Exhibit No. 10.1

 

INDEMNIFICATION AGREEMENT

 

This Agreement is made as of July [ ], 2004 (“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
                     , residing at
                                                (“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:

 

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.

 

INDEMNIFICATION.

 

(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,

 

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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.

 

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

 

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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.

 

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.

 

EXPENSES; INDEMNIFICATION PROCEDURE.

 

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.

 

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.

 

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.

 

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.

 

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

 

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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.

 

ADDITIONAL INDEMNIFICATION RIGHTS; NON-EXCLUSIVITY.

 

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.

 

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.

 

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.

 

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.

 

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

 

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INDEMNIFICATION TO A COURT IN CERTAIN CIRCUMSTANCES FOR A DETERMINATION OF THE
COMPANY’S RIGHT UNDER PUBLIC POLICY TO INDEMNIFY INDEMNITEE.

 

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.

 

EXCEPTIONS. ANY OTHER PROVISION HEREIN TO THE CONTRARY NOTWITHSTANDING, UNITY
SHALL NOT BE OBLIGATED PURSUANT TO THE TERMS OF THIS AGREEMENT:

 

EXCLUDED ACTION OR OMISSIONS. TO INDEMNIFY INDEMNITEE FOR ACTS, OMISSIONS OR
TRANSACTIONS FROM WHICH INDEMNITEE MAY NOT BE RELIEVED OF LIABILITY UNDER
APPLICABLE LAW;

 

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

 

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.

 

CONSTRUCTION OF CERTAIN PHRASES.

 

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.

 

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

 

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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.

 

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.

 

COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH
OF WHICH SHALL CONSTITUTE AN ORIGINAL.

 

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.

 

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.

 

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.

 

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.

 

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

 

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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.

 

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.

 

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.

 

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.

 

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.

 

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

 

 

 

 

 

UNITY BANK

 

By

 

 

 

 

 

 

 

INDEMNITEE:

 

 

 

 

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