eTrade 2005 Annual Report Download - page 253

only in integral multiples of 128,000 Corporate Units. In such an event, the Holder shall Transfer Treasury Securities having an
aggregate principal amount at maturity equal to equal to the aggregate Stated Amount of the Purchase Contracts constituting a part of
the Corporate Units for which Collateral Substitution is being made to the Securities Intermediary, for credit to the Collateral Account,
and the Purchase Contract Agent, Collateral Agent and Securities Intermediary shall effect a Collateral Substitution for the appropriate
Pledged Applicable Ownership Interests in the Treasury Portfolio in the manner set forth in clause (a)above.
(c) In the event a Holder making a Collateral Substitution pursuant to this Section3.13 fails to effect a book-entry transfer of the
Corporate Units or fails to deliver Corporate Units Certificates to the Purchase Contract Agent after depositing Treasury Securities
with the Securities Intermediary, any distributions on the Subordinated Notes underlying the Applicable Ownership Interests in
Subordinated Notes, or with respect to the Applicable Ownership Interests in the Treasury Portfolio, in each case constituting a part of
such Corporate Units, shall be held in the name of the Purchase Contract Agent or its nominee in trust for the benefit of such Holder,
until such Corporate Units are so transferred or the Corporate Units Certificate is so delivered, as the case may be, or such Holder
provides evidence satisfactory to the Company and the Purchase Contract Agent that such Corporate Units Certificate has been
destroyed, lost or stolen, together with any indemnity that may be required by the Purchase Contract Agent and the Company.
(d) Except as described in Section5.02 or in this Section3.13 or in connection with a Cash Settlement, an Early Settlement, a Cash
Merger Early Settlement or a Termination Event, for so long as the Purchase Contract underlying a Corporate Unit remains in effect,
such Corporate Units shall not be separable into its constituent parts, and the rights and obligations of the Holder in respect of the
Applicable Ownership Interests in Subordinated Notes or Applicable Ownership Interests in the Treasury Portfolio, as the case may
be, and the Purchase Contract comprising such Corporate Units may be acquired, and may be transferred and exchanged, only as a
Corporate Unit.
Section3.14
Recreation of Corporate Units
. (a)Unless Applicable Ownership Interests in the Treasury Portfolio have replaced
Applicable Ownership Interests in Subordinated Notes as a component of the Corporate Units, and subject to the conditions set forth
in this Agreement, a Holder of Treasury Units may recreate Corporate Units at any time from and after the date of this Agreement and
prior to 5:00 p.m. (New York City time) on the seventh Business Day immediately preceding the Purchase Contract Settlement Date;
provided
that Holders of Treasury Units may only recreate Corporate Units in integral multiples of 40 Treasury Units. To recreate
Corporate Units, the Holder must:
(1) Transfer to the Collateral Agent for credit to the Collateral Account Subordinated Notes or security entitlements with respect
thereto having an aggregate principal amount equal to the Value of the Pledged Treasury Securities to be released; and
(2) Transfer the related Treasury Units to the Purchase Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, whereupon the Purchase Contract Agent shall promptly provide an instruction to such
effect to the Collateral Agent, substantially in the form of Exhibit I hereto.
Upon confirmation that the Subordinated Notes described in clause (1)above or security entitlements with respect thereto have been
credited to the Collateral Account and receipt of the instruction from the Purchase Contract Agent described in clause (2)above, the
Collateral Agent shall promptly release such Pledged Treasury Securities from the Pledge and shall promptly instruct the Securities
Intermediary by a notice, substantially in the form of Exhibit J hereto, to Transfer such Pledged Treasury Securities to the Purchase
Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.
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