eTrade 2005 Annual Report Download - page 258

Collateral Substitution, as the case may be, shall not be payable hereunder to the Holder of such Corporate Units;
provided
,
however
,
that to the extent that such Holder continues to hold Separate Subordinated Notes or Applicable Ownership Interests in the Treasury
Portfolio that formerly comprised a part of such Holder’s Corporate Units, such Holder shall be entitled to receive interest on such
Separate Subordinated Notes or distributions on such Applicable Ownership Interests in the Treasury Portfolio.
Section4.02
Payments Prior to or on Purchase Contract Settlement Date
. (a)Subject to the provisions of Section5.02(a),
Section5.04(b)(ii) and Section5.07, and except as provided in Section4.02(b) below, if no Termination Event shall have occurred, all
payments received by the Securities Intermediary in respect of (1)the principal amount of the Subordinated Notes underlying Pledged
Applicable Ownership Interests in Subordinated Notes, (2)the Pledged Applicable Ownership Interests in the Treasury Portfolio and
(3)the Pledged Treasury Securities, shall be credited to the Collateral Account, to be invested in Permitted Investments until the
Purchase Contract Settlement Date, and transferred to the Company on the Purchase Contract Settlement Date as provided in
Section5.02 hereof. Any balance remaining in the Collateral Account shall be released from the Pledge and transferred to the Purchase
Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests,
free and clear of the Pledge created hereby. The Company shall instruct the Collateral Agent in writing as to the specific Permitted
Investments in which any payments made under this Section4.02 shall be invested,
provided
,
however
, that if the Company fails to
deliver such instructions by 10:30 a.m. (New York City time) on the day such payments are received by the Securities Intermediary, the
Collateral Agent shall instruct the Securities Intermediary to invest such payments in the Permitted Investments described in clause
(6)of the definition of Permitted Investments. In no event shall the Collateral Agent be liable for the selection of Permitted Investments
or for investment losses incurred thereon. The Collateral Agent shall have no liability in respect of losses incurred as a result of the
failure of the Company to provide timely written investment direction.
(b) All payments received by the Securities Intermediary in respect of (1)the Subordinated Notes, (2)the Applicable Ownership
Interests in the Treasury Portfolio and (3)the Treasury Securities or security entitlements with respect thereto, that, in each case, have
been released from the Pledge hereunder shall be transferred to the Purchase Contract Agent for the benefit of the applicable Holders
for distribution to such Holders in accordance with their respective interests.
Section4.03
Notice and Voting
. (a)Subject to Section4.03(b) hereof, the Purchase Contract Agent may exercise, or refrain from
exercising, any and all voting and other consensual rights pertaining to the Subordinated Notes underlying Pledged Applicable
Ownership Interests in Subordinated Notes or any part thereof for any purpose not inconsistent with the terms of this Agreement;
provided
that the Purchase Contract Agent shall not exercise or shall not refrain from exercising such right, as the case may be, if, in
the judgment of the Purchase Contract Agent, such action would impair or otherwise have a material adverse effect on the value of all
or any of the Subordinated Notes underlying Pledged Applicable Ownership Interests in Subordinated Notes; and
provided further
that the Purchase Contract Agent shall give the Company and the Collateral Agent at least five Business Days’ prior written notice of
the manner in which it intends to exercise, or its reasons for refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Subordinated Notes underlying Pledged Applicable Ownership Interests in Subordinated
Notes, including either notice of any meeting at which holders of the Subordinated Notes are entitled to vote or the solicitation of
consents, waivers or proxies of holders of the Subordinated Notes, the Collateral Agent shall use reasonable efforts to send promptly
to the Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request
therefor from the Purchase Contract Agent, to execute and deliver to the Purchase Contract Agent such proxies and other instruments
in respect of such Subordinated Notes underlying Pledged Applicable Ownership Interests in Subordinated Notes (in form and
substance satisfactory to the Collateral Agent) as are prepared by the Company and delivered to the Purchase Contract Agent with
respect to the Subordinated Notes underlying Pledged Applicable Ownership Interests in Subordinated Notes.
31

2006. EDGAR Online, Inc.