eTrade 2005 Annual Report Download - page 276

another Person into the Company (other than a merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), or the sale by the Company of all or substantially all of its assets, in each case
in which 30% or more of the total consideration paid to the Company’s shareholders consists of cash or cash equivalents (a “
Cash
Merger
”), then a Holder of a Unit may settle (“
Cash Merger Early Settlement
”) its Purchase Contract, upon the conditions set forth
below, at the Settlement Rate in effect immediately prior to the closing of the Cash Merger;
provided
that no Cash Merger Early
Settlement will be permitted pursuant to this Section5.04(b)(ii) unless, at the time such Cash Merger Early Settlement is effected, there
is an effective Registration Statement with respect to any securities to be issued and delivered in connection with such Cash Merger
Early Settlement, if such a Registration Statement is required (in the view of counsel, which need not be in the form of a written
opinion, for the Company) under the Securities Act. If such a Registration Statement is so required, the Company covenants and
agrees to use its commercially reasonable efforts to (x)have in effect a Registration Statement covering any securities to be delivered in
respect of the Purchase Contracts being settled and (y)provide a Prospectus in connection therewith, in each case in a form that may
be used in connection with such Cash Merger Early Settlement. The Company shall pay such amount as a credit against the amount
otherwise payable by such Holder to effect such Cash Merger Early Settlement.
Within five Business Days of the completion of a Cash Merger, the Company shall provide written notice to Holders of such
completion of a Cash Merger, which shall specify the deadline for submitting the notice to settle early in cash pursuant to this
Section5.04(b)(ii), the date on which such Cash Merger Early Settlement shall occur (which date shall be at least five days after the date
of such written notice by the Company, but which shall in no event be later than the earlier of 20 days after the date of such written
notice by the Company and the fifth Business Day immediately preceding the Purchase Contract Settlement Date) (the “
Cash Merger
Early Settlement Date
”), the applicable Settlement Rate and the amount (per share of Common Stock) of cash, securities and other
consideration receivable by the Holder upon settlement.
Corporate Units Holders (unless Applicable Ownership Interests in the Treasury Portfolio have replaced Applicable Ownership
Interests in Subordinated Notes as a component of the Corporate Units) and Treasury Units Holders may only effect Cash Merger
Early Settlement pursuant to this Section5.04(b)(ii) in integral multiples of 40 Corporate Units or Treasury Units, as the case may be. If
Applicable Ownership Interests in the Treasury Portfolio have replaced Applicable Ownership Interests in Subordinated Notes as a
component of the Corporate Units, Corporate Units Holders may only effect Cash Merger Early Settlement pursuant to this
Section5.04(b)(ii) in multiples of 128,000 Corporate Units. Other than the provisions relating to timing of notice and settlement, which
shall be as set forth in the immediately preceding paragraph, the provisions of Section5.01 shall apply with respect to a Cash Merger
Early Settlement pursuant to this Section5.04(b)(ii).
In order to exercise the right to effect Cash Merger Early Settlement with respect to any Purchase Contracts, the Holder of the
Certificate evidencing Units shall deliver, no later than 5:00 p.m. (New York City time) on the third Business Day immediately preceding
the Cash Merger Early Settlement Date, such Certificate to the Purchase Contract Agent at the Corporate Trust Office duly endorsed
for transfer to the Company or in blank with the form of Election to Settle Early on the reverse thereof duly completed and accompanied
by payment (payable to the Company in immediately available funds) in an amount equal to the product of (A)the Stated Amount times
(B)the number of Purchase Contracts with respect to which the Holder has elected to effect Cash Merger Early Settlement
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