TABLE OF CONTENTS

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ARTICLE I CERTAIN DEFINITIONS							1
		Section 1.1.		Certain Definitions			1
ARTICLE II THE MERGER							9
		Section 2.1.		The Merger			9
		Section 2.2.		Effective Date and Effective Time; Closing			9
ARTICLE III CONSIDERATION AND EXCHANGE PROCEDURES							10
		Section 3.1.		Effect on Capital Stock			10
		Section 3.2.		Exchange Procedures			10
		Section 3.3.		Interchange Stock Options and Other Equity Awards			12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INTERCHANGE							12
		Section 4.1.		Corporate Organization			13
		Section 4.2.		Capitalization			13
		Section 4.3.		Authority; No Violation			14
		Section 4.4.		Consents and Approvals			15
		Section 4.5.		SEC Documents; Other Reports; Internal and Disclosure Controls			16
		Section 4.6.		Financial Statements; Undisclosed Liabilities			17
		Section 4.7.		Brokers Fees			18
		Section 4.8.		Absence of Certain Changes or Events			18
		Section 4.9.		Legal Proceedings			19
		Section 4.10.		Taxes			19
		Section 4.11.		Employees; Employee Benefit Plans			20
		Section 4.12.		Board Approval			22
		Section 4.13.		Compliance With Applicable Law			22
		Section 4.14.		Certain Contracts			23
		Section 4.15.		Agreements With Regulatory Agencies			24
		Section 4.16.		Proxy Statement			24
		Section 4.17.		Title to Property			25
		Section 4.18.		Insurance			25
		Section 4.19.		Environmental Liability			26
		Section 4.20.		Opinion of Financial Advisor			26
		Section 4.21.		Patents, Trademarks, Etc			26
		Section 4.22.		Labor Matters			27
		Section 4.23.		Derivative Instruments and Transactions			27
		Section 4.24.		Investment Companies and Investment Advisers			27
		Section 4.25.		Loan Matters			28
		Section 4.26.		Antitakeover Provisions			29
		Section 4.27.		Books and Records			29
		Section 4.28.		Disclosure			29

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ARTICLE V REPRESENTATIONS AND WARRANTIES OF TD BANKNORTH							29
		Section 5.1.		Corporate Organization			29
		Section 5.2.		Authority; No Violation			30
		Section 5.3.		Consents and Approvals			31
		Section 5.4.		Parent Stockholder Consent			32
		Section 5.5.		SEC Documents			32
		Section 5.6.		Brokers Fees			32
		Section 5.7.		Legal Proceedings			32
		Section 5.8.		Compliance With Applicable Law			32
		Section 5.9.		Agreements with Regulatory Agencies			33
		Section 5.10.		TD Banknorth Information			33
		Section 5.11.		Operations of Merger Sub			33
		Section 5.12.		Financing			33
		Section 5.13.		Disclosure			33
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS							34
		Section 6.1.		Conduct of Business of Interchange Prior to the Effective Time			34
		Section 6.2.		Interchange Forbearances			34
		Section 6.3.		TD Banknorth Forbearances			38
ARTICLE VII ADDITIONAL AGREEMENTS							38
		Section 7.1.		Proxy Statement; Regulatory Filings			38
		Section 7.2.		Access to Information			39
		Section 7.3.		Shareholder Approval			40
		Section 7.4.		Acquisition Proposals			41
		Section 7.5.		Legal Conditions to the Merger			42
		Section 7.6.		Indemnification; Directors and Officers Insurance			43
		Section 7.7.		Advice of Changes			44
		Section 7.8.		Financial Statements and Other Current Information			45
		Section 7.9.		Transition Matters			45
		Section 7.10.		Employee Benefit Plans			46
		Section 7.11.		The Bank Merger			48
		Section 7.12.		Publicity			48
		Section 7.13.		Merger Sub			48
ARTICLE VIII CONDITIONS PRECEDENT							49
		Section 8.1.		Conditions to Each Partys Obligation to Effect the Merger			49
		Section 8.2.		Conditions to Obligations of TD Banknorth and Merger Sub			49
		Section 8.3.		Conditions to Obligations of Interchange			50
ARTICLE IX TERMINATION AND AMENDMENT							51
		Section 9.1.		Termination			51
		Section 9.2.		Effect of Termination			52
		Section 9.3.		Amendment			53
		Section 9.4.		Extension; Waiver			53

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ARTICLE X GENERAL PROVISIONS							53
		Section 10.1.		Nonsurvival of Representations, Warranties and Agreements			53
		Section 10.2.		Expenses			54
		Section 10.3.		Notices			54
		Section 10.4.		Interpretation			55
		Section 10.5.		Counterparts			55
		Section 10.6.		Entire Agreement			55
		Section 10.7.		Governing Law; Jurisdiction; Waiver of Jury Trial			55
		Section 10.8.		Severability			56
		Section 10.9.		Assignment; Third Party Beneficiaries			56
		Section 10.10.		Alternative Structure			57
Exhibit A Form of Shareholder Agreement

AGREEMENT AND PLAN OF MERGER

          AGREEMENT AND PLAN OF MERGER, dated as of April 13, 2006 (as amended, supplemented, restated or otherwise modified from time to time, this Agreement), is entered into by and between Interchange Financial Services Corporation (Interchange), a New Jersey corporation, and TD Banknorth Inc. (TD Banknorth), a Delaware corporation and a majority-owned subsidiary of The Toronto-Dominion Bank, a Canadian-chartered bank.

RECITALS

          WHEREAS, the respective Boards of Directors of each of Interchange and TD Banknorth have determined that it is in the best interests of their respective companies and shareholders to consummate the business combination transaction provided for herein, in which a newly-formed transitory subsidiary of TD Banknorth will, subject to the terms and conditions set forth herein, merge with and into Interchange (the Merger); and

          WHEREAS, as soon as practicable after the execution and delivery of this Agreement, Interchange Bank, a New Jersey-chartered bank and a wholly-owned subsidiary of Interchange, and TD Banknorth, National Association (TD Banknorth, NA), a national bank and a wholly-owned subsidiary of TD Banknorth, will enter into an agreement and plan of merger (the Bank Merger Agreement) providing for the merger of Interchange Bank with and into TD Banknorth, NA (the Bank Merger), it being intended that the Bank Merger be consummated immediately following consummation of the Merger; and

          WHEREAS, as a material inducement to TD Banknorth to enter into this Agreement, and simultaneously with the execution of this Agreement, each director of Interchange is entering into an agreement, in the form of Exhibit A hereto, pursuant to which such person has agreed, among other things, to vote his or her shares of Interchange Common Stock (as defined herein) in favor of this Agreement; and

          WHEREAS, the parties desire to make certain representations, warranties and agreements in connection with the transactions provided for herein and also to prescribe certain conditions to the consummation of such transactions;

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

ARTICLE I

CERTAIN DEFINITIONS

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

     Acquisition Proposal means any proposal or offer by any Person or group of Persons with respect to any of the following: (i) any merger, consolidation, share exchange, business combination, recapitalization, liquidation or dissolution or other

similar transaction involving Interchange or any Subsidiary of Interchange whose assets, individually or in the aggregate, constitute more than 10% of the consolidated assets of Interchange; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets (including for this purpose the outstanding capital stock of any Subsidiary of Interchange and the capital stock of any entity surviving any merger or business combination involving any Subsidiary of Interchange) and/or liabilities that constitute 10% or more of the net revenues, net income or assets of Interchange and its Subsidiaries taken as a whole in a single transaction or series of transactions; or (iii) any purchase or other acquisition or tender offer or exchange offer that if consummated would result in such Person(s) beneficially owning 10% or more of the outstanding shares of the common stock of Interchange or any Subsidiary of Interchange whose assets, individually or in the aggregate, constitute more than 10% of the consolidated assets of Interchange, in each case other than (x) the transactions contemplated by this Agreement and (y) any transaction referred to in clause (i) or (ii) involving only Interchange and one or more of its Subsidiaries, or involving two or more of its Subsidiaries, provided that any such transaction is not entered into in violation of the terms of this Agreement.