THE TRANSFER OF THIS AGREEMENT IS
SUBJECT TO CERTAIN PROVISIONS CONTAINED
HEREIN AND MAY BE SUBJECT TO TRANSFER
RESTRICTIONS UNDER
FEDERAL AND STATE LAW
ASTORIA FINANCIAL CORPORATION STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of April 2, 1998 (the
"Agreement"), by and between Long Island Bancorp, Inc., a Delaware corporation
("LISB"), and Astoria Financial Corporation, a Delaware corporation ("AFC").
RECITALS
A. THE PLAN. LISB and AFC have entered into an Agreement
and Plan of Merger, dated as of April 2, 1998 (the "Plan"), providing for, among
other things, the merger of LISB with and into AFC, with AFC being the surviving
corporation.
B. CONDITION TO PLAN. As a condition and an inducement to
LISB's execution and delivery of the Plan, LISB has required that AFC agree, and
AFC has agreed, to grant LISB the Option (as hereinafter defined).
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Plan, and intending to be legally bound hereby, AFC and LISB agree as
follows:
1. DEFINED TERMS. Capitalized terms which are used but not
defined herein shall have the meanings ascribed to such terms in the Plan.
2. GRANT OF OPTION. Subject to the terms and conditions
set forth herein, AFC hereby grants to LISB an irrevocable option (the "Option")
to purchase up to 5,246,587 shares of common stock, par value $0.01 per share
("AFC Common Stock"), of AFC (as adjusted as set forth herein, the "Option
Shares," which shall include the Option Shares before and after any transfer of
such Option Shares, but in no event shall the number of Option Shares for which
this Option is exercisable exceed 19.9% of the issued and outstanding shares of
AFC Common Stock as of the date hereof ), at a purchase price per Option Share
(as adjusted as set forth herein, the "Purchase Price") equal to $61.8125. Each
Option Share issued upon exercise of the Option shall be accompanied by the
related preferred share purchase right ("AFC Rights") issued pursuant to the
Rights Agreement between AFC and ChaseMellon Shareholder Services, L.L.C., dated
as of July 17, 1996, as amended, as in effect on the date hereof ("AFC Rights
Agreement").
3. EXERCISE OF OPTION.
(a) Provided that (i) LISB or Holder (as hereinafter
defined), as applicable, shall not be in material breach of the agreements or
covenants contained in this Agreement or the Plan, and (ii) no preliminary or
permanent injunction or other order against the delivery of Option Shares issued
by any court of competent jurisdiction in the United States shall be in effect,
the Holder may exercise the Option, in whole or in part, at any time and from
time to time, following the occurrence of a Purchase Event (as hereinafter
defined); provided, that the Option shall terminate and be of no further force
or effect upon the earliest to occur of (A) the Effective Time, (B) termination
of the Plan in accordance with the terms thereof prior to the occurrence of a
Purchase Event or a Preliminary Purchase Event other than a termination thereof
by LISB pursuant to Section 6.01(b)(ii) of the Plan (a termination of the Plan
by LISB pursuant to such Section of the Plan, being referred to herein as a
"Default Termination"), (C) 18 months after a Default Termination or (D) 18
months after termination of the Plan (other than a Default Termination)
following the occurrence of a Purchase Event or a Preliminary Purchase Event;
provided, however, that any purchase of shares upon exercise of the Option shall
be subject to compliance with applicable law; provided further, however, that if
the Option cannot be exercised on any day because of an injunction, order or
similar restraint issued by a court of competent jurisdiction, the period during
which the Option may be exercised shall be extended so that the Option shall
expire no earlier than the tenth business day after such injunction, order or
restraint shall have been dissolved or when such injunction, order or restraint
shall have become permanent and no longer subject to appeal, as the case may be.
The term "Holder" shall mean the holder or holders of the Option from time to
time, and which initially is LISB. The rights set forth in Sections 8 and 9 of
this Agreement shall terminate when the right to exercise the Option and
Substitute Option terminate (other than as a result of a complete exercise of
the Option or Substitute Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the
following events:
(i) Without LISB's prior written consent, AFC
shall have recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or AFC shall have
entered into an agreement with any person (other than LISB or any
subsidiary of LISB) to effect (A) a merger, consolidation or similar
transaction involving AFC or any of its significant subsidiaries, (B)
the disposition, by sale, lease, exchange or otherwise, of assets or
deposits of AFC or any of its significant subsidiaries representing
in either case all or substantially all of the consolidated assets or
deposits of AFC and its subsidiaries or (C) the issuance, sale or
other disposition by AFC of (including by way of merger,
consolidation, share exchange or any similar transaction) securities
representing 10% or more of the voting power of AFC or any of its
significant subsidiaries (each of (A), (B) or (C), an "Acquisition
Transaction"); or
(ii) Any person (other than LISB or any
subsidiary of LISB) shall have acquired beneficial ownership (as such
term is defined in Rule 13d-3, promulgated under the Securities and
Exchange Act of 1934 (the "Exchange Act") of, or the right to acquire
beneficial ownership of, or any "group" (as such term is defined in
Section 13(d)(3) of the
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Exchange Act), other than a group of which LISB or any subsidiary of
LISB is a member, shall have been formed which beneficially owns or
has the right to acquire beneficial ownership of, 10% or more of the
voting power of AFC or any of its significant subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means
any of the following events:
(i) Any person (other than LISB or any subsidiary
of LISB) shall have commenced (as such term is defined in Rule 14d-2,
promulgated under the Exchange Act) or shall have filed a
registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to, a tender offer or exchange
offer to purchase any shares of AFC Common Stock such that, upon
consummation of such offer, such person would own or control 10% or
more of the then outstanding shares of AFC Common Stock (such an
offer being referred to herein as a "Tender Offer" or an "Exchange
Offer," respectively); or
(ii) The stockholders shall not have approved the
Plan by the requisite vote at the stockholders meeting of AFC called
for that purpose ("Company Meeting"), the Company Meeting shall not
have been held or shall have been canceled prior to termination of
the Plan or AFC's Board of Directors shall have withdrawn or modified
in a manner adverse to LISB the recommendation of AFC's Board of
Directors with respect to the Plan, in each case after it shall have
been publicly announced that any person (other than LISB or any
subsidiary of LISB) shall have (A) made, or disclosed an intention to
make, a bona fide proposal to engage in an Acquisition Transaction or
(B) filed an application (or given a notice), whether in draft or
final form, under the Home Owners' Loan Act of 1933, as amended, the
Bank Holding Company Act, as amended, the Bank Merger Act, as amended
or the Change in Bank Control Act of 1978, as amended, for approval
to engage in an Acquisition Transaction; or
(iii) Any person (other than LISB or any
subsidiary of LISB) shall have made a bona fide proposal to AFC or
its stockholders by public announcement, or written communication
that is or becomes the subject of public disclosure, to engage in an
Acquisition Transaction; or
(iv) After a proposal is made by a third party to
AFC or its stockholders to engage in an Acquisition Transaction, or
such third party states its intention to AFC to make such a proposal
if the Plan terminates, AFC shall have breached any representation,
warranty, covenant or agreement contained in the Plan and such breach
would entitle LISB to terminate the Plan under Section 6.01(b)
thereof (without regard to the cure period provided for therein
unless such cure is promptly effected without jeopardizing
consummation of the Merger pursuant to the terms of the Plan).
As used in this Agreement, the term "person" shall have the
meaning specified in Sections 3(a)(9) and 13(d)(3)
of the Exchange Act.
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(d) AFC shall notify LISB promptly in writing of the
occurrence of any Preliminary Purchase Event or Purchase Event of which it has
knowledge, it being understood that the giving of such notice by AFC shall not
be a condition to the right of Holder to exercise the Option.
(e) In the event Holder wishes to exercise the Option, it
shall send to AFC a written notice (the "Stock Exercise Notice," the date of
which being herein referred to as the "Notice Date") specifying (i) the total
number of Option Shares it intends to purchase pursuant to such exercise and
(ii) a place and date not earlier than three business days nor later than 15
business days from the Notice Date for the closing (the "Closing") of such
purchase (such date as it may be extended pursuant to the next sentence, the
"Closing Date"); provided that the first notice of exercise shall be sent to AFC
within 180 days after the first Purchase Event of which LISB has been notified.
If prior notification to or approval of any Regulatory Authority is required in
connection with any such purchase, AFC shall cooperate with the Holder in the
filing of the required notice of application for approval and the obtaining of
such approval, and the Closing shall occur promptly following such regulatory
approvals and any mandatory waiting periods. Any exercise of the Option shall be
deemed to occur on the Notice Date relating thereto.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Holder shall (i) pay to AFC, in
immediately available funds by wire transfer to a bank account designated by
AFC, an amount equal to the Purchase Price multiplied by the number of Option
Shares to be purchased on such Closing Date and (ii) present and surrender this
Agreement to AFC at the address of AFC specified in Section 14(f) of this
Agreement.
(b) At each Closing, simultaneously with the delivery of
immediately available funds and surrender of this Agreement as provided in
Section 4(a) of this Agreement, (i) AFC shall deliver to Holder (A) a
certificate or certificates representing the Option Shares to be purchased at
such Closing, which Option Shares shall be free and clear of all Liens (as
defined in the Plan) and subject to no preemptive rights, and (B) if the Option
is exercised in part only, an executed new agreement with the same terms as this
Agreement evidencing the right to purchase the balance of the shares of AFC
Common Stock purchasable hereunder, and (ii) Holder shall deliver to AFC a
letter agreeing that Holder shall not offer to sell or otherwise dispose of such
Option Shares in violation of applicable federal and state law or of the
provisions of this Agreement.
(c) In addition to any other legend that is required by
applicable law, certificates for the Option Shares delivered at each Closing
shall be endorsed with a restrictive legend which shall read substantially as
follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF APRIL 2, 1998. A COPY OF
SUCH AGREEMENT WILL BE PROVIDED
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TO THE HOLDER HEREOF WITHOUT CHARGE UPON RECEIPT BY ASTORIA FINANCIAL
CORPORATION OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the portion of the above legend relating to the
Securities Act shall be removed by delivery of substitute certificate(s) without
such legend if Holder shall have delivered to AFC a copy of a letter from the
staff of the Securities Exchange Commission (the "SEC"), or an opinion of
counsel in form and substance reasonably satisfactory to AFC and its counsel, to
the effect that such legend is not required for purposes of the Securities Act.
(d) Upon the giving by Holder to AFC of the Stock Exercise
Notice, the tender of the applicable purchase price in immediately available
funds and the tender of this Agreement to AFC, Holder shall be deemed to be the
holder of record of the shares of AFC Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of AFC shall then be closed or
that certificates representing such shares of AFC Common Stock shall not then be
actually delivered to Holder. AFC shall pay all expenses, and any and all United
States federal, state and local taxes and other charges that may be payable in
connection with the preparation, issuance and delivery of stock certificates
under this Section 4 in the name of Holder or its assignee, transferee or
designee.
(e) AFC agrees (i) that it shall at all times maintain,
free from preemptive rights, sufficient authorized but unissued or treasury
shares of AFC Common Stock so that the Option may be exercised without
additional authorization of AFC Common Stock after giving effect to all other
options, warrants, convertible securities and other rights to purchase AFC
Common Stock, (ii) that it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observance or performance of any
of the covenants, stipulations or conditions to be observed or performed
hereunder by AFC, (iii) promptly to take all action as may from time to time be
required (including (A) complying with all premerger notification, reporting and
waiting period requirements and (B) in the event prior approval of or notice to
any Regulatory Authority is necessary before the Option may be exercised,
cooperating fully with Holder in preparing such applications or notices and
providing such information to such Regulatory Authority as it may require) in
order to permit Holder to exercise the Option and AFC duly and effectively to
issue shares of AFC Common Stock pursuant hereto and (iv) promptly to take all
action provided herein to protect the rights of Holder against dilution.
5. REPRESENTATIONS AND WARRANTIES OF AFC. AFC hereby
represents and warrants to LISB (and Holder, if different than LISB) as follows:
(a) CORPORATE AUTHORITY. AFC has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; the execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by the Board of
Directors of AFC, and no other corporate proceedings on the part of
AFC are necessary to authorize this Agreement or to consummate the
transactions so contemplated; this Agreement has been duly and
validly executed and delivered by AFC.
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(b) BENEFICIAL OWNERSHIP. To the best knowledge of AFC, as
of the date of this Agreement, no person or group has beneficial
ownership of more than 10% of the issued and outstanding shares of
AFC Common Stock.
(c) SHARES RESERVED FOR ISSUANCE; CAPITAL STOCK. AFC has
taken all necessary corporate action to authorize and reserve and
permit it to issue, and at all times from the date hereof through the
termination of the Option in accordance with Section 3(a) of this
Agreement, will have reserved for issuance upon the exercise of the
Option, that number of shares of AFC Common Stock equal to the
maximum number of Option Shares at any time and from time to time
purchasable upon exercise of the Option, and all such Shares, upon
issuance pursuant to the Option, will be duly authorized, validly
issued, fully paid and nonassessable, and will be delivered free and
clear of all claims, liens, encumbrances and security interests
(other than those created by this Agreement) and not subject to any
preemptive rights.
(d) NO VIOLATIONS. The execution, delivery and performance
of this Agreement does not and will not, and the consummation by AFC
of any of the transactions contemplated hereby will not, constitute
or result in (i) a breach or violation of, or a default under, its
certificate of incorporation or bylaws, or the comparable governing
instruments of any of its subsidiaries, or (ii) a breach or violation
of, or a default under, any agreement, lease, contract, note,
mortgage, indenture, arrangement or other obligation of it or any of
its subsidiaries (with or without the giving of notice, the lapse of
time or both) or under any law, rule, ordinance or regulation or
judgment, decree, order, award or governmental or non-governmental
permit or license to which it or any of its subsidiaries is subject,
that would, in any case, give any other person the ability to prevent
or enjoin AFC's performance under this Agreement in any material
respect.
6. REPRESENTATIONS AND WARRANTIES OF LISB. LISB hereby
represents and warrants to AFC that LISB has full corporate power and authority
to enter into this Agreement and, subject to obtaining the approvals referred to
in this Agreement, to consummate the transactions contemplated by this
Agreement; the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of LISB; and this Agreement has been duly executed
and delivered by LISB.
7. ADJUSTMENT UPON CHANGES IN AFC CAPITALIZATION, ETC.
(a) In the event of any change in AFC Common Stock by
reason of a stock dividend, stock split, split-up, recapitalization,
combination, exchange of shares, exercise of the Company Rights or similar
transaction, the type and number of shares or securities subject to the Option,
and the Purchase Price therefor, shall be adjusted appropriately, and proper
provision shall be made in the agreements governing any such transaction so that
Holder shall receive, upon exercise of the Option, the number and class of
shares or other securities or property that Holder would have received in
respect of AFC Common Stock if the Option had been exercised immediately prior
to such event, or the record date therefor, as applicable. If any additional
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shares of AFC Common Stock are issued after the date of this Agreement (other
than pursuant to an event described in the first sentence of this Section 7(a),
upon exercise of any option to purchase AFC Common Stock outstanding on the date
hereof or upon conversion into AFC Common Stock of any convertible security of
AFC outstanding on the date hereof), the number of shares of AFC Common Stock
subject to the Option shall be adjusted so that, after such issuance, it,
together with any shares of AFC Common Stock previously issued pursuant hereto,
equals 19.9% of the number of shares of AFC Common Stock then issued and
outstanding, without giving effect to any shares subject to or issued pursuant
to the Option. No provision of this Section 7 shall be deemed to affect or
change, or constitute authorization for any violation of, any of the covenants
or representations in the Plan.
(b) In the event that AFC shall enter into an agreement (i)
to consolidate with or merge into any person, other than LISB or one of its
subsidiaries, and AFC shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than LISB or one
of its subsidiaries, to merge into AFC and AFC shall be the continuing or
surviving corporation, but, in connection with such merger, the then outstanding
shares of AFC Common Stock shall be changed into or exchanged for stock or other
securities of AFC or any other person or cash or any other property, or the
outstanding shares of AFC Common Stock immediately prior to such merger shall
after such merger represent less than 50% of the outstanding shares and share
equivalents of the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets or deposits to any person, other than LISB or
one of its subsidiaries, then, and in each such case, the agreement governing
such transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Holder, of either (A) the Acquiring Corporation (as
hereinafter defined), (B) any person that controls the Acquiring Corporation or
(C) in the case of a merger described in clause (ii), AFC (such person being
referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the
Option, provided, that, if the terms of the Substitute Option cannot, for legal
reasons, be the same as the Option, such terms shall be as similar as possible
and in no event less advantageous to Holder. Substitute Option Issuer shall also
enter into an agreement with Holder in substantially the same form as this
Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of Substitute Common Stock (as hereinafter defined) as is equal
to the Assigned Value (as hereinafter defined) multiplied by the number of
Option Shares for which the Option was theretofore exercisable, divided by the
Average Price (as hereinafter defined). The exercise price of the Substitute
Option per share of Substitute Common Stock (the "Substitute Option Price")
shall be equal to the Purchase Price multiplied by a fraction in which the
numerator is the number of shares of AFC Common Stock for which the Option was
theretofore exercisable and the denominator is the number of shares of the
Substitute Common Stock for which the Substitute Option is exercisable.
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(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (A) the
continuing or surviving corporation of a consolidation or merger with
AFC (if other than AFC), (B) AFC in a merger in which AFC is the
continuing or surviving person, or (C) the transferee of all or
substantially all of AFC's assets (or a substantial part of the
assets of its subsidiaries taken as a whole).
(ii) "Substitute Common Stock" shall mean the
shares of capital stock (or similar equity interest) with the
greatest voting power in respect of the election of directors (or
persons similarly responsible for the direction of the business and
affairs) of the Substitute Option Issuer.
(iii) "Assigned Value" shall mean the highest of
(A) the price per share of AFC Common Stock at which a Tender Offer
or an Exchange Offer therefor has been made, (B) the price per share
of AFC Common Stock to be paid by any third party pursuant to an
agreement with AFC, (C) the highest closing price for shares of AFC
Common Stock within the sixty-day period immediately preceding the
consolidation, merger or sale in question and (D) in the event of a
sale of all or substantially all of AFC's assets or deposits, an
amount equal to (x) the sum of the price paid in such sale for such
assets (and/or deposits) and the current market value of the
remaining assets of AFC, as determined by a nationally recognized
investment banking firm selected by Holder, divided by (y) the number
of shares of AFC Common Stock outstanding at such time. In the event
that a Tender Offer or an Exchange Offer is made for AFC Common Stock
or an agreement is entered into for a merger or consolidation
involving consideration other than cash, the value of the securities
or other property issuable or deliverable in exchange for AFC Common
Stock shall be determined by a nationally recognized investment
banking firm selected by Holder.
(iv) "Average Price" shall mean the average
closing price of a share of Substitute Common Stock for the one year
immediately preceding the consolidation, merger or sale in question,
but in no event higher than the closing price of the shares of
Substitute Common Stock on the day preceding such consolidation,
merger or sale; provided, that, if AFC is the issuer of the
Substitute Option, the Average Price shall be computed with respect
to a share of common stock issued by AFC, the person merging into AFC
or by any company which controls such person, as Holder may elect.
(f) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more than 19.9% of
the aggregate of the shares of Substitute Common Stock outstanding prior to
exercise of the Substitute Option. In the event that the Substitute Option would
be exercisable for more than 19.9% of the aggregate of the shares of Substitute
Common Stock but for the limitation in the first sentence of this Section 7(f),
Substitute Option Issuer shall make a cash payment to Holder equal to the excess
of (i) the value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 7(f) over (ii) the value of the
Substitute Option after giving effect to the limitation in the first sentence of
this Section 7(f). This
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difference in value shall be determined by a nationally recognized investment
banking firm selected by Holder.
(g) AFC shall not enter into any transaction described in
Section 7(b) of this Agreement unless the Acquiring Corporation and any person
that controls the Acquiring Corporation assume in writing all the obligations of
AFC hereunder and take all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including, without
limitation, any action that may be necessary so that the holders of the other
shares of common stock issued by Substitute Option Issuer are not entitled to
exercise any rights by reason of the issuance or exercise of the Substitute
Option and the shares of Substitute Common Stock are otherwise in no way
distinguishable from or have lesser economic value (other than any diminution in
value resulting from the fact that the shares of Substitute Common Stock are
restricted securities, as defined in Rule 144, promulgated under the Securities
Act ("Rule 144"), or any successor provision) than other shares of common stock
issued by Substitute Option Issuer).
(h) Notwithstanding anything herein to the contrary, in the
event that AFC completes a reorganization involving the formation of a holding
company for AFC, the agreement governing such transaction shall make proper
provisions so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option of such holding company.
8. PURCHASE AT THE OPTION OF HOLDER.
(a) Subject to the last sentence of Section 3(a) of this
Agreement, at the request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d) hereof) and ending
12 months immediately thereafter, AFC shall repurchase from Holder (i) the
Option and (ii) all shares of AFC Common Stock purchased by Holder pursuant
hereto with respect to which Holder then has beneficial ownership. The date on
which Holder exercises its rights under this Section 8 is referred to as the
"Section 8 Request Date." Such repurchase shall be at an aggregate price (the
"Section 8 Repurchase Consideration") equal to the sum of:
(i) The aggregate Purchase Price paid by Holder
for any shares of AFC Common Stock acquired pursuant to the Option
with respect to which Holder then has beneficial ownership;
(ii) The excess, if any, of (A) the Applicable
Price (as defined below) for each share of AFC Common Stock over (B)
the Purchase Price (subject to adjustment pursuant to Section 7 of
this Agreement), multiplied by the number of shares of AFC Common
Stock with respect to which the Option has not been exercised; and
(iii) The excess, if any, of the Applicable Price
over the Purchase Price (subject to adjustment pursuant to Section 7
of this Agreement) paid (or, in the case of Option Shares with
respect to which the Option has been exercised but the Closing Date
has not occurred, payable) by Holder for each share of AFC Common
Stock with respect
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to which the Option has been exercised and with respect to which
Holder then has beneficial ownership, multiplied by the number of
such shares.
(b) If Holder exercises its rights under this Section 8,
AFC shall, within 10 business days after the Section 8 Request Date, pay the
Section 8 Repurchase Consideration to Holder in immediately available funds, and
contemporaneously with such payment, Holder shall surrender to AFC the Option
and the certificates evidencing the Option Shares purchased thereunder with
respect to which Holder then has beneficial ownership, and Holder shall warrant
that it has sole record and beneficial ownership of such shares and that the
same are then free and clear of all Liens. Notwithstanding the foregoing, to the
extent that prior notification to or approval of any Regulatory Authority is
required in connection with the payment of all or any portion of the Section 8
Repurchase Consideration, Holder shall have the ongoing option to revoke its
request for repurchase pursuant to this Section 8, in whole or in part, or to
require that AFC deliver from time to time that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from paying and
promptly file the required notice or application for approval and expeditiously
process the same (and each party shall cooperate with the other in the filing of
any such notice or application and the obtaining of any such approval). If any
Regulatory Authority disapproves of any part of AFC's proposed repurchase
pursuant to this Section 8, AFC shall promptly give notice of such fact to
Holder and Holder shall have the right (i) to revoke the repurchase request or
(ii) to the extent permitted by such Regulatory Authority, determine whether the
repurchase should apply to the Option and/or Option Shares and to what extent to
each, and Holder shall thereupon have the right to exercise the Option as to the
number of Option Shares for which the Option was exercisable at the Section 8
Request Date less the number of shares covered by the Option in respect of which
payment has been made pursuant to Section 8(a)(ii) of this Agreement. Holder
shall notify AFC of its determination under the preceding sentence within five
business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, in the event that AFC delivers
to the Holder written notice accompanied by a certification of AFC's independent
auditor each stating that a requested repurchase of AFC Common Stock would
result in the recapture of AFC's bad debt reserves under the Internal Revenue
Code of 1986, as amended, Holder's repurchase request shall be deemed to be
automatically revoked.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 8 shall terminate on the date of termination
of this Option pursuant to Section 3(a) of this Agreement.
(c) For purposes of this Agreement, the "Applicable Price"
means the highest of (i) the highest price per share of AFC Common Stock paid
for any such share by the person or groups described in Section 8(d)(i) hereof,
(ii) the price per share of AFC Common Stock received by holders of AFC Common
Stock in connection with any merger, sale or other business combination
transaction described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement, or (iii) the highest closing sales price per share of AFC Common
Stock quoted on the Nasdaq (or if AFC Common Stock is not quoted on the Nasdaq,
the highest bid price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a recognized
source chosen by Holder) during the 40 business days preceding the Section 8
Request
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Date; provided, however, that in the event of a sale of less than all of AFC's
assets, the Applicable Price shall be the sum of the price paid in such sale for
such assets and the current market value of the remaining assets of AFC as
determined by a nationally recognized investment banking firm selected by
Holder, divided by the number of shares of the AFC Common Stock outstanding at
the time of such sale. If the consideration to be offered, paid or received
pursuant to either of the foregoing clauses (i) or (ii) shall be other than in
cash, the value of such consideration shall be determined in good faith by an
independent nationally recognized investment banking firm selected by Holder and
reasonably acceptable to AFC, which determination shall be conclusive for all
purposes of this Agreement.
(d) As used herein, "Repurchase Event" shall occur if (i)
any person (other than LISB or any subsidiary of LISB) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3, promulgated
under the Exchange Act), or the right to acquire beneficial ownership of, or any
"group" (as such term is defined under the Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial ownership of, 50%
or more of the then outstanding shares of AFC Common Stock, or (ii) any of the
transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of this
Agreement shall be consummated.
9. REPURCHASE OF SUBSTITUTE OPTION.
(a) Subject to the last sentence of Section 3(a) of this
Agreement, at the request of Holder at any time commencing upon the first
occurrence of a Repurchase Event (as defined in Section 8(d) hereof) and ending
12 months immediately thereafter, Substitute Option Issuer (or any successor
entity thereof) shall repurchase from Holder (i) the Substitute Option and (ii)
all shares of Substitute Common Stock purchased by Holder pursuant hereto with
respect to which Holder then has beneficial ownership. The date on which Holder
exercises its rights under this Section 9 is referred to as the "Section 9
Request Date." Such repurchase shall be at an aggregate price (the "Section 9
Repurchase Consideration") equal to the sum of:
(i) The aggregate Purchase Price paid by Holder
for any shares of Substitute Common Stock acquired pursuant to the
Substitute Option with respect to which
Holder then has beneficial ownership;
(ii) The excess, if any, of (A) the Highest
Closing Price (as defined below) for each share of Substitute Common
Stock over (B) the Purchase Price (subject to adjustment pursuant to
Section 7 of this Agreement), multiplied by the number of shares of
Substitute Common Stock with respect to which the Substitute Option
has not been exercised; and
(iii) The excess, if any, of the Highest Closing
Price over the Purchase Price (subject to adjustment pursuant to
Section 7 of this Agreement) paid (or, in the case of Substitute
Option Shares with respect to which the Substitute Option has been
exercised but the Closing Date has not occurred, payable) by Holder
for each share of Substitute Common Stock with respect to which the
Substitute Option has been exercised and with
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respect to which Holder then has beneficial ownership, multiplied by
the number of such shares.
(b) If Holder exercises its rights under this Section 9,
Substitute Option Issuer shall, within 10 business days after the Section 9
Request Date, pay the Section 9 Repurchase Consideration to Holder in
immediately available funds, and contemporaneously with such payment, Holder
shall surrender to Substitute Option Issuer the Substitute Option and the
certificates evidencing the shares of Substitute Common Stock purchased
thereunder with respect to which Holder then has beneficial ownership, and
Holder shall warrant that it has sole record and beneficial ownership of such
shares and that the same are then free and clear of all Liens. Notwithstanding
the foregoing, to the extent that prior notification to or approval of any
Regulatory Authority is required in connection with the payment of all or any
portion of the Section 9 Repurchase Consideration, Holder shall have the ongoing
option to revoke its request for repurchase pursuant to this Section 9, in whole
or in part, or to require that Substitute Option Issuer deliver from time to
time that portion of the Section 9 Repurchase Consideration that it is not then
so prohibited from paying and promptly file the required notice or application
for approval and expeditiously process the same (and each party shall cooperate
with the other in the filing of any such notice or application and the obtaining
of any such approval). If any Regulatory Authority disapproves of any part of
Substitute Option Issuer's proposed repurchase pursuant to this Section 9,
Substitute Option Issuer shall promptly give notice of such fact to Holder and
Holder shall have the right (i) to revoke the repurchase request or (ii) to the
extent permitted by such Regulatory Authority, determine whether the repurchase
should apply to the Substitute Option and/or Substitute Option Shares and to
what extent to each, and Holder shall thereupon have the right to exercise the
Substitute Option as to the number of Substitute Option Shares for which the
Substitute Option was exercisable at the Section 9 Request Date less the number
of shares covered by the Substitute Option in respect of which payment has been
made pursuant to Section 9(a)(ii) of this Agreement. Holder shall notify
Substitute Option Issuer of its determination under the preceding sentence
within five business days of receipt of notice of disapproval of the repurchase.
Notwithstanding anything herein to the contrary, in the event that Substitute
Option Issuer delivers to the Holder written notice accompanied by a
certification of Substitute Option Issuer's independent auditor each stating
that a requested repurchase of AFC Common Stock would result in the recapture of
Substitute Option Issuer's bad debt reserves under the Internal Revenue Code of
1986, as amended, Holder's repurchase request shall be deemed to be
automatically revoked.
Notwithstanding anything herein to the contrary, all of
Holder's rights under this Section 9 shall terminate on the date of termination
of this Substitute Option pursuant to Section 3(a) of this Agreement.
(c) For purposes of this Agreement, the "Highest Closing
Price" means the highest of closing sales price for shares of Substitute Common
Stock quoted on the Nasdaq (or if the Substitute Common Stock is not quoted on
the Nasdaq, on the principal trading market on which such shares are traded as
reported by a recognized source) during the six-month period preceding the
Section 9 Request Date.
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10. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. AFC shall, subject to the
conditions of Section 10(c) of this Agreement, if requested by any Holder,
including LISB and any permitted transferee ("Selling Shareholder"), as
expeditiously as possible, prepare and file a registration statement under the
Securities Act, if such registration is necessary in order to permit the sale or
other disposition of any or all shares of AFC Common Stock or other securities
that have been acquired by or are issuable to the Selling Shareholder upon
exercise of the Option in accordance with the intended method of sale or other
disposition stated by the Selling Shareholder in such request, including without
limitation a "shelf" registration statement under Rule 415, promulgated under
the Securities Act, or any successor provision, and AFC shall use its best
efforts to qualify such shares or other securities for sale under any applicable
state securities laws.
(b) ADDITIONAL REGISTRATION RIGHTS. If AFC at any time
after the exercise of the Option proposes to register any shares of AFC Common
Stock under the Securities Act, in connection with an underwritten public
offering of such AFC Common Stock, AFC will promptly give written notice to the
Selling Shareholders of its intention to do so and, upon the written request of
any Selling Shareholder given within 30 days after receipt of any such notice
(which request shall specify the number of shares of AFC Common Stock intended
to be included in such underwritten public offering by the Selling Shareholder),
AFC will cause all such shares for which a Selling Shareholder requests
participation in such registration, to be so registered and included in such
underwritten public offering; provided, however, that AFC may elect to not cause
any such shares to be so registered (i) if the underwriters in good faith object
for valid business reasons, or (ii) in the case of a registration solely to
implement an employee benefit plan or a registration filed on Form S-4 of the
Securities Act or any equivalent or successor Form. If some, but not all the
shares of AFC Common Stock, with respect to which AFC shall have received
requests for registration pursuant to this Section 10(b), shall be excluded from
such registration, AFC shall make appropriate allocation of shares to be
registered among the Selling Shareholders desiring to register their shares PRO
RATA in the proportion that the number of shares requested to be registered by
each such Selling Shareholder bears to the total number of shares requested to
be registered by all such Selling Shareholders then desiring to have AFC Common
Stock registered for sale.
(c) CONDITIONS TO REQUIRED REGISTRATION. AFC shall use all
reasonable efforts to cause each registration statement referred to in Section
10(a) of this Agreement to become effective and to obtain all consents or
waivers of other parties which are required therefor and to keep such
registration statement effective, provided, however, that AFC may delay any
registration of Option Shares required pursuant to Section 10(a) of this
Agreement for a period not exceeding 90 days provided AFC shall in good faith
determine that any such registration would adversely affect an offering or
contemplated offering of other securities by AFC, and AFC shall not be required
to register Option Shares under the Securities Act pursuant to Section 10(a)
hereof:
(i) Prior to the earliest of (A) termination of
the Plan pursuant to Article VI thereof, (B) failure to obtain the
requisite stockholder approval pursuant to Section 6.01 of Article VI
of the Plan, and (C) a Purchase Event or a Preliminary Purchase
Event;
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(ii) On more than one occasion during any
calendar year;
(iii) Within 90 days after the effective date of
a registration referred to in Section 9(b) of this Agreement pursuant
to which the Selling Shareholder or Selling Shareholders concerned
were afforded the opportunity to register such shares under the
Securities Act and such shares were registered as requested; and
(iv) Unless a request therefor is made to AFC by
Selling Shareholders that hold at least 25% or more of the aggregate
number of Option Shares (including shares of AFC Common Stock
issuable upon exercise of the Option) then outstanding.
In addition to the foregoing, AFC shall not be required to
maintain the effectiveness of any registration statement after the expiration of
nine months from the effective date of such registration statement. AFC shall
use all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares; provided, however, that AFC
shall not be required to consent to general jurisdiction or qualify to do
business in any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.
(d) EXPENSES. Except where applicable state law prohibits
such payments, AFC will pay all expenses (including without limitation
registration fees, qualification fees, blue sky fees and expenses (including the
fees and expenses of counsel), legal expenses, including the reasonable fees and
expenses of one counsel to the holders whose Option Shares are being registered,
printing expenses and the costs of special audits or "cold comfort" letters,
expenses of underwriters, excluding discounts and commissions but including
liability insurance if AFC so desires or the underwriters so require, and the
reasonable fees and expenses of any necessary special experts) in connection
with each registration pursuant to Section 10(a) or 10(b) of this Agreement
(including the related offerings and sales by holders of Option Shares) and all
other qualifications, notifications or exemptions pursuant to Section 10(a) or
10(b) of this Agreement.
(e) INDEMNIFICATION. In connection with any registration
under Section 10(a) or 10(b) of this Agreement, AFC hereby indemnifies the
Selling Shareholders, and each underwriter thereof, including each person, if
any, who controls such holder or underwriter within the meaning of Section 15 of
the Securities Act, against all expenses, losses, claims, damages and
liabilities caused by any untrue, or alleged untrue, statement of a material
fact contained in any registration statement or prospectus or notification or
offering circular (including any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission, or alleged omission, to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such expenses, losses,
claims, damages or liabilities of such indemnified party are caused by any
untrue statement or alleged untrue statement that was included by AFC in any
such registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon and in
conformity with, information furnished in writing to AFC by such indemnified
party expressly for use therein, and AFC and each officer, director and
controlling person of AFC shall be
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indemnified by such Selling Shareholders, or by such underwriter, as the case
may be, for all such expenses, losses, claims, damages and liabilities caused by
any untrue, or alleged untrue, statement, that was included by AFC in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon, and in
conformity with, information furnished in writing to AFC by such Selling
Shareholder or such underwriter, as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this
Section 10(e) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this Section 10(e), such indemnified party
shall notify the indemnifying party in writing of the commencement of such
action, but the failure so to notify the indemnifying party shall not relieve it
of any liability which it may otherwise have to any indemnified party under this
Section 10(e). In case notice of commencement of any such action shall be given
to the indemnifying party as above provided, the indemnifying party shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and satisfactory to such
indemnified party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel (other than reasonable costs of investigation)
shall be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be entitled
to assume the defense of such action notwithstanding its obligation to bear fees
and expenses of such counsel. No indemnifying party shall be liable for any
settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this Section 10(e)
is unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or liabilities
in such proportion as is appropriate to reflect the relative benefits received
by AFC, the Selling Shareholders and the underwriters from the offering of the
securities and also the relative fault of AFC, the Selling Shareholders and the
underwriters in connection with the statements or omissions which resulted in
such expenses, losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The amount paid or payable by a party as a
result of the expenses, losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim; provided, however, that in no case shall any Selling Shareholder be
responsible, in the aggregate, for any amount in excess of the net offering
proceeds attributable to its Option Shares included in the offering. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from
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any person who was not guilty of such fraudulent misrepresentation. Any
obligation by any holder to indemnify shall be several and not joint with other
holders.
In connection with any registration pursuant to Section
10(a) or 10(b) of this Agreement, AFC and each Selling Shareholder (other than
LISB) shall enter into an agreement containing the indemnification provisions of
Section 10(e) of this Agreement.
(f) MISCELLANEOUS REPORTING. AFC shall comply with all
reporting requirements and will do all such other things as may be necessary to
permit the expeditious sale at any time of any Option Shares by the Selling
Shareholders thereof in accordance with and to the extent permitted by any rule
or regulation promulgated by the SEC from time to time, including, without
limitation, Rule 144. AFC shall at its expense provide the Selling Shareholders
with any information necessary in connection with the completion and filing of
any reports or forms required to be filed by them under the Securities Act or
the Exchange Act, or required pursuant to any state securities laws or the rules
of any stock exchange.
(g) ISSUE TAXES. AFC will pay all stamp taxes in connection
with the issuance and the sale of the Option Shares and in connection with the
exercise of the Option, and will save the Selling Shareholders harmless, without
limitation as to time, against any and all liabilities, with respect to all such
taxes.
11. QUOTATION; LISTING. If AFC Common Stock or any other
securities to be acquired in connection with the exercise of the Option are then
authorized for quotation or trading or listing on the Nasdaq or any securities
exchange, AFC, upon the request of Holder, will promptly file an application, if
required, to authorize for quotation or trading or listing the shares of AFC
Common Stock or other securities to be acquired upon exercise of the Option on
the Nasdaq or such other securities exchange and will use its best efforts to
obtain approval, if required, of such quotation or listing as soon as
practicable.
12. DIVISION OF OPTION. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option of Holder, upon
presentation and surrender of this Agreement at the principal office of AFC for
other Agreements providing for Options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of AFC
Common Stock purchasable hereunder. The terms "Agreement" and "Option" as used
herein include any other Agreements and related Options for which this Agreement
(and the Option granted hereby) may be exchanged. Upon receipt by AFC of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Agreement, if mutilated, AFC will execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and delivered shall
constitute an additional contractual obligation on the part of AFC, whether or
not the Agreement so lost, stolen, destroyed or mutilated shall at any time be
enforceable by anyone.
13. PROFIT LIMITATION. (a) Notwithstanding any other
provision of this agreement, in no event shall LISB's Total Profit (as
hereinafter defined) exceed $60 million and,
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if it otherwise would exceed such amount, LISB, at its sole election, shall
either (a) deliver to AFC for cancellation Shares previously purchased by LISB,
(b) pay cash or other consideration to AFC or (c) undertake any combination
thereof, so that LISB's total Profit shall not exceed $60 million after taking
into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement,
this Option may not be exercised for a number of Shares as would, as of the
Notice Date, result in a Notional Total Profit (as defined below) of more than
$60 million and, if exercise of the Option otherwise would exceed such amount,
LISB, at its discretion, may increase the Purchase Price for that number of
Shares set forth in the Stock Exercise Notice so that the Notional Total Profit
shall not exceed $60 million; provided, that nothing in this sentence shall
restrict any exercise of the Option permitted hereby on any subsequent date at
the Purchase Price set forth in Section 2 hereof.
(c) As used herein, the term "Total Profit" shall mean the
aggregate amount (before taxes) of the following: (i) the amount of cash
received by LISB pursuant to Section 6.03 of the Merger Agreement and Section
8(a)(ii) hereof, (ii) (x) the amount received by LISB pursuant to the repurchase
of Option Shares pursuant to Section 8 or Section 9 hereof, less (y) LISB's
purchase price for such Option Shares, and (iii) (z) the net cash amounts
received by LISB pursuant to the sale of Option Shares (or any other securities
into which such Option Shares are converted or exchanged) to any unaffiliated
party, less (y) LISB's purchase price for such Option Shares.
(d) As used herein, the term "Notional Total Profit" with
respect to any number of Option Shares as to which LISB may propose to exercise
this Option shall be the Total Profit determined as of the date of the Stock
Exercise Notice assuming that this Option were exercised on such date for such
number of Shares and assuming that such Option Shares, together with all other
Option Shares held by LISB and its affiliates as of such date, were sold for
cash at the closing market price for the Common Stock as of the close of
business on the preceding trading day (less customary brokerage commissions).
14. MISCELLANEOUS.
(a) EXPENSES. Except to the extent expressly provided for
herein, each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) WAIVER AND AMENDMENT. Any provision of this Agreement
may be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) ENTIRE AGREEMENT: NO THIRD-PARTY BENEFICIARIES;
SEVERABILITY. This Agreement, together with the Plan and the other documents and
instruments referred to herein and therein, between LISB and AFC (i) constitutes
the entire agreement and supersedes all prior
-17-
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof and (ii) is not intended to confer upon any
person other than the parties hereto (other than the indemnified parties under
Section 9(e) of this Agreement and any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 11(h) of this
Agreement) any rights or remedies hereunder. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
Regulatory Authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
If for any reason such court or Regulatory Authority determines that the Option
does not permit Holder to acquire, or does not require AFC to repurchase, the
full number of shares of AFC Common Stock as provided in Section 3 of this
Agreement (as may be adjusted herein), it is the express intention of AFC to
allow Holder to acquire or to require AFC to repurchase such lesser number of
shares as may be permissible without any amendment or modification hereof.
(d) GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York without regard to
any applicable conflicts of law rules.
(e) DESCRIPTIVE HEADINGS. The descriptive headings
contained herein are for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
(f) NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (with confirmation) or mailed by registered or certified mail (return
receipt requested) to the parties at the addresses set forth in the Plan (or at
such other address for a party as shall be specified by like notice).
(g) COUNTERPARTS. This Agreement and any amendments hereto
may be executed in two counterparts, each of which shall be considered one and
the same agreement and shall become effective when both counterparts have been
signed, it being understood that both parties need not sign the same
counterpart.
(h) ASSIGNMENT. Neither this Agreement nor any of the
rights, interests or obligations hereunder or under the Option shall be assigned
by any of the parties hereto (whether by operation of law or otherwise) without
the prior written consent of the other party, except that Holder may assign this
Agreement to a wholly-owned subsidiary of Holder and Holder may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event.
Subject to the preceding sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties and their respective
successors and assigns.
(i) FURTHER ASSURANCES. In the event of any exercise of the
Option by the Holder, AFC, and the Holder shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such exercise.
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(j) SPECIFIC PERFORMANCE. The parties hereto agree that
this Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection with
the obtaining of any such equitable relief and that this provision is without
prejudice to any other rights that the parties hereto may have for any failure
to perform this Agreement.
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IN WITNESS WHEREOF, AFC and LISB have caused this Stock
Option Agreement to be signed by their respective officers thereunto duly
authorized, all as of the day and year first written above.
ASTORIA FINANCIAL CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx, Xx.
-----------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Chairman, President and Chief
Executive Officer
LONG ISLAND BANCORP, INC.
By:/s/ Xxxx X. Xxxxxxx, Xx.
-----------------------------------------
Xxxx X. Xxxxxxx, Xx.
Chairman and Chief Executive Officer
