BRANCH PURCHASE ASSUMPTION AGREEMENT

Exhibit 10.1

BRANCH PURCHASE AND ASSUMPTION AGREEMENT

This Agreement, dated as of November 6, 2006 is made by and between Sun National Bank, a national banking association organized under the laws of the United States of America and having its principal place of business in Vineland, New Jersey (“Seller”), and 1^st Constitution Bank, a commercial bank chartered under the laws of the State of New Jersey and having its principal place of business in Cranbury, New Jersey (“Buyer”).

I.             DEFINITIONS

1.1    Certain Defined Terms.

Some of the capitalized terms appearing in this Agreement are defined below. The definition of a term expressed in the singular also applies to that term as used in the plural and vice versa.

“Affiliate” means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a specified Person, except in those cases where the controlling Person exercises control solely in a fiduciary capacity.

“Amount of Premium” has the meaning set forth in Section 3.1 of this Agreement.

“Assets” has the meaning set forth in Section 2.1 of this Agreement.

“Assignment” shall mean, with respect to the Leased Realty, each Landlord’s written consent to the assignment and assumption of such Lease related to the Leased Realty or a certificate of estoppel with respect to the remaining term of the Lease with respect to the Leased Realty for the benefit of Buyer with respect to the Branch.

“ATM” means automatic teller machine.

“Benefit Plan” means any pension, profit-sharing, or other employee benefit, fringe benefit, severance or welfare plan maintained by or with respect to which contributions are made by, Seller or any of its Affiliates with respect to Seller’s employees.

“Branch” means the branch office of Seller located at 140 Mercer Street, Hightstown, New Jersey 08520.

“Branch Cash” means cash on hand at the Branch, including vault cash, teller drawer cash, petty cash and ATM cash.

“Business Day” means any Monday, Tuesday, Wednesday, Thursday or Friday on which Seller is open for business.

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“Closing” means the purchase of the Assets by Buyer and the assumption of the Liabilities by Buyer on the Closing Date.

“Closing Date” has the meaning set forth in Section 9.1 of this Agreement.

“Deposit Accounts” means the deposit accounts at the Branch, the balances of which are included in the Deposits or would be so included if the Deposit Account had a positive balance.

“Deposits” or “Deposit Liabilities” means all deposits (as defined in 12 U.S.C. Section 1813(l)) which are booked at the Branch on the Closing Date, including in each case accrued but unpaid interest and both collected and uncollected funds, but excluding (i) deposits held in accounts for which Seller acts as fiduciary and are not transferring from Seller to Buyer (other than deposits held by Retirement Plans that are transferring from Seller to Buyer in accordance with this Agreement) and (ii) deposits constituting official checks, travelers checks, money orders or certified checks (“Excluded Deposits” shall refer to excluded deposits referred to at (i) and (ii)). A true and accurate list of the Deposits as of a date within 5 days prior to the date of this Agreement is attached hereto as Exhibit A.

“Dispute Resolver” means an independent accounting firm or other independent third-party mutually acceptable to Buyer and Seller to act as Dispute Resolver.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any entity that is considered one employer with Seller under Section 4001 of ERISA or Section 414 of the Internal Revenue Code of 1986, as amended.

“Equipment Leases” means those operating and financial leases and conditional sales contracts covering Fixed Assets which Seller may assign to Buyer without restriction or with the lessor’s written consent.

“Federal Funds Rate” means, for any day, the rate per annum (expressed on a basis of calculation of actual days in a year) equal to the “near closing bid” federal funds rate published in The Wall Street Journal on the Business Day following the Closing Date.

“Fixed Assets” means all fixtures (including signage poles), leasehold improvements, furnishings, vaults, safe deposit boxes, equipment (including, for example, all coin counters, security equipment and ATMs, but excluding any other computer and telecommunications equipment located at the Branch), supplies (other than forms and other supplies which bear Seller’s name or logo), and other personal property, that are owned or (to the extent of Seller’s interest as lessee) leased by Seller, that are located at the Branch on the Closing Date, as detailed on Schedule 2.1(a) .

“FDIC” means the Federal Deposit Insurance Corporation.

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“Governmental Entity” means any government or any agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government having authority in the United States, whether federal, state or local.

“Hazardous Material” means any substance presently listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous or otherwise regulated, under any applicable state or federal law relating to the protection, preservation or restoration of the environment, including, but not limited to, the following federal environmental laws: the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Superfund Amendment and Reauthorization Act, the Water Pollution Control Act of 1972, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act of 1976, the Solid Waste Disposal Act, the Toxic Substances Control Act and the Insecticide, Fungicide and Rodenticide Act, each as amended.

“Loans” means (i) those loans identified on Exhibit B attached hereto pursuant to which Seller has a security interest in a Deposit transferred hereunder, and (ii) those lines of credit identified on Exhibit C attached hereto which are provided as overdraft protection by Seller for a Deposit transferred hereunder.

“Leased Realty” shall mean Seller’s rights as lessee in and to any real property leased by Seller at the Branch as detailed under the List of Leases set forth at Schedule 1.2, together with all of Seller’s rights and interests in the leasehold improvements therein.

“Liabilities” has the meaning set forth in Section 2.2 of this Agreement.

“Overdrafts” means those overdrafts of the book balance of any Deposit Accounts which are not overdrawn for more than seven days as of the Closing Date and which are not evidenced by a Loan.

“Person” means an association, a corporation, an individual, a partnership, a trust or any other entity or organization, including a Governmental Entity.

“Retirement Plans” means those non-discretionary individual retirement accounts (IRAs) and Keogh retirement plan accounts relating to the Deposits for which Seller acts as custodian or trustee.

“Safe Deposit Contracts” has the meaning set forth in Section 2.1(e) of this Agreement.

“Welfare Benefit Plans” means those Benefit Plans which are “welfare benefit plans” as defined by ERISA.

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II.            PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES

2.1     Purchase of Assets.

Subject to the terms and conditions of this Agreement, Seller agrees to sell, assign and transfer possession of and all right, title and interest of Seller in and to the following assets to Buyer (collectively, the “Assets”) and Buyer agrees to purchase the same from Seller, as of the close of business on the Closing Date:

(a)     the Fixed Assets;

(b)     the Branch Cash;

(c)     the Overdrafts;

(d)     Seller’s rights with respect to the Leased Realty;

(e)     all lease contracts related to rental of safe deposit boxes at the Branch (“Safe Deposit Contracts”) and the rented and unrented safe deposit boxes at the Branch;

(f)     With regard to each Retirement Plan, all of Seller’s right, title and interest in and to the related plan or trustee or custodial arrangement, and in and to all assets held by Seller pursuant thereto; and

(g)     the Loans.

2.2     Assumption of Liabilities.

Buyer agrees to assume, pay, perform and discharge the following liabilities of Seller (the “Liabilities”) as of the close of business on the Closing Date:

(a)     the Deposits and all terms and agreements relating to the Deposit Accounts, excluding the deposit accounts set forth at Schedule 2.2(a);

(b)     Seller’s duties and responsibilities relating to the Deposits arising after the Closing Date with respect to: (i) the abandoned property laws of any state, (ii) any legal process which is served on Seller on or before the Closing Date with respect to claims against or for the Deposits that is not against Seller or is over and above the amount of the Deposits; or (iii) any other applicable law;

(c)     Seller’s duties and responsibilities with respect to any Equipment Leases;

(d)     Seller’s duties and responsibilities with respect to the Safe Deposit Contracts;

(e)     Seller’s duties and responsibilities with respect to the Retirement Plans;

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(f)     Seller’s duties and responsibilities with respect to the Leased Realty; and

(g)     Seller’s duties and responsibilities with respect to the Loans.

2.3     Transfer of Records.

(a) At the Closing, Seller also shall transfer to Buyer possession and all right, title and interest of Seller in and to all books and records relating to the Assets and the Liabilities which are maintained at the Branch.

(b) All books and records relating to the Assets and the Liabilities held by either Seller or Buyer after the Closing Date shall be maintained in accordance with (and for the period provided in) that party’s standard recordkeeping policies and procedures and subject to applicable laws and regulations governing records retention. Throughout such period, the party holding such books and records shall comply with the reasonable request of the other party to provide copies of specified documents, at the expense of the requesting party. The requesting party shall give reasonable notice of any such request.

2.4     Tax Matters.

Each party shall be responsible for its sales and use taxes and any interest and penalties thereon which are payable or arise as a result of this Agreement or the consummation of any of the transactions contemplated by this Agreement. Seller shall be responsible for any taxes as a result of the sale and transfer of the Leased Realty and the payment of any taxes or levies that may arise under the New Jersey Bulk Sales Act with respect to the Branch for all transactions occurring on or prior to the Closing Date.

2.5     Proration of Certain Items.

Except as detailed at Section 2.4 herein, all rental income or expenses associated with the operation of the Branch (including, but not limited to rental lease payments related to the Branch, safe deposit box rental fees actually collected, and any security deposits or prepaid rents paid related to such Leased Realty), real estate taxes, personal property taxes (tangible or intangible), utility, water and sewer charges and assessments, and any and all other pre-paid charges related to the operation of the Branch shall be prorated between Buyer and Seller as of the close of business on the Closing Date. In addition, any quarterly assessments actually paid by Seller to the Deposit Insurance Fund of the FDIC prior to the Closing Date for the quarterly assessment period containing the Closing Date with respect to the Deposits, shall be prorated between Buyer and Seller as of the close of business on the Closing Date based upon the daily assessment rate in effect as of such assessment quarter with respect to Seller, the Deposits subject to assessment that actually transfer as of the Closing Date and the number of calendar days remaining until the end of such assessment quarter, such that Seller shall receive a reimbursement from Buyer for such number of calendar days remaining until the end of such assessment quarter.

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2.6     Back Office Conversion.

Seller and Buyer shall cooperate with each other and shall use their reasonable best efforts (consistent with their internal day-to-day operations) in order to cause the timely transfer of information concerning the Assets and the Liabilities which is maintained on Seller’s data processing systems so that Buyer can incorporate such information into Buyer’s data processing systems no later than the opening of business on the Business Day following the Closing Date, including testing of such data transfers prior to the Closing Date. Buyer shall bear the costs of any third-party programming requirements related to such data processing efforts.

2.7     Certain Transitional Matters Following the Closing Date

(a)     Buyer agrees to honor in accordance with applicable law, up to the collected amount on deposit (and any other funds available by reason of any agreement between the depositor and Buyer), all properly drawn and presented checks, drafts, electronic debits and credits and withdrawal orders presented to Buyer by mail, over its counters, throughout the check clearing system, and Automated Clearing House of the banking industry, by depositors of the accounts assumed, whether drawn on the checks, withdrawal or draft forms provided by Seller, or by Buyer, and all other respects to discharge, in the usual course of the banking business, the duties and obligations of Seller with respect to the balances due and owing to the depositors whose accounts are assumed by Buyer. Buyer’s obligation under this Section to honor checks, withdrawal, draft forms and electronic debits and credits provided by Seller and carrying its imprint shall expire at the close of business on the 60^th business day following the Closing Date or a date mutually agreeable to both parties.

(b)     If any of such depositors, instead of accepting the obligation of Buyer to pay the Deposit Liabilities assumed, shall demand payment from Seller for all or any part of any such assumed Deposit Liabilities, Seller shall not be liable or responsible for making such payment. Instead, Seller may, at its discretion, assume custody of the check or other item presented for payment, including electronic items, on an account which has been transferred with the Branch, batch such items and send them to Buyer by fax and by mail by the next business day after receipt thereof by Seller. Seller shall not, at any time, be liable or responsible for making payment on such items by reason of its obtaining custody of them for transmittal to Buyer. Nothing herein shall, however, be construed to relieve the Seller of any liability which it may have for accepting custody of any check or item presented for payment on a Deposit which Seller does not timely batch and send to Buyer in accordance with this Section 2.7(b), to the extent Buyer’s ability to satisfy such check or other item has been prejudiced by such delay.

In order to reduce the continuing charges to Seller through the check clearing system of the banking industry which will result from check forms of Seller being used after the Closing Date by the depositors whose accounts are assumed, Buyer agrees, at its cost and expense within 30 days prior to the Closing Date, to notify depositors of Buyer’s assumption of Deposit Liabilities. Within 10 days of the Closing Date, Buyer shall, at its sole cost and expense and without cost to depositors, (i) furnish each depositor of an assumed account with not less than fifty (50) checks on the forms of Buyer, with instructions to utilize Buyer’s

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checks and to destroy unused checks of Seller as of the Closing Date and (ii) notify holders of ATM cards that all ATM cards held by Branch customers will be void as of the Closing Date, and that they will receive new ATM cards on or immediately prior to the Closing Date. Buyer will send Seller a copy of notification letters forwarded to depositors by Buyer. Seller hereby agrees that after the 60^th business day following the Closing Date or a date mutually agreeable to both parties, it shall, with respect to the Branch, at its sole option, either: (1) return such check or other item with reference to the maker thereof; or (2) assume custody thereof and deliver the same in the manner aforesaid.

(c)     Buyer agrees, no later than the start of the second business day after demand by Seller, to pay Seller an amount equivalent to the amount of any uncollected item included in a depositor’s balance on the Closing Date which is returned after the Closing Date as not collected to the extent that Buyer has not suffered a loss with respect thereto. Buyer shall be required to make such payment for an item only up to the amount on deposit with Buyer at the time Seller makes the demand aforesaid.

(d)     Buyer shall timely forward to Seller any mail, facsimile or other correspondence, received at the Branch after the Closing Date, that is (i) addressed to Seller, or (ii) addressed to Buyer but relating to an obligation of Seller that originated prior to the Closing Date.

(e)     Adjustments after the Closing Date shall be made daily as may be required. Such adjustments shall be by wire transfer.

2.8     Information Returns.

Buyer shall file all required information returns with the Internal Revenue Service with respect to interest paid on the Deposits after the Closing Date, interest received on Overdrafts after the Closing Date, and any other information returns required with respect to the Assets and the Liabilities for the periods beginning after the Closing Date. Seller will file all required information returns with the Internal Revenue Service and any information returns required by state or local tax authorities with respect to interest paid on the Deposits on or before the Closing Date, interest received on the Overdrafts on or before the Closing Date, and any other information returns required with respect to the Assets and the Liabilities for periods ending on or before the Closing Date.

2.9     Assignment and Assumption of Branch Lease.

Promptly following execution of this Agreement, Buyer and Seller, shall use its commercially reasonable efforts to obtain the Assignment from the Landlord and any other party related to the Leased Realty effective as of the Closing Date.

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III.          CONSIDERATION

3.1     Calculation.

In consideration of Buyer’s purchase of the Assets and its assumption of the Liabilities, Seller agrees to pay to Buyer in immediately available funds not later than 2:00 pm, New Jersey time, on the Closing Date an amount equal to the Deposits to be transferred under Section 2.2(a), plus accrued interest on such Deposits to be transferred, less the sum of the following, in each case calculated as of the close of business on the Closing Date (except as otherwise detailed herein):

(a)     the sum equal to the aggregate net book value of the Fixed Assets and Leasehold Improvements as of the Closing Date as set forth at Schedule 2.1(a) ;

(b)     the amount of Branch Cash;

(c)     the principal amount of the Overdrafts, provided however that Seller shall refund to Buyer the amount of such Overdrafts to the extent that such amount shall remain uncollected as of 30 days following the Closing Date, plus accrued interest from the Closing Date through the date of collection at the contract rate determined in accordance with the policies of Seller as detailed at Schedule 3.1(c);

(d)     the net amount (which may be a negative amount) of any adjustments under Section 2.5 (i.e., the amount payable by Buyer less the amount payable by Seller);

(e)     an amount equal to the Amount of Deposit Premium. The “Amount of Deposit Premium” shall be equal to: (i) four percent (4.00%) of the average closing daily Deposits attributable to the Branch for the thirty (30) calendar day period ending as of the calendar day two days prior to the Closing Date, in the case of Deposits which are not municipal Deposits or Deposits of a state or local government or agency, plus (ii) four percent (4.00%) of the average closing month-end balance for the twelve (12) calendar month periods completed as of or immediately prior to the Closing Date, in the case of Deposits attributable to the Branch which are municipal Deposits or Deposits of a state or local government or agency. For purposes of this subparagraph, Deposits shall exclude any pledged deposits or accounts where such pledged deposits or accounts secure a loan that is not being transferred and any Excluded Deposits;

(f)     an amount in cash equal to prepaid safe deposit box rental fees actually collected, prorated for the period from the Closing Date to the end of the respective Safe Deposit Contract; and

(g)     the aggregate outstanding principal and interest balances with respect to the Loans.

3.2     Settlement.

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(a)     Not later than three (3) business days prior to the Closing Date, Seller shall deliver to Buyer the Closing Statement prepared in accordance with Seller’s customary practices and procedures used in preparing financial statements, substantially in the form of Exhibit B to this Agreement, which shall be completed based upon information as of the close of business five business days prior to the Closing Date and shall be the basis of the payment made to Buyer’s account as of the Closing Date in the manner detailed at Section 3.1 herein (the “Settlement Payment”).

(b)     The parties shall cooperate in the preparation of the Adjusted Closing Statement within 30 days after the Closing Date, which shall be prepared in accordance with Seller’s customary practices and procedures used in preparing financial statements, substantially in the form of Exhibit C to this Agreement, which shall be completed as of the close of business on the Closing Date. On the Business Day after Buyer and Seller agree to the Adjusted Closing Statement, or Buyer and Seller receive notice of any determination of the Adjusted Closing Statement under subsection (c) (the “Adjusted Settlement Date”), Seller shall pay to Buyer (or Buyer shall pay to Seller, as the case may be) an amount (the “Adjustment Payment”) equal to the amount due stated on the Adjusted Closing Statement, plus interest from the day after the Closing Date until the calendar day before the Adjustment Payment is made at a rate per annum (calculated daily based on a 360-day year) equal to the daily Federal Funds Rate.

(c)     The Settlement Payment and the Adjustment Payment shall each be made by wire transfer of immediately available funds to the account of the party receiving the payment, which account shall be identified by the party receiving the funds to the other party not less than two Business Days prior to such payment.

(d)     Any errors associated with the Deposits or other items or calculations as detailed on the Closing Statement or the Adjusted Closing Statement (“Mistakes-in-Fact”) which are determined as of the date of the Adjusted Closing Statement shall be reconciled as of such date and appropriate adjustments of payments shall be made to Seller or Buyer, as appropriate, at such time. Notwithstanding the foregoing, or anything else herein to the contrary, any Mistakes-in-Fact which shall be determined by Seller or Buyer thereafter related to the Transaction consummated under this Agreement shall nevertheless be reconciled by adjustment or payment to Seller or Buyer, as appropriate, within 30 days of such determination; provided that either party shall notify the other of any such alleged Mistakes-in-Fact within one year after the Closing Date in order for a claim to be made with respect thereto.

(e)     Seller and Buyer shall use their best efforts to resolve any disagreement related to the Adjusted Closing Statement during the thirty (30) day period following receipt by Seller of notice from Buyer as to any such disagreement. If the disagreement is not resolved during such thirty (30) day period, the dispute shall be referred to a Dispute Resolver, and such Adjusted Closing Statement shall be modified by any such resolution and thereupon such Adjusted Closing Statement shall become final and binding on Buyer and Seller provided, however, that for any claim that does not exceed $5,000, in the event the fees of such Dispute Resolver as estimated by such firm would exceed fifty percent (50%) of the net amount in dispute, the parties agree that such firm will not be engaged by either party

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and that such net amount in dispute will be equally apportioned between Seller, on the one hand, and Buyer, on the other hand. Such Dispute Resolver shall be instructed to resolve the disputed items within ten (10) Business Days of engagement, to the extent reasonably practicable. All determinations under this Agreement made by a Dispute Resolver shall be binding upon Buyer and Seller. Buyer and Seller shall share equally in the cost of any Dispute Resolver.

IV.          SELLER’S REPRESENTATIONS AND WARRANTIES

Seller makes the following representations and warranties to Buyer.

4.1     Power and Authority.

(a)     The execution and delivery of this Agreement has been duly authorized by all necessary corporate action by Seller. Upon execution and delivery by both parties, this Agreement will constitute a valid and binding obligation of Seller, enforceable in accordance with its terms, subject to conservatorship, receivership, and a court’s right under general principles of equity to refuse to direct specific performance.

(b)     The performance of this Agreement by Seller will not violate any provision of the Articles of Association or Bylaws of Seller, or any applicable law, rule, regulation, or any governmental permit or license or order or any contract or instrument by which Seller is bound, except for such violations which alone, or taken in the aggregate, would not reasonably be expected to have a material adverse effect on the consummation of the transactions contemplated by this Agreement (a “Seller Material Adverse Effect”).

(c)     The Seller is a national banking association duly organized and validly existing under the laws of the United States of America, and has full corporate power to own the Branch, and to conduct the business of the Branch and to enter into and perform this Agreement.

4.2     Litigation and Regulatory Proceedings.

There are no actions, complaints, petitions, suits or other proceedings, or any decree, injunction, judgment, order or ruling, entered, promulgated or pending or (to Seller’s knowledge) threatened against Seller or any of the Assets or the Liabilities, which alone, or taken in the aggregate, reasonably would be expected to have a Seller Material Adverse Effect. No governmental agency has notified Seller that it would oppose or not approve or consent to the transactions contemplated by this Agreement and Seller knows of no reason for any such opposition, disapproval or non-consent, including, but not limited to Seller’s compliance with the Community Reinvestment Act, the Bank Secrecy Act and the Truth-in-Lending Act.

4.3     Consents and Approvals.

Except for required regulatory approvals, no consents, approvals, filings or registrations with any third party or any public body, agency or authority are required in connection with Seller’s consummation of the

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transactions contemplated by this Agreement, other than any required Assignments relating to the Leased Realty or any required lessor consents to the assignment of any the Equipment Leases, as detailed at Schedule 4.3, and as may be required as a result of any facts or circumstances relating solely to Buyer.

4.4     Leased Realty.

Schedule 4.4 sets forth a copy of the Lease applicable to the Leased Realty. Except for (a) exceptions to title that do not interfere materially with Seller’s use and enjoyment of the Leased Realty, (b) liens for current real estate taxes not yet delinquent, or being contested in good faith, properly reserved against, and (c) items listed in Schedule 4.4, Seller, as lessee, has the right under a valid and subsisting lease to occupy, use and possess the Leased Realty, and Seller has not experienced any material uninsured damage or destruction with respect to the Leased Realty since the commencement date of the Lease. The Leased Realty is in good operating condition and repair. Seller enjoys peaceful and undisturbed possession under the Lease for the use of the Leased Realty, and the Lease is a valid and binding obligation of Seller in accordance with the terms thereof. Seller is not in material default under the Lease, and there has occurred no default by Seller or event which with the lapse of time or the giving of notice, or both, would constitute a material default under the Lease. There are no laws, conditions of record, or other impediments which materially interfere with Seller’s use or Buyer’s intended use of the Leased Realty. Seller knows of no reason why the parties may not be able to obtain the consent of the landlord of the Leased Realty to assign the Lease.

4.5     Fixed Assets.

Seller has good and marketable title to the Fixed Assets as detailed at Schedule 3.1(a), free and clear of all encumbrances, claims, charges, security interests, or liens.

4.6     Loans.

(a)     Except for the Loans, no loans are being sold by Seller to Buyer in this transaction.

(b)     None of the Loans is void or voidable by any person as a matter of law, pursuant to any public policy, or otherwise;

(c)     Each of the Loans and the loan documents relating thereto are enforceable against the borrower in accordance with their respective terms;

(d)     The Loans and the loan documents relating thereto are in compliance with all applicable laws; and

(e)     No notice of default or other failure (including breach, non-payment, or non-performance) has been sent by Seller and is outstanding and uncured with respect to any of the Loans or the loan documents relating thereto.

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4.7     Compliance with Certain Laws.

The Deposit Accounts were opened, extended or made, and have been maintained, in accordance with all applicable federal and state laws, regulations, rules and orders, and the Branch has been operated in compliance with Seller’s policies and procedures and all applicable federal and state laws, regulations, rules and orders, except for such instances of noncompliance which do not have