E*TRADE Financial Corporation New York, NY 10022
E*TRADE
Financial Corporation
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
December
12, 2007
Xxxxxxx
Capital Ltd.
c/o
Citadel Limited Partnership
000
Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxx Xxxxxx, Esq.
Reference
is made to the Master Investment and Securities Purchase Agreement (the
“Agreement”),
dated
as of November 29, 2007, by and between Xxxxxxx Capital Ltd. (“Purchaser”),
and
E*Trade Financial Corporation (the “Company”).
Purchaser
and the Company hereby agree as follows:
1. The
allocation of the Purchased Common Stock issuable to Purchaser pursuant to
the
Agreement shall be amended to provide for (i) an increase, from 30,741,901
shares to 33,182,197 shares, in the aggregate number of shares of Common Stock
issued and issuable to Purchaser in connection with the transactions
contemplated to occur at the Initial Closing, and (ii) a corresponding decrease,
from 49,125,186 shares to 46,684,890 shares, in the aggregate number of shares
of Common Stock issuable to Purchaser in connection with the transactions
contemplated to occur at the Final Closing. Accordingly, the Agreement is hereby
amended as follows:
a. Clause
“(c)” of the first “WHEREAS” clause is hereby deleted in its entirety and
replaced with the following:
“(c)
33,182,197 shares of the Company’s common stock, par value $.01 per share
(“Common
Stock”),
of
which 10,000,000 shares will be issued to Purchaser at the Initial Closing
and
23,182,197 will be issued to Purchaser immediately following termination or
expiration on any applicable waiting period under the HSR Act with respect
to
such issuance; and”;
b. Clause
“(b)” of the fourth “WHEREAS” clause is hereby deleted in its entirety and
replaced with the following:
“(b)
an
additional 46,684,890 shares of Common Stock (together with the shares of Common
Stock issued pursuant to clause (c) of the first WHEREAS clause, the
“Purchased
Common Stock”
and
the
Purchased Common Stock together with the Springing Lien Notes being issued
pursuant to this Agreement, the “Securities”);
and
”;
c. The
reference to “20,741,901 shares” in the first sentence of Section 2.01(a)(iii)
is hereby deleted and replaced with “23,182,197 shares”; and
d. Clause
“(A)” of Section 2.01(b)(i) is hereby deleted in its entirety and replaced with
the following:
“(A)
46,684,890 shares of Purchased Common Stock; and”.
2. The
proviso to Section 4.15 of the Agreement is hereby deleted in its entirety
and
replaced with the following:
“provided
that:
(1) notwithstanding
the foregoing clauses (a) through (e), (i) any purchase or agreement to purchase
entered into prior to the date hereof shall be permitted, (ii) any purchase
of
securities issued by Federal National Mortgage Association or Xxxxxxx Mac shall
be permitted, and (iii) none of the restrictions in the foregoing clauses (a)
through (e) shall apply during any fiscal quarter of E*Trade Bank immediately
following the quarter in which its regulatory capital exceeds the amount of
regulatory capital required for it to be Well Capitalized by $500 million;
(2) “purchase
for its own account” shall mean purchases of assets subject to E*TRADE Bank’s
investment policy and included in an “investment portfolio” (as defined in FASB
115); and
(3) for
purposes of clauses (d) and (e) above, the term “purchase for its own account”
shall mean purchases in the secondary market and shall not include purchases
of
such mortgage loans or equity lines of credit originated by any Affiliate of
the
Company.”
3. Except
as
expressly set forth in this letter agreement, this letter agreement shall not
constitute an amendment or modification of any other provision of the Agreement,
and all terms, conditions and covenants contained in the Agreement shall remain
in full force and effect in accordance with their terms. Each reference to
“hereof”, “hereunder”, “herein”, “hereby” and each other similar reference, and
each reference to “this Agreement” and each other similar reference contained in
the Agreement shall refer to the Agreement as amended by this letter agreement;
provided
that
each reference in the Agreement to “the date of this Agreement” or “the date
hereof” (or any words of like import) shall be deemed to refer to November
29, 2007.
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4. This
letter agreement shall be governed by, and interpreted in accordance with,
the
laws of the State of New York.
5. This
letter agreement may be executed in one or more counterparts, each of which
shall be deemed to constitute an original, but all of which together shall
constitute one and the same document.
[Signature
Page follows]
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Please
confirm your agreement to the foregoing by executing a counterpart to this
letter agreement in the space provided below.
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Very
truly yours,
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E*TRADE
FINANCIAL CORPORATION
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By:
/s/
R. Xxxxxx
Xxxxxx
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Name:
R.
Xxxxxx Xxxxxx
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Title:
President
and COO
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ACCEPTED
AND AGREED
as
of the
date first set forth above:
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XXXXXXX
CAPITAL LTD.
By:
Citadel Limited Partnership, Portfolio Manager
By:
Citadel Investment Group, L.L.C., its General Partner
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By:
/s/
Xxxxxxx
Xxxxxxxxx
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Name:
Xxxxxxx
Xxxxxxxxx
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Title:
Managing
Director and Deputy General Counsel
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| cc: |
Xxxxxx
X. Xxxxxxxxx (Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP)
Xxxxxx
X. Xxxxxxxxx (Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
LLP)
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