Document:

Exhibit 4.1

 

(FORM OF SUBORDINATED NOTE)

THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED
NOTE IS SUBORDINATED AND JUNIOR IN RIGHT OF PAYMENT TO THE CLAIMS OF CREDITORS (OTHER THAN CREDITORS OF EXISTING SUBORDINATED DEBT)
AND DEPOSITORS OF STEWARDSHIP FINANCIAL CORPORATION (THE “COMPANY”), INCLUDING OBLIGATIONS OF THE COMPANY TO
ITS GENERAL AND SECURED CREDITORS AND IS UNSECURED. IT IS INELIGIBLE AS COLLATERAL FOR ANY EXTENSION OF CREDIT BY THE COMPANY OR
ANY OF ITS SUBSIDIARIES. IN THE EVENT OF LIQUIDATION ALL DEPOSITORS AND OTHER CREDITORS OF THE COMPANY SHALL BE ENTITLED TO BE
PAID IN FULL WITH SUCH INTEREST AS MAY BE PROVIDED BY LAW BEFORE ANY PAYMENT SHALL BE MADE ON ACCOUNT OF PRINCIPAL OF OR INTEREST
ON THIS SUBORDINATED NOTE. AFTER PAYMENT IN FULL OF ALL SUMS OWING TO SUCH DEPOSITORS AND CREDITORS, THE HOLDER OF THIS SUBORDINATED
NOTE SHALL BE ENTITLED TO BE PAID FROM THE REMAINING ASSETS OF THE COMPANY THE UNPAID PRINCIPAL AMOUNT OF THIS SUBORDINATED NOTE
PLUS ACCRUED AND UNPAID INTEREST THEREON BEFORE ANY PAYMENT OR OTHER DISTRIBUTION, WHETHER IN CASH, PROPERTY OR OTHERWISE, SHALL
BE MADE ON ACCOUNT OF ANY SHARES OF CAPITAL STOCK OF THE COMPANY.

THE INDEBTEDNESS EVIDENCED BY THIS SUBORDINATED
NOTE IS NOT A DEPOSIT AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”) OR ANY OTHER
GOVERNMENT AGENCY OR FUND.

THIS SUBORDINATED NOTE WILL BE ISSUED
AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $1,000 AND MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED TRANSFER
OF THIS SUBORDINATED NOTE IN A DENOMINATION OF LESS THAN $1,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY
SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF THIS SUBORDINATED NOTE FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF PAYMENTS ON THIS SUBORDINATED NOTE, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER
IN THIS SUBORDINATED NOTE.

THIS SUBORDINATED NOTE MAY BE SOLD ONLY
IN COMPLIANCE WITH APPLICABLE FEDERAL AND STATE SECURITIES LAWS. THIS SUBORDINATED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES
LAWS. NEITHER THIS SUBORDINATED NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS SUBORDINATED NOTE IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER
AND OTHER PROVISIONS OF A SUBORDINATED NOTE PURCHASE AGREEMENT DATED AUGUST 28, 2015 BETWEEN THE COMPANY AND THE PURCHASERS
REFERRED TO THEREIN (THE “PURCHASE AGREEMENT”), A COPY OF WHICH IS ON FILE WITH THE COMPANY. THE SUBORDINATED
NOTE REPRESENTED BY THIS INSTRUMENT MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PURCHASE AGREEMENT. ANY SALE OR OTHER
TRANSFER NOT IN COMPLIANCE WITH THE PURCHASE AGREEMENT WILL BE VOID.

    1 

     

    

CERTAIN ERISA CONSIDERATIONS:

THE HOLDER OF THIS SECURITY, OR ANY
INTEREST HEREIN, BY ITS ACCEPTANCE HEREOF OR THEREOF AGREES, REPRESENTS AND WARRANTS THAT IT IS NOT AN EMPLOYEE BENEFIT PLAN, INDIVIDUAL
RETIREMENT ACCOUNT OR OTHER PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)
(EACH A “PLAN”), OR AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE “PLAN ASSETS” BY REASON OF ANY PLAN’S
INVESTMENT IN THE ENTITY, AND NO PERSON INVESTING “PLAN ASSETS” OF ANY PLAN MAY ACQUIRE OR HOLD THIS SECURITY OR ANY
INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION 96-23, 95-60, 91-38, 90-1 OR 84-14 OR ANOTHER APPLICABLE EXEMPTION OR ITS PURCHASE AND HOLDING
OF THIS SECURITY, OR ANY INTEREST HEREIN, ARE NOT PROHIBITED BY SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE WITH RESPECT TO
SUCH PURCHASE AND HOLDING. ANY PURCHASER OR HOLDER OF THIS SECURITY OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY
ITS PURCHASE AND HOLDING THEREOF THAT EITHER: (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN TO WHICH TITLE I OF ERISA OR
SECTION 4975 OF THE CODE IS APPLICABLE, A TRUSTEE OR OTHER PERSON ACTING ON BEHALF OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN, OR
ANY OTHER PERSON OR ENTITY USING THE “PLAN ASSETS” OF ANY SUCH EMPLOYEE BENEFIT PLAN OR PLAN TO FINANCE SUCH PURCHASE
OR (ii) SUCH PURCHASE OR HOLDING WILL NOT RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH FULL EXEMPTIVE RELIEF IS NOT AVAILABLE UNDER APPLICABLE STATUTORY OR ADMINISTRATIVE EXEMPTION.

ANY FIDUCIARY OF ANY PLAN WHO IS CONSIDERING
THE ACQUISITION OF ANY OF THE SECURITIES SHOULD CONSULT WITH HIS OR HER LEGAL COUNSEL PRIOR TO ACQUIRING SUCH SECURITIES.

    2 

     

    

	No. 2025-[●]	CUSIP [●]

STEWARDSHIP FINANCIAL CORPORATION

6.75% FIXED RATE SUBORDINATED NOTE
DUE 2025

1.           Subordinated
Notes. This Subordinated Note is one of an issue of notes of Stewardship Financial Corporation, a New Jersey corporation (the
“Company”) designated as the “6.75% Fixed Rate Subordinated Notes due 2025” (the “Subordinated
Notes”).

2.           Payment.
The Company, for value received, promises to pay to                       ,
or its registered assigns, the principal sum of                   Dollars
(U.S.) ($                   ), plus accrued
but unpaid interest, on August 28, 2025 (the “Stated Maturity”) and to pay interest thereon at the rate of 6.75%
per annum from the original issue date of the Subordinated Note, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semiannually in arrears on March 1 and September 1 of each year (each, an “Interest
Payment Date”), commencing March 1, 2016, until the principal hereof is paid or made available for payment, with such
interest calculated on the basis of a 360-day year consisting of twelve 30-day months and the number of days elapsed in any partial
month. If any payment of interest or principal is not paid in full when the same becomes due and payable, then interest will be
compounded quarterly.

Any payment of principal
of or interest on this Subordinated Note that would otherwise become due and payable on a day which is not a Business Day shall
become due and payable on the next succeeding Business Day, with the same force and effect as if made on the date for payment of
such principal or interest, and no interest will accrue in respect of such payment for the period after such day. The term “Business
Day” means any day that is not a Saturday or Sunday and that is not a day on which banks in the State of New Jersey are
generally authorized or required by law or executive order to be closed.

3.           Subordination.
The indebtedness of the Company evidenced by this Subordinated Note, including the principal and interest on this Subordinated
Note, shall be subordinate and junior in right of payment to the prior payment in full of all existing claims of creditors and
depositors of the Company, whether now outstanding or subsequently created, assumed, guaranteed or incurred (collectively, “Senior
Indebtedness”), which shall consist of principal of (and premium, if any) and interest, if any, on: (a) all indebtedness
and obligations of, or guaranteed or assumed by, the Company for money borrowed, whether or not evidenced by bonds, debentures,
securities, notes or other similar instruments, and including, but not limited to, deposits of the Company, and all obligations
to the Company’s general and secured creditors; (b) any deferred obligations of the Company for the payment of the purchase
price of property or assets acquired other than in the ordinary course of business; (c) all obligations, contingent or otherwise,
of the Company in respect of any letters of credit, bankers’ acceptances, security purchase facilities and similar direct
credit substitutes; (d) any capital lease obligations of the Company; (e) all obligations of the Company in respect of interest
rate swap, cap or other agreements, interest rate future or option contracts, currency swap agreements, currency future or option
contracts, commodity contracts and other similar arrangements or derivative products; (f) all obligations that are similar to those
in clauses (a) through (e) of other persons for the payment of which the Company is responsible or liable as obligor, guarantor
or otherwise arising from an off-balance sheet guarantee; and (g) all obligations of the types referred to in clauses (a) through
(f) of other persons secured by a lien on any property or asset of the Company, and (h) in the case of (a) through (g) above, all
amendments, renewals, extensions, modifications and refunding’s of such indebtedness and obligations; except “Senior
Indebtedness” does not include (i) the Subordinated Notes, (ii) any obligation that by its terms expressly is junior to,
or ranks equally in right of payment with, the Subordinated Notes, or (iii) any indebtedness between the Company and any of its
subsidiaries or Affiliates. This Subordinated Note is not secured by any assets of the Company.

    1 

     

    

In
the event of liquidation of the Company, all creditors of the Company shall be entitled to be paid in full with such interest as
may be provided by law before any payment shall be made on account of principal of or interest on this Subordinated Note. Additionally,
in the event of any insolvency, dissolution, assignment for the benefit of creditors or any liquidation or winding up of or relating
to the Company, whether voluntary or involuntary, holders of Senior Indebtedness shall be entitled to be paid in full before any
payment shall be made on account of the principal of or interest on the Subordinated Notes, including this Subordinated Note. In
the event of any such proceeding, after payment in full of all sums owing with respect to the Senior Indebtedness, the registered
holders of the Subordinated Notes from time to time (each a “Noteholder” and, collectively, the “Noteholders”),
together with the holders of any obligations of the Company ranking on a parity with the Subordinated Notes, shall be entitled
to be paid from the remaining assets of the Company the unpaid principal thereof, and the unpaid interest thereon before any payment
or other distribution, whether in cash, property or otherwise, shall be made on account of any capital stock.

If
there shall have occurred and be continuing (a) a default in any payment with respect to any Senior Indebtedness or (b) an event
of default with respect to any Senior Indebtedness as a result of which the maturity thereof is accelerated, unless and until such
payment default or event of default shall have been cured or waived or shall have ceased to exist, no payments shall be made by
the Company with respect to the Subordinated Notes. The provisions of this paragraph shall not apply to any payment with respect
to which the immediately preceding paragraph of this Section 3 would be applicable.

Nothing
herein shall act to prohibit, limit or impede the Company from issuing additional debt of the Company having the same rank as the
Subordinated Notes or which may be junior or senior in rank to the Subordinated Notes.

4.           Redemption.

(a)           Redemption
Prior to Fifth Anniversary. This Subordinated Note shall not be redeemable by the Company in whole or in part prior to the
fifth anniversary of the date upon which this Subordinated Note was originally issued (the “Issue Date”), except
in the event: (i) this Subordinated Note no longer qualifies as “Tier 2” Capital (as defined by the Board
of Governors of the Federal Reserve System (the “Federal Reserve”)) as a result of a change in interpretation
or application of law or regulation by any judicial, legislative or regulatory authority that becomes effective after the date
of issuance of this Subordinated Note (“Tier 2 Capital Event”); (ii) of a Tax Event (as defined below);
or (iii) the Company becomes required to register as an investment company pursuant to the Investment Company Act of 1940, as amended
(and “Investment Company Event”). Upon the occurrence of a Tier 2 Capital Event, a Tax Event or an Investment
Company Event, the Company may redeem this Subordinated Note in whole at any time, or in part from time to time, upon giving not
less than 10 days’ notice to the holder of this Subordinated Note at an amount equal to 100% of the outstanding principal
amount being redeemed plus accrued but unpaid interest to, but excluding, the redemption date. “Tax Event” means
the receipt by the Company of an opinion of counsel to the Company that as a result of any amendment to, or change (including any
final and adopted (or enacted) prospective change) in, the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, there exists a material risk that interest payable by the Company on the Subordinated
Notes is not, or within 120 days after the receipt of such opinion will not be, deductible by the Company, in whole or in part,
for United States federal income tax purposes.

    2 

     

    

(b)           Redemption
on or after Fifth Anniversary. On or after the fifth anniversary of the Issue Date, this Subordinated Note shall be redeemable
at the option of and by the Company, in whole at any time, or in part upon any Interest Payment Date, at an amount equal to 100%
of the outstanding principal amount being redeemed plus accrued but unpaid interest to, but excluding, the redemption date, but
in all cases in a principal amount with integral multiples of $1,000. In addition, the Company may redeem all or a portion of the
Subordinated Notes, at any time upon the occurrence of a Tier 2 Capital Event, Tax Event or an Investment Company Event.

(c)           Partial
Redemption. If less than the then outstanding principal amount of this Subordinated Note is redeemed, (i) a new Subordinated
Note shall be issued representing the unredeemed portion without charge to the holder thereof and (ii) such redemption shall be
effected on a pro rata basis as to the Noteholders. For purposes of clarity, upon a partial redemption, a like percentage of the
principal amount of every Subordinated Note held by every Noteholder shall be redeemed.

(d)           No
Redemption at Option of Noteholder. This Subordinated Note is not subject to redemption at the option of the holder of this
Subordinated Note.

(e)           Effectiveness
of Redemption. If notice of redemption has been duly given and notwithstanding that this Subordinated Note has been called
for redemption but has not yet been surrendered for cancellation, on and after the date fixed for redemption interest shall cease
to accrue on this Subordinated Note, this Subordinated Note shall no longer be deemed outstanding and all rights with respect to
this Subordinated Note shall forthwith on such date fixed for redemption cease and terminate unless the Company shall default in
the payment of the redemption price, except only the right of the holder hereof to receive the amount payable on such redemption,
without interest.

(f)           Regulatory
Approvals. Any such redemption shall be subject to receipt of any and all required federal and state regulatory approvals,
including, but not limited to, the consent of the Federal Reserve. In the case of any redemption of this Subordinated Note pursuant
to paragraphs (b) and (c) of this Section 4, the Company will give the holder hereof notice of redemption, which notice
shall indicate the aggregate principal amount of Subordinated Notes to be redeemed, not less than 30 nor more than 45 calendar
days prior to the redemption date.

    3 

     

    

(g)           Purchase
and Resale of the Subordinated Notes. Subject to any required federal and state regulatory approvals and the provisions of
this Subordinated Note, the Company shall have the right to purchase any of the Subordinated Notes at any time in the open market,
private transactions or otherwise. If the Company purchases any Subordinated Notes, it may, in its discretion, hold, resell or
cancel any of the purchased Subordinated Notes.

5.           Events
of Default; Acceleration; Compliance Certificate. Each of the following events shall constitute an “Event of Default”:

(a)           the
entry of a decree or order for relief in respect of the Company by a court having jurisdiction in the premises in an involuntary
case or proceeding under any applicable bankruptcy, insolvency, or reorganization law, now or hereafter in effect of the United
States or any political subdivision thereof, and such decree or order will have continued unstayed and in effect for a period of
60 consecutive days;

(b)           the
commencement by the Company of a voluntary case under any applicable bankruptcy, insolvency or reorganization law, now or hereafter
in effect of the United States or any political subdivision thereof, or the consent by the Company to the entry of a decree or
order for relief in an involuntary case or proceeding under any such law;

(c)           the
failure of the Company to pay any installment of interest on any of the Subordinated Notes as and when the same will become due
and payable, and the continuation of such failure for a period of 30 days;

(d)           the
failure of the Company to pay all or any part of the principal of any of the Subordinated Notes as and when the same will become
due and payable;

(e)           the
failure of the Company to perform any other covenant or agreement on the part of the Company contained in the Subordinated Notes,
and the continuation of such failure for a period of 60 days after the date on which notice specifying such failure, stating that
such notice is a “Notice of Default” hereunder and demanding that the Company remedy the same, will have been given,
in the manner set forth in Section 22, to the Company by the Noteholders of at least 25% in aggregate principal amount of
the Subordinated Notes at the time outstanding; or the default by the Company under any bond, debenture, note or other evidence
of indebtedness for money borrowed by the Company having an aggregate principal amount outstanding of at least $25,000,000, whether
such indebtedness now exists or is created or incurred in the future, which default (i) constitutes a failure to pay any portion
of the principal of such indebtedness when due and payable after the expiration of any applicable grace period or (ii) results
in such indebtedness becoming due or being declared due and payable prior to the date on which it otherwise would have become due
and payable without, in the case of clause (i), such indebtedness having been discharged or, in the case of clause (ii), without
such indebtedness having been discharged or such acceleration having been rescinded or annulled.

    4 

     

    

Unless
the principal of this Subordinated Note already shall have become due and payable, if an Event of Default set forth in subsections
(c) or (d) above shall have occurred and be continuing, the holder of this Subordinated Note, by notice in writing to the Company,
may declare the principal amount of this Subordinated Note to be due and payable immediately and, upon any such declaration the
same shall become and shall be immediately due and payable. The Company waives demand, presentment for payment, notice of nonpayment,
notice of protest, and all other notices. The Company, within 45 calendar days after the receipt of written notice from any Noteholder
of the occurrence of an Event of Default with respect to this Subordinated Note, shall mail to all Noteholders, at their addresses
shown on the Security Register (as defined in Section 13 below), such written notice of Event of Default, unless such Event
of Default shall have been cured or waived before the giving of such notice as certified by the Company in writing.

6.           Failure
to Make Payments. In the event of failure by the Company to make any required payment of principal or interest on this Subordinated
Note (and, in the case of payment of interest, such failure to timely pay shall have continued for 15 calendar days), the Company
will, upon demand of the holder of this Subordinated Note, pay to the holder of this Subordinated Note the amount then due and
payable on this Subordinated Note for principal and interest (without acceleration of the Note in any manner), with interest on
the overdue principal and interest at the rate borne by this Subordinated Note, to the extent permitted by applicable law. If the
Company fails to pay such amount upon such demand, the holder of this Subordinated Note may, among other things, institute a judicial
proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company and collect the amounts adjudged or decreed to be payable in the manner provided by law out
of the property of the Company.

Upon
the occurrence of a failure by the Company to make any required payment of principal or interest on this Subordinated Note, or
an Event of Default until such Event of Default is cured by the Company, the Company shall not: (a) declare or pay any dividends
or distributions on, or redeem, purchase, acquire, or make a liquidation payment with respect to, any of the Company’s capital
stock; (b) make any payment of principal or interest or premium, if any, on or repay, repurchase or redeem any debt securities
of the Company that rank equal with or junior to the Subordinated Notes; or (c) make any payments under any guarantee that ranks
equal with or junior to the Subordinated Notes, other than (i) any dividends or distributions in shares of, or options, warrants
or rights to subscribe for or purchase shares of, any class of the Company’s common stock; (ii) any declaration of a non-cash
dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification of
the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for
another class or series of the Company’s capital stock; (iv) the purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged;
or (v) purchases of any class of the Company’s common stock related to the issuance of common stock or rights under any benefit
plans for the Company’s directors, officers or employees or any of the Company’s dividend reinvestment plans; provided,
however, that any payment permitted by clauses (iii), (iv) or (v) above shall not exceed $300,000.

7.           Affirmative
Covenants of the Company.

    5 

     

    

(a)           Payment
of Principal and Interest. The Company covenants and agrees for the benefit of the holder of this Subordinated Note that it
will duly and punctually pay the principal of, and interest on, this Subordinated Note, in accordance with the terms hereof. Principal
and interest will be considered paid on the date due if the Company or a subsidiary thereof holds as of 11:00 a.m., Midland Park,
New Jersey time, on any Interest Payment Date, an amount in immediately available funds provided
by the Company that is designated for and sufficient to pay all principal and interest then due. 

(b)           Maintenance
of Office. The Company will maintain an office or agency in the Borough of Midland Park, New Jersey where Subordinated Notes
may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect
of the Subordinated Notes may be served.

The Company
may also from time to time designate one or more other offices or agencies where the Subordinated Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission
will in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Midland Park, New Jersey.
The Company will give prompt written notice to the Noteholders of any such designation or rescission and of any change in the location
of any such other office or agency.

(c)           Corporate
Existence. The Company will do or cause to be done all things necessary to preserve and keep in full force and effect: (i)
the corporate existence of the Company; (ii) the existence (corporate or other) of each subsidiary; and (iii) the rights (charter
and statutory), licenses and franchises of the Company and each of its subsidiaries; provided, however, that the Company will not
be required to preserve the existence (corporate or other) of any of its subsidiaries or any such right, license or franchise of
the Company or any of its subsidiaries if the Board of Directors of the Company determines that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its subsidiaries taken as a whole and that the loss thereof
will not be disadvantageous in any material respect to the Noteholders.

(d)           Maintenance
of Properties. The Company will, and will cause each subsidiary to, cause all its properties used or useful in the conduct
of its business to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment
of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section will prevent the Company or any subsidiary from discontinuing the
operation and maintenance of any of their respective properties if such discontinuance is, in the judgment of the Board of Directors
of the Company or of any subsidiary, as the case may be desirable in the conduct of its business.

(e)           Waiver
of Certain Covenants. The Company may omit in any particular instance to comply with any term, provision or condition set forth
in Section 7(a) or Section 7(b) above, with respect to this Subordinated Note if before the time for such compliance the Noteholders
of at least a majority in principal amount of the outstanding Subordinated Notes, by act of such Noteholders, either will waive
such compliance in such instance or generally will have waived compliance with such term, provision or condition, but no such waiver
will extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver will
become effective, the obligations of the Company in respect of any such term, provision or condition will remain in full force
and effect.

    6 

     

    

(f)           Company
Statement as to Compliance. The Company will deliver to the Noteholders, within 120 days after the end of each fiscal year,
an Officer’s Certificate covering the preceding calendar year, stating whether or not, to the best of his or her knowledge,
the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Subordinated
Note (without regard to notice requirements or periods of grace) and if the Company will be in default, specifying all such defaults
and the nature and status thereof of which he or she may have knowledge.

(g)           Tier
2 Capital. If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than due to the
limitation imposed on the capital treatment of subordinated debt during the 5 years immediately preceding the Maturity Date of
the Subordinated Notes, Company will immediately notify the Noteholders, and thereafter the Company shall request, subject to the
terms hereof, that the Noteholders execute and deliver all agreements as reasonably necessary in order to restructure the applicable
portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital.

8.           Negative
Covenant of the Company. The Company shall not declare or pay any dividend or make any distribution on capital stock or other
equity securities of any kind of the Company if the Company is not adequately capitalized for regulatory purposes immediately prior
to the declaration of such dividend or distribution, except for dividends payable solely in shares of common stock of the Company.

9.           Denominations.
The Subordinated Notes are issuable only in registered form without interest coupons in minimum denominations of $1,000 and integral
multiples of $1,000 in excess thereof.

10.           Charges
and Transfer Taxes. No service charge will be made for any registration of transfer or exchange of this Subordinated Note,
or any redemption or repayment of this Subordinated Note, or any conversion or exchange of this Subordinated Note for other types
of securities or property, but the Company may require payment of a sum sufficient to pay all taxes, assessments or other governmental
charges that may be imposed in connection with the transfer or exchange of this Subordinated Note from the Noteholder requesting
such transfer or exchange.

    7 

     

    

11.           Payment
Procedures. Payment of the principal and interest payable on the Maturity Date will be made by check, or by wire transfer in
immediately available funds to a bank account in the United States designated by the registered Noteholder of this Subordinated
Note if such Noteholder shall have previously provided wire instructions to the Company, upon presentation and surrender of this
Subordinated Note at the Payment Office (as defined in Section 22 below) or at such other place or places as the Company
shall designate by notice to the registered Noteholders as the Payment Office, provided that this Subordinated Note is presented
to the Company in time for the Company to make such payments in such funds in accordance with its normal procedures. Payments of
interest (other than interest payable on the Maturity Date) shall be made by wire transfer in immediately available funds or check
mailed to the registered Noteholder, as such person’s address appears on the Security Register. Interest payable on any Interest
Payment Date shall be payable to the Noteholder in whose name this Subordinated Note is registered at the close of business on
the fifteenth calendar day prior to the applicable Interest Payment Date, without regard to whether such date is a Business Day
(such date being referred to herein as the “Regular Record Date”), except that interest not paid on the Interest
Payment Date, if any, will be paid to the holder in whose name this Subordinated Note is registered at the close of business on
a special record date fixed by the Company (a “Special Record Date”), notice of which shall be given to the
holder of this Subordinated Note not less than 10 calendar days prior to such Special Record Date. (The Regular Record Date and
Special Record Date are referred to herein collectively as the “Record Dates”). To the extent permitted by applicable
law, interest shall accrue, at the rate at which interest accrues on the principal of this Subordinated Note, on any amount of
principal or interest on this Subordinated Note not paid when due. All payments on this Subordinated Note shall be applied first
against costs and expenses of the Noteholder hereunder; then against interest due hereunder; and then against principal due hereunder.
The holder of this Subordinated Note acknowledges and agrees that the payment of all or any portion of the outstanding principal
amount of this Subordinated Note and all interest hereon shall be pari passu in right of payment and in all other respects
to the other Subordinated Notes. In the event that the holder of this Subordinated Note receives payments in excess of its pro
rata share of the Company’s payments to the holders of all of the Subordinated Notes, then the holder of this Subordinated
Note shall hold in trust all such excess payments for the benefit of the holders of the other Subordinated Notes and shall pay
such amounts held in trust to such other holders upon demand by such holders.

12.           Form
of Payment. Payments of principal and interest on this Subordinated Note shall be made in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the payment of public and private debts.

13.           Registration
of Transfer, Security Register. Except as otherwise provided herein, this Subordinated Note is transferable in whole or in
part, and may be exchanged for a like aggregate principal amount of Subordinated Notes of other authorized denominations, by the
Noteholder in person, or by his attorney duly authorized in writing, at the Payment Office. The Company shall maintain a register
providing for the registration of the Subordinated Notes and any exchange or transfer thereof (the “Security Register”).
Upon surrender or presentation of this Subordinated Note for exchange or registration of transfer, the Company shall execute and
deliver in exchange therefor a Subordinated Note or Subordinated Notes of like aggregate principal amount, each in a minimum denomination
of $1,000 or any amount in excess thereof which is an integral multiple of $1,000 (and, in the absence of an opinion of counsel
satisfactory to the Company to the contrary, bearing the restrictive legend(s) set forth hereinabove) and that is or are registered
in such name or names requested by the Noteholder. Any Subordinated Note presented or surrendered for registration of transfer
or for exchange shall be duly endorsed and accompanied by a written instrument of transfer in such form as is attached hereto and
incorporated herein, duly executed by the Noteholder or his attorney duly authorized in writing, with such tax identification number
or other information for each person in whose name a Subordinated Note is to be issued, and accompanied by evidence of compliance
with any restrictive legend(s) appearing on such Subordinated Note or Subordinated Notes as the Company may reasonably request
to comply with applicable law. No exchange or registration of transfer of this Subordinated Note shall be made on or after the
fifteenth day immediately preceding the Maturity Date.

    8 

     

    

14.           Charges
and Transfer Taxes. No service charge (other than any cost of delivery) shall be imposed for any exchange or registration of
transfer of this Subordinated Note, but the Company may require the payment of a sum sufficient to cover any stamp or other tax
or governmental fee or charge that may be imposed in connection therewith (or presentation of evidence that such tax, charge or
fee has been paid).

15.           Priority.
The Subordinated Notes rank pari passu among themselves and pari passu, in the event of any insolvency proceeding,
dissolution, assignment for the benefit of creditors, reorganization, restructuring of debt, marshaling of assets and liabilities
or similar proceeding or any liquidation or winding up of the Company, with all other present or future unsecured subordinated
debt obligations of the Company, except any unsecured subordinated debt that, pursuant to its express terms, is senior or subordinate
in right of payment to the Subordinated Notes.

16.           Ownership.
Prior to due presentment of this Subordinated Note for registration of transfer, the Company may treat the Noteholder in whose
name this Subordinated Note is registered in the Security Register as the absolute owner of this Subordinated Note for receiving
payments of principal and interest on this Subordinated Note and for all other purposes whatsoever, whether or not this Subordinated
Note be overdue, and the Company shall not be affected by any notice to the contrary.

17.           Waiver
and Consent. Any consent or waiver given by the holder of this Subordinated Note shall be conclusive and binding upon such
holder and upon all future holders of this Subordinated Note and of any Subordinated Note issued upon the registration of transfer
hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Subordinated
Note. This Subordinated Note may be also amended or waived pursuant to, and in accordance with, the provisions of Section 8.2 of
the Purchase Agreement. No delay or omission of the holder of this Subordinated Note to exercise any right or remedy accruing upon
any Event of Default shall impair such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein.
Any insured depository institution which shall be a holder of this Subordinated Note or which otherwise shall have any beneficial
ownership interest in this Subordinated Note shall, by its acceptance of such Subordinated Note (or beneficial interest therein),
be deemed to have waived any right of offset with respect to the indebtedness evidenced thereby.

18.           No
Impairment. No provisions of this Subordinated Note shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal and interest on this Subordinated Note at the times, places and rate, and in the coin or
currency, herein prescribed.

19.           No
Sinking Fund; Convertibility. This Subordinated Note is not entitled to the benefit of any sinking fund. This Subordinated
Note is not convertible into or exchangeable for any of the equity securities, other securities or assets of the Company or any
subsidiary.

    9 

     

    

20.           No
Recourse Against Others. No recourse under or upon any obligation, covenant or agreement contained in this Subordinated Note,
or for any claim based thereon or otherwise in respect thereof, will be had against any past, present or future shareholder, employee,
officer, or director, as such, of the Company or of any predecessor or successor, either directly or through the Company or any
predecessor or successor, under any rate of law, statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of
this Subordinated Note by the holder of this Subordinated Note and as part of the consideration for the issuance of this Subordinated
Note.

21.           Abbreviations.
Customary abbreviations may be used in the name of a Noteholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= custodian),
and U/G/M/A (= Uniform Gifts to Minors Act). Additional abbreviations may also be used though not in the above list.

22.           Notices.
All notices to the Company under this Subordinated Note shall be in writing and addressed to the Company at Stewardship Financial
Corporation, 630 Godwin Avenue, Midland Park, New Jersey, 07432, Attn: Claire Chadwick, or to such other address as the Company
may notify the holder of this Subordinated Note (the “Payment Office”). All notices to the Noteholders shall
be in writing and sent by first-class mail to each Noteholder at his or its address as set forth in the Security Register.

23.           Governing
Law. THIS SUBORDINATED NOTE WILL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW JERSEY AND WILL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.
THIS SUBORDINATED NOTE IS INTENDED TO MEET THE CRITERIA FOR QUALIFICATION OF THE OUTSTANDING PRINCIPAL AS TIER 2 CAPITAL UNDER
THE REGULATORY GUIDELINES OF THE FEDERAL RESERVE, AND THE TERMS HEREOF SHALL BE INTERPRETED IN A MANNER TO SATISFY SUCH INTENT.

[Signature Page Follows]

 

    10 

     

    

 

IN WITNESS WHEREOF,
the undersigned has caused this Subordinated Note to be duly executed.

Dated:
August 28, 2015

 

	 	STEWARDSHIP FINANCIAL 
	 	CORPORATION
	 	 	 
	 	 	 
	 	 	 
	 	By:	 
	 	 	Paul Van Ostenbridge, President and Chief
	 	 	Executive Officer 

 

    11 

     

    

 

ASSIGNMENT FORM

To assign this Subordinated Note, fill
in the form below: (I) or (we) assign and transfer this Subordinated Note to:

 

(Print or type
assignee’s name, address and zip code)

 

 

(Insert assignee’s
social security or tax I.D. No.)

 

and irrevocably appoint _______________________
agent to transfer this Subordinated Note on the books of the Company. The agent may substitute another to act for him.

 

	Date:	 	 	Your signature:	 
	 	 	 	(Sign exactly as your name appears on the face of this Subordinated Note)
	 	 	 	 	 
	 	 	 	Tax Identification No:

 

	Signature Guarantee:	 

(Signatures must be guaranteed by an eligible
guarantor institution (banks, stockbroker’s, savings and loan associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15).

 

The undersigned
certifies that it [is / is not] an Affiliate of the Company and that, to its knowledge, the proposed transferee [is / is not] an
Affiliate of the Company.

In connection with
any transfer or exchange of this Subordinated Note occurring prior to the date that is one year after the later of the date of
original issuance of this Subordinated Note and the last date, if any, on which this Subordinated Note was owned by the Company
or any Affiliate of the Company, the undersigned confirms that this Subordinated Note is being:

CHECK ONE BOX BELOW:

	o	(1)	acquired for the undersigned’s own account, without transfer;
	o	(2)	transferred to the Company;
	o	(3)	transferred in accordance and in compliance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”);
	o	(4)	transferred under an effective registration statement under the Securities Act;
	o	(5)	transferred in accordance with and in compliance with Regulation S under the Securities Act;

 

    12 

     

    

	o	(6)	transferred to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) or an “accredited investor” (as defined in Rule 501(a)(4) under the Securities Act), that has furnished a signed letter containing certain representation’s and agreements; or
	o	(7)	transferred in accordance with another available exemption from the registration requirements of the Securities Act of 1933, as amended.

Unless one of the boxes is checked,
the Company will refuse to register this Subordinated Note in the name of any person other than the registered holder thereof;
provided, however, that if box (5), (6) or (7) is checked, the Company may require, prior to registering any such transfer of this
Subordinated Note, in its sole discretion, such legal opinions, certifications and other information as the Company may reasonably
request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act such as the exemption provided by Rule 144 under such Act.

	 	Signature:	 

 

	Signature Guarantee:	 

(Signatures must be guaranteed by an
eligible guarantor institution (banks, stockbroker’s, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-l5).

TO BE COMPLETED BY PURCHASER IF BOX
(1) OR (3) ABOVE IS CHECKED.

The undersigned
represents and warrants that it is purchasing this Subordinated Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the
meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant
to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s
foregoing representations in order to claim the exemption from registration provided by Rule 144A.

	Date:	 	 	Signature:	 

 

 

    13Exhibit 10.1

 

SUBORDINATED
NOTE PURCHASE AGREEMENT

This SUBORDINATED
NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of August 28, 2015, and is made by and among Stewardship
Financial Corporation, a New Jersey corporation (“Company”), and the several purchasers of the Subordinated
Notes named on Schedule I hereto (each a “Purchaser” and collectively, the “Purchasers”).

RECITALS

WHEREAS,
Company has requested that the Purchasers purchase from Company up to $16,600,000 in aggregate principal amount of Subordinated
Notes (as defined herein), which aggregate amount is intended to qualify as Tier 2 Capital (as defined herein).

WHEREAS, Company
has engaged Sandler O’Neill + Partners, L.P., as its exclusive placement agent (“Placement Agent”) for
the offering of the Subordinated Notes.

WHEREAS, each
of the Purchasers is an institutional accredited investor as such term is contemplated by Rule 501 of Regulation D (“Regulation
D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

WHEREAS, the
sale of the Subordinated Notes by Company is being made pursuant to Rule 506(b) of Regulation D.

WHEREAS, each
Purchaser is willing to purchase from Company a Subordinated Note in the principal amount set forth in Schedule I (the “Subordinated
Note Amount”) in accordance with the terms, subject to the conditions and in reliance on, the recitals, representations,
warranties, covenants and agreements set forth herein and in the Subordinated Notes.

NOW, THEREFORE,
in consideration of the mutual covenants, conditions and agreements herein contained and other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

		1.	DEFINITIONS.

1.1           Defined
Terms. The following capitalized terms generally used in this Agreement and in the Subordinated Notes have the meanings
defined or referenced below. Certain other capitalized terms used only in specific sections of this Agreement may be defined in
such sections.

“Affiliate(s)”
means, with respect to any Person, such Person’s immediate family members, partners, members or parent and subsidiary corporations,
and any other Person directly or indirectly controlling, controlled by, or under common control with said Person and their respective
Affiliates.

“Agreement”
has the meaning set forth in the preamble hereto.

“Bank”
means Atlantic Stewardship Bank, a New Jersey chartered commercial bank and wholly owned subsidiary of Company.

     

     

    

“Business
Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in the State of New
Jersey are permitted or required by any applicable law or executive order to close.

“Closing”
has the meaning set forth in Section 2.4.

“Closing
Date” means August 28, 2015.

“Company”
has the meaning set forth in the preamble hereto and shall include any successors to Company.

“Company’s
Liabilities” means Company’s obligations under the Transaction Documents.

“Company’s
SEC Reports” means (i) Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014,
as filed with the SEC, (ii) Company’s Definitive Proxy Statement on Schedule 14A related to its 2015 Annual Meeting of Shareholders,
as filed with the SEC, (iii) any Current Report on Form 8-K, as filed or furnished by Company with the SEC since January 1, 2015,
and (iv) Company’s Quarterly Report on Form 10-Q for the quarterly period ended on June 30, 2015, as filed with the SEC pursuant
to the requirements of the Exchange Act.

“Disbursement”
has the meaning set forth in Section 3.1.

“Equity
Interest” means any and all shares, interests, participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests in a Person which is not a corporation, and any and all warrants,
options or other rights to purchase any of the foregoing.

“Exchange
Act” has the meaning set forth in Section 4.8.

“FDIC”
means the Federal Deposit Insurance Corporation.

“GAAP”
means generally accepted accounting principles in effect from time to time in the United States of America.

“Governmental
Agency(ies)” means, individually or collectively, any federal, state, county or local governmental department, commission,
board, regulatory authority or agency (including, without limitation, each applicable Regulatory Agency) with jurisdiction over
Company.

“Governmental
Licenses” has the meaning set forth in Section 4.3.

“Indebtedness”
means and includes: (i) all items arising from the borrowing of money that, according to GAAP as in effect from time to time, would
be included in determining total liabilities as shown on the consolidated balance sheet of Company or any Subsidiary of Company;
and (ii) all obligations secured by any lien in property owned by Company or any Subsidiary whether or not such obligations shall
have been assumed; provided, however, Indebtedness shall not include deposits or other indebtedness created, incurred
or maintained in the ordinary course of Company’s or Bank’s business (including, without limitation, federal funds
purchased, advances from any Federal Home Loan Bank, secured deposits of municipalities, letters of credit issued by Company or
Bank and repurchase arrangements) and consistent with customary banking practices and applicable laws and regulations.

    2 

     

    

“Leases”
means all leases, licenses or other documents providing for the use or occupancy of any portion of any Property, including all
amendments, extensions, renewals, supplements, modifications, sublets and assignments thereof and all separate letters or separate
agreements relating thereto.

“Material
Adverse Effect” means, with respect to any Person, any change or effect that (i) is or would be reasonably likely to
be material and adverse to the financial position, results of operations or business of such Person, or (ii) would materially impair
the ability of any Person to perform its respective obligations under any of the Transaction Documents, or otherwise materially
impede the consummation of the transactions contemplated hereby; provided, however, that “Material Adverse
Effect” shall not be deemed to include the impact of (1) changes in banking and similar laws, rules or regulations of general
applicability or interpretations thereof by Governmental Agencies, (2) changes in GAAP or regulatory accounting requirements applicable
to financial institutions and their holding companies generally, (3) changes after the date of this Agreement in general economic
or capital market conditions affecting financial institutions or their market prices generally and not specifically related to
Company or the Purchasers, (4) direct effects of compliance with this Agreement on the operating performance of Company or the
Purchasers, including expenses incurred by Company or the Purchasers in consummating the transactions contemplated by this Agreement,
and (5) the effects of any action or omission taken by Company with the prior written consent of the Purchasers, and vice versa,
or as otherwise contemplated by this Agreement and the Subordinated Notes.

“Maturity
Date” means August 28, 2025.

“Person”
means an individual, a corporation (whether or not for profit), a partnership, a limited liability company, a joint venture, an
association, a trust, an unincorporated organization, a government or any department or agency thereof (including a Governmental
Agency) or any other entity or organization.

“Placement
Agent” means Sandler O’Neill + Partners, L.P.

“Property”
means any real property owned or leased by Company or any Affiliate or Subsidiary of Company.

“Purchaser”
or “Purchasers” has the meaning set forth in the preamble hereto.

“Regulation
D” has the meaning set forth in the Recitals.

“Regulatory
Agencies” means any federal or state agency charged with the supervision or regulation of depositary institutions or
holding companies of depositary institutions, or engaged in the insurance of depositary institution deposits, or any court, administrative
agency or commission or other authority, body or agency having supervisory or regulatory authority with respect to Company, Bank
or any of their Subsidiaries.

“SEC”
means the Securities and Exchange Commission.

    3 

     

    

“Secondary
Market Transaction” has the meaning set forth in Section 5.5.

“Securities
Act” has the meaning set forth in the Recitals.

“Subordinated
Note” means the Subordinated Note (or collectively, the “Subordinated Notes”) in the form attached
as Exhibit A hereto, as amended, restated, supplemented or modified from time to time, and each Subordinated Note delivered
in substitution or exchange for such Subordinated Note.

“Subordinated
Note Amount” has the meaning set forth in the Recitals.

“Subsidiary”
means with respect to any Person, any corporation or entity in which a majority of the outstanding Equity Interest is directly
or indirectly owned by such Person.

“Tier 2
Capital” has the meaning given to the term “Tier 2 capital” in 12 C.F.R. Part 208 and 12 C.F.R. Part 250,
as amended, modified and supplemented and in effect from time to time or any replacement thereof.

“Transaction
Documents” has the meaning set forth in Section 3.2.1.

1.2           Interpretations.
The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words “hereof”,
“herein” and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement. The word “including” when used in this Agreement
without the phrase “without limitation,” shall mean “including, without limitation.” All references to
time of day herein are references to Eastern Time unless otherwise specifically provided. All references to this Agreement and
Subordinated Notes shall be deemed to be to such documents as amended, modified or restated from time to time. With respect to
any reference in this Agreement to any defined term, (i) if such defined term refers to a Person, then it shall also mean all heirs,
legal representatives and permitted successors and assigns of such Person, and (ii) if such defined term refers to a document,
instrument or agreement, then it shall also include any replacement, extension or other modification thereof.

1.3           Exhibits
Incorporated. All Exhibits attached are hereby incorporated into this Agreement.

2.           SUBORDINATED
DEBT.

2.1           Certain
Terms. Subject to the terms and conditions herein contained, Company proposes to issue and sell to the Purchasers, severally
and not jointly, Subordinated Notes, in an amount equal to the aggregate of the Subordinated Note Amounts. The Purchasers, severally
and not jointly, each agree to purchase the Subordinated Notes, from Company on the Closing Date in accordance with the terms of,
and subject to the conditions and provisions set forth in, this Agreement and the Subordinated Notes. The Subordinated Note Amounts
shall be disbursed in accordance with Section 3.1. The Subordinated Notes shall bear interest per annum as set forth in
the Subordinated Notes. The unpaid principal balance of the Subordinated Notes plus all accrued but unpaid interest thereon shall
be due and payable on the Maturity Date, or such earlier date on which such amount shall become due and payable on account of (i)
acceleration by the Purchasers in accordance with the terms of the Subordinated Notes and this Agreement or (ii) Company’s
delivery of a notice of redemption or repayment in accordance with the terms of the Subordinated Notes.

    4 

     

    

2.2           Subordination.
The Subordinated Notes shall be subordinated in accordance with the subordination provisions set forth therein.

2.3           Maturity
Date. On the Maturity Date, all sums due and owing under this Agreement and the Subordinated Notes shall be repaid in full.
Company acknowledges and agrees that the Purchasers have not made any commitments, either express or implied, to extend the terms
of the Subordinated Notes past their Maturity Date, and shall not extend such terms beyond the Maturity Date unless Company and
the Purchasers hereafter specifically otherwise agree in writing.

2.4           Unsecured
Obligations. The obligations of Company to the Purchasers under the Subordinated Notes shall be unsecured.

2.5           The
Closing. The execution and delivery of the Transaction Documents (the “Closing”) shall occur at the
offices of Company at 10:00 a.m. (local time) on the Closing Date, or at such other place or time or on such other date as the
parties hereto may agree.

2.6           Payments.
Company agrees that matters concerning payments and application of payments shall be as set forth in this Agreement and in the
Subordinated Notes.

2.7           Right
of Offset. Each Purchaser hereby expressly waives any right of offset it may have against Company.

2.8           Use
of Proceeds. Company shall use the net proceeds from the sale of Subordinated Notes to redeem outstanding shares of preferred
stock issued to the United States Treasury in connection with its participation in the Small Business Lending Fund and for general
corporate purposes.

3.           DISBURSEMENT.

3.1           Disbursement.
On the Closing Date, assuming all of the terms and conditions set forth in Section 3.2 have been satisfied by Company and
Company has executed and delivered to each of the Purchasers this Agreement and such Purchaser’s the Subordinated Note and
any other related documents in form and substance reasonably satisfactory to the Purchasers, each Purchaser shall disburse the
Subordinated Note Amount in immediately available funds set forth next to its name in Schedule I to Company in exchange
for a Subordinated Note with a principal amount equal to such Subordinated Note Amount (the “Disbursement”).
The Company will deliver to the respective Purchaser one or more certificates representing the Subordinated Notes in definitive
form (or provide evidence of the same with the original to be delivered by the Company by overnight delivery on the next calendar
day in accordance with the delivery instructions of the Purchaser), registered in such names and denominations as such Purchasers
may request.

3.2           Conditions
Precedent to Disbursement.

3.2.1           Conditions
to the Purchasers’ Obligation. The obligation of each Purchaser to consummate the purchase of the Subordinated Notes
to be purchased by them at Closing and to effect the Disbursement is subject to delivery by or at the direction of the Company
to such Purchaser each of the following (or written waiver by such Purchaser prior to the Closing of such delivery):

    5 

     

    

3.2.1.1           Transaction
Documents. This Agreement and the Subordinated Notes (collectively, the “Transaction Documents”), each
duly authorized and executed by Company.

3.2.1.2           Authority
Documents.

		(a)	A copy, certified by the Secretary or Assistant Secretary of Company, of the Restated Certificate
of Incorporation of Company;

		(b)	A certificate of existence of Company issued by the Secretary of State of the State of New Jersey;

		(c)	A copy, certified by the Secretary or Assistant Secretary, of the Bylaws of Company;

		(d)	A copy, certified by the Secretary or Assistant Secretary of Company, of the resolutions of the
board of directors (and any committee thereof) of Company authorizing the execution, delivery and performance of the Transaction
Documents;

		(e)	An incumbency certificate of the Secretary or Assistant Secretary of Company certifying the names
of the officer or officers of Company authorized to sign the Transaction Documents and the other documents provided for in this
Agreement; and

		(f)	The opinion of McCarter & English, LLP, counsel to the Company, dated as of the Closing Date,
substantially in the form set forth at Exhibit B attached hereto addressed to the Purchasers and Placement Agent.

3.2.1.3           Officer’s
Certificate. A certificate signed on behalf of Company by a senior executive officer certifying that the representations
and warranties of Company set forth in this Agreement are true and correct in all respects on and as of the date of this Agreement
and on and as of the Closing Date as though made on and as of the Closing Date, except where the failure to be true and correct,
individually or in the aggregate, would not be reasonably likely to have a Material Adverse Effect (and except that (i) representations
and warranties made as of a specified date shall only be required to be true and correct as of such date and (ii) the representations
and warranties of Company set forth in Sections 4.2.1, 4.2.3 and 4.5 shall be true and correct in all respects).

3.2.1.4           Other
Documents. Such other certificates, affidavits, schedules, resolutions, notes and/or other documents which are provided
for hereunder or as a Purchaser may reasonably request.

    6 

     

    

3.2.1.5           Aggregate
Investments. Prior to, or contemporaneously with the Closing, each of the Purchasers set forth on Schedule I shall
have actually subscribed for the amounts set forth opposite such Purchaser’s name on Schedule I.

3.2.2        Conditions
to Company’s Obligation.

3.2.2.1           Since
the date of this Agreement, there shall not have been any action taken, or any law, rule or regulation enacted, entered, enforced
or deemed applicable to Company or its Subsidiaries or the transactions contemplated by this Agreement by any Governmental Agency
which imposes any restriction or condition that Company determines, in its reasonable good faith judgment, is materially and unreasonably
burdensome on Company’s business or would materially reduce the economic benefits of the transactions contemplated by this
Agreement to Company to such a degree that Company would not have entered into this Agreement had such condition or restriction
been known to it on the date hereof.

3.2.2.2           With
respect to a given Purchaser, the obligation of Company to consummate the sale of the Subordinated Notes and to effect the Closing
is subject to delivery by or at the direction of such Purchaser to Company each of the following (or written waiver by Company
prior to the Closing of such delivery):

		(a)	Transaction Documents. This Agreement, duly authorized and executed by such Purchaser.

		(b)	Officer’s Certificate. A certificate signed on behalf of such Purchaser by a duly authorized
person certifying that the representations and warranties of such Purchaser set forth in this Agreement are true and correct in
all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing
Date.

		4.	REPRESENTATIONS AND WARRANTIES OF COMPANY.

Company hereby represents
and warrants to each Purchaser as follows:

		4.1	Organization and Authority.

4.1.1        Organization
Matters of Company and Its Subsidiaries.

4.1.1.1           Company
is validly existing and in good standing under the laws of the State of New Jersey and has all requisite corporate power and authority
to conduct its business and activities as presently conducted, to own its properties, and to perform its obligations under the
Transaction Documents. Company is duly qualified as a foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct
of business, except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. Company
is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended.

    7 

     

    

4.1.1.2           Each
Subsidiary either has been duly organized and is validly existing as a corporation, a limited liability company or has been duly
chartered and is validly existing as a New Jersey chartered commercial bank, in each case in good standing under the laws of the
jurisdiction of its incorporation or formation, has corporate power and authority to own, lease and operate its properties and
to conduct its business and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not result in a Material Adverse Effect. All of the issued
and outstanding shares of capital stock or other equity interests in each Subsidiary have been duly authorized and validly issued,
are fully paid and non-assessable and are owned by Company, directly or through Subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim; none of the outstanding shares of capital stock of, or other equity interests in,
any Subsidiary were issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary or any other
entity.

4.1.1.3           Bank
is a New Jersey chartered commercial bank. The deposit accounts of Bank are insured by the FDIC up to applicable limits. Neither
Company nor Bank has received any notice or other information indicating that Bank is not an “insured depository institution”
as defined in 12 U.S.C. Section 1813, nor has any event occurred which could reasonably be expected to adversely affect the status
of Bank as an FDIC-insured institution.

4.1.2          Capital
Stock and Related Matters. All of the outstanding capital stock of Company has been duly authorized and validly issued
and is fully paid and non-assessable. There are, as of the date hereof, no outstanding options, rights, warrants or other agreements
or instruments obligating Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the
capital stock of Company or obligating Company to grant, extend or enter into any such agreement or commitment to any Person other
than Company except pursuant to Company’s equity incentive plans duly adopted by Company’s Board of Directors.

4.2           No
Impediment to Transactions.

4.2.1           Transaction
is Legal and Authorized. Company has the requisite corporate power to enter into and perform its obligations under this
Agreement.

4.2.2           Agreement.
This Agreement has been duly authorized, executed and delivered, and, assuming due authorization, execution and delivery by the
other parties thereto, constitutes the legal, valid and binding obligations of Company, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors’ rights generally or by general equitable principles.

4.2.3           Subordinated
Notes. The Subordinated Notes have been duly authorized by the Company and when executed by the Company and issued, delivered
to and paid for by the Purchasers in accordance with the terms of the Agreement, will have been duly executed, authenticated,
issued and delivered and will constitute legal, valid and binding obligations of Company, and enforceable in accordance with
their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors’ rights generally or by general equitable principles.

    8 

     

    

4.2.4           No
Defaults or Restrictions. Neither the execution and delivery of the Transaction Documents nor compliance with their respective
terms and conditions will (whether with or without the giving of notice or lapse of time or both) (i) violate, conflict with or
result in a breach of, or constitute a default under: (1) the Certificate of Incorporation or Bylaws of Company; (2) any of the
terms, obligations, covenants, conditions or provisions of any corporate restriction or of any contract, agreement, indenture,
mortgage, deed of trust, pledge, bank loan or credit agreement, or any other agreement or instrument to which Company or Bank,
as applicable, is now a party or by which it or any of its properties may be bound or affected; (3) any judgment, order, writ,
injunction, decree or demand of any court, arbitrator, grand jury, or Governmental Agency; or (4) any statute, rule or regulation
applicable to Company, except, in the case of items (2), (3) or (4), for such violations and conflicts that would not reasonably
be expected to have, singularly or in the aggregate, a Material Adverse Effect on Company, or (ii) result in the creation or imposition
of any lien, charge or encumbrance of any nature whatsoever upon any property or asset of Company. Neither Company nor Bank is
in default in the performance, observance or fulfillment of any of the terms, obligations, covenants, conditions or provisions
contained in any indenture or other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which any
such Indebtedness is issued, or any other agreement or instrument to which Company or Bank, as applicable, is a party or by which
Company or Bank, as applicable, or any of its properties may be bound or affected, except, in each case, only such defaults that
would not reasonably be expected to have, singularly or in the aggregate, a Material Adverse Effect on Company.

4.2.5           Governmental
Consent. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained by Company
that have not been obtained, and no registrations or declarations are required to be filed by Company that have not been filed
in connection with, or, in contemplation of, the execution and delivery of, and performance under, the Transaction Documents, except
for applicable requirements, if any, of the Securities Act, the Exchange Act or state securities laws or “blue sky”
laws of the various states and any applicable federal or state banking laws and regulations.

4.3           Possession
of Licenses and Permits. Company and its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations
(collectively, “Governmental Licenses”) issued by the appropriate Governmental Agencies necessary to conduct
the business now operated by it except where the failure to possess such Governmental Licenses would not, singularly or in the
aggregate, have a Material Adverse Effect on Company or such applicable Subsidiary; Company and each Subsidiary of Company is in
compliance with the terms and conditions of all such Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect on Company or such applicable Subsidiary of Company; all of the Governmental
Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a Material Adverse Effect on Company or such applicable Subsidiary
of Company; and neither Company nor any Subsidiary of Company has received any notice of proceedings relating to the revocation
or modification of any such Governmental Licenses.

4.4           Financial
Condition.

4.4.1           Company
Financial Statements. The financial statements of Company included in Company’s SEC Reports (including the related
notes, where applicable) (i) have been prepared from, and are in accordance with, the books and records of Company; (ii) fairly
present in all material respects the results of operations, cash flows, changes in stockholders’ equity and financial position
of Company and its consolidated Subsidiaries, for the respective fiscal periods or as of the respective dates therein set forth
(subject in the case of unaudited statements to recurring year-end audit adjustments normal in nature and amount), as applicable;
(iii) complied as to form, as of their respective dates of filing in all material respects with applicable accounting and banking
requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during
the periods involved, except, in each case, as indicated in such statements or in the notes thereto and Regulation S-X promulgated
under the Securities Act. The books and records of Company have been, and are being, maintained in all material respects in accordance
with GAAP and any other applicable legal and accounting requirements. Company does not have any material liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities
that are reflected or reserved against on the consolidated balance sheet of Company contained in Company SEC Reports for Company’s
most recently filed quarterly or annual fiscal period, as applicable, and for liabilities incurred in the ordinary course of business
consistent with past practice or in connection with this Agreement and the transactions contemplated hereby.

    9 

     

    

4.4.2           Absence
of Default. Since the date of the latest audited financial statements included in Company’s SEC Reports, no event
has occurred which either of itself or with the lapse of time or the giving of notice or both, would give any creditor of Company
the right to accelerate the maturity of any material Indebtedness of Company. Company is not in default under any other Lease,
agreement or instrument, or any law, rule, regulation, order, writ, injunction, decree, determination or award, non-compliance
with which could reasonably be expected to result in a Material Adverse Effect on Company.

4.4.3           Ownership
of Property. Company and each of its Subsidiaries has good and marketable title as to all real property owned by it and
good title to all assets and properties owned by Company and such Subsidiary in the conduct of its businesses, whether such assets
and properties are real or personal, tangible or intangible, including assets and property reflected in the most recent balance
sheet contained in Company’s SEC Reports or acquired subsequent thereto (except to the extent that such assets and properties
have been disposed of in the ordinary course of business, since the date of such balance sheet), subject to no encumbrances, liens,
mortgages, security interests or pledges, except (i) those items which secure liabilities for public or statutory obligations or
any discount with, borrowing from or other obligations to the Federal Home Loan Bank, inter-bank credit facilities, reverse repurchase
agreements or any transaction by Bank acting in a fiduciary capacity, (ii) statutory liens for amounts not yet delinquent or which
are being contested in good faith and (iii) such as do not, singly or in the aggregate, materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of such property by Company or any of its Subsidiaries.
Company and each of its Subsidiaries, as lessee, has the right under valid and existing leases of real and personal properties
that are material to Company or such Subsidiary, as applicable, in the conduct of its business to occupy or use all such properties
as presently occupied and used by it. Such existing leases and commitments to lease constitute or will constitute operating leases
for both tax and financial accounting purposes and the lease expense and minimum rental commitments with respect to such leases
and lease commitments are as disclosed in all material respects in Company’s SEC Reports.

    10 

     

    

4.5           No
Material Adverse Change. Since the date of the latest audited financial statements included in Company’s SEC Reports,
there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect on Company
or any of its Subsidiaries.

4.6           Legal
Matters.

4.6.1           Compliance
with Law. Company and each of its Subsidiaries (i) has complied with and (ii) is not under investigation with respect to,
and, to the Company’s knowledge, have not been threatened to be charged with or given any notice of any material violation
of any applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government, or any instrumentality
or agency thereof, having jurisdiction over the conduct of its business or the ownership of its properties, except where any such
failure to comply or violation would not reasonably be expected to have a Material Adverse Effect on Company or any of its Subsidiaries.

4.6.2           Regulatory
Enforcement Actions. Company, Bank and its other Subsidiaries are in compliance in all material respects with all laws
administered by and regulations of any Governmental Agency applicable to it or to them, the failure to comply with which would
have a Material Adverse Effect. None of Company, Bank, Company’s Subsidiaries nor any of their officers or directors is now
operating under any restrictions, agreements, memoranda, or commitments (other than restrictions of general application) imposed
by any Governmental Agency, nor are, to Company’s knowledge, (a) any such restrictions threatened or (b) any agreements,
memoranda or commitments being sought by any Governmental Agency.

4.6.3           Pending
Litigation. There are no actions, suits, proceedings or written agreements pending, or, to Company’s knowledge, threatened
or proposed, against Company, Bank, or any of its other Subsidiaries at law or in equity or before or by any federal, state, municipal,
or other governmental department, commission, board, or other administrative agency, domestic or foreign, that, either separately
or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Company or any of its Subsidiaries or affect
issuance or payment of the Subordinated Notes; and neither Company nor any of its Subsidiaries is a party to or named as subject
to the provisions of any order, writ, injunction, or decree of, or any written agreement with, any court, commission, board or
agency, domestic or foreign, that either separately or in the aggregate, will have a Material Adverse Effect on Company or any
of its Subsidiaries.

4.6.4           Brokerage
Commissions. Except for commissions paid to the Placement Agent, neither Company nor any Affiliate of Company is obligated
to pay any brokerage commission or finder’s fee to any Person in connection with the transactions contemplated by this Agreement.

4.6.5           Investment
Company Act. Neither Company nor any of its Subsidiaries is an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

4.7           No
Misstatement. No information, exhibit, report, schedule or document, when viewed together as a whole, furnished by Company
to Purchasers in connection with the negotiation, execution or performance of this Agreement contains any untrue statement of a
material fact, or omits to state a material fact necessary to make the statements contained therein not misleading in light of
the circumstances under which they were made, not misleading.

    11 

     

    

4.8           Reporting
Compliance. Company is subject to, and is in compliance in all material respects with, the reporting requirements of Section
13 and Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and the rules and the regulations of the
SEC thereunder (collectively, the “Exchange Act”). Company’s SEC Reports at the time they were or hereafter
are filed with the SEC, complied in all material respects with the requirements of the Exchange Act and did not and do not include
any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.

4.9           Internal
Control Over Financial Reporting. Company and its Subsidiaries maintain systems of “internal control over financial
reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have
been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons
performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP, including, but not limited to, a system of accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s
general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. Since the end of Company’s most recent audited
fiscal year, (y) Company has no knowledge of (i) any material weakness in Company’s internal control over financial reporting
(whether or not remediated) or (ii) any fraud, whether or not material, that involves management or other employees who have a
significant role in Company’s internal controls and (z) there has been no change in Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to materially affect, Company’s internal control
over financial reporting.

4.10           Disclosure
Controls and Procedures. Company and its Subsidiaries maintain an effective system of disclosure controls and procedures
(as defined in Rule 13a-15 and Rule 15d-15 of the Exchange Act), that (i) are designed to ensure that information required to be
disclosed by Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms and that material information relating to Company and its
Subsidiaries is made known to Company’s principal executive officer and principal financial officer by others within Company
and its Subsidiaries to allow timely decisions regarding disclosure, and (ii) are effective in all material respects to perform
the functions for which they were established. As of the date hereof, Company has no knowledge that would reasonably cause it to
believe that the evaluation to be conducted of the effectiveness of Company’s disclosure controls and procedures for the
most recently ended fiscal quarter period will result in a finding that such disclosure controls and procedures are ineffective
for such quarter ended. Based on the evaluation of Company’s and each Subsidiary’s disclosure controls and procedures
described above, Company is not aware of (1) any significant deficiency in the design or operation of internal controls which could
adversely affect Company’s ability to record, process, summarize and report financial data or any material weaknesses in
internal controls or (2) any fraud, whether or not material, that involves management or other employees who have a significant
role in Company’s internal controls. Since the most recent evaluation of Company’s disclosure controls and procedures
described above, there have been no significant changes in internal controls or in other factors that could significantly affect
internal controls.

    12 

     

    

4.11           Representations
and Warranties Generally. The representations and warranties of Company set forth in this Agreement are true and correct
as of the date hereof and will be true and correct as of the Closing Date and as otherwise specifically provided herein. Any certificate
signed by an officer of Company and delivered to the Purchasers or to counsel for Purchasers shall be deemed to be a representation
and warranty by Company to the Purchasers as to the matters set forth therein.

5.            GENERAL
COVENANTS, CONDITIONS AND AGREEMENTS.

Company hereby further
covenants and agrees with each Purchaser as follows:

5.1           Compliance
with Transaction Documents. Company shall comply with, observe and timely perform each and every one of the covenants,
agreements and obligations under the Transaction Documents.

5.2           Affiliate
Transactions. Company shall not itself, nor shall it cause, permit or allow any Subsidiary to enter into any transaction,
including, the purchase, sale or exchange of property or the rendering of any service, with any Affiliate of Company except in
the ordinary course of business and pursuant to the reasonable requirements of Company’s or such Affiliate’s business
and upon terms consistent with applicable laws and regulations and reasonably found by the appropriate board(s) of directors to
be fair and reasonable and no less favorable to Company or such Affiliate than would be obtained in a comparable arm’s length
transaction with a Person not an Affiliate.

5.3           Compliance
with Laws.

5.3.1           Generally.
Company shall comply and cause Bank and each other Subsidiary to comply in all material respects with all applicable statutes,
rules, regulations, orders and restrictions in respect of the conduct of its business and the ownership of its properties, except,
in each case, where such noncompliance would not reasonably be expected to have a Material Adverse Effect on Company.

5.3.2           Regulated
Activities. Company shall not itself, nor shall it cause, permit or allow Bank or any other Subsidiary (i) engage in any
business or activity not permitted by all applicable laws and regulations, except where such business or activity would not reasonably
be expected to have a Material Adverse Effect on Company, Bank and/or such Subsidiary or (ii) make any loan or advance secured
by the capital stock of another bank or depository institution, or acquire the capital stock, assets or obligations of or any interest
in another bank or depository institution, in each case other than in accordance with applicable laws and regulations and safe
and sound banking practices.

5.3.3           Taxes.
Company shall and shall cause Bank and any other Subsidiary to promptly pay and discharge all taxes, assessments and other governmental
charges imposed upon Company, Bank or any other Subsidiary or upon the income, profits, or property of Company or any Subsidiary
and all claims for labor, material or supplies which, if unpaid, might by law become a lien or charge upon the property of Company,
Bank or any other Subsidiary. Notwithstanding the foregoing, none of Company, Bank or any other Subsidiary shall be required to
pay any such tax, assessment, charge or claim, so long as the validity thereof shall be contested in good faith by appropriate
proceedings, and appropriate reserves therefor shall be maintained on the books of Company, Bank and such other Subsidiary.

    13 

     

    

5.3.4           Corporate
Existence. Company shall do or cause to be done all things reasonably necessary to maintain, preserve and renew its corporate
existence and that of Bank and the other Subsidiaries and its and their rights and franchises, and comply in all material respects
with all related laws applicable to Company, Bank or the other Subsidiaries.

5.3.5           Dividends,
Payments, and Guarantees During Event of Default. During the continuance of an Event of Default (as defined under the Subordinated
Notes) and except as required by any federal or state Governmental Agency, Company agrees not to (a) declare or pay any dividends
on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock; (b) make any payment
of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any of Company’s debt that ranks equal
with or junior to the Subordinated Notes; or (c) make any payments under any guarantee that ranks equal with or junior to the Subordinated
Notes, other than (i) any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase
shares of, any class of Company’s common stock; (ii) any declaration of a non-cash dividend in connection with the implementation
of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase
of any such rights pursuant thereto; (iii) as a result of a reclassification of Company’s capital stock or the exchange or
conversion of one class or series of Company’s capital stock for another class or series of Company’s capital stock;
(iv) the purchase of fractional interests in shares of Company’s capital stock pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged; or (v) purchases of any class of Company’s common stock
related to the issuance of common stock or rights under any benefit plans for Company’s directors, officers or employees
or any of Company’s dividend reinvestment plans; provided, however, that any payment permitted by clauses (iii), (iv) or
(v) above shall not exceed $300,000.

5.3.6           Tier
2 Capital. If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than due to
the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity
Date of the Subordinated Notes, Company will immediately notify the Purchasers, and thereafter Company and the Purchasers will
work together in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the applicable
portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital.

5.4           Absence
of Control. It is the intent of the parties to this Agreement that in no event shall the Purchasers, by reason of any of
the Transaction Documents, be deemed to control, directly or indirectly, Company, and the Purchasers shall not exercise, or be
deemed to exercise, directly or indirectly, a controlling influence over the management or policies of Company.

5.5           Secondary
Market Transactions. Each Purchaser shall have the right at any time and from time to time to securitize its Subordinated
Notes or any portion thereof in a single asset securitization or a pooled loan securitization of rated single or multi-class securities
secured by or evidencing ownership interests in the Subordinated Notes (each such securitization is referred to herein as a “Secondary
Market Transaction”). In connection with any such Secondary Market Transaction, Company shall, at Company’s expense,
cooperate with the Purchasers and otherwise reasonably assist the Purchasers in satisfying the market standards to which the Purchasers
customarily adhere or which may be reasonably required in the marketplace or by applicable rating agencies in connection with any
such Secondary Market Transaction. Subject to any written confidentiality obligation, all information regarding Company may be
furnished, without liability except in the case of gross negligence or willful misconduct, to any Purchaser and to any Person reasonably
deemed necessary by Purchaser in connection with participation in such Secondary Market Transaction. All documents, financial statements,
appraisals and other data relevant to Company or the Subordinated Notes may be retained by any such Person.

    14 

     

    

6.           REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE PURCHASERS.

Each Purchaser hereby
represents and warrants to Company, and covenants with Company, severally and not jointly, as follows:

6.1           Legal
Power and Authority. It has all necessary power and authority to execute, deliver and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. It is an entity duly organized, validly existing and in good
standing under the laws its jurisdiction of organization.

6.2           Authorization
and Execution. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action
on the part of such Purchaser, and this Agreement is a legal, valid and binding obligation of such Purchaser, enforceable against
such Purchaser in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

6.3           No
Conflicts. Neither the execution, delivery or performance of the Transaction Documents nor the consummation of any of the
transactions contemplated thereby will conflict with, violate, constitute a breach of or a default (whether with or without the
giving of notice or lapse of time or both) under (i) its organizational documents, (ii) any agreement to which it is party, (iii)
any law applicable to it or (iv) any order, writ, judgment, injunction, decree, determination or award binding upon or affecting
it.

6.4           Purchase
for Investment. It is purchasing the Subordinated Note for its own account and not with a view to distribution and with
no present intention of reselling, distributing or otherwise disposing of the same. It has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for, or which is likely to compel, a disposition of
the Subordinated Notes in any manner.

6.5           Institutional
Accredited Investor. It is and will be on the Closing Date an institutional “accredited investor” as such term
is defined in Rule 501(a) of Regulation D and as contemplated by subsections (1), (2), (3) and (7) of Rule 501(a) of Regulation
D, and has no less than $5,000,000 in total assets.

    15 

     

    

6.6           Financial
and Business Sophistication. It has such knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of the prospective investment in the Subordinated Notes. It has relied solely upon its own knowledge
of, and/or the advice of its own legal, financial or other advisors with regard to, the legal, financial, tax and other considerations
involved in deciding to invest in the Subordinated Notes.

6.7           Ability
to Bear Economic Risk of Investment. It recognizes that an investment in the Subordinated Notes involves substantial risk.
It has the ability to bear the economic risk of the prospective investment in the Subordinated Notes, including the ability to
hold the Subordinated Notes indefinitely, and further including the ability to bear a complete loss of all of its investment in
Company.

6.8           Information.
It acknowledges that: (i) it is not being provided with the disclosures that would be required if the offer and sale of the Subordinated
Notes were registered under the Securities Act, nor is it being provided with any offering circular or prospectus prepared in connection
with the offer and sale of the Subordinated Notes; (ii) it has conducted its own examination of Company and the terms of the Subordinated
Notes to the extent it deems necessary to make its decision to invest in the Subordinated Notes; and (iii) it has availed itself
of publicly available financial and other information concerning Company to the extent it deems necessary to make its decision
to purchase the Subordinated Notes. It has reviewed the information set forth in Company’s SEC Reports and the exhibits and
schedules hereto.

6.9           Access
to Information. It acknowledges that it and its advisors have been furnished with all materials relating to the business,
finances and operations of Company that have been requested of it or its advisors and have been given the opportunity to ask questions
of, and to receive answers from, persons acting on behalf of Company concerning terms and conditions of the transactions contemplated
by this Agreement in order to make an informed and voluntary decision to enter into this Agreement.

6.10           Investment
Decision. It has made its own investment decision based upon its own judgment, due diligence and advice from such advisors
as it has deemed necessary and not upon any view expressed by any other person or entity, including the Placement Agent. Neither
such inquiries nor any other due diligence investigations conducted by it or its advisors or representatives, if any, shall modify,
amend or affect its right to rely on Company’s representations and warranties contained herein. It is not relying upon, and
has not relied upon, any advice, statement, representation or warranty made by any Person by or on behalf of Company, including,
without limitation, the Placement Agent, except for the express statements, representations and warranties of Company made or contained
in this Agreement. Furthermore, it acknowledges that (i) the Placement Agent has not performed any due diligence review on behalf
of it and (ii) nothing in this Agreement or any other materials presented by or on behalf of Company to it in connection with the
purchase of the Subordinated Notes constitutes legal, tax or investment advice.

6.11           Private
Placement; No Registration; Restricted Legends. It understands and acknowledges that the Subordinated Notes are being sold
by Company without registration under the Securities Act in reliance on the exemption from federal and state registration set forth
in, respectively, Rule 506(b) of Regulation D under Section 4(a)(2) of the Securities Act and Section 18 of the Securities Act,
or any state securities laws, and accordingly, may be resold, pledged or otherwise transferred only if exemptions from the Securities
Act and applicable state securities laws are available to it. It further acknowledges and agrees that all certificates or other
instruments representing the Subordinated Notes will bear the restrictive legend set forth in the form of Subordinated Note. It
further acknowledges its primary responsibilities under the Securities Act and, accordingly, will not sell or otherwise transfer
the Subordinated Notes or any interest therein without complying with the requirements of the Securities Act and the rules and
regulations promulgated thereunder and the requirements set forth in this Agreement.

    16 

     

    

6.12           Placement
Agent. It will purchase the Subordinated Note(s) directly from Company and not from the Placement Agent and understands
that neither the Placement Agent nor any other broker or dealer has any obligation to make a market in the Subordinated Notes.

6.13           Tier
2 Capital. If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than due to
the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity
Date of the Subordinated Notes, Company will immediately notify the Purchasers, and thereafter Company and the Purchasers will
work together in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the applicable
portions of the obligations evidenced by the Subordinated Notes to qualify as Tier 2 Capital.

6.14           Accuracy
of Representations. It understands that each of the Placement Agent and Company will rely upon the truth and accuracy of
the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement,
and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or
if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agent
and Company.

6.15           Representations
and Warranties Generally. The representations and warranties of the Purchaser set forth in this Agreement are true and
correct as of the date hereof and will be true and correct as of the Closing Date and as otherwise specifically provided herein.
Any certificate signed by a duly authorized representative of the Purchaser and delivered to the Company or to counsel for Company
shall be deemed to be a representation and warranty by the Purchaser to Company as to the matters set forth therein.

7.           TERMINATION.

The Purchasers may
terminate this Agreement (i) at any time prior to the Closing Date by written notice signed by all Purchasers to Company if the
Purchasers shall decline to purchase the Subordinated Notes for any reason permitted by this Agreement or (ii) on the Closing Date
if any condition described in Section 3.2 is not fulfilled by the Company or waived in writing by the Purchasers on or prior
to the Closing Date. Any termination pursuant to this Section shall be without liability on the part of (a) Company to the Purchasers
or (b) the Purchasers to Company.

8.           MISCELLANEOUS.

8.1           Time
of the Essence. Time is of the essence of this Agreement.

    17 

     

    

8.2           Waiver
or Amendment. No waiver or amendment of any term, provision, condition, covenant or agreement herein or in the Subordinated
Notes shall be effective except with the consent of the holders of not less than more than fifty percent (50%) in aggregate principal
amount (excluding any Subordinated Notes held by Company or any of its Affiliates) of the Subordinated Notes at the time outstanding;
provided, however, that without the consent of each holder of an affected Subordinated Note, no such amendment or
waiver may: (i) reduce the principal amount of the Subordinated Note; (ii) reduce the rate of or change the time for payment of
interest on any Subordinated Note; (iii) extend the maturity of any Subordinated Note, (iv) change the currency in which payment
of the obligations of Company under this Agreement and the Subordinated Notes are to be made; or (v) lower the percentage of aggregate
principal amount of outstanding Subordinated Notes required to approve any amendment of this Agreement or the Subordinated Notes,
(vi) make any changes to Section 6 (Failure to Make a Payment) of the Subordinated Notes that adversely affects the rights of any
holder of a Subordinated Note; or (vii) disproportionately affect any of the holders of the then outstanding Subordinated Notes.
Notwithstanding the foregoing, Company may amend or supplement the Subordinated Notes without the consent of the holders of the
Subordinated Notes to cure any ambiguity, defect or inconsistency or to provide for uncertificated Subordinated Notes in addition
to or in place of certificated Subordinated Notes, or to make any change that does not adversely affect the rights of any holder
of any of the Subordinated Notes. No failure to exercise or delay in exercising, by a Purchaser or any holder of the Subordinated
Notes, of any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right or remedy provided
by law. The rights and remedies provided in this Agreement are cumulative and not exclusive of any right or remedy provided by
law or equity. No notice or demand on Company in any case shall, in itself, entitle Company to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the Purchasers to any other or further action in any
circumstances without notice or demand. No consent or waiver, expressed or implied, by the Purchasers to or of any breach or default
by Company in the performance of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any
other breach or default in the performance of the same or any other obligations of Company hereunder. Failure on the part of the
Purchasers to complain of any acts or failure to act or to declare an Event of Default, irrespective of how long such failure continues,
shall not constitute a waiver by the Purchasers of their rights hereunder or impair any rights, powers or remedies on account of
any breach or default by Company.

8.3           Severability.
Any provision of this Agreement which is unenforceable or invalid or contrary to law, or the inclusion of which would adversely
affect the validity, legality or enforcement of this Agreement, shall be of no effect and, in such case, all the remaining terms
and provisions of this Agreement shall subsist and be fully effective according to the tenor of this Agreement the same as though
any such invalid portion had never been included herein. Notwithstanding any of the foregoing to the contrary, if any provisions
of this Agreement or the application thereof are held invalid or unenforceable only as to particular persons or situations, the
remainder of this Agreement, and the application of such provision to persons or situations other than those to which it shall
have been held invalid or unenforceable, shall not be affected thereby, but shall continue valid and enforceable to the fullest
extent permitted by law.

8.4           Notices.
Any notice which any party hereto may be required or may desire to give hereunder shall be deemed to have been given if in writing
and if delivered personally, or if mailed, postage prepaid, by United States registered or certified mail, return receipt requested,
or if delivered by a responsible overnight commercial courier promising next business day delivery, addressed:

    18 

     

    

	if to Company:	
        Stewardship Financial Corporation

        630 Godwin Avenue

        Midland Park, New Jersey 07432

         

        Attention: Claire Chadwick

	with a copy to:	
        McCarter & English, LLP

        Four Gateway Center

        100 Mulberry Street

        Newark, New Jersey 07102

         

        Attention: Michael Horn, Esq.

           Michele Vaillant, Esq.

         

	if to the Purchasers:	To the addresses indicated on Schedule I.

 

or to such other address or addresses
as the party to be given notice may have furnished in writing to the party seeking or desiring to give notice, as a place for the
giving of notice; provided that no change in address shall be effective until five (5) Business Days after being given to the other
party in the manner provided for above. Any notice given in accordance with the foregoing shall be deemed given when delivered
personally or, if mailed, three (3) Business Days after it shall have been deposited in the United States mails as aforesaid or,
if sent by overnight courier, the Business Day following the date of delivery to such courier (provided next business day delivery
was requested).

8.5           Successors
and Assigns. This Agreement shall inure to the benefit of the parties and their respective heirs, legal representatives,
successors and assigns; except that, unless a Purchaser consents in writing, no assignment made by Company in violation of this
Agreement shall be effective or confer any rights on any purported assignee of Company. The term “successors and assigns”
will not include a purchaser of any of the Subordinated Notes from any Purchaser merely because of such purchase.

8.6           No
Joint Venture. Nothing contained herein or in any document executed pursuant hereto and no action or inaction whatsoever
on the part of a Purchaser, shall be deemed to make a Purchaser a partner or joint venturer with Company.

8.7           Documentation.
All documents and other matters required by any of the provisions of this Agreement to be submitted or furnished to a Purchaser
shall be in form and substance satisfactory to such Purchaser.

8.8           Entire
Agreement. This Agreement and the Subordinated Notes along with the Exhibits thereto constitute the entire agreement between
the parties hereto with respect to the subject matter hereof and may not be modified or amended in any manner other than by supplemental
written agreement executed by the parties hereto. No party, in entering into this Agreement, has relied upon any representation,
warranty, covenant, condition or other term that is not set forth in this Agreement or in the Subordinated Notes.

8.9           Choice
of Law. This Agreement shall be governed by and construed in accordance with the laws of the New Jersey without giving
effect to its laws or principles of conflict of laws. Nothing herein shall be deemed to limit any rights, powers or privileges
which a Purchaser may have pursuant to any law of the United States of America or any rule, regulation or order of any department
or agency thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by a Purchaser which is lawful
pursuant to, or which is permitted by, any of the foregoing.

    19 

     

    

8.10           No
Third Party Beneficiary. This Agreement is made for the sole benefit of Company and the Purchasers, and no other person
shall be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for any purpose whatsoever,
nor shall any other person have any right of action of any kind hereon or be deemed to be a third party beneficiary hereunder;
provided, that the Placement Agent may rely on the representations and warranties contained herein to the same extent as
if it were a party to this Agreement.

8.11           Legal
Tender of United States. All payments hereunder shall be made in coin or currency which at the time of payment is legal
tender in the United States of America for public and private debts.

8.12           Captions;
Counterparts. Captions contained in this Agreement in no way define, limit or extend the scope or intent of their respective
provisions. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute
but one and the same instrument. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original
thereof.

8.13           Knowledge;
Discretion. All references herein to the Purchaser’s or Company’s knowledge shall be deemed to mean the knowledge
of such party based on the actual knowledge of such party’s Chief Executive Officer and Chief Financial Officer or such other
persons holding equivalent offices. Unless specified to the contrary herein, all references herein to an exercise of discretion
or judgment by a Purchaser, to the making of a determination or designation by a Purchaser, to the application of a Purchaser’s
discretion or opinion, to the granting or withholding of a Purchaser’s consent or approval, to the consideration of whether
a matter or thing is satisfactory or acceptable to a Purchaser, or otherwise involving the decision making of a Purchaser, shall
be deemed to mean that such Purchaser shall decide using the reasonable discretion or judgment of a prudent lender.

8.14           Waiver
Of Right To Jury Trial. TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH ANY OF THE TRANSACTION
DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF COMPANY OR THE PURCHASERS. THE PARTIES ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED
IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF THEIR OWN FREE WILL.
THE PARTIES FURTHER ACKNOWLEDGE THAT (i) THEY HAVE READ AND UNDERSTAND THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS
WAIVER HAS BEEN REVIEWED BY THE PARTIES AND THEIR COUNSEL AND IS A MATERIAL INDUCEMENT FOR ENTRY INTO THIS AGREEMENT AND (iii)
THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

    20 

     

    

8.15           Expenses.
Except as otherwise provided in this Agreement, each of the parties will bear and pay all other costs and expenses incurred by
it or on its behalf in connection with the transactions contemplated pursuant to this Agreement.

8.16           Survival.
Each of the representations and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated
hereby for a period of one year after the date hereof. Except as otherwise provided herein, all covenants and agreements contained
herein shall survive until, by their respective terms, they are no longer operative.

[Signature Pages Follow]

    21 

     

    

IN WITNESS WHEREOF,
Company has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the date
first above written.

	 	COMPANY:

STEWARDSHIP FINANCIAL CORPORATION

 

 

	 	By: 	 
	 	 	
        Paul Van Ostenbridge

        President and Chief Executive Officer

	 	 	 
	 	 	 

 

 

[Company Signature Page to Subordinated
Note Purchase Agreement]

    

     

    

IN WITNESS WHEREOF,
the Purchaser has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the
date first above written.

			

	 	PURCHASER:
	 	[INSERT PURCHASER’S NAME]
	 	 	 
	 	By:	 
	 	 	Name:   [●]
	 	 	Title:     [●]

 

 

[Purchaser Signature Page to Subordinated
Note Purchase Agreement]

    

     

    

SCHEDULE I

[Intentionally omitted from Form version.]

 

    

     

    

EXHIBIT A

SUBORDINATED NOTE

 

    

     

    

EXHIBIT B

OPINION OF COUNSEL

1.           Each
of the Company and the Bank (i) has been organized or formed, as the case may be, is validly existing and is in good standing or
authorized to transact business under the laws of the State of New Jersey, (ii) has all requisite power and authority to carry
on its business and to own, lease and operate its properties and assets as described in the Company’s SEC Reports and (iii)
is duly qualified or licensed to do business and is in good standing as a foreign corporation, partnership or other entity, as
the case may be, authorized to do business in each jurisdiction in which the nature of such businesses or the ownership or leasing
of such properties requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect.

2.           The
Company has all necessary power and authority to execute, deliver and perform its obligations under the Transaction Documents to
which it is a party and to consummate the transactions contemplated by the Transaction Documents.

3.           The
Subordinated Note Purchase Agreement has been duly and validly authorized, executed and delivered by the Company.

4.           The
Notes have been duly and validly authorized by the Company and when issued and delivered to and paid for by the Purchasers in accordance
with the terms of the Subordinated Note Purchase Agreement, will have been duly executed, authenticated, issued and delivered and
will constitute legal, valid and binding obligations of the Company, and enforceable against the Company in accordance with their
terms, except that the enforcement thereof may be subject to (i) bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent conveyance, fraudulent transfer or other similar laws now or hereafter in effect relating to creditors’ rights
generally and (ii) general principles of equity (whether applied by a court of law or equity) and the discretion of the court before
which any proceeding therefor may be brought.

5.           Assuming
the accuracy of the representations of each of the Purchasers set forth in the Subordinated Note Purchase Agreement, the Notes
to be issued and sold by the Company to the Purchasers pursuant to the Subordinated Note Purchase Agreement will be issued in a
transaction exempt from the registration requirements of the Securities Act

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00249-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00249-of-00352.parquet"}]]