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EXHIBIT 10.4
PLEDGE AGREEMENT
This PLEDGE AGREEMENT ("Pledge Agreement") is made as of the 1st day of
January, 2000, by and between the ASTORIA FEDERAL SAVINGS AND LOAN ASSOCIATION
EMPLOYEE STOCK OWNERSHIP PLAN TRUST, acting by and through its Trustee, STATE
STREET BANK AND TRUST COMPANY, a banking corporation organized under the laws of
the Massachusetts ("Pledgor"), and ASTORIA FINANCIAL CORPORATION ("Pledgee"), a
corporation organized and existing under the laws of the State of Delaware.
W I T N E S S E T H :
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WHEREAS, this Pledge Agreement is being executed and delivered to the
Pledgee pursuant to the terms of An Amended and Restated Loan Agreement of even
date herewith ("Loan Agreement"), by and between the Pledgor and the Pledgee;
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and in the Loan Agreement, the parties hereto do hereby covenant and agree as
follows:
Section 1. Definitions. The following definitions shall apply for purposes
of this Pledge Agreement, except to the extent that a different meaning is
plainly indicated by the context; all capitalized terms used but not defined
herein shall have the respective meanings assigned to them in the Loan
Agreement:
(a) "Collateral" shall mean the Pledged Shares and the Pledged Assets
and, subject to section 5 hereof, and to the extent permitted by applicable
law, all rights with respect thereto, and all proceeds of such Pledged
Shares, Pledged Assets and rights.
(b) "Event of Default" shall mean an event so defined in the Loan
Agreement.
(c) "Liabilities" shall mean all the obligations of the Pledgor to the
Pledgee, howsoever created, arising or evidenced, whether direct or
indirect, absolute or contingent, now or hereafter existing, or due or to
become due, under the Loan Agreement and the Promissory Note.
(d) "Pledged Assets" means all assets of the Borrower pledged, as of
January 1, 2000, as collateral security for the Borrower's performance of
its obligations under that certain Loan Agreement between the Borrower and
the Lender dated April 14, 1994, excluding any Pledged Shares.
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(e) "Pledged Shares" shall mean all the shares of common stock, par
value $ .01 per share, of Astoria Financial Corporation purchased by the
Pledgor with the proceeds of the loan made by the Pledgee to the Pledgor
pursuant to the Loan Agreement dated April 14, 1994, but excluding any such
shares previously released pursuant to section 4.
Section 2. Pledge. To secure the payment of and performance of all the
Liabilities, the Pledgor hereby pledges to the Pledgee, and grants to the
Pledgee a security interest in and lien upon the Collateral.
Section 3. Representations and Warranties of the Pledgor. The Pledgor
represents, warrants, and covenants to the Pledgee as follows:
(a) to the actual knowledge of the Trustee, the execution, delivery and
performance of this Pledge Agreement and the pledging of the Collateral
hereunder do not and will not conflict with, result in a violation of, or
constitute a default under any agreement binding upon the Pledgor;
(b) the Pledged Shares are and will continue to be owned by the Pledgor
free and clear of any liens or rights of any other person except the lien
hereunder and under the Loan Agreement in favor of the Pledgee, and the security
interest of the Pledgee in the Pledged Shares and the proceeds thereof is and
will continue to be prior to and senior to the rights of all others;
(c) to the actual knowledge of the Trustee, this Pledge Agreement is the
legal, valid and binding obligation of the Pledgor and is enforceable against
the Pledgor in accordance with its terms;
(d) the Pledgor shall, from time to time, upon request of the Pledgee,
promptly deliver to the Pledgee such financing statements, stock powers,
proxies, and similar documents, satisfactory in form and substance to the
Pledgee, with respect to the Collateral as the Pledgee may reasonably request;
and
(e) subject to the first sentence of section 4(b), the Pledgor shall not,
so long as any Liabilities are outstanding, sell, assign, exchange, pledge or
otherwise transfer or encumber any of its rights in and to any of the
Collateral.
Section 4. Eligible Collateral.
(a) As used herein the term "Eligible Collateral" shall mean that amount of
Collateral which has an aggregate fair market value equal to the amount by which
the Pledgor is in default (without regard to any amounts owing solely as the
result of an acceleration of the Loan Agreement) or such lesser amount of
Collateral as may be required pursuant to section 12 of this Pledge Agreement.
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(b) The Collateral shall be released from this Pledge Agreement in a manner
conforming to the requirements of Treasury Regulation ss. 54.4975-7(b)(8)(i), as
the same may be from time to time amended or supplemented. In the event of a
termination of the ESOP or the occurrence of a Change in Control after December
31, 2009, all Pledged Shares shall be forthwith released from this Pledge
Agreement and shall not be applied to satisfy any Liabilities. In the event of a
Change in Control prior to January 1, 2010, all Pledged Shares in excess of the
number determined under the following table shall be forthwith released from
this Pledge Agreement and shall not be applied to satisfy any Liabilities:
YEAR OF PLEDGED YEAR OF PLEDGED
CHANGE SHARES CHANGE SHARES
IN IN
CONTROL CONTROL
------- ---------- -------- -------
2001 1,048,266 2006 0
2002 827,371 2007 0
2003 606,476 2008 0
2004 385,581 2009 0
2005 164,686
To the extent that the Collateral consists of assets other than or in addition
to Pledged Shares, the provisions of such Regulations shall be applied
separately to each class of security or each class or other type of asset
included in the Collateral. Subject to such Regulations, the Pledgee may from
time to time, after any Default or Event of Default, and without prior notice to
the Pledgor, transfer all or any part of the Eligible Collateral into the name
of the Pledgee or its nominee, with or without disclosing that such Eligible
Collateral is subject to any rights of the Pledgor and may from time to time,
whether before or after any of the Liabilities shall become due and payable,
without notice to the Pledgor, take all or any of the following actions: (i)
notify the parties obligated on any of the Collateral to make payment to the
Pledgee of any amounts due or to become due thereunder, (ii) release or exchange
all or any part of the Collateral, or compromise or extend or renew for any
period (whether or not longer than the original period) any obligations of any
nature of any party with respect thereto, and (iii) take control of any proceeds
of the Collateral.
Section 5. Delivery; Further Assurances.
(a) The Pledgor shall deliver to the Pledgee upon execution of this Pledge
Agreement an assignment by the Pledgor of all the Pledgor's rights to and
interest in the Collateral.
(b) So long as no Default or Event of Default shall have occurred and be
continuing, (i) the Pledgor shall be entitled to exercise any and all voting and
other rights pertaining to the Collateral or any part thereof for any purpose
not inconsistent with the terms of this Pledge Agreement, and (ii) the Pledgor
shall be entitled to receive any and all cash dividends or other distributions
paid in respect of the Collateral.
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(c) For so long as this Pledge Agreement shall be in effect, the Pledgor
shall take such other actions and execute and deliver such other documents as
the Pledgee may reasonably request in order to secure for the Pledgee's benefit
a perfected first priority lien and security interest in any or all of the
Collateral under the New York Uniform Commercial Code; provided, however, that
the Pledgee shall not be required to take any action or execute or deliver any
document pursuant to this section 5(c) to the extent that it determines, in
reliance on an opinion of legal counsel, that the taking of such action or the
execution or delivery of such document would result in a prohibited transaction
under section 4975 of the Code or section 406 of ERISA, impair the status of the
ESOP as a tax-qualified plan under section 401(a) of the Code or an employee
stock ownership plan under section 4975 of the Code, impair the tax-exempt
status of the Borrower under section 501(a) of the Code or violate any other
requirement of ERISA applicable to the ESOP.
Section 6. Events of Default.
(a) If a Default or an Event of Default shall be existing, in addition to
the rights it may have under the Loan Agreement, the Promissory Note, and this
Pledge Agreement, or by virtue of any other instrument, (i) the Pledgee may
exercise, with respect to Eligible Collateral, from time to time any rights and
remedies available to it under the Uniform Commercial Code as in effect from
time to time in the State of New York or otherwise available to it and (ii) the
Pledgee shall have the right, for and in the name, place and stead of the
Pledgor, to execute endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or any of the Eligible
Collateral. Written notification of intended disposition of any of the Eligible
Collateral shall be given by the Pledgee to the Pledgor at least three (3)
Business Days before such disposition. Subject to section 13 below, any proceeds
of any disposition of Eligible Collateral may be applied by the Pledgee to the
payment of expenses in connection with the Eligible Collateral, including,
without limitation, reasonable attorneys' fees and legal expenses, and any
balance of such proceeds may be applied by the Pledgee toward the payment of
such of the Liabilities as are in Default, and in such order of application, as
the Pledgee may from time to time elect. No action of the Pledgee permitted
hereunder shall impair or affect its rights in and to the Eligible Collateral.
All rights and remedies of the Pledgee expressed hereunder are in addition to
all other rights and remedies possessed by it, including, without limitation,
those contained in the documents referred to in the definition of Liabilities in
section 1 hereof.
(b) In any sale of any of the Eligible Collateral after a Default or an
Event of Default shall have occurred, the Pledgee is hereby authorized to comply
with any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including, without limitation, compliance with such procedures as may
restrict the number of prospective bidders and purchasers or further restrict
such prospective bidders or purchasers to persons who will represent and agree
that they are purchasing for their own account for investment and not with a
view to the distribution or resale of such Eligible Collateral), or in order to
obtain such required approval of the sale or of the purchase by any governmental
regulatory authority or official, and the Pledgor further agrees that such
compliance shall not result in such sale's being considered or deemed not to
have been made in a commercially reasonable manner, nor shall the Pledgee be
liable or accountable to the Pledgor for any discount allowed by reason of the
fact that such Eligible Collateral is sold in compliance with any such
limitation or
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restriction.
Section 7. Payment in Full. Upon the payment in full of all
outstanding Liabili ties, this Pledge Agreement shall terminate and the Pledgee
shall forthwith assign, transfer and deliver to the Pledgor, against receipt and
without recourse to the Pledgee, all Collateral then held by the Pledgee
pursuant to this Pledge Agreement.
Section 8. No Waiver. No failure or delay on the part of the
Pledgee in exer cising any right or remedy hereunder or under any other document
which confers or grants any rights in the Pledgee in respect of the Liabilities
shall operate as a waiver thereof nor shall any single or partial exercise of
any such right or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy of the Pledgee.
Section 9. Binding Effect; No Assignment or Delegation. This
Pledge Agreement shall be binding upon and inure to the benefit of the Pledgor,
the Pledgee and their respective successors and assigns, except that the Pledgor
may not assign or transfer its rights hereunder without the prior written
consent of the Pledgee (which consent shall not unreasonably be withheld). Each
duty or obligation of the Pledgor to the Pledgee pursuant to the provisions of
this Pledge Agreement shall be performed in favor of any person or entity
designated by the Pledgee, and any duty or obligation of the Pledgee to the
Pledgor may be performed by any other person or entity designated by the
Pledgee.
Section 10. Governing Law. This Pledge Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of New York applicable to contracts to be performed wholly within the State of
New York entered into between parties all of whom are citizens and residents of
the State of New York.
Section 11. Notices. All notices, requests, instructions or
documents hereunder shall be in writing and delivered by hand or commercial
messenger service or sent by United States mail, registered or certified, return
receipt requested, with proper postage prepaid, or by telex or facsimile,
addressed as follows:
(a) If to the Pledgee:
Astoria Financial Corporation
Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
(b) If to the Pledgor:
Astoria Federal Savings and Loan Association
Employee Stock Ownership Plan Trust
State Street Bank and Trust Company
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Investment Services Xxxxxx
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
with copies to:
Astoria Federal Savings and Loan Association
Employee Stock Ownership Plan Trust
c/o Astoria Federal Savings and Loan Association
Xxx Xxxxxxx Xxxxxxx Xxxxx
Xxxx Xxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Any notice, request or communication hereunder shall be deemed to have been
given on the day on which it is delivered by hand or by commercial messenger
service, or sent by telex or facsimile, to such party at its address specified
above, or, if sent by mail, on the third Business Day after the day deposited in
the mail, postage prepaid, addressed as aforesaid. Any party may change the
person or address to whom or which notices are to be given hereunder, by notice
duly given hereunder; provided, however, that any such notice shall be deemed to
have been given only when actually received by the party to whom it is
addressed.
Section 12. Interpretation. Wherever possible each provision of
this Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision hereof shall be prohibited by
or invalid under such law, such provisions shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions hereof.
Section 13. Construction. All provisions hereof shall be
construed so as to maintain (a) the ESOP as a qualified leveraged employee stock
ownership plan under section 401(a) and 4975(e)(7) of the Internal Revenue Code
of 1986 (the "Code"), (b) the Trust as exempt from taxation under section 501(a)
of the Code and (c) the loan made pursuant to the Loan Agreement as an exempt
loan under Treasury Regulation ss. 54.4975-7(b) and as described in Department
of Labor Regulation ss. 2550.408b-3.
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IN WITNESS WHEREOF, this Pledge Agreement has been duly executed
by the parties hereto as of the day and year first above written.
ASTORIA FEDERAL SAVINGS AND LOAN
ASSOCIATION EMPLOYEE STOCK OWNERSHIP PLAN
TRUST
By STATE STREET BANK AND TRUST COMPANY
solely as Trustee and not in any other
capacity
By: /S/ Xxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxx
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Title: Vice President
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ASTORIA FINANCIAL CORPORATION
By: /S/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
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Title: Executive Vice President and General
Counsel
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