sentence of this paragraph shall
be  applicable,  shall be  authorized  to act,  and shall so act, for all of the
Transferees,  all of whom shall be bound by any decision or action taken by such
person,  and the  Company,  the Company and all of the other  Members,  shall be
entitled to rely on the  decisions or actions  taken by such  person.  Until the
Company shall be advised as to the identity of such person,  (i) the Transferees
shall be  entitled  only to  distributions  and tax  allocations  as provided in
Article 8 and 9 hereof, but shall have no right, power or authority with respect
to any decision  making  reserved  herein to the Members or any of them and (ii)
wherever in this Operating  Agreement provision shall be made for the Members to
make decisions with respect to Company matters,  the interests of the Member, as
transferred to the Transferees, shall not be included in determining whether the
requisite interest of members have consented to or approved of such decision.



<PAGE>

        17.2 Without the prior written consent of all Members and other than as
provided in Section 6.1(b) above, a Member may not resign from the Company prior
to the dissolution and winding up of the Company.


                                   ARTICLE 18
                        ADMISSION OF SUBSTITUTED MEMBERS;
                     DEATH OR INCAPACITY; FURTHER CONDITIONS

         18.1 No  assignment or transfer of all or any part of the interest of a
Member permitted to be made under this Operating Agreement shall be binding upon
the  Company  unless  and  until a  duplicate  original  of such  assignment  or
instrument of transfer,  duly executed and  acknowledged by the assignor and the
transferee, has been delivered to the Company.

         18.2 As a condition to the  admission  of any  substituted  Member,  as
provided in Article 17 hereof,  the person so to be admitted  shall  execute and
acknowledge such instruments,  in form and substance reasonably  satisfactory to
the  Company,  as a majority in interest  of the Members may deem  necessary  or
desirable  to  effectuate  such  admission  and to confirm the  agreement of the
person to be admitted as a Member to be bound by all of the covenants, terms and
conditions of this Operating Agreement, as the same may have been amended.

         18.3 Any person to be admitted as a member  pursuant to the  provisions
of this Operating Agreement shall, as a condition to such admission as a Member,
pay all  reasonable  expenses in  connection  with such  admission  as a Member,
including,  but  not  limited  to,  the  cost  of the  preparation,  filing  and
publication of any amendment to this Operating  Agreement and/or  Certificate of
Formation.

         18.4 In the event of the death or  adjudication  of  incompetency  of a
Member,  or upon the  happening  of any  event  described  in  Article  16,  the
executor, administrator, committee or other legal representative of such Member,
or the  successor in interest of such Member,  shall succeed only to be right of
such  Member to receive  allocations  and  distributions  hereunder,  and may be
admitted  to the  Company  as a Member in the  place and stead of the  deceases,
incompetent,  or bankrupt  Member in accordance  with this Article 18, but shall
not be  deemed  to be a  substituted  Member  unless so  admitted.  Such  event,
however,  shall cause a termination  or  dissolution  of the Company  within one
hundred  twenty  (120) days of such event  unless a majority  in interest of the
Members shall elect to continue the Company within said one hundred twenty (120)
day period.

         18.5  Notwithstanding  anything  to  the  contrary  contained  in  this
Operating  Agreement,  no sale or  exchange of an interest in the Company may be
made if the interest sought to be sold or exchanged,  when added to the total of
all  other  interests  sold or  exchanged  within  the  period  of  twelve  (12)

<PAGE>

consecutive  months prior  thereto,  results in the  termination  of the Company
under Section 708 of the Code without the prior written consent of a majority in
interest of the Members.


       18.6  In the  event  of a  permitted  transfer  of all or  part  of the
interest  of a Member,  the Company  shall,  if  requested,  file an election in
accordance with Section 754 of the Code or a similar  provision  enacted in lieu
thereof,  to  adjust  the  basis of the  Property  of the  Company.  The  Member
requesting  said  election  shall  pay all costs and  expenses  incurred  by the
Company in connection therewith.

                                   ARTICLE 19
                                   LIQUIDATION


         19.1  Upon  the  dissolution  of the  Company,  the  Company  shall  be
liquidated  and its assets  distributed  as required by Section  42:2B-51 of the
Act.

         19.2 The assets of the  Company  shall be  liquidated  as  promptly  as
possible,  but in an orderly and businesslike  manner so as not to involve undue
sacrifice.

         19.3 In the  event  that  any  proceeds  are to be  distributed  to the
Members same shall be distributed,  if  practicable,  no later than the later of
(i) the end of the taxable year of the Company in which such liquidation occurs;
or (ii) within ninety (90) days after the date of such liquidation event.
         19.4 In any  liquidation,  the Company's  assets shall be used first to
pay the costs and expenses of the dissolution and  liquidation.  The liquidation
trustee  (which may be a Member)  shall be  entitled  to  establish  reserves to
provide for any  contingent  or unforeseen  liabilities  or  obligations  of the
Company.

         19.5     With respect to distributions to Members, said distributions
shall be made:

                  (a) first, to the repayment of any accrued and unpaid interest
on,  and the then  outstanding  principal  balance  of,  any  Default  Loan,  in
proportion to the aggregate amount of interest, and then principal, owed, and if
more than one Member shall have made a Default  Loan,  then in proportion to the
amounts so loaned.  If there shall be more than one  instance in which a Default
loan has been made, the Default loans shall be repaid in the order in which they
shall have been outstanding the longest;

                  (b)      second, to the payment of an obligation owed
pursuant to Section 11.3 (c).

                  (c) third,  to all Members in  proportion to and to the extent
         of any remaining  positive  balances in such Member's  Capital  Account
         after giving effect to all locations to such Member under Article 10 of
         this  Operating  Agreement  so  that  liquidation   proceeds  shall  be
<PAGE>


         distributed in accordance with each Member's  positive  Capital Account
         balance (within the meaning of Treasury  Regulation  Section 1.704-1(b)
         (2) (ii) (b) as in effect on the date hereof); and

                  (d)      last, to all Members pro rata in accordance with
their Company Interests.


                                   ARTICLE 20
                                     GENDER


         20.1 All terms and words used in this Operating  Agreement,  regardless
of the sense or gender in which they are used,  shall be deemed to include  each
other sense and gender unless the context requires otherwise.


                                   ARTICLE 21
                               FURTHER ASSURANCES

         21.1 The Members  agree  immediately  and from time to time to execute,
acknowledge,  deliver,  file,  record and  publish  such  further  certificates,
amendments to certificates,  instruments and documents, and to do all such other
acts and  things as may be  required  by law,  or as may,  in the  opinion  of a
majority in interest of the Members,  be necessary or advisable to carry out the
intent and purposes of this Operating Agreement.

                                   ARTICLE 22
                           COVENANT AGAINST PARTITION

         22.1 The Members, on behalf of themselves, their legal representatives,
heirs,  successors and assigns,  hereby specifically renounce,  waive and fofeit
all rights whether arising under contract,  statute,  or by operation of law, to
seek,  bring, or maintain any action for partition in any court of law or equity
pertaining to any real property  which the Company may now or in the future own,
regardless of the manner in which title to any such property may be held.

                                   ARTICLE 23
                                     NOTICES

         23.1  Unless  otherwise  specified  in this  Operating  Agreement,  all
notices,  demands,  requests or other communications which any of the parties to
this   Operating   Agreement  may  desire  or  be  required  to  give  hereunder
(hereinafter  referred to  collectively  as  "Notices")  shall be in writing and
shall be given by mailing the same by postage  prepaid  certified or  registered
mail, return receipt requested, or by nationally recognized overnight courier to
the  appropriate  Member at the address set forth in this  Operating  Agreement.
Notices given in compliance  with the provisions of this Article shall be deemed

<PAGE>

given one (1) business day after delivery to a nationally  recognized  overnight
courier or four (4) business  days after  mailing in a repository  of the United
States Postal Service.


                                   ARTICLE 24
                                 APPLICABLE LAW

         24.1 The parties  agree that the parties shall be governed by, and this
Operating  Agreement  construed in accordance with, the laws of the State of New
Jersey  applicable to agreements made and to be performed in such state and that
all  claims and suits  shall be heard in the courts  located in the State of New
Jersey.

                                   ARTICLE 25
                                    CAPTIONS

         25.1  All  section  titles  or  captions  contained  in this  Operating
Agreement  are for  convenience  only  and  shall  not be  deemed a part of this
Operating Agreement.

                                   ARTICLE 26
                                  COUNTERPARTS

         26.1 This Operating  Agreement may be executed in counterparts and each
counterpart  so executed by each Member shall  constitute  and original,  all of
which when taken together shall constitute one agreement,  notwithstanding  that
all the parties are not signatories to the same counterpart.

                                   ARTICLE 27
                                 BINDING EFFECT

         27.1 This Operating Agreement may not be changed,  modified,  waived or
discharged,  in whole or in part,  unless in  writing  and  signed by all of the
Members.  This Operating  Agreement  shall be binding upon the Members and their
respective executors,  administrators,  legal representatives,  heirs, successor
and  assigns.  The  singular  of any defined  term or term used herein  shall be
deemed to include the plural.

                                   ARTICLE 28
                               PARTIAL INVALIDITY

         28.1  If any  term or  provision  of this  Operating  Agreement  or the
application thereof to any person or circumstance shall to any extent be invalid

<PAGE>


or unenforceable, the reminder of this Operating Agreement or the application of
such term or provision to persons or circumstances  other than those as to which
it is held invalid or unenforceable  shall not be affected thereby and each term
and  provision of this  Operating  Agreement  shall be valid and enforced to the
fullest extent permitted by law.

                                   ARTICLE 29
                                   INTEGRATION

         29.1 This Operating Agreement is the entire agreement among the parties
with respect to the subject matter hereof and  supersedes  all prior  agreements
relative to such subject matter.



<PAGE>


         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Operating
Agreement as of the day and year first above written.





                                                        /S/ Lawrence Seidman






                                                       /S/  Sonia Seidman




                                                      /S/  SEIDCAL ASSOCIATES



                                                    By:

                                                  /S/  Angelo R. Cali, Partner





                                                      /S/  Paul Schmidt






                                                     /S/ Richard Greenberg



<PAGE>


                                                    SCHEDULE A

                                              Required Contributions

                                                     Lawrence Seidman
                                                     $50,000
                                                     Sonia Seidman
                                                     $200,000
                                                     SEIDCAL Associates
                                                              $1,500,000
                                                     Paul Schmidt
                                                              $100,000
                                                     Richard Greenberg
                                                              $250,000

<PAGE>


                                                    SCHEDULE B

                                                PERCENTAGE INTEREST

                                                              Lawrence Seidman:
                                                                       %
                                                              Sonia Seidman:
                                                                       %
                               SEIDCAL Associates:
                                        %
                                                              Paul Schmidt:
                                                                       %
                                                              Richard Greenberg:
                                                                       %


<PAGE>


                                   SCHEDULE B

                     EXAMPLE OF THE OPERATION OF SECTION 7.3


Assume the following facts:

         (a)      The interests are as follows:

                           A                10%
                           B                30%
                           C                60%

         (b)      The aggregate capital contributions made by the Members in
proportion to their respective interests is $2,000,000.

         (c)      The Company requires additional funds of $1,000,000.

         (d) A and B  each  contribute  their  Additional  Contributions  to the
Company  ($100,000 and  $300,000,  respectively)  and C fails to contribute  his
Additional Contribution ($600,000).

         (e)      B contributes C's Additional Contribution to Company.

         The amount  that C's  Interest  is  decreased  and the amount  that B's
Interest is increased is computed as follows:

         (i)      Multiply the amount of the contribution not made by C
($600,000) by 200% resulting in a product of $1,200,000;

         (ii)     Divide the result of (i) above ($1,200,000) by the aggregate
 amount of all capital
contributions made by the Members ($3,000,000), resulting in a product of .40;

         (iii) Convert the product arrived at in computation (ii) above (.40) to
a percentage (by  multiplying  the same by 100) resulting in 40%.  Subtract such
percentage from the Company  Interest of C (40%) resulting in a new Interest for
C of 20%; and

         (iv)  Increase  the  Interest  of B (30%) by  adding  thereto  the same
Percentage  that was subtracted  from Member C (40%) resulting in a new Interest
for B of 70%.


<PAGE>



                     FIRST AMENDMENT TO OPERATING AGREEMENT
                       FOR SEIDMAN & ASSOCIATES, L.L.C.

     THIS  AMENDMENT is made on July , 1998,  by and between  LAWRENCE  SEIDMAN,
having an address at 19 Veteri Place,  Wayne,  New Jersey 07470,  SONIA SEIDMAN,
having  an  address  at 19  Veteri  Place,  Wayne,  New  Jersey  07470;  SEIDCAL
ASSOCIATES,  L.L.C., a New Jersey limited liability  company,  having an address
c/o Mack-Cali Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016;
PAUL SCHMIDT,  having an address at 159 Clinton  Place,  Hackensack,  New Jersey
07601; and RICHARD GREENBERG, having an address at 1235A Route 23 South, Wayne,
New Jersey 07474 (hereinafter referred to collectively as the "Members").

                              W I T N E S S E T H:

     WHEREAS, the Members previously formed a limited liability company known as
Seidman & Associates,  L.L.C. (the "Company") pursuant to the New Jersey Limited
Liability Company Act; and

     WHEREAS,  the Members entered into an Operating  Agreement for the Company,
dated November 1994; and

     WHEREAS, the Members desire to amend the Operating  Agreement,  pursuant to
Article 27 thereof, in accordance with the terms and provisions set forth below.

     NOW, THEREFORE, the Members do hereby agree as follows:

     1. INCORPORATION BY REFERENCE

     Subject to the provisions of this  Amendment,  the  definitions,  terms and
conditions of the  Operating  Agreement are  incorporated  in this  Amendment by
reference  in the same  manner  and to the same  extent as if such  definitions,
terms and conditions were fully set forth in this Amendment.

     2. AMENDMENT OF OPERATING AGREEMENT

     2.1  Subparagraph  4.1(a)  of the  Operating  Agreement  be and the same is
hereby amended to read as follows:

     4.1 The  Company  shall  commence  upon the  filing of the  Certificate  of
Formation,  and shall  continue  in full  force and  effect  until May 1,  2024,
provided,  however,  that the Company shall be dissolved prior to such date upon
the happening of any of the following events:

     (a) The mutual  written  consent of the  Members to dissolve  the  Company;
provided, however, that the Company may not be dissolved by mutual consent prior
to December 31, 2000.

     2.2  Subparagraph  11.3(c) of the  Operating  Agreement  be and the same is
hereby amended to read as follows:

                  The Managing Member may be removed or replaced
                  any any time after December 31, 2000 by a majority in
                  interest of the Members, but if the Managing Member
                  is removed, he shall be entitled to receive $315,000.00
                  reduced by the payments already received pursuant
                  to Section 11.3(b), together with any other fees earned
                  prior to his removal.

     2.3 Except as modified by Subparagraphs 2.1 and 2.2 of this Agreement,  all
of the terms and  conditions  of the  Operating  Agreement  shall remain in full
force and effect.

     3. COVENANT OF FURTHER ASSURANCES

     The  Members  agree  that  they  shall  execute  and  deliver  any  and all
additional  writings,  instruments,  and other  documents  and take such further
action as shall  reasonably be required in order to effectuate the provisions of
this Amendment.

     IN WITNESS  WHEREOF,  the parties hereto have executed this First Amendment
to Operating Agreement as of the day and year first above written.

                                                         -----------------------
                                                                LAWRENCE SEIDMAN

                                                         -----------------------
                                                                   SONIA SEIDMAN

[SIGNATURES CONTINUED ON NEXT PAGE]

                                                      SEIDCAL ASSOCIATES, L.L.C.

                                                       By:----------------------


                                                         -----------------------
                                                           Brant B. Cali, Member

                                                         -----------------------
                                                                    PAUL SCHMIDT

                                                         -----------------------
                                                               RICHARD GREENBERG

 LAWRENCE B. SEIDMAN, ESQ.
                            Lanidex Executive Center
                                 100 Misty Lane
                                 P. O. BOX 5430
                          Parsippany, New Jersey 07054

                                                            (973) 560-1400

                                 March 30, 1999




Mr. Brant Cali, Executive Vice President
Mack-Cali Real Estate Corporation
11 Commerce Drive
Cranford, NJ 07016

Dear Brant:

                  This will confirm the agreement  reached last week with Angelo
and John  whereby  my annual  management  fee from  Seidman &  Associates,  LLC,
provided for in 11.3(b) of the  Operating  Agreement,  shall be  increased  from
$125,000 to $250,000.

                                                     Very truly yours,



                                                     LAWRENCE B. SEIDMAN

LS:rr