eTrade 2005 Annual Report Download - page 313

Notes and the underlying Subordinated Notes, as provided in the Purchase Contract and Pledge Agreement and any reference herein
to the Subordinated Notes or Applicable Ownership Interests in Subordinated Notes shall be deemed to be a reference to the Treasury
Portfolio or the Applicable Ownership Interests in the Treasury Portfolio, as the case may be.
The Corporate Units Certificates are issuable only in registered form and only in denominations of a single Corporate Unit and any
integral multiple thereof. The transfer of any Corporate Units Certificate will be registered and Corporate Units Certificates may be
exchanged as provided in the Purchase Contract and Pledge Agreement. A Holder who elects to substitute a Treasury Security for the
Subordinated Note underlying the Applicable Ownership Interests in Subordinated Notes or Applicable Ownership Interests in the
Treasury Portfolio, as the case may be, thereby creating Treasury Units, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Purchase Contract and Pledge Agreement, such Corporate Unit shall not be separable
into its constituent parts, and the rights and obligations of the Holder of such Corporate Unit in respect of the Applicable Ownership
Interest in Subordinated Notes, or Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and Purchase Contract
constituting such Corporate Units may be transferred and exchanged only as a Corporate Unit.
Subject to, and in compliance with, the conditions and terms set forth in the Purchase Contract and Pledge Agreement, the Holder of
Corporate Units may effect a Collateral Substitution. From and after such Collateral Substitution, each Unit for which Pledged Treasury
Securities secure the Holder’s obligation under the Purchase Contract shall be referred to as a “Treasury Unit”. A Holder may make
such Collateral Substitution only in integral multiples of 40 Corporate Units for 40 Treasury Units. If Applicable Ownership Interests in
the Treasury Portfolio have replaced the Applicable Ownership Interests in Subordinated Notes as a component of the Corporate
Units, a Holder may substitute Treasury Securities for the Applicable Ownership Interests in the Treasury Portfolio only in integral
multiples of 128,000 Corporate Units.
Subject to and upon compliance with the provisions of the Purchase Contract and Pledge Agreement, at the option of the Holder
thereof, Purchase Contracts underlying Units may be settled early by effecting an Early Settlement as provided in the Purchase
Contract and Pledge Agreement in integral multiples of 40 Corporate Units, or if Applicable Ownership Interests in the Treasury
Portfolio have replaced the Applicable Ownership Interests in Subordinated Notes as a component of the Corporate Units, in integral
multiples of 128,000 Corporate Units.
Upon Early Settlement of Purchase Contracts by a Holder of the related Units, the Subordinated Notes underlying the Pledged
Applicable Ownership Interests in Subordinated Notes or the Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (i)of the definition of such term) underlying such Units shall be released from the Pledge as provided in the Purchase Contract
and Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase
Contract forming part of a Corporate Unit as to which Early Settlement is effected equal to the Minimum Settlement Rate.
Upon the occurrence of a Cash Merger, a Holder of Corporate Units may effect Cash Merger Early Settlement of the Purchase
Contracts underlying such Corporate Units pursuant to the terms of the Purchase Contract and Pledge Agreement in integral multiples
of 40 Corporate Units, or if the Applicable Ownership Interests in the Treasury Portfolio have replaced the Applicable Ownership
Interests in Subordinated Notes as a component of the Corporate Units, in integral multiples of 128,000 Corporate Units. Upon Cash
Merger Early Settlement of Purchase Contracts by a Holder of the related Corporate Units, the Subordinated Notes underlying the
Pledged Applicable Ownership Interests in Subordinated Notes or the Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (i)of the
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