FORM OF
INDEMNIFICATION AGREEMENT
This Agreement is made as of _______________________, (“Agreement”), by and
among Unity Bancorp, Inc. a New Jersey corporation, with principal offices at 64
Old Highway 22, Clinton, New Jersey 08809, (the “Company”), Unity Bank, a New
Jersey bank and a wholly-owned subsidiary of the Company (the “Bank”) and
____________________ (“Indemnitee”).
W I T N E S S E T H:
WHEREAS, highly competent persons are becoming more reluctant to serve
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their service
to and activities on behalf of the corporation; and
WHEREAS, the current difficulties attendant to obtaining adequate insurance and
the uncertainties relating to indemnification have increased the difficulty of
attracting and retaining such persons;
WHEREAS, the Board of Directors of the Company and the Bank has determined that
any inability to attract and retain such persons is detrimental to the best
interests of the Company's stockholders and that the Company and the Bank should
act to assure such persons that there will be increased certainty of such
protection in the future; and
WHEREAS, it is reasonable, prudent and necessary for the Company and the Bank
contractually to obligate themselves to indemnify such persons to the fullest
extent permitted by applicable law so that they will serve or continue to serve
the Company or the Bank, or both, as the case may be, free from undue concern
that they will not be so indemnified; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company or the Bank, or both, as the
case may be, on the condition that he be so indemnified;
NOW, THEREFORE, in consideration of the premises and the covenants contained
herein, the Company, the Bank and Indemnitee do hereby covenant and agree as
follows:
Section 1.Services by Indemnitee. Indemnitee agrees to serve as a director of
the Company and the Bank. Indemnitee may at any time and for any reason resign
from such positions (subject to any other contractual obligation or any
obligation imposed by operation of law), in which event neither the Company nor
the Bank shall have any obligation under this Agreement to continue Indemnitee
in such positions.

Section 2.Indemnification.

(a)(i) Indemnification - Proceedings Other Than Proceedings by or in the Right
of the Company. The Company and the Bank, jointly and severally (collectively,
with respect to their joint and several obligations hereunder, “Unity”), shall
indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was or
is or becomes a party to or witness or other participant in, or is threatened to
be made a party to or witness or other participant in, any threatened, pending
or completed action, suit, proceeding (other than an action by or in the right
of the Company or the Bank) or alternative dispute resolution mechanism, or any
hearing, inquiry or investigation that Indemnitee in good faith believes might
lead to the institution of any such action, suit, proceeding or alternative
dispute resolution mechanism, whether civil, criminal, administrative,
investigative or other (hereinafter, a “Claim”) by reason of (or arising in part
out of) any event or occurrence related to the fact that Indemnitee is or was a
director, officer, employee, agent or fiduciary of the Company or the Bank, as
the case may be, or any subsidiary of the Company, or is or was serving at the
request of the Company or the Bank as a director, officer, employee, agent or
fiduciary of another corporation, partnership, joint venture, trust or other
enterprise (service in any of such capacities, the Indemnitee’s “Corporate
Status”), or by reason of any action or inaction on the part of Indemnitee while
serving in any such capacity (hereinafter, an “Indemnifiable Event”) against any
and all expenses (including attorneys' fees) and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, be
a witness in or participate in, any such action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation, judgments,
fines, penalties and amounts paid in settlement of such Claim and any federal,
state, local or foreign taxes imposed on the Indemnitee as a result of the
actual or deemed receipt of any payments under this Agreement (collectively,
“Expenses”), including all interest, assessments and other charges paid or
payable in connection with or in respect of such Expenses, if, in connection
with such Claim, he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the Company or the Bank, and
with respect to any criminal Claim, had no reasonable cause to believe his
conduct was

--------------------------------------------------------------------------------

unlawful. Such payment of Expenses shall be made by Unity as soon as practicable
but in any event no later than 30 days after written demand by Indemnitee
therefor is presented to Unity.
(ii) Indemnification - Proceedings by or in the Right of the Company or the
Bank. Indemnitee shall be entitled to the rights of indemnification provided in
this Section 1(a)(ii) if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to or participant with respect to any Claim
brought by or in the right of Unity. Pursuant to this Section 1(b)(ii),
Indemnitee shall be indemnified against all Expenses actually and reasonably
incurred by him, or on his behalf, in connection with such Claim, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of Unity; provided, however, that no indemnification against such
Expenses shall be made in respect of any Claim (or any issue or matter therein)
as to which Indemnitee shall have been adjudged to be liable to Unity unless and
only to the extent that the court in which such Claim was brought shall
determine upon application that, despite the adjudication of liability, but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such Expenses as such court shall deem proper.
(b)Reviewing Party. Notwithstanding the foregoing: (i) the obligations of the
Unity under Paragraph (a) of this Section 2 shall be subject to the condition
that the Reviewing Party (as described in Paragraph (c) of Section 10 hereof)
shall not have determined that Indemnitee would not be permitted to be
indemnified under applicable law, and (ii) the obligation of Unity to make an
advance payment of Expenses to Indemnitee pursuant to Paragraph (a) of Section 3
hereof (an “Expense Advance”) shall be subject to the condition that, if, when
and to the extent that the Reviewing Party determines that Indemnitee would not
be permitted to be so indemnified under applicable law, Unity shall be entitled
to be reimbursed by Indemnitee (who hereby agrees to reimburse Unity) for all
such amounts theretofore paid; provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified
under applicable law, any determination made by the Reviewing Party that
Indemnitee would not be permitted to be indemnified under applicable law shall
not be binding and Indemnitee shall not be required to reimburse Unity for any
Expense Advance until a final judicial determination is made with respect
thereto (as to which all rights of appeal therefrom have been exhausted or
lapsed). If there has been no determination by the Reviewing Party or if the
Reviewing Party determines that Indemnitee substantively would not be permitted
to be indemnified in whole or in part under applicable law, Indemnitee shall
have the right to commence litigation seeking an initial determination by the
court or challenging any such determination by the Reviewing Party or any aspect
thereof, including the legal or factual bases therefor, and each of the Company
and the Bank hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on Unity and Indemnitee.

(c)Mandatory Payment of Expenses. Notwithstanding any other provision of this
Agreement, other than Section 10 hereof, to the extent that Indemnitee has been
successful on the merits or otherwise, including, without limitation, the
dismissal of an action without prejudice, in defense of any action, suit,
proceeding, inquiry or investigation referred to in Section (2)(a) hereof or in
the defense of any claim, issue or matter therein, Indemnitee shall be
indemnified against all Expenses incurred by Indemnitee in connection therewith.

Section 3.Expenses; Indemnification Procedure.

(a)Advancement of Expenses. Unity shall advance all Expenses incurred by
Indemnitee. The advances to be made hereunder shall be paid by Unity to
Indemnitee as soon as practicable but in any event no later than ten business
days after written demand by Indemnitee therefor to Unity.

(b)Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent
to Indemnitee's right to be indemnified under this Agreement, give Unity notice
in writing as soon as practicable of any Claim made against Indemnitee for which
indemnification will or could be sought under this Agreement. Notice to Unity
shall be directed to the Corporate Secretary of the Company at the address shown
above (or such other address as the Company shall designate in writing to
Indemnitee). In addition, Indemnitee shall give Unity such information and
cooperation as it may reasonably require and as shall be within Indemnitee's
power.

(c)No Presumptions; Burden of Proof. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, by judgment, order,
settlement (whether with or without court approval) or conviction, or upon a
plea of nolo contendere, or its equivalent, shall not create a presumption that
Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the failure of the Reviewing
Party to have made a determination as to whether Indemnitee has met any
particular standard of conduct or had any particular belief, nor an actual
determination by the Reviewing Party that Indemnitee has not met such standard
of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee
should be indemnified under applicable law, shall be a defense to Indemnitee's
claim or create a presumption that Indemnitee has not met any particular
standard of conduct or did not have any particular belief. In connection

--------------------------------------------------------------------------------

with any determination by the Reviewing Party or otherwise as to whether the
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be
on Unity to establish that Indemnitee is not so entitled.

(d)Notice to Insurers. If, at the time of the receipt by Unity of a notice of a
Claim pursuant to Paragraph (b) of Section 3 hereof, Unity has liability
insurance in effect which may cover such Claim, Unity shall give prompt notice
of the commencement of such Claim to the insurers in accordance with the
procedures set forth in the respective policies. Unity shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the
Indemnitee, all amounts payable as a result of such action, suit, proceeding,
inquiry or investigation in accordance with the terms of such policies.

(e)Selection of Counsel. In the event that Unity shall be obligated hereunder to
pay the Expenses of any action, suit, proceeding, inquiry or investigation,
Unity, if appropriate, shall be entitled to assume the defense of such action,
suit, proceeding, inquiry or investigation with counsel approved by Indemnitee
(which approval shall not be unreasonably withheld), upon the delivery to
Indemnitee of written notice of its election so to do. After delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by Unity, Unity will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with respect to the same
action, suit, proceeding, inquiry or investigation; provided that: (i)
Indemnitee shall have the right to employ Indemnitee's counsel in any such
action, suit, proceeding, inquiry or investigation at Indemnitee's expense and
(ii) if (A) the employment of counsel by Indemnitee has been previously
authorized by Unity, (B) Indemnitee shall have reasonably concluded that there
may be a conflict of interest between Unity and Indemnitee in the conduct of any
such defense, or (C) Unity shall not continue to retain such counsel to defend
such action, suit, proceeding, inquiry or investigation, then the fees and
expenses of Indemnitee's counsel shall be at the expense of Unity.

(f)    Repayment of Expense Advance.    In addition to the requirements set
forth in Section 2(b)(ii) hereof, in the event a court of competent jurisdiction
shall determine in a final judicial determination (as to which all rights of
appeal therefrom have been exhausted or lapsed) that Indemnitee would not be
permitted to be so indemnified under applicable law, Unity shall be entitled to
be reimbursed by Indemnitee (who hereby agrees to reimburse Unity) for all such
amounts theretofore paid hereunder.
Section 4.Additional Indemnification Rights; Non-exclusivity.

(a)Scope. Unity hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company's Certificate
of Incorporation, the Company's By-laws, the Bank’s certificate of
incorporation, the Bank’s By-laws, or by statute. In the event of any change
after the date of this Agreement in any applicable law, statute or rule which
expands the right of a New Jersey corporation or a New Jersey bank to indemnify
a member of its board of directors or an officer, employee, agent or fiduciary,
it is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a New
Jersey corporation or a New Jersey bank to indemnify a member of its board of
directors or an officer, employee, agent or fiduciary, such change, to the
extent not otherwise required by such law, statute or rule to be applied to this
Agreement, shall have no effect on this Agreement or the parties' rights and
obligations hereunder.

(b)Non-exclusivity. The indemnification provided by this Agreement shall be in
addition to any rights to which Indemnitee may be entitled under the Company's
Certificate of Incorporation or its By-laws, the Bank’s Certificate of
Incorporation or its By-laws, any agreement, any vote of shareholders, the New
Jersey Business Corporation Act, the Banking Act of 1948, as amended, or
otherwise. The indemnification provided under this Agreement shall continue as
to Indemnitee for any action taken or not taken while serving in an indemnified
capacity even though Indemnitee may have ceased to serve in such capacity.

Section 5.No Duplication of Payments. Unity shall not be liable under this
Agreement to make any payment in connection with any action, suit, proceeding,
inquiry or investigation made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy, Certificate of
Incorporation, By-laws or otherwise) of the amounts otherwise indemnifiable
hereunder.

Section 6.Partial Indemnification. If Indemnitee is entitled under any provision
of this Agreement to indemnification by Unity for some or a portion of Expenses
in the investigation, defense, appeal or settlement of any civil or criminal
action, suit, proceeding, inquiry or investigation, but not, however, for all of
the total amount thereof, Unity shall nevertheless indemnify Indemnitee for the
portion of such Expenses to which Indemnitee is entitled.

Section 7.Mutual Acknowledgment. Each of the Company, the Bank and Indemnitee
acknowledges that in certain instances, federal law or applicable public policy
may prohibit the Company or the Bank, or both, from indemnifying their
respective directors, officers, employees, agents or fiduciaries under this
Agreement or otherwise. Indemnitee understands and acknowledges

--------------------------------------------------------------------------------

that the Company has undertaken or may be required in the future to undertake
with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee. Further, the
obligations of the Company and the Bank hereunder are subject to any limitations
on indemnification provided for under Part 359 of the regulations of the Federal
Deposit Insurance Corporation, 12 C.F.R. 359 et. seq.

Section 8.Liability Insurance. To the extent that Unity maintains liability
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of Unity’s directors.

Section 9.Exceptions. Any other provision herein to the contrary
notwithstanding, Unity shall not be obligated pursuant to the terms of this
Agreement:

(a)Excluded Action or Omissions. To indemnify Indemnitee for acts, omissions or
transactions from which Indemnitee may not be relieved of liability under
applicable law;

(b)Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except (i) with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Certificate of Incorporation or By-laws, or the Bank’s Certificate of
Incorporation or By-laws, now or hereafter in effect relating to Claims for
Indemnifiable Events, (ii) in specific cases if the Board of Directors of the
Company or the Bank has approved the initiation or bringing of such suit, or
(iii) as otherwise required under Section 14A:3-5 of the New Jersey Business
Corporation Act, or Section 250 of the Banking Act of 1948, as amended,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be; or

(c)Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by the
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that
each of the material assertions made by the Indemnitee in such proceeding was
not made in good faith or was frivolous.

Section 10.Construction of Certain Phrases.

(a)For purposes of this Agreement, references to the “Company” and the “Bank”
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees,
agents or fiduciaries, so that if Indemnitee is or was a director, officer,
employee, agent or fiduciary of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, Indemnitee shall stand in the
same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

(b)For purposes of this Agreement, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and
references to “serving at the request of the Company or the Bank” shall include
any service as a director, officer, employee, agent or fiduciary of the Company
or the Bank which imposes duties on, or involves services by, such director,
officer, employee, agent or fiduciary with respect to an employee benefit plan,
its participants or its beneficiaries; and if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan, Indemnitee shall be
deemed to have acted in a manner “not opposed to the best interests of the
Company or the Bank” as referred to in this Agreement.

(c)For purposes of this Agreement, a “Reviewing Party” shall mean any
appropriate person or body consisting of a member or members of the Company's
and/or the Bank’s Board of Directors or any other person or body appointed by
such Board of Directors who is not a party to the particular Claim for which
Indemnitee is seeking indemnification, or Independent Legal Counsel.

--------------------------------------------------------------------------------

Section 11.Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

Section 12.Binding Effect; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of Unity, spouses, heirs, and
personal and legal representatives. This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as a director of the Company
or the Bank or of any other enterprise at the Company's or the Bank’s request.

Section 13.Attorneys' Fees. In the event that any action is instituted by
Indemnitee under this Agreement or under any liability insurance policies
maintained by Unity to enforce or interpret any of the terms hereof or thereof,
Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with
respect to such action, regardless of whether Indemnitee is ultimately
successful in such action, and shall be entitled to the advancement of Expenses
with respect to such action, unless as a part of such action the court of
competent jurisdiction over such action determines that each of the material
assertions made by Indemnitee as a basis for such action were not made in good
faith or were frivolous. In the event of an action instituted by or in the name
of the Company or the Bank under this Agreement to enforce or interpret any of
the terms of this Agreement, Indemnitee shall be entitled to be paid all
Expenses incurred by Indemnitee in defense of such action (including costs and
expenses incurred with respect to Indemnitee's counterclaims and cross-claims
made in such action), and shall be entitled to the advancement of Expenses with
respect to such action, unless as a part of such action the court having
jurisdiction over such action determines that each of Indemnitee's material
defenses to such action were made in bad faith or were frivolous.

Section 14.Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by domestic certified or registered mail with postage
prepaid, on the third business day after the date postmarked. Addresses for
notice to either party are as first hereinabove set forth in this Agreement, or
as subsequently modified by written notice.

Section 15.Consent to Jurisdiction. Each of the Company, the Bank and Indemnitee
hereby irrevocably consent to the jurisdiction of the courts of the State of New
Jersey for all purposes in connection with any action or proceeding which arises
out of or relates to this Agreement and agree that any action instituted under
this Agreement shall be commenced, prosecuted and continued only in the Superior
Court of the State of New Jersey in and for Hunterdon County, which shall be the
exclusive and only proper forum for adjudicating such a claim.

Section 16.Severability. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

Section 17.Choice of Law. This Agreement shall be governed by and its provisions
construed and enforced in accordance with the laws of the State of New Jersey,
as applied to contracts between New Jersey residents, entered into and to be
performed entirely within the State of New Jersey, without regard to the
conflict of laws principles thereof.

Section 18.Subrogation. In the event of payment under this Agreement, the
Company, the Bank or both, as the case may be, shall be subrogated to the extent
of such payment to all of the rights of recovery of Indemnitee, who shall
execute all documents required and shall do all acts that may be necessary to
secure such rights and to enable Unity effectively to bring suit to enforce such
rights.

Section 19.Amendment and Termination. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 20.Integration and Entire Agreement. This Agreement sets forth the
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

--------------------------------------------------------------------------------

Section 21.No Construction as Employment Agreement. Nothing contained in this
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries including, without
limitation, the Bank.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
ATTEST:                        UNITY BANCORP, INC.
______________________________            By______________________________            
                
INDEMNITEE:                         UNITY BANK
______________________________            By______________________________