eTrade 2005 Annual Report Download - page 295

ARTICLE 12
ADMINISTRATION OF COLLATERAL
Section12.01
Initial Deposit of Subordinated Notes
. (a)Prior to or concurrently with the execution and delivery of this Agreement, the
Purchase Contract Agent, on behalf of the initial Holders of the Corporate Units, shall Transfer to the Securities Intermediary, for credit
to the Collateral Account, the Applicable Ownership Interests in Subordinated Notes and the Subordinated Notes underlying such
Applicable Ownership Interests in Subordinated Notes or security entitlements relating thereto and the Securities Intermediary shall
indicate by book-entry that a securities entitlement with respect to such Applicable Ownership Interests in Subordinated Notes has
been credited to the Collateral Account.
(b) The Collateral Agent may, at any time or from time to time, in its sole discretion, cause any or all securities or other property
underlying any financial assets credited to the Collateral Account to be registered in the name of the Securities Intermediary, the
Collateral Agent or their respective nominees;
provided
,
however
, that unless any Event of Default (as defined in the Indenture) shall
have occurred and be continuing, the Collateral Agent agrees not to cause any Subordinated Notes to be so re-registered.
Section12.02
Establishment of Collateral Account
. The Securities Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary shall identify in its records the Collateral Agent as the
entitlement holder entitled to exercise the rights that comprise any financial asset credited to the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to this Agreement, including any Applicable Ownership Interests in
the Treasury Portfolio (as specified in clause (i)of the definition thereof) or Treasury Securities and the Permitted Investments, will be
credited promptly to the Collateral Account; and
(e) all securities or other property underlying any financial assets credited to the Collateral Account shall be (i)registered in the name
of the Purchase Contract Agent and indorsed to the Securities Intermediary or in blank, (ii)registered in the name of the Securities
Intermediary or (iii)credited to another securities account maintained in the name of the Securities Intermediary.
In no case will any financial asset credited to the Collateral Account be registered in the name of the Purchase Contract Agent (in its
capacity as such) or any Holder or specially indorsed to the Purchase Contract Agent (in its capacity as such) or any Holder, unless
such financial asset has been further indorsed to the Securities Intermediary or in blank.
Section12.03
Treatment as Financial Assets
. Each item of property (whether investment property, financial asset, security, instrument
or cash) credited to the Collateral Account shall be treated as a financial asset.
Section12.04
Sole Control by Collateral Agent
. Except as provided in Section15.01, at all times prior to the termination of the Pledge,
the Collateral Agent shall have sole control of the Collateral
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