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EXHIBIT 10.7
PLEDGE AGREEMENT
This PLEDGE AGREEMENT ("Pledge Agreement") is made as of the
1st day of January, 2000, by and between THE LONG ISLAND SAVINGS BANK FSB
EMPLOYEE STOCK OWNERSHIP PLAN TRUST, acting by and through its Trustee, CG TRUST
COMPANY, a banking corporation organized under the laws of the Illinois
("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
issued in exchange for shares of common stock of Long Island Bancorp,
Inc. pursuant to the acquisition of Long Island Bancorp, Inc. by
Astoria Federal Corporation, which shares of common stock of Long
Island Bancorp, Inc. were 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
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Agreement) or such lesser amount of Collateral as may be required pursuant to
section 12 of this Pledge Agreement.
(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 1,708,900 2006 1,611,725
2002 1,689,463 2007 1,592,288
2003 1,670,026 2008 1,572,851
2004 1,650,589 2009 1,553,414
2005 1,591,152
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
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distributions paid in respect of the Collateral.
(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
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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 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 Loan 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
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(b) If to the Pledgor:
The Long Island Savings Bank FSB
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Employee Stock Ownership Plan Trust
CG Trust Company
000 X. Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
with copies to:
The Long Island Savings Bank FSB
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
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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.
IN WITNESS WHEREOF, this Pledge Agreement has been duly
executed by the parties hereto as of the day and year first above written.
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THE LONG ISLAND SAVINGS BANK FSB EMPLOYEE
STOCK OWNERSHIP PLAN TRUST
By CG TRUST COMPANY
solely as Trustee and not in any other
capacity
By: /S/ Xxxx Xxx Xxxxxxxx
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Name: Xxxx Xxx 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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