Document:

exv10w1

    Exhibit 10.1

 

    EXECUTION
    VERSION

 

 

    AGREEMENT
    AND PLAN OF MERGER

    By and Among

    INVESTORS SAVINGS BANK,

    INVESTORS BANCORP, INC.,

    INVESTORS BANCORP, MHC

    And

    BROOKLYN FEDERAL SAVINGS BANK,

    BROOKLYN FEDERAL BANCORP, INC.,

    BFS BANCORP, MHC

    Dated as of August 16, 2011

 

 

 

    TABLE OF
    CONTENTS

 

	 	 	 	 	 	 	 
	

    ARTICLE I CERTAIN DEFINITIONS

	
 
	 
	
    2
	 

	

    Section 1.01
    

	
 
	
    Definitions
	
 
	 
	
    2
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE II THE MERGER AND RELATED MATTERS

	
 
	 
	
    8
	 

	

    Section 2.01
    

	
 
	
    Effects of Merger; Surviving Entities
	
 
	 
	
    8
	 

	

    Section 2.02
    

	
 
	
    Effect on Outstanding Shares of Investors Bancorp Common Stock
	
 
	 
	
    9
	 

	

    Section 2.04.
    

	
 
	
    Conversion of Brooklyn Bancorp Common Stock; Mid-Tier Cash
    Merger Consideration
	
 
	 
	
    10
	 

	

    Section 2.05
    

	
 
	
    Procedures for Exchange of Brooklyn Bancorp Common Stock
	
 
	 
	
    11
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE
    BROOKLYN PARTIES

	
 
	 
	
    12
	 

	

    Section 3.01
    

	
 
	
    Organization
	
 
	 
	
    13
	 

	

    Section 3.02
    

	
 
	
    Capitalization
	
 
	 
	
    13
	 

	

    Section 3.03
    

	
 
	
    Authority; No Violation
	
 
	 
	
    14
	 

	

    Section 3.04
    

	
 
	
    Consents
	
 
	 
	
    15
	 

	

    Section 3.05
    

	
 
	
    Financial Statements and Securities Documents
	
 
	 
	
    15
	 

	

    Section 3.07
    

	
 
	
    No Material Adverse Effect
	
 
	 
	
    17
	 

	

    Section 3.08
    

	
 
	
    Material Contracts; Leases; Defaults
	
 
	 
	
    17
	 

	

    Section 3.09
    

	
 
	
    Ownership of Property; Insurance Coverage
	
 
	 
	
    18
	 

	

    Section 3.10
    

	
 
	
    Legal Proceedings
	
 
	 
	
    19
	 

	

    Section 3.11
    

	
 
	
    Compliance With Applicable Law
	
 
	 
	
    19
	 

	

    Section 3.12
    

	
 
	
    Employee Benefit Plans
	
 
	 
	
    20
	 

	

    Section 3.13
    

	
 
	
    Brokers, Finders and Financial Advisors
	
 
	 
	
    22
	 

	

    Section 3.14
    

	
 
	
    Environmental Matters
	
 
	 
	
    23
	 

	

    Section 3.15
    

	
 
	
    Loan Portfolio
	
 
	 
	
    23
	 

	

    Section 3.16
    

	
 
	
    Securities Documents
	
 
	 
	
    26
	 

	

    Section 3.17
    

	
 
	
    Related Party Transactions
	
 
	 
	
    26
	 

	

    Section 3.18
    

	
 
	
    Deposits
	
 
	 
	
    26
	 

	

    Section 3.19
    

	
 
	
    Required Votes
	
 
	 
	
    26
	 

	

    Section 3.20
    

	
 
	
    Registration Obligations
	
 
	 
	
    27
	 

	

    Section 3.21
    

	
 
	
    Risk Management Instruments
	
 
	 
	
    27
	 

	

    Section 3.22
    

	
 
	
    Fairness Opinion
	
 
	 
	
    27
	 

	

    Section 3.23
    

	
 
	
    Trust Accounts
	
 
	 
	
    27
	 

	

    Section 3.24
    

	
 
	
    Intellectual Property
	
 
	 
	
    27
	 

	

    Section 3.25
    

	
 
	
    Labor Matters
	
 
	 
	
    27
	 

	

    Section 3.26
    

	
 
	
    Brooklyn Bancorp Information Supplied
	
 
	 
	
    28
	 

 

	 	 	 	 	 	 	 
	

    ARTICLE IV REPRESENTATIONS AND WARRANTIES OF
    INVESTORS

	
 
	 
	
    28
	 

	

    Section 4.01
    

	
 
	
    Organization
	
 
	 
	
    28
	 

	

    Section 4.02
    

	
 
	
    Capitalization
	
 
	 
	
    29
	 

	

    Section 4.03
    

	
 
	
    Authority; No Violation
	
 
	 
	
    29
	 

	

    Section 4.04
    

	
 
	
    Consents
	
 
	 
	
    30
	 

	

    Section 4.05
    

	
 
	
    Financial Statements
	
 
	 
	
    30
	 

	

    Section 4.06
    

	
 
	
    Legal Proceedings
	
 
	 
	
    31
	 

	

    Section 4.07
    

	
 
	
    Compliance With Applicable Law
	
 
	 
	
    32
	 

	

    Section 4.08
    

	
 
	
    Investors Bancorp Common Stock
	
 
	 
	
    33
	 

	

    Section 4.09.
    

	
 
	
    Availability of Funds
	
 
	 
	
    33
	 

	

    Section 4.10
    

	
 
	
    Investors Bancorp Information Supplied
	
 
	 
	
    33
	 

	

    Section 4.11
    

	
 
	
    CRE Disposition
	
 
	 
	
    33
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE V COVENANTS OF THE BROOKLYN FEDERAL PARTIES

	
 
	 
	
    33
	 

	

    Section 5.01
    

	
 
	
    Conduct of Business
	
 
	 
	
    33
	 

	

    Section 5.02
    

	
 
	
    Current Information
	
 
	 
	
    36
	 

	

    Section 5.03
    

	
 
	
    Access to Properties and Records
	
 
	 
	
    37
	 

	

    Section 5.04
    

	
 
	
    Financial and Other Statements
	
 
	 
	
    38
	 

	

    Section 5.05
    

	
 
	
    Maintenance of Insurance
	
 
	 
	
    39
	 

	

    Section 5.06
    

	
 
	
    Disclosure Supplements
	
 
	 
	
    39
	 

	

    Section 5.07
    

	
 
	
    Consents and Approvals of Third Parties
	
 
	 
	
    39
	 

	

    Section 5.08
    

	
 
	
    Reasonable Best Efforts
	
 
	 
	
    39
	 

	

    Section 5.09
    

	
 
	
    Failure to Fulfill Conditions
	
 
	 
	
    39
	 

	

    Section 5.10
    

	
 
	
    No Solicitation
	
 
	 
	
    40
	 

	

    Section 5.11
    

	
 
	
    Reserves and Merger-Related Costs
	
 
	 
	
    42
	 

	

    Section 5.12
    

	
 
	
    Board of Directors and Committee Meetings
	
 
	 
	
    42
	 

	

    Section 5.13
    

	
 
	
    Voting of MHC Shares; Brooklyn MHC Members Meeting
	
 
	 
	
    42
	 

	

    Section 5.14
    

	
 
	
    REIT Matters
	
 
	 
	
    42
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE VI COVENANTS OF INVESTORS BANCORP

	
 
	 
	
    43
	 

	

    Section 6.01
    

	
 
	
    Conduct of Business
	
 
	 
	
    43
	 

	

    Section 6.02
    

	
 
	
    Current Information
	
 
	 
	
    43
	 

	

    Section 6.03
    

	
 
	
    Financial and Other Statements
	
 
	 
	
    43
	 

	

    Section 6.04
    

	
 
	
    Disclosure Supplements
	
 
	 
	
    43
	 

	

    Section 6.05
    

	
 
	
    Consents and Approvals of Third Parties
	
 
	 
	
    43
	 

	

    Section 6.06
    

	
 
	
    Regulatory Cooperation
	
 
	 
	
    43
	 

	

    Section 6.07
    

	
 
	
    Failure to Fulfill Conditions
	
 
	 
	
    44
	 

	

    Section 6.08
    

	
 
	
    Employee Benefits
	
 
	 
	
    44
	 

	

    Section 6.09
    

	
 
	
    Directors and Officers Indemnification and Insurance
	
 
	 
	
    45
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE VII REGULATORY AND OTHER MATTERS

	
 
	 
	
    46
	 

	

    Section 7.01
    

	
 
	
    Brooklyn Bancorp Shareholders Meeting
	
 
	 
	
    46
	 

	

    Section 7.02
    

	
 
	
    Merger Proxy Statement
	
 
	 
	
    46
	 

	

    Section 7.03
    

	
 
	
    Brooklyn MHC Membership Approval
	
 
	 
	
    47
	 

	

    Section 7.04
    

	
 
	
    Regulatory Approvals
	
 
	 
	
    47
	 

    ii

 

	 	 	 	 	 	 	 
	

    ARTICLE VIII CLOSING CONDITIONS

	
 
	 
	
    48
	 

	

    Section 8.01
    

	
 
	
    Conditions to Each Party’s Obligations under this Agreement
	
 
	 
	
    48
	 

	

    Section 8.02
    

	
 
	
    Conditions to the Obligations of Investors under this Agreement
	
 
	 
	
    48
	 

	

    Section 8.03
    

	
 
	
    Conditions to the Obligations of the Brooklyn Federal Parties
    under this Agreement
	
 
	 
	
    49
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE IX THE CLOSING

	
 
	 
	
    50
	 

	

    Section 9.01
    

	
 
	
    Time and Place
	
 
	 
	
    50
	 

	

    Section 9.02
    

	
 
	
    Deliveries at the Pre-Closing and the Closing
	
 
	 
	
    50
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE X TERMINATION, AMENDMENT AND WAIVER

	
 
	 
	
    50
	 

	

    Section 10.01
    

	
 
	
    Termination
	
 
	 
	
    50
	 

	

    Section 10.02
    

	
 
	
    Effect of Termination
	
 
	 
	
    51
	 

	

    Section 10.03
    

	
 
	
    Amendment, Extension and Waiver
	
 
	 
	
    52
	 

	
 
	
 
	
	
 
	 
	

    ARTICLE XI MISCELLANEOUS

	
 
	 
	
    52
	 

	

    Section 11.01
    

	
 
	
    Confidentiality
	
 
	 
	
    52
	 

	

    Section 11.02
    

	
 
	
    Public Announcements
	
 
	 
	
    52
	 

	

    Section 11.03
    

	
 
	
    Survival
	
 
	 
	
    52
	 

	

    Section 11.04
    

	
 
	
    Notices
	
 
	 
	
    53
	 

	

    Section 11.05
    

	
 
	
    Parties in Interest
	
 
	 
	
    53
	 

	

    Section 11.06
    

	
 
	
    Complete Agreement
	
 
	 
	
    53
	 

	

    Section 11.07
    

	
 
	
    Counterparts
	
 
	 
	
    54
	 

	

    Section 11.08
    

	
 
	
    Severability
	
 
	 
	
    54
	 

	

    Section 11.09
    

	
 
	
    Governing Law
	
 
	 
	
    54
	 

	

    Section 11.10
    

	
 
	
    Interpretation
	
 
	 
	
    54
	 

	

    Section 11.11
    

	
 
	
    Specific Performance; Jurisdiction
	
 
	 
	
    54
	 

 

	 	 	 	 	 	 	 
	

    Exhibit A

	
 
	
    Form of Merger Agreement For the Bank Merger
	
 
	 
	
 
	 

	

    Exhibit B

	
 
	
    Form of Merger Agreement For the MHC Merger
	
 
	 
	
 
	 

	

    Exhibit C

	
 
	
    Form of Voting Agreement
	
 
	 
	
 
	 

    iii

 

    AGREEMENT
    AND PLAN OF MERGER

 

    THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”),
    dated as of August 16, 2011, is by and between
    (i) Investors Savings Bank, a New Jersey savings bank
    (“Investors Bank”), Investors Bancorp, Inc., a
    Delaware corporation (“Investors Bancorp”), Investors
    Bancorp, MHC, a New Jersey mutual holding company
    (“Investors MHC”), and (ii) Brooklyn Federal
    Savings Bank, a Federal savings bank (“Brooklyn Federal
    Savings”), Brooklyn Federal Bancorp, Inc., a Federal
    corporation (“Brooklyn Bancorp”), and BFS Bancorp,
    MHC, a Federal mutual holding company (“Brooklyn
    MHC”). Each of Investors Bank, Investors Bancorp, Investors
    MHC, Brooklyn Federal Savings, Brooklyn Bancorp and Brooklyn MHC
    is sometimes individually referred to herein as a
    “party,” and Investors Bank, Investors Bancorp,
    Investors MHC, Brooklyn Federal Savings, Brooklyn Bancorp and
    Brooklyn MHC are collectively sometimes referred to as the
    “parties.”

 

    RECITALS

 

    1. Investors MHC owns a majority of the issued and
    outstanding capital stock of Investors Bancorp, which owns all
    of the issued and outstanding capital stock of Investors Bank.
    Each of Investors Bank, Investors Bancorp and Investors MHC has
    its principal offices located in Short Hills, New Jersey.

 

    2. Brooklyn MHC owns a majority of the issued and
    outstanding capital stock of Brooklyn Bancorp, which owns all of
    the issued and outstanding capital stock of Brooklyn Federal
    Savings. Each of Brooklyn Federal Savings, Brooklyn Bancorp and
    Brooklyn MHC has its principal offices located in Brooklyn, New
    York.

 

    3. The Board of Directors of each Party deems it advisable
    and in its best interests, including with respect to Investors,
    the members of Investors MHC and the stockholders of Investors
    Bancorp, and with respect to the Brooklyn Federal Parties, the
    stockholders of Brooklyn Bancorp and the Brooklyn MHC Members,
    for Brooklyn MHC to merge with and into Investors MHC with
    Investors MHC as the surviving entity, for Brooklyn Bancorp to
    merge with and into Investors Bancorp (or a wholly-owned
    subsidiary of Investors Bancorp), with Investors Bancorp as the
    surviving entity, and for Brooklyn Federal Savings to merge with
    and into Investors Bank with Investors Bank as the surviving
    entity, all pursuant to the terms, conditions and procedures set
    forth in this Agreement and the exhibits thereto.

 

    4. As a condition to the willingness of Investors to enter
    into this Agreement, each of the directors of Brooklyn Bancorp
    and Brooklyn MHC, and Brooklyn MHC itself, have entered into a
    Voting Agreement, substantially in the form of Exhibit C
    hereto, dated as of the date hereof, with Investors Bancorp (the
    “Voting Agreements”), pursuant to which each director
    of Brooklyn Bancorp and Brooklyn MHC, as well as Brooklyn MHC
    itself, have agreed, among other things, to vote all shares of
    Brooklyn Bancorp Common Stock 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 the Voting Agreements.

 

    5. The parties intend the Mergers to qualify as
    reorganizations 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.

 

    6. The parties desire to provide for certain undertakings,
    conditions, representations, warranties and covenants in
    connection with the transactions contemplated by this Agreement.

 

    7. In consideration of the premises and of the mutual
    representations, warranties and covenants herein contained and
    intending to be legally bound hereby, the parties hereby agree
    as follows:

 

 

    ARTICLE I

    

 

    CERTAIN
    DEFINITIONS
    

 

    Section 1.01  Definitions

 

    Except as otherwise provided herein, as used in this Agreement,
    the following terms shall have the indicated meanings (such
    meanings to be equally applicable to both the singular and
    plural forms of the terms defined):

 

    “Affiliate” means, with respect to any Person,
    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 or supplement hereto, which constitutes a “plan
    of merger” between the Investors Parties and the Brooklyn
    Federal Savings Parties.

 

    “Applications” means the applications to be
    filed with the appropriate Regulatory Authorities requesting
    approval or nonobjection of the transactions described in this
    Agreement.

 

    “Assignment of Leases and Rents” means, with
    respect to any Mortgaged Property, any assignment of leases,
    rents and profits or similar document or instrument executed by
    the related Mortgagor in connection with the origination of the
    related Mortgage Loan, assigning to the Mortgagee all of the
    income, rents and profits derived from the ownership, operation,
    leasing or other disposition of all or a portion of such
    Mortgaged Property, in the form which such assignment or similar
    agreement was duly executed, acknowledged and delivered, as such
    document may be amended, modified, renewed or extended from time
    to time.

 

    “Banking Act” means the New Jersey Banking Act
    of 1948, as amended.

 

    “Bank Merger” means the merger of Brooklyn
    Federal Savings with and into Investors Bank with Investors Bank
    as the surviving entity. The Bank Merger shall follow the MHC
    Merger and the Mid-Tier Merger.

 

    “Bank Merger Act” means the Bank Merger Act,
    within the FDIA and applicable regulations thereunder.

 

    “Bank Merger Effective Date” means the date
    that the certificate evidencing stockholder approval of the Bank
    Merger is filed with the Department or such other date as set
    forth in the certificate or as determined in accordance with
    applicable law.

 

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

 

    “Brooklyn Bancorp” means Brooklyn Federal
    Bancorp, Inc., a Federal corporation having its principal place
    of business located at 81 Court Street, Brooklyn, New York 11201.

 

    “Brooklyn Bancorp Common Stock” means the
    common stock of Brooklyn Bancorp described in
    Section 3.02(a).

 

    “Brooklyn Bancorp Compensation and Benefit Plan”
    has the meaning given to that term in Section 3.12 of
    this Agreement.

 

    “Brooklyn Bancorp Option” means an option to
    purchase shares of Brooklyn Bancorp Common Stock granted
    pursuant to the Brooklyn Bancorp 2006 Stock-Based Incentive Plan.

 

    “Brooklyn Bancorp Regulatory Agreement” has the
    meaning given to that term in Section 3.11(c) of this
    Agreement.

 

    “Brooklyn Bancorp Restricted Share” means a
    share of Brooklyn Bancorp Common Stock granted as a Restricted
    Stock Award pursuant to the Brooklyn Bancorp 2006 Stock-Based
    Incentive Plan.

 

    “Brooklyn Bancorp Shareholders Meeting” has the
    meaning given to that term in Section 7.01 of this
    Agreement.

 

    “Brooklyn Bancorp Stock Incentive Plan” means
    the Brooklyn Bancorp 2006 Stock-Based Incentive Plan.

    

    2

 

 

    “Brooklyn Bancorp Stockholders Meeting” has the
    meaning given to that term in Section 7.02 of this
    Agreement.

 

    “Brooklyn Disclosure Schedules” means the
    Disclosure Schedules delivered by Brooklyn to Investors pursuant
    to Article III of this Agreement.

 

    “Brooklyn Federal Savings” means Brooklyn
    Federal Savings Bank, a federally chartered savings bank having
    its principal place of business located at 81 Court Street,
    Brooklyn, New York 11201.

 

    “Brooklyn Federal Parties” means Brooklyn
    Federal Savings, Brooklyn Bancorp and Brooklyn MHC.

 

    “Brooklyn Financials” means (i) the
    audited consolidated financial statements of Brooklyn Bancorp as
    of September 30, 2010 and 2009 and for the two years ended
    September 30, 2010, including the notes thereto, and
    (ii) the unaudited interim consolidated financial
    statements of Brooklyn Bancorp as of each calendar quarter
    following September 30, 2010, in each case as filed by
    Brooklyn Bancorp in its Securities Documents.

 

    “Brooklyn MHC” means BFS Bancorp, MHC, a
    Federal mutual holding company having its principal place of
    business located at 81 Court Street, Brooklyn, New York 11201.

 

    “Brooklyn MHC Members” means those depositors
    of Brooklyn Federal Savings who are members of Brooklyn MHC in
    accordance with the charter and bylaws of Brooklyn MHC and
    applicable regulations.

 

    “Brooklyn MHC Members Meeting” has the meaning
    given to such term in Section 7.03(a) of this Agreement.

 

    “Brooklyn Regulatory Reports” means the Thrift
    Financial Reports of Brooklyn Federal Savings and accompanying
    schedules, as filed with the OTS, for each calendar quarter
    beginning with the quarter ended December 31, 2010, through
    the Closing Date, and all Annual, Quarterly and Current Reports
    filed with applicable Regulatory Authorities by Brooklyn Bancorp
    and Brooklyn MHC from December 31, 2010 through the Closing
    Date.

 

    “Brooklyn Subsidiary” means any corporation,
    50% or more of the capital stock of which is owned by Brooklyn
    Bancorp, either directly or indirectly through Brooklyn Federal
    Savings, and includes Brooklyn Federal Savings, except that it
    does not include any corporation the stock of which is held in
    the ordinary course of the lending activities of Brooklyn
    Federal Savings.

 

    “Cash Merger Consideration” has the meaning
    given to such term in Section 2.04(c) of this Agreement.

 

    “Certificate” shall mean certificates
    evidencing shares of Brooklyn Bancorp Common Stock held by
    Minority Shareholders.

 

    “Closing Date” shall have the meaning given to
    such term in Section 2.03 of this Agreement.

 

    “Commercial Loan Mortgage File” has the meaning
    given to that term in Section 3.15(e) of this Agreement.

 

    “Commercial Real Estate Loan” means a mortgage
    loan or participation interest in such mortgage loan to the
    extent applicable, other than a one- to four-family mortgage
    loan or a home equity loan, in the loan portfolio of Brooklyn
    Federal Savings.

 

    “Commercial Real Estate Loan Portfolio” means
    the Commercial Real Estate Loans listed on Brooklyn Disclosure
    Schedule 3.15(e).

 

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

 

    “Confidentiality Agreement” has the meaning
    given to that term in Section 11.01 of this Agreement.

 

    “CRE Personnel” has the meaning given to that
    term in Section 5.01(b)(xxvii).

 

    “Department” means the New Jersey Department of
    Banking and Insurance.

 

    “DGCL” means the Delaware General Corporation
    Law.

 

    “Dissenters’ Shares” has the meaning given
    to that term in Section 2.04(d) of this Agreement.

    

    3

 

 

    “Dodd-Frank Act” means the Dodd-Frank Wall
    Street Reform and Consumer Protection Act.

 

    “Effective Time” has the meaning given to such
    term in Section 2.03 of this Agreement.

 

    “Encumbrance” means, with respect to a
    Mortgaged Property, an encumbrance having arisen from and after
    the issuance date of the respective title insurance policy as a
    result of which the lien of the respective mortgage can be
    divested, subordinated or extinguished or its validity or
    priority impaired.

 

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

 

    “Exchange Act” means the Securities Exchange
    Act of 1934, as amended, and the rules and regulations
    promulgated from time to time thereunder.

 

    “Exchange Agent” means the bank or trust
    company or other agent designated by Investors Bancorp, and
    reasonably acceptable to Brooklyn Bancorp, which shall act as
    agent for Investors Bancorp in connection with the exchange
    procedures for converting Certificates into the Cash Merger
    Consideration.

 

    “Exchange Fund” has the meaning given to such
    term in Section 2.05 of this Agreement.

 

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

 

    “FDIC” means the Federal Deposit Insurance
    Corporation.

 

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

 

    “FRB” means the Board of Governors of the
    Federal Reserve System, and, where appropriate, either the
    Federal Reserve Bank of New York or Federal Reserve Bank of
    Philadelphia, as applicable.

 

    “GAAP” means accounting principles generally
    accepted in the United States of America as in effect at the
    relevant date and consistently applied.

 

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

 

    “HOLA” the Home Owners’ Loan Act.

 

    “Investors” means the Investors Parties
    and/or any
    direct or indirect Subsidiary of such entities.

 

    “Investors Bancorp” means Investors Bancorp,
    Inc., a Delaware corporation having its principal place of
    business located at 101 JFK Parkway, Short Hills, New Jersey
    07078.

 

    “Investors Bancorp Disclosure Schedules” means
    the Disclosure Schedules delivered by Investors to Brooklyn
    Federal Savings pursuant to Article III of this Agreement.

 

    “Investors Bancorp Option” means an option to
    purchase Investors Bancorp Common Stock granted pursuant to
    the Investors Bancorp Stock Benefit Plan.

    

    4

 

 

    “Investors Bancorp Regulatory Agreement” has
    the meaning given to such term in Section 4.07(c) of this
    Agreement.

 

    “Investors Bancorp Stock Benefit Plan” means
    the Investors Bancorp, Inc. 2006 Equity Incentive Plan.

 

    “Investors Bank” means Investors Savings Bank,
    a New Jersey chartered, stock savings bank, having its principal
    place of business located at 101 JFK Parkway, Short Hills, New
    Jersey 07078.

 

    “Investors MHC” means Investors Bancorp, MHC, a
    New Jersey chartered mutual holding company having its principal
    place of business located at 101 JFK Parkway, Short Hills, New
    Jersey.

 

    “Investors Financials” means (i) the
    audited consolidated balance sheets of Investors Bancorp and
    subsidiaries as of December 31, 2010 and 2009, and the
    related consolidated statements of operations,
    stockholders’ equity, and cash flows for the year ended
    December 31, 2010, the six-month period ended
    December 31, 2009, and for each of the years in the
    two-year period ended June 30, 2009, including the notes
    thereto; and (ii) the unaudited interim consolidated
    financial statements of Investors Bancorp as of each calendar
    quarter following December 31, 2010 included in Securities
    Documents filed by Investors Bancorp.

 

    “Investors Parties” means Investors Bank,
    Investors Bancorp and Investors MHC.

 

    “Investors Subsidiary” means any corporation,
    50% or more of the capital stock of which is owned, either
    directly or indirectly, by Investors Bancorp, and includes
    Investors Bank, except that it does not include any corporation
    the stock of which is held in the ordinary course of the lending
    activities of Investors Bank.

 

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

 

    “IRS” means the Internal Revenue Service.

 

    “Knowledge” as used with respect to a Party
    (including references to such Party 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 Party, and
    includes any facts, matters or circumstances set forth in any
    written notice from any Regulatory Authority or Governmental
    Entity or any other material written notice received by that
    Party.

 

    “Major Decision” means with respect to any
    Commercial Real Estate Loan: (i) any acceleration of such
    Commercial Real Estate Loan (other than acceleration that is
    automatic by the terms of the loan documents), any determination
    to commence a foreclosure or other legal or judicial proceeding
    to enforce the terms of such Commercial Real Estate Loan or
    realize on the collateral therefor or any actual foreclosure
    upon or comparable conversion (which may include acquisitions of
    real estate owned) of the ownership of properties securing such
    Commercial Real Estate Loan; (ii) any modification, consent
    to a modification, forbearance or waiver of any term of such
    Commercial Real Estate Loan (including any short payoff or short
    sale) or any extension of the maturity date thereof;
    (iii) any sale or other disposition of such Commercial Real
    Estate Loan, including real estate owned that originated as a
    Commercial Real Estate Loan (“REO”); (iv) any
    determination to bring an REO property into compliance with
    applicable environmental laws or to otherwise address hazardous
    material located at an REO property, except as required by law,
    court or administrative order; (v) any release of
    collateral or any acceptance of substitute or additional
    collateral for such Commercial Real Estate Loan or any consent
    to either of the foregoing, other than if required pursuant to
    the specific terms of such Commercial Real Estate Loan and for
    which there is no material lender discretion; (vi) any
    waiver of a
    “due-on-sale”
    or
    “due-on-encumbrance”
    clause or any consent to such a waiver or consent to a transfer
    of the related Mortgaged Property or interests in the borrower
    or consent to the incurrence of additional debt; (vii) any
    property management company changes or franchise changes, in
    each case, if the lender is required to consent or approve under
    the Commercial Real Estate Loan documents; (viii) any
    release of any escrow accounts, reserve accounts or letters of
    credit held as performance escrows or reserves, other than those
    required pursuant to the specific terms of such Commercial Real
    Estate Loan and for which there is no material lender
    discretion; (ix) any acceptance of an assumption agreement
    releasing a borrower from any liability under such Commercial
    Real Estate Loan other than pursuant to the specific terms
    thereof and for which there is no material lender discretion;
    (x) any release of the borrower, any guarantor or
    indemnitor from liability with respect to such Commercial Real
    Estate Loan or any modification to, waiver of any provision of,
    or release of, any guaranty or indemnity agreement;
    (xi) any transfer of the Mortgaged Property or any portion
    thereof, or any transfer of any direct or indirect ownership
    interest in the borrower, except in each case as expressly
    permitted by the loan

    

    5

 

    documents and for which there is no material lender discretion;
    (xii) any incurrence of additional debt by the borrower or
    any Affiliate thereof, including the terms of any document
    evidencing or securing any such additional debt, preferred
    equity investment or mezzanine loan and of any intercreditor or
    subordination agreement executed in connection therewith and any
    waiver of or amendment or modification to the terms of any such
    document or agreement, except as expressly permitted by the loan
    documents and for which there is no material lender discretion;
    (xiii) the voting on any plan of reorganization,
    restructuring or similar plan in the bankruptcy of the borrower;
    (xiv) the settlement of any hazard insurance claim for a
    cash payment that will be applied to the principal amount of
    such Commercial Real Estate Loan if such repayment would not
    result in the payment in full of all amounts due and payable
    thereunder; (xv) the termination or modification of any
    ground lease or ground lessor estoppel agreement, except (other
    than in connection with REO) as expressly permitted by the loan
    documents and for which there is no material lender discretion;
    (xvi) any modification, waiver or amendment of, or consent
    under, any intercreditor, participation agreement or similar
    agreement relating to such Commercial Real Estate Loan;
    (xvii) any subordination of the related mortgage to any
    other interest in the Mortgaged Property; (xviii) any
    waiver of an obligation to contribute cash to a reserve or any
    waiver of a condition for disbursement of funds from a reserve;
    (xix) any determination to rebuild the Mortgaged Property
    after the occurrence of a casualty or condemnation (except as
    expressly permitted by the loan documents and for which there is
    no material lender discretion); (xx) any consent to a lease
    that covers more than 5% of the net rentable area or amendment
    thereto or to any alteration to the extent lender consent is
    required under the terms of the loan documents;
    (xxi) commencing or settling any legal proceedings relating
    to such Commercial Real Estate Loan or the related borrower, or
    responding, without prior notice to Investors, to any such legal
    proceedings; and (xxii) force placing any insurance with
    respect to such Commercial Real Estate Loan.

 

    “Material Adverse Effect” shall mean, with
    respect to an Investors Party or a Brooklyn Federal Party,
    respectively, any effect that (i) is material and adverse
    to the financial condition, results of operations or business of
    Investors MHC, Investors Bancorp and its Subsidiaries taken as a
    whole, or Brooklyn MHC, Brooklyn Bancorp and the Brooklyn
    Subsidiaries taken as a whole, respectively, or (ii) does
    or would materially impair the ability of any of the Brooklyn
    Federal Parties, on the one hand, or the Investors Parties, 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;
    provided that “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) actions and omissions of a party hereto (or any of its
    Subsidiaries) taken with the prior written consent of the other
    party, (d) the announcement of this Agreement and the
    transactions contemplated hereby, and 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,
    and (e) 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 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.

 

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

 

    “Members Proxy Statement” means the proxy
    statement, if any, together with any supplements thereto,
    transmitted by Brooklyn Federal Savings
    and/or
    Brooklyn MHC to the Brooklyn MHC Members in connection with any
    applicable membership vote that may be required by the OTS with
    respect to the transactions contemplated by this Agreement.

 

    “Mergers” shall mean collectively the Bank
    Merger, the MHC Merger and the Mid-Tier Merger, and any
    other mergers by interim corporate entities necessary to
    effectuate the transactions contemplated by this Agreement.

 

    “MHC Merger” means the merger of Brooklyn MHC
    with and into Investors MHC, with Investors MHC as the surviving
    entity.

    

    6

 

 

    “MHC Shares” has the meaning given to such term
    in Section 3.02(a) of this Agreement.

 

    “Mid-Tier Effective Time” has the meaning
    given to such term in the Form of Merger Agreement for the MHC
    Merger.

 

    “Mid-Tier Merger” means the merger of
    Brooklyn Bancorp with and into Investors Bancorp (or a
    wholly-owned subsidiary of Investors Bancorp) with Investors
    Bancorp as the surviving entity, which shall follow the MHC
    Merger.

 

    “Minority Shareholders” shall mean those
    holders of Brooklyn Bancorp Common Stock other than Brooklyn MHC.

 

    “Minority Shares” means those shares of
    Brooklyn Bancorp Common Stock other than those held by or on
    behalf of Brooklyn MHC.

 

    “Mortgage” means, with respect to a Commercial
    Real Estate Loan, the mortgage, deed of trust or other
    instrument creating a first or second lien on the Mortgaged
    Property securing the Mortgage Note.

 

    “Mortgage Loan” means, for purposes of
    Section 3.15(e) of this Agreement, a Commercial Real Estate
    Loan.

 

    “Mortgage Loan Schedule” has the meaning given
    to such term in Section 3.15(e) of this Agreement.

 

    “Mortgage Note” means, with respect a
    Commercial Real Estate Loan, the original executed note or other
    evidence of the Commercial Mortgage Loan indebtedness of a
    Mortgagor.

 

    “Mortgaged Property” means, with respect to a
    Commercial Real Estate Loan, the real property securing
    repayment of the Mortgage Note, consisting of a fee simple
    estate or a leasehold estate in such real property.

 

    “Mortgagee” means, with respect to a Commercial
    Real Estate Loan, the mortgagee or beneficiary named in the
    Mortgage and the successors and assigns of such mortgagee or
    beneficiary.

 

    “Mortgagor” means, with respect to a Commercial
    Real Estate Loan, the obligor on a Mortgage Note, the owner of
    the Mortgaged Property and the grantor or mortgagor named in the
    related Mortgage and such grantor’s or mortgagor’s
    successors in title to the Mortgaged Property.”

 

    “OCC” means the Office of the Comptroller of
    the Currency.

 

    “Order to Cease and Desist” means the Order to
    Cease and Desist issued by the OTS to, the issuance of which was
    consented by, each of the Brooklyn Federal Parties, which Order
    to Cease and Desist was effective as to each Brooklyn Federal
    Party as of March 31, 2011, as may be amended or superseded
    by a Consent Order with the OCC and any written agreement with
    the FRB.

 

    “OTS” means the Office of Thrift Supervision,
    and as to Brooklyn Federal Savings, shall include the OCC
    following the Transfer Date, as defined in the Dodd-Frank Act,
    and the transfer of authority from the OTS to the OCC pursuant
    to Section 312 of the Dodd-Frank Act, and as to Brooklyn
    Bancorp and Brooklyn MHC, shall include the FRB following the
    Transfer Date, as defined in the Dodd-Frank Act, and the
    transfer of authority from the OTS to the FRB as to savings and
    loan holding companies pursuant to Section 312 of the
    Dodd-Frank Act.

 

    “Participation Facility” shall have the meaning
    given to such term in Section 3.14(a) of this Agreement.

 

    “Participation Interest” shall have the meaning
    given to such term in Section 5.03(b) of this Agreement.

 

    “Permitted Encumbrances” means, with respect to
    any Mortgage or Mortgaged Property related to a Mortgage Loan,
    (a) the lien for current real estate taxes, ground rents,
    water charges, sewer rents and assessments not yet due and
    payable, (b) covenants, conditions and restrictions, rights
    of way, easements and other matters that are of public record
    and are referred to in the related lender’s title insurance
    policy, none of which (individually or in the aggregate),
    materially interferes with the security intended to be provided
    by such Mortgage, (c) exceptions and exclusions
    specifically referred to in such lender’s title insurance
    policy, none of which (individually or in the aggregate)
    materially interferes with the security intended to be provided
    by such Mortgage, and (d) the rights of tenants (as tenants
    only) under leases (including subleases) pertaining to the
    related Mortgaged Property which the

    

    7

 

    Seller did not require to be subordinated to the lien of such
    Mortgage and which do not (individually or in the aggregate)
    materially interfere with the security intended to be provided
    by such Mortgage.

 

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

 

    “Regulations” means applicable regulations
    promulgated by the OTS, the FRB, the OCC or the Department with
    respect to the operations of the Brooklyn Parties or the
    Investors Parties.

 

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

 

    “Regulatory Authority” or “Regulatory
    Authorities” means any agency or department of any Federal
    or state government having supervisory jurisdiction over the
    parties and the transactions contemplated by this Agreement,
    including without limitation the OTS, the OCC, the FDIC, the FRB
    and the Commissioner.

 

    “REIT” means BFS REIT, Inc., an operating
    subsidiary of Brooklyn Federal Savings.

 

    “Release” means any spilling, leaking, seepage,
    pumping, pouring, emitting, emptying, discharging, dumping,
    disposing or depositing.

 

    “Right” means any warrant, option, right,
    convertible security or other capital stock equivalent that
    obligates an entity to issue its securities.

 

    “SEC” means the Securities and Exchange
    Commission.

 

    “Securities Act” means the Securities Act of
    1933, as amended, and the rules and regulations promulgated from
    time to time thereunder.

 

    “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” means the Securities Act and
    the Exchange Act and the rules and regulations promulgated from
    time to time thereunder.

 

    “Subsidiary” means any corporation, 50% or more
    of the capital stock of which is owned, either directly or
    indirectly, by another entity, except any corporation the stock
    of which is held as security by either Investors Bank or
    Brooklyn Federal Savings, as the case may be, in the ordinary
    course of their lending activities.

 

    “Termination Date” means January 31, 2012.

 

    “Treasury Stock” has the meaning given to that
    term in Section 2.04(b) of this Agreement.

 

    “UCC Financing Statement” means a financing
    statement executed and filed pursuant to the Uniform Commercial
    Code, as in effect in the relevant jurisdiction.

 

    “Voting Agreements” has the meaning given to
    that term in the Recitals.

 

    ARTICLE II

    

 

    THE MERGER
    AND RELATED MATTERS
    

 

    Section 2.01  Effects
    of Merger; Surviving Entities.

 

    The Mergers will be effected as follows:

 

    (a) The Bank Merger.  Brooklyn Federal
    Savings shall merge with and into Investors Bank with Investors
    Bank as the surviving entity pursuant to the merger agreement
    substantially in the form of Exhibit A hereto. The separate
    existence of Brooklyn Federal Savings shall cease, and all of
    the property (real, personal and mixed), rights, powers and
    duties and obligations of Brooklyn Federal Savings shall be
    transferred to and assumed by Investors Bank as the surviving
    entity in the Bank Merger, without further act or deed, all in
    accordance with the HOLA and the Bank Merger Act, and applicable
    Regulations, and if applicable the Banking Act. As a result of
    the

    

    8

 

    Bank Merger, each holder of a deposit account in Brooklyn
    Federal Savings as of the Merger Effective Date shall have the
    same rights and privileges in Investors Bank as if the deposit
    account had been established at Investors Bank, and all deposit
    accounts established at Brooklyn Federal Savings prior to the
    Merger Effective Date shall confer on a depositor the same
    rights and privileges in Investors Bank as if such deposit
    account had been established at Investors Bank on the date
    established at Brooklyn Federal Savings, including without
    limitation for purposes of any subscription rights in any future
    conversion of Investors MHC to stock form. The officers of
    Investors Bank immediately prior to the Effective Time shall be
    the initial officers of surviving entity, in each case until
    their respective successors are duly elected or appointed and
    qualified.

 

    (b) The MHC Merger.  Brooklyn MHC shall
    merge with and into Investors MHC with Investors MHC as the
    surviving entity pursuant to the merger agreement substantially
    in the form of Exhibit B hereto. The separate existence of
    Brooklyn MHC shall cease, and all of the property (real,
    personal and mixed), rights, powers and duties and obligations
    of Brooklyn MHC shall be transferred to and assumed by Investors
    MHC as the surviving entity in the MHC Merger, without further
    act or deed, all in accordance with the HOLA, and applicable
    Regulations. As a result of the MHC Merger, each holder of a
    deposit account in Brooklyn Federal Savings as of the Merger
    Effective Date shall have the same rights and privileges in
    Investors MHC as if such deposit account had been established at
    Investors Bank, and all deposit accounts established at Brooklyn
    Federal Savings prior to the Merger Effective Date shall confer
    on a depositor the same rights and privileges in Investors MHC
    as if such deposit account had been established at Investors
    Bank on the date established at Brooklyn Federal Savings,
    including without limitation for purposes of any subscription
    rights in any future conversion of Investors MHC to stock form.
    The officers of Investors MHC immediately prior to the Effective
    Time shall be the initial officers of surviving entity, in each
    case until their respective successors are duly elected or
    appointed and qualified.

 

    (c) The Mid-Tier Merger.  Brooklyn
    Bancorp shall merge with and into Investors Bancorp, or a
    to-be-formed, wholly owned subsidiary thereof, with Investors
    Bancorp (or its wholly-owned subsidiary) as the surviving entity
    pursuant to this Agreement. The separate existence of Brooklyn
    Bancorp shall cease, and all of the property (real, personal and
    mixed), rights, powers and duties and obligations of Brooklyn
    Bancorp shall be transferred to and assumed by Investors Bancorp
    (or its wholly-owned subsidiary) as the surviving entity in the
    Mid-Tier Merger, without further act or deed, all in
    accordance with the DGCL
    and/or the
    HOLA, and applicable Regulations. The Certificate of
    Incorporation and Bylaws of Investors Bancorp as in effect
    immediately prior to the Effective Time shall be the Certificate
    of Incorporation and Bylaws of the surviving entity, until
    thereafter amended as provided therein and by applicable law.
    The directors of Investors Bancorp immediately prior to the
    Effective Time shall be the initial directors of the surviving
    entity, each to hold office in accordance with the Certificate
    of Incorporation and Bylaws of the surviving entity. The
    officers of Investors Bancorp immediately prior to the Effective
    Time shall be the initial officers of surviving entity, in each
    case until their respective successors are duly elected or
    appointed and qualified.

 

    (d) Modification of
    Structure.  Notwithstanding any provision of this
    Agreement to the contrary, Investors Bancorp may, subject to the
    filing of all necessary applications and the receipt of all
    required Regulatory Approvals, modify the structure of the
    transactions described in this Section 2.01, and the
    parties shall enter into such alternative transactions, so long
    as (i) there are no adverse tax consequences to any of the
    stockholders of Brooklyn Bancorp or member of Brooklyn MHC as a
    result of such modification, (ii) such modification will
    not materially delay or jeopardize receipt of any required
    Regulatory Approvals required under Section 7.03, and
    (iii) the consideration to be paid to the holders of
    Brooklyn Bancorp Common Stock under this Agreement is not
    thereby changed in kind or value or reduced in amount.

 

    Section 2.02  Effect
    on Outstanding Shares of Investors Bancorp Common Stock.

 

    At and after the Mid-Tier Merger Effective Time, each share
    of Investors Bancorp Common Stock issued and outstanding
    immediately prior to the Effective Time shall remain an issued
    and outstanding share of common stock of Investors Bancorp and
    shall not be affected by the Merger, and each share of Investors
    Bank Common Stock issued and outstanding immediately prior to
    the Mid-Tier Effective Time shall remain an issued and
    outstanding share of Common Stock of Investors Bank and shall
    not be affected by the Merger.

    

    9

 

 

    Section 2.03.  Closing;
    Effective Time.

 

    The closing (“Closing”) shall occur on the date
    determined by Investors, in consultation with and upon no less
    than three (3) business days prior written notice to
    Brooklyn Bancorp, but in no event later than the close of
    business on the tenth business day following the satisfaction or
    (to the extent permitted by applicable law) waiver of the
    conditions set forth in Article VIII (other than those
    conditions that by their terms are to be satisfied at the
    Closing, but subject to the satisfaction or (to the extent
    permitted by applicable law) waiver of those conditions), or
    such other date that may be agreed to in writing by the parties.
    The Mid-Tier Merger shall be effected by the filing of a
    certificate of merger with the Delaware Office of the Secretary
    of State, and the filing of Articles of Combination with the
    Regulatory Authorities, on the day of the Closing (the
    “Closing Date”), in accordance with the DGCL and the
    HOLA. 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, or as otherwise stated in the
    certificate of merger, in accordance with the DGCL.

 

    Section 2.04.  Conversion
    of Brooklyn Bancorp Common Stock; Mid-Tier Cash Merger
    Consideration.

 

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

 

    (a) Each share of Investors Bancorp 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 Mid-Tier Merger.

 

    (b) All shares of Brooklyn Bancorp Common Stock held in the
    treasury of Brooklyn Bancorp (“Treasury Stock”) and
    each share of Brooklyn Bancorp Common Stock owned by Investors
    Bancorp 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 therefore.

 

    (c) Subject to the foregoing provisions of this
    Section 2.04, each share of Brooklyn Bancorp Common Stock
    issued and outstanding immediately prior to the Effective Time
    (other than Dissenters’ Shares) held by Minority
    Shareholders shall become and be converted into, as provided in
    and subject to the terms set forth in this Agreement, the right
    to receive a cash payment equal to eighty cents ($0.80) (the
    “Cash Merger Consideration”). Each share of Brooklyn
    Bancorp Common Stock issued and outstanding immediately prior to
    the Effective Time that is held by Brooklyn MHC shall be
    cancelled and converted into a number of shares of Investors
    Bancorp Common Stock as shall equal (x) $0.80 times the
    number of shares of Brooklyn Bancorp Common Stock held by
    Brooklyn MHC immediately prior to the Effective Time, divided by
    (y) the average of the closing sales price of a share of
    Investors Bancorp common stock, as reported on NASDAQ stock
    market, for the twenty (20) consecutive trading days
    preceding the Closing Date (rounded down to the nearest whole
    share), which shares shall be issued to Investors MHC as a
    result of the MHC Merger.

 

    (d) If shares of Brooklyn Bancorp Common Stock are not
    listed for trading on the NASDAQ Market as of the date of the
    Brooklyn Bancorp Shareholders Meeting, then holders of Brooklyn
    Bancorp Common Stock shall have dissenters’ rights of
    appraisal in accordance with applicable Regulations and this
    Section 2.04(d). In such event, shares of Brooklyn Bancorp
    Common Stock that are outstanding immediately prior to the
    Effective Time and which are held by stockholders who shall have
    not voted in favor of the Mid-Tier Merger nor consented
    thereto in writing and who shall have properly demanded
    appraisal for such shares in accordance with applicable
    Regulations (collectively, the “Dissenters’
    Shares”), shall not be converted into or represent the
    right to receive the Cash Merger Consideration. Such
    stockholders instead shall be entitled to such rights as are
    granted by the applicable Regulations, except that all
    Dissenters’ Shares held by Brooklyn Bancorp stockholders
    who shall have failed to perfect or who effectively shall have
    withdrawn or otherwise lost their appraisal rights shall
    thereupon be deemed to have been converted into and to have
    become exchangeable, as of the Effective Time, for the right to
    receive, without any interest thereon, the Cash Merger
    Consideration upon surrender, in the manner provided in this
    Article II, of the Certificate(s) that, immediately prior
    to the Effective Time, evidenced such shares. Brooklyn Bancorp
    shall give Investors Bancorp (i) prompt notice of any
    written

    

    10

 

    demands for appraisal rights, attempted withdrawals of demands
    for payment and any other instruments served pursuant to the
    applicable Regulations and received by Brooklyn Bancorp relating
    to Dissenters’ Shares, and (ii) the opportunity to
    participate in all negotiations and proceedings with respect to
    appraisal demands, consistent with the obligations of Brooklyn
    Bancorp thereunder. Brooklyn Bancorp shall not, except with
    prior written consent of Investors Bancorp, (x) make any
    payment with respect to such demands, (y) offer to settle
    or settle any demand for payment or (z) waive any failure
    to timely deliver a written demand for appraisal rights or
    timely take any other action to perfect appraisal rights in
    accordance with Regulations.

 

    (e) After the Effective Time, shares of Brooklyn Bancorp
    Common Stock shall be no longer outstanding and shall
    automatically be canceled and shall cease to exist, and, except
    as to Dissenters’ Shares, shares held by Minority
    Shareholders shall thereafter by operation of this section
    represent the right to receive the Cash Merger Consideration.

 

    Section 2.05  Procedures
    for Exchange of Brooklyn Bancorp Common Stock.

 

    (a) At or prior to the Effective Time, Investors Bancorp
    shall deposit, or shall cause to be deposited, with the Exchange
    Agent for the benefit of the Minority Shareholders, for exchange
    in accordance with this Article II, an aggregate amount of
    cash equal to the aggregate amount of the Cash Merger
    Consideration payable pursuant to Section 2.04 of this
    Article II (such cash being hereinafter referred to as the
    “Exchange Fund”).

 

    (b) Investors Bancorp shall 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 Cash Merger Consideration into which the
    Brooklyn Bancorp Common Stock represented by such Certificates
    shall have been converted as a result of the
    Mid-Tier Merger. The letter of transmittal shall be subject
    to the approval of Brooklyn Bancorp (which shall not be
    unreasonably withheld, conditioned or delayed) and specify that
    delivery shall be affected, 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, a check representing the
    aggregate amount of Cash Merger Consideration which such former
    holder has the right to receive in respect of the Certificate(s)
    surrendered pursuant to the provisions of this
    Section 2.05, and the Certificate(s) so surrendered shall
    forthwith be cancelled. No interest will be paid or accrued on
    the Cash Merger Consideration.

 

    (c) The holder of a Certificate that prior to the
    Mid-Tier Merger represented issued and outstanding Brooklyn
    Bancorp Common Stock shall have no rights, after the Effective
    Time, with respect to such Brooklyn Bancorp Common Stock except
    to surrender the Certificate(s) in exchange for the Cash Merger
    Consideration as provided in this Agreement. After the surrender
    of a Certificate in accordance with this Section 2.05, the
    record holder thereof shall be entitled to receive, without any
    interest thereon, the Cash Merger Consideration that has become
    payable with respect to shares of Brooklyn Bancorp Common Stock
    represented by such Certificate.

 

    (d) 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 the payment of the Cash
    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.

 

    (e) From and after the Effective Time, there shall be no
    transfers on the stock transfer books of Brooklyn Bancorp of the
    Brooklyn Bancorp Common Stock that were issued and outstanding
    immediately prior to the Effective Time other than to settle
    transfers of Brooklyn Bancorp Common Stock that occurred 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 Cash
    Merger Consideration and canceled as provided in this
    Article II.

    

    11

 

 

    (f) At any time following the twelve (12) month period
    after the Effective Time, Investors Bancorp 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 Bancorp (subject to abandoned property, escheat and
    other similar laws) with respect to any Cash Merger
    Consideration that may be payable upon due surrender of the
    Certificates held by them. Notwithstanding the foregoing,
    neither Investors Bancorp nor the Exchange Agent shall be liable
    to any holder of a Certificate for any Cash Merger Consideration
    delivered in respect of such Certificate to a public official
    pursuant to applicable abandoned property, escheat or other
    similar law.

 

    (g) In the event any Certificate shall have been lost,
    stolen or destroyed, upon the making of an affidavit of that
    fact by the person claiming such Certificate to be lost, stolen
    or destroyed and, if reasonably required by Investors Bancorp,
    the posting by such person of a bond in such amount as Investors
    Bancorp 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 Cash Merger Consideration
    deliverable in respect thereof.

 

    (h) Investors Bancorp 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 Brooklyn Bancorp Common
    Stock such amounts as Investors Bancorp (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 Bancorp 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 Brooklyn Bancorp Common Stock in
    respect of whom such deduction and withholding were made by
    Investors Bancorp or the Exchange Agent.

 

    Section 2.06.  Treatment
    of Brooklyn Bancorp Options and Restricted Stock.

 

    At the Effective Time, each Brooklyn Bancorp Option will vest in
    full and then cease to represent an option to purchase Brooklyn
    Bancorp Common Stock and will be converted automatically into
    the right to receive an amount of cash equal to: (i) $.001
    multiplied by (ii) the number of shares of Brooklyn Bancorp
    Common Stock subject to said Brooklyn Bancorp Option. At the
    Effective Time, each Brooklyn Bancorp Restricted Share will
    become fully vested, and will be exchanged for the Cash Merger
    Consideration. Brooklyn Disclosure Schedule 2.06 sets forth
    each Brooklyn Bancorp Option and each Brooklyn Bancorp
    Restricted Share outstanding as of the date of this Agreement,
    which schedule includes the name of the individual grantee, the
    date of grant, the vesting schedule, and as to Brooklyn Bancorp
    Options, the exercise price and the expiration date. Brooklyn
    Bancorp shall take such steps as necessary to terminate the
    Brooklyn Bancorp Incentive Plan as of the Effective Time.

 

    ARTICLE III

    

 

    REPRESENTATIONS
    AND WARRANTIES OF THE BROOKLYN PARTIES
    

 

    Each of the Brooklyn Federal Parties represents and warrants to
    Investors that the statements contained in this Article III
    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 III),
    except as set forth in the Brooklyn Disclosure Schedules
    delivered to Investors on the date hereof, and except as to any
    representation or warranty which relates to a specific date. The
    Brooklyn Federal Parties have made a good faith effort to ensure
    that the disclosure on each schedule of the Brooklyn Disclosure
    Schedules corresponds to the section reference herein. However,
    for purposes of the Brooklyn Disclosure Schedules, 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 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 Brooklyn Bancorp shall
    include the Knowledge of Brooklyn MHC and Brooklyn Federal
    Savings.

    

    12

 

 

    Section 3.01  Organization

 

    (a) Brooklyn MHC is a Federal mutual holding company
    organized and validly existing under the laws of the United
    States, and is duly registered as a savings and loan holding
    company under the HOLA. Brooklyn MHC has full 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, except where the failure to be so licensed or
    qualified would not have a Material Adverse Effect on Brooklyn
    MHC. Brooklyn MHC has no assets, other than shares of Brooklyn
    Bancorp Common Stock, and has no liabilities.

 

    (b) Brooklyn Bancorp is a Federal corporation organized and
    validly existing under the laws of the United States, and is
    duly registered as a savings and loan holding company under the
    HOLA. Brooklyn Bancorp has the full corporate power and
    authority to own or lease all of its properties and assets and
    to carry on its business as it is now being conducted, and is
    duly licensed or qualified to do business and is in good
    standing in each jurisdiction in which the nature of the
    business conducted by it or the character or location of the
    properties and assets owned or leased by it makes such licensing
    or qualification necessary, except where the failure to be so
    licensed, qualified or in good standing would not have a
    Material Adverse Effect on Brooklyn. Other than shares of
    capital stock of Brooklyn Federal Savings and the Subsidiaries
    of Brooklyn Federal Savings as identified on Brooklyn Disclosure
    Schedule 3.01(b) (collectively, the “Brooklyn
    Subsidiaries”), Brooklyn Bancorp does not own or control,
    directly or indirectly, or have the right to acquire directly or
    indirectly, an equity interest in any corporation, company,
    association, partnership, joint venture or other entity.

 

    (c) Brooklyn Federal Savings is a Federal savings bank
    organized and validly existing under the laws of the United
    States. Except for its Subsidiaries that are identified as
    Brooklyn Subsidiaries, Brooklyn Federal Savings does not
    possess, directly or indirectly, any material equity interest in
    any corporate entity, except for equity interests held in its
    investment portfolio, and equity interests held by Brooklyn
    Federal Savings in a fiduciary capacity, and equity interests
    held in connection with its lending activities, including stock
    in the FHLB. Brooklyn Federal Savings owns all of the
    outstanding shares of capital stock of each Subsidiary
    identified as a Brooklyn Subsidiary free and clear of all liens,
    security interests, pledges, charges, encumbrances, agreements
    and restrictions of any kind or nature, except that, in the case
    of the REIT, Brooklyn Federal Savings owns 100% of the common
    securities and less than 100% of the preferred securities. The
    deposits of Brooklyn Federal Savings 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 by Brooklyn Federal Savings.

 

    (d) Brooklyn Federal Savings is a member in good standing
    of the FHLB and owns the requisite amount of stock therein.

 

    (e) The respective minute books of Brooklyn MHC, Brooklyn
    Bancorp and Brooklyn Federal Savings accurately records, in all
    material respects, all material corporate actions of their
    respective stockholders and boards of directors (including
    committees) through the date of this Agreement.

 

    (f) Prior to the date of this Agreement, Brooklyn has made
    available to Investors true and correct copies of the charters
    and bylaws of Brooklyn Federal Savings, Brooklyn Bancorp and
    Brooklyn MHC.

 

    Section 3.02  Capitalization

 

    (a) The authorized capital stock of Brooklyn Bancorp
    consists of twenty million (20,000,000) shares of common stock,
    $0.01 par value (“Brooklyn Bancorp Common
    Stock”), and one million (1,000,000) shares of Preferred
    Stock, $0.01 par value (the “Brooklyn Preferred
    Stock”). There are 12,882,607 shares of Brooklyn
    Bancorp Common Stock outstanding, validly issued, fully paid and
    nonassessable and free of preemptive rights, including
    9,257,500 shares of Brooklyn Bancorp Common Stock held by
    Brooklyn MHC (the “MHC Shares”). There are no shares
    of Brooklyn Bancorp Preferred Stock issued and outstanding.
    There are 601,603 shares of Brooklyn Bancorp Common Stock
    held by Brooklyn Bancorp as treasury stock. Except for Brooklyn
    Bancorp Options, neither Brooklyn Bancorp nor any Brooklyn
    Subsidiary has or is bound by any Right of any character
    relating to the purchase, sale, issuance or voting of, or right
    to receive dividends or other distributions on, any shares of
    Brooklyn Bancorp Common Stock, or any other security of Brooklyn
    Bancorp or any Brooklyn Subsidiary, or

    

    13

 

    any securities representing the right to vote, purchase or
    otherwise receive any shares of Brooklyn Bancorp Common Stock or
    any other security of Brooklyn Bancorp.

 

    (b) Brooklyn MHC owns the MHC Shares free and clear of any
    lien or encumbrance. Except for shares of Brooklyn Bancorp
    Common Stock (and any equity interests that may be attributed to
    Brooklyn MHC due to its ownership of Brooklyn Bancorp Common
    Stock), Brooklyn MHC does not possess, directly or indirectly,
    any equity interest in any corporation.

 

    (c) The authorized capital stock of Brooklyn Federal
    Savings consists of ten million (10,000,000) shares of common
    stock, $0.01 par value, and one million (1,000,000) shares
    of Preferred Stock, $0.01 par value. There are
    1,000 shares of Brooklyn Federal Savings common stock
    outstanding, all of which are validly issued, fully paid and
    nonassessable and free of preemptive rights, and all of which
    are owned by Brooklyn Bancorp free and clear of any liens,
    encumbrances, charges, restrictions or rights of third parties
    of any kind whatsoever.

 

    Section 3.03  Authority;
    No Violation

 

    (a) The Brooklyn Federal Parties have full power and
    authority to execute and deliver this Agreement and to
    consummate the transactions contemplated hereby. The execution
    and delivery of this Agreement by the Brooklyn Federal Parties
    and the completion by the Brooklyn Federal Parties of the
    transactions contemplated hereby have been duly and validly
    approved by the requisite vote of each Board of Directors of the
    Brooklyn Federal Parties and by Brooklyn Bancorp as the sole
    stockholder of Brooklyn Federal Savings, and, except for
    approval from the stockholders of Brooklyn Bancorp and if
    required from the Brooklyn MHC Members, no other proceedings on
    the part of the Brooklyn Federal Parties are necessary to
    complete the transactions contemplated hereby. This Agreement
    has been duly and validly executed and delivered by each of the
    Brooklyn Federal Parties and, subject, if required, to the
    approval of the stockholders of Brooklyn Bancorp and if required
    the Brooklyn MHC Members and the receipt of the required
    approvals of the Regulatory Authorities, constitutes the valid
    and binding obligations of each of the Brooklyn Federal Parties,
    enforceable against each of the Brooklyn Federal Parties in
    accordance with its terms, subject to applicable bankruptcy,
    insolvency and similar laws affecting creditors’ rights
    generally, and as to Brooklyn Federal Savings, the
    conservatorship or receivership provisions of the FDIA, and
    subject, as to enforceability, to general principles of equity.

 

    (b) Subject to the receipt of approvals from the Regulatory
    Authorities and the compliance by the Brooklyn Federal Parties
    and Investors with any conditions contained therein,

 

    (A) the execution and delivery of this Agreement by the
    Brooklyn Federal Parties,

 

    (B) the consummation of the transactions contemplated
    hereby, and

 

    (C) compliance by the Brooklyn Federal Parties with any of
    the terms or provisions hereof,

 

    will not: (i) conflict with or result in a material breach
    of any provision of the charters or bylaws of any of the
    Brooklyn Federal Parties or the certificate of incorporation of
    any Brooklyn Subsidiary; (ii) violate any statute, code,
    ordinance, rule, regulation, judgment, order, writ, decree or
    injunction applicable to the Brooklyn Federal Parties or any of
    the properties or assets of the Brooklyn Federal Parties; 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 any of the
    Brooklyn Federal Parties 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 Brooklyn Party is a party, or by which
    they or any of their respective properties or assets may be
    bound or affected, except in the case of clause (iii)
    above, for violations which, individually or in the aggregate,
    would not have a Material Adverse Effect on any or all of the
    Brooklyn Federal Parties.

 

    (c) The affirmative vote of the holders of a majority of
    the issued and outstanding shares of Brooklyn Bancorp Common
    Stock held by Minority Shareholders, as well as an affirmative
    vote of two-thirds of all of the issued and outstanding shares
    of Brooklyn Bancorp Common Stock, are the only votes of holders
    of any class of Brooklyn Bancorp’s capital stock necessary
    to adopt and approve this Agreement and the transactions
    contemplated hereby.

    

    14

 

 

    (d) The board of directors of Brooklyn Bancorp, by
    resolution duly adopted by the requisite vote of the board of
    directors at a meeting duly called and held, has
    (x) determined that this Agreement, the
    Mid-Tier Merger and the other transactions contemplated
    hereby are fair to and in the best interests of Brooklyn Bancorp
    and its shareholders and declared the Mid-Tier Merger to be
    advisable, and (y) recommended that the shareholders of
    Brooklyn Bancorp approve this Agreement and directed that such
    matter be submitted for consideration by the Brooklyn Bancorp
    stockholders at the Brooklyn Bancorp Stockholders Meeting.

 

    (e) The board of directors of Brooklyn MHC, by resolution
    duly adopted by the requisite vote of the board of directors at
    a meeting duly called and held, has (x) determined that
    this Agreement, the MHC Merger and the other transactions
    contemplated hereby are fair to and in the best interests of
    Brooklyn MHC and its Members and declared the MHC Merger to be
    advisable, and (y) recommended that the Members of Brooklyn
    MHC approve the MHC Merger and directed that such matter be
    submitted for consideration by the Brooklyn MHC Members at the
    Brooklyn MHC Members Meeting, if required.

 

    Section 3.04  Consents

 

    Except for (a) filings with Regulatory Authorities, the
    receipt of the Regulatory Approvals, and compliance with any
    conditions contained therein, (b) the filing of the
    Certificate of Merger with the Secretary of State of the State
    of Delaware, the Articles of Combination with the Regulatory
    Authorities, and such filings with the Department as required
    for the Bank Merger and the MHC Merger, (c) the filing with
    the SEC of (i) the Merger Proxy 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) the filing with Regulatory
    Authorities of the Members Proxy Statement for any requisite
    vote of Brooklyn MHC members, and (e) the approval of this
    Agreement by the requisite vote of the shareholders of Brooklyn
    Bancorp, and if required by the Brooklyn MHC Members, no
    consents, waivers or approvals of, or filings or registrations
    with, any Governmental Entity are necessary, and, to the
    Knowledge of Brooklyn Bancorp, 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 the Brooklyn Federal Parties, and
    (y) the completion of the Mergers by the Brooklyn Federal
    Parties. The Brooklyn Federal Parties have no reason to believe
    that any Regulatory Approvals or other required consents or
    approvals will not be received.

 

    Section 3.05  Financial
    Statements and Securities Documents

 

    (a) The Annual Reports on
    Form 10-K
    for the fiscal years ended September 30, 2010 and
    September 30, 2009 filed with the SEC by Brooklyn Bancorp
    on the dates set forth in Disclosure Schedule 3.05, and all
    other reports, registration statements, definitive proxy
    statements or information statements filed by Brooklyn Bancorp
    subsequent to September 30, 2009 under the Securities Act,
    or under Section 13(a), 13(c), 14 or 15(d) of the Exchange
    Act or under the securities regulations of the SEC, in the form
    filed with the SEC as of the date filed or, if amended or
    supplemented as of the date amended or supplemented,
    (A) complied in all material respects as to form with the
    applicable requirements under the Securities Act or the Exchange
    Act, as the case may be, and (B) did not contain any untrue
    statement of a material fact or omit to state a material fact
    required to be stated therein or necessary to make the
    statements therein, in the light of the circumstances under
    which they were made, not misleading. The Brooklyn Bancorp
    Financial Statements included or incorporated by reference into
    any such filing (including the related notes and schedules
    thereto) have been prepared in accordance with GAAP, and 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 Brooklyn Bancorp and the Brooklyn
    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.

 

    (b) Brooklyn Bancorp has made available to Investors true,
    correct and complete copies of all written correspondence
    between the SEC and it and any of its subsidiaries occurring
    since September 30, 2009 and prior to the date hereof.
    There are no outstanding comments from or unresolved issues
    raised by the SEC with respect to any of Brooklyn Bancorp
    Securities Documents. The books and records of Brooklyn Bancorp
    and its subsidiaries have

    

    15

 

    been, and are being, maintained in all material respects in
    accordance with GAAP and any other applicable legal and
    accounting requirements and reflect only actual transactions.

 

    (c) Except as set forth in Brooklyn Disclosure
    Schedule 3.05(c), Brooklyn Bancorp and each of its
    subsidiaries have timely filed all reports, forms, schedules,
    registrations, statements and other documents, together with any
    amendments required to be made with respect thereto, that they
    were required to file since September 30, 2008 with any
    Governmental Entity (other than the SEC) and have paid all fees
    and assessments due and payable in connection therewith.

 

    (d) Except as set forth in Brooklyn Disclosure
    Schedule 3.05(d), the records, systems, controls, data and
    information of Brooklyn Bancorp 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 it 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
    in the following sentence. Brooklyn Bancorp and its subsidiaries
    have devised and maintain a system of internal accounting
    controls sufficient to provide reasonable assurances regarding
    the reliability of financial reporting and the preparation of
    financial statements in accordance with GAAP. Brooklyn Bancorp
    has designed and implemented disclosure controls and procedures
    (within the meaning of
    Rules 13a-15(e)
    and
    15d-15(e) of
    the Exchange Act) to ensure that material information relating
    to it and its subsidiaries is made known to its management by
    others within those entities as appropriate to allow timely
    decisions regarding required disclosure and to make the
    certifications required by the Exchange Act.

 

    (e) Brooklyn Bancorp has disclosed, based on its most
    recent evaluation prior to the date hereof, to its auditors and
    the audit committee of its board of directors and in the
    Brooklyn Bancorp Securities Documents and the Brooklyn
    Disclosure Schedules (A) any significant deficiencies and
    material weaknesses in the design or operation of internal
    controls over financial reporting which are reasonably likely to
    adversely affect in any material respect its ability to record,
    process, summarize and report financial information and
    (B) any fraud, whether or not material, that involves
    management or other employees who have a significant role in its
    internal controls over financial reporting.

 

    (f) Since September 30, 2008, (A) neither
    Brooklyn Bancorp nor any of its subsidiaries nor, to its
    Knowledge, any director, officer, employee, auditor, accountant
    or representative of it 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 it or any of its
    subsidiaries or their respective internal accounting controls,
    including any material complaint, allegation, assertion or claim
    that it or any of its subsidiaries has engaged in questionable
    accounting or auditing practices, and (B) no attorney
    representing it or any of its subsidiaries, whether or not
    employed by it or any of its subsidiaries, has reported evidence
    of a material violation of securities laws, breach of fiduciary
    duty or similar violation by it or any of its officers,
    directors, employees or agents to its board of directors or any
    committee thereof or to any of its directors or officers.

 

    (g) Since September 30, 2010, Brooklyn Bancorp and its
    subsidiaries have not incurred any liability other than in the
    ordinary course of business consistent with past practice.

 

    (h) The allowance for loan losses reflected in Brooklyn
    Bancorp’s audited statement of condition at
    September 30, 2010 was, and the allowance for loan losses
    shown on the balance sheets in Brooklyn Bancorp’s
    Securities Documents for periods ending after September 30,
    2010 will be, adequate, as of the dates thereof, under GAAP.

 

    Section 3.06  Taxes

 

    Brooklyn Bancorp and the Brooklyn Subsidiaries are members of
    the same affiliated group within the meaning of Code
    Section 1504(a). Each Brooklyn Federal Party and each
    Brooklyn Subsidiary has duly filed all federal, state and
    material local tax returns required to be filed by or with
    respect to it on or prior to the Closing Date, taking into
    account any extensions (all such returns, to the Knowledge of
    Brooklyn Bancorp, 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

    

    16

 

    which have been incurred by or are due or claimed to be due from
    it 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 Brooklyn
    Disclosure Schedule 3.06, as of the date of this Agreement,
    none of the Brooklyn Federal Parties has received written notice
    of, and to Knowledge of Brooklyn Bancorp there is no audit
    examination, deficiency assessment, tax investigation or refund
    litigation with respect to any taxes of any Brooklyn Federal
    Party or any Brooklyn Subsidiary, and no written claim has been
    made by any authority in a jurisdiction where any Brooklyn Party
    or any Brooklyn Subsidiary does not file tax returns that a
    Brooklyn Federal Party or any Brooklyn Subsidiary is subject to
    taxation in that jurisdiction. No Brooklyn Federal Party and no
    Brooklyn Subsidiary has 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. Each Brooklyn
    Federal Party and each Brooklyn Subsidiary 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 each
    Brooklyn Federal Party and each Brooklyn Subsidiary, to the
    Knowledge of Brooklyn Bancorp, 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.

 

    Section 3.07  No
    Material Adverse Effect.

 

    Other than as disclosed in the Securities Documents filed by
    Brooklyn Bancorp on or before the date of this Agreement,
    Brooklyn Bancorp has not suffered any Material Adverse Effect
    since September 30, 2010 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
    Brooklyn Bancorp.

 

    Section 3.08  Material
    Contracts; Leases; Defaults.

 

    (a) Except as set forth in Brooklyn Disclosure
    Schedule 3.08, neither Brooklyn MHC, Brooklyn Bancorp nor
    any Brooklyn 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, 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; (iii) any collective bargaining agreement
    with any labor union relating to employees; (iv) any
    agreement which by its terms limits the payment of dividends by
    Brooklyn Bancorp or any Brooklyn 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 Brooklyn Bancorp or
    any Brooklyn 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 Bancorp or any Investors
    Bancorp Subsidiary; (vi) any other agreement, written or
    oral, that obligates Brooklyn MHC, Brooklyn Bancorp or any
    Brooklyn 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
    (other than agreements for commercially available
    “off-the-
    shelf” software), 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 Brooklyn Bancorp
    or any Brooklyn Subsidiary (it being understood that any
    non-compete or similar provision shall be deemed material, but
    any limitation on the scope of any license granted under any
    such agreement shall not be deemed material).

 

    (b) Each real estate lease that requires the consent of the
    lessor or its agent resulting from the Mergers by virtue of the
    terms of any such lease, is listed in Brooklyn Disclosure
    Schedule 3.08, 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
    Brooklyn Bancorp nor any Brooklyn Subsidiary is in default in
    any material respect under any material contract, agreement,
    commitment, arrangement,

    

    17

 

    lease, insurance policy or other instrument to which it is a
    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.

 

    (c) True and correct copies of agreements, contracts,
    arrangements and instruments referred to in Section 3.08(a)
    and (b) (“Material Contracts”) have been made
    available to Investors Bancorp on or before the date hereof, and
    are in full force and effect on the date hereof and neither
    Brooklyn Bancorp nor any Brooklyn Subsidiary (nor, to the
    Knowledge of Brooklyn Bancorp, 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 Material Contract. Except as listed on Brooklyn Disclosure
    Schedule 3.08(c), no party to any Material Contract will
    have the right to terminate any or all of the provisions of any
    such Material Contract as a result of the execution of, and the
    consummation of the transactions contemplated by, this Agreement.

 

    (d) Since September 30, 2009, through and including
    the date of this Agreement, except as publicly disclosed in the
    Securities Documents filed or furnished by Brooklyn Bancorp
    prior to the date hereof, neither Brooklyn Bancorp nor any
    Brooklyn Subsidiary has (i) except for (A) normal
    increases for 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, 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
    September 30, 2009 (which amounts have been previously made
    available to Investors Bancorp), 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 Brooklyn Disclosure
    Schedule 3.08(d), 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 Brooklyn Bancorp 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 Brooklyn Bancorp Stock Incentive Plan,
    (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
    Brooklyn Bancorp or any of the Brooklyn 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 $25,000, 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 Brooklyn Bancorp 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.

 

    Section 3.09  Ownership
    of Property; Insurance Coverage.

 

    (a) Brooklyn Bancorp and each Brooklyn Subsidiary has good
    and, as to real property, marketable title to all material
    assets and properties owned by Brooklyn Bancorp or each Brooklyn
    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 Brooklyn Regulatory Reports and in the Brooklyn
    Financials 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 Brooklyn
    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 Brooklyn Financials. Brooklyn Bancorp and the Brooklyn
    Bancorp Subsidiaries, as lessee, have the right under valid and

    

    18

 

    existing leases of real and personal properties used by Brooklyn
    Bancorp 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.

 

    (b) With respect to all material agreements pursuant to
    which Brooklyn Bancorp or any Brooklyn Subsidiary has purchased
    securities subject to an agreement to resell, if any, Brooklyn
    Bancorp or such Brooklyn Subsidiary, as the case may be, has a
    lien or security interest (which to Brooklyn Bancorp’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.

 

    (c) Brooklyn Bancorp and each Brooklyn Subsidiary currently
    maintain insurance considered by each of them to be reasonable
    for their respective operations. Neither Brooklyn Bancorp nor
    any Brooklyn Subsidiary, except as disclosed in Brooklyn
    Disclosure Schedule 3.09, 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 or disability 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 Brooklyn
    Bancorp or any Brooklyn Subsidiary under such policies (other
    than with respect to health or disability insurance). All such
    insurance is valid and enforceable and in full force and effect,
    and within the last three years Brooklyn Bancorp and each
    Brooklyn 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. Brooklyn Disclosure
    Schedule 3.09 identifies all material policies of insurance
    maintained by Brooklyn Bancorp and each Brooklyn Subsidiary as
    well as the other matters required to be disclosed under this
    Section.

 

    Section 3.10  Legal
    Proceedings.

 

    Except as set forth in Brooklyn Disclosure Schedule 3.10,
    neither Brooklyn MHC, Brooklyn Bancorp nor any Brooklyn
    Subsidiary is a party to any, and there are no pending or, to
    the Knowledge of Brooklyn Bancorp, threatened legal,
    administrative, arbitration or other proceedings, claims
    (whether asserted or unasserted), actions or governmental
    investigations or inquiries of any nature (i) against
    Brooklyn MHC, Brooklyn Bancorp or any Brooklyn Subsidiary,
    (ii) to which Brooklyn MHC, Brooklyn Bancorp or any
    Brooklyn 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 any of the Brooklyn
    Federal Parties to perform under this Agreement, except as to
    (i) and (ii) above, 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 Brooklyn MHC or
    Brooklyn Bancorp.

 

    Section 3.11  Compliance
    With Applicable Law.

 

    (a) Except as set forth in Brooklyn Disclosure
    Schedule 3.11(a), to Brooklyn Bancorp’s Knowledge,
    each of Brooklyn Bancorp and each Brooklyn 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, the
    Bank Secrecy Act and all other applicable fair lending laws and
    other laws relating to discriminatory business practices and
    neither Brooklyn Bancorp nor any Brooklyn Subsidiary has
    received any written notice to the contrary. The Board of
    Directors of Brooklyn Federal Savings has adopted and Brooklyn
    Federal Savings 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 Entity and that meets the requirements of
    Sections 352 and 326 of the USA PATRIOT Act and the
    regulations thereunder.

 

    (b) Each of Brooklyn MHC, Brooklyn Bancorp and each
    Brooklyn Subsidiary has all material permits, licenses,
    authorizations, orders and approvals of, and has made all
    filings, applications and registrations with, all Governmental
    Entities and Regulatory Authorities that are required in order
    to permit it to own or lease its properties and to conduct its
    business as presently conducted except where the failure to hold
    such permits, licensees, authorizations, orders or approvals, or
    the failure to make such filings, applications or registrations
    would

    

    19

 

    not, individually or in the aggregate, reasonably be expected to
    have a Material Adverse Effect on Brooklyn MHC or Brooklyn
    Bancorp; all such permits, licenses, certificates of authority,
    orders and approvals are in full force and effect in all
    material respects and, to the Knowledge of Brooklyn Bancorp, 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.

 

    (c) Other than those listed on Brooklyn Disclosure
    Schedule 3.11(c), for the period beginning October 1,
    2008, neither Brooklyn MHC, Brooklyn Bancorp nor any Brooklyn
    Subsidiary has received any written notification or, to Brooklyn
    Bancorp’s Knowledge, any other communication from any
    Regulatory Authority (i) asserting that Brooklyn MHC,
    Brooklyn Bancorp or any Brooklyn Subsidiary is not in material
    compliance with any of the statutes, regulations or ordinances
    which such Regulatory Authority enforces; (ii) threatening
    to revoke any license, franchise, permit or governmental
    authorization which is material to Brooklyn MHC, Brooklyn
    Bancorp or any Brooklyn Subsidiary; (iii) requiring, or
    threatening to require, Brooklyn MHC, Brooklyn Bancorp or any
    Brooklyn Subsidiary, or indicating that Brooklyn MHC, Bancorp or
    any Brooklyn 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 Brooklyn Bancorp or any
    Brooklyn 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 Brooklyn Bancorp or any
    Brooklyn 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 “Brooklyn Bancorp
    Regulatory Agreement”). Except as set forth on Brooklyn
    Disclosure Schedule 3.11(c), neither Brooklyn MHC, Brooklyn
    Bancorp nor any Brooklyn Subsidiary has consented to or entered
    into any Brooklyn Bancorp Regulatory Agreement that is currently
    in effect or that was in effect since January 1, 2008. The
    most recent regulatory rating given to Brooklyn Federal Savings
    as to compliance with the Community Reinvestment Act
    (“CRA”) is satisfactory or better.

 

    (d) Since October 1, 2008, and except as set forth on
    Brooklyn Disclosure Schedule 3.11(d), Brooklyn Bancorp has
    been and is in compliance in all material respects with
    (i) the applicable provisions of the Sarbanes-Oxley Act of
    2002 and (ii) the applicable listing and corporate
    governance rules and regulations of the NASDAQ. Brooklyn
    Disclosure Schedule 3.11(d) sets forth, as of June 30,
    2011, a schedule of all executive officers and directors of
    Brooklyn Bancorp who have outstanding loans from Brooklyn
    Bancorp or Brooklyn Federal Savings, 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.

 

    (e) Each Brooklyn Federal Party is in compliance in all
    material respects with the Order to Cease and Desist, except as
    set forth in Brooklyn Disclosure Schedule 3.11(e).

 

    Section 3.12  Employee
    Benefit Plans.

 

    (a) Brooklyn Disclosure Schedule 3.12(a) includes a
    list of all existing bonus, incentive, deferred compensation,
    supplemental executive retirement plans, 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 material benefit
    policies and procedures), fringe benefit plans, employment,
    consulting, settlement and change in control agreements and all
    other material benefit practices, policies and arrangements
    maintained by Brooklyn MHC, Brooklyn Bancorp or any Brooklyn
    Subsidiary in which any employee or former employee, consultant
    or former consultant or director or former director participates
    or to which any such employee, consultant or director is a party
    or is otherwise entitled to receive benefits (the “Brooklyn
    Bancorp Compensation and Benefit Plans”). Neither Brooklyn
    MHC, Brooklyn Bancorp nor any Brooklyn Subsidiary has any
    commitment to create any additional Brooklyn Bancorp
    Compensation and Benefit Plan or to materially modify, change or
    renew any existing Brooklyn Bancorp 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, Brooklyn Bancorp has made
    available to Investors Bancorp true and correct copies of the
    Brooklyn Bancorp Compensation and Benefit Plans.

    

    20

 

 

    (b) To the Knowledge of Brooklyn Bancorp, and except as
    disclosed in Brooklyn Disclosure Schedule 3.12(b), each
    Brooklyn Bancorp 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, Part G of
    Subtitle I of ERISA and Section 4980B of the Code
    (collectively, “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. Each Brooklyn Bancorp 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 or is entitled to rely on a
    determination letter issued to the sponsor or a master or
    prototype plan, and Brooklyn Bancorp 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 Brooklyn Bancorp,
    threatened action, suit or claim relating to any of the Brooklyn
    Bancorp Compensation and Benefit Plans (other than routine
    claims for benefits). Neither Brooklyn Bancorp nor any Brooklyn
    Subsidiary has engaged in a transaction, or omitted to take any
    action, with respect to any Brooklyn Bancorp Compensation and
    Benefit Plan that would reasonably be expected to subject
    Brooklyn Bancorp or any Brooklyn Subsidiary to a material unpaid
    tax or penalty imposed by either Chapter 43 of the Code or
    Sections 409 or 502 of ERISA.

 

    (c) No liability under Title IV of ERISA has been
    incurred by Brooklyn Bancorp or any Brooklyn Subsidiary with
    respect to any Brooklyn Bancorp Compensation and Benefit Plan
    which is subject to Title IV of ERISA (“Brooklyn
    Bancorp Pension Plan”) currently or formerly maintained by
    Brooklyn Bancorp or any entity which is considered one employer
    with Brooklyn Bancorp under Section 4001(b)(1) of ERISA or
    Section 414 of the Code (an “Brooklyn Bancorp ERISA
    Affiliate”) since the effective date of ERISA that has not
    been satisfied in full, and no condition exists that presents a
    material risk to Brooklyn Bancorp or any Brooklyn Bancorp ERISA
    Affiliate of incurring a liability under such Title. No Brooklyn
    Bancorp Pension Plan had an “accumulated funding
    deficiency” (as defined in Section 302 of ERISA),
    whether or not waived, as of the last day of the end of the most
    recent plan year ending prior to the date hereof; the fair
    market value of the assets of each Brooklyn Bancorp Pension Plan
    exceeds the present value of the “benefit liabilities”
    (as defined in Section 4001(a)(16) of ERISA) under such
    Brooklyn Bancorp Pension Plan as of the end of the most recent
    plan year with respect to the respective Brooklyn Bancorp
    Pension Plan ending prior to the date hereof, calculated on the
    basis of the actuarial assumptions used in the most recent
    actuarial valuation for such Brooklyn Bancorp Pension Plan as of
    the date hereof; there is not currently pending with the PBGC
    any filing with respect to any reportable event under
    Section 4043 of ERISA nor has any reportable event occurred
    as to which a filing is required and has not been made (other
    than as might be required with respect to this Agreement and the
    transactions contemplated thereby). Neither Brooklyn Bancorp nor
    any Brooklyn Bancorp ERISA Affiliate has contributed to any
    “multiemployer plan,” as defined in Section 3(37)
    of ERISA. Neither Brooklyn Bancorp, nor any Brooklyn Bancorp
    ERISA Affiliate, nor any Brooklyn Bancorp Compensation and
    Benefit Plan, including any Brooklyn Bancorp Pension Plan, nor
    any trust created thereunder, nor any trustee or administrator
    thereof has engaged in a transaction in connection with which
    Brooklyn Bancorp, any Brooklyn Bancorp ERISA Affiliate, and any
    Brooklyn Bancorp Compensation and Benefit Plan, including any
    Brooklyn Bancorp Pension Plan or any such trust or any trustee
    or administrator thereof, could reasonably be expected to be
    subject to either a civil liability or penalty pursuant to
    Section 409, 502(i) or 502(l) of ERISA or a tax imposed
    pursuant to Chapter 43 of the Code.

 

    (d) All material contributions required to be made under
    the terms of any Brooklyn Bancorp Compensation and Benefit Plan
    have been timely made, and all anticipated contributions and
    funding obligations are accrued on Brooklyn Bancorp’s
    consolidated financial statements to the extent required by
    GAAP. Brooklyn Bancorp and each Brooklyn Subsidiary has expensed
    and accrued as a liability the present value of future benefits
    under each applicable Brooklyn Bancorp Compensation and Benefit
    Plan for financial reporting purposes as required by GAAP.

 

    (e) Neither Brooklyn Bancorp nor any Brooklyn Subsidiary
    has any obligations to provide retiree health, life insurance,
    or disability insurance, or any retiree death benefits under any
    Brooklyn Bancorp Compensation and

    

    21

 

    Benefit Plan, other than benefits mandated by COBRA. There has
    been no communication to employees by Brooklyn Bancorp or any
    Brooklyn Subsidiary that would reasonably be expected to promise
    or guarantee such employees retiree health, life insurance, or
    disability insurance, or any retiree death benefits, other than
    as set forth in Brooklyn Disclosure Schedule 3.12(e).

 

    (f) Brooklyn Bancorp and its Subsidiaries do not maintain
    any Brooklyn Bancorp Compensation and Benefit Plans covering
    employees who are not United States residents.

 

    (g) With respect to each Brooklyn Bancorp Compensation and
    Benefit Plan, if applicable, Brooklyn Bancorp has provided or
    made available to Investors Bancorp copies of the: (A) plan
    documents, trust instruments and insurance contracts;
    (B) three most recent IRS Forms 5500; (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); and (H) PBGC Form 500 and 501 filings, along
    with the Notice of Intent to Terminate, ERISA
    Section 204(h) Notice, Notice of Plan Benefits, and all
    other documentation related to the termination of a Brooklyn
    Bancorp Pension Plan.

 

    (h) Except as provided in Brooklyn Disclosure
    Schedule 3.12(h) and in Section 2.06, 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) entitle any employee or independent
    contractor to terminate any plan, agreement or arrangement
    without cause and continue to accrue future benefits thereunder,
    or result in the vesting or acceleration of any benefits under
    any Brooklyn Bancorp Compensation and Benefit Plan,
    (C) result in any material increase in benefits payable
    under any Brooklyn Bancorp Compensation and Benefit Plan, or
    (D) entitle any current or former employee, director or
    independent contractor of Brooklyn Bancorp or any Brooklyn
    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).

 

    (i) Except as disclosed in Brooklyn Disclosure
    Schedule 3.12(i), neither Brooklyn Bancorp nor any Brooklyn
    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.

 

    (j) Except as disclosed in Brooklyn Disclosure
    Schedule 3.12(j), all “non-qualified” deferred
    compensation plans, programs or arrangements (within the meaning
    of Section 409A of the Code) have (i) between
    January 1, 2005 and December 31, 2008, been operated
    in all material respects in good faith compliance with
    Section 409A of the Code and IRS Notice
    2005-01 and
    (ii) since January 1, 2009 (or such later date
    permitted under applicable guidance), been in documentary
    compliance with Section 409A of the Code and IRS
    regulations and guidance thereunder. All stock options and stock
    appreciation rights granted by Brooklyn Bancorp to any current
    or former employee or director have been granted with a per
    share exercise price or reference price at least equal to the
    fair market value of the underlying stock on the date the option
    or stock appreciation right was granted, within the meaning of
    Section 409A of the Code and associated guidance.

 

    (k) Except as disclosed in Brooklyn Disclosure
    Schedule 3.12(k), there are no stock options, stock
    appreciation or similar rights, earned dividends or dividend
    equivalents, or shares of restricted stock, outstanding under
    any of the Brooklyn Bancorp Compensation and Benefit Plans or
    otherwise as of the date hereof and none will be granted,
    awarded, or credited after the date hereof.

 

    (l) Brooklyn Disclosure Schedule 3.12(l) 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
    Brooklyn Federal Savings or Brooklyn Bancorp, their title and
    rate of salary, and their date of hire.

 

    Section 3.13  Brokers,
    Finders and Financial Advisors.

 

    Neither Brooklyn MHC, Brooklyn Bancorp nor any Brooklyn
    Subsidiary, nor any of their respective officers, directors,
    employees or agents, has employed any broker, finder or
    financial advisor in connection with the

    

    22

 

    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 Sandler O’Neill +
    Partners, LP (“Sandler O’Neill”) by Brooklyn
    Bancorp and the fee payable pursuant thereto. A true and correct
    copy of the engagement agreement with Sandler O’Neill,
    setting forth the fee payable to Sandler O’Neill for its
    services rendered to the Brooklyn Parties in connection with the
    Mergers and transactions contemplated by this Agreement, is
    attached to Brooklyn Disclosure Schedule 3.13.

 

    Section 3.14  Environmental
    Matters.

 

    (a) Except as may be set forth in Brooklyn Disclosure
    Schedule 3.14 and any Phase I Environmental Report
    identified therein, with respect to Brooklyn Bancorp and each
    Brooklyn Subsidiary:

 

    (i) To the Knowledge of Brooklyn Bancorp, neither the
    conduct nor operation of its business nor any condition of any
    property currently or previously owned or operated by it,
    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 Brooklyn
    Bancorp or any Brooklyn Subsidiary. To the Knowledge of Brooklyn
    Bancorp, no condition exists or event has occurred with respect
    to any of Brooklyn Bancorp and each Brooklyn Subsidiary or any
    owned or operated property that is reasonably likely to result
    in any material liability to Brooklyn Bancorp or any Brooklyn
    Subsidiary by reason of any Environmental Laws. Neither Brooklyn
    Bancorp nor any Brooklyn Subsidiary during the past five years
    has received any written notice from any Person or Governmental
    Entity that Brooklyn Bancorp or any Brooklyn Subsidiary or the
    operation or condition of any property ever owned, operated by
    Brooklyn Bancorp or any Brooklyn Subsidiary (including
    Participation Facilities) are currently in violation of or
    otherwise are alleged to have liability 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 Brooklyn
    Bancorp or any Brooklyn Subsidiary;

 

    (ii) There is no suit, claim, action, demand, executive or
    administrative order, directive, investigation or proceeding
    pending or, to the Brooklyn Bancorp’s Knowledge,
    threatened, before any court, governmental agency or other forum
    against Brooklyn Bancorp or any Brooklyn 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 into the environment of any Materials
    of Environmental Concern whether or not occurring at or on a
    site owned, leased or operated by Brooklyn Bancorp or any
    Brooklyn Subsidiary;

 

    (iii) To Brooklyn Bancorp’s Knowledge, there are no
    underground storage tanks on, in or under any properties owned
    or operated by Brooklyn Bancorp or any of the Brooklyn Bancorp
    Subsidiaries, and to Brooklyn Bancorp’s Knowledge, no
    underground storage tanks have been closed or removed from any
    properties owned or operated by Brooklyn Bancorp or any of the
    Brooklyn Bancorp Subsidiaries or any Participation Facility
    except in compliance with Environmental Laws in all material
    respects; and

 

    (iv) To the Knowledge of Brooklyn Bancorp, at the time of
    Closing, no condition exists on any property for which Brooklyn
    Bancorp holds a lien, that results or resulted in a material
    violation of Environmental Laws or creates a material liability
    under Environmental Law that is reasonably likely to impose a
    material liability (including a material remediation obligation)
    upon Brooklyn Bancorp or any Brooklyn Subsidiary; and

 

    (b) “Participation Facility” means any facility
    in which Brooklyn Bancorp or its Subsidiaries participates in
    the management (as that term is defined under CERCLA), whether
    as a fiduciary, lender in control of the facility, owner or
    operator.

 

    Section 3.15  Loan
    Portfolio.

 

    (a) The allowance for loan losses reflected in Brooklyn
    Bancorp’s audited consolidated balance sheet at
    September 30, 2010 was, and the allowance for loan losses
    shown on the balance sheets in Brooklyn Bancorp’s
    Securities Documents for periods ending after September 30,
    2010 was or will be, adequate, as of the date thereof, under
    GAAP.

    

    23

 

 

    (b) Brooklyn Disclosure Schedule 3.15(b) sets forth a
    listing, as of June 30, 2011, by account, of: (A) all
    loans (including loan participations) of Brooklyn Federal
    Savings or any other Brooklyn Subsidiary that have been
    accelerated during the past twelve months; (B) all loan
    commitments or lines of credit of Brooklyn Federal Savings or
    any other Brooklyn Subsidiary which have been terminated by
    Brooklyn Federal Savings or any other Brooklyn 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) each borrower, customer or other party which has
    notified Brooklyn Federal Savings or any other Brooklyn
    Subsidiary during three years preceding the date of this
    Agreement, or has asserted against Brooklyn Federal Savings or
    any other Brooklyn Subsidiary, in each case in writing, any
    “lender liability” or similar claim, and, to the
    Knowledge of Brooklyn Bancorp, each borrower, customer or other
    party which has given Brooklyn Federal Savings or any other
    Brooklyn Subsidiary any oral notification of, or orally asserted
    to or against Brooklyn Federal Savings or any other Brooklyn
    Subsidiary, any such claim; (D) 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
    are as of the date of this Agreement classified as
    “substandard,” “doubtful,” “loss,”
    “classified,” “criticized,” “credit
    risk assets,” “concerned loans,” “watch
    list” or “special mention” (or words of similar
    import) by Brooklyn Bancorp and any Brooklyn Subsidiary, or any
    applicable Regulatory Authority, (4) as to which 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, (6) where a specific reserve allocation
    exists in connection therewith or (7) that are required to
    be accounted for as a troubled debt restructuring in accordance
    with Statement of Financial Accounting Standards No. 15;
    and (E) all assets classified by Brooklyn Federal Savings
    or any Brooklyn Federal 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. Brooklyn Disclosure Schedule 3.15(b) may
    exclude any individual loan with a principal outstanding balance
    of less than $25,000.

 

    (c) All loans receivable (including discounts) and accrued
    interest entered on the books of Brooklyn Bancorp and the
    Brooklyn Subsidiaries arose out of bona fide arm’s-length
    transactions, were made for good and valuable consideration in
    the ordinary course of Brooklyn Bancorp’s or the
    appropriate Brooklyn 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. To the Knowledge of Brooklyn Bancorp,
    the loans, discounts and the accrued interest reflected on the
    books of Brooklyn Bancorp and the Brooklyn 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. All such loans are owned by
    Brooklyn Bancorp or the appropriate Brooklyn Subsidiary free and
    clear of any liens.

 

    (d) 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.

 

    (e) Attached to Brooklyn Disclosure Schedule 3.15(e)
    is a schedule of information with respect to each Commercial
    Real Estate Loan, which schedule of information is true,
    complete and correct in all material respects (the
    “Mortgage Loan Schedule”). As to each Commercial Real
    Estate Loan: (i) Brooklyn Federal Savings has good and
    marketable title to, and is the sole owner of, each such loan or
    Participation Interest to the extent applicable; Brooklyn
    Federal Savings has full right, power and authority to transfer
    and assign each such loan or Participation Interest to or at the
    direction of Investors Bancorp free and clear of any and all
    pledges, liens, charges, security interests, participation
    interests
    and/or other
    interests and Encumbrances; (ii) the Mortgage related to
    and delivered in connection with each such loan constitutes a
    valid and enforceable first or second priority lien upon the
    related Mortgaged Property, and there are no liens
    and/or
    Encumbrances that are pari passu with the lien of such
    Mortgage except for Permitted Encumbrances; such Mortgage,
    together with any separate security agreements, chattel
    mortgages or equivalent instruments and UCC Financing
    Statements, establishes and creates a valid and enforceable
    security interest in favor of the holder thereof in all items of
    personal property owned by the related Mortgagor

    

    24

 

    which are material to the conduct in the ordinary course of the
    Mortgagor’s business on the related Mortgaged Property,
    except to the extent that the enforcement of such security
    interest may be limited by (i) bankruptcy, insolvency,
    reorganization, fraudulent transfer or other similar laws
    affecting the enforcement of creditors’ rights generally
    and (ii) general principles of equity (regardless of
    whether such enforcement is considered in a proceeding in equity
    or at law), but such limitations or unenforceability will not
    render such loan documents invalid or a whole or substantially
    interfere with the lender’s realization of the principal
    benefits
    and/or
    security provided thereby; (iii) as to each such loan for
    which, as indicated in the Mortgage Loan Schedule, there exists
    an Assignment of Leases and Rents, either as a separate
    instrument or as part of the Mortgage, related to and delivered
    in connection with each such loan, the Assignment of Leases and
    Rents establishes and creates a valid, subsisting and
    enforceable assignment of or first priority lien on and security
    interest in, subject to applicable law, the property, rights and
    interests of the related Mortgagor described therein; and each
    assignor thereunder has the full right to assign the same; if an
    Assignment of Leases and Rents exists with respect to any such
    loan (whether as part of the related Mortgage or separately),
    then the related Mortgage or related Assignment of Leases and
    Rents, subject to applicable law, provides for, upon an event of
    default under the loan, the appointment of a receiver for the
    collection of rents or for the related mortgagee to enter into
    possession to collect the rents or for rents to be paid directly
    to the mortgagee; (iv) neither the Brooklyn Federal
    Parties, nor, to the Knowledge of Brooklyn Bancorp, any other
    holder of the loan, has done, by act or omission, anything that
    would materially impair the coverage under the title insurance
    policy related to such loan; (v) there is no valid offset,
    defense, counter claim or right of rescission available to the
    related Mortgagor with respect to any of the related Mortgage
    Notes, Mortgages or other loan documents, including, without
    limitation, any such valid offset, defense, counter claim or
    right based on fraud in connection with the origination or
    servicing of the loan, that would deny the mortgagee the
    principal benefits intended to be provided by the Mortgage Note,
    Mortgage or other loan documents; (vi) the Mortgaged
    Properties, including, all improvements upon each Mortgaged
    Property securing such loan are insured under a fire and
    extended perils insurance (or the equivalent) as required
    pursuant to the loan documents executed in connection with each
    such loan; the Mortgage Properties are insured for general
    liability; (vii) except for those loans identified on the
    Mortgage Loan Schedule as participation interests, no such loan
    contains any equity participation by the Mortgagee thereunder,
    is convertible by its terms into an equity ownership interest in
    the related Mortgaged Property or the related Mortgagor,
    provides for any contingent or additional interest in the form
    of participation in the cash flow of the related Mortgaged
    Property, or provides for the negative amortization of interest;
    (viii) except as identified on Brooklyn Disclosure
    Schedule 3.15(e), as of the date of origination and as of
    the Closing Date, to the Knowledge of Brooklyn Bancorp, there
    are no pending actions, suits, governmental investigations or
    proceedings by or before any court or governmental authority
    against or affecting the Mortgagor under any such loan or the
    related Mortgaged Property that, if determined adversely to such
    Mortgagor or Mortgaged Property, would materially and adversely
    affect the value of the Mortgaged Property, the principal
    benefit of the security intended to be provided by the loan
    documents, the current ability of the Mortgaged Property to
    generate net cash flow sufficient to service such loan, or the
    current principal use of the Mortgaged Property; (ix) all
    escrow deposits (including capital improvements, environmental
    remediation reserves and other reserve deposits, if any)
    relating to any such loan that were required to be delivered to
    the lender under the terms of the related loan documents, have
    been received and, to the extent of any remaining balances of
    such escrow deposits, are in the possession or under the control
    of Brooklyn Federal Savings or its agents (which shall include
    any applicable servicer); all such escrow deposits which are
    required for the administration and servicing of such loan are
    being conveyed hereunder to Investors Bancorp; (x) there
    are no delinquent taxes or assessments, water or sewer fees or
    other outstanding charges (including interest), affecting any
    Mortgaged Property securing any such loan that are a lien of
    priority equal to or higher than the lien of the related
    Mortgage, or if there are such delinquent charges, fees,
    assessments or taxes, or if the appropriate amount of such
    taxes, assessments, fees or charges is being appealed or is
    otherwise in dispute, the unpaid taxes, assessments or charges
    are covered by an escrow of funds or other security sufficient
    to pay such tax, assessment or charge (for purposes of this
    representation and warranty, real property taxes and assessments
    shall not be considered delinquent until the date on which
    interest
    and/or
    penalties would be payable thereon); (xi) none of the
    Mortgaged Properties is subject to any (1) Encumbrances,
    other than a Permitted Encumbrance, or (2) monetary liens
    (including delinquent taxes, any judgments against the Mortgaged
    Property or the related Mortgagor or mechanic’s or similar
    liens to which the Mortgaged Property is subject) having
    priority over the lien of a respective Mortgage not insured
    against by each respective title insurance policy due to a
    monetary lien or an Encumbrance arising since the date the title
    insurance policy was issued up to and including the Closing Date
    or (3) undisclosed subordinate liens; and

    

    25

 

    (xii) there are no material adverse environmental
    circumstances or conditions with respect to any Mortgaged
    Properties; there is no pending action or proceeding directly
    involving any Mortgaged Property in which compliance with any
    environmental law, rule or regulation is an issue; there is no
    violation of any environmental law, rule or regulation with
    respect to any Mortgage Property; and nothing further remains to
    be done to satisfy in full all requirements of each such law,
    rule or regulation constituting a prerequisite to use and
    enjoyment of said property; (xiii) as of the Closing Date,
    the loan file with respect to each such loan shall include each
    document listed in Investors Bancorp Disclosure
    Schedule 3.15(e) (the “Commercial Loan Mortgage
    File”) and each such document shall be in the possession of
    Brooklyn Federal Savings; and (xiv) with respect to each
    Participation Interest, such Participation Interest and the
    servicing thereof are subject to the related participation
    agreement and participation certificate identified on Brooklyn
    Schedule 3.15(e) hereto, and are not subject to any other
    agreement or arrangement; Brooklyn Federal Savings has complied
    with all of its obligations under each participation agreement
    and participation certificate, has not received from any other
    participant in a Participation Interest a notice that Brooklyn
    Federal Savings has breached or is otherwise not complying with
    its obligations under a participation agreement and
    participation certificate and has not received notice, and is
    not otherwise aware, of any breach or noncompliance by another
    participant under a participation agreement.

 

    Section 3.16  Securities
    Documents.

 

    Brooklyn Bancorp has made available to Investors Bancorp copies
    of its (i) annual reports on
    Form 10-K
    for the years ended September 30, 2010, 2009 and 2008,
    (ii) quarterly reports on
    Form 10-Q
    for the quarters ended December 31, 2010 and March 31,
    2011, and (iii) proxy materials used in connection with its
    meetings of shareholders held in 2010, 2009 and 2008. Such
    reports and proxy materials complied, as to form, at the time
    filed with the SEC or if amended, as of the amendment date, in
    all material respects, with the Securities Laws.

 

    Section 3.17  Related
    Party Transactions.

 

    Except as described in Brooklyn Bancorp’s Proxy Statement
    distributed in connection with the annual meeting of
    shareholders held in February 2010 (which has previously been
    provided to Investors Bancorp), or as set forth in Brooklyn
    Disclosure Schedule 3.17, neither Brooklyn Bancorp nor any
    Brooklyn Subsidiary is a party to any transaction (including any
    loan or other credit accommodation) with any Affiliate of
    Brooklyn Bancorp or any Brooklyn Subsidiary. 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 substantially more than the normal risk
    of collectability or present other unfavorable features (as such
    terms are used under Item 404 of SEC
    Regulation S-K
    promulgated under the Securities Act and the Exchange Act). No
    loan or credit accommodation to any Affiliate of Brooklyn
    Bancorp or any Brooklyn 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. To the Knowledge of Brooklyn Bancorp,
    neither Brooklyn Bancorp nor any Brooklyn 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 Brooklyn Bancorp is inappropriate.

 

    Section 3.18  Deposits.

 

    As of the date of this Agreement, none of the deposits of
    Brooklyn Federal Savings is a “brokered deposit” as
    defined in 12 CFR Section 337.6(a)(2).

 

    Section 3.19  Required
    Votes.

 

    The affirmative vote of two thirds of the issued and outstanding
    shares of Brooklyn Bancorp Common Stock, and the affirmative
    vote of a majority of the Minority Shares, are required to
    approve this Agreement and the Merger under Brooklyn
    Bancorp’s certificate of incorporation and applicable
    Regulations. Unless otherwise required by the Regulatory
    Authorities, the affirmative vote of a majority of the Members
    present and voting, provided there is a Quorum, shall be
    required for approval of the MHC Merger.

    

    26

 

 

    Section 3.20  Registration
    Obligations.

 

    Neither Brooklyn Bancorp nor any Brooklyn 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.

 

    Section 3.21  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 Brooklyn
    Bancorp’s own account, or for the account of one or more of
    Brooklyn Bancorp’s Subsidiaries or their customers (all of
    which are set forth in Brooklyn Disclosure Schedule 3.21),
    were in all material respects entered into in compliance with
    all applicable laws, rules, regulations and regulatory policies,
    and to the Knowledge of Brooklyn Bancorp, with counterparties
    believed to be financially responsible at the time; and to
    Brooklyn Bancorp’s Knowledge each of them constitutes the
    valid and legally binding obligation of Brooklyn Bancorp 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 Brooklyn
    Bancorp nor any Brooklyn Subsidiary, nor to the Knowledge of
    Brooklyn Bancorp any other party thereto, is in breach of any of
    its obligations under any such agreement or arrangement in any
    material respect.

 

    Section 3.22  Fairness
    Opinion.

 

    Brooklyn Bancorp has received a written opinion from Sandler
    O’Neill to the effect that, subject to the terms,
    conditions and qualifications set forth therein, as of the date
    hereof, the Cash Merger Consideration to be received by the
    shareholders of Brooklyn Bancorp 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.

 

    Section 3.23  Trust Accounts.

 

    Brooklyn Federal Savings and each of its subsidiaries has
    properly administered all accounts for which it acts as a
    fiduciary, including but not limited to accounts for which it
    serves as trustee, agent, custodian, personal representative,
    guardian, conservator or investment advisor, in accordance with
    the terms of the governing documents and applicable laws and
    regulations. Neither Brooklyn Federal Savings nor any other
    Brooklyn Subsidiary, and to the Knowledge of Brooklyn Bancorp,
    nor has any of their respective directors, officers or
    employees, committed any breach of trust with respect to any
    such fiduciary account and the records for each such fiduciary
    account.

 

    Section 3.24  Intellectual
    Property.

 

    Brooklyn Bancorp and each Brooklyn Subsidiary owns or, to
    Brooklyn Bancorp’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, service marks and trademarks, which are material to
    the conduct of their business as currently conducted, each
    without payment, except for all license agreements under which
    license fees or other payments are due in the ordinary course of
    Brooklyn Bancorp’s or each of Brooklyn Bancorp’s
    Subsidiaries’ business, and neither Brooklyn Bancorp nor
    any Brooklyn Subsidiary has received any notice of conflict with
    respect thereto that asserts the rights of others. Brooklyn
    Bancorp and each Brooklyn Subsidiary has performed all the
    material 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 Brooklyn Bancorp, the conduct of the business
    of Brooklyn Bancorp and each Brooklyn Subsidiary as currently
    conducted or proposed to be conducted does not, in any material
    respect, infringe upon, dilute, misappropriate or otherwise
    violate any intellectual property owned or controlled by any
    third party.

 

    Section 3.25  Labor
    Matters.

 

    There are no labor or collective bargaining agreements to which
    Brooklyn Bancorp or any Brooklyn Subsidiary is a party. To the
    Knowledge of Brooklyn Bancorp, there is no union organizing
    effort pending or to the Knowledge of Brooklyn Bancorp,
    threatened against Brooklyn Bancorp or any Brooklyn Subsidiary.
    There is

    

    27

 

    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
    Brooklyn Bancorp, threatened against Brooklyn Bancorp or any
    Brooklyn Subsidiary. There is no unfair labor practice or labor
    arbitration proceeding pending or, to the Knowledge of Brooklyn
    Bancorp, threatened against Brooklyn Bancorp or any Brooklyn
    Subsidiary (other than routine employee grievances that are not
    related to union employees). Brooklyn Bancorp and each Brooklyn
    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.

 

    Section 3.26  Brooklyn
    Bancorp Information Supplied.

 

    The information relating to Brooklyn Bancorp and any Brooklyn
    Subsidiary to be contained in the Merger Proxy Statement, or in
    any other document filed with any Regulatory Authority 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
    Proxy 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 Brooklyn
    Bancorp with respect to statements made or incorporated by
    reference therein based on information supplied by Investors
    Bancorp specifically for inclusion or incorporation by reference
    in the Merger Proxy Statement.

 

    ARTICLE IV

    

 

    REPRESENTATIONS
    AND WARRANTIES OF INVESTORS
    

 

    Investors represent and warrant to Brooklyn Bancorp that the
    statements contained in this Article IV are correct and
    complete as of the date of this Agreement, except as set forth
    in the Investors Bancorp Disclosure Schedules delivered by
    Investors Bancorp to Brooklyn Bancorp on the date hereof.
    Investors Bancorp has made a good faith effort to ensure that
    the disclosure on each schedule of the Investors Bancorp
    Disclosure Schedule corresponds to the section referenced
    herein. However, for purposes of the Investors Bancorp
    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 Bancorp shall include the Knowledge of Investors
    Bank and Investors MHC.

 

    Section 4.01  Organization.

 

    (a) Investors MHC is a mutual holding company organized,
    validly existing and in good standing under the laws of the
    State of New Jersey, and is duly registered as a bank holding
    company under the BHCA. Investors MHC has full 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, except where the failure to be so licensed or
    qualified would not have a Material Adverse Effect on Investors
    MHC.

 

    (b) Investors Bancorp 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 Bancorp 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, except where the failure to be so
    licensed or qualified would not have a Material Adverse Effect
    on Investors Bancorp.

 

    (c) Investors Bank is a savings bank duly organized and
    validly existing under the laws of the State of New Jersey. The
    deposits of Investors 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 Bank is a member in good standing
    of the FHLB and owns the requisite amount of stock therein.

    

    28

 

 

    (d) Investors Bancorp Disclosure Schedule 4.01(d) sets
    forth each Investors Bancorp Subsidiary. Each Investors Bancorp
    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.

 

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

 

    (f) Prior to the date of this Agreement, Investors Bancorp
    has made available to Brooklyn Bancorp true and correct copies
    of the certificate of incorporation and bylaws of Investors
    Bancorp and Investors Bank and the Investors Bancorp
    Subsidiaries.

 

    Section 4.02  Capitalization.

 

    (a) The authorized capital stock of Investors Bancorp
    consists of two hundred million (200,000,000) shares of common
    stock, $0.01 par value (“Investors Bancorp Common
    Stock”), and fifty million (50,000,000) shares of Preferred
    Stock, $0.01 par value (the “Investors Bancorp
    Preferred Stock”). There are 112,337,326 shares of
    Investors Bancorp Common Stock outstanding, validly issued,
    fully paid and nonassessable and free of preemptive rights,
    including 64,844,373 shares of Investors Bancorp Common
    Stock held by Investors MHC (the “Investors MHC
    Shares”). There are no shares of Investors Bancorp
    Preferred Stock issued and outstanding. There are
    5,682,954 shares of Investors Bancorp Common Stock held by
    Investors Bancorp as treasury stock. Except for Investors
    Bancorp Options, neither Investors Bancorp nor any Investors
    Bancorp Subsidiary has or is bound by any Right of any character
    relating to the purchase, sale, issuance or voting of, or right
    to receive dividends or other distributions on, any shares of
    Investors Bancorp Common Stock, or any other security of
    Investors Bancorp or any Investors Bancorp Subsidiary, or any
    securities representing the right to vote, purchase or otherwise
    receive any shares of Investors Bancorp Common Stock or any
    other security of Investors Bancorp.

 

    (b) Investors MHC owns the Investors MHC Shares free and
    clear of any lien or encumbrance. Except for shares of Investors
    Bancorp Common Stock (and any equity interests that may be
    attributed to Investors MHC due to its ownership of Investors
    Bancorp Common Stock), Investors MHC does not possess, directly
    or indirectly, any equity interest in any corporation.

 

    (c) The authorized capital stock of Investors Bank consists
    of five million (5,000,000) shares of common stock,
    $2.00 par value, and no shares of preferred stock. There
    are two hundred and fifty thousand (250,000) shares of Investors
    Bank common stock outstanding, all of which are validly issued,
    fully paid and nonassessable and free of preemptive rights, and
    all of which are owned by Investors Bancorp free and clear of
    any liens, encumbrances, charges, restrictions or rights of
    third parties of any kind whatsoever.

 

    (d) To the Knowledge of Investors Bancorp, and except as
    set forth in the Investors Bancorp proxy statement dated
    April 29, 2011, 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
    Investors Bancorp Common Stock.

 

    Section 4.03  Authority;
    No Violation.

 

    (a) The Investors Parties have full power and authority to
    execute and deliver this Agreement and to consummate the
    transactions contemplated hereby. The execution and delivery of
    this Agreement by the Investors Parties and the completion by
    the Investors Parties of the transactions contemplated hereby
    have been duly and validly approved by the requisite vote of
    each Board of Directors of the Investors Parties and by
    Investors Bancorp as the sole stockholder of Investors Federal
    Savings, and, no other proceedings on the part of the Investors
    Parties are necessary to complete the transactions contemplated
    hereby. This Agreement has been duly and validly executed and
    delivered by each of the Investors Parties and, subject to the
    approval of the stockholders of Brooklyn Bancorp and if required
    Brooklyn MHC Members and the receipt of the required approvals
    of the Regulatory Authorities, constitutes the valid and binding
    obligations of each of the Investors Parties, enforceable
    against each of the Investors Parties in accordance with its
    terms, subject to applicable bankruptcy, insolvency and similar
    laws affecting creditors’ rights generally, and as to
    Investors Bank, the conservatorship or receivership provisions
    of the FDIA, and subject, as to enforceability, to general
    principles of equity.

    

    29

 

 

    (b) Subject to the receipt of approvals from the Regulatory
    Authorities and the compliance by the Investors Parties and the
    Brooklyn Federal Parties with any conditions contained therein,

 

    (A) the execution and delivery of this Agreement by the
    Investors Parties,

 

    (B) the consummation of the transactions contemplated
    hereby, and

 

    (C) compliance by the Investors Parties with any of the
    terms or provisions hereof,

 

    will not: (i) conflict with or result in a material breach
    of any provision of the charters or bylaws of any of the
    Investors Parties or the certificate of incorporation of any
    Investors Subsidiary; (ii) violate any statute, code,
    ordinance, rule, regulation, judgment, order, writ, decree or
    injunction applicable to the Investors Parties or any of the
    properties or assets of the Investors Parties; 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 any of the
    Investors Parties 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 Investors Party is a party, or by which
    they or any of their respective properties or assets may be
    bound or affected, except in the case of clause (iii)
    above, for violations which, individually or in the aggregate,
    would not have a Material Adverse Effect on Investors Bancorp.

 

    Section 4.04  Consents.

 

    Except for (a) filings with Regulatory Authorities, the
    receipt of the Regulatory Approvals, and compliance with any
    conditions contained therein, (b) the filing of the
    Certificate of Merger with the Secretary of State of the State
    of Delaware, the Articles of Combination with the Regulatory
    Authorities, and such filings with the Department as required
    for the Bank Merger and the MHC Merger, (c) the filing with
    the SEC of (i) the Merger Proxy 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) the filing with Regulatory
    Authorities of the Members Proxy Statement for any requisite
    vote of Brooklyn MHC members, and (e) the approval of this
    Agreement by the requisite vote of the shareholders of Brooklyn
    Bancorp, and if required by the Brooklyn MHC Members, no
    consents, waivers or approvals of, or filings or registrations
    with, any Governmental Entity are necessary, and, to the
    Knowledge of Investors Bancorp, 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 the Investors Parties, and
    (y) the completion of the Mergers by the Investors Parties.
    The Investors Parties have no reason to believe that any
    Regulatory Approvals or other required consents or approvals
    will not be received.

 

    Section 4.05  Financial
    Statements.

 

    (a) The Annual Reports on
    Form 10-K
    for the years ended December 31, 2010 and December 30,
    2009 filed with the SEC by Investors Bancorp, and all other
    reports, registration statements, definitive proxy statements or
    information statements filed by Investors Bancorp subsequent to
    December 31, 2010 under the Securities Act, or under
    Section 13(a), 13(c), 14 or 15(d) of the Exchange Act or
    under the securities regulations of the SEC, in the form filed
    with the SEC as of the date filed, (A) complied in all
    material respects as to form with the applicable requirements
    under the Securities Act or the Exchange Act, as the case may
    be, and (B) did not contain any untrue statement of a
    material fact or omit to state a material fact required to be
    stated therein or necessary to make the statements therein, in
    the light of the circumstances under which they were made, not
    misleading. The Investors Bancorp Financial Statements included
    or incorporated by reference into any such filing (including the
    related notes and schedules thereto) have been prepared in
    accordance with GAAP, and 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 Bancorp and the Investors Bancorp 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.

    

    30

 

 

    (b) Investors Bancorp has made available to the Brooklyn
    Federal Parties true, correct and complete copies of all written
    correspondence between the SEC and it and any of its
    subsidiaries occurring since December 31, 2009 and prior to
    the date hereof. There are no outstanding comments from or
    unresolved issues raised by the SEC with respect to any of
    Investors Bancorp Securities Documents. The books and records of
    Investors Bancorp and its subsidiaries have been, and are being,
    maintained in all material respects in accordance with GAAP and
    any other applicable legal and accounting requirements and
    reflect only actual transactions.

 

    (c) Investors Bancorp and each of its Subsidiaries have
    timely filed all reports, forms, schedules, registrations,
    statements and other documents, together with any amendments
    required to be made with respect thereto, that they were
    required to file since December 31, 2008 with any
    Governmental Entity (other than the SEC) and have paid all fees
    and assessments due and payable in connection therewith.

 

    (d) The records, systems, controls, data and information of
    Investors Bancorp 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 it
    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 in the following
    sentence. Investors Bancorp and its subsidiaries have devised
    and maintain a system of internal accounting controls sufficient
    to provide reasonable assurances regarding the reliability of
    financial reporting and the preparation of financial statements
    in accordance with GAAP. Investors Bancorp has designed and
    implemented disclosure controls and procedures (within the
    meaning of
    Rules 13a-15(e)
    and
    15d-15(e) of
    the Exchange Act) to ensure that material information relating
    to it and its subsidiaries is made known to its management by
    others within those entities as appropriate to allow timely
    decisions regarding required disclosure and to make the
    certifications required by the Exchange Act.

 

    (e) Investors Bancorp’s management has completed an
    assessment of the effectiveness of its internal control over
    financial reporting in compliance with the requirements of
    Section 404 of the Sarbanes-Oxley Act for the year ended
    December 31, 2010, and such assessment concluded that such
    controls were effective. Investors Bancorp has disclosed, based
    on its most recent evaluation prior to the date hereof, to its
    auditors and the audit committee of its board of directors and
    in the Investors Bancorp Securities Documents and the Investors
    Bancorp Disclosure Schedules (A) any significant
    deficiencies and material weaknesses in the design or operation
    of internal controls over financial reporting which are
    reasonably likely to adversely affect in any material respect
    its ability to record, process, summarize and report financial
    information and (B) any fraud, whether or not material,
    that involves management or other employees who have a
    significant role in its internal controls over financial
    reporting.

 

    (f) Since December 31, 2008, (A) neither
    Investors Bancorp nor any of its Subsidiaries nor, to its
    Knowledge, any director, officer, employee, auditor, accountant
    or representative of it 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 it or any of its
    subsidiaries or their respective internal accounting controls,
    including any material complaint, allegation, assertion or claim
    that it or any of its subsidiaries has engaged in questionable
    accounting or auditing practices, and (B) no attorney
    representing it or any of its Subsidiaries, whether or not
    employed by it or any of its Subsidiaries, has reported evidence
    of a material violation of securities laws, breach of fiduciary
    duty or similar violation by it or any of its officers,
    directors, employees or agents to its board of directors or any
    committee thereof or to any of its directors or officers.

 

    (g) The allowance for loan losses reflected in Investors
    Bancorp’s audited statement of condition at
    December 31, 2010 was, and the allowance for loan losses
    shown on the balance sheets in Investors Bancorp’s
    Securities Documents for periods ending after December 31,
    2010 will be, adequate, as of the dates thereof, under GAAP.

 

    Section 4.06  Legal
    Proceedings.

 

    Except as disclosed in Investors Bancorp Disclosure
    Schedule 4.06, neither Investors Bancorp nor any Investors
    Bancorp Subsidiary is a party to any, and there are no pending
    or, to the Knowledge of Investors Bancorp, threatened legal,
    administrative, arbitration or other proceedings, claims
    (whether asserted or unasserted), actions

    

    31

 

    or governmental investigations or inquiries of any nature
    (i) against Investors Bancorp or any Investors Bancorp
    Subsidiary, (ii) to which Investors Bancorp or any
    Investors Bancorp 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 Bancorp to perform under this
    Agreement, except as to (i) and (ii) above, 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
    Investors Bancorp.

 

    Section 4.07  Compliance
    With Applicable Law.

 

    (a) To the Knowledge of Investors Bancorp, each of
    Investors Bancorp and each Investors Bancorp 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, the
    Bank Secrecy Act and all other applicable fair lending laws and
    other laws relating to discriminatory business practices, and
    neither Investors Bancorp nor any Investors Bancorp Subsidiary
    has received any written notice to the contrary. The Board of
    Directors of Investors Bank has adopted and Investors 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 Entity and that meets the requirements of
    Sections 352 and 326 of the USA PATRIOT Act and the
    regulations thereunder.

 

    (b) Each of Investors Bancorp and each Investors Bancorp
    Subsidiary has all material permits, licenses, authorizations,
    orders and approvals of, and has made all filings, applications
    and registrations with, all Regulatory Authorities 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 Bancorp, 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 the
    Regulatory Approvals.

 

    (c) For the period beginning January 1, 2009, neither
    Investors Bancorp nor any Investors Bancorp Subsidiary has
    received any written notification or, to the Knowledge of
    Investors Bancorp, any other communication from any Regulatory
    Authority (i) asserting that Investors Bancorp or any
    Investors Bancorp Subsidiary is not in material compliance with
    any of the statutes, regulations or ordinances which such
    Regulatory Authority enforces; (ii) threatening to revoke
    any license, franchise, permit or governmental authorization
    which is material to Investors Bancorp or Investors Bank,
    (iii) requiring or threatening to require Investors Bancorp
    or any Investors Bancorp Subsidiary, or indicating that
    Investors Bancorp or any Investors Bancorp 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 Bancorp or any Investors Bancorp
    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 Bancorp or any Investors
    Bancorp 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 Bancorp Regulatory
    Agreement”). Neither Investors Bancorp nor any Investors
    Bancorp Subsidiary has consented to or entered into any
    currently effective Investors Bancorp Regulatory Agreement. The
    most recent regulatory rating given to Investors Bank as to
    compliance with the CRA is satisfactory or better.

 

    (d) Since the enactment of the Sarbanes-Oxley Act,
    Investors Bancorp 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.

    

    32

 

 

    Section 4.08  Investors
    Bancorp Common Stock.

 

    The shares of Investors Bancorp Common Stock to be issued to
    Investors MHC 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.

 

    Section 4.09.  Availability
    of Funds.

 

    Parent has and will have available to it at the Effective Time,
    sources of funds sufficient to pay the aggregate Cash Merger
    Consideration and to pay any other amounts payable pursuant to
    this Agreement and to effect the transactions contemplated
    hereby.

 

    Section 4.10  Investors
    Bancorp Information Supplied.

 

    The information relating to Investors Bancorp and any Investors
    Bancorp Subsidiary to be contained in the Merger Proxy
    Statement, or in any other document filed with any Regulatory
    Authority 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 Proxy 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 Bancorp with respect to
    statements made or incorporated by reference therein based on
    information supplied by Brooklyn Bancorp specifically for
    inclusion or incorporation by reference in the Merger Proxy
    Statement.

 

    Section 4.11  CRE
    Disposition.

 

    Investors Bancorp is a party to a written agreement to dispose
    of all or substantially all of the Commercial Real Estate Loan
    Portfolio subsequent to the Effective Time.

 

    ARTICLE V

    

 

    COVENANTS OF
    THE BROOKLYN FEDERAL PARTIES
    

 

    Section 5.01  Conduct
    of Business.

 

    (a) Affirmative Covenants.  During the
    period from the date of this Agreement to the Effective Time,
    except with the written consent of Investors Bancorp, which
    consent will not be unreasonably withheld, conditioned or
    delayed, the Brooklyn Federal Parties will, and it will cause
    each Brooklyn 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, including without
    limitation, maintaining its servicing systems and operations
    necessary to continue the diligent servicing of the Commercial
    Real Estate Loan Portfolio in a prudent manner; and voluntarily
    take no action which would, or would be reasonably likely to,
    (i) materially adversely affect the ability of the parties
    to obtain any Regulatory Approvals or other approvals of
    Governmental Entities required for the transactions contemplated
    hereby or materially increase the period of time necessary to
    obtain such approvals, (ii) materially adversely affect its
    ability to perform its covenants and agreements under this
    Agreement, or (iii) materially and adversely affect the
    value of, or the rights of the lender with respect to, any
    Commercial Real Estate Loan.

 

    (b) Negative Covenants.  Each of the
    Brooklyn Federal Parties agree that from the date of this
    Agreement to the Effective Time, except as otherwise
    specifically permitted or required by this Agreement set forth
    in Brooklyn Disclosure Schedule 5.01, or consented to by
    Investors Bancorp in writing (which consent shall not be
    unreasonably withheld, conditioned or delayed, except as to
    Sections 5.01(b)(xii), (xiii), (xx), (xxii), (xxiii),
    (xxiv) and (xxvii) below, which consent may be
    withheld in the discretion of Investors Bancorp), it will not,
    and it will cause each Brooklyn Subsidiary not to:

 

    (i) change or waive any provision of its Certificate of
    Incorporation, Charter or Bylaws, or appoint a new director to
    its board of directors;

    

    33

 

 

    (ii) change the number of authorized or issued shares of
    its capital stock, issue any shares of Brooklyn Bancorp 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
    Brooklyn Bancorp Stock Incentive Plan or any other equity
    compensation plan or arrangement, 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 Brooklyn Bancorp may issue shares of Brooklyn
    Bancorp Common Stock upon the valid exercise, in accordance with
    the information set forth in Brooklyn Disclosure
    Schedule 2.06, of presently outstanding Brooklyn Bancorp
    Options issued under the Brooklyn Bancorp Stock Incentive Plan.

 

    (iii) enter into, amend in any material respect or
    terminate any contract or agreement (including without
    limitation any settlement agreement with respect to litigation)
    except for any such contract or agreement that is for a term of
    twelve months or less or terminable at will without penalty,
    involves a cost of less than $10,000 and is otherwise in the
    ordinary course of business;

 

    (iv) make application for the opening or closing of any, or
    open or close any, branch or automated banking facility;

 

    (v) 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 Brooklyn Disclosure Schedule 5.01(b)(v), and
    (ii) pay increases in the ordinary course of business
    consistent with past practice to non-officer employees. Neither
    Brooklyn Bancorp nor any Brooklyn 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
    Brooklyn Bancorp or an Brooklyn Subsidiary may hire at-will,
    non-officer employees to fill vacancies that may from time to
    time arise in the ordinary course of business;

 

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

 

    (vii) merge or consolidate Brooklyn Bancorp or any Brooklyn
    Subsidiary with any other corporation; sell or lease all or any
    substantial portion of the assets or business of Brooklyn
    Bancorp or any Brooklyn 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 Brooklyn Bancorp, or any Brooklyn
    Subsidiary, and any other person; enter into a purchase and
    assumption transaction with respect to deposits and liabilities;
    voluntarily revoke or surrender any 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;

 

    (viii) sell or otherwise dispose of the capital stock of
    Brooklyn Bancorp or sell or otherwise dispose of any asset of
    Brooklyn Bancorp or of any Brooklyn Subsidiary other than in the
    ordinary course of business consistent with past practice;
    except for transactions with the FHLB, subject any asset of
    Brooklyn Bancorp or of any Brooklyn Subsidiary to a lien,
    pledge, security interest or other encumbrance 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;

 

    (ix) voluntarily take any action which would result in any
    of the representations and warranties of Brooklyn Bancorp or
    Brooklyn Federal Savings set forth in this Agreement becoming
    untrue as of any date

    

    34

 

    after the date hereof or in any of the conditions set forth in
    Article VIII hereof not being satisfied, except in each
    case as may be required by applicable law;

 

    (x) 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 Regulatory
    Authority responsible for regulating Brooklyn Bancorp or
    Brooklyn Federal Savings;

 

    (xi) 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 Brooklyn
    Bancorp or any Brooklyn Subsidiary is a party;

 

    (xii) purchase any equity securities, or purchase any
    securities other than securities (i) issued or guaranteed
    by the United States (“U.S.”) government,
    U.S. government agencies, or U.S. government sponsored
    entities, (ii) having a face amount of not more than
    $3,000,000, and (iii) with a weighted average life of not
    more than three (3) years assuming a 200 basis point
    increase in interest rates;

 

    (xiii) except for commitments issued prior to the date of
    this Agreement which have not yet expired and which have been
    disclosed on the Brooklyn Disclosure
    Schedule 5.01(b)(xiii), acquire (including a loan
    participation) or make any new loan or other credit facility
    commitment or renew any credit facility (including without
    limitation, lines of credit and letters of credit) for a
    mortgage loan, other than a one-to four-family mortgage loan in
    an amount not in excess of the conforming loan amount, provided
    the loan qualifies for sale to the secondary market pursuant to
    Fannie Mae or Freddie Mac guidelines; with respect to any
    Commercial Real Estate Loan that is a construction loan, make
    any advance unless evidence satisfactory to Investors is
    provided indicating that all conditions precedent to such
    advance under the related loan documents have been satisfied; or
    take any Major Decision with respect to a Commercial Real Estate
    Loan;

 

    (xiv) enter into, renew, extend or modify any other
    transaction (other than a deposit transaction) with any
    Affiliate;

 

    (xv) enter into 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 exposure of its interest-earning assets and interest-bearing
    liabilities to changes in market rates of interest;

 

    (xvi) 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;

 

    (xvii) 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; deposit
    pricing or gathering; or other material banking policies except
    as may be required by changes in applicable law or regulations,
    GAAP or by a Regulatory Authority;

 

    (xviii) 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 Brooklyn Bancorp Employee Plan;

 

    (xix) make any capital expenditures in excess of $25,000
    individually or $50,000 in the aggregate, other than pursuant to
    binding commitments existing on the date hereof (which are set
    forth in Brooklyn Disclosure Schedule 5.02(b)(xix)) and
    other than expenditures necessary to maintain existing assets in
    good repair;

 

    (xx) except as set forth in Brooklyn Disclosure
    Schedule 5.02(b)(xx) or as otherwise permitted by this
    Agreement, 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;

 

    (xxi) 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 Brooklyn Bancorp or Brooklyn Federal
    Savings of more than $25,000 annually, or containing any
    financial commitment extending beyond 24 months from the
    date hereof;

    

    35

 

 

    (xxii) other than for matters involving or relating to any
    Commercial Real Estate Loan, pay, discharge, settle or
    compromise any claim, action, litigation, arbitration or
    proceeding, except, in consultation with Investors, with respect
    to 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 $50,000 in the aggregate, and that does
    not create negative precedent for other pending or potential
    claims, actions, litigation, arbitration or proceedings, or
    waive or release any material rights or claims, or agree to
    consent to the issuance of any injunction, decree, order or
    judgment restricting or otherwise affecting its business or
    operations;

 

    (xxiii) 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 Materials of Environmental Concern;

 

    (xxiv) purchase or sell any mortgage loan servicing rights;

 

    (xxv) issue any broadly distributed communication relating
    to the Mergers to employees (including general communications
    relating to benefits and compensation) without prior
    consultation with Investors Bancorp and, to the extent relating
    to post-Closing employment, benefit or compensation information
    without the prior consent of Investors Bancorp (which shall not
    be unreasonably withheld) or issue any broadly distributed
    communication to customers relating to the Mergers without the
    prior approval of Investors Bancorp (which shall not be
    unreasonably withheld), except as required by law or for
    communications in the ordinary course of business consistent
    with past practice that do not relate to the Mergers or other
    transactions contemplated hereby;

 

    (xxvi) take any action or knowingly fail to take any
    reasonable action that would, or would be reasonably likely to,
    prevent, impede or delay the Mergers from qualifying as
    reorganizations within the meaning of Section 368(a) of the
    Internal Revenue Code or (2) take any action that is
    reasonably likely to result in (A) any of the conditions to
    the Mergers not being satisfied in a timely manner, (B) a
    material violation of any provision of this Agreement except, in
    each case, as may be required by applicable law or regulation,
    or (C) any of its representations and warranties set forth
    in this Agreement being or becoming untrue in any material
    respect at any time prior to the Effective Time;

 

    (xxvii) terminate, other than for cause, any Brooklyn Party
    employee as set forth on Investors Bancorp Disclosure
    Schedule 5.01(b)(xxvii) (the “CRE
    Personnel”); or

 

    (xxviii) agree to do any of the foregoing.

 

    Section 5.02  Current
    Information.

 

    (a) During the period from the date of this Agreement to
    the Effective Time, Brooklyn Bancorp will cause one or more of
    its representatives to confer with representatives of Investors
    Bancorp and report the general status of its ongoing operations
    at such times as Investors Bancorp may reasonably request,
    provided that such representatives shall be subject to the
    Confidentiality Agreement. Brooklyn Bancorp will promptly notify
    Investors Bancorp 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
    Brooklyn Bancorp or any Brooklyn Subsidiary. Without limiting
    the foregoing, senior officers of Investors Bancorp and Brooklyn
    Bancorp shall meet on a reasonably regular basis (expected to be
    at least monthly) to review the financial and operational
    affairs of Brooklyn Bancorp and its Subsidiaries, in accordance
    with applicable law, and Brooklyn Bancorp shall give due
    consideration to Investors Bancorp’s input on such matters,
    with the understanding that, notwithstanding any other provision
    contained in this Agreement, neither Investors Bancorp nor any
    Investors Bancorp Subsidiary shall under any circumstance be
    permitted to exercise control of Brooklyn Bancorp or any
    Brooklyn Subsidiary prior to the Effective Time. In addition,
    consistent with the Confidentiality Agreement Investors Bancorp
    and its designees may at any time during normal business hours
    prior to the Closing Date and upon reasonable advance-notice,
    communicate with the CRE Personnel and any other persons
    responsible for managing and servicing the Commercial Real
    Estate Loan Portfolio with respect to the Commercial Real Estate
    Loan Portfolio and the performance of the servicing activities
    related thereto. For the sake of clarity, prior to the

    

    36

 

    Effective Time, such CRE Personnel shall be under the
    supervision and control of Brooklyn Bancorp or a Brooklyn
    Subsidiary.

 

    (b) Brooklyn Federal Savings and Investors Bank shall meet
    on a regular basis to discuss and plan for the conversion of
    Brooklyn Federal Savings’ data processing and related
    electronic informational systems to those used by Investors
    Bank, which planning shall include, but not be limited to,
    discussion of the possible termination by Brooklyn Federal
    Savings 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 Brooklyn
    Federal Savings 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 Brooklyn Federal Savings shall not be obligated
    to take any such action prior to the Effective Time and, unless
    Brooklyn Federal Savings otherwise agrees, no conversion shall
    take place prior to the Effective Time. In the event that
    Brooklyn Federal Savings takes, at the request of Investors
    Bank, any action relative to third parties to facilitate the
    conversion that results in the imposition of any termination
    fees or charges, Investors Bank shall indemnify Brooklyn Federal
    Savings 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 Brooklyn Bancorp, or a termination of this
    Agreement under Section 10.01(g) or 10.01(h).

 

    (c) Brooklyn Federal Savings shall provide Investors 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, Brooklyn Bancorp shall provide Investors Bank
    with a schedule of all loan approvals, which schedule shall
    indicate the loan amount, loan type and other material features
    of the loan. Brooklyn Bancorp shall provide Investors Bancorp
    and its designees within five (5) days of the end of each
    month, a servicing report, in a form agreed to between Brooklyn
    Bancorp and Investors Bancorp, with respect to the Commercial
    Real Estate Loan Portfolio.

 

    (d) Brooklyn Bancorp shall promptly inform Investors
    Bancorp 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 Brooklyn
    Bancorp or any Brooklyn Subsidiary under any labor or employment
    law.

 

    (e) Brooklyn Bancorp shall inform Investors Bancorp and its
    designees immediately upon, but in no event later than five
    (5) days after, receiving notice that any CRE Personnel
    intends to voluntarily terminate employment with Brooklyn
    Federal. Until the Closing Date, and for so long as the CRE
    Personnel are employed by Brooklyn Federal, such CRE Personnel
    shall continue to be responsible for servicing the Commercial
    Real Estate Loan Portfolio. Moreover, with advanced-notice to
    and in consultation with Brooklyn Federal, Investors Bancorp and
    its designees shall have the right, in its sole discretion, to
    contact any CRE Personnel to negotiate compensation arrangements
    for such CRE Personnel.

 

    (f) Brooklyn Federal shall promptly deliver to Investors
    Bancorp and its designees copies of all notices, pleadings and
    other documentation received by the Brooklyn Federal Parties
    with respect to legal proceedings relating to any Commercial
    Real Estate Loan or the related borrower.

 

    Section 5.03  Access
    to Properties and Records.

 

    (a) Subject to Section 11.01 hereof, Brooklyn Bancorp
    shall permit Investors Bancorp and its designated agents (who
    agree to be bound by the terms of the Confidentiality Agreement)
    reasonable access during normal business hours upon reasonable
    notice to its properties and those of the Brooklyn Bancorp
    Subsidiaries, and shall disclose and make available to Investors
    Bancorp and its designees 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 Brooklyn Bancorp
    reasonably determines should be treated as confidential) and
    shareholders’ meetings, organizational documents,

    

    37

 

    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 Bancorp may have a reasonable interest, and
    shall allow Investors Bancorp and its designees to communicate
    with the CRE Personnel and any other persons responsible for
    managing and servicing the Commercial Real Estate Loans and the
    performance of the servicing activities related thereto;
    provided, however, that Brooklyn Bancorp 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. Brooklyn Bancorp shall provide and shall request
    its auditors to provide Investors Bancorp with such historical
    financial information regarding it (and related audit reports
    and consents) as Investors Bancorp may reasonably request for
    securities disclosure purposes. Investors Bancorp shall use
    commercially reasonable efforts to minimize any interference
    with Brooklyn Bancorp’s regular business operations during
    any such access to Brooklyn Bancorp’s property, books and
    records. Without limiting the foregoing, Brooklyn Federal
    Savings shall allow Investors Bancorp or its designees, within
    five (5) business days of the date of this Agreement, to
    commence an inventory of the loan files with respect to the
    Commercial Loan Portfolio to determine which documents to be
    included in the Commercial Loan Mortgage File are in possession
    of Brooklyn Federal Savings and which documents need to be
    obtained, and such inventory may be updated from time to time
    prior to the Closing Date, and for each Commercial Real Estate
    Loan, Brooklyn Bancorp and Brooklyn Federal Savings shall not
    permit any documents to be missing from the Commercial Loan
    Mortgage File that existed as of the date above-referenced
    inventory was completed and from and after such dates, permit
    any changes or altercations to the Commercial Loan Mortgage File
    without the prior written consent of Investors Bancorp and its
    designees. The expenses of such inventory (not to exceed
    $50,000) shall be reimbursed by Brooklyn Federal Savings,
    subject to the receipt of any required regulatory approval.
    Brooklyn Bancorp shall permit Investors Bancorp, at its expense,
    to cause a “phase I environmental audit” and a
    “phase II environmental audit” to be performed at
    each Branch at any time prior to the Closing Date;
    provided, however, that Investors Bancorp shall
    have the right to conduct a “phase II environmental
    audit” prior to the Closing only to the extent that a
    “phase II environmental audit” is within the
    scope of additional testing recommended by the
    “phase I environmental audit” to be performed as
    a result of a “Recognized Environmental Condition” (as
    such term is defined by The American Society for Testing
    Materials) that was discovered in the “phase I
    environmental audit” and provided that as to any
    “phase II environmental audits” performed at a
    Branch which Brooklyn Federal Savings leases, the landlord
    pursuant to the applicable lease has consented to such
    “phase II environmental audit” if such consent is
    necessary pursuant to the lease. Brooklyn Federal Savings will
    use its commercially reasonable efforts (at no cost to Brooklyn
    Federal Savings) to obtain such landlord consent. Prior to
    performing any “phase II environmental audits,”
    Investors Bancorp will provide Brooklyn Bancorp with a copy of
    its proposed work plan and Investors Bancorp will cooperate in
    good faith with Brooklyn Bancorp to address any comments or
    suggestions made by Brooklyn Bancorp regarding the work plan.
    Investors Bancorp and its environmental consultant shall conduct
    all environmental assessments pursuant to this Section at
    mutually agreeable times and so as to eliminate or minimize to
    the greatest extent possible interference with Brooklyn
    Bancorp’s operation of its business, and Investors Bancorp
    shall maintain or cause to be maintained reasonably adequate
    insurance with respect to any assessment conducted hereunder.
    Investors Bancorp shall be required to restore each Owned Real
    Property to substantially its pre-assessment condition. All
    costs and expenses incurred in connection with any
    “phase I environmental audit” and any
    “phase II environmental audit,” and any
    restoration and clean up, shall be borne solely by Investors
    Bancorp.

 

    (b) Brooklyn Bancorp and Brooklyn Federal Savings shall
    consult with and keep Investors Bancorp informed as to matters
    related to the ongoing management of the Brooklyn Federal
    Savings Commercial Real Estate Loan portfolio. Brooklyn Federal
    Savings shall fully cooperate with Investors Bank in order to
    obtain all consents necessary so that Investors Bank may
    transfer, following consummation of the Mergers, any Commercial
    Real Estate Loan and related servicing agreements in which
    Brooklyn Federal Savings has a participation interest (whether
    as lead participant or otherwise) (a “Participation
    Interest”).

 

    Section 5.04  Financial
    and Other Statements.

 

    (a) Promptly upon receipt thereof, Brooklyn Bancorp will
    furnish to Investors Bancorp copies of each annual, interim or
    special audit of the books of Brooklyn Bancorp and the Brooklyn
    Bancorp Subsidiaries made by its

    

    38

 

    independent auditors and copies of all internal control reports
    submitted to Brooklyn Bancorp by such auditors in connection
    with each annual, interim or special audit of the books of
    Brooklyn Bancorp and the Brooklyn Bancorp Subsidiaries made by
    such auditors.

 

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

 

    (c) Brooklyn Bancorp will advise Investors Bancorp promptly
    of the receipt of any examination report of any Regulatory
    Authority with respect to the condition or activities of
    Brooklyn Bancorp or any of the Brooklyn Bancorp Subsidiaries.

 

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

 

    Section 5.05  Maintenance
    of Insurance.

 

    Brooklyn Bancorp shall maintain, and cause each Brooklyn
    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 their properties and the nature of
    their business.

 

    Section 5.06  Disclosure
    Supplements.

 

    From time to time prior to the Effective Time, Brooklyn Bancorp
    will promptly supplement or amend the Brooklyn 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 Brooklyn Disclosure Schedule or
    which is necessary to correct any information in such Brooklyn
    Disclosure Schedule which has been rendered materially
    inaccurate thereby. No supplement or amendment to such Brooklyn
    Disclosure Schedule shall have any effect for the purpose of
    determining satisfaction of the conditions set forth in
    Article IX.

 

    Section 5.07  Consents
    and Approvals of Third Parties.

 

    Brooklyn Bancorp 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.

 

    Section 5.08  Reasonable
    Best Efforts.

 

    Subject to the terms and conditions herein provided, Brooklyn
    Bancorp agrees to use reasonable best 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. Additionally, the Brooklyn
    Federal Parties shall use their best efforts, in coordination
    with the Investors Parties, to obtain any required third party
    consents to transfer Commercial Real Estate Loans that have
    participation interests held by Brooklyn Federal Savings
    and/or the
    servicing rights related thereto, in connection with
    Investors’ agreement to dispose of all or substantially all
    of the Commercial Real Estate Loan Portfolio subsequent to the
    Effective Time.

 

    Section 5.09  Failure
    to Fulfill Conditions.

 

    In the event that Brooklyn Bancorp 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 Bancorp.

    

    39

 

 

    Section 5.10  No
    Solicitation.

 

    (a) Brooklyn Bancorp shall not, and shall cause the
    Brooklyn 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 Bancorp) any
    information or data with respect to Brooklyn Bancorp 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 Brooklyn Bancorp 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 Brooklyn Bancorp or any Representative, whether
    or not such Representative is so authorized and whether or not
    such Representative is purporting to act on behalf of Brooklyn
    Bancorp or otherwise, shall be deemed to be a breach of this
    Agreement by Brooklyn Bancorp. Brooklyn Bancorp and its
    Subsidiaries shall, and shall cause each of Brooklyn Bancorp
    Representatives 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 Bancorp), 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 Brooklyn Bancorp 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 Brooklyn Bancorp or any of its Subsidiaries
    representing, in the aggregate, twenty-five percent (25%) or
    more of the assets of Brooklyn Bancorp 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 twenty-five percent (25%) or more
    of the votes attached to the outstanding securities of Brooklyn
    Bancorp 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 twenty-five percent (25%) or
    more of any class of equity securities of Brooklyn Bancorp 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 5.10(a), Brooklyn Bancorp
    may take any of the actions described in clause (ii) of
    Section 5.10(a) if, but only if, (i) Brooklyn Bancorp
    has received a bona fide unsolicited written Acquisition
    Proposal that did not result from a breach of this
    Section 5.10; (ii) the Brooklyn Bancorp Board
    determines in good faith, after consultation with and having
    considered the advice of its outside legal counsel and its
    independent financial advisor, that such Acquisition Proposal
    constitutes or is reasonably likely to lead to a Superior
    Proposal; (iii) Brooklyn Bancorp has provided Investors
    Bancorp with at least one (1) Business Day’s prior
    notice of such determination; and (iv) prior to furnishing
    or affording access to any information or data with respect to
    Brooklyn Bancorp or any of its Subsidiaries or otherwise
    relating to an Acquisition Proposal, Brooklyn Bancorp receives
    from such Person a confidentiality agreement with terms no less
    favorable to Brooklyn Bancorp than those contained in the
    Confidentiality Agreement. Brooklyn Bancorp shall promptly
    provide to Investors Bancorp any non-public information
    regarding Brooklyn Bancorp or its Subsidiaries provided to any
    other Person that was not previously provided to Investors
    Bancorp, 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 the Brooklyn Bancorp 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,

    

    40

 

    result in the acquisition of all, but not less than all, of the
    issued and outstanding shares of Brooklyn Bancorp Common Stock
    or all, or substantially all, of the assets of Brooklyn Bancorp
    and its Subsidiaries on a consolidated basis; (ii) would
    result in a transaction that (A) involves consideration to
    the holders of the shares of Brooklyn Bancorp Common Stock that
    is more favorable, from a financial point of view, than the
    consideration to be paid to Brooklyn Bancorp’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
    Brooklyn Bancorp’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) Brooklyn Bancorp shall promptly (and in any event
    within twenty-four (24) hours) notify Investors Bancorp 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,
    Brooklyn Bancorp or any Brooklyn Bancorp 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. Brooklyn Bancorp agrees that it shall keep Investors
    Bancorp 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 Brooklyn Bancorp Board nor any committee
    thereof shall (i) withdraw, qualify or modify, or propose
    to withdraw, qualify or modify, in a manner adverse to Investors
    Bancorp in connection with the transactions contemplated by this
    Agreement (including the Mergers), the Brooklyn Bancorp
    Recommendation (as defined in Section 7.01), or make any
    statement, filing or release, in connection with Brooklyn
    Bancorp Shareholders Meeting or otherwise, inconsistent with the
    Brooklyn Bancorp 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
    Brooklyn Bancorp Recommendation); (ii) approve or
    recommend, or publicly propose to approve or recommend, any
    Acquisition Proposal; or (iii) enter into (or cause
    Brooklyn Bancorp 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 5.10(b)) or
    (B) requiring Brooklyn Bancorp to abandon, terminate or
    fail to consummate the Mergers or any other transaction
    contemplated by this Agreement.

 

    (e) Notwithstanding Section 5.10(d), prior to the date
    of Brooklyn Bancorp Shareholders Meeting, the Brooklyn Bancorp
    Board may approve or recommend to the shareholders of Brooklyn
    Bancorp a Superior Proposal and withdraw, qualify or modify the
    Brooklyn Bancorp Recommendation in connection therewith (a
    “Brooklyn Bancorp Subsequent Determination”) after the
    third
    (3rd)

    Business Day following Investors Bancorp’s receipt of a
    notice (the “Notice of Superior Proposal”) from
    Brooklyn Bancorp advising Investors Bancorp that the Brooklyn
    Bancorp Board has decided that a bona fide unsolicited written
    Acquisition Proposal that it received (that did not result from
    a breach of this Section 5.10) constitutes a Superior
    Proposal (it being understood that Brooklyn Bancorp 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 Brooklyn Bancorp proposes to accept and the
    subsequent notice period shall be two (2) business days)
    if, but only if, (i) the Brooklyn Bancorp Board has
    reasonably determined in good faith, after consultation with and
    having considered the advice of outside legal counsel and a
    financial advisor, that the failure to take such actions would
    be reasonably likely to be inconsistent with its fiduciary
    duties to Brooklyn Bancorp’s shareholders under applicable
    law, and (ii) at the end of such three (3) Business
    Day period or the two (2) Business Day Period (as the case
    may be), after taking into account any such adjusted, modified
    or amended terms as may have been committed to in writing by
    Investors Bancorp since its receipt of such Notice of Superior

    

    41

 

    Proposal (provided, however, that Investors
    Bancorp shall not have any obligation to propose any
    adjustments, modifications or amendments to the terms and
    conditions of this Agreement), Brooklyn Bancorp Board has again
    in good faith made the determination (A) in clause (i)
    of this Section 5.10(e) and (B) that such Acquisition
    Proposal constitutes a Superior Proposal. Notwithstanding the
    foregoing, the changing, qualifying or modifying of the Brooklyn
    Bancorp Recommendation or the making of a Brooklyn Bancorp
    Subsequent Determination by the Brooklyn Bancorp Board shall not
    change the approval of the Brooklyn Bancorp Board for purposes
    of causing any Takeover Laws to be inapplicable to this
    Agreement and the Brooklyn Bancorp Voting Agreements and the
    transactions contemplated hereby and thereby, including the
    Merger.

 

    (f) Nothing contained in this Section 5.10 shall
    prohibit Brooklyn Bancorp or the Brooklyn Bancorp Board from
    complying with Brooklyn Bancorp’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 Brooklyn
    Bancorp Recommendation unless Brooklyn Bancorp Board reaffirms
    Brooklyn Bancorp Recommendation in such disclosure.

 

    Section 5.11  Reserves
    and Merger-Related Costs.

 

    Brooklyn Bancorp agrees to consult with Investors Bancorp with
    respect to its loan, litigation and real estate valuation
    policies and practices (including loan classifications and
    levels of reserves). Investors Bancorp and Brooklyn Bancorp
    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 Bancorp shall reasonably request
    and which are not inconsistent with GAAP, provided that
    (i) no such actions need be effected until Investors
    Bancorp shall have irrevocably certified to Brooklyn Bancorp
    that all conditions set forth in Article VIII to the
    obligation of Investors Bancorp to consummate the transactions
    contemplated hereby (other than the delivery of certificates or
    opinions) have been satisfied or, where legally permissible,
    waived, and (ii) the effect of any such actions shall not
    be included in calculating Brooklyn Bancorp Delinquent Loans.

 

    Section 5.12  Board
    of Directors and Committee Meetings.

 

    Brooklyn Bancorp and Brooklyn Federal Savings shall permit
    representatives of Investors Bancorp (no more than two) to
    attend any meeting of the Board of Directors of Brooklyn Bancorp
    and/or
    Brooklyn Federal Savings or the Executive and
    Loan Committees thereof as an observer, subject to the
    Confidentiality Agreement, provided that neither Brooklyn
    Bancorp nor Brooklyn Federal Savings shall be required to permit
    the Investors Bancorp 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 Brooklyn Bancorp or Brooklyn Federal Savings
    or during any other matter that the respective Board of
    Directors has reasonably determined to be confidential with
    respect to Investors Bancorp’s participation.

 

    Investors Bancorp shall bear all legal and financial
    responsibility for ensuring that observer rights shall not
    constitute control of Brooklyn Bancorp or Brooklyn Federal
    Savings under applicable laws.

 

    Section 5.13  Voting
    of MHC Shares; Brooklyn MHC Members Meeting

 

    Brooklyn MHC shall vote the MHC Shares in favor of the
    Mid-Tier Merger, and if required, Brooklyn MHC shall submit
    this Agreement
    and/or the
    MHC Merger contemplated herein to the Brooklyn MHC Members for
    approval, and the Board of Directors of Brooklyn MHC shall
    recommend approval of this Agreement to the Brooklyn MHC Members.

 

    Section 5.14  REIT
    Matters.

 

    Each of the Brooklyn Parties will take all necessary actions to
    enable the REIT to merge or liquidate into Brooklyn Federal
    Savings at Closing.

    

    42

 

 

    ARTICLE VI

    

 

    COVENANTS OF
    INVESTORS BANCORP
    

 

    Section 6.01  Conduct
    of Business.

 

    During the period from the date of this Agreement to the
    Effective Time, except with the written consent of Brooklyn
    Bancorp, which consent will not be unreasonably withheld,
    Investors Bancorp will, and it will cause each Investors Bancorp
    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, or would
    be reasonably likely to: (i) adversely affect the ability
    of the parties to obtain the Regulatory Approvals or other
    approvals of Governmental Entities required for the transactions
    contemplated hereby, 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 IV 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 VIII hereof not being
    satisfied.

 

    Section 6.02  Current
    Information.

 

    During the period from the date of this Agreement to the
    Effective Time, Investors Bancorp will cause one or more of its
    representatives to confer with representatives of Brooklyn
    Bancorp and report the general status of matters relating to the
    completion of the transactions contemplated hereby, at such
    times as Brooklyn Bancorp may reasonably request. Investors
    Bancorp will promptly notify Brooklyn Bancorp, to the extent
    permitted by applicable law, of any governmental complaints,
    investigations or hearings (or communications indicating that
    the same may be contemplated), which might adversely affect the
    ability of the parties to obtain the Regulatory Approvals or
    materially increase the period of time necessary to obtain such
    approvals; or the institution of material litigation involving
    Investors Bancorp and any Investors Bancorp Subsidiary.

 

    Section 6.03  Financial
    and Other Statements.

 

    Investors Bancorp will make available to Brooklyn Bancorp the
    Securities Documents filed by it with the SEC under the
    Securities Laws. Investors Bancorp will furnish to Brooklyn
    Bancorp copies of all documents, statements and reports as it
    files with any Regulatory Authority with respect to the Mergers.

 

    Section 6.04  Disclosure
    Supplements.

 

    From time to time prior to the Effective Time, Investors Bancorp
    will promptly supplement or amend the Investors Bancorp
    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 Bancorp Disclosure Schedule or which is necessary to
    correct any information in such Investors Bancorp Disclosure
    Schedule which has been rendered inaccurate thereby. No
    supplement or amendment to such Investors Bancorp Disclosure
    Schedule shall have any effect for the purpose of determining
    satisfaction of the conditions set forth in Article VIII.

 

    Section 6.05  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.

 

    Section 6.06  Regulatory
    Cooperation.

 

    Each of the Investors Parties will cooperate with the Brooklyn
    Federal Parties 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 Regulatory
    Authorities and any other third parties and governmental bodies
    necessary to consummate the transactions contemplated by this
    Agreement. Applications to Regulatory Authorities for Regulatory
    Approvals to the transactions contemplated by this Agreement
    shall be filed in definitive form no later than twenty-one
    (21) days after the date of this Agreement. Investors
    Parties and Brooklyn Federal Parties 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

    

    43

 

    or advisable in connection with the Merger Proxy Statement and
    any application, petition or any other statement or application
    made by or on behalf of Brooklyn
    and/or
    Investors to any Regulatory Authority or governmental body in
    connection with the Mergers, and the other transactions
    contemplated by this Agreement. Brooklyn Federal Parties shall
    have the right to review and approve in advance all
    characterizations of the information relating to the Brooklyn
    Federal Parties which appear in any filing made in connection
    with the transactions contemplated by this Agreement with any
    Regulatory Authority. Investors Parties shall give Brooklyn
    Federal Parties and its counsel the opportunity to review and
    comment on each filing prior to its being filed with a
    Regulatory Authority and shall give Brooklyn Federal Parties and
    its counsel the opportunity to review and comment on all
    regulatory filings, 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 Regulatory Authority.

 

    Section 6.07  Failure
    to Fulfill Conditions.

 

    In the event that Investors Bancorp 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
    Brooklyn Bancorp.

 

    Section 6.08  Employee
    Benefits.

 

    (a) Investors Bancorp will review all Brooklyn Bancorp
    Compensation and Benefit Plans to determine whether to maintain,
    terminate or continue such plans. In the event employee
    compensation
    and/or
    benefits as currently provided by Brooklyn Bancorp or any
    Brooklyn Subsidiary are changed or terminated by Investors
    Bancorp, in whole or in part, Investors Bancorp 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 Bancorp or applicable Investors Bancorp
    Subsidiary (as of the date any such compensation or benefit is
    provided). Employees of Brooklyn Bancorp or any Brooklyn
    Subsidiary who become participants in an Investors Bancorp
    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 Brooklyn Bancorp or Brooklyn Federal
    Savings 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 Bancorp ESOP, and
    provided further, that credit for benefit accrual purposes will
    be given only for purposes of Investors Bancorp vacation
    policies or programs and for purposes of the calculation of
    severance benefits under any severance compensation plan of
    Investors Bancorp. This Agreement shall not be construed to
    limit the ability of Investors Bancorp or Investors 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.

 

    (b) Investors Bancorp shall honor the terms of all
    employment, consulting and change in control agreements set
    forth on Brooklyn Disclosure Schedule 3.12(a), to the
    extent permitted under 12 U.S.C. Section 1828(k) and
    12 CFR Part 359 et. seq.

 

    (c) In the event of any termination or consolidation of any
    Brooklyn Bancorp health plan with any Investors Bancorp health
    plan, Investors Bancorp shall make available to employees of
    Brooklyn Bancorp or any Brooklyn Subsidiary who continue
    employment with Investors Bancorp or an Investors Bancorp
    Subsidiary (“Continuing Employees”) and their
    dependents employer-provided health coverage on the same basis
    as it provides such coverage to Investors Bancorp employees.
    Unless a Continuing Employee affirmatively terminates coverage
    under an Brooklyn Bancorp health plan prior to the time that
    such Continuing Employee becomes eligible to participate in the
    Investors Bancorp health plan, no coverage of any of the
    Continuing Employees or their dependents shall terminate under
    any of the Brooklyn Bancorp 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 Bancorp and their dependents. In the
    event of a termination or consolidation of any Brooklyn Bancorp
    health plan, terminated Brooklyn Bancorp employees and qualified
    beneficiaries will have the right to continued coverage under
    group health plans of Investors Bancorp in accordance with
    COBRA, consistent with the provisions below. All Brooklyn
    Bancorp Employees who cease participating in a Brooklyn Bancorp
    health plan and become participants in a comparable Investors
    Bancorp health plan (each a “Former Brooklyn Bancorp Health
    Plan Participant”) shall receive credit for any co-payment
    and deductibles paid under Brooklyn Bancorp’s health plan
    for

    

    44

 

    purposes of satisfying any applicable deductible or
    out-of-pocket
    requirements under the Investors Bancorp health plan, upon
    substantiation, in a form satisfactory to Investors Bancorp that
    such co-payment
    and/or
    deductible has been satisfied. With respect to any Former
    Brooklyn Bancorp Health Plan Participant, any coverage
    limitation under the Investors Bancorp health plan due to any
    pre-existing condition shall be waived by the Investors Bancorp
    health plan to the degree that such condition was covered by the
    Brooklyn Bancorp health plan and such condition would otherwise
    have been covered by the Investors Bancorp health plan in the
    absence of such coverage limitation.

 

    Section 6.09  Directors
    and Officers Indemnification and Insurance.

 

    (a) For a period of six years after the Effective Time,
    Investors Bancorp 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 or
    director of Brooklyn Bancorp or an Brooklyn 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 Bancorp, 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 or arising in whole or in part out
    of the fact that such person is or was a director, officer or
    employee of Brooklyn Bancorp or an Brooklyn 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, to the fullest extent as
    would have been permitted by Brooklyn Bancorp under the
    applicable Regulations and under Brooklyn Bancorp’s
    Certificate of Incorporation and Bylaws. Investors Bancorp shall
    pay expenses in advance of the final disposition of any such
    action or proceeding to each Indemnified Party to the fullest
    extent as would have been permitted by Brooklyn Bancorp under
    applicable Regulations and under Brooklyn Bancorp’s
    Certificate of Incorporation and Bylaws, upon receipt of an
    undertaking to repay such advance payments if he shall be
    adjudicated or determined to be not entitled to indemnification
    in the manner set forth below. Any Indemnified Party wishing to
    claim indemnification under this Section 6.09 upon learning
    of any Claim, shall notify Investors Bancorp (but the failure to
    so notify Investors Bancorp shall not relieve it from any
    liability which it may have under this Section 6.09, except
    to the extent such failure materially prejudices Investors
    Bancorp) and shall deliver to Investors Bancorp the undertaking
    referred to in the previous section. In the event of any such
    claim, action, suit, proceeding or investigation (whether
    arising before or after the Effective Time), (i) Investors
    Bancorp or an insurance carrier pursuant to Section 6.09(c)
    below shall have the right to assume the defense thereof and
    Investors Bancorp shall not be liable to such Indemnified
    Persons for any legal expenses of other counsel or any other
    expenses subsequently incurred by such Indemnified Persons in
    connection with the defense thereof, except that if Investors
    Bancorp elects not to assume such defense or counsel for the
    Indemnified Persons advises that there are issues which raise
    conflicts of interest between Investors Bancorp and the
    Indemnified Persons, the Indemnified Persons may retain counsel
    which is reasonably satisfactory to Investors Bancorp, unless
    the Indemnified Person is provided with counsel by an insurance
    carrier pursuant to Section 6.09(c) below, and Investors
    Bancorp shall pay, promptly as statements therefore are
    received, the reasonable fees and expenses of such counsel for
    the Indemnified Persons (which may not exceed one firm in any
    jurisdiction), (ii) the Indemnified Persons will cooperate
    in the defense of any such matter, (iii) Investors Bancorp
    shall not be liable for any settlement effected without its
    prior written consent (which consent shall not be unreasonably
    withheld) and (iv) Investors Bancorp shall have no
    obligation hereunder to the extent that a federal or state
    banking agency or a court of competent jurisdiction shall
    determine that indemnification of an Indemnified Person in the
    manner contemplated hereby is prohibited by applicable laws and
    regulations.

 

    (b) In the event that either Investors Bancorp 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 Bancorp shall assume the obligations set forth in this
    Section 6.09.

 

    (c) Investors Bancorp shall use its best efforts to
    maintain, or shall cause Investors 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 Brooklyn Bancorp
    (provided, that Investors Bancorp may substitute therefor
    policies of

    

    45

 

    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 Bancorp be required to expend
    pursuant to this Section 7.9.3 an amount that in the
    aggregate is more than 200% of the annual cost currently
    expended by Brooklyn Bancorp with respect to such insurance (the
    “Maximum Amount”); provided, further, that if
    the amount of the annual premium necessary to maintain or
    procure such insurance coverage exceeds the Maximum Amount,
    Investors Bancorp 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, Brooklyn Bancorp agrees in order for Investors
    Bancorp 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.

 

    (d) The obligations of Investors Bancorp provided under
    this Section 6.09 are intended to be enforceable against
    Investors Bancorp directly by the Indemnified Parties and shall
    be binding on all respective successors and permitted assigns of
    Investors Bancorp.

 

    ARTICLE VII

    

 

    REGULATORY
    AND OTHER MATTERS
    

 

    Section 7.01  Brooklyn
    Bancorp Shareholders Meeting.

 

    Brooklyn Bancorp will (i) as promptly as practicable after
    it is informed by the SEC that either the SEC will not review,
    or has no further comments as to, the Merger Proxy Statement,
    take all steps necessary to duly call, give notice of, convene
    and hold a meeting of its shareholders (the “Brooklyn
    Bancorp Shareholders Meeting”), for the purpose of
    considering this Agreement and the Merger, and for such other
    purposes as may be, in Brooklyn Bancorp’s reasonable
    judgment, necessary or desirable, (ii) subject to
    Section 6.10, have its Board of Directors recommend
    approval of this Agreement to the Brooklyn Bancorp shareholders
    (the “Brooklyn Bancorp Recommendation”).

 

    Section 7.02  Merger
    Proxy Statement.

 

    (a) For the purposes of holding the Brooklyn Bancorp
    Shareholders Meeting and soliciting the approval of the Brooklyn
    Bancorp shareholders, Brooklyn Bancorp shall draft and prepare,
    and Investors Bancorp shall cooperate in the preparation of, a
    proxy statement satisfying all applicable requirements of the
    Exchange Act and of the applicable state securities and banking
    laws, and the rules and regulations thereunder (such proxy
    statement in the form mailed to the Brooklyn Bancorp
    shareholders, together with any and all amendments or
    supplements thereto, being herein referred to as the
    “Merger Proxy Statement”). Brooklyn Bancorp shall file
    the Merger Proxy Statement with the SEC. Brooklyn Bancorp shall
    use its best efforts to have the Merger Proxy Statement cleared
    for mailing as promptly as practicable after such filing, and
    Brooklyn Bancorp shall thereafter promptly mail the Merger Proxy
    Statement to the Brooklyn Bancorp shareholders.

 

    (b) Investors Bancorp shall provide Brooklyn Bancorp with
    any information concerning itself that Brooklyn Bancorp may
    reasonably request in connection with the drafting and
    preparation of the Merger Proxy Statement, and Brooklyn Bancorp
    shall notify Investors Bancorp promptly of the receipt of any
    comments of the SEC with respect to the Merger Proxy Statement
    and of any requests by the SEC for any amendment or supplement
    thereto or for additional information and shall provide to
    Investors Bancorp promptly copies of all correspondence between
    Brooklyn Bancorp or any of their representatives and the SEC.
    Brooklyn Bancorp shall give Investors Bancorp and its counsel
    the opportunity to review and comment on the Merger Proxy
    Statement prior to its being filed with the SEC and shall give
    Investors Bancorp and its counsel the opportunity to review and
    comment on all amendments and supplements to the Merger Proxy
    Statement 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 Bancorp and
    Brooklyn Bancorp 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
    Merger Proxy Statement and all required amendments and
    supplements thereto to be mailed to the holders of Brooklyn
    Bancorp Common Stock entitled to vote at the Brooklyn Bancorp
    Shareholders Meeting hereof at the earliest practicable time.

    

    46

 

 

    (c) Brooklyn Bancorp and Investors Bancorp shall promptly
    notify the other party if at any time it becomes aware that the
    Merger Proxy 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, Brooklyn Bancorp shall
    cooperate with Investors Bancorp in the preparation of a
    supplement or amendment to such Merger Proxy Statement that
    corrects such misstatement or omission, and Brooklyn Bancorp
    shall file an amended Merger Proxy Statement with the SEC, and
    Brooklyn Bancorp shall mail an amended Merger Proxy Statement to
    the Brooklyn Bancorp shareholders.

 

    Section 7.03  Brooklyn
    MHC Membership Approval

 

    (a) If the approval of the Brooklyn MHC Members for the MHC
    Merger is required by a Regulatory Authority, Brooklyn MHC will
    take all steps necessary to duly call, give notice of, convene
    and hold a meeting of its Members (the “Brooklyn MHC
    Members Meeting”), for the purpose of considering this
    Agreement and the MHC Merger. Brooklyn MHC shall draft and
    prepare, and Investors Bancorp shall cooperate in the
    preparation of, a proxy statement satisfying all applicable
    requirements (such proxy statement in the form mailed to the
    Brooklyn MHC members, together with any and all amendments or
    supplements thereto, being herein referred to as the
    “Members Proxy Statement”). Brooklyn MHC shall file
    the Members Proxy Statement with the Regulatory Authority.
    Brooklyn MHC shall use its best efforts to have the Members
    Proxy Statement cleared for mailing as promptly as practicable
    after such filing, and Brooklyn MHC shall thereafter promptly
    mail the Members Proxy Statement to the Brooklyn MHC Members.

 

    (b) Investors Bancorp shall provide Brooklyn MHC with any
    information concerning itself that Brooklyn MHC may reasonably
    request in connection with the drafting and preparation of the
    Members Proxy Statement, and Brooklyn Bancorp shall notify
    Investors Bancorp promptly of the receipt of any comments of the
    applicable Regulatory Authority with respect to the Members
    Proxy Statement and of any requests by the applicable Regulatory
    Authority for any amendment or supplement thereto or for
    additional information and shall provide to Investors Bancorp
    promptly copies of all correspondence between Investors Bancorp
    or any of their representatives and the applicable Regulatory
    Authority. Brooklyn MHC shall give Investors Bancorp and its
    counsel the opportunity to review and comment on the Members
    Proxy Statement prior to its being filed with the applicable
    Regulatory Authority and shall give Investors Bancorp and its
    counsel the opportunity to review and comment on all amendments
    and supplements to the Members Proxy Statement and all responses
    to requests for additional information and replies to comments
    prior to their being filed with, or sent to, the applicable
    Regulatory Authority. Each of Investors Bancorp and each
    Brooklyn Federal Party 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 applicable
    Regulatory Authority and to cause the Members Proxy Statement
    and all required amendments and supplements thereto to be mailed
    to the Brooklyn MHC Members entitled to vote at the Brooklyn MHC
    Members Meeting hereof at the earliest practicable time.

 

    (c) Brooklyn MHC and Investors Bancorp shall promptly
    notify the other party if at any time it becomes aware that the
    Members Proxy 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, Brooklyn MHC shall
    cooperate with Investors Bancorp in the preparation of a
    supplement or amendment to such Members Proxy Statement that
    corrects such misstatement or omission, and Brooklyn MHC shall
    file an amended Members Proxy Statement with the applicable
    Regulatory Authority, and Brooklyn MHC shall mail an amended
    Members Proxy Statement to the Brooklyn MHC Members.

 

    Section 7.04  Regulatory
    Approvals.

 

    The Parties will cooperate with each 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 Regulatory Authorities and any
    other third parties and governmental bodies necessary to
    consummate the transactions contemplated by this Agreement. The
    Parties 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 Merger
    Proxy Statement and any Membership Proxy Statement and any
    application, petition or any other statement or application made
    to any Regulatory Authority or Governmental Entity in connection
    with the Mergers, and the other

    

    47

 

    transactions contemplated by this Agreement. Brooklyn Bancorp
    shall have the right to review the information relating to
    Brooklyn Bancorp and any of its Subsidiaries, which appear in
    any filing made in connection with the transactions contemplated
    by this Agreement with any Regulatory Authority or any
    Governmental Entity. Investors Bancorp shall give Brooklyn
    Bancorp and its counsel the opportunity to review each filing
    prior to its being filed with a Regulatory Authority and shall
    give Brooklyn Bancorp and its counsel the opportunity to review
    all regulatory filings, 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 Regulatory Authority.

 

    ARTICLE VIII

    

 

    CLOSING
    CONDITIONS
    

 

    Section 8.01  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:

 

    (a) Shareholder and Membership
    Approval.  This Agreement and the transactions
    contemplated hereby shall have been approved by the requisite
    vote of the shareholders of Brooklyn Bancorp and if required, by
    the requisite vote of the Brooklyn MHC Members.

 

    (b) 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 Regulatory Authority that
    enjoins or prohibits the consummation of the transactions
    contemplated by this Agreement.

 

    (c) Regulatory Approvals.  All Regulatory
    Approvals 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 shall have expired; all other necessary approvals,
    authorizations and consents of any Governmental Entities
    required to consummate the transactions contemplated by this
    Agreement, the failure of which to obtain would reasonably be
    expected to have a Material Adverse Effect, 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. 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
    Bancorp, materially and adversely affect the business,
    operations, financial condition, property or assets of the
    combined enterprise of the Parties or materially impair the
    value of Brooklyn Federal Savings to Investors Bancorp.

 

    (d) Merger Proxy Statement.  No
    proceedings shall have been initiated or threatened by the SEC
    challenging the Merger Proxy Statement.

 

    (e) 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
    Bancorp shall have received an opinion of Luse Gorman
    Pomerenk & Schick, P.C., acceptable in form and
    substance to Investors Bancorp, dated as of the Closing Date,
    substantially to the effect that for federal income tax
    purposes, the Mergers will qualify as reorganizations within the
    meaning of Section 368(a) of the Code. In rendering the tax
    opinion described in this Section 8.01, the law firm may
    require and rely upon customary representations contained in
    certificates of officers of Investors Bancorp and Brooklyn
    Bancorp and their respective Subsidiaries.

 

    Section 8.02  Conditions
    to the Obligations of Investors under this Agreement.

 

    The obligations of the Investors under this Agreement shall be
    further subject to the satisfaction of the conditions set forth
    in this Sections 8.02 at or prior to the Closing Date:

 

    (a) Representations and Warranties.  Each
    of the representations and warranties of the Brooklyn Federal
    Parties set forth in this Agreement that are qualified as to
    materiality shall be true and correct,

    

    48

 

    and each of the representations and warranties of the Brooklyn
    Federal Parties that are not so qualified shall be true and
    correct in all material respects, in each case 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); and Brooklyn
    Bancorp shall have delivered to Investors Bancorp a certificate
    to such effect signed by the Chief Executive Officer and the
    Chief Financial Officer of Brooklyn Bancorp as of the Effective
    Time.

 

    (b) Agreements and Covenants.  With
    respect to covenants and obligations relating to the Commercial
    Real Estate Loan Portfolio set forth in this Agreement, the
    Brooklyn Federal Parties shall have performed all obligations,
    and complied with all agreements or covenants to be performed or
    complied with by it at or prior to the Effective Time. With
    respect to all other covenants and obligations set forth in this
    Agreement, the Brooklyn Federal Parties 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. Investors Bancorp shall have received a certificate signed
    on behalf of Brooklyn Bancorp by the Chief Executive Officer and
    Chief Financial Officer of Brooklyn Bancorp to such effects
    dated as of the Effective Time.

 

    (c) Permits, Authorizations, Etc.  The
    Brooklyn Federal Parties 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.

 

    (d) Appraisal Rights.  The aggregate
    number of shares of Brooklyn Bancorp Common Stock with respect
    to which the holders thereof have exercised and not withdrawn
    their appraisal rights shall not exceed 10% of the Minority
    Shares, as of the record date for the Brooklyn Bancorp
    Shareholders Meeting.

 

    (e) No Material Adverse Effect.  Since the
    date of this Agreement, there shall not have occurred any
    Material Adverse Effect with respect to the Brooklyn Bancorp on
    a consolidated basis.

 

    Brooklyn Bancorp will furnish Investors Bancorp with such
    certificates of its officers or others and such other documents
    to evidence fulfillment of the conditions set forth in this
    Section 8.02 as Investors Bancorp may reasonably request.

 

    Section 8.03  Conditions
    to the Obligations of the Brooklyn Federal Parties under this
    Agreement.

 

    The obligations of the Brooklyn Federal Parties under this
    Agreement shall be further subject to the satisfaction of the
    conditions set forth in this Section 8.03 at or prior to
    the Closing Date:

 

    (a) Representations and Warranties.  Each
    of the representations and warranties of Investors set forth in
    this Agreement that are qualified as to materiality shall be
    true and correct, and each of the representations and warranties
    of Investors that are not so qualified shall be true and correct
    in all material respects, in each case 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); and Investors
    Bancorp shall have delivered to Brooklyn Bancorp a certificate
    to such effect signed by the Chief Operating Officer and the
    Chief Financial Officer of Investors Bancorp as of the Effective
    Time.

 

    (b) 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 Brooklyn Bancorp shall have received a
    certificate signed on behalf of Investors Bancorp by the Chief
    Operating Officer and Chief Financial Officer to such effect
    dated as of the Effective Time.

 

    (c) 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 Mergers.

 

    (d) Payment of Cash Merger
    Consideration.  Investors Bancorp shall have
    delivered the Exchange Fund to the Exchange Agent on or before
    the Closing Date and the Exchange Agent shall provide Brooklyn
    Bancorp with a certificate evidencing such delivery.

    

    49

 

 

    Investors Bancorp will furnish Brooklyn Bancorp with such
    certificates of their officers or others and such other
    documents to evidence fulfillment of the conditions set forth in
    this Section 8.03 as Brooklyn Bancorp may reasonably
    request.

 

    ARTICLE IX

    

 

    THE CLOSING
    

 

    Section 9.01  Time
    and Place.

 

    Subject to the provisions of Articles VIII and X hereof,
    the Closing of the transactions contemplated hereby shall take
    place at the offices of Luse Gorman Pomerenk & Schick,
    5335 Wisconsin Avenue, Suite 780, Washington, D.C. at
    10:00 a.m., or at such other place or time upon which
    Investors Bancorp and Brooklyn Bancorp mutually agree. A
    pre-closing of the transactions contemplated hereby (the
    “Pre-Closing”) shall take place at the offices of Luse
    Gorman Pomerenk & Schick, 5335 Wisconsin Avenue,
    Suite 780, Washington, D.C. at 10:00 a.m. on the
    day prior to the Closing Date.

 

    Section 9.02  Deliveries
    at the Pre-Closing and the Closing.

 

    At the Pre-Closing there shall be delivered to Investors Bancorp
    and Brooklyn Bancorp 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 Bancorp shall have delivered the Cash Merger
    Consideration as set forth under Section 8.03 hereof.

 

    ARTICLE X

    

 

    TERMINATION,
    AMENDMENT AND WAIVER
    

 

    Section 10.01  Termination.

 

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

 

    (a) At any time by the mutual written agreement of
    Investors Bancorp and Brooklyn Bancorp;

 

    (b) By the Board of Directors of either Investors Bancorp
    or Brooklyn Bancorp (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 (disregarding any
    qualification as to Knowledge) 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;

 

    (c) By the Board of Directors of Investors Bancorp or
    Brooklyn Bancorp (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;

 

    (d) At the election of the Board of Directors of either
    Investors Bancorp or Brooklyn Bancorp 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 Bancorp and
    Brooklyn Bancorp; provided, that no party may terminate this
    Agreement pursuant to this Section 10.01(d) 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;

 

    (e) By the Board of Directors of either Investors Bancorp
    or Brooklyn Bancorp if: (x) the shareholders of Brooklyn
    Bancorp shall have voted at the Brooklyn Bancorp Shareholders
    Meeting on the transactions

    

    50

 

    contemplated by this Agreement and such vote shall not have been
    sufficient to approve such transactions, or (y) the members
    of Brooklyn MHC shall have voted at the Brooklyn MHC Members
    Meeting on the transactions contemplated by this Agreement and
    such vote shall not have been sufficient to approve the
    transactions;

 

    (f) By the Board of Directors of either Investors Bancorp
    or Brooklyn Bancorp if (i) final action has been taken by a
    Regulatory Authority 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 any of the Mergers and such
    order, decree, ruling or other action shall have become final
    and nonappealable;

 

    (g) By the Board of Directors of Investors Bancorp if
    Brooklyn Bancorp has received a Superior Proposal, and in
    accordance with Section 5.10 of this Agreement, the Board
    of Directors of Brooklyn Bancorp 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 Bancorp; or

 

    (h) By the Board of Directors of Brooklyn Bancorp if
    Brooklyn Bancorp has received a Superior Proposal, and in
    accordance with Section 5.10 of this Agreement, the Board
    of Directors of Brooklyn Bancorp has made a determination to
    accept such Superior Proposal.

 

    Section 10.02  Effect
    of Termination.

 

    (a) In the event of termination of this Agreement pursuant
    to any provision of Section 10.01, this Agreement shall
    forthwith become void and have no further force, except that
    (i) the provisions of Sections 10.02, 11.01, 11.02,
    11.06, 11.09, 11.10, 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.

 

    (b) If this Agreement is terminated, expenses and damages
    of the parties hereto shall be determined as follows:

 

    (i) Except as provided below, whether or not the Mergers
    are 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.

 

    (ii) 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.

 

    (iii) As a condition of Investors’ willingness, and in
    order to induce Investors to enter into this Agreement, and to
    reimburse Investors Bancorp for incurring the costs and expenses
    related to entering into this Agreement and consummating the
    transactions contemplated by this Agreement, Brooklyn Bancorp
    hereby agrees to pay Investors Bancorp, and Investors Bancorp
    shall be entitled to payment of a fee equal to $460,000, plus
    out-of-pocket
    expenses not to exceed the sum of $50,000 less any loan
    inventory expenses paid by Brooklyn Federal Savings pursuant to
    Section 5.03 (the “Investors Bancorp Fee”). The
    Investors Bancorp Fee shall be paid within three business days
    after written demand for payment is made by Investors Bancorp,
    following the occurrence of any of the events set forth below:

 

    (A) Brooklyn Bancorp terminates this Agreement pursuant to
    Section 10.01(h) or Investors Bancorp terminates this
    Agreement pursuant to Section 10.01(g); or

 

    (B) The entering into a definitive agreement by Brooklyn
    Bancorp relating to an Acquisition Proposal or the consummation
    of an Acquisition Proposal involving Brooklyn Bancorp within
    twelve months after the occurrence of any of the following:
    (i) the termination of the Agreement by Investors

    

    51

 

    Bancorp pursuant to Section 10.01(b) or 10.01(c) because
    of, in either case, a willful breach by a Brooklyn Federal
    Party; or (ii) the failure of the shareholders of Brooklyn
    Bancorp to approve this Agreement after the public disclosure or
    public awareness of an Acquisition Proposal.

 

    (c) The right to receive payment of the Investors Bancorp
    Fee under Section 10.02(b)(iii) will constitute the sole
    and exclusive remedy of Investors against the Brooklyn Federal
    Parties and their respective officers and directors with respect
    to a termination under (A) or (B) above.

 

    Section 10.03  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 Brooklyn Bancorp), 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 contained herein; provided, however,
    that after any approval of this Agreement and the transactions
    contemplated hereby by the shareholders of Brooklyn Bancorp,
    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 Brooklyn
    Bancorp’s shareholders pursuant to this Agreement. 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 XI

    

 

    MISCELLANEOUS
    

 

    Section 11.01  Confidentiality.

 

    Except as specifically set forth herein, Investors Bancorp and
    Brooklyn Bancorp mutually agree to be bound by the terms of the
    confidentiality agreement dated March 22, 2011 (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 Agreement shall continue in accordance with
    its respective terms, notwithstanding the termination of this
    Agreement.

 

    Section 11.02  Public
    Announcements.

 

    Brooklyn Bancorp and Investors Bancorp 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 Brooklyn
    Bancorp nor Investors Bancorp 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. Notwithstanding the foregoing, a party may, without the
    prior consent of the other party (but after prior consultation
    with the other party), issue such press release or public
    disclosure as may upon the advice of counsel be required by law
    or the rules and regulations of the applicable exchange, as the
    case may be.

 

    Section 11.03  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.

    

    52

 

 

    Section 11.04  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:

 

    (a) If to Investors to:

 

    Investors Bancorp, Inc.

    101 JFK Parkway

    Short Hills, New Jersey 07078

			
	 	    Attn:  
	
    Domenick Cama

    Senior Executive Vice President and Chief Operating Officer

    Fax:
    (973) 924-5192

 

    with a copy to:

 

 

    Luse Gorman Pomerenk & Schick

    5335 Wisconsin Avenue, NW

    Suite 780

    Washington, DC 20016

			
	 	    Attn:  
	
    John J. Gorman, Esq.

    Marc Levy, Esq.

    Fax:
    (202) 362-2902

 

    (b) If to Brooklyn to:

 

    Brooklyn Federal Bancorp, Inc.

    81 Court Street

    Brooklyn, New York

                   Attn:
    Gregg J. Wagner

                   President
    and Chief Executive Officer

                   Fax:
    (718) 858-5174

 

    with a copy to:

 

 

    Paul Hastings LLP

    875 15th Street, N.W.

    Washington, DC 20005

			
	 	                   Attn:  
	
    V. Gerard Comizio, Esq.

    Lawrence D. Kaplan, Esq.

                   Fax:
    (202) 551-0229

 

    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.

 

    Section 11.05  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 for the provisions of Article II
    and Section 6.09, following the Effective Time, 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.

 

    Section 11.06  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

    

    53

 

    Section 11.01, 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 Agreement referred to in Section 11.1
    hereof) between the parties, both written and oral, with respect
    to its subject matter.

 

    Section 11.07  Counterparts.

 

    This Agreement may be executed in one or more counterparts all
    of which shall be considered one and the same agreement and each
    of which shall be deemed an original. A facsimile copy or
    electronic transmission of a signature page shall be deemed to
    be an original signature page.

 

    Section 11.08  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.

 

    Section 11.09  Governing
    Law.

 

    This Agreement shall be governed by the laws of Delaware,
    without giving effect to its principles of conflicts of laws,
    except to the extent that federal law applies.

 

    Section 11.10  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. 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.

 

    Section 11.11  Specific
    Performance; Jurisdiction.

 

    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 the United States District Court for
    the District of Delaware or in any state court in the State of
    Delaware, this being in addition to any other remedy to which
    they are entitled at law or in equity. Each party agrees that it
    will not seek and will agree to waive any requirement for the
    securing or posting of a bond in connection with the other
    party’s seeking or obtaining such injunctive relief. In
    addition, each of the parties hereto (a) consents to submit
    itself to the personal jurisdiction of the United States
    District Court for the District of Delaware or of any state
    court located in the State of Delaware in the event any dispute
    arises out of this Agreement or the transactions contemplated by
    this Agreement, (b) agrees that it will not attempt to deny
    or defeat such personal jurisdiction by motion or other request
    for leave from any such court and (c) agrees that it will
    not bring any action relating to this Agreement or the
    transactions contemplated by this Agreement in any court other
    United States District Court for the District of Delaware or a
    state court located in the State of Delaware.

    

    54

 

    IN WITNESS WHEREOF, the Parties have caused this
    Agreement to be executed by their duly authorized officers as of
    the day and year first above written.

 

    INVESTORS SAVINGS BANK

 

			
	 	    By: 
	
    /s/  Domenick
    Cama

    Domenick Cama, Senior Executive Vice

    President and Chief Operating Officer

 

    INVESTORS BANCORP, INC.

 

			
	 	    By: 
	
    /s/  Domenick
    Cama

    Domenick Cama, Senior Executive Vice

    President and Chief Operating Officer

 

    INVESTORS BANCORP, MHC

 

			
	 	    By: 
	
    /s/  Domenick
    Cama

    Domenick Cama, Senior Executive Vice

    President and Chief Operating Officer

 

    BROOKLYN FEDERAL SAVINGS BANK

 

			
	 	    By: 
	
    /s/  Gregg
    J. Wagner

    Gregg J. Wagner, President and Chief

    Executive Officer

 

    BROOKLYN FEDERAL BANCORP, INC.

 

			
	 	    By: 
	
    /s/  Gregg
    J. Wagner

    Gregg J. Wagner, President and Chief

    Executive Officer

 

    BROOKLYN BANCORP, MHC

 

			
	 	    By: 
	
    /s/  Gregg
    J. Wagner

    Gregg J. Wagner, President and Chief

    Executive Officer

    

    55Exhibit 10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of August 17, 2011
(the “Effective Date”), by and between HealthMarkets, Inc., a Delaware corporation (“HealthMarkets”
or the “Company”) and K. Alec Mahmood (the “Executive”). Certain capitalized terms used herein are
defined in Section 23.

WHEREAS, the Company desires to continue to employ the Executive, and the Executive desires to
continue to be employed by the Company;

WHEREAS, the Company and the Executive desire to set forth in this Agreement the terms and
conditions of Executive’s employment with the Company; and

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
it is agreed as follows:

1. Employment. Effective as of the Effective Date, the Company hereby agrees to
employ the Executive, and the Executive hereby agrees to be employed by the Company, upon the terms
and conditions set forth herein. The employment relationship between the Company and the Executive
shall be governed by the general employment policies and practices of the Company, including
without limitation those relating to the Company’s Code of Professional Conduct, the treatment of
confidential information and avoidance of conflicts; provided, however, that when
the terms of this Agreement differ from or are in conflict with the Company’s general employment
policies or practices, the terms of this Agreement shall control. The Executive shall serve as an
officer and/or an employee of any Subsidiary, as may be requested from time to time by the
Reporting Person (as such term is defined in Section 3(a) below) and without any additional
compensation, unless otherwise determined by the Reporting Person. In addition, the Executive’s
service as an officer and/or an employee of any Subsidiary will be encompassed within any reference
made in this Agreement to employment by the Company. If the Executive serves as an officer and/or
an employee of any Subsidiary, any payment or provision of benefits to the Executive by such
Subsidiary shall fulfill the Company’s obligation to make such payment or provide such benefits
pursuant to the terms of this Agreement.

2. Term. Subject to earlier termination of the Executive’s employment as provided
under Section 9, the Executive’s employment shall be for an initial term commencing on the
Effective Date (the “Commencement Date”) and ending on the second anniversary of the Effective Date
(the “Initial Employment Term”); provided, however, that at the end of the Initial
Employment Term and on each succeeding anniversary of the Commencement Date, the employment of the
Executive will be automatically continued upon the terms and conditions set forth herein for one
additional year (each, a “Renewal Term”), unless either party to this Agreement gives the other
party written notice (in accordance with Section 17) of such party’s intention to terminate this
Agreement and the employment of the Executive at least ninety (90) days prior to the end of such
initial or extended term. For purposes of this Agreement, the Initial Employment Term and any
Renewal Term shall collectively be referred to as the “Employment Term.”

 

 

 

3. Position and Duties of the Executive.

(a) The Executive shall serve in the position set forth on Exhibit A and shall report directly
to the position set forth on Exhibit A attached hereto (the “Reporting Person”). The Executive
shall have such duties, responsibilities and authority commensurate with the Executive’s position
and such related duties and responsibilities, as from time to time may be assigned to the Executive
by the Reporting Person. In addition, the Executive will be subject to, and will act in
substantial accordance with, all reasonable lawful instructions and directions of the Board and all
applicable reasonable policies and rules thereof as are consistent with the above position, duties,
responsibilities and authority.

(b) During the Employment Term, the Executive shall, except as may from time to time be
otherwise agreed in writing by the Company and during vacations (as set forth in Section 7 hereof)
and authorized leave, devote substantially all of his normal business working time and his best
efforts, full attention and energies to the business of the Company, the performance of the
Executive’s duties hereunder and such other related duties and responsibilities as may from time to
time be reasonably prescribed by the Board or any committee thereof, the Reporting Person or any
committee or person delegated by the Reporting Person, in each case, within the framework of the
Company’s policies and objectives.

(c) During the Employment Term and provided that such activities do not either (i) contravene
the provisions of Section 3(a), 3(b), 11 or 12 hereof or (ii) materially interfere with the
performance of the Executive’s duties hereunder, the Executive may continue to serve as a member of
the governing board of the governmental, educational, charitable or other community affairs
organizations set forth on Exhibit A attached hereto. The Executive may retain all fees and other
compensation from any such service, and the Company shall not reduce his compensation by the amount
of such fees.

4. Compensation.

(a) Base Salary. During the Employment Term, the Company shall pay to the Executive a
base salary of not less than the amount set forth on Exhibit A attached hereto per annum (the “Base
Salary”). The Executive’s Base Salary may be increased (but not decreased) from time to time by
the Committee in its sole discretion, payable at the times and in the manner consistent with the
Company’s general policies regarding compensation of executive employees. Such Base Salary shall
be reviewed by the Board or an authorized committee of the Board at least annually for purposes of
evaluating an increase in the Executive’s Base Salary.

(b) Cash Incentive Compensation. With respect to each fiscal year of the Company
commencing with the Company’s 2011 fiscal year, all or part of which is contained in the Employment
Term, the Executive will be eligible to participate in the Company’s annual management incentive
program or arrangement approved by the Board (or any authorized committee thereof) or any successor
program or plan thereto or thereunder on terms and conditions no less favorable to the Executive
than those available to similarly situated executives of the Company, with a target bonus
opportunity of the percentage of the Base Salary set forth on Exhibit A attached hereto (the
“Target Bonus Percentage”) and a maximum bonus opportunity of not less than the percentage of the
Base Salary set forth on Exhibit A attached hereto (the
“Annual Bonus Percentage”). The Board (or any authorized committee thereof) shall have the
authority to establish performance metrics and such other terms and conditions of the annual
management incentive program pursuant to which such bonuses may be earned.

 

2

 

(c) Equity Compensation. The Executive will be eligible to participate in the
Company’s MOP and any other incentive, equity-based and deferred compensation plans and programs or
arrangements as may be determined by the Board or any successor programs or plans thereto or
thereunder.

5. Employee Benefits. In addition to the compensation described in Section 4, the
Executive shall be eligible to participate in the employee benefit plans and programs, and to
receive perquisites, provided from time to time to similarly situated executives of the Company and
its Subsidiaries generally.

6. Expenses. During the Employment Term, the Company shall pay or reimburse the
Executive for reasonable and necessary expenses incurred by the Executive in connection with the
Executive’s performance of the Executive’s duties on behalf of the Company and its Subsidiaries in
accordance with the expense policy of the Company applicable to similarly situated executives of
the Company and its Subsidiaries generally.

7. Vacation. The Executive shall be entitled to a number of days of vacation per year
in accordance with the Company’s policies, whether written or unwritten, regarding vacation for
similarly situated executives of the Company and its Subsidiaries generally. Subject to the
Company’s policies, the duration of such vacations and the time or times when they shall be taken
will be determined by the Executive in consultation with the Company.

8. Termination.

(a) Termination of Employment by the Company. The Executive’s employment hereunder
may be terminated by the Company or any of its Subsidiaries that employ the Executive for any
reason or no reason (including with or without Cause or notification by the Company at any time
during the Employment Term pursuant to Section 2 that the Company intends to terminate the
Agreement and the Executive’s employment, rather than allow the Agreement to renew automatically)
by written notice as provided in Section 17. If the Company terminates the Executive’s employment
with Cause, all of the Executive’s Option Rights, whether or not vested, will be immediately
forfeited. Stock Options, if any, held by the Executive following termination of the Executive’s
employment with the Company or any of its Subsidiaries, shall remain exercisable in accordance with
their terms.

(b) Voluntary Termination by the Executive. The Executive may voluntarily terminate
the Executive’s employment with or without Good Reason at any time by notice to the Company as
provided in Section 17.

(c) Benefits Period. Subject to Section 9 and any benefit continuation requirements
of applicable laws, in the event the Executive’s employment hereunder is terminated for any reason
whatsoever, the compensation and benefits obligations of the Company under Sections 4 and 5 shall
cease as of the effective date of such termination, except for any compensation and benefits earned
but unpaid through such date.

 

3

 

(d) Call Right. Upon termination of the Executive’s employment with the Company or
any of its Subsidiaries for any reason prior to an IPO, the Company will have the right to purchase
(the “Call Right”) any of the Executive’s shares of HealthMarkets’ Class A-1 common stock in
accordance with the terms and conditions of the Stockholders Agreement.

(e) Resignation from All Positions. Notwithstanding any other provision of this
Agreement to the contrary, upon the termination of the Executive’s employment for any reason,
unless otherwise requested by the Board, the Executive shall immediately resign from all positions
that he holds with the Company, its Subsidiaries and any of their affiliates (and with any other
entities with respect to which the Company has requested the Executive to perform services), as
applicable, including, without limitation, the Board and all boards of directors of any affiliates.
The Executive hereby agrees to execute any and all documentation to effectuate such resignations
upon request by the Company, but he shall be treated for all purposes as having so resigned upon
termination of his employment, regardless of when or whether he executes any such documentation.

9. Termination Payments and Benefits. If, during the Employment Term, the Executive’s
employment hereunder is terminated by the Company without Cause (and other than by reason of the
Executive’s death or Disability), or the Executive terminates his employment for Good Reason,
subject to (i) the Executive execution and non-revocation of a release of claims against the
Company by the 60th day following the date of the Executive’s termination of employment (the
“Release Deadline”), substantially in the form attached hereto as Exhibit B, (ii) the terms of
Section 13 and (iii) the Executive’s continued compliance with the covenants of Sections 11 and 12,
during the Payment Period, then in such case the Company shall be obligated to pay to the Executive
such payments and make available to the Executive such benefits as are set forth in this Section 9
during the Payment Period.

(a) Salary Continuation. The Executive will be entitled to receive an amount equal to
the sum of; (i) one (1) times the Executive’s Base Salary in effect at the time of termination of
employment and (ii) one (1) times an amount equal to the product of (A) the Executive’s Base Salary
in effect at the time of termination of employment and (B) the Executive’s Target Bonus Percentage
for the year of the Executive’s termination of employment, or if the Target Bonus Percentage has
not been set for such year as of the date of the termination of employment, the Target Bonus
Percentage for the immediately preceding year (the sum of (i) and (ii), the “Termination
Payments”), such amount to be payable in equal installments payable over the Payment Period.
Termination Payments shall be paid to the Executive in accordance with the Company’s regular
payroll schedule for the duration of the Payment Period, provided, however that if the Executive’s
employment with the Company terminates at a time during the calendar year when the initial
Termination Payment could occur in the calendar year following the calendar year during which the
Executive’s employment was terminated based on the Release Deadline, then the Termination Payments
shall begin on the later of (i) January 1 of the calendar year following the calendar year during
which the termination of the Executive’s employment with the Company occurs and (ii) the first
regularly scheduled payroll following the payroll period in which the Executive executed and did
not revoke the Release, with any Termination Payments that would have been made during the period
between the date of termination of employment and the first Termination Payment date, as determined
based on the foregoing, to be paid in a lump sum on the first Termination Payment date. In the
event that the
Executive dies while any Termination Payments are still payable to the Executive hereunder,
unless otherwise provided herein, all such unpaid amounts shall be paid, not later than the tenth
(10th) business day following the Executive’s death, to the Executive’s beneficiary as
named on the Executive’s 401(k) plan beneficiary forms, or, if no such beneficiary is so named,
then to the Executive’s estate, in the form of a lump sum cash payment equal to the remaining
Termination Payments.

 

4

 

(b) Bonus Entitlement. To the extent the Executive’s termination of employment occurs
after the last day of the first quarter of an applicable Company fiscal year, the Executive will be
entitled to receive a pro rata portion of the Executive’s Target Bonus Percentage (based on the
number of days the Executive was employed with the Company during such fiscal year of termination
divided by 365) multiplied by the Executive’s Base Salary, which amount shall be payable over the
Payment Period; provided, however, that, if the Target Bonus Percentage has not
been set for the year in which the date of termination occurs, the Executive’s Target Bonus
Percentage for purpose of this Section 9(b) shall be the Executive’s Target Bonus Percentage for
the year immediately preceding the year in which the Executive’s employment is terminated
hereunder.

(c) Equity Compensation. To the extent not previously vested, cancelled or expired,
the Executive will vest in any grant of Option Rights in accordance with their terms, which will
remain exercisable in accordance with their terms.

(d) Welfare Benefits. During the Payment Period, the Company shall maintain in full
force and effect for the continued benefit of the Executive all employee welfare benefit plans in
which the Executive was entitled to participate immediately prior to the Executive’s termination or
shall arrange to make available to the Executive benefits (except disability coverage)
substantially similar to those which the Executive would otherwise have been entitled to receive if
his employment had not been terminated. Such welfare benefits shall be provided to the Executive
on the same terms and conditions under which the Executive was entitled to participate immediately
prior to his termination of employment, including any applicable employee contributions.

(e) Not Compensation for Benefit Plans. Any payments under this Section 9 to the
Executive shall not be taken into account for purposes of any retirement plan (including any
supplemental retirement plan or arrangement) or other benefit plan sponsored by the Company, except
as otherwise expressly required by such plans or applicable law.

(f) No Obligation to Mitigate. The Executive is under no obligation to mitigate
damages or the amount of any payment provided for hereunder by seeking other employment or
otherwise.

 

5

 

10. Certain Additional Payments by the Company. Anything in this Agreement to the
contrary notwithstanding, in the event that it is determined (as hereafter provided) that any
payment (other than the Gross-Up Payments provided for in this Section 10 and Exhibit C attached
hereto) or distribution by the Company, its Subsidiaries or any of its affiliates to or for the
benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including any stock option, performance share,
performance unit, stock appreciation right or similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of the foregoing (a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto)
by reason of being considered “contingent on a change in ownership or control” of the Company,
within the meaning of Section 280G of the Code (or any successor provision thereto) or to any
similar tax imposed by state or local law, or any interest or penalties with respect to such tax
(such tax or taxes, together with any such interest and penalties, being hereafter collectively
referred to as the “Excise Tax”), then the Executive will be entitled to receive an additional
payment or payments (collectively, a “Gross-Up Payment”) (subject to Paragraph 7 of Exhibit C
attached hereto). The Gross-Up Payment will be in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payment. For purposes of determining the
amount of the Gross-Up Payment, the Executive will be considered to pay (1) federal income taxes at
the highest rate in effect in the year in which the Gross-Up Payment will be made and (2) state and
local income taxes at the highest rate in effect in the state or locality in which the Gross-Up
Payment would be subject to state or local tax, net of the maximum reduction in federal income tax
that could be obtained from deduction of such state and local taxes. The obligations set forth in
this Section 10 will be subject to the procedural provisions described in Exhibit C attached
hereto.

11. Confidentiality.

(a) The Executive acknowledges that in the course of his employment by the Company, he will or
may have access to and become informed of confidential or proprietary information of the Company
and its Subsidiaries (“Confidential Information”), which is a competitive asset, including, without
limitation, (i) the terms of any agreement between the Company and any employee, customer or
supplier, (ii) pricing strategy, (iii) merchandising and marketing methods, (iv) product
development ideas and strategies, (v) personnel training and development programs, (vi) financial
results, (vii) strategic plans and demographic analyses, (viii) proprietary computer and systems
software, and (ix) any non-public information concerning the Company, its employees, suppliers or
customers. The Executive agrees that he will keep all Confidential Information in strict
confidence during the term of his employment by the Company and thereafter, and will never directly
or indirectly make known, divulge, reveal, furnish, make available, or use any Confidential
Information (except in the course of his regular authorized duties on behalf of the Company). The
Executive agrees that the obligations of confidentiality under this Section 11 shall survive
termination of the Executive’s employment with the Company regardless of any actual or alleged
breach by the Company of this Agreement, until and unless any such Confidential Information shall
have become, through no fault of the Executive, generally known to the public or the Executive is
required by lawful service of process, subpoena, court order, law or the rules or regulations of
any regulatory body to which he is subject to make disclosure (after providing to the Company a
copy of the documents seeking disclosure of such information and giving the Company prompt notice
upon receipt of such documents and prior to their disclosure). All records, files, memoranda,
reports, customer lists, drawings, plans, documents and the like relating to the Company’s business
that the Executive uses, prepares or comes into contact with during the course of the Executive’s
employment shall
remain the sole property of the Company and/or its affiliates, as applicable, and shall be
turned over to the Company upon termination of the Executive’s employment. The Executive’s
obligations under this Section 11 are in addition to, and not in limitation of or preemption of,
all other obligations of confidentiality which the Executive may have to the Company under general
legal or equitable principles.

 

6

 

(b) Except in the ordinary course of the Company’s business, the Executive has not made, nor
shall at any time following the date of this Agreement, make or cause to be made, any copies,
pictures, duplicates, facsimiles or other reproductions or recordings or any abstracts or summaries
including or reflecting Confidential Information. All such documents and other property furnished
to the Executive by the Company or any of its Subsidiaries or affiliates or otherwise acquired or
developed by the Company or any of its Subsidiaries or affiliates shall at all times be the
property of the Company. Upon termination of the Executive’s employment with the Company, the
Executive will return to the Company any such documents or other property of the Company or any of
its Subsidiaries or affiliates which are in the possession, custody or control of the Executive.

(c) Without the prior written consent of the Company (which may be withheld for any reason or
no reason), except in the ordinary course of the Company’s business, the Executive shall not at any
time following the date of this Agreement use for the benefit or purposes of the Executive or for
the benefit or purposes of any other person, firm, partnership, association, trust, venture,
corporation or business organization, entity or enterprise or disclose in any manner to any person,
firm, partnership, association, trust, venture, corporation or business organization, entity or
enterprise any Confidential Information.

12. Covenant Not to Compete; Covenant Not to Solicit. For a period commencing on the
Commencement Date and for a period ending one (1) year after the termination of the Executive’s
employment with the Company for any reason (the “Restricted Period”), including termination for
Cause or the Executive’s voluntary resignation without Good Reason, the Executive acknowledges and
agrees that he will not, directly or indirectly, individually or on behalf of any other person or
entity:

(a) engage in any activity that can be reasonably expected to result in a competitive harm to
the Company or any of the Company’s Subsidiaries or affiliates (collectively, the “Company Group”)
in any region of the United States in which the business of the Company Group is being conducted;
or

(b) solicit for hire, hire or employ (whether as an officer, director or insurance agent) any
person who is an employee or independent contractor of any member of the Company Group or has been
an employee or independent contractor of any member of the Company Group at any time during the
six-month period prior to the Executive’s termination of employment or solicit, aid or induce any
such person to leave his or her employment with any member of the Company Group to accept
employment with any other person or entity.

(c) Executive’s ownership of less than one percent (1%) of any class of stock in a
publicly-traded corporation shall not be deemed a breach of this Section 12.

 

7

 

(d) The Executive acknowledges and agrees that a violation of the foregoing provisions of
Section 11 or Section 12 would result in material detriment to the Company would cause irreparable
harm to the Company, and that the Company’s remedy at law for any such violation would be
inadequate. In recognition of the foregoing, the Executive agrees that, in addition to any other
relief afforded by law or this Agreement, including damages sustained by a breach of this Agreement
and without the necessity or proof of actual damages, the Company shall have the right to enforce
this Agreement by specific remedies, which shall include, among other things, temporary and
permanent injunctions, it being the understanding of the undersigned parties hereto that damages
and injunctions all shall be proper modes of relief and are not to be considered as alternative
remedies.

13. Compliance with Section 409A of the Code. This Agreement is intended to comply
and shall be administered in a manner that is intended to comply with Section 409A of the Code and
shall be construed and interpreted in accordance with such intent. To the extent that a payment
and/or benefit owed or due to the Executive under this Agreement is subject to Section 409A of the
Code, it shall be paid in a manner that complies with Section 409A of the Code, including proposed,
temporary or final regulations or any other guidance issued by the Secretary of the Treasury and
the Internal Revenue Service with respect thereto (the “409A Guidance”). Any provision of this
Agreement that would cause a payment and/or benefit to fail to satisfy Section 409A of the Code
shall have no force and effect until amended to comply with Code Section 409A (which amendment
shall be effected and may be retroactive to the extent permitted by the 409A Guidance).

14. Prior Agreement. As of the Effective Date, this Agreement supersedes any and all
prior and/or contemporaneous agreements, either oral or in writing, between the parties hereto with
respect to the subject matter hereof, except for the retention compensation program, which shall
continue pursuant to its current terms and conditions that were communicated to the Executive.
Each party to this Agreement acknowledges that no representations, inducements, promises, or other
agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any
party, pertaining to the subject matter hereof, which are not embodied herein, and that no prior
and/or contemporaneous agreement, statement or promise pertaining to the subject matter hereof that
is not contained in this Agreement shall be valid or binding on either party.

15. Withholding of Taxes. The Company may withhold from any amounts payable or
transfer made under any compensation or other amount owing to the Executive under this Agreement
all applicable federal, state, city or other withholding taxes as the Company is required to
withhold pursuant to any law or government regulation or ruling.

 

8

 

16. Successors and Binding Agreement.

(a) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the business or assets
of the Company or of any Subsidiary or any division or business unit thereof for which the
Executive performs services, by agreement in form and substance satisfactory to the Executive (and
any such successor, the “Successor”), expressly to assume and agree to perform this Agreement in
the same manner and to the same extent the Company would be
required to perform if no such succession had taken place. Notwithstanding anything in this
Agreement to the contrary, the Executive acknowledges and agrees that to the extent the Executive
is offered and accepts comparable employment with such Successor, the Executive will not be
entitled to receive any severance/termination compensation payments and benefits, as provided
pursuant to the terms and conditions of Section 9 or otherwise under this Agreement, from the
Company in connection with such acquisition/transaction with the Successor. To the extent the
Executive is offered but does not accept an offer of comparable employment from such Successor on
terms and conditions set forth in this Agreement, any non-acceptance of employment will be treated
as a voluntary termination of employment without Good Reason by the Executive in accordance with
the provisions of this Agreement. This Agreement will be binding upon and inure to the benefit of
the Company and any successor to the Company, including without limitation any persons acquiring
directly or indirectly all or substantially all of the business or assets of the Company or of any
Subsidiary or any division or business unit thereof for which the Executive performs services
whether by purchase, merger, consolidation, reorganization or otherwise (and such successor shall
thereafter be deemed the “Company” for the purposes of this Agreement), but will not otherwise be
assignable, transferable or delegable by the Company.

(b) This Agreement will inure to the benefit of and be enforceable by the Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees and legatees.

(c) This Agreement is personal in nature and neither of the parties hereto shall, without the
consent of the other, assign, transfer or delegate this Agreement or any rights or obligations
hereunder except as expressly provided in Sections 16(a) and 16(b). Without limiting the
generality or effect of the foregoing, the Executive’s right to receive payments hereunder will not
be assignable, transferable or delegable, whether by pledge, creation of a security interest, or
otherwise, other than by a transfer by the Executive’s will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary to this Section
16(c), the Company shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.

17. Notices. For all purposes of this Agreement, all communications, including
without limitation notices, consents, requests or approvals, required or permitted to be given
hereunder will be in writing and will be deemed to have been duly given when hand delivered or
dispatched by electronic facsimile transmission (with receipt thereof confirmed), or five (5)
business days after having been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three (3) business days after having been sent by a
nationally recognized overnight courier service such as Federal Express, UPS, or Purolator,
addressed to the Company (to the attention of the Secretary of the Company) at its principal
executive offices and to the Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance herewith, except that notices of
changes of address shall be effective only upon receipt.

18. Governing Law. The validity, interpretation, construction and performance of this
Agreement will be governed by and construed in accordance with the substantive laws of the State of
Delaware, without giving effect to the principles of conflict of laws of such State.

 

9

 

19. Indemnification. The Company will indemnify the Executive (and his legal
representative or other successors) to the fullest extent permitted (including a payment of
expenses in advance of final disposition of a proceeding) by applicable law, and the Executive
shall be entitled to the protection of any insurance policies the Company may elect to maintain
generally for the benefit of its directors and officers, against all costs, charges and expenses
whatsoever incurred or sustained by him or his legal representatives (including but not limited to
any judgment entered by a court of law) at the time such costs, charges and expenses are incurred
or sustained, in connection with any action, suit or proceeding to which the Executive (or his
legal representatives or other successors) may be made a party by reason of his having accepted
employment with the Company or by reason of his being or having been a director, officer or
employee of the Company, or any Subsidiary of the Company, or his serving or having served any
other enterprise as a director, officer or employee at the request of the Company, and to the
extent the Company maintains such an insurance policy or policies, the Executive shall be covered
by such policy or policies, in accordance with its or their terms to the maximum extent of the
coverage available for any Company officer or director. The Executive’s rights under this Section
19 shall continue without time limit for so long as he may be subject to any such liability,
whether or not the Employment Term may have ended.

20. Validity. If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid or unenforceable, the remainder of this
Agreement and the application of such provision to any other person or circumstances will not be
affected, and the provision so held to be invalid or unenforceable will be reformed to the extent
(and only to the extent) necessary to make it enforceable or valid.

21. Survival of Provisions. Notwithstanding any other provision of this Agreement,
the parties’ respective rights and obligations under Sections 8, 9, 10, 11, 12, 13, 15, 18, 19 and
21 will survive any termination or expiration of this Agreement or the termination of the
Executive’s employment for any reason whatsoever.

22. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing signed by the
Executive and the Company. No waiver by either party hereto at any time of any breach by the other
party hereto or compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time. Unless otherwise noted, references to “Sections” are to
sections of this Agreement. The captions used in this Agreement are designed for convenient
reference only and are not to be used for the purpose of interpreting any provision of this
Agreement.

23. Defined Terms.

(a) “409A Guidance” has the meaning specified in Section 13.

(b) “Agreement” has the meaning specified in the introductory paragraph herein.

(c) “Annual Bonus Percentage” has the meaning specified in Section 4(b).

 

10

 

(d) “Base Salary” has the meaning specified in Section 4(a).

(e) “Board” means the Board of Directors of the Company.

(f) “Call Right” has the meaning specified in Section 8(d).

(g) “Cause” means the occurrence of any of the following:

(i) the Executive commits an act of gross negligence, willful misconduct, fraud,
embezzlement, misappropriation or breach of fiduciary duty against the Company or any
of its affiliates or Subsidiaries, or shall be convicted by a court of competent
jurisdiction of, or shall plead guilty or nolo contendere to, any felony or any crime
involving moral turpitude or any crime which reasonably could affect the reputation
of the Company or the Executive’s ability to perform the duties required under this
Agreement;

(ii) the Executive commits a material breach of any of the covenants in this
Agreement or the Stockholders Agreement, which breach has not been remedied within 30
days of the delivery to the Executive by the Board of written notice of the facts
constituting the breach, and which breach if not cured, would have a material adverse
effect on the Company; or

(iii) the Executive habitually and willfully neglects his obligations under this
Agreement or the Executive’s duties as an employee of the Company.

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

(i) “Commencement Date” has the meaning specified in Section 2.

(j) “Committee” means the Executive Compensation Committee of the Board.

(k) “Company” has the meaning specified in the introductory paragraph of this Agreement.

(l) “Company Group” has the meaning specified in Section 12(a).

(m) “Confidential Information” has the meaning specified in Section 11.

(n) “Disability” shall mean the Executive’s incapacity due to physical or mental illness to
substantially perform his duties on a full-time basis for at least 26 consecutive weeks or an
aggregate period in excess of 26 weeks in any one fiscal year, and within 30 days after a notice of
termination is thereafter given by the Company, the Executive shall not have returned to the
full-time performance of the Executive’s duties; provided, however, if the
Executive shall not agree with a determination to terminate his employment because of Disability,
the question of the Executive’s Disability shall be subject to the certification of a qualified
medical doctor selected by the Company or its insurers and acceptable to the Executive
or, in the event of the Executive’s incapacity to accept a doctor, the Executive’s legal
representative.

 

11

 

(o) “Effective Date” has the meaning specified in the introductory paragraph of this
Agreement.

(p) “Employment Term” has the meaning specified in Section 2.

(q) “Excise Tax” has the meaning specified in Section 10.

(r) “Executive” has the meaning specified in the introductory paragraph of this Agreement.

(s) “Good Reason” means termination of employment by the Executive with written notice to the
Company within 90 days following the occurrence, without the Executive’s consent, of any the
following events (after failure of the Company to cure in thirty (30) days):

(i) the reduction of the Executive’s position or responsibilities from that of
Chief Financial Officer of the Company;

(ii) a decrease in the Executive’s Base Salary or Target Bonus Percentage, other
than in the case of a decrease for a majority of similarly situated executives of the
Company;

(iii) a reduction in the Executive’s participation in the Company’s benefit
plans and policies to a level materially less favorable to the Executive unless such
reduction applies to a majority of the senior level executives of the Company; or

(iv) the announcement of the relocation of the Executive’s primary place of
employment to a location 50 or more miles from the current headquarters.

(t) “Gross-Up Payment” has the meaning specified in Section 10.

(u) “HealthMarkets Affiliates” has the meaning specified in paragraph 1 of Exhibit B attached
hereto.

(v) “Initial Employment Term” has the meaning specified in Section 2.

(w) “IPO” has the meaning specified in the Stockholders Agreement.

(x) “MOP” means the Company’s 2006 Management Option Plan, as may be amended from time to
time.

(y) “National Firm” has the meaning specified in paragraph 1 of Exhibit C attached
hereto.

(z) “Option Rights” has the meaning specified in the MOP.

 

12

 

(aa) “Payment” has the meaning specified in Section 10.

(bb) “Payment Period” means the one-year period following the later of (i) the Executive’s
date of termination of employment with the Company or (ii) the first business day after the date
that is six (6) months following the date of the Executive’s separation from service with the
Company to the extent required in order to avoid the imposition of taxes or penalties under Code
Section 409A

(cc) “Release” has the meaning specified in the introductory paragraph of Exhibit B attached
hereto.

(dd) “Renewal Term” has the meaning specified in Section 2.

(ee) “Reporting Person” has the meaning specified in Section 3(a).

(ff) “Restricted Period” has the meaning specified in Section 12.

(gg) “Revocation Date” has the meaning specified in paragraph 3 of Exhibit B attached hereto.

(hh) “Stockholders Agreement” means the Stockholders Agreement by and among investment funds
affiliated with The Blackstone Group, L.P., Goldman Sachs & Co. and DLJ Merchant Banking Partners
IV, L.P., the Company, the Executive, and other signatories thereto, dated April 5, 2006, as may be
amended from time to time.

(ii) “Stock Option” means an Option Right.

(jj) “Subsidiary” shall mean any entity, corporation, partnership (general or limited),
limited liability company, firm, business organization, enterprise, association or joint venture in
which the Company directly or indirectly controls ten percent (10%) or more of the voting interest.

(kk) “Successor” has the meaning specified in Section 16(a).

(ll) “Target Bonus Percentage” has the meaning specified in Section 4(b).

(mm) “Termination Payments” has the meaning specified in Section 9(a).

(nn) “Underpayment” has the meaning specified in paragraph 1 of Exhibit C attached hereto.

24. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

13

 

IN WITNESS WHEREOF, with the Company signatory listed below having been duly authorized by the
Company to enter into this Agreement by the Company, the parties hereto have executed this
Agreement as of the day and year first written.

	 	 	 	 	 
	 	  	 
	 	K. Alec Mahmood 	 
	 	 	 
	 	HealthMarkets, Inc.

 	 
	 	By:  	 	 
	 	 	Kenneth J. Fasola 	 
	 	 	Chief Executive Officer 	 
	 

 

14

 

Exhibit A

Position: Chief Financial Officer

Reporting Person: Chief Executive Officer

Outside Activities: None

			
	Base Salary:	 	$400,000, or such higher amount resulting from one or more subsequent increases in Base Salary by the Committee pursuant to Section 4(a).

Target Bonus Percentage: 75%

Annual Bonus Percentage: 150%

 

 

 

Exhibit B

Form of Release

In consideration of the payments and promises contained in your Employment Agreement with the
Company dated August [•], 2011, and in full compromise and settlement of any of your potential claims
and causes of action relating to or arising out of your employment relationship with the Company or
the termination of that relationship, and any and all other claims or causes of action that you
have or may have against the HealthMarkets Affiliates (as defined below) up to the date of
execution of this release (the “Release”), you hereby:

1. knowingly and voluntarily agree to irrevocably and unconditionally waive and release the
Company and any other entity controlled by, controlling or under common control with the Company,
and their respective predecessors and successors and their respective directors, officers,
employees, representatives, attorneys, including all persons acting by, through, under or in
concert with any of them (collectively, the “HealthMarkets Affiliates”), from any and all charges,
complaints, claims, liabilities, obligations, promises, sums of money, agreements, controversies,
damages, actions, lawsuits, rights, demands, sanctions, costs (including attorneys’ fees), losses,
debts and expenses of any nature whatsoever, existing on, or at any time prior to, the date hereof
in law, in equity or otherwise, which you, your successors, heirs or assigns had or have upon or by
reason of any fact, matter, cause, or thing whatsoever, and specifically including any matter that
may be based on the sole or contributory negligence (whether active, passive or gross) of any
HealthMarkets Affiliate. This release includes, but is not limited to, a release of all claims or
causes of action arising out of or relating to your employer-employee relationship with the Company
or the termination of that relationship, and any other claim, including, without limitation,
alleged breach of express or implied written or oral contract, alleged breach of employee handbook,
alleged wrongful discharge, and tort claims, or claims or causes of action arising under any
federal, state, or local law, including, but not limited to, the Age Discrimination in Employment
Act, 29 U.S.C. § 621, et seq., the Reconstruction Era Civil Rights Act of 1866 and 1871, 42 U.S.C.
§§ 1981 and 1983, the Civil Rights Act of 1964, Title VII, 42 U.S.C. §§ 2000(e) et seq., The Civil
Rights Act of 1991, 42 U.S.C. § 1981(a) et seq., the Equal Pay Act of 1963, 29 U.S.C. § 206(d) et
seq., the Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et seq. the Rehabilitation
Act of 1973, 29 U.S.C. § 701 et seq., the Worker Adjustment and Retraining Notification Act, 29
U.S.C. §§ 2101-2109, the Sarbanes-Oxley Act of 2002, as amended, and any claim under any other
statutes of the State of Texas, or other jurisdictions, and the facts, circumstances, allegations,
and controversies relating or giving rise thereto that have accrued to the date of execution of
this Release;

 

B-1

 

2. agree that you will not commence, maintain, initiate, or prosecute, or cause, encourage,
assist, volunteer, advise or cooperate with any other person to commence, maintain, initiate or
prosecute, any action, lawsuit, proceeding, investigation, or claim before any court, legislative
body or committee, or administrative agency (whether state, federal or otherwise) against the
HealthMarkets Affiliates relating to any claims, liabilities, obligations, promises, sums of money,
agreements, controversies, damages, actions, lawsuits, rights, demands, sanctions, costs (including
attorneys’ fees), losses, debts and expenses described in the foregoing Paragraph 1;
provided, however, that, notwithstanding anything to the contrary in the foregoing,
nothing hereunder shall be deemed to affect, impair or diminish in any respect (i) any vested
rights as of the date of termination or entitlement you may have under the HealthMarkets 401(k) and
Savings Plan; (ii) any other vested rights as of the date of termination you may have under any
employee plan or program in which you have participated in your capacity as an employee of the
Company or any other HealthMarkets Affiliate; (iii) your right to seek to collect unemployment
benefits that you may be entitled to as a result of your employment with the Company or your right
to seek benefits under workers’ compensation insurance, if applicable; (iv) your rights under this
Release; including but not limited to your right to bring a claim for breach of this Release; (v)
any rights you may have under that Section 19 (Indemnification) of the Employment Agreement and
certain Indemnification Agreement, dated as of April 24, 2007 between you and the Company (which
Indemnification Agreement the Company, by its signature hereto, confirms shall remain in full force
and effect in accordance with the terms thereof); (vi) any rights to indemnification that you have
or may have under the terms of the HealthMarkets Amended and Restated Bylaws; or (vii) your right
to bring a claim under the Age Discrimination in Employment Act to challenge the validity of this
Release, to file a charge under the civil rights statutes, or to otherwise participate in an
investigation or proceeding conducted by the Equal Employment Opportunity Commission or other
investigative agency;

3. acknowledge that: (i) this entire Release is written in a manner calculated to be
understood by you; (ii) you have been advised to consult with an attorney before executing this
Release; (iii) you were given a period of twenty-one days within which to consider this Release;
and (iv) to the extent you execute this Release before the expiration of the twenty-one-day period,
you do so knowingly and voluntarily and only after consulting your attorney. You shall have the
right to cancel and revoke this Release during a period of seven days following the date on which
you execute it, and this Release shall not become effective, and no money will be paid to you in
respect of severance, until the day after the expiration of such seven-day period (the “Revocation
Date”). In order to revoke this Release, you shall deliver to the Company, prior to the expiration
of said seven-day period, a written notice of revocation. Upon such revocation, this Release shall
be null and void and of no further force or effect;

4. agree to make yourself reasonably available to the Company following the date of your
termination to assist the HealthMarkets Affiliates, as may be requested by the Company at mutually
convenient times and places, with respect to the business of the Company and pending and future
litigations, arbitrations, governmental investigations or other dispute resolutions relating to or
in connection with the Company; and

5. agree not to, either in writing or by any other medium, make any disparaging or derogatory
statement about the HealthMarkets Affiliates or any of their respective officers, directors,
employees, affiliates, Subsidiaries, successors, assigns or businesses, as the case may be;
provided, however, that you may make such statements as are necessary to comply with law.

 

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Exhibit C

EXCISE TAX GROSS-UP PROCEDURAL PROVISIONS

1. Subject to the provisions of Paragraph 5, all determinations required to be made under
Section 10 of the Agreement and this Exhibit C, including whether an Excise Tax is payable by the
Executive and the amount of such Excise Tax and whether a Gross-Up Payment is required to be paid
by the Company to the Executive and the amount of such Gross-Up Payment, if any, will be made by a
nationally recognized accounting firm selected by the Company (the “National Firm”). The Company
will direct the National Firm to submit its determination and detailed supporting calculations to
both the Company and the Executive within thirty (30) calendar days after the date of termination
of the Executive’s employment, if applicable, and any such other time or times as may be requested
by the Company or the Executive. If the National Firm determines that any Excise Tax is payable by
the Executive, the Company will pay the required Gross-Up Payment to the Executive within five (5)
business days after receipt of such determination and calculations with respect to any Payment to
the Executive. If the National Firm determines that no Excise Tax is payable by the Executive with
respect to any material benefit or amount (or portion thereof), it will, at the same time as it
makes such determination, furnish the Company and the Executive with an opinion that the Executive
has substantial authority not to report any Excise Tax on Executive’s federal, state or local
income or other tax return with respect to such benefit or amount. As a result of the uncertainty
in the application of Section 4999 of the Code and the possibility of similar uncertainty regarding
applicable state or local tax law at the time of any determination by the National Firm hereunder,
it is possible that Gross-Up Payments that will not have been made by the Company should have been
made (an “Underpayment”), consistent with the calculations required to be made hereunder. In the
event that the Company exhausts or fails to pursue its remedies pursuant to Paragraph 5 and the
Executive thereafter is required to make a payment of any Excise Tax, the Executive will direct the
National Firm to determine the amount of the Underpayment that has occurred and to submit its
determination and detailed supporting calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment will be promptly paid by the Company to, or for the
benefit of, the Executive within five (5) business days after receipt of such determination and
calculations.

2. The Company and the Executive will each provide the National Firm access to and copies of
any books, records and documents in the possession of the Company or the Executive, as the case may
be, reasonably requested by the National Firm, and otherwise cooperate with the National Firm in
connection with the preparation and issuance of the determinations and calculations contemplated by
Paragraph 1. Any determination by the National Firm as to the amount of the Gross-Up Payment will
be binding upon the Company and the Executive.

3. The federal, state and local income or other tax returns filed by the Executive will be
prepared and filed on a consistent basis with the determination of the National Firm with respect
to the Excise Tax payable by the Executive. The Executive will report and make proper payment of
the amount of any Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of the Executive’s federal income tax
return as filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such other documents
reasonably requested by the Company, evidencing such payment. If prior to the filing of the
Executive’s federal income tax return, or corresponding state or local tax return, if relevant, the
National Firm determines that the amount of the Gross-Up Payment should be reduced, the Executive
will within five (5) business days pay to the Company the amount of such reduction.

4. The fees and expenses of the National Firm for its services in connection with the
determinations and calculations contemplated by Paragraph 1 will be borne by the Company. If such
fees and expenses are initially paid by the Executive, the Company will reimburse the Executive the
full amount of such fees and expenses within five (5) business days after receipt from the
Executive of a statement therefor and reasonable evidence of Executive’s payment thereof.

 

C-1

 

5. The Executive will notify the Company in writing of any claim by the Internal Revenue
Service or any other taxing authority that, if successful, would require the payment by the Company
of a Gross-Up Payment. Such notification will be given as promptly as practicable but no later
than ten (10) business days after the Executive actually receives notice of such claim and the
Executive will further apprise the Company of the nature of such claim and the date on which such
claim is requested to be paid (in each case, to the extent known by the Executive). The Executive
will not pay such claim prior to the expiration of the 30-calendar-day period following the date on
which Executive gives such notice to the Company or, if earlier, the date that any payment of
amount with respect to such claim is due. If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest such claim, the Executive will:

(a) provide the Company with any written records or documents in Executive’s possession
relating to such claim reasonably requested by the Company;

(b) take such action in connection with contesting such claim as the Company reasonably
requests in writing from time to time, including without limitation accepting legal representation
with respect to such claim by an attorney competent in respect of the subject matter and reasonably
selected by the Company;

(c) cooperate with the Company in good faith in order effectively to contest such claim; and

 

C-2

 

(d) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company will bear and pay directly all costs and
expenses (including interest and penalties) incurred in connection with such contest and will
indemnify and hold harmless the Executive, on an after-tax basis, for and against any Excise Tax or
income or other tax, including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses. Without limiting the foregoing provisions
of this Paragraph 5, the Company will control all proceedings taken in connection with the contest
of any claim contemplated by this Paragraph 5 and, at its sole option, may pursue or forego any and
all administrative appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim (provided, however, that the Executive may participate
therein at Executive’s own cost and expense) and may, at its option, either direct the Executive to
pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the Company determines;
provided, however, that if the Company directs the Executive to pay the tax claimed and sue for a
refund, the Company will advance the amount of such payment to the Executive on an interest-free
basis and will indemnify and hold the Executive harmless, on an after-tax basis, from any Excise
Tax or income or other tax, including interest or penalties with respect thereto, imposed with
respect to such advance; and provided further, however, that any extension of the
statute of limitations relating to payment of taxes for the taxable year of the Executive with
respect to which the contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company’s control of any such contested claim will be limited to issues
with respect to which a Gross-Up Payment would be payable hereunder, and the Executive will be
entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

6. If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Paragraph 5, the Executive receives any refund with respect to such claim, the Executive will
(subject to the Company’s complying with the requirements of Paragraph 5) promptly pay to the
Company the amount of such refund (together with any interest paid or credited thereon after any
taxes applicable thereto). If, after the receipt by the Executive of an amount paid by the Company
pursuant to Paragraph 5, a determination is made that the Executive is not entitled to any refund
with respect to such claim and the Company does not notify the Executive in writing of its intent
to contest such denial or refund prior to the expiration of thirty (30) calendar days after such
determination, then such payment will be forgiven and will not be required to be repaid and the
amount of any such payment will offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid by the Company to the Executive pursuant to Section 10 and this Exhibit C.

 

C-3

 

7. Notwithstanding any provision of this Agreement to the contrary, but giving effect to any
redetermination of the amount of Gross-Up payments otherwise required by this Exhibit C, if (A) but
for this sentence, the Company would be obligated to make a Gross-Up Payment to the Executive, (B)
the aggregate “present value” of the “parachute payments” to be paid or provided to the Executive
under this Agreement or otherwise does not exceed 1.10 multiplied by three times the Executive’s
“base amount,” then the payments and benefits to be paid or provided under this Agreement will be
reduced (or repaid to the Company, if previously paid or provided) to the minimum extent necessary
so that no portion of any payment or benefit to the Executive, as so reduced or repaid, constitutes
an “excess parachute payment.” For purposes of this Paragraph 7, the terms “excess parachute
payment,” “present value,” “parachute payment,” and “base amount” will have the meanings assigned
to them by Section 280G of the Code. The determination of whether any reduction in or repayment of
such payments or benefits to be provided under this Agreement is required pursuant to this
Paragraph 7 will be made at the expense of the Company by the National Firm. Appropriate
adjustments will be made to amounts previously paid to the Executive, or to amounts not paid
pursuant to this Paragraph 7, as the case may be, to reflect properly a subsequent determination
that the Executive owes more or less Excise Tax than the amount previously determined to be due.
In the event that any payment
or benefit intended to be provided under this Agreement or otherwise is required to be reduced
or repaid pursuant to this Paragraph 7, the Executive will be entitled to designate the payments
and/or benefits to be so reduced or repaid in order to give effect to this Paragraph 7. The
Company will provide the Executive with all information reasonably requested by the Executive to
permit the Executive to make such designation. In the event that the Executive fails to make such
designation within ten (10) business days prior to the Termination Date or other due date, the
Company may effect such reduction or repayment in any manner it deems appropriate.

 

C-4

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