Document:

Blueprint

 

Exhibit 10.3

 

ESCROW AGREEMENT

 

PARTIES:

 

FORMER SHAREHOLDERS

OF NEW JERSEY COMMUNITY BANK,

a New
Jersey state commercial bank (the “Shareholders”),

 

1ST CONSTITUTION BANCORP

a New
Jersey corporation and registered bank holding company
(“1st
Constitution”), and

 

[ESCROW AGENT], as Escrow Agent (the “Escrow Agent”)

 

DATE: [DATE], 2018

 

BACKGROUND

 

WHEREAS, the Shareholders are former
shareholders of New Jersey Community Bank (“NJCB”) that did not perfect their
dissenters’ rights under Section 17:9A-140 of the New Jersey
Banking Act of 1948, as amended, in connection with the merger (the
“Merger”) of
NJCB with and into 1st Constitution Bank, a New Jersey state
commercial bank and the wholly-owned banking subsidiary of 1st
Constitution (the “Bank”), contemplated by the
Agreement and Plan of Merger, dated as of November 6, 2017 (the
“Merger
Agreement”), by and among 1st Constitution, the Bank
and NJCB;

 

WHEREAS, [SHAREHOLDER REPRESENTATIVE] is
serving as the representative of the Shareholders (including its
successors, the “Shareholder
Representative”);

 

WHEREAS, in accordance with Sections 1.4
and 1.17 of the Merger Agreement, the sum of $400,773.45 (including
any interest or other earnings thereon, the “Escrowed Funds”) is to be
delivered to the Escrow Agent;

 

WHEREAS, pursuant to the Merger
Agreement, the Escrowed Funds will be delivered to the Escrow Agent
by 1st Constitution immediately upon the consummation of the Merger
and shall be held in an escrow account (the “Escrow Account”) pursuant to the
terms and conditions set forth herein; and

 

WHEREAS, capitalized terms not otherwise
defined herein shall have the meanings ascribed thereto in the
Merger Agreement.

 

NOW, THEREFORE, the parties hereto agree
as follows:

 

1.           Escrow
Account.  1st
Constitution shall deliver, or cause to be delivered, to the Escrow
Agent the Escrowed Funds immediately upon the consummation of the
Merger.  The Escrow Agent shall hold the Escrowed Funds in an
account pursuant to the provisions of this Escrow
Agreement.

 

 

 

 

 

 

2.           
Management of
the Escrow Funds; Permitted Investment. Pending distribution
of the Escrowed Funds in accordance with the terms and conditions
hereof, the Escrow Agent shall invest the Escrowed Funds in
accordance with the instructions set forth on Appendix A attached hereto or
in such other investment as is directed in a joint written
direction to the Escrow Agent from 1st Constitution and the
Shareholder Representative. The Escrow Agent shall not invest the
Escrowed Funds in any investment that would require the Escrow
Agent to pay a penalty for early withdrawal to pay a disbursement
of the Escrowed Funds. Interest earned on the Escrowed Funds shall
be maintained in the Escrow Account and made a part of the Escrowed
Funds.

 

3.           Reservations
of Escrowed Funds. 

 

(a)           In
the event that at any time, or from time to time, after the
Effective Time of the Merger, 1st Constitution incurs any losses,
liabilities, costs, expenses, judgments, settlement amounts,
assessments, penalties, damages, deficiencies, suits, actions,
claims, proceedings, demands, and causes of action, including, but
not limited, to reasonable attorney fees, court costs, and related
expenses (each, a “Claim” and collectively, the
“Claims”) as a
result of or in connection with that certain litigation matter
captioned Robert O’Donnell v. New Jersey Community Bank,
Shelly LoCascio, Andrew Harris (Docket No. MON-L-4711-15) or the
settlement thereof (“Litigation Matter”) which is not
subject to reimbursement by Continental Insurance Company of New
Jersey (“CNA”)
or, if subject to reimbursement, not actually reimbursed by CNA,
1st Constitution shall provide prompt written notice thereof to the
Shareholder Representative (“Indemnification Notice”). 
Each request for indemnification made pursuant to an
Indemnification Notice is referred to herein as an
“Indemnification
Matter.”

 

(b)           Each
Indemnification Notice shall set forth (i) a description of the
Claim or Claims relating to the Indemnification Matter for which
indemnification is sought pursuant to the Indemnification Notice,
and (ii) an accounting by 1st Constitution of the aggregate dollar
amount of losses incurred as a result of such Claim or
Claims.

 

(c)           There
is no limit on the number or timing of Indemnification Notices that
may be delivered by 1st Constitution.

 

(d)           Whenever
1st Constitution provides an Indemnification Notice to the
Shareholder Representative, it shall send a copy thereof to the
Escrow Agent.  Promptly after receipt of an Indemnification
Notice, the Escrow Agent shall reserve on its records an amount
equal to the losses set forth in the Indemnification Notice
(“Reserved
Funds”). 

 

4.           Distributions
of Escrowed Funds.  The Escrow Agent shall
distribute the Escrowed Funds in accordance with one or more of the
following provisions, as applicable:

 

 

 

2

 

 

(a)           If
the Shareholder Representative objects to any Claim set forth in an
Indemnification Notice, it shall notify the Escrow Agent and 1st
Constitution in writing of its objection (“Objection Notice”), including the
basis for such objection and the amount of the Claim in controversy
(“Disputed
Amount”), within five (5) business days after the
date upon which the Indemnification Notice is delivered to the
Shareholder Representative.

 

(b)           If
the Escrow Agent receives a timely Objection Notice, (i) the
Escrow Agent shall promptly distribute to 1st Constitution the
amount by which the amount of the Claim set forth in the
Indemnification Notice exceeds the Disputed Amount, and
(ii) 1st Constitution and the Shareholders Representative
shall cooperate in good faith to resolve the Disputed Amount. 
Any Indemnification Matter that is not resolved by 1st Constitution
and the Shareholder Representative within thirty (30) days after
the date upon which the Objection Notice is delivered to 1st
Constitution shall be resolved by binding arbitration in accordance
with the rules and regulations of the American Arbitration
Association.

 

(c)           Unless
the Escrow Agent receives an Objection Notice within five
(5) business days after the date upon which the
Indemnification Notice is delivered to the Shareholder
Representative, the Escrow Agent shall promptly distribute to 1st
Constitution the amount of the Claim set forth in such
Indemnification Notice.

 

(d)           The
Escrow Agent shall distribute the Escrowed Funds at such time and
in such manner as is set forth in (i) this Section 4, (ii) any
written agreement or written instructions signed by both 1st
Constitution and the Shareholder Representative and delivered to
the Escrow Agent, (iii) the final decision of an arbitrator in
connection with the arbitration of an Indemnification Matter in
accordance with Section 4(b) of this Agreement, or
(iv) the order of any court of competent
jurisdiction.

 

(e)           Immediately
upon the later of (i) the date upon which the Litigation
Matter is resolved completely by written settlement agreement or
judgment, and all appeals have been made, heard and finally decided
and/or all applicable time periods for appeals have expired (the
“Termination
Date”), 1st Constitution and the Shareholder
Representative shall deliver joint written notice to the Escrow
Agent of the occurrence of the Termination Date (the
“Termination
Notice”).  If, upon receipt of the Termination
Notice, there are no Indemnification Matters outstanding, then
within five (5) business days after receipt of the Termination
Notice (the “Payment
Date”), the Escrow Agent shall distribute to the
Shareholder Representative all remaining Escrowed Funds for prompt
distribution by the Shareholder Representative to the
Shareholders.

 

(f)           If
there are Indemnification Matters outstanding when the Escrow Agent
receives the Termination Notice, then (i) on the Payment Date,
the Escrow Agent shall distribute to the Shareholders any Escrowed
Funds, other than Reserved Funds, in accordance with the
Shareholder Representative’s written instructions as provided
to the Escrow Agent, (ii) as each such outstanding
Indemnification Matter is finally resolved, the Escrow Agent shall
distribute to 1st Constitution any Escrowed Funds to which 1st
Constitution is then entitled as a result of such resolved
Indemnification Matter in accordance with 1st Constitution’s
written instructions as provided to the Escrow Agent, and
(iii) within five (5) business days after the last of
such outstanding Indemnification Matters is resolved and any
corresponding distributions to 1st Constitution are made, the
Escrow Agent shall distribute any remaining Escrowed Funds to the
Shareholder Representative for prompt distribution by the
Shareholder Representative to the Shareholders.

 

 

 

3

 

 

(g)           The
Escrowed Funds shall be the sole source of all distributions or
other payments made by Escrow Agent under this Agreement. 
Notwithstanding anything in this Agreement to the contrary, the
Escrow Agent shall not be obligated to make any distributions or
other payments under this Agreement to the extent that such
distributions or other payments exceed the Escrowed
Funds.

 

5.           Resignation
and Removal of Escrow Agent.  The Escrow Agent may resign at
any time or be removed by the mutual consent of 1st Constitution
and the Shareholder Representative upon notice given at least 30
days before the effective date of such resignation or removal;
provided that no resignation or removal of the Escrow Agent and no
appointment of a successor Escrow Agent shall be effective unless
and until the successor Escrow Agent accepts its appointment as
Escrow Agent in accordance with this Section 5.  If the
Escrow Agent resigns or is removed but 1st Constitution and the
Shareholder Representative fail to agree upon a successor Escrow
Agent within 30 days after they receive notice of such resignation
or removal, then 1st Constitution shall have the right to appoint a
successor Escrow Agent which shall be a commercial bank or trust
company having a combined capital and surplus of at least
$50,000,000.  Any successor Escrow Agent, whether appointed by
the mutual agreement of 1st Constitution and the Shareholder
Representative or otherwise, shall execute and deliver to the
predecessor Escrow Agent an instrument accepting such appointment,
and thereupon such successor Escrow Agent shall, without further
act, become vested with all the estates, properties, rights, powers
and duties of the predecessor Escrow Agent as if originally named
herein.

 

6.           Liability
of Escrow Agent; Expenses.  The Escrow Agent shall have no
liability or obligation hereunder except for its willful
misconduct, bad faith or gross negligence.  The Escrow Agent
may rely upon any instrument, not only as to its due execution,
validity and effectiveness, but also as to the truth and accuracy
of any information contained therein, which the Escrow Agent shall
in good faith believe to be genuine, to have been signed or
presented by the person or persons purporting to sign the same, and
to conform to the provisions of this Agreement.  The Escrow
Agent may consult legal counsel selected by it in the event of any
dispute or question of the construction of any of the provisions
hereof or of the Merger Agreement or of its duties hereunder, and
shall incur no liability and shall be fully protected in acting in
accordance with the opinion or instruction of such counsel. 
The fees and expenses of the Escrow Agent charged and incurred in
performing its obligations hereunder shall be paid from the
Escrowed Funds.  Escrow Agent shall be entitled to
compensation for its services as stated in the fee schedule
attached hereto as Appendix B, which such
compensation shall be paid out of the Escrowed Funds.  The fee
agreed upon for the services rendered hereunder is intended as full
compensation for Escrow Agent’s services as contemplated by
this Agreement.

 

 7.           Indemnification
of Escrow Agent.  1st Constitution and the
Shareholders (but only to the extent of the Escrowed Funds),
jointly and severally, hereby indemnify and hold harmless Escrow
Agent from and against any and all loss, liability, cost, damage
and expense, including, without limitation, reasonable
attorney’s fees, which Escrow Agent may suffer or incur by
reason of any action, claim or proceeding brought against Escrow
Agent arising out of or relating in any way to this Agreement or
any transaction to which this Agreement relates, unless such
action, claim or proceeding is the result of the willful
misconduct, bad faith or gross negligence of Escrow
Agent.

 

 

 

4

 

 

8.           Notices. 
All notices, consents or other communications required or permitted
to be given under this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or one
business day after being sent by a nationally recognized overnight
delivery service, or three business days after being sent by
registered or certified mail, return receipt requested, in each
case postage or delivery charges prepaid.  Notices may also be
given by facsimile and shall be effective on the date
transmitted.  Notices to 1st Constitution shall be sent to its
address stated in Section 9.4 of the Merger Agreement to the
attention of Robert F. Mangano, Chief Executive Officer. 
Notices to the Shareholders and the Shareholder Representative
shall be sent to the Shareholder Representative at the following
address: [ADDRESS].  Notices to the Escrow Agent shall be sent
to the following address: [ADDRESS]. 

 

9.           Governing
Law.  THIS AGREEMENT
SHALL BE GOVERNED BY AND INTERPRETED UNDER THE LAWS OF THE STATE OF
NEW JERSEY.

 

10.        
Binding
Effect.  This
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, executors,
administrators, successors and assigns.

 

11.        
Counterparts. 
This Agreement may be executed in counterparts, each of which will
be deemed an original and all of which together shall constitute
one and the same instrument.

 

12.        
Entire
Agreement. 
This Agreement sets forth the entire understanding of the parties
hereto with respect to the subject matter hereof and cannot be
changed, modified or terminated except by written
amendment.

 

 Witness the
due execution and delivery of this Agreement as of the date first
stated above.

 

	

ON BEHALF OF SHAREHOLDERS:

 

 

	
 

	

ESCROW AGENT:

 

	

By:

	
 

	
 

	

By:

	
 

	
 

	

Name:

	
 

	
 

	

Name:

	
 

	

Title:
Shareholder Representative

 

	
 

	
 

	

Title:

	

1ST CONSTITUTION BANCORP:

 

 

	
 

	
 

	

By: 

	
 

	
 

	
 

	
 

	
 

	

Name:
Robert F. Mangano

	
 

	
 

	
 

	
 

	

Title:
President and CEO

	
 

	
 

	
 

 

 

 

5

 

 

Appendix A

 (Investment
Direction)

 

The
investment direction is to invest all Escrowed Funds in a
non-interest bearing demand deposit account at 1st Constitution
Bank.

 

 

6

 

 

Appendix B

 (Escrow
Agent Fee Schedule)

 

 

 

 

 

 7Blueprint

 

Exhibit 10.4

 

AMENDED AND RESTATED INDEMNIFICATION AGREEMENT

 

This
Amended and Restated Indemnification Agreement (this
“Agreement”), dated
as of [●], 2018, is by and between New Jersey Community Bank,
a commercial bank formed under the laws of New Jersey (“the
“Company”), and
[______________] (“Indemnitee”).

 

WHEREAS, Indemnitee
is a director and/or an officer of the Company;

 

WHEREAS, both the
Company and Indemnitee recognize the increased risk of litigation
and other claims being asserted against directors and officers of
commercial banks;

 

WHEREAS, the board
of directors of the Company (the “Board”) has
determined that enhancing the ability of the Company to retain and
attract as directors and officers the most capable persons is in
the best interests of the Company and that the Company therefore
should seek to assure such persons that indemnification is
available; and

 

WHEREAS, in
recognition of the need to provide Indemnitee with substantial
protection against personal liability, in order to procure
Indemnitee’s continued service as a director and/or officer
of the Company and to enhance Indemnitee’s ability to serve
the Company in an effective manner, and in order to provide such
protection pursuant to express contract rights (intended to be
enforceable irrespective of, among other things, any amendment to
the Company’s certificate of incorporation or bylaws
(collectively, the “Constituent
Documents”), any change in the composition of the
Board or any change in control or business combination transaction
relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of, and the advancement of
Expenses (as defined in Section 1(d) below) to, Indemnitee
as set forth in this Agreement; and

 

 WHEREAS, this
Agreement replaces the Indemnification Agreement between the
Company and the Indemnitee (the “Original Agreement”),
which is amended and restated effective as of the date of the
Original Agreement as if the Original Agreement had always been
this Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing and the Indemnitee's
agreement to continue to provide services to the Company, the
parties agree as follows:

 

1.            
Definitions. For
purposes of this Agreement, the following terms shall have the
following meanings:

 

(a)            

“Claim” means any
proceeding, threatened or contemplated civil, criminal,
administrative or arbitration action, suit or proceeding and any
appeal therein and any inquiry or investigation which could lead to
such action, suit or proceeding.

 

(b)            

“New Jersey Court” shall have
the meaning ascribed to it in Section 9(e) below.

 

 

 

 

 

(c)            

“Disinterested
Director” means a director of the Company who is not
and was not a party to the Claim in respect of which
indemnification is sought by Indemnitee.

 

(d)            

“Expenses” means
any and all reasonable expenses, including attorneys’ and
experts’ fees, court costs, transcript costs, travel
expenses, duplicating, printing and binding costs, telephone
charges, and all other reasonable costs and expenses incurred in
connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be
a witness or participate in, any Claim. Expenses also shall include
(i) Expenses reasonably incurred in connection with any appeal
resulting from any Claim, including without limitation the premium,
security for, and other costs relating to any cost bond, supersedes
bond, or other appeal bond or its equivalent, and (ii) for purposes
of Section 5 only, Expenses reasonably incurred by Indemnitee
in connection with the interpretation, enforcement or defense of
Indemnitee’s rights under this Agreement, by litigation or
otherwise. Expenses, however, shall not include amounts paid in
settlement by Indemnitee or the amount of judgments or fines
against Indemnitee. All Expenses included in a demand by Indemnitee
hereunder must be certified by affidavit of Indemnitee’s
counsel as being reasonable.

 

(e)            

“Expense Advance”
means any payment of Expenses advanced to Indemnitee by the Company
pursuant to Section 4
or Section 5
hereof.

 

(f)            

“Indemnifiable
Event” means any event or occurrence, whether
occurring on or after the effective date of this Agreement, related
to the fact that Indemnitee is or was a director, officer, employee
or agent of the Company or any subsidiary of the Company, or is or
was serving at the request of the Company as a director, officer,
employee, member, manager, trustee or agent of any other
corporation, limited liability company, partnership, joint venture,
trust or other entity or enterprise (collectively with the Company,
“Enterprise”) or by
reason of an action or inaction by Indemnitee in any such capacity
(whether or not serving in such capacity at the time any Loss is
incurred for which indemnification can be provided under this
Agreement).

 

(g)            

“Independent
Counsel” means a law firm, or a member of a law firm,
that is experienced in matters of corporation and banking law and
neither presently performs, nor in the past five years has
performed, services for either: (i) the Company or Indemnitee
(other than in connection with matters concerning Indemnitee under
this Agreement or of other indemnitees under similar agreements) or
(ii) any other party to the Claim giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Agreement.

 

(h)            

“Losses” means any
and all Expenses, damages, losses, liabilities, judgments, fines,
penalties (whether civil, criminal or other), ERISA excise taxes,
amounts paid or payable in settlement, including any interest,
assessments, and all other charges paid or payable in connection
with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, be a witness or
participate in, any Claim.

 

 

2

 

 

 

(i)            

“Person” means any
individual, corporation, firm, partnership, joint venture, limited
liability company, estate, trust, business association,
organization, governmental entity or other entity and includes the
meaning set forth in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).

 

(j)            

“Standard of Conduct
Determination” shall have the meaning ascribed to it
in Section 9(b)
below.

 

(k)            

“Voting Securities”
means any securities of the Company that vote generally in the
election of directors.

 

2.            
Employment. This
Agreement shall not be deemed an employment agreement between the
Company (or any of its subsidiaries or Enterprise) and Indemnitee.
Indemnitee specifically acknowledges that his or her employment
with or service to the Company or any of its subsidiaries or
Enterprise is at will and the Indemnitee may be discharged at any
time for any reason, with or without cause, except as may be
otherwise provided in any written employment agreement between
Indemnitee and the Company (or any of its subsidiaries or
Enterprise), other applicable formal severance policies duly
adopted by the Board or, with respect to service as a director or
officer of the Company, by the Company's Constituent Documents or
New Jersey law. This Agreement shall continue in force after
Indemnitee has ceased to serve as a director or officer of the
Company or, at the request of the Company, of any of its
subsidiaries or Enterprise, as provided in Section 12 hereof.

 

3.            
Indemnification.
Subject to Section 9
and Section 10 of this
Agreement, the Company shall indemnify Indemnitee, to the fullest
extent permitted by the laws of the State of New Jersey and
applicable federal law in effect on the date hereof, or as such
laws may from time to time hereafter be amended to increase the
scope of such permitted indemnification, against any and all Losses
if Indemnitee was or is or becomes a party to or participant in, or
is threatened to be made a party to or participant in, any Claim by
reason of or arising in part out of an Indemnifiable Event,
including, without limitation, Claims brought by or in the right of
the Company, Claims brought by third parties, and Claims in which
the Indemnitee is solely a witness.

 

4.            
Advancement of
Expenses. Indemnitee shall have the right to advancement by
the Company, prior to the final disposition of any Claim by final
adjudication to which there are no further rights of appeal, of any
and all Expenses actually and reasonably paid or incurred by
Indemnitee in connection with any Claim arising out of an
Indemnifiable Event. Indemnitee’s right to such advancement
is not subject to the satisfaction of any standard of conduct.
Without limiting the generality or effect of the foregoing, within
120 days after any written request by Indemnitee to the Board, the
Company shall, in accordance with such request, (a) pay such
Expenses on behalf of Indemnitee, (b) advance to Indemnitee
funds in an amount sufficient to pay such Expenses, or
(c) reimburse Indemnitee for such Expenses. In connection with
any request for Expense Advances, Indemnitee shall not be required
to provide any documentation or information to the extent that the
provision thereof would undermine or otherwise jeopardize
attorney-client privilege. In connection with any request for
Expense Advances, Indemnitee shall execute and deliver to the
Company an undertaking in form reasonably satisfactory to the Board
to repay any amounts paid, advanced, or reimbursed by the Company
for such Expenses to the extent that it is ultimately determined,
following the final disposition of such Claim, that Indemnitee is
not entitled to indemnification hereunder. Indemnitee’s
obligation to reimburse the Company for Expense Advances shall be
unsecured and no interest shall be charged thereon.

 

 

3

 

 

 

5.            
Indemnification for
Expenses in Enforcing Rights. To the fullest extent
allowable under applicable law, the Company shall also indemnify
against, and, if requested by Indemnitee, shall advance to
Indemnitee subject to and in accordance with Section 4, any Expenses actually
and reasonably paid or incurred by Indemnitee in connection with
any action or proceeding by Indemnitee for (a) indemnification
or reimbursement or advance payment of Expenses by the Company
under any provision of this Agreement, or under any other agreement
or provision of the Constituent Documents now or hereafter in
effect relating to Claims relating to Indemnifiable Events, and/or
(b) recovery under any directors' and officers' liability
insurance policies maintained by the Company. However, in the event
that Indemnitee is ultimately determined not to be entitled to such
indemnification or insurance recovery, as the case may be, then all
amounts advanced under this Section 5 shall be repaid.
Indemnitee shall be required to reimburse the Company in the event
that a final judicial determination is made that such action
brought by Indemnitee was frivolous or not made in good
faith.

 

6.            
Partial Indemnity.
If Indemnitee is entitled under any provision of this Agreement to
indemnification by the Company for a portion of any Losses in
respect of a Claim related to an Indemnifiable Event but not for
the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion thereof to which Indemnitee is
entitled.

 

7.            
Notification and Defense
of Claims.

 

(a)           Notification
of Claims. Indemnitee shall notify the Company in writing as
soon as practicable of any Claim which could relate to an
Indemnifiable Event or for which Indemnitee could seek Expense
Advances, including a brief description (based upon information
then available to Indemnitee) of the nature of, and the facts
underlying, such Claim. The failure by Indemnitee to timely notify
the Company hereunder shall not relieve the Company from any
liability hereunder unless the Company's ability to participate in
the defense of such claim was materially and adversely affected by
such failure, except that the Company shall not be liable to
indemnify Indemnitee under this Agreement with respect to any
judicial award in a Claim related to an Indemnifiable Event if the
Company was not given a reasonable and timely opportunity to
participate at its expense in the defense of such action. If at the
time of the receipt of such notice, the Company has directors' and
officers' liability insurance in effect under which coverage for
Claims related to Indemnifiable Events is potentially available,
the Company shall give prompt written notice to the applicable
insurers in accordance with the procedures set forth in the
applicable policies. The Company shall provide to Indemnitee a copy
of such notice delivered to the applicable insurers, and copies of
all subsequent correspondence between the Company and such insurers
regarding the Claim, in each case substantially concurrently with
the delivery or receipt thereof by the Company.

 

 

4

 

 

(b)           Defense
of Claims. The Company shall be entitled to participate in
the defense of any Claim relating to an Indemnifiable Event at its
own expense and, except as otherwise provided below, to the extent
the Company so wishes, it may assume the defense thereof with
counsel reasonably satisfactory to Indemnitee. After notice from
the Company to Indemnitee of its election to assume the defense of
any such Claim, the Company shall not be liable to Indemnitee under
this Agreement or otherwise for any Expenses subsequently directly
incurred by Indemnitee in connection with Indemnitee’s
defense of such Claim other than reasonable costs of investigation
or as otherwise provided below. Indemnitee shall have the right to
employ its own legal counsel in such Claim, but all Expenses
related to such counsel incurred after notice from the Company of
its assumption of the defense shall be at Indemnitee’s own
expense; provided, however, that if (i) Indemnitee’s
employment of its own legal counsel has been authorized by the
Company, (ii) Indemnitee has reasonably determined that there may
be a conflict of interest between Indemnitee and the Company in the
defense of such Claim, or (iii) the Company shall not in fact
have employed counsel to assume the defense of such Claim, then
Indemnitee shall be entitled to retain its own separate counsel
(but not more than one law firm plus, if applicable, local counsel
in respect of any such Claim) and all Expenses related to such
separate counsel shall be borne by the Company.

 

8.           Procedure
upon Application for Indemnification. In order to obtain
indemnification pursuant to this Agreement, Indemnitee shall submit
to the Company a written request therefor, including in such
request such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification following the final disposition of the Claim.
Indemnification shall be made insofar as the Company determines
Indemnitee is entitled to indemnification in accordance with
Section 9
below.

 

9.           Determination
of Right to Indemnification.

 

(a)           Mandatory
Indemnification; Indemnification as a Witness.

 

(i) 

To the extent that
Indemnitee shall have been successful on the merits or otherwise in
defense of any Claim relating to an Indemnifiable Event, including,
without limitation, dismissal without prejudice, Indemnitee shall
be indemnified against all Losses relating to such Claim in
accordance with Section 3 to the fullest extent
allowable by law.

 

(ii) 

To the extent that
Indemnitee’s involvement in a Claim relating to an
Indemnifiable Event is to prepare to serve and serve as a witness,
and not as a party, the Indemnitee shall be indemnified against all
Losses incurred in connection therewith to the fullest extent
allowable by law.

 

(b)           Standard
of Conduct. To the extent that the provisions of
Section 9(a) are
inapplicable to a Claim related to an Indemnifiable Event that
shall have been finally disposed of, any determination of whether
Indemnitee has satisfied any applicable standard of conduct under
New Jersey or applicable federal law that is a legally required
condition to indemnification of Indemnitee hereunder against Losses
relating to such Claim and any determination that Expense Advances
must be repaid to the Company (a “Standard of Conduct
Determination”) shall be made (i) by a majority
vote of the Disinterested Directors, even if less than a quorum of
the Board, (ii) by a committee of Disinterested Directors
designated by a majority vote of the Disinterested Directors, even
though less than a quorum,
or (iii) if there are no such Disinterested Directors, by
Independent Counsel in a written opinion addressed to the Board, a
copy of which shall be delivered to Indemnitee; and

 

 

5

 

 

 

The
Company shall indemnify and hold harmless Indemnitee against and,
if requested by Indemnitee, shall reimburse Indemnitee for, or
advance to Indemnitee, within 120 days after such request, any and
all Expenses incurred by Indemnitee in cooperating with the person
or persons making such Standard of Conduct
Determination.

 

(c)           Making
the Standard of Conduct Determination. The Company shall use
its reasonable best efforts to cause any Standard of Conduct
Determination required under Section 9(b) to be made as promptly
as practicable. If the person or persons designated to make the
Standard of Conduct Determination under Section 9(b) shall not have made a
determination within 120 days after the later of
(A) receipt by the Company of a written request from
Indemnitee for indemnification pursuant to Section 8 (the date of such receipt
being the “Notification
Date”) and (B) the selection of an Independent
Counsel, if such determination is to be made by Independent
Counsel, then Indemnitee shall be deemed to have satisfied the
applicable standard of conduct; provided that such 120-day period
may be extended for a reasonable time, not to exceed an additional
90 days, if the person or persons making such determination in good
faith requires such additional time to obtain or evaluate
information relating thereto. Notwithstanding anything in this
Agreement to the contrary, no determination as to entitlement of
Indemnitee to indemnification under this Agreement shall be
required to be made prior to the final disposition of any
Claim.

 

(d)         
Payment of
Indemnification. If, in regard to any Losses:

 

(i) 

Indemnitee shall be
entitled to indemnification pursuant to Section 9(a);

 

(ii) 

No Standard Conduct
Determination is legally required as a condition to indemnification
of Indemnitee hereunder; or

 

(iii) 

Indemnitee has been
determined or deemed pursuant to Section 9(b) or Section 9(c) to have satisfied the
Standard of Conduct Determination,

 

then
the Company shall pay to Indemnitee, within 30 days after the later
of (A) the Notification Date or (B) the earliest date on which the
applicable criterion specified in clause (i), (ii) or (iii) is
satisfied, an amount equal to such Losses.

 

 

6

 

 

(e)           Selection
of Independent Counsel for Standard of Conduct
Determination. If a Standard of Conduct Determination is to
be made by Independent Counsel pursuant to Section 9(b)(iii), the Independent
Counsel shall be selected by the Board of Directors, and the
Company shall give written notice to Indemnitee advising Indemnitee
of the identity of the Independent Counsel so selected. Indemnitee
may, within five (5) days after receiving written notice of
selection from the Company, deliver to the Company a written
objection to such selection; provided, however, that such objection
may be asserted only on the ground that the Independent Counsel so
selected does not satisfy the criteria set forth in the definition
of “Independent Counsel” in Section 1(i), and the objection
shall set forth with particularity the factual basis of such
assertion. Absent a proper and timely objection, the person or firm
so selected shall act as Independent Counsel. If such written
objection is properly and timely made and substantiated,
(i) the Independent Counsel so selected may not serve as
Independent Counsel unless and until such objection is withdrawn or
a court has determined that such objection is without merit; and
(ii) the Company may, at its option, select an alternative
Independent Counsel and give written notice to Indemnitee advising
Indemnitee of the identity of the alternative Independent Counsel
so selected, in which case the provisions of the two immediately
preceding sentences, the introductory clause of this sentence and
numbered clause (i) of this sentence shall apply to such subsequent
selection and notice. If applicable, the provisions of clause (ii)
of the immediately preceding sentence shall apply to successive
alternative selections. If no Independent Counsel that is permitted
under the foregoing provisions of this Section 9(e) to make the Standard
of Conduct Determination shall have been selected within 20 days
after the Company gives its initial notice pursuant to the first
sentence of this Section 9(e), either the Company or
Indemnitee may petition the Superior Court of the State of New
Jersey (“New
Jersey Court”) to resolve
any objection which shall have been made by Indemnitee to the
Company’s selection of Independent Counsel and/or to appoint
as Independent Counsel a person to be selected by the Court or such
other person as the Court shall designate, and the person or firm
with respect to whom all objections are so resolved or the person
or firm so appointed will act as Independent Counsel. In all
events, the Company shall pay all of the reasonable fees and
expenses of the Independent Counsel incurred in connection with the
Independent Counsel’s determination pursuant to Section 9(b).

 

(f)           Indemnitee’s
Entitlement to Indemnification. In making any Standard of
Conduct Determination, the person or persons making such
determination shall presume that Indemnitee has satisfied the
applicable standard of conduct and is entitled to indemnification,
and the Company shall have the burden of proof to overcome that
presumption and establish that Indemnitee is not so entitled. Any
Standard of Conduct Determination that is adverse to Indemnitee may
be challenged by Indemnitee in the New Jersey Court. No
determination by the Company (including by its directors or any
Independent Counsel) that Indemnitee has not satisfied any
applicable standard of conduct may be used as a defense to any
legal proceedings brought by Indemnitee to secure indemnification
or reimbursement or advance payment of Expenses by the Company
hereunder or create a presumption that Indemnitee has not met any
applicable standard of conduct.

 

10.           Exclusions
from Indemnification. Notwithstanding anything in this
Agreement to the contrary, the Company shall not be obligated
to:

 

(a)           indemnify
or advance funds to Indemnitee for Expenses or Losses with respect
to proceedings initiated by Indemnitee, including any proceedings
against the Company or its directors, officers, employees or other
indemnitees and not by way of defense, except:

 

 

7

 

 

(i) 

proceedings
referenced in Section 5
above (unless a court of competent jurisdiction determines that
each of the material assertions made by Indemnitee in such
proceeding was not made in good faith or was frivolous);
or

 

(ii) 

where the Company
has joined in or the Board has consented to the initiation of such
proceedings.

 

(b)         
indemnify or advance funds to Indemnitee if a final decision by a
court of competent jurisdiction determines that such
indemnification is prohibited by applicable law.

 

(c)         
indemnify Indemnitee for the disgorgement of profits arising from
the purchase or sale by Indemnitee of securities of the Company in
violation of Section 16(b) of the Exchange Act, or any similar
successor statute.

 

(d)         
indemnify or advance funds to Indemnitee for Indemnitee's
reimbursement to the Company of any bonus or other incentive-based
or equity-based compensation previously received by Indemnitee or
payment of any profits realized by Indemnitee from the sale of
securities of the Company, as required in each case under the
Exchange Act (including any such reimbursements under Section 304
of the Sarbanes-Oxley Act of 2002 in connection with an accounting
restatement of the Company or the payment to the Company of profits
arising from the purchase or sale by Indemnitee of securities in
violation of Section 306 of the Sarbanes-Oxley Act).

 

(e)         
indemnify or advance funds to Indemnitee for Expenses or Losses (i)
if the Company has been advised by a bank regulatory authority that
doing so may result in the imposition of fines or other penalties
on the Company or its directors or officers or a finding that the
Company is engaging in an unsafe and unsound banking practice, or
(ii) if such indemnification or advancement would violate the
terms of any agreement, memorandum of understanding or similar
arrangement between the Company and a bank regulatory authority or
resolutions of the Board adopted at the direction of a bank
regulatory authority or (iii) result in the Company failing to
meet, or while it does not meet, minimum capital requirements under
applicable law, or (iv) if it would violate any federal or state
laws or regulations applicable to the Company or any entity which
controls the Company including but not limited to Section 18 (k) of
the Federal Deposit Insurance Act or any regulation of the Federal
Deposit Insurance Corporation adopted thereunder..

 

11.         
Settlement of
Claims. The Company shall not be liable to Indemnitee under
this Agreement for any amounts paid in settlement of any threatened
or pending Claim related to an Indemnifiable Event effected without
the Company's prior written consent, which shall not be
unreasonably withheld. The Company shall not settle any Claim
related to an Indemnifiable Event in any manner that would impose
any Losses on the Indemnitee without the Indemnitee's prior written
consent.

 

 

8

 

 

12.           Duration.
All agreements and obligations of the Company contained herein
shall continue during the period that Indemnitee is a director or
officer of the Company (or is serving at the request of the Company
as a director, officer, employee, member, trustee or agent of
another Enterprise) and shall continue thereafter (i) so long
as Indemnitee may be subject to any possible Claim relating to an
Indemnifiable Event (including any rights of appeal thereto) and
(ii) throughout the pendency of any proceeding (including any
rights of appeal thereto) commenced by Indemnitee to enforce or
interpret his or her rights under this Agreement, even if, in
either case, he or she may have ceased to serve in such capacity at
the time of any such Claim or proceeding.

 

13.           Non-Exclusivity.
The rights of Indemnitee hereunder will be in addition to any other
rights Indemnitee may have under the Constituent Documents, the
Banking Act of 1948, as amended of the State of New Jersey, any
other contract or otherwise (collectively, “Other Indemnity
Provisions”); provided, however, that (a) to the
extent that Indemnitee otherwise would have any greater right to
indemnification under any Other Indemnity Provision, Indemnitee
will be deemed to have such greater right hereunder and (b) to
the extent that any change is made to any Other Indemnity Provision
which permits any greater right to indemnification than that
provided under this Agreement as of the date hereof, Indemnitee
will be deemed to have such greater right hereunder; provided however, that the Original
Agreement shall be deemed to be of no force and effect for that or
any other purpose.

 

14.         
No Duplication of
Payments. The Company shall not be liable under this
Agreement to make any payment to Indemnitee in respect of any
Losses to the extent Indemnitee has otherwise received payment
under any insurance policy, the Constituent Documents, Other
Indemnity Provisions or otherwise of the amounts otherwise
indemnifiable by the Company hereunder.

 

15.           Subrogation.
In the event of payment to Indemnitee under this Agreement, the
Company shall be subrogated to the extent of such payment to all of
the rights of recovery of Indemnitee. Indemnitee shall execute all
papers required and shall do everything that may be necessary to
secure such rights, including the execution of such documents
necessary to enable the Company effectively to bring suit to
enforce such rights.

 

16.           Amendments.
No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto.
No waiver of any of the provisions of this Agreement shall be
binding unless in the form of a writing signed by the party against
whom enforcement of the waiver is sought, and no such waiver shall
operate as a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver.
Except as specifically provided herein, no failure to exercise or
any delay in exercising any right or remedy hereunder shall
constitute a waiver thereof.

 

17.         
Binding Effect.
This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective
successors (including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of
the business and/or assets of the Company), assigns, spouses, heirs
and personal and legal representatives.

 

18.         
Severability. The
provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any portion thereof) are
held by a court of competent jurisdiction to be invalid, illegal,
void or otherwise unenforceable, and the remaining provisions shall
remain enforceable to the fullest extent permitted by
law.

 

 

9

 

 

19.           Notices.
All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if
delivered by hand, against receipt, or mailed, by postage prepaid,
certified or registered mail:

 

(a) 

if to Indemnitee,
to the address set forth on the signature page hereto.

 

(b) 

if to the Company,
to: New Jersey Community Bank, 3441 U.S. Highway 9, Freehold, New
Jersey 07728, Attn: Chief Executive Officer.

 

Notice
of change of address shall be effective only when given in
accordance with this Section. All notices complying with this
Section shall be deemed to have been received on the date of hand
delivery or on the third business day after mailing.

 

20.           Governing
Law and Forum. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of
New Jersey applicable to contracts made and to be performed in such
state without giving effect to its principles of conflicts of laws
and applicable federal law. The Company and Indemnitee hereby
irrevocably and unconditionally: (a) agree that any action or
proceeding arising out of or in connection with this Agreement
shall be brought only in the New Jersey Court and not in any other
state or federal court in the United States, (b) consent
to submit to the exclusive jurisdiction of the New Jersey Court for
purposes of any action or proceeding arising out of or in
connection with this Agreement, and (c) waive, and agree not
to plead or make, any claim that the New Jersey Court lacks venue
or that any such action or proceeding brought in the New Jersey
Court has been brought in an improper or inconvenient
forum.

 

22.           Headings.
The headings of the sections and paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute
part of this Agreement or to affect the construction or
interpretation thereof.

 

23.           Counterparts.
This Agreement may be executed in one or more counterparts, each of
which shall for all purposes be deemed to be an original, but all
of which together shall constitute one and the same
Agreement.

 

 

[SIGNATURE
PAGE FOLLOWS]

 

 

10

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

 

 

	
 

	

New
Jersey Community Bank

 

	
 

	

 

By:         
                 
             
  

Name:                                       

Title:                                       
 

	
 

	
 

 

	
 

	

INDEMNITEE

 

	
 

	

 

                                                 

 

Name:                                      

Address:                    
           
  
                                                
 

                                              
  

 

Effective Date:                                                              

 

	
 

	
 

 

 

 11

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