Exhibit
        10.1

      


      [ASTORIA
        FINANCIAL CORPORATION LETTERHEAD]

      


      August
        29, 2008

      

        BY
          CERTIFIED MAIL, NO. 7099 3400 0015 9306 2482

        RETURN
          RECEIPT REQUESTED

      

      


      Astoria
        Federal Savings and Loan Association

      Employee
        Stock Ownership Plan Trust

      c/o
        Prudential Bank & Trust, FSB, Trustee

      280
        Trumbull Street, 6th Floor

      Hartford,
        CT 06103

      


      
        	
                Re:

              	
                Amended
                  and Restated Loan Agreement entered into as of January 1,
                  2000

              


      

      


      Ladies
        and Gentlemen:

      


      This
        letter is furnished to you by Astoria Financial Corporation ("AFC") to clarify
        certain rights and obligations of AFC and the Astoria Federal Savings and
        Loan
        Association Employee Stock Ownership Plan Trust (the "ESOP Trust") under
        the
        following documents:

       

      
        	 	
                ▪

              	
                Amended
                  and Restated Loan Agreement by and between Astoria Federal Savings
                  and
                  Loan Association Employee Stock Ownership Plan Trust and Astoria
                  Financial
                  Corporation made and entered into as of January 1, 2000 (the "Astoria
                  Loan
                  Agreement");

              


      

       

      
        	 	
                ▪

              	
                Promissory
                  Note of Astoria Federal Savings and Loan Association Employee Stock
                  Ownership Plan Trust dated January 1, 2000 (the "Astoria Promissory
                  Note");

              


      

       

      
        	 	
                ▪

              	
                Pledge
                  Agreement made as of January 1, 2000 by and between Astoria Federal
                  Savings and Loan Association Employee Stock Ownership Plan Trust
                  and
                  Astoria Financial Corporation (the "Astoria Pledge
                  Agreement");

              


      

       

      
        	 	
                ▪

              	
                Amended
                  and Restated Loan Agreement by and between The Long Island Savings
                  Bank
                  Employee Stock Ownership Plan Trust and Astoria Financial Corporation
                  made
                  and entered into as of January 1, 2000 (the "LISB Loan Agreement,"
                  and,
                  together with the Astoria Loan Agreement, the "Loan
                  Agreements");

              


      

       

      
        	 	
                ▪

              	
                Promissory
                  Note of The Long Island Savings Bank FSB Employee Stock Ownership
                  Plan
                  Trust dated January 1 2000 (the "LISB Promissory Note," and, together
                  with
                  the Astoria Promissory Note," the "Promissory Notes");
                  and

              


      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        Astoria
          Federal Savings and Loan Association Employee Stock Ownership Plan
          Trust


        
          
            	
                    August
                      29, 2008

                  	
                    Page
                      2.

                  


          

        

      

       

      
        	 	
                ▪

              	
                Pledge
                  Agreement made as of January 1, 2000 by and between The Long Island
                  Savings Bank FSB Employee Stock Ownership Plan Trust and Astoria
                  Financial
                  Corporation (the "LISB Pledge Agreement," and, taken together with
                  the
                  Astoria Pledge Agreement, the "Pledge
                  Agreements").

              


      

       

      These
        documents are collectively referred to in this letter as the "Loan
        Documents."

       

      1. Payment
        on Default Not Reduced by Expenses.

       

      AFC
        understands that a concern exists that the Loan Documents (including but
        not
        limited to section 6(a) of each of the Pledge Agreements) may confer upon
        AFC
        the right, and impose on the ESOP Trust the obligation to allow AFC, to take
        recourse against the ESOP Trust or its assets for AFC's expenses in connection
        with collateral surrendered by the ESOP Trust in the event of default, and
        to
        require the ESOP Trust to pay an amount greater than the amount of the actual
        default in satisfaction of its obligations under the Loan Documents on an
        event
        of default. AFC
        hereby confirms its position that the Loan Documents do not confer on it
        such a
        right or impose on the ESOP Trust such an obligation. For avoidance of further
        doubt, AFC, for itself and its successors and assigns, hereby permanently
        and
        irrevocably waives any right that it may have, and any obligation that the
        ESOP
        Trust may have to allow AFC, under the Loan Documents, to take recourse against
        the ESOP Trust or its assets for AFC's expenses in connection with collateral
        surrendered by the ESOP Trust in the event of default, or to require the
        ESOP
        Trust to pay an amount greater than the amount of the actual default in
        satisfaction of its obligations under the Loan Documents on an event of default
        under the Loan Documents.

       

      2. No
        Loan Acceleration.

       

      AFC
        understand that a concern exists that the Loan Documents (including but not
        limited to the fifth paragraph of each of the Promissory Notes) may confer
        on
        AFC the right, and impose on the ESOP Trust the obligation, to cause assets
        of
        the ESOP to be transferred upon default in excess of the extent of the failure
        of the ESOP Trust to meet the payment schedule under the Loan Documents,
        and to
        require the ESOP Trust to pay an amount greater than the amount of the actual
        default in satisfaction of its obligations under the Loan Documents on an
        event
        of default. AFC hereby confirms its position that the Loan Documents do not
        confer on it such a right or impose on the ESOP Trust such an obligation.
        For
        avoidance of further doubt, AFC, for itself and its successors and assigns,
        hereby permanently and irrevocably waives any right that it may have, and
        any
        obligation that the ESOP Trust may have, under the Loan Documents, to cause
        assets of the ESOP to be transferred upon default in excess of the extent
        of the
        failure of the ESOP Trust to meet the payment schedule under the Loan Documents,
        and to require the ESOP Trust to pay an amount greater than the amount of
        the
        actual default in satisfaction of its obligations under the Loan Documents
        on an
        event of default under the Loan Documents.

       

      3. Scope
        of Waivers.

       

      This
        letter shall be interpreted, administered and enforced in such manner as
        shall
        be necessary to cause the Loan Documents to provide that (a) the loans made
        pursuant to the Loan Agreements (the "Loans") shall be without recourse against
        the ESOP, except to the extent permitted by 29 C.F.R. § 2550.408b-3(e); (b)
        in the event of default upon one of the Loans, the value of plan assets
        transferred in satisfaction of that Loan shall not exceed the amount of


       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        Astoria
          Federal Savings and Loan Association Employee Stock Ownership Plan
          Trust


        
          
            	
                    August
                      29, 2008

                  	
                    Page
                      3.

                  


          

        

      

       

      default,
        except to the extent permitted by 29 C.F.R. § 2550.408b-3(f); and (c) a
        transfer of ESOP assets upon default shall be made only upon and to the extent
        of the failure of the plan to meet the payment schedule of the respective
        Loan,
        except to the extent permitted by 29 C.F.R. § 2550.408b-3(f).

       

      4. Effect
        of this Letter.

       

      This
        letter constitutes a waiver of AFC's rights and the obligations of the ESOP
        Trusts under the Loan Documents with respect to the matters described herein
        as
        contemplated by section 6.3 of the Loan Agreement, shall have the same force
        and
        effect as an amendment to each and every Loan Document with respect to the
        matters waived, and shall, upon delivery to you, constitute a "Loan Document"
        within the meaning of Section 1.8 of the Loan Agreements. This waiver shall
        be
        binding on AFC and its successors and assigns without any action on the part
        of
        the ESOP Trust.

       

      Kindly
        indicate receipt of this letter by countersigning the enclosed copy of this
        letter in the signature block provided below and returning it in the postage
        prepaid envelope provided.

       

      
        	 	
                
                  ASTORIA
                    FINANCIAL CORPORATION

                

              
	 	 
	 	
                By:
                  

              	
                /s/
                  Alan P. Eggleston

              
	 	 	
                Name:

              	
                Alan
                  P. Eggleston

              
	 	 	
                Title:

              	
                Executive
                  Vice President, Secretary and General
                  Counsel

              


      

      
      

       

      
        	
                cc:

              	
                Astoria
                  Federal Savings and Loan Association Employee Stock Ownership Plan
                  Trust,
                  care of Astoria Federal Savings and Loan
                  Association

              


      

       

      Accepted
        and Agreed to:

      

        ASTORIA
          FEDERAL SAVINGS AND LOAN ASSOCIATION EMPLOYEE

        STOCK
          OWNERSHIP PLAN TRUST (for
          itself and as successor to The

        Long
          Island Savings Bank FSB Employee Stock Ownership Plan
          Trust
          )

      

      


      
        	
                By:

              	
                
                  PRUDENTIAL
                    BANK & TRUST, FSB (successor
                    to State Street

                  Bank
                    and Trust Company as trustee of the Astoria
                    Federal

                  Savings
                    and Loan Association Employee Stock Ownership

                  Plan
                    Trust and successor to CG Trust Company as trustee
                    of

                  The
                    Long Island Savings Bank FSB Employee Stock

                  Ownership
                    Plan
                    Trust)

                

              


      

      


      
        	
                By:

              	
                /s/
                  Andrew Levesque

              
	 	
                Name:
                  Andrew Levesque

              
	 	
                Title:
                  Trust Officer