Exhibit 10.40

                                 BUSINESS LEASE
                                 --------------

      The  Landlord  and the Tenant  agree to rent the Rental Space for the Term
and at the Rent Stated as follows:  (The words  Landlord and Tenant  include all
landlords and all tenants under this Lease.)

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Date of Lease:    September 13, 2005
Term:             15 years with three 5 year options

Beginning date:   October 1, 2006
                  (date to be adjusted to date of occupancy)

Ending date:      September 30, 2021
                   (date to be adjusted to end of 15th year)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Landlord:         FANWOOD PLAZA PARTNERS, LLC
                  a New Jersey limited liability company
                  219 South Street (Suite 106)
                  New Providence, NJ 07974
--------------------------------------------------------------------------------
Tenant:           THE TOWN BANK
                  a corporation of the State of New Jersey
                  520 South Avenue
                  Westfield, NJ 07090
--------------------------------------------------------------------------------

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Rental Space:     a free standing building containing approximately 2,966 square
                  feet as
                  1. set forth on the attached proposed floor plan
                  dated December 13, 2004 prepared by Carol C. Hewit,
                  A.I.A., 800 Kimball Avenue, Westfield, NJ 07090
                  2. set forth on the attached proposed site plan
                  dated 2005. prepared by EKA Associates, P.A., 1765 East Second
                  Street, Scotch Plains, NJ, 07076

Building:         328 South Avenue, Fanwood, NJ 07023 (Lot 5, Block 91)
--------------------------------------------------------------------------------

Base Rent for the Term is  $1,557,000.00.  It is subject to adjustment  starting
January 1, 2009 in accordance with paragraph 25.

The Rent is payable in advance on the first day of each month as follows:

$8,650.00  starting  September 1, 2006 and adjusted annually starting January 1,
2009 in accordance with paragraph 25.

Security: $10,000.00

Liability Insurance:       Minimum amounts:
                           for each person injured:           $1,000,000.00;
                           for any one accident:              $3,000,000.00;
                           for property damage:               $1,000,000.00; or
                           single limit:                      $3,000,000.00.
                           casualty limit:                    $1,000.000.00


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Municipal Real Estate Taxes                 $       Base Year 2006 or 2007(1)

Use of Rental Space: Bank branch facility with drive-up  windows;  marketing and
sale of financial or financial related  products.  The use includes the business
of a trust company,  investment,  security  and/or safe deposit  business,  loan
office,  operating  of a  drive-up  banking  facility,  sales of  insurance  and
insurance  related  products (i.e.,  annuities),  sales of securities and mutual
funds,  operation of one or more automated teller machines  (ATM's)  including a
drive-up ATM, other financial  services,  general  executive and  administrative
offices and all  activities  necessary or  incidental  to the  foregoing and any
similar or allied business and any combination of the foregoing.

Additional agreements:

      The Landlord  represents  that the Landlord  acquired the Property on June
16, 2005 and will make  application to the Fanwood  Planning Board for site plan
approval of the project set forth on the conceptual  plan for the development of
314-328  South  Avenue,  Fanwood,  NJ  (Block  91,  Lots  3-5)  prepared  by EKA
Associates, P.A. dated May 6, 2005.

      The site plan shows a proposed  second  structure for Goddard  Systems for
use as a child care center,  with an address of 214 South Avenue.  The site plan
provides 68 parking stalls for the shared use by the Tenant, the Goddard School,
and Fanwood  Plaza.  ss.184-160 of the Fanwood Land Use  Ordinance  requires one
parking  stall per 250  square  feet of floor  area for a bank and one space for
each  employee for a child care  center.  The bank's  requirement  is 12 parking
spaces.  The Goddard School's  requirement is 19 parking spaces. The requirement
for both uses is 31 parking  spaces.  The remaining 37 parking spaces exceed the
minimum  requirement for both uses and are available for both tenants as well as
Fanwood  Plaza.  Unless  directed to do so by the Fanwood  Planning  Board,  the
parking spaces will not be designated for either tenant.

      By design, the Rental Space involves shared parking and shared maintenance
of the  parking  area with the  occupant  of the child care  center  about to be
located at 314 South Avenue, Fanwood, NJ.

      All references in this Business Lease to "Landlord's  Written Consent" are
amended  to  provide  that the  Landlord's  consent  shall  not be  unreasonably
withheld or delayed.

      The  Landlord's  obligations  under  this  Lease are  contingent  upon the
Landlord's obtaining:

      a. site plan approval from the Planning Board of the Borough of Fanwood,

      b. construction financing from Synergy Bank,(2)

      c. a building permit for the construction of a free standing building, and

      d. a certificate  of occupancy and a zoning use permit upon  completion of
      construction of a new free standing building.

The  Landlord  will  provide the Tenant with  regular  status  reports as to the
Landlord's obligations, including notice of any public meetings with the Fanwood
Planning Board.

      The Tenant's obligations under this Lease are contingent upon:

      a. the  Tenant's  review and  approval  of the  Landlord's  proposed  free
      standing building and site plan,

      b. site plan approval from the Planning Board of the Borough of Fanwood,

      c. the completion of construction of a new free standing building,

----------
(1) The base year tax will be established by the Landlord and the Tenant as soon
as practicable after the property is assessed by the Borough of Fanwood.

(2) The construction mortgage closing took place on June 16, 2005.


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         d. the issuance of a certificate of occupancy and a zoning use permit
         for the Tenant's use of the Rental Space

         e. the issuance of all required federal, state and local approvals for
         the operation of a branch bank at the Rental Space including, without
         limitation, the New Jersey Department of Banking.

The Tenant will  provide the  Landlord  with  regular  status  reports as to the
Tenant's  obligations,  including  notice of any  public  meetings  with the New
Jersey  Department  of Banking.  The Tenant will also assist the Landlord in the
presentation of the site plan  application by providing one or more witnesses to
testify as to the Tenant's proposed banking operations at the Property.

      The Landlord  shall  provide the Rental Space to the Tenant in  accordance
with a "work  letter" to be attached to this Lease.  The "work  letter"  will be
prepared and mutually agreed upon after the Landlord's  architect  completes the
construction plans for the building.  The Tenant shall "fit up" the Rental Space
in accordance with the "work letter".

      The  Landlord  will not lease the  building at 314 South Avenue to another
financial  institution  with the same or similar uses as the Tenant  without the
Tenant's consent.

      The  Landlord has not  conducted a Phase 1  Environmental  Audit.  The two
existing  structures at 314 & 328 South Avenue were constructed as single-family
residential  dwellings.  During the past fifteen years,  the buildings have been
used by  Children's  Specialized  Hospital as office  buildings.  The lot at 324
South Avenue was virgin wooded land until 1986 when it was cleared and developed
as a parking lot for Fanwood Plaza. The SIC numbers for the past uses are exempt
from the requirements of ISRA.

      The  Landlord  will,  as  part  of  the  demolition  of the  two  existing
structures  and the  construction  of the two new  structures at 314 & 328 South
Avenue, remove all asbestos and underground storage tanks. The Tenant shall have
the  right  to  inspect  the  site  during  the  course  of the  demolition  and
construction  and to conduct  such  environmental  investigations  as the Tenant
deems appropriate.

                                TABLE OF CONTENTS
                                -----------------

1. Possession and Use
2. Delay in Giving of Possession
3. No Assignment or Subletting
4. Base Rent and Additional Rent
5. Security
6. Liability Insurance
7. Unavailability of Fire Insurance, Rent Increases
8. Water Damage
9. Liability of Landlord and Tenant
10. Acceptance of Rental Space
11. Quiet Enjoyment
12. Utilities and Services
13. Tenant's Repairs, Maintenance and Compliance
14. Landlord's Repairs and Maintenance
15. No Alterations
16. Signs
17. Window Treatments
18. Access to Rental Space
19. Fire and Other Casualty
20. Eminent Domain
21. Subordination to Mortgage
22. Tenant's Certificate
23. Violation, Eviction, Re-entry and Damages
24. ISRA Compliance


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25. Rent Adjustment for Third through Twentieth Years
26. Option to Renew
27. Right of First Refusal
28. Notices
29. No Waiver
30. Survival
31. End of Term
32. Binding
33. Full Agreement

1.    Possession and Use

      The Landlord  shall give  possession of the Rental Space to the Tenant for
the Term stated  above.  The Tenant shall take  possession of and use the Rental
Space for the purpose stated above.  The Tenant may not use the Rental Space for
any other purpose without the written consent of the Landlord.

      The Tenant shall not allow the Rental Space to be used for any unlawful or
hazardous  purpose.  The  Tenant  shall  obtain  any  necessary  certificate  of
occupancy,  use  permit or other  certificate  permitting  the Tenant to use the
Rental Space for that Use.

      The Landlord has advised the Tenant that the Building is located in the GC
General Commercial District and that a bank or other financial  institution is a
permitted  use. The Tenant has  represented to the Landlord that the Tenant will
use the  Rental  Space  for the use set  forth  above  in  accordance  with  the
requirements  of the GC  General  Commercial  District.  The  Tenant  shall  not
knowingly  use the Rental  Space in any way that  would  violate  the  Municipal
Zoning Ordinance.

      The Tenant shall not use the Rental Space in any manner that results in:

      a. an increase in the rate of fire or liability insurance, or

      b.  cancellation of any fire or liability  insurance  policy on the Rental
      Space.

The  Tenant  shall  comply  with all  requirements  of the  insurance  companies
insuring the Rental Space.

      The Tenant  shall not  abandon  the Rental  Space  during the Term of this
Lease or permit it to become vacant for extended periods.

2.    Delay in Giving of Possession

      This paragraph applies if:

      a. the Landlord  cannot give  possession of the Rental Space to the Tenant
      on the beginning date, and

      b. the reason for the delay is not the Landlord's fault.

      The Landlord  shall not be held liable for the delay.  The Landlord  shall
then have 180 days in which to give  possession.  If  possession is given within
that time,  the Tenant shall accept  possession and pay the rent from that date.
The ending date of the Term shall be fifteen  years after the starting  date. If
possession is not given within that time,  this Lease may be cancelled by either
party on notice to the other.

3.    No Assignment or Subletting

      The Tenant may not do any of the following without the Landlord's  written
consent:

      a. assign this Lease, except to a successor by merger or acquisition

      b. sublet all or any part of the Rental Space, or


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      c. permit any other person or business to use the Rental Space.

The  Landlord  specifically  consents  to a shared use of the Rental  Space by a
joint  venture  partner  engaged in the sale of financial  or financial  related
products pursuant to an agreement with the Tenant.

      If the Tenant  requests the  Landlord to assign or sublet this Lease,  the
following provisions shall apply:

      a. Landlord's Consent Required.  Upon requesting the Landlord's consent to
      an Assignment or Sublease,  Tenant shall notify Landlord,  in writing,  of
      the name and address of the Assignee  and the nature and  character of the
      Assignee's business, and shall provide Landlord with appropriate financial
      information  including,  without limitation,  financial  statements of the
      Assignee. Landlord shall not unreasonably withhold or delay the Landlord's
      consent  to any  Assignment  or  Sublease,  provided,  however,  it  shall
      conclusively  be deemed  that the  Landlord's  refusal or  withholding  of
      consent is not unreasonable if:

            (1) the net worth of the proposed  Assignee  does not, in Landlord's
      sole judgment, provide adequate credit for the proposed Assignee to assume
      the performance of all of the Tenant's obligations under the Lease; or

            (2) the  business  reputation,  managerial  skills  and  operational
      skills of the  proposed  Assignee  are not in  accordance  with  generally
      acceptable commercial standards;

            (3) the use of the  Rental  Space by the  proposed  Assignee  is not
      identical to the use permitted by this Lease; or

            (4)  the use of the  Rental  Space  by the  proposed  Assignee  will
      violate or create a potential  violation  of any laws or other  agreements
      affecting the Rental Space, the Landlord or other tenants and occupants of
      the Property.

      b.  Permitted  Transfers.  The  Tenant  may,  upon  written  notice to the
      Landlord,  assign  this  Lease  without  need of the prior  consent of the
      Landlord to:

            (1) any wholly-owned subsidiary or the Tenant's parent corporation,

            (2) any person or corporation owning 100% of Tenant's stock, or

            (3) any company into which the Tenant may be merged or  consolidated
      so long as substantially all the assets then held by the Tenant become the
      property of the continuing entity.

      c. Written Instrument  Required.  The Landlord's consent to any Assignment
      or Sublease shall not be effective  unless and until a written  instrument
      of  such  Assignment  or  Sublease,   in  form  and  substance  reasonably
      acceptable  to  Landlord,  has  been  delivered  to  and  executed  by the
      Landlord.

            The  Tenant  shall  pay  Landlord  the sum of five  hundred  dollars
      ($500.00)  to  cover  Landlord's   administrative   costs,   overhead  and
      attorney's fees in connection with such Assignment or Sublease.  The money
      is payable upon Tenant's initial  submission of its Assignment or Sublease
      proposal to Landlord.

            The  consent by  Landlord to any  Assignment  or Sublease  shall not
      relieve the Tenant from the  obligation to obtain the  Landlord's  express
      written consent to any other  Assignment or Sublease,  nor shall reference
      anywhere else in this Lease to an assignee or subtenant be considered as a
      consent by the Landlord to such  Assignment or Sublease or a waiver of the
      provisions of this Lease.

      d. No Release of Tenant's Liability.  No sublease or any other transfer by
      Tenant,  either  with or  without  the  Landlord's  consent,  required  or
      otherwise,  during the term of this Lease,  shall  release the Tenant from
      any  liability  under the  terms of this  Lease,  nor shall the  Tenant be
      relieved of the obligation of performing  any of the terms,  covenants and
      conditions of this Lease.

            The Tenant may, however,  request the Landlord to release the Tenant
      and the Landlord will, in good faith,  assess the Tenant's  request in the
      context of the  financial  strength  and  stability of the  assignee.  The
      decision of the Landlord is a matter of the Landlord's sole discretion and
      cannot be contested by the Tenant.


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      Exception:   If  the  Landlord   approves  an   Assignment  of  Lease  (as
      distinguished  from a Sublease),  such assignment shall release the Tenant
      from any  liability  under the terms of this Lease and shall  relieve  the
      Tenant of the obligation of performing the terms, covenants and conditions
      of this Lease.

4.    Base Rent and Additional Rent

      The Tenant shall pay the Base Rent and Additional  Rent to the Landlord at
the Landlord's address.

      The  Tenant  shall  pay  rent to the  Landlord  by U.S.  mail or  personal
delivery. Although good personal checks will be accepted by the Landlord, if the
Landlord receives any check which is returned by the Tenant's bank, the Landlord
reserves  the  right to  require  the  Tenant to pay rent by money  order,  bank
cashier's checks, certified check, or cash.

      If the Tenant  fails to comply  with any  agreement  in this  Lease  after
reasonable  notice and a reasonable  opportunity to cure, the Landlord may do so
on behalf of the Tenant.  The Landlord may charge the cost to comply,  including
reasonable attorney's fees (as defined in subparagraph (f) below), to the Tenant
as "Additional  Rent". The Additional Rent shall be due and payable as Rent with
the next monthly Rent payment.  Non-payment  of  Additional  Rent shall give the
Landlord the same rights  against the Tenant as if the Tenant  failed to pay the
Rent.

      The Tenant shall also pay as Additional Rent:

      a. Tax Rent -- Real Estate Taxes:  Tax Rent equal to 100% of the municipal
      real estate tax attributable to the Rental Space at 328 South Avenue.  The
      tax is not  yet  known  and  will  not be  known  until  the  building  is
      constructed  and  approved  and the property is assessed by the Borough of
      Fanwood.(3)  The Tenant shall pay the monthly tax on the first day of each
      month starting with the first rent payment.  The Landlord  shall, in turn,
      pay the tax to the municipality. The monthly amount shall be adjusted when
      the second year's final tax bill is received by the Landlord.  Thereafter,
      the  monthly  amount  shall be adjusted  when  future  final tax bills are
      received by the Landlord.  The Tenant's  liability for this Tax Rent shall
      be pro-rated  for any part of the  calendar  year that the Tenant does not
      occupy the Rental Space under this Lease.

      b. Late  Charge:  The Tenant  will pay a Late  Charge of 5% of the monthly
      rent  installment  if rent is paid on or after  the 6th day  after the due
      date.  The late  charge is to account  for the  Landlord's  administrative
      costs and expenses.

      c. Interest:  If the Tenant shall fail to pay any Rent or Additional  Rent
      within 15 days after the same first  became due and  payable,  such unpaid
      amounts shall bear  interest at a rate of 5% above the announced  prime or
      base  rate set by  CitiBank,  N.A.  (or its  successor)  from the due date
      thereof  to the date of its  payment,  but in no  event  at more  than the
      highest legal rate.

      d. Bank Fee: A $40.00 fee for each check  returned  by a bank  (i.e.,  for
      insufficient or uncollected funds, etc.)

      e.  Replacement  Key Charge:  A $150.00  fee for each key  replaced by the
      Landlord.

      f. Legal Costs: All reasonable attorney's fees, court costs, court officer
      fees and other expenses incurred by the Landlord in the enforcement of the
      Tenant's  obligations,  including suits for  possession,  except where the
      Landlord's claim is adjudicated to be without merit. The minimum fee for a
      suit for possession is $750.00.

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(3) The  Fanwood  Tax  Assessor  will  provide  the  allocation  between the two
buildings  as to  the  improvement  assessment.  The  land  assessment  will  be
allocated as follows: 314 South Avenue - 75%; 328 South Avenue -25%.


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      If any action or  proceeding  arising  out of or relating to this Lease is
commenced  by either party then,  as between the  Landlord  and the Tenant,  the
prevailing  party shall be entitled to receive from the other party, in addition
to any other relief that may be granted,  all reasonable  attorney's fees, costs
and expenses incurred in that action or proceeding.

5.    Security

      Any  security  deposit  paid  pursuant  to this  Lease will be held by the
Landlord  during  the Term of this  Lease.  The  Landlord  may  deduct  from the
Security any expenses incurred in connection with the Tenant's  violation of any
agreement in this Lease.  For  example,  if the Tenant does not leave the Rental
Space in good  condition at the end of the Term,  normal wear and tear excepted,
the  security may be used to put it in good  condition.  If the amount of damage
exceeds the Security, the Tenant shall pay the additional amount to the Landlord
on demand.

      If the Landlord  uses the security or any part of it during the Term,  the
Tenant shall, on demand, pay the Landlord for the amount used. The amount of the
security is to remain  constant  throughout  the Term. The security is not to be
used by the Tenant for the payment of Rent.  The Landlord  shall  account to the
Tenant  for any  security  used and repay to the Tenant  any  balance  remaining
within a reasonable  time (not to exceed 60 days) after the end of the Term. The
Tenant shall not be entitled to interest on the security.

      If the  Landlord's  interest  in the  Rental  Space  is  transferred,  the
Landlord  shall turn over the security to the new Landlord.  The Landlord  shall
notify the Tenant of the name and address of the new Landlord. Notification must
be given within 5 days after the transfer, by registered or certified mail. Once
the new  Landlord  assumes the  Landlord's  obligations  under this  Lease,  the
Landlord  shall then no longer be responsible to the Tenant for the repayment of
the security. The new Landlord shall be responsible to the Tenant for the return
of the security in accordance with the terms of this Lease.

6.    Casualty and Liability Insurance

      The Tenant  shall  obtain,  pay for, and keep in effect for the benefit of
the  Landlord  and the Tenant  casualty  and public  liability  insurance on the
Rental  Space in the amounts set forth on page 1 of this  Lease.  The  insurance
company and the Broker must be acceptable to the Landlord. This coverage must be
in at least the minimum amounts stated above.

      All  policies  shall state that the  insurance  company  cannot  cancel or
refuse to renew without at least 10 days written notice to the Landlord.

      The Tenant shall deliver the original policy to the Landlord with proof of
payment  of the first  year's  premium.  This shall be done not less than 5 days
before the Beginning of the Term.  The Tenant shall deliver a renewal  policy to
the  Landlord  with proof of payment not less than 5 days before the  expiration
date of each policy.

      The Tenant's public liability insurance on the Rental Space shall:

      a. include a waiver of subrogation,

      b. include fire legal liability coverage, and

      c. designate the Landlord as an additional insured (not a named insured).

7.    Unavailability of Fire Insurance, Rate Increases

      If, due to the  Tenant's  use of the Rental  Space,  the  Landlord  cannot
obtain  and  maintain  fire  insurance  on the  Building  in an amount  and form
reasonably acceptable to the Landlord,  the Landlord may cancel this Lease on 30
days notice to the Tenant.  If due to the  Tenant's  use of the Rental Space the
fire  insurance  rate is  increased,  the Tenant  shall pay the  increase in the
premium to the Landlord on demand.


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8.    Water and Other Damage

      The Landlord shall not be liable for any damage or injury to any person or
property  caused by the leak or flow of water  over  which the  Landlord  has no
control  from or into any part of the  Building.  The Tenant has to insure  this
risk of loss.  Note:  The  Landlord's  insurance  does not cover all  losses for
damage to the Tenant's  property and the Landlord  does not indemnify the Tenant
as to water  damage  not  covered  by the  Landlord's  insurer.  Exception:  The
Landlord  shall remain liable for any damage or injury to any person or property
caused by the leak or flow of water  arising from any  structural  defect in the
Landlord's building.

9.    Liability of Landlord and Tenant

      The  Landlord  shall not be liable  for  injury or damage to any person or
property unless it is due to the Landlord's willful act or neglect. The Landlord
shall defend the Tenant from and reimburse  the Tenant for all  liability  costs
resulting  from any  injury or damage due to the  willful  act or neglect of the
Landlord or the Landlord's authorized representatives (i.e., employees,  agents,
customers or clients, and guests).

      The  Tenant is  liable  for any  loss,  injury or damage to any  person or
property  caused by the act or neglect of the Tenant or the Tenant's  authorized
representatives,  customers or clients,  and guests. The Tenant shall defend the
Landlord from and  reimburse the Landlord for all liability and costs  resulting
from any  injury  or  damage  due to the act or  neglect  of the  Tenant  or the
Tenant's  authorized  representatives  (i.e.,  employees,  agents,  customers or
clients, and guests).

      For the purpose of this paragraph,  the obligation of a party to indemnify
or hold  harmless  shall  be  limited  to the sum that  exceeds  the  amount  of
insurance proceeds, if any, received by the party being indemnified.

10.   Acceptance of Rental Space

      The  Landlord  shall  deliver the Rental  Space to the Tenant in a new and
clean  condition  in  accordance  with the "work  letter" to be attached to this
Lease.  The Tenant  shall  inspect the Rental  Space and  determine  whether the
Rental Space is in satisfactory  condition,  suitable for the Tenant's  intended
use.  Thereafter,  the Tenant shall "fit up" the Rental Space in accordance with
the Tenant's "work letter".

11.   Quiet Enjoyment

      Upon  satisfaction of the  contingencies  set forth above under Additional
Agreements,  the Landlord has the right to enter into this Lease.  If the Tenant
complies with this Lease,  the Landlord must provide the Tenant with undisturbed
possession  of the  Rental  Space.  This  means  that on  paying  the  rent  and
performing the conditions and covenants  contained in this Business  Lease,  the
Tenant  shall and may  peaceably  and  quietly  have,  hold and enjoy the Rental
Space.

12.   Utilities and Services

      The Tenant shall arrange and pay for all separately  metered utilities and
services required for the Rental Space, including the following;  Y=Yes  N=No

      [ Y ] HVAC
      [ Y ] Hot and cold water
      [ Y ] Electric
      [Y] Gas
      [ Y ] Telephone
      [ Y ] Cable Television
      [ Y ] Janitorial service

The  Tenant's  failure to make timely  payment of the Tenant's  utility  charges
shall be an event of default  for which  Landlord  reserves a right of  re-entry
under Paragraph 23.


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      The  Tenant  shall pay pro rata  (25%)  for the  following  utilities  and
services  that are to be shared with the  occupant of the  building at 314 South
Avenue, Fanwood, NJ:

      [ Y ] Lawn care
      [ Y ] Snow removal
      [ Y ] Leaf Removal
      [ Y ] Sanitary sewer
      [ Y ] Trash disposal
      [ Y ] Reserves for replacement of the landscaping and parking lot
            improvements

      The Goddard  School,  its successors  and assigns,  will pay the remaining
75%.

      The  Landlord  is not liable for any  inconvenience  or harm caused by any
stoppage  or  reduction  of  utilities  and  services  beyond the control of the
Landlord. This does not excuse the Tenant from paying Rent.

13.   Tenant's Repairs, Maintenance and Compliance

      The Tenant shall:

      a.  Promptly  comply  with all laws,  orders,  rules and  requirements  of
      governmental  authorities,  insurance carriers, board of fire underwriters
      or similar groups.

      b.  Maintain the Rental Space and all equipment and fixtures in it in good
      repair and appearance.

      c. Make all necessary repairs and replacements to the Rental Space and all
      equipment and fixtures in it, except  structural  repairs as per paragraph
      14.

      d.  Maintain  the  Rental  Space  in a neat,  clean,  safe,  and  sanitary
      condition, free of all garbage.

      e. Keep the walks, driveway,  parking area, yard, entrances,  hallways and
      stairs  clean  and free from  trash and  debris.  This  includes,  without
      limitation, cleanup of the ATM area and the drive-up window area.

      f. Use all  electric,  plumbing and other  facilities  in the Rental Space
      safely.

      g. Use no more  electricity than the wiring or feeders to the Rental Space
      can safely carry.

      h. Promptly replace all broken glass in the Rental Space.

      i. Do nothing to destroy,  deface, damage or remove any part of the Rental
      Space.

      j. Keep  nothing in the Rental  Space which is  inflammable,  dangerous or
      explosive or which might increase the danger of fire or other casualty.

      k.  Promptly  notify  the  Landlord  when there are  conditions  that need
      structural repair.

      l. Do  nothing  to  destroy  the peace and  quiet of the  Landlord,  other
      tenants or persons in the neighborhood.

      m. Avoid littering in the building or on its grounds.

      n.  Recycle  recyclables  in  accordance  with the law and the  Landlord's
      requirements.

      o. Maintain an inside  temperature  during the heating  season of not less
      than 50(degree) F.

      The Tenant shall pay any  reasonable  expenses  involved in complying with
the above.

14.   Landlord's Repairs and Maintenance

      The Landlord shall;

      a.  Maintain  (subject to the  provisions of this Lease) the public areas,
      roof, and exterior walls in good condition,

      b. Make all  structural  repairs  (the  Tenant  may be liable for the cost
      incurred by the Landlord when made  necessary by the act or neglect of the
      Tenant or the Tenant's authorized  representatives,  customers or clients,
      and guests),


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15.   No Alterations

      Except for  emergency  repairs,  the  Tenant  may not make any  changes or
additions  to the Rental  Space  without the  Landlord's  written  consent.  All
changes or  additions  made  without the  Landlord's  written  consent  shall be
removed by the Tenant on demand.

      All changes or additions  made with the Landlord's  written  consent shall
become the property of the Landlord  when  completed and paid for by the Tenant.
They  shall  remain  as part of the  Rental  Space at the end of the  Term.  The
Landlord  may demand that the Tenant  remove any changes or additions at the end
of the Term.  The  Tenant  shall  promptly  pay for all  costs of any  permitted
changes or additions.  The Tenant shall not allow any  mechanic's  lien or other
claim to be filed  against the  Building.  If any lien or claim is filed against
the Building as the result of any action of the Tenant, the Tenant shall have it
promptly removed.

      The Tenant intends to install a vault that will become a permanent part of
the Rental  Space.  It will not have to be removed at the end of the term of the
Lease.

16.   Signs

      The Tenant shall be permitted to place signs on or about the Rental Space,
provided  that the Tenant or the Landlord (as part of the  Landlord's  site plan
application  to  the  Planning   Board  of  the  Borough  of  Fanwood)   obtains
governmental  approval for the signs.  The Tenant  shall  obtain the  Landlord's
written consent before placing any sign on or about the Rental Space. Signs must
conform with all applicable municipal ordinances and regulations.

      The Tenant's  signs must conform to  Landlord's  design  standards for the
building.  The Tenant must remove the  Tenant's  signs at the end of the term of
the Lease.

17.   Window Treatments

      Tenant shall obtain the  Landlord's  written  consent  before  placing any
window  treatments on or about the Rental Space.  Window treatments must conform
to the standards  established by the Landlord,  subject to the Tenant's security
requirements.

18.   Access to Rental Space

      The Landlord shall have access to the Rental Space on reasonable notice to
the Tenant to:

      a. inspect the Rental Space,

      b. make necessary repairs, alterations or improvements,

      c. supply services, and

      d.  show  it to  prospective  buyers,  mortgage  lenders,  contractors  or
      insurers.

      The Landlord may show the Rental Space to rental  applicants at reasonable
hours on notice to the Tenant within 6 months before the end of the Term.

      The Landlord may enter the Rental Space at any time without  notice to the
Tenant in case of emergency.

      Except for an  emergency,  all access by the  Landlord to the Rental Space
shall be:

      a. in the  company of the  Tenant's  Security  Officer or another  officer
      designated by the Tenant,

      b. when the Tenant is not open for business to the public, and

      c. with minimum possible disruption of the Tenant's business.


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19.   Fire and Other Casualty

      The Tenant shall notify the Landlord at once of any fire or other casualty
in the  Rental  Space.  The Tenant is not  required  to pay Rent when the Rental
Space is unusable.  If the Tenant uses part of the Rental Space, the Tenant must
pay Rent pro-rata for the usable part.

      If the Rental Space is partially  damaged by fire or other  casualty,  the
Landlord  shall repair it as soon as possible.  This  includes the damage to the
Rental  Space and  fixtures  installed by the  Landlord.  The Landlord  need not
repair or replace anything installed by the Tenant.

      Either  party may cancel  this Lease if the Rental  Space is so damaged by
fire or other  casualty  that it  cannot be  repaired  within  180 days.  If the
parties cannot agree, the opinion of a contractor chosen by the Landlord and the
Tenant will be binding on both parties.

      This Lease shall end if the Rental Space is totally destroyed.  The Tenant
shall pay Rent to the date of destruction.

      Note: If the fire or other casualty is caused by the act or neglect of the
Tenant or the Tenant's employees, the Tenant shall be responsible to pay for all
repairs and all other damage.

20.   Eminent Domain

      Eminent  domain is the right of a government to lawfully  condemn and take
private  property for public use. Fair value must be paid for the property.  The
taking occurs either by court order or by deed to the condemning  party.  If any
part of the Rental  Space is taken by eminent  domain,  either  party may cancel
this Lease on 30 days  notice to the other.  The entire  payment  for the taking
shall  belong to the  Landlord.  The Tenant shall make no claim for the value of
this Lease for the remaining part of the Term.

21.   Subordination to Mortgage; Non-Disturbance by Mortgagees

      In a foreclosure  sale all mortgages  that now or in the future affect the
Building have priority over this Lease. This means that the holder of a mortgage
may  end  this  Lease  on a  foreclosure  sale.  Subject  to  the  terms  of the
non-disturbance  agreement  referred to below,  the Tenant shall sign all papers
needed to give any mortgage priority over this Lease. If the Tenant refuses, the
Landlord may sign the papers on behalf of the Tenant.

      The  Landlord   shall  obtain  from  any  mortgagee  or  ground  lessor  a
non-disturbance  agreement  (in such form and  substance  as may  reasonably  be
acceptable  to the Tenant)  that permits the Tenant to use and occupy the Rental
Space so long as the Tenant is not in default under this Lease.  The Tenant must
attorn to the mortgagee or ground lessor.

      In the event of a foreclosure,  the Landlord shall immediately  notify the
Tenant (in  accordance  with  paragraph  29) of the pendency of the  foreclosure
proceeding.

      The Landlord  warrants and represents that as of the date of this Lease no
such  proceeding  has been filed and the Landlord is not aware of any threatened
foreclosure proceeding.

22.   Tenant's Certificate

      At the  request  of the  Landlord,  the Tenant  shall  sign a  certificate
stating that:

      a. this  Lease has not been  amended  and is in effect  or, if it has been
      amended, specifying such amendment,

      b. the Landlord has fully  performed all of the  Landlord's  agreements in
      this Lease,

      c. the Tenant has no rights to the Rental  Space  except as stated in this
      Lease,

      d. the Tenant has paid all Rent to date, and


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<PAGE>

      e. the Tenant has not paid Rent for more than one month in advance.

         The Certificate shall also list all the property attached to the Rental
         Space owned by the Tenant.

23.   Violation, Eviction, Re-entry and Damages

      The Landlord  reserves a right of re-entry that allows the Landlord to end
this Lease and re-enter the Rental Space if the Tenant violates any agreement in
this Lease. This is done by eviction.  Eviction is a court procedure to remove a
tenant.  Eviction  is  started  by the  filing of a  complaint  in court and the
service of a summons on a tenant to appear in court.

      The Landlord may also evict the Tenant for any one of the other grounds of
good cause provided by law. After a court order of eviction and compliance  with
the warrant of removal,  the Landlord may re-enter and take back  possession  of
the Rental Space. If the cause for eviction is non-payment of Rent,  notice does
not have to be given to the Tenant  before the Landlord  files a  complaint.  If
there is any other  cause to evict,  the  Landlord  must give to the  Tenant the
notice required by law before the Landlord files a complaint for eviction.

      The Tenant is liable for all damages  caused by the Tenant's  violation of
any agreement in this Lease.  The Landlord is also liable for all damages caused
by the  Landlord's  violation  of any  agreement  in this Lease.  This  includes
reasonable attorneys fees and costs in accordance with paragraph 4.f.

      After eviction, the Tenant shall be liable to pay the Rent for the Term or
until the  Landlord  re-rents  the  Rental  Space,  if sooner.  If the  Landlord
re-rents the Rental Space for less than the Tenant's  Rent, the Tenant shall pay
the  difference  until the end of the Term.  The Tenant shall not be entitled to
any excess  resulting  from the  re-renting.  The Tenant shall also be liable to
pay:

      a. all  reasonable  expenses  incurred by the  Landlord in  preparing  the
      Rental space for re-renting, and

      b. commissions paid to a broker for finding a new tenant.

24.   Environmental Representations/ISRA Compliance

      The  Landlord  represents  that to the best of the  Landlord's  knowledge,
information and belief:

      a. No toxic wastes, pollutants,  asbestos, PCB's or other toxic substances
      are  located  upon or beneath the  premises  in which the Rental  Space is
      located,

      b. No debris has been buried beneath the Property,

      c.  Landlord  has no  knowledge  that the  Property  has ever been used to
      generate,  refine, produce, store, handle, transfer,  process or transport
      any "Hazardous  Substance" or "Hazardous  Waste" as such terms are defined
      in N.J.S.A. 58:10-23.1l(b)(k) and/or N.J.A.C. 7:1-3.3,

      d. The premises will not be so used by any party prior to the commencement
      date of this Lease.

      e. No  notice  has  been  received  of any  outstanding  violation  of any
      governmental law, rule,  statute,  ordinance or regulation by the Landlord
      or any agent or affiliate of the Landlord.

The Landlord  shall  indemnify  and hold harmless the Tenant with respect to any
violation of these representations.

      The Tenant shall, at the Tenant's own expense,  comply with the Industrial
Site  Recovery  Act  ("ISRA"),  N.J.S.A.  13:1K-6  et seq.  and the  regulations
promulgated thereunder. This means that the Tenant shall:

      a. Make, if required by law or regulation, all submissions to, provide all
      information  to  and  comply  with  all  requirements  of  the  Bureau  of
      Industrial Site Evaluations of the New Jersey  Department of Environmental
      Protection.

      b.  Prepare and submit,  if required by law or  regulation,  any  required
      plans and financial assurance and carry out the approved plans.


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<PAGE>

      c. Provide all information  requested by the Landlord for preparation of a
      non-applicability   affidavit  and  promptly  sign  such  affidavits  when
      requested by the Landlord.

      d. Indemnify, defend and save harmless the Landlord from all fines, suits,
      procedures,  claims, and actions of any kind arising out of, or in any way
      connected  with,  any  discharge of hazardous  substances  or waste at the
      Rental  Space which occur during the term of this Lease as a result of the
      Tenant's  actions;  or arising out of the Tenant's  failure to provide all
      information,  make sure all  submissions  are made,  and take all  actions
      required by the ISRA Bureau or any other  division of NJDEP.  The Tenant's
      failure to abide by the terms of this Paragraph  shall be  restrainable by
      injunction.

      The Tenant  shall not be  responsible  for prior acts of the  Landlord  or
other tenants of the Landlord,  and, in no event shall the Tenant be responsible
for any liability arising out of any acts prior to the Tenant's occupancy.

25.   Rent Adjustment for Third through Fifteenth Years

      The monthly rent reserved  during the third through  fifteenth years shall
be $8,650.00 adjusted by the revised Consumer Price Index for Urban Wage Earners
and Clerical  Workers for New York, New  York-Northeastern  New Jersey  (C.P.I.)
with a base period of June 2006 ( ) as follows:

         SAMPLE                                         Monthly Rent Adjustment
                                                        Starting Date
                                                        ------------------------

C.P.I. for June 2008 (     ) x $8,650.00  =    $
----------------------------
C.P.I. for June 2006 (     )       1                    January 1, 2009

C.P.I. for June 2009 (     ) x $8,650.00  =    $
----------------------------
C.P.I. for June 2006 (     )        1                   January 1, 2010

C.P.I. for June 2010 (     ) x $8,650.00  =    $
----------------------------
C.P.I. for June 2006 (     )        1                   January 1, 2011

The same formula shall be applied to calculate the adjustments for the remaining
years of the term.  No annual  adjustment  shall  exceed  1.05% of the  previous
year's rent. If, however, the C.P.I. exceeds 1.05%, the excess shall be "banked"
and applied to one or more future rent  adjustments  where the C.P.I. is le than
1.05%. The intent here is that the 1.05% shall be cumulative  during the term of
the Lease.

26.   Option to Renew

      The Landlord hereby grants to the Tenant an option to renew this Lease for
three additional terms of five years from:

      January 1, 2021 to December 31, 2025
      January 1, 2026 to December 31, 2030
      January 1, 2031 to December 31, 2035.

If the Tenant fails to notify the Landlord of the Tenant's intention to exercise
each option to renew by the following notice dates:

       January 1, 2020
       January 1, 2025
       January 1, 2030

each such option to renew shall become null and void. The notice shall be given
in accordance with Paragraph 29 of this Lease.


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      For the first five-year option, the monthly rent reserved starting January
1, 2021 shall be adjusted  (but not reduced) to Fair Market Rent ("FMR") for the
Rental Space. The monthly rent starting January 1, 2022 shall be adjusted by the
Revised Consumer Price Index for Urban Wage Earners and Clerical Workers for New
York, New  York-Northeastern New Jersey (C.P.I.) with a base period of June 2020
( ) as follows:

                                                      Monthly Rent Adjustment
                                                      Starting Date
                                                      -----------------------

C.P.I. for June 2021 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2020 (     )     1                    January 1, 2022

C.P.I. for June 2022 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2020 (     )     1                    January 1, 2023

C.P.I. for June 2023 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2020 (     )     1                    January 1, 2024

C.P.I. for June 2024 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2020 (     )     1                    January 1, 2025

      For the second  five year  option,  the  monthly  rent  reserved  starting
January 1, 2026 shall be adjusted  (but not reduced) to Fair Market Rent ("FMR")
for the  Rental  Space.  The  monthly  rent  starting  January  1, 2027 shall be
adjusted by the Revised Consumer Price Index for Urban Wage Earners and Clerical
Workers for New York,  New  York-Northeastern  New Jersey  (C.P.I.)  with a base
period of June 2025 ( ) as follows:

                                                      Monthly Rent Adjustment
                                                      Starting Date
                                                      -----------------------

C.P.I. for June 2026 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2025 (     )     1                    January 1, 2027

C.P.I. for June 2027 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2025 (     )     1                    January 1, 2028

C.P.I. for June 2028 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2025 (     )     1                    January 1, 2029

C.P.I. for June 2029 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2025 (     )     1                    January 1, 2030

      For the third five year option, the monthly rent reserved starting January
1, 2031 shall be adjusted  (but not reduced) to Fair Market Rent ("FMR") for the
Rental Space. The monthly rent starting January 1, 2032 shall be adjusted by the
Revised Consumer Price Index for Urban Wage Earners and Clerical Workers for New
York, New  York-Northeastern New Jersey (C.P.I.) with a base period of June 2030
( ) as follows:

                                                      Monthly Rent Adjustment
                                                      Starting Date
                                                      -----------------------

C.P.I. for June 2031 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2030 (     )     1                    January 1, 2032

C.P.I. for June 2032 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2030 (     )     1                    January 1, 2033


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C.P.I. for June 2033 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2030 (     )     1                    January 1, 2034

C.P.I. for June 2034 (     ) x FMR    =        $
----------------------------   ---
C.P.I. for June 2030 (     )     1                    January 1, 2035

For the purpose of this Paragraph the Fair Market Rent is to be determined as
follows:

      a. By the agreement of the parties.

      b. If the  parties are unable to agree,  by  arbitration  in Fanwood,  New
      Jersey.  The Landlord and the Tenant shall each select an appraiser having
      the  qualifications  of an MAI with a principal  office located within ten
      miles from the Rental Space.  If the  appraisers  selected by the Landlord
      and the Tenant are unable to agree upon a Fair  Market Rent within 21 days
      after the issue is submitted to each appraiser, then both appraisers shall
      select a third  independent  appraiser having the  qualifications of State
      Certified  Real Estate  Appraiser to determine the Fair Market Rent within
      21 days after the issue is submitted.  The cost of the appraisal  shall be
      shared equally  between the Landlord and the Tenant.  The Fair Market Rent
      shall not be less than the lower of the two appraisals nor higher than the
      higher of the two appraisals.

27.   Right to Purchase at Fair Market Value

      The  Landlord  grants to the Tenant the right to purchase  the property at
314-328  South Avenue if and when the Landlord  elects to sell the property to a
third  party.  Sales to present or future  members of the  Landlord  will not be
deemed to be a third party.  This means that the  Landlord  shall first offer to
the  Tenant  the right to  purchase  the  property  at Fair  Market  Value.  The
Landlord's  notice  shall be  given  in  accordance  with  paragraph  29 of this
Business  Lease.  If the Tenant  fails to  exercise  the right to  purchase  the
property at Fair Market Value within  thirty (30) calendar days after receipt of
the Landlord's notice, this right to purchase shall become null and void and the
Landlord shall have the right to market and sell the property to a third party.

      For  the  purpose  of this  paragraph,  the  Fair  Market  Value  is to be
determined as follows:

      a. By the agreement of the parties.

      b. If the parties are unable to agree,  by  arbitration  in Scotch Plains,
      New Jersey.  The  Landlord  and the Tenant  shall each select an appraiser
      having the  qualifications  of an MAI and with a principal  office located
      within ten miles from the Rental Space. If the appraisers  selected by the
      Landlord  and the  Tenant are  unable to agree  upon a Fair  Market  Value
      within 21 days after the issue is submitted to each  appraiser,  then both
      appraisers  shall  select  a  third   independent   appraiser  having  the
      qualifications  of a State  Certified Real Estate  Appraiser to detetinine
      the Fair Market  Value  within 21 days after the issue is  submitted.  The
      cost of the appraisal shall be shared equally between the Landlord and the
      Tenant.  The Fair Market Value shall not be less than the lower of the two
      appraisals nor higher than the higher of the two appraisals.

28.   Notices

      All notices  given  under this Lease must be in  writing.  Each party must
accept and claim the notices given by the other.  Unless  otherwise  provided by
law, they may be given by:

      a. personal delivery, or

      b. certified mail, return receipt requested, or

      c. confirmed telephone facsimile or other electronic media, or

      d. recognized  national courier service with delivery  confirmation (i.e.,
      Federal Express, Airborne Express, United Parcel Service).

      Notices  shall be addressed to the Landlord at the address  written at the
being of this Lease and to the Tenant at the Rental Space with a copy to:


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<PAGE>

      Leib, Kraus, Grispin & Roth
      Attn: Robert H. Kraus, Esq.
      328 Park Avenue, P. O. Box 310
      Scotch Plains, NJ 07076-0310

            29. No Waiver

      The  Landlord's  failure to enforce any  agreement in this Lease shall not
prevent the Landlord from enforcing the agreement for any  violations  occurring
at a later time.

30.   Governing Law/Survival

      This Lease shall be construed by a court of competent  jurisdiction in the
State of New Jersey in accordance  with the laws of the State of New Jersey.  If
any  agreement  in this Lease is  contrary  to law,  the rest of the Lease shall
remain in effect.

31.   End of Term

      At the end of the Term, the Tenant shall:

      a. leave the Rental Space clean,

      b. remove all of the Tenant's property,

      c. remove all signs and restore  that portion of the Rental Space on which
      they were placed,

      d. repair all damage caused by moving, and

      e. return the Rental Space to the Landlord in the same condition as it was
      at the beginning of the Term except for normal wear and tear.

         If the Tenant leaves any property in the Rental Space, the Landlord may

      a. dispose of it and charge the Tenant for the cost of disposal, or

      b. keep it as abandoned property.

32.   Binding

      This Lease binds the  Landlord and the Tenant and all parties who lawfully
succeed to their rights or take their places.

33.   Full Agreement

      The parties have read this Lease. It contains their full agreement. It may
not be changed except in writing signed by the Landlord and the Tenant.


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<PAGE>

SIGNATURES

The Landlord and the Tenant agree to the terms of this Business Lease by signing
below. (If a party is a corporation or limited liability company,  this Lease is
signed by its proper corporate  officers and its corporate seal is affixed or it
is signed by its proper limited  liability company officers and the company seal
is affixed.)

WITNESSED OR ATTESTED BY:                FANWOOD PLAZA PARTNERS, LLC


/s/ Lisa J. Larue                        /s/ John P. Boyle, III
-----------------------------------      ---------------------------------------
Lisa J. Larue                            By John P. Boyle, III           Manager


/s/ Lisa J. Larue                        /s/ Robert H. Kraus
-----------------------------------      ---------------------------------------
Lisa J. Larue                            By Robert H. Kraus              Manager

                                         THE TOWN BANK


/s/ Angela Bellino                       /s/ Robert W. Dowens, Sr.
-----------------------------------      ---------------------------------------
                          Secretary      By Robert W. Dowens, Sr.      President


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