EX-10.1








    Exhibit
    10.1



 


 


 




    AGREEMENT
    AND PLAN OF MERGER

    BY AND BETWEEN

    INVESTORS BANCORP, INC.

    AND

    AMERICAN BANCORP OF NEW JERSEY, INC.



 












 







    TABLE OF
    CONTENTS



 


	 	 	 	 	 	 	 
	

    ARTICLE I CERTAIN DEFINITIONS


	
 
	 
	
    A-1
	 

	

    1.1.


	
 
	
    Certain Definitions
	
 
	 
	
    A-1
	 

	

    ARTICLE II THE MERGER


	
 
	 
	
    A-6
	 

	

    2.1.


	
 
	
    Merger
	
 
	 
	
    A-6
	 

	

    2.2.


	
 
	
    Effective Time
	
 
	 
	
    A-6
	 

	

    2.3.


	
 
	
    Certificate of Incorporation and Bylaws
	
 
	 
	
    A-6
	 

	

    2.4.


	
 
	
    Directors and Officers of Surviving
    Corporation
	
 
	 
	
    A-6
	 

	

    2.5.


	
 
	
    Effects of the Merger
	
 
	 
	
    A-6
	 

	

    2.6.


	
 
	
    Tax Consequences
	
 
	 
	
    A-6
	 

	

    2.7.


	
 
	
    Possible Alternative Structures
	
 
	 
	
    A-7
	 

	

    2.8.


	
 
	
    Bank Merger
	
 
	 
	
    A-7
	 

	

    2.9.


	
 
	
    Additional Actions
	
 
	 
	
    A-7
	 

	

    ARTICLE III CONVERSION OF SHARES


	
 
	 
	
    A-8
	 

	

    3.1.


	
 
	
    Conversion of ABNJ Common Stock; Merger
    Consideration
	
 
	 
	
    A-8
	 

	

    3.2.


	
 
	
    Election Procedures
	
 
	 
	
    A-9
	 

	

    3.3.


	
 
	
    Procedures for Exchange of ABNJ Common Stock
	
 
	 
	
    A-11
	 

	

    3.4.


	
 
	
    Reservation of Shares
	
 
	 
	
    A-13
	 

	

    3.5.


	
 
	
    Modification of Merger Consideration
	
 
	 
	
    A-13
	 

	

    ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
    ABNJ


	
 
	 
	
    A-13
	 

	

    4.1.


	
 
	
    Standard
	
 
	 
	
    A-13
	 

	

    4.2.


	
 
	
    Organization
	
 
	 
	
    A-13
	 

	

    4.3.


	
 
	
    Capitalization
	
 
	 
	
    A-14
	 

	

    4.4.


	
 
	
    Authority; No Violation
	
 
	 
	
    A-14
	 

	

    4.5.


	
 
	
    Consents
	
 
	 
	
    A-15
	 

	

    4.6.


	
 
	
    Financial Statements
	
 
	 
	
    A-15
	 

	

    4.7.


	
 
	
    Taxes
	
 
	 
	
    A-16
	 

	

    4.8.


	
 
	
    No Material Adverse Effect
	
 
	 
	
    A-17
	 

	

    4.9.


	
 
	
    Material Contracts; Leases; Defaults
	
 
	 
	
    A-17
	 

	

    4.10.


	
 
	
    Ownership of Property; Insurance Coverage
	
 
	 
	
    A-19
	 

	

    4.11.


	
 
	
    Legal Proceedings
	
 
	 
	
    A-19
	 

	

    4.12.


	
 
	
    Compliance With Applicable Law
	
 
	 
	
    A-19
	 

	

    4.13.


	
 
	
    Employee Benefit Plans
	
 
	 
	
    A-20
	 

	

    4.14.


	
 
	
    Brokers, Finders and Financial Advisors
	
 
	 
	
    A-22
	 

	

    4.15.


	
 
	
    Environmental Matters
	
 
	 
	
    A-22
	 

	

    4.16.


	
 
	
    Loan Portfolio
	
 
	 
	
    A-23
	 

	

    4.17.


	
 
	
    Securities Documents
	
 
	 
	
    A-24
	 

	

    4.18.


	
 
	
    Related Party Transactions
	
 
	 
	
    A-25
	 

	

    4.19.


	
 
	
    Deposits
	
 
	 
	
    A-25
	 

	

    4.20.


	
 
	
    Antitakeover Provisions Inapplicable; Required
    Vote
	
 
	 
	
    A-25
	 

	

    4.21.


	
 
	
    Registration Obligations
	
 
	 
	
    A-25
	 

	

    4.22.


	
 
	
    Risk Management Instruments
	
 
	 
	
    A-25
	 

	

    4.23.


	
 
	
    Fairness Opinion
	
 
	 
	
    A-25
	 

	

    4.24.


	
 
	
    Intellectual Property
	
 
	 
	
    A-26
	 





    

    A-i








 





	 	 	 	 	 	 	 
	

    4.25.


	
 
	
    Labor Matters
	
 
	 
	
    A-26
	 

	

    4.26.


	
 
	
    ABNJ Information Supplied
	
 
	 
	
    A-26
	 

	

    ARTICLE V REPRESENTATIONS AND WARRANTIES OF
    INVESTORS


	
 
	 
	
    A-26
	 

	

    5.1.


	
 
	
    Standard
	
 
	 
	
    A-27
	 

	

    5.2.


	
 
	
    Organization
	
 
	 
	
    A-27
	 

	

    5.3.


	
 
	
    Capitalization
	
 
	 
	
    A-27
	 

	

    5.4.


	
 
	
    Authority; No Violation
	
 
	 
	
    A-27
	 

	

    5.5.


	
 
	
    Consents
	
 
	 
	
    A-28
	 

	

    5.6.


	
 
	
    Financial Statements
	
 
	 
	
    A-28
	 

	

    5.7.


	
 
	
    Taxes
	
 
	 
	
    A-29
	 

	

    5.8.


	
 
	
    No Material Adverse Effect
	
 
	 
	
    A-30
	 

	

    5.9.


	
 
	
    Ownership of Property; Insurance Coverage
	
 
	 
	
    A-30
	 

	

    5.10.


	
 
	
    Legal Proceedings
	
 
	 
	
    A-30
	 

	

    5.11.


	
 
	
    Compliance With Applicable Law
	
 
	 
	
    A-30
	 

	

    5.12.


	
 
	
    Employee Benefit Plans
	
 
	 
	
    A-31
	 

	

    5.13.


	
 
	
    Environmental Matters
	
 
	 
	
    A-32
	 

	

    5.14.


	
 
	
    Securities Documents
	
 
	 
	
    A-32
	 

	

    5.15.


	
 
	
    Investors Common Stock
	
 
	 
	
    A-32
	 

	

    5.16.


	
 
	
    Investors Information Supplied
	
 
	 
	
    A-32
	 

	

    ARTICLE VI COVENANTS OF ABNJ


	
 
	 
	
    A-33
	 

	

    6.1.


	
 
	
    Conduct of Business
	
 
	 
	
    A-33
	 

	

    6.2.


	
 
	
    Current Information
	
 
	 
	
    A-36
	 

	

    6.3.


	
 
	
    Access to Properties and Records
	
 
	 
	
    A-36
	 

	

    6.4.


	
 
	
    Financial and Other Statements
	
 
	 
	
    A-37
	 

	

    6.5.


	
 
	
    Maintenance of Insurance
	
 
	 
	
    A-37
	 

	

    6.6.


	
 
	
    Disclosure Supplements
	
 
	 
	
    A-37
	 

	

    6.7.


	
 
	
    Consents and Approvals of Third Parties
	
 
	 
	
    A-37
	 

	

    6.8.


	
 
	
    All Reasonable Efforts
	
 
	 
	
    A-38
	 

	

    6.9.


	
 
	
    Failure to Fulfill Conditions
	
 
	 
	
    A-38
	 

	

    6.10.


	
 
	
    No Solicitation
	
 
	 
	
    A-38
	 

	

    6.11.


	
 
	
    Reserves and Merger-Related Costs
	
 
	 
	
    A-40
	 

	

    6.12.


	
 
	
    Board of Directors and Committee Meetings
	
 
	 
	
    A-40
	 

	

    ARTICLE VII COVENANTS OF INVESTORS


	
 
	 
	
    A-40
	 

	

    7.1.


	
 
	
    Conduct of Business
	
 
	 
	
    A-40
	 

	

    7.2.


	
 
	
    Current Information
	
 
	 
	
    A-41
	 

	

    7.3.


	
 
	
    Financial and Other Statements
	
 
	 
	
    A-41
	 

	

    7.4.


	
 
	
    Disclosure Supplements
	
 
	 
	
    A-41
	 

	

    7.5.


	
 
	
    Consents and Approvals of Third Parties
	
 
	 
	
    A-41
	 

	

    7.6.


	
 
	
    All Reasonable Efforts
	
 
	 
	
    A-41
	 

	

    7.7.


	
 
	
    Failure to Fulfill Conditions
	
 
	 
	
    A-41
	 

	

    7.8.


	
 
	
    Employee Benefits
	
 
	 
	
    A-42
	 

	

    7.9.


	
 
	
    Directors and Officers Indemnification and
    Insurance
	
 
	 
	
    A-43
	 

	

    7.10.


	
 
	
    Stock Listing
	
 
	 
	
    A-44
	 

	

    7.11.


	
 
	
    Stock and Cash Reserve
	
 
	 
	
    A-44
	 





    

    A-ii








 





	 	 	 	 	 	 	 
	

    ARTICLE VIII REGULATORY AND OTHER MATTERS


	
 
	 
	
    A-44
	 

	

    8.1.


	
 
	
    ABNJ Shareholder Meeting
	
 
	 
	
    A-44
	 

	

    8.2.


	
 
	
    Proxy Statement-Prospectus
	
 
	 
	
    A-44
	 

	

    8.3.


	
 
	
    Regulatory Approvals
	
 
	 
	
    A-45
	 

	

    ARTICLE IX CLOSING CONDITIONS


	
 
	 
	
    A-46
	 

	

    9.1.


	
 
	
    Conditions to Each Party’s Obligations under
    this Agreement
	
 
	 
	
    A-46
	 

	

    9.2.


	
 
	
    Conditions to the Obligations of Investors under
    this Agreement
	
 
	 
	
    A-46
	 

	

    9.3.


	
 
	
    Conditions to the Obligations of ABNJ under this
    Agreement
	
 
	 
	
    A-47
	 

	

    ARTICLE X THE CLOSING


	
 
	 
	
    A-47
	 

	

    10.1.


	
 
	
    Time and Place
	
 
	 
	
    A-47
	 

	

    10.2.


	
 
	
    Deliveries at the Pre-Closing and the Closing
	
 
	 
	
    A-48
	 

	

    ARTICLE XI TERMINATION, AMENDMENT AND WAIVER


	
 
	 
	
    A-48
	 

	

    11.1.


	
 
	
    Termination
	
 
	 
	
    A-48
	 

	

    11.2.


	
 
	
    Effect of Termination
	
 
	 
	
    A-50
	 

	

    11.3.


	
 
	
    Amendment, Extension and Waiver
	
 
	 
	
    A-50
	 

	

    ARTICLE XII MISCELLANEOUS


	
 
	 
	
    A-51
	 

	

    12.1.


	
 
	
    Confidentiality
	
 
	 
	
    A-51
	 

	

    12.2.


	
 
	
    Public Announcements
	
 
	 
	
    A-51
	 

	

    12.3.


	
 
	
    Survival
	
 
	 
	
    A-51
	 

	

    12.4.


	
 
	
    Notices
	
 
	 
	
    A-51
	 

	

    12.5.


	
 
	
    Parties in Interest
	
 
	 
	
    A-52
	 

	

    12.6.


	
 
	
    Complete Agreement
	
 
	 
	
    A-52
	 

	

    12.7.


	
 
	
    Counterparts
	
 
	 
	
    A-52
	 

	

    12.8.


	
 
	
    Severability
	
 
	 
	
    A-52
	 

	

    12.9.


	
 
	
    Governing Law
	
 
	 
	
    A-52
	 

	

    12.10.


	
 
	
    Waiver of Trial by Jury
	
 
	 
	
    A-52
	 

	

    12.11.


	
 
	
    Interpretation
	
 
	 
	
    A-53
	 

	

    12.12.


	
 
	
    Specific Performance
	
 
	 
	
    A-53
	 










    

    A-iii








 







    AGREEMENT
    AND PLAN OF MERGER



 



    This AGREEMENT AND PLAN OF MERGER (this “Agreement”)
    is dated as of December 14, 2008, by and between Investors
    Bancorp, Inc., a Delaware corporation (“Investors”),
    and American Bancorp of New Jersey, Inc., a New Jersey
    corporation (“ABNJ”).



 



    WHEREAS, the Board of Directors of each of Investors and
    ABNJ (i) has determined that this Agreement and the
    business combination and related transactions contemplated
    hereby are in the best interests of their respective companies
    and shareholders and (ii) has determined that this
    Agreement and the transactions contemplated hereby are
    consistent with and in furtherance of their respective business
    strategies, and (iii) has adopted a resolution approving
    this Agreement and declaring its advisability; and



 



    WHEREAS, in accordance with the terms of this Agreement,
    ABNJ will merge with and into Investors (the
    “Merger”), and immediately thereafter American Bank of
    New Jersey, a federally chartered stock savings bank and wholly
    owned subsidiary of ABNJ (“American Bank”), will be
    merged with and into Investors Savings Bank, a New Jersey
    chartered stock savings bank and wholly owned subsidiary of
    Investors (“Investors Savings Bank”); and



 



    WHEREAS, as a condition to the willingness of Investors
    to enter into this Agreement, each of the directors and
    executive officers of ABNJ has entered into a Voting Agreement,
    substantially in the form of Exhibit A hereto, dated as of
    the date hereof, with Investors (the “ABNJ Voting
    Agreement”), pursuant to which each such director has
    agreed, among other things, to vote all shares of common stock
    of ABNJ owned by such person in favor of the approval of this
    Agreement and the transactions contemplated hereby, upon the
    terms and subject to the conditions set forth in such Voting
    Agreements; and



 



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



 



    WHEREAS, the parties desire to make certain
    representations, warranties and agreements in connection with
    the business transactions described in this Agreement and to
    prescribe certain conditions thereto.



 



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



 




    ARTICLE I

    



 




    Certain
    Definitions
    




 



    1.1.  Certain Definitions.



 



    As used in this Agreement, the following terms have the
    following meanings (unless the context otherwise requires,
    references to Articles and Sections refer to Articles and
    Sections of this Agreement).



 



    “ABNJ” shall mean American Bancorp of New Jersey,
    Inc., a New Jersey corporation, with its principal offices
    located at 365 Broad Street, Bloomfield, New Jersey 07003.



 



    “ABNJ Common Stock” shall mean the common stock, par
    value $0.10 per share, of ABNJ.



 



    “ABNJ DISCLOSURE SCHEDULE” shall mean a written
    disclosure schedule delivered by ABNJ to Investors specifically
    referring to the appropriate section of this Agreement.



 



    “ABNJ Financial Statements” shall mean (i) the
    audited consolidated balance sheets (including related notes and
    schedules, if any) of ABNJ and subsidiaries as of
    September 30, 2008 and 2007 and the consolidated statements
    of operations, stockholders’ equity and cash flows
    (including related notes and schedules, if any) of ABNJ and
    subsidiaries for each of the three years ended
    September 30, 2008, 2007 and 2006, and (ii) the




    

    A-1








 






    unaudited interim consolidated financial statements of ABNJ and
    subsidiaries as of the end of each calendar quarter following
    September 30, 2008 and for the periods then ended.



 



    “ABNJ Equity Plans” shall mean the ABNJ 2005 Stock
    Option Plan, the ABNJ 2005 Restricted Stock Plan and the ABNJ
    2006 Equity Incentive Plan and any amendments thereto.



 



    “ABNJ Option” shall mean an option to purchase shares
    of ABNJ Common Stock granted pursuant to the ABNJ Equity Plans
    and as set forth in ABNJ DISCLOSURE SCHEDULE 4.3.1.



 



    “ABNJ Regulatory Agreement” shall have the meaning set
    forth in Section 4.12.3.



 



    “ABNJ Regulatory Reports” means the Thrift Financial
    Reports of American Bank and accompanying schedules, as filed
    with the OTS, for each calendar quarter beginning with the
    quarter ended March 31, 2007, through the Closing Date, and
    all Reports filed with the OTS by ABNJ from March 31, 2007
    through the Closing Date.



 



    “ABNJ Shareholders Meeting” shall have the meaning set
    forth in Section 8.1.1.



 



    “ABNJ Subsidiary” means any corporation, of which more
    than 50% of the capital stock is owned, either directly or
    indirectly, by ABNJ or American Bank, except any corporation the
    stock of which is held in the ordinary course of the lending
    activities of American Bank.



 



    “Affiliate” means any Person who directly, or
    indirectly, through one or more intermediaries, controls, or is
    controlled by, or is under common control with, such Person and,
    without limiting the generality of the foregoing, includes any
    executive officer or director of such Person and any Affiliate
    of such executive officer or director.



 



    “Agreement” means this agreement and any amendment
    hereto.



 



    “American Bank” shall mean American Bank of New
    Jersey, a stock savings bank chartered by the OTS, with its
    principal offices located at 365 Broad Street, Bloomfield, New
    Jersey 07003, which is a wholly owned subsidiary of ABNJ.



 



    “Applications” means the applications for regulatory
    approval that are required by the transactions contemplated
    hereby.



 



    “Bank Merger” shall mean the merger of American Bank
    with and into Investors Savings Bank, with Investors Savings
    Bank as the surviving institution, which merger shall occur
    immediately following the Merger.



 



    “Bank Regulator” shall mean any Federal or state
    banking regulator, including but not limited to the OTS, FDIC,
    FRB and the Department, which regulates Investors Savings Bank
    or American Bank, or any of their respective holding companies
    or subsidiaries, as the case may be.



 



    “BHCA” shall mean the Bank Holding Company Act of
    1956, as amended.



 



    “Cash Consideration” shall have the meaning set forth
    in Section 3.1.3.



 



    “Cash Election” shall have the meaning set forth in
    Section 3.1.3.



 



    “Cash Election Shares” shall have the meaning set
    forth in Section 3.1.3.



 



    “Certificate” shall mean certificates evidencing
    shares of ABNJ Common Stock.



 



    “Closing” shall have the meaning set forth in
    Section 2.2.



 



    “Closing Date” shall have the meaning set forth in
    Section 2.2.



 



    “COBRA” shall mean the Consolidated Omnibus Budget
    Reconciliation Act of 1985, as amended.



 



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



 



    “Confidentiality Agreement” shall mean the
    confidentiality agreement referred to in Section 12.1 of
    this Agreement.




    

    A-2








 






    “Department” shall mean the New Jersey Department of
    Banking and Insurance.



 



    “DGCL” shall mean the Delaware General Corporation Law.



 



    “Effective Time” shall mean the date and time
    specified pursuant to Section 2.2 hereof as the effective
    time of the Merger.



 



    “Election Deadline” shall have the meaning set forth
    in Section 3.2.3.



 



    “Election Form” shall have the meaning set forth in
    Section 3.2.2.



 



    “Election Form Record Date” shall have the
    meaning set forth in Section 3.2.2.



 



    “Environmental Laws” means any applicable Federal,
    state or local law, statute, ordinance, rule, regulation, code,
    license, permit, authorization, approval, consent, order,
    judgment, decree, injunction or agreement with any governmental
    entity relating to (1) the protection, preservation or
    restoration of the environment (including, without limitation,
    air, water vapor, surface water, groundwater, drinking water
    supply, surface soil, subsurface soil, plant and animal life or
    any other natural resource),
    and/or
    (2) the use, storage, recycling, treatment, generation,
    transportation, processing, handling, labeling, production,
    release or disposal of Materials of Environmental Concern. The
    term Environmental Law includes without limitation (a) 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; the Clean Air Act, as
    amended, 42 U.S.C. § 7401, et seq; the Federal
    Water Pollution Control Act, as amended, 33 U.S.C.
    § 1251, et seq; the Toxic Substances Control Act, as
    amended, 15 U.S.C. § 2601, et seq; the Emergency
    Planning and Community Right to Know Act, 42 U.S.C.
    § 11001, et seq; the Safe Drinking Water Act,
    42 U.S.C. § 300f, et seq; and all comparable
    state and local laws, and (b) any common law (including
    without limitation common law that may impose strict liability)
    that may impose liability or obligations for injuries or damages
    due to the presence of or exposure to any Materials of
    Environmental Concern.



 



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



 



    “Exchange Act” shall mean the Securities Exchange Act
    of 1934, as amended.



 



    “Exchange Agent” shall mean such bank or trust company
    or other agent designated by Investors, which shall act as agent
    for Investors in connection with the exchange procedures for
    converting Certificates into the Merger Consideration.



 



    “Exchange Fund” shall have the meaning set forth in
    Section 3.3.1.



 



    “Exchange Ratio” shall have the meaning set forth in
    Section 3.1.3.



 



    “FDIA” shall mean the Federal Deposit Insurance Act,
    as amended.



 



    “FDIC” shall mean the Federal Deposit Insurance
    Corporation or any successor thereto.



 



    “FHLB” shall mean the Federal Home Loan Bank of New
    York.



 



    “FINRA” shall mean the Financial Institutions
    Regulatory Authority.



 



    “FRB” shall man the Board of Governors of the Federal
    Reserve or any successor thereto.



 



    “GAAP” shall mean accounting principles generally
    accepted in the United States of America, consistently applied
    with prior practice.



 



    “Governmental Entity” shall mean any Federal or state
    court, administrative agency or commission or other governmental
    authority or instrumentality.



 



    “HOLA” shall mean the Home Owners’ Loan Act, as
    amended.



 



    “Investors Savings Bank” shall mean Investors Savings
    Bank, a New Jersey chartered stock savings bank, with its
    principal offices located at 101 JFK Parkway, Short Hills, New
    Jersey 07078, which is a wholly owned subsidiary of Investors.




    

    A-3








 






    “Investors” shall mean Investors Bancorp, Inc., a
    Delaware corporation, with its principal executive offices
    located at 101 JFK Parkway, Short Hills, New Jersey 07078.



 



    “Investors Common Stock” shall mean the common stock,
    par value $.01 per share, of Investors.



 



    “INVESTORS DISCLOSURE SCHEDULE” shall mean a written
    disclosure schedule delivered by Investors to ABNJ specifically
    referring to the appropriate section of this Agreement.



 



    “Investors Financial Statements” shall mean the
    (i) the audited consolidated statements of condition
    (including related notes and schedules) of Investors and
    subsidiaries as of June 30, 2008, 2007 and 2006 and the
    consolidated statements of income, comprehensive income, changes
    in stockholders’ equity and cash flows (including related
    notes and schedules, if any) of Investors and subsidiaries for
    each of the three years ended June 30, 2008, 2007 and 2006,
    as set forth in Investors’ annual report for the year ended
    June 30, 2008, and (ii) the unaudited interim
    consolidated financial statements of Investors and subsidiaries
    as of the end of each calendar quarter following June 30,
    2008, and for the periods then ended, as filed by Investors in
    its Securities Documents.



 



    “Investors Stock Benefit Plans” shall mean the 2006
    Equity Incentive Plan.



 



    “Investors Subsidiary” means any corporation, of which
    more than 50% of the capital stock is owned, either directly or
    indirectly, by Investors or Investors Savings Bank, except any
    corporation the stock of which is held in the ordinary course of
    the lending activities of Investors Savings Bank.



 



    “IRS” shall mean the United States Internal Revenue
    Service.



 



    “Proxy Statement-Prospectus” shall have the meaning
    set forth in Section 8.2.1.



 



    “Knowledge” as used with respect to a Person
    (including references to such Person being aware of a particular
    matter) means those facts that are known or should have been
    known by the executive officers and directors of such Person,
    and includes any facts, matters or circumstances set forth in
    any written notice from any Bank Regulator or any other material
    written notice received by that Person.



 



    “Material Adverse Effect” shall mean, with respect to
    Investors or ABNJ, respectively, any effect that (i) is
    material and adverse to the financial condition, results of
    operations or business of Investors and its Subsidiaries taken
    as a whole, or ABNJ and its Subsidiaries taken as a whole,
    respectively, or (ii) does or would materially impair the
    ability of either ABNJ, on the one hand, or Investors, on the
    other hand, to perform its obligations under this Agreement or
    otherwise materially threaten or materially impede the
    consummation of the transactions contemplated by this Agreement.
    With respect to ABNJ, and without limiting the foregoing, a
    Material Adverse Effect shall be deemed to have occurred if
    loans accounted for on a non-accrual basis, together with loans
    90 days or more delinquent (“non-performing
    loans”) at any month end prior to Closing exceed 4% of
    total loans at such month end (provided that loans (or any
    amount thereof) accounted for on a non-accrual basis together
    with loans 90 days or more delinquent that are charged-off
    after the date hereof but prior to Closing shall be considered
    non-performing loans for purposes of this calculation). For
    purposes of this Agreement, the term “Material Adverse
    Effect” shall not be deemed to include the impact of
    (a) changes in laws and regulations affecting banks or
    thrift institutions or their holding companies generally, or
    interpretations thereof by courts or governmental agencies,
    (b) changes in GAAP or regulatory accounting principles
    generally applicable to financial institutions and their holding
    companies, (c) the impact of compliance with this Agreement
    on the business, financial condition or results of operations of
    the parties and their respective subsidiaries, including the
    expenses incurred by the parties hereto in consummating the
    transactions contemplated by this Agreement, (d) the
    payment of any amounts due to, or the provision of any other
    benefits to, any directors, officers or employees of ABNJ and
    its Subsidiaries pursuant to the employment agreements, plans
    and other arrangements described in Section 7.8 of this
    Agreement, (e) any charge or reserve taken by ABNJ at the
    request of Investors pursuant to Section 6.11 of this
    Agreement, (f) actions and omissions of a party hereto (or
    any of its Subsidiaries) taken with the prior written consent of
    the other party or pursuant to the terms of this Agreement,
    (g) changes in national or international political or
    social conditions including the engagement by the United States
    in hostilities, whether or not pursuant to the declaration of a
    national emergency or war, or the occurrence of any military or
    terrorist attack upon or within




    

    A-4








 






    the United States, or any of its territories, possessions or
    diplomatic or consular offices or upon any military
    installation, equipment or personnel of the United States,
    unless it uniquely affects either or both of the parties or any
    of their Subsidiaries or (e) any change in the value of the
    securities or loan portfolio, or any change in the value of the
    deposits or borrowings, of Investors or ABNJ, or any of their
    Subsidiaries, respectively, resulting from a change in interest
    rates generally.



 



    “Materials of Environmental Concern” means pollutants,
    contaminants, wastes, toxic substances, petroleum and petroleum
    products, and any other materials regulated under Environmental
    Laws.



 



    “Merger” shall mean the merger of ABNJ with and into
    Investors (or a subsidiary thereof) pursuant to the terms hereof.



 



    “Merger Consideration” shall have the meaning set
    forth in Section 3.1.6.



 



    “Merger Registration Statement” shall mean the
    registration statement, together with all amendments, filed with
    the SEC under the Securities Act for the purpose of registering
    shares of Investors Common Stock to be offered to holders of
    ABNJ Common Stock in connection with the Merger.



 



    “Nasdaq” shall mean the Nasdaq Global Select Market.



 



    “NJBCA” shall mean the New Jersey Business Corporation
    Act.



 



    “OTS” shall mean the Office of Thrift Supervision or
    any successor thereto.



 



    “PBGC” shall mean the Pension Benefit Guaranty
    Corporation, or any successor thereto.



 



    “Pension Plan” shall have the meaning set forth in
    Section 4.13.2.



 



    “Person” shall mean any individual, corporation,
    partnership, joint venture, association, trust or
    “group” (as that term is defined under the Exchange
    Act).



 



    “Regulatory Approvals” means the approval of any Bank
    Regulator that is necessary in connection with the consummation
    of the Merger, the Bank Merger and the related transactions
    contemplated by this Agreement.



 



    “Rights” shall mean warrants, options, rights,
    convertible securities, stock appreciation rights and other
    arrangements or commitments which obligate an entity to issue or
    dispose of any of its capital stock or other ownership interests
    or which provide for compensation based on the equity
    appreciation of its capital stock.



 



    “SEC” shall mean the Securities and Exchange
    Commission or any successor thereto.



 



    “Securities Act” shall mean the Securities Act of
    1933, as amended.



 



    “Securities Documents” shall mean all reports,
    offering circulars, proxy statements, registration statements
    and all similar documents filed, or required to be filed,
    pursuant to the Securities Laws.



 



    “Securities Laws” shall mean 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 the SEC promulgated thereunder.



 



    “Shortfall Number” shall have the meaning set forth in
    Section 3.2.5.



 



    “Significant Subsidiary” shall have the meaning set
    forth in
    Rule 1-02
    of
    Regulation S-X
    of the SEC.



 



    “Stock Consideration” shall have the meaning set forth
    in Section 3.1.3.



 



    “Stock Conversion Number” shall have the meaning set
    forth in Section 3.2.1.



 



    “Stock Election Shares” shall have the meaning set
    forth in Section 3.1.3.



 



    “Stock Election Number” shall have the meaning set
    forth in Section 3.2.4.



 



    “Stock Election” shall have the meaning set forth in
    Section 3.1.3.



 



    “Stock Exchange” shall mean the Nasdaq Stock Market.




    

    A-5








 






    “Surviving Corporation” shall have the meaning set
    forth in Section 2.1 hereof.



 



    “Termination Date” shall mean September 30, 2009.



 



    “Treasury Stock” shall have the meaning set forth in
    Section 3.1.2.



 



    Other terms used herein are defined in the preamble and
    elsewhere in this Agreement.



 




    ARTICLE II

    



 




    The Merger
    




 



    2.1.  Merger.



 



    Subject to the terms and conditions of this Agreement, at the
    Effective Time: (a) ABNJ shall merge with and into
    Investors, with Investors as the resulting or surviving
    corporation (the “Surviving Corporation”); and
    (b) the separate existence of ABNJ shall cease and all of
    the rights, privileges, powers, franchises, properties, assets,
    liabilities and obligations of ABNJ shall be vested in and
    assumed by Investors. As part of the Merger, each share of ABNJ
    Common Stock (other than Treasury Stock) will be converted into
    the right to receive the Merger Consideration pursuant to the
    terms of Article III hereof. Immediately after the Merger,
    American Bank shall merge with and into Investors Savings Bank,
    with Investors Savings Bank as the resulting institution.



 



    2.2.  Effective Time.



 



    The Closing shall occur no later than the close of business on
    the tenth business day following the latest to occur of
    (i) all Regulatory Approvals of the Merger and the Bank
    Merger, (ii) ABNJ shareholder approval of the Merger, or
    (iii) the passing of any applicable waiting periods; or at
    such other date or time upon which Investors and ABNJ mutually
    agree (the “Closing”). The Merger shall be effected by
    the filing of a certificate of merger with the Delaware Office
    of the Secretary of State and with the New Jersey Secretary of
    State on the day of the Closing (the “Closing Date”),
    in accordance with the DGCL. The “Effective Time”
    means the date and time upon which the certificate of merger is
    filed with the Delaware Office of the Secretary of State and the
    New Jersey Office of the Secretary of State, or as otherwise
    stated in the certificate of merger, in accordance with the DGCL
    and the NJBCA.



 



    2.3.  Certificate of Incorporation and Bylaws.



 



    The Certificate of Incorporation and Bylaws of Investors as in
    effect immediately prior to the Effective Time shall be the
    Certificate of Incorporation and Bylaws of the Surviving
    Corporation, until thereafter amended as provided therein and by
    applicable law.



 



    2.4.  Directors and Officers of Surviving
    Corporation.



 



    The directors of Investors immediately prior to the Effective
    Time shall remain directors of the Surviving Corporation.
    Effective upon the Effective Time, the number of persons
    comprising the Board of Directors of Investors and Investors
    Savings Bank shall each be increased by one, and James H.
    Ward III shall be appointed to the Board of Directors of
    Investors and Investors Savings Bank. The officers of Investors
    immediately prior to the Effective Time shall remain the
    officers of Surviving Corporation, in each case until their
    respective successors are duly elected or appointed and
    qualified.



 



    2.5.  Effects of the Merger.



 



    At and after the Effective Time, the Merger shall have the
    effects as set forth in the DGCL and the NJBCA.



 



    2.6.  Tax Consequences.



 



    It is intended that the Merger shall constitute a reorganization
    within the meaning of Section 368(a) of the Code, and that
    this Agreement shall constitute a “plan of
    reorganization” as that term is used in Sections 354
    and 361 of the Code. From and after the date of this Agreement
    and until the Closing, each party




    

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    hereto shall use its reasonable best efforts to cause the Merger
    to qualify, and will not knowingly take any action, cause any
    action to be taken, fail to take any action or cause any action
    to fail to be taken which action or failure to act could prevent
    the Merger from qualifying as a reorganization under
    Section 368(a) of the Code. Following the Closing, neither
    Investors, ABNJ nor any of their affiliates shall knowingly take
    any action, cause any action to be taken, fail to take any
    action or cause any action to fail to be taken, which action or
    failure to act could cause the Merger to fail to qualify as a
    reorganization under Section 368(a) of the Code. Investors
    and ABNJ each hereby agrees to deliver certificates
    substantially in compliance with IRS published advance ruling
    guidelines, with customary exceptions and modifications thereto,
    to enable counsel to deliver the legal opinion contemplated by
    Section 9.1.6, which certificates shall be effective as of
    the date of such opinion.



 



    2.7.  Possible Alternative Structures.



 



    Notwithstanding anything to the contrary contained in this
    Agreement, prior to the Effective Time, Investors shall be
    entitled to revise the structure of the Merger or the Bank
    Merger, including without limitation, by merging ABNJ into a
    wholly owned subsidiary of Investors, provided that (i) any
    such subsidiary shall become a party to, and shall agree to be
    bound by, the terms of this Agreement (ii) there are no
    adverse Federal or state income tax consequences to ABNJ
    shareholders as a result of the modification; (iii) the
    consideration to be paid to the holders of ABNJ Common Stock
    under this Agreement is not thereby changed in kind, value or
    reduced in amount; and (iv) such modification will not
    delay materially or jeopardize the receipt of Regulatory
    Approvals or other consents and approvals relating to the
    consummation of the Merger and the Bank Merger or otherwise
    cause any condition to Closing set forth in Article IX not
    to be capable of being fulfilled. The parties hereto agree to
    appropriately amend this Agreement and any related documents in
    order to reflect any such revised structure.



 



    2.8.  Bank Merger



 



    Investors and ABNJ shall use their reasonable best efforts to
    cause the merger of American Bank with and into Investors
    Savings Bank, with Investors Savings Bank as the surviving
    institution, to occur as soon as practicable after the Effective
    Time. In addition, following the execution and delivery of this
    Agreement, Investors will cause Investors Savings Bank, and ABNJ
    will cause American Bank, to execute and deliver the Plan of
    Bank Merger substantially in the form attached to this Agreement
    as Exhibit A.



 



    2.9.  Additional Actions



 



    If, at any time after the Effective Time, Investors shall
    consider or be advised that any further deeds, assignments or
    assurances in law or any other acts are necessary or desirable
    to (i) vest, perfect or confirm, of record or otherwise, in
    Investors its right, title or interest in, to or under any of
    the rights, properties or assets of ABNJ, American Bank, or
    (ii) otherwise carry out the purposes of this Agreement,
    ABNJ and its officers and directors shall be deemed to have
    granted to Investors an irrevocable power of attorney to execute
    and deliver, in such official corporate capacities, all such
    deeds, assignments or assurances in law or any other acts as are
    necessary or desirable to (a) vest, perfect or confirm, of
    record or otherwise, in Investors its right, title or interest
    in, to or under any of the rights, properties or assets of ABNJ
    or (b) otherwise carry out the purposes of this Agreement,
    and the officers and directors of the Investors are authorized
    in the name of ABNJ or otherwise to take any and all such action.




    

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    ARTICLE III

    



 




    Conversion
    of Shares
    




 



    3.1.  Conversion of ABNJ Common Stock; Merger
    Consideration.



 



    At the Effective Time, by virtue of the Merger and without any
    action on the part of Investors, ABNJ or the holders of any of
    the shares of ABNJ Common Stock, the Merger shall be effected in
    accordance with the following terms:



 



    3.1.1. Each share of Investors Common Stock that is issued
    and outstanding immediately prior to the Effective Time shall
    remain issued and outstanding following the Effective Time and
    shall be unchanged by the Merger.



 



    3.1.2. All shares of ABNJ Common Stock held in the treasury
    of ABNJ (“Treasury Stock”) and each share of ABNJ
    Common Stock owned by Investors immediately prior to the
    Effective Time (other than shares held in a fiduciary capacity
    or in connection with debts previously contracted) shall, at the
    Effective Time, cease to exist, and the certificates for such
    shares shall be canceled as promptly as practicable thereafter,
    and no payment or distribution shall be made in consideration
    therefor.



 



    3.1.3. Subject to the provisions of this Article III,
    each share of ABNJ Common Stock issued and outstanding
    immediately prior to the Effective Time (other than Treasury
    Stock) shall become and be converted into, as provided in and
    subject to the limitations set forth in this Agreement, the
    right to receive at the election of the holder thereof as
    provided in Section 3.2, the following, without interest:



 



    (A) for each share of ABNJ Common Stock with respect to
    which an election to receive cash has been effectively made and
    not revoked or lost, pursuant to Section 3.2 (a “Cash
    Election”), cash from Investors in an amount equal to
    $12.50 (the “Cash Consideration”) (collectively,
    “Cash Election Shares”);



 



    (B) for each share of ABNJ Common Stock with respect to
    which an election to receive Investors Common Stock has been
    effectively made and not revoked or lost, pursuant to
    Section 3.2 (a “Stock Election”),
    0.9218 shares (“the Exchange Ratio”) of Investors
    Common (the “Stock Consideration”) (collectively, the
    “Stock Election Shares”);



 



    (C) a combination of the Cash Consideration and the Stock
    Consideration (a “Mixed Election” and collectively the
    “Mixed Election Shares”); and



 



    (D) for each share of ABNJ Common Stock other than shares
    as to which a Cash Election, a Stock Election or a Mixed
    Election has been effectively made and not revoked or lost,
    pursuant to Section 3.2 (collectively, “Non-Election
    Shares”), such Stock Consideration
    and/or Cash
    Consideration as is determined in accordance with
    Section 3.2.



 



    3.1.4. After the Effective Time, shares of ABNJ Common
    Stock shall be no longer outstanding and shall automatically be
    canceled and shall cease to exist, and shall thereafter by
    operation of this section represent the right to receive the
    Merger Consideration and any dividends or distributions with
    respect thereto or any dividends or distributions with a record
    date prior to the Effective Time that were declared or made by
    ABNJ on such shares of ABNJ Common Stock in accordance with the
    terms of this Agreement on or prior to the Effective Time and
    which remain unpaid at the Effective Time.



 



    3.1.5. In the event Investors changes (or establishes a
    record date for changing) the number of, or provides for the
    exchange of, shares of Investors Common Stock issued and
    outstanding prior to the Effective Time as a result of a stock
    split, stock dividend, recapitalization, reclassification, or
    similar transaction with respect to the outstanding Investors
    Common Stock and the record date therefor shall be prior to the
    Effective Time, the Exchange Ratio shall be proportionately and
    appropriately adjusted; provided, that no such adjustment shall
    be made with regard to Investors Common Stock if Investors
    issues additional shares of Common Stock and receives fair
    market value consideration for such shares.



 



    3.1.6. The consideration that any one ABNJ shareholder may
    receive pursuant to Article III is referred to herein as
    the “Merger Consideration.”




    

    A-8








 





 



    3.2.  Election Procedures.



 



    3.2.1. Holders of ABNJ Common Stock may elect to receive
    shares of Investors Common Stock or cash (in either case without
    interest) in exchange for their shares of ABNJ Common Stock in
    accordance with the procedures set forth herein; provided that,
    in the aggregate, and subject to the provisions of
    Section 3.2.7, 70% of the total number of shares of ABNJ
    Common Stock issued and outstanding at the Effective Time,
    excluding any Treasury Shares (the “Stock Conversion
    Number”), shall be converted into the Stock Consideration
    and the remaining outstanding shares of ABNJ Common Stock shall
    be converted into the Cash Consideration. Shares of ABNJ Common
    Stock as to which a Cash Election (including, pursuant to a
    Mixed Election) has been made are referred to herein as
    “Cash Election Shares.” Shares of ABNJ Common Stock as
    to which a Stock Election has been made (including, pursuant to
    a Mixed Election) are referred to as “Stock Election
    Shares.” Shares of ABNJ Common Stock as to which no
    election has been made (or as to which an Election Form is not
    returned properly completed) are referred to herein as
    “Non-Election Shares.” The aggregate number of shares
    of ABNJ Common Stock with respect to which a Stock Election has
    been made is referred to herein as the “Stock Election
    Number.”



 



    3.2.2. An election form and other appropriate and customary
    transmittal materials (which shall specify that delivery shall
    be effected, and risk of loss and title to the Certificates
    shall pass, only upon proper delivery of such Certificates to
    the Exchange Agent), in such form as ABNJ and Investors shall
    mutually agree (“Election Form”), shall be mailed no
    more than 40 business days and no less than 20 business days
    prior to the anticipated Effective Time or on such earlier date
    as Investors and ABNJ shall mutually agree (the “Mailing
    Date”) to each holder of record of ABNJ Common Stock as of
    five business days prior to the Mailing Date (the “Election
    Form Record Date”). Each Election Form shall permit
    such holder, subject to the allocation and election procedures
    set forth in this Section 3.2, (i) to elect to receive
    the Cash Consideration for all of the shares of ABNJ Common
    Stock held by such holder, in accordance with
    Section 3.1.3, (ii) to elect to receive the Stock
    Consideration for all of such shares, in accordance with
    Section 3.1.3, (iii) elect to receive the Stock
    Consideration for a part of such holder’s ABNJ Common Stock
    and the Cash consideration for the remaining part of such
    holder’s ABNJ Common Stock, or (iv) to indicate that
    such record holder has no preference as to the receipt of cash
    or Investors Common Stock for such shares. A holder of record of
    shares of ABNJ Common Stock who holds such shares as nominee,
    trustee or in another representative capacity (a
    “Representative”) may submit multiple Election Forms,
    provided that each such Election Form covers all the shares of
    ABNJ Common Stock held by such Representative for a particular
    beneficial owner. Any shares of ABNJ Common Stock with respect
    to which the holder thereof shall not, as of the Election
    Deadline, have made an election by submission to the Exchange
    Agent of an effective, properly completed Election Form shall be
    deemed Non-Election Shares.



 



    3.2.3. To be effective, a properly completed Election Form
    shall be submitted to the Exchange Agent on or before
    5:00 p.m., New York City time, on the 25th day
    following the Mailing Date (or such other time and date as
    Investors and ABNJ may mutually agree) (the “Election
    Deadline”); provided, however, that the Election Deadline
    may not occur on or after the Closing Date. ABNJ shall use its
    reasonable best efforts to make available up to two separate
    Election Forms, or such additional Election Forms as Investors
    may permit, to all persons who become holders (or beneficial
    owners) of ABNJ Common Stock between the Election
    Form Record Date and the close of business on the business
    day prior to the Election Deadline. ABNJ shall provide to the
    Exchange Agent all information reasonably necessary for it to
    perform as specified herein. An election shall have been
    properly made only if the Exchange Agent shall have actually
    received a properly completed Election Form by the Election
    Deadline. An Election Form shall be deemed properly completed
    only if accompanied by one or more Certificates (or customary
    affidavits and indemnification regarding the loss or destruction
    of such Certificates or the guaranteed delivery of such
    Certificates) representing all shares of ABNJ Common Stock
    covered by such Election Form, together with duly executed
    transmittal materials included with the Election Form. If an
    ABNJ shareholder either (i) does not submit a properly
    completed Election Form in a timely fashion or (ii) revokes
    its Election Form prior to the Election Deadline (without later
    submitting a properly completed Election Form prior to the
    Election Deadline), the shares of ABNJ Common Stock held by such
    shareholder shall be designated as Non-Election Shares. Any
    Election Form may be revoked or changed by the person submitting
    such Election Form to the Exchange Agent by written notice




    

    A-9








 






    to the Exchange Agent only if such notice of revocation or
    change is actually received by the Exchange Agent at or prior to
    the Election Deadline. Investors shall cause the Certificate or
    Certificates relating to any revoked Election Form to be
    promptly returned without charge to the person submitting the
    Election Form to the Exchange Agent. Subject to the terms of
    this Agreement and of the Election Form, the Exchange Agent
    shall have discretion to determine when any election,
    modification or revocation is received and whether any such
    election, modification or revocation has been properly made. All
    Elections shall be revoked automatically if the Exchange Agent
    is notified in writing by Investors or ABNJ, upon exercise by
    Investors or ABNJ of its respective or their mutual rights to
    terminate this Agreement to the extent provided under
    Article XI, that this Agreement has been terminated in
    accordance with Article XI.



 



    3.2.4. If the aggregate number of shares of ABNJ Common
    Stock with respect to which Stock Elections shall have been made
    (the “Stock Election Number”) exceeds the Stock
    Conversion Number, then all Cash Election Shares and all
    Non-Election Shares of each holder thereof shall be converted
    into the right to receive the Cash Consideration, and Stock
    Election Shares of each holder thereof will be converted into
    the right to receive the Stock Consideration in respect of that
    number of Stock Election Shares equal to the product obtained by
    multiplying (x) the number of Stock Election Shares held by
    such holder by (y) a fraction, the numerator of which is
    the Stock Conversion Number and the denominator of which is the
    Stock Election Number, with the remaining number of such
    holder’s Stock Election Shares being converted into the
    right to receive the Cash Consideration.



 



    3.2.5. If the Stock Election Number is less than the Stock
    Conversion Number (the amount by which the Stock Conversion
    Number exceeds the Stock Election Number being referred to
    herein as the “Shortfall Number”), then all Stock
    Election Shares shall be converted into the right to receive the
    Stock Consideration and the Non-Election Shares and Cash
    Election Shares shall be treated in the following manner:



 



    (A) If the Shortfall Number is less than or equal to the
    number of Non-Election Shares, then all Cash Election Shares
    shall be converted into the right to receive the Cash
    Consideration and the Non-Election Shares of each holder thereof
    shall convert into the right to receive the Stock Consideration
    in respect of that number of Non-Election Shares equal to the
    product obtained by multiplying (x) the number of
    Non-Election Shares held by such holder by (y) a fraction,
    the numerator of which is the Shortfall Number and the
    denominator of which is the total number of Non-Election Shares,
    with the remaining number of such holder’s Non-Election
    Shares being converted into the right to receive the Cash
    Consideration; or



 



    (B) If the Shortfall Number exceeds the number of
    Non-Election Shares, then all Non-Election Shares shall be
    converted into the right to receive the Stock Consideration and
    Cash Election Shares of each holder thereof shall convert into
    the right to receive the Stock Consideration in respect of that
    number of Cash Election Shares equal to the product obtained by
    multiplying (x) the number of Cash Election Shares held by
    such holder by (y) a fraction, the numerator of which is
    the amount by which (1) the Shortfall Number exceeds
    (2) the total number of Non-Election Shares and the
    denominator of which is the total number of Cash Election
    Shares, with the remaining number of such holder’s Cash
    Election Shares being converted into the right to receive the
    Cash Consideration.



 



    3.2.6. Adjustment to Preserve Tax
    Treatment.  Notwithstanding anything in this
    Article III to the contrary, if the aggregate value of the
    Stock Consideration to be delivered as of the Effective Time,
    less the amount of cash paid in lieu of fractional shares of
    Investors Common Stock pursuant to Section 3.2.7 (the
    “Stock Value”), is less than 42.5% of the sum of
    (i) the aggregate value of the Merger Consideration to be
    delivered as of the Effective Time, plus (ii) the value of
    any consideration described in Treasury Regulations
    Section 1.368-1(e)(1)(ii),
    plus (iii) the value of any consideration paid by Investors
    or any of its Subsidiaries (or any “related person” to
    Investors or any of its Subsidiaries within the meaning of
    Treasury Regulations
    Section 1.368-1(e)(3))
    to acquire shares of ABNJ Common Stock prior to the Effective
    Time (such sum, the “Aggregate Value”), then Investors
    may reduce the number of shares of outstanding ABNJ Common Stock
    entitled to receive the Cash Consideration and correspondingly
    increase the number of shares of ABNJ Common Stock entitled to
    receive the Stock Consideration by the minimum amount necessary
    to cause the Stock Value to equal 42.5% of the Aggregate Value.




    

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    3.2.7. No Fractional
    Shares.  Notwithstanding anything to the contrary
    contained herein, no certificates or scrip representing
    fractional shares of Investors Common Stock shall be issued upon
    the surrender for exchange of Certificates, no dividend or
    distribution with respect to Investors Common Stock shall be
    payable on or with respect to any fractional share interest, and
    such fractional share interests shall not entitle the owner
    thereof to vote or to any other rights of a shareholder of
    Investors. In lieu of the issuance of any such fractional share,
    Investors shall pay to each former holder of ABNJ Common Stock
    who otherwise would be entitled to receive a fractional share of
    Investors Common Stock, an amount in cash, rounded to the
    nearest cent and without interest, equal to the product of
    (i) the fraction of a share to which such holder would
    otherwise have been entitled and (ii) the average of the
    daily closing sales prices of a share of Investors Common Stock
    as reported on the Nasdaq for the five consecutive trading days
    immediately preceding the Closing Date. For purposes of
    determining any fractional share interest, all shares of ABNJ
    Common Stock owned by a ABNJ shareholder shall be combined so as
    to calculate the maximum number of whole shares of Investors
    Common Stock issuable to such ABNJ shareholder.



 



    3.3.  Procedures for Exchange of ABNJ Common
    Stock.



 



    3.3.1. Investors to Make Merger Consideration
    Available.  After the Election Deadline and no
    later than the Closing Date, Investors shall deposit, or shall
    cause to be deposited, with the Exchange Agent for the benefit
    of the holders of ABNJ Common Stock, for exchange in accordance
    with this Section 3.3, certificates representing the shares
    of Investors Common Stock and an aggregate amount of cash
    sufficient to pay the aggregate amount of cash payable pursuant
    to this Article III (including any cash that may be payable
    in lieu of any fractional shares of ABNJ Common Stock) (such
    cash and certificates for shares of Investors Common Stock,
    together with any dividends or distributions with respect
    thereto, being hereinafter referred to as the “Exchange
    Fund”).



 



    3.3.2. Exchange of
    Certificates.  Investors shall take all steps
    necessary to cause the Exchange Agent, within five
    (5) business days after the Effective Time, to mail to each
    holder of a Certificate or Certificates, a form letter of
    transmittal for return to the Exchange Agent and instructions
    for use in effecting the surrender of the Certificates for the
    Merger Consideration and cash in lieu of fractional shares, if
    any, into which the ABNJ Common Stock represented by such
    Certificates shall have been converted as a result of the
    Merger. The letter of transmittal shall specify that delivery
    shall be effected, and risk of loss and title to the
    Certificates shall pass, only upon delivery of the Certificates
    to the Exchange Agent. Upon proper surrender of a Certificate
    for exchange and cancellation to the Exchange Agent, together
    with a properly completed letter of transmittal, duly executed,
    the holder of such Certificate shall be entitled to receive in
    exchange therefor, as applicable, (i) a certificate
    representing that number of shares of Investors Common Stock (if
    any) to which such former holder of ABNJ Common Stock shall have
    become entitled pursuant to the provisions of Section 3.1
    or 3.2 hereof, (ii) a check representing that amount of
    cash (if any) to which such former holder of ABNJ Common Stock
    shall have become entitled pursuant to the provisions of
    Section 3.1 or 3.2 hereof and (iii) a check
    representing the amount of cash (if any) payable in lieu of
    fractional shares of Investors Common Stock, which such former
    holder has the right to receive in respect of the Certificate
    surrendered pursuant to the provisions of Section 3.2, and
    the Certificate so surrendered shall forthwith be cancelled. No
    interest will be paid or accrued on the cash payable in lieu of
    fractional shares.



 



    3.3.3. Rights of Certificate Holders after the Effective
    Time.  The holder of a Certificate that prior to
    the Merger represented issued and outstanding ABNJ Common Stock
    shall have no rights, after the Effective Time, with respect to
    such ABNJ Common Stock except to surrender the Certificate in
    exchange for the Merger Consideration as provided in this
    Agreement. No dividends or other distributions declared after
    the Effective Time with respect to Investors Common Stock shall
    be paid to the holder of any unsurrendered Certificate until the
    holder thereof shall surrender such Certificate in accordance
    with this Section 3.3. After the surrender of a Certificate
    in accordance with this Section 3.3, the record holder
    thereof shall be entitled to receive any such dividends or other
    distributions, without any interest thereon, which theretofore
    had become payable with respect to shares of Investors Common
    Stock represented by such Certificate.



 



    3.3.4. Surrender by Persons Other than Record
    Holders.  If the Person surrendering a Certificate
    and signing the accompanying letter of transmittal is not the
    record holder thereof, then it shall be a condition of




    

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    the payment of the Merger Consideration that: (i) such
    Certificate is properly endorsed to such Person or is
    accompanied by appropriate stock powers, in either case signed
    exactly as the name of the record holder appears on such
    Certificate, and is otherwise in proper form for transfer, or is
    accompanied by appropriate evidence of the authority of the
    Person surrendering such Certificate and signing the letter of
    transmittal to do so on behalf of the record holder; and
    (ii) the person requesting such exchange shall pay to the
    Exchange Agent in advance any transfer or other taxes required
    by reason of the payment to a person other than the registered
    holder of the Certificate surrendered, or required for any other
    reason, or shall establish to the satisfaction of the Exchange
    Agent that such tax has been paid or is not payable.



 



    3.3.5. Closing of Transfer Books.  From
    and after the Effective Time, there shall be no transfers on the
    stock transfer books of ABNJ of the ABNJ Common Stock that were
    outstanding immediately prior to the Effective Time. If, after
    the Effective Time, Certificates representing such shares are
    presented for transfer to the Exchange Agent, they shall be
    exchanged for the Merger Consideration and canceled as provided
    in this Section 3.3.



 



    3.3.6. Return of Exchange Fund.  At any
    time following the six (6) month period after the Effective
    Time, Investors shall be entitled to require the Exchange Agent
    to deliver to it any portions of the Exchange Fund which had
    been made available to the Exchange Agent and not disbursed to
    holders of Certificates (including, without limitation, all
    interest and other income received by the Exchange Agent in
    respect of all funds made available to it), and thereafter such
    holders shall be entitled to look to Investors (subject to
    abandoned property, escheat and other similar laws) with respect
    to any Merger Consideration that may be payable upon due
    surrender of the Certificates held by them. Notwithstanding the
    foregoing, neither Investors nor the Exchange Agent shall be
    liable to any holder of a Certificate for any Merger
    Consideration delivered in respect of such Certificate to a
    public official pursuant to any abandoned property, escheat or
    other similar law.



 



    3.3.7. Lost, Stolen or Destroyed
    Certificates.  In the event any Certificate shall
    have been lost, stolen or destroyed, upon the making of an
    affidavit of that fact by the person claiming such Certificate
    to be lost, stolen or destroyed and, if required by Investors,
    the posting by such person of a bond in such amount as Investors
    may reasonably direct as indemnity against any claim that may be
    made against it with respect to such Certificate, the Exchange
    Agent will issue in exchange for such lost, stolen or destroyed
    Certificate the Merger Consideration deliverable in respect
    thereof.



 



    3.3.8. Withholding.  Investors or the
    Exchange Agent will be entitled to deduct and withhold from the
    consideration otherwise payable pursuant to this Agreement or
    the transactions contemplated hereby to any holder of ABNJ
    Common Stock such amounts as Investors (or any Affiliate
    thereof) or the Exchange Agent are required to deduct and
    withhold with respect to the making of such payment under the
    Code, or any applicable provision of U.S. federal, state,
    local or
    non-U.S. tax
    law. To the extent that such amounts are properly withheld by
    Investors or the Exchange Agent, such withheld amounts will be
    treated for all purposes of this Agreement as having been paid
    to the holder of the ABNJ Common Stock in respect of whom such
    deduction and withholding were made by Investors or the Exchange
    Agent.



 



    3.3.9. Treatment of ABNJ Options.  ABNJ
    DISCLOSURE SCHEDULE 4.3.1 sets forth all of the outstanding
    ABNJ Options as of the date hereof. Prior to and effective as of
    the Effective Time, ABNJ shall take all actions necessary to
    terminate the ABNJ Equity Plans. Holders of all unexercised ABNJ
    Options as of the Effective Time will receive, in cancellation
    of their ABNJ Options, a cash payment from ABNJ immediately
    prior to the Effective Time, in an amount equal to the product
    of (x) the number of shares of ABNJ Common Stock provided
    for in such ABNJ Option and (y) the excess, if any, of
    $12.50 over the exercise price per share provided for in such
    ABNJ Option (the “Cash Option Payment”), which cash
    payment shall be treated as compensation and shall be net of any
    applicable federal or state withholding tax. Subject to the
    foregoing, ABNJ Options not exercised prior to the Effective
    Time shall terminate. Prior to the Effective Time, ABNJ shall
    obtain the written consent of each option holder to the
    cancellation of the ABNJ Options in exchange for the Cash Option
    Payment.




    

    A-12








 





 



    3.4.  Reservation of Shares.



 



    3.4.1. Investors shall reserve for issuance a sufficient
    number of shares of the Investors Common Stock for the purpose
    of issuing shares of Investors Common Stock to the ABNJ
    shareholders in accordance with this Article III.



 



    3.5.  Modification of Merger Consideration



 



    Notwithstanding anything in this Agreement to the contrary, in
    the event that by May 31, 2009 Investors has not received
    Regulatory Approvals to issue shares of Investors Common Stock
    in the Merger, in accordance with the terms hereof, then
    Investors may elect to proceed with the Merger on the basis of
    converting each outstanding share of ABNJ Common Stock into the
    right to receive the Cash Consideration, all references to
    Merger Consideration shall mean the Cash Consideration, and the
    applicable provisions of this Agreement shall be deemed modified
    accordingly. In such event, and notwithstanding anything
    contained in Section 2.7 hereof, the Merger shall be
    accomplished by merging a newly formed, wholly owned first tier
    subsidiary of Investors with and into ABNJ.



 




    ARTICLE IV

    



 




    Representations
    and Warranties of ABNJ
    



 



    ABNJ represents and warrants to Investors that the statements
    contained in this Article IV are correct and complete as of
    the date of this Agreement and will be correct and complete as
    of the Closing Date (as though made then and as though the
    Closing Date were substituted for the date of this Agreement
    throughout this Article IV), subject to the standard set
    forth in Section 4.1 and except as set forth in the ABNJ
    DISCLOSURE SCHEDULE delivered by ABNJ to Investors on the date
    hereof, and except as to any representation or warranty which
    specifically relates to an earlier date, which only need be so
    correct as of such earlier date. ABNJ has made a good faith
    effort to ensure that the disclosure on each schedule of the
    ABNJ DISCLOSURE SCHEDULE corresponds to the section referenced
    herein. However, for purposes of the ABNJ DISCLOSURE SCHEDULE,
    any item disclosed on any schedule therein is deemed to be fully
    disclosed with respect to all schedules under which such item
    may be relevant as and to the extent that it is reasonably clear
    on the face of such schedule that such item applies to such
    other schedule. References to the Knowledge of ABNJ shall
    include the Knowledge of American Bank.



 



    4.1.  Standard.



 



    No representation or warranty of ABNJ contained in this
    Article IV shall be deemed untrue or incorrect, and ABNJ
    shall not be deemed to have breached a representation or
    warranty, as a consequence of the existence of any fact,
    circumstance or event unless such fact, circumstance or event,
    individually or taken together with all other facts,
    circumstances or events inconsistent with any paragraph of
    Article IV, has had or is reasonably expected to have a
    Material Adverse Effect, disregarding for these purposes
    (x) any qualification or exception for, or reference to,
    materiality in any such representation or warranty and
    (y) any use of the terms “material”,
    “materially”, “in all material respects”,
    “Material Adverse Effect” or similar terms or phrases
    in any such representation or warranty. The foregoing standard
    shall not apply to representations and warranties contained in
    Sections 4.2 (other than the last sentence of
    Section 4.2.1 and 4.2.2, 4.2.4 and 4.2.5), 4.3, 4.4, 4.8,
    4.9.5, 4.13.5, 4.13.8, 4.13.10 and 4.13.11, which shall be
    deemed untrue, incorrect and breached if they are not true and
    correct in all material respects based on the qualifications and
    standards therein contained. Provided further, that as to the
    representations contained in Sections 4.13.5, 4.13.8,
    4.13.10, 4.13.11, if there is a breach that relates to an
    undisclosed payment, expense accrual or cost in excess of
    $300,000 (either individually or in the aggregate), such breach
    shall be considered material.



 



    4.2.  Organization.



 



    4.2.1. ABNJ is a corporation duly organized, validly
    existing and in good standing under the laws of the State of New
    Jersey, and is duly registered as a savings and loan holding
    company under the HOLA. ABNJ has full corporate power and
    authority to carry on its business as now conducted and is duly
    licensed or




    

    A-13








 






    qualified to do business in the states of the United States and
    foreign jurisdictions where its ownership or leasing of property
    or the conduct of its business requires such qualification.



 



    4.2.2. American Bank is a federally chartered savings bank
    duly organized and validly existing under the laws of the United
    States. The deposits of American Bank are insured by the FDIC to
    the fullest extent permitted by law, and all premiums and
    assessments required to be paid in connection therewith have
    been paid by American Bank when due. American Bank is a member
    in good standing of the FHLB and owns the requisite amount of
    stock therein.



 



    4.2.3. ABNJ DISCLOSURE SCHEDULE 4.2.3 sets forth each
    ABNJ Subsidiary. Each ABNJ Subsidiary is a corporation or
    limited liability company duly organized, validly existing and
    in good standing under the laws of its jurisdiction of
    incorporation or organization.



 



    4.2.4. The respective minute books of ABNJ, American Bank
    and each other ABNJ Subsidiary accurately records, in all
    material respects, all material corporate actions of their
    respective shareholders and boards of directors (including
    committees).



 



    4.2.5. Prior to the date of this Agreement, ABNJ has made
    available to Investors true and correct copies of the
    certificate of incorporation or charter and bylaws of ABNJ,
    American Bank and each other ABNJ Subsidiary.



 



    4.3.  Capitalization.



 



    4.3.1. The authorized capital stock of ABNJ consists of
    20,000,000 shares of common stock, $0.10 par value per
    share, of which 10,859,692 shares are outstanding, validly
    issued, fully paid and nonassessable and free of preemptive
    rights, and 10,000,000 shares of Preferred Stock, par value
    $0.10 per share, of which there are no shares issued and
    outstanding. There are 3,668,261 shares of ABNJ Common
    Stock held by ABNJ as Treasury Stock. Neither ABNJ nor any ABNJ
    Subsidiary has or is bound by any Rights of any character
    relating to the purchase, sale or issuance or voting of, or
    right to receive dividends or other distributions on any shares
    of ABNJ Common Stock, or any other security of ABNJ or a ABNJ
    Subsidiary or any securities representing the right to vote,
    purchase or otherwise receive any shares of ABNJ Common Stock or
    any other security of ABNJ or any ABNJ Subsidiary, other than
    shares issuable under the ABNJ Equity Plans. ABNJ DISCLOSURE
    SCHEDULE 4.3.1 sets forth the name of each holder of
    options to purchase ABNJ Common Stock, the number of shares each
    such individual may acquire pursuant to the exercise of such
    options, the grant and vesting dates, and the exercise price
    relating to the options held.



 



    4.3.2. ABNJ owns all of the capital stock of American Bank,
    free and clear of any lien or encumbrance. Except for the ABNJ
    Subsidiaries, ABNJ does not possess, directly or indirectly, any
    material equity interest in any corporate entity, except for
    equity interests held in the investment portfolios of ABNJ
    Subsidiaries, equity interests held by ABNJ Subsidiaries in a
    fiduciary capacity, and equity interests held in connection with
    the lending activities of ABNJ Subsidiaries, including stock in
    the FHLB. Either ABNJ or American Bank owns all of the
    outstanding shares of capital stock of each ABNJ Subsidiary free
    and clear of all liens, security interests, pledges, charges,
    encumbrances, agreements and restrictions of any kind or nature.



 



    4.3.3. To ABNJ’s Knowledge, no Person or
    “group” (as that term is used in Section 13(d)(3)
    of the Exchange Act), is the beneficial owner (as defined in
    Section 13(d) of the Exchange Act) of 5% or more of the
    outstanding shares of ABNJ Common Stock, except as listed on
    ABNJ’s DISCLOSURE SCHEDULE 4.3.3.



 



    4.4.  Authority; No Violation.



 



    4.4.1. ABNJ has full corporate power and authority to
    execute and deliver this Agreement and, subject to the receipt
    of the Regulatory Approvals and the approval of this Agreement
    by ABNJ’s shareholders, to consummate the transactions
    contemplated hereby. The execution and delivery of this
    Agreement by ABNJ and the completion by ABNJ of the transactions
    contemplated hereby, including the Merger, have been duly and
    validly approved by the Board of Directors of ABNJ, and no other
    corporate proceedings on the part of ABNJ, except for the
    approval of the ABNJ shareholders, is necessary to complete the
    transactions contemplated hereby, including the Merger. This
    Agreement has been duly and validly executed and delivered




    

    A-14








 






    by ABNJ, and subject to approval by the shareholders of ABNJ and
    receipt of the Regulatory Approvals and due and valid execution
    and delivery of this Agreement by Investors, constitutes the
    valid and binding obligation of ABNJ, enforceable against ABNJ
    in accordance with its terms, subject to applicable bankruptcy,
    insolvency and similar laws affecting creditors’ rights
    generally, and subject, as to enforceability, to general
    principles of equity.



 



    4.4.2. Subject to receipt of Regulatory Approvals and
    ABNJ’s and Investors’ compliance with any conditions
    contained therein, and to the receipt of the approval of the
    shareholders of ABNJ, (A) the execution and delivery of
    this Agreement by ABNJ, (B) the consummation of the
    transactions contemplated hereby, and (C) compliance by
    ABNJ with any of the terms or provisions hereof will not
    (i) conflict with or result in a breach of any provision of
    the certificate of incorporation or bylaws of ABNJ or any ABNJ
    Subsidiary or the charter and bylaws of American Bank;
    (ii) violate any statute, code, ordinance, rule,
    regulation, judgment, order, writ, decree or injunction
    applicable to ABNJ or any ABNJ Subsidiary or any of their
    respective properties or assets; or (iii) violate, conflict
    with, result in a breach of any provisions of, constitute a
    default (or an event which, with notice or lapse of time, or
    both, would constitute a default), under, result in the
    termination of, accelerate the performance required by, or
    result in a right of termination or acceleration or the creation
    of any lien, security interest, charge or other encumbrance upon
    any of the properties or assets of ABNJ or American Bank under
    any of the terms, conditions or provisions of any note, bond,
    mortgage, indenture, deed of trust, license, lease, agreement or
    other investment or obligation to which ABNJ or American Bank is
    a party, or by which they or any of their respective properties
    or assets may be bound or affected, except for such violations,
    conflicts, breaches or defaults under clause (ii) or
    (iii) hereof which, either individually or in the
    aggregate, will not have a Material Adverse Effect on ABNJ and
    the ABNJ Subsidiaries taken as a whole.



 



    4.5.  Consents.



 



    Except for (a) filings with Bank Regulators, the receipt of
    the Regulatory Approvals, and compliance with any conditions
    contained therein and filing of Articles of Combination with
    Bank Regulators, (b) the filing of the Certificate of
    Merger with the Secretary of State of the States of Delaware and
    New Jersey, (c) the filing with the SEC of (i) the
    Merger Registration Statement and (ii) such reports under
    Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act
    as may be required in connection with this Agreement and the
    transactions contemplated hereby and the obtaining from the SEC
    of such orders as may be required in connection therewith,
    (d) approval of the listing of Investors Common Stock to be
    issued in the Merger on the Nasdaq, (e) such filings and
    approvals as are required to be made or obtained under the
    securities or “Blue Sky” laws of various states in
    connection with the issuance of the shares of Investors Common
    Stock pursuant to this Agreement, and (f) the approval of
    this Agreement by the requisite vote of the shareholders of
    ABNJ, no consents, waivers or approvals of, or filings or
    registrations with, any Governmental Entity are necessary, and,
    to ABNJ’s Knowledge, no consents, waivers or approvals of,
    or filings or registrations with, any other third parties are
    necessary, in connection with (x) the execution and
    delivery of this Agreement by ABNJ, and (y) the completion
    of the Merger and the Bank Merger. ABNJ has no reason to believe
    that (i) any Regulatory Approvals or other required
    consents or approvals will not be received, or that
    (ii) any public body or authority, the consent or approval
    of which is not required or to which a filing is not required,
    will object to the completion of the transactions contemplated
    by this Agreement.



 



    4.6.  Financial Statements.



 



    4.6.1. ABNJ has previously made available to Investors the
    ABNJ Regulatory Reports. The ABNJ Regulatory Reports have been
    prepared in all material respects in accordance with applicable
    regulatory accounting principles and practices throughout the
    periods covered by such statements.



 



    4.6.2. ABNJ has previously made available to Investors the
    ABNJ Financial Statements. The ABNJ Financial Statements have
    been prepared in accordance with GAAP, and (including the
    related notes where applicable) fairly present in each case in
    all material respects (subject in the case of the unaudited
    interim statements to normal year-end adjustments), the
    consolidated financial position, results of operations and cash
    flows of ABNJ and the ABNJ Subsidiaries on a consolidated basis
    as of and for the respective periods ending




    

    A-15








 






    on the dates thereof, in accordance with GAAP during the periods
    involved, except as indicated in the notes thereto, or in the
    case of unaudited statements, as permitted by
    Form 10-Q.



 



    4.6.3. At the date of each balance sheet included in the
    ABNJ Financial Statements or the ABNJ Regulatory Reports,
    neither ABNJ nor American Bank, as applicable, had any
    liabilities, obligations or loss contingencies of any nature
    (whether absolute, accrued, contingent or otherwise) of a type
    required to be reflected in such ABNJ Financial Statements or
    ABNJ Regulatory Reports or in the footnotes thereto which are
    not fully reflected or reserved against therein or fully
    disclosed in a footnote thereto, except for liabilities,
    obligations and loss contingencies which are not material
    individually or in the aggregate or which are incurred in the
    ordinary course of business, consistent with past practice, and
    except for liabilities, obligations and loss contingencies which
    are within the subject matter of a specific representation and
    warranty herein and subject, in the case of any unaudited
    statements, to normal, recurring audit adjustments and the
    absence of footnotes.



 



    4.6.4. The records, systems, controls, data and information
    of ABNJ and its Subsidiaries are recorded, stored, maintained
    and operated under means (including any electronic, mechanical
    or photographic process, whether computerized or not) that are
    under the exclusive ownership and direct control of ABNJ or its
    Subsidiaries or accountants (including all means of access
    thereto and therefrom), except for any non-exclusive ownership
    and non-direct control that would not reasonably be expected to
    have a material adverse effect on the system of internal
    accounting controls described below in this Section 4.6.4.
    ABNJ (x) has implemented and maintains a system of internal
    control over financial reporting (as required by
    Rule 13a-15(a)
    of the Exchange Act) that is designed to provide reasonable
    assurances regarding the reliability of financial reporting and
    the preparation of its financial statements for external
    purposes in accordance with GAAP, (y) has implemented and
    maintains disclosure controls and procedures (as defined in
    Rule 13a-15(e)
    of the Exchange Act) to ensure that material information
    relating to ABNJ, including its consolidated Subsidiaries, is
    made known to the chief executive officer and the chief
    financial officer of ABNJ by others within those entities, and
    (z) has disclosed, based on its most recent evaluation
    prior to the date hereof, to ABNJ’s outside auditors and
    the audit committee of ABNJ’s Board of Directors
    (i) any significant deficiencies and material weaknesses in
    the design or operation of internal control over financial
    reporting (as defined in
    Rule 13a-15(f)
    of the Exchange Act) which are reasonably likely to adversely
    affect ABNJ’s ability to record, process, summarize and
    report financial information and (ii) any fraud, whether or
    not material, that involves management or other employees who
    have a significant role in ABNJ’s internal control over
    financial reporting. These disclosures (if any) were made in
    writing by management to ABNJ’s auditors and audit
    committee and a copy has previously been made available to
    Investors. As of the date hereof, to the knowledge of ABNJ, its
    chief executive officer and chief financial officer will be able
    to give the certifications required pursuant to the rules and
    regulations adopted pursuant to Section 302 of the
    Sarbanes-Oxley Act, without qualification, when next due.



 



    4.6.5. Since October 1, 2006, (i) neither ABNJ
    nor any of its Subsidiaries nor, to the knowledge of ABNJ, any
    director, officer, employee, auditor, accountant or
    representative of ABNJ or any of its Subsidiaries has received
    or otherwise had or obtained knowledge of any material
    complaint, allegation, assertion or claim, whether written or
    oral, regarding the accounting or auditing practices,
    procedures, methodologies or methods of ABNJ or any of its
    Subsidiaries or their respective internal accounting controls,
    including any material complaint, allegation, assertion or claim
    that ABNJ or any of its Subsidiaries has engaged in questionable
    accounting or auditing practices, and (ii) no attorney
    representing ABNJ or any of its Subsidiaries, whether or not
    employed by ABNJ or any of its Subsidiaries, has reported
    evidence of a material violation of securities laws, breach of
    fiduciary duty or similar violation by ABNJ or any of its
    officers, directors, employees or agents to the Board of
    Directors of ABNJ or any committee thereof or to any director or
    officer of ABNJ.



 



    4.7.  Taxes.



 



    Except as set forth in ABNJ DISCLOSURE SCHEDULE 4.7, ABNJ
    and the ABNJ Subsidiaries that are at least 80 percent
    owned by ABNJ are members of the same affiliated group within
    the meaning of Code Section 1504(a). ABNJ has duly filed
    all federal, state and material local tax returns required to be
    filed by or with respect to ABNJ and every ABNJ Subsidiary on or
    prior to the Closing Date, taking into account any




    

    A-16








 






    extensions (all such returns, to ABNJ’s Knowledge, being
    accurate and correct in all material respects) and has duly paid
    or made provisions for the payment of all material federal,
    state and local taxes which have been incurred by or are due or
    claimed to be due from ABNJ and any ABNJ Subsidiary by any
    taxing authority or pursuant to any written tax sharing
    agreement on or prior to the Closing Date other than taxes or
    other charges which (i) are not delinquent, (ii) are
    being contested in good faith, or (iii) have not yet been
    fully determined. Except as set forth in ABNJ DISCLOSURE
    SCHEDULE 4.7(b), as of the date of this Agreement, ABNJ has
    received no written notice of, and to ABNJ’s Knowledge
    there is no audit examination, deficiency assessment, tax
    investigation or refund litigation with respect to any taxes of
    ABNJ or any of its Subsidiaries, and no claim has been made by
    any authority in a jurisdiction where ABNJ or any of its
    Subsidiaries do not file tax returns that ABNJ or any such
    Subsidiary is subject to taxation in that jurisdiction. Except
    as set forth in ABNJ DISCLOSURE SCHEDULE 4.7 (c), ABNJ and
    its Subsidiaries have not executed an extension or waiver of any
    statute of limitations on the assessment or collection of any
    material tax due that is currently in effect. ABNJ and each of
    its Subsidiaries has withheld and paid all taxes required to
    have been withheld and paid in connection with amounts paid or
    owing to any employee, independent contractor, creditor,
    shareholder or other third party, and ABNJ and each of its
    Subsidiaries, to ABNJ’s Knowledge, has timely complied with
    all applicable information reporting requirements under
    Part III, Subchapter A of Chapter 61 of the Code and
    similar applicable state and local information reporting
    requirements.



 



    4.8.  No Material Adverse Effect.



 



    ABNJ has not suffered any Material Adverse Effect since
    September 30, 2007 and no event has occurred or
    circumstance arisen since that date which, in the aggregate, has
    had or is reasonably likely to have a Material Adverse Effect on
    ABNJ.



 



    4.9.  Material Contracts; Leases; Defaults.



 



    4.9.1. Except as set forth in ABNJ DISCLOSURE
    SCHEDULE 4.9.1, neither ABNJ nor any ABNJ Subsidiary is a
    party to or subject to: (i) any employment, consulting or
    severance contract or material arrangement with any past or
    present officer, director or employee of ABNJ or any ABNJ
    Subsidiary, except for “at will” arrangements;
    (ii) any plan, material arrangement or contract providing
    for bonuses, pensions, options, deferred compensation,
    retirement payments, profit sharing or similar material
    arrangements for or with any past or present officers, directors
    or employees of ABNJ or any ABNJ Subsidiary; (iii) any
    collective bargaining agreement with any labor union relating to
    employees of ABNJ or any ABNJ Subsidiary; (iv) any
    agreement which by its terms limits the payment of dividends by
    ABNJ or any ABNJ Subsidiary; (v) any instrument evidencing
    or related to material indebtedness for borrowed money whether
    directly or indirectly, by way of purchase money obligation,
    conditional sale, lease purchase, guaranty or otherwise, in
    respect of which ABNJ or any ABNJ Subsidiary is an obligor to
    any person, which instrument evidences or relates to
    indebtedness other than deposits, repurchase agreements, FHLB
    advances, bankers’ acceptances, and “treasury tax and
    loan” accounts and transactions in “federal
    funds” in each case established in the ordinary course of
    business consistent with past practice, or which contains
    financial covenants or other restrictions (other than those
    relating to the payment of principal and interest when due)
    which would be applicable on or after the Closing Date to
    Investors or any Investors Subsidiary; (vi) any other
    agreement, written or oral, that obligates ABNJ or any ABNJ
    Subsidiary for the payment of more than $25,000 annually or for
    the payment of more than $50,000 over its remaining term, which
    is not terminable without cause on 60 days’ or less
    notice without penalty or payment, or (vii) any agreement
    (other than this Agreement), contract, arrangement, commitment
    or understanding (whether written or oral) that restricts or
    limits in any material way the conduct of business by ABNJ or
    any ABNJ Subsidiary (it being understood that any non-compete or
    similar provision shall be deemed material).



 



    4.9.2. Each real estate lease that requires the consent of
    the lessor or its agent resulting from the Merger or the Bank
    Merger by virtue of the terms of any such lease, is listed in
    ABNJ DISCLOSURE SCHEDULE 4.9.2 identifying the section of
    the lease that contains such prohibition or restriction. Subject
    to any consents that may be required as a result of the
    transactions contemplated by this Agreement, to its Knowledge,
    neither ABNJ nor any ABNJ Subsidiary is in default in any
    material respect under any material contract, agreement,
    commitment, arrangement, lease, insurance policy or other
    instrument to which it is a




    

    A-17








 






    party, by which its assets, business, or operations may be bound
    or affected, or under which it or its assets, business, or
    operations receive benefits, and there has not occurred any
    event that, with the lapse of time or the giving of notice or
    both, would constitute such a default.



 



    4.9.3. True and correct copies of agreements, contracts,
    arrangements and instruments referred to in Section 4.9.1
    and 4.9.2 have been made available to Investors on or before the
    date hereof, are listed on ABNJ DISCLOSURE SCHEDULE 4.9.1
    and are in full force and effect on the date hereof and neither
    ABNJ nor any ABNJ Subsidiary (nor, to the Knowledge of ABNJ, any
    other party to any such contract, arrangement or instrument) has
    materially breached any provision of, or is in default in any
    respect under any term of, any such contract, arrangement or
    instrument. Except as listed on ABNJ DISCLOSURE
    SCHEDULE 4.9.3(a), no party to any material contract,
    arrangement or instrument will have the right to terminate any
    or all of the provisions of any such contract, arrangement or
    instrument as a result of the execution of, and the consummation
    of the transactions contemplated by, this Agreement. Except as
    set forth in ABNJ DISCLOSURE SCHEDULE 4.9.3(b), no plan,
    contract, employment agreement, termination agreement, or
    similar agreement or arrangement to which ABNJ or any ABNJ
    Subsidiary is a party or under which ABNJ or any ABNJ Subsidiary
    may be liable contains provisions which permit an employee or
    independent contractor to terminate it without cause and
    continue to accrue future benefits thereunder. Except as set
    forth in ABNJ DISCLOSURE SCHEDULE 4.9.3(c), no such
    agreement, plan, contract, or arrangement (x) provides for
    acceleration in the vesting of benefits or payments due
    thereunder upon the occurrence of a change in ownership or
    control of ABNJ or any ABNJ Subsidiary or upon the occurrence of
    a subsequent event; or (y) requires ABNJ or any ABNJ
    Subsidiary to provide a benefit in the form of ABNJ Common Stock
    or determined by reference to the value of ABNJ Common Stock.



 



    4.9.4. Since December 31, 2007, through and including
    the date of this Agreement, except as publicly disclosed by ABNJ
    in the Securities Documents filed or furnished by ABNJ prior to
    the date hereof, neither ABNJ nor any ABNJ Subsidiary has
    (i) except for (A) normal increases for employees
    (other than officers and directors subject to the reporting
    requirements of Section 16(a) of the Exchange Act) made in
    the ordinary course of business consistent with past practice,
    or (B) as required by applicable law, increased the wages,
    salaries, compensation, pension, or other fringe benefits or
    perquisites payable to any executive officer, employee, or
    director from the amount thereof in effect as of
    December 31, 2007 (which amounts have been previously made
    available to Investors), granted any severance or termination
    pay, entered into any contract to make or grant any severance or
    termination pay (except as required under the terms of
    agreements or severance plans listed on ABNJ DISCLOSURE
    SCHEDULE 4.13.1, as in effect as of the date hereof), or
    paid any bonus other than the customary year-end bonuses in
    amounts consistent with past practice, (ii) granted any
    options to purchase shares of ABNJ Common Stock, or any right to
    acquire any shares of its capital stock to any executive
    officer, director or employee other than grants to employees
    (other than officers subject to the reporting requirements of
    Section 16(a) of the Exchange Act) made in the ordinary
    course of business consistent with past practice under ABNJ
    Equity Plans, (iii) increased or established any bonus,
    insurance, severance, deferred compensation, pension,
    retirement, profit sharing, stock option (including, without
    limitation, the granting of stock options, stock appreciation
    rights, performance awards, or restricted stock awards), stock
    purchase or other employee benefit plan, (iv) made any
    material election for federal or state income tax purposes,
    (v) made any material change in the credit policies or
    procedures of ABNJ or any of its Subsidiaries, the effect of
    which was or is to make any such policy or procedure less
    restrictive in any material respect, (vi) made any material
    acquisition or disposition of any assets or properties, or any
    contract for any such acquisition or disposition entered into
    other than loans and loan commitments, (vii) entered into
    any lease of real or personal property requiring annual payments
    in excess of $100,000, other than in connection with foreclosed
    property or in the ordinary course of business consistent with
    past practice, (viii) changed any accounting methods,
    principles or practices of ABNJ or its Subsidiaries affecting
    its assets, liabilities or businesses, including any reserving,
    renewal or residual method, practice or policy or
    (ix) suffered any strike, work stoppage, slow-down, or
    other labor disturbance.



 



    4.9.5. ABNJ did not apply to participate in the Capital
    Purchase Program established by the United States Treasury
    Department under the Troubled Assets Relief Program, pursuant to
    the Emergency Economic Stabilization Act of 2008.




    

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    4.10.  Ownership of Property; Insurance
    Coverage.



 



    4.10.1. ABNJ and each ABNJ Subsidiary has good and, as to
    real property, marketable title to all material assets and
    properties owned by ABNJ or each ABNJ Subsidiary in the conduct
    of its businesses, whether such assets and properties are real
    or personal, tangible or intangible, including assets and
    property reflected in the balance sheets contained in the ABNJ
    Regulatory Reports and in the ABNJ Financial Statements or
    acquired subsequent thereto (except to the extent that such
    assets and properties have been disposed of in the ordinary
    course of business, since the date of such balance sheets),
    subject to no material encumbrances, liens, mortgages, security
    interests or pledges, except (i) those items which secure
    liabilities for public or statutory obligations or any discount
    with, borrowing from or other obligations to FHLB, inter-bank
    credit facilities, or any transaction by an ABNJ Subsidiary
    acting in a fiduciary capacity, (ii) statutory liens for
    amounts not yet delinquent or which are being contested in good
    faith, (iii) non-monetary liens affecting real property
    which do not adversely affect the value or use of such real
    property, and (iv) those described and reflected in the
    ABNJ Financial Statements. ABNJ and the ABNJ Subsidiaries, as
    lessee, have the right under valid and existing leases of real
    and personal properties used by ABNJ and its Subsidiaries in the
    conduct of their businesses to occupy or use all such properties
    as presently occupied and used by each of them. Such existing
    leases and commitments to lease constitute or will constitute
    operating leases for both tax and financial accounting purposes
    and the lease expense and minimum rental commitments with
    respect to such leases and lease commitments are as disclosed in
    all material respects in the notes to the ABNJ Financial
    Statements.



 



    4.10.2. With respect to all material agreements pursuant to
    which ABNJ or any ABNJ Subsidiary has purchased securities
    subject to an agreement to resell, if any, ABNJ or such ABNJ
    Subsidiary, as the case may be, has a lien or security interest
    (which to ABNJ’s Knowledge is a valid, perfected first
    lien) in the securities or other collateral securing the
    repurchase agreement, and the value of such collateral equals or
    exceeds the amount of the debt secured thereby.



 



    4.10.3. ABNJ and each ABNJ Subsidiary currently maintain
    insurance considered by each of them to be reasonable for their
    respective operations. Neither ABNJ nor any ABNJ Subsidiary,
    except as disclosed in ABNJ DISCLOSURE SCHEDULE 4.10.3(a),
    has received notice from any insurance carrier during the past
    five years that (i) such insurance will be canceled or that
    coverage thereunder will be reduced or eliminated, or
    (ii) premium costs (other than with respect to health
    insurance) with respect to such policies of insurance will be
    substantially increased. There are presently no material claims
    pending under such policies of insurance and no notices have
    been given by ABNJ or any ABNJ Subsidiary under such policies.
    All such insurance is valid and enforceable and in full force
    and effect, and within the last three years ABNJ and each ABNJ
    Subsidiary has received each type of insurance coverage for
    which it has applied and during such periods has not been denied
    indemnification for any material claims submitted under any of
    its insurance policies. ABNJ DISCLOSURE SCHEDULE 4.10.3(b)
    identifies all material policies of insurance maintained by ABNJ
    and each ABNJ Subsidiary as well as the other matters required
    to be disclosed under this Section.



 



    4.11.  Legal Proceedings.



 



    Except as set forth in ABNJ DISCLOSURE SCHEDULE 4.11,
    neither ABNJ nor any ABNJ Subsidiary is a party to any, and
    there are no pending or, to ABNJ’s Knowledge, threatened
    legal, administrative, arbitration or other proceedings, claims
    (whether asserted or unasserted), actions or governmental
    investigations or inquiries of any nature (i) against ABNJ
    or any ABNJ Subsidiary, (ii) to which ABNJ or any ABNJ
    Subsidiary’s assets are or may be subject,
    (iii) challenging the validity or propriety of any of the
    transactions contemplated by this Agreement, or (iv) which
    could adversely affect the ability of ABNJ or American Bank to
    perform under this Agreement, except for any proceeding, claim,
    action, investigation or inquiry which, if adversely determined,
    individually or in the aggregate, would not be reasonably
    expected to have a Material Adverse Effect on ABNJ.



 



    4.12.  Compliance With Applicable Law.



 



    4.12.1. To ABNJ’s Knowledge, each of ABNJ and each
    ABNJ Subsidiary is in compliance in all material respects with
    all applicable federal, state, local and foreign statutes, laws,
    regulations, ordinances, rules,




    

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    judgments, orders or decrees applicable to it, its properties,
    assets and deposits, its business, and its conduct of business
    and its relationship with its employees, including, without
    limitation, the USA Patriot Act, the Equal Credit Opportunity
    Act, the Fair Housing Act, the Community Reinvestment Act of
    1977, the Home Mortgage Disclosure Act, and all other applicable
    fair lending laws and other laws relating to discriminatory
    business practices and neither ABNJ nor any ABNJ Subsidiary has
    received any written notice to the contrary. The Board of
    Directors of American Bank has adopted and American Bank has
    implemented an anti-money laundering program that contains
    adequate and appropriate customer identification verification
    procedures that has not been deemed ineffective by any
    Governmental Authority and that meets the requirements of
    Sections 352 and 326 of the USA Patriot Act and the
    regulations thereunder.



 



    4.12.2. Each of ABNJ and each ABNJ Subsidiary has all
    material permits, licenses, authorizations, orders and approvals
    of, and has made all filings, applications and registrations
    with, all Governmental Entities and Bank Regulators that are
    required in order to permit it to own or lease its properties
    and to conduct its business as presently conducted; all such
    permits, licenses, certificates of authority, orders and
    approvals are in full force and effect and, to the Knowledge of
    ABNJ, no suspension or cancellation of any such permit, license,
    certificate, order or approval is threatened or will result from
    the consummation of the transactions contemplated by this
    Agreement, subject to obtaining Regulatory Approvals.



 



    4.12.3. For the period beginning January 1, 2003,
    neither ABNJ nor any ABNJ Subsidiary has received any written
    notification or, to ABNJ’s Knowledge, any other
    communication from any Bank Regulator (i) asserting that
    ABNJ or any ABNJ Subsidiary is not in material compliance with
    any of the statutes, regulations or ordinances which such Bank
    Regulator enforces; (ii) threatening to revoke any license,
    franchise, permit or governmental authorization which is
    material to ABNJ or any ABNJ Subsidiary; (iii) requiring,
    or threatening to require, ABNJ or any ABNJ Subsidiary, or
    indicating that ABNJ or any ABNJ Subsidiary may be required, to
    enter into a cease and desist order, agreement or memorandum of
    understanding or any other agreement with any federal or state
    governmental agency or authority which is charged with the
    supervision or regulation of banks or engages in the insurance
    of bank deposits restricting or limiting, or purporting to
    restrict or limit, in any material respect the operations of
    ABNJ or any ABNJ Subsidiary, including without limitation any
    restriction on the payment of dividends; or (iv) directing,
    restricting or limiting, or purporting to direct, restrict or
    limit, in any manner the operations of ABNJ or any ABNJ
    Subsidiary, including without limitation any restriction on the
    payment of dividends (any such notice, communication,
    memorandum, agreement or order described in this sentence is
    hereinafter referred to as a “ABNJ Regulatory
    Agreement”). Neither ABNJ nor any ABNJ Subsidiary has
    consented to or entered into any ABNJ Regulatory Agreement that
    is currently in effect or that was in effect since
    January 1, 2003. The most recent regulatory rating given to
    American Bank as to compliance with the Community Reinvestment
    Act (“CRA”) is satisfactory or better.



 



    4.12.4. Since the enactment of the Sarbanes-Oxley Act, ABNJ
    has been and is in compliance in all material respects with
    (i) the applicable provisions of the Sarbanes-Oxley Act and
    (ii) the applicable listing and corporate governance rules
    and regulations of the Nasdaq. ABNJ DISCLOSURE
    SCHEDULE 4.12.4 of sets forth, as of November 30,
    2008, a schedule of all officers and directors of ABNJ who have
    outstanding loans from ABNJ or American Bank, and there has been
    no default on, or forgiveness or waiver of, in whole or in part,
    any such loan during the two years immediately preceding the
    date hereof.



 



    4.13.  Employee Benefit Plans.



 



    4.13.1. ABNJ DISCLOSURE SCHEDULE 4.13.1 includes a
    descriptive list and copy of all existing bonus, incentive,
    deferred compensation, pension, retirement, profit-sharing,
    thrift, savings, employee stock ownership, stock bonus, stock
    purchase, restricted stock, stock option, stock appreciation,
    phantom stock, severance, welfare benefit plans (including paid
    time off policies and other benefit policies and procedures),
    fringe benefit plans, employment, severance and change in
    control agreements, split dollar life insurance and any
    supplemental life insurance agreements
    and/or
    policies, and all other material benefit practices, policies and
    arrangements maintained by ABNJ or any ABNJ Subsidiary in which
    any employee or former employee, consultant or former consultant
    or director or former director of ABNJ or any ABNJ Subsidiary
    participates or to which any such employee, consultant or
    director is a party or is otherwise entitled to receive benefits
    (the




    

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    “ABNJ Compensation and Benefit Plans”). Except as set
    forth in ABNJ DISCLOSURE SCHEDULE 4.13.1, neither ABNJ nor
    any of its Subsidiaries has any commitment to create any
    additional ABNJ Compensation and Benefit Plan or to materially
    modify, change or renew any existing ABNJ Compensation and
    Benefit Plan (any modification or change that increases the cost
    of such plans would be deemed material), except as required to
    maintain the qualified status thereof.



 



    4.13.2. To the Knowledge of ABNJ and except as disclosed in
    ABNJ DISCLOSURE SCHEDULE 4.13.2, each ABNJ Compensation and
    Benefit Plan has been operated and administered in all material
    respects in accordance with its terms and with applicable law,
    including, but not limited to, ERISA, the Code, the Securities
    Act, the Exchange Act, the Age Discrimination in Employment
    Act, COBRA, the Health Insurance Portability and Accountability
    Act (“HIPAA”) and any regulations or rules promulgated
    thereunder, and all material filings, disclosures and notices
    required by ERISA, the Code, the Securities Act, the Exchange
    Act, the Age Discrimination in Employment Act, COBRA and
    HIPAA and any other applicable law have been timely made or any
    interest, fines, penalties or other impositions for late filings
    have been paid in full and each ABNJ Compensation and Benefit
    Plan that is subject to Code Section 409A is in compliance
    with Code Section 409A. Each ABNJ Compensation and Benefit
    Plan which is an “employee pension benefit plan”
    within the meaning of Section 3(2) of ERISA (a
    “Pension Plan”) and which is intended to be qualified
    under Section 401(a) of the Code has received a favorable
    determination letter from the IRS, and ABNJ is not aware of any
    circumstances which are reasonably likely to result in
    revocation of any such favorable determination letter. There is
    no material pending or, to the Knowledge of ABNJ, threatened
    action, suit or claim relating to any of the ABNJ Compensation
    and Benefit Plans (other than routine claims for benefits).
    Neither ABNJ nor any ABNJ Subsidiary has engaged in a
    transaction, or omitted to take any action, with respect to any
    ABNJ Compensation and Benefit Plan that would reasonably be
    expected to subject ABNJ or any ABNJ Subsidiary to an unpaid tax
    or penalty imposed by either Section 4975 of the Code or
    Section 502 of ERISA.



 



    4.13.3. ABNJ does not maintain any defined benefit pension
    plan. To the Knowledge of ABNJ, and except as set forth in ABNJ
    DISCLOSURE SCHEDULE 4.13.3, there is no pending
    investigation or enforcement action by any Governmental Entity
    or Bank Regulator with respect to any ABNJ Compensation and
    Benefit Plan, or any plan maintained by any entity which is
    considered one employer with ABNJ under Section 4001(b)(1)
    of ERISA or Code Section 414 (“ERISA
    Affiliate”)(such plan being referred to as an “ERISA
    Affiliate Plan”). Neither ABNJ, its Subsidiaries, nor any
    ERISA Affiliate has contributed to any “multiemployer
    plan,” as defined in Section 3(37) of ERISA.



 



    4.13.4. Except as set forth in ABNJ DISCLOSURE
    SCHEDULE 4.13.4, all material contributions required to be
    made under the terms of any ABNJ Compensation and Benefit Plan
    or ERISA Affiliate Plan or any employee benefit arrangements to
    which ABNJ or any ABNJ Subsidiary is a party or a sponsor have
    been timely made, and all anticipated contributions and funding
    obligations are accrued on ABNJ’s consolidated financial
    statements to the extent required by GAAP. ABNJ and its
    Subsidiaries have expensed and accrued as a liability the
    present value of future benefits under each applicable ABNJ
    Compensation and Benefit Plan for financial reporting purposes
    as required by GAAP.



 



    4.13.5. Except as set forth in ABNJ DISCLOSURE
    SCHEDULE 4.13.5(a), neither ABNJ nor any ABNJ Subsidiary
    has any obligations to provide retiree health, life insurance,
    disability insurance, or other retiree death benefits under any
    ABNJ Compensation and Benefit Plan, other than benefits mandated
    by COBRA or other applicable law to any employee or director.
    Except as set forth in ABNJ DISCLOSURE SCHEDULE 4.13.5(b),
    there has been no communication to employees by ABNJ or any ABNJ
    Subsidiary that would reasonably be expected to promise or
    guarantee such employees or directors retiree health, life
    insurance, disability insurance, or other retiree death benefits.



 



    4.13.6. Except as set forth in ABNJ DISCLOSURE
    SCHEDULE 4.13.6, ABNJ and its Subsidiaries do not maintain
    any ABNJ Compensation and Benefit Plans covering employees who
    are not United States residents.



 



    4.13.7. With respect to each ABNJ Compensation and Benefit
    Plan, if applicable, ABNJ has provided or made available to
    Investors copies of the: (A) plan documents, administrative
    forms, any loan documents under an ABNJ employee stock ownership
    plan, trust instruments and insurance contracts; (B) three
    most




    

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    recent Forms 5500 as filed; (C) three most recent
    actuarial reports and financial statements; (D) most recent
    summary plan description; (E) most recent determination
    letter issued by the IRS; (F) any Form 5310 or
    Form 5330 filed with the IRS within the last three years;
    (G) most recent nondiscrimination tests performed under
    ERISA and the Code (including 401(k) and 401(m) tests);
    (H) ESOP allocation and suspense account records for the
    past three years; and (I) copies of all equity grant
    agreements.



 



    4.13.8. Except as disclosed in ABNJ DISCLOSURE
    SCHEDULE 4.13.8, the consummation of the Merger will not,
    directly or indirectly (including, without limitation, as a
    result of any termination of employment or service at any time
    prior to or following the Effective Time) (A) entitle any
    employee, consultant or director to any payment or benefit
    (including severance pay, change in control benefit, or similar
    compensation) or any increase in compensation, (B) result
    in the vesting or acceleration of any benefits under any ABNJ
    Compensation and Benefit Plan or (C) result in any material
    increase in benefits payable under any ABNJ Compensation and
    Benefit Plan.



 



    4.13.9. Except as disclosed in ABNJ DISCLOSURE
    SCHEDULE 4.13.9, neither ABNJ nor any ABNJ Subsidiary
    maintains any compensation plans, programs or arrangements under
    which any payment is reasonably likely to become non-deductible,
    in whole or in part, for tax reporting purposes as a result of
    the limitations under Section 162(m) of the Code and the
    regulations issued thereunder.



 



    4.13.10. To the Knowledge of ABNJ, the consummation of the
    Merger and the Bank Merger will not, directly or indirectly
    (including without limitation, as a result of any termination of
    employment or service at any time prior to or following the
    Effective Time), entitle any current or former employee,
    director or independent contractor of ABNJ or any ABNJ
    Subsidiary to any actual or deemed payment (or benefit) which
    could constitute a “parachute payment” (as such term
    is defined in Section 280G of the Code), except as set
    forth in ABNJ DISCLOSURE SCHEDULE 4.13.10.



 



    4.13.11. Except as disclosed in ABNJ DISCLOSURE
    SCHEDULE 4.13.11, there are no stock options, stock
    appreciation or similar rights, earned dividends or dividend
    equivalents, or shares of restricted stock or restricted stock
    units, outstanding under any of the ABNJ Compensation and
    Benefit Plans or otherwise as of the date hereof and none will
    be granted, awarded, or credited after the date hereof.



 



    4.13.12. ABNJ DISCLOSURE SCHEDULE 4.13.12(a) sets
    forth, as of the payroll date immediately preceding the date of
    this Agreement, a list of the full names of all officers, and
    employees whose annual rate of salary is $50,000 or greater, of
    American Bank or ABNJ, their title and rate of salary, and their
    date of hire. ABNJ DISCLOSURE SCHEDULE 4.13.12(b) also sets
    forth any changes to any ABNJ Compensation and Benefit Plan
    since December 31, 2007.



 



    4.14.  Brokers, Finders and Financial Advisors.



 



    Neither ABNJ nor any ABNJ Subsidiary, nor any of their
    respective officers, directors, employees or agents, has
    employed any broker, finder or financial advisor in connection
    with the transactions contemplated by this Agreement, or
    incurred any liability or commitment for any fees or commissions
    to any such person in connection with the transactions
    contemplated by this Agreement except for the retention of
    Keefe, Bruyette & Woods, Inc. (“KBW”) by
    ABNJ and the fee payable pursuant thereto. A true and correct
    copy of the engagement agreement with KBW, setting forth the fee
    payable to KBW for its services rendered to ABNJ in connection
    with the Merger and transactions contemplated by this Agreement,
    is attached to ABNJ DISCLOSURE SCHEDULE 4.14.



 



    4.15.  Environmental Matters.



 



    4.15.1. Except as may be set forth in ABNJ DISCLOSURE
    SCHEDULE 4.15 and any Phase I Environmental Report
    identified therein, with respect to ABNJ and each ABNJ
    Subsidiary:



 



    (A) To ABNJ’s Knowledge, each of ABNJ and the ABNJ
    Subsidiaries, the Participation Facilities, and, to ABNJ’s
    Knowledge, the Loan Properties are, and have been, in
    substantial compliance with, and are not liable under, any
    Environmental Laws;




    

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    (B) ABNJ has received no written notice that there is any
    suit, claim, action, demand, executive or administrative order,
    directive, investigation or proceeding pending and, to
    ABNJ’s Knowledge, no such action is threatened, before any
    court, governmental agency or other forum against it or any of
    the ABNJ Subsidiaries or any Participation Facility (x) for
    alleged noncompliance (including by any predecessor) with, or
    liability under, any Environmental Law or (y) relating to
    the presence of or release (as defined herein) into the
    environment of any Materials of Environmental Concern (as
    defined herein), whether or not occurring at or on a site owned,
    leased or operated by it or any of the ABNJ Subsidiaries or any
    Participation Facility;



 



    (C) ABNJ has received no written notice that there is any
    suit, claim, action, demand, executive or administrative order,
    directive, investigation or proceeding pending and, to
    ABNJ’s Knowledge no such action is threatened, before any
    court, governmental agency or other forum relating to or against
    any Loan Property (or ABNJ or any of the ABNJ Subsidiaries in
    respect of such Loan Property) (x) relating to alleged
    noncompliance (including by any predecessor) with, or liability
    under, any Environmental Law or (y) relating to the
    presence of or release into the environment of any Materials of
    Environmental Concern, whether or not occurring at or on a site
    owned, leased or operated by a Loan Property;



 



    (D) To ABNJ’s Knowledge, the properties currently
    owned or operated by ABNJ or any ABNJ Subsidiary (including,
    without limitation, soil, groundwater or surface water on, or
    under the properties, and buildings thereon) are not
    contaminated with and do not otherwise contain any Materials of
    Environmental Concern other than as permitted under applicable
    Environmental Law;



 



    (E) Neither ABNJ nor any ABNJ Subsidiary during the past
    five years has received any written notice, demand letter,
    executive or administrative order, directive or request for
    information from any federal, state, local or foreign
    governmental entity or any third party indicating that it may be
    in violation of, or liable under, any Environmental Law;



 



    (F) To ABNJ’s Knowledge, there are no underground
    storage tanks on, in or under any properties owned or operated
    by ABNJ or any of the ABNJ Subsidiaries or any Participation
    Facility, and to ABNJ’s Knowledge, no underground storage
    tanks have been closed or removed from any properties owned or
    operated by ABNJ or any of the ABNJ Subsidiaries or any
    Participation Facility; and



 



    (G) To ABNJ’s Knowledge, during the period of
    (s) ABNJ’s or any of the ABNJ Subsidiaries’
    ownership or operation of any of their respective current
    properties or (t) ABNJ’s or any of the ABNJ
    Subsidiaries’ participation in the management of any
    Participation Facility, there has been no contamination by or
    release of Materials of Environmental Concerns in, on, under or
    affecting such properties that could reasonably be expected to
    result in material liability under the Environmental Laws. To
    ABNJ’s Knowledge, prior to the period of
    (x) ABNJ’s or any of the ABNJ Subsidiaries’
    ownership or operation of any of their respective current
    properties or (y) ABNJ’s or any of the ABNJ
    Subsidiaries’ participation in the management of any
    Participation Facility, there was no contamination by or release
    of Materials of Environmental Concern in, on, under or affecting
    such properties that could reasonably be expected to result in
    material liability under the Environmental Laws.



 



    4.15.2. “Loan Property” means any property in
    which the applicable party (or a Subsidiary of it) holds a
    security interest, and, where required by the context, includes
    the owner or operator of such property, but only with respect to
    such property. “Participation Facility” means any
    facility in which the applicable party (or a Subsidiary of it)
    participates in the management (including all property held as
    trustee or in any other fiduciary capacity) and, where required
    by the context, includes the owner or operator of such property,
    but only with respect to such property.



 



    4.16.  Loan Portfolio.



 



    4.16.1. The allowance for loan losses reflected in
    ABNJ’s audited consolidated balance sheet at
    September 30, 2008 was, and the allowance for loan losses
    shown on the balance sheets in ABNJ’s Securities Documents
    for periods ending after September 30, 2007 was or will be,
    as the case may be, adequate, as of the dates thereof, under
    GAAP.




    

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    4.16.2. ABNJ DISCLOSURE SCHEDULE 4.16.2 sets forth a
    listing, as of the most recently available date (and in no event
    later than November 30, 2008), by account, of: (A) all
    loans (including loan participations) of American Bank or any
    other ABNJ Subsidiary that have been accelerated during the past
    twelve months; (B) all loan commitments or lines of credit
    of American Bank or any other ABNJ Subsidiary which have been
    terminated by American Bank or any other ABNJ Subsidiary during
    the past twelve months by reason of a default or adverse
    developments in the condition of the borrower or other events or
    circumstances affecting the credit of the borrower; (C) all
    loans, lines of credit and loan commitments as to which American
    Bank or any other ABNJ Subsidiary has given written notice of
    its intent to terminate during the past twelve months;
    (D) with respect to all commercial loans (including
    commercial real estate loans), all notification letters and
    other written communications from American Bank or any other
    ABNJ Subsidiary to any of their respective borrowers, customers
    or other parties during the past twelve months wherein American
    Bank or any other ABNJ Subsidiary has requested or demanded that
    actions be taken to correct existing defaults or facts or
    circumstances which may become defaults; (E) each borrower,
    customer or other party which has notified American Bank or any
    other ABNJ Subsidiary during the past twelve months of, or has
    asserted against American Bank or any other ABNJ Subsidiary, in
    each case in writing, any “lender liability” or
    similar claim, and, to the Knowledge of American Bank, each
    borrower, customer or other party which has given American Bank
    or any other ABNJ Subsidiary any oral notification of, or orally
    asserted to or against American Bank or any other ABNJ
    Subsidiary, any such claim; (F) all loans, (1) that
    are contractually past due 90 days or more in the payment
    of principal
    and/or
    interest, (2) that are on non-accrual status, (3) that
    as of the date of this Agreement are classified as “Other
    Loans Specially Mentioned”, “Special Mention”,
    “Substandard”, “Doubtful”, “Loss”,
    “Classified”, “Criticized”, “Watch
    list” or words of similar import, together with the
    principal amount of and accrued and unpaid interest on each such
    Loan and the identity of the obligor thereunder, (4) where
    a reasonable doubt exists as to the timely future collectability
    of principal
    and/or
    interest, whether or not interest is still accruing or the loans
    are less than 90 days past due, (5) where, during the
    past three years, the interest rate terms have been reduced
    and/or the
    maturity dates have been extended subsequent to the agreement
    under which the loan was originally created due to concerns
    regarding the borrower’s ability to pay in accordance with
    such initial terms, or (6) where a specific reserve
    allocation exists in connection therewith, and (G) all
    assets classified by American Bank or any American Bank
    Subsidiary as real estate acquired through foreclosure or in
    lieu of foreclosure, including in-substance foreclosures, and
    all other assets currently held that were acquired through
    foreclosure or in lieu of foreclosure. DISCLOSURE
    SCHEDULE 4.16.2 may exclude any individual loan with a
    principal outstanding balance of less than $50,000, provided
    that DISCLOSURE SCHEDULE 4.16.2 includes, for each category
    described, the aggregate amount of individual loans with a
    principal outstanding balance of less than $50,000 that has been
    excluded.



 



    4.16.3. All loans receivable (including discounts) and
    accrued interest entered on the books of ABNJ and the ABNJ
    Subsidiaries arose out of bona fide arm’s-length
    transactions, were made for good and valuable consideration in
    the ordinary course of ABNJ’s or the appropriate ABNJ
    Subsidiary’s respective business, and the notes or other
    evidences of indebtedness with respect to such loans (including
    discounts) are true and genuine and are what they purport to be,
    except as set forth in ABNJ DISCLOSURE SCHEDULE 4.16.3. To
    the Knowledge of ABNJ, the loans, discounts and the accrued
    interest reflected on the books of ABNJ and the ABNJ
    Subsidiaries are subject to no defenses, set-offs or
    counterclaims (including, without limitation, those afforded by
    usury or
    truth-in-lending
    laws), except as may be provided by bankruptcy, insolvency or
    similar laws affecting creditors’ rights generally or by
    general principles of equity. Except as set forth in ABNJ
    DISCLOSURE SCHEDULE 4.16.3, all such loans are owned by
    ABNJ or the appropriate ABNJ Subsidiary free and clear of any
    liens.



 



    4.16.4. The notes and other evidences of indebtedness
    evidencing the loans described above, and all pledges,
    mortgages, deeds of trust and other collateral documents or
    security instruments relating thereto are, in all material
    respects, valid, true and genuine, and what they purport to be.



 



    4.17.  Securities Documents.



 



    ABNJ has made available to Investors copies of its
    (i) annual reports on
    Form 10-K
    for the years ended September 30, 2007, 2006 and 2005 and
    (ii) proxy materials used or for use in connection with its
    meetings of




    

    A-24








 






    shareholders held in 2008, 2007 and 2006. Such reports and proxy
    materials complied, at the time filed with the SEC, in all
    material respects, with the Securities Laws.



 



    4.18.  Related Party Transactions.



 



    Except as described in ABNJ’s Proxy Statement distributed
    in connection with the annual meeting of shareholders held in
    February 2008 (which has previously been provided to Investors),
    or as set forth in ABNJ DISCLOSURE SCHEDULE 4.18, neither
    ABNJ nor any ABNJ Subsidiary is a party to any transaction
    (including any loan or other credit accommodation) with any
    Affiliate of ABNJ or any ABNJ Affiliate. All such transactions
    (a) were made in the ordinary course of business,
    (b) were made on substantially the same terms, including
    interest rates and collateral, as those prevailing at the time
    for comparable transactions with other Persons, and (c) did
    not involve more than the normal risk of collectability or
    present other unfavorable features. No loan or credit
    accommodation to any Affiliate of ABNJ or any ABNJ Subsidiary is
    presently in default or, during the three year period prior to
    the date of this Agreement, has been in default or has been
    restructured, modified or extended. Neither ABNJ nor any ABNJ
    Subsidiary has been notified that principal and interest with
    respect to any such loan or other credit accommodation will not
    be paid when due or that the loan grade classification accorded
    such loan or credit accommodation by ABNJ is inappropriate.



 



    4.19.  Deposits.



 



    Except as set forth in ABNJ DISCLOSURE SCHEDULE 4.19, none
    of the deposits of ABNJ or any ABNJ Subsidiary is a
    “brokered deposit” as defined in 12 CFR
    Section 337.6(a)(2).



 



    4.20.  Antitakeover Provisions Inapplicable;
    Required Vote.



 



    The affirmative vote of a majority of the votes cast by the
    holders of ABNJ Common Stock is required to approve this
    Agreement and the Merger under the NJBCA. The requirements of
    the New Jersey Shareholders Protection Act do not apply to the
    Merger and the Agreement.



 



    4.21.  Registration Obligations.



 



    Neither ABNJ nor any ABNJ Subsidiary is under any obligation,
    contingent or otherwise, which will survive the Effective Time
    by reason of any agreement to register any transaction involving
    any of its securities under the Securities Act.



 



    4.22.  Risk Management Instruments.



 



    All material interest rate swaps, caps, floors, option
    agreements, futures and forward contracts and other similar risk
    management arrangements, whether entered into for ABNJ’s
    own account, or for the account of one or more of ABNJ’s
    Subsidiaries or their customers (all of which are set forth in
    ABNJ DISCLOSURE SCHEDULE 4.22), were in all material
    respects entered into in compliance with all applicable laws,
    rules, regulations and regulatory policies, and to the Knowledge
    of ABNJ, with counterparties believed to be financially
    responsible at the time; and to ABNJ’s Knowledge each of
    them constitutes the valid and legally binding obligation of
    ABNJ or one of its Subsidiaries, enforceable in accordance with
    its terms (except as enforceability may be limited by applicable
    bankruptcy, insolvency, reorganization, moratorium, fraudulent
    transfer and similar laws of general applicability relating to
    or affecting creditors’ rights or by general equity
    principles), and is in full force and effect. Neither ABNJ nor
    any ABNJ Subsidiary, nor to the Knowledge of ABNJ any other
    party thereto, is in breach of any of its obligations under any
    such agreement or arrangement in any material respect.



 



    4.23.  Fairness Opinion.



 



    ABNJ has received a written opinion from KBW to the effect that,
    subject to the terms, conditions and qualifications set forth
    therein, as of the date hereof, the Merger Consideration to be
    received by the shareholders of ABNJ pursuant to this Agreement
    is fair to such shareholders from a financial point of view.
    Such opinion has not been amended or rescinded as of the date of
    this Agreement.




    

    A-25








 





 



    4.24.  Intellectual Property



 



    ABNJ and each ABNJ Subsidiary owns or, to ABNJ’s Knowledge,
    possesses valid and binding licenses and other rights (subject
    to expirations in accordance with their terms) to use all
    patents, copyrights, trade secrets, trade names, servicemarks
    and trademarks used in their business, each without payment
    (except as set forth in ABNJ DISCLOSURE SCHEDULE 4.24), and
    neither ABNJ nor any ABNJ Subsidiary has received any notice of
    conflict with respect thereto that asserts the rights of others.
    ABNJ and each ABNJ Subsidiary have performed all the obligations
    required to be performed, and are not in default in any respect,
    under any contract, agreement, arrangement or commitment
    relating to any of the foregoing. To the Knowledge of ABNJ, the
    conduct of the business of ABNJ and each ABNJ Subsidiary as
    currently conducted or proposed to be conducted does not, in any
    respect, infringe upon, dilute, misappropriate or otherwise
    violate any intellectual property owned or controlled by any
    third party.



 



    4.25.  Labor Matters



 



    There are no labor or collective bargaining agreements to which
    ABNJ or any ABNJ Subsidiary is a party. To the Knowledge of
    ABNJ, there is no union organizing effort pending or threatened
    against ABNJ or any ABNJ Subsidiary. There is no labor strike,
    labor dispute (other than routine employee grievances that are
    not related to union employees), work slowdown, stoppage or
    lockout pending or, to the Knowledge of ABNJ, threatened against
    ABNJ or any ABNJ Subsidiary. There is no unfair labor practice
    or labor arbitration proceeding pending or, to the Knowledge of
    ABNJ, threatened against ABNJ or any ABNJ Subsidiary (other than
    routine employee grievances that are not related to union
    employees). ABNJ and each ABNJ Subsidiary is in compliance in
    all material respects with all applicable laws respecting
    employment and employment practices, terms and conditions of
    employment and wages and hours, and are not engaged in any
    unfair labor practice.



 



    4.26.  ABNJ Information Supplied



 



    The information relating to ABNJ and any ABNJ Subsidiary to be
    contained in the Merger Registration Statement, or in any other
    document filed with any Bank Regulator or other Governmental
    Entity in connection herewith, will not contain any untrue
    statement of a material fact or omit to state a material fact
    necessary to make the statements therein, in light of the
    circumstances in which they are made, not misleading. The Merger
    Registration Statement will comply with the provisions of the
    Exchange Act and the rules and regulations thereunder and the
    provisions of the Securities Act and the rules and regulations
    thereunder, except that no representation or warranty is made by
    ABNJ with respect to statements made or incorporated by
    reference therein based on information supplied by Investors
    specifically for inclusion or incorporation by reference in the
    Merger Registration Statement.



 




    ARTICLE V

    



 




    REPRESENTATIONS
    AND WARRANTIES OF INVESTORS
    



 



    Investors represents and warrants to ABNJ that the statements
    contained in this Article V are correct and complete as of
    the date of this Agreement and will be correct and complete as
    of the Closing Date (as though made then and as though the
    Closing Date were substituted for the date of this Agreement
    throughout this Article V), subject to the standard set
    forth in Section 5.1, and except as set forth in the
    Investors DISCLOSURE SCHEDULE delivered by Investors to ABNJ on
    the date hereof, and except as to any representation or warranty
    which specifically relates to an earlier date, which only need
    be so correct as of such earlier date. Investors has made a good
    faith effort to ensure that the disclosure on each schedule of
    the Investors DISCLOSURE SCHEDULE corresponds to the section
    referenced herein. However, for purposes of the Investors
    DISCLOSURE SCHEDULE, any item disclosed on any schedule therein
    is deemed to be fully disclosed with respect to all schedules
    under which such item may be relevant as and to the extent that
    it is reasonably clear on the face of such schedule that such
    item applies to such other schedule. References to the Knowledge
    of Investors shall include the Knowledge of Investors Savings
    Bank.




    

    A-26








 





 



    5.1.  Standard.



 



    No representation or warranty of Investors contained in this
    Article V shall be deemed untrue or incorrect, and
    Investors shall not be deemed to have breached a representation
    or warranty, as a consequence of the existence of any fact,
    circumstance or event unless such fact, circumstance or event,
    individually or taken together with all other facts,
    circumstances or events inconsistent with any paragraph of
    Article V, has had or is reasonably expected to have a
    Material Adverse Effect, disregarding for these purposes
    (x) any qualification or exception for, or reference to,
    materiality in any such representation or warranty and
    (y) any use of the terms “material”,
    “materially”, “in all material respects”,
    “Material Adverse Effect” or similar terms or phrases
    in any such representation or warranty. The foregoing standard
    shall not apply to representations and warranties contained in
    Sections 5.2 (other than the last sentence of
    Sections 5.2.1 and 5.2.2, 5.2.4 and 5.2.5), 5.3, 5.4, and
    5.8 which shall be deemed untrue, incorrect and breached if they
    are not true and correct in all material respects based on the
    qualifications and standards therein contained.



 



    5.2.  Organization.



 



    5.2.1. Investors is a corporation duly organized, validly
    existing and in good standing under the laws of the State of
    Delaware, and is duly registered as a bank holding company under
    the BHCA. Investors has full corporate power and authority to
    carry on its business as now conducted and is duly licensed or
    qualified to do business in the states of the United States and
    foreign jurisdictions where its ownership or leasing of property
    or the conduct of its business requires such qualification.



 



    5.2.2. Investors Savings Bank is a savings bank duly
    organized, validly existing and in good standing (to the extent
    required) under New Jersey law. The deposits of Investors
    Savings Bank are insured by the FDIC to the fullest extent
    permitted by law, and all premiums and assessments required to
    be paid in connection therewith have been paid when due.
    Investors Savings Bank is a member in good standing of the FHLB
    and own the requisite amount of stock therein.



 



    5.2.3. INVESTORS DISCLOSURE SCHEDULE 5.2.3 sets forth
    each Investors Subsidiary. Each Investors Subsidiary is a
    corporation or limited liability company duly organized, validly
    existing and in good standing under the laws of its jurisdiction
    of incorporation or organization.



 



    5.2.4. The respective minute books of Investors and each
    Investors Subsidiary accurately records, in all material
    respects, all material corporate actions of their respective
    shareholders and boards of directors (including committees).



 



    5.2.5. Prior to the date of this Agreement, Investors has
    made available to ABNJ true and correct copies of the
    certificate of incorporation and bylaws of Investors and
    Investors Savings Bank and the Investors Subsidiaries.



 



    5.3.  Capitalization.



 



    5.3.1. The authorized capital stock of Investors consists
    of 200,000,000 shares of common stock, $0.01 par
    value, of which 108,927,929 shares are outstanding, validly
    issued, fully paid and nonassessable and free of preemptive
    rights, and 50,000,000 shares of preferred stock,
    $0.01 par value (“Investors Preferred Stock”),
    none of which are outstanding. There are 9,092,351 shares
    of Investors Common Stock held by Investors as treasury stock.
    Neither Investors nor any Investors Subsidiary has or is bound
    by any Rights of any character relating to the purchase, sale or
    issuance or voting of, or right to receive dividends or other
    distributions on any shares of Investors Common Stock, or any
    other security of Investors or any securities representing the
    right to vote, purchase or otherwise receive any shares of
    Investors Common Stock or any other security of Investors, other
    than shares issuable under the Investors Stock Benefit Plans.



 



    5.3.2. Investors owns all of the capital stock of Investors
    Savings Bank free and clear of any lien or encumbrance.



 



    5.4.  Authority; No Violation.



 



    5.4.1. Investors has full corporate power and authority to
    execute and deliver this Agreement and, subject to receipt of
    the Regulatory Approvals, to consummate the transactions
    contemplated hereby. The execution




    

    A-27








 






    and delivery of this Agreement by Investors and the completion
    by Investors of the transactions contemplated hereby, including
    the Merger, have been duly and validly approved by the Board of
    Directors of Investors, and no other corporate proceedings on
    the part of Investors are necessary to complete the transactions
    contemplated hereby, including the Merger. This Agreement has
    been duly and validly executed and delivered by Investors, and
    subject to the receipt of the Regulatory Approvals and due and
    valid execution and delivery of this Agreement by ABNJ,
    constitutes the valid and binding obligations of Investors,
    enforceable against Investors in accordance with its terms,
    subject to applicable bankruptcy, insolvency and similar laws
    affecting creditors’ rights generally, and subject, as to
    enforceability, to general principles of equity.



 



    5.4.2. Subject to receipt of Regulatory Approvals and
    ABNJ’s and Investors’ compliance with any conditions
    contained therein, (A) the execution and delivery of this
    Agreement by Investors, (B) the consummation of the
    transactions contemplated hereby, and (C) compliance by
    Investors with any of the terms or provisions hereof will not
    (i) conflict with or result in a breach of any provision of
    the certificate of incorporation or bylaws of Investors or any
    Investors Subsidiary; (ii) violate any statute, code,
    ordinance, rule, regulation, judgment, order, writ, decree or
    injunction applicable to Investors or any Investors Subsidiary
    or any of their respective properties or assets; or
    (iii) violate, conflict with, result in a breach of any
    provisions of, constitute a default (or an event which, with
    notice or lapse of time, or both, would constitute a default),
    under, result in the termination of, accelerate the performance
    required by, or result in a right of termination or acceleration
    or the creation of any lien, security interest, charge or other
    encumbrance upon any of the properties or assets of Investors or
    any Investors Subsidiary under any of the terms, conditions or
    provisions of any note, bond, mortgage, indenture, deed of
    trust, license, lease, agreement or other investment or
    obligation to which any of them is a party, or by which they or
    any of their respective properties or assets may be bound or
    affected, except for such violations, conflicts, breaches or
    defaults under clause (ii) or (iii) hereof which,
    either individually or in the aggregate, will not have a
    Material Adverse Effect on Investors.



 



    5.5.  Consents.



 



    Except for (a) filings with Bank Regulators, the receipt of
    the Regulatory Approvals, compliance with any conditions
    contained therein and the filing of Articles of Combination with
    Bank Regulators, (b) the filing of the Certificate of
    Merger with the Secretary of States of the States of Delaware
    and New Jersey, (c) the filing with the SEC of (i) the
    Merger Registration Statement and (ii) such reports under
    Sections 13(a), 13(d), 13(g) and 16(a) of the Exchange Act
    as may be required in connection with this Agreement and the
    transactions contemplated hereby and the obtaining from the SEC
    of such orders as may be required in connection therewith,
    (d) approval of the listing of Investors Common Stock to be
    issued in the Merger on the Nasdaq, (e) such filings and
    approvals as are required to be made or obtained under the
    securities or “Blue Sky” laws of various states in
    connection with the issuance of the shares of Investors Common
    Stock pursuant to this Agreement, and (f) the approval of
    this Agreement by the requisite vote of the shareholders of
    ABNJ, no consents, waivers or approvals of, or filings or
    registrations with, any Governmental Entity are necessary, and,
    to Investors’ Knowledge, no consents, waivers or approvals
    of, or filings or registrations with, any other third parties
    are necessary, in connection with (x) the execution and
    delivery of this Agreement by Investors, and (y) the
    completion of the Merger and the Bank Merger. Investors has no
    reason to believe that (i) any Regulatory Approvals or
    other required consents or approvals will not be received, or
    that (ii) any public body or authority, the consent or
    approval of which is not required or to which a filing is not
    required, will object to the completion of the transactions
    contemplated by this Agreement.



 



    5.6.  Financial Statements.



 



    5.6.1. Investors has previously made available to ABNJ the
    Investors Financial Statements. The Investors Financial
    Statements have been prepared in accordance with GAAP, and
    (including the related notes where applicable) fairly present in
    each case in all material respects (subject in the case of the
    unaudited interim statements to normal year-end adjustments) the
    consolidated financial position, results of operations and cash
    flows of Investors and the Investors Subsidiaries on a
    consolidated basis as of and for the respective periods ending
    on the dates thereof, in accordance with GAAP during the periods
    involved, except as indicated in the notes thereto, or in the
    case of unaudited statements, as permitted by
    Form 10-Q.




    

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    5.6.2. At the date of each balance sheet included in the
    Investors Financial Statements, Investors did not have any
    liabilities, obligations or loss contingencies of any nature
    (whether absolute, accrued, contingent or otherwise) of a type
    required to be reflected in such Investors Financial Statements
    or in the footnotes thereto which are not fully reflected or
    reserved against therein or fully disclosed in a footnote
    thereto, except for liabilities, obligations and loss
    contingencies which are not material individually or in the
    aggregate or which are incurred in the ordinary course of
    business, consistent with past practice, and except for
    liabilities, obligations and loss contingencies which are within
    the subject matter of a specific representation and warranty
    herein and subject, in the case of any unaudited statements, to
    normal, recurring audit adjustments and the absence of footnotes.



 



    5.6.3. The records, systems, controls, data and information
    of Investors and its Subsidiaries are recorded, stored,
    maintained and operated under means (including any electronic,
    mechanical or photographic process, whether computerized or not)
    that are under the exclusive ownership and direct control of
    Investors or its Subsidiaries or accountants (including all
    means of access thereto and therefrom), except for any
    non-exclusive ownership and non-direct control that would not
    reasonably be expected to have a material adverse effect on the
    system of internal accounting controls described below in this
    Section 5.6.3. Investors (x) has implemented and
    maintains a system of internal control over financial reporting
    (as required by
    Rule 13a-15(a)
    of the Exchange Act) that is designed to provide reasonable
    assurances regarding the reliability of financial reporting and
    the preparation of its financial statements for external
    purposes in accordance with GAAP, (y) has implemented and
    maintains disclosure controls and procedures (as defined in
    Rule 13a-15(e)
    of the Exchange Act) to ensure that material information
    relating to Investors, including its consolidated Subsidiaries,
    is made known to the chief executive officer and the chief
    financial officer of Investors by others within those entities,
    and (z) has disclosed, based on its most recent evaluation
    prior to the date hereof, to Investors’ outside auditors
    and the audit committee of Investors’ Board of Directors
    (i) any significant deficiencies and material weaknesses in
    the design or operation of internal control over financial
    reporting (as defined in
    Rule 13a-15(f)
    of the Exchange Act) which are reasonably likely to adversely
    affect Investors’ ability to record, process, summarize and
    report financial information and (ii) any fraud, whether or
    not material, that involves management or other employees who
    have a significant role in Investors’ internal control over
    financial reporting. As of the date hereof, to the knowledge of
    Investors, its chief executive officer and chief financial
    officer will be able to give the certifications required
    pursuant to the rules and regulations adopted pursuant to
    Section 302 of the Sarbanes-Oxley Act, without
    qualification, when next due.



 



    5.6.4. The allowance for credit losses reflected in
    Investors’ audited statement of condition at June 30,
    2008 was, and the allowance for credit losses shown on the
    balance sheets in Investors’ Securities Documents for
    periods ending after June 30, 2008 was or will be,
    adequate, as of the dates thereof, under GAAP.



 



    5.7.  Taxes.



 



    Investors and the Investors Subsidiaries that are at least
    80 percent owned by Investors are members of the same
    affiliated group within the meaning of Code
    Section 1504(a). Investors has duly filed all federal,
    state and material local tax returns required to be filed by or
    with respect to Investors and each Investors Subsidiary on or
    prior to the Closing Date, taking into account any extensions
    (all such returns, to the Knowledge of Investors, being accurate
    and correct in all material respects) and has duly paid or made
    provisions for the payment of all material federal, state and
    local taxes which have been incurred by or are due or claimed to
    be due from Investors and any Investors Subsidiary by any taxing
    authority or pursuant to any written tax sharing agreement on or
    prior to the Closing Date other than taxes or other charges
    which (i) are not delinquent, (ii) are being contested
    in good faith, or (iii) have not yet been fully determined.
    Investors and each of its Subsidiaries has withheld and paid all
    taxes required to have been withheld and paid in connection with
    amounts paid or owing to any employee, independent contractor,
    creditor, shareholder or other third party, and Investors and
    each of its Subsidiaries, to the Knowledge of Investors, has
    timely complied with all applicable information reporting
    requirements under Part III, Subchapter A of
    Chapter 61 of the Code and similar applicable state and
    local information reporting requirements.




    

    A-29








 





 



    5.8.  No Material Adverse Effect.



 



    Investors has not suffered any Material Adverse Effect since
    June 30, 2008 and no event has occurred or circumstance
    arisen since that date which, in the aggregate, has had or is
    reasonably likely to have a Material Adverse Effect on Investors.



 



    5.9.  Ownership of Property; Insurance Coverage.



 



    5.9.1. Investors and each Investors Subsidiary has good
    and, as to real property, marketable title to all material
    assets and properties owned by Investors or each Investors
    Subsidiary in the conduct of their businesses, whether such
    assets and properties are real or personal, tangible or
    intangible, including assets and property reflected in the
    balance sheets contained in the Investors Financial Statements
    or acquired subsequent thereto (except to the extent that such
    assets and properties have been disposed of in the ordinary
    course of business, since the date of such balance sheets),
    subject to no material encumbrances, liens, mortgages, security
    interests or pledges, except (i) those items which secure
    liabilities for public or statutory obligations or any discount
    with, borrowing from or other obligations to FHLB, inter-bank
    credit facilities, or any transaction by a Investors Subsidiary
    acting in a fiduciary capacity, (ii) statutory liens for
    amounts not yet delinquent or which are being contested in good
    faith, (iii) non-monetary liens affecting real property
    which do not adversely affect the value or use of such real
    property, and (iv) those described and reflected in the
    Investors Financial Statements. Investors and the Investors
    Subsidiaries, as lessee, have the right under valid and existing
    leases of real and personal properties used by Investors and its
    Subsidiaries in the conduct of their businesses to occupy or use
    all such properties as presently occupied and used by each of
    them. Investors and each Investors Subsidiary currently maintain
    insurance considered by each of them to be reasonable for their
    respective operations.



 



    5.10.  Legal Proceedings.



 



    Except as disclosed in INVESTORS DISCLOSURE SCHEDULE 5.10,
    neither Investors nor any Investors Subsidiary is a party to
    any, and there are no pending or, to the Knowledge of Investors,
    threatened legal, administrative, arbitration or other
    proceedings, claims (whether asserted or unasserted), actions or
    governmental investigations or inquiries of any nature
    (i) against Investors or any Investors Subsidiary,
    (ii) to which Investors or any Investors Subsidiary’s
    assets are or may be subject, (iii) challenging the
    validity or propriety of any of the transactions contemplated by
    this Agreement, or (iv) which would reasonably be expected
    to adversely affect the ability of Investors to perform under
    this Agreement, except for any proceeding, claim, action,
    investigation or inquiry which, if adversely determined,
    individually or in the aggregate, would not be reasonably
    expected to have a Material Adverse Effect.



 



    5.11.  Compliance With Applicable Law.



 



    5.11.1. To the Knowledge of Investors, each of Investors
    and each Investors Subsidiary is in compliance in all material
    respects with all applicable federal, state, local and foreign
    statutes, laws, regulations, ordinances, rules, judgments,
    orders or decrees applicable to it, its properties, assets and
    deposits, its business, and its conduct of business and its
    relationship with its employees, including, without limitation,
    the USA Patriot Act, the Equal Credit Opportunity Act, the Fair
    Housing Act, the Community Reinvestment Act of 1977, the Home
    Mortgage Disclosure Act, and all other applicable fair lending
    laws and other laws relating to discriminatory business
    practices, and neither Investors nor any Investors Subsidiary
    has received any written notice to the contrary. The Board of
    Directors of Investors Savings Bank has adopted and Investors
    Savings Bank has implemented an anti-money laundering program
    that contains adequate and appropriate customer identification
    verification procedures that has not been deemed ineffective by
    any Governmental Authority and that meets the requirements of
    Sections 352 and 326 of the USA Patriot Act and the
    regulations thereunder.



 



    5.11.2. Each of Investors and each Investors Subsidiary has
    all material permits, licenses, authorizations, orders and
    approvals of, and has made all filings, applications and
    registrations with, all Bank Regulators that are required in
    order to permit it to own or lease its properties and to conduct
    its business as presently conducted; all such permits, licenses,
    certificates of authority, orders and approvals are in full
    force and effect and, to the Knowledge of Investors, no
    suspension or cancellation of any such permit, license,
    certificate, order




    

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    or approval is threatened or will result from the consummation
    of the transactions contemplated by this Agreement, subject to
    obtaining the Regulatory Approvals.



 



    5.11.3. For the period beginning January 1, 2003,
    neither Investors nor any Investors Subsidiary has received any
    written notification or, to the Knowledge of Investors, any
    other communication from any Bank Regulator (i) asserting
    that Investors or any Investors Subsidiary is not in material
    compliance with any of the statutes, regulations or ordinances
    which such Bank Regulator enforces; (ii) threatening to
    revoke any license, franchise, permit or governmental
    authorization which is material to Investors or Investors
    Savings Bank; (iii) requiring or threatening to require
    Investors or any Investors Subsidiary, or indicating that
    Investors or any Investors Subsidiary may be required, to enter
    into a cease and desist order, agreement or memorandum of
    understanding or any other agreement with any federal or state
    governmental agency or authority which is charged with the
    supervision or regulation of banks or engages in the insurance
    of bank deposits restricting or limiting, or purporting to
    restrict or limit, in any material respect the operations of
    Investors or any Investors Subsidiary, including without
    limitation any restriction on the payment of dividends; or
    (iv) directing, restricting or limiting, or purporting to
    direct, restrict or limit, in any manner the operations of
    Investors or any Investors Subsidiary, including without
    limitation any restriction on the payment of dividends (any such
    notice, communication, memorandum, agreement or order described
    in this sentence is hereinafter referred to as an
    “Investors Regulatory Agreement”). Neither Investors
    nor any Investors Subsidiary has consented to or entered into
    any currently effective Investors Regulatory Agreement. The most
    recent regulatory rating given to Investors Savings Bank as to
    compliance with the CRA is satisfactory or better.



 



    5.11.4. Since the enactment of the Sarbanes-Oxley Act,
    Investors has been and is in compliance in all material respects
    with (i) the applicable provisions of the Sarbanes-Oxley
    Act and (ii) the applicable listing and corporate
    governance rules and regulations of the Nasdaq.



 



    5.12.  Employee Benefit Plans.



 



    5.12.1. INVESTORS DISCLOSURE SCHEDULE 5.12 includes a
    list of all existing bonus, incentive, deferred compensation,
    pension, retirement, profit-sharing, thrift, savings, employee
    stock ownership, stock bonus, stock purchase, restricted stock,
    stock option, stock appreciation, phantom stock, severance,
    welfare benefit plans, fringe benefit plans, employment,
    severance and change in control agreements and all other benefit
    practices, policies and arrangements maintained by Investors or
    any Investors Subsidiary and in which employees in general may
    participate (the “Investors Compensation and Benefit
    Plans”). Each Investors Compensation and Benefit Plan has
    been administered in form and in operation, in all material
    respects with its terms and all applicable requirements of law
    and no notice has been issued by any Governmental Authority
    questioning or challenging such compliance.



 



    5.12.2. To the Knowledge of Investors and except as
    disclosed in INVESTORS DISCLOSURE SCHEDULE 5.12.2, each
    Investors Compensation and Benefit Plan has been operated and
    administered in all material respects in accordance with its
    terms and with applicable law, including, but not limited to,
    ERISA, the Code, the Securities Act, the Exchange Act, the
    Age Discrimination in Employment Act, COBRA, the Health
    Insurance Portability and Accountability Act and any regulations
    or rules promulgated thereunder, and all material filings,
    disclosures and notices required by ERISA, the Code, the
    Securities Act, the Exchange Act, the Age Discrimination in
    Employment Act and any other applicable law have been timely
    made or any interest, fines, penalties or other impositions for
    late filings have been paid in full. Each Investors Compensation
    and Benefit Plan which is a Pension Plan and which is intended
    to be qualified under Section 401(a) of the Code has
    received a favorable determination letter from the IRS, and
    Investors is not aware of any circumstances which are reasonably
    likely to result in revocation of any such favorable
    determination letter. There is no material pending or, to the
    Knowledge of Investors, threatened action, suit or claim
    relating to any of the Investors Compensation and Benefit Plans
    (other than routine claims for benefits). Neither Investors nor
    any Investors Subsidiary has engaged in a transaction, or
    omitted to take any action, with respect to any Investors
    Compensation and Benefit Plan that would reasonably be expected
    to subject Investors or any Investors Subsidiary to an unpaid
    tax or penalty imposed by either Section 4975 of the Code
    or Section 502 of ERISA.




    

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    5.12.3. All material contributions required to be made
    under the terms of any Investors Compensation and Benefit Plan
    or ERISA Affiliate Plan or any employee benefit arrangements to
    which Investors or any Investors Subsidiary is a party or a
    sponsor have been timely made, and all anticipated contributions
    and funding obligations are accrued on Investors’
    consolidated financial statements to the extent required by
    GAAP. Investors and its Subsidiaries have expensed and accrued
    as a liability the present value of future benefits under each
    applicable Investors Compensation and Benefit Plan for financial
    reporting purposes as required by GAAP.



 



    5.13.  Environmental Matters.



 



    5.13.1. To the Knowledge of Investors, neither the conduct
    nor operation of its business nor any condition of any property
    currently or previously owned or operated by it (including,
    without limitation, in a fiduciary or agency capacity), or on
    which it holds a lien, results or resulted in a violation of any
    Environmental Laws that is reasonably likely to impose a
    material liability (including a material remediation obligation)
    upon Investors or any Investors Subsidiary. To the Knowledge of
    Investors, no condition has existed or event has occurred with
    respect to any of them or any such property that, with notice or
    the passage of time, or both, is reasonably likely to result in
    any material liability to Investors or any Investors Subsidiary
    by reason of any Environmental Laws. Neither Investors nor any
    Investors Subsidiary during the past five years has received any
    written notice from any Person that Investors or any Investors
    Subsidiary or the operation or condition of any property ever
    owned, operated, or held as collateral or in a fiduciary
    capacity by any of them are currently in violation of or
    otherwise are alleged to have financial exposure under any
    Environmental Laws or relating to Materials of Environmental
    Concern (including, but not limited to, responsibility (or
    potential responsibility) for the cleanup or other remediation
    of any Materials of Environmental Concern at, on, beneath, or
    originating from any such property) for which a material
    liability is reasonably likely to be imposed upon Investors or
    any Investors Subsidiary.



 



    5.13.2. There is no suit, claim, action, demand, executive
    or administrative order, directive, investigation or proceeding
    pending or, to Investors’s Knowledge, threatened, before
    any court, governmental agency or other forum against Investors
    or any Investors Subsidiary (x) for alleged noncompliance
    (including by any predecessor) with, or liability under, any
    Environmental Law or (y) relating to the presence of or
    release (defined herein) into the environment of any Materials
    of Environmental Concern (as defined herein), whether or not
    occurring at or on a site owned, leased or operated by Investors
    or any Investors Subsidiary.



 



    5.14.  Securities Documents.



 



    Investors has made available to ABNJ copies of its
    (i) annual reports on
    Form 10-K
    for the years ended June 30, 2008, 2007 and 2006, and
    (ii) proxy materials used or for use in connection with its
    meetings of shareholders held in 2008, 2007 and 2006. Such
    reports and such proxy materials complied, at the time filed
    with the SEC, in all material respects, with the Securities Laws.



 



    5.15.  Investors Common Stock



 



    The shares of Investors Common Stock to be issued pursuant to
    this Agreement, when issued in accordance with the terms of this
    Agreement, will be duly authorized, validly issued, fully paid
    and non-assessable and subject to no preemptive rights.



 



    5.16.  Investors Information Supplied



 



    The information relating to Investors and any Investors
    Subsidiary to be contained in the Merger Registration Statement,
    or in any other document filed with any Bank Regulator or other
    Governmental Entity in connection herewith, will not contain any
    untrue statement of a material fact or omit to state a material
    fact necessary to make the statements therein, in light of the
    circumstances in which they are made, not misleading. The Merger
    Registration Statement will comply with the provisions of the
    Exchange Act and the rules and regulations thereunder and the
    provisions of the Securities Act and the rules and regulations
    thereunder, except that no representation or warranty is made by
    Investors with respect to statements made or incorporated by
    reference therein based on information supplied by ABNJ
    specifically for inclusion or incorporation by reference in the
    Merger Registration Statement.




    

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    ARTICLE VI

    



 




    COVENANTS
    OF ABNJ




 



    6.1.  Conduct of Business.



 



    6.1.1. Affirmative Covenants.  During the
    period from the date of this Agreement to the Effective Time,
    except with the written consent of Investors, which consent will
    not be unreasonably withheld, conditioned or delayed, ABNJ will,
    and it will cause each ABNJ Subsidiary to: operate its business,
    only in the usual, regular and ordinary course of business; use
    reasonable efforts to preserve intact its business organization
    and assets and maintain its rights and franchises; and
    voluntarily take no action which would (i) adversely affect
    the ability of the parties to obtain any Regulatory Approval or
    other approvals of Governmental Entities required for the
    transactions contemplated hereby or materially increase the
    period of time necessary to obtain such approvals, or
    (ii) adversely affect its ability to perform its covenants
    and agreements under this Agreement.



 



    6.1.2. Negative Covenants.  ABNJ agrees
    that from the date of this Agreement to the Effective Time,
    except as otherwise specifically permitted or required by this
    Agreement, set forth in ABNJ DISCLOSURE SCHEDULE 6.1.2, or
    consented to by Investors in writing (which consent shall not be
    unreasonably withheld or delayed), it will not, and it will
    cause each ABNJ Subsidiary not to:



 



    (A) change or waive any provision of its Certificate of
    Incorporation, Charter or Bylaws, except as required by law, or
    appoint a new director to the board directors;



 



    (B) change the number of authorized or issued shares of its
    capital stock, issue any shares of ABNJ Common Stock, including
    any shares that are held as “treasury shares” as of
    the date of this Agreement, or issue or grant any Right or
    agreement of any character relating to its authorized or issued
    capital stock or any securities convertible into shares of such
    stock, make any grant or award under the ABNJ Equity Plans, or
    split, combine or reclassify any shares of capital stock, or
    declare, set aside or pay any dividend or other distribution in
    respect of capital stock, or redeem or otherwise acquire any
    shares of capital stock, except that (i) ABNJ may continue
    to pay its regular quarterly cash dividend of $0.05 per share,
    with payment and record dates consistent with past practice,
    (ii) ABNJ may issue shares of ABNJ Common Stock upon the
    valid exercise, in accordance with the information set forth in
    ABNJ DISCLOSURE SCHEDULE 4.3.1, of presently outstanding
    ABNJ Options issued under the ABNJ Equity Plans, and
    (iii) any ABNJ Subsidiary may pay dividends to its parent
    company (as permitted under applicable law or regulations)
    consistent with past practice.



 



    (C) enter into, amend in any material respect or terminate
    any contract or agreement (including without limitation any
    settlement agreement with respect to litigation) except in the
    ordinary course of business;



 



    (D) other than as set forth in ABNJ DISCLOSURE
    SCHEDULE 6.1.2(D), make application for the opening or
    closing of any, or open or close any, branch or automated
    banking facility;



 



    (E) grant or agree to pay any bonus, severance or
    termination to, or enter into, renew or amend any employment
    agreement, severance agreement
    and/or
    supplemental executive agreement with, or increase in any manner
    the compensation or fringe benefits of, any of its directors,
    officers or employees, except (i) as may be required
    pursuant to commitments existing on the date hereof and set
    forth on ABNJ DISCLOSURE SCHEDULES 4.9.1 and 4.13.1, and
    (ii) pay increases in the ordinary course of business
    consistent with past practice to non-officer employees. Neither
    ABNJ nor any ABNJ Subsidiary shall hire or promote any employee
    to a rank having a title of vice president or other more senior
    rank or hire any new employee at an annual rate of compensation
    in excess of $50,000, provided that ABNJ or an ABNJ Subsidiary
    may hire at-will, non-officer employees to fill vacancies that
    may from time to time arise in the ordinary course of business.



 



    (F) enter into or, except as may be required by law,
    materially modify any pension, retirement, stock option, stock
    purchase, stock appreciation right, stock grant, savings, profit
    sharing, deferred compensation, supplemental retirement,
    consulting, bonus, group insurance or other employee benefit,
    incentive or welfare contract, plan or arrangement, or any trust
    agreement related thereto, in respect of any of its




    

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    directors, officers or employees; or make any contributions to
    any defined contribution plan not in the ordinary course of
    business consistent with past practice;



 



    (G) merge or consolidate ABNJ or any ABNJ Subsidiary with
    any other corporation; sell or lease all or any substantial
    portion of the assets or business of ABNJ or any ABNJ
    Subsidiary; make any acquisition of all or any substantial
    portion of the business or assets of any other person, firm,
    association, corporation or business organization other than in
    connection with foreclosures, settlements in lieu of
    foreclosure, troubled loan or debt restructuring, or the
    collection of any loan or credit arrangement between ABNJ, or
    any ABNJ Subsidiary, and any other person; enter into a purchase
    and assumption transaction with respect to deposits and
    liabilities; permit the revocation or surrender by any ABNJ
    Subsidiary of its certificate of authority to maintain, or file
    an application for the relocation of, any existing branch
    office, or file an application for a certificate of authority to
    establish a new branch office;



 



    (H) sell or otherwise dispose of the capital stock of ABNJ
    or sell or otherwise dispose of any asset of ABNJ or of any ABNJ
    Subsidiary other than in the ordinary course of business
    consistent with past practice; except for transactions with the
    FHLB, subject any asset of ABNJ or of any ABNJ Subsidiary to a
    lien, pledge, security interest or other encumbrance (other than
    in connection with deposits, repurchase agreements, bankers
    acceptances, “treasury tax and loan” accounts
    established in the ordinary course of business and transactions
    in “federal funds” and the satisfaction of legal
    requirements in the exercise of trust powers) other than in the
    ordinary course of business consistent with past practice; incur
    any indebtedness for borrowed money (or guarantee any
    indebtedness for borrowed money), except in the ordinary course
    of business consistent with past practice;



 



    (I) voluntarily take any action which would result in any
    of the representations and warranties of ABNJ or American Bank
    set forth in this Agreement becoming untrue as of any date after
    the date hereof or in any of the conditions set forth in
    Article IX hereof not being satisfied, except in each case
    as may be required by applicable law;



 



    (J) change any method, practice or principle of accounting,
    except as may be required from time to time by GAAP (without
    regard to any optional early adoption date) or any Bank
    Regulator responsible for regulating ABNJ or American Bank;



 



    (K) waive, release, grant or transfer any material rights
    of value or modify or change in any material respect any
    existing material agreement or indebtedness to which ABNJ or any
    ABNJ Subsidiary is a party, other than in the ordinary course of
    business, consistent with past practice;



 



    (L) purchase any securities (other than FHLB stock as
    required by the FHLB); or purchase any securities other than
    securities (i) issued by a federal government agency, and
    (iii) with a weighted average life of not more than one
    year;



 



    (M) except for commitments issued prior to the date of this
    Agreement which have not yet expired and which have been
    disclosed on the ABNJ DISCLOSURE SCHEDULE 6.12(M), and the
    renewal of existing lines of credit, make any new loan or other
    credit facility commitment (including without limitation, lines
    of credit and letters of credit) in an amount in excess of
    $1.0 million for a commercial real estate loan or $250,000
    for a commercial business loan, or $500,000 for a construction
    loan, or in excess of $750,000 for a residential loan. In
    addition, the prior approval of Investors is required with
    respect to the foregoing: (i) any new loan or credit
    facility commitment to any borrower or group of affiliated
    borrowers whose credit exposure with American Bank, ABNJ or any
    ABNJ Subsidiary, in the aggregate, exceeds $5.0 million
    prior thereto or as a result thereof; and (ii) any new loan
    or credit facility commitment in any property located, outside
    of New Jersey.



 



    (N) except as set forth on the ABNJ DISCLOSURE
    SCHEDULE 6.12(N), enter into, renew, extend or modify any
    other transaction (other than a deposit transaction) with any
    Affiliate;



 



    (O) enter into (or renew) any futures contract, option,
    interest rate caps, interest rate floors, interest rate exchange
    agreement or other agreement or take any other action for
    purposes of hedging the




    

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    exposure of its interest-earning assets and interest-bearing
    liabilities to changes in market rates of interest; enter into
    (or renew) any structured financing transaction;



 



    (P) except for the execution of this Agreement, and actions
    taken or which will be taken in accordance with this Agreement
    and performance thereunder, take any action that would give rise
    to a right of payment to any individual under any employment
    agreement;



 



    (Q) make any material change in policies in existence on
    the date of this Agreement with regard to: the extension of
    credit, or the establishment of reserves with respect to the
    possible loss thereon or the charge off of losses incurred
    thereon; investments; asset/liability management; or other
    material banking policies except as may be required by changes
    in applicable law or regulations or by a Bank Regulator;



 



    (R) except for the execution of this Agreement, and the
    transactions contemplated therein, take any action that would
    give rise to an acceleration of the right to payment to any
    individual under any ABNJ Employee Plan;



 



    (S) except as set forth in ABNJ DISCLOSURE
    SCHEDULE 6.12(S), make any capital expenditures in excess
    of $25,000 individually or $75,000 in the aggregate, other than
    pursuant to binding commitments existing on the date hereof and
    other than expenditures necessary to maintain existing assets in
    good repair;



 



    (T) except as set forth in ABNJ DISCLOSURE
    SCHEDULE 6.12(T), purchase or otherwise acquire, or sell or
    otherwise dispose of, any assets or incur any liabilities other
    than in the ordinary course of business consistent with past
    practices and policies;



 



    (U) sell any participation interest in any loan (other than
    sales of loans secured by one- to four-family real estate that
    are consistent with past practice) (and provided that Investors
    Savings Bank will be given the first opportunity to purchase any
    loan participation being sold) or OREO properties (other than
    sales of OREO which generate a net book loss of not more than
    $10,000 per property);



 



    (V) undertake or enter into any lease, contract or other
    commitment for its account, other than in the normal course of
    providing credit to customers as part of its banking business,
    involving a payment by ABNJ or American Bank of more than
    $25,000 annually, or containing any financial commitment
    extending beyond 12 months from the date hereof;



 



    (W) pay, discharge, settle or compromise any claim, action,
    litigation, arbitration or proceeding, other than any such
    payment, discharge, settlement or compromise in the ordinary
    course of business consistent with past practice that involves
    solely money damages in the amount not in excess of $25,000
    individually or $75,000 in the aggregate, and that does not
    create negative precedent for other pending or potential claims,
    actions, litigation, arbitration or proceedings;



 



    (X) foreclose upon or take a deed or title to any
    commercial real estate without first conducting a Phase I
    environmental assessment of the property or foreclose upon any
    commercial real estate if such environmental assessment
    indicates the presence of a Materials of Environmental Concern;



 



    (Y) purchase or sell any mortgage loan servicing rights
    other than in the ordinary course of business consistent with
    past practice;



 



    (Z) borrow or otherwise enter into any agreement (including
    but not limited to structured borrowings or any indebtedness the
    maturity date of which is in excess of 12 months) to
    increase the indebtedness of ABNJ or any of its subsidiaries
    except for liquidity and operational purposes;



 



    (AA) issue any broadly distributed communication of a
    general nature to employees (including general communications
    relating to benefits and compensation) without prior
    consultation with Investors and, to the extent relating to
    post-Closing employment, benefit or compensation information
    without the prior consent of Investors (which shall not be
    unreasonably withheld) or issue any broadly distributed
    communication of a general nature to customers without the prior
    approval of Investors (which shall not be unreasonably
    withheld), except as required by law or for communications in
    the ordinary course of




    

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    business consistent with past practice that do not relate to the
    Merger or other transactions contemplated hereby; or



 



    (BB) agree to do any of the foregoing.



 



    6.2.  Current Information.



 



    6.2.1. During the period from the date of this Agreement to
    the Effective Time, ABNJ will cause one or more of its
    representatives to confer with representatives of Investors and
    report the general status of its ongoing operations at such
    times as Investors may reasonably request. ABNJ will promptly
    notify Investors of any material change in the normal course of
    its business or in the operation of its properties and, to the
    extent permitted by applicable law, of any governmental
    complaints, investigations or hearings (or communications
    indicating that the same may be contemplated), or the
    institution or the threat of material litigation involving ABNJ
    or any ABNJ Subsidiary. Without limiting the foregoing, senior
    officers of Investors and ABNJ shall meet on a reasonably
    regular basis (expected to be at least monthly) to review the
    financial and operational affairs of ABNJ and its Subsidiaries,
    in accordance with applicable law, and ABNJ shall give due
    consideration to Investors’ input on such matters, with the
    understanding that, notwithstanding any other provision
    contained in this Agreement, neither Investors nor any Investors
    Subsidiary shall under any circumstance be permitted to exercise
    control of ABNJ or any ABNJ Subsidiary prior to the Effective
    Time.



 



    6.2.2. American Bank and Investors Savings Bank shall meet
    on a regular basis to discuss and plan for the conversion of
    American Bank’s data processing and related electronic
    informational systems to those used by Investors Savings Bank,
    which planning shall include, but not be limited to, discussion
    of the possible termination by American Bank of third-party
    service provider arrangements effective at the Effective Time or
    at a date thereafter, non-renewal of personal property leases
    and software licenses used by American Bank in connection with
    its systems operations, retention of outside consultants and
    additional employees to assist with the conversion, and
    outsourcing, as appropriate, of proprietary or self-provided
    system services, it being understood that American Bank shall
    not be obligated to take any such action prior to the Effective
    Time and, unless American Bank otherwise agrees, no conversion
    shall take place prior to the Effective Time. In the event that
    American Bank takes, at the request of Investors Savings Bank,
    any action relative to third parties to facilitate the
    conversion that results in the imposition of any termination
    fees or charges, Investors Savings Bank shall indemnify American
    Bank for any such fees and charges, and the costs of reversing
    the conversion process, if for any reason the Merger is not
    consummated for any reason other than a breach of this Agreement
    by ABNJ, or a termination of this Agreement under
    Section 11.1.8 or 11.1.9.



 



    6.2.3. American Bank shall provide Investors Savings Bank,
    within fifteen (15) business days of the end of each
    calendar month, a written list of nonperforming assets (the term
    “nonperforming assets,” for purposes of this
    subsection, means (i) loans that are “troubled debt
    restructuring” as defined in Statement of Financial
    Accounting Standards No. 15, “Accounting by Debtors
    and Creditors for Troubled Debt Restructuring,”
    (ii) loans on nonaccrual, (iii) real estate owned,
    (iv) all loans ninety (90) days or more past due) as
    of the end of such month and (iv) and impaired loans. On a
    monthly basis, ABNJ shall provide Investors Savings Bank with a
    schedule of all loan approvals, which schedule shall indicate
    the loan amount, loan type and other material features of the
    loan.



 



    6.2.4. ABNJ shall promptly inform Investors upon receiving
    notice of any legal, administrative, arbitration or other
    proceedings, demands, notices, audits or investigations (by any
    federal, state or local commission, agency or board) relating to
    the alleged liability of ABNJ or any ABNJ Subsidiary under any
    labor or employment law.



 



    6.3.  Access to Properties and Records.



 



    Subject to Section 12.1 hereof, ABNJ shall permit Investors
    reasonable access upon reasonable notice to its properties and
    those of the ABNJ Subsidiaries, and shall disclose and make
    available to Investors during normal business hours all of its
    books, papers and records relating to the assets, properties,
    operations, obligations and liabilities, including, but not
    limited to, all books of account (including the general ledger),
    tax records, minute books of directors’ (other than minutes
    that discuss any of the transactions contemplated by this
    Agreement or any other subject matter ABNJ reasonably determines
    should be treated as confidential) and




    

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    shareholders’ meetings, organizational documents, Bylaws,
    material contracts and agreements, filings with any regulatory
    authority, litigation files, plans affecting employees, and any
    other business activities or prospects in which Investors may
    have a reasonable interest; provided, however, that ABNJ shall
    not be required to take any action that would provide access to
    or to disclose information where such access or disclosure would
    violate or prejudice the rights or business interests or
    confidences of any customer or other person or would result in
    the waiver by it of the privilege protecting communications
    between it and any of its counsel. ABNJ shall provide and shall
    request its auditors to provide Investors with such historical
    financial information regarding it (and related audit reports
    and consents) as Investors may reasonably request for securities
    disclosure purposes. Investors shall use commercially reasonable
    efforts to minimize any interference with ABNJ’s regular
    business operations during any such access to ABNJ’s
    property, books and records. ABNJ and each ABNJ Subsidiary shall
    permit Investors, at its expense, to cause a “phase I
    environmental audit” and a “phase II
    environmental audit” to be performed at any physical
    location owned or occupied by ABNJ or any ABNJ Subsidiary. In
    the event any subsurface or phase II site assessments are
    conducted, Investors shall indemnify ABNJ and its Subsidiaries
    for all costs and expenses associated with returning the
    property to its previous condition.



 



    6.4.  Financial and Other Statements.



 



    6.4.1. Promptly upon receipt thereof, ABNJ will furnish to
    Investors copies of each annual, interim or special audit of the
    books of ABNJ and the ABNJ Subsidiaries made by its independent
    auditors and copies of all internal control reports submitted to
    ABNJ by such auditors in connection with each annual, interim or
    special audit of the books of ABNJ and the ABNJ Subsidiaries
    made by such auditors.



 



    6.4.2. As soon as reasonably available, but in no event
    later than the date such documents are filed with the SEC, ABNJ
    will make available to Investors the Securities Documents filed
    by it with the SEC under the Securities Laws. ABNJ will furnish
    to Investors copies of all documents, statements and reports as
    it or any ABNJ Subsidiary shall send to its shareholders, the
    FDIC, the FRB, the Department or any other regulatory authority,
    except as legally prohibited thereby. Within 25 days after
    the end of each month, American Bank will deliver to Investors a
    consolidated balance sheet and a consolidated statement of
    income, without related notes, for such month prepared in
    accordance with current financial reporting practices.



 



    6.4.3. ABNJ will advise Investors promptly of the receipt
    of any examination report of any Bank Regulator with respect to
    the condition or activities of ABNJ or any of the ABNJ
    Subsidiaries.



 



    6.4.4. With reasonable promptness, ABNJ will furnish to
    Investors such additional financial data that ABNJ possesses and
    as Investors may reasonably request, including without
    limitation, detailed monthly financial statements and loan
    reports.



 



    6.5.  Maintenance of Insurance.



 



    ABNJ shall maintain, and cause each ABNJ Subsidiary to maintain,
    insurance in such amounts as are reasonable to cover such risks
    as are customary in relation to the character and location of
    theirs properties and the nature of their business.



 



    6.6.  Disclosure Supplements.



 



    From time to time prior to the Effective Time, ABNJ will
    promptly supplement or amend the ABNJ DISCLOSURE SCHEDULE
    delivered in connection herewith with respect to any matter
    hereafter arising which, if existing, occurring or known at the
    date of this Agreement, would have been required to be set forth
    or described in such ABNJ DISCLOSURE SCHEDULE or which is
    necessary to correct any information in such ABNJ DISCLOSURE
    SCHEDULE which has been rendered materially inaccurate thereby.
    No supplement or amendment to such ABNJ DISCLOSURE SCHEDULE
    shall have any effect for the purpose of determining
    satisfaction of the conditions set forth in Article IX.



 



    6.7.  Consents and Approvals of Third Parties.



 



    ABNJ shall use all commercially reasonable efforts to obtain as
    soon as practicable all consents and approvals necessary or
    desirable for the consummation of the transactions contemplated
    by this Agreement.




    

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    6.8.  All Reasonable Efforts.



 



    Subject to the terms and conditions herein provided, ABNJ agrees
    to use all commercially reasonable efforts to take, or cause to
    be taken, all action and to do, or cause to be done, all things
    necessary, proper or advisable under applicable laws and
    regulations to consummate and make effective the transactions
    contemplated by this Agreement.



 



    6.9.  Failure to Fulfill Conditions.



 



    In the event that ABNJ determines that a condition to its
    obligation to complete the Merger cannot be fulfilled and that
    it will not waive that condition, it will promptly notify
    Investors.



 



    6.10.  No Solicitation.



 



    (a) ABNJ shall not, and shall cause its Subsidiaries and
    the respective officers, directors, employees, investment
    bankers, financial advisors, attorneys, accountants,
    consultants, affiliates and other agents (collectively, the
    “Representatives”) not to, directly or indirectly,
    (i) initiate, solicit, induce or knowingly encourage, or
    take any action to facilitate the making of, any inquiry, offer
    or proposal which constitutes, or could reasonably be expected
    to lead to, an Acquisition Proposal; (ii) participate in
    any discussions or negotiations regarding any Acquisition
    Proposal or furnish, or otherwise afford access, to any Person
    (other than Investors) any information or data with respect to
    ABNJ or any of its Subsidiaries or otherwise relating to an
    Acquisition Proposal; (iii) release any Person from, waive
    any provisions of, or fail to enforce any confidentiality
    agreement or standstill agreement to which ABNJ is a party; or
    (iv) enter into any agreement, agreement in principle or
    letter of intent with respect to any Acquisition Proposal or
    approve or resolve to approve any Acquisition Proposal or any
    agreement, agreement in principle or letter of intent relating
    to an Acquisition Proposal. Any violation of the foregoing
    restrictions by ABNJ or any Representative, whether or not such
    Representative is so authorized and whether or not such
    Representative is purporting to act on behalf of ABNJ or
    otherwise, shall be deemed to be a breach of this Agreement by
    ABNJ. ABNJ and its Subsidiaries shall, and shall cause each of
    ABNJ Representative to, immediately cease and cause to be
    terminated any and all existing discussions, negotiations, and
    communications with any Persons with respect to any existing or
    potential Acquisition Proposal.



 



    For purposes of this Agreement, “Acquisition Proposal”
    shall mean any inquiry, offer or proposal (other than an
    inquiry, offer or proposal from Investors), whether or not in
    writing, contemplating, relating to, or that could reasonably be
    expected to lead to, an Acquisition Transaction. For purposes of
    this Agreement, “Acquisition Transaction” shall mean
    (A) any transaction or series of transactions involving any
    merger, consolidation, recapitalization, share exchange,
    liquidation, dissolution or similar transaction involving ABNJ
    or any of its Subsidiaries; (B) any transaction pursuant to
    which any third party or group acquires or would acquire
    (whether through sale, lease or other disposition), directly or
    indirectly, any assets of ABNJ or any of its Subsidiaries
    representing, in the aggregate, fifteen percent (15%) or more of
    the assets of ABNJ and its Subsidiaries on a consolidated basis;
    (C) any issuance, sale or other disposition of (including
    by way of merger, consolidation, share exchange or any similar
    transaction) securities (or options, rights or warrants to
    purchase or securities convertible into, such securities)
    representing fifteen percent (15%) or more of the votes attached
    to the outstanding securities of ABNJ or any of its
    Subsidiaries; (D) any tender offer or exchange offer that,
    if consummated, would result in any third party or group
    beneficially owning fifteen percent (15%) or more of any class
    of equity securities of ABNJ or any of its Subsidiaries; or
    (E) any transaction which is similar in form, substance or
    purpose to any of the foregoing transactions, or any combination
    of the foregoing.



 



    (b) Notwithstanding Section 6.10(a), ABNJ may take any
    of the actions described in clause (ii) of
    Section 6.10(a) if, but only if, (i) ABNJ has received
    a bona fide unsolicited written Acquisition Proposal that did
    not result from a breach of this Section 6.10;
    (ii) ABNJ Board determines in good faith, after
    consultation with and having considered the advice of its
    outside legal counsel and its independent financial advisor,
    that (A) such Acquisition Proposal constitutes or is
    reasonably likely to lead to a Superior Proposal and
    (B) the failure to take such actions would be inconsistent
    with its fiduciary duties to ABNJ’s shareholders under
    applicable law; (iii) ABNJ has provided Investors with at
    least two (2) Business Days’ prior notice of such




    

    A-38








 






    determination; and (iv) prior to furnishing or affording
    access to any information or data with respect to ABNJ or any of
    its Subsidiaries or otherwise relating to an Acquisition
    Proposal, ABNJ receives from such Person a confidentiality
    agreement with terms no less favorable to ABNJ than those
    contained in the Confidentiality Agreement. ABNJ shall promptly
    provide to Investors any non-public information regarding ABNJ
    or its Subsidiaries provided to any other Person that was not
    previously provided to Investors, such additional information to
    be provided no later than the date of provision of such
    information to such other party.



 



    For purposes of this Agreement, “Superior Proposal”
    shall mean any bona fide written proposal (on its most recently
    amended or modified terms, if amended or modified) made by a
    third party to enter into an Acquisition Transaction on terms
    that ABNJ Board determines in its good faith judgment, after
    consultation with and having considered the advice of outside
    legal counsel and a financial advisor (i) would, if
    consummated, result in the acquisition of all, but not less than
    all, of the issued and outstanding shares of ABNJ Common Stock
    or all, or substantially all, of the assets of ABNJ and its
    Subsidiaries on a consolidated basis; (ii) would result in
    a transaction that (A) involves consideration to the
    holders of the shares of ABNJ Common Stock that is more
    favorable, from a financial point of view, than the
    consideration to be paid to ABNJ’s shareholders pursuant to
    this Agreement, considering, among other things, the nature of
    the consideration being offered and any material regulatory
    approvals or other risks associated with the timing of the
    proposed transaction beyond or in addition to those specifically
    contemplated hereby, and which proposal is not conditioned upon
    obtaining additional financing and (B) is, in light of the
    other terms of such proposal, more favorable to ABNJ’s
    shareholders than the Merger and the transactions contemplated
    by this Agreement; and (iii) is reasonably likely to be
    completed on the terms proposed, in each case taking into
    account all legal, financial, regulatory and other aspects of
    the proposal.



 



    (c) ABNJ shall promptly (and in any event within
    twenty-four (24) hours) notify Investors in writing if any
    proposals or offers are received by, any information is
    requested from, or any negotiations or discussions are sought to
    be initiated or continued with, ABNJ or any ABNJ
    Representatives, in each case in connection with any Acquisition
    Proposal, and such notice shall indicate the name of the Person
    initiating such discussions or negotiations or making such
    proposal, offer or information request and the material terms
    and conditions of any proposals or offers (and, in the case of
    written materials relating to such proposal, offer, information
    request, negotiations or discussion, providing copies of such
    materials (including
    e-mails or
    other electronic communications) unless (i) such materials
    constitute confidential information of the party making such
    offer or proposal under an effective confidentiality agreement,
    (ii) disclosure of such materials jeopardizes the
    attorney-client privilege or (iii) disclosure of such
    materials contravenes any law, rule, regulation, order, judgment
    or decree. ABNJ agrees that it shall keep Investors informed, on
    a current basis, of the status and terms of any such proposal,
    offer, information request, negotiations or discussions
    (including any amendments or modifications to such proposal,
    offer or request).



 



    (d) Neither the ABNJ Board nor any committee thereof shall
    (i) withdraw, qualify or modify, or propose to withdraw,
    qualify or modify, in a manner adverse to Investors in
    connection with the transactions contemplated by this Agreement
    (including the Merger), the ABNJ Recommendation (as defined in
    Section 8.1), or make any statement, filing or release, in
    connection with ABNJ Shareholders Meeting or otherwise,
    inconsistent with the ABNJ Recommendation (it being understood
    that taking a neutral position or no position with respect to an
    Acquisition Proposal shall be considered an adverse modification
    of the ABNJ Recommendation); (ii) approve or recommend, or
    propose to approve or recommend, any Acquisition Proposal; or
    (iii) enter into (or cause ABNJ or any of its Subsidiaries
    to enter into) any letter of intent, agreement in principle,
    acquisition agreement or other agreement (A) related to any
    Acquisition Transaction (other than a confidentiality agreement
    entered into in accordance with the provisions of
    Section 6.10(b)) or (B) requiring ABNJ to abandon,
    terminate or fail to consummate the Merger or any other
    transaction contemplated by this Agreement.



 



    (e) Notwithstanding Section 6.10(d), prior to the date
    of ABNJ Shareholders Meeting, the ABNJ Board may approve or
    recommend to the shareholders of ABNJ a Superior Proposal and
    withdraw, qualify or modify ABNJ Recommendation in connection
    therewith (a “ABNJ Subsequent Determination”) after
    the fourth (4th) Business Day following Investors’ receipt
    of a notice (the “Notice of Superior Proposal”) from
    ABNJ advising Investors that the ABNJ Board has decided that a
    bona fide unsolicited written Acquisition Proposal that it




    

    A-39








 






    received (that did not result from a breach of this
    Section 6.10) constitutes a Superior Proposal (it being
    understood that ABNJ shall be required to deliver a new Notice
    of Superior Proposal in respect of any revised Superior Proposal
    from such third party or its affiliates that ABNJ proposes to
    accept) if, but only if, (i) the ABNJ Board has reasonably
    determined in good faith, after consultation with and having
    considered the advice of outside legal counsel and a financial
    advisor, that it is required to take such actions to comply with
    its fiduciary duties to ABNJ’s shareholders under
    applicable law, (ii) during the four (4) Business Day
    Period after receipt of the Notice of Superior Proposal by
    Investors, ABNJ and the ABNJ Board shall have cooperated and
    negotiated in good faith with Investors to make such
    adjustments, modifications or amendments to the terms and
    conditions of this Agreement as would enable ABNJ to proceed
    with the ABNJ Recommendation without a ABNJ Subsequent
    Determination; provided, however, that Investors shall
    not have any obligation to propose any adjustments,
    modifications or amendments to the terms and conditions of this
    Agreement and (iii) at the end of such four
    (4) Business Day period, after taking into account any such
    adjusted, modified or amended terms as may have been proposed by
    Investors since its receipt of such Notice of Superior Proposal,
    ABNJ Board has again in good faith made the determination
    (A) in clause (i) of this Section 6.10(e) and
    (B) that such Acquisition Proposal constitutes a Superior
    Proposal. Notwithstanding the foregoing, the changing,
    qualifying or modifying of the ABNJ Recommendation or the making
    of a ABNJ Subsequent Determination by the ABNJ Board shall not
    change the approval of the ABNJ Board for purposes of causing
    any Takeover Laws to be inapplicable to this Agreement and the
    Voting Agreements and the transactions contemplated hereby and
    thereby, including the Merger.



 



    (f) Nothing contained in this Section 6.10 shall
    prohibit ABNJ or the ABNJ Board from complying with ABNJ’s
    obligations required under
    Rules 14d-9
    and 14e-2(a)
    promulgated under the Exchange Act; provided, however,
    that any such disclosure relating to an Acquisition Proposal
    shall be deemed a change in ABNJ Recommendation unless ABNJ
    Board reaffirms ABNJ Recommendation in such disclosure.



 



    6.11.  Reserves and Merger-Related Costs.



 



    ABNJ agrees to consult with Investors with respect to its loan,
    litigation and real estate valuation policies and practices
    (including loan classifications and levels of reserves).
    Investors and ABNJ shall also consult with respect to the
    character, amount and timing of restructuring charges to be
    taken by each of them in connection with the transactions
    contemplated hereby and shall take such charges as Investors
    shall reasonably request and which are not inconsistent with
    GAAP, provided that no such actions need be effected until
    Investors shall have irrevocably certified to ABNJ that all
    conditions set forth in Article IX to the obligation of
    Investors to consummate the transactions contemplated hereby
    (other than the delivery of certificates or opinions) have been
    satisfied or, where legally permissible, waived.



 



    6.12.  Board of Directors and Committee
    Meetings.



 



    ABNJ and American Bank shall permit representatives of Investors
    to attend any meeting of the Board of Directors of ABNJ
    and/or
    American Bank or the Executive and Loan Committees thereof as an
    observer (the “Observer”), provided that neither ABNJ
    nor American Bank shall be required to permit the Investors
    representative to remain present during any confidential
    discussion of this Agreement and the transactions contemplated
    hereby or any third party proposal to acquire control of ABNJ or
    American Bank or during any other matter that the respective
    Board of Directors has reasonably determined to be confidential
    with respect to Investors’ participation.



 




    ARTICLE VII

    



 




    COVENANTS
    OF INVESTORS




 



    7.1.  Conduct of Business.



 



    During the period from the date of this Agreement to the
    Effective Time, except with the written consent of ABNJ, which
    consent will not be unreasonably withheld, Investors will, and
    it will cause each Investors Subsidiary to use reasonable
    efforts to preserve intact its business organization and assets
    and maintain its rights and franchises; and voluntarily take no
    action that would: (i) adversely affect the ability of the
    parties to




    

    A-40








 






    obtain the Regulatory Approvals or materially increase the
    period of time necessary to obtain such approvals;
    (ii) adversely affect its ability to perform its covenants
    and agreements under this Agreement; or (iii) result in the
    representations and warranties contained in Article V of
    this Agreement not being true and correct on the date of this
    Agreement or at any future date on or prior to the Closing Date
    or in any of the conditions set forth in Article IX hereof
    not being satisfied.



 



    7.2.  Current Information.



 



    During the period from the date of this Agreement to the
    Effective Time, Investors will cause one or more of its
    representatives to confer with representatives of ABNJ and
    report the general status of its financial condition, operations
    and business and matters relating to the completion of the
    transactions contemplated hereby, at such times as ABNJ may
    reasonably request. Investors will promptly notify ABNJ, to the
    extent permitted by applicable law, of any governmental
    complaints, investigations or hearings (or communications
    indicating that the same may be contemplated), or the
    institution of material litigation involving Investors and any
    Investors Subsidiary. Investors shall be reasonably responsive
    to requests by ABNJ for access to such information and personnel
    regarding Investors and its Subsidiaries as may be reasonably
    necessary for ABNJ to confirm that the representations and
    warranties of Investors contained herein are true and correct
    and that the covenants of Investors contained herein have been
    performed in all material respects; provided, however, that
    Investors shall not be required to take any action that would
    provide access to or to disclose information where such access
    or disclosure, in Investors’ reasonable judgment, would
    interfere with the normal conduct of Investors’ business or
    would violate or prejudice the rights or business interests or
    confidences of any customer or other person or would result in
    the waiver by it of the privilege protecting communications
    between it and any of its counsel.



 



    7.3.  Financial and Other Statements.



 



    Investors will make available to ABNJ the Securities Documents
    filed by it with the SEC under the Securities Laws. Investors
    will furnish to ABNJ copies of all documents, statements and
    reports as it or Investors Savings Bank file with the FDIC or
    any other Bank Regulator with respect to the Merger. Investors
    will furnish to ABNJ copies of all documents, statements and
    reports as it or any Investors Subsidiary sends to the
    shareholders of Investors.



 



    7.4.  Disclosure Supplements.



 



    From time to time prior to the Effective Time, Investors will
    promptly supplement or amend the Investors DISCLOSURE SCHEDULE
    delivered in connection herewith with respect to any material
    matter hereafter arising which, if existing, occurring or known
    at the date of this Agreement, would have been required to be
    set forth or described in such Investors DISCLOSURE SCHEDULE or
    which is necessary to correct any information in such Investors
    DISCLOSURE SCHEDULE which has been rendered inaccurate thereby.
    No supplement or amendment to such Investors DISCLOSURE SCHEDULE
    shall have any effect for the purpose of determining
    satisfaction of the conditions set forth in Article IX.



 



    7.5.  Consents and Approvals of Third Parties.



 



    Investors shall use all commercially reasonable efforts to
    obtain as soon as practicable all consents and approvals
    necessary or desirable for the consummation of the transactions
    contemplated by this Agreement.



 



    7.6.  All Reasonable Efforts.



 



    Subject to the terms and conditions herein provided, Investors
    agrees to use all commercially reasonable efforts to take, or
    cause to be taken, all action and to do, or cause to be done,
    all things necessary, proper or advisable under applicable laws
    and regulations to consummate and make effective the
    transactions contemplated by this Agreement.



 



    7.7.  Failure to Fulfill Conditions.



 



    In the event that Investors determines that a condition to its
    obligation to complete the Merger cannot be fulfilled and that
    it will not waive that condition, it will promptly notify ABNJ.




    

    A-41








 





 



    7.8.  Employee Benefits.



 



    7.8.1. Investors will review all ABNJ Compensation and
    Benefit Plans to determine, subject to Section 7.8.3,
    whether to maintain, terminate or continue such plans. In the
    event employee compensation
    and/or
    benefits as currently provided by ABNJ or any ABNJ Subsidiary
    are changed or terminated by Investors, in whole or in part,
    Investors shall provide Continuing Employees (as defined below)
    with compensation and benefits that are, in the aggregate,
    substantially similar to the compensation and benefits provided
    to similarly situated employees of Investors or applicable
    Investors Subsidiary (as of the date any such compensation or
    benefit is provided). Employees of ABNJ or any ABNJ Subsidiary
    who become participants in an Investors Compensation and Benefit
    Plan shall, for purposes of determining eligibility for and for
    any applicable vesting periods of such employee benefits only
    (and not for benefit accrual purposes unless specifically set
    forth herein) be given credit for meeting eligibility and
    vesting requirements in such plans for service as an employee of
    ABNJ or American Bank or any predecessor thereto prior to the
    Effective Time, provided, however, that credit for prior service
    shall not be given for any purpose under the Investors ESOP, and
    provided further, that credit for benefit accrual purposes will
    be given only for purposes of Investors vacation policies or
    programs and for purposes of the calculation of severance
    benefits under any severance compensation plan of Investors.
    This Agreement shall not be construed to limit the ability of
    Investors or Investors Savings Bank to terminate the employment
    of any employee or to review employee benefits programs from
    time to time and to make such changes (including terminating any
    program) as they deem appropriate.



 



    7.8.2. Subject to the occurrence of the Effective Time, the
    ABNJ ESOP shall be terminated immediately prior to and effective
    as of the Effective Time (all shares held by the ABNJ ESOP shall
    be converted into the right to receive the Merger Consideration,
    as elected by the ABNJ ESOP participants), all outstanding ABNJ
    ESOP indebtedness shall be repaid, and the balance of the shares
    and any other assets remaining in the Loan Suspense Account (as
    such term is defined in the ABNJ ESOP) shall be allocated and
    distributed to ABNJ ESOP participants (subject to the receipt of
    a favorable determination letter from the IRS), as provided for
    in the ABNJ ESOP and unless otherwise required by applicable
    law. Prior to the Effective Time, ABNJ, and following the
    Effective Time, Investors shall use their respective best
    efforts in good faith to obtain such favorable determination
    letter (including, but not limited to, making such changes to
    the ABNJ ESOP and the proposed allocations as may be requested
    by the IRS as a condition to its issuance of a favorable
    determination letter). ABNJ and following the Effective Time,
    Investors, will adopt such amendments to the ABNJ ESOP as may be
    reasonably required by the IRS as a condition to granting such
    favorable determination letter on termination. Neither ABNJ, nor
    following the Effective Time, Investors, shall make any
    distribution from the ABNJ ESOP except as may be required by
    applicable law until receipt of such favorable determination
    letter. In the case of a conflict between the terms of this
    Section 7.8.2 and the terms of the ABNJ ESOP, the terms of
    the ABNJ ESOP shall control; however, in the event of any such
    conflict, ABNJ before the Merger and Investors after the Merger,
    shall use their best efforts to cause the ESOP to be amended to
    conform to the requirements of this Section.



 



    7.8.3. The payments and benefits that would be required to
    be made under the employment agreements, Executive Salary
    Continuation Agreements and split dollar agreements between
    (i) ABNJ
    and/or
    American Bank and (ii) each of the following individuals,
    Messrs. Kliminski, Kowal, Heyer, Bzdek and
    Gaccione, Jr. and Ms. Bringuier, assuming a
    termination of employment as of the Effective Time and to any
    current or former director under the Directors Consultation and
    Retirement Plan assuming a termination of service as of the
    Effective Time shall be made, unless otherwise set forth herein,
    immediately prior to the Effective Time, and in accordance with
    the principles set forth in such agreements and in INVESTORS
    DISCLOSURE SCHEDULE 7.8.3 Each of the individuals
    referenced in this Section 7.8.3 entitled to a payment
    under the agreements shall sign an acknowledgement in connection
    with the execution of this Agreement, which shall be included in
    INVESTORS DISCLOSURE SCHEDULE 7.8.3, agreeing to the
    application of the principles set forth in this Section, which
    acknowledgement shall also include explanatory detail and
    analysis as to the method of the calculation of the payments and
    benefits due. INVESTORS DISCLOSURE SCHEDULE 7.8.3 shall
    also include the form of the acknowledgment and release that
    each executive and director or former




    

    A-42








 






    director shall sign in connection with any payment
    and/or
    provision of benefits under their respective agreements.



 



    7.8.4. Any employee of ABNJ or any ABNJ Subsidiary who is
    not a party to an employment, change in control or severance
    agreement or contract providing severance payments shall, at the
    Effective Time, be covered by and eligible to receive severance
    benefits under the severance plan set forth in ABNJ DISCLOSURE
    SCHEDULE 7.8.4 in accordance with the terms of such plan or
    policy.



 



    7.8.5. In the event of any termination or consolidation of
    any ABNJ health plan with any Investors health plan, Investors
    shall make available to employees of ABNJ or any ABNJ Subsidiary
    who continue employment with Investors or a Investors Subsidiary
    (“Continuing Employees”) and their dependents
    employer-provided health coverage on the same basis as it
    provides such coverage to Investors employees. Unless a
    Continuing Employee affirmatively terminates coverage under a
    ABNJ health plan prior to the time that such Continuing Employee
    becomes eligible to participate in the Investors health plan, no
    coverage of any of the Continuing Employees or their dependents
    shall terminate under any of the ABNJ health plans prior to the
    time such Continuing Employees and their dependents become
    eligible to participate in the health plans, programs and
    benefits common to all employees of Investors and their
    dependents. In the event of a termination or consolidation of
    any ABNJ health plan, terminated ABNJ employees and qualified
    beneficiaries will have the right to continued coverage under
    group health plans of Investors in accordance with Code
    Section 4980B(f), consistent with the provisions below. In
    the event of any termination of any ABNJ health plan, or
    consolidation of any ABNJ health plan with any Investors health
    plan, any coverage limitation under the Investors health plan
    due to any pre-existing condition shall be waived by the
    Investors health plan to the degree that such condition was
    covered by the ABNJ health plan and such condition would
    otherwise have been covered by the Investors health plan in the
    absence of such coverage limitation. Continuing Employees who
    cease participating in an ABNJ health plan and become
    participants in a comparable Investors health plan shall receive
    credit for any co-payment and deductibles paid under ABNJ’s
    health plan for purposes of satisfying any applicable deductible
    or out-of-pocket requirements under the Investors health plan,
    upon substantiation, in a form satisfactory to Investors or
    Investors’ health insurance carrier that such co-payment
    and/or
    deductible has been satisfied.



 



    7.9.  Directors and Officers Indemnification and
    Insurance.



 



    7.9.1. For a period of six years after the Effective Time,
    Investors shall indemnify, defend and hold harmless each person
    who is now, or who has been at any time before the date hereof
    or who becomes before the Effective Time, an officer, director
    or employee of ABNJ or a ABNJ Subsidiary (the “Indemnified
    Parties”) against all losses, claims, damages, costs,
    expenses (including attorney’s fees), liabilities or
    judgments or amounts that are paid in settlement (which
    settlement shall require the prior written consent of Investors,
    which consent shall not be unreasonably withheld) of or in
    connection with any claim, action, suit, proceeding or
    investigation, whether civil, criminal, or administrative (each
    a “Claim”), in which an Indemnified Party is, or is
    threatened to be made, a party or witness in whole or in part on
    or arising in whole or in part out of the fact that such person
    is or was a director, officer or employee of ABNJ or a ABNJ
    Subsidiary if such Claim pertains to any matter of fact arising,
    existing or occurring at or before the Effective Time
    (including, without limitation, the Merger and the other
    transactions contemplated hereby), regardless of whether such
    Claim is asserted or claimed before, or after, the Effective
    Time (the “Indemnified Liabilities”), to the fullest
    extent that such Indemnified Parties were entitled to
    indemnification under applicable New Jersey and federal law and
    under ABNJ’s Certificate of Incorporation and Bylaws. This
    right of indemnification shall include the right to be paid
    expenses in advance of the final disposition of any such action
    or proceeding upon receipt of an undertaking to repay such
    advance payments if it shall be adjudicated or determined that
    such Indemnified Party is not entitled to indemnification. Any
    Indemnified Party wishing to claim indemnification under this
    Section 7.9.1 upon learning of any Claim, shall notify
    Investors (but the failure so to notify Investors shall not
    relieve it from any liability which it may have under this
    Section 7.9.1, except to the extent such failure materially
    prejudices Investors) and shall deliver to Investors the
    undertaking referred to in the previous sentence.




    

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    7.9.2. In the event that either Investors or any of its
    successors or assigns (i) consolidates with or merges into
    any other person and shall not be the continuing or surviving
    bank or entity of such consolidation or merger or
    (ii) transfers all or substantially all of its properties
    and assets to any person, then, and in each such case, proper
    provision shall be made so that the successors and assigns of
    Investors shall assume the obligations set forth in this
    Section 7.9.



 



    7.9.3. Investors shall maintain, or shall cause Investors
    Savings Bank to maintain, in effect for six years following the
    Effective Time, the current directors’ and officers’
    liability insurance policies covering the officers and directors
    of ABNJ (provided, that Investors may substitute therefor
    policies of at least the same coverage containing terms and
    conditions which are not materially less favorable) with respect
    to matters occurring at or prior to the Effective Time;
    provided, however, that in no event shall Investors be required
    to expend pursuant to this Section 7.9.3 more than 175% of
    the annual cost currently expended by ABNJ with respect to such
    insurance (the “Maximum Amount”); provided,
    further, that if the amount of the premium necessary to
    maintain or procure such insurance coverage exceeds the Maximum
    Amount, Investors shall maintain the most advantageous policies
    of directors’ and officers’ insurance obtainable for a
    premium equal to the Maximum Amount. In connection with the
    foregoing, ABNJ agrees in order for Investors to fulfill its
    agreement to provide directors and officers liability insurance
    policies for six years to provide such insurer or substitute
    insurer with such reasonable and customary representations as
    such insurer may request with respect to the reporting of any
    prior claims.



 



    7.9.4. The obligations of Investors provided under this
    Section 7.9 are intended to be enforceable against
    Investors directly by the Indemnified Parties and shall be
    binding on all respective successors and permitted assigns of
    Investors.



 



    7.10.  Stock Listing.



 



    Investors agrees to list on the Nasdaq (or such other national
    securities exchange on which the shares of the Investors Common
    Stock shall be listed as of the date of consummation of the
    Merger), subject to official notice of issuance, the shares of
    Investors Common Stock to be issued in the Merger.



 



    7.11.  Stock and Cash Reserve.



 



    Investors agrees at all times from the date of this Agreement
    until the Merger Consideration has been paid in full to reserve
    a sufficient number of shares of its common stock and to
    maintain sufficient liquid accounts or borrowing capacity to
    fulfill its obligations under this Agreement.



 




    ARTICLE VIII

    



 




    REGULATORY
    AND OTHER MATTERS
    




 



    8.1.  ABNJ Shareholder Meeting.



 



    ABNJ will (i) as promptly as practicable after the Merger
    Registration Statement is declared effective by the SEC, take
    all steps necessary to duly call, give notice of, convene and
    hold a meeting of its shareholders (the “ABNJ Shareholders
    Meeting”), for the purpose of considering this Agreement
    and the Merger, and for such other purposes as may be, in
    ABNJ’s reasonable judgment, necessary or desirable,
    (ii) subject to Section 6.10, have its Board of
    Directors recommend approval of this Agreement to the ABNJ
    shareholders.



 



    8.2.  Proxy Statement-Prospectus.



 



    8.2.1. For the purposes (x) of registering Investors
    Common Stock to be offered to holders of ABNJ Common Stock in
    connection with the Merger with the SEC under the Securities Act
    and (y) of holding the ABNJ Shareholders Meeting, Investors
    shall draft and prepare, and ABNJ shall cooperate in the
    preparation of, the Merger Registration Statement, including a
    proxy statement and prospectus satisfying all applicable
    requirements of applicable state securities and banking laws,
    and of the Securities Act and the Exchange Act, and the rules
    and regulations thereunder (such proxy statement/prospectus in
    the form mailed to the ABNJ shareholders, together with any and
    all amendments or supplements thereto, being herein referred to
    as the “Proxy Statement-Prospectus”). Investors shall
    file the Merger Registration Statement, including the Proxy




    

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    Statement-Prospectus, with the SEC. Each of Investors and ABNJ
    shall use their best efforts to have the Merger Registration
    Statement declared effective under the Securities Act as
    promptly as practicable after such filing, and ABNJ shall
    thereafter promptly mail the Proxy Statement-Prospectus to the
    ABNJ shareholders. Investors shall also use its best efforts to
    obtain all necessary state securities law or “Blue
    Sky” permits and approvals required to carry out the
    transactions contemplated by this Agreement, and ABNJ shall
    furnish all information concerning ABNJ and the holders of ABNJ
    Common Stock as may be reasonably requested in connection with
    any such action.



 



    8.2.2. ABNJ shall provide Investors with any information
    concerning itself that Investors may reasonably request in
    connection with the drafting and preparation of the Proxy
    Statement-Prospectus, and Investors shall notify ABNJ promptly
    of the receipt of any comments of the SEC with respect to the
    Proxy Statement-Prospectus and of any requests by the SEC for
    any amendment or supplement thereto or for additional
    information and shall provide to ABNJ promptly copies of all
    correspondence between Investors or any of their representatives
    and the SEC. Investors shall give ABNJ and its counsel the
    opportunity to review and comment on the Proxy
    Statement-Prospectus prior to its being filed with the SEC and
    shall give ABNJ and its counsel the opportunity to review and
    comment on all amendments and supplements to the Proxy
    Statement-Prospectus and all responses to requests for
    additional information and replies to comments prior to their
    being filed with, or sent to, the SEC. Each of Investors and
    ABNJ agrees to use all reasonable efforts, after consultation
    with the other party hereto, to respond promptly to all such
    comments of and requests by the SEC and to cause the Proxy
    Statement-Prospectus and all required amendments and supplements
    thereto to be mailed to the holders of ABNJ Common Stock
    entitled to vote at the ABNJ Shareholders Meeting hereof at the
    earliest practicable time.



 



    8.2.3. ABNJ and Investors shall promptly notify the other
    party if at any time it becomes aware that the Proxy
    Statement-Prospectus or the Merger Registration Statement
    contains any untrue statement of a material fact or omits to
    state a material fact required to be stated therein or necessary
    to make the statements contained therein, in light of the
    circumstances under which they were made, not misleading. In
    such event, ABNJ shall cooperate with Investors in the
    preparation of a supplement or amendment to such Proxy
    Statement-Prospectus that corrects such misstatement or
    omission, and Investors shall file an amended Merger
    Registration Statement with the SEC, and ABNJ shall mail an
    amended Proxy Statement-Prospectus to the ABNJ shareholders.



 



    8.3.  Regulatory Approvals.



 



    Each of ABNJ and Investors will cooperate with the other and use
    all reasonable efforts to promptly prepare all necessary
    documentation, to effect all necessary filings and to obtain all
    necessary permits, consents, waivers, approvals and
    authorizations of the SEC, the Bank Regulators and any other
    third parties and governmental bodies necessary to consummate
    the transactions contemplated by this Agreement. ABNJ and
    Investors will furnish each other and each other’s counsel
    with all information concerning themselves, their subsidiaries,
    directors, officers and shareholders and such other matters as
    may be necessary or advisable in connection with the Proxy
    Statement-Prospectus and any application, petition or any other
    statement or application made by or on behalf of ABNJ, Investors
    to any Bank Regulatory or governmental body in connection with
    the Merger, and the other transactions contemplated by this
    Agreement. ABNJ shall have the right to review and approve in
    advance all characterizations of the information relating to
    ABNJ and any ABNJ Subsidiary, which appear in any filing made in
    connection with the transactions contemplated by this Agreement
    with any governmental body. Investors shall give ABNJ and its
    counsel the opportunity to review and comment on each filing
    prior to its being filed with a Bank Regulator and shall give
    ABNJ and its counsel the opportunity to review and comment on
    all amendments and supplements to such filings and all responses
    to requests for additional information and replies to comments
    prior to their being filed with, or sent to, a Bank Regulator.
    Investors will file a regulatory application with the FRB for
    approval to issue shares in Merger within 30 days of the
    date hereof.




    

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    ARTICLE IX

    



 




    CLOSING
    CONDITIONS
    




 



    9.1.  Conditions to Each Party’s Obligations
    under this Agreement.



 



    The respective obligations of each party under this Agreement
    shall be subject to the fulfillment at or prior to the Closing
    Date of the following conditions, none of which may be waived:



 



    9.1.1. Shareholder Approval. This Agreement and the
    transactions contemplated hereby shall have been approved by the
    requisite vote of the shareholders of ABNJ.



 



    9.1.2. Injunctions. None of the parties hereto shall
    be subject to any order, decree or injunction of a court or
    agency of competent jurisdiction that enjoins or prohibits the
    consummation of the transactions contemplated by this Agreement
    and no statute, rule or regulation shall have been enacted,
    entered, promulgated, interpreted, applied or enforced by any
    Governmental Entity or Bank Regulator, that enjoins or prohibits
    the consummation of the transactions contemplated by this
    Agreement.



 



    9.1.3. Regulatory Approvals. Subject to
    Section 3.5, all Regulatory Approvals and other necessary
    approvals, authorizations and consents of any Governmental
    Entities required to consummate the transactions contemplated by
    this Agreement shall have been obtained and shall remain in full
    force and effect and all waiting periods relating to such
    approvals, authorizations or consents shall have expired; and no
    such approval, authorization or consent shall include any
    condition or requirement, excluding standard conditions that are
    normally imposed by the regulatory authorities in bank merger
    transactions, that would, in the good faith reasonable judgment
    of the Board of Directors of Investors, materially and adversely
    affect the business, operations, financial condition, property
    or assets of the combined enterprise of ABNJ, American Bank and
    Investors or materially impair the value of ABNJ or American
    Bank to Investors.



 



    9.1.4. Effectiveness of Merger Registration
    Statement. The Merger Registration Statement shall have
    become effective under the Securities Act and no stop order
    suspending the effectiveness of the Merger Registration
    Statement shall have been issued, and no proceedings for that
    purpose shall have been initiated or threatened by the SEC and,
    if the offer and sale of Investors Common Stock in the Merger is
    subject to the blue sky laws of any state, shall not be subject
    to a stop order of any state securities commissioner.



 



    9.1.5. Nasdaq Listing. The shares of Investors
    Common Stock to be issued in the Merger shall have been
    authorized for listing on the Nasdaq, subject to official notice
    of issuance.



 



    9.1.6. Tax Opinion. On the basis of facts,
    representations and assumptions which shall be consistent with
    the state of facts existing at the Closing Date, Investors shall
    have received an opinion of Luse Gorman Pomerenk &
    Schick, P.C., reasonably acceptable in form and substance
    to Investors and ABNJ, dated as of the Closing Date,
    substantially to the effect that for federal income tax
    purposes, the Merger will qualify as a reorganization within the
    meaning of Section 368(a) of the Code. In rendering the tax
    opinions described in this Section 9.1.6, the law firm may
    require and rely upon customary representations contained in
    certificates of officers of Investors and ABNJ and their
    respective Subsidiaries. This condition shall not apply if the
    Merger proceeds under Section 3.5.



 



    9.2.  Conditions to the Obligations of Investors
    under this Agreement.



 



    The obligations of Investors under this Agreement shall be
    further subject to the satisfaction of the conditions set forth
    in Sections 9.2.1 through 9.2.5 at or prior to the Closing
    Date:



 



    9.2.1. Representations and Warranties. Each of the
    representations and warranties of ABNJ set forth in this
    Agreement shall be true and correct as of the date of this
    Agreement and upon the Effective Time with the same effect as
    though all such representations and warranties had been made on
    the Effective Time (except to the extent such representations
    and warranties speak as of an earlier date), in any case subject
    to the standard set forth in Section 4.1; and ABNJ shall
    have delivered to Investors a certificate to such effect signed
    by the Chief Executive Officer and the Chief Financial Officer
    of ABNJ as of the Effective Time.




    

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    9.2.2. Agreements and Covenants. ABNJ shall have
    performed in all material respects all obligations and complied
    in all material respects with all agreements or covenants to be
    performed or complied with by it at or prior to the Effective
    Time, and Investors shall have received a certificate signed on
    behalf of ABNJ by the Chief Executive Officer and Chief
    Financial Officer of ABNJ to such effect dated as of the
    Effective Time.



 



    9.2.3. Permits, Authorizations, Etc. ABNJ shall have
    obtained any and all material permits, authorizations, consents,
    waivers, clearances or approvals required for the lawful
    consummation of the Merger and the Bank Merger.



 



    9.2.4. No Material Adverse Effect. Since
    September 30, 2007, no event has occurred or circumstance
    arisen that, individually or in the aggregate, has had or is
    reasonably likely to have a Material Adverse Effect on ABNJ.



 



    ABNJ will furnish Investors with such certificates of its
    officers or others and such other documents to evidence
    fulfillment of the conditions set forth in this Section 9.2
    as Investors may reasonably request.



 



    9.3.  Conditions to the Obligations of ABNJ under
    this Agreement.



 



    The obligations of ABNJ under this Agreement shall be further
    subject to the satisfaction of the conditions set forth in
    Sections 9.3.1 through 9.3.5 at or prior to the Closing
    Date:



 



    9.3.1. Representations and Warranties. Each of the
    representations and warranties of Investors set forth in this
    Agreement shall be true and correct as of the date of this
    Agreement and upon the Effective Time with the same effect as
    though all such representations and warranties had been made on
    the Effective Time (except to the extent such representations
    and warranties speak as of an earlier date), in any case subject
    to the standard set forth in Section 5.1; and Investors
    shall have delivered to ABNJ a certificate to such effect signed
    by the Chief Executive Officer and the Chief Financial Officer
    of Investors as of the Effective Time.



 



    9.3.2. Agreements and Covenants. Investors shall
    have performed in all material respects all obligations and
    complied in all material respects with all agreements or
    covenants to be performed or complied with by it at or prior to
    the Effective Time, and ABNJ shall have received a certificate
    signed on behalf of Investors by the Chief Executive Officer and
    Chief Financial Officer to such effect dated as of the Effective
    Time.



 



    9.3.3. Permits, Authorizations, Etc. Investors shall
    have obtained any and all material permits, authorizations,
    consents, waivers, clearances or approvals required for the
    lawful consummation of the Merger and the Bank Merger.



 



    9.3.4. Payment of Merger Consideration. Investors
    shall have delivered the Exchange Fund to the Exchange Agent on
    or before the Closing Date and the Exchange Agent shall provide
    ABNJ with a certificate evidencing such delivery.



 



    9.3.5. No Material Adverse Effect. Since
    June 30, 2008, no event has occurred or circumstance arisen
    that, individually or in the aggregate, has had or is reasonably
    likely to have a Material Adverse Effect on Investors. This
    condition shall not apply if the Merger proceeds under
    Section 3.5.



 



    Investors will furnish ABNJ with such certificates of its
    officers or others and such other documents to evidence
    fulfillment of the conditions set forth in this Section 9.3
    as ABNJ may reasonably request.



 




    ARTICLE X

    



 




    THE CLOSING
    




 



    10.1.  Time and Place.



 



    Subject to the provisions of Articles IX and XI hereof, the
    Closing of the transactions contemplated hereby shall take place
    at the offices of Luse Gorman Pomerenk & Schick, 5335
    Wisconsin Avenue, Suite 400, Washington, D.C. at
    10:00 a.m., or at such other place or time upon which
    Investors and ABNJ mutually agree. A pre-closing of the
    transactions contemplated hereby (the “Pre-Closing”)
    shall take place at the offices




    

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    of Luse Gorman Pomerenk & Schick, 5335 Wisconsin
    Avenue, Suite 400, Washington, D.C. at 10:00 a.m.
    on the day prior to the Closing Date.



 



    10.2.  Deliveries at the Pre-Closing and the
    Closing.



 



    At the Pre-Closing there shall be delivered to Investors and
    ABNJ the opinions, certificates, and other documents and
    instruments required to be delivered at the Pre-Closing under
    Article IX hereof. At or prior to the Closing, Investors
    shall have delivered the Merger Consideration as set forth under
    Section 9.3.4 hereof.



 




    ARTICLE XI

    



 




    TERMINATION,
    AMENDMENT AND WAIVER
    




 



    11.1.  Termination.



 



    This Agreement may be terminated at any time prior to the
    Closing Date, whether before or after approval of the Merger by
    the shareholders of ABNJ:



 



    11.1.1. At any time by the mutual written agreement of
    Investors and ABNJ;



 



    11.1.2. By the Board of Directors of either party
    (provided, that the terminating party is not then in material
    breach of any representation, warranty, covenant or other
    agreement contained herein) if there shall have been a material
    breach of any of the representations or warranties set forth in
    this Agreement on the part of the other party, which breach by
    its nature cannot be cured prior to the Termination Date or
    shall not have been cured within 30 days after written
    notice of such breach by the terminating party to the other
    party; provided, however, that neither party shall have the
    right to terminate this Agreement pursuant to this
    Section 11.1.2 unless the breach of representation or
    warranty, together with all other such breaches, would entitle
    the terminating party not to consummate the transactions
    contemplated hereby under Section 9.2.1 (in the case of a
    breach of a representation or warranty by ABNJ) or
    Section 9.3.1 (in the case of a breach of a representation
    or warranty by Investors);



 



    11.1.3. By the Board of Directors of either party
    (provided, that the terminating party is not then in material
    breach of any representation, warranty, covenant or other
    agreement contained herein) if there shall have been a material
    failure to perform or comply with any of the covenants or
    agreements set forth in this Agreement on the part of the other
    party, which failure by its nature cannot be cured prior to the
    Termination Date or shall not have been cured within
    30 days after written notice of such failure by the
    terminating party to the other party; provided, however, that
    neither party shall have the right to terminate this Agreement
    pursuant to this Section 11.1.3 unless the breach of
    covenant or agreement, together with all other such breaches,
    would entitle the terminating party not to consummate the
    transactions contemplated hereby under Section 9.2.2 (in
    the case of a breach of covenant by ABNJ) or Section 9.3.2
    (in the case of a breach of covenant by Investors);



 



    11.1.4. At the election of the Board of Directors of either
    party if the Closing shall not have occurred by the Termination
    Date, or such later date as shall have been agreed to in writing
    by Investors and ABNJ; provided, that no party may terminate
    this Agreement pursuant to this Section 11.1.4 if the
    failure of the Closing to have occurred on or before said date
    was due to such party’s material breach of any
    representation, warranty, covenant or other agreement contained
    in this Agreement;



 



    11.1.5. By the Board of Directors of either party if the
    shareholders of ABNJ shall have voted at its shareholders’
    meeting on the transactions contemplated by this Agreement and
    such vote shall not have been sufficient to approve such
    transactions;



 



    11.1.6. By the Board of Directors of either party if
    (i) final action has been taken by a Bank Regulator whose
    approval is required in connection with this Agreement and the
    transactions contemplated hereby, which final action
    (x) has become unappealable and (y) does not approve
    this Agreement or the transactions contemplated hereby, or
    (ii) any court of competent jurisdiction or other
    governmental authority shall have issued an order, decree,
    ruling or taken any other action restraining, enjoining or
    otherwise prohibiting the Merger and such order, decree, ruling
    or other action shall have become final and nonappealable;




    

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    11.1.7. By the Board of Directors of either party
    (provided, that the terminating party is not then in material
    breach of any representation, warranty, covenant or other
    agreement contained herein) in the event that any of the
    conditions precedent to the obligations of such party to
    consummate the Merger cannot be satisfied or fulfilled by the
    date specified in Section 11.1.4 of this Agreement.



 



    11.1.8. By the Board of Directors of Investors if ABNJ has
    received a Superior Proposal, and in accordance with
    Section 6.10 of this Agreement, the Board of Directors of
    ABNJ has entered into an acquisition agreement with respect to
    the Superior Proposal, terminated this Agreement, or withdraws
    its recommendation of this Agreement, fails to make such
    recommendation or modifies or qualifies its recommendation in a
    manner adverse to Investors.



 



    11.1.9. By the Board of Directors of ABNJ if ABNJ has
    received a Superior Proposal, and in accordance with
    Section 6.10 of this Agreement, the Board of Directors of
    ABNJ has made a determination to accept such Superior Proposal.



 



    11.1.10. By ABNJ, if its Board of Directors so determines
    by a majority vote of the members of its entire Board, at any
    time during the
    five-day
    period commencing on and following the Determination Date, such
    termination to be effective on the 10th day following such
    Determination Date (“Effective Termination Date”), if
    both of the following conditions are satisfied:



 



    (i) The Investors Market Value on the Determination Date is
    less than $10.85; and



 



    (ii) the number obtained by dividing the Investors Market
    Value on the Determination Date by the Initial Investors Market
    Value (“Investors Ratio”) shall be less than the
    quotient obtained by dividing the Final Index Price by the
    Initial Index Price minus 0.20;



 



    subject, however, to the following three sentences. If ABNJ
    elects to exercise its termination right pursuant to this
    Section 11.1.10, it shall give prompt written notice
    thereof to Investors. During the five business day period
    commencing with its receipt of such notice, Investors shall have
    the option of paying additional Merger Consideration in the form
    of Investors Common Stock, cash, or a combination of Investors
    Common Stock and cash so that the Aggregate Investors Share
    Amount shall be valued at the lesser of (i) the product of
    0.80 and the Initial Investors Market Value or (ii) the
    product obtained by multiplying the Index Ratio by the Initial
    Investors Market Value. If within such five business day period,
    Investors delivers written notice to ABNJ that it intends to
    proceed with the Merger by paying such additional consideration,
    as contemplated by the preceding sentence, then no termination
    shall have occurred pursuant to this Section 11.1.10 and
    this Agreement shall remain in full force and effect in
    accordance with its terms (except that the Merger Consideration
    shall have been so modified). Moreover, this
    Section 11.1.10 shall not apply if the Merger proceeds in
    accordance with the provisions of Section 3.5.



 



    For purposes of this Section 11.1.10, the following terms
    shall have the meanings indicated below:



 



    “Determination Date” shall mean the first date on
    which all Regulatory Approvals (and waivers, if applicable)
    necessary for consummation of the Merger and the Bank Mergers
    have been received (disregarding any waiting period).



 



    “Final Index Price” means the average of the daily
    closing value of the Index for the five consecutive trading days
    immediately preceding the Determination Date.



 



    “Initial Index Price” means the closing value of the
    Index on the trading day ended two days preceding the execution
    of this Agreement.



 



    “Index Group” means the SNL Thrift Index.



 



    “Index Ratio” shall be the Final Index Price divided
    by the Initial Index Price.



 



    “Initial Investors Market Value” means $13.56,
    adjusted if applicable as indicated in the last sentence of
    Section 11.1.10.




    

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    “Investors Market Value” shall be the average of the
    daily closing sales prices of a share of Investors Common Stock
    as reported on the Nasdaq for the five consecutive trading days
    immediately preceding the Determination Date.



 



    If Investors declares or effects a stock dividend,
    reclassification, recapitalization,
    split-up,
    combination, exchange of shares or similar transaction between
    the date of this Agreement and the Determination Date, the
    prices of Investors Common Stock shall be appropriately adjusted
    for the purposes of applying this Section 11.1.10.



 



    11.2.  Effect of Termination.



 



    11.2.1. In the event of termination of this Agreement
    pursuant to any provision of Section 11.1, this Agreement
    shall forthwith become void and have no further force, except
    that (i) the provisions of Sections 11.2, 12.1, 12.2,
    12.6, 12.9, 12.10, and any other Section which, by its terms,
    relates to post-termination rights or obligations, shall survive
    such termination of this Agreement and remain in full force and
    effect.



 



    11.2.2. If this Agreement is terminated, expenses and
    damages of the parties hereto shall be determined as follows:



 



    (A) Except as provided below, whether or not the Merger is
    consummated, all costs and expenses incurred in connection with
    this Agreement and the transactions contemplated by this
    Agreement shall be paid by the party incurring such expenses.



 



    (B) In the event of a termination of this Agreement because
    of a willful breach of any representation, warranty, covenant or
    agreement contained in this Agreement, the breaching party shall
    remain liable for any and all damages, costs and expenses,
    including all reasonable attorneys’ fees, sustained or
    incurred by the non-breaching party as a result thereof or in
    connection therewith or with respect to the enforcement of its
    rights hereunder.



 



    (C) As a condition of Investors’ willingness, and in
    order to induce Investors, to enter into this Agreement, and to
    reimburse Investors for incurring the costs and expenses related
    to entering into this Agreement and consummating the
    transactions contemplated by this Agreement, ABNJ hereby agrees
    to pay Investors, and Investors shall be entitled to payment of
    a fee of $5.6 million (the “Investors Fee”),
    within three business days after written demand for payment is
    made by Investors, following the occurrence of any of the events
    set forth below:



 



    (i) ABNJ terminates this Agreement pursuant to
    Section 11.1.9 or Investors terminates this Agreement
    pursuant to Section 11.1.8; or



 



    (ii) The entering into a definitive agreement by ABNJ
    relating to an Acquisition Proposal or the consummation of an
    Acquisition Proposal involving ABNJ within twelve months after
    the occurrence of any of the following: (i) the termination
    of the Agreement by Investors pursuant to Section 11.1.2 or
    11.1.3 because of a willful breach by ABNJ; or (ii) the
    failure of the shareholders of ABNJ to approve this Agreement
    after the occurrence of an Acquisition Proposal.



 



    (D) If demand for payment of the Investors Fee is made
    pursuant to Section 11.2.2(C) and payment is timely made,
    then Investors will not have any other rights or claims against
    ABNJ, its Subsidiaries, and their respective officers and
    directors, under this Agreement, it being agreed that the
    acceptance of the Investors Fee under Section 11.2.2(C)
    will constitute the sole and exclusive remedy of Investors
    against ABNJ and its Subsidiaries and their respective officers
    and directors.



 



    11.3.  Amendment, Extension and Waiver.



 



    Subject to applicable law, at any time prior to the Effective
    Time (whether before or after approval thereof by the
    shareholders of ABNJ), the parties hereto by action of their
    respective Boards of Directors, may (a) amend this
    Agreement, (b) extend the time for the performance of any
    of the obligations or other acts of any other party hereto,
    (c) waive any inaccuracies in the representations and
    warranties contained herein or in any document delivered
    pursuant hereto, or (d) waive compliance with any of the
    agreements or conditions




    

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    contained herein; provided, however, that after any approval of
    this Agreement and the transactions contemplated hereby by the
    shareholders of ABNJ, there may not be, without further approval
    of such shareholders, any amendment of this Agreement which
    reduces the amount, value or changes the form of consideration
    to be delivered to ABNJ’s shareholders pursuant to this
    Agreement, except as provided in Section 3.5 hereof. This
    Agreement may not be amended except by an instrument in writing
    signed on behalf of each of the parties hereto. Any agreement on
    the part of a party hereto to any extension or waiver shall be
    valid only if set forth in an instrument in writing signed on
    behalf of such party, but such waiver or failure to insist on
    strict compliance with such obligation, covenant, agreement or
    condition shall not operate as a waiver of, or estoppel with
    respect to, any subsequent or other failure.



 




    ARTICLE XII

    



 




    MISCELLANEOUS
    




 



    12.1.  Confidentiality.



 



    Except as specifically set forth herein, Investors and ABNJ
    mutually agree to be bound by the terms of the confidentiality
    agreements dated October 14, 2008 (the
    “Confidentiality Agreement”) previously executed by
    the parties hereto, which Confidentiality Agreement is hereby
    incorporated herein by reference. The parties hereto agree that
    such Confidentiality Agreements shall continue in accordance
    with their respective terms, notwithstanding the termination of
    this Agreement.



 



    12.2.  Public Announcements.



 



    ABNJ and Investors shall cooperate with each other in the
    development and distribution of all news releases and other
    public disclosures with respect to this Agreement, and except as
    may be otherwise required by law, neither ABNJ nor Investors
    shall issue any news release, or other public announcement or
    communication with respect to this Agreement unless such news
    release, public announcement or communication has been mutually
    agreed upon by the parties hereto.



 



    12.3.  Survival.



 



    All representations, warranties and covenants in this Agreement
    or in any instrument delivered pursuant hereto or thereto shall
    expire on and be terminated and extinguished at the Effective
    Time, except for those covenants and agreements contained herein
    which by their terms apply in whole or in part after the
    Effective Time.



 



    12.4.  Notices.



 



    All notices or other communications hereunder shall be in
    writing and shall be deemed given if delivered by receipted hand
    delivery or mailed by prepaid registered or certified mail
    (return receipt requested) or by recognized overnight courier
    addressed as follows:



 


	 	 	 
	

    If to ABNJ, to:


	
 
	
    Joseph Kliminski

    Chief Executive Officer

    American Bancorp of New Jersey, Inc.

    365 Broad Street

    Bloomfield, New Jersey 07003

    Fax: (973) 748-8088

	

    With required copies to:


	
 
	
    James S. Fleischer, Esq.

    Silver, Freedman & Taff, L.L.P.

    3299 K Street, N.W., Suite 100

    Washington, D.C. 20007

    Fax: (202) 337-5502





    

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    If to Investors, to:


	
 
	
    Kevin Cummings

    President and Chief Executive Officer

    Investors Bancorp, Inc.

    101 JFK Parkway

    Short Hills, New Jersey 07078

    Fax: (973) 924-5192

	

    With required copies to:


	
 
	
    John J. Gorman, Esq.

    Luse Gorman Pomerenk & Schick, P.C.

    5335 Wisconsin Avenue, N.W., Suite 400

    Washington, D.C. 20015

    Fax: (202) 362-2902









 



    or such other address as shall be furnished in writing by any
    party, and any such notice or communication shall be deemed to
    have been given: (a) as of the date delivered by hand;
    (b) three (3) business days after being delivered to
    the U.S. mail, postage prepaid; or (c) one
    (1) business day after being delivered to the overnight
    courier.



 



    12.5.  Parties in Interest.



 



    This Agreement shall be binding upon and shall inure to the
    benefit of the parties hereto and their respective successors
    and assigns; provided, however, that neither this Agreement nor
    any of the rights, interests or obligations hereunder shall be
    assigned by any party hereto without the prior written consent
    of the other party. Except as provided in Article III and
    Sections 7.8.2 and 7.9, nothing in this Agreement, express
    or implied, is intended to confer upon any person, other than
    the parties hereto and their respective successors, any rights,
    remedies, obligations or liabilities under or by reason of this
    Agreement.



 



    12.6.  Complete Agreement.



 



    This Agreement, including the Exhibits and Disclosure Schedules
    hereto and the documents and other writings referred to herein
    or therein or delivered pursuant hereto, and the Confidentiality
    Agreement, referred to in Section 12.1, contains the entire
    agreement and understanding of the parties with respect to its
    subject matter. There are no restrictions, agreements, promises,
    warranties, covenants or undertakings between the parties other
    than those expressly set forth herein or therein. This Agreement
    supersedes all prior agreements and understandings (other than
    the Confidentiality Agreements referred to in Section 12.1
    hereof) between the parties, both written and oral, with respect
    to its subject matter.



 



    12.7.  Counterparts.



 



    This Agreement may be executed in one or more counterparts all
    of which shall be considered one and the same agreement and
    shall become effective when counterparts have been signed by
    each of the parties and delivered to the other parties. A
    facsimile or other electronic copy of a signature page shall be
    deemed to be an original signature page.



 



    12.8.  Severability.



 



    In the event that any one or more provisions of this Agreement
    shall for any reason be held invalid, illegal or unenforceable
    in any respect, by any court of competent jurisdiction, such
    invalidity, illegality or unenforceability shall not affect any
    other provisions of this Agreement and the parties shall use
    their reasonable efforts to substitute a valid, legal and
    enforceable provision which, insofar as practical, implements
    the purposes and intents of this Agreement.



 



    12.9.  Governing Law



 



    This Agreement shall be governed by the laws of Delaware,
    without giving effect to its principles of conflicts of laws.



 



    12.10.  Waiver of Trial by Jury.



 



    The parties hereto hereby knowingly, voluntarily and
    intentionally waive the right any may have to a trial by jury in
    respect to any litigation based hereon, or arising out of,
    under, or in connection with this Agreement




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    and any agreement contemplated to be executed in connection
    herewith, or any course of conduct, course of dealing,
    statements (whether verbal or written) or actions of either
    party in connection with such agreements.



 



    12.11.  Interpretation.



 



    When a reference is made in this Agreement to Sections or
    Exhibits, such reference shall be to a Section of or Exhibit to
    this Agreement unless otherwise indicated. The recitals hereto
    constitute an integral part of this Agreement. References to
    Sections include subsections, which are part of the related
    Section (e.g., a section numbered “Section 5.5.1”
    would be part of “Section 5.5” and references to
    “Section 5.5” would also refer to material
    contained in the subsection described as
    “Section 5.5.1”). The table of contents, index
    and headings contained in this Agreement are for reference
    purposes only and shall not affect in any way the meaning or
    interpretation of this Agreement. Whenever the words
    “include”, “includes” or
    “including” are used in this Agreement, they shall be
    deemed to be followed by the words “without
    limitation”. The phrases “the date of this
    Agreement”, “the date hereof” and terms of
    similar import, unless the context otherwise requires, shall be
    deemed to refer to the date set forth in the Recitals to this
    Agreement. The parties have participated jointly in the
    negotiation and drafting of this Agreement. In the event an
    ambiguity or question of intent or interpretation arises, this
    Agreement shall be construed as if drafted jointly by the
    parties and no presumption or burden of proof shall arise
    favoring or disfavoring any party by virtue of the authorship of
    any of the provisions of this Agreement.



 



    12.12.  Specific Performance.



 



    The parties hereto agree that irreparable damage would occur in
    the event that the provisions contained in this Agreement were
    not performed in accordance with its specific terms or was
    otherwise breached. It is accordingly agreed that the parties
    shall be entitled to an injunction or injunctions to prevent
    breaches of this Agreement and to enforce specifically the terms
    and provisions thereof 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.



 



    IN WITNESS WHEREOF, Investors and ABNJ have caused this
    Agreement to be executed under seal by their duly authorized
    officers as of the date first set forth above.



 


	 	 	 
	
 
	
 
	
    Investors Bancorp, Inc.

	
 
	
 
	
 

	

    Dated: December 14, 2008


	
 
	

    By: /s/  Kevin
    Cummings


    
Name:     Kevin
    Cummings

    Title: President

    and Chief Executive Officer




	
 
	
 
	
 

	
 
	
 
	
    American Bancorp of New Jersey, Inc.

	
 
	
 
	
 

	

    Dated: December 14, 2008


	
 
	

    By: /s/  Joseph
    Kliminski


    
Name:     Joseph
    Kliminski

    Title: Chief Executive Officer 













    

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