AGREEMENT AND PLAN OF MERGER

Exhibit 2.1

EXECUTION COPY

AGREEMENT AND PLAN OF MERGER

BETWEEN

BCB BANCORP, INC.

AND

PAMRAPO BANCORP, INC.

Table of Contents

 

 

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AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER , is dated as of June 29, 2009, by and between BCB Bancorp, Inc., a New Jersey corporation (“BCB” or the “Surviving Corporation”) and Pamrapo Bancorp, Inc., a New Jersey corporation (“Pamrapo”). (BCB and Pamrapo are herein sometimes collectively referred to herein as the “Parties.”)

WHEREAS , the Boards of Directors of each of BCB and Pamrapo have determined that it is in the best interests of their respective companies and their stockholders to enter into this Agreement and complete the business combination and related transactions contemplated herein in which Pamrapo will, subject to the terms and conditions set forth herein, merge (the “Merger”) with and into BCB; and

WHEREAS , as soon as practicable after the execution and delivery of this Agreement and Plan of Merger (“Agreement”), BCB Community Bank, a New Jersey chartered bank and a wholly owned subsidiary of BCB (the “Bank,” or the “Surviving Institution”), and Pamrapo Savings Bank, S.L.A., a New Jersey chartered stock savings and loan association and a wholly owned subsidiary of Pamrapo (“Pamrapo Bank”), will enter into a Subsidiary Agreement and Plan of Merger (the “Bank Merger Agreement”), a form of which is attached as Annex A , providing for the merger (the “Subsidiary Merger”) of Pamrapo Bank with and into the Bank, with the Surviving Institution to bear the corporate name BCB Community Bank . It is intended that the Subsidiary Merger be consummated as soon as practicable following the consummation of the Merger; and

WHEREAS , the directors and executive officers of Pamrapo have on the date hereof entered into Voting Agreements with BCB, in the form attached hereto as Annex B , agreeing to vote for the Merger; and

WHEREAS , the directors and executive officers of BCB have on the date hereof entered into Voting Agreements with Pamrapo, in the form attached hereto as Annex C , agreeing to vote for the Merger; and

WHEREAS , the parties intend the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement be and is hereby adopted as a “plan of reorganization” within the meaning of Sections 354 and 361 of the Code; and

WHEREAS , the Parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

NOW, THEREFORE , in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

THE MERGER

1.1 The Merger . Subject to the terms and conditions of this Agreement, in accordance with the New Jersey Business Corporation Act (the “NJBCA”), at the Effective Time (as defined in Section 1.2 hereof), Pamrapo shall merge with and into BCB. BCB shall be the surviving corporation in the Merger, and shall continue its corporate existence under the laws of the State of New Jersey. The name of the Surviving Corporation shall be BCB Bancorp, Inc. Upon consummation of the Merger, the separate corporate existence of Pamrapo shall terminate.

1.2 Effective Time . The Merger shall become effective as set forth in the certificate of merger (the “Certificate of Merger”) which shall be filed with appropriate authorities in the State of New Jersey (the “Authorities”) on the Closing Date (as defined in Section 9.1 hereof). The term “Effective Time” shall be the date and time when the Merger becomes effective, as set forth in the Certificate of Merger.

1.3 Effects of the Merger . At and after the Effective Time, the Merger shall have the effects set forth in the NJBCA.

1.4 Conversion of Pamrapo Common Stock .

(a) At the Effective Time, subject to Section 2.2 (e) hereof, each share of the common stock, par value $0.01 per share, of Pamrapo (the “Pamrapo Common Stock”) issued and outstanding immediately prior to the Effective Time (other than shares of Pamrapo Common Stock held (x) in Pamrapo’s treasury or (y) directly or indirectly by BCB or Pamrapo or any of their respective Subsidiaries (as defined below) (except for Trust Account Shares and DPC shares, as such terms are defined in Section 1.4 (b) hereof)) shall, by virtue of this Agreement and without any action on the part of the holder thereof, be converted into and exchangeable for 1.0 share (the “Exchange Ratio”) of the common stock, without par value, of BCB (“BCB Common Stock”). All of the shares of Pamrapo Common Stock converted into BCB Common Stock pursuant to this Article I shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and each certificate (each a “Certificate”) previously representing any such shares of Pamrapo Common Stock shall thereafter only represent the right to receive (i) the number of whole shares of BCB Common Stock and (ii) the cash in lieu of fractional shares into which the shares of Pamrapo Common Stock represented by such Certificate have been converted pursuant to this Section 1.4(a) and Section 2.2(e) hereof. Certificates previously representing shares of Pamrapo Common Stock shall be exchanged for certificates representing whole shares of BCB Common Stock and cash in lieu of fractional shares issued in consideration therefor upon the surrender of such Certificates in accordance with Section 2.2 hereof, without any interest thereon. If prior to the Effective Time, either BCB or Pamrapo should merge, reclassify its shares, recapitalize, declare a stock dividend, stock split or other similar change in capitalization, or other distribution in such common stock, then the Exchange Ratio shall be appropriately adjusted to reflect such action.

(b) At the Effective Time, all shares of Pamrapo Common Stock that are owned by Pamrapo as treasury stock and all shares of Pamrapo Common Stock that are owned

 

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directly or indirectly by BCB or Pamrapo or any of their respective Subsidiaries (other than shares of Pamrapo Common Stock (x) held directly or indirectly in trust accounts, managed accounts and the like or otherwise held in a fiduciary capacity that are beneficially owned by third parties (any such shares, and shares of BCB Common Stock which are similarly held, whether held directly or indirectly by BCB or Pamrapo, as the case may be, being referred to herein as “Trust Account Shares”) and (y) shares of Pamrapo Common Stock held by BCB or Pamrapo or any of their respective Subsidiaries in respect of a debt previously contracted (any such shares of Pamrapo Common Stock, and shares of BCB Common Stock which are similarly held, whether held directly or indirectly by BCB or Pamrapo being referred to herein as “DPC Shares”)) shall be cancelled and shall cease to exist and no stock of BCB or other consideration shall be delivered in exchange therefor. All shares of BCB Common Stock that are owned by Pamrapo or any of its Subsidiaries (other than Trust Account Shares and DPC Shares) shall become treasury stock of BCB.

1.5 Stock Options .

(a) At the Effective Time, all options granted by Pamrapo (“Pamrapo Options”) to purchase shares of Pamrapo Common Stock which are outstanding and unexercised immediately prior thereto shall be converted, in their entirety, automatically into options to purchase shares of BCB Common Stock (the “Continuing Options”) in an amount and at an exercise price determined as provided below (and otherwise subject to the terms of Pamrapo Bancorp, Inc.’s 2003 Stock Based Incentive Plan (the “Pamrapo Stock Plan”):

(1) The number of shares of BCB Common Stock to be subject to the Continuing Options shall be equal to the product of the number of shares of Pamrapo Common Stock subject to the Pamrapo Options and the Exchange Ratio, provided that any fractional shares of BCB Common Stock resulting from such multiplication shall be rounded down to the nearest share; and

(2) The exercise price per share of BCB Common Stock under the Continuing Options shall be equal to the exercise price per share of Pamrapo Common Stock under the Pamrapo Options divided by the Exchange Ratio, provided that such exercise price shall be rounded up to the nearest cent.

The adjustment provided herein with respect to any options which are “incentive stock options” (as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)) shall be and is intended to be effected in a manner which is consistent with Section 424(a) of the Code. The duration and other terms of the Continuing Options shall be the same as the Pamrapo Options, except that all references to Pamrapo shall be deemed to be references to BCB.

(b) At all times after the Effective Time, BCB shall reserve for issuance such number of shares of BCB Common Stock as necessary so as to permit the exercise of Continuing Options in the manner contemplated by this Agreement and in the instruments pursuant to which such options were granted. Shares of BCB Common Stock issuable upon exercise of Continuing Options shall be covered by an effective registration statement on Form S-8, and BCB shall file a registration statement on Form S-8 covering such shares as soon as practicable after the Effective Time, but in no event later than 30 days after the Effective Time.

 

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(c) Continuing Options may be exercised in accordance with the terms of the Pamrapo Options in effect immediately prior to the Effective Time, subject to applicable law and regulation.

1.6 BCB Common Stock . Except for shares of BCB Common Stock owned by Pamrapo or any of its Subsidiaries (other than Trust Account Shares and DPC Shares), which shall be converted into treasury stock of BCB as contemplated by Section 1.4 hereof, the shares of BCB Common Stock issued and outstanding immediately prior to the Effective Time shall be unaffected by the Merger and at the Effective Time, such shares shall remain issued and outstanding.

1.7 Certificate of Incorporation . At the Effective Time, the Certificate of Incorporation of BCB, as in effect at the Effective Time, shall be amended and restated as of the Effective Time so as to read in its entirety in the form set forth as Exhibit 1.7 and, as so amended and restated, such Certificate of Incorporation shall be the Certificate of Incorporation of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law.

1.8 Bylaws . At the Effective Time, the Bylaws of BCB, shall be amended to increase the number of authorized directors of BCB to up to 14 persons, and these Bylaws as amended shall be the Bylaws of the Surviving Corporation until thereafter changed or amended as provided therein or by applicable law.

1.9 Directors and Officers . The initial boards of directors and certain officers of the Surviving Corporation and the Surviving Institution shall be as set forth on and designated in accordance with Exhibit 1.9 hereto until the earlier of the resignation, retirement or removal of any individual set forth on or designated in accordance with Exhibit 1.9 or until their respective successors are duly elected and qualified, as the case may be. Upon Effective Time, Daniel Massarelli will serve as Chairman of the Board of Directors of the Surviving Corporation and Bank and Mark Hogan will serve as Vice Chairman of the Board of Directors of the Surviving Corporation and Bank. At the Effective Time, Donald Mindiak will serve as the President and Chief Executive Officer, Kenneth Walter will serve as the Chief Financial Officer and Thomas Coughlin will serve as the Chief Operating Officer.

1.10 Tax Consequences . It is intended that the Merger and the Subsidiary Merger each constitute a reorganization within the meaning of Section 368(a) of the Code, and that this Agreement shall constitute a “plan of reorganization” within the meaning of Sections 354 and 361 of the Code. From and after the date of this Agreement and until the Effective Time, each party shall use its best efforts to cause the Merger to qualify, and will not knowingly take any action, or fail to take any action or cause any action to fail to be taken, which action of failure to act could prevent the Merger from qualifying as a reorganization under Section 368(a) of the Code.

 

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ARTICLE II

EXCHANGE OF SHARES

2.1 BCB to Make Shares Available . At or prior to the Effective Time (and following the filing of the amended Certificate of Incorporation), BCB shall deposit, or shall cause to be deposited, with a bank or trust company (the “Exchange Agent”), selected by BCB and reasonably satisfactory to Pamrapo, for the benefit of the holders of Certificates, for exchange in accordance with this Article II, certificates representing the shares of BCB Common Stock and the cash in lieu of fractional shares (such cash and certificates for shares of BCB Common Stock, together with any dividends or distributions with respect thereto, being hereinafter referred to as the “Exchange Fund”) to be issued pursuant to Section 1.4 and paid pursuant to Section 2.2(a) in exchange for outstanding shares of Pamrapo Common Stock.

2.2 Exchange of Shares

(a) As soon as practicable after the Effective Time, and in no event more than five business days thereafter, the Exchange Agent shall mail to each holder of record of a Certificate or Certificates a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent) and instructions for use in effecting the surrender of the Certificates in exchange for certificates representing the shares of BCB Common Stock and the cash in lieu of fractional shares into which the shares of Pamrapo Common Stock represented by such Certificate or Certificates shall have been converted pursuant to this Agreement. Pamrapo shall have the right to review both the letter of transmittal and the instructions prior to the Effective Time and provide reasonable comments thereon. Upon surrender of a Certificate for exchange and cancellation to the Exchange Agent, together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor (x) a certificate representing that number of whole shares of BCB Common Stock to which such holder of Pamrapo Common Stock shall have become entitled pursuant to the provisions of Article I hereof and (y) a check representing the amount of cash in lieu of fractional shares, if any, which such holder has the right to receive in respect of the Certificate surrendered pursuant to the provisions of this Article II, and the Certificate so surrendered shall forthwith be cancelled. No interest will be paid or accrued on the cash in lieu of fractional shares and unpaid dividends and distributions, if any, payable to holders of Certificates.

(b) No dividends or other distributions declared after the Effective Time with respect to BCB Common Stock and payable to the holders of record thereof shall be paid to the holder of any unsurrendered Certificate until the holder thereof shall surrender such Certificate in accordance with this Article II. After the surrender of a Certificate in accordance with this Article II, the record holder thereof shall be entitled to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect to shares of BCB Common Stock represented by such Certificate. No holder of an unsurrendered Certificate shall be entitled, until the surrender of such Certificate, to vote the shares of BCB Common Stock into which his Pamrapo Common Stock shall have been converted.

 

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(c) If any certificate representing shares of BCB Common Stock is to be issued in a name other than that in which the Certificate surrendered in exchange therefor is registered, it shall be a condition of the issuance thereof that the Certificate so surrendered shall be properly endorsed (or accompanied by an appropriate instrument of transfer) and otherwise in proper form for transfer, and that the person requesting such exchange shall pay to the Exchange Agent in advance any transfer or other taxes required by reason of the issuance of a certificate representing shares of BCB Common Stock in any name other than that of the registered holder of the Certificate surrendered, or required for any other reason, or shall establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.

(d) After the Effective Time, there shall be no transfers on the stock transfer books of Pamrapo of the shares of Pamrapo Common Stock which were issued and outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates representing such shares are presented for transfer to the Exchange Agent, they shall be cancelled and exchanged for certificates representing shares of BCB Common Stock as provided in this Article II.

(e) Notwithstanding anything to the contrary contained herein, no certificates or scrip representing fractional shares of BCB Common Stock shall be issued upon the surrender for exchange of Certificates, no dividend or distribution with respect to BCB Common Stock shall be payable on or with respect to any fractional share, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of a stockholder of BCB. In lieu of the issuance of any such fractional share, BCB shall pay to each former stockholder of Pamrapo who otherwise would be entitled to receive a fractional share of BCB Common Stock (after taking into account all certificates delivered by such holder) an amount in cash determined by multiplying (i) the Average Closing Price by (ii) the fraction of a share of BCB Common Stock to which such holder would otherwise be entitled to receive pursuant to Section 1.4 hereof. As used herein, the term “Average Closing Price” means the average of the last reported daily sales price (or if no sale on such date, then the mean of the closing bid/ask price) per share of BCB Common Stock on the NASDAQ Global Market (“Nasdaq”), for the 10 consecutive trading days (the “Valuation Period”) ending on the fifth business day prior to the date of the Effective Time.

(f) Any portion of the Exchange Fund that remains unclaimed by the stockholders of Pamrapo for six months after the Effective Time shall be paid to BCB at the end of such time. Any stockholders of Pamrapo who have not theretofore complied with this Article II shall thereafter look only to BCB for payment of their shares of BCB Common Stock, cash in lieu of fractional shares and unpaid dividends and distributions on BCB Common Stock deliverable in respect of each share of Pamrapo Common Stock such stockholder holds as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding the foregoing, none of BCB, Pamrapo, the Exchange Agent or any other person shall be liable to any former holder of shares of Pamrapo Common Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

(g) In the event any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or

 

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destroyed and the posting by such person of a bond in such amount as BCB may direct as indemnity against any claim that may be made against it with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the shares of BCB Common Stock and cash in lieu of fractional shares deliverable in respect thereof pursuant to this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PAMRAPO

Prior to the date hereof, BCB has delivered to Pamrapo a Schedule and Pamrapo has delivered to BCB a Schedule (respectively, its “Disclosure Schedule”) setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Article III or IV or to one or more of BCB’s and Pamrapo’s covenants contained in Article V; provided , that (a) no such item is required to be set forth in a Disclosure Schedule as an exception to a representation or warranty if its absence would not be reasonably likely to result in the representation or warranty being deemed materially untrue or incorrect, and (b) the mere inclusion of an item in a Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by a party that such item represents a material exception or fact, event or circumstance. !

No representation or warranty of Pamrapo contained in this Article III shall be deemed untrue or incorrect, and Pamrapo shall not be deemed to have breached a representation or warranty, as a consequence of the existence of any fact, circumstance or event unless such fact, circumstance or event, individually or taken together with all other facts, circumstances or events inconsistent with any paragraph of Article III, has had or is reasonably expected to have a Material Adverse Effect (as defined at Section 9.14), disregarding for these purposes (x) any qualification or exception for, or reference to, materiality in any such representation or warranty and (y) any use of the terms “material”, “materially”, “in all material respects”, “Material Adverse Effect” or similar terms or phrases in any such representation or warranty. The foregoing standard shall not apply to representations and warranties contained in Sections 3.1 (other than the last sentence of Section 3.1(a)) and Sections 3.1(c), 3.2, 3.3 and 3.11), which shall be deemed untrue, incorrect and breached if they are not true and correct in all material respects based on the qualifications and standards therein contained.

Subject to the foregoing paragraphs in this Article III, Pamrapo hereby represents and warrants to BCB as follows:

3.1. Corporate Organization .

(a) Pamrapo is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey. Pamrapo has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or the location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to

 

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be so licensed or qualified would not have a Material Adverse Effect. Pamrapo is duly registered as unitary savings and loan holding company under the Home Owners’ Loan Act of 1933, as amended (the “HOLA”). The Certificate of Incorporation and Bylaws of Pamrapo, copies of which have previously been delivered to BCB are true, complete and correct copies of such documents as in effect as of the date of this Agreement. As used in this Agreement, the word “Subsidiary” when used with respect to any party means any corporation, partnership, association, organization, trust or other organization, whether incorporated or unincorporated, which is consolidated with such party for financial reporting purposes.

(b) Pamrapo Bank is in good standing as a savings and loan association duly organized and validly existing under the laws of the State of New Jersey and the rules and regulations of the New Jersey Department of Banking and Insurance (the “NJDBI”) and the Federal Deposit Insurance Corporation (“FDIC”). In addition to the NJDBI, Pamrapo Bank is regulated by the Office of Thrift Supervision (“OTS”). Pamrapo Bank has in effect all federal, state, local and foreign governmental authorizations necessary for it to own or lease its properties and assets and to carry on its business as now conducted. The deposit accounts of Pamrapo Bank are insured by the FDIC to the fullest extent permitted by law, and all premiums and assessments required to be paid in connection therewith have been paid by Pamrapo Bank. Each of Pamrapo’s Subsidiaries is duly organized, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization. Each of Pamrapo’s Subsidiaries (including Pamrapo Bank) has the corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or the location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified would not have a Material Adverse Effect. The governing documents of each Subsidiary of Pamrapo, copies of which have previously been delivered to BCB, are true, complete and correct copies of such documents as in effect as of the date of this Agreement.

(c) The minute books of Pamrapo and each of its Subsidiaries contain true, complete and accurate records in all material respects of all meetings and other corporate actions held or taken since December 31, 2003 of its respective stockholders and boards of directors (including committees of their respective boards of directors). Pamrapo has made available to BCB correct and complete copies of all minutes of the board of directors of Pamrapo and its Subsidiaries since December 31, 2003.

3.2. Capitalization .

(a) The authorized capital stock of Pamrapo consists of 25 million shares of Pamrapo Common Stock and 3 million shares of preferred shares, par value $.01 per share (“Pamrapo Preferred Stock”). No other capital stock is authorized. As of the date of this Agreement, there are (x) 4,935,542 shares of Pamrapo Common Stock issued and outstanding and 1,964,458 shares of Pamrapo Common Stock held in Pamrapo’s treasury; (y) no shares of Pamrapo Common Stock reserved for issuance upon exercise of outstanding stock options or otherwise except for 56,380 shares of Pamrapo Common Stock reserved for issuance pursuant to the Pamrapo Stock Plan and (z) no shares of Pamrapo Preferred Stock issued and outstanding. All of the issued and outstanding shares of Pamrapo Common Stock have been duly authorized

 

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and validly issued and are fully paid, nonassessable and free of preemptive rights. Except as set forth in Schedule 3.2 of the Pamrapo Disclosure Schedules, Pamrapo does not have and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of Pamrapo Common Stock, Pamrapo Preferred Stock or any other equity security of Pamrapo. Schedule 3.2 of the Pamrapo Disclosure Schedule includes a complete and true list of all outstanding option awards, including persons to whom the awards were made, the exercise price of such awards and the vested and unvested awards, as well as a list of option awards intended to be granted following the announcement of the merger, subject to regulatory approval.

(b) Schedule 3.2(b) of the Pamrapo Disclosure Schedules sets forth a true and correct list of all of the Subsidiaries of Pamrapo and Pamrapo Bank as of the date of this Agreement, including the number of shares of capital stock of each Subsidiary. Pamrapo and Pamrapo Bank each own, directly or indirectly, all of the issued and outstanding shares of the capital stock of each of their respective Subsidiaries, free and clear of all liens, charges, encumbrances, pledges or security interests whatsoever, and all of such shares are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. No Subsidiary of Pamrapo or Pamrapo Bank has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of any shares of capital stock or any other equity security of such Subsidiary.

3.3. Authority; No Violation .

(a) Pamrapo has full corporate power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. This Agreement and the transactions contemplated hereby have been duly and validly approved by the board of directors of Pamrapo. The board of directors of Pamrapo has directed that this Agreement be submitted to Pamrapo’s stockholders for adoption at a meeting of such stockholders and, except for the adoption of this Agreement by the requisite vote of Pamrapo’s stockholders, no other corporate proceedings (except for regulatory approvals) on the part of Pamrapo (other than the approval of the Bank Merger Agreement by Pamrapo as the sole stockholder of Pamrapo Bank) are necessary to approve this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Pamrapo and (assuming due authorization, execution and delivery by BCB) constitutes a valid and binding obligation of Pamrapo, enforceable against Pamrapo in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws affecting creditors’ rights and remedies generally.

(b) Pamrapo Bank has full corporate power and authority to execute, deliver and perform its obligations under the Bank Merger Agreement and to consummate the Subsidiary Merger and the transactions contemplated thereby. The execution and delivery of the Bank Merger Agreement and the consummation of the transactions contemplated thereby have been duly and validly approved prior thereto by the board of directors of Pamrapo Bank. No other corporate proceedings on the part of Pamrapo Bank are necessary to consummate the transactions contemplated by the Bank Merger Agreement. The Bank Merger Agreement

 

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(assuming due authorization, execution and delivery by the Bank) will constitute a valid and binding obligation of Pamrapo Bank, enforceable against Pamrapo Bank in accordance with its terms, except as enforcement may be limited by general principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium, fraudulent transfer and similar laws affecting creditors’ rights and remedies generally.

(c) Neither the execution and delivery of this Agreement by Pamrapo or the Bank Merger Agreement by Pamrapo Bank, nor the consummation by Pamrapo or Pamrapo Bank, as the case may be, of the transactions contemplated hereby or thereby, nor compliance by Pamrapo or Pamrapo Bank, as the case may be, with any of the terms or provisions hereof or thereof, will (i) violate any provision of their respective governing documents, or (ii) assuming that the consents and approvals referred to in Section 3.4 hereof are duly obtained, (x) violate any statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Pamrapo or any of its Subsidiaries, or any of their respective properties or assets, or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, result in the obligation to sell or result in the creation of any lien, pledge, security interest, charge or other encumbrance upon any of the respective properties or assets of Pamrapo or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Pamrapo or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound or affected, except for any violation, conflict, breach, default, acceleration, termination, modification or cancellation which, individually or in the aggregate, would not have a Material Adverse Effect on Pamrapo or materially impact the terms and conditions or transactions contemplated hereby.

3.4. Consents and Approvals . Except for (a) the filing of a merger application with the FDIC and approval or non-objection of such applications by the FDIC and any other Governmental Entity; (b) the filing with the Securities and Exchange Commission (“SEC”) of (i) a joint proxy statement/prospectus in definitive form relating to the stockholder meetings of Pamrapo and BCB to be held in connection with this Agreement and the Merger contemplated hereby (the “Proxy Statement”) and (ii) a Registration Statement on Form S-4 (the “S-4”) registering the BCB Common Stock to be issued in connection with this Agreement and the transactions contemplated hereby (c) the adoption of this Agreement by the requisite vote of the stockholders of Pamrapo and the adoption of the Bank Merger Agreement by the requisite vote of stockholders of Pamrapo Bank; (d) the filing of the Certificate of Merger with the New Jersey Secretary of State; (e) the approval by the NASDAQ Stock Market of the listing of the additional shares of BCB Common Stock on the NASDAQ Global Market to be issued pursuant to Article II hereof; (f) the adoption of this Agreement by the requisite vote of the stockholders of BCB; and (i) such filings, authorizations or approvals as may be set forth in Schedule 3.4 of the Pamrapo Disclosure Schedules; with a Governmental Entity to satisfy the applicable requirements of the laws of states in which Pamrapo and its Subsidiaries are qualified or licensed to do business or state securities or “blue sky” laws, no consents or approvals of or filings or registrations with any court, administrative agency or commission or other governmental authority or instrumentality (each a “Governmental Entity”) or with any third party are necessary

 

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in connection with (1) the execution and delivery by Pamrapo of this Agreement and (2) the consummation by Pamrapo of the Merger and the other transactions contemplated hereby.

3.5. Reports . Pamrapo and each of its Subsidiaries have timely filed all material reports, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file since December 31, 2005 with (i) the NJDBI, (ii) the OTS, (iii) the FDIC, (iv) any state regulatory authority (a “State Regulator”) and (v) any self-regulatory organization (“SRO”) (collectively with the Federal Reserve Board, the “Regulatory Agencies” and individually a “Regulatory Agency”), and all other material reports and statements required to be filed by them since December 31, 2005, including, without limitation, any report or statement required to be filed pursuant to the laws, rules or regulations of the United States, the NJDBI, the OTS, the FDIC or any SRO, and have paid all fees and assessments due and payable in connection therewith. Except for normal examinations conducted by a Regulatory Agency in the regular course of the business of Pamrapo and its Subsidiaries and except as set forth in Schedule 3.5 of the Pamrapo Disclosure Schedules, no Regulatory Agency has initiated any proceeding or, to Pamrapo’s knowledge, investigation into the business or operations of Pamrapo or any of its Subsidiaries since December 31, 2005. Except as set forth in Schedule 3.5 , there is no unresolved material violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of Pamrapo or any of its Subsidiaries.

3.6. Financial Statements . Pamrapo has previously delivered to BCB copies of the consolidated balance sheets of Pamrapo and its Subsidiaries as of December 31 for the fiscal years 2008 and 2007, and the related consolidated statements of income, changes in stockholders’ equity and cash flows for the fiscal years 2006 through 2008, inclusive, as reported in Pamrapo’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in each case accompanied by the audit report of Beard Miller Company LLP, independent registered public accountants with respect to Pamrapo, (collectively the “Pamrapo Financial Statements”). The December 31, 2008 consolidated balance sheet of Pamrapo (including the related notes, where applicable) fairly presents the consolidated financial position of Pamrapo and its Subsidiaries as of the date thereof, and the other financial statements referred to in this Section 3.6 (including the related notes, where applicable) fairly present, and the financial statements referred to in Section 6.7 hereof will fairly present (subject, in the case of the unaudited statements, to recurring audit adjustments normal in nature and amount and the absence of footnotes), the results of the consolidated operations and consolidated financial position of Pamrapo and its Subsidiaries for the respective fiscal periods or as of the respective dates therein set forth; each of such statements (including the related notes, where applicable) comply, and the financial statements referred to in Section 6.7 hereof will comply, in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto; and each of such statements (including the related notes, where applicable) has been, and the financial statements referred to in Section 6.7 hereof will be, prepared in accordance with GAAP consistently applied during the periods involved, except as indicated in the notes thereto or, in the case of unaudited statements, as permitted by Form 10-Q. The books and records of Pamrapo and its Subsidiaries have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements and reflect only actual transactions.

 

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3.7. Broker’s Fees . Neither Pamrapo nor any Subsidiary of Pamrapo has employed any broker or finder or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with any of the transactions contemplated by this Agreement, except that Pamrapo has engaged, and will pay a fee or commission to The Endicott Group (“Endicott”) in accordance with the terms of a letter agreement between Endicott and Pamrapo concerning the Merger and for the issuance of an opinion, subject to the terms, conditions, assumptions and qualifications set forth therein, that the Exchange Ratio is fair to Pamrapo stockholders, from a financial point of view.

3.8. Absence of Certain Changes or Events .

(a) Except as may be set forth in Schedule 3.8(a) of the Pamrapo Disclosure Schedules or as provided for in the Pamrapo Financial Statements, since December 31, 2008, (i) neither Pamrapo nor any of its Subsidiaries has incurred any material liability, except in the ordinary course of their business consistent with their past practices, and (ii) no event has occurred which has caused, or is reasonably likely to cause, individually or in the aggregate, a Material Adverse Effect on Pamrapo.

(b) Except as set forth in Schedule 3.8(b) of the Pamrapo Disclosure Schedules, since December 31, 2008, Pamrapo and its Subsidiaries each (i) has been operated in the ordinary course of business consistent with past practice and (ii) has not made any changes in its respective capital or corporate structures, nor any material change in its methods of business operations.

(c) Except as set forth in Schedule 3.8(c) of the Pamrapo Disclosure Schedules, since December 31, 2008, neither Pamrapo nor any of its Subsidiaries has (i) increased the wages, salaries, compensation, pension, or other fringe benefits or perquisites payable to any executive officer, employee, or director from the amount thereof in effect as of December 31, 2008 (which amounts have been previously disclosed to BCB), granted any severance or termination pay, entered into any contract to make or grant any severance or termination pay, granted any Pamrapo Options or other derivative security or paid any bonus or (ii) suffered any strike, work stoppage, slow-down, or other labor disturbance.

(d) Except as set forth in Schedule 3.8(d) of the Pamrapo Disclosure Schedule since December 31, 2008, neither Pamrapo nor any of its Subsidiaries has had any layoffs, work force reductions or otherwise terminated the employment of its employees, other than (i) in the ordinary course of business, consistent with past practice or (ii) for cause.

3.9. Legal Proceedings .

(a) Except as set forth in Schedule 3.9(a) of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries is a party to any, and there are no pending or, to Pamrapo’s knowledge, threatened, legal, administrative, arbitration or other proceedings, claims, actions, suits or governmental or regulatory investigations (i) of any nature against Pamrapo or any of its Subsidiaries or (ii) challenging the validity or propriety of the transactions contemplated by this Agreement or the Bank Merger Agreement.

 

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(b) There is no injunction, order, judgment, decree, or regulatory restriction imposed upon Pamrapo, any of its Subsidiaries or the assets of Pamrapo or any of its Subsidiaries, which has had, or could reasonably be expected to have, a Material Adverse Effect on Pamrapo.

(c) Except as set forth in Schedule 3.9(c) of the Pamrapo Disclosure Schedules, there are no actions, suits, claims, proceedings, investigations or assessments of any kind pending or, to the best of Pamrapo’s knowledge, threatened, against any of the directors or officers of Pamrapo or any of its Subsidiaries in their capacities as such, and no director or officer of Pamrapo or any of its Subsidiaries currently is being indemnified or seeking to be indemnified by Pamrapo or any of its Subsidiaries pursuant to applicable law or their governing documents.

3.10. Taxes .

(a) Except as set forth in Schedule 3.10(a) of the Pamrapo Disclosure Schedule, (i) all Tax Returns for which the statute of limitations for assessment has not expired that are required to be filed on or before the Closing Date (taking into account any extensions of time within which to file which have not expired) by or with respect to Pamrapo and its Subsidiaries have been or will be timely filed on or before the Closing Date; (ii) all such Tax Returns are or will be true and complete in all material respects; (iii) all Taxes shown to be due on the Tax Returns referred to in clause (i) have been or will be timely paid in full or adequate provision for such payment has been or will be made; (iv) the Tax Returns referred to in clause (i) for which the statute of limitations for assessment has not expired have not been examined by the IRS or the appropriate taxing authority; (v) all deficiencies asserted or assessments made as a result of examinations conducted by any taxing authority have been paid in full; (vi) no issues that have been raised by the relevant taxing authority in connection with the examination of any of the Tax Returns referred to in clause (i) are currently pending; and (vii) neither Pamrapo nor any Subsidiary has extended any statutes of limitation with respect to the assessment of any Taxes of Pamrapo or any of its Subsidiary, other than extensions that have expired.

(b) Pamrapo has made available to BCB (i) true and correct copies of the United States federal, state, local and foreign income Tax Returns filed by Pamrapo and its Subsidiaries for each of the three most recent fiscal years for which such returns have been filed and (ii) any audit report issued within the last three years relating to Taxes due from or with respect to Pamrapo and its Subsidiaries. Since January 1, 2002, no claim has been made by a taxing authority in a jurisdiction where Pamrapo and its Subsidiaries do not file Tax Returns that Pamrapo or any of its Subsidiaries is or may be subject to taxation by that jurisdiction.

(c) Neither Pamrapo nor any of its Subsidiaries has liability with respect to income, franchise or similar Taxes that accrued on or before the end of the most recent period covered by the Pamrapo Financial Statements in excess of the amounts accrued or subject to a reserve with respect thereto that are reflected in the Pamrapo Financial Statements.

(d) Schedule 3.10(d) of the Pamrapo Disclosure Schedules list all combined, consolidated or unitary federal, state, local, or foreign returns filed by or with respect to Pamrapo and any of its Subsidiaries after January 1, 2006.

 

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(e) Except as set forth in Schedule 3.10(e) of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries is a party to any Tax allocation or sharing agreement. Any such Tax allocation or sharing agreement will be terminated on or before the Closing Date.

(f) Since January 1, 2003, no closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings have been entered into or issued by any taxing authority with respect to Pamrapo or any of its Subsidiaries.

(g) Except for the amounts calculated and the detailed disclosure for each person set forth on Schedule 3.10(g) of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries maintains any compensation plans, programs or arrangements the payments under which would not reasonably be expected to be deductible as a result of the limitations under Section 162(m) or Section 280G of the Code and the Treasury Regulations issued thereunder.

(h) Neither Pamrapo nor any of its Subsidiaries has ever been an “S corporation” within the meaning of Section 1361 of the Code.

(i) Neither Pamrapo nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.

(j) Neither Pamrapo nor any of its Subsidiaries (A) has been a member of an affiliated group filing a consolidated federal income tax return the common parent of which was not Pamrapo or (B) has any liability for the taxes of any person (other than Pamrapo or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local, or foreign law), as a transferee or successor, by contract, or otherwise.

(k) Except as set forth on Schedule 3.10(k) of the Pamrapo Disclosure Schedules, since January 1, 2006, neither Pamrapo nor any of its Subsidiaries has agreed to, or is required to, make any adjustments pursuant to Section 481(a) of the Code or any similar provision of law by reason of a change in accounting method initiated by Pamrapo or any of its Subsidiaries or proposed by any taxing authority, and no application is pending with any taxing authority requesting permission for any changes in accounting methods that related to business or operations of Pamrapo or any of its Subsidiaries.

(l) Neither Pamrapo nor any of its Subsidiaries is required to make any disclosure to any taxing authority with respect to a “listed transaction” pursuant to Section 1.6011-4(b)(2) of the Treasury Regulations.

(m) As of the date hereof, Pamrapo has no reason to believe that any conditions exist that might prevent or impede the Merger from qualifying as a reorganization within the meaning of Section 368(a) of the Code.

(n) Each of Pamrapo and its Subsidiaries has complied in all material respects with all applicable laws, rules and regulations relating to the withholding of Taxes and has duly and timely withheld from employee salaries, wages and other compensation paid to independent

 

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contractors, creditors, stockholders, or other third parties and has paid over to the appropriate taxing authorities all material amounts required to be so withheld and paid over for all periods under applicable laws.

(o) There are no liens or other encumbrances on any of the assets of Pamrapo or its Subsidiaries that arose in connection with any failure (or alleged failure) to pay Tax (other than Taxes not yet due and payable).

(p) Except as set forth in Schedule 3.10(p) of the Pamrapo Disclosure Schedules, which Schedule lists the amount and the expiration dates of consolidated net operating losses, net capital losses, net unrealized built-in losses, foreign tax credits, minimum tax credits, investment tax credits and other tax credits carryovers of the Pamrapo Group allocable to Pamrapo and each of its Subsidiaries, Pamrapo Group does not have any net operating losses or other tax attributes that are currently subject to limitation under Section 382, 383 or 384 of the Code.

(q) No liability will be created for Pamrapo or its successors after the Closing Date as a result of the triggering into income or gain of deferred inter-company transactions or excess loss accounts as a result of the application of Treasury Regulations sections 1.1502-13 and 1.1502-19 or related to items of income or gain arising with respect to any interest in a Subsidiary which is not a member of the Pamrapo Group.

(r) Neither Pamrapo nor any of its Subsidiaries has investment tax credits or overall foreign losses allocable to it subject to recapture.

(s) Except as set forth in Schedule 3.10(s) of the Pamrapo Disclosure Schedules, each of Pamrapo and its Subsidiaries has made estimated Tax payments of federal and state income and franchise Taxes on the applicable estimated Tax payment dates at levels sufficient not to cause Pamrapo or its Subsidiaries to be liable for any penalties attributable to underpayment of estimated Taxes, and Pamrapo and its Subsidiaries will continue to make timely estimated Tax payments at levels sufficient to not cause Pamrapo or any successor to Pamrapo to be liable for any such penalties.

For the purposes of this Agreement, “Tax” or “Taxes” shall mean all taxes, charges, fees, levies, penalties or other assessments imposed by any United States federal, state, local or foreign taxing authority, including, but not limited to income, excise, property, sales, transfer, franchise, payroll, withholding, social security or other taxes, including any interest, penalties or additions attributable thereto.

For purposes of this Agreement, “Tax Return” shall mean any return, report, information return or other document (including any related or supporting information) with respect to Taxes.

For purposes of this Agreement, “Pamrapo Group” shall mean any “affiliated group” (as defined in Section 1504(a) of the Code without regard to the limitation contained in Section 1504(b) of the Code that includes Pamrapo and its Subsidiaries or any predecessor of or any successor to Pamrapo (or to another such predecessor or successor).

 

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3.11. Employee Benefit Plan Matters .

(a) Schedule 3.11(a) of the Pamrapo Disclosure Schedules sets forth a true and complete list of each employee benefit plan, as the term is defined in Section 3 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and any other employee benefit arrangement or agreement that is sponsored, maintained or contributed to, or required to be contributed to, as of the date of this Agreement (collectively referred to as the “Plans”) by Pamrapo or any of its Subsidiaries or by any trade or business, whether or not incorporated which together with Pamrapo would be deemed a “single employer” within the meaning of Section 4001 of ERISA or Section 414 of the Code (an “ERISA Affiliate”), for the benefit of any employee or former employee of Pamrapo, any Subsidiary or any ERISA Affiliate.

(b) Pamrapo has heretofore delivered to BCB true and complete copies of each of the Plans and related trust instruments and all amendments thereto, the most recent summary plan description and summaries of material modifications thereto, underlying insurance contracts and (i) the actuarial report for any Plan (if applicable) for each of the last three (3) years, (ii) the most recent determination letter from the Internal Revenue Service (“IRS”) (if applicable) for any Plan, (iii) the most recent two (2) years’ annual reports (Form 5500), together with all Schedules, as required, filed with the IRS or Department of Labor (“DOL”) for any Plan, (iv) any financial statements and opinions required by Section 103(e)(3) of ERISA with respect to each Plan, and (v) for any Plan which for ERISA purposes is a “top-hat” plan, a copy of any top-hat filing with the DOL.

(c) Except as set forth in Schedule 3.11(c) of the Pamrapo Disclosure Schedules, (i) each of the Plans has been operated and administered in all material respects in accordance with its terms and applicable law, including but not limited to ERISA and the Code, (ii) each of the Plans intended to be “qualified” within the meaning of Section 401(a) of the Code (1) has received a favorable determination letter from the IRS, (2) is or will be the subject of an application for a favorable determination letter, or (3) is set forth on a prototype document which is subject to a current opinion letter which has not expired and Pamrapo is not aware of any circumstances that could reasonably be expected to result in the revocation or denial of any such favorable determination letter, (iii) with respect to each Plan which is subject to Title IV of ERISA, the present value of accrued benefits under such Plan, based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such Plan’s actuary with respect to such Plan, did not, as of its latest valuation date, exceed the then current value of the assets of such Plan allocable to such accrued benefits, (iv) no Plan provides benefits, including without limitation death or medical benefits (whether or not insured), with respect to current or former employees of Pamrapo, its Subsidiaries or any ERISA Affiliate beyond their retirement or other termination of service, other than (w) coverage mandated by applicable law, (x) death benefits or retirement benefits under any “employee pension plan,” as that term is defined in Section 3(2) of ERISA, (y) deferred compensation benefits accrued as liabilities on the books of Pamrapo, its Subsidiaries or the ERISA Affiliates or (z) benefits the full cost of which is borne by the current or former employee (or his beneficiary), (v) no liability under Title IV of ERISA has been incurred by Pamrapo, its Subsidiaries or any ERISA Affiliate that has not been satisfied in full, and no condition exists that presents a material risk to Pamrapo, its Subsidiaries or a Pamrapo ERISA Affiliate of incurring a material liability

 

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thereunder, (vi) no Plan is a “multiemployer pension plan,” as such term is defined in Section 3(37) of ERISA, (vii) each Plan that is a “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) and which has not been terminated has been operated since January 1, 2006 in good faith compliance with Section 409A of the Code and the regulations issued under Section 409A of the Code, (viii) each Plan set forth on Schedule 3.11(a) can be terminated without payment of an additional contribution or amount, other than contributions and amounts required by the terms of the Plan without regard to the Plan’s termination, and without vesting or acceleration of any benefits provided under such Plan, other than vesting required by the Code as a result of a qualified Plan’s termination, (ix) all contributions or other amounts payable by Pamrapo, its Subsidiaries or any ERISA Affiliates as of the Effective Time with respect to each Plan which is subject to Title IV of ERISA in respect of current or prior plan years have been paid or accrued in accordance with GAAP and Section 412 of the Code, (x) neither Pamrapo, its Subsidiaries nor any ERISA Affiliate has engaged in a merger in connection with which Pamrapo, its Subsidiaries or any ERISA Affiliate could be subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a tax imposed pursuant to Section 4975 or 4976 of the Code, (x) there are no pending, or, to Pamrapo’s knowledge, threatened proceedings, investigations or claims (other than routine claims for benefits) by, on behalf of or against any of the Plans or any trusts related thereto and (xi) the consummation of the transactions contemplated by this Agreement will not (1) entitle any current or former employee or officer of Pamrapo or any ERISA Affiliate to severance pay, termination pay or any other payment, except as expressly provided in this Agreement or (2) accelerate the time of payment or vesting or increase the amount of compensation due any such employee or officer. Pamrapo acknowledges and agrees that the Surviving Entity shall not be liable for any tax assessed as a result of a Plan being deemed noncompliant under Section 409A of the Code.

3.12. SEC Reports . Since December 31, 2005, no (a) final registration statement, prospectus, report (including Forms 10-K, 10-Q and 8-K), Schedule and definitive proxy statement filed by Pamrapo with the SEC pursuant to the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1943 (“Exchange Act”) (the “Pamrapo Reports”) or (b) communication mailed by Pamrapo to its stockholders contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they were made, not misleading, except that information as of a later date shall be deemed to modify information as of an earlier date. Pamrapo has timely filed all Pamrapo Reports and other documents required to be filed by it under the Securities Act and the Exchange Act, and, as of their respective dates, all Pamrapo Reports complied in all material respects with the published rules and regulations of the SEC with respect thereto.

3.13. Pamrapo Information . The information provided by and relating to Pamrapo and its Subsidiaries to be contained in, or incorporated by reference in, the Proxy Statement and the S-4 or in any other document filed with any other regulatory agency in connection herewith, will (i) not contain 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 in which they are made, not misleading and (ii) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder.

 

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3.14. Ownership of BCB Common Stock . None of Pamrapo or its Subsidiaries (i) beneficially owns, directly or indirectly, or (ii) is a party to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of, in each case, any shares of capital stock of BCB; provided, however, that the foregoing shall not include, and shall not speak to, any shares of capital stock of BCB constituting a component or portion of any index or mutual fund.

3.15. Compliance with Applicable Law . Except as set forth in Schedule 3.15 of the Pamrapo Disclosure Schedule, each of Pamrapo and its Subsidiaries: (i) is in material compliance with all applicable federal, state, local and foreign statutes, laws, regulations, policies, ordinances, rules, judgments, orders or decrees applicable thereto or to the employees conducting such businesses, including, without limitation, the Equal Credit Opportunity Act of 1974 and the regulations promulgated thereunder, the Truth in Lending Act and Regulation Z promulgated thereunder, the Fair Housing Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Bank Secrecy Act, the USA PATRIOT Act and all other applicable fair lending laws and other laws relating to discriminatory business practices except for such noncompliance that would not, individually or in the aggregate, have or be reasonably likely to have, a Material Adverse Effect on Pamrapo; and (ii) holds all material licenses, franchises, permits and authorizations necessary for the lawful conduct of their respective businesses under and pursuant to all, and are in material compliance with and are not, to Pamrapo’s knowledge, in default in any respect under any such licenses, franchises, permits and authorizations under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to Pamrapo or any of its Subsidiaries, except where the failure to hold such license, franchise, permit or authorization or such noncompliance or default would not, individually or in the aggregate, have or be reasonably likely to have a Material Adverse Effect on Pamrapo.

3.16. Certain Contracts .

(a) Except as set forth in Schedule 3.16(a) of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries is a party to or bound by any contract, arrangement, commitment or understanding (whether written or oral) (i) with respect to the employment of any directors, officers, employees; (ii) which would entitle any present or former director, officer, employee or agent of Pamrapo or any of its Subsidiaries to indemnification from Pamrapo or any of its Subsidiaries; (iii) which, upon the consummation of the transactions contemplated by this Agreement or the Bank Merger Agreement will (either alone or upon the occurrence of any additional acts or events) result in any payment (whether of severance pay or otherwise) becoming due from BCB, Pamrapo, Pamrapo Bank, the Bank or any of their respective Subsidiaries or successors to any officer or employee thereof; (iv) which involves the annual payment of $25,000 or more; (v) which is a consulting agreement (including data processing, software programming and licensing contracts) not terminable on 60 days or less notice involving the payment of more than $25,000 per annum, in the case of any such agreement with an individual, or $50,000 per annum, in the case of any other such agreement; (vi) which materially restricts the conduct of any line of business by Pamrapo or any of its Subsidiaries; (vii) with or to a labor union or guild (including any collective bargaining agreement); (viii) relating to the acquisition or disposition of any business (whether by merger,

 

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sale of stock, sale of assets or otherwise) or material assets (other than this Agreement and the Bank Merger Agreement); (ix) that grants any right of first refusal or right of first offer or similar right or that limits or purports to limit the ability of Pamrapo or any of its Subsidiaries to own, operate, sell, transfer, pledge or otherwise dispose of any material amount of assets or business; (x) with respect to any material joint venture, partnership agreement or similar agreement; (xi) with respect to any agreement relating to any intellectual property other than “shrink wrap” licenses related to software; (xii) relating to the indebtedness by Pamrapo or its Subsidiaries for borrowed money or any guaranty of indebtedness for borrowed money in excess of $5,000,000; or (xiii) excluding the plans set forth on Schedule 3.11 , where any employee benefits (including any stock option plan, stock appreciation rights plan, restricted stock plan or stock purchase plan) will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the Bank Merger Agreement, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement or the Bank Merger Agreement. Each contract, arrangement, commitment or understanding of the type described in Sections 3.16(a) and 3.16(c) hereof, is set forth in Schedule 3.16(a) or Schedule 3.16(c) of the Pamrapo Disclosure Schedules, is referred to herein as a “Pamrapo Contract.” Pamrapo has previously delivered to BCB true and correct copies of each Pamrapo Contract.

(b) Except as set forth in Schedule 3.16(b) of the Pamrapo Disclosure Schedules, (i) each Pamrapo Contract is valid and binding and in full force and effect, (ii) Pamrapo and each of its Subsidiaries has in all material respects performed all obligations required to be performed by it to date under each Pamrapo Contract, except where such noncompliance, individually or in the aggregate, would not have or be reasonably likely to have a Material Adverse Effect on Pamrapo, (iii) no event or condition exists which constitutes or, after notice or lapse of time or both, would constitute, a material default on the part of Pamrapo or any of its Subsidiaries under any such Pamrapo Contract, except where such default, individually or in the aggregate, would not have or be reasonably likely to have a Material Adverse Effect on Pamrapo and (iv) no other party to such Pamrapo Contract is, to Pamrapo’s knowledge, in default in any respect thereunder.

(c) Schedule 3.16(c) of the Pamrapo Disclosure Schedules sets forth all agreements of Pamrapo providing for the lease of real property, copies of which have previously been delivered or made available to BCB including term of the lease, any option to extend such lease and any consent or notice required in connection with the Merger and the transactions contemplated hereby.

3.17. Agreements with Regulatory Agencies . Except as set forth in Schedule 3.17 of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries is subject to any cease-and-desist or other order issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or is a recipient of any supervisory letter from, or has adopted any board resolutions at the request of (as set forth on Schedule 3.17 of the Pamrapo Disclosure Schedules, a “Regulatory Agreement”), any Regulatory Agency or other Governmental Entity that restricts the conduct of its business or that in any manner relates to its capital adequacy, its credit policies, its management, its compliance with any matter set forth in Section 3.15 hereof or its business, nor has Pamrapo or any of its

 

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Subsidiaries been advised by any Regulatory Agency or other Governmental Entity that it is considering issuing or requesting any Regulatory Agreement.

3.18. Investment Securities . Schedule 3.18 of the Pamrapo Disclosure Schedules sets forth the book and market value as of December 31, 2008 of the investment securities, mortgage-backed securities and securities held for investment, sale or trading of Pamrapo and its Subsidiaries. Schedule 3.18 of the Pamrapo Disclosure Schedules sets forth an investment securities report that includes, security descriptions, CUSIP numbers, pool face values, book values, coupon rates and current market values. The totals presented in the securities report agree to the amounts carried in Pamrapo’s and its Subsidiaries’ general ledgers in accordance with GAAP. Except for matters of general application to the banking industry (including but not limited to, changes in laws or regulations or GAAP) or for events relating to the business environment in general, including market fluctuations and changes in interest rates, Pamrapo has no knowledge of any events which may be expected to result in any material adverse change in the quality or performance of its investment portfolio.

3.19. Intellectual Property . Pamrapo and each of its Subsidiaries owns (without lien or encumbrance of any kind) or possesses valid and binding licenses and other rights to use without payment all material patents, copyrights, trade secrets, trade names, servicemarks, trademarks and computer software used in its businesses; and neither Pamrapo nor any of its Subsidiaries has received any notice of conflict with respect thereto that asserts the right of others. Pamrapo and each of its Subsidiaries have in all material respects performed all the obligations required to be performed by them and are not in default in any material respect under any contract, agreement, arrangement or commitment relating to any of the foregoing, except where such non-performance or default would not, individually or in the aggregate, have or be reasonably likely to have a Material Adverse Effect on Pamrapo. Schedule 3.19 of the Pamrapo Disclosure Schedules lists (i) all patents, registered copyrights, trade names, servicemarks and trademarks of Pamrapo and its Subsidiaries that are owned by Pamrapo and its Subsidiaries and (ii) all material patents, registered copyrights, trade names, servicemarks and trademarks of Pamrapo and its Subsidiaries that are licensed by Pamrapo and its Subsidiaries.

3.20. Undisclosed Liabilities . Except (a) as set forth in Schedule 3.20 of the Pamrapo Disclosure Schedules, (b) for those liabilities that are fully reflected or reserved against on the consolidated balance sheet of Pamrapo included in the Pamrapo Financial Statements; and (c) for liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2008 that, either alone or when combined with all similar liabilities, have not had, and could not reasonably be expected to have, a Material Adverse Effect on Pamrapo, neither Pamrapo nor any of its Subsidiaries has incurred any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due).

3.21. State Takeover Laws . There are no antitakeover provisions in the Pamrapo Certificate of Incorporation or the NJBCA that will apply to or otherwise adversely affect this Agreement or the transactions contemplated herein. Pamrapo has taken all actions required to exempt BCB and the Agreement from any provisions of an antitakeover nature in its Certificate of Incorporation, Bylaws and the provisions of any federal or state “antitakeover,” “fair price,” “moratorium,” “control share acquisition” or similar laws or regulations. Pamrapo does not have in place any “poison pill” or other type of stockholder rights plans, agreement or arrangement.

 

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3.22. Administration of Fiduciary Accounts . Pamrapo and each of its Subsidiaries has properly administered in all material respects all accounts for which it acts as a fiduciary, including but not limited to accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable state and federal law and regulation and common law. Neither Pamrapo nor any of its Subsidiaries nor any of their respective directors, officers or employees has committed any breach of trust with respect to any such fiduciary account which has had or could reasonably be expected to have a Material Adverse Effect on Pamrapo, and the accountings for each such fiduciary account are true and correct in all material respects and accurately reflect the assets of such fiduciary account.

3.23. Environmental Matters .

(a) Each of Pamrapo, its current or prior Subsidiaries, the Participation Facilities and the Loan Properties (each as hereinafter defined) are, and have been, in material compliance with all applicable federal, state and local laws, regulations and ordinances and with all applicable permits, decrees, orders and contractual obligations relating to pollution, the discharge of, or exposure to materials in the environment or workplace (“Environmental Laws”);

(b) There is no suit, claim, action or proceeding pending or, to Pamrapo’s knowledge, threatened, before any court, Governmental Entity or other forum (including arbitration) in which Pamrapo, any of its Subsidiaries, any Participation Facility or any Loan Property, has been or, with respect to threatened proceedings, may be, named as a defendant (x) for alleged noncompliance (including by any predecessor), with any Environmental Laws, or (y) relating to the release, threatened release or exposure to any material whether or not occurring at or on a site owned, leased or operated by Pamrapo or any of its current or prior Subsidiaries, any Participation Facility or any Loan Property;

(c) During the period of (x) Pamrapo’s or any of its Subsidiaries’ ownership or operation of any of their respective current properties, (y) Pamrapo’s or any of its Subsidiaries’ participation in the management of any Participation Facility, or (z) Pamrapo’s or any of its Subsidiaries’ holding of a security interest in a Loan Property, there has been no release of materials in, on, under or affecting any such property except in compliance with required governmental permits. To Pamrapo’s knowledge, prior to the period of (x) Pamrapo’s or any of its Subsidiaries’ ownership or operation of any of their respective current properties, (y) Pamrapo’s or any of its Subsidiaries’ participation in the management of any Participation Facility, or (z) Pamrapo’s or any of its Subsidiaries’ holding of a security interest in a Loan Property, there was no release or threatened release of materials in, on, under or affecting any such property, Participation Facility or Loan Property, except in compliance with required permits;

(d) All Phase I or Phase II environmental surveys on any properties owned or leased by Pamrapo or its Subsidiaries, including but not limited to other real estate owned (“OREO”) properties have been provided in full to BCB and its representatives prior to execution of this Agreement, and those listed in the Schedule will be provided within ten days of execution of this Agreement; and

 

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(e) The following definitions apply for purposes of this Section 3.23 hereof: (x) “Loan Property” means any property in which Pamrapo or any of its Subsidiaries holds a security interest or otherwise owns, including OREO; (y) “Participation Facility” means any facility in which Pamrapo or any of its Subsidiaries participates in the management thereof, other than Loan Properties; (z) “materials” includes, but is not limited to, hazardous substances and petroleum as defined in section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9601(14) and section 311 of the Clean Water Act, 33 U.S.C. § 1321 and their implementing regulations.

3.24. Derivative Transactions . Except as set forth in Schedule 3.24 of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries is a party to or has agreed to enter into an exchange traded or over-the-counter equity, interest rate, foreign exchange or other swap, forward, future, option, cap, floor or collar or any other contract that is not included on its balance sheet and is a derivatives contract (including various combinations thereof) (each, a “Derivatives Contract”) nor does Pamrapo or any of its Subsidiaries own securities that (i) are referred to generically as “structured notes,” “high risk mortgage derivatives,” “capped floating rate notes” or “capped floating rate mortgage derivatives” or (ii) are likely to have changes in value as a result of interest or exchange rate changes that significantly exceed normal changes in value attributable to interest or exchange rate changes.

3.25. Opinion . Pamrapo has received a written opinion, dated the date hereof, from Endicott to the effect that, subject to the terms, conditions and qualifications set forth therein, as of the date thereof the Exchange Ratio is fair to Pamrapo stockholders from a financial point of view.

3.26. Assistance Agreements . Neither Pamrapo nor any of its Subsidiaries is a party to any agreement or arrangement entered into in connection with the consummation of a federally assisted acquisition of a depository institution pursuant to which Pamrapo or any of its Subsidiaries is entitled to receive financial assistance or indemnification from any governmental agency.

3.27. Approvals . As of the date of this Agreement, Pamrapo knows of no reason why all regulatory approvals required for the consummation of the transactions contemplated hereby (including, without limitation, the Merger) should not be obtained.

3.28. Loan Portfolio .

(a) In Pamrapo’s reasonable judgment, the allowance for loan losses reflected in Pamrapo’s audited statement of financial condition at December 31, 2008 was, and the allowance for loan losses shown on the balance sheets in Pamrapo’s Reports for periods ending after December 31, 2008 will be, adequate in all material respects, as of the dates thereof, under GAAP, and no Regulatory Agencies have required or requested Pamrapo Bank to increase the allowance for loan losses for such periods.

(b) As of December 31, 2008, except as set forth in Schedule 3.28 (b) of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries is a party to any written or oral (i) loan agreement, note or borrowing arrangement (including, without limitation,

 

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leases, credit enhancements, commitments, guarantees and interest-bearing assets) (individually, a “Loan” and collectively, “Loans”), under the terms of which the obligor is, as of the date of this Agreement, over 90 days delinquent in payment of principal or interest or in default of any other material provision, or (ii) Loans with any director, executive officer or ten percent stockholder of Pamrapo or any of its Subsidiaries, or to the knowledge of Pamrapo, any person, corporation or enterprise controlling, controlled by or under common control with any of the foregoing. Schedule 3.28 (b) of the Pamrapo Disclosure Schedules sets forth (i) all of the Loans of Pamrapo or any of its Subsidiaries that as of the date of this Agreement are classified as “Special Mention,” “Substandard,” “Doubtful,” “Loss” or “Watch List,” together with the principal amount of and accrued and unpaid interest on each such Loan and the identity of the Loan by number; and (ii) by category of Loan (i.e., commercial, consumer, etc.), all of the other Loans of Pamrapo or any of its Subsidiaries that as of the date of this Agreement are classified as such, together with the aggregate principal amount of and accrued and unpaid interest on such Loans by category. From the date hereof through the Closing Date, Pamrapo shall inform BCB in writing, on a monthly basis and within 30 days of the prior month end, of any Loan that becomes classified in the manner described in the previous sentence, or any Loan the classification of which is changed.

(c) Each Loan reflected as an asset in the Pamrapo Reports (i) is evidenced by notes, agreements or other evidences of indebtedness which are true, genuine and correct in all material respects, (ii) to the extent secured, has been secured by valid liens and security interests which have been perfected, and (iii) is the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

3.29. Mortgage Banking Business .

(a) Warehouse Lines of Credit . Pamrapo and its Subsidiaries do not maintain any warehouse lines of credit.

(b) Compliance . Except as set forth in Schedule 3.29(b) of the Pamrapo Disclosure Schedules, neither Pamrapo nor any of its Subsidiaries has done or failed to do, or caused to be done or failed to be done, any act, the effect of which would operate to invalidate or materially impair (i) any private mortgage insurance or commitment of any private mortgage insurer to insure, (ii) any title insurance policy, (iii) any hazard insurance policy, (iv) any flood insurance policy, (v) any fidelity bond, direct surety bond, errors and omissions or other insurance policy required by any Regulatory Agency, investor or insurer, (vi) any surety or guaranty agreement or (vii) the rights of Pamrapo or any of its Subsidiaries under any loan servicing agreement or loan purchase commitment. No Regulatory Agency, investor in Loans or insurer has (i) notified Pamrapo or its Subsidiaries, or to Pamrapo’s knowledge, claimed, that Pamrapo or any of its Subsidiaries has violated or has not complied on a recurring basis with the applicable underwriting standards with respect to Loans sold by Pamrapo or any of its Subsidiaries to an investor or (ii) imposed restrictions on the activities (including commitment authority) of Pamrapo or any of its Subsidiaries. Pamrapo Bank has not and currently does not originate any FHA or VA Loans.

 

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(c) Loan Files . The loan documents relating to each Loan maintained in the loan files of Pamrapo Bank were in compliance with all applicable laws and regulations at the time of the origination, assumption or modification of such Loan, as the case may be, except where the failure to so comply, either individually or in the aggregate, would not have a Material Adverse Effect on Pamrapo. The loan files maintained by Pamrapo Bank contain originals or true, correct and complete copies of the documents relating to each Loan and the information contained in such loan files with respect to each such Loan is true, complete and accurate in all material respects and in compliance with all applicable laws and regulations, except where the failure to so comply, either individually or in the aggregate, would not have a Material Adverse Effect on Pamrapo. Except as set forth in the loan documents relating to a Loan maintained in the loan files of Pamrapo Bank, the terms of the note, bond, deed of trust and mortgage for each such Loan have not been impaired, waived, altered or modified in any respect from the date of their origination except by a written instrument which written instrument has been recorded, or submitted for recordation in due course, if recordation is necessary to protect the interests of the owner thereof, except where the failure to do any of the foregoing, either individually or in the aggregate, would not have a Material Adverse Effect on Pamrapo. Except as set forth in the loan documents maintained in the loan files by Pamrapo Bank, to Pamrapo’s knowledge, no mortgagor has been released from such mortgagor’s obligations with respect to the applicable Loan.

(d) No Recourse . Except as set forth in Schedule 3.29(d) of the Pamrapo Disclosure Schedules, Pamrapo Bank is not subject to recourse in connection with any Loans sold by it for (i) losses on liquidation of a loan, (ii) borrower defaults or (iii) repurchase obligations upon the occurrence of non-payment.

(e) Escrow Account . All escrow accounts have been maintained by Pamrapo Bank and, to Pamrapo’s knowledge, all prior servicers, in material compliance with the related loan documents, all applicable laws, rules, regulations, and requirements of governmental authorities. Pamrapo Bank has credited to the account of borrowers all interest required to be paid on any escrow account in accordance with applicable law and the terms of such agreements and loan documents. All escrow, custodial, and suspense accounts related to the Loans are held in Pamrapo Bank’s name or the investor’s name by Pamrapo Bank.

(f) ARM Adjustments . With respect to each Loan for which the interest rate is not fixed for the entire term of the Loan, Pamrapo Bank has, since the date it originated such Loan: (i) properly and accurately entered into its system all data required to service the loan in accordance with the related loan documents and all regulations, (ii) properly and accurately adjusted the monthly payment on each payment adjustment date, (iii) properly and accurately calculated the amortization of principal and interest on each payment adjustment date, in each case in compliance with all applicable laws, rules and regulations and the related loan documents, and (iv) executed and delivered any and all necessary notices required under, and in a form that complies with, all applicable laws, rules and regulations and the terms of the related loan documents regarding the interest rate and payment adjustments, except where the failure to do any of the foregoing, either individually or in the aggregate, would not have a Material Adverse Effect on Pamrapo.

 

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(g) Pools . Each Loan included in a pool of Loans originated or acquired by Pamrapo Bank (a “Pool”) meets all eligibility requirements (including, without limitation, all applicable requirements for obtaining mortgage insurance certificates and loan guaranty certificates) for inclusion in such Pool. All of such Pools have been finally certified or, if required, recertified in accordance with all applicable laws, rules and regulations, except where the time for certification or recertification has not expired. To Pamrapo’s knowledge, no Pools have been improperly certified. The loan file for each Loan included in a certified Pool contains all documents and instruments necessary for the final certification or recertification of such Pool. Neither the execution, delivery or performance of this Agreement by Pamrapo nor the consummation by Pamrapo or Pamrapo Bank of the transactions contemplated hereby will require any Pool to be recertified.

(h) Mortgage Insurance . For each Loan which is insured by private mortgage insurance, Pamrapo Bank has complied with or been granted waivers from applicable provisions of the insurance or guarantee contract and applicable laws and regulations, except where such failure to comply or to receive waivers, either individually or in the aggregate, would not have a Material Adverse Effect on Pamrapo, the insurance or guarantee is in full force and effect with respect to each such Loan, and to Pamrapo’s knowledge, there does not exist any event or condition which, but for the passage of time or the giving of notice or both, can result in a revocation of any such insurance or guarantee or constitute adequate grounds for the applicable Insurer to refuse to provide insurance or guarantee payments thereunder.

3.30. Properties . All real property and material personal property owned by Pamrapo and its Subsidiaries or presently used by them in their businesses (but specifically excluding real estate acquired through foreclosure or deed in lieu thereof) is in an adequate condition (ordinary wear and tear excepted) and is sufficient to carry on business in the ordinary course of business consistent with its past practices. Pamrapo and its Subsidiaries have good and marketable title free and clear of all Liens to all of the material properties and assets, real and personal, reflected on the balance sheet of Pamrapo as of December 31, 2008, included in Pamrapo’s Reports or acquired after such date, other than properties sold by Pamrapo in the ordinary course of business, except (i) Liens for current taxes and assessments not yet due or payable (ii) pledges to secure deposits and other Liens incurred in the ordinary course of its banking business, and (iii) such imperfections of title, easements and encumbrances, if any, as are not material in character, amount or extent. All real and personal property which is material to Pamrapo or any of its Subsidiaries’ businesses and leased or licensed by Pamrapo or its Subsidiaries is held pursuant to leases or licenses which are valid and enforceable in accordance with their respective terms and such leases will not terminate or lapse prior to the Effective Time.

3.31. Labor and Employment Matters . Except as set forth in Schedule 3.31 of the Pamrapo Disclosure Schedules, neither Pamrapo nor its Subsidiaries is or has ever been a party to, or is or has ever been bound by, any collective bargaining agreement, contract, or other agreement or understanding with a labor union or labor organization with respect to its employees, nor is Pamrapo or its Subsidiaries the subject of any procee