PURCHASE AND ASSUMPTION AGREEMENT

Exhibit 10.1

EXECUTION COPY

PURCHASE AND ASSUMPTION AGREEMENT

dated as of

May 21, 2009

by and among

Banco Popular North America

and

Investors Savings Bank

List of Schedules

     This PURCHASE AND ASSUMPTION AGREEMENT , dated as of May 21, 2009 (this “ Agreement ”), by and among Banco Popular North America, a banking corporation organized under the laws of the State of New York, with its principal office located at 7 West Street, New York, New York, 10019 (“ Seller ”), and Investors Savings Bank, a New Jersey chartered savings bank, with its principal office located at 101 JFK Parkway, Short Hills, New Jersey, 07078 (“ Purchaser ”).

RECITALS

      WHEREAS, Seller desires to sell, and Purchaser desires to acquire, certain assets of Seller in accordance with the terms and provisions of this Agreement; and

      WHEREAS, Seller desires to transfer to Purchaser, and Purchaser desires to assume from Seller, certain liabilities of Seller in accordance with the terms and provisions of this Agreement

      NOW, THEREFORE , in consideration of the premises and the mutual promises and obligations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby subject to the terms and conditions set forth herein, Seller and Purchaser agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

     1.1 Certain Definitions . The terms set forth below are used in this Agreement with the following meanings:

     “ Accrued Interest ” means, as of any date, with respect to a Deposit, interest which is accrued on such Deposit to but excluding such date and not yet posted to the relevant deposit account.

     “ ACH ” has the meaning set forth in Section 4.3.

     “ ACH Direct Deposit Cut-Off Date ” has the meaning set forth in Section 4.3.

     “ Adjusted Payment Amount ” means (x) the aggregate balance (including Accrued Interest) of the Deposits, minus (y) the Purchase Price, each as set forth on the Final Closing Statement. For avoidance of doubt, the Adjusted Payment Amount may be a negative amount.

     “ Adjustment Date ” has the meaning set forth in Section 3.3(a).

     “ Affiliate ” means, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with such person. As used in this definition, the term “person” shall be broadly interpreted to include, without limitation, any corporation, company, partnership and individual or group.

     “ Agreement ” means this Purchase and Assumption Agreement, including all schedules, exhibits and addenda, each as amended from time to time in accordance with Section 12.9(b).

     “ Appraised Value of the Owned Real Property ” means the appraised value of the Owned Real Property as set forth in Schedule 1.1(a).

     “ Assets ” has the meaning set forth in Section 2.1(a).

     “ Assignment and Assumption Agreement ” has the meaning set forth in Section 3.5(c).

     “ Branch Employees ” means the employees of Seller or its Affiliates employed at the Branches as of the date hereof who continue to be employed by Seller on the Closing Date (including, without limitation, those employees who on the Closing Date are on family and medical leave, military leave or personal, short-term or long-term disability or pregnancy leave and who are eligible to return to work under Seller’s policies), except to the extent employees leave the employ of Seller, and shall include employees hired to replace such departing employee in the ordinary course of business. Schedule 1.1(f) contains a complete and accurate list of the employees of Seller or its Affiliates employed at the Branches as of the date hereof, including those employees who as of the date hereof are on family and medical leave, military leave or personal, short-term or long-term disability or pregnancy leave and who are eligible to return to work under Seller’s policies, and such list shall be updated promptly upon Purchaser’s request from time to time following the date hereof to reflect changes to the foregoing with the final such update to occur no later than ten (10) calendar days prior to the Closing Date. From the date hereof through the Closing date, Seller shall not transfer Branch Employees to other offices of Seller.

     “ Branch Lease Security Deposit ” means any security deposit held by the lessor under a Branch Lease.

     “ Branch Leases ” means the leases under which Seller leases land and/or buildings used as Branches, including without limitation ground leases.

     “ Branches ” means each of the banking offices of Seller at the locations identified on Schedule 1.1(b) hereto.

     “ Business Day ” means a day on which banks are generally open for business in New Jersey, and which is not a Saturday or Sunday.

     “ Cash on Hand ” means, as of any date, all petty cash, vault cash, teller cash, ATM cash, prepaid postage and cash equivalents held at a Branch.

     “ Closing ” and “ Closing Date ” refer to the closing of the P&A Transaction, which is to be held on such date as provided in Article 3 hereof and which shall be deemed to be effective at 11:59 p.m. New Jersey time on such date.

     “ Code ” means the Internal Revenue Code of 1986, as amended.

     “ Commissioner ” means the Commissioner of Banking and Insurance of the State of New Jersey, and where appropriate includes the Department of Banking and Insurance of the State of New Jersey.

     “ Controlling Party ” has the meaning set forth in Section 11.1(f).

     “ Customers ” shall mean, individually and collectively, the Persons named as the owners of the deposit accounts relating to the Deposits.

     “ Deposit(s) ” means all of Seller’s obligations and liabilities relating to (a) the deposit accounts listed on Schedule 1.1(c) hereto and as updated on the Draft Closing Statement., and (b) deposit accounts which are opened on behalf of a Customer by Bank Employees between the date of this Agreement and the close of business on the Closing Date, including, without limitation, all passbook accounts, statement savings accounts, checking, Money Market and NOW accounts, Interest on Lawyers Trust Accounts (“IOLTAs”), certificates of deposit, and IRA accounts, together with Accrued Interest thereon, all as exists at the close of business on the Closing Date, but excluding any claim or other liability relating to the origination of any such deposit account or the administration of any such deposit account prior to the close of business on the Closing Date, but shall exclude the Excluded IRA/Keogh Deposits, deposits that are pledged as security for a loan or other obligation of Seller (which pledged deposits are set forth in Schedule 1.1(c)), and deposits that are linked to loans originated and retained by Seller (which linked deposits are also set forth in Schedule 1.1(c)).

     “ Draft Allocation Statement ” has the meaning set forth in Section 3.10(a).

     “ Draft Closing Statement ” means a draft closing statement, prepared by Seller, as of the close of business of the third (3 ^rd ) Business Day preceding the Closing Date setting forth an estimated calculation of both the Purchase Price and the Estimated Payment Amount.

     “ Encumbrances ” means all mortgages, claims, charges, liens, encumbrances, easements, limitations, restrictions, commitments and security interests, Acts of Assembly, ordinances, restrictions, requirements, resolutions, laws or orders of any governmental authority now or hereafter acquiring jurisdiction over the Assets, and all amendments or additions thereto in force as of the date of this Agreement or in force as of the Closing Date, and other matters now of public record relating to the Real Property, except for statutory liens securing Tax and/or other payments not yet due, liens incurred in the ordinary course of business, including without limitation liens in favor of mechanics or materialmen, and any such matters as do not materially and adversely affect the current use of the properties or assets subject thereto or affected thereby or which otherwise do not materially impair the business operations at such properties and except for obligations pursuant to applicable escheat and unclaimed property laws relating to the Escheat Deposits.

     “ Environmental Law ” means any Federal, state, or local law, statute, rule, regulation, code, rule of common law, order, judgment, decree, injunction or agreement with any Federal, state, or local governmental authority, (a) relating to the protection, preservation or restoration of the environment (including, without limitation, air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource) or to human health or safety or (b) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Substances, in each case as amended and now in effect. Environmental Laws include, without limitation, the Clean Air Act (42 USC §7401 et seq .); the Comprehensive Environmental Response Compensation and Liability Act (42 USC §9601 et seq .); the Resource Conservation and Recovery Act (42 USC §6901 et seq .); the Federal Water Pollution Control Act (33 USC §1251 et seq .); and the Occupational Safety and Health Act (29 USC §651 et seq .).

     “ Escheat Deposits ” means, as of any date, Deposits and safe deposit box contents, in each case held on such date at the Branches which become subject to escheat, in the calendar year in which the Closing occurs, to any governmental authority pursuant to applicable escheat and unclaimed property laws.

     “ Estimated Payment Amount ” means (x) the aggregate balance (including Accrued Interest) of the Deposits, minus (y) the Estimated Purchase Price, each as set forth on the Draft Closing Statement as reasonably agreed upon prior to Closing between Seller and Purchaser. For avoidance of doubt, the Estimated Payment Amount may be a negative amount.

     “ Estimated Purchase Price ” means the Purchase Price as set forth on the Draft Closing Statement.

     “ Excluded IRA/Keogh Deposits ” has the meaning set forth in Section 2.4(c).

     “ Excluded Taxes ” means any Taxes of, or relating to, the Assets, the Liabilities or the operation of the Branches for, or applicable to, the Pre-Closing Tax Period.

     “ Existing Branches ” means the branches operated by Seller listed on Schedule 7.6(a) which are not subject to the P&A Transaction.

     “ FDIC ” means the Federal Deposit Insurance Corporation.

     “ FDIC Special Assessment ” means the emergency special assessment imposed by the FDIC payable on September 30, 2009 with respect to deposits as of June 30, 2009.

     “ Federal Funds Rate ” on any day means the per annum rate of interest (rounded upward to the nearest 1/100 of 1%) which is the weighted average of the rates on overnight federal funds transactions arranged on such day or, if such day is not a Business Day, the previous Business Day, by federal funds brokers computed and released by the Federal Reserve Bank of New York (or any successor) in substantially the

same manner as such Federal Reserve Bank currently computes and releases the weighted average it refers to as the “Federal Funds Effective Rate” at the date of this Agreement.

     “ Federal Reserve Board ” means the Board of Governors of the Federal Reserve System.

     “ FedWire Direct Deposit Cut-off Date ” has the meaning set forth in Section 4.3.

     “ Final Allocation Statement ” has the meaning set forth in Section 3.10(a).

     “ Final Closing Statement ” means a final closing statement, prepared by Seller in accordance with the accounting policies used in preparing the Draft Closing Statement, on or before the thirtieth (30 ^th ) calendar day following the Closing Date setting forth both the Purchase Price and the Adjusted Payment Amount.

     “ GAAP ” has the meaning set forth in Section 1.2.

     “ Hazardous Substance ” means any substance, whether liquid, solid or gas (a) listed, identified or designated as hazardous or toxic; (b) which, applying criteria specified in any Environmental Law, is hazardous or toxic; or (c) the use or disposal, or any manner or aspect of management or handling, of which is regulated under Environmental Law.

     “ Information ” has the meaning set forth in Section 7.2(c).

     “ IRA ” means an “individual retirement account” or similar account created by a trust for the exclusive benefit of any individual or his beneficiaries in accordance with the provisions of Section 408 of the Code.

     “ IRS ” means the Internal Revenue Service.

     “ Item ” means checks, drafts, negotiable orders of withdrawal and items of a like kind which are drawn on or deposited and credited to the Deposit accounts.

     “ Keogh Account ” means an account created by a trust for the benefit of employees (some or all of whom are owner-employees) and that complies with the provisions of Section 401 of the Code.

     “ Lease Assignment ” has the meaning set forth in Section 3.5(d).

     “ Liabilities ” has the meaning set forth in Section 2.2(a).

     “ Loss ” means the amount of losses, liabilities, damages and reasonable expenses actually incurred by the indemnified party or its Affiliates in connection with the matters described in Section 11.1, less the amount of the economic benefit (if any) to the indemnified party or its Affiliates obtained or to be obtained in connection with any such damage, loss, liability or expense (including net Tax benefits obtainable under applicable

law, amounts recovered under insurance policies net of deductibles, recovery by setoffs or counterclaims, and other economic benefits).

     “ Material Adverse Effect ” means (a) with respect to Seller, a material adverse effect on (i) the business or direct economic results of operations of the Branches, taken as a whole (excluding any effect to the extent arising out of or resulting from (A) changes, after the date hereof, in generally accepted accounting principles or regulatory accounting requirements applicable to banks or savings associations and their holding companies generally, (B) changes, after the date hereof, in laws, rules or regulations of general applicability or interpretations thereof by courts or governmental agencies or authorities, (C) changes, after the date hereof, in global or national political conditions or in general U.S. or global economic or market conditions affecting banks or their holding companies generally (including changes in interest or exchange rates or in credit availability and liquidity), (D) public disclosure of the transactions contemplated hereby, including the impact thereof on customers, suppliers, licensors and employees, or (E) the commencement, occurrence, continuation or intensification of any war, sabotage, armed hostilities or acts of terrorism not directly involving the Assets, or (ii) the ability of Seller to timely consummate the P&A Transaction as contemplated by this Agreement, and (b) with respect to Purchaser, a material adverse effect on the ability of Purchaser to perform any of its financial or other obligations under this Agreement, including the ability of Purchaser to timely consummate the P&A Transaction as contemplated by this Agreement. For purposes of this Agreement, a Material Adverse Effect with respect to Seller shall be deemed to have occurred, without limitation, if the results of any “phase II environmental audit” referenced in Section 7.2(b) indicates that there is potential liability under the Environmental Laws, including for clean up costs, that may exceed $500,000.

     “ Non-Controlling Party ” has the meaning set forth in Section 11.1(f).

     “ Order ” has the meaning set forth in Section 9.1(b).

     “ Owned Branches ” has the meaning set forth in Section 7.10(a).

     “ Owned Real Property ” means Real Property where Seller owns both the real property and improvements thereon that are used for Branches.

     “ P&A Transaction ” means the purchase and sale of Assets and the assumption of Liabilities described in Sections 2.1 and 2.2.

     “ Personal Property ” means all of the personal property goods of Seller located in the Branches consisting of the trade fixtures, shelving, furniture, on-premises ATMs (excluding Seller licensed software), equipment, security systems, safe deposit boxes (exclusive of contents), vaults, sign structures (exclusive of signage containing any trade name, trademark or service mark, if any, of Seller or any of its Affiliates) and supplies excluding any items consumed or disposed of, but including new items acquired or obtained, in the ordinary course of the operation of the Branches through the Closing Date; provided , however , that the foregoing shall not include any (i) controller or server of the branch or (ii) personal computers.

     “ POS ” has the meaning set forth in Section 4.9.

     “ Post-Closing Processing Period ” has the meaning set forth in Section 4.2(c).

     “ Pre-Closing Tax Period ” means a taxable period or portion thereof that ends on or prior to the Closing Date; if a taxable period begins on or prior to the Closing Date and ends after the Closing Date, then the portion of the taxable period that ends on and includes the Closing Date shall constitute the Pre-Closing Tax Period.

     “ Property Taxes ” means real, personal, and intangible ad valorem property Taxes.

     “ Purchase Price ” has the meaning set forth in Section 2.3.

     “ Purchaser Taxes ” has the meaning set forth in Section 11.1(f).

     “ Real Property ” means the parcels of real property on which the Branches listed on Schedule 1.1(b) are located, including any improvements thereon, which Schedule indicates whether or not such real property is Owned Real Property.

     “ Records ” means as to the Assets and Liabilities, all records and original documents, or where reasonable, appropriate copies thereof, in Seller’s possession that pertain to and are used by Seller to administer, reflect, monitor, evidence or record information respecting the business or conduct of the Branches (including transaction tickets through the Closing Date and all records for closed accounts located in Branches and excluding any other transaction tickets and records for closed accounts) and all such records and original documents, or where reasonable and appropriate copies thereof, regarding the Assets, or the Deposits, including all such records maintained on electronic or magnetic media in the electronic database system of Seller reasonably accessible by Branch, or to comply with the applicable laws and governmental regulations to which the Deposits are subject, including but not limited to applicable unclaimed property and escheat laws.

     “ Regulatory Approvals ” means the following approvals required to consummate the P&A Transaction: the approval of the FDIC and the Commissioner.

     “ Regulatory Authority ” means any federal or state banking, other regulatory, self-regulatory or enforcement authority or any court, administrative agency or commission or other governmental authority or instrumentality.

     “ Returned Items ” has the meaning set forth in Section 4.10(c).

     “ Safe Deposit Agreements ” means the agreements relating to safe deposit boxes located in the Branches.

     “ Seller Disclosure Schedule ” means the disclosure schedule of Seller delivered to Purchaser in connection with the execution and delivery of this Agreement.

     “ Seller Taxes ” has the meaning set forth in Section 11.1(f).

     “ Seller’s knowledge ” or other similar phrases means information that is actually known to the persons set forth on Schedule 1.1(e).

     “ Straddle Period ” means any taxable period beginning on or prior to and ending after the Closing Date.

     “ Tax Claim ” has the meaning set forth in Section 11.1(f).

     “ Tax Returns ” means any report, return, declaration, statement, claim for refund, information return or statement relating to Taxes or other information or document required to be supplied to a taxing authority in connection with Taxes, including any schedule or attachment thereto, and including any amendment thereof.

     “ Taxes ” means all taxes, charges, fees, levies or other like assessments, including income, gross receipts, excise, real and personal and intangible property, sales, use, transfer (including transfer gains taxes), withholding, license, payroll, recording, ad valorem and franchise taxes, whether computed on a separate or consolidated, unitary or combined basis or in any other manner, whether disputed or not and including any obligation to indemnify or otherwise assume or succeed to the tax liability of another person, imposed by the United States, or any state, local or foreign government or subdivision or agency thereof and such term shall include any interest, penalties or additions to tax attributable to such assessments.

     “ Tenant Leases ” means leases, subleases, licenses or other use agreements between Seller and tenants with respect to Real Property, if any.

     “ Tenant Security Deposit ” means any security deposit held by Seller with respect to a Tenant Lease.

     “ Transaction Account ” means any account at a Branch in respect of which deposits therein are withdrawable in practice upon demand or upon which third party drafts may be drawn by the depositor, including checking accounts, negotiable order of withdrawal accounts and money market deposit accounts.

     “ Transfer Date ” means the Closing Date, except that for Branch Employees on disability leave at the Closing Date, “Transfer Date” means the date of active commencement of such Branch Employee’s employment with Purchaser or one of its Affiliates, as applicable.

     “ Transfer Taxes ” has the meaning set forth in Section 8.3.

     “ Transferred Employees ” has the meaning set forth in Section 8.7(a).

     1.2 Accounting Terms . All accounting terms not otherwise defined herein shall have the respective meanings assigned to them in accordance with consistently applied generally accepted accounting principles as in effect from time to time in the United States of America (“ GAAP ”).

     1.3 Interpretation . All references in this Agreement to Articles or Sections are references to Articles or Sections of this Agreement, unless some other reference is clearly indicated. The rule of construction against the draftsman shall not be applied in interpreting and construing this Agreement.

ARTICLE 2

THE P&A TRANSACTION

     2.1 Purchase and Sale of Assets . Subject to the terms and conditions set forth in this Agreement, at the Closing, Seller shall grant, sell, convey, assign, transfer and deliver to Purchaser, and Purchaser shall purchase and accept from Seller, all of Seller’s right, title and interest, as of the Closing Date, in and to the following (collectively, the “ Assets ”):

     2.2 Assumption of Liabilities . (a) Subject to the terms and conditions set forth in this Agreement, at the Closing, Purchaser shall assume, pay, perform and discharge all duties, responsibilities, obligations or liabilities of Seller (whether accrued, contingent or otherwise) to be discharged, performed, satisfied or paid on or after the Closing Date, with respect to the following (collectively, the “ Liabilities ”):

     (b) Notwithstanding anything to the contrary in this Agreement, Purchaser shall not assume or be bound by any duties, responsibilities, obligations or liabilities of Seller, or of any of Seller’s Affiliates, of any kind or nature, known, unknown, contingent or otherwise, other than the Liabilities or as otherwise expressly set forth herein.

     2.3 Purchase Price . The purchase price (“ Purchase Price ”) for the Assets shall be the sum of:

     (a) An amount equal to 1.0% of the average daily balance (including Accrued Interest) of the Deposits for the period commencing ten (10) calendar days prior to and inclusive of the second (2 ^nd ) Business Day prior to the Closing Date and ending on the second (2 ^nd ) Business Day prior to the Closing Date;

     (b) The aggregate amount of Cash on Hand as of the Closing Date;

     (c) The aggregate net book value of all the Assets, other than Cash on Hand and Owned Real Property, as reflected on the books of Seller as of the close of business of the month-end day most recently preceding the Closing Date; and

     (d) The Appraised Value of the Owned Real Property.

     2.4 Assumption of IRA and Keogh Account Deposits . (a) With respect to Deposits in IRAs, Seller will use reasonable efforts and will cooperate with Purchaser in taking any action reasonably necessary to accomplish either the appointment of Purchaser as successor custodian or the delegation to Purchaser (or to an Affiliate of Purchaser) of Seller’s authority and responsibility as custodian of all such IRA deposits (except self-directed IRA deposits), including, but not limited to, sending to the depositors thereof appropriate notices, cooperating with Purchaser (or such Affiliate) in soliciting consents from such depositors, and filing any appropriate applications with applicable Regulatory Authorities. If any such delegation is made to Purchaser (or such Affiliate), Purchaser (or such Affiliate) will perform all of the duties so delegated and comply with the terms of Seller’s agreement with the depositor of the IRA deposits affected thereby.

     (b) With respect to Deposits in Keogh Accounts, Seller shall use reasonable efforts and cooperate with Purchaser to invite depositors thereof to direct a transfer of each such depositor’s Keogh Account and the related Deposits to Purchaser (or an Affiliate of Purchaser), as trustee thereof, and to adopt Purchaser’s (or such Affiliate’s) form of Keogh Master Plan as a successor to that of Seller. Purchaser (or such Affiliate) will not be required to assume a Keogh Account unless Purchaser (or such Affiliate) has received the documents reasonably necessary for such assumption at or before the Closing. With respect to any owner of a Keogh Account who does not adopt Purchaser’s (or such affiliate’s) form of Keogh Master Plan, Seller will use reasonable efforts in order to enable Purchaser (or such Affiliate) to retain such Keogh Accounts at the Branches.

     (c) If, notwithstanding the foregoing, as of the Closing Date, Purchaser shall be unable to retain deposit liabilities in respect of an IRA or Keogh Account, such deposit liabilities, which shall on or prior to the Closing Date be set forth on Schedule 2.4(c), shall be

excluded from Deposits for purposes of this Agreement and shall constitute “ Excluded IRA/Keogh Account Deposits .”.

ARTICLE 3

CLOSING PROCEDURES; ADJUSTMENTS

     3.1 Closing . (a) The Closing will be held at the offices of Investors Savings Bank, at 101 JFK Parkway, Short Hills, New Jersey, or such other place as may be agreed to by the parties.

     (b) Subject to the satisfaction or, where legally permitted, the waiver of the conditions set forth in Article 9, the parties anticipate that the Closing Date shall be September 30, 2009, or an earlier mutually agreeable date, or, if the Closing cannot occur on such date, it is the intention of the parties to have the Closing on the date that is the last business day of the month during which all regulatory approvals are received and all related waiting periods have expired. Unless the parties agree pursuant to Section 4.10(a) that the conversion of the data processing with respect to the Branches and the Assets and Liabilities will be performed on a date other than the Closing Date, the Closing Date shall be a Friday.

     3.2 Payment at Closing . (a) At Closing, (i) if the Estimated Payment Amount is a positive amount, Seller shall pay to Purchaser an amount in dollars equal to such positive amount, or (ii) if the Estimated Payment Amount is a negative amount, Purchaser shall pay to Seller an amount in dollars equal to the absolute value of such negative amount. In addition, Purchaser shall be responsible for payment of any Transfer Taxes due or incurred in connection with the transactions contemplated by this Agreement.

     (b) All payments to be made hereunder by one party to the other shall be made by wire transfer of immediately available funds (in all cases to an account specified in writing by Seller or Purchaser, as the case may be, to the other not later than the third (3 ^rd ) Business Day prior to the Closing Date) on or before 12:00 noon New Jersey time on the date of payment.

     (c) If any instrument of transfer contemplated herein shall be recorded in any public record before the Closing and thereafter the Closing does not occur, then at the request of such transferring party the other party will deliver (or execute and deliver) such instruments and take such other action as such transferring party shall reasonably request to revoke such purported transfer.

     3.3 Adjustment of Purchase Price . (a) On or before 12:00 noon New Jersey time on the thirtieth (30 ^th ) calendar day following the Closing Date (the “ Adjustment Date ”), Seller shall deliver to the Purchaser the Final Closing Statement and shall make available such work papers, schedules and other supporting data as may be reasonably requested by Purchaser to enable it to verify the amounts set forth in the Final Closing Statement.

     (b) The determination of the Adjusted Payment Amount shall be final and binding on the parties hereto on the thirtieth (30 ^th ) calendar day after receipt by Purchaser of the Final Closing Statement, unless Purchaser shall notify Seller in writing of its disagreement with any

amount included therein or omitted therefrom, in which case, if the parties are unable to resolve the disputed items within ten (10) Business Days of the receipt by Seller of notice of such disagreement, such items shall be determined by a nationally recognized independent accounting firm selected by mutual agreement between Seller and Purchaser. Such accounting firm shall be instructed to resolve the disputed items within ten (10) Business Days of engagement, to the extent reasonably practicable. The determination of such accounting firm shall be final and binding on the parties hereto. The fees of any such accounting firm shall be divided equally between Seller and Purchaser.

     (c) On or before 12:00 noon New Jersey time on the tenth (10 ^th ) Business Day after the Adjusted Payment Amount shall have become final and binding or, in the case of a dispute, the date of the resolution of the dispute pursuant to Section 3.3(b) above, if the Adjusted Payment Amount exceeds the Estimated Payment Amount, Seller shall pay to Purchaser an amount in dollars equal to such excess, plus interest on such excess amount from the Closing Date to but excluding the payment date, at the Federal Funds Rate or, if the Estimated Payment Amount exceeds the Adjusted Payment Amount, Purchaser shall pay to Seller an amount in dollars equal to such excess, plus interest on such excess amount from the Closing Date to but excluding the payment date, at the Federal Funds Rate. Any payments required by Section 3.4 shall be made contemporaneously with the foregoing payment.

     3.4 Proration; Other Closing Date Adjustments . (a) Except as otherwise specifically provided in this Agreement, it is the intention of the parties that Seller will operate the Branches for its own account until 11:59 p.m. New Jersey time on the Closing Date, and that Purchaser shall operate the Branches, hold the Assets and assume the Liabilities for its own account after the Closing Date. Thus, except as otherwise specifically provided in this Agreement, items of income and expense, as defined herein, shall be prorated as of 11:59 p.m. New Jersey time on the Closing Date, and settled between Seller and Purchaser on the Closing Date, whether or not such adjustment would normally be made as of such time. Items of proration will be handled at Closing as an adjustment to the Purchase Price unless otherwise agreed by the parties hereto.

     (b) For purposes of this Agreement, items of proration and other adjustments shall include, without limitation: (i) rental payments under the Branch Leases and the Tenant Leases; (ii) Property Taxes and assessments; (iii) FDIC deposit insurance assessments, except for the FDIC Special Assessment, which shall be borne by Seller; (iv) trustee or custodian fees on IRA and Keogh Accounts; (v) prepaid expenses and items and accrued but unpaid liabilities, as of the close of business on the Closing Date; and (vi) safe deposit rental payments previously received by Seller.

     3.5 Seller Deliveries . At the Closing, Seller shall deliver to Purchaser:

     (a) Special Warranty Deeds in substantially the form of Schedule 3.5(a), pursuant to which the Owned Real Property shall be transferred to Purchaser “AS IS”, “WHERE IS” and with all faults;

     (b) A bill of sale in substantially the form of Schedule 3.5(b), pursuant to which the Personal Property shall be transferred to Purchaser “AS IS”, “WHERE IS” and with all faults;

     (c) An assignment and assumption agreement in substantially the form of Schedule 3.5(c) (except as otherwise required by local state law), with respect to the Liabilities, (the “ Assignment and Assumption Agreement ”);

     (d) Lease assignment and assumption agreements, in recordable form, in substantially the form of Schedule 3.5(d), with respect to each of the Branch Leases (the “ Lease Assignments ”);

     (e) Sublease assignment and assumption agreements in substantially the form of Schedule 3.5(e), with respect to each of the Branch Leases (the “ Sublease Assignments ”);

     (f) An Officer’s Certificate in substantially the form of Schedule 3.5(f);

     (g) The Draft Closing Statement;

     (h) Seller’s resignation as trustee or custodian, as applicable, with respect to each IRA or Keogh Account included in the Deposits and designation of Purchaser as successor trustee or custodian with respect thereto, as contemplated by Section 2.4;

     (i) A certificate of non-foreign status pursuant to Treasury Regulations Section 1.1445-2(b)(2) from Seller; and

     (j) Such other documents as the parties determine are reasonably necessary to consummate the P&A Transaction as contemplated hereby.

     3.6 Purchaser Deliveries . At the Closing, Purchaser shall deliver to Seller:

     (a) The Assignment and Assumption Agreement;

     (b) Purchaser’s acceptance of its appointment as successor trustee or custodian, as applicable, of the IRA and Keogh Accounts included in the Deposits and assumption of the fiduciary obligations of the trustee or custodian with respect thereto, as contemplated by Section 2.4;

     (c) The Lease Assignments and such other instruments and documents as any landlord under a Branch Lease may reasonably require as necessary for providing for the assumption by Purchaser of a Branch Lease, each such instrument and document in form and substance reasonably satisfactory to the parties and dated as of the Closing Date;

     (d) The Sublease Assignments and such other instruments and documents as any subtenant under a Tenant Lease may reasonably require as necessary for providing for the assumption by Purchaser of a Tenant Lease, each such instrument and document in form and substance reasonably satisfactory to the parties and dated as of the Closing Date;

     (e) An Officer’s Certificate in substantially the form of Schedule 3.6(e); and

     (f) Such other documents as the parties determine are reasonably necessary to consummate the P&A Transaction as contemplated hereby.

     3.7 Owned Real Property Filings . On or prior to the Closing Date, Purchaser shall file or record, or cause to be filed or recorded, any and all documents necessary in order that the legal and equitable title to Owned Real Property shall be duly vested in Purchaser. Purchaser agrees to engage a mutually acceptable title company in connection with the foregoing actions. Any expenses or documentary transfer Taxes with respect to such filings and all escrow closing costs shall be borne by Purchaser.

     3.8 Allocation of Purchase Price . (a) No later than the Adjustment Date, Seller shall prepare and deliver to Purchaser a draft of a statement (the “ Draft Allocation Statement ”) setting forth the allocation of the total consideration paid by Purchaser to Seller pursuant to this Agreement among the Assets for purposes of Section 1060 of the Code. If, within thirty (30) calendar days of the receipt of the Draft Allocation Statement, Purchaser shall not have objected in writing to such draft, the Draft Allocation Statement shall become the Final Allocation Statement, as defined below. If Purchaser objects to the Draft Allocation Statement in writing within such thirty (30) calendar-day period, Purchaser and Seller shall negotiate in good faith to resolve any disputed items. If, within ninety (90) calendar days after the Adjustment Date, Purchaser and Seller fail to agree on such allocation, any disputed aspects of such allocation shall be resolved by a nationally recognized independent accounting firm mutually acceptable to Purchaser and Seller. The allocation of the total consideration, as agreed upon by Purchaser and Seller (as a result of either the Purchaser’s failure to object to the Draft Allocation Statement or of good faith negotiations between Purchaser and Seller) or determined by an accounting firm under this Section 3.10(a), (the “ Final Allocation Statement ”) shall be final and binding upon the parties. Each of Purchaser and Seller shall bear all fees and costs incurred by it in connection with the determination of the allocation of the total consideration, except that the parties shall each pay one-half (50%) of the fees and expenses of such accounting firm.

     (b) Purchaser and Seller shall report the transaction contemplated by this Agreement (including income Tax reporting requirements imposed pursuant to Section 1060 of the Code) in accordance with the allocation specified in the Final Allocation Statement. Each of Purchaser and Seller agrees to timely file, or cause to be timely filed, IRS Form 8594 (or any comparable form under state or local Tax law) and any required attachment thereto in accordance with the Final Allocation Statement. Except as otherwise required pursuant to a “determination” under Section 1313 of the Code (or any comparable provision of state or local law), neither Purchaser nor Seller shall take, or shall permit its Affiliates to take, a Tax position which is inconsistent with the Final Allocation Statement. In the event any party hereto receives notice of an audit in respect of the allocation of the consideration paid for the Assets, such party shall immediately notify the other party in writing as to the date and subject of such audit.

ARTICLE 4

TRANSITIONAL MATTERS

     4.1 Transitional Arrangements . Seller and Purchaser agree to cooperate and to proceed as follows to effect the transfer of account record responsibility for the Branches:

     (a) Not later than thirty (30) calendar days after the date of this Agreement, Seller will meet with Purchaser to investigate, confirm and agree upon mutually acceptable transaction

settlement procedures and specifications, files, procedures and schedules, for the transfer of account record responsibility; provided , however , that Seller shall not be obligated under this Agreement to provide Purchaser any information regarding Seller’s relationship with the customers outside of the relevant Branch (e.g., other customer products, householding information).

     (b) Not later than sixty (60) calendar days after the date of this Agreement, Seller shall deliver to Purchaser the mutually agreed upon specifications and conversion sample files.

     (c) From time to time prior to the Closing, after Purchaser has tested and confirmed the conversion sample files, Purchaser may request and Seller shall provide reasonable additional file-related information, including, without limitation, complete name and address, account masterfile, ATM account number information, applicable transaction and stop/hold/caution information, account-to-account relationship information and any other related information with respect to the Deposits.

     (d) From the date of this Agreement, through the Closing and for a reasonable period of time thereafter, upon the reasonable request of Purchaser Seller will cooperate with Purchaser and will make available from time to time a reasonable number of technical personnel for consultation with Purchaser concerning matters other than the matters referred to in this Section 4.1.

     (e) Upon the reasonable request of Purchaser, Seller will cooperate to assist Purchaser with respect to the continuation, at Purchaser’s expense, of any third-party vendor services to the Branches from and after the Closing Date. From the date of this Agreement until the Closing, Seller and Purchaser shall cooperate in good faith to address any transitional issues that may arise and that are not specifically addressed in this Article IV.

     4.2 Customers . (a) Not later than thirty (30) calendar days nor earlier than forty-five (45) calendar days prior to the Closing Date (except as otherwise required by applicable law):

A party proposing to send or publish any notice or communication pursuant to this Section 4.2 shall furnish to the other party a copy of the proposed form of such notice or communication, to the extent reasonably practicable, two (2) Business Days, but in any event at least one (1) Business Day, in advance of the proposed date of the first mailing, posting, or other dissemination thereof to customers, and shall not unreasonably refuse to amend such notice to incorporate any changes that the other such party proposes as necessary to comply with

applicable law. All costs and expenses of any notice or communication sent or published by Purchaser or Seller shall be the responsibility of the party sending such notice or communication and all costs and expenses of any joint notice or communication shall be shared equally by Seller and Purchaser. As soon as reasonably practicable and in any event within thirty (30) calendar days after the date hereof, Seller shall provide to Purchaser a report of the names and addresses of the owners of the Deposits and the lessees of the safe deposit boxes as of the date hereof in connection with the mailing of such materials. No communications by Purchaser, and no communications by Seller outside the ordinary course of business, to any such owners, customers or lessees shall be made prior to the Closing Date except as provided in this Agreement or otherwise agreed to by the parties in writing.

     (b) Following the giving of any notice described in paragraph (a) above, Purchaser and Seller shall deliver to each new customer at any of the Branches such notice or notices as may be reasonably necessary to notify such new customers of Purchaser’s pending assumption of liability for the Deposits and to comply with applicable law.

     (c) Notwithstanding the provisions of Section 7.6, neither Purchaser nor Seller shall object to the use, by depositors of the Deposits, of payment orders issued to or ordered by such depositors on or prior to the Closing Date, which payment orders bear the name, or any logo, trademark, service mark or the proprietary mark of Seller, or any of their respective Affiliates; provided , however , that Purchaser shall notify Deposit account customers that, upon the expiration of a post-Closing processing period, which shall be sixty (60) calendar days after Closing Date (the “ Post-Closing Processing Period ”), any Items which are drawn on Seller shall not thereafter be honored by Seller. Such notice shall be given by delivering written instructions to such effect to such Deposit account customers in accordance with this Section 4.2.

     (d) During the period beginning on the Closing Date and ending on the ninetieth (90 ^th ) calendar day thereafter, Seller shall, by commercially reasonable efforts and at Purchaser’s expense (A) accept as a correspondent bank for forwarding to Purchaser all Items which are presented to Seller for payment or credit in any manner including, without limitation, through Seller’s Federal Reserve cash letters or correspondent bank cash letters or deposited by Deposit account customers, correspondent banks or others but excluding ATM withdrawals, deposits and transfers unless initiated with an automated teller machine card issued by Purchaser; and (B) batch all such items in paper format (checks or IRDs) or electronic format and have them available for pickup by Purchaser no later than 12:00 noon New Jersey time on the Business Day after presentation to Seller. For deposits processed in error by Seller, copies of the deposit slips and copies of the deposited items will be batched and provided to Purchaser by 12:00 noon New Jersey time on the next Business Day and will be provided via secured email to allow memo posting of the deposits to the customer accounts.

     4.3 Direct Deposits . Seller will use its reasonable best efforts to transfer to Purchaser on the Closing Date all of those automated clearing house (“ ACH ”) and FedWire direct deposit arrangements related (by agreement or other standing arrangement) to the Deposits. For a period of ninety (90) calendar days following the Closing, in the case of ACH direct deposits to accounts containing Deposits (the final Business Day of such period being the “ ACH Direct Deposit Cut-Off Date ”), Seller shall transfer to Purchaser all received ACH direct deposits each Business Day at 10:00 a.m. New Jersey time, to the extent reasonably practicable, but in any

event not later than 10:30 a.m. New Jersey time. Such transfers shall contain Direct Deposits effective for that Business Day only. On each Business Day, for a period of thirty (30) calendar days following the Closing Date (the final Business Day of such period being the “ FedWire Direct Deposit Cut-Off Date ”), FedWires received by Seller shall be returned (as soon as is practicable after receipt) to the originator with an indication of Purchaser’s correct Wire Room contact information and an instruction that such wire should be sent to Purchaser. Compensation for ACH direct deposits or FedWire direct deposits not forwarded to Purchaser on the same Business Day as that on which Seller has received such deposits will be handled in accordance with the applicable rules established by the United States Council on International Banking. After the respective ACH Direct Deposit Cut-Off Date or FedWire Direct Deposit Cut-Off Date, Seller may discontinue accepting and forwarding ACH and FedWire entries and funds and return such direct deposits to the originators marked “Account Closed.” Seller and its Affiliates shall not be liable for any overdrafts that may thereby be created. Purchaser and Seller shall agree on a reasonable period of time prior to the Closing during which Seller will no longer be obligated to accept new direct deposit arrangements related to the Branches. At the time of the ACH Direct Deposit Cut-Off Date, Purchaser will provide ACH originators with account numbers relating to the Deposits.

     4.4 Direct Debits . As soon as practicable after the date of this Agreement and after the notice provided in Section 4.2(a), Purchaser shall send appropriate notice to all customers having accounts constituting Deposits the terms of which provide for direct debit of such accounts by third parties, instructing such customers concerning the transfer of customer direct debit authorizations from Seller to Purchaser. Such notice shall be in a form reasonably agreed to by the parties. For a period of ninety (90) calendar days following the Closing, Seller shall transfer to Purchaser all received direct debits on accounts constituting Deposits each Business Day at 10:00 a.m. New Jersey time, to the extent reasonably practicable, but in any event not later than 10:30 a.m. New Jersey time. Such transfers shall contain Direct Debits effective for that Business Day only. Thereafter, Seller may discontinue forwarding such entries and return them to the originators marked “Account Closed.” Purchaser and Seller shall agree on a reasonable period of time prior to the Closing during which Seller will no longer be obligated to accept new direct debit arrangements related to the Branches. On the Closing Date, Purchaser shall provide ACH originators of such Direct Debits with account numbers relating to the Deposits.

     4.5 Escheat Deposits . No current Escheat Deposits are being sold. After Closing, Purchaser shall be solely responsible for the proper reporting and transmission to the appropriate governmental entity of Escheat Deposits.

     4.6 Access to Records . (a) From and after the Closing Date, each of the parties shall permit the other reasonable access to any applicable Records in its possession relating to matters arising on or before the Closing Date and reasonably necessary in connection with any claim, action, litigation or other proceeding involving the party requesting access to such Records or in connection with any legal obligation owed by such party to any present or former depositor or other customer, subject to confidentiality requirements. All Records, whether held by Purchaser or Seller, shall be maintained for such periods as are required by law, unless the parties shall agree in writing to a longer period. Between the date hereof and the Closing Date, Purchaser and Seller shall use their reasonable best efforts to develop policies and procedures to be followed by

each party in connection with any request by Purchaser, following the Closing Date, for Seller to provide it with Records retained by Seller following the Closing.

     (b) Each party agrees that any records or documents that come into its possession as a result of the transactions contemplated by this Agreement, to the extent relating to the other party’s business and not relating to the Assets and Liabilities (which becomes the property of the Purchaser), shall remain the property of the other party, and shall, upon the other party’s request from time to time and as it may elect in its sole discretion, be returned to the other party or destroyed, and each party agrees not to make any use of such records or documents and to keep such records and documents confidential in accordance with Section 7.2(b).

     4.7 Interest Reporting and Withholding . (a) Unless otherwise agreed to by the parties, Seller will re