Document:

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                                                            Lease - EXHIBIT 10.7

THIS LEASE made this 12 day of March, 1997 by and between EAST MAIN PROPERTIES,
                     --        -----
L.L.C. (hereafter Landlord), and the SALEM BANK AND TRUST, NATIONAL ASSOCIATION,
(hereafter, collectively, Tenant), provided:

1.   Premises. Landlord leases to Tenant and Tenant hires from Landlord office
     space described as follows:

     Approximately 5,190 square feet of office space located on the first floor,
     as designated on Exhibit "A", together with access to eight (8) parking
     spaces, to be designated by the Landlord from time to time.

in the building situated at the southwest corner of Main Street and College
Avenue in the City of Salem, Virginia, commonly known as the Salem Bank Building
(hereafter Building) together with all appurtenances thereto belonging,
including, but not limited to, the right in common with others to use the
lobbies, stairways, and other public and service portions of the Building for
the respective purposes for which they are intended (hereafter Common Areas).

     In addition to the eight (8) parking spaces described above, Tenant shall
have the sole and exclusive use of the estimated seven (7) parking spaces behind
(to the south) of the demised premises for parking or such other bank related
use as the Bank may, deem proper.

     Landlord shall provide such paving and means of ingress and egress as are
necessary to enable Tenant to operate a "drive-in window" to the rear (south) of
the demised premises.

2.   Term.  The term of this Lease shall be commencing on the 1st day of March
     ----
1997, and ending on the 28th day of February 2007.

3.   Use.  Tenant shall use Premises solely for the operation of a banking
     ---
facility and shall not permit any other operation which might cause additional
premium to be payable for insurance on Premises or the Building against fire or
other hazard, or which might render void or voidable any such Federal, State or
local laws, ordinances and regulations attached hereto, and incorporated herein
as a part hereof and with such further reasonable rules and regulations as
Landlord may

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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prescribe from time to time for the safety, care and cleanliness of the Building
and the comfort, quiet and conveniences of occupants of the Building.

4.   Rent.
     ----

4.1  Tenant shall pay the Landlord as base rental for the initial ten (10) year
term of the Lease, the total sum of $782,652.50, Seven-Hundred Eighty Two
Hundred Thousand and Six Hundred Fifty-Two Dollars and Fifty Cents, apportioned
and payable as follows:

            Lease Term             Annual        Monthly       Per Sq. Ft.
         3/1/97  to  2/28/98       $59,529.36    $4,960.79       $11.47
         3/1/98  to  2/28/99        61,605.36     5,133.78        11.87
         3/1/99  to  2/28/00        63,785.16     5,315.43        12.29
         3/1/00  to  2/28/01        66,016.80     5,501.40        12.72
         3/1/02  to  2/28/02        68,352.36     5,696.03        13.17
         3/1/03  to  2/28/03        70,739.76     5,894.98        13.63
         3/1/04  to  2/28/04        73,230.96     6,102.58        14.11
         3/1/05  to  2/28/05        75,774.00     6,314.50        14.60
         3/1/06  to  2/28/06        78,420.96     6,535.08        15.11
         3/1/07  to  2/29/07        81,171.60     6,764.30        15.64
         3/1/08  to  2/29/08        84,026.16     7,002.18        16.19

4.2  During the initial term and during any renewal or extension of this Lease,
Tenant shall pay all monthly rental installments in legal tender of the United
States without demand, deduction or offset, in advance, on or before the first
day of each month. timely payment being of the essence.

4.3  For purposes of this Lease, the expression "base rental" shall mean the
fixed minimum rent payable by the Tenant exclusive of all additional rent and
other charges required to be made by the Tenant as provided in this Lease.

4.4  Tenant covenants and agrees during the initial term of this Lease and
during any extension or renewal of this Lease to pay  as additional charge or
rental the sum of twenty-five

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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($25.00) Dollars for each rental installment not paid within five (5) days of
the due date thereof. In the event Tenant fails to pay monthly rental
installment within ten days of the date due then the penalty,. shall become Ten
(10%) percent of such installment due. That portion for the rental of any period
of less than one calendar month shall be pro-rated and paid in advance.

4.5  Tenant agrees to pay Landlord as additional rent Twenty (20%) percent of
any increase in real property taxes, or other assessments or governmental
impositions of any kind which are imposed upon the building, the land upon which
it is constructed, and the parking area available to tenants of the building,
over $8,576.25 (1978 calendar year property taxes).

4.6  Tenant agrees to pay Landlord as additional rent Twenty (20%) percent of
any increase in the cost of premiums for fire, extended coverage, and public
liability insurance on the building over that charged for the base year 1978, or
$1,900.00.

4.7  Landlord shall deliver to Tenant a statement setting forth the amount of
real estate taxes and insurance costs and comparable figures for the base year.
Within thirty (30) days after the delivery of such statements, Tenant shall pay
to Landlord its proportionate share of such increase as provided in Sections 4.6
and 4.7 above.

5.   Option to Renew.
     ---------------

     The Tenant shall have the right, privilege and option to extend this lease
for two (2) additional periods of five (5) years each from the date of the
expiration of the then current lease term, provided it is not in default
thereunder, upon the following terms and conditions:

     (a)  Tenant shall give Landlord notice in writing of its intention to
          exercise each renewal option at least ONE (1) YEAR prior to the
          expiration of the then current lease term.
     (b)  Should Tenant exercise its option to renew for the aforementioned
          periods of five (5) years, all terms and conditions of the original
          Lease shall prevail during the extension periods except the rents due
          thereunder shall be as follows:

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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     First Five (5) Year Renewal Term:
     --------------------------------

              Lease Term              Annual      Monthly       Per Sq. Ft.

           3/1/08  to  2/28/08     $ 86,984.40  $7,248.70       $16.76
           3/1/09  to  2/28/09       90,046.56   7,503.88        17.35
           3/1/10  to  2/28/10       93,212.40   7,767.70        17.96
           3/1/11  to  2/28/11       96,482.16   8,040.18        18.59
           3/1/12  to  2/28/12       99,855.60   8,321.30        19.24

     Second Five (5) Year Renewal Term:
     ---------------------------------

              Lease Term              Annual      Monthly       Per Sq. Ft.

           3/1/13  to  2/28/13     $103,332.96  $8,611.08       $19.91

           3/1/14  to  2/28/14      106,965.96   8,913.83        20.61

           3/1/15  to  2/28/15      110,702.76   9,225.23        21.33

           3/1/16  to  2/28/16      114,595.20   9,549.60        22.08

           3/1/17  to  2/28/17      118,591.56   9,882.63        22.85

6.   Repairs and Maintenance.
     -----------------------

6.1  Landlord, at its sole expense, and throughout the term of this Lease, shall
make all structural repairs to the building, including the exterior walls, roof,
gutters, downspouts, any interior support columns and all structural floor
surfaces, plumbing mains to building, electrical conduits to building, heating
and air conditioning equipment, but excluding without limitation all floor
coverings and interior partitions. Landlords shall also perform exterior
painting and shall maintain all common areas which provide access to or service
the premises; provided, however, that Landlord shall have no responsibility to
make any repairs unless and until Landlord receives written notice of the need
for such repair. Tenant shall give Landlord prompt written notice of

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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any damage to or defect on the structural portions of the Premises or the common
areas. Landlord shall have a reasonable time after receipt of notice to
investigate the need for repairs and to complete them where necessary.

6.2  Landlord shall also have no responsibility to repair any damages which
arise out of or are caused by Tenant's use or occupancy of the Premises or by
Tenant's installation of equipment in or upon the Premises or by any act or
omission of Tenant or any employee, agent, contractor or invitee of Tenant. If
the need for such repairs is occasioned by the negligent or willful act of
Tenant, its agents, employees or invitees, such repairs shall be made by
Landlord, and shall be charged to Tenant.

6.3  Anything in this Lease to the contrary notwithstanding, Landlord shall have
no responsibility to Tenant for and shall have no duty to repair, replace or
restore any damage whatsoever to the fixtures, improvements,. alterations,
furniture or any other property owned, installed, made by, or in the possession
of Tenant, unless caused by the Landlord's negligence or refusal to maintain the
building.

6.4  The Tenant at its sole expense shall make all other repairs, including
repairs and replacements to the interior necessary to keep the Leased premises,
building, improvements, and fixtures in good order and repair and the interior
of the building neat and attractive. Lessee will, at the expiration of the term
of this Lease or any renewal thereof. deliver up the leased premises in as good
order and condition as received, reasonable wear and tear and damage by fire or
other casualty of the kind insured against in standard policies of fire
insurance with extended coverage excepted.

7.   Alterations, Additions and Fixtures.
     -----------------------------------

     7.1  Subject to the provisions of Section 7.3 hereof, Tenant shall have the
right to install in the Premises any trade fixtures from time to time during the
term of this Lease; provided, however, that no such installation or removal
thereof shall affect the structural portions of the Building. and the Tenant
shall repair and restore any damage or injury to the Premises

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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caused thereby. Tenant shall have the right, at Tenant's sole expense, to
display logo on building, subject to the provisions of paragraphs 7.1, 7.2 and
7.3.

     7.2  Tenant shall not make or permit to be made any alterations,
improvements, or additions to the Premises without, on each occasion first
presenting to Landlord plans and specifications therefore and obtaining
Landlord's priority written consent thereto; except that Tenant may make minor
non-structural changes to the interior of the Premises without the consent of
Landlord provided that: (I) Tenant supplies Landlord with plans and
specifications and any necessary permits therefore at least ten days in advance
of commencing construction thereof; (II) such alterations and improvements do
not impair the structural strength of the Building or any other improvements or
reduce the value of the Premises; (III) Tenant shall take or cause to be taken
all steps that are required by Section 7.3 hereof and that are required or
permitted by law in order to avoid the imposition of any mechanic's, laborer's
or materialman's lien upon the Premises or the Building; and (IV) the occupants
adjoining the Premises are not annoyed or disturbed by- reason thereof.  Any and
all alterations, improvements and additions to the Premises which are
constructed, installed or otherwise made by Tenant shall be the property of
Tenant until the expiration or sooner termination of this lease; at which time
all such alterations and additions shall remain on the Premises and become the
property of the Landlord without payment therefore by Landlord; unless, upon
termination of this Lease, Landlord shall give written notice to Tenant to
remove the same; in which event Tenant shall promptly remove such alterations,
improvements and additions, and promptly repair and restore any damages to the
Premises or the Building caused by the installation or removal thereof.  In the
event Tenant fails to promptly remove any alterations, improvements and
additions and to so repair or restore the Premises, promptly after receipt of
notice to do so from Landlord, Landlord may so remove, repair or restore and
recover as additional rent from Tenant all of Landlord's costs incurred in so
doing.

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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7.3  Mechanics' liens.  Tenant shall promptly pay any contractor or materialman
who shall supply labor, work or materials to Tenant at the Premises so as to
minimize the possibility of a lien attaching to the Premises or the Building.
Tenant shall take all steps permitted by law- in order to avoid the imposition
of any mechanic's, laborer's or materialman's lien upon the Premises or the
Building.  Should any such lien or notice of lien be filed, Tenant shall bond
against or discharge the same within fifteen days after the lien or claim is
filed or formal notice of said lien or claim has been issued regardless of the
validity of such lien or claim.  Nothing in this Lease is intended to authorize
Tenant to do or cause any work or labor to be done or any, material to be
supplied for the account of Landlord, all of the same to be solely for the
Tenant's risk and expense.  Throughout this Lease, the term "mechanic's lien" is
used to include any lien, encumbrance or charge levied or imposed upon the
Premises or the Building or any interest therein or income therefrom on account
of any mechanic's, laborer's or material man's lien or arising out of any, debt
or liability to or any materialman or laborer and shall include without
limitation any mechanic's notice of intention given to Landlord or Tenant, any
stop order given to Landlord or Tenant, any notice of refusal to pay naming
Landlord or Tenant and any injunctive or equitable action brought by any person
entitled to any mechanic's lien.

8.   Utilities and Services.
     ----------------------

8.1  Landlord shall furnish elevator service at all times so that there shall
always be at least one elevator subject to call.

8.2  Tenant shall at all times have access to the Premises subject to reasonable
miles and regulations.

8.3  Landlord shall furnish normal and reasonable janitorial services for the
common areas of the Building.  Tenant shall keep the interior of the premises in
good repair and shall furnish all janitorial service and supplies, painting.
replacement of incandescent Tenant's Initials florescent bulbs. interior window
washing, and other similar utilities, services rendered on or supplied in
connection with the Leased Premises.

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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8.4  Landlord shall cause the necessary mains, conduits, and other facilities to
be provided and maintained to supply cold water, and electrical current, sewage
drains and elevator service to the Building.  Any equipment, machinery, meters
or fixtures which may be installed by Tenant (at Tenant's sole expense) on or
about the Premises shall be in accordance with plans and specifications approved
by Landlord in writing prior to their installation.  Landlord shall furnish cold
water only for lavatory, drinking and office cleaning purposes without
additional charge.  All other utilities shall be metered to and be paid by
Tenant.

8.5  Tenant will furnish heat and air conditioning during the seasons of the
year when heat and air conditioning is required 24 hours  per day, 365 days per
year, as needed to protect Building Monday through Sunday.

8.6  Landlord reserves the right to interrupt, curtail or suspend any and all of
the services furnished pursuant to this paragraph when necessary by reason of
accident or emergency, or for repairs, alterations, replacements, or
improvements, as reasonably determined solely by Landlord.  On the event of such
interruption, Landlord shall restore such services with reasonable dispatch, but
shall have no responsibility or liability for such interruption; and there will
be no abatement of rent or suspension of any of Tenant's other covenants under
this Lease.

9.   Negative Covenants.
     ------------------

9.1  Tenant shall not, without Landlord's prior written consent, make
alterations, additions or improvements to Premises.

9.2  Tenant shall not, without the prior written consent of the Landlord,
mortgage, pledge or encumber this Lease.  This covenant shall be binding upon
the legal representatives of Tenant, and upon every person to whom Tenant's
interest under this Lease passes by operation of law.

9.3  Tenant shall not vacate nor abandon the Premises during the term of this
Lease except for temporary repairs or casualty.

9.4  Tenant shall not permit any equipment on the Premises which would exceed
the normal demands placed on the Building's electrical, water, heating, or air
conditioning systems. nor shall

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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Tenant permit any equipment which would exceed a maximum floor load of 80 pounds
per square foot.

10.  Insurance.
     ---------

     Landlord. at its sole expense, shall carry fire and extended coverage
insurance on the Building in such an amount as shall be necessary to comply with
the standard co-insurance clause and comprehensive general liability insurance
in a single limit amount of not less than $1,000,000 for any occurrence
resulting in personal injury, death or property damage in or about the Building
with insurance companies of Landlord's choice.  A copy of such policy shall be
fumished to Tenant.

     Tenant. at Tenant's sole cost and expense, shall maintain and keep in
effect throughout the term of this Lease, insurance with companies licensed to
do business in the state in which the Premises is located against loss or damage
to all improvements to and contents of the Premises by fire or such other
casualties as may be included in a standard all-risk insurance policy in an
amount equal to the full insurable value of the improvements and contents, which
policy shall name the Landlord as an additional insured as its interest may
appear and a copy of such policy shall be provided to the Landlord.  Each policy
shall also provide that it may not be canceled without first giving ten-day
advance written notice to the Landlord of cancellation.  Tenant shall also
provide and maintain comprehensive general liability insurance for bodily
injury, death, and property damage in or about the Premises with such limits as
may be reasonable required by Landlord from time to time but not less than a
single limit of $1,000,000 for each occurrence.

     In the event Tenant shall fail, refuse or neglect to obtain or to maintain
any insurance that it is required to provide, or to furnish Landlord with
satisfactory evidence of coverage within the time required, Landlord shall have
the right to purchase such insurance and charge Tenant as additional rent to
premiums paid by Landlord therefore.

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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11.  Indemnification of Landlord.

     Tenant will indemnify Landlord and save Landlord harmless from and against
any and all claims. actions, damages, liability and expense (including without
limitation fees of attorneys, investigators and experts) in connection with the
loss of life, personal injury or damage to property caused to any person in or
about the Premises or arising out of the occupancy or use by Tenant, its
employees, agents and invitees, of the Premises or any part thereof or
occasioned wholly or in part by any act or omission of Tenant, its agents,
contractors, employees, licensees or invitees; unless such loss, injury or
damage was caused by the negligence of Landlord, its agents, employees,
licensees or invitees.  Without limiting the foregoing, Tenant will forever
release and hold Landlord harmless from all claims arising out of damage to
Tenant's property.  In case any such claim, action or proceeding is brought
against Landlord. upon notice from Landlord and at Tenant's sole cost and
expense, Tenant shall resist or defend such claim, action or proceeding or shall
cause to be resisted or defended by its insurer.

12.  Waiver of Subrogation.
     ---------------------

     Landlord and Tenant hereby release each other to the extent of the
releasing party's insurance coverage, from any and all liability for any loss or
damage covered by such insurance which may be inflicted upon the property of
such party even if such loss or damage shall be brought about by the fault or
negligence of the other party, its agent or employees-, provided. however, that
this release shall be effective only with respect to loss or damage occurring
during such time as the appropriate policy of insurance shall contain a clause
to the effect that this release shall not affect such policy or the right of the
insured to recover thereunder. If any policy does not permit such a waiver, when
the party to benefit therefrom requests that such a waiver be obtained. the
other party agrees to obtain an endorsement to its insurance policies permitting
such waiver of subrogation if it is available.

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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13.  Landlord's Liability.
     --------------------

     Landlord shall not be responsible for any latent defect or change in the
condition of Premises or of the Building, or of any resulting damage to person
or property.  Landlord shall not be liable for loss to any property of Tenant as
a result of theft or misplacement unless as the result of a negligent act of
Landlord.  Landlord shall not be liable for any death, injury, loss or damage to
persons or property however caused unless due to the negligence or willful act
of Landlord.

14.  Fire.
     ----

14.1 If the Building is damaged by fire or any- other casualty to such extent
that (I) the cost of restoration, as reasonably estimated  by Landlord, will
equal or exceed thirty (30%) percent of the replacement value (exclusive of
foundation) of the Building immediately prior to the occurrence, or (II) if the
time necessary to restore the Building, as reasonably estimated by Landlord,
will exceed ninety (90) days, Landlord may, within thirty (30) days of such
occurrence of such damage, give notice to Tenant of Landlord's election to
terminate this Lease.  In the event of such election, the Lease shall terminate
on the third day after the give of said notice, and tenant shall surrender
possession of Premises as quickly as is practicable and the rent and all
additional rent shall be apportioned as of the date of such surrender and any
rent paid for any period beyond such date shall be repaid to Tenant.

14.2 If Landlord does not elect to terminate this Lease, Landlord shall restore
the Building and Premises with reasonable dispatch, subject to delays beyond
Landlord's control and delays in the making of insurance adjustments by
Landlord.  Landlord need not restore fixtures and improvements installed or
owned by Tenant.

14.3 In any case in which use of Premises is affected by any damage to the
Building, there shall be either an abatement or an equitable reduction in rent
depending on the time period and the extent to which Premises are not reasonably
usable for the purposes for which  they are leased hereunder.  If the damage
results from the fault of Tenant or Tenant's agents, servants, visitors',

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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or licensees, Tenant shall not be entitled to any abatement or reduction of
rent, except to any extent that Landlord receives the proceed of rent insurance
in lieu of such rent.

14.4 In no event shall Landlord's obligations to restore include fixtures,
improvements or other property of Tenant.

14.5 In case of any damage or destruction to the Premises or any contents
thereof, each party hereto shall look first to its own insurer before making any
claim against the other.

15.  Condemnation.
     ------------

15.1 Termination.

     If all of the Building is covered by a condemnation order or decree or, if
any portion of the Building including the Premises is covered by a condemnation
order or decree and, in Landlord's sole opinion, it would be impractical or the
condemnation proceeds are insufficient to restore the Building or the remainder
of the Premises; then, in any such event, this Lease shall terminate and all
obligations hereunder shall cease as of the date upon which possession is taken
by the condemnor and the Tenant to Landlord to that date and all rent prepaid
for periods beyond that date shall forthwith be repaid by Landlord to Tenant.

15.2 If there is a partial condemnation and Landlord has not exercised its right
to terminate on the date upon which the condemn shall have obtained possession,
the obligations of Landlord and Tenant under the Lease shall be unaffected by
such condemnation except that there shall be an equitable abatement for the
balance of the term of the base rent according to the value of the Premises
before and after the date upon which the condemnor shall have taken possession.
In the event that the parties are unable to agree upon the amount of such
abatement, either party may submit the issue to arbitration conducted in
accordance with the procedures, rules and regulations of the American
Arbitration Association, then in effect relating to commercial disputes.

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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15.3 Award.

     Tenant shall have no right to participate or share in any condemnation
claim, damage, award or settlement in lieu of thereof with respect to any taking
of any nature unless the amount of same is not subtracted from the award which
Landlord would otherwise be entitled to receive; provided however, that Tenant
shall not be precluded from claiming or receiving payment for Tenant's
relocation and moving expenses as may be permitted under applicable law so long
as the amount of same is not subtracted from the award which Landlord is
entitled to receive.

15.4 Temporary Taking.

     If the condemnor should take only the right to possession for a fixed
period of time or for the duration of an emergency or other temporary condition,
then, notwithstanding anything hereinabove provided, this Lease shall continue
in full force and effect without any abatement of rent, but the amounts payable
by the condemnor with respect to any period of time prior to the expiration or
sooner termination of the Lease shall be paid by the condemnor to Landlord and
the condemnor shall be paid by the condemnor to Landlord and the condemnor shall
be considered a subtenant of Tenant.  Landlord shall apply the amount received
from the condemnor applicable to the rent due hereunder net of costs to Landlord
for the collection thereof, or as much thereof as may be necessary for the
purpose, toward the amount due from Tenant as rent for that period; and, Tenant
shall pay to Landlord any deficiency between the amounts thus paid by the
condemnor and the amount of the rent, or Landlord shall pay to Tenant any excess
of the amount of the award over the amount of the rent.

16.  Subordination.
     -------------

     This Lease is subject and subordinate to all ground or underlying leases
and to all mortgages or deeds of trust which may now or hereafter affect such
leases, the Building. or site composed of the land on which the Building is
situated, and to all renewals, modifications, replacements and extensions
thereof.  The foregoing subordination provisions shall be self-operative and no
further instrument of subordination shall be required by any mortgagee or other
interest party; provided however, that in confirmation of such subordination
requested by

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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Landlord, Tenant hereby constitutes and appoints Landlord to Tenant's attorney
in fact to execute an), such subordination instrument on behalf of Tenant.

17.  Notices.
     -------

     Any notice by either party to the other shall be in writing and shall be
deemed to be duly given only if delivered personally or mailed by registered or
certified mail in a post-paid envelope addressed (a) if to Tenant, at Building,
and (b) if to Landlord, at Landlord's address first above set forth, or at such
other addresses as Tenant or Landlord, respectively, may designate in writing.

18.  Landlord's Right to Inspect and Repair.
     --------------------------------------

     Landlord and its agents, officers, employees, or licensees may enter
Premises at any reasonable time, on reasonable notice to Tenant (except that no
notice need be given in event of an emergency) for the purpose of inspecting or
the making of repairs, replacements and additions in, to, on and about Premises
or the Building.

19.  Landlord's Right to Show.
     ------------------------

     Landlord may show premises to prospective purchasers and mortgagees during
the term of this Lease and to prospective tenants in the last one (1)-year
period prior to termination of the Lease.

20.  Assignment.  Subleasing and Holding Over.
     ----------------------------------------

20.1 Tenant agrees that it will not transfer or assign this Lease, nor lease or
sublease the whole or any part of the Premises ,without the written consent of
Landlord.  Consent by Landlord to any assignment or sublease shall not be
unreasonably withheld, but no such assignment or sublease shall release Tenant
from liability hereunder except upon the express written agreement of the
Landlord.  Consent by, Landlord to any assignment or sublease must be in writing
executed by all parties.

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

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20.2 This Lease and all the terms, covenants, conditions, and provisions herein
contained shall be binding upon and shall ensure to the benefit of the parties
hereto and their representatives, heirs, successors, and assigns (if assigned in
accordance with the terms herein set out above).

20.3 If Tenant, or any person claiming through Tenant, shall continue to occupy
the Premises after the expiration or earlier termination of the term or any
renewal of this Lease, such occupancy shall be deemed to be under a month-to-
month tenancy under the same terms and conditions as set forth in this Lease,
except Lease shall be 120% the amount so indicated.  Furthermore, any holding
over without Landlord's prior written consent shall constitute a default
hereunder and shall be subject to all the remedies available to Landlord
hereunder.

21.  Quiet Enjoyment.
     ---------------

     Subject to the other terms of this Lease, Landlord covenants that Tenant,
upon performing all its obligations hereunder, shall have quiet and peaceable
possession of Premises during the term hereof.

22.  Default and Remedies.
     --------------------

     If Tenant shall:

     (a)  Fail to pay any installment of Base Rent, additional rent or any other
amount due and payable hereunder when due, whether or not such payment shall
have been demanded;

     (b)  Fail to perform or comply with any other condition or agreement
expressed or implied herein and fail to remedy such lack of compliance within 10
days after notice from Landlord of such default;

     (c)  Liquidate or cease to exist, admit insolvency, seek relief under any
law for relief of debtors, make any assignment for the benefit of creditors or
in the event of any like occurrence which, in the sole judgment of Landlord,
evidences the serious financial insecurity of the Tenant or if the estate of
Tenant created by this Lease shall be levied upon or taken by execution of
process of Law, then and in any of such cases regardless of any waiver or
consent to any earlier

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

                                       15
<PAGE>

event of remedies available to Landlord under applicable Law, all of such rights
and remedies being cumulative and non-exclusive, including without limitation
the following:

          (1)  Landlord may terminate this Lease upon giving Tenant five (5)
days' advance written notice of termination and this Lease shall terminate on
the date specified in such notice.  Tenant shall quit and surrender the Premises
by said date and shall remain liable as set forth below;

          (2)  Landlord may enter upon the Premises forthwith or at any
subsequent time without notice or demand (which notice or demand is hereby
expressly waived by Tenant) and thereby terminate the estate hereby created and
expel Tenant and those claiming under it and remove all of Tenant's property
therefrom without being guilty of any manner of trespass.  Tenant shall remain
liable as set forth below and Landlord shall not be liable or responsible for
any loss or damage to Tenant's property thereafter.

          (3)  In the event of termination of this Lease as provided above,
Tenant shall pay to Landlord as current liquidated damages the Base Rent, the
additional rent and all other amounts payable hereunder up to and including the
date of termination.  Landlord, at its sole option, may either (I) accelerate
the payment of all remaining Base Rent for the balance of the Lease term which
Tenant shall pay to Landlord upon demand or (II) permit Tenant to pay to
Landlord the Base Rent, additional rent and all additional amounts becoming due
and payable after the date of termination until the expiration of the lease
term, whether or not the Premises shall be relet and as and when due in
accordance with the provisions hereof, as if this Lease had remained in effect,
less the net proceeds to the Landlord of any reletting of such Premises, after
deducting all expenses in connection with such reletting, including without
limitation, all costs, fees and courts, repairing, cleaning, refurbishing and
remodeling the Premises for relenting.

          (4)  Nothing contained in this section shall be deemed to require the
Landlord to relet the Premises or to take any other action with regard to the
Premises.  Landlord shall not be liable for any failure to relet, collect rent,
or take any other action with regard to the Premises

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

                                       16
<PAGE>

after termination of this Lease. Tenant hereby waives any right of redemption
that it may at any time have by reason of Tenant's default or conviction
hereunder.

     (d)  Tenant further agrees that all personal property located in or about
the Premises shall be liable for rent, and for said damages, costs and any other
charges payable as rent, and for all costs of distress, watchmen's wages and or
officer's commission of 5% and in case any goods have been removed from the
Premises, Landlord may follow, take or return said goods to the Premises or
distrain on and sell the same wherever found, Tenant hereby waiving the benefit
of all laws made, or to be made, exempting property from levy or sale on a
judgment for said rent, damages, costs or any other charges payable as rent.

23.  Expenses of Enforcement.
     -----------------------

     The Tenant hereby agrees to pay all costs, expenses fees, and charges
incurred by the Landlord in enforcing by legal action or otherwise any of the
provisions covenants, and conditions of the Lease, including reasonable
attorney's fees.

24.  Memorandum of Lease and Certificate.
     -----------------------------------

     Either Landlord or Tenant, at any time and from time to time and within
five (5) days after receiving written request, shall execute, acknowledge and
deliver to the requesting party a short form or memorandum of this Lease for
recording purposes.

     Either Landlord or Tenant, at any time and from time to time and within
five (5) days after receiving written request shall execute, acknowledge and
deliver to the requesting party a written instrument in recordable form
certifying that this Lease is unmodified and in full force and effect (or, if
there have been modifications); certifying that Tenant has accepted possession
of the Premises, stating the date on which the term of the Lease commenced and
the dates to which minimum rent, additional rent and other charges have been
paid in advance, if any; stating that the best knowledge of the signer of such
instrument Landlord or Tenant is not in default of this Lease; stating any other
fact or certifying any other condition reasonably requested by Landlord or
Tenant or required by any mortgagee or prospective mortgagee or purchaser of the

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

                                       17
<PAGE>

Premises or any interest therein or by any assignee of Landlord's or Tenant's
interest in this Lease or by any assignee of any mortgage.  The foregoing
instrument shall be addressed to Landlord or Tenant and to any mortgagee,
prospective mortgagee, purchaser or other party specified by Landlord or Tenant.

25.  Rights Cumulative.
     -----------------

     All rights, powers, and privileges conferred hereunder upon parties hereto
shall be cumulative. but not restrictive to those given by law

26.  Title and paragraph Headings.
     ----------------------------

     The titles and paragraph headings used herein are for convenience only and
are not substantive in any way.

27.  Separability Clause.
     -------------------

     Should any provision of the Lease be or become void or unenforceable, the
remaining provisions thereof shall remain in full force and effect.

28.  Entire Agreement.
     ----------------

     This Lease contains the entire agreement between Landlord and Tenant
relating to the Premises and supersedes all prior and contemporaneous
negotiations, understandings and agreements, written or oral, between the
parties.  This Lease shall not be amended or modified except by written
instrument executed by both parties.

29.  No Representations.
     ------------------

     Neither party has made any representations or promises except as contained
herein or in some future writing signed by the party making such representation
or promise.

30.  Additional Sections.
     -------------------

     The following Additional Sections 1 through 2 attached hereto are hereby
made a part hereof.

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

                                       18
<PAGE>

     IN WITNESS the following signatures and seals:

                    Tenant:     SALEM BANK & TRUST, NATIONAL ASSOCIATION

                        By:   __________________________________________________

                      Date:   __________________________________________________

                  Landlord:   EAST MAIN PROPERTIES, L.L.C.

                        By:   __________________________________________________
                              David A. Thompson, Manager

                      Date:   __________________________________________________

STATE OF VIRGINIA

City OF Salem, TO-WIT:
----    -----

The foregoing Lease Agreement was acknowledged before me this 14/th/ day of
                                                              ------
March, 1997, by President, of Salem Bank and Trust, National Association.
                ---------

     My commission expires:  1-31-98
                             -------

                                   _____________________________________________
                                   Notary Public

STATE OF VIRGINIA

County OF Roanoke, TO-WIT:
------    -------

     The foregoing Lease Agreement was acknowledged before me this 19/th/ day of
                                                                   ------
March, 1997, by David A. Thompson, of East Main Health Investors, L. L.C.
-----           -----------------

     My commission expires:  May 31, 1999
                             ------------

                                   _____________________________________________
                                   Notary Public

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

                                       19
<PAGE>

RULES AND REGULATION REFERRED TO IN THE FOREGOING LEASE
-------------------------------------------------------

     1.   The sidewalks, entrances, passages, courts, elevators, vestibules.
stairways, corridors and public parts of the Building shall not be obstructed or
encumbered by Tenant or used by Tenant for any purpose other than ingress and
egress to and from the Premises.

     2.   No awnings, air conditioning units or other projections shall be
attached to the outside walls or windowsills of the Building or otherwise
project from the Building, without the prior written consent of Landlord.

     3.   Windows in the Premises shall not be covered or obstructed by Tenant,
nor shall any bottles, parcels or other articles be placed on the windowsills or
in the halls or in any other part of the Building, nor shall any article be
thrown out of the doors or windows of the Premises.

     4.   Tenant shall not alter the floor covering of the Premises without the
prior written consent of Landlord.

     5.   Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or interfere with other tenants or those having business with
them.

     6.   Tenant shall, upon the termination of this tenancy, deliver to
Landlord all keys to any space within the Building, either furnished to, or
otherwise procured by, Tenant, and in the event of the loss of any keys so
furnished, Tenant shall pay to Landlord the cost of replacement.

     7.   The carrying in or out of freight, furniture or bulky matter of any
description must take place during such hours as Landlord may from time to time
reasonably determine.  The installation and moving of such freight, furniture or
bulky matter shall be made upon previous notice to the superintendent of the
Building and the persons employed by Tenant for such work must be reasonably
acceptable to Landlord.  Tenant may, subject to the provisions of the
immediately preceding sentence, move freight, furniture, bulky matter and other
material into or out of the premises provided Tenant pays the additional costs,
if any, incurred by Landlord for elevator operators, security guards and other
expenses arising by reason of such move by Tenant if-, at least two (2) days
prior to such move, Landlord requests that Tenant deposit with

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

                                       20
<PAGE>

Landlord, as security for Tenant's obligation to pay such additional costs, a
sum which Landlord reasonably estimates to be the amount of such additional
costs, then Tenant shall deposit such sum with Landlord as security for such
costs.

     8.   Landlord reserves the right to prescribe the weight and position of
all safes and other heavy equipment so as to distribute properly the weight
thereof and to prevent any unsafe condition from business machines and other
equipment shall be placed and maintained by Tenant at Tenant's expense in
settings sufficient in Landlord's reasonable judgment to absorb and prevent
unreasonable vibration, noise and annoyance.

     9.   Venetian blinds shall be used on all windows.  All curtains, blinds,
shades screen and other fixtures must be of a quality, type, design and color,
and attached in a manner approved by Landlord.

     10.  Premises shall not be defaced in any way.  No nails shall be driven,
no screws inserted, there shall be no boring or cutting for wires, and no
changes in electric fixtures or other appurtenances of the Premise, without the
prior written consent of the Landlord, which consent shall not be unreasonably
withheld.

     11.  For the general welfare of all tenants and the overall security of the
Building, Landlord may require all persons entering and/or leaving the Building
at times other than normal business hours to register with the Building
attendant or other employees of Landlord,, who may deny entry during such hours
to any person who fails satisfactorily to identify himself.

     12.  No bicycles or vehicles of any kind shall be brought into or kept
about the Premises or Common Area of the Building (except for any garage that
may be a part of the Building).

                                                     Tenant's Initials _________
                                                   Landlord's Initials _________

                                       21<PAGE>

                                                            Lease - EXHIBIT 10.8

                                LEASE AGREEMENT

     This LEASE AGREEMENT is made and entered into this 1/st/ day of December,
                                                        -----        --------
1999, between VIRGINIA LUTHERAN HOMES, INC., a Virginia corporation, hereinafter
called "Landlord", party of the first part, and SALEM BANK AND TRUST, N.A., a
national banking association, hereinafter called "Tenant", party of the second
part.

                                  WITNESSETH:

     That the Landlord hereby lets and demises unto Tenant and Tenant hereby
takes and holds from the Landlord, as Tenant, the following described space in
the Brandon Oaks retirement community, hereinafter called "Community", located
on 3804 Brandon Avenue, SW, Roanoke, Virginia 24018-1499: approximately 317
square feet of floor space being further shown on Exhibit "A" hereto and
hereinafter referred to as the "Demised Premises". The Demised Premises are to
be used by Tenant for the purpose of operating a branch bank.

     1.   Term.  The Lease Agreement for the Demised Premises shall be for the
          -----
term commencing on April 1, 2000 and ending five (5) years thereafter (the
"Initial Term"). Provided the Tenant is not in default under the Lease
Agreement, Tenant shall have the option to extend the Lease Term for two
additional five-year terms ("Option Terms"). Tenant shall exercise its option,
in writing, if at all, no later than six months prior to the expiration of the
Initial Term for the first Option Term and no later than six months prior to the
expiration of the first Option Term for the second Option Term. If Tenant does
not provide notice of its intention to exercise its option within such time
periods, the Lease Agreement shall terminate upon expiration of the then current
term. Should the Tenant not have its banking facility open for business by April
3, 2000, the lease shall be terminated provided that the delay is caused by the
Tenant and not the Landlord.

     2.   Regulatory Approval. Commencement of this Lease is subject to Tenant's
          --------------------
receipt of authority to establish a branch bank at the Community from the Office
of the Comptroller of
<PAGE>

the Currency. In the event of a conflict between the terms and conditions of
this Lease Agreement and federal and state banking laws and regulations, the
federal provisions will prevail.

     3.   Basic Annual Rent.  Tenant hereby agrees to pay in the Initial Term
          ------------------
basic annual rent for the Demised Premises at the rate of Nineteen Thousand Two
Hundred Dollars per year or Sixteen Hundred Dollars per month. Basic annual rent
during the first Option Term, if any, shall be agreed upon prior to the
Commencement Date of the first Option Term and shall be at the then current
market rate, not to exceed the rate of inflation as determined by the consumer
price index during the prior five year lease period. Basic annual rent during
the second Option Term, if any, shall be agreed upon prior to the Commencement
Date of the second Option Term and shall be at the then current market rate, not
to exceed the rate of inflation as determined by the consumer price index during
the prior five year lease period. Should the parties fail to agree upon a then
current market rate, the Tenant shall have the option to cancel any further
Option Term even if the additional term has been requested in writing. In the
event that the Commencement Date occurs on a day other than the first day of a
calendar month, the monthly rent for the month during which the Commencement
Date occurs shall be paid on the Commencement Date and shall be prorated on the
basis of the actual number of days in said month. In the event that the Lease
Agreement expires or terminates on a day other than the last day of a calendar
month, the monthly rent for the month during which expiration or termination
occurs shall be prorated on the basis of the actual number of days in said
month.

     4.   Use and Occupancy of the Demised Premises.
          ------------------------------------------

          (a)  Tenant hereby agrees to use and occupy the Demised Premises for
the purposes of a banking office to be operated in a careful and proper manner.
Tenant will be the only financial institution who is permitted to operate a
banking office at the Community during the period this Agreement is in effect.
Products and services to be supplied by Tenant or its business partner include,
but are not limited to: check cashing; opening and servicing of checking,
statement savings, NOW and market rate accounts; savings certificates; U. S.
Savings Bonds; U. S.

                                       2
<PAGE>

Treasury Securities; Travelers Cheques; official bank checks and money orders;
checkbook reconciliation; wire transfers; direct deposit services; financial
counseling; and estate planning.

          (b)  Tenant will provide safe deposit boxes at the Community site.

          (c)  Tenant will insure its accounts through the Federal Deposit
Insurance Corporation ("FDIC") to the maximum limits established by the FDIC
(presently 1 00,000) or such greater limits as required by law.

          (d)  All services provided by Tenant are for the primary use of the
Community residents and staff. Tenant may make its services known and available
to all residents, staff and family members of residents and staff of the
Community. Tenant may disseminate information on the banking services offered by
the Tenant to the residents and staff of the Community in a manner which is
agreeable to the Landlord. Landlord shall be reasonable in considering its
agreement to Tenant's dissemination of information on banking services. Except
for the notational reference to the branch bank in lists of the banking offices
of Tenant as specifically follows, "Brandon Oaks" (a controlled access
retirement community facility), 3804 Brandon Avenue, S.W., Roanoke, Virginia
24018-1499, advertising of the branch bank by Tenant outside of the Community
without the prior consent of Landlord is prohibited.

          (e)  The branch bank will be operated by a full time branch manager
from 9:00 a.m. to 2:00 p.m. Monday through Friday and for such additional or
different hours as the Landlord and Tenant shall mutually agree.

          (f)  Tenant will conform to and obey all laws and ordinances and all
rules, regulations, requirements and orders of all municipal, county, state or
federal authorities or agencies, respecting the use and occupancy of the Demised
Premises.  Tenant will obtain all required permits and licenses incident to its
use of the Demised Premises and pay any taxes and fees resulting from such use.

          (g)  Tenant will, at its own expense, recruit, employ, train and
properly supervise all employees necessary for the smooth and efficient
operation of the branch bank.

                                       3
<PAGE>

          (h)  All employees of Tenant will wear appropriate business dress
and/or identification and, when on the Community premises, will conduct
themselves in a manner consistent with the standards, quality and image of the
Community.

          (i)  The Tenant shall not use, or permit the use of, the Demised
Premises in a manner that is unlawful; or knowingly in contravention of the
Certificate of Occupancy for the Community; or which, in the reasonable judgment
of Landlord, may in any way impair or interfere with the operation of the
Community, occasion discomfort, inconvenience or annoyance to any of the
residents of the Community, or impair the appearance of the Community.

          (j)  Tenant will keep, observe and conform with all Community Policies
and Rules and Regulations which reasonably apply to Tenant.

     5.   Tenant's Improvements,
          ---------------------

          (a)  With the Landlord's written approval, which shall not be
unreasonably withheld, the Tenant may, at its sole expense, make such additional
improvements to the Demised Premises as it may consider necessary for its use
thereof including installation of equipment such as a vault, 24 hour automated
teller machine (ATM), and safe deposit boxes, such improvements and equipment
installations, however, to be subject to the further provisions of this Section
3.

          (b)  Not less than sixty (60) days prior to April 1, 2000, Tenant will
supply Landlord with working drawings detailing the interior decorating scheme
and/or any improvements and equipment installations that Tenant intends to
effect prior to occupancy of the Demised Premises.  Thereafter, Landlord shall
have thirty (30) days within which to give or withhold its consent to the
proposed decorating scheme and/or improvements and equipment installations, such
consent not to be unnecessarily withheld.

          (c)  Prior to the Lease Commencement Date, Landlord shall permit
Tenant access to the building for the purpose of installing any improvements,
furnishings, fixtures or equipment.

                                       4
<PAGE>

          (d)  At the expiration or termination of this Lease Agreement, Tenant
shall return the Demised Premises to the Landlord and shall not remove any
additions, improvements or alterations, including but not limited to,
partitions, doorways, carpeting, wall covering, lighting fixtures, decorative
trim or millwork, and built-in counters, bookcases, closets or other cabinet
work, which thereupon become the property of Landlord.  Notwithstanding anything
to the contrary contained herein, Tenant shall be entitled to remove, at the
termination of this Lease Agreement all moveable furniture and equipment
provided by Tenant and, Tenant's security equipment; safe and safe deposit boxes
so long as such items are removed in a workmanlike manner and the Demised
Premises are returned to Landlord with normal wear and tear expected.

     6.   Services.
          --------

          (a)  The Landlord covenants and agrees, without additional cost or
expense
 to Tenant, to provide the following:

               (i)   Heating and air conditioning in reasonable quantities for
the normal use of the Demised Premises.

                                       6

               (ii)  All maintenance and janitorial services to the Demised
Premises.

               (iii) Reasonable ventilation within the Demised Premises. (iv)
Electricity for normal office use.

               (v)   Reasonable structural building repairs within the Demised
Premises except (i) reasonable repairs necessitated by negligence or willful act
of Tenant or its employees and (ii) repairs to any improvements, additions or
alterations installed by Tenant.

               (vi)  Payment of all bills for water, electricity and heat used
in the Demised Premises.

               (vii) Payment of the real estate taxes, if any, on the Community
building, including the Demised Premises.  Tenant will pay as additional rent
any taxes which may be assessed against the Landlord or the Tenant as a result
of this Lease Agreement.

                                       5
<PAGE>

               (viii) Removal of snow and ice from the parking lot, driveways,
entrances, walkways and sidewalks adjacent to the building and maintenance of
all paved areas, lawns, shrubs and landscaping within or adjacent to the
building.

     7.   Insurance.
          ---------

          (a)  Tenant will provide and maintain at all times and at its own
expense:

               (i)  Workers' Compensation insurance including employers
liability that complies with the workers' compensation laws applicable to the
Tenant and all employees working for the Tenant.

               (ii) Comprehensive general liability insurance, including
products and contractual liability, for bodily injury or property damage with a
combined single limit of not less than $1,000,000.00 per occurrence. Such
insurance shall name Landlord as additional insured.

     8.   Indemnification. Tenant covenants and agrees that throughout the
          ----------------
Initial Term of this Lease agreement and any Option Term thereof it will
protect, indemnify, defend and hold harmless Landlord and it officers,
directors, agents, employees, affiliated companies, successors and/or assigns
from and against any and all claims, actions, liability, suits, demands,
damages, judgments and all other expenses, including attorney's fees, in
connection with its use of the premises as a branch bank in the Demised Premises
conducted by Tenant with the exception of losses caused by the negligence or
willful misconduct of Landlord, it agents and employees.

     9.   Assignment. Tenant will not transfer or assign this Lease Agreement,
          -----------
nor let or sublet the whole or any part of said Demised Premises, nor permit the
Demised Premises to be used by others without the prior written consent of the
Landlord, which shall not be unreasonably refused.

     10.  Access to Demised Premises. Tenant will allow Landlord or its agents
          ---------------------------
to have access to the Demised Premises at any reasonable time for the purpose of
inspection, or in the event of fire or other property damage, or for the purpose
of making any repairs Landlord

                                       6
<PAGE>

considers necessary or desirable, or for any other purposes for the reasonable
protection of the Demised Premises or of the building of which they are a part.

     11.  Damage Notice. Tenant will give Landlord prompt notice of any defects
          --------------
or breakage in the structure of fixtures of said Demised Premises.

     12.  Fire and Casualty Damage.
          -------------------------

          (a)  If the Demised Premises are damaged by fire or other casualty,
Tenant shall give immediate written notice thereof to Landlord.

          (b)  If the Demised Premises should be totally destroyed by fire or
other casualty, or if they should be so damaged that rebuilding or repairs
cannot be completed within one hundred eighty (180) days after the date upon
which Landlord is notified by Tenant of such damage, this Lease Agreement shall
terminate and the rent shall be abated during the unexpired portion of this
Lease Agreement, effective upon the date of the occurrence of such damage.

          (c)  If the Demised Premises should be damaged by fire or other
casualty, but only to such extent that rebuilding or repairs can be completed
within one hundred eighty days after the date upon which Landlord is notified by
Tenant of such damage, this Lease Agreement shall not terminate, but Landlord
shall, at its expense, proceed with reasonable diligence to rebuild and repair
Demised Premises to substantially the condition in which they existed prior to
such damage.  If the Demised Premises are untenable in whole or in part
following such damage, the rent payable hereunder during the period in which
they are untenable shall be reduced to such extent as may be fair and reasonable
under all the circumstances.  However, notwithstanding the foregoing, there
shall be no adjustment of rent if such fire or other casualty shall have been
caused by the negligence or improper conduct of Tenant or its officers, agents
or employees.  In the event that Landlord shall fail to complete such repairs
and rebuilding within one hundred eighty (180) days after the date upon which
Landlord is notified by Tenant of such damage, Tenant may at its option
terminate this Lease Agreement by delivering written notice of termination to
Landlord as Tenant's exclusive remedy, whereupon all rights and obligations
hereunder shall cease.

                                       7
<PAGE>

     13.  Condemnation.  If the whole or any part of the Demised Premises shall
          -------------
be taken in any eminent domain, condemnation, compulsory acquisition or similar
proceeding by any competent authority for any public or quasi-public use or
purpose with the result that it is unreasonable to continue to operate the
Demised Premises as a branch bank, this Lease Agreement shall terminate from the
date of possession of the part so taken.

     14.  Landlord's Remedies in the Event of Default.  If Tenant shall fail to
          -------------------------------------------
pay any rent to Landlord when such rent is due and payable under the terms of
this Lease, and such default shall continue for a period of fifteen (I 5) days
after written notice thereof has been given to Tenant by Landlord, or if Tenant
shall fail to perform any other duty or obligation imposed upon him by the terms
of this Lease, and such default shall continue for a period of thirty (30) days
after written notice of such default has been given to Tenant by Landlord, or if
Tenant shall be adjudged bankrupt, or make a general assignment for the benefit
of its creditors, or if a receiver of any property of Tenant in or upon the
Demised Premises be appointed in any action, suit, or proceeding by or against
Tenant and such appointment shall not be vacated or annulled within sixty (60)
days, or if the interest of Tenant in the Demised Premises shall be sold under
execution or other legal process, then, and in any such event, Landlord shall
have, in addition to any other rights and remedies to which he may be entitled,
the right to enter upon the Demised Premises and again have, repossess and enjoy
the same as if this Lease had not been made, and thereupon this Lease shall
terminate without prejudice, however, to the right of Landlord to recover from
Tenant all rent due under this Lease. The Tenant shall also be obligated to pay
reasonable attorney's fees and costs as well as interest on any unpaid
installment of rent. In the event of any such default and re-entry, Landlord
shall endeavor to re-let the Demised Premises for the remainder of the then
existing term whether such term be the initial term or any renewed or extended
term.

     15.  Quiet enjoyment. The Landlord covenants and agrees that Tenant, on
          ---------------
performing all of the covenants and agreements herein contained, shall
peacefully and quietly, have, hold and enjoy the Demised Premises for the
term(s) aforesaid.  Tenant agrees to keep said Demised

                                       8
<PAGE>

Premises in good order and condition and surrender same at the expiration or
other termination of the Lease Agreement, to remove all goods and effects from
the Demised Premises not the property of the Landlord, and to yield up to the
Landlord the Demised Premises, and all keys, locks, and other attached
improvements connected therewith, in the same order in which they were received,
ordinary wear and tear excepted.

     16.  Notice.  All notices will be in writing and sent by registered or
          ------
certified mail, addressed as follows:

          To Tenant:     President
                         Salem Bank and Trust, NA
                         P. 0. Box 979
                         Salem, Va 24153

          To Landlord:   Virginia Lutheran Homes, Inc.
                         Attn: Executive Officer
                         3804 Brandon Avenue
                         Roanoke, Virginia 24018

                         Osterhoudt, Ferguson, Natt, Aheron & Agee
                         Attn: Edward A. Natt, Esquire
                         P. 0. Box 20068
                         Roanoke, Virginia 24018

or to such other persons or places as either party may from time to time
designate by notice.

     17.  Successors and Assigns.  It is mutually agreed that the covenants,
          ----------------------
conditions and agreements herein contained are alike binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, administrators, successors and/or assigns.

     18.  Force Majeure. If, because of acts of God, civil disturbance,
          -------------
governmental action, strikes or other labor disputes, vendor delays, or other
unavoidable cause, either party is unable to perform its obligations hereunder,
such non-performance shall not be considered a breach of the Agreement.

     19.  Equal Opportunity Employer.  Tenant affirms that it is an Equal
          --------------------------

                                       9
<PAGE>

Opportunity Employer and will comply with all laws and regulations prohibiting
employment discrimination in the performance of the Agreement.

     20.  Waiver, The failure of either party to insist upon a strict
          ------
performance of any of terms or provisions of this Lease Agreement, or to
exercise any option, right or remedy herein contained, shall not be construed as
waiver or as a relinquishment for the future of such term, provision, option,
right or remedy, but the same shall continue and remain in full force and
effect.  No waiver by either party of any term or provision hereof shall be
deemed to have been made unless expressed in writing and signed by such party.

     21.  Partial Invalidity, This Agreement shall be construed in accordance
          ------------------
with the laws of the Commonwealth of Virginia.  If any portion of this Lease
Agreement shall be declared invalid by order, decree or judgment of a court, the
Lease Agreement shall be construed as if such portion had not been inserted
herein except when such construction would operate as an undue hardship on
Landlord or Tenant or constitute a substantial deviation from the general intent
and purpose of said parties as reflected in the Lease Agreement.

     22.  Subordination.  This Agreement and the term and estate hereby granted
          -------------
are and shall be subject and subordinate to any underlying leases, mortgages or
deeds of trust which now or may hereafter affect the real property of which the
Demised Premises form a part; and the Tenant shall execute and deliver, upon the
demand of Landlord, or its successors in interest, any and all instruments as
required subordinating, in the manner requested by Landlord, this Agreement to
such lease, mortgage or deed of trust. The Tenant shall permit Landlord, any
landlord under any of the underlying leases, any mortgages under any of the
underlying mortgages and any trustees under any of the underlying deeds of
trust, and their representatives, to enter the Premises at such hours as shall
not unreasonably interfere with the Tenant's business, for the purpose of
inspection and permit them or any of their agents or contractors so to enter for
the purpose of complying with any law, order or requirement of any governmental
authority or insurance body, or exercising any right reserved to Landlord
hereunder.  Notwithstanding

                                       10
<PAGE>

anything to the contrary contained herein, so long as Tenant is not in default,
Tenant's rights under this Lease Agreement shall not be affected by such
subordination.

     23.  Recording and Short Form Lease. Tenant agrees not to record this Lease
          ------------------------------
without the express prior written consent of Landlord and further agrees that
any recording thereof in violation of this provision shall make this Lease null
and void at Landlord's election.  Further, Tenant agrees to execute, acknowledge
and deliver at any time after the date of this Lease, at the request of
Landlord, a "Short Form Lease" suitable for recording.  All recording costs,
fees or charges due and payable upon the recording of such Short Form Lease
(including, without limitation, any and all taxes due or collectible upon such
recording) shall be payable in full by the party recording the same.

     24.  Community Alterations.  In the event during the term this Lease
          ---------------------
Agreement is in effect structural alterations, renovation, remodeling or
construction within the Community is to take place affecting the Demised
Premises to the extent that bank operations may no longer be conducted feasibly,
Landlord agrees to use its best efforts to relocate the Demised Premises to a
comparable location within the Community. In the event that an agreement of such
relocation cannot be accomplished, either party may terminate this Lease
Agreement.

     25.  Parking.  The Tenant agrees that it will not permit any of its
          -------
officers or employees to park automobiles any place upon the Premise of the
Community except in those areas specifically designated from time to time by
Landlord.

     26.  Use of Community Facilities by Tenant.  Tenant's employees shall have
          -------------------------------------
access to restrooms and dining facilities.  Tenant shall also have access to
meeting rooms for programs and providing banking services to residents, staff
and family members of residents and staff.

     27.  Signs. Tenant will not permit any sign, advertisements, or notices to
          -----
be displayed, inscribed upon, or affixed on any part of the outside of the
Community buildings except with the written approval of the Landlord which shall
not be unreasonably withheld.  On the interior of the Community, signs
identifying the Demised Premises shall be permitted by the Landlord.

                                       11
<PAGE>

     28.  No Partnership.  The undertakings, covenants, obligations and
          --------------
agreements of the parties hereto shall in no way be construed as forming nor
shall this Agreement be considered to have formed in any way a joint venture or
partnership between the parties hereto, which relationship shall always remain
that of Landlord and Tenant.

     29.  Entire Agreement.  This Agreement constitutes the entire agreement
          ----------------
between Landlord and Tenant. Any amendment or modification of the Agreement must
1 5 be in writing and signed by Landlord and Tenant.

     IN WITNESS WHEREOF, the authorized representatives of the parties hereto
have executed this Lease Agreement the day and year first above written.

Witness:                                VIRGINIA LUTHERAN HOMES, INC.

___________________________             By:_______________________________
                                        Title:

Witness:                                SALEM BANK AND TRUST, N. A.

___________________________             By:_______________________________
                                        Title:

DRAFT: November 8, 1999

                                       12

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