FIRST AMENDMENT TO RIGHTS AGREEMENT
Exhibit
4.3
FIRST
AMENDMENT TO RIGHTS AGREEMENT
This
Amendment dated as of November 29, 2007 (this “Amendment”) to
the Rights Agreement, dated as of July 9, 2001 (the “Rights
Agreement”), between E*TRADE Financial Corporation (formerly known as
E*TRADE Group, Inc.), a Delaware corporation (the “Company”),
and American Stock Transfer and Trust Company, as Rights Agent (the
“Rights Agent”). Capitalized terms used herein and
not defined shall have the meanings specified in the Rights
Agreement.
WHEREAS,
the Company and the Rights Agent are parties to the Rights
Agreement;
WHEREAS,
the Company proposes to enter into a Master Investment and Securities Purchase
Agreement, dated as of November 29, 2007 (as amended, supplemented, modified
or
replaced from time to time, the “Master Investment and Securities
Purchase Agreement”), by and between the Company and Xxxxxxx Capital
Ltd. (“Investor”), a Cayman Islands
company, as well as the
Ancillary
Documents (as such term is defined in the Master Investment and Securities
Purchase Agreement, the “Ancillary Documents”), providing for,
among other transactions, the purchase by Investor of 12.5% Springing Lien
Notes
of the Company and shares of the Company’s Common Stock and (the
“Securities”) (collectively, the
“Transactions”);
WHEREAS,
Section 27 of the Rights Agreement permits the Company to amend the Rights
Agreement on the terms set forth in this Amendment;
WHEREAS,
the Board of Directors of the Company has determined that the Master Investment
and Securities Purchase Agreement, the Ancillary Documents and the terms and
conditions set forth therein and the transactions contemplated thereby,
including, without limitation, the Transactions, are in the best interests
of
the Company and its shareholders;
WHEREAS,
the Board of Directors of the Company has determined that it is in the best
interests of the Company and its shareholders to modify the terms of the Rights
Agreement to exempt the Master Investment and Securities Purchase Agreement,
the
Ancillary Documents and all of the transactions contemplated thereby including,
without limitation, the Transactions, from the application of the Rights
Agreement, and in connection therewith the Company is entering into this
Amendment and directing the Rights Agent to enter into this Amendment;
and
WHEREAS,
all acts and things necessary to make this Amendment a valid agreement,
enforceable according to its terms have been done and performed, and the
execution and delivery of this Amendment by the Company and the Rights Agent
have been in all respects duly authorized by the Company and the Rights
Agent.
NOW,
THEREFORE, in consideration of the promises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the Company and the Rights Agent hereby agree as follows:
A. Amendment
of Certain Definitions.
Section
1
of the Rights Agreement is supplemented to add the following definitions in
the
appropriate alphabetical locations:
“Investor”
shall mean Xxxxxxx Capital Ltd., a Cayman Islands company.
“Transactions”
shall have the meaning ascribed to such term in the Master Investment and
Securities Purchase Agreement.
“Master
Investment and Securities Purchase Agreement” shall mean the Master Investment
and Securities Purchase Agreement, dated as of November 29, 2007, by and between
the Company and Investor, as it may be amended, supplemented, modified or
replaced from time to time.
“Securities”
shall have the meaning ascribed to such term in the Master Investment and
Securities Purchase Agreement.
The
definition of “Acquiring Person” in Section 1 of the Rights Agreement is hereby
amended by adding the following sentence at the end thereof as paragraph
(d):
“(d)
notwithstanding anything in this Agreement to the contrary, Investor or any
of
its Affiliates or Associates shall not be deemed to be an Acquiring Person
solely by virtue of (i) the approval, execution and delivery of the Master
Investment and Securities Purchase Agreement and the Ancillary Documents, (ii)
the consummation of the Transactions or (iii) the purchase of any Securities
contemplated in the Master Investment and Securities Purchase Agreement or
the
Ancillary Documents, or the purchase by Investor or any of its Affiliates or
Associates of up to an additional 8,474,989 shares of Common Stock (as adjusted
for any stock splits, combinations and the like).”
The
definition of “Stock Acquisition Date” in Section 1 of the Rights Agreement is
hereby amended by adding the following sentence at the end thereof:
“Notwithstanding
anything in this Agreement to the contrary, a Stock Acquisition Date shall
not
be deemed to have occurred solely as the result of (i) the approval, execution,
delivery or public announcement of the Master Investment and Securities Purchase
Agreement or the Ancillary Documents, (ii) the consummation of the Transactions,
or (iii) the purchase of any Securities contemplated in the Master Investment
and Securities Purchase Agreement or the Ancillary Documents, or the purchase
by
Investor or any of its Affiliates or Associates of up to an
additional
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8,474,989
shares of Common Stock (as adjusted for any stock splits, combinations and
the
like).”
B. Amendment
of Section 3. Section 3(b) of the Rights Agreement is hereby
amended and supplemented by adding the following sentence at the end
thereof:
“Notwithstanding
anything in this Agreement to the contrary, a Distribution Date shall not be
deemed to have occurred solely as the result of (i) the approval, execution
and
delivery of the Master Investment and Securities Purchase Agreement and the
Ancillary Documents, (ii) the consummation of the Transactions, or (iii) the
purchase of any Securities contemplated in the Master Investment and Securities
Purchase Agreement or the Ancillary Documents, or the purchase by Investor
or
any of its Affiliates or Associates of up to an additional 8,474,989 shares
of
Common Stock (as adjusted for any stock splits, combinations and the
like).”
Furthermore,
Section 3 of the Rights Agreement is amended to add the following sentence
at
the end thereof as Section 3(e):
“(e)
Nothing in this Agreement shall be construed to give any holder of Rights or
any
other Person any legal or equitable rights, remedies or claims under this
Agreement by virtue of the execution and delivery of the Master Investment
and
Securities Purchase Agreement and the Ancillary Documents or by virtue of any
of
the Transactions or the purchase of any Securities contemplated in the Master
Investment and Securities Purchase Agreement or the Ancillary Documents, or
the
purchase by Investor or any of its Affiliates or Associates of up to an
additional 8,474,989 shares of Common Stock (as adjusted for any stock splits,
combinations and the like).
C. New
Section 35: Section 35 is hereby added to the Rights Agreement to
read in its entirety as follows:
“Section
35. The Master Investment and Securities Purchase Agreement; The Ancillary
Documents. Notwithstanding anything contained in this Agreement to
the contrary, neither the approval, execution, delivery or public announcement
of the Master Investment and Securities Purchase Agreement and the Ancillary
Documents nor the consummation of the Transactions or the purchase of any
Securities contemplated in the Master Investment and Securities Purchase
Agreement or the Ancillary Documents, or the purchase by Investor or any of
its
Affiliates or Associates of up to an additional 8,474,989 shares of Common
Stock
(as adjusted for any stock splits, combinations and the like), or the
performance by the Company of its obligations thereunder shall cause (a) the
Rights to become exercisable, (b) Investor or any of its Affiliates or
Associates to be an Acquiring Person, (c) a Stock Acquisition Date to occur
or
(d) a Distribution Date to occur.”
D. Effect
of Amendment. Except as expressly set forth herein, the Rights
Agreement shall not by implication or otherwise be supplemented or amended
by
virtue of this
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Amendment,
but shall remain in full force and effect, as amended hereby. This
Amendment shall be construed in accordance with and as a part of the Rights
Agreement, and all terms, conditions, representations, warranties, covenants
and
agreements set forth in the Rights Agreement and each other instrument or
agreement referred to therein, except as herein amended, are hereby ratified
and
confirmed. To the extent that there is a conflict between the terms
and provisions of the Rights Agreement and this Amendment, the terms and
provisions of this Amendment shall govern for purposes of the subject matter
of
this Amendment only.
E. Waiver
of Notice. The Rights Agent and the Company hereby waive any
notice requirement with respect to each other under the Rights Agreement, if
any, pertaining to the matters covered by this Amendment.
F. Severability. If
any provision, covenant or restriction of this Amendment is held by a court
of
competent jurisdiction or other authority to be invalid, illegal or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be effected, impaired or invalidated.
G. Governing
Law. This Amendment shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by
and
construed in accordance with the laws of such state applicable to contracts
to
be made and performed entirely within such state, except that the rights and
obligations of the Rights Agent shall be governed by the law of the State of
New
York.
H. Counterparts. This
Amendment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
I. Effective
Date of Amendment. This Amendment shall be deemed effective as of
the date first written above, as if executed on such date.
J. Descriptive
Headings. Descriptive headings appear herein for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
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IN
WITNESS
WHEREOF, the parties hereto have caused this Amendment to be duly executed
as of
the date first written above.
| E*TRADE FINANCIAL CORPORATION | |||
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By:
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/s/ Xxxxxx Xxxxxxx Xxxxxx | ||
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Name:
Xxxxxx Xxxxxxx Lilien
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Title:
President
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| AMERICAN STOCK TRANSFER & TRUST COMPANY | |||
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By:
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/s/ Xxxxxxx X. Xxxxxx | ||
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Name: Xxxxxxx
X. Xxxxxx
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Title:
Vice President
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