EXHIBIT 10.32
Loan Agreement
by and between
Employee Stock Ownership Plan Trust
of
Hudson City Savings Bank
and
Hudson City Bancorp, Inc.
Made and Entered Into as of
June 21, 2005

 

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EXHIBIT 10.32
TABLE OF CONTENTS

              Page
ARTICLE I
       
 
       
DEFINITIONS
       
 
       
Section 1.1 Business Day
    2  
Section 1.2 Code
    2  
Section 1.3 Default
    2  
Section 1.4 ERISA
    2  
Section 1.5 Event of Default
    2  
Section 1.6 Fiscal Year
    2  
Section 1.7 Independent Counsel
    2  
Section 1.8 Loan
    2  
Section 1.9 Loan Documents
    2  
Section 1.10 Pledge Agreement
    2  
Section 1.11 Principal Amount
    2  
Section 1.12 Promissory Note
    2  
Section 1.13 Register
    2  
ARTICLE II
       
 
       
THE LOAN; PRINCIPAL AMOUNT; INTEREST;
       
 
       
SECURITY INDEMNIFICATION
       
 
       
Section 2.1 The Loan; Principal Amount
    3  
Section 2.2 Interest
    4  
Section 2.3 Promissory Note
    4  
Section 2.4 Payment of Trust Loan
    4  
Section 2.5 Prepayment
    6  
Section 2.6 Method of Payments
    6  
Section 2.7 Use of Proceeds of Loan
    7  
Section 2.8 Security
    8  
Section 2.9 Registration of the Promissory Note
    8  
 
       
ARTICLE III
       
 
       
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
       
 
       
Section 3.1 Power; Authority; Consents
    9  
Section 3.2 Due Execution; Validity; Enforceability
    9  
Section 3.3 Properties; Priority of Liens
    9  
Section 3.4 No Defaults; Compliance with Laws
    9  
Section 3.5 Purchases of Common Stock
    9  

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EXHIBIT 10.32

              Page
ARTICLE IV
       
 
       
REPRESENTATIONS AND WARRANTIES OF THE LENDER
       
 
       
Section 4.1 Power; Authority; Consents
    10  
Section 4.2 Due Execution; Validity; Enforceability
    10  
Section 4.3 ESOP; Contributions
    10  
Section 4.4 Trustee; Committee
    10  
Section 4.5 Compliance with Laws; Actions
    10  
 
       
ARTICLE V
       
 
       
EVENTS OF DEFAULT
       
 
       
Section 5.1 Events of Default under Loan Agreement
    11  
Section 5.2 Lender’s Rights upon Event of Default
    11  
 
       
ARTICLE VI
       
 
       
MISCELLANEOUS PROVISIONS
       
 
       
Section 6.1 Payments Due to the Lender
    11  
Section 6.2 Payments
    12  
Section 6.3 Survival
    12  
Section 6.4 Modifications, Consents and Waivers; Entire Agreement
    12  
Section 6.5 Remedies Cumulative
    12  
Section 6.6 Further Assurances; Compliance with Covenants
    13  
Section 6.7 Notices
    13  
Section 6.8 Counterparts
    14  
Section 6.9 Construction; Governing Law
    14  
Section 6.10 Severability
    14  
Section 6.11 Binding Effect; No Assignment or Delegation
    15  
 
       
EXHIBIT A Form of Promissory Note
    A-1  
EXHIBIT B Form of Pledge Agreement
    B-1  
EXHIBIT C Form of Assignment
    C-1  

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Loan Agreement
     This Loan Agreement (“Loan Agreement”) is made and entered into as of the
21st day of June, 2005, by and between the Employee Stock Ownership Plan Trust
of Hudson City Savings Bank (“Borrower”), a trust forming part of the Employee
Stock Ownership Plan of Hudson City Savings Bank (“ESOP”), acting through and by
its Trustee, GreatBanc Trust Company (“Trustee”), a trust corporation organized
under the laws of the state of Illinois and having an office at 45 Rockefeller
Plaza, Suite 2055, New York, New York, 10111-2000; and Hudson City Bancorp, Inc.
(“Lender”), a corporation organized and existing under the laws of the state of
Delaware, having an office at West 80 Century Road, Paramus, New Jersey
07652-1473.
WITNESSETH :
     Whereas, the Borrower and the Lender are parties to the Loan Agreement by
and between the Employee Stock Ownership Plan Trust of Hudson City Savings Bank
and Hudson City Bancorp, Inc., made and entered into as of June 21, 1999 (“First
Loan Agreement”), pursuant to which the Lender agreed to loan the Borrower
certain amounts to purchase shares of common stock of Hudson City Bancorp, Inc.
(“Common Stock”) pursuant to the terms set forth in the First Loan Agreement;
     Whereas, pursuant to the First Loan Agreement, the Borrower borrowed
$58,645,380 from the Lender (“First Loan”) and used the proceeds of the First
Loan to purchase 27,879,376 shares of Common Stock (based on a 2 to 1 stock
split effected in June 2002 and a 3.2060 to 1 stock split effected in
June 2005);
     Whereas, under the First Loan, a total of 22,303,450 shares of Common Stock
are scheduled to be released for allocation to participants in the ESOP during
the years 2005 through 2028, with a final allocation of 464,716 shares of Common
Stock in 2029;
     Whereas, the Compensation Committee of the Lender (“Committee”) has
authorized the Borrower to purchase additional shares of Common Stock, either
directly from Hudson City Bancorp, Inc. or in open market purchases in an amount
not to exceed 15,719,223 of the shares of Common Stock issued in connection with
the transactions effected pursuant to the Plan of Conversion and Reorganization
adopted by Hudson City Savings Bank on December 16, 2004, as amended (the
“Reorganization”);
     Whereas, the Committee has further authorized the Borrower to borrow funds
from the Lender for the purpose of financing authorized purchases of Common
Stock; and
     Whereas, the Lender is willing to make a loan to the Borrower for such
purpose pursuant to the terms of this Loan Agreement subject to the condition
that the First Loan and the First Loan Agreement be amended and restated (the
First Loan, as amended and restated, the “Amended and Restated Loan” and the
First Loan Agreement, as amended and restated, the “Amended and Restated Loan
Agreement”) concurrently with the execution and delivery of this Loan Agreement.
     Now, Therefore, the parties hereto agree as follows:

 

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EXHIBIT 10.32
ARTICLE I
DEFINITIONS
     The following definitions shall apply for purposes of this Loan Agreement,
except to the extent that a different meaning is plainly indicated by the
context:
          Section 1.1 Business Day means any day other than a Saturday, Sunday
or other day on which banks are authorized or required to close under federal
law or the laws of the State of New Jersey.
          Section 1.2 Code means the Internal Revenue Code of 1986 (including
the corresponding provisions of any succeeding law).
          Section 1.3 Default means an event or condition which would constitute
an Event of Default. The determination as to whether an event or condition would
constitute an Event of Default shall be determined without regard to any
applicable requirement of notice or lapse of time.
          Section 1.4 ERISA means the Employee Retirement Income Security Act of
1974, as amended (including the corresponding provisions of any succeeding law).
          Section 1.5 Event of Default means an event or condition described in
Article V.
          Section 1.6 Fiscal Year means the fiscal year of Hudson City Bancorp,
Inc.
          Section 1.7 Independent Counsel means Thacher Proffitt & Wood llp or
other counsel mutually satisfactory to both the Lender and the Borrower.
          Section 1.8 Loan means the loan described in section 2.1.
          Section 1.9 Loan Documents means, collectively, this Loan Agreement,
the Promissory Note and the Pledge Agreement and all other documents now or
hereafter executed and delivered in connection with such documents, including
all amendments, modifications and supplements of or to all such documents.
          Section 1.10 Pledge Agreement means the agreement described in section
2.8(a).
          Section 1.11 Principal Amount means the face amount of the Promissory
Note, determined as set forth in section 2.1(c).
          Section 1.12 Promissory Note means the promissory note described in
section 2.3.
          Section 1.13 Register means the register described in section 2.9.

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EXHIBIT 10.32
ARTICLE II
THE LOAN; PRINCIPAL AMOUNT;
INTEREST; SECURITY INDEMNIFICATION
          Section 2.1 The Loan; Principal Amount.
     (a) The Lender hereby agrees to lend to the Borrower such amounts, and at
such times, as shall be determined under this section 2.1; provided, however,
that in no event shall the aggregate amount lent under this Loan Agreement from
time to time exceed the aggregate amount paid by the Borrower, exclusive of
commissions, fees and other charges, to purchase an additional number of shares
of Common Stock not to exceed 15,719,223 of the shares of Common Stock issued in
connection with the Reorganization.
     (b) Subject to the limitations of section 2.1(a), the Borrower shall
determine the amounts borrowed under this Agreement, and the times at which such
borrowings are effected. Each such determination shall be evidenced in a writing
which shall set forth the amount to be borrowed and the date on which the Lender
shall disburse such amount, and such writing shall be furnished to the Lender by
notice from the Borrower. The Lender shall disburse to the Borrower the amount
specified in each such notice on the date specified therein or, if later, as
promptly as practicable following the Lender’s receipt of such notice; provided,
however, that the Lender shall have no obligation to disburse funds pursuant to
this Agreement (i) following the occurrence of a Default or an Event of Default
until such time as such Default or Event of Default shall have been cured; and
(ii) on any date on which Common Stock is listed or admitted to trading on an
established market (including but not limited to the NASDAQ Stock Market), while
the Borrower is in possession of funds previously advanced under this Agreement
that have not been used to purchase Common Stock; and (iii) on any date on which
Common Stock is listed or admitted to trading on an established market
(including but limited to the NASDAQ Stock Market), to the extent that the
making of such advance would permit the Borrower to purchase more than 6,000,000
shares of Common Stock during the period of 10 business days after the making of
such advance or the period of 10 business days ending on the date of such
advance.
     (c) For all purposes of this Loan Agreement, the Principal Amount on any
date shall be equal to the excess, if any, of:
          (i) the aggregate amount disbursed by the Lender pursuant to section
2.1(b) on or before such date; over
          (ii) the aggregate amount of any repayments of such amount made before
such date.
The Lender shall remain on the Register a record of, and shall record on the
Promissory Note, the Principal Amount, any changes in the Principal Amount and
the effective date of any changes in the Principal Amount.

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EXHIBIT 10.32
          Section 2.2 Interest.
     (a) The Borrower shall pay to the Lender interest on the Principal Amount,
for the period commencing on the date of this Loan Agreement and continuing
until the Principal Amount shall be paid in full, at the rate of five percent
(5.00%) per annum. Interest payable under this Agreement shall be computed on
the basis of a year of 360 days and months consisting of 30 days each and actual
days elapsed (including the first day but excluding the last) occurring in the
period to which the computation relates.
     (b) Except as otherwise provided in this section 2.2(b), accrued interest
on the Principal Amount shall be payable by the Borrower quarterly in arrears
commencing on the last Business Day of the first calendar quarter to end
following the date of this Agreement and continuing on the last Business Day of
each calendar quarter thereafter and upon the payment or prepayment of the Loan.
All interest on the Principal Amount shall be paid by the Borrower in
immediately available funds. The Lender shall remit to the Borrower, at least
three (3) Business Days before the end of each calendar quarter, a statement of
the interest payment due under section 2.2(a) for such quarter; provided,
however, that a delay or failure by the Lender in providing the Borrower with
such statement shall not alter the Borrower’s obligation to make such payment.
     (c) Anything in this Loan Agreement or the Promissory Note to the contrary
notwithstanding, the obligation of the Borrower to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be made to the Lender to the extent that the Lender’s receipt
thereof would not be permissible under the law or laws applicable to the Lender
limiting rates of interest which may be charged or collected by the Lender. Any
such payment referred to in the preceding sentence shall be made by the Borrower
to the Lender on the earliest interest payment date or dates on which the
receipt thereof would be permissible under the laws applicable to the Lender
limiting rates of interest which may be charged or collected by the Lender. Such
deferred interest shall not bear interest.
          Section 2.3 Promissory Note.
     The Loan shall be evidenced by a Promissory Note of the Borrower in
substantially the form of Exhibit A attached hereto, dated the date hereof,
payable to the order of the Lender in the Principal Amount and otherwise duly
completed.
          Section 2.4 Payment of Trust Loan.
     The Principal Amount of the Loan shall be repaid in annual installments
payable on the last Business Day of each December ending after the date of this
Agreement. The amount of each such annual installment shall be that portion of
the lesser of (i) that portion of the Principal Amount which will result in the
release for allocation to participants in the ESOP, pursuant to the Pledge
Agreement, of a cumulative fraction of the Collateral (within the meaning of the
Pledge Agreement and determined as of the last Business Day of December, 2005)
equal to the percentage set forth in Column II below and (ii) that portion of
the Principal Amount which will result in the release for allocation to
participants in the ESOP, pursuant to the Pledge Agreement, of Collateral
(within the meaning of the Pledge Agreement), valued as of the date of

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EXHIBIT 10.32
payment, and collateral released pursuant to the terms of the Amended and
Restated Loan, also valued as of the date of payment, having an aggregate value
equal to twenty-five and three quarters percent (25.75%) of the compensation
taken into account under the ESOP for each person entitled to share in such
allocation:

          Column I   Column II           Installment Due on   Cumulative
Fraction Last Business Day   of Collateral of December in   Released
2005
    2/80  
2006
    4/80  
2007
    6/80  
2008
    8/80  
2009
    10/80  
2010
    12/80  
2011
    14/80  
2012
    16/80  
2013
    18/80  
2014
    20/80  
2015
    22/80  
2016
    24/80  
2017
    26/80  
2018
    28/80  
2019
    30/80  
2020
    32/80  
2021
    34/80  
2022
    36/80  
2023
    38/80  
2024
    40/80  
2025
    42/80  
2026
    44/80  
2027
    46/80  
2028
    48/80  
2029
    50/80  
2030
    52/80  
2031
    54/80  
2032
    56/80  
2033
    58/80  
2034
    60/80  
2035
    62/80  
2036
    64/80  
2037
    66/80  
2038
    68/80  
2039
    70/80  
2040
    72/80  
2041
    74/80  

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EXHIBIT 10.32

          Column I   Column II           Installment Due on   Cumulative
Fraction Last Business Day   of Collateral of December in   Released
2042
    76/80  
2043
    78/80  
2044
    80/80  

provided, however, that the Borrower shall not be required to make any payment
of principal due to be made in any Fiscal Year to the extent that such payment
would not be deductible for federal income tax purposes for such Fiscal Year
under Section 404 of the Code; provided further, however, that if the total
aggregate number of shares of Common Stock scheduled to be released pursuant to
clause (i) hereunder and under section 2.4(i) of the Amended and Restated Loan
Agreement in any year is less than one hundred and three percent (103%) of the
number of shares of Common Stock that would have been required to be released
under the First Loan Agreement in the absence of its amendment and restatement,
the terms of the Loan and the Amended and Restated Loan shall be reduced such
that the aggregate number of shares of Common Stock scheduled to be released in
such year shall be equal to one hundred and three percent (103%) of the number
of shares of Common Stock that would have been required to be released under the
First Loan Agreement in the absence of its amendment and restatement (or, if
less, the total number of shares of Common Stock then pledged as Collateral (as
defined in the Pledge Agreement and the Pledge Agreement relating to the Amended
and Restated Loan)), subject to the limitation set forth in clause (ii).
Principal payments may be deferred to the extent that such payments would be in
excess of the amount described above or otherwise would be nondeductible for
federal income tax purposes. Any payment not required to be made pursuant to
clause (ii) of the above provision shall be deferred to and be payable on the
earlier of the last Business Day of December 2044 or the last day of the first
Plan Year in which such proviso would not apply to alleviate a requirement of
payment; and payment not required to be made pursuant to the immediately
preceding sentence shall be deferred to, and be payable on, the last day of the
first Plan Year in which such payment may be made on a tax deductible basis.
          Section 2.5 Prepayment.
     The Borrower shall be entitled to prepay the Loan in whole or in part, at
any time and from time to time; provided, however, that the Borrower shall give
notice to the Lender of any such prepayment. Any such prepayment shall be:
(a) permanent and irrevocable; (b) accompanied by all accrued interest through
the date of such prepayment; (c) made without premium or penalty; and
(d) applied first to the installment of principal due and payable in the Fiscal
Year in which the prepayment is made and second in the order of the maturity of
the remaining installments thereof unless the Lender and the Borrower agree to
apply such prepayments in some other order.
          Section 2.6 Method of Payments.
     (a) All payments of principal, interest, other charges (including
indemnities) and other amounts payable by the Borrower hereunder shall be made
in lawful money of the

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EXHIBIT 10.32
United States, in immediately available funds, to the Lender at the address
specified in or pursuant to this Loan Agreement for notices to the Lender, not
later than 3:00 P.M., Eastern Standard time, on the date on which such payment
shall become due. Any such payment made on such date but after such time shall,
if the amount paid bears interest, and except as expressly provided to the
contrary herein, be deemed to have been made on, and interest shall continue to
accrue and be payable thereon until, the next succeeding Business Day. If any
payment of principal or interest becomes due on a day other than a Business Day,
such payment may be made on the next succeeding Business Day, and when paid,
such payment shall include interest to the day on which such payment is in fact
made.
          (b) Notwithstanding anything to the contrary contained in this Loan
Agreement or the Promissory Note, neither the Borrower nor the Trustee shall be
obligated to make any payment, repayment or prepayment on the Promissory Note or
take or refrain from taking any other action hereunder or under the Promissory
Note if doing so would cause the ESOP to cease to be an employee stock ownership
plan within the meaning of section 4975(e)(7) of the Code or qualified under
section 401(a) of the Code or cause the Borrower to cease to be a tax exempt
trust under section 501(a) of the Code or if such act or failure to act would
cause the Borrower or the Trustee to engage in any “prohibited transaction” as
such term is defined in section 4975(c) of the Code and the regulations
promulgated thereunder which is not exempted by section 4975(c)(2) or (d) of the
Code and the regulations promulgated thereunder or in section 406 of ERISA and
the regulations promulgated thereunder which is not exempted by section 408(b)
of ERISA and the regulations promulgated thereunder; provided, however, that in
each case, the Borrower or the Trustee or both, as the case may be, may act or
refrain from acting pursuant to this section 2.6(b) on the basis of an opinion
of Independent Counsel. The Borrower and the Trustee may consult with
Independent Counsel, and any opinion of such Independent Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with such
opinion of Independent Counsel. Nothing contained in this section 2.6(b) shall
be construed as imposing a duty on either the Borrower or the Trustee to consult
with Independent Counsel. Any obligation of the Borrower or the Trustee to make
any payment, repayment or prepayment on the Promissory Note or to take or
refrain from taking any other act hereunder or under the Promissory Note which
is excused pursuant to this section 2.6(b) shall be considered a binding
obligation of the Borrower or the Trustee, or both, as the case may be, for the
purposes of determining whether a Default or Event of Default has occurred
hereunder or under the Promissory Note and nothing in this section 2.6(b) shall
be construed as providing a defense to any remedies otherwise available upon a
Default or an Event of Default hereunder (other than the remedy of specific
performance).
          Section 2.7 Use of Proceeds of Loan.
     The entire proceeds of the Loan shall be used solely for acquiring shares
of Common Stock, and for no other purpose whatsoever.

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EXHIBIT 10.32
          Section 2.8 Security.
     (a) In order to secure the due payment and performance by the Borrower of
all of its obligations under this Loan Agreement, simultaneously with the
execution and delivery of this Loan Agreement by the Borrower, the Borrower
shall:
               (i) pledge to the Lender as Collateral (as defined in the Pledge
Agreement), and grant to the Lender a first priority lien on and security
interest in, the Common Stock purchased with the Principal Amount, by the
execution and delivery to the Lender of a Pledge Agreement in the form attached
hereto as Exhibit B; and
               (ii) execute and deliver, or cause to be executed and delivered,
such other agreements, instruments and documents as the Lender may reasonably
require in order to effect the purposes of the Pledge Agreement and this Loan
Agreement, including, but not limited to, the Form of Assignment in the form
attached hereto as Exhibit C.
     (b) The Lender shall release from encumbrance under the Pledge Agreement
and transfer to the Borrower, as of the date on which any payment or prepayment
of the Principal Amount is made, the number of shares of Common Stock held as
Collateral determined pursuant to section 6.4 of the ESOP.
          Section 2.9 Registration of the Promissory Note.
     (a) The Lender shall maintain a Register providing for the registration of
the Principal Amount and any stated interest and of transfer and exchange of the
Promissory Note. Transfer of the Promissory Note may be effected only by the
surrender of the old instrument and either the reissuance by the Borrower of the
old instrument to the new holder or the issuance by the Borrower of a new
instrument to the new holder. The old Promissory Note so surrendered shall be
canceled by the Lender and returned to the Borrower after such cancellation.
     (b) Any new Promissory Note issued pursuant to section 2.9(a) shall carry
the same rights to interest (unpaid and to accrue) carried by the Promissory
Note so transferred or exchanged so that there will not be any loss or gain of
interest on the note surrendered. Such new Promissory Note shall be subject to
all of the provisions and entitled to all of the benefits of this Agreement.
Prior to due presentment for registration or transfer, the Borrower may deem and
treat the registered holder of any Promissory Note as the holder thereof for
purposes of payment and all other purposes. A notation shall be made on each new
Promissory Note of the amount of all payments of principal and interest
theretofore paid.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
     The Borrower hereby represents and warrants to the Lender as follows:

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EXHIBIT 10.32
          Section 3.1 Power; Authority; Consents.
     The Borrower has the power to execute, deliver and perform this Loan
Agreement, the Promissory Note and the Pledge Agreement, all of which have been
duly authorized by all necessary and proper corporate or other action.
          Section 3.2 Due Execution; Validity; Enforceability.
     Each of the Loan Documents, including, without limitation, this Loan
Agreement, the Promissory Note and the Pledge Agreement, have been duly executed
and delivered by the Borrower; and each constitutes the valid and legally
binding obligation of the Borrower, enforceable in accordance with its terms.
          Section 3.3 Properties; Priority of Liens.
     The liens which have been created and granted by the Pledge Agreement
constitute valid, first liens on the properties and assets covered by the Pledge
Agreement, subject to no prior or equal lien.
          Section 3.4 No Defaults; Compliance with Laws.
     The Borrower is not in default in any material respect under any agreement,
ordinance, resolution, decree, bond, note, indenture, order or judgment to which
it is a party or by which it is bound, or any other agreement or other
instrument by which any of the properties or assets owned by it is materially
affected.
          Section 3.5 Purchases of Common Stock.
     Upon consummation of any purchase of Common Stock by the Borrower with the
proceeds of the Loan, the Borrower shall acquire valid, legal and marketable
title to all of the Common Stock so purchased, free and clear of any liens,
other than a pledge to the Lender of the Common Stock so purchased pursuant to
the Pledge Agreement. Neither the execution and delivery of the Loan Documents
nor the performance of any obligation thereunder violates any provision of law
or conflicts with or results in a breach of or creates (with or without the
giving of notice or lapse of time, or both) a default under any agreement to
which the Borrower is a party or by which it is bound or any of its properties
is affected. No consent of any federal, state or local governmental authority,
agency or other regulatory body, the absence of which could have a materially
adverse effect on the Borrower or the Trustee, is or was required to be obtained
in connection with the execution, delivery or performance of the Loan Documents
and the transactions contemplated therein or in connection therewith, including,
without limitation, with respect to the transfer of the shares of Common Stock
purchased with the proceeds of the Loan pursuant thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE LENDER
     The Lender hereby represents and warrants to the Borrower as follows:

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EXHIBIT 10.32
          Section 4.1 Power; Authority; Consents.
     The Lender has the power to execute, deliver and perform this Loan
Agreement, the Pledge Agreement and all documents executed by the Lender in
connection with the Loan, all of which have been duly authorized by all
necessary and proper corporate or other action. No consent, authorization or
approval or other action by any governmental authority or regulatory body, and
no notice by the Lender to, or filing by the Lender with, any governmental
authority or regulatory body is required for the due execution, delivery and
performance of this Loan Agreement.
          Section 4.2 Due Execution; Validity; Enforceability.
     This Loan Agreement and the Pledge Agreement have been duly executed and
delivered by the Lender; and each constitutes a valid and legally binding
obligation of the Lender, enforceable in accordance with its terms.
          Section 4.3 ESOP; Contributions.
     The ESOP and the Borrower have been duly created, organized and maintained
by the Lender in compliance with all applicable laws, regulations and rulings.
The ESOP qualifies as an “employee stock ownership plan” as defined in section
4975(e)(7) the Code. The ESOP provides that the Lender may make contributions to
the ESOP in an amount necessary to enable the Trustee to amortize the Loan in
accordance with the terms of the Promissory Note and this Loan Agreement, and
the Lender will make such contributions; provided, however, that no such
contributions shall be required to the extent they would adversely affect the
qualification of the ESOP under section 401(a) of the Code.
          Section 4.4 Trustee; Committee.
     The Lender has taken such action as is required to be taken by it to duly
appoint the Trustee and the members of the Committee. The Committee constitutes
the Committee defined in and described in the plan document for the Employee
Stock Ownership Plan of Hudson City Savings Bank and the Trust Agreement by and
between the Trustee and Hudson City Savings Bank made as of June 21, 1999, as
amended from time to time. The Lender expressly acknowledges and agrees that
this Loan Agreement, the Promissory Note and the Pledge Agreement are being
executed by the Trustee not in its individual capacity but solely as trustee of
and on behalf of the Borrower.
          Section 4.5 Compliance with Laws; Actions.
     Neither the execution and delivery by the Lender of this Loan Agreement or
any instruments required thereby, nor compliance with the terms and provisions
of any such documents by the Lender, constitutes a violation of any provision of
any law or any regulation, order, writ, injunction or decree of any court or
governmental instrumentality, or an event of default under any agreement, to
which the Lender is a party or by which the Lender is bound or to which the
Lender is subject, which violation or event of default would have a material
adverse effect on the Lender. There is no action or proceeding pending or
threatened against either of the ESOP or the Borrower before any court or
administrative agency.

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EXHIBIT 10.32
ARTICLE V
EVENTS OF DEFAULT
          Section 5.1 Events of Default under Loan Agreement.
     Each of the following events shall constitute an “Event of Default”
hereunder:
     (a) Failure to make any payment or mandatory prepayment of principal on the
Promissory Note, or failure to make any payment of interest on the Promissory
Note, within five (5) Business Days after the date when due.
     (b) Failure by the Borrower to perform or observe any term, condition or
covenant of this Loan Agreement or of any of the other Loan Documents,
including, without limitation, the Promissory Note and the Pledge Agreement,
provided, however, that such failure is not cured by the Borrower within five
(5) Business Days after notice of such failure is provided to the Borrower by
the Lender.
     (c) Any representation or warranty made in writing to the Lender in any of
the Loan Documents or any certificate, statement or report made or delivered in
compliance with this Loan Agreement, shall have been false or misleading in any
material respect when made or delivered.
          Section 5.2 Lender’s Rights upon Event of Default.
     If an Event of Default under this Loan Agreement shall occur and be
continuing, the Lender shall have no rights to assets of the Borrower other
than: (a) contributions (other than contributions of Common Stock) that are made
by the Lender to enable the Borrower to meet its obligations pursuant to this
Loan Agreement and earnings attributable to the investment of such contributions
and (b) “Eligible Collateral” (as defined in the Pledge Agreement); provided,
however, that: (i) the value of the Borrower’s assets transferred to the Lender
following an Event of Default in satisfaction of the due and unpaid amount of
the Loan shall not exceed the amount in default (without regard to amounts owing
solely as a result of any acceleration of the Loan); (ii) the Borrower’s assets
shall be transferred to the Lender following an Event of Default only to the
extent of the failure of the Borrower to meet the payment schedule of the Loan;
and (iii) all rights of the Lender to the Common Stock purchased with the
proceeds of the Loan covered by the Pledge Agreement following an Event of
Default shall be governed by the terms of the Pledge Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
          Section 6.1 Payments Due to the Lender.
     If any amount is payable by the Borrower to the Lender pursuant to any
indemnity obligation contained herein, then the Borrower shall pay, at the time
or times provided therefor, any such amount and shall indemnify the Lender
against and hold it harmless from any loss or

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EXHIBIT 10.32
damage resulting from or arising out of the nonpayment or delay in payment of
any such amount. If any amounts as to which the Borrower has so indemnified the
Lender hereunder shall be assessed or levied against the Lender, the Lender may
notify the Borrower and make immediate payment thereof, together with interest
or penalties in connection therewith, and shall thereupon be entitled to and
shall receive immediate reimbursement therefor from the Borrower, together with
interest on each such amount as provided in section 2.2. Notwithstanding any
other provision contained in this Loan Agreement, the covenants and agreements
of the Borrower contained in this section 6.1 shall survive: (a) payment of the
Promissory Note and (b) termination of this Loan Agreement.
          Section 6.2 Payments.
     All payments hereunder and under the Promissory Note shall be made without
set-off or counterclaim and in such amounts as may be necessary in order that
all such payments shall not be less than the amounts otherwise specified to be
paid under this Loan Agreement and the Promissory Note, subject to any
applicable tax withholding requirements. Upon payment in full of the Promissory
Note, the Lender shall mark such Promissory Note “Paid” and return it to the
Borrower.
          Section 6.3 Survival.
     All agreements, representations and warranties made herein shall survive
the delivery of this Loan Agreement and the Promissory Note.
          Section 6.4 Modifications, Consents and Waivers; Entire Agreement.
     No modification, amendment or waiver of or with respect to any provision of
this Loan Agreement, the Promissory Note, the Pledge Agreement, or any of the
other Loan Documents, nor consent to any departure from any of the terms or
conditions thereof, shall in any event be effective unless it shall be in
writing and signed by the party against whom enforcement thereof is sought. Any
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No consent to or demand on a party in any case
shall, of itself, entitle it to any other or further notice or demand in similar
or other circumstances. This Loan Agreement embodies the entire agreement and
understanding between the Lender and the Borrower and supersedes all prior
agreements and understandings relating to the subject matter hereof other than
the Amended and Restated Loan Agreement and instruments and agreements executed
thereunder.
          Section 6.5 Remedies Cumulative.
     Each and every right granted to the Lender hereunder or under any other
document delivered hereunder or in connection herewith, or allowed it by law or
equity, shall be cumulative and may be exercised from time to time. No failure
on the part of the Lender or the holder of the Promissory Note to exercise, and
no delay in exercising, any right shall operate as a waiver thereof, nor shall
any single or partial exercise of any right preclude any other or future
exercise thereof or the exercise of any other right. The due payment and
performance of the obligations under the Loan Documents shall be without regard
to any counterclaim, right of offset or any other claim whatsoever which the
Borrower may have against the Lender and

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EXHIBIT 10.32
without regard to any other obligation of any nature whatsoever which the Lender
may have to the Borrower, and no such counterclaim or offset shall be asserted
by the Borrower in any action, suit or proceeding instituted by the Lender for
payment or performance of such obligations.
          Section 6.6 Further Assurances; Compliance with Covenants.
     At any time and from time to time, upon the request of the Lender, the
Borrower shall execute, deliver and acknowledge or cause to be executed,
delivered and acknowledged, such further documents and instruments and do such
other acts and things as the Lender may reasonably request in order to fully
effect the terms of this Loan Agreement, the Promissory Note, the Pledge
Agreement, the other Loan Documents and any other agreements, instructions and
documents delivered pursuant hereto or in connection with the Loan.
          Section 6.7 Notices.
     Except as otherwise specifically provided for herein, all notices,
requests, reports and other communications pursuant to this Loan Agreement shall
be in writing, either by letter (delivered by hand or commercial messenger
service or sent by registered or certified mail, return receipt requested,
except for routine reports delivered in compliance with Article VI hereof which
may be sent by ordinary first-class mail) or telex or facsimile, addressed as
follows:

         
 
  (a)   If to the Borrower:
 
       
 
      Employee Stock Ownership Plan Trust
 
         of Hudson City Bancorp, Inc.
 
      Hudson City Savings Bank
 
      West 80 Century City Road
 
      Paramus, New Jersey 07652-1473
 
      Attention: Senior Personnel Officer
 
            with copies to:
 
       
 
      GreatBanc Trust Company
 
      45 Rockefeller Plaza, Suite 2055
 
      New York, New York 10111-2000
 
      Attention: Mr. Stephen J. Hartman, Jr.
 
       
 
      Thacher Proffitt & Wood llp
 
      Two World Financial Center, 28th Floor
 
      New York New York 10281
 
      Attention: W. Edward Bright, Esq.
 
       
 
      The Goldstein Law Firm, P.C.
 
      12 Corporate Woods Boulevard
 
      Albany, New York 12211-2350
 
      Attention: Brian P. Goldstein, Esq.

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EXHIBIT 10.32

         
 
  (b)   If to the Lender:
 
       
 
      Hudson City Bancorp, Inc.
 
      West 80 Century Road
 
      Paramus, New Jersey 07652-1473
 
      Attention: Chief Financial Officer
 
            with a copy to:
 
       
 
      Thacher Proffitt & Wood llp
 
      Two World Financial Center, 28th Floor
 
      New York New York 10281
 
      Attention: W. Edward Bright, Esq.

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 6.8 Counterparts.
     This Loan Agreement may be signed in any number of counterparts which, when
taken together, shall constitute one and the same document.
          Section 6.9 Construction; Governing Law.
     The headings used in the table of contents and in this Loan Agreement are
for convenience only and shall not be deemed to constitute a part hereof. All
uses herein of any gender or of singular or plural terms shall be deemed to
include uses of the other genders or plural or singular terms, as the context
may require. All references in this Loan Agreement to an Article or section
shall be to an Article or section of this Loan Agreement, unless otherwise
specified. This Loan Agreement, the Promissory Note, the Pledge Agreement and
the other Loan Documents shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New Jersey. It is intended that the
transactions contemplated by this Loan Agreement constitute an exempt loan
within the meaning of Treasury Regulation §54.4975-7(b)(1)(iii) and Department
of Labor Regulation §2550.408b-3, and the provisions hereof shall be construed
and enforced in such manner as shall be necessary to give effect to such intent.
          Section 6.10 Severability.
     Wherever possible, each provision of this Loan Agreement shall be
interpreted in such manner as to be effective and valid under applicable law;
however, the provisions of this Loan Agreement are severable, and if any clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability

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EXHIBIT 10.32
shall affect only such clause or provision, or part thereof, in such
jurisdiction and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision in this Loan Agreement in
any jurisdiction. Each of the covenants, agreements and conditions contained in
this Loan Agreement is independent, and compliance by a party with any of them
shall not excuse non-compliance by such party with any other. The Borrower shall
not take any action the effect of which shall constitute a breach or violation
of any provision of this Loan Agreement.
          Section 6.11 Binding Effect; No Assignment or Delegation.
     This Loan Agreement shall be binding upon and inure to the benefit of the
Borrower and its successors and the Lender and its successors and assigns. The
rights and obligations of the Borrower under this Agreement shall not be
assigned or delegated without the prior written consent of the Lender, and any
purported assignment or delegation without such consent shall be void.

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EXHIBIT 10.32
     In Witness Whereof, the parties hereto have caused this Loan Agreement to
be duly executed as of the date first above written.

                 
Employee Stock Ownership Plan Trust Of Hudson City Savings Bank
   
 
           
 
  By:   GreatBanc Trust Company, as Trustee    
 
           
 
  By:   /s/ Stephen J. Hartman, Jr.
 
   
 
           
 
  Title:   Senior Vice President    
 
                Hudson City Bancorp, Inc.    
 
           
 
  By:   Ronald E. Hermance, Jr.
 
   
 
           
 
  Title:   President and Chief Executive Officer    

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