Exhibit 10.39

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                               AGREEMENT OF LEASE
                              WITH PURCHASE OPTION
                     (HEREIN REFERRED TO AS THE "AGREEMENT")

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                        Dated: __________________________

                             CONJOE REALTY CO., INC.
                            a New Jersey Corporation
                      c/o Robert Papandrea, Vice President
                              54 DOCK WATCH HOLLOW
                            WARREN, NEW JERSEY 07059,

                               AS LANDLORD/SELLER

                                       AND

                          RONALD FRIGERIO, as agent for
                   THE TOWN BANK OF WESTFIELD, In Organization
                              115 EAST GROVE STREET
                           WESTFIELD, NEW JERSEY 07091

                               AS TENANT/PURCHASER

                                 FRIERI & CONROY
                                777 WALNUT AVENUE
                           CRANFORD, NEW JERSEY 07016
                                 (908) 653-1441

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                                TABLE OF CONTENTS

SECTION 1.    THE LEASE........................................................1

SECTION 2.    USE..............................................................1

SECTION 3.    LEASE COMMENCEMENT...............................................1

SECTION 4.    PRE-COMMENCEMENT EXPENSES........................................1

SECTION 5.    TERM.............................................................2

SECTION 6.    RENT COMMENCEMENT DATE...........................................2

SECTION 7.    RENT.............................................................2

SECTION 8.    FIRST OPTION TO RENEW............................................2

SECTION 9.    SECOND OPTION TO RENEW...........................................3

SECTION 10.   THIRD OPTION TO RENEW............................................3

SECTION 11.   TENANT/PURCHASER FIT-UP..........................................3

SECTION 12.   SECURITY.........................................................4

SECTION 13.   TAXES............................................................4

SECTION 14.   UTILITIES........................................................4

SECTION 15.   REPAIRS MAINTENANCE AND REPLACEMENTS.............................5

SECTION 16.   COMPLIANCE WITH LAWS.............................................5

SECTION 17.   ALTERATIONS AND IMPROVEMENTS.....................................5

SECTION 18.   INSURANCE........................................................5

SECTION 19.   INDEMNITY........................................................6

SECTION 20.   FIRE AND OTHER CASUALTY..........................................6

SECTION 21.   CONDEMNATION.....................................................6

SECTION 22.   ASSIGNMENT AND SUBLETTING........................................7

SECTION 23.   LANDLORD/SELLER'S RIGHT OF ACCESS................................7

SECTION 24.   SUBORDINATION TO MORTGAGES. NONDISTURBANCE BY MORTGAGEE..........8

SECTION 25.   CERTIFICATE OF LEASE STATUS......................................8

SECTION 26.   SIGNS............................................................8

SECTION 27.   NON-LIABILITY OF LANDLORD/SELLER.................................8

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SECTION 28.   CONSTRUCTION LIEN CLAIMS.........................................8

SECTION 29.   LANDLORD/SELLER'S RIGHT TO CURE..................................8

SECTION 30.   HOLDING OVER.....................................................9

SECTION 31.   ENVIRONMENTAL MATTERS............................................9

SECTION 32.   DEFAULT.........................................................10

SECTION 33.   FORCE MAJEURE...................................................11

SECTION 34.   WAIVER OF SUBROGATION...........................................11

SECTION 35.   BROKERAGE.......................................................11

SECTION 36.   QUIET ENJOYMENT.................................................11

SECTION 37.   LEASE SCHEDULES AND EXHIBITS....................................11

SECTION 38.   RECORDATION OF LEASE............................................11

SECTION 39.   NOTICES.........................................................12

SECTION 40.   BINDING EFFECT..................................................12

SECTION 41.   APPLICABLE LAW..................................................12

SECTION 42.   REMOVAL OF TENANT/PURCHASER'S PROPERTY..........................12

SECTION 43.   SUMS DEEMED ADDITIONAL RENT.....................................13

SECTION 44.   PURCHASE OPTION.................................................13

SECTION 45.   FIRST RIGHT OF REFUSAL..........................................13

SECTION 46.   EARLY TERMINATION...............................................14

SECTION 47.   VALIDITY OF LEASE/AUTHORITY TO LEASE............................14

SECTION 48.   ENTIRE AGREEMENT................................................14

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SECTION 1. THE LEASE

      Landlord/Seller  hereby leases to  Tenant/Purchaser  and  Tenant/Purchaser
hereby  rents  from  Landlord/Seller  the entire  property  located at 520 South
Avenue West, Westfield,  New Jersey, also known as Lot 20, Block 2510 on the tax
map of the Township of Westfield and as more  particularly  described in Exhibit
A, which is annexed hereto and hereinafter referred to as the "Premises".  It is
understood and agreed that, subject to the Tenant/Purchaser's  right of purchase
and first refusal as  hereinafter  defined,  the Premises may be conveyed by the
Landlord/Seller  to another person or entity.  Upon such  conveyance,  the third
party  shall  take title  subject to and such  transferee  shall  recognize  the
Tenant/Purchaser's tenancy hereunder and the terms and provisions of this Lease.

      It is  further  understood  and  agreed  that  Tenant/Purchaser  is in the
process of forming,  with the requisite approval of the New Jersey Department of
Banking and the Federal Deposit Insurance  Corporation,  a New Jersey commercial
banking  corporation,  the charter application for which is soon to be filed, to
be named "The Town Bank of Westfield" or such substitute name as may be required
by the New Jersey  Commissioner of Banking (the "Bank").  Upon the charter being
duly issued by the New Jersey  Department  of Banking and the Bank becoming duly
qualified to do a banking business in New Jersey,  Tenant/Purchaser shall assign
this Lease to the Bank and upon the Bank's assuming each and every obligation of
Tenant/Purchaser    under   this   Lease,    Landlord/Seller    shall    release
Tenant/Purchaser  from any  further  Lease  obligations  and  there  shall be no
further liability to Tenant/Purchaser thereafter.

SECTION 2. USE

      The  Tenant/Purchaser  may use and occupy  the  Premises  as a  commercial
banking  office.  The  Tenant/Purchaser's  use of the Premises is expressly made
subject to the  provisions  of  Section 31 of this  Lease.  In  addition  to the
limitations set forth in the aforesaid  Section 31, the  Tenant/Purchaser  shall
not use or occupy nor  knowingly  permit the  Premises or any part thereof to be
used or occupied for any unlawful  business use or purpose or for any purpose or
in any manner which is in violation of any present or future  governmental  laws
or  regulations.  The  Tenant/Purchaser  shall save  harmless and  indemnify the
Landlord/Seller  from and  against  all costs,  expenses,  liabilities,  losses,
damages, injunctions,  suits, fines, penalties, claims, and demands, arising out
of  Tenant/Purchaser's  own negligence,  except if the Landlord/Seller  shall be
compensated therefore by recovery under fire or extended coverage insurance.

SECTION 3. LEASE COMMENCEMENT

      The Lease Commencement Date shall be upon, or before at Tenant/Purchaser's
option,  issuance of the Certificate of Authority from the New Jersey Department
of Banking (hereafter the "COA"), currently anticipated in February, 1998.

SECTION 4. PRE-COMMENCEMENT EXPENSES

      Tenant/Purchaser agrees to begin payment of all real estate taxes that
come due on the Premises upon execution of this Lease by both parties.
Tenant/Purchaser shall pay all real estate taxes to the Landlord/Seller on a
monthly pro-rata basis in arrears. At the time of execution of this Lease, the
monthly payment is approximately $1,497.00. All pre-commencement expenses shall
cease to be paid by Tenant/Purchaser upon the happening of any of the following
events:

            A.    the denial of the COA; or

            B.    the  Tenant/Purchaser   failing  to  obtain  final  site  plan
                  approval  on or before  February  1,  1998 from the  Westfield
                  Planning  Board  for the use of the  Premises  as a bank  with
                  drive-up  facilities in accordance with the plans submitted by
                  Tenant/Purchaser to the Westfield Planning Board; or

            C.    the  Tenant/Purchaser  failing to obtain approval for the curb
                  cut in the driveway  for entrance to the drive-up  facility as
                  shown on the plans  submitted to the Westfield  Planning Board
                  and the New Jersey Department of Transportation; or


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            D.    the receipt of an unsatisfactory engineering inspection report
                  of the  condition  of the  Premises  within  21 days  from the
                  execution of this Agreement. An unsatisfactory report shall be
                  a report that the Tenant/Purchaser deems unsatisfactory in its
                  sole and absolute discretion.

            E.    Rent Commencement as hereafter defined.

      Upon the  occurance  of sub-part A, B, C, D or E herein,  Tenant/Purchaser
will stop  payment of real estate  taxes as  pre-commencement  expenses  and all
rights under this Lease and Purchase Option shall terminate.

SECTION 5. TERM

      The  Lease  term  shall  be  five  (5)  years   beginning  from  the  Rent
Commencement  Date (the "Initial Term") as hereafter defined with three (3) five
year fixed rent renewal options as defined and set forth hereafter.

SECTION 6. RENT COMMENCEMENT DATE

      Tenant/Purchaser  shall begin the payment of Rent as  hereafter  set forth
exactly  ninety (90) days after issuance of the COA to the Bank or upon the Bank
opening for business,  whichever first occurs. In no event, however,  shall Rent
Commencement  be later  than May 1, 1998.  In the event  that Rent  Commencement
begins on a day other than the first day of the month,  rent for that month will
be prorated for the number of days remaining in that month.

SECTION 7. RENT

      Rent during the Initial Term shall,  for a period of five (5) years, be as
follows:

              Lease Year              Annual                 Monthly
              ----------              ------                 -------

                   1                $24,000.00              $2,000.00
                  2-5               $54,000.00              $4,500.00

      The Tenant/Purchaser  covenants and agrees to pay the Landlord/Seller as a
total base rent for the Premises,  without set-off or deduction of any kind, the
sum of TWO HUNDRED FORTY THOUSAND ($240,000.00) DOLLARS, payable by the 15th day
of each calendar  month in accordance  with the above  monthly  installments  as
noted herein for the entire Initial Term.

SECTION 8. FIRST OPTION TO RENEW

      Provided Tenant/Purchaser is not at the time of exercise and, prior to the
expiration of the applicable  Lease term will not be in default under this Lease
and  has  not  been  in  default  of  the  Lease  during  the   expiring   Term,
Tenant/Purchaser  shall have an option to renew this Lease for a renewal term of
five (5) years.  This  option may be  exercised  only by  Tenant/Purchaser  upon
written  notice to  Landlord/Seller  not less than six (6)  months  prior to the
expiration  of the initial Term.  The terms and  conditions of the first renewal
term of the  exercised  option  shall be the same as those in this Lease  except
only as hereinafter provided.

      Rent during the first renewal term shall be as follows

              Lease Year              Annual                 Monthly
              ----------              ------                 -------

                 6-10               $70,000.00              $5,833.00

      The Tenant/Purchaser  covenants and agrees to pay the Landlord/Seller as a
total base rent for the Premises,  without set-off or deduction of any kind, the
sum of THREE HUNDRED FIFTY THOUSAND ($350,000.00)


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DOLLARS, payable by the 15th day of each calendar month in equal installments as
noted herein for the entire First Renewal Term.

SECTION 9. SECOND OPTION TO RENEW

      Provided Tenant/Purchaser is not at the time of exercise and, prior to the
expiration of the applicable  Lease term will not be in default under this Lease
and  has  not  been  in  default  of  the  Lease  during  the   expiring   Term,
Tenant/Purchaser  shall have an option to renew this Lease for a renewal term of
five (5) years.  This  option may be  exercised  only by  Tenant/Purchaser  upon
written  notice to  Landlord/Seller  not less than six (6)  months  prior to the
expiration  of the First Renewal  Term.  The terms and  conditions of the second
renewal  term of the  exercised  option shall be the same as those in this Lease
except only as hereinafter provided.

      Rent during the second renewal term shall be as follows

              Lease Year                  Annual                Monthly
              ----------                  ------                -------

                 11-15                  $80,000.00             $6,667.00

      The Tenant/Purchaser  covenants and agrees to pay the Landlord/Seller as a
total base rent for the Premises,  without set-off or deduction of any kind, the
sum of FOUR HUNDRED  THOUSAND  ($400,000.00)  DOLLARS,  payable in equal monthly
installments as noted herein for the entire Second Renewal Term.

SECTION 10. THIRD OPTION TO RENEW

      Provided Tenant/Purchaser is not at the time of exercise and, prior to the
expiration of the applicable  Lease term will not be in default under this Lease
and  has  not  been  in  default  of  the  Lease  during  the   expiring   Term,
Tenant/Purchaser  shall have an option to renew this Lease for a renewal term of
five (5) years.  This  option may be  exercised  only by  Tenant/Purchaser  upon
written  notice to  Landlord/Seller  not less than six (6)  months  prior to the
expiration  of the Second  Renewal Term.  The terms and  conditions of the third
renewal  term of the  exercised  option shall be the same as those in this Lease
except only as hereinafter provided.

      Rent during the third renewal term shall be as follows

              Lease Year                Annual                    Monthly
              ----------                ------                    -------

                 16-20                $90,000.00                 $7,500.00

      The Tenant/Purchaser  covenants and agrees to pay the Landlord/Seller as a
total base rent for the Premises,  without set-off or deduction of any kind, the
sum of FOUR  HUNDRED  FIFTY  THOUSAND  ($450,000.00)  DOLLARS,  payable in equal
monthly installments as noted herein for the entire Third Renewal Term.

SECTION 11. TENANT/PURCHASER FIT-UP

      After signing the Lease and depositing the rent security, Tenant/Purchaser
may commence its fit-up work  required to convert the Premises into a commercial
bank location with drive-in facility. This work, at the sole cost and expense of
Tenant/Purchaser,  shall be performed in  accordance  with  architect  plans and
specifications  as approved by  Tenant/Purchaser  and the  Township of Westfield
including all appeal periods. Prior to application being made to the Township of
Westfield  for approval,  Landlord/Seller  shall be given a set of the plans for
review and  informational  purposes only.  Landlord/Seller  shall cooperate with
Tenant/Purchaser in making all appropriate and necessary applications to convert
Premises as set forth herein  including  execution  of owners  consent as may be
required  by the  Westfield  Planning  Board or any  other  appropriate  agency.
Insurance  certificates  and a hold harmless  agreement shall be required of any
general contractor  employed by  Tenant/Purchaser to complete the renovations to
the Premises.  Said  certificates and hold harmless  agreement shall be in place
prior to work commencing.


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SECTION 12. SECURITY

      Simultaneous  with  the  Rent  Commencement  Date  Tenant/Purchaser  shall
deposit the sum of FOUR THOUSAND  ($4,000.00) DOLLARS with the  Landlord/Seller,
as security for the full and faithful  performance  by the  Tenant/Purchaser  of
each and every term,  covenant,  and condition of this Lease.  In the event that
the Tenant/Purchaser  shall default in respect of any of the terms,  provisions,
covenants, and conditions of this Lease, including but not limited to payment of
any rent, the Landlord/Seller may use, apply, or retain the whole or any part of
the security so deposited for the payment of any such rent in default or for any
other sum which the Landlord/Seller shall expend by reason of Tenant/Purchaser's
default,  including  any damages or deficiency in the reletting of the Premises,
whether  such  damages  or  deficiency  shall  accrue  before  or after  summary
proceedings or other re-entry by the Landlord/Seller.

      Tenant/Purchaser  shall pay to  Landlord/Seller  on demand  the  amount so
applied in order to restore the  security to its original  amount.  In the event
that the Tenant/Purchaser  shall fully and faithfully comply with all the terms,
provisions, covenants, and conditions of this Lease, the security or any balance
thereof  shall be returned to the  Tenant/Purchaser  after the time fixed as the
expiration  of this Lease or any  renewals  thereof.  In the absence of evidence
satisfactory  to the  Landlord/Seller  of any assignment of the right to receive
the security,  or the remaining balance thereof,  the Landlord/Seller may return
the  security  to the  original  Tenant/Purchaser,  regardless  of  one or  more
assignments of the Lease itself. This provision, however, shall not be construed
as a consent by the Landlord/Seller to any such assignment.

      In the event of a bona fide sale of the  Premises  to a third  party,  the
Landlord/Seller  shall have the right to transfer the security to the vendee for
the benefit of the Tenant/Purchaser, and the Landlord/Seller shall be considered
released  by the  Tenant/Purchaser  from all  liability  for the  return of such
security,  and the  Tenant/Purchaser  agrees to look to the new  Landlord/Seller
solely for the return of the security, and it is agreed that this shall apply to
every  transfer or  assignment  made of the  security to a new  Landlord/Seller.
Prior to any such transfer of security, the Landlord/Seller shall have given the
Tenant/Purchaser  written notice  thereof and the transferee  shall have assumed
the responsibilities relating thereto, as herein contained, in writing.

      The security  deposit under this Lease shall not be assigned or encumbered
by the Tenant/Purchaser without the written consent of the Landlord/Seller.

      In the event the Federal  Deposit  Insurance  Corporation  (hereafter  the
"FDIC"),  by statute or  published  regulation,  requires  the  treatment of the
security  different  from that herein  provided,  the  applicable  FDIC required
procedure will be adhered to by the parties.

SECTION 13. TAXES

      Tenant/Purchaser  shall be responsible for all real estate taxes beginning
on the Rent  Commencement  Date.  Tenant/Purchaser  shall make all tax  payments
quarterly  when due  directly to the Township of  Westfield.  Landlord/Purchaser
shall provide  Tenant/Purchaser  a copy of the annual tax bill  immediately upon
receipt of same.  However,  Tenant/Purchaser's  agreement to pay the real estate
taxes is expressly  contingent upon the full cooperation of the  Landlord/Seller
with the  Tenant/Purchaser  in the event that  Tenant/Purchaser  shall choose to
file a tax appeal with the  appropriate  authorities at any time during the term
of this Lease.

SECTION 14. UTILITIES

      Tenant/Purchaser  shall make  arrangements  directly with the suppliers of
electricity, gas and water to have these utility bills put in Tenant/Purchaser's
name and  shall  promptly  pay all  bills  for  such  services  directly  to the
suppliers of such services.

      Tenant/Purchaser  shall  furnish  heat,  cooling  and all  other  services
Tenant/Purchaser  may  deem  necessary  or  desirable  in  connection  with  its
occupancy of the Premises at Tenant/Purchaser's sole cost and expense.


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<PAGE>

SECTION 15. REPAIRS MAINTENANCE AND REPLACEMENTS

      Throughout the term of this Lease, the Tenant/Purchaser shall, at its sole
cost and expense, maintain and keep the Premises (including sidewalks,  parking,
entrance and exitways) in as good order and repair as at the Lease  Commencement
Date,  ordinary wear and tear  excepted and shall make any and all  replacements
required for this purpose. The Tenant/Purchaser shall promptly perform, or cause
to be performed, all required repairs to the Premises. These obligations include
but are not limited to snow removal, paving, painting, HVAC, electric, plumbing,
roof repairs and glass.

SECTION 16. COMPLIANCE WITH LAWS

      The Tenant/Purchaser shall comply with any law, ordinance, and regulation,
whether federal,  state, county, or municipal,  as well as rules and regulations
adopted by the Landlord/Seller for the building of which the Premises is a part,
applicable  to the  Premises,  relating to use or  occupancy  thereof or, to the
making  of  repairs,  changes,   alterations,   or  improvements,   ordinary  or
extraordinary,  seen or unforeseen, including but not limited to the performance
of any duty imposed upon the  Landlord/Seller or  Tenant/Purchaser in respect of
the sidewalks or curbs  adjacent to the Leased  Property.  The  Tenant/Purchaser
shall comply with any and all rules and  regulations  applicable to the Premises
issued  by the Board of Fire  Underwriters,  or by any  other  body  hereinafter
constituted  exercising  similar functions,  and by insurance  companies writing
policies  covering the Premises which now or hereafter may become  applicable to
the Premises. The Tenant/Purchaser shall pay all costs, expenses, claims, fines,
penalties,  and damages  that may be imposed  because of the  Tenant/Purchaser's
negligence  and the  Tenant/Purchaser's  use of the  Premises,  and  shall  save
harmless  and  indemnify  the  Landlord/Seller  from  and  against  any  and all
liability  arising  from  such   noncompliance.   The  Landlord/Seller  and  the
Tenant/Purchaser  shall each  promptly give notice to the other of any notice of
violation  received  by  them.   Without   diminishing  the  obligation  of  the
Tenant/Purchaser,  if the  Tenant/Purchaser  shall at any time fail to comply as
expeditiously  as  reasonably  feasible  with  any  law,  ordinance,   rule,  or
regulation  concerning  or  affecting  the  Premises,  or the use and  occupancy
thereof, and, if a stay is necessary with respect to such compliance, shall have
failed to obtain such stay,  then the  Landlord/Seller  after  fifteen (15) days
prior written notice to the Tenant/Purchaser may so comply. The Tenant/Purchaser
shall have the right to contest by appropriate  legal proceedings in the name of
the Tenant/Purchaser or the Landlord/Seller, or both, without cost or expense to
the  Landlord/Seller,  the validity or application  of any such law,  ordinance,
rule,  or  requirement  and  the   Landlord/Seller   shall  cooperate  with  the
Tenant/Purchaser  and will execute and deliver any appropriate  papers which may
be  necessary  to  permit  the  Tenant/Purchaser  to  contest  the  validity  or
application thereof.

SECTION 17. ALTERATIONS AND IMPROVEMENTS

      Except for those alterations, improvements and demolition set forth in the
plans and  specifications  provided to the Township of Westfield  Planning Board
that form the basis of the ultimate building permit application, no alterations,
additions,  or  improvements  shall  be made,  and no  climate  regulating,  air
conditioning,  cooling,  heating  or  sprinkler  systems,  television  or  radio
antennas,  heavy  equipment,  apparatus and  fixtures,  shall be installed in or
attached to the Premises,  without the written  consent of the  Landlord/Seller,
which shall not be unreasonably  withheld or delayed.  All such  alterations and
improvements  shall be made in a good and workmanlike  manner.  Unless otherwise
provided  for herein,  all such  alterations,  additions,  or  improvements  and
systems,  when made,  installed in or attached to the Premises,  shall belong to
and became the property of the Landlord/Seller and shall be surrendered with the
Premises and as part thereof upon the  expiration or sooner  termination of this
Lease, without hindrance,  molestation or injury. Nothing contained herein shall
prevent future alterations by the  Tenant/Purchaser  as deemed necessary by said
Tenant/Purchaser.

SECTION 18. INSURANCE

      18.1.  Liability  Insurance.  Effective on the Lease Commencement Date, or
such earlier date as Tenant/Purchaser may enter the Premises or perform any work
therein,  the Tenant/Purchaser  shall be required to maintain,  at its sole cost
and expense, comprehensive public liability insurance in minimum single limit of
$2,000,000.00 per occurrence.  The policies of insurance hereunder shall provide
that they shall not be cancelable  without  thirty (30) days' written  notice to
the Landlord/Seller and the Tenant/Purchaser from insurer except in the event of
nonpayment  in which case  notice of  cancellation  shall be ten (10) days.  All
insurance shall be issued by


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reputable  insurers  licensed to do  business  in the State of New Jersey.  Each
policy  shall  name  Landlord/Seller  and  any  mortgagee,  if  required,  as an
additional  assured.  Evidence shall be furnished to the  Landlord/Seller by the
Tenant/Purchaser  at all  times  during  the  Lease  term,  indicating  that all
required premiums for insurance  hereunder have been paid and that such coverage
is in effect.  A  certificate  setting  forth the scope of  coverage  and policy
limits  for  each  required   policy   hereunder   shall  be  furnished  to  the
Landlord/Seller by the  Tenant/Purchaser  and at all times maintained on file at
the Landlord/Seller's office.

      18.2.  All  Risk  Insurance.  Effective  on the  Lease  Commencement  Date
Tenant/Purchaser  shall provide property  insurance coverage on the Premises for
100% of the total replacement cost of the building.

SECTION 19. INDEMNITY

Except to the extent that the  Landlord/Seller  shall receive  compensation from
insurance proceeds,  the Tenant/Purchaser  shall save harmless and indemnify the
Landlord/Seller  from and against  any and all  liability,  penalties,  damages,
expenses,  and judgments by reason of any injury or claim or injury to person or
property, of any nature, arising out of the use, occupation,  and control of the
Premises  by the  Tenant/Purchaser  at any time  during the term of this  Lease,
including  those  resulting  from any work in connection  with any  alterations,
changes,  new  construction,  or  demolition.  The  Tenant/Purchaser  is  hereby
subrogated  to any  rights of the  Landlord/Seller  against  any  other  parties
whomsoever in connection  therewith.  The Landlord/Seller  shall promptly notify
the  Tenant/Purchaser  of any claim  asserted  against  the  Landlord/Seller  on
account of any such injury or claimed  injury to persons or  property  and shall
promptly  deliver to the  Tenant/Purchaser  the  original  or a true copy of any
summons  or other  process,  pleading,  or  notice  issued  in any suit or other
proceedings to assert or enforce any such claim. The Tenant/Purchaser shall have
the right to  defend  any such suit with  attorneys  of its own  selection.  The
Landlord/Seller  shall  have a right,  if it sees fit,  to  participate  in such
defense at its own expense.  The indemnity provided for in this Section 19 shall
not extend to the  Landlord/Seller's  intentional or negligent act or for damage
caused by fire or the extended coverage hazards.

SECTION 20. FIRE AND OTHER CASUALTY

      Effective  upon  the  Lease  Commencement  Date,  in case of fire or other
casualty,   the   Tenant/Purchaser   shall   give   immediate   notice   to  the
Landlord/Seller.  If the Leased Premises shall be partially damaged by fire, the
elements or other casualty so that  Tenant/Purchaser  is able to  satisfactorily
operate its business,  as Tenant/Purchaser may in its sole discretion determine,
then the Tenant/Purchaser shall repair the same as speedily as practicable,  but
the  Tenant/Purchaser's  obligation  to pay the rent  hereunder  shall not cease
unless and until the Lease is terminated in accordance with this Section 20. If,
however,   in  the   reasonable   opinion  of  the   Tenant/Purchaser   and  the
Landlord/Seller,  the Premises shall be totally  destroyed or so extensively and
substantially  damaged as to require practically a rebuilding thereof,  then the
rent shall be paid to the time of such destruction and then and from thenceforth
this Lease shall come to an end unless  Tenant/Purchaser  in its sole discretion
should  decide  to  rebuild  the  Premises.  In no  event,  however,  shall  the
provisions  of this clause  become  effective or be  applicable,  if the fire or
other casualty and damage shall be the result of the carelessness, negligence or
improper  conduct  of the  Tenant/Purchaser  or the  Tenant/Purchaser's  agents,
employees, guests, licensees, invitees, subtenants, assignees or successors and,
as a result thereof, insurance proceeds shall be not collectible.  In such case,
the Tenant/Purchaser's liability for the payment of the rent and the performance
of all the  covenants,  conditions,  and terms hereof on the  Tenant/Purchaser's
part to be performed shall continue and the Tenant/Purchaser  shall be liable to
the Landlord/Seller for the damage and loss suffered by the Landlord/Seller.  If
the  Tenant/Purchaser  shall have been  insured  against any of the risks herein
covered,  then  the  proceeds  of  such  insurance  shall  be  paid  over to the
Tenant/Purchaser to the extent of the  Tenant/Purchaser's  costs and expenses to
make the repairs  hereunder,  and such insurance carriers shall have no recourse
against the  Landlord/Seller  for reimbursement,  unless the damage is caused by
the action of the Landlord/Seller in which case the Tenant/Purchaser may proceed
to collect all expenses from Landlord/Seller.

SECTION 21. CONDEMNATION

      21.1.  If the whole of the  Premises  shall be taken for any public or any
quasi-public use or by private purchase in lieu thereof, under any statute or by
right of eminent domain, then this Lease shall automatically terminate as of the
date that title shall have been taken.  If any part of the Premises  shall be so
taken to render the


                                       6
<PAGE>

remainder thereof unusable,  in the reasonable judgment of the  Tenant/Purchaser
with  satisfactory  proof thereof to the  Landlord/Seller,  for the purposes for
which the Premises was leased, then the Landlord/Seller and the Tenant/Purchaser
shall each have the right to terminate this Lease on thirty (30) days' notice to
the other,  given  within  ninety  (90) days after the date of the filing of the
complaint for  condemnation.  In the event that this Lease shall terminate or be
terminated, the rent shall, if and as necessary, be equitably adjusted.

      21.2.  If any part of the Premises  shall be so taken and this Lease shall
not terminate or be terminated under the provisions of subparagraph 21.1 hereof,
then the rental shall be equitably  apportioned according to the space so taken,
and the  Landlord/Seller  shall,  at its  own  cost  and  expense,  restore  the
remaining portion of the Premises the extent necessary,  as mutually  determined
by the Landlord/Seller and  Tenant/Purchaser,  to render it reasonably equitable
for the purposes for which it was leased.

      21.3. All compensation awarded or paid upon such a total or partial taking
of the  Premises  shall  belong to and be the  property  of the  Landlord/Seller
without any  participation  by the  Tenant/Purchaser;  provided,  however,  that
nothing  contained herein shall be construed as precluding the  Tenant/Purchaser
from  prosecuting  any claim directly  against the condemning  authority in such
condemnation proceedings for loss of business, or depreciation to, damage to, or
cost of removal of, or for the value of stock,  trade fixtures,  furniture,  and
other personal property belonging to the  Tenant/Purchaser,  provided,  however,
that  no  such  claim  shall   diminish  or  otherwise   adversely   affect  the
Landlord/Seller's  award.  However,  any  award to  Landlord/Purchaser  shall be
limited to the  purchase  price of the Premises as set forth in Section 44 A and
all  money  awarded  above  said  price  shall be given to  Tenant/Purchaser  as
reimbursement for all improvements to the Premises. Furthermore, in the event of
a partial condemnation the award shall be apportioned on a pro rated basis using
the purchase price set forth in Section 44 A for the  Landlord/Purchaser and the
total cost of all  improvements  made to the Premises for the  Tenant/Purchaser.
The ratio of Landlord/Seller's  number to  Tenant/Purchaser's  number shall form
the basis of any proration in a partial condemnation.  By way of example, if the
Landlord/Seller's   price   is   $600,000   and   the   improvement   costs   of
Tenant/Purchaser  are  $400,000 and the partial  condemnation  award is $10,000,
then in that event the Landlord/Seller would receive $6,000 of the award and the
Tenant/Purchaser would receive $4,000 of the award.

SECTION 22. ASSIGNMENT AND SUBLETTING

      Tenant/Purchaser  shall be  permitted  to assign or sublet the Premises to
any lawful user for that users  particular  purpose  without first obtaining the
Landlord/Seller's   approval.   However,  the  Landlord/Seller's   approval,  if
obtained,  shall  not  operate  or serve  to  excuse,  relieve  or  release  the
Tenant/Purchaser  from any  liability,  obligation or  responsibility  hereunder
unless otherwise agreed to by the Parties.

      If, in spite of the  foregoing  prohibitions,  this Lease is  nevertheless
assigned to any person or entity  pursuant to the  provisions of the  Bankruptcy
Code, 11 U.S.C.  Sec.101 et seq (the "Bankruptcy  Code"), such assignee shall be
deemed  without  further  act or  deed to have  assumed  all of the  obligations
arising under this Lease on and after the date of such assignment and shall upon
demand  execute and deliver to  Landlord/Seller  an instrument  confirming  such
assignment; and provided further that any and all monies or other considerations
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord/Seller, shall be and remain the exclusive property
of Landlord/Seller  and shall not constitute  property of Tenant/Purchaser or of
the estate of  Tenant/Purchaser  within the meaning of the Bankruptcy  Code. Any
and all monies or other considerations  constituting  Landlord/Seller's property
under the preceding sentence not paid or delivered to  Landlord/Seller  shall be
held in  trust  for the  benefit  of  Landlord/Seller  and be  promptly  paid or
delivered to Landlord/Seller.

SECTION 23. LANDLORD/SELLER'S RIGHT OF ACCESS

      Due to the nature of Tenant/Purchasers'  business as a commercial bank and
the essential security  requirements  thereof,  Landlord/Seller  shall have only
controlled  access  to the  Premises  at  all  times  and in all  circumstances.
Tenant/Purchaser  shall provide  appropriate  escort when access is requested by
Landlord/Seller.  Tenant/Purchaser  hereby  agrees to exculpate  Landlord/Seller
from any liability due to  Landlord/Seller's  inability to enter the Premises in
the event of an emergency.


                                       7
<PAGE>

SECTION 24. SUBORDINATION TO MORTGAGES. NONDISTURBANCE BY MORTGAGEE

      Landlord/Seller  represents  that  it  currently  has no  mortgage  on the
Premises.  In the event however  should  Landlord/Seller  take a mortgage on the
Premises,  the  Mortgagee  shall  agree that so long as  Tenant/Purchaser  is in
compliance with the terms of this Agreement, the Mortgagee shall not disturb the
tenancy  and  shall  fully  abide  by the  requirements  of the  terms  of  this
Agreement.

SECTION 25. CERTIFICATE OF LEASE STATUS

      The  Tenant/Purchaser  shall at any time  upon  thirty  (30)  days'  prior
written notice by the Landlord/Seller,  execute,  acknowledge and deliver to the
Landlord/Seller, in recordable form, a certificate certifying that this Lease is
unmodified and in full force and effect or, if modified, then that this Lease is
in full force and effect as modified,  setting forth the  modifications  and the
dates  to which  the  rent and  other  additional  charges  required  to be paid
hereunder have been paid. Such certificate shall affirmatively state (if such is
the case) that the  Landlord/Seller  is not in default under this Lease and that
the  Tenant/Purchaser  is not possessed of any set-offs or defenses  against the
enforcement of this Lease of any nature whatsoever. Such certificate shall be in
such form that it may be relied upon by the Landlord/Seller,  by any prospective
purchaser of the fee or any  interest  therein or any  mortgagee  thereof or any
assignee of any mortgagee upon the fee of the Premises.

SECTION 26. SIGNS

      Tenant/Purchaser shall obtain all permits for the erection of signs on the
Premises and shall be paid for by the Tenant/Purchaser.  All such signs shall at
all times  comply  with and  conform to all  applicable  ordinances,  laws,  and
regulations in effect governing signs and their erection.  The  Tenant/Purchaser
shall save  harmless  and  indemnify  the  Landlord/Seller  from and against any
violation  hereof and shall  defend any  action  for  violation  at its cost and
expense.

SECTION 27. NON-LIABILITY OF LANDLORD/SELLER

      Except  in the  case  of the  Landlord/Seller's  act  or  negligence,  the
Landlord/Seller  shall not be  liable  for any  damage  or  injury  which may be
sustained by the  Tenant/Purchaser  or any other person, as a consequence of the
failure,  breakage, leakage or obstruction of the water, plumbing, steam, sewer,
waste or soil pipes, roof, drains, leaders, gutters, valleys,  downspouts or the
like or of the electrical gas, power, conveyor,  refrigeration,  sprinkler,  air
conditioning or heating systems,  elevators or hoisting equipment,  or by reason
of the elements,  beyond the control of the Landlord/Seller,  or any services to
be furnished or supplied by the Landlord/Seller.

SECTION 28. CONSTRUCTION LIEN CLAIMS

      If any  construction  lien claim  shall at any time be filed  against  the
Premises or any part  thereof by reason of work,  labor,  service or  materials,
performed  or  furnished by the  Tenant/Purchaser  or on the  Tenant/Purchaser's
order, then the Tenant/Purchaser shall forthwith cause such lien or notice to be
discharged or bonded after being notified of its filing. If the Tenant/Purchaser
shall not procure such  discharge or secure such bonding  within sixty (60) days
of such notice,  then the  Landlord/Seller  may, but shall not be obligated  to,
discharge the lien or notice by paying the amount  claimed to be due, which sum,
including the  Landlord/Seller's  reasonable  attorneys'  fees, shall be due and
payable by the Tenant/Purchaser to the Landlord/Seller as additional rent on the
first day of the next following month.

SECTION 29. LANDLORD/SELLER'S RIGHT TO CURE

      In addition to all remedies of the  Landlord/Seller  contained  herein and
available   to  it  at  law,  in  equity  or  pursuant  to  any   statute,   the
Landlord/Seller  shall have the right after thirty (30) days  written  notice to
the  Tenant/Purchaser  to cure any  default of the  Tenant/Purchaser  hereunder,
which default arises as a result of the non-payment by the  Tenant/Purchaser  or
the failure of the  Tenant/Purchaser to obligate himself for payment of any sums
of  money  required  to be  expensed,  utilized  or  paid  over  hereunder.  The
Landlord/Seller  shall provide the Tenant/Purchaser  with notice of having cured
the Tenant/Purchaser's  default pursuant to this Section 29 within five


                                       8
<PAGE>

(5) days of having so cured the  Tenant/Purchaser's  default. In such event, any
and all  sums  reasonably  expended  by the  Landlord/Seller  or for  which  the
Landlord/Seller  shall  obligate  itself  shall  become due and payable from the
Tenant/Purchaser  to the  Landlord/Seller as additional rent on the first day of
the month following the expenditure or the obligation by the  Landlord/Seller of
such sum.

SECTION 30. HOLDING OVER

      If the Tenant/Purchaser shall fail at the expiration or sooner termination
of  this  Lease  to  yield  up  immediate  possession  of  the  Premises  to the
Landlord/Seller,  except  in the  event of  conditions  beyond  the  control  of
Tenant/Purchaser  in which  event  Tenant/Purchaser  shall have a sixty (60) day
grace period, then it shall be considered as a holdover tenancy.  This shall not
be  deemed a waiver  by  Landlord/Seller  of any  rights  or  reentry  otherwise
available to it.  Receipt of rent or any part  thereof  during such holding over
shall not act as an affiance of the  tenancy,  nor act as a bar or waiver of the
Landlord/Seller's right to deem the Lease terminated and of no further force and
effect.

SECTION 31. ENVIRONMENTAL MATTERS

      The following  requirements  shall be in addition to, and concurrent with,
the requirements set forth in other Sections of this Lease.

            A. The  Tenant/Purchaser  covenants and agrees that it shall provide
the Landlord/Seller with immediate telephone and written notice of any discharge
of  a   "Hazardous   Substance   or  Waste"   within  the  meaning  of  N.J.S.A.
58:10-23.11b(k) with respect to the Premises. Tenant/Purchaser further covenants
and  represents  that it will not  dispose  of,  process or  generate  Hazardous
Substance or Waste at the Premises.

            B. The Tenant/Purchaser hereby agrees to save harmless and indemnify
the  Landlord/Seller  from and against any and all damages,  costs and expenses,
including,  without  limitation,  attorneys'  fees,  incurred  for  cleanup  and
remediation  necessitated  by or resulting  from a discharge  of any  "Hazardous
Substance  or Waste"  within the meaning of the Spill  Compensation  and Control
Act,  N.J.S.A.  58:10-23.11  et seq.,  or a release of any  hazardous  substance
within the meaning of the Comprehensive Environmental Response, Compensation and
liability Act, 42 U.S.C.S.  Section 9601, et seq.,  occurring  subsequent to the
commencement  of this Lease.  Any and all  preexisting  and prior  environmental
conditions,  including  present or future  migration of  Hazardous  Substance or
Waste  from  neighboring   properties,   are   specifically   exempt  from  this
indemnification.

            C. The  Tenant/Purchaser  covenants and agrees that it shall provide
the  Landlord/Seller  with immediate telephone and written notice of any release
of  any  "Hazardous   Substance"   within  the  meaning  of  the   Comprehensive
Environmental  Response,  Compensation,  and Liability Act, 42 U.S.C.S.  Section
9602, et seq., with respect to the Premises.

            D. The Tenant/Purchaser hereby agrees to indemnify and hold harmless
the Landlord/Seller from and against any damages, costs and expenses,  including
without  limitation  attorneys'  fees,  incurred  for  cleanup  and  remediation
necessitated  by or resulting  from any  spilling,  leaking,  pumping,  pouring,
emitting,  emptying,  discharging,  injecting,  escaping,  leaching, dumping, or
disposing of a hazardous  substance into the environment as defined in 42 U.S.C.
Section 9601(14).

            E.   Landlord/Seller   represents  that  the  Premises  is  free  of
environmental  hazards including  underground storage tanks or other underground
facilities and no violations have been served upon the Landlord/Seller  from the
Department  of  Environmental  Protection  or any other State or Federal  agency
regarding hazardous  substances on the Premises to the date hereof. In addition,
Tenant/Purchaser  shall  at its  sole  cost  and  expense  commission  a Phase 1
environmental audit of the entire Premises the report of which will be delivered
to Tenant/Purchaser  and to Landlord/Seller.  In the event that report discloses
the  presence of any  hazardous  materials  or  hazardous  waste or  underground
storage tanks actionable under existing applicable law,  Tenant/Purchaser  shall
have thirty (30) days from receipt of said report to notify  Landlord/Seller  of
its intent to  continue  with the Lease or cancel  the Lease.  In the event that
Tenant/Purchaser shall determine to continue with the Lease, Landlord/Seller, at
its sole cost and expense will begin  remediation of any such  conditions to the
extent legally  required within thirty (30) days from receiving  notice to do so
from  Tenant/Purchaser.  Landlord/Seller  shall diligently continue


                                       9
<PAGE>

remediation until same has been complete and all required documentation from the
Department of Environmental  Protection or any other appropriate agency has been
received, copies of which shall be provided to Tenant/Purchaser.

SECTION 32. DEFAULT

      Upon the occurrence of any of the following events, each of which shall be
deemed an Event of Default, the Landlord/Seller  shall have the right to reenter
the Premises to declare this Lease and the tenancy  hereby  created  terminated,
end notwithstanding such termination, to hold the Tenant/Purchaser liable to all
remaining  rent  unpaid  hereunder  and any  damages  which  may  accrue  to the
Landlord/Seller:

      32.1. Events of Default.

            A. Rent.  Failure to pay rent (base rent or additional  rent) on the
date due, which failure is not cured within seven (7) days from said date.

            B. Breach of Covenant. Breach by Tenant/Purchaser of a any covenant,
representation,  condition or  requirement  of this Lease,  the  performance  or
observance  of which is  required  by the  Tenant/Purchaser  (other than for the
payment  of  rent),   which  breach  or  failure  shall  not  be  cured  by  the
Tenant/Purchaser   within   thirty   (30)  days  of  written   notice  from  the
Landlord/Seller  specifying  such breach or failure,  unless such breach  cannot
reasonably be cured within thirty (30) days, and the  Tenant/Purchaser  shall be
diligently attempting to cure the same, in which case the Tenant/Purchaser shall
have a reasonable  time,  not to exceed an additional  one hundred  eighty (180)
days, so to cure.

            C.  Insolvency.  If the  Tenant/Purchaser  shall  be  adjudicated  a
bankrupt  or  insolvent  or shall  avail  itself of any  insolvency  law for the
appointment  of a  Receiver  or  Trustee,  or shall make an  assignment  for the
benefit of creditors, or shall have a petition or insolvency or bankruptcy filed
against it which shall not be vacated within ninety (90) days of such filing

            D. Abandonment. Abandonment of the Premises by the Tenant/Purchaser.

            E.  Limitations  on Rights of  Landlord/Seller  to Terminate  Lease.
Notwithstanding   any  other   provision  of  this  Lease,   in  the  event  the
Tenant/Purchaser or its successors or assigns shall became insolvent,  bankrupt,
or make an assignment for the benefit of creditors,  or if it or their interests
hereunder  shall be levied upon or sold under  execution or other legal process,
or in the event the bank to being  operated  on the  Premises  is closed,  or is
taken over by the  Superintendent  of Banks of the State of New Jersey, or other
bank supervisory  authority,  the  Landlord/Seller  may terminate the Lease only
with the concurrence of said Superintendent or other bank supervisory authority,
and any such authority  shall in any event have the election  either to continue
or terminate the Lease,  provided,  that in the event this Lease is  terminated,
the  maximum  claim of  Landlord/Seller  for  damages  or  indemnity  for injury
resulting from the rejection or  abandonment of the unexpired  Lease shall in no
event  be in an  amount  exceeding  the  rent  reserved  by the  Lease,  without
acceleration  for the year  next  succeeding  the date of the  surrender  of the
Premises  to  the   Landlord/Seller,   or  the  date  of  the  re-entry  of  the
Landlord/Seller,  whichever first occurs, whether before or after the closing of
the bank, plus an amount equal to the unpaid rent accrued,  without acceleration
up to such date.

      32.2. Late Payment of Rent.

      Without  prejudice  to  any  other  right  of the  Landlord/Seller  herein
contained,  the  Landlord/Seller  shall  have the right to charge a late fee for
rent paid later than the seventh  (7th) day of each month in which such  payment
shall have been due, which fee shall be two percent (2%) per month of the amount
of late rent.  Said late  charge  shall be due as  additional  rent and  payment
thereof shall cure any default under this paragraph 32.2.


                                       10
<PAGE>

      32.3. Landlord/Seller`s Lien.

      Upon the Tenant/Purchaser's  default, the Landlord/Seller shall have, with
respect to all personal  property and  equipment  of the  Tenant/Purchaser,  all
statutory and common law liens of Landlords, now or hereafter available to it to
the extent permitted under applicable FDIC regulations.

      32.4. Cumulative Remedies.

      All remedies of the Landlord/Seller and the Tenant/Purchaser  herein shall
be cumulative and shall be deemed to be in addition to all other remedies,  both
statutory and available at law and in equity.

SECTION 33. FORCE MAJEURE

      Any  performance or undertaking  required to be performed or undertaken by
the  Landlord/Seller  or the  Tenant/Purchaser  herein  shall  be  performed  or
undertaken as expeditiously as possible.  It shall not be a breach of this Lease
if such  performance  or  undertaking  is  prevented,  delayed  or  hindered  by
unavailability of materials,  strikes, acts of war, quotes, acts of governmental
authorities,   casualties,   Acts   of   God  or   other   forces   beyond   the
Landlord/Seller's or the Tenant/Purchaser's control.

SECTION 34. WAIVER OF SUBROGATION

      The  Landlord/Seller  and the  Tenant/Purchaser  each  waive all rights of
recovery  against  the  other or their  respective  agents,  employees  or other
representatives  for any loss, damages or injury of any nature whatsoever to the
Premises,  persons and personal  property in the  Premises,  provided  that such
loss, damage or injury results from fire or the extended coverage hazards.  Each
party will obtain from its  insurance  carriers,  and will deliver to the other,
waiver of Subrogation rights under the respective  policies,  but this provision
shall remain in effect despite either party's failure to obtain such waiver from
its insurance carriers.

SECTION 35. BROKERAGE

      The parties  represent  and warrant that no real estate  brokers have been
involved  in the  transaction  contemplated  hereby.  Both  parties  shall  save
harmless  and  indemnify  the other from and  against  any claims for  brokerage
commissions by any person or entity claiming a commission from that party.

SECTION 36. QUIET ENJOYMENT

      The  Tenant/Purchaser  upon the  payment of the rent and  additional  rent
herein  set forth and upon the  performance  of all the  terms,  covenants,  and
conditions  of this  Lease  shall at all times  during  the  lease  term and any
extensions or renewals or modifications thereof, peaceably and quietly enjoy the
Premises  without  disturbance  from the  Landlord/Seller  or  persons  claiming
through the Landlord/Seller.

SECTION 37. LEASE SCHEDULES AND EXHIBITS

      All schedules and exhibits annexed to this lease are expressly  integrated
herein and made a part hereof.

SECTION 38. RECORDATION OF LEASE

      The   Tenant/Purchaser   shall  not   record   this  Lease   without   the
Landlord/Seller's   prior  approval  in  writing.  The  Tenant/Purchaser  hereby
constitutes  Landlord/Seller its  attorney-in-fact to discharge such recordation
in the event of a breach of this  covenant.  The  Tenant/Purchaser  may record a
memorandum of this Lease, setting forth the terms hereof, the Tenant/Purchaser's
options, and right of non-disturbance.


                                       11
<PAGE>

SECTION 39. NOTICES

All notices  required or  permitted  hereunder  shall be in writing and shall be
delivered  by  United  States  registered  or  certified  mail,  return  receipt
requested, addressed as follows:

If to the Landlord/Seller:
Conjoe Realty Co., Inc.
c/o Robert Papandrea, V.P.
54 Dock Watch Hollow
Warren, NJ 07059

with a copy to:
Louis DiMare, Esq.
Garrubbo & Romankow
53 Cardinal Drive
Westfield, New Jersey 07090

If to the Tenant/Purchaser:
Ronald Frigerio, as agent for the Town Bank of Westfield, In Organization
115 East Grave Street
Westfield, New Jersey 07090

with a copy to:
Donna M. Conroy, Esq.
Frieri & Conroy, Esqs.
777 Walnut Avenue
Cranford, NJ 07016

SECTION 40. BINDING EFFECT

      This Lease  shall be binding  upon and inure to the benefit of the parties
hereto and their respective successors, representatives and assigns.

SECTION 41. APPLICABLE LAW

      This Lease shall be governed by and construed  under the laws of the State
of New Jersey.  Venue for any legal  action  filed in this  matter  shall be the
Superior Court located in Elizabeth, New Jersey.

SECTION 42. REMOVAL OF TENANT/PURCHASER'S PROPERTY

      Any equipment,  fixtures, goods or other property of the Tenant/Purchaser,
not removed by the Tenant/Purchaser  upon the termination of this Lease, or upon
any quitting,  vacating or abandonment of the Premises by the  Tenant/Purchaser,
or  upon  the  Tenant/Purchaser's   eviction,   shall,  at  the  option  of  the
Landlord/Seller,  be considered as abandoned and the Landlord/Seller  shall have
the right,  without  any notice to the  Tenant/Purchaser,  to sell or  otherwise
dispose of the same,  at the expense of the  Tenant/Purchaser,  and shall not be
accountable to the  Tenant/Purchaser  for any part of the proceeds of such sale,
if any,  except that the sale shall be  conducted in a  commercially  reasonable
manner and an accounting of the proceeds  actually  realized by  Landlord/Seller
will be made  available  for  inspection by  Tenant/Purchaser  upon its request.
Notwithstanding  the  preceding  sentence,  it  is  expressly  agreed  that  the
Tenant/Purchaser  shall be permitted to remove any and all equipment,  machinery
and trade fixtures  belonging to it from the Premises at the termination of this
Lease.  Any and all damage to the Premises  which shall result from such removal
shall be repaired by the Tenant/Purchaser.


                                       12
<PAGE>

SECTION 43. SUMS DEEMED ADDITIONAL RENT

      All charges,  costs and expenses which the Tenant/Purchaser is required to
pay hereunder,  together with all interest and penalties that may accrue thereon
in the event of the  Tenant/Purchaser's  failure  to pay such  amounts,  and all
damages, costs and expenses which the Landlord/Seller may incur by reason of any
default of the  Tenant/Purchaser  or failure on the  Tenant/Purchaser's  part to
comply with the terms of this Lease,  shall be deemed to be additional rent and,
in the event of nonpayment by the  Tenant/Purchaser,  the Landlord/Seller  shall
have all the rights and remedies with respect thereto as the Landlord/Seller has
for the non-payment of the basic rent.

SECTION 44. PURCHASE OPTION

      Tenant/Purchaser  shall have,  in its sole and  absolute  discretion,  the
option to purchase the Premises at the end of the First  Renewal Term (year 10),
Second Renewal Term (year 15) and at the end of the Third Renewal Term (year 20)
upon the following terms:

            A. Purchase  price shall be eighty  percent (80%) of the fair market
value of the Premises.

            B.  Fair  Market  Value  shall  be  determined  by  obtaining  three
appraisals of the Premises and  obtaining  the average of the three  appraisals.
The  appraisals  set forth herein  shall be  conducted by an appraiser  one each
chosen by the Tenant/Purchaser and Landlord/Seller,  respectively. The third and
final  appraiser  shall  be one  chosen  by  mutual  agreement  between  the two
appraisers chosen by the Tenant/Purchaser and Landlord/Seller, respectively.

            C. The  Tenant/Purchaser  must give notice of the intent to exercise
the option to  purchase  not less than sixth (6) months  prior to the end of the
First  Renewal Term,  Second  Renewal Term or Third Renewal Term as the case may
be.  Tenant/Purchaser  must give the  Landlord/Seller  notice in  writing at the
address listed in Section 39 in the same manner as if the Tenant/Purchaser  were
renewing the lease term. This shall be the Option Exercise Date.

            D.  Closing of title will take place as soon as  possible  but in no
event  more  than  six  months  after  notice  is given  to  Landlord/Seller  by
Tenant/Purchaser except as otherwise provided in sub-part E below.

            E. Tenant/Purchaser's obligation under this Purchase Option shall be
conditioned  upon title to the Premises being good and marketable such that same
shall be insurable by a New Jersey licensed title insurance company,  at regular
rates,  free and clear of all liens.  Failure of  Landlord/Purchaser  to provide
such clear title shall be a breach of this Purchase  Option and  Landlord/Seller
shall  reimburse  Tenant/Seller  for all money expended by  Tenant/Purchaser  in
anticipation of the purchase,  including but not limited to legal,  engineering,
surveying  and all other fees.  This  remedy is in addition to any other  remedy
available to Tenant/Purchaser at law or in equity.

            F. At closing,  Landlord/Seller  shall deliver to Tenant/Purchaser a
bargain and sale deed with covenants against grantor's acts for the Premises and
an affidavit of title in the usual form and corporate  resolution  approving the
sale and any other documents  required to properly and  effectively  convey full
ownership to Tenant/Purchaser.

SECTION 45. FIRST RIGHT OF REFUSAL

      In the event that  Landlord/Seller  shall wish to sell the  Premises  at a
time not coincident  with  Tenant/Purchaser's  option to purchase,  then in that
event  Tenant/Purchaser  shall  have the right of first  refusal.  Upon  written
notification from the  Landlord/Seller  that it wishes to sell the Premises to a
third  party,  Tenant/Purchaser  shall  then have forty five days (45) to notify
Landlord/Seller  that it will  exercise  its  option to  purchase  the  Premises
pursuant to the terms of Section 44 or at the price  offered by the third party,
whichever  is less,  all other  terms of  Section  44 shall  remain in force and
govern the sale and transfer of title. Should  Tenant/Purchaser fail to agree to
exercise the purchase  option for the Premises at that time and  Landlord/Seller
goes  through  with the sale to the third party or not,  Tenant/Purchaser  shall
retain the right to  exercise  the  option to  purchase  pursuant  to Section 44
hereof so long as the option set forth in Section 44 has not then expired.


                                       13
<PAGE>

SECTION 46. EARLY TERMINATION

      46.1.  Tenant/Purchaser  has or will apply to the New Jersey Department of
Banking for the issuance of Charter in the name of "The Town Bank of  Westfield"
and  pursuant  thereto will  diligently  proceed  with the  solicitation  of the
minimum  equity  required by statute and  regulations to obtain a Certificate of
Authority to perform a commercial banking business at the Premises. In the event
the  Charter  has not  been  issued  by  January  1,  1998 or in the  event  the
Certificate  of Authority has not been issued within  eighteen (18) months after
the earlier of the  issuance of Charter or by July 1, 1999,  then in any of such
event Tenant/Purchaser, on thirty (30) days notice, may terminate this Lease.

      46.2. Tenant/Purchaser shall diligently prosecute its application for site
plan  approval.  In the event such approval is not obtained  prior to January 1,
1998,   Tenant/Purchaser   may,   upon   thirty   (30)   days'   notice  to  the
Landlord/Seller, terminate this Lease.

      46.3.  Tenant/Purchaser  must obtain site plan  approval for a bank with a
drive-up facility as submitted,  including curb cut approval from the Department
of  Transportation,  on or before January 1, 1998. In the event such approval is
not obtained  prior to January 1, 1998,  Tenant/Purchaser  may, upon thirty (30)
days' notice to the Landlord/Seller, terminate this Lease.

      46.4.  Tenant/Purchaser  must  obtain a  satisfactory  engineering  report
within  twenty-one  days of the  date  of  execution.  Failure  to  obtain  said
satisfactory report to  Tenant/Purchaser  shall be an event of early termination
by election of Tenant/Purchaser only.

      46.5. In the event of termination  under either Section 46.1,  46.2,  such
termination  shall be deemed to be the expiration of this Lease under Section 12
in so far as the return of security is concerned.

      46.6.  In the event that  Tenant/Purchaser  is within  thirty (30) days of
approval  under 46.2 or 46.3 or within  forty five (45) days of  approval  under
46.1,  Landlord/Seller will provide Tenant/Purchaser with extension of the dates
contained in those  Sections to such time as is required to obtain the approvals
set forth in those Sections.

SECTION 47. VALIDITY OF LEASE/AUTHORITY TO LEASE

      The terms,  conditions,  covenants,  and provisions of this Lease shall be
deemed to be severable.  If any clause or provision  herein  contained  shall be
adjudged to be invalid or unenforceable by a court of competent  jurisdiction or
by  operation  of any  applicable  law, it shall not affect the  validity of any
other clause or provision  herein,  but such other  clause or  provisions  shall
remain in full force and effect.

      Landlord/Seller  represents  that it has good title and has  authority  to
enter into this Lease for the Premises.

SECTION 48. ENTIRE AGREEMENT

      This  Agreement  of Lease  with  Purchase  Option  constitutes  the entire
agreement of the parties. There are no other agreements, express or implied. Any
oral  representations,  undertakings or agreements are expressly  merged herein.
This Lease may not be changed,  amended or modified  except by an  agreement  in
writing signed by the parties hereto.


                                       14
<PAGE>

      IN WITNESS WHEREOF,  the parties hereto have executed this Lease this 17th
day of September, 1997.

Attest:
                                     Conjoe Realty Co., Inc.,
                                     a New Jersey Corporation,
                                                     as Landlord/Seller


/s/ Patricia Papandrea               By: /s/ Robert Papandrea
---------------------------------        ---------------------------------------
                           , Sec.    Robert Papandrea, Vice President

Attest:

Attest:                              Ronald Frigerio, as Agent for The Town
Bank                                 of Westfield, In Organization,
                                                     as Tenant/Purchaser


/s/ Germaine B. Thakit               By: /s/ Ronald Frigerio
---------------------------------        ---------------------------------------
                        Asst, Sec.   Ronald Frigerio, as Agent for
                                     The Town Bank of Westfield, In Organization


                                       15
<PAGE>

                              CORPORATE RESOLUTION

      BE IT RESOLVED that the Board of Directors of Conjoe Realty Co., Inc. have
voted and unanimously  approved  Robert  Papandrea,  Vice  President,  to sign a
certain  Agreement of Lease with Purchase Option between Conjoe Realty Co., Inc.
and Ronald Frigerio, as agent for The Town Bank of Westfield, In Organization.


                                              By: /s/ Patricia Papandrea
                                              -----------------------------
                                                                       Sec.


                                       16
<PAGE>

                           ADDENDUM TO LEASE AGREEMENT

      This  Addendum  entered into as of this 15 day of Jan, 1998 by and between
Ronald Frigerio, as agent for The Town Bank of Westfield In Organization with an
address   of  115  East  Grove   Street,   Westfield,   New  Jersey   (hereafter
"Tenant/Purchaser"  ) and Conjoe  Realty Co, Inc.  with an address of c/o Robert
Papandrea,  Vice President 54 Dock Watch Hollow,  Warren, New Jersey (hereafter"
Landlord/Seller") the parties agree as follows:

                                   WITNESSETH
                                   ----------

      WHEREAS the Tenant/  Purchaser and Landlord/ Seller have previously agreed
to a lease for 520 South Avenue, Westfield, New Jersey (the" Premises"); and

      WHEREAS as a condition of lease the  Tenant/Purchaser  was to obtain final
approval  from the New Jersey  Department  of  Transportation  for a curb cut in
conjunction with the final site plan approval by the Township of Westfield; and

      WHEREAS the Tenant/Purchaser is diligently pursuing said approvals and the
Landlord/  Seller wishes to afford the  Tenant/Purchaser  every  opportunity  to
obtain said approvals prior to commencing payment of rent.

      NOW THEREFORE the parties  acknowledge  receipt of One dollar ($1.00) each
to the other in hand and in consideration of the mutual covenants of the parties
they agree as follows:

      1. Sections 46.2 and 46.3 of the Lease  between the  Tenant/Purchaser  and
the  Landlord/Seller  are  hereby  amended  to  extend  the  time  within  which
Tenant/Purchaser  may  obtain  final  approval  from New  Jersey  Department  of
Transportation  for a curb cut and final site plan approval from the Township of
Westfield through and including March 31, 1998. All other dates and times in the
Agreement of Lease and the provisions thereto shall remain unchanged.

      2. To the extent that the terms of this  Addendum to Lease are contrary to
or different  from the  Agreement of Lease,  the terms of this Addendum to Lease
Agreement shall control.

      The parties  hereto  have set there hands to this  Addendum as of the date
and year first above written.

Attest:                                   Conjoe Realty Co., Inc.,
                                          a New Jersey Corporation,
                                                            as Landlord/Seller


                                          By: /s/ Robert Papandrea
---------------------------------            -----------------------------------
                    , Sec.                   Robert Papandrea, Vice-President

                                          Ronald Frigerio, as Agent for The Town
                                          Bank of Westfield, In Organization,
Attest:                                                     as Tenant/Purchaser


                                          By: /s/ Ronald Frigerio
---------------------------------            -----------------------------------
                    , Sec.                   Ronald Frigerio, as Agent for
                                             The Town Bank of Westfield, In
                                             Organization


                                       17