EXHIBIT 10.2

                                    INDENTURE

                                       OF

                                      LEASE

LANDLORD:                        KFC ASSOCIATES
TENANT:                          MONMOUTH COMMUNITY BANK, IN ORGANIZATION
DATED:                           JUNE 26, 1997
PREMISES:                        627 Second Avenue,
                                 Block 124, Lot 10
                                 Long Branch, New Jersey


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                                TABLE OF CONTENTS

ARTICLE 2.      RENT...........................................................

ARTICLE 3.      CONTINGENCIES AND APPROVALS....................................

ARTICLE 4.      PAYMENT OF TAXES AND ASSESSMENTS...............................

ARTICLE 5.      TAX APPEALS....................................................

ARTICLE 6.      ACCEPTANCE OF PREMISES AND REMOVAL OF
                LANDLORD'S IMPROVEMENTS........................................

ARTICLE 7.      SURRENDER......................................................

ARTICLE 8.      INSURANCE......................................................

ARTICLE 9.      LANDLORD'S RIGHT TO PERFORM
                TENANT'S COVENANTS.............................................

ARTICLE 10.     REPAIRS AND MAINTENANCE OF
                THE DEMISED PREMISES...........................................

ARTICLE 11.     COMPLIANCE WITH LAWS, ORDINANCES, ETC..........................

ARTICLE 12.     CONSTRUCTION AND ALTERATIONS...................................

ARTICLE 13.     DISCHARGE OF LIENS.............................................

ARTICLE 14.     MORTGAGE OF FEE INTEREST;
                SUBORDINATION AND NON-DISTURBANCE..............................

ARTICLE 15.     ENVIRONMENTAL MATTERS..........................................

ARTICLE 16.     ASSIGNMENT OF SUBLETTING.......................................

ARTICLE 17.     DAMAGE OR DESTRUCTION..........................................

ARTICLE 18.     CONDEMNATION...................................................

ARTICLE 19.     NO WASTE.......................................................

ARTICLE 20.     USE OF PROPERTY................................................

ARTICLE 21.     INSPECTION AND ENTRY...........................................

ARTICLE 22.     INDEMNIFICATION OF LANDLORD....................................

ARTICLE 23.     DEFAULT PROVISIONS.............................................

ARTICLE 24.     OPTION TO PURCHASE.............................................

ARTICLE 25.     RIGHT OF FIRST REFUSAL.........................................

ARTICLE 26.     NOTICES........................................................

ARTICLE 27.     QUIET ENJOYMENT................................................

ARTICLE 28.     NO RENT ABATEMENT..............................................

ARTICLE 29.     ESTOPPEL CERTIFICATE...........................................

ARTICLE 30.     ARBITRATION AND APPRAISAL......................................

ARTICLE 31.     SIGNS..........................................................


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                               INDENTURE OF LEASE

     THIS  INDENTURE OF LEASE made this ____ day of June,  1997,  by and between
KFC  ASSOCIATES,  a New  Jersey  General  Partnership,  having an  address  at 9
Memorial Parkway,  Long Branch, New Jersey 07740 (hereinafter called "Landlord")
and MONMOUTH COMMUNITY BANK, a New Jersey Corporation,  having an address at c/o
James G. Aaron,  Esq., Ansell Zaro Grimm & Aaron,  1500 Lawrence Avenue,  Ocean,
New Jersey 07712 (hereinafter called "Tenant").

                              W I T N E S S E T H:

     In  consideration  of the mutual promises and covenants  herein  contained,
Landlord and Tenant agree as follows:

ARTICLE 1. DEMISED PREMISES-TERM OF LEASING AND COMMENCEMENT DATE.
---------  -------------------------------------------------------

     1.01.  Landlord,  for and in  consideration  of the  terms,  covenants  and
conditions herein contained, does hereby demise, lease and let to Tenant free of
all tenancies,  and Tenant does hereby hire and take from  Landlord,  subject to
the terms,  conditions and covenants herein contained,  the following  described
premises (hereinafter called the "Demised Premises"):

            ALL THAT  certain  lot,  tract or parcel of land,  lying and
            being in the City of Long  Branch  being known as Block 124,
            Lot 10 on the tax map of the City of Long  Branch,  and also
            known as 627 Second Avenue, Long Branch, New Jersey and more
            particularly set forth on Schedule A annexed hereto and made
            a part hereof (hereinafter sometimes referred to as the "Fee
            Interest").

            TOGETHER  with  any  and  all  buildings  and   improvements
            (hereinafter  sometimes  referred to as the "Buildings") and
            subject to easements,  covenants and restrictions of record,
            if any.

     1.02.  Landlord  has and will have as of the date of  Commencement  of this
Lease, full power to execute,  deliver and carry out the terms and provisions of
this  Lease,  owns  the  Premises  in  fee,  knows  of no  encumbrances,  liens,
agreements,  etc. which would limit Tenant's rights hereunder, except a mortgage
to Fleet Bank,  and has taken all necessary  action to authorize the  execution,
delivery and performance of this Lease.

     1.03.  The term of this Lease shall be ten (10) years  (hereinafter  called
the "Original Term")  commencing on the Commencement Date and expiring ten years
from date of Commencement. The Lease shall commence (Commencement Date) upon the
delivery of the  Premises by Landlord to Tenant.  Tenant  shall not be deemed to
have accepted possession of the Premises until each of the following  conditions
have been  satisfied:  (a) Tenant shall have received and/or waived the approval
of the permits provided for in Article 3; and (b) the Tenant presently occupying
the Premises shall have vacated the Premises.  Promptly  after the  Commencement
Date,  Landlord  and  Tenant  shall  execute a  memorandum  stating  the  actual
Commencement Date.

     1.04.  Provided the Tenant is not in default  under the terms  hereof,  and
further  provided there has been no earlier  termination  of this Lease,  Tenant
shall have the right and option to renew and extend this  agreement for four (4)
further  terms  each  for a period  of five  (5)  years  under  the same  terms,
provisions and conditions as herein contained except that the rental shall be as
set forth in Article 2 hereof.

     The options to extend shall be deemed automatically exercised unless Tenant
provides  Landlord with written  notice,  by certified mail, not later than nine
(9)  months  prior to the  expiration  of the  initial  term of the Lease or any
option  term,  as the case may be, that  Tenant has elected not to exercise  its
option.

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ARTICLE 2. RENT.
---------- -----

     2.01. Tenant agrees to pay to Landlord, in currency of the United States of
America,  when due, without notice or demand and without deduction or set-off of
any kind or amount for any reason whatsoever, as the annual minimum fix net rent
for the Demised  Premises for the entire initial term  (hereinafter  called "Net
Rent"),  such Net Rent to be over and  above the  other  payments  to be made by
Tenant as hereinafter provided.

     2.02 Such Net Rent shall be payable as follows:

     A.  (i) at the monthly rate of FORTY-FIVE  HUNDRED ($4,500.00)  DOLLARS per
month in equal monthly  installments,  each in advance,  on the first day of the
month for a period of sixty (60) months commencing on the Commencement Date, and
through and inclusive of the sixtieth (60th) month of the term;

         (ii) for and during  each of the sixth (6th)  through the tenth  (10th)
Lease  years  of the term  hereof,  inclusive,  an  amount  equal to  $54,000.00
increased by the cumulative percentage increase in the Consumer Price Index (the
"Index") between the Commencement Date and fifty-ninth (59th) month of the Lease
year.

         (a) As used  herein;  the term "Index"  shall mean the  Consumer  Price
Index for All Urban Consumer  (CPI-U_ for the New  York-Northeastern  New Jersey
Area, All Items (1984 = 100) published by the Bureau of Labor  Statistics of the
United States  Department  of Labor.  In the event that, as of any relevant date
during the Term hereof,  the Index is no longer published or issues,  such other
index as has been  generally  recognized  and  accepted  as the  basis  for wage
negotiations shall be used and employed in the place thereof.  In the event that
the increase in Basic Rent to be determined pursuant to this Section 2.02 cannot
be  calculated  as of the  commencement  of any Lease  Year,  the  Tenant  shall
continue to pay Basic Rent at the rate payable during the immediately  preceding
Lease  Year  pending  the  computation  of  the  increase  as  aforesaid.   Upon
determination  of the increase,  Landlord  shall notify Tenant and Tenant shall,
within twenty (20) days after such notice,  remit an additional payment of Basic
Rent equal to the aggregate  adjustment  for the months during the current lease
year for which such adjustment is applicable and which have expired prior to the
termination of the amount of the adjustment. Thereafter, monthly installments of
Basic Rent for such Lease Year  shall be equal to  one-twelfth  of the  adjusted
annual Basic Rent for such Lease Year.

         (b) The Basic Rent shall be payable  in  advance,  in equal  successive
monthly  installments,  with the first  installment being due and payable on the
Commencement Date of the Term. Said Basic Rent shall be payable at the office of
the  Landlord  above set forth,  or at such other  place as the  Landlord  shall
designated by notice in the manner hereinafter provided.

     2.03. In the event of the exercise of the option(s) to extend the term, the
Net Rent shall be as follows:

     A. (i) During each Extended Term (a maximum of four (4) in total), each for
a period of five (5) years subject to the conditions set forth in Paragraph 1.04
above,  rent  shall be due at the  monthly  rate of the  adjusted  Basic Rent as
determined by  application  of the Consumer  Price Index formula  "Index" as set
forth in Paragraph 2.02(a)(1)(a) above.

     During the first  extended  Term,  the monthly rate shall be the Basic Rent
determined by the  adjustment to the rental  payments made for the period during
the 61st month through the 119th month,  increased by the cumulative  percentage
increase  in the Index  between  the 61st month and the 119th month of the Lease
Year.  The Basic Rent shall then be  adjusted  and the new  Extended  Term which
covers the period of the 121st month through the 180th month inclusive.

         (ii) During any of the  successive  Extended  Terms (three (3) in total
after the first  extended term) subject to the conditions set forth in Paragraph
1.04


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above,  the Basic Rent shall be  adjusted  in the same manner as set forth above
using the Index in place at the  Commencement  Date of the  respective  term and
increased  by the  cumulative  percentage  increase  from that date to the month
preceding  the  expiration  of the existing  Term (the 179th,  the 239th and the
299th month respectively).  See attached Schedule "B" which is intended to be an
example of  hypothetical  increases in the CPI as applied to the $54,000,00 Base
Rent.  The example is not to be relied upon and is given for the sole purpose of
providing a hypothetical application of the formula, with no reliance whatsoever
being  given  to the  assumed  increases  in the  CPI as have  been  used in the
examples.


     2.04. Until Tenant shall have been given notice otherwise by Landlord under
the  provisions  of the  notice  article  hereof,  Tenant  shall pay the rent to
Landlord at the address set forth at Page 1 of this Lease.

     2.05.  It is the purpose and intend of Landlord  and Tenant that this Lease
is a net,  net,  net  lease  and that the Net Rent  shall be  absolutely  net to
Landlord,  so that this  Lease  shall  yield,  net,  to  Landlord,  the Net Rent
specified in Article  2.01 hereof in each year during the Original  Term of this
Lease and that all  costs,  expenses  and  obligations  of every kind and nature
whatsoever relating to the Demised Premises which may arise or become due during
or out of the  Original  or any  renewal  term of this  Lease,  shall be paid by
Tenant, and that Landlord shall be indemnified and saved harmless by Tenant from
and against the same.

     2.06.  The Net Rent shall be paid to Landlord  without notice or demand and
without abatement, deduction or set-off.

     2.07.  Except as herein otherwise  provided,  Tenant shall also pay without
notice and without  abatements,  deduction or set-off,  as additional  rent, all
sums, impositions, costs, expenses and other payments which Tenant in any of the
provisions  of this  Lease  assumes  or  agrees  to pay,  and,  in the  event of
non-payment  thereof,  Landlord  shall have (in addition to all other rights and
remedies herein set forth) all the rights and remedies provided for herein or by
law in the case of non-payment of the Net Rent.

     2.08. Ten (10) days subsequent to the Commencement  Date, Tenant shall post
with the Landlord the sum of $5,000.00 which it is to retain as security for the
faithful performance of all of the covenants,  conditions and agreements to this
Lease,  but in no event shall  Landlord be  obligated  to apply same on rents or
other  charges in arrears or damages for the  Tenant's  failure to perform  said
covenants,  conditions and agreements; the Landlord may so apply the security at
its  option and the  Landlord's  right to the  possession  of the  Premises  for
non-payment  of rent or for any other  reason shall not in any event be affected
by reason of the fact that  Landlord  holds this  security.  The said sum is not
applied  toward the payment of rents in arrears or to  compensate  Landlord  for
Tenant's  failure to observe the  conditions and agreements of this Lease are to
be  returned  to the Tenant when this Lease is  terminated,  according  to these
terms,  and in no event is the said security to be returned until the Tenant has
vacated the Premises and delivered possession to the Landlord.

     In the event that the Landlord  repossesses itself of said Premises because
of the  Tenant's  default or because  of the  Tenant's  failure to carry out the
covenants,  conditions and agreements of this Lease,  the Landlord may apply the
said security on all damages suffered to the date of repossession and may retain
the said  security to apply on such damage as may be suffered  and shall  accrue
thereafter by reason of the Tenant's  default or breach.  The Landlord shall not
be obligated to keep the said  security as a separate  fund but may mix the said
security  with its own funds.  The Tenant  shall not be entitled to any interest
earned with respect to the security  deposit.  This  security  deposit under the
Lease shall not be mortgaged,  assigned, pledged or encumbered by Tenant without
the written  consent of Landlord.  In the event of assignment for the benefit of
creditors,  or upon the  insolvency of Tenant,  title to the monies paid over to
the Landlord as security shall vest in the Landlord free and clear of any claims
of the Trustee in bankruptcy,  assignee for the benefit of creditors or Receiver
that may be appointed for the insolvent Tenant.

     In the event of a bona fide sale, subject to this lease, the Landlord shall
have the right to  transfer  the  security  to the vendee for the benefit of the
Tenant and Landlord shall

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be  considered  released by the Tenant of all  liability  for the return of such
security;  and the  Tenant  agrees to look  solely to the new  Landlord  for the
return  of said  security,  and it is  agreed  that  this  shall  apply to every
transfer or assignment made of the security to the new Landlord.

     Provided  the Tenant is not in  default  and the Lease is in full force and
effect at the end of the 60th month of the initial term of this Lease,  Landlord
agrees to return the aforesaid security deposit to Tenant.

     2.09.  Accruing  additional rent,  Tenant hereby agrees to pay and Landlord
agrees  to  receive  from  Tenant,  the rent at the rate of FOUR  THOUSAND  FIVE
HUNDERED  ($4,500.00)  DOLLARS per month beginning when Monmouth  Community Bank
takes possession of the premises to begin renovations and improvements until the
date Monmouth  Community  Bank opens its doors for  business.  The rent for that
period shall accrue and be paid monthly over the three (3) years  beginning  the
month following the date the bank opens for business.

ARTICLE 3. CONTINGENCIES AND APPROVALS.
---------- ----------------------------

     The parties  acknowledge that the within Lease shall not be effective until
the satisfaction of the following conditions unless waived by Tenant:

     A. Landlord represents that its mortgagee Fleet Bank, is the sole mortgagee
of the subject  Premises.  Written consent of the mortgagee to the subject Lease
shall  be  obtained  by  Landlord  within  sixty  (60)  days of the date of this
Agreement.

     B.  The  issuance  of an  interpretation  letter  issued  by  the  Building
Department of the City of Long Branch with respect to the proposed modifications
to be made to the  Premises  by Tenant and the  proposed  use by Tenant.  In the
event that such an  interpretation  letter  cannot or will not be issued and the
municipality  requires  site plan  approval  or an  application  for a variance,
Tenant shall make such  application  promptly and within thirty (30) days of the
date of its charter  approval from the New Jersey  Department of Banking and the
Federal Deposit Insurance  Corporation (as set forth in Paragraph C below). Said
application(s)  shall be made at Tenant's  cost and expense but with the consent
and  cooperation of Landlord.  Tenant shall  diligently  pursue the  application
process  and will file the  application  within  thirty (30) days of the date of
approval or  satisfaction  of the charter as defined above.  Tenant shall have a
total of six (6) months  from the date of the  execution  of this  Lease  within
which to obtain its  approvals.  Reference  is made to certain  thirty  (30) day
periods  of  extension,  the  terms  and  conditions  of which  are set forth in
Subparagraph F below.

     C. The obtaining of all necessary  approvals from the New Jersey Department
of Banking and the Federal  Deposit  Insurance  Corporation  with respect to the
charter  approval of Monmouth  Community Bank.  Tenant shall have six (6) months
from the date of the  execution  of this  Agreement  within which to obtain such
approvals.  Reference  is made to  Subparagraph  F below which  provides for the
granting of certain  thirty (30) day period  extensions  under certain terms and
conditions.  Tenant represents that it will diligently and faithfully pursue the
charter approval process.

     D. At time of  execution of this Lease,  Tenant  shall apply for  leasehold
title insurance,  from a title company acceptable to Tenant showing title to the
Demised Premises and appurtenant  easements in Landlord. If the report on title,
title  binder or  commitment  discloses  any  conditions,  restrictions,  liens,
encumbrances,  easements or covenants  which,  in Tenant's  opinion would effect
Tenant's use and enjoyment of the Demised Premises,  and appurtenant  easements,
Landlord shall have thirty (30) days from the date Tenant  notified  Landlord of
said defects,  to make a good faith effort to cure such defects and to furnish a
title  report,  binder or commitment  showing such defects cured or removed.  If
such defects in title are not so cured within  thirty (30) days,  Tenant may, at
its option,  terminate  this Lease.  Tenant  shall be deemed to have waived this
condition  if it does not formally  terminate  this Lease within sixty (60) days
from the date Tenant provided Landlord with the notice of defects.

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     E.  Tenant  may order a current  certified  survey by a  licensed  surveyor
within  forty-five (45) days from the last execution of this Lease.  Said survey
shall show:

         (i) the area, dimensions and location of the Demised Premises;

         (ii) the location of the existing  improvements and available utilities
in adjoining street, alleys or property;

         (iii) the location of all recorded  easements against or appurtenant to
the Demised Premises;

         (iv)  encroachments of any  improvements  adjoining the Premises on the
Demised Premises;

         (v) the legal description of the Demised Premises; and

         (vi) the topography.

     If said survey discloses  unsuitable or interfering  easements,  party wall
agreements, or encroachments or that the location, area, dimensions and shape of
the Demised  Premises are not as represented by Landlord as depicted on Schedule
"A" attached  hereto,  then Tenant shall have the right to terminate  this Lease
and declare same null and void and of no force and effect.  In addition,  if the
survey  indicates  that a site  plan  cannot  be  designed  in  accordance  with
municipal standards to accommodate the use defined in Article 20, the Tenant may
declare  this Lease null and void.  If Tenant does not elect to  terminate  this
Lease within the forty-five  (45) day period,  it shall be deemed to have waived
that right.

     F.  In  the  event  Tenant  has  diligently  and  faithfully   pursued  its
applications for charter  approval and municipal  approvals as defined above and
such  approval  has not been  obtained  within  the six (6)  month  period or if
obtained,  the  applicable  periods of appeal have not  expired,  then  Landlord
agrees to extend the six (6) month period  within which all  approvals are to be
obtained for successive  thirty (30) day period not to exceed 300 days.  Each of
such periods  shall be granted upon the written  request of Tenant at least five
(5) days prior to the expiration of the current period and with the tendering of
the sum of One Thousand Dollars ($1,000.00) with its request, which sum shall be
deemed an extension  fee for each of the  applicable  thirty (30) day periods or
any part thereof.

     In the event final approvals are not obtained within the six (6) month time
frame as extended  for a maximum of 300 days  (assuming  each of the thirty (30)
day  extension  periods have been  properly  exercised)  and that Tenant has not
provided  adequate proof that all such approvals with respect to its charter and
the City of Long  Branch  have been  obtained  by the 480th day from the date of
execution of this  Agreement and unless these  specific  contingencies  have not
been waived by Tenant, then this Agreement shall be null and void and shall have
no further force and effect,  and the security  deposit advanced by Tenant shall
be returned intact to Tenant. All other sums paid by Tenant shall be retained by
Landlord.

     During the period of any application for municipal approvals and throughout
the term prior to the  Commencement  Date of the subject Lease,  Landlord agrees
that all real estate taxes will remain current  during such  municipal  approval
process.

ARTICLE 4. PAYMENT OF TAXES AND ASSESSMENTS.
---------- ---------------------------------

     4.01.  Tenant  shall pay or cause to be paid,  before  any  fine,  penalty,
interest or cost may be added thereto for the  non-payment  thereof,  all taxes,
assessments,  water and sewer rents, charges, license fees, levies, permit fees,
and  all  other  governmental  charges,   general  and  special,   ordinary  and
extraordinary,  foreseen and unforeseen, of any kind and nature whatsoever which
at any time during the term of this Lease may be  assessed,  levied,  confirmed,
imposed upon or become due and payable out of or in respect of, or become a lien
on, the Demised  Premises,  or any part  thereof  (all such taxes,  assessments,
water and sewer rents, charges,  license and permit fees and other charges being
hereinafter  referred  to  as  "Impositions");   provided,   however,  that  all

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Impositions  for the  fiscal or tax year in which the term of this  Lease  shall
begin and end shall be  apportioned so that Tenant shall pay only those portions
thereof which  correspond with the portion of said years as are within the terms
hereby demised.

     Tenant  agrees to provide  Landlord  with a copy of the  receipted tax bill
marked "Paid in Full" by November 30th of each calendar year. Failure to pay any
such taxes or other  charges as set forth  above shall  entitle  Landlord to the
right to advance such sums and upon such payment,  Landlord shall be entitled to
interest at the rate of ten  percent  (10%) per annum or the then  maximum  rate
allowed by municipalities  with respect to tax sale  certificates,  whichever is
greater.

     4.02. Nothing herein contained shall require Tenant to pay Federal or State
Income Taxes  assessed  against the Landlord,  or any gift,  estate  succession,
inheritance  or transfer  taxes of  Landlord  imposed as owner of the fee of the
Demised Premises or any taxes imposed upon rent as such, payable by Tenant under
this Lease; provided,  however, that if at any time during the term of the Lease
the methods of taxation  prevailing  at the  commencement  of the original  term
hereof shall be altered so that in lieu of or as a  substitute  for the whole or
any part of the taxes, assessments,  levies,  Impositions or charges now levied,
assessed  or imposed on real  estate and  improvements  thereon  there  shall be
levied,  assessed and imposed a tax,  assessment,  levy,  Imposition  or charge,
wholly or  partially  as a capital  levy or  otherwise,  all the rents  received
therefrom, or measured by or based in whole or in part upon the Demised Premises
and  imposed  upon  Landlord,   then  all  such  taxes,   assessments,   levies,
Impositions, or charges or any part thereof so measured or based shall be deemed
to be included  within the term  "Impositions"  for the  purposes  hereof to the
extent that such  Imposition  would be payable if the Demised  Premises were the
only property of Landlord subject to such  Imposition,  and Tenant shall pay and
discharge the same as herein  provided in respect of the payment of Impositions.
Tenant shall,  in addition to the  foregoing,  pay any new taxes of a nature not
presently in effect,  but which may be hereafter  levied against or imposed upon
Landlord or the  Demised  Premises if such tax shall be based on or arise out of
the ownership, use or operation of the Demised Premises.

     4.03. Tenant,  upon request of Landlord,  shall furnish to Landlord,  or if
requested  by Landlord  furnish to any Fee  Mortgagee,  within  thirty (30) days
after the date when such  Imposition will become due,  official  receipts of the
appropriate taxing authority, or other evidence satisfactory to Landlord or such
Mortgagee  evidencing the payment thereof.  The certificate,  receipt or bill of
the  appropriate  official  designed  by law to make or issue the same  shall be
prima facie evidence that such Imposition is due and unpaid, or has been paid at
the time of the making or issuance of such certificate, receipt or bill.

     4.04.  Landlord  appoints Tenant the  attorney-in-fact  of Landlord for the
purpose  of making  all  payments  to be made by Tenant  pursuant  to any of the
provisions of this Lease to persons or entities other than Landlord. In case any
person  or entity to whom any sum is  directly  paid by Tenant  under any of the
provisions of this Lease shall refuse to accept payment of such sum from Tenant,
Tenant shall  thereupon  give written  notice of such fact to Landlord and shall
pay such sum to Landlord  at the address  specified  herein and  Landlord  shall
thereupon pay such sum to such person or entity.

ARTICLE 5. TAX APPEALS.
---------- ------------

     5.01.  Tenant shall have the right to seek a reduction in the  valuation of
the  Demised  Premises  for  tax  purposes  and to  contest  in  good  faith  by
appropriate proceedings, at Tenant's expense, the amount or validity in whole or
in part of any Imposition, tax or assessment affecting the Demised Premises.

     5.02. Landlord shall not be required to join in any proceedings referred to
in Section 5.01 hereof  unless the  provisions of any law, rule or regulation at
the time in effect shall require that such  proceedings  be brought by or in the
name of Landlord or any owner of the Demised  Premises,  in which event Landlord
shall  join in such  proceedings  or permit  the same to be brought in its name.
Landlord shall not ultimately be subject to any liability for the payment of any
costs or expenses in  connection  with any such  proceedings,  and Tenant  shall
indemnify  and save harmless  Landlord from any such costs



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and  expenses.  Tenant  shall be  entitled to any refund of any  Imposition  and
penalties  or interest  thereon  received  by  Landlord  which have been paid by
Tenant or which have been paid by Landlord but previously  reimbursed in full by
Tenant.

     5.03.  Landlord  reserves unto itself in the last lease year of the term or
the last lease year of any renewal term (unless Tenant has properly executed the
next option to renew) and in the final renewal term the right to appeal and seek
a reduction in the valuation of the Demised Premises for tax purposes.

ARTICLE 6. ACCEPTANCE OF PREMISES AND REMOVAL OF LANDLORD'S IMPROVEMENTS.
---------- --------------------------------------------------------------

     6.01.  Tenant  accepts the Demised  Premises "as is" except  Landlord shall
assure the absence of any existing hazardous materials,  substances or wastes as
defined in Paragraph  15.02 of this Lease upon the land  comprising  the Demised
Premises.

     6.02.  Tenant  acknowledges  that it  will  change  the use of the  Demised
Premises from that of a fast-food  restaurant to a commercial  banking facility.
Accordingly,  it  acknowledges  that none of the  improvements  which  presently
exist,  including  utility  systems,  etc.,  are  adequate  for its  intended or
proposed  uses. All such systems and  improvements  will be replaced by upgraded
and new  facilities,  all at Tenant's cost and expense.  Likewise,  the Landlord
intends to use the Demised  Premises in its present form until  Tenant  provides
the requisite notice of compliance or satisfaction of all contingencies.

     6.03. Upon the  satisfaction of all  contingencies or the waiver of same by
Tenant and upon written notice of Tenant to Landlord, Landlord shall have thirty
(30) days within which to defranchise the subject Demised  Premises,  remove all
its  furniture,  fixtures,  equipment and  improvements.  Because the Tenant has
acknowledged  that it is doing the  structure as a "shell",  it is  specifically
agreed  that  Landlord's   removal  of  any  of  its  furniture,   fixtures  and
improvements  including  leasehold  improvements  which may cause  damage to the
Demised Premises, such damage shall not be required to be repaired provided such
damage is nonstructural.

ARTICLE 7. SURRENDER.
---------- ----------

     7.01. Except as herein otherwise provided,  Tenant shall on the last day of
the term or upon any earlier termination of this Lease, well and truly surrender
and  deliver up the  Demised  Premises  to the  possession  and use of  Landlord
without delay and in the condition, order and repair existing on the date of the
execution of this Lease, reasonable wear and tear excepted and free and clear of
all  sub-tenancies  and  occupancies  and  free  and  clear  of  all  liens  and
encumbrances without any payment or allowance whatever by Landlord on account of
any improvements which may be on the Demised Premises.

     7.02.  Any  and  all  buildings,  structures,  alterations,  additions  and
improvements  upon the Demised Premises at the expiration or sooner  termination
of this  Lease  shall  then  become  the  property  of  Landlord  and  shall  be
surrendered at that time in accordance  with the  provisions of this Lease.  All
personalty (other than trade fixtures  furnished by or at the expense of Tenant)
attached or affixed to the real estate or building, including but not limited to
flooring, HVAC equipment, bathroom fixtures and ceiling light fixtures, shall at
Landlord's  option  remain the  property of the  Landlord at the  expiration  or
sooner termination of this Lease.

     7.03.  Any trade fixtures of Tenant which shall remain in or on the Demised
Premises  after the  termination  of this  Lease and  Tenant's  vacation  of the
Demised  Premises,  may,  at the  option  of  Landlord,  be  deemed to have been
abandoned by Tenant and either may be retained by Landlord as its property or be
disposed of without accountability  therefore in such manner as Landlord may see
fit.

     7.04. Landlord shall not be responsible for any loss or damage occurring to
any property  owned by Tenant.  The  provisions  of this Article  shall  survive
termination of the Lease.

                                       9
<PAGE>


ARTICLE 8. INSURANCE.
---------- ----------

     8.01.  Tenant,  at is sole cost and expense shall keep the  improvements on
the Demised  Premises  insured,  during the term of this Lease,  against loss or
damage  by fire  with  such  extended  coverage  as shall  from  time to time be
reasonable  and customary,  which amount of insurance  shall in no event be less
than the full replacement  value of the building and improvements on the Demised
Premises.  Such replacement  value shall be determined by the Tenant at Tenant's
expense  from time to time but not less  frequent  than  once in any sixty  (60)
consecutive  calendar  months,  at the  request of  Landlord,  by an  appraiser,
architect or  contractor,  who shall be mutually and  reasonably  acceptable  to
Landlord  and  Tenant.  No  omission on the part of Landlord to request any such
determination shall relieve Tenant of its obligations hereunder.

     8.02. Tenant, at its sole cost and expense, shall maintain:

     A. General  public  liability  insurance  naming  Landlord as an additional
insured against claims for bodily injury,  death and property  damage  occurring
on, in or about the Demised  Premises and on, in or about adjoining  passageways
(including  without  limitation  personal  injury,  death  and  property  damage
resulting  directly or indirectly  upon any change,  alteration,  improvement or
repair  thereof) in an amount of  $1,000,000.00  for bodily  injury and property
damage combined with a $2,000,000.00 aggregate.

     B. Rental insurance against loss of rental or other income derived from the
operation due to risks referred to Article 8.01 hereof in an amount equal to the
amount of Net Rent and the real estate taxes  hereunder  for a period of one (1)
year,  and Tenant hereby  assigns to Landlord the proceeds of such  insurance so
that in the event the improvements on the Demised Premises shall be destroyed or
seriously  damaged,  such proceeds shall be applied by Landlord when received by
Landlord to the Net Rent and real estate taxes  hereunder  until the restoration
of such improvements. Tenant shall make payment of such Net Rent and real estate
taxes to the extent the  insurance  proceeds  received by Landlord are less than
the amount of the Net Rent and real estate taxes due.

     C. Such other  insurance  and in such amounts as may from time to time (but
Landlord  shall not request  same more than every  thirty-six  (36)  consecutive
calendar  months) be reasonably  required by Landlord  against  other  insurable
hazards,  which at the  time  are  customarily  insured  against  in the case of
premises similarly situated in Monmouth County, due regard being, or to be given
to the type of construction, its use and occupancy.

     8.03.  All insurance  provided for herein shall be effected under valid and
enforceable  policies issued by insurers licensed to do business in the State of
New Jersey.  Upon the effective date of this Lease and thereafter,  originals of
the policies or valid certificates of insurance bearing notations evidencing the
payment of premiums or  certificates  issued by such  insurers  satisfactory  to
Landlord  shall be delivered  by Tenant to Landlord  except that  whenever  this
Lease shall be  mortgaged,  such  policies of  insurance  may be lodged with the
mortgagee  until the  mortgage  debt shall be paid or the term of this Lease and
renewals  thereof  shall sooner end and  certificates  of such  insurance  shall
meanwhile be delivered to Landlord.

     8.04. Except with respect to insurance  required by Article 8.02(A) hereof,
neither Landlord nor Tenant shall take out separate insurance concurrent in form
of  contributing  in the event of loss with that  required in this Article to be
furnished  by, or which may be  reasonably  required to be furnished  by, Tenant
unless  Landlord  and Tenant are  included  therein  as the  insureds  with loss
payable as in this Lease, provided each party shall immediately notify the other
of the procurement of any such separate insurance and shall cause the same to be
delivered to the other party.

     8.05. All policies of insurance provided for herein shall name Landlord and
Tenant  and  any  mortgagee  of the  fee as the  insureds  as  their  respective
interests may appear.

                                       10
<PAGE>


     8.06.   All  such  policies  shall  contain  a  provision  to  that  extent
permissible under the laws of the State of New Jersey that no act or omission of
Tenant shall affect or limit the obligations of the insurance  company so to pay
the amount of the loss sustained, and each policy or certificate therefore shall
contain an  agreement  by the  insurer  that no such  policy  shall be  canceled
without at least thirty (30) days prior written notice to Landlord.

     8.07.  Landlord  may request a change in the amounts or  limitation  of the
insurance to be made  hereunder  and any dispute  with  respect  thereto will be
resolved by arbitration as herein set forth.  Pending such  arbitration,  Tenant
shall supply Landlord with such further or increased insurance as Landlord shall
then demand and shall pay the premiums  thereon.  If the  determination  of such
arbitration  shall be that Landlord was not entitled to  reasonably  demand such
insurance or increase so  requested,  Landlord  shall  reimburse  Tenant for the
amount of premiums so paid by Tenant, in which event Tenant shall surrender such
policies to  Landlord  and  Landlord  shall have the option of  continuing  such
further or increased insurance or canceling the same, in which latter event, the
unearned premiums shall be the property of Landlord.

ARTICLE 9. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.
---------- -----------------------------------------------

     9.01. If Tenant shall at any time fail to pay any  Imposition in accordance
with the  provisions  of Article 4 hereof or to take out,  pay for,  maintain or
deliver any of the insurance  policies or certificates  therefor as provided for
in  Article 8 hereof,  or shall fail to make any other  payment  or perform  any
other act on its part to be made or performed,  then Landlord, after twenty (20)
days written notice to Tenant and Tenant's failure to cure such defect or breach
(or without  notice in case of an  emergency)  and without  waiving or releasing
Tenant from any obligation of Tenant contained in this Lease or from any default
by Tenant and  without  waiving  Landlord's  right to take such action as may be
permissible  under  this  Lease as a result of such  default,  may (but shall be
under no obligation to) (a) pay any Imposition payable by Tenant pursuant to the
provisions of Article 4 hereof; or (b) take out, pay for and maintain any of the
insurance  policies  provided  for in  Article 8  hereof;  or (c) make any other
payment or perform any other act on Tenant's  part to be made or performed as in
this  Lease  provided,  and may enter  upon the  Demised  Premises  for any such
purpose, and take all such action thereon as may be necessary therefor.

     9.02.  All sums so paid by Landlord and all costs and expenses  incurred by
Landlord,   including  reasonable   attorney's  fees,  in  connection  with  the
performance of any such act,  together with interest  thereon in an amount equal
to three (3%)  percent in excess of the Prime Rate of interest as  published  in
the Wall Street Journal or any successor thereto (or substitute if no successor)
from the date of such payment or incurrence by Landlord of such cost and expense
shall constitute additional rent payable by Tenant under this Lease and shall be
paid by Tenant to Landlord on demand.

ARTICLE 10. REPAIRS AND MAINTAINANCE OF THE DEMISED PREMISES.
----------- -------------------------------------------------

     10.01.  Throughout  the term of this  Lease,  Tenant  at its sole  cost and
expense, shall maintain,  repair and take good care of the Demised Premises, all
exclusive rights-of-way, curbs and appurtenances thereto and shall keep the same
in good order and condition,  except for reasonable wear and tear after the last
necessary repair, replacement, restoration or renewal made by Tenant pursuant to
its obligations hereunder, and make all necessary repairs thereto,  interior and
exterior, structural and non-structural, ordinary or extraordinary, and foreseen
and unforeseen. All repairs made by Tenant shall be substantially in quality and
class to the original work.  Tenant shall do or cause others to do all necessary
acts for the safety and preservation thereof.

     10.02.  Tenant  shall put,  keep and  maintain  all portions of the Demised
Premises and the curbs,  easements and passageways adjoining the same in a clean
and orderly condition, free of dirt, rubbish, snow, ice and unlawful obstruction
and shall pay all costs for maintenance and repair of the portion of the Demised
Premises and property which are used in common by Tenant with other parties.


ARTICLE 11. COMPLIANCE WITH LAWS, ORDINANCES, ETC.
----------- --------------------------------------

                                       11
<PAGE>

     11.01.  Throughout  the term of this  Lease,  Tenant,  at its sole cost and
expense (except with respect to hazardous  substances or materials preceding the
date of the execution of this Lease by the parties),  shall promptly comply with
all  present  and  future  laws,  ordinances,  orders,  rules,  regulations  and
requirements of all federal,  state and municipal  governments,  departments and
agencies and all orders, rules and regulations of the Board of Fire Underwriters
having  jurisdiction  over the  Demised  Premises  or any  other  body or bodies
exercising  similar  functions,  foreseen  or  unforeseen,  ordinary  as well as
extraordinary,  which may be applicable of the Demised  Premises or to the rules
or manner of use of the  Demised  Premises  whether or not such law,  ordinance,
order, rule,  regulation or requirement shall affect the interior or exterior of
improvements  upon the  Demised  Premises,  necessitate  structural  changes  or
improvements  or interfere  with the use and enjoyment of the Demised  Premises,
and whether or not such compliance is prior to or after the  commencement of the
term of this Lease.  Landlord represents to Tenant that as of the date hereof he
has no  knowledge  of any  discharge  of  hazardous  substances  at the  Demised
Premises or of the  presence  of any  underground  storage  tanks at the Demised
Premises or the presence of asbestos.

     11.02.  Tenant shall likewise  observe and comply with the  requirements of
all  policies of public  liability,  fire and all other  policies  of  insurance
required  to be  supplied  by tenant at any time in force  with  respect  to the
Demised  Premises,  whether or not such  observance or compliance is required by
reason of any condition,  event or  circumstance  existing prior to or after the
commencement  of the term of this  Lease and Tenant  shall,  in the event of any
violation or an attempted  violation  of the  provisions  of this section by any
subsequent sub-tenant,  take steps, immediately upon knowledge of such violation
or attempted violation, to prevent or remedy the same as the case may be. In any
case,  Tenant shall be  privileged  to  substitute  policies of other  insurance
companies.

     11.03. Tenant shall have the right, after prior written notice to Landlord,
to contest by appropriate legal proceedings  diligently conducted in good faith,
in the name of Tenant or Landlord or both,  without cost or expense to Landlord,
the validity or application of any law,  ordinance,  order, rule,  regulation or
requirement of the nature referred to herein. Landlord without cost to Landlord,
shall execute and deliver any  appropriate  documents  which may be necessary or
proper to permit  Tenant to so contest the validity or  application  of any such
law, ordinance, order, rule, regulation or requirement.

ARTICLE 12. CONSTRUCTION AND ALTERATIONS.
----------- -----------------------------

     12.01.   Tenant,   at  Tenant's  cost,  may  install  such  initial  tenant
improvements in the Demised  Premises as Tenant deems necessary or desirable for
the conduct of Tenant's  business thereof (the "Initial  Improvements").  Tenant
shall  submit the plans and  specifications  (the  "Plans")  for any  structural
elements  of the Initial  Improvements  to Landlord  for  Landlord's  review and
approval.  Landlord  shall  have a period of  fourteen  (14)  days (the  "Review
Period")  to  review  the  Plans.  Landlord  shall  not  unreasonably  withhold,
condition or delay its approval of the Plans.  Landlord  shall be deemed to have
approved the Plans as presented  unless, on or before the last day of the Review
Period,  Landlord has delivered to Tenant a written  description of the specific
structural  items in the Plans that are not  acceptable and a description of the
specific changes that must be made to the Plans to secure  Landlord's  approval.
Tenant shall either (a) submit modified plans for approval; or (b) terminate the
Lease if Landlord's requested revisions are not acceptable to Tenant in its sole
discretion. The review and approval process described above shall continue until
such time as Landlord has approved the Plans in writing (the "Final Plans").

     12.02. After the installation of the Initial Improvements,  Tenant may make
such  interior  non-structural  alterations,  improvements  and additions to the
Demised  Premises  including,   without  limitation,   changing  color  schemes,
installing new countertops,  flooring, wall-covering and modifying the layout of
the tenant fixtures,  as Tenant deems necessary or desirable  without  obtaining
Landlord's  consent.  Notwithstanding  the foregoing,  Tenant shall not make any
alterations,  improvements,  additions  or repairs  in, on or about the  Demised
Premises  which affect the structure or the  mechanical  systems of the Building
without   Landlord's  prior  written   consent,   which


                                       12
<PAGE>

consent shall not be  unreasonably  withheld,  conditioned or delayed.  Landlord
shall be deemed to have approved any subsequent  improvement  proposed by Tenant
unless Landlord disapproves of Tenant's proposal in writing within fourteen (14)
days of receiving Tenant's proposal and request for consent.

     12.03.  All personal  property,  furnishings,  machinery,  trade  fixtures,
equipment and  improvements  (trade or otherwise)  which Tenant installed in the
Demised Premises ("Tenant's Property") shall remain the property of Tenant. Upon
the termination or expiration of the Term,  Tenant may remove Tenant's  Property
from the Demised  Premises no later than the  termination  or  expiration  date.
Tenant shall repair any damage to the Demised Premises or the Building caused by
such removal,  including  patching and filling  holes.  In no event shall Tenant
remove or be required to remove any restrooms,  flooring,  ceilings,  utility or
electrical components located inside the wall or HVAC systems. All other utility
systems  will be  capped  and  returned  to a  condition  compatible  with  code
requirements.

     12.04.  Any of Tenant's  Property not removed from the Demised  Premises on
the date the Lease  terminates  or expires  shall be deemed  abandoned and shall
thereupon become the property of Landlord.

     12.05.  All costs of renovations  and  improvements  and expenses  relating
thereto,  whether direct or indirect, shall be the responsibility of Tenant. All
work to be performed shall be in good and workmanlike manner.

ARTICLE 13. DISCHARGE OF LIENS.
----------- -------------------

     13.01.  Tenant  shall not create or permit to be created or to remain,  and
shall  discharge any  mechanic's,  laborer's or  materialman's  lien or security
agreement or financing  statement which might be or become a lien,  encumbrances
or charge upon the Demised  Premises or any part thereof  having any priority or
preference  over or ranking on a parity with the estate,  rights and interest of
Landlord in the Demised Premises or any part thereof.

     13.02. If any mechanic's, laborer's or materialman's lien shall at any time
be filed against the Demised Premises or any part thereof, Tenant, within thirty
(30) days of such filing will cause same to be  discharged of record by payment,
deposit, bond, order of court of competent jurisdiction or otherwise.  If Tenant
shall fail to cause such lien to be discharged within the period aforesaid, then
unless Tenant has bonded same, and is proceeding diligently to contest the lien,
in addition to any other remedy or right,  Landlord  may after 10 days'  written
notice to Tenant,  but shall not be obligated  to,  discharge the same either by
paying he amount claimed to be due or by procuring the discharge of such lien by
deposit  or by  bonding  proceeding,  and in any such  event  Landlord  shall be
entitled,  if Landlord so elects, to compel the prosecution of an action for the
foreclosure of such lien by Lienor and to pay the amount of judgment in favor of
the Lienor with costs, interests and allowances.  Any amount so paid by Landlord
and all costs  and  expenses  incurred  by  Landlord  in  connection  therewith,
together  with interest  thereon at the prime rate of interest  published in the
Wall Street Journal or any successor  thereto (or  substitute,  if no successor)
from the  respective  dates of Landlord's  making of the payment or incurring of
the costs and expenses  shall  constitute  additional  rent by Tenant under this
Lease and shall be paid by Tenant to Landlord on demand.

     13.03.  Nothing in this Lease contained shall be deemed or construed in any
way as constituting the consent or request of Landlord,  expressed or implied by
inference  or  otherwise,   to  any  contractor,   sub-contractor,   laborer  or
materialman  of the  performance  of any labor or the furnishing of any material
for any specific improvement, alteration to or repair of the Demised Premises or
any part thereof.

     13.04.  Tenant  shall not  create or permit to be  created or to remain and
shall  discharge  any  obligation  which would  constitute a lien on the Demised
Premises or any part thereof.

ARTICLE 14. MORTGAGE OF FEE INTEREST; SUBORDINATION AND NON-DISTURBANCE.
----------- ------------------------------------------------------------

                                       13
<PAGE>


     14.01.  Except as otherwise  provided in this  Article,  during the term of
this Lease,  Landlord  shall have the right to place any  mortgage or  mortgages
upon its Fee Interest in an amount(s) not exceeding the sum of  $560,000.00  and
the recording of such mortgage or mortgages shall have preference and precedence
and be superior and prior in lien to this Lease. Landlord shall use best efforts
(but without cost to Landlord) to obtain mortgagee's  consent to Articles 17 and
18 of this Lease.  Irrespective  of the date of recording,  the Tenant agrees to
execute an  instrument,  without cost,  which shall be  reasonably  necessary to
effect the subordination of this Lease to any such mortgage or mortgages.

     14.02.  Notwithstanding the provision of Article 14.01 of this Article, the
subordination  of this Lease shall be  contingent  upon the holder or holders of
the mortgage or mortgages  referred to therein agreeing in the mortgage or other
documents in recordable  form that so long as Tenant is not in default under the
terms and  provisions  of this Lease,  in no event shall Tenant be joined in any
foreclosure  proceeding  or  in no  event  shall  Tenant's  use,  occupancy  and
enjoyment  of the  Demised  Premises  and its rights  pursuant  to this Lease be
disturbed or interfered with by said holder.

     14.03.  Tenant further  agrees to  subordinate  this Lease and to attorn to
Landlord's successor following any foreclosure, sale or transfer in lieu thereof
on condition that the transferee,  purchaser, lessor or beneficiary ("Landlord's
Successor")  agrees in a written  instrument in recordable  form that so long as
the Tenant is not in default under the terms and provision of this Lease,  in no
event shall Tenant shall be joined in any  foreclosure  preceding or in no event
shall  Tenant's use,  occupancy  and  enjoyment of the Demised  Premises and its
rights pursuant to this Lease be disturbed or interfered with by said holder nor
shall its obligations be enlarged or its rights be abridged  hereunder by reason
of any such transaction.

ARTICLE 15. ENVIRONMENTAL MATTERS.
----------- ----------------------

         15.01.            ISRA.

     A.  Tenant   warrants  and   represents   that  the   Standard   Industrial
Classification ("SIC") Number appropriate to Tenant's intended use and operation
of the Demised  Premises as determined in accordance  with the current  Standard
Industrial  Classification  Manual ("SIC Manual") is 6022.  Tenant shall not, at
any  time  during  the  term of this  Lease,  carry  on any use or  conduct  any
operation at or upon the Demised Premises which would require the remediation of
the Demised  Premises  pursuant to the  Industrial  Site  Recovery Act ("ISRA"),
N.J.S.A.  13:1K-6  et seq.,  as amended  and  supplemented  and the  regulations
promulgated   pursuant   thereto  and;  or  pursuant  to  its  predecessor  (the
Environmental  Cleanup  Responsibility  Act) by the  New  Jersey  Department  of
Environmental  Protection  and Energy  ("NJDEPE")  as the result of any closing,
terminating  or  transferring  of such uses and operation as defined by ISRA and
its regulations.  Tenant shall, at its sole cost and expense and at least thirty
(30) days prior to any closing, terminating or transferring of Tenant's uses and
operation of the Demised Premises, which shall include the expiration or earlier
termination  of this Lease,  obtain  from  NJDEPE its  written  and  unqualified
determination  that any such closure,  termination  or transfer does not require
the remediation of the Demised  Premises  pursuant to ISRA and its  regulations.
Such a determination  by NJDEPE typically takes the form of a letter referred to
as a "letter of nonapplicability" or "LNA".

     B. Tenant  shall not make any change in Tenant's  use or  operation  of the
Demised  Premises  which  would  result  in a  change  in  Tenant's  SIC  Number
identified in subparagraph  (a) above to a SIC Number within 22 to 33 inclusive,
46-49  inclusive,  51 or 56 as  determined  in  accordance  with the current SIC
Manual.

     C. Tenant shall promptly  provide Landlord with full and complete copies of
any and all  correspondence,  notices,  application,  reports plans,  laboratory
analyses,  directives, orders and any other documents sent by Tenant or Tenant's
consultants  to NJDEPE or sent by  NJDEPE  to  Tenant  or  Tenant's  consultants
concerning  the Demised  Premises and Tenant's uses and operation at or upon the
Demised Premises.

     15.02. Environmental Indemnification.

                                       14
<PAGE>

     A. Except with respect to such  conditions  existing  prior to execution of
the Lease by the parties or any condition  created by the migration of hazardous
materials,  substances  or  wastes as  herein  defined  unless  the  Tenant  had
knowledge or should have had knowledge of such  conditions  and Tenant failed to
take responsible actions to prevent any continued  migration,  Tenant covenants,
warrants and  represents to Landlord  that,  during the term of this Lease,  the
building,  improvements, soil, groundwater and surface water at, on or a part of
or under the  Demised  Premises  shall not become  contaminated  with  hazardous
material,  substances  or wastes  (as those  terms are  defined  in the  Federal
Comprehensive Environmental Response,  Compensation and Liability Act, 42 U.S.S.
SS9601 et seq., the federal Solid Waste Disposal Act, 42 U.S.S.  SS6901 et seq.,
the New Jersey Solid Waste  Management  Act,  N.J.S.A.  13:1E-1 et seq., the New
Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 et seq., the New
Jersey Water Pollution  Control Act,  N.J.S.A.  58:10A-1 et seq., the Industrial
Site Recovery Act, N.J.S.A.  13:1K-6 et seq., as amended and  supplemented,  all
regulations  promulgated  pursuant to the foregoing and any other  environmental
statutes,  ordinances,  rules and  regulations  of the  federal,  state or local
governmental. In the event such contamination occurs, notwithstanding Landlord's
exercise of any of its rights under any of the  remedies  provided by this Lease
for the breach of the foregoing covenant,  warranty and  representation,  Tenant
shall,  at its sole cost and  expense,  immediately  and fully  comply  with all
federal, state and local statutes,  ordinances, rules and regulations applicable
to such contamination and Tenant shall, at its sole cost and expenses, clean up,
remove and/or  mediate such  contamination  consistent  with all such  statutes,
ordinances, rules or regulations.

     B. Tenant  covenants,  warrants and represents to Landlord that the Demised
Premises  shall not during  the term of the Lease be  subject to any  federal or
state  lien  pursuant  to  the  federal  Comprehensive  Environmental  Response,
Compensation  and Liability  Act, 42 U.S.C.  SS 9601 et seq., nor to any similar
lien to the benefit of any local  government or agency thereof,  and the Demised
Premises shall not be the subject of any proceedings, claim, liability or action
for the cleanup, removal or mediation of any hazardous materials,  substances or
wastes as  defined  in  subparagraph  (a) above nor any  notice or  notification
regarding same nor subject to the threat or likelihood thereof.

     C. Tenant shall  indemnify and save Landlord  harmless of, from and against
any and all claims, demands,  liabilities,  damages, suits, actions,  judgments,
fines,  penalties,  loss,  cost  and  expense,  including,  without  limitation,
attorney's  fees,  directly or indirectly  arising out of or resulting  from the
untruth or breach of, or mistake in any of the  representations  and  warranties
set forth in subparagraphs (A) and (B) above.

     D. All of the provisions of this Article 15 shall survive the expiration or
earlier termination of this Lease.

     15.03.  Landlord Covenants.  Landlord warrants,  represents,  covenants and
agrees as follows:

     A. To the best of  Landlord's  knowledge,  no Hazardous  Substance has been
released, discharged or disposed of on, under or about the Demised Premises, the
Buildings  or the  property  by any  entity,  firm or person or from any  source
whatsoever.

     B.  Landlord  shall  require each of its  employees,  agents,  contractors,
subcontractors,  tenants,  subtenants  or any other party over whom Landlord has
supervision  or  control  or  right of the same to  comply  with all  applicable
Environmental Laws.

     C. To the best of Landlord's  knowledge,  there are no underground  storage
tanks on the Demised Premises, the Buildings or the property, and no underground
storage tanks have been removed from the Demised Premises,  the Buildings or the
property. To the best of Landlord's knowledge,  there is no asbestos or asbestos
containing  material  in or on the  Demised  Premises  or the  Buildings  and no
asbestos or  asbestos  containing  material  has been  removed  from the Demised
Premises or the Buildings.

     D.  Landlord  shall give prompt  notice to Tenant of (a) any  proceeding or
inquiry  by any  governmental  authority  with  respect to the  presence  of any
Hazardous Substance

                                       15
<PAGE>

on the Demised Premises or the Buildings (or off-site of the Premises that might
affect the Demised  Premises) or related to any loss or injury that might result
from any  Hazardous  Substance;  (b) all claims made or  threatened by any third
party against  Landlord or the Demised  Premises,  the Buildings or the property
relating to any loss or injury resulting from any Hazardous  Substance;  and (c)
Landlord's discovery of any occurrence or condition on the Demised Premises, the
Buildings or the property (or off-site of the Demised Premises that might affect
the Demised Premises) that could cause the Demised Premises or any part thereof,
to be subject to any  restriction  on occupancy or use of the Premises under any
Environmental Law.

     E. If any Hazardous  Substances  discovered or present in or on the Demised
Premises, the Buildings or the property,  Landlord, at Landlord's expense, shall
(subject to  Tenant's  obligations  set forth in this  Article) in a manner that
complies  with all  applicable  laws,  rules,  regulations  and  policies of any
governmental body with jurisdiction over the same, remove, transport and dispose
of such  substances  and  perform  all  remediation  and  cleanup  necessary  or
advisable to remediate any damage to personal  property or the  environment as a
result of the present of such Hazardous Substances.  Landlord shall use its best
efforts to minimize  direct and indirect  impact on Tenant during all activities
related to  remediation.  If any asbestos is discovered in the Demised  Premises
during Tenant's inspection of the Demised Premises or construction of its tenant
improvements, then Landlord shall promptly remove the asbestos or cause it to be
removed at Landlord's sole cost and expense.

         15.04.            Indemnities.

     A. Landlord  shall  protect,  indemnify  and hold  harmless  Tenant and its
agents, officers,  directors,  contractors,  employees,  parents,  subsidiaries,
successors  and  assigns  from and against  any claims  directly  or  indirectly
related to: (A) a violation of or responsibility under Environmental Laws except
that if such  claims  are  directly  related  to  Tenant,  or  Tenant's  agents,
contracts  or  employees  use,  manufacture,  storage,  release or disposal of a
Hazardous Substance on the Demised Premises or the Buildings; or (B) a breach of
any representation,  warranty,  covenant or agreement contained in this Article.
This indemnity shall survive any court order concerning  Hazardous Substances on
the Demised Premises,  the Buildings or the property (not caused by Tenant) that
precluded  Tenant  from  reasonable  operation  of its  business  on the Demised
Premises.  Tenant may cease  operating  and Rent and all other  charges shall be
abated.  If such  governmental  or court  order is not  resolved  within six (6)
months, Tenant may terminate this Lease.

     15.05.  Environmental  Assessment.  Tenant,  at its cost and  expense,  may
conduct an  environmental  assessment  of the  Demised  Premises.  Tenant  shall
indemnify,  defend and hold  harmless  Landlord  for the action or  inaction  of
Tenant's employees and contractors  conducting the testing.  The results of this
testing must be submitted  to Landlord no later than  forty-five  (45) days from
the date of this Lease.  Tenant may terminate this Lease if Tenant determines in
its reasonable opinion that the environmental  condition of the Demised Premises
is not acceptable to Tenant.  Said termination must occur within sixty (60) days
of the last signing of this Lease. If this Lease is not terminated  according to
this Article, both parties will be released from further liability or obligation
to each other, and this Lease shall become null and void.

ARTICLE 16. ASSIGNMENT AND SUBLETTING.
----------- --------------------------

     16.01.  Tenant,  and its successors,  shall not have the right to assign or
sublet this Lease without the express  written  consent  thereto from  Landlord,
which consent shall not be  unreasonably  withheld,  conditioned or delayed.  If
Tenant requests Landlord's consent, Tenant shall give Landlord (i) notice of the
proposed subtenant,  (ii) a copy of the proposed  assignment or sublease,  (iii)
reasonably  satisfactory  information about the business history of the proposed
assignee or subtenant,  and (iv) bonding,  financial or other credit information
and  references  about the proposed  assignee or subtenant  sufficient to enable
Landlord to determine the financial responsibility and character of the proposed
assignee  or  subtenant.   Landlord  and  Tenant  hereby  acknowledge  that  the
contemplated  use of the  Demised  Premises as set forth in Article 20 hereof is
material to the valuation of the Demised Premises.  Upon the consent of any such
assignment,  no such  assignment  shall be effective  unless and until  Landlord
receives

                                       16
<PAGE>

from the assignee an  assignment  under which  assignee  shall have assumed this
Lease and the  obligations of Tenant  hereunder and agree to perform and observe
the covenants and conditions in this Lease.

     16.02.  Tenant may assign  without  Landlord's  consent  but with notice to
Landlord  all or part of this  Lease,  or  sublease  all or part of the  Demised
Premises, to:

     (a) any corporation  which has the power to direct Tenant's  management and
operation,  or any corporation  whose  management and operation is controlled by
tenant; or

     (b) any corporation a majority of whose voting stock is owned by Tenant; or

     (c) any corporation in which or with which Tenant, its corporate successors
or assigns, is merged or consolidated,  in accordance with applicable  statutory
provisions  for  merger  or  consolidation  of  corporations,  so  long  as  the
liabilities of the  corporations  participating  in such merger or consolidation
are  assumed  by the  corporation  surviving  such  merger  or  created  by such
consolidation; or

     (d) any  corporate  successor to a successor  corporation  becoming such by
either of the methods described in (c).

     16.03.  Tenant's right to assign or sublease pursuant to Paragraph 16.02 is
subject to the condition that upon the completion of such merger, consolidation,
acquisition,  or assumption, the successor has a net worth no less than Tenant's
net  worth  immediately  prior to such  merger,  consolidation,  acquisition  or
assumption.

     Notwithstanding  any  assignment or sublease,  Tenant shall not be released
from any  obligations  under  the  Lease but  shall  continue  to remain  liable
hereunder. Upon any sublet of the Demised Premises in accordance with provisions
hereof,  the  sub-tenancy  shall be  subject  and  subordinate  to the rights of
Landlord hereunder,  it being understood that such sub-tenancy shall only be for
a term or terms which shall  expire prior to the  expiration  of the term hereby
granted or a renewal thereof.

     16.04.  In addition to the  remedies of the Landlord  hereunder  set forth,
Landlord  shall  have the right in the event  rent is not paid or other  default
occurs  hereunder to seek payment of rent from the  sub-tenant and apply any net
amount  collected  from such  sub-tenant to the Net Rent or additional  rent due
under this Lease.  No collection of rent by Landlord form the  sub-tenant  shall
constitute  waiver of any of the  provisions of this article or an acceptance of
the sub-tenant as a tenant or a release of Tenant from  performance by Tenant of
its obligations under this Lease.

ARTICLE 17. DAMAGE OR DESTRUCTION.
----------- ----------------------

     17.01.  In case of  damage to or  destruction  of any  improvements  on the
Demised Premises or any part thereof by fire or otherwise, Tenant shall promptly
give written notice  thereof to the Landlord.  Landlord may elect to receive the
insurance proceeds and restore,  replace, repair or rebuild the Demised Premises
or elect to have Tenant restore, replace, repair or rebuild the Demised Premises
except that if the damage or destruction shall occur in the first three years of
the original  term or a renewal  term (other than the last  renewal  term) of if
Tenant has properly exercised the option for the last renewal option then Tenant
shall  have the  right to  restore,  replace,  repair  or  rebuild  the  Demised
Premises.  Tenant,  at Tenant's  sole cost and expense shall proceed to do so as
provided  herein (and whether or not the insurance  proceeds,  if any,  shall be
sufficient for the purpose) to restore,  replace,  repair or rebuild the same as
nearly as possible to its value  immediately prior to such damage or destruction
with  such  changes  or  alterations  as may be  reasonably  made at  Landlord's
election. Such restorations,  repairs,  replacements,  rebuilding or alterations
shall  commence  within  ninety  (90) days from the time of  occurrence  of such
damage or destruction.  In the event that the damage or destruction  shall occur
in

                                       17
<PAGE>

the last two years of the  original  term or a renewal  term and Tenant does not
then  elect to  exercise  its option to renew or in the event that the damage or
destruction  shall occur in the last renewal term Landlord may elect upon notice
to Tenant to terminate  the Lease.  In the event that the damage or  destruction
shall occur in the last two years of the original  term or of a renewal term and
the damage shall equal or exceed sixty (60%) percent of the replacement value of
the  Buildings  Tenant may elect upon notice to Landlord to terminate the Lease.
In any such event Landlord shall retain the insurance  proceeds  (except for the
fair  market  value of Tenant's  trade  fixtures  if not  separately  insured by
Tenant) and Landlord may elect to not  restore,  replace,  repair or rebuild the
Demised Premises.

     17.02. In the event that Tenant shall restore,  replace,  repair or rebuild
the  Demised  Premises,  all  insurance  money paid on account of such damage or
destruction  shall be deposited  in escrow with a bank  selected by Landlord and
reasonably  acceptable to Tenant and shall be applied to the payment of the cost
of the aforesaid restoration, repair, replacement, or rebuilding (as provided in
Article  17.01  hereof),  including  the cost of  temporary  repairs  or for the
protection  of the Demised  Premises  pending the  completion  of the  permanent
restoration,  repairs, replacements, or rebuilding and same shall be paid out at
the  request  of Tenant  from time to time as such  restoration  progresses,  in
installments  equal to ninety (90%) percent of the work  completed and materials
furnished  and shall be received  by Tenant for the  purpose of paying  costs of
such  restoration or rebuilding upon the written request of Tenant,  which shall
be accompanied by the following:

     A. A verified  statement signed by Tenant or Tenant's architect or engineer
in charge of such construction setting forth (i) that the sum then requested has
been  paid  by  Tenant  or  is  justly  due  to   contractors,   subcontractors,
materialmen, engineer, architects or other persons who have rendered services or
furnished  materials  for the  restoration  therein  specified  and give a brief
description of the services and materials and the several amounts so paid or due
to each of said  persons in respect  thereof  and  stating  that no part of such
expenditures  has  been or is being  made the  basis,  in any  previous  or then
pending  request,  for the withdrawal of insurance money or has been made out of
the proceeds of insurance  received by Tenant,  and that the sum then  requested
does not  exceed  the  value of the  services  and  materials  described  in the
certificate;  (ii)  that  except  for the  amount,  if any,  set  forth  in such
certificate,  there is no  outstanding  indebtedness  shown on Tenant's books or
known to the person signing such  certificate  after due inquiry which is due on
the date of such certificate for labor, wages,  materials,  supplies or services
in connection with such restoration which, if unpaid,  might become the basis of
a materialman's  lien or similar lien upon such  restoration or upon the Demised
Premises or any part thereof; and (iii) that the cost as estimated by the person
signing such  certificate of the  restoration  required to be done subsequent to
the date of such  certificate  in order to complete the same does not exceed the
aggregate of the insurance money remaining in such account, after payment of the
sum requested in such certificate or exceed such sums evidenced by an additional
cash deposit or a firm,  bona fide loan commitment of the remaining funds issued
by a reputable lender to complete such restoration.

     B. A search of the records of the County in which the Demised  Premises are
located  showing  that  there has not been filed  with  respect  to the  Demised
Premises  any  mechanic's  notice  of  intention  or lien  which  has  not  been
discharged of record or subordinated to the sum so advanced.

     Any balance of such fund shall be paid to Landlord upon  completion of such
restoration in accordance with the provisions hereof. If the net insurance money
as aforesaid at the time held by such escrowee shall be  insufficient to pay the
entire cost of such restoration, Tenant shall pay such deficiency.

     17.03.  Except as expressly provided herein, no destruction of or damage to
the  improvements  upon the Demised  Premises or any part thereof by fire or any
other casualty shall permit Tenant to surrender or terminate this Lease or shall
relieve  Tenant from its  liability  to pay the rent and other  charges  payable
under the Lease or from any of its other obligations under this Lease and Tenant
waives any rights now or hereafter  conferred upon it by statute or otherwise to
quit or surrender  this Lease or the Demised  Premises or any part thereof or to
any  suspension,  diminution,  abatements or reduction of rent on account of any
destruction or damage.

ARTICLE 18. CONDEMNATION.
----------- -------------

                                       18
<PAGE>


     18.01. In the event that the Demised  Premises or any part thereof shall be
taken in condemnation  proceedings or by exercise of any right of eminent domain
or by agreement between  Landlord,  Tenant and those authorized to exercise such
right, Landlord, Tenant and any person or entity having an interest in the award
or  awards  shall  have  the  right  to  participate  in any  such  condemnation
proceedings  or  agreement  for  the  purpose  of  protecting   their  interests
hereunder.  Each party so participating shall pay their own expenses with regard
thereto.

     18.02. If at any time during the term of this Lease there shall be a taking
of the whole or  substantially  all of the  Demised  Premises,  this Lease shall
terminate and expire on the date of such taking and the rent and additional rent
shall be proportioned  and paid as of the date of such taking.  For the purposes
of this Article, substantially all of the Demised Premises shall be deemed to be
a taking  which  takes a portion of the  structure  construed  upon the  Demised
Premises or such portion of lands upon which the structures are constructed with
the result that the Demised  Premises  are no longer  reasonably  suited for the
conduct of Tenant's usual business  (applying the reasonable  business  judgment
rule),  or a taking of any other lands along Second  Avenue which results in the
elimination of ingress and egress to the Demised Premises without the condemning
authority providing  alternative ingress and egress to the Demised Premises from
Second Avenue,  then Tenant shall have the option to terminate this Lease within
ninety (90) days of the date when  possession of the Demised  Premises  shall be
required by the condemning  authority.  If Tenant fails to terminate  within the
ninety (90) day period,  Tenant's  right to terminate  shall be waived,  and the
Lease shall remain in full force and effect.

     18.03.  If this Lease is terminated as a result of such taking set forth in
section  18.02 hereof,  the award or awards paid  pursuant to such  condemnation
proceedings or agreement shall be distributed as follows:

         A. Any and all mortgage liens upon the fee shall be repaid in full.

         B. All  awards of land,  exclusive  of  improvements,  shall be paid to
Landlord.

         C. All awards for  building  and other  improvements  upon the  Demised
Premises shall be paid to Landlord.

         D. All awards for loss of fixtures  which Tenant was entitled to remove
and  moving  expenses  shall  belong to Tenant  provided  such  amount  does not
diminish Landlord's award.

         E. Any balance shall be paid to Landlord.

     18.04.  Notwithstanding  any other provision herein set forth, in the event
of taking of less than  substantially all of the Demised Premises (as defined in
Section  18.02  above),  this Lease shall  continue with regard to the remaining
premises  subject to all of the terms and conditions  hereof (with the exception
that the  amounts  set forth in the  purchase  options  in  Article  24 shall be
reduced by the amount net of any  professional  fees related thereto realized by
Landlord as a result of the  condemnation  award),  it being understood that the
distribution of proceeds of any condemnation  award shall be made as hereinabove
set forth, provided however:

     A.  Landlord  or Tenant,  at  Landlord  election  shall,  after such taking
promptly  restore  the  remaining  building  to a complete  architectural  unit,
provided  the  condemnation  proceeds  payable  to it are  sufficient  to do so.
Landlord shall make available  condemnation proceeds to Tenant in the event that
Tenant shall restore the Demised  Premises.  The condemnation  proceeds shall be
released  and expended in  accordance  with the  procedure  set forth in Article
17.02.  Any  portion of the  proceeds  made  available  to Tenant  which are not
required to restore the building(s) to a complete  architectural  unit, shall be
paid to Landlord.

     18.05.  In the event of a taking of an easement or any other  taking  which
shall be of an  interest  or estate in the land  less than a fee  simple,  which
taking shall not affect the operation of the Demised  Premises by Tenant for the
business  of  Tenant,  such
                                       19
<PAGE>

taking shall be deemed a taking  insufficient  to  terminate  this Lease and the
award therefor shall be paid fully to Landlord.

     18.06.  In the event of a partial  taking of the Demised  Premises or of an
easement servicing the Demised Premises, it is understood that Tenant's intended
use of the Demised  Premises as a commercial  banking facility is dependent upon
its ability to conduct business both in the Demised Premises, to provide parking
for its customers  and to further  provide for two drive-in  facilities.  In the
event  Landlord  and  Tenant  cannot  agree  that the taking has such an adverse
impact upon Tenant that it would  interfere with its continued  right to conduct
its  business,  then in such  event a  determination  will be made  pursuant  to
Paragraph 18.07 below.

     18.07. In the event of any dispute  between  Landlord or Tenant with regard
to any issue or fact (other than one determined by a condemnation  proceeding or
condemnation  commissioner  arising  out of a taking  set  forth  herein),  such
dispute shall be resolved by arbitration as hereinafter set forth.

     18.08. Notwithstanding anything to the contrary contained herein, if at any
time during the initial term (ten years) or the first extended term (five years)
any portion of the Demised Premises shall be taken or condemned,  the Tenant may
elect to purchase the Demised  Premises in accordance  with its purchase  option
and,  upon  closing  of  title,  the  Tenant  shall  be  entitled  to  the  full
condemnation award.

ARTICLE 19. NO WASTE.
----------- ---------

     19.01. Tenant shall not do or suffer any waste or damage,  disfigurement or
injury to the Demised Premises or any part thereof, but this shall not be deemed
to prevent  construction or alterations  thereof pursuant to other provisions of
this Lease.

ARTICLE 20. USE OF PROPERTY.
----------- ----------------

     20.01.  Tenant shall use and occupy the Demised  Premises as a full-service
commercial  banking  facility with two (2) drive-in  windows and at least twenty
(20)  parking  spaces.  Tenant may not,  subsequent  to the  initial  use of the
Demised Premises,  change such use unless consent thereto is given in writing by
the Landlord,  such consent not to be unreasonably  withheld.  All uses shall be
subject to compliance with the existing zoning ordinances.

     20.02.  Notwithstanding the foregoing,  Tenant will not use or permit to be
used the Demised  Premises or any part  thereof  for any  dangerous,  noxious or
offensive  trade or  business  and will not cause or  maintain,  or  permit  the
maintenance of any nuisance in or upon the Demised Premises.

     20.03.  Tenant  shall not  suffer or permit  the  Demised  Premises  or any
portion  thereof to be used by the public,  as such,  without  restriction or in
such manner as might  reasonably tend to impair  Landlord's title to the Demised
Premises or any portion  thereof,  or in such  manner as might  reasonably  make
possible a claim or claims of adverse usage,  adverse possession or prescription
by the public,  as such or of implied  dedication of the Demised Premises or any
portion thereof.

ARTICLE 21. INSPECTION AND ENTRY.
----------- ---------------------

     21.01.  Tenant shall permit Landlord and its authorized  representatives to
enter the Demised  Premises at reasonable  times upon prior notice to Tenant and
in the presence of a  representative  of Tenant  except in an emergency  for the
purpose of:

     A. Inspecting the same, or

     B. Taking any necessary  action with regard to the  condition  thereof that
may be necessary by reason of Tenant's  failure to perform or satisfy  covenants
and conditions of the within Lease.

                                       20
<PAGE>

     Nothing  herein  shall  imply any duty upon the part of  Landlord to do any
such  work or  performances  and  performance  thereof  by  Landlord  shall  not
constitute a waiver of Tenant's default in failing to perform the same.

     21.02.  Landlord shall have the right to enter the Demised  Premises at all
reasonable times during usual business hours for the purpose of showing the same
to prospective  mortgagees of the Demised Premises;  with respect to prospective
purchasers,  tenants or brokers,  at any time  within  nine months  prior to the
expiration of the term of this Lease.

ARTICLE 22. INDEMNIFICATION OF LANDLORD.
----------- ----------------------------

     22.01.  Tenant hereby  indemnifies and saves Landlord  harmless against and
from all liabilities,  obligations,  damages, penalties,  claims, costs, charges
and expenses including reasonable  attorney's fees, which may be imposed upon or
incurred  by or  asserted  against  Landlord  by reason of any of the  following
occurrences  during the term of this Lease: (a) any work or thing done in, on or
about the Demised Premises or any part thereof by Tenant or any party other than
Landlord; (b) any use, possession, occupation, condition, operation, maintenance
or management of the Demised Premises or any part thereof; (c) any negligence on
the  part of  Tenant  or any of its  agents,  contractor,  servants,  employees,
sub-tenants,  licensees or invitees;  (d) any accident,  injury or damage to any
person or property  occurring  in, on or about the Demised  Premises or any part
thereof;  or (e) any failure on the part of Tenant to perform or comply with any
of the  covenants,  agreements,  terms,  provisions,  conditions or  limitations
contained in this Lease on its part to be performed or complied with.

     In case any action or proceeding is brought  against  Landlord by reason of
any such claim,  Tenant,  upon written notice from  Landlord,  shall at Tenant's
expense  resist or defend such action or proceeding  by an attorney  approved by
Landlord in writing which approval Landlord agrees not unreasonably to withhold,
said consent of Landlord,  however, shall be required if the claim is covered by
insurance and the insurance carrier is required to provide a defense.

     22.02.  Landlord shall  indemnify and save Tenant harmless from and against
any and all liability and reasonable expense (including  reasonable  architects'
and reasonable attorneys' fees) incurred by Tenant by reason of:

     (a) any and all claims of whatever  nature  against Tenant arising from the
negligence or willful acts of Landlord, its agents and employees; or

     (b) any breach,  violation or  non-performance by Landlord of any covenant,
condition,  agreement or obligation in this Lease set forth and contained on the
part of Landlord to be kept,  observed and  performed.  This  indemnity and hold
harmless  agreement  shall  include  indemnity  from  and  against  any  and all
liability,  fines, suits, demands,  reasonable costs and expenses of any kind or
nature  incurred in or in connection  with any such claim or proceeding  brought
thereon, and the reasonable cost of the defense thereof.

ARTICLE 23. DEFAULT PROVISIONS.
----------- -------------------

     23.01.  If any one or  more of the  following  events  (hereinafter  called
"Events of Default") shall happen:

     (a) If  default  shall be made in the due and  punctual  payment of any Net
Rent, or additional rent payable under this Lease or any part thereof,  and such
default  shall  continue  for a period of twenty  (20) days (and after seven (7)
days' notice to Tenant); or

     (b) If default  shall be made by Tenant in the  performance  or  compliance
with  any of the  agreements,  terms,  covenants  or  conditions  in this  Lease
provided  other than those  referred to in the  foregoing  paragraph (a) of this
section  for a period of thirty (30) days after  notice from  Landlord to Tenant
specifying  the items in default or in the case of a default  which  cannot with
due diligence be cured within said 30-day period, Tenant fails to proceed within
said 30-day period to commence to cure the same and  thereafter to prosecute the
curing of such default with due diligence; or

                                       21
<PAGE>


     (c) If Tenant  shall file a voluntary  petition in  bankruptcy  or shall be
adjudicated  a  bankrupt  or  insolvent,  or shall file any  petition  or answer
seeking reorganization,  arrangement,  composition,  readjustment,  liquidation,
dissolution or similar relief under the present or any future federal bankruptcy
act or any  other  present  or  future  federal,  state or other  bankruptcy  or
insolvency  statute or all,  or shall seek or  consent  to or  acquiesce  in the
appointment of any bankruptcy or insolvency  trustee,  receiver or liquidator of
Tenant or of all of any  substantial  part of its  properties  or of the Demised
Premises,  and if such condition  shall continue for a period of sixty (60) days
after notice from Landlord  specifying the matter  involved and the rent,  taxes
and other payments to Landlord as herein set forth are not paid. In the event of
such  default  herein,  no assets of Tenant  shall be removed  from the  Demised
Premises; or

     (d) If within 60 days  after the  commencement  of any  proceeding  against
Tenant  seeking  any  reorganization,  arrangement,  composition,  readjustment,
liquidation,  dissolution or similar relief under the present or future federal,
state or other  bankruptcy or insolvency  statute or law, such proceeding  shall
not be dismissed or stayed or such appointment shall not have been vacated.

     (e) A default by Tenant  under any other lease or agreement  with  Landlord
shall be deemed a default under the Lease.

     Then,  and in any such event,  Landlord at any time  thereafter  shall give
written  notice to Tenant  stating  that this Lease and the term hereof  demised
shall expire and  terminate on the date  specified in such notice which shall be
at least 10 days after the giving of such notice, and upon the date specified in
such  notice  this Lease and the term  hereby  demised  and all of the rights of
Tenant  under  this  Lease,  including  any  renewal  privileges  whether or not
exercised,  shall  expire  and  terminate  and  Tenant  shall  remain  liable as
hereinafter provided.

     23.02. Upon any expiration or termination of this Lease,  Tenant shall quit
and peacefully surrender the Demised Premises to Landlord and Landlord,  upon or
at any time after such  expiration or  termination,  may without further notice,
enter upon and re-enter the Demised  Premises and possess and repossess  himself
thereof,  by  force,  summary  proceedings,  ejectment  or  otherwise,  and  may
dispossess  Tenant and remove Tenant and all other persons and property from the
Demised Premises and may have, hold and enjoy the Demised Premises and the right
to receive all rental income of and from the same.

     23.03.  At all  times,  from  time to time  after  any such  expiration  or
termination,  Landlord  may relet the Demised  Premises or any part  thereof for
such terms (which may be greater or less than the period  which would  otherwise
have  constituted the balance of the terms of this Lease) and on such conditions
(which  may  include  concessions  or free  rent or  alteration  of the  Demised
Premises) as Landlord in his sole  discretion  may determine and may collect and
receive the rents  therefore.  Landlord shall in no way be responsible or liable
for any failure to relet the Demised  Premises or any part  thereof,  or for any
failure to collect any rent due upon any such  reletting but Landlord shall make
good faith efforts to mitigate damages.

     23.04. No such expiration or termination of this Lease shall relieve Tenant
of its  liability  and  obligations  under this Lease,  and such  liability  and
obligation  shall survive such  expiration or  termination.  In the event of any
such expiration and termination, whether or not the Demised Premises or any part
thereof shall have been relet, Tenant shall pay to Landlord the Net Rent and all
other charges required to be paid by Tenant up to the time of such expiration or
termination of this Lease,  and thereafter  Tenant,  until the end of what would
have  been  the  term  of this  Lease  in the  absence  of  such  expiration  or
termination,  shall be liable to Landlord,  for and shall pay to  Landlord,  the
equivalent  of the amount of Net Rent and the other rent and charges which would
be payable  under this Lease by Tenant if this Lease were still in effect,  less
the net proceeds of any reletting effective pursuant hereto, after deducting all
Landlord's  expenses  in  connection  with  such  reletting  including,  without
limitation,  all  repossession  costs,  brokerage  and  management  commissions,
operating  expenses,  legal expenses,  reasonable  attorney's  fees,  alteration
costs, and the expenses of preparation of such reletting.  Tenant shall pay such
current damage to Landlord  monthly on the date on which the New Rent

                                       22
<PAGE>

would have been  payable  under this Lease if the Lease were still in effect and
Landlord  shall be entitled to recover  form Tenant each monthly  deficiency  as
same shall arise.

     At any time after such expiration or termination, in lieu of collecting any
further monthly deficiencies as aforesaid, Landlord shall be entitled to recover
from Tenant, and Tenant shall pay to Landlord, on demand, an amount equal to the
"worth"  at the time of the claim  judgment,  or other  award,  of the amount by
which the unpaid rent for the  balance of the term  exceeds the then fair rental
value of the Demised Premises for the same period, less any monthly deficiencies
previously recovered from Tenant. "Worth" as used in this provision, is computed
by calculating the total at the discount rate six percent (6%).

     If the Demised  Premises or any part  thereof be relet by Landlord  for the
unexpired term of this Lease, or any part thereof,  before presentation of proof
of such  damages  to any  court,  commission  or  tribunal,  the  amount of rent
received  upon,  such  reletting  shall prima  facie be the fair and  reasonable
rental  value for the part or the whole of the Demised  Premises so relet during
the term of the reletting. Nothing herein contained shall limit or prejudice the
right of Landlord to prove for and obtain damages by reason of such  termination
an amount  equal to the maximum  allowed by any statute or rule of law in effect
at the time when, and governing the  proceedings in which such damages are to be
proved  whether or not such amount be greater,  equal to or less than the amount
of the difference referred to above.

     23.05. No failure by Landlord to insist upon the strict  performance of any
agreement, term, covenant or condition hereof or to exercise any right or remedy
consequent  upon a breach  thereof  and no  acceptance  of full or partial  rent
during the continuance of any such breach,  shall constitute  waiver of any such
breach or such  agreement,  term,  covenant or condition.  No  agreement,  term,
covenant or condition hereof to be performed or complied with by Tenant,  and no
breach  thereof,  shall  be  waived,  altered  or  modified  except  by  written
instrument  executed by Landlord.  No waiver of any breach shall affect or alter
this Lease,  but each and every agreement,  term,  covenant and condition hereof
shall  continue in full force and effect with respect to any other then existing
or subsequent breach thereof.

     23.06. In the event of any breach or threatened  breach by Tenant of any of
the agreements, terms, covenants or conditions contained in this Lease, Landlord
shall be entitled to enjoin such  breach or  threatened  breach,  shall have the
right to evoke any right and remedy allowed at law or in equity or by statute or
otherwise as though  re-entry  summary  proceedings  and other remedies were not
provided for in this Lease.

     23.07. Each right and remedy provided for in the Lease shall be in addition
to every other right or remedy  provided  for in this Lease or now or  hereafter
existing  at law or in equity or by statute or  otherwise,  and the  exercise or
beginning of the exercise by Landlord or Tenant of any one or more of the rights
or remedies provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise  shall not preclude the  simultaneous or later
exercise  by the  party in  question  of any or all  other  rights  or  remedies
provided for in this Lease or now or  hereafter  existing at law or in equity or
by statute or otherwise.

ARTICLE 24. OPTION TO PURCHASE.
----------- -------------------

     Provided  Tenant is not in  default of the within  Lease,  Landlord  grants
Tenant an option to purchase  the subject  Demised  Premises  during the initial
Term of the Lease (namely ten years) at two (2) specific time periods and on the
following terms and conditions:

     A. At the end of the 60th  month of the Term  Tenant  shall have sixty (60)
days from the date of  expiration  of the sixtieth  (60th) month within which to
notify  Landlord of its option to purchase  the Demised  Premises.  The purchase
price for this option is Five Hundred Fifty Thousand Dollars  ($550,000.00)  and
closing of title shall take place within  thirty (30) days of notice of election
of option  with the  purchase  price to be paid all cash or  certified  check at
closing.  Attached  hereto  as  Schedule  "C" is an  outline  of the

                                       23
<PAGE>

steps and  conditions  to close,  all of which are to be  followed  in the event
Tenant  exercises  its option to purchase at any time  pursuant to the terms set
forth herein.

     B. At any time after  114th month of the term of the Lease and prior to the
expiration  of the 118th  month of the term of the  Lease,  Tenant  shall  serve
notice of its election of option to purchase and closing shall take place within
thirty (30) days of notice of election of option with the  purchase  price to be
paid all cash or certified  check at closing.  Reference is made to Schedule "C"
attached hereto which is an outline of the steps and conditions to close, all of
which are to be followed in the event Tenant exercises its option to purchase at
any time pursuant to the terms set forth herein.

     C. In the event  Tenant has  exercised  its first option to renew the Lease
which would cover  months 121 through 180 months from the date of  Commencement,
then Tenant shall have the option to purchase  the Demised  Premises at any time
during that time frame,  namely months 121 through 180. The purchase price to be
paid by Tenant is set forth below and is based upon closing  taking place during
the specified months as follows:

         1.       Between months 121 through 132
                  sale price = $558,000.00;
         2.       Between months 133 through 144
                  Sale price = $566,000.00;
         3.       Between months 145 through 156
                  sale price = $574,000.00;
         4.       Between months 157 through 168
                  sale price = $582,000.00;
         5.       Between months 169 through 180
                  sale price = $590,000.00;

         The  procedure for closing title shall be that which is as set forth in
the attached Schedule "C".

ARTICLE 25. RIGHT OF FIRST REFUSAL.
----------- -----------------------

     25.01.  Provided  Tenant is not in default of the within  Lease and has not
exercised  its option to purchase  pursuant to the terms set forth in Article 24
above and has  exercised  its option or options to renew beyond the 180th month,
Tenant shall have the right of first refusal to purchase the Demised Premises as
hereinafter  in this  Article  set  forth.  If at any  time  during  the  period
following the 180th month and Tenant has extended its term of Lease as set forth
above and Landlord  shall receive a bona fide offer,  from a third  person,  who
does not have the power of  eminent  domain,  for the  purchase  of the  Demised
Premises,  which offer Landlord shall desire to accept,  Landlord shall promptly
deliver  to  Tenant  a copy  of  such  offer,  and  Tenant  may  within  20 days
thereafter,  elect to purchase  the Demised  Premises on the same terms as those
set forth in such offer.  If Tenant  shall not accept such offer within the time
herein specified therefor, said right of first refusal shall cease to exist, but
this Lease shall  continue  otherwise  on all the other  terms,  covenants,  and
conditions  in this Lease as set forth.  This  right of first  refusal  shall be
inapplicable to a transfer, by way of sale, gift, or devise,  including a trust,
to or for a party related to Landlord,  or to any transfer from one such related
party to another,  but shall apply to any such transfer to a third  person.  For
the purpose of this Article,  if the then owner of the Demised Premises shall be
an individual  or  individuals,  a related  party shall  include a wife,  lineal
descendent  or spouse of such  descendant,  ancestor or sibling  (whether by the
whole or half blood),  a  partnership  of which such owner is a member,  a joint
ownership or ownership in common,  which  includes the then owner of the Demised
Premises,  or a  corporation,  the majority of whose  securities is owned by the
owner(s) of the Demised Premises,  or any one or more of the foregoing  parties.
If the then owner of the  Demised  Premises  shall be a  corporation,  a related
party shall include an affiliate,  subsidiary or parent corporation, a successor
by merger or  consolidation,  or the holder or holders  of the  majority  of the
securities of such corporation.

                                       24
<PAGE>


     If the Demised Premises shall be conveyed to the Tenant under this right of
first refusal,  any prepaid rent shall be apportioned  and applied on account of
the purchase price.

ARTICLE 26. NOTICES.
----------- --------

     26.01.  Any and all notices,  demands,  requests,  submissions,  approvals,
consents, disapprovals,  objections, offers or other communications or documents
required to be given,  delivered  or served or which may be given,  delivered or
served under or by the terms and  provisions of this Lease or pursuant to law or
otherwise, shall be in writing and shall be deemed to have been given, delivered
or served if and when sent by  registered  mail or  certified  mail with  proper
postage  prepaid  thereon  addressed if to Tenant at the Demised  Premises or to
such other address as Tenant may from time to time  designate by written  notice
to  Landlord;  or if to  Landlord  at the  address set forth at page one of this
Lease or to such other  address as Landlord  may from time to time  designate by
written notice to Tenant.

ARTICLE 27. QUIET ENJOYMENT.
----------- ----------------

     27.01.  Tenant,  upon paying the Net Rent and all additional rent and other
charges herein provided for and observing and keeping all covenants, agreements,
and  conditions  of this Lease on his part to be kept,  shall  quietly  have and
enjoy the Demised  Premises  during the term of this Lease without  hindrance or
molestation by anyone  claiming by,  through or under Landlord as such,  subject
however, to the covenants of this Lease.

ARTICLE 28. NO RENT ABATEMENT.
----------- ------------------

     28.01.  Except  as in this  Lease  as  expressly  provided,  no  abatement,
diminution  or reduction of rent or charges  shall be claimed by Tenant,  or any
person   claiming   under   Tenant,   under  any   circumstances,   whether  for
inconvenience,  discomfort, interruption of business, or otherwise, arising from
the construction, alteration, changes, additions, improvements or repairs to any
buildings  to be erected on the Demised  Premises,  or because of any present or
future governmental laws, ordinances, requirements, orders, directions, rules or
regulations or for any other reason or cause.

ARTICLE 29. ESTOPPEL CERTIFICATE.
----------- ---------------------

     29.01. Tenant shall,  without charge, at any time from time to time, within
10 days after request by Landlord, certify by written instrument, duly executed,
acknowledged  and  delivered  to  Landlord,  or to any  other  person,  firm  or
corporation specified by Landlord: (a) that this Lease is unmodified and in full
force and effect, or, if there have been modifications, that the same is in full
force and effect as modified  and stating the  modification;  (b) whether or not
there are then  existing  any  defenses  against the  enforcement  of any of the
agreements,  terms,  covenants or conditions hereof and any modifications hereof
on the part of Tenant to be performed or complied with,  and, if so,  specifying
the same;  (c) the date, if any, to which the Net Rent and  additional  rent and
other charges hereunder have been paid in advance; (d) the date of expiration of
the current term; and (e) the Net Rent payable under this Lease.

     29.02. Landlord shall, without charge, at any time from time to time within
10 days after request by Tenant,  certify by written instrument,  duly executed,
acknowledged  and delivered,  to the effect that this Lease is unmodified and in
full force and effect,  and the dates to which the rent and other  charges  have
been paid, the date of expiration and the net term and stating whether Tenant is
in default hereunder and, if so, specifying such default.

ARTICLE 30. ARBITRATION AND APPRAISAL.
----------- --------------------------

     30.01.  In any case in which it is  provided by the terms of this Lease any
matter shall be conducted in the manner specified in this Article.

     30.02.  The party  desiring such  arbitration  shall give written notice to
that effect to the other party and shall in such notice appoint a  disinterested
person of

                                       25
<PAGE>

recognized  competence in the field involved as arbitrator on its behalf. Within
30 days  thereafter,  the other  party shall by written  notice to the  original
party appoint a second  disinterested  person of  recognized  competence in such
field as arbitrator on its behalf.  The arbitrators thus appointed shall appoint
a third  disinterested  person of recognized  competence in such field, and such
three  arbitrators  shall,  as  promptly  as  possible,  determine  such  matter
provided,  however,  that (a) if the  second  arbitrator  shall  not  have  been
appointed as aforesaid,  the first  arbitrator  shall proceed to determine  such
matter; and (b) if the two arbitrators  appointed by the parties shall be unable
to agree,  within 20 days after appointment of the second  arbitrator,  upon the
appointment  of a third  arbitrator,  they  shall  give  written  notice of such
failure to agree to the  parties,  and,  if the  parties  fail to agree upon the
selection  of such  third  arbitrator  within  20  days  after  the  arbitrators
appointed  by the  parties  give  notice  as  aforesaid,  then  within  10  days
thereafter  either of the parties,  upon written notice to the other party,  may
request such  appointment  by the  American  Arbitration  Association  or if the
American Arbitration Association ceases to exist then by a judge of the Superior
Court of New Jersey or of any other court  having  jurisdiction  and  exercising
functions  similar  to those  exercised  by the  Superior  Court of New  Jersey.
Landlord  and Tenant each shall be entitled to present  evidence and argument to
the arbitrators.

     30.03. The  determination  of the majority of the arbitrators,  or the sole
arbitrator,  as the case may be,  shall be  conclusive  upon the parties and the
judgment upon the same may be entered in any court having jurisdiction  thereof.
The  arbitrators  shall give written notice to the parties  stating their or his
determination   and  shall   furnish  to  each  party  a  signed  copy  of  such
determination.  If any such dispute shall involve a determination of value or of
a fixed amount of money or rent and if there shall be no  determination  thereof
by a majority of the  arbitrators,  then either  party shall be entitled to seek
judicial  determination  of  the  matter  in  issue  in  a  court  of  competent
jurisdiction.

     30.04.  Each  party  shall  pay the  fees  and  expense  of the  arbitrator
appointed  by such  party and  one-half  of the fees and  expenses  of the third
arbitrator and the American Arbitration Association, if any.

ARTICLE 31. SIGNS.
----------- -------
     31.01.  Tenant shall have the right to place on the Demised  Premises signs
or advertising material including  illuminated signs with regard to Tenant's use
thereon, provided such signs are in good condition and repair at all times. Upon
the termination or expiration of this Lease, Tenant shall cause such signs to be
removed.

ARTICLE 32. INVALIDITY OF PARTICULAR PROVISIONS.
----------- ------------------------------------

     32.01. If any term or provision of this Lease or the application thereof to
any person or circumstances  shall, to any extent,  be invalid or unenforceable,
the remainder of this Lease,  or the  application  of such terms 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 Lease shall be valid and be enforced to the  fullest  extent  permitted  by
law.

ARTICLE 33. DEFINITIONS.
----------- ------------

     33.01. The term "Landlord" as used herein shall mean only the owner for the
time being of the Demised  Premises,  so that in the event of a sale,  transfer,
conveyance or other termination of Landlord's  interest in the Demised Premises,
Landlord  shall be and hereby is entirely freed and relieved of all liability of
Landlord hereunder. It shall be deemed and construed,  without further agreement
between the parties or their  successors  in interest or between the parties and
such  successor-owner  of the Demised Premises,  that such  successor-owner  has
assumed  and  agreed  to  carry  out  any  and  all  agreements,  covenants  and
obligations of Landlord hereunder.

     33.02.  The term "fee mortgage"  shall mean a mortgage on Landlord's fee or
any part thereof and the term "fee mortgagee"  shall mean any holder of such fee
mortgage.

                                       26
<PAGE>


     33.03. The neuter gender, when used herein,  shall include all persons, and
works used in the plural shall include words in the singular,  where the text so
requires.

ARTICLE 34. MISCELLANEOUS.
----------- --------------

     34.01.  Upon the approval of the charter of Monmouth  Community Bank by the
New Jersey Department of Banking and the Federal Deposit Insurance  Corporation,
the designation of Tenant shall  automatically  and without the necessity of any
other  written   instrument  be  changed  from  Monmouth   Community   Bank,  In
Organization to Monmouth  Community Bank, a Banking  Corporation of the State of
New Jersey.

     34.02. Landlord acknowledges that any security interest created in personal
property situated in the Demised Premises shall be superior to any lien or claim
of Landlord and in the event of a default by Tenant in the terms and  conditions
of  the  Security  Agreement  which  has  created  the  aforementioned  security
interest,  the  Secured  Party may enter the  Demised  Premises  and  remove its
collateral.

     34.03. Notwithstanding any other provisions contained in this Lease, in the
event (a) Tenant or its successors or assignees become insolvent or bankrupt, or
if it or their  interests  under this Lease  shall be levied  upon or sold under
execution  or  other  legal  process,  or (b) the  depository  institution  then
operating on the Demised Premises is closed,  or is taken over by any depository
institution  supervisory authority  ("Authority"),  Landlord may, in either such
event,  terminate  this  Lease  only with the  concurrence  of any  Receiver  or
Liquidator appointed by such Authority;  provided,  that in the event this Lease
is terminated by the Receiver or  Liquidator,  the maximum claim of Landlord for
rent,   damages,  or  indemnity  for  injury  resulting  from  the  termination,
rejection,  or abandonment of the unexpired Lease shall by law in no event be in
an amount equal to all accrued and unpaid rent to the date of termination.

ARTICLE 35. RECORDING.
----------- ----------

     35.01. A short form lease may be recorded in form mutually  satisfactory to
Landlord  and Tenant  once the  contingency  Paragraph 3 has been  satisfied  or
waived by Tenant, which form shall set forth the Tenant's rights with respect to
the options to renew and to purchase.

ARTICLE 36. BINDING EFFECT.
----------- ---------------

36.01.  This  Lease is  binding  upon and  shall  inure  to the  benefit  of the
respective  parties hereto,  their respective heirs, legal  representatives  and
successors by operations of law or otherwise and their assigns.

IN WITNESS  WHEREOF,  Landlord and Tenant have caused this Lease be executed the
day and year first above written.

Witness:                                            LANDLORD



/s/ Betsy O'Toole                              BY:  /s/ [illegible]
-------------------------------                     --------------------------

Witness:                                            TENANT



/s/ Betsy O'Toole                              BY:  /s/ Richard O. Lindsey
-------------------------------                     --------------------------
                                                    President & CEO



                                       27
<PAGE>



                                  SCHEDULE "A"

                              Property Description

                     To be added if Tenant provides updated
                       metes and bounds survey description






                                       28
<PAGE>


                                  SCHEDULE "B"

               Hypothetical Example of Application of CPI Formula
                             Regarding Article 2.02

Term in Months             Base Rent         CPI Calculation
--------------             ---------         ---------------

T-1        -60             $54,000.00        December  1996 59th month  assumes
                                             6 percent increase $3,240.00
T-2        61-120          $54,240.00        61st-119th    month    assumes   7
                                             percent increase $3,796.80
First Option 121-180       $58,036.80        121st-197th   assume   8   percent
                                             increase $4,642.94
Second Option 181-240      $62,679.74        181st-239th   assumes   9  percent
                                             increase $5,641.18
Third Option 241-300       $68,320.92        241st-229th   assumes  10  percent
                                             increase $6,832.09
Fourth Option 301-360      $75,153.01


===============================================================================
T-1 and T-2 represent the first ten years or the initial term of Lease.

First, second, third and fourth are the respective options defined in months.
===============================================================================
Additional Example:

Assuming a CPI Index of 164.8 on  inception  of Lease and 174.7 for the  nearest
month prior to the month in which the successive  term  commences  (60th month),
the  calculations  to determine base rent for period T-2 (months 61 to 120 would
be):

                       $54,000.00 x 174.7    =    $57,243.93
                                    164.8




                                       29
<PAGE>

                                  SCHEDULE "C"

                    Outline of Steps and Conditions to Close
                (to be followed in the event Tenant exercises its
              option to purchase at any time pursuant to the terms
                                set forth herein)

Provided  Tenant is not in  default of any of the terms and  conditions  of this
Lease,  Tenant  shall have the right at any time during the Term to exercise its
option by serving  written  notice as set forth in Article 26 upon Landlord care
of  ____________________________.  If at the time of giving of the notice Tenant
is aware of the address  change of either of the above named parties or has been
given  notice by Landlord to  substitute  either or both of the above names with
others, Tenant shall serve notice upon those substituted parties.

The notice shall refer to the Lease,  specifically  Article 24, and accompanying
said  notice  shall be a bank or  certified  check in the amount of ten  percent
(10%) of the sale  price  which  shall be held in trust by  Landlord's  attorney
until closing of title.

Tenant  shall have thirty (30) days from the date of the notice  within which to
obtain a title  insurance  binder as  required  in Article  3(D).  Tenant  shall
deliver a binder to  Landlord in  accordance  with the notice  requirements  set
forth above.  Landlord agrees that the title shall be  substantially in the same
form and condition as presently  exists at the time of Commencement  Date of the
within Lease and acknowledges  that Tenant has produced a title insurance binder
for leasehold title insurance purposes which contains  exceptions  acceptable to
Tenant.  Landlord agrees that it will not cause any additional  exceptions other
than those which are set forth and existing at the time of the Commencement Date
and as are set forth in the aforementioned  title insurance binder, all of which
shall be known as  "Permitted  Exceptions".  In the event  there are  additional
exceptions  discovered at the time that Tenant exercises its option to purchase,
Landlord shall have sixty (60) days from the date of receipt of notice to remove
such  exceptions  or to  satisfy  Tenant's  title  insurance  company  that such
exceptions  will  either be  removed  or will be  insured  in favor of Tenant as
owner.  If  Landlord  does not or  cannot  remove  such  exceptions  within  the
aforementioned  sixty-day  period and should Tenant refuse or fail to waive such
exception(s) within such sixty-day period, then the option by Tenant to purchase
shall be deemed  null and void and Tenant  shall have no further  obligation  to
purchase the Demised  Premises no shall Landlord have any further  obligation to
sell the Demised  Premises to Tenant and Landlord shall promptly  return the ten
percent (10%) of sales price previously posted.

Upon the  termination  of the  within  option,  the  balance  of the  terms  and
conditions of the Lease shall remain in full force and effect and shall continue
pursuant to the terms and conditions of the within Lease.

In the event all of the above  conditions  are satisfied  within the time period
prescribed  above,  Tenant  agrees to close title within twenty (20) days of the
satisfaction of the contingencies  set forth above.  Either party may serve upon
the other notice that the contingencies have been satisfied and unless contested
in writing, the contingencies shall be deemed to have been satisfied and closing
shall take place within twenty (20) days of such satisfaction.




                                       30
<PAGE>


                                   EXHIBIT 1.03 to the MONMOUTH COMMUNITY BANK/
                                               KFC ASSOCIATES LEASE


         A.   Lease is to commence upon the tenant  receiving and/or waiving the
              contingencies  contained  in  Article  3 of  this  Lease  and  the
              approval  provisions  of Article 3. The  Landlord  has  previously
              provided evidence that the former tenant has vacated the premises,
              which acknowledgment is accepted as of the date of this memorandum
              by Monmouth Community Bank. The Landlord agrees that there will be
              no change in the tenancy  status from the date of this  Memorandum
              and its annexation to the Lease to the time that the tenant waives
              the contingencies and receives  approvals as outlined in Article 3
              of this Lease.

         B.   The  Article 3  contingencies  may be waived at any time by Tenant
              and when so waived shall  constitute the commencement of the Lease
              and the right of Tenant to take possession.

         C.   The forwarding of the  notification of the waiver of contingencies
              and date  selection  shall  serve as the  date for the  taking  of
              possession of the premises and commencement of the Lease.

         D.   Prior to the  commencement  of any renovation and tenant  fit-ups,
              the tenant shall provide to the landlord a fully-executed building
              contract.  Tenant  further  agrees  that upon the  delivery of the
              building contract, that the building contract, as delivered,  will
              serve as comfort to the landlord that all  renovations  and fit-up
              work will be  completed  by the tenant as provided by the building
              plans and  building  contract.  It is further  agreed  that in the
              event the building  plans and Tenant  fit-up do not  encompass the
              entire  building or if Tenant  vacates the premises for any reason
              prior to  completing  fit-ups  and  improvements,  the Tenant will
              provide the landlord with a vanilla box (vanilla box is defined as
              operable condition, ready for decoration by subsequent tenant) for
              any areas which are not fully developed for tenant use as a result
              of the initial building contract.


Witness:                                            LANDLORD



/s/ Betsy O'Toole                              BY:  /s/ [illegible]
-------------------------------                     --------------------------

Witness:                                            TENANT



/s/ Betsy O'Toole                              BY:  /s/ Richard O. Lindsey
-------------------------------                     --------------------------
                                                    President




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