eTrade 2005 Annual Report Download - page 312

As provided in the Purchase Contract and Pledge Agreement, upon the occurrence of a Failed Final Remarketing, as of the Purchase
Contract Settlement Date, each Holder of any Pledged Applicable Interests in Subordinated Notes, unless such Holder has elected
Cash Settlement and delivered cash in accordance with Section5.02(a) of the Purchase Contract and Pledge Agreement, shall be
deemed to have exercised such Holder’s Put Right with respect to the Subordinated Notes underlying such Applicable Ownership
Interests in Subordinated Notes and to have elected to have the Proceeds of the Put Right set-off against such Holder’s obligation to
pay the aggregate Purchase Price for the shares of Common Stock to be issued under the related Purchase Contracts in full satisfaction
of such Holders’ obligations under such Purchase Contracts.
The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment of the aggregate Purchase Price for the shares of Common Stock to be
purchased thereunder in the manner set forth in the Purchase Contract and Pledge Agreement.
Each Purchase Contract evidenced hereby and all obligations and rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall occur. Upon the occurrence of a Termination Event, the Company shall give written notice to the Purchase
Contract Agent and to the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release 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) forming a part of each Corporate Unit from the Pledge. A Corporate Unit shall thereafter represent the right to receive the
Subordinated Note underlying the Applicable Ownership Interest in the Subordinated Notes or the Applicable Ownership Interests in
the Treasury Portfolio forming a part of such Corporate Units in accordance with the terms of the Purchase Contract and Pledge
Agreement.
Under the terms of the Purchase Contract and Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Subordinated Notes underlying the Pledged Applicable Ownership Interests in
Subordinated Notes, but only to the extent instructed in writing by the Holders. Upon receipt of notice of any meeting at which holders
of Subordinated Notes are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Subordinated Notes,
the Purchase Contract Agent shall, as soon as practicable thereafter, mail, first class, postage pre-paid, to the Corporate Units Holders
the notice required by the Purchase Contract and Pledge Agreement.
Upon the occurrence of a Special Event Redemption, the Collateral Agent shall surrender the Subordinated Notes underlying the
Pledged Applicable Ownership Interests in Subordinated Notes against delivery of an amount equal to the aggregate Redemption Price
of such Subordinated Notes and shall deposit the funds in the Collateral Account in exchange for such Subordinated Notes.
Thereafter, the Collateral Agent shall cause the Securities Intermediary to apply an amount equal to the aggregate Redemption Amount
of such funds to purchase, on behalf of the Holders of Corporate Units, the Treasury Portfolio.
Following the occurrence of a Special Event Redemption prior to the Purchase Contract Settlement Date, the Collateral Agent shall
have such security interest rights with respect to the Applicable Ownership Interests in the Treasury Portfolio (as specified in clause
(i)of the definition of such term) as the Collateral Agent had in respect of Applicable Ownership Interests in Subordinated
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