AGREEMENT AND PLAN OF REORGANIZATION BY AND BETWEEN BCB BANCORP, INC. AND IA BANCORP, INC.

EXHIBIT 2.1
 

BY AND BETWEEN

BCB BANCORP, INC.

AND

IA BANCORP, INC.

Dated as of June 7, 2017

TABLE OF CONTENTS

ARTICLE 1 TRANSACTIONS AND TERMS OF MERGER
1.1 Merger	1
1.2 Time and Place of Closing	1
1.3 Effective Time	2
1.4 Charter	2
1.5 Bylaws	2
1.6 Directors and Officers	2
1.7 Bank Merger	2
ARTICLE 2 MANNER OF CONVERTING SHARES
2.1 Conversion of Shares	3
2.2 Proration	5
2.3 Anti-Dilution Provisions	6
2.4 Treatment of IAB Equity Awards	7
2.5 Shares Held by IAB or BCB	7
2.6 Fractional Shares	7
ARTICLE 3 EXCHANGE OF SHARES
3.1 Election Procedures	7
3.2 Exchange Procedures	9
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF IAB
4.1 Organization, Standing, and Power	11
4.2 Authority of IAB; No Breach By Agreement	11
4.3 Capitalization of IAB	12
4.4 Capitalization of IAB Bank	13
4.5 IAB Subsidiaries	14
4.6 Regulatory Reports	14
4.7 Financial Matters	14
4.8 Absence of Undisclosed Liabilities	15
4.9 Absence of Certain Changes or Events	15
4.10 Tax Matters	15
4.11 Assets	16
4.12 Intellectual Property; Privacy	17
4.13 Environmental Matters	17
4.14 Compliance with Laws	18
4.15 Community Reinvestment Act Compliance	19
4.16 Foreign Corrupt Practices	19
4.17 Labor Relations	19
4.18 Employee Benefit Plans	21
4.19 Material Contracts	23
4.20 Agreements with Regulatory Authorities	24
4.21 Investment Securities	25
4.22 Derivative Instruments and Transactions	25
4.23 Legal Proceedings	25
4.24 Statements True and Correct	26
4.25 State Takeover Statutes and Takeover Provisions	26
4.26 Opinion of Financial Advisor	26
4.27 Tax and Regulatory Matters	27
4.28 Loan Matters	27
4.29 Deposits	28
4.30 Allowance for Loan and Lease Losses	28
4.31 Insurance	28
4.32 OFAC	29
4.33 Brokers and Finders	29
4.34 Transactions with Affiliates	29
4.35 Investment Adviser Subsidiary	29
4.36 No Broker-Dealer Subsidiary	29
4.37 No Insurance Subsidiary	30
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BCB
5.1 The Standard	30
5.2 Organization, Standing, and Power	30
5.3 Authority; No Breach By Agreement	30
5.4 Capital Stock	31
5.5 SEC Filings; Financial Statements	31
5.6 Absence of Undisclosed Liabilities	32
5.7 Absence of Certain Changes or Events	33
5.8 Tax Matters	33
5.9 Compliance with Laws	33
5.10 Legal Proceedings	34
5.11 Reports	34
5.12 Statements True and Correct	34
5.13 Tax and Regulatory Matters	35
5.14 Ownership of IAB Common Stock	35
5.15 Brokers and Finders	35
ARTICLE 6 CONDUCT OF BUSINESS PENDING CONSUMMATION
6.1 Affirmative Covenants of IAB	35
6.2 Negative Covenants of IAB	36
6.3 Covenants of BCB	39
6.4 Reports	40
ARTICLE 7 ADDITIONAL AGREEMENTS
7.1 Registration Statement; Proxy Statement; Shareholder Approval	40
7.2 Acquisition Proposals	41
7.3 Exchange Listing	43
7.4 Consents of Regulatory Authorities	43
7.5 Investigation and Confidentiality	44
7.6 Press Releases	44
7.7 Tax Treatment	45
7.8 Employee Benefits	45
7.9 Indemnification	47
7.10 Operating Functions	49
7.11 Shareholder Litigation	49
7.12 Legal Conditions to Merger	49
7.13 Dividends	49
7.14 Change of Method	50
7.15 Takeover Laws	50
7.16 Closing Financial Statements	50
7.17 Corporate Governance	51
ARTICLE 8 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
8.1 Conditions to Obligations of Each Party	51
8.2 Conditions to Obligations of BCB	52
8.3 Conditions to Obligations of IAB	53
ARTICLE 9 TERMINATION
9.1 Termination	54
9.2 Effect of Termination	56
9.3 Non-Survival of Representations and Covenants	56
ARTICLE 10 MISCELLANEOUS
10.1 Definitions	57
10.2 Referenced Pages	65
10.3 Expenses	67
10.4 Entire Agreement; Third Party Beneficiaries	68
10.5 Amendments	68
10.6 Waivers	68
10.7 Assignment	69
10.8 Notices	69
10.9 Governing Law; Jurisdiction; Waiver of Jury Trial	69
10.10 Counterparts; Signatures	69
10.11 Captions; Articles and Sections	69
10.12 Interpretations	70
10.13 Enforcement of Agreement	70
10.14 Severability	70
10.15 Disclosure	70
10.16 Delivery by Facsimile or Electronic Transmission	70

Exhibits

THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and entered into as of June 7, 2017, by and between BCB Bancorp, Inc. ("BCB"), a New Jersey corporation, and IA Bancorp, Inc. ("IAB"), a New Jersey corporation.

Preamble

The respective boards of directors of IAB and BCB have approved this Agreement and declared that this Agreement and the transactions contemplated hereby are advisable and in the best interests of the Parties to this Agreement and their respective stockholders.  Each of the directors and officers of IAB have delivered to BCB a voting agreement dated as of the date hereof in the form attached hereto as Exhibit B. This Agreement provides for the acquisition of IAB by BCB pursuant to the merger of IAB with and into BCB with BCB surviving as the surviving corporation.  At the effective time of such Merger, the outstanding shares of the common stock of IAB shall be converted into the right to receive a combination of cash and shares of common stock of BCB, and the outstanding shares of preferred stock of IAB shall be converted into the right to receive shares of preferred stock of BCB, subject to the terms and conditions set forth herein. The transactions described in this Agreement are subject to the approvals of the shareholders of IAB and applicable regulatory authorities and the satisfaction of certain other conditions described in this Agreement.  It is the intention of the Parties to this Agreement that the Merger for federal income tax purposes shall qualify as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code, and this Agreement is intended to be and is adopted as a "plan of reorganization" for purposes of Sections 354 and 361 of the Internal Revenue Code.

Capitalized terms used in this Agreement and not otherwise defined herein are defined in Section 10.1 of this Agreement.

NOW, THEREFORE, in consideration of the above and the mutual warranties, representations, covenants, and agreements set forth herein, the Parties agree as follows:

ARTICLE 1 
TRANSACTIONS AND TERMS OF MERGER

Subject to the terms and conditions of this Agreement, at the Effective Time, IAB shall be merged with and into BCB in accordance with the provisions of the New Jersey Business Corporation Act (the "NJBCA"), as applicable, with the effects set forth in the NJBCA (the "Merger").  BCB shall be the Surviving Corporation resulting from the Merger, and shall succeed to and assume all the rights and obligations of IAB in accordance with the NJBCA. Upon consummation of the Merger the separate corporate existence of IAB shall terminate.  The Merger shall be consummated pursuant to the terms of this Agreement, which has been approved and adopted by the respective boards of directors of IAB and BCB.

The closing of the transactions contemplated hereby (the "Closing") will take place at 10:00 A.M., Eastern Time, on the date that the Effective Time occurs, or at such other date and time as the Parties, acting through their authorized officers, may mutually agree in writing.  The Closing shall be held at the offices of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, located at One CityCenter, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, unless another location is mutually agreed upon by the Parties.

 

The Merger and other transactions contemplated by this Agreement shall become effective on the date and at the time specified in the certificate of merger to be filed with the Division of Revenue of the State of New Jersey (the "Effective Time"). Subject to the terms and conditions hereof, unless otherwise mutually agreed upon in writing by the authorized officers of each Party, the Parties shall cause the Effective Time to occur on the third Business Day following satisfaction or waiver (subject to applicable Law) of the last to occur of the conditions set forth in Article 8 (other than those conditions that by their nature are to be satisfied or waived at the Closing).

The certificate of incorporation of BCB in effect immediately prior to the Effective Time shall be the certificate of incorporation of the Surviving Corporation until duly amended or repealed.

The bylaws of BCB in effect immediately prior to the Effective Time shall be the bylaws of the Surviving Corporation until duly amended or repealed.

The directors of BCB in office immediately prior to the Effective Time, shall serve as the directors of the Surviving Corporation from and after the Effective Time in accordance with the bylaws of the Surviving Corporation.

The officers of BCB in office immediately prior to the Effective Time shall serve as the officers of the Surviving Corporation from and after the Effective Time in accordance with the bylaws of the Surviving Corporation.

Simultaneously with the Merger, Indus-American Bank, a New Jersey chartered bank and a wholly owned IAB Subsidiary ("IAB Bank"), will merge (the "Bank Merger") with and into BCB Community Bank, a New Jersey chartered bank and wholly owned BCB Subsidiary ("BCB Bank"). BCB Bank shall be the surviving entity in the Bank Merger and shall continue its corporate existence under the name "BCB Community Bank" and, following the Bank Merger, the separate corporate existence of IAB Bank shall terminate. The Parties agree that the Bank Merger shall become effective simultaneously with the Effective Time. The Bank Merger shall be implemented pursuant to a subsidiary plan of merger, attached as Exhibit A hereto (the "Subsidiary Plan of Merger").  In order to obtain the necessary regulatory approvals for the Bank Merger, the Parties shall cause the following to be accomplished prior to the filing of applications for regulatory approval of the Bank Merger: (i) IAB shall cause IAB Bank to approve the Subsidiary Plan of Merger; IAB, as the sole shareholder of IAB Bank, shall approve the Subsidiary Plan of Merger, and IAB shall cause the Subsidiary Plan of Merger to be duly executed by IAB Bank and delivered to BCB; (ii) BCB shall cause BCB Bank to approve the Subsidiary Plan of Merger; BCB, as the sole stockholder of BCB Bank, shall approve the Subsidiary Plan of Merger; (iii) BCB shall cause BCB Bank to duly execute and deliver the Subsidiary Plan of Merger to IAB. Prior to the Effective Time, IAB shall cause IAB Bank; and (iv) BCB shall cause BCB Bank, to execute such articles of combination, required merger certificates, and such other documents and certificates as are necessary to make the Bank Merger effective simultaneously with the Effective Time.

 

ARTICLE 2 
MANNER OF CONVERTING SHARES

Subject to the provisions of this Article 2, at the Effective Time, by virtue of the Merger and without any action on the part of BCB, IAB or the stockholders of either of the foregoing, the shares of the consolidated corporations shall be converted as follows:

(i)

for each share of IAB Common Stock with respect to which an election to receive cash has been effectively made and not revoked or deemed revoked pursuant to Article 3 (a "Cash Election" and such shares collectively, the "Cash Election Shares"), the right to receive from BCB an amount in cash (the "Cash Consideration") equal to the Per Share Cash Amount;

(ii)

for each share of IAB Common Stock with respect to which an election to receive BCB Common Stock has been effectively made and not revoked or deemed revoked pursuant to Article 3 (a "Stock Election" and such shares collectively, the "Stock Election Shares") the right to receive from BCB 0.189 (the "Exchange Ratio") shares of BCB Common Stock (the "Stock Consideration"); and

(iii)

for each share of IAB Common Stock other than Cash Election Shares and Stock Election Shares (collectively, the "Non-Electing Shares"), the right to receive from BCB the Stock Consideration.

 

 

(i)	the Per Share Cash Amount will be reduced by an amount equal to the quotient obtained by dividing (A) the difference between (1) $18,500,000 and (2) the Closing Tangible Common Equity, by (B) the Outstanding Shares Number, rounded to the nearest cent.

(ii)	the Exchange Ratio shall be the difference between (A) 0.189 minus (B) the quotient obtained by dividing the Change in Tangible Common Equity Per Share by the Reference Price.

(i)	all Cash Election Shares shall be converted into the right to receive the Cash Consideration;

(ii)

Non-Electing Shares shall then be deemed to be Cash Election Shares to the extent necessary to have the total number of Cash Election Shares times the Per Share Cash Amount equal to the Cash Value. If less than all of the Non-Electing Shares need to be treated as Cash Election Shares as provided in this clause (ii), then the Exchange Agent shall convert on a pro rata basis, as described in Section 2.2(f), a sufficient number of Non-Electing Shares to Cash Election Shares, and all remaining Non-Electing Shares to Stock Election Shares;

(iii)

if all of the Non-Electing Shares are converted to Cash Election Shares under Section 2.2(c)(ii) and the total number of Cash Election Shares times the Per Share Cash Amount is less than the Cash Value, then the Exchange Agent shall convert on a pro rata basis, as described in Section 2.2(f), a sufficient number of Stock Election Shares into Cash Election Shares ("Reallocated Cash Shares") such that the sum of the number of Cash Election Shares plus the number of Reallocated Cash Shares times the Per Share Cash Amount equals the Cash Value, and all Reallocated Cash Shares will be converted into the right to receive the Cash Consideration; and

(iv)	the Stock Election Shares that are not Reallocated Cash Shares shall be converted into the right to receive the Stock Consideration.

(i)	all Stock Election Shares and all Non-Electing Shares shall be converted into the right to receive the Stock Consideration;

(ii)

the Exchange Agent shall convert on a pro rata basis, as described in Section 2.2(f), a sufficient number of Cash Election Shares into Stock Election Shares ("Reallocated Stock Shares") such that the number of remaining Cash Election Shares times the Per Share Cash Amount equals the Cash Value, and all Reallocated Stock Shares shall be converted into the right to receive the Stock Consideration; and

(iii)

the Cash Election Shares that are not Reallocated Stock Shares shall be converted into the right to receive the Cash Consideration.

 

In the event BCB changes the number of shares of BCB Common Stock issued and outstanding prior to the Effective Time as a result of a stock split, stock dividend, or similar recapitalization with respect to such stock and the record date therefor (in the case of a stock dividend) or the effective date thereof (in the case of a stock split or similar recapitalization for which a record date is not established) shall be prior to the Effective Time, the  Exchange Ratio shall be equitably and proportionately adjusted, if necessary and without duplication, to reflect fully the effect of any such change.

 

Each Canceled Share shall automatically be canceled and retired and shall cease to exist, and no consideration shall be issued or delivered in exchange therefor.

No certificate or scrip representing fractional shares of BCB Common Stock shall be issued upon the surrender for exchange of Certificates, no dividend or distribution of BCB shall relate to such fractional share interests, and such fractional share interests will not entitle the owner thereof to vote or to any rights of a stockholder of BCB.  Notwithstanding any other provision of this Agreement, each holder of shares of IAB Common Stock exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of BCB Common Stock (after taking into account all certificates delivered by such holder) shall receive, in lieu thereof, cash rounded up to the nearest cent (without interest) in an amount equal to such fractional part of a share of BCB Common Stock that such holder of shares of IAB Common Stock would otherwise have been entitled multiplied by the Per Share Cash Amount.  No such holder will be entitled to dividends, voting rights, or any other rights as a stockholder in respect of any fractional shares.

ARTICLE 3 
EXCHANGE OF SHARES

Subject to the terms of the Exchange Agent Agreement, each holder of record of shares of IAB Common Stock issued and outstanding immediately prior to the Effective Time (a "Holder") shall have the right, subject to the limitations set forth in this Article 3, to submit an election on or prior to the Election Deadline in accordance with the following procedures:

 

 

 

 

ARTICLE 4 
REPRESENTATIONS AND WARRANTIES OF IAB

Except as Previously Disclosed, IAB hereby represents and warrants to BCB as follows:

 

 

 

 

No IAB Entity has incurred any Liability, except for Liabilities: (i) incurred in the Ordinary Course since December 31, 2016; (ii) incurred in connection with this Agreement and the transactions contemplated hereby; or, (iii) that are accrued or reserved against in the consolidated statement of financial condition of IAB as of December 31, 2016, and included in the IAB Financial Statements at and for the period ended December 31, 2016.

 income) set forth on the face of the most recent balance sheet (rather than in any notes thereto) for such IAB Entity; and, (ii) do not exceed that reserve as adjusted for the passage of time through the Closing Date in accordance with past custom and practice of the IAB Entities in filing their Tax Returns.

Each IAB Entity has good and marketable title to those Assets reflected in the latest IAB Financial Statements as being owned by such IAB Entity or acquired after the date thereof (except for Assets sold or otherwise disposed of since the date thereof in the Ordinary Course), free and clear of all Liens, except: (a) statutory Liens securing payments not yet due; (b) Liens for real property Taxes not yet due and payable; (c) easements, rights of way, and other similar encumbrances that do not materially affect the use of the properties or Assets subject thereto or affected thereby or otherwise materially impair business operations at such properties; and, (d) such imperfections or irregularities of title or Liens as do not materially affect the use of the properties or Assets subject thereto or affected thereby or otherwise materially impair business operations at such properties (collectively, "Permitted Liens").  IAB is the fee simple owner of all owned real property and the lessee of all leasehold estates each as reflected in the latest IAB Financial Statements, free and clear of all Liens of any nature whatsoever, except for Permitted Liens, and is in possession of the properties purported to be owned or leased thereunder, as applicable, and each such lease is valid without Default thereunder by the lessee or, to the Knowledge of IAB, the lessor.  There are no pending or, to the Knowledge of IAB, threatened condemnation or eminent domain proceedings against any real property that is owned or leased by IAB.  IAB and its Subsidiaries own or lease all properties as are necessary to their operations as now conducted and no person has any option or right to acquire or purchase any ownership interest in the owned real property, or any portion thereof.

 

 

(i)	is in Default under any of the provisions of its articles of incorporation or bylaws (or other governing instruments);

(ii)	is in material Default under any Laws, Orders, or Permits applicable to its business or employees conducting its business; or

(iii)

since December 31, 2013, has received any written notification or communication from any agency or department of federal, state, or local government or any Regulatory Authority or the staff thereof: (i) asserting that any IAB Entity is not in compliance with any Laws or Orders; or (ii) requiring any IAB Entity to enter into or consent to the issuance of a cease and desist order, injunction, formal agreement, directive, commitment, or memorandum of understanding, or to adopt any board resolution or similar undertaking which restricts materially the conduct of its business.

 

IAB Bank is an "insured depository institution" as defined in the FDIA and applicable regulations thereunder, is in compliance in all material respects with the applicable provisions of the CRA and the regulations promulgated thereunder, and has received a CRA rating of "satisfactory" or "outstanding" in its most recently completed examination. IAB has no Knowledge of the existence of any fact or circumstance or set of facts or circumstances which could reasonably be expected to result in IAB Bank having its current rating lowered such that it is no longer "satisfactory" or "outstanding."

No IAB Entity, or, to the Knowledge of IAB, any director, officer, agent, employee or other Person acting on behalf of an IAB Entity has, in the course of its actions for, or on behalf of, any IAB Entity: (i) used any corporate funds of IAB or any of its Subsidiaries to give, agree, offer or promise to give any unlawful contribution, gift, entertainment or other unlawful expenses to any foreign or domestic government official or employee; (ii) directly or indirectly given, agreed, offered or promised to give any unlawful gift, contribution, payment, rebate, payoff, influence payment, bribe or kickback to any foreign or domestic government official or employee from corporate funds of IAB or any of its Subsidiaries; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, the UK ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, Laws enacted to comply with the UN Convention Against Corruption and the OECD Anti-Bribery Convention, or any other anti-corruption or anti-bribery Law or requirement applicable to any IAB Entity; (iv) directly, or indirectly through a third party, made, offered, paid, authorized, facilitated, or promised any payment, contribution, gift, entertainment, bribe, rebate, kickback, financial or other advantage, or anything else of value, regardless of form or amount, for the purpose of securing an improper advantage for any IAB Entity; (v) established or maintained any unlawful fund of monies or other Assets of IAB or any of its Subsidiaries; (vi) made any fraudulent entry on the Books and Records of IAB or any of its Subsidiaries; (vii) been under administrative, civil, or criminal investigation, indictment, suspension, debarment, or audit (other than a routine contract audit) by any party, in connection with alleged or possible violations of any Law that prohibits bribery, corruption, fraud or other improper payments; or, (viii) violated or is in violation of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the Bank Secrecy Act, the USA PATRIOT ACT of 2001, the money laundering Laws of any jurisdiction and any related or similar rules, regulations or guidelines, issued, administered or enforced by any Regulatory Authority (collectively, the "Money Laundering Laws") and no action, suit or proceeding by or before any Regulatory Authority or any arbitrator involving any IAB Entity with respect to the Money Laundering Laws is pending or, to the Knowledge of IAB, threatened.

 

 

 

 

Except as otherwise reflected in the IAB Financial Statements, neither IAB nor any of its Assets, businesses, or operations, is a party to, or is bound or affected by, or receives benefits under: (a) any employment, severance, termination, consulting, or retirement Contract providing for aggregate payments to any Person in any calendar year in excess of $100,000; (b) any Contract relating to the borrowing of money by any IAB Entity or the guarantee by IAB of any such obligation (other than Contracts evidencing deposit liabilities, purchases of federal funds, fully secured repurchase agreements, and Federal Home Loan Bank advances of depository institution Subsidiaries, and trade payables) in excess of $1,000,000; (c) any Contract which prohibits or restricts any IAB Entity (and/or, following consummation of the transactions contemplated by this Agreement, BCB) from engaging in any business activities in any geographic area, line of business or otherwise in competition with any other Person; (d) any Contract relating to the purchase or sale of any goods or services by any IAB Entity (other than Contracts entered into in the Ordinary Course involving payments under any individual Contract not in excess of $100,000 or involving Loans, borrowings or guarantees originated or purchased by IAB in the

 

Ordinary Course); (e) any Contract which obligates any IAB Entity to conduct business with any third party on an exclusive or preferential basis; (f) any Contract which requires referrals of business or requires any IAB Entity to make available investment opportunities to any Person on a priority or exclusive basis; (g) any Contract which grants any "most favored nation" right, right of first refusal, right of first offer or similar right with respect to any material Assets, rights or properties of any IAB Entity; (h) any Contract which limits the payment of dividends by any IAB Entity, pursuant to which any IAB Entity has agreed with any third party to a change of control transaction such as an acquisition, divestiture or merger or contains a put, call or similar right involving the purchase or sale of any equity interests or Assets of any Person and which contains representations, covenants, indemnities or other obligations (including indemnification, "earn-out" or other contingent obligations) that are still in effect; (i) any Contract pursuant to which any IAB Entity has agreed with any third parties to become a member of, manage or control a joint venture, partnership, limited liability company or other similar entity; (j) any Contract which relates to Intellectual Property of any IAB Entity (including permitting the use of the name Indus-American Bank or any variant thereof); (k) between any IAB Entity, on the one hand, and (i) any officer or director of any IAB Entity, or (ii) to the Knowledge of IAB, any (x) record or beneficial owner of five percent or  more of the voting securities of IAB, (y) Affiliate or family member of any such officer, director or record or beneficial owner or (z) any other Affiliate of IAB, on the other hand, except those of a type available to employees of IAB Entities generally; (l) that provides for payments to be made by any IAB Entity upon a change in control thereof; (m) that may not be canceled by BCB, IAB or any of their respective Subsidiaries without payment of a penalty or termination fee equal to or greater than $100,000 (assuming such Contract was terminated on the Closing Date) (n) containing any standstill or similar agreement pursuant to which any IAB Entity has agreed not to acquire Assets or equity interests of another Person; (o) that provides for indemnification by any IAB Entity of any Person, except for non-material Contracts entered into in the Ordinary Course; (p) with or to a labor union or guild (including any collective bargaining agreement); or (q) any other Contract or amendment thereto that would be required to be filed as an exhibit to a SEC Report filed by IAB with the SEC as of the date of this Agreement if IAB were required to file or voluntarily filed such SEC Reports (together with all Contracts referred to in Sections 4.12, 4.18(a) and 4.34, the "IAB Contracts").  With respect to each IAB Contract: (i) the Contract is legal, valid and binding on IAB or an IAB Subsidiary and each other Person who is a party to such contract and is in full force and effect and is enforceable in accordance with its terms except in all cases as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship, moratorium, or similar Laws affecting the enforcement of creditors' rights generally and except that the availability of the equitable remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding may be brought; (ii) no IAB Entity is in material Default thereunder; (iii) no IAB Entity has repudiated or waived any material provision of any such Contract; and (iv) no other party to any such Contract is, to the Knowledge of IAB, in Default in any material respect or has repudiated or waived any material provision thereunder.  All of the IAB Contracts have been Previously Disclosed.  All of the indebtedness of any IAB Entity for money borrowed is prepayable at any time by such IAB Entity without penalty or premium.

Neither IAB nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action 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, supervisory letter or directive by, or has been ordered to pay any civil money penalty by, or has been since December 31, 2013, a recipient of any supervisory letter from, or since December 31, 2013, has adopted any policies, procedures or board resolutions at the request or suggestion of any Regulatory Authority that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in IAB's Disclosure Memorandum, a "IAB Regulatory Agreement"), nor has IAB or any of its Subsidiaries been advised in writing or, to IAB's Knowledge, orally, since December 31, 2013, by any Regulatory Authority that it is considering issuing, initiating, ordering, or requesting any such IAB Regulatory Agreement.

 

All Derivative Transactions (as defined below) whether entered into for the account of any IAB Entity or for the account of a customer of any IAB Entity (a) were entered into in the Ordinary Course and in accordance with prudent banking practice and applicable rules, regulations and policies of all applicable Regulatory Authorities, (b) are legal, valid and binding obligations of the IAB Entity party thereto and, to the Knowledge of IAB, each of the counterparties thereto, and (c) are legal, valid and binding obligations of any IAB Entity and are in full force and effect and enforceable in accordance with their terms. IAB or its Subsidiaries and, to the Knowledge of IAB, the counterparties to all such Derivative Transactions, have duly performed, in all material respects, their obligations thereunder to the extent that such obligations to perform have accrued.  To the Knowledge of IAB, there are no material breaches, violations or Defaults or allegations or assertions of such by any party pursuant to any such Derivative Transactions.  The financial position of IAB and its Subsidiaries on a consolidated basis under or with respect to each such Derivative Transaction has been reflected in the Books and Records of IAB and such Subsidiaries in accordance with GAAP.  For purposes of this Agreement, the term "Derivative Transaction" means any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions or any indexes, or any other similar transaction (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to such transactions.

 

IAB has taken all action required to be taken by it in order to exempt this Agreement and the transactions contemplated hereby from, and this Agreement and the transactions contemplated hereby are exempt from, the requirements of any "moratorium," "fair price," "affiliate transaction," "business combination," "control share acquisition" or similar provision of the NJBCA and any successor thereto (collectively, "Takeover Laws").  No IAB Entity is the beneficial owner (directly or indirectly) of more than 10% of the outstanding capital stock of BCB entitled to vote in the election of BCB's directors. Holders of IAB Common Stock do not have any dissenters' rights with respect to the Merger under NJBCA.

The board of directors of IAB has received the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. which, if initially rendered verbally has been confirmed by a written opinion, dated the same date, to the effect that, as of the date of the opinion, and based upon and subject to the factors, assumptions and limitations set forth therein, the consideration to be paid to the holders of IAB Common Stock in the Merger is fair, from a financial point of view, to such holders.  Such opinion has not been amended or rescinded as of the date of this Agreement.

 

No IAB Entity or, to the Knowledge of IAB, any Affiliate thereof has taken or agreed to take any action, and IAB does not have any Knowledge of any agreement, plan or other circumstance, that is reasonably likely to (a) prevent the Merger from qualifying as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code, or (b) materially impede or delay receipt of any of the Requisite Regulatory Approvals. Since December 31, 2013, neither IAB nor IAB Bank has been informed of or taken any action with respect to: (i) any transaction that resulted in an acquisition of control, as that term is used in the BHC Act or the implementing regulations of the Federal Reserve (12 CFR part 225), of IAB or IAB Bank; (ii) any transaction that resulted in a change in control, as that term is used in the Change in Bank Control Act (12 USC 1817(j)) or the implementing regulations of the Federal Reserve (12 CFR part 225) or of the FDIC (12 CFR part 303, subpart E), of IAB or IAB Bank; (iii) the filing of a bank holding company application, a notice of a change in bank control, or a rebuttal of control with respect to IAB or IAB Bank; or (iv) any agreement with the Federal Reserve to enter into passivity commitments or anti-association commitments with respect to IAB or IAB Bank.

 

All of the deposits held by IAB Bank (including the records and documentation pertaining to such deposits) have been established and are held in compliance in all material respects with: (a) all applicable policies, practices and procedures of IAB Bank; and, (b) all applicable Laws, including Money Laundering and anti-terrorism Laws, or embargoed persons requirements.  All of the deposits held by IAB Bank are insured to the maximum limit set by the FDIC, the FDIC premium and all assessments have been fully paid, and no proceedings for the termination or revocation of such insurance are pending, or, to the Knowledge of IAB Bank, threatened.

The allowance for loan and lease losses ("ALLL") reflected in the IAB Financial Statements was, as of the date of each of the IAB Financial Statements, and is, in the opinion of management of IAB, in compliance with IAB's existing methodology for determining the adequacy of its ALLL and in compliance in all material respects with the standards established by the applicable Regulatory Authority, the Financial Accounting Standards Board and GAAP, and is adequate.

IAB Entities are insured with reputable insurers against such risks and in such amounts as the management of IAB reasonably has determined to be prudent and consistent with industry practice.  Section 4.31 of IAB's Disclosure Memorandum contains a true, correct and complete list and a brief description (including the name of the insurer, agent, coverage and the expiration date) of all material insurance policies in force on the date hereof with respect to the business and Assets of the IAB Entities, true, correct and complete copies of which policies have been made available to BCB prior to the date hereof.  The IAB Entities are in material compliance with their insurance policies and are not in Default under any of the material terms thereof.  Each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of officers, directors and employees of the IAB Entities, IAB or IAB Bank is the sole beneficiary of such policies.  All premiums and other payments due under any such policy have been paid, and all material claims thereunder have been filed in due and timely fashion.  To IAB's Knowledge, no IAB Entity has received any written notice of cancellation or non-renewal of any such policies, nor, to IAB's Knowledge, is the termination of any such policies threatened.

 

None of IAB, any IAB Entity or, to the Knowledge of IAB, any director, officer, agent, employee, affiliate or other Person acting on behalf of IAB or any IAB Entity is: (a) engaged in any services (including financial services), transfers of goods, software, or technology, or any other business activity involving or related to: (i) Cuba, Iran, North Korea, Sudan, Syria or the Crimea region of Ukraine claimed by Russia ("Sanctioned Countries"); (ii) the government of any Sanctioned Country; (iii) any Person, entity or organization located in, resident in, formed under the laws of, or owned or controlled by the government of, any Sanctioned Country; or (iv) any Person made subject of any sanctions administered or enforced by the United States Government, including, without limitation, the list of Specially Designated Nationals of the U.S. Department of the Treasury's Office of Foreign Assets Control, or by the United Nations Security Council, the European Union, Her Majesty's Treasury, or other relevant sanctions authority (collectively, "Sanctions"); (b) engaged in any transfers of goods, technologies or services (including financial services) that may assist the governments of Sanctioned Countries or facilitate money laundering or other activities proscribed by United States Law; (c) a Person currently the subject of any Sanctions; or, (d) located, organized or resident in any Sanctioned Country.

Except for ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., neither IAB nor any of its officers, directors, employees, or Affiliates has employed any broker or finder or incurred any Liability for any financial advisory fees, investment bankers' fees, brokerage fees, commissions, or finders' fees in connection with this Agreement or the transactions contemplated hereby.

There are no Contracts, plans, arrangements or other transactions between any IAB Entity, on the one hand, and (a) any officer or director of any IAB Entity, or (b) to IAB's Knowledge, any (i) record or beneficial owner of five percent or more of the voting securities of IAB, (ii) Affiliate or immediate family member of any such officer, director or record or beneficial owner or (iii) any other Affiliate of IAB, on the other hand, except those of a type available to employees or customers of IAB generally.

Neither IAB nor any IAB Subsidiary provides investment management, investment advisory or sub-advisory services to any Person (including management and advice provided to separate accounts and participation in wrap fee programs) and is required to register with the SEC as an investment adviser under the Investment Advisers Act of 1940, as amended.

Neither IAB nor any IAB Subsidiary is a broker-dealer required to be registered under the Exchange Act with the SEC.

 

Neither IAB nor any IAB Subsidiary conducts insurance operations that require a license from any national, state or local governmental authority or Regulatory Authority under any applicable Law.

ARTICLE 5 
REPRESENTATIONS AND WARRANTIES OF BCB

Except as Previously Disclosed, BCB hereby represents and warrants to IAB as follows:

No representation or warranty of BCB contained in Article 5 shall be deemed untrue or incorrect, and BCB shall not be deemed to have breached a representation or warranty, in any case as a consequence or result of the existence or absence of any fact, circumstance, change or event unless such fact, circumstance, change or event, individually or taken together with all other facts, circumstances, changes or events inconsistent with any representation or warranty contained in Article 5 has had or is reasonably likely to have a Material Adverse Effect on BCB.

BCB is a corporation duly organized, validly existing, and in good standing under the Laws of the State of New Jersey and has the corporate power and authority to carry on its business as now conducted and to own, lease and operate its material Assets. BCB is duly qualified or licensed to transact business as a foreign corporation in good standing in the states of the United States and foreign jurisdictions where the character of its Assets or the nature or conduct of its business requires it to be so qualified or licensed.

 

 

No BCB Entity has incurred any Liability, except: (i) such Liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2016; (ii) in connection with this Agreement and the transactions contemplated hereby; or, (iii) such Liabilities that are accrued or reserved against in the consolidated balance sheets of BCB as of December 31, 2016, included in the BCB Financial Statements delivered or filed prior to the date of this Agreement.

 

Since December 31, 2016, no events have occurred that have had or would be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on BCB.

(i)	is in Default under its certificate of incorporation or bylaws (or other governing instruments); or

(ii)	is in Default under any Laws, Orders or Permits applicable to its business or employees conducting its business; or

(iii)

since December 31, 2013, has received any notification or communication from any agency or department of federal, state, or local government or any Regulatory Authority or the staff thereof: (i) asserting that any BCB Entity is not in compliance with any Laws or Orders; or, (ii) requiring any BCB Entity to enter into or consent to the issuance of a cease and desist order, injunction, formal agreement, directive, commitment or memorandum of understanding, or to adopt any board resolution or similar undertaking, which restricts materially the conduct of its business.

 

There is no Litigation instituted or pending, or, to the Knowledge of BCB, threatened against any BCB Entity, or against any director, employee or employee benefit plan of any BCB Entity, or against any Asset, interest, or right of any of them, nor are there any Orders outstanding against any BCB Entity.

Since December 31, 2013, each BCB Entity has filed all reports and statements, together with any amendments required to be made with respect thereto, that it was required to file with Regulatory Authorities (other than the SEC). As of its respective date, each such report and document was in compliance in all material respects with the requirements of any applicable Law and did not, in all material respects, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein not misleading.

 

No BCB Entity or, to the Knowledge of BCB, any Affiliate thereof has taken or agreed to take any action, and BCB does not have any Knowledge of any agreement, plan or other circumstance, that is reasonably likely to: (i) prevent the Merger from qualifying as a "reorganization" within the meaning of Section 368(a) of the Internal Revenue Code; or, (ii) materially impede or delay receipt of any of the Requisite Regulatory Approvals.

Neither BCB nor any BCB Subsidiary: (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, any shares of capital stock of IAB.

Except for FinPro Financial Partners, neither BCB nor any of its officers, directors, employees, or Affiliates has employed any broker or finder or incurred any Liability for any financial advisory fees, investment bankers' fees, brokerage fees, commissions, or finders' fees in connection with this Agreement or the transactions contemplated hereby.

ARTICLE 6 
CONDUCT OF BUSINESS PENDING CONSUMMATION

From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of BCB shall have been obtained, and except as otherwise expressly contemplated herein or as set forth in Section 6.1 of IAB's Disclosure Memorandum, IAB shall, and shall cause each of its Subsidiaries to: (a) operate its business only in the usual, regular, and Ordinary Course; (b) use its reasonable best efforts to: (i) preserve intact its business (including its organization, Assets, goodwill and insurance coverage); (ii) maintain its rights, authorizations, franchises, advantageous business relationships with customers, vendors, strategic partners, suppliers, distributors and others doing business with it, and the services of its executive officers and key employees; and, (c) take no action which would reasonably be expected to impede or materially delay: (i) the receipt of any approvals of any Regulatory Authority required to consummate the transactions contemplated by this Agreement; (ii) the consummation of the transactions contemplated by this Agreement; or, (iii) performance of its covenants and agreements in this Agreement.

 

From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of BCB shall have been obtained, and except as otherwise expressly contemplated herein or as set forth in Section 6.2 of IAB's Disclosure Memorandum, IAB covenants and agrees that it will not do or agree or commit to do, or permit any of its Subsidiaries or Affiliates to do or agree or commit to do, any of the following:

 

 

 

From the date of this Agreement until the earlier of the Effective Time or the termination of this Agreement, unless the prior written consent of IAB shall have been obtained, and except as otherwise expressly contemplated herein or as set forth in BCB's Disclosure Memorandum, BCB covenants and agrees that it shall not do or agree or commit to do, or permit any of its Subsidiaries to do or agree or commit to do, any of the following without the prior written consent of IAB, which consent shall not be unreasonably withheld, delayed or conditioned:

 

Each Party and its Subsidiaries shall file all reports, including Call Reports, required to be filed by it with Regulatory Authorities between the date of this Agreement and the Effective Time and shall deliver to the other Party copies of all such reports promptly after the same are filed.  If financial statements are contained in any such reports filed with the SEC and with respect to the financial statements in the Call Reports, such financial statements will fairly present the consolidated financial condition of the entity filing such statements as of the dates indicated and the consolidated results of operations, changes in stockholders' equity, and cash flows for the periods then ended in accordance with GAAP (subject in the case of interim financial statements to normal recurring year-end adjustments that are not material) or applicable regulatory accounting principles (with respect to the financial statements contained in the Call Reports) consistently applied, except as may be otherwise indicated in the notes thereto and except for the omission of footnotes.

ARTICLE 7 
ADDITIONAL AGREEMENTS

 

 

 

BCB shall use its reasonable best efforts to list, prior to the Effective Time, on Nasdaq the shares of BCB Common Stock to be issued to the holders of IAB Common Stock pursuant to the Merger, and BCB shall give all notices and make all filings with Nasdaq required in connection with the transactions contemplated herein.

 

IAB and BCB agree that no press release or other public disclosure or communication (including communications to employees, agents and contractors of IAB) related to this Agreement or the transactions contemplated hereby shall be issued by either Party (or its Affiliates) without the prior written consent of the other Party (which consent shall not be unreasonably withheld, delayed or conditioned); provided, that nothing in this Section 7.6 shall be deemed to prohibit any Party from making any press release or other public disclosure required by Law or the rules or regulations of any United States or non-United States securities exchange, in which case the Party required to make the release or disclosure shall use its reasonable best efforts to allow the other Party reasonable time to comment on such release or disclosure in advance of the issuance thereof.  The Parties have agreed upon the form of a joint press release announcing the execution of this Agreement.

 

 

 

reof.  In the event of any such Litigation (whether arising before or after the Effective Time): (i) BCB shall have the right to assume the defense thereof and BCB shall not be liable to such Indemnified Parties for any legal expenses of other counsel or any other expenses subsequently incurred by such Indemnified Parties in connection with the defense thereof, except that if BCB elects not to assume such defense, or independent legal counsel for the Indemnified Parties advises that there are substantive issues which raise conflicts of interest between BCB and the Indemnified Parties, the Indemnified Parties may retain counsel satisfactory to them, and BCB shall pay all reasonable fees and expenses of such counsel for the Indemnified Parties promptly as statements therefor are received; provided, that BCB shall be obligated pursuant to this Section 7.9(c) to pay for only one firm of counsel for all Indemnified Parties; (ii) the Indemnified Parties will cooperate in the defense of any such Litigation; and (iii) BCB shall not be liable for any settlement effected without its prior written consent; and provided, further, that BCB shall not have any obligation hereunder to any Indemnified Party when and if a court of competent jurisdiction shall determine, and such determination shall have become final, that the indemnification of such Indemnified Party in the manner contemplated hereby is prohibited by applicable Law.

 

IAB and IAB Bank shall cooperate with BCB and BCB Bank in connection with planning for the efficient and orderly combination of the Parties and the operation of BCB Bank (including the former operations of IAB Bank) after the Bank Merger, and in preparing for the consolidation of appropriate operating functions to be effective at the Effective Time or such later date as BCB may decide. IAB shall take any action BCB may reasonably request prior to the Effective Time to facilitate the combination of the operations of IAB with BCB.  Each Party shall cooperate with the other Party in preparing to execute at or after the Effective Time conversion or consolidation of systems and business operations generally (including by entering into customary confidentiality, non-disclosure and similar agreements with such service providers and/or the other party).  Without limiting the foregoing, senior officers of IAB and BCB shall meet from time to time as IAB or BCB may reasonably request to review the financial and operational affairs of IAB and IAB Bank, and IAB shall give due consideration to BCB's input on such matters, with the understanding that, notwithstanding any other provision contained in this Agreement: (a) neither BCB nor BCB Bank shall under any circumstance be permitted to exercise control of IAB, IAB Bank or any other IAB Subsidiaries prior to the Effective Time; (b) neither IAB nor IAB Bank shall be under any obligation to act in a manner that could reasonably be deemed to constitute anti-competitive behavior under federal or state antitrust Laws; and, (c) neither IAB nor IAB Bank shall be required to agree to any material obligation that is not contingent upon the consummation of the Merger.

Each of BCB and IAB shall promptly notify each other in writing of any Litigation brought, conducted, served or heard by or before, or otherwise involving, any Regulatory Authority or arbitrator pending or, to the Knowledge of BCB or IAB, as applicable, threatened against BCB, IAB or any of their respective Subsidiaries that: (a) questions or would reasonably be expected to question the validity of this Agreement, the Subsidiary Plan of Merger or the other agreements contemplated hereby or thereby or any actions taken or to be taken by BCB, IAB or their respective Subsidiaries with respect hereto or thereto; or (b) seeks to enjoin or otherwise restrain the transactions contemplated hereby or thereby. IAB shall give BCB every opportunity to participate in the defense or settlement of any shareholder Litigation against IAB and/or its officers or directors relating to the transactions contemplated by this Agreement, and no such settlement shall be agreed to without BCB's prior written consent.

Subject in all respects to Sections 7.1 and 7.4 of this Agreement, each of BCB and IAB shall, and shall cause its Subsidiaries to, use their reasonable best efforts: (a) to take, or cause to be taken, all actions necessary, proper or advisable to comply promptly with all legal requirements that may be imposed on such party or its Subsidiaries with respect to the Merger and the Bank Merger and, subject to the conditions set forth in Article 8 hereof, to consummate the transactions contemplated by this Agreement; and, (b) to obtain (and to cooperate with the other Party to obtain) any Consent or Order by any Regulatory Authority and any other third party that is required to be obtained by IAB or BCB or any of their respective Subsidiaries in connection with the Merger, the Bank Merger and the other transactions contemplated by this Agreement.

After the date of this Agreement, each of BCB and IAB shall coordinate with the other the declaration of any dividends in respect of BCB Common Stock and IAB Common Stock and the record dates and payment dates relating thereto, it being the intention of the parties hereto that holders of IAB Common Stock shall not receive two dividends in any quarter with respect to their shares of IAB Common Stock and any shares of BCB Common Stock any such holder receives in exchange therefor in the Merger.

 

BCB may at any time change the method of effecting the Merger (including by providing for the merger of IAB with a wholly owned BCB Subsidiary) if and to the extent requested by BCB, and IAB agrees to enter into such amendments to this Agreement as BCB may reasonably request in order to give effect to such restructuring; provided, that no such change or amendment shall: (a) alter or change the amount or kind of the Merger Consideration provided for in this Agreement; (b) adversely affect the Tax treatment of the Merger with respect to IAB's shareholders; or, (c) be reasonably likely to cause the Closing to be materially delayed or the receipt of the Requisite Regulatory Approvals to be prevented or materially delayed.

Neither BCB nor IAB shall take any action that would cause any Takeover Law to become applicable to this Agreement, the Merger, or any of the other transactions contemplated hereby, and each of BCB and IAB shall take all necessary steps to exempt (or ensure the continued exemption of) the Merger and the other transactions contemplated hereby from any applicable Takeover Law now or hereafter in effect.  If any Takeover Law may become, or may purport to be, applicable to the transactions contemplated hereby, each of BCB and IAB will grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Law on any of the transactions contemplated by this Agreement, including, if necessary, challenging the validity or applicability of any such Takeover Law.

At least eight Business Days prior to the Effective Time of the Merger, IAB shall provide BCB with IAB's consolidated financial statements presenting the financial condition of IAB and its Subsidiaries as of the close of business on the last day of the last month ended prior to the Effective Time of the Merger and IAB's consolidated results of operations, cash flows, and shareholders' equity for the period from January 1, 2017 through the close of business on the last day of the last month ended prior to the Effective Time of the Merger (the "Closing Financial Statements"); provided, that if the Effective Time of the Merger occurs on or before the 15th Business Day of the month, IAB shall have provided consolidated financial statements as of and through the second month preceding the Effective Time of the Merger.  Such financial statements shall be accompanied by a certificate of IAB's chief financial officer, dated as of the Effective Time, to the effect that such financial statements continue to reflect accurately, as of the date of the certificate, the financial condition of IAB in all material respects. Such financial statements shall have been prepared in accordance with GAAP and regulatory accounting principles and other applicable legal and accounting requirements, and reflect all period-end accruals and other adjustments.  Such Closing Financial Statements shall also reflect as of their date: (a) accruals for all fees and expenses directly incurred or expected to be directly incurred (whether or not doing so is in accordance with GAAP) in connection with the transactions contemplated by this Agreement (collectively, the "Transaction Expenses"); (b) the Closing Tangible Common Equity (provided, that for purposes of determining the Closing Tangible Common Equity, the Transaction Expenses shall be excluded from such determination); (c) all fees and Liabilities paid and accrued and payable with respect to, and in connection with, the matters set forth in Section 7.16 of BCB's Disclosure Memorandum; and, (d) the asset quality metrics set forth in Section 8.2(e), and shall be accompanied by a certificate of IAB's chief financial officer, dated as of the Effective Time, to the effect that such financial statements meet the requirements of this Section 7.16 and continue to reflect accurately, as of the date of such certificate, the consolidated financial condition, results of operations, cash flows and shareholders' equity of IAB in all material respects.

 

ARTICLE 8 
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

The respective obligations of each Party to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by both Parties pursuant to Section 10.6:

 

The obligations of BCB to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by BCB pursuant to Section 10.6(a):

 

The obligations of IAB to perform this Agreement and consummate the Merger and the other transactions contemplated hereby are subject to the satisfaction of the following conditions, unless waived by IAB pursuant to Section 10.6(b):

 

ARTICLE 9 
TERMINATION

Notwithstanding any other provision of this Agreement, and notwithstanding the approval of this Agreement by the shareholders of IAB, this Agreement may be terminated and the Merger abandoned at any time prior to the Effective Time:

 

(i)	The number obtained by dividing the Average Closing Price by the Starting Price (as defined below) (the "BCB Ratio") shall be less than 0.80; and

(ii)

(x) the BCB Ratio shall be less than (y) the number obtained by dividing the Final Index Price by the Index Price on the Starting Date (each as defined below) and subtracting 0.20 from the quotient in this clause (ii) (y) (such number in this clause (ii) (y) being referred to herein as the "Index Ratio");

subject, however, to the following three sentences. If IAB elects to exercise its termination right pursuant to this Section 9.1(i), it shall give written notice to BCB (provided that such notice of election to terminate may be withdrawn at any time within the aforementioned five-day period). During the five-day period commencing with its receipt of such notice, BCB shall have the option to increase the consideration to be received by the holders of IAB Common Stock hereunder, by adjusting the Exchange Ratio (calculated to the nearest one one-thousandth) to equal the lesser of (x) a number (rounded to the nearest one one-thousandth) obtained by dividing (A) the product of the Starting Price, 0.80 and the Exchange Ratio (as then in effect) by (B) the Average Closing Price and (y) a number (rounded to the nearest one one-thousandth) obtained by dividing (A) the product of the Index Ratio and the Exchange Ratio (as then in effect) by (B) the BCB Ratio. If BCB so elects within such five-day period, it shall give prompt written notice to IAB of such election and the revised Exchange Ratio, whereupon no termination shall have occurred pursuant to this Section 9.1(i) and this Agreement shall remain in effect in accordance with its terms (except as the Exchange Ratio shall have been so modified).

 

For purposes of this Section 9.1(i) the following terms shall have the meanings indicated:

"Average Closing Price" shall mean the average of the daily closing prices for the shares of BCB Common Stock for the 20 consecutive full trading days on which such shares are actually traded on Nasdaq (as reported by The Wall Street Journal or, if not reported thereby, any other authoritative source) ending at the close of trading on the Determination Date.

"Determination Date" shall mean the 10th day prior to the Closing Date, provided that if shares of the BCB Common Stock are not actually traded on Nasdaq on such day, the Determination Date shall be the immediately preceding day to the 10th day prior to the Closing Date on which shares of BCB Common Stock actually trade on Nasdaq.

"Final Index Price" shall mean the average of the Index Prices for the 20 consecutive full trading days ending on the trading day prior to the Determination Date.

"Index Price" shall mean the closing price on such date of the Nasdaq Bank Index.

"Starting Date" shall mean the last trading day immediately preceding the date of the first public announcement of entry into this Agreement.

"Starting Price" shall mean the closing price of a share of BCB Common Stock on Nasdaq (as reported in The Wall Street Journal, or if not reported therein, in another authoritative source) on the Starting Date.

In the event of the termination and abandonment of this Agreement pursuant to Section 9.1, this Agreement shall become void and have no effect, except that: (i) the provisions of this Section 9.2, Section 7.5, and Article 10, shall survive any such termination and abandonment; and, (ii) no such termination shall relieve the breaching Party from Liability resulting from any breach by that Party of this Agreement.

The respective representations, warranties, obligations, covenants, and agreements of the Parties shall not survive the Effective Time except this Section 9.3 and Sections 7.5, 7.7, 7.8 and 7.9, and Article 1, Article 2, Article 3 and Article 10.

 

ARTICLE 10 
MISCELLANEOUS

"Acquisition Agreement" means a letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement.

"Acquisition Proposal" means any offer, inquiry, proposal or indication of interest (whether communicated to IAB or publicly announced to IAB's shareholders and whether binding or non-binding) by any Person (other than a BCB Entity) for an Acquisition Transaction.

"Acquisition Transaction" means any transaction or series of related transactions (other than the transactions contemplated by this Agreement) involving: (i) any acquisition or purchase, direct or indirect, by any Person or "Group" (other than a BCB Entity) of 20% or more in interest of the total outstanding voting securities of IAB or any of its Subsidiaries, or any tender offer or exchange offer that if consummated would result in any Person or "Group" (other than a BCB Entity) beneficially owning 20% or more in interest of the total outstanding voting securities of IAB or any of its Subsidiaries, or any merger, consolidation, business combination or similar transaction involving IAB or any of its Subsidiaries pursuant to which the shareholders of IAB immediately preceding such transaction hold less than 80% of the equity interests in the surviving or resulting entity (which includes the parent corporation of any constituent corporation to any such transaction) of such transaction; (ii) any sale, lease, exchange, transfer, license, acquisition or disposition of 20% or more of the consolidated Assets of IAB and its Subsidiaries, taken as a whole; or (iii) any liquidation or dissolution of IAB.

"Affiliate" of a Person means any other Person directly, or indirectly through one or more intermediaries, controlling, controlled by or under common control with such Person and "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a person, whether through the ownership of voting securities, as trustee or executor, by contract or any other means.

"Assets" of a Person means all of the assets, properties, businesses and rights of such Person of every kind, nature, character and description, whether real, personal or mixed, tangible or intangible, accrued or contingent, or otherwise relating to or utilized in such Person's business, directly or indirectly, in whole or in part, whether or not carried on the books and records of such Person, and whether or not owned in the name of such Person or any Affiliate of such Person and wherever located.

"BCB Capital Stock" means, collectively, BCB Common Stock, any preferred stock of BCB and any other class or series of capital stock of BCB.

"BCB Common Stock" means the $0.01 par value common stock of BCB.

"BCB Entities" means, collectively, BCB and all BCB Subsidiaries.

"BCB Financial Statements" means (i) the consolidated statements of condition (including related notes and schedules, if any) of BCB as of March 31, 2017, and as of December 31, 2016 and 2015, and the related statements of operations, changes in stockholders' equity, and cash flows (including related notes and schedules, if any) for the quarter and nine months ended March 31, 2017, and for each of the three fiscal years ended December 31, 2016, 2015, and 2014, as filed by BCB in SEC Documents, and (ii) the consolidated statements of condition of BCB (including related notes and schedules, if any) and related statements of operations, changes in stockholders' equity, and cash flows (including related notes and schedules, if any) included in SEC Documents filed with respect to periods ended subsequent to March 31, 2017.

 

"BCB Options" means each option or other Equity Right to purchase shares of BCB Common Stock pursuant to stock options or stock appreciation rights.

"BCB Stock Plans" means the existing stock option and other stock-based compensation plans of BCB designated as follows: 2011 Stock Plan.

"BCB Subsidiaries" means the Subsidiaries of BCB, which shall include any corporation, bank, savings association, limited liability company, limited partnership, limited liability partnership or other organization acquired as a Subsidiary of BCB after the date hereof and held as a Subsidiary by BCB at the Effective Time.

"BHC Act" means the Bank Holding Company Act of 1956, as amended.

"Books and Records" means all files, ledgers and correspondence, all manuals, reports, texts, notes, memoranda, invoices, receipts, accounts, accounting records and books, financial statements and financial working papers and all other records and documents of any nature or kind whatsoever, including those recorded, stored, maintained, operated, held or otherwise wholly or partly dependent on discs, tapes and other means of storage, including any electronic, magnetic, mechanical, photographic or optical process, whether computerized or not, and all software, passwords and other information and means of or for access thereto, belonging to IAB Bank or relating to its business.

"Business Day" means any day other than a Saturday, a Sunday or a day on which all banking institutions in New York, New York are authorized or obligated by Law or executive order to close.

 "Call Reports" means IAB Bank's Consolidated Reports of Condition and Income (FFIEC Form 041) or any successor form of the Federal Financial Institutions Examination Council.

"Change in Tangible Common Equity Per Share" means the quotient obtained by dividing (a) $18,500,000 minus the Closing Tangible Common Equity by (b) the Outstanding Shares Number.

"Closing Date" means the date on which the Closing occurs.

"Consent" means any consent, approval, authorization, clearance, exemption, waiver, or similar affirmation by any Person pursuant to any Contract, Law, Order, or Permit.

"Continuing Employees" means the employees of the IAB or an IAB Subsidiary who are offered continued employment with BCB or any of its Subsidiaries and who execute an Offer Letter and become employees of BCB or any of its Subsidiaries following the Effective Time.

 

"Contract" means any written or oral agreement, arrangement, authorization, commitment, contract, indenture, instrument, lease, license, obligation, plan, practice, restriction, understanding, or undertaking of any kind or character, or other document to which any Person is a party or that is binding on any Person or its capital stock, Assets or business.

"Contractors" means each independent contractor, consultant, freelancer or other service provider.

"Default" means (i) any breach or violation of, default under, contravention of, conflict with, or failure to perform any obligations under any Contract, Law, Order, or Permit, (ii) any occurrence of any event that with the passage of time or the giving of notice or both would constitute a breach or violation of, default under, contravention of, or conflict with, any Contract, Law, Order, or Permit, or (iii) any occurrence of any event that with or without the passage of time or the giving of notice would give rise to a right of any Person to exercise any remedy or obtain any relief under, terminate or revoke, suspend, cancel, or modify or change the current terms of, or renegotiate, or to accelerate the maturity or performance of, or to increase or impose any Liability under, any Contract, Law, Order, or Permit.

"Disclosure Memorandum" of a Party means a letter delivered by such Party to the other Party prior to execution of this Agreement, 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, as an exception to one or more representations or warranties contained in Article 4 and Article 5, or to one or more of its covenants contained in this Agreement; provided, that: (a) no such item is required to be set forth in a Disclosure Memorandum as an exception to a representation or warranty if its absence would not be reasonably likely to result in the related representation or warranty being deemed untrue or incorrect; and, (b) the mere inclusion of an item in a Disclosure Memorandum 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 or that such item is reasonably likely to result in a Material Adverse Effect on the Party making the representation or warranty.

"Employee Benefit Plan" means each pension, retirement, profit-sharing, deferred compensation, stock option, restricted stock, employee stock ownership, share purchase, severance pay, vacation, bonus, retention, change in control or other incentive plan, medical, vision, dental or other health plan, any life insurance plan, flexible spending account, cafeteria plan, vacation, holiday, disability or any other employee benefit plan or fringe benefit plan, including any "employee benefit plan," as that term is defined in Section 3(3) of ERISA and any other plan, fund, policy, program, practice, custom, understanding or arrangement providing compensation or other benefits, including employment and change in control agreements, whether or not such Employee Benefit Plan is or is intended to be (i) covered or qualified under the Internal Revenue Code, ERISA or any other applicable Law, (ii) written or oral, (iii) funded or unfunded, (iv) actual or contingent, or (v) arrived at through collective bargaining or otherwise.

"Environmental Laws" means all Laws relating to pollution or protection of human health or the environment (including ambient air, surface water, ground water, land surface, or subsurface strata) including the Comprehensive Environmental Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. 6901 et seq., and other Laws relating to emissions, discharges, releases, or threatened releases of any Hazardous Material, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of any Hazardous Material.

 

"Equity Rights" means all arrangements, calls, commitments, Contracts, options, rights (including preemptive rights or redemption rights), scrip, understandings, warrants, or other binding obligations of any character whatsoever relating to, or securities or rights convertible into or exchangeable for, shares of the capital stock or equity interest of a Person or by which a Person is or may be bound to issue additional shares of its capital stock or other equity interests.

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

"ERISA Affiliate" means any entity which together with an IAB Entity would be treated as a single employer under Internal Revenue Code Section 414.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Exhibit" means the Exhibits so marked, copies of which are attached to this Agreement.  Such Exhibits are hereby incorporated by reference herein and made a part hereof, and may be referred to in this Agreement and any other related instrument or document without being attached hereto.

"Federal Reserve" means the Board of Governors of the Federal Reserve System or a Federal Reserve Bank acting under the appropriately delegated authority thereof, as applicable.

"GAAP" means U.S. generally accepted accounting principles, consistently applied during the periods involved.

"Hazardous Material" means (i) any hazardous substance, hazardous material, hazardous waste, regulated substance, or toxic substance (as those terms are defined by any applicable Environmental Laws) and (ii) any chemicals, pollutants, contaminants, petroleum, petroleum products, or oil, asbestos-containing materials and any polychlorinated biphenyls.

"IAB Common Stock" means the $0.10 par value common stock of IAB.

"IAB Entities" means, collectively, IAB and all IAB Subsidiaries.

"IAB Financial Statements" means (i) the consolidated statements of condition (including related notes and schedules, if any) of IAB as of March 31, 2017, and as of December 31, 2016 and 2015, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows (including related notes and schedules, if any) for the three months ended March 31, 2017, and for each of the fiscal years ended December 31, 2016, 2015, and 2014, as filed by IAB in Call Reports (and, in the case of the annual financial statements, as audited and made available to the stockholders of IAB) and (ii) the consolidated statements of financial condition of IAB and related statements of income and changes in stockholders' equity included in Call Reports filed by IAB with respect to periods ended subsequent to March 31, 2017.

"IAB Series C Preferred Stock" means the IAB Perpetual Non-Cumulative Convertible Preferred Stock, Series C, no par value.

 

"IAB Series D Preferred Stock" means the IAB Perpetual Non-Cumulative Convertible Preferred Stock, Series D, par value $0.10 per share.

"IAB Stock Option Plan" means the IAB [   ] Stock Option Plan.

"IAB Subsidiary" means the Subsidiaries of IAB, which shall include IAB Bank, and any corporation, bank, savings association, limited liability company, limited partnership, limited liability partnership or other organization acquired as a Subsidiary of IAB after the date hereof and held as a Subsidiary by IAB at the Effective Time.

"Intellectual Property" means copyrights, patents, trademarks, service marks, service names, trade names, brand names, internet domain names, logos together with all goodwill associated therewith, registrations and applications therefor, technology rights and licenses, computer software (including any source or object codes therefor or documentation relating thereto), trade secrets, franchises, know-how, inventions, and other intellectual property rights.

"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended.

"Knowledge" or "knowledge" as used with respect to a Person (including references to such Person being aware of a particular matter) means the actual knowledge of the chairman, president, chief financial officer, chief risk officer, chief accounting officer, chief operating officer, chief credit officer, general counsel (in the case of BCB), or any senior, executive or other vice president in charge of human resources of such Person, if any, and the knowledge of any such Persons obtained or which would have been obtained from a reasonable investigation.

"Law" means any code, law (including common law), ordinance, regulation, reporting or licensing requirement, rule, or statute applicable to a Person or its Assets, Liabilities, or business, including those promulgated, interpreted or enforced by any Regulatory Authority.

"Liability" means any direct or indirect, primary or secondary, liability, indebtedness, obligation, penalty, cost or expense (including costs of investigation, collection and defense), claim, deficiency, guaranty or endorsement of or by any Person (other than endorsements of notes, bills, checks, and drafts presented for collection or deposit in the Ordinary Course) of any type, whether accrued, absolute or contingent, liquidated or unliquidated, matured or unmatured, or otherwise.

"Lien" means any conditional sale agreement, default of title, easement, encroachment, encumbrance, hypothecation, infringement, lien, mortgage, pledge, option, right of first refusal, reservation, restriction, security interest, title retention or other security arrangement, or any adverse right or interest, charge, or claim of any nature whatsoever of, on, or with respect to any property or property interest, other than Permitted Liens.

"Litigation" means any action, arbitration, cause of action, lawsuit, claim, complaint, criminal prosecution, subpoena, summons, governmental or other examination or investigation, audit (other than regular audits of financial statements by outside auditors), compliance review, inspection, hearing, administrative or other proceeding relating to or affecting a Party, its business, its records, its policies, its practices, its compliance with a Law, its actions, its Assets (including Contracts related to it), or the transactions contemplated by this Agreement, but shall not include regular, periodic examinations of depository institutions and their Affiliates by Regulatory Authorities.

 

"Loans" means any written or oral loan, loan agreement, participation loan, note or borrowing arrangement (including leases, credit enhancements, guarantees and interest bearing assets) to which IAB Bank or any Subsidiary of IAB Bank is party as a creditor.

"Material" or "material" for purposes of this Agreement shall be determined in light of the facts and circumstances of the matter in question; provided that any specific monetary amount stated in this Agreement shall determine materiality in that instance.

"Material Adverse Effect" means with respect to any Party, any fact, circumstance, event, change, effect, development or occurrence that, individually or in the aggregate together with all other facts, circumstances, events, changes, effects, developments or occurrences, directly or indirectly; (i) has had or would reasonably be expected to result in a material adverse effect on the condition (financial or otherwise), results of operations, Assets, liabilities or business of such Party and its Subsidiaries taken as a whole; provided, that a "Material Adverse Effect" shall not be deemed to include effects to the extent resulting from: (A) changes after the date of this Agreement in GAAP or regulatory accounting requirements; (B) changes after the date of this Agreement in Laws of general applicability to companies in the financial services industry; (C) changes after the date of this Agreement in global, national or regional political conditions or general economic or market conditions in the United States and the State of New Jersey, including changes in prevailing interest rates, credit availability and liquidity, currency exchange rates, and price levels or trading volumes in the United States or foreign securities markets) affecting other companies in the financial services industry; (D) after the date of this Agreement, general changes in the credit markets or general downgrades in the credit markets; (E) failure, in and of itself, to meet earnings projections or internal financial forecasts, but not including any underlying causes thereof unless separately excluded hereunder, or changes in the trading price of a Party's common stock, in and of itself, but not including any underlying causes unless separately excluded hereunder; (F) the public disclosure of this Agreement and the impact thereof on relationships with customers or employees; (G) any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism; or, (H) actions or omissions taken with the prior written consent of the other Party hereto or expressly required by this Agreement; except, with respect to clauses (A), (B), (C), (D) and (G), to the extent that the effects of such change disproportionately affect such Party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such Party and its Subsidiaries operate; or, (ii) prevents or materially impairs the ability of such Party to timely consummate the transactions contemplated hereby.

"Nasdaq" means the Nasdaq Global Market.

"Ordinary Course" means the conduct of the business of IAB and IAB Bank in substantially the same manner as such business was operated on the date of this Agreement, including operations in conformance and consistent with IAB and IAB Bank's practices and procedures prior to and as of such date.

"Operating Property" means any property owned, leased, or operated by the Party in question or by any of its Subsidiaries or in which such Party or Subsidiary holds a security interest or other interest (including an interest in a fiduciary capacity), and, where required by the context, includes the owner or operator of such property, but only with respect to such property.

"Order" means any administrative decision or award, decree, injunction, judgment, order, consent decree, quasi-judicial decision or award, ruling, or writ of any federal, state, local or foreign or other court, arbitrator, mediator, tribunal, administrative agency, or Regulatory Authority.

 

"Outstanding Shares Number" means the total number of shares of IAB Common Stock outstanding on the Closing Date.

"Participation Facility" means any facility or property in which the Party in question or any of its Subsidiaries participates in the management and, where required by the context, said term means the owner or operator of such facility or property, but only with respect to such facility or property.

"Party" means either of IAB or BCB, and "Parties" means IAB and BCB.

"Permit" means any federal, state, local, or foreign governmental approval, authorization, certificate, easement, filing, franchise, license, notice, permit, or right to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or its securities, Assets, or business.

"Per Share Cash Amount" means $3.05 per share, subject to adjustment pursuant to Section 2.1(h).

"Person" means a natural person or any legal, commercial or governmental entity, such as, but not limited to, a corporation, general partnership, joint venture, limited partnership, limited liability company, limited liability partnership, trust, business association, group acting in concert, or any person acting in a Representative capacity.

"Previously Disclosed" by a Party means information set forth in its Disclosure Memorandum or information set forth in its SEC Documents that were filed prior to the date hereof.

"Reference Price" means $16.14.

"Registration Statement" means the Registration Statement on Form S‑4, or other appropriate form, including any pre-effective or post-effective amendments or supplements thereto, to be filed with the SEC by BCB under the Securities Act with respect to the shares of BCB Common Stock to be issued to the shareholders of IAB pursuant to this Agreement.

"Regulatory Authorities" means, collectively, the SEC, the NASDAQ, state securities authorities, the Financial Industry Regulatory Authority, the Securities Investor Protector Corporation, applicable securities, commodities and futures exchanges, and other industry self-regulatory organizations, the Federal Reserve, the Office of the Comptroller of the Currency, the FDIC, the NJBD, the IRS, the DOL, the PBGC, and all other foreign, federal, state, county, local or other governmental, banking or regulatory agencies, authorities (including taxing and self-regulatory authorities), instrumentalities, commissions, boards, courts, administrative agencies, commissions or bodies.

"Representative" means, with respect to any Person, any officer, director, employee, investment banker, financial or other advisor, attorney, accountant, consultant, or other representative or agent of or engaged or retained by such Person.

"SEC" means the United States Securities and Exchange Commission.

 

"SEC Documents" means all forms, proxy statements, registration statements, prospectuses, reports, schedules, and other documents filed, together with any amendments thereto, by BCB or any of BCB's Subsidiaries with the SEC on or after January 1, 2011.

"Securities Act" means the Securities Act of 1933, as amended.

"Securities Laws" means the Securities Act, the Exchange Act, the Investment Company Act of 1940, as amended, the Investment Advisers Act of 1940, as amended, the Trust Indenture Act of 1939, as amended, and the rules and regulations of any Regulatory Authority promulgated thereunder.

"Subsidiaries" means all those corporations, associations, or other business entities of which the entity in question either: (i) owns or controls more than 50% of the outstanding equity securities or other ownership interests either directly or through an unbroken chain of entities as to each of which more than 50% of the outstanding equity securities is owned directly or indirectly by its parent (provided, there shall not be included any such entity the equity securities of which are owned or controlled in a fiduciary capacity); (ii) in the case of partnerships, serves as a general partner; (iii) in the case of a limited liability company, serves as a managing member; or, (iv) otherwise has the ability to elect a majority of the directors, trustees or managing members thereof.

"Superior Proposal" means any unsolicited bona fide written Acquisition Proposal with respect to which the board of directors of IAB determines in its good faith judgment (based on, among other things, the advice of outside legal counsel and a financial advisor) to be more favorable, from a financial point of view, to IAB's shareholders than the Merger and the other transactions contemplated by this Agreement (as it may be proposed to be amended by BCB), taking into account all relevant factors (including the Acquisition Proposal and this Agreement (including any proposed changes to this Agreement that may be proposed by BCB in response to such Acquisition Proposal)); provided, that for purposes of the definition of "Superior Proposal," the references to "20%" and "80%" in the definitions of Acquisition Proposal and Acquisition Transaction shall be deemed to be references to "100%".

 "Surviving Corporation" means BCB as the surviving corporation resulting from the Merger.

"Tax" or "Taxes" means any federal, state, county, local, or foreign taxes, or, to the extent in the nature of a tax, any charges, fees, levies, imposts, duties, or other assessments, including income, gross receipts, excise, employment, sales, use, transfer, recording license, payroll, franchise, severance, documentary, stamp, occupation, windfall profits, environmental, commercial rent, capital stock, paid-up capital, profits, withholding, Social Security, single business and unemployment, real property, personal property, registration, ad valorem, value added, alternative or add-on minimum, estimated, or other tax, imposed or required to be withheld by the United States or any state, county, local or foreign government or subdivision or agency thereof, including any interest, penalties, and additions imposed thereon or with respect thereto.

"Tax Return" means any report, return, information return, or other document required to be supplied to a Regulatory Authority in connection with Taxes, including any return of an affiliated or combined or unitary group that includes a Party or its Subsidiaries.

 

The terms set forth below shall have the meanings ascribed thereto in the referenced pages:

 

2010 Health Care Law	22
401(k) Plan	46
Additional Director	51
Advisory Board	51
Agreement	1
ALLL	28
Average Closing Price	56
Bank Merger	2
BCB	1
BCB Bank	2
BCB Certificates	9
BCB Ratio	55
BCB SEC Reports	31
BCB Series E Preferred Stock	3
BCB Series F Preferred Stock	4
Burdensome Condition	43
Canceled Shares	3
Cash Consideration	3
Cash Election	3
Cash Election Shares	3
Cash Value	5
Certificate	4
Change in the IAB Recommendation	41
Chosen Courts	69
Closing	1
Closing Financial Statements	50
Closing Tangible Common Equity	4
Covered Employees	45
CRA	18
Derivative Transaction	25
Determination Date	56
DOL	21
Effective Time	2
Election	7
Election Deadline	8
Exchange Agent	7, 9
Exchange Agent Agreement	7
Exchange Fund	9
Exchange Ratio	3
FDIA	14
FDIC	14
Final Index Price	56
Form of Election	7
Holder	7
IAB	1
IAB Bank	2

IAB Bank Common Stock	13
IAB Benefit Plans	21
IAB Contracts	24
IAB Recommendation	41
IAB Regulatory Agreement	24
IAB Shareholder Approval	41
IAB Stock Option	7
Indemnified Party	47
Indemnity Payment	48
Index Price	56
Index Ratio	55
IRS	21
Mailing Date	8
Maximum Amount	47
Merger	1
Merger Consideration	3
Money Laundering Laws	19
▇▇▇▇▇	▇
▇▇▇▇	11
Non-Electing Shares	3
Offer Letter	45
PBGC	21
Permitted Liens	16
Pool	27
Proxy Statement	40
Reallocated Cash Shares	5
Reallocated Stock Shares	5
Regulatory Communication	43
Requisite Regulatory Approvals	51
Sanctioned Countries	29
Sanctions	29
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act	18
Shareholders' Meeting	41
Starting Date	56
Starting Price	56
Stock Consideration	3
Stock Election	3
Stock Election Shares	3
Subsidiary Plan of Merger	2
Systems	17
Takeover Laws	26
Tax Opinion	52
Termination Fee	67
Transaction Expenses	50

Any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words "include," "includes" or "including" are used in this Agreement, they shall be deemed followed by the words "without limitation."  The words "hereby," "herein," "hereof," "hereunder" and similar terms refer to this Agreement as a whole and not to any specific Section.  All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as the context may require. If a word or phrase is defined, the other grammatical forms of such word or phrase

 

have a corresponding meaning. Any capitalized terms used in any schedule or Exhibit but not otherwise defined therein shall have the meaning set forth in this Agreement.  All references to "dollars" or "$" in this Agreement are to United States dollars.  All references to "the transactions contemplated by this Agreement" (or similar phrases) include the transactions provided for in this Agreement, including the Merger and the Bank Merger.  Any Contract or Law defined or referred to herein or in any Contract that is referred to herein means such Contract or Law as from time to time amended, modified or supplemented, including (in the case of Contracts) by waiver or consent and (in the case of Law) by succession of comparable successor Law and references to all attachments thereto and instruments incorporated therein.  The term "made available" means any document or other information that was (a) provided by one Party or its representatives to the other Party and its representatives at least two Business Days prior to the date hereof, (b) included in the virtual data room (on a continuation basis without subsequent modification) of a Party at least two Business Days prior to the date hereof or (c) filed by a Party with the SEC and publicly available on ▇▇▇▇▇ at least two Business days prior to the date hereof.

(i)

Either IAB or BCB terminates this Agreement pursuant to Section 9.1(b) or 9.1(c), and at the time of such termination, any Person has made and not withdrawn an Acquisition Proposal or has publicly announced an intention (whether or not conditional) to make an Acquisition Proposal, and within 12 months of such termination IAB shall either (A) consummate an Acquisition Transaction or (B) enter into an Acquisition Agreement with respect to an Acquisition Transaction, whether or not such Acquisition Transaction is subsequently consummated; or

(ii)	BCB shall terminate this Agreement pursuant to Section 9.1(d),

then IAB shall pay to BCB an amount equal to $800,000 (the "Termination Fee").  The payment of the Termination Fee by IAB pursuant to this Section 10.3(b) constitutes liquidated damages and not a penalty, and shall be the sole monetary remedy of BCB in the event of termination of this Agreement pursuant to Section 9.1(b) or 9.1(c).  If the Termination Fee shall be payable pursuant to subsection (i) of this Section 10.3(b), the Termination Fee shall be paid in same-day funds at or prior to the earlier of the date of consummation of such Acquisition Transaction or the date of execution of an Acquisition Agreement with respect to such Acquisition Transaction.  If the Termination Fee shall be payable pursuant to subsection (ii) of this Section 10.3(b), the Termination Fee shall be paid in same-day funds within two Business Days from the date of termination of this Agreement.

 

Except as otherwise expressly provided herein, this Agreement (including the Disclosure Memorandum of each of IAB and BCB, the exhibits, the schedules, and the other documents and instruments referred to herein) constitutes the entire agreement between the Parties with respect to the transactions contemplated hereunder and supersedes all prior arrangements or understandings with respect thereto, written or oral.  Nothing in this Agreement expressed or implied, is intended to confer upon any Person, other than the Parties or their respective successors, any rights, remedies, obligations, or liabilities under or by reason of this Agreement, other than as provided in Section 7.9. The representations and warranties in this Agreement are the product of negotiations among the Parties hereto and are for the sole benefit of the Parties.  Any inaccuracies in such representations and warranties are subject to waiver by the Parties hereto in accordance herewith without notice or liability to any other Person.  In some instances, the representations and warranties in this Agreement may represent an allocation among the Parties hereto of risks associated with particular matters regardless of the knowledge of any of the Parties hereto.  Consequently, Persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.  Notwithstanding any other provision hereof to the contrary, no consent, approval or agreement of any third party beneficiary will be required to amend, modify to waive any provision of this Agreement.

To the extent permitted by Law, this Agreement may be amended by a subsequent writing signed by each of the Parties upon the approval of each of the Parties, whether before or after IAB Shareholder Approval of this Agreement has been obtained; provided, that after obtaining IAB Shareholder Approval, there shall be made no amendment that requires further approval by such IAB shareholders unless such further approval of such shareholders is obtained.

 

Except as expressly contemplated hereby, neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party hereto (whether by operation of Law or otherwise) without the prior written consent of the other Party. Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and assigns.

All notices or other communications which are required or permitted hereunder shall be in writing and sufficient if delivered by hand, by facsimile transmission (followed by overnight courier), by registered or certified mail, postage pre-paid, or by courier or overnight carrier, or by email (with receipt confirmed) to the persons at the addresses set forth below (or at such other address as may be provided hereunder), and shall be deemed to have been delivered as of the date so delivered:

BCB:	BCB Bancorp, Inc.
	▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇
	▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
	Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
	Attention:  ▇▇▇▇ ▇▇▇▇▇▇

Copy to Counsel:	▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
	One CityCenter
	▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
	▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
	Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
	Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
	Email: ▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
	▇▇▇▇▇▇▇ ▇. ▇▇▇▇
	Email: ▇▇▇▇▇@▇▇▇.▇▇▇

IAB:	IA Bancorp, Inc.
	▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
	▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

Copy to Counsel:	▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇, LLP
	▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
	▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
	Facsimile Number:  (▇▇▇) ▇▇▇-▇▇▇▇
	Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇

This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.  Executed signature pages to this Agreement may be delivered by facsimile transmission or by e-mail delivery of a "pdf" format data file and such signature pages will be deemed as sufficient as if actual signature pages had been delivered.

The captions contained in this Agreement are for reference purposes only and are not part of this Agreement.  Unless otherwise indicated, all references to particular Articles or Sections shall mean and refer to the referenced Articles and Sections of this Agreement.

 

Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved against any Party, whether under any rule of construction or otherwise.  No Party to this Agreement shall be considered the draftsman.  The Parties acknowledge and agree that this Agreement has been reviewed, negotiated, and accepted by all Parties and their attorneys and, unless otherwise defined herein, the words used shall be construed and interpreted according to their ordinary meaning so as fairly to accomplish the purposes and intentions of all Parties hereto.

The Parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement was not performed in accordance with its specific terms or was otherwise breached and that money damages would be both incalculable and an insufficient remedy for any breach of this Agreement.  It is accordingly agreed that the Parties shall be entitled, without the requirement of posting bond, to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.  Each of the Parties waives any defense in any action for specific performance that a remedy at law would be an adequate remedy.

Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction.  If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.

Any disclosure made in any document delivered pursuant to this Agreement or referred to or described in writing in any Section of this Agreement in any schedule or exhibit attached hereto or in any Disclosure Memorandum shall apply only to, or only qualify, the indicated Section of this Agreement, except to the extent that (a) any other Section of this Agreement specifically referenced or cross-referenced in such disclosure or (b) the relevance of such item to another Section of this Agreement is reasonably apparent on the face of such disclosure (notwithstanding the absence of a specific cross reference) from a reading of the disclosure that such disclosure applies to such other Sections of this Agreement.

This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by means of a facsimile machine or by e-mail delivery of a ".pdf" format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No Party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or e-mail delivery of a ".pdf" format data file to deliver a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a ".pdf" format data file as a defense to the formation of a contract and each Party hereto forever waives any such defense.

[Signatures on following page]

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on its behalf by its duly authorized officers as of the day and year first above written.

	BCB BANCORP, INC.
By:	/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
	Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
	Title: President and Chief Executive Officer

	IA BANCORP, INC.
By:	/s/ ▇▇▇▇▇ ▇▇▇▇▇
	Name: ▇▇▇▇▇ ▇▇▇▇▇
	Title: President and Chief Executive Officers

 

EXHIBIT A

Subsidiary Plan of Merger

EXHIBIT B

Form of Voting Agreement

EXHIBIT C

Terms of BCB Series E Noncumulative Perpetual Preferred Stock and

BCB Series F Noncumulative Perpetual Preferred Stock