CUSIP No. 269246104
|
Page 2 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Limited Partnership
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
AF
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES £
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent1
|
||
14
|
TYPE OF REPORTING PERSON
PN, HC
|
CUSIP No. 269246104
|
Page 3 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel LLC
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
AF
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES£
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent2
|
||
14
|
TYPE OF REPORTING PERSON
OO, HC
|
CUSIP No. 269246104
|
Page 4 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Kenneth Griffin
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
AF
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
United States
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON£
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES£
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent3
|
||
14
|
TYPE OF REPORTING PERSON
IN, HC
|
CUSIP No. 269246104
|
Page 5 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Equity Fund Ltd.
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
WC
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON£
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES £
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent4
|
||
14
|
TYPE OF REPORTING PERSON
CO
|
CUSIP No. 269246104
|
Page 6 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Securities LLC
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
WC
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES£
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent5
|
||
14
|
TYPE OF REPORTING PERSON
OO, BD
|
CUSIP No. 269246104
|
Page 7 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Derivatives Trading Ltd.
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
WC
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Cayman Islands
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES £
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent6
|
||
14
|
TYPE OF REPORTING PERSON
CO
|
CUSIP No. 269246104
|
Page 8 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Advisors LLC
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
AF
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES £
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent7
|
||
14
|
TYPE OF REPORTING PERSON
OO, HC, IA
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Holdings I LP
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
AF
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES £
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent8
|
||
14
|
TYPE OF REPORTING PERSON
PN, HC
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Holdings II LP
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
AF
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES £
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent9
|
||
14
|
TYPE OF REPORTING PERSON
PN, HC
|
CUSIP No. 269246104
|
Page 11 of 15 Pages
|
1
|
NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Citadel Investment Group II, L.L.C.
|
||
2
|
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)S
(b)£
|
||
3
|
SEC USE ONLY
|
||
4
|
SOURCE OF FUNDS
AF
|
||
5
|
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) £
|
||
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
|
||
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0
|
|
8
|
SHARED VOTING POWER
27,423,988 shares
|
||
9
|
SOLE DISPOSITIVE POWER
0
|
||
10
|
SHARED DISPOSITIVE POWER
See Row 8 above.
|
||
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON £
See Row 8 above.
|
||
12
|
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES £
|
||
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.8 percent10
|
||
14
|
TYPE OF REPORTING PERSON
OO, HC
|
CUSIP No. 269246104
|
Page 12 of 15 Pages
|
(a)
|
Number of shares: 27,423,988 shares
|
Percentage of shares: 9.8%15
|
CUSIP No. 269246104
|
Page 13 of 15 Pages
|
(b)
|
Sole power to vote or direct the vote: 0 shares
|
Shared power to vote or direct the vote: 27,423,988 shares
|
|
Sole power to dispose or to direct the disposition: 0 shares
|
|
Shared power to dispose or direct the disposition: 27,423,988 shares
|
|
(c)
|
The table attached hereto as Exhibit 99.43 sets forth a listing of the transactions effected by the Reporting Persons in the shares of Common Stock of the Issuer in the sixty days prior to the date of this Amendment No. 22.
|
(d)
|
Not applicable.
|
(e)
|
Not applicable.
|
ITEM 6.
|
CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER
|
CUSIP No. 269246104
|
Page 14 of 15 Pages
|
Exhibit 99.43
|
Transaction Listing required by Item 5(c)
|
Exhibit 99.44
|
Underwriting Agreement, dated April 25, 2011, by and among CEF, the April 2011 Underwriter and the Issuer
|
Exhibit 99.45
|
Lock-Up Agreement, dated April 25, 2011
|
CUSIP No. 269246104
|
Page 15 of 15 Pages
|
CITADEL LIMITED PARTNERSHIP
|
CITADEL LLC
|
||||
By:
|
Citadel LLC,
|
By:
|
/s/ John C. Nagel
|
||
its General Partner
|
John C. Nagel, Authorized Signatory
|
||||
By:
|
/s/ John C. Nagel
|
||||
John C. Nagel, Authorized Signatory
|
|||||
CITADEL EQUITY FUND LTD.
|
CITADEL DERIVATIVES TRADING LTD.
|
||||
By:
|
Citadel Advisors LLC,
|
By:
|
Citadel Advisors LLC,
|
||
its Portfolio Manager
|
its Portfolio Manager
|
||||
By:
|
Citadel Holdings II LP,
its Managing Member
|
By:
|
Citadel Holdings II LP,
its Managing Member
|
||
By:
|
Citadel Investment Group II, L.L.C.,
|
By:
|
Citadel Investment Group II, L.L.C.,
|
||
its General Partner
|
its General Partner
|
||||
By:
|
/s/ John C. Nagel
|
By:
|
/s/ John C. Nagel
|
||
John C. Nagel, Authorized Signatory
|
John C. Nagel, Authorized Signatory
|
||||
KENNETH GRIFFIN
|
CITADEL SECURITIES LLC
|
||||
By:
|
/s/ John C. Nagel
|
By:
|
Citadel Advisors LLC,
|
||
John C. Nagel, attorney-in-fact*
|
its Managing Member
|
||||
By:
|
Citadel Holdings II LP,
its Managing Member
|
||||
By:
|
Citadel Investment Group II, L.L.C.,
|
||||
its General Partner
|
|||||
By:
|
/s/ John C. Nagel
|
||||
John C. Nagel, Authorized Signatory
|
|||||
CITADEL ADVISORS LLC
|
CITADEL HOLDINGS I LP
|
||||
By:
|
Citadel Holdings II LP,
|
By:
|
Citadel Investment Group II, L.L.C.,
|
||
its Managing Member
|
its General Partner
|
||||
By:
|
/s/ John C. Nagel
|
By:
|
/s/ John C. Nagel
|
||
John C. Nagel, Authorized Signatory
|
John C. Nagel, Authorized Signatory
|
||||
CITADEL HOLDINGS II LP
|
CITADEL INVESTMENT GROUP II, L.L.C.
|
||||
By:
|
Citadel Investment Group II, L.L.C.,
|
By:
|
/s/ John C. Nagel
|
||
its General Partner
|
John C. Nagel, Authorized Signatory
|
||||
By:
|
/s/ John C. Nagel
|
||||
John C. Nagel, Authorized Signatory
|
Date
|
Security
|
Transaction Type
|
Price per Share
|
Number of Shares
|
||||
02/28/2011
|
Common Stock
|
Acquisition (conversion from Class A Debenture)
|
$10.34
|
20,927,947
|
||||
04/25/2011
|
Common Stock
|
Acquisition (conversion from Class A Debenture)
|
$10.34
|
2,979,593
|
||||
04/25/2011
|
Common Stock
|
Sale pursuant to April 2011 Underwriting Agreement
|
$16.38
|
27,500,000
|
|
1585 Broadway
|
|
New York, New York 10036
|
|
(a)
|
No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus included in the Pricing Disclosure Package, at the time of filing thereof, complied in all material respects with the Securities Act, and no Preliminary Prospectus, at the time of filing thereof, contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use in any Preliminary Prospectus, it being understood and agreed that the only such information furnished by the Underwriter consists of the information described as such in Section 10(c) hereof. The Pricing Disclosure Package as of the Time of Sale did not, and as of the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to the Underwriter furnished to the Company in writing by the Underwriter expressly for use in such Pricing Disclosure Package, it being understood and agreed that the only such information furnished by the Underwriter consists of the information described as such in Section 10(c) hereof. The Registration Statement is an “automatic shelf registration statement” as defined under Rule 405 of the Securities Act that has been filed with the Commission not earlier than three years prior to the date hereof; there is no order preventing or suspending the use of the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus, and, to the knowledge of the Company, no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering has been initiated or threatened by the Commission; no notice of objection of the Commission to the use of such Registration Statement pursuant to Rule 401(g)(2) under the Securities Act has been received by the Company; the Registration Statement complied when it initially became effective, complies as of the date hereof and, as then amended or supplemented, as of each other Representation Date will comply, in all material respects, with the requirements of the Securities Act; the conditions to the use of Form S-3 in connection with the offering and sale of the Shares as contemplated hereby have been satisfied; the Registration Statement meets, and the offering and sale of the Shares as contemplated hereby complies with, the requirements of Rule 415 under the Securities Act (including, without limitation, Rule 415(a)(5)); the Prospectus complied or will comply, at the time it was or will be filed with the Commission, and will comply, as then amended or supplemented, as of the Closing Date, in all material respects, with the requirements of the Securities Act; the Registration Statement did not, as of the time of its initial effectiveness, and does not or will not, as then amended or supplemented, as of each Representation Date, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or
|
|
necessary to make the statements therein not misleading; as of the Closing Date, the Prospectus, as then amended or supplemented, together with all of the then issued Permitted Free Writing Prospectuses, if any, will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company makes no representation or warranty with respect to any statement or omission in the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning the Underwriter and furnished in writing by or on behalf of the Underwriter expressly for use in the Registration Statement, the Prospectus or such Permitted Free Writing Prospectus (it being understood that such information consists solely of the information specified in Section 10(c)).
|
|
(b)
|
Prior to the execution of this Agreement, the Company has not, directly or indirectly, offered or sold any of the Shares by means of any “prospectus” (within the meaning of the Securities Act) or used any “prospectus” (within the meaning of the Securities Act) in connection with the offer or sale of the Shares, in each case other than the Basic Prospectus and the Preliminary Prospectus. The Company represents and agrees that, unless it obtains the prior consent of the Underwriter, it has not made and will not make any offer relating to the Shares that would constitute an “issuer free writing prospectus” (as defined in Rule 433 under the Securities Act) or that would otherwise constitute a “free writing prospectus” (as defined in Rule 405 under the Securities Act). Any such free writing prospectus relating to the Shares consented to by the Underwriter is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents that it has complied and will comply in all material respects with the requirements of Rule 433 under the Securities Act applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. The conditions set forth in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the Securities Act are satisfied, and the registration statement relating to the offering of the Shares contemplated hereby, as initially filed with the Commission, includes a prospectus that, other than by reason of Rule 433 or Rule 431 under the Securities Act, satisfies the requirements of Section 10 of the Securities Act; neither the Company nor the Underwriter is disqualified, by reason of Rule 164(f) or (g) under the Securities Act, from using, in connection with the offer and sale of the Shares, “free writing prospectuses” (as defined in Rule 405 under the Securities Act) pursuant to Rules 164 and 433 under the Securities Act; the Company is not an “ineligible issuer” (as defined in Rule 405 under the Securities Act) as of the eligibility determination date for purposes of Rules164 and 433 under the Securities Act with respect to the offering of the Shares contemplated by the Registration Statement.
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(c)
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The Incorporated Documents, when they were filed with the Commission, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents contained an untrue
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statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
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(d)
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The financial statements and the related notes thereto included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus (other than with respect to the financial data incorporated by reference from the Company’s Current Report on Form 8-K filed with the Commission on April 20, 2011) comply in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present fairly the financial position of the Company and its consolidated subsidiaries at the dates indicated and their results of operations, stockholders’ equity and cash flows for the periods specified, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States (“GAAP”) applied on a consistent basis throughout the periods involved. The other historical financial and statistical information and data included or incorporated by reference (including, without limitation, the financial data incorporated by reference from the Company’s Current Report on Form 8-K filed with the Commission on April 20, 2011) in the Registration Statement, the Pricing Disclosure Package, Prospectus or any Permitted Free Writing Prospectus are, in all material respects, fairly presented.
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(e)
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Except in each case as otherwise disclosed in the Registration Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus, since the date of the most recent financial statements of the Company included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus, (i) there has not been any material change in the capital stock or long-term debt of the Company or any of its subsidiaries and there has not been a Material Adverse Effect (as defined below), (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries, taken as a whole, or incurred any liability or obligation, direct or contingent, except for such liabilities or obligations that, individually or in the aggregate, would not have a Material Adverse Effect and (iii) neither the Company nor any of its subsidiaries has sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except for such losses that, individually or in the aggregate, would not have a Material Adverse
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Effect. As used herein, “Material Adverse Effect” means a material adverse effect on the earnings, business, properties, condition (financial or otherwise), results of operations or prospects of the Company and its subsidiaries taken as a whole.
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(f)
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The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of the state of Delaware, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect.
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(g)
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Each of the subsidiaries of the Company listed on Schedule 1 hereto (the “Named Subsidiaries”) has been duly organized, and is validly existing and in good standing under the laws of its respective jurisdictions of formation or organization, has the corporate power and authority to own, lease and operate its property and to conduct its business as described in Registration Statement, the Pricing Disclosure Package and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect; all of the issued shares of capital stock of each Named Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims (“Liens”), except as to Liens disclosed in the Prospectus. Each significant subsidiary (as defined in Rule 1-02(w) of Regulation S-X) of the Company is a Named Subsidiary.
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(h)
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The Company has an authorized capitalization as set forth in the Registration Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus; all the outstanding shares of capital stock of the Company (including the Shares to be sold by the Selling Stockholder) have been duly and validly authorized and have been, or with respect to any Shares to be issued upon conversion of any Convertible Debentures after the date hereof, have been reserved, and when issued upon conversion will be, validly issued and fully paid and non-assessable and are not, or will not be, as applicable, subject to any pre-emptive or similar rights; except as described in or expressly contemplated by the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interests in the Company or any of its significant subsidiaries, nor any contracts, commitments, agreements, understandings or arrangements of any kind relating to the issuance of any capital stock of the Company or any such significant subsidiary, any such convertible or exchangeable securities or any
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such rights, warrants or options; and the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus.
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(i)
|
The Class A Debentures and the Indenture governing the Class A Debentures, dated August 25, 2009, between E*Trade Financial Corporation and The Bank of New York Mellon, as amended (the “Indenture”, together with the Class A Debentures, the “Debenture Documents”) have been duly authorized , executed and delivered by the Company and, assuming due execution and delivery in accordance with their terms by each of the parties thereto (other than the Company), constitute valid and legally binding agreements of the Company enforceable against the Company in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors’ rights generally or by equitable principles relating to enforceability.
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(j)
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The Company has full right, power and authority to execute and deliver this Agreement and perform its obligations hereunder and under the Debenture Documents; and all action required to be taken for the due and proper authorization, execution and delivery by it of this Agreement and the consummation by it of the transactions contemplated hereby and thereby has been duly and validly taken.
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(k)
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This Agreement has been duly authorized, executed and delivered by the Company.
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(l)
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This Agreement conforms in all material respects to the description thereof contained in the Registration Statement, the Pricing Disclosure Package, the Prospectus and any Permitted Free Writing Prospectus.
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(m)
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Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents, (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, including, but not limited to, the laws, regulations and rules administered by the Commission, the Financial Industry Regulatory Authority, Inc. (“FINRA”), the Federal Reserve, the Office of Thrift Supervision (the “OTS”), the Federal Deposit Insurance Corporation (the “FDIC”), any applicable state, federal or self regulatory organization and the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”), the Equal Credit Opportunity Act, the Fair Housing Act,
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the Community Reinvestment Act, the Home Mortgage Disclosure Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, all other applicable fair lending and fair housing laws or other laws relating to discrimination (including, without limitation, anti-redlining, equal credit opportunity and fair credit reporting), truth-in-lending, real estate settlement procedures, adjustable rate mortgages disclosures or consumer credit (including, without limitation, the federal Consumer Credit Protection Act, the federal Truth-in Lending Act and Regulation Z thereunder, the federal Real Estate Settlement Procedures Act of 1974 and Regulation X thereunder, and the federal Equal Credit Opportunity Act and Regulation B thereunder) or with respect to the Flood Disaster Protection Act and the Bank Secrecy Act, except, in the case of clauses (ii) and (iii) above, for any default or violation that is accurately described in all material respects in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus and for any such default or violation that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.
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(n)
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The execution, delivery and performance by the Company of this Agreement, the compliance by the Company with the terms hereof and of the Debenture Documents and the consummation of the transactions contemplated hereby and thereby will not (i) contravene, conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other material agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) contravene or result in any violation of the provisions of the charter or bylaws of the Company or (iii) contravene or result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (i) and (iii) above, for any such conflict, breach, violation or default that would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the execution, delivery and performance by the Company of this Agreement or the Debenture Documents and compliance by the Company with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby, except as have been made or obtained and except as may be required by and made with or obtained from state securities laws or regulations.
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(o)
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The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement and the Debenture Documents do not require any consent or approval of any shareholders or any other securityholders of the Company (other than the Selling Stockholder or the Underwriter with respect to any Shares issued upon conversion of Class A
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Debentures by the Selling Stockholder or the Underwriter, as applicable, pursuant to the terms of this Agreement).
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(p)
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The Company and its subsidiaries own or possess, or can acquire on reasonable terms, adequate patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names or other intellectual property (collectively, “Intellectual Property”) necessary to carry on the business now operated by them, and neither the Company nor its subsidiaries has received any notice or is otherwise aware of any infringement of or conflict with asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate to protect the interest of the Company or any of its subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would result in a Material Adverse Effect.
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(q)
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Except as set forth in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, each of the Company and its Named Subsidiaries holds, and is in compliance in all material respects with, all material permits, licenses, authorizations, exemptions, orders and approvals (“Permits”), necessary for the operation of their respective businesses, and there are no proceedings pending to which the Company or any of its Named Subsidiaries is a party or, to the knowledge of the Company, threatened by any governmental entity seeking to terminate, revoke or limit any such Permits, nor, to the knowledge of the Company, do grounds exist for any such action by any governmental entities.
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(r)
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Each of the Company and ETB Holdings, Inc. is duly registered with the OTS as a savings and loan holding company under the Home Owners Loan Act, as amended (“HOLA”); E*TRADE Bank continues to hold a valid charter to do business as a federal savings bank; E*TRADE Bank meets the qualified thrift lender test under Section 10(m) of HOLA; and the Company is a savings and loan holding company under Section 10 of HOLA, as amended; and the direct and indirect activities of the Company and its subsidiaries comply with restrictions on holding company activities provided in Section 10 of HOLA. E*TRADE Bank is well capitalized according to the capital standards set forth by the OTS. E*TRADE Bank and its deposits are insured by FDIC to the fullest extent permitted by law.
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(s)
|
Each of E*TRADE Securities LLC, E*TRADE Clearing LLC and E*TRADE Capital Markets, LLC is duly registered as a broker-dealer with the Commission, and is registered as a broker-dealer with each state and is a member in good standing of each self-regulatory organization where its business so requires.
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(t)
|
None of the Company, its Named Subsidiaries, or E*TRADE Capital Management, LLC (“ETCM”) (i) is subject or is party to, or has received any
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notice or advice that any of them may become subject or party to, any legal or governmental proceedings pending or threatened, including but not limited to, any investigation with respect to any cease-and-desist order, consent agreement, any commitment letter or similar undertaking to, memorandum of understanding or other regulatory enforcement action, proceeding or order with or by, other than proceedings accurately described in all material respects in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus and proceedings that would not have a Material Adverse Effect, or on the power or ability of the Company to perform its obligations under this Agreement or to consummate the transactions contemplated hereby or (ii) is subject to, other than proceedings accurately described in all material respects in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, any directive by, or has been a recipient of any supervisory letter from, or has adopted any board resolutions at the request of, any Regulatory Agency (as defined below) that currently restricts in any material respect the conduct of their business or that in any material manner relates to their capital adequacy, their credit policies, their management or their business (each, a “Regulatory Agreement”), nor has the Company or any of its subsidiaries been advised by any Regulatory Agency that it is considering issuing or requesting any such Regulatory Agreement or that they may be subject to an investigation, audit or other examination which is likely to lead to the imposition of any civil monetary or other penalties that would have a Material Adverse Effect, and there is no unresolved violation, criticism or exception by any Regulatory Agency with respect to any report or statement relating to any examinations of the Company or any of its subsidiaries which, in the reasonable judgment of the Company, is expected to result in a Material Adverse Effect. As used herein, the term “Regulatory Agency” means OTS, FDIC, the Federal Reserve Bank, and any other federal or state agency charged with the supervision or regulation of depository institutions or holding companies of depository institutions, or engaged in the insurance of depository institution deposits, or the Commission, FINRA or any other applicable self regulatory organization, or any court, administrative agency or commission or other governmental agency, authority or instrumentality having supervisory or regulatory authority with respect to the Company or any of its subsidiaries.
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(u)
|
The Company, E*TRADE Bank and each of the Company’s applicable subsidiaries have duly filed with the OTS and the FDIC, as the case may be, in correct form the reports required to be filed under applicable laws and regulations and such reports were in all material respects complete and accurate and in compliance with the requirements of applicable laws and regulations; provided that information as of a later date shall be deemed to modify information as of an earlier date; and the Company has previously delivered or made available to the Underwriter accurate and complete copies of all such reports requested by the Underwriter. Except as disclosed in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, neither the Company nor E*TRADE Bank is subject to, or expects to be subject to, any formal or informal enforcement or supervisory action by the OTS or the
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FDIC. Neither the Company nor E*TRADE Bank has been required by the OTS or the FDIC to make material corrections or changes in its management, operations or policies or procedures, which to the knowledge of the Company or E*TRADE Bank, have not been substantially corrected or changed to the satisfaction of the regulators.
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(v)
|
The Company has delivered or made available to the Underwriter a true and complete copy of the Company’s and its subsidiaries’ currently effective Forms BD and ADV as filed with the Commission and all other similar forms required to be filed with governmental entities. The information contained in such forms and reports was or will be, in the case of any forms and reports filed after the date of this Agreement, complete and accurate in all material respects as of the time of filing thereof.
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(w)
|
Except for such as would not, individually or in the aggregate, have a Material Adverse Effect, neither the Company nor any of its subsidiaries nor any of their respective officers, directors or employees has been the subject of any disciplinary proceedings or orders of any governmental entity arising under applicable laws or regulations which would be required to be disclosed on Forms BD or ADV except as disclosed thereon, and no such disciplinary proceeding or order is pending or, to the knowledge of the Company, threatened, nor, to the knowledge of the Company, do grounds exist for any such material action by any governmental entity; and except as disclosed on such Form BD or ADV, neither the Company nor any of its subsidiaries nor any of their respective officers, directors or employees has been enjoined by the order, judgment or decree of any governmental entity from engaging in or continuing any conduct or practice in connection with any Company activity or in connection with the purchase or sale of any security.
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(x)
|
Except as disclosed in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company or to a subsidiary of the Company, from making any other distribution on such subsidiary’s capital stock to the Company or to a subsidiary of the Company, from repaying to the Company or to a subsidiary of the Company any loans or advances to such subsidiary from the Company or a subsidiary of the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company, other than prohibitions arising under applicable law.
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(y)
|
There are no contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement and described in the Registration Statement, the Pricing Disclosure Package, Prospectus or any Permitted Free Writing Prospectus that are not so filed as exhibits to the Registration Statement, the Pricing Disclosure Package or described in the Registration Statement and the Prospectus.
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(z)
|
Deloitte & Touche LLP, which certified the financial statements and supporting schedules, if any, included or incorporated by reference in the Pricing Disclosure Package or the Prospectus, is (i) an independent certified public accountant with respect to the Company and the subsidiaries within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants and (ii) registered with the Public Company Accounting Oversight Board.
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(aa)
|
Each of the Company and its subsidiaries has filed all material federal, state, local and foreign tax returns required to be filed through the date hereof (taking into account any extension of time to file granted or obtained on behalf of the Company or any of its subsidiaries) and has paid all taxes due thereon (except as contested in good faith and adequately reserved for in accordance with GAAP), and no tax deficiency has been determined, as a result of a final determination, adversely to the Company or any of its subsidiaries which has had (nor does the Company or any of its subsidiaries have any knowledge of any tax deficiency which, if determined adversely to the Company or any of its subsidiaries, would have) a Material Adverse Effect.
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(bb)
|
The Company is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Investment Company Act”).
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(cc)
|
No client of ETCM to which it provides investment advisory services is currently registered as an investment company under the Investment Company Act of 1940. Neither the Company nor any of its subsidiaries other than ETCM provides investment advisory services to clients that are currently registered as an investment company under the Investment Company Act of 1940.
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(dd)
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Each of the Company and its subsidiaries (i) is in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its respective businesses and (iii) is in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect.
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(ee)
|
There are no costs or liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) which would, singly or in the aggregate, and to the Company’s knowledge, have a Material Adverse Effect.
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(ff)
|
No prohibited transaction (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)) has occurred with respect to any employee benefit plan of the Company or any of its subsidiaries, excluding transactions effected pursuant to a statutory or administrative exemption, which would have a Material Adverse Effect; each such employee benefit plan is in compliance with applicable law, including ERISA and the Code, except where such noncompliance, individually or in the aggregate, would not have a Material Adverse Effect; none of the Company, any subsidiary, or any entity that was at any time required to be treated as a single employer together with the Company under Section 414(b)(c)(m) or (o) of the Code or Section 4001(a)(14) of ERISA has at any time maintained, sponsored or contributed to, and none of the employee benefit plans of the Company or any subsidiary is, a single employer plan (within the meaning of Section 4001(a)(15) of ERISA), a multiemployer plan (within the meaning of Section 3(37) or 4001(a)(3) of ERISA) or a single employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for which the Company or any subsidiary could incur liability under Section 4063 or 4064 of ERISA; and each such pension plan that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and, to the knowledge of the Company, nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.
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(gg)
|
The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that complies with the requirements of the Exchange Act and that has been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure. The Company and its subsidiaries have carried out evaluations of the effectiveness of their disclosure controls and procedures as required by Rule 13a-15 of the Exchange Act.
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(hh)
|
The Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, but not limited to, internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in
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conformity with generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Based on the Company’s most recent evaluation of its internal controls over financial reporting pursuant to Rule 13a-15(c) of the Exchange Act, except as disclosed in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, as of December 31, 2010, there are no material weaknesses in the Company’s internal controls. The Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of: (i) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which have adversely affected or are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.
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(ii)
|
The Company and each of its subsidiaries carry or are covered by insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as are prudent and customary in the businesses which they are engaged or the Company believes in its reasonable judgment are adequate to protect the Company and its subsidiaries and their respective businesses.
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(jj)
|
None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent or employee of the Company or any of its subsidiaries is currently included on the List of Specially Designated Nationals and Blocked Persons maintained by the OFAC or currently subject to any U.S. sanctions administered by the OFAC.
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(kk)
|
Neither the Company nor, to the knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of the subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds, (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977 or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
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(ll)
|
Other than as set forth in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, there are no material transactions, contracts, agreements or understandings that are required to be disclosed under Item 404 of Regulation S-K between any of the Company or any of its subsidiaries and (i) any director or executive officer of the Company or
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any of its subsidiaries, (ii) any nominee for elections as director of the Company or any of its subsidiaries, (iii) any 5% securityholder of the Company or any of its subsidiaries or (iv) any member of the immediate family of the foregoing persons.
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(ll)
|
Other than as set forth in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, there are no material transactions, contracts, agreements or understandings that are required to be disclosed under Item 404 of Regulation S-K between any of the Company or any of its subsidiaries and (i) any director or executive officer of the Company or any of its subsidiaries, (ii) any nominee for elections as director of the Company or any of its subsidiaries, (iii) any 5% securityholder of the Company or any of its subsidiaries or (iv) any member of the immediate family of the foregoing persons.
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(mm)
|
The operations of the Company and its subsidiaries are and have been conducted at all times in material compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), except as disclosed on Form BD, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries that could reasonably be expected to be material to the Company and its subsidiaries taken as a whole with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
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(nn)
|
There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans and Sections 302 and 906 related to certifications.
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(oo)
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Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that could reasonably be expected to give rise to a valid claim against the Company or any of its subsidiaries or the Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.
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(pp)
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Other than pursuant to the Amended and Restated Registration Rights Agreement between the Company and the Selling Stockholder dated as of August 25, 2009, no person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or, to the knowledge of the Company, the sale of the Shares or Class A Debentures, if applicable, to be sold by the Selling Stockholder hereunder.
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(qq)
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The Company has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Company.
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(rr)
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No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, the
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Prospectus or any Permitted Free Writing Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.
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(ss)
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Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus, is not based on or derived from sources that are reliable and accurate in all material respects.
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(tt)
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The Company is a “well-known seasoned issuer” as defined under the Securities Act and at the times specified in the Securities Act in connection with the offering of the Shares. The Company has paid or will pay the registration fee for this offering pursuant to Rule 456(b)(1) under the Securities Act within the time period specified in such Rule.
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(uu)
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The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock from the NASDAQ Global Select Market (the “Exchange”), nor has the Company received any notification that the Commission or the Exchange is contemplating terminating such registration or listing. The outstanding shares of the Common Stock have been approved for listing and the Shares being sold hereunder have been approved for listing, subject only to official notice of issuance, on the Exchange.
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(vv)
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There are no transfer taxes or other similar fees or charges under federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement.
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(ww)
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The Common Stock (i) is an “actively-traded security” excepted from the requirements of Rule 101 of Regulation M under the Exchange Act by Rule 101(c)(1) thereunder and (ii) has an Average Daily Trading Volume of at least $1.0 million (as provided in Regulation M) and a public float of at least $150.0 million (as defined in Regulation M).
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(xx)
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There are no legal or governmental proceedings pending or threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that are required to be described in the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus and are not so described or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement, the Prospectus or Permitted Free Writing Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.
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(a)
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All consents, approvals, authorizations and orders necessary for the execution and delivery by the Selling Stockholder of this Agreement, and for the sale and delivery of the Shares and Class A Debentures, if applicable, to be sold by the Selling Stockholder hereunder, have been obtained; and the Selling Stockholder has full right, power and authority to enter into this Agreement and to sell, assign, transfer and deliver the Shares and Class A Debentures, if applicable, to be sold by the Selling Stockholder hereunder; this Agreement has been duly authorized, executed and delivered by the Selling Stockholder.
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(b)
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The execution, delivery and performance by the Selling Stockholder of this Agreement, the sale of the Shares and Class A Debentures, if applicable, to be sold by the Selling Stockholder and the consummation by the Selling Stockholder of the transactions contemplated herein or therein will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Selling Stockholder pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Selling Stockholder is a party or by which the Selling Stockholder is bound or to which any of the property or assets of the Selling Stockholder is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Selling Stockholder or (iii) result in the violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory agency, except in the case of (i) and (iii) above for any such conflict, breach, violation or default that would not, individually or in the aggregate, have a material adverse effect on the Selling Stockholder’s ability to consummate the transactions contemplated by this Agreement.
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(c)
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The Selling Stockholder has good and valid title to the Shares and Class A Debentures, if applicable, to be sold at the Closing Date by the Selling Stockholder hereunder, free and clear of all liens, encumbrances, equities or adverse claims; the Selling Stockholder will have, immediately prior to the Closing Date good and valid title to the Shares and Class A Debentures, if applicable, to be sold at the Closing Date by the Selling Stockholder, free and clear of all liens, encumbrances, equities or adverse claims; and, upon DTC or another securities intermediary indicating by book entry on its records that such Shares and Class A Debentures, if applicable, have been credited to securities accounts of the Underwriter and payment therefor pursuant hereto, good and valid title to such Shares and Class A Debentures, if applicable, free and clear of all liens, encumbrances, equities or adverse claims, will pass to the Underwriter. Citadel LLC and all affiliates thereof (other than individuals) that currently own
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Common Stock, any of the Class A Debentures or any of the Company’s Class B Senior Convertible Debentures due 2019 (together with the Class A Debentures, the “Convertible Debentures”) are parties to a “lock up” agreement referred to in Section 8.
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(d)
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The Selling Stockholder has not taken and will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.
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(e)
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The Pricing Disclosure Package, at the Time of Sale did not, and at the Closing Date, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Selling Stockholder makes no representation and warranty with respect to any statements or omissions other than statements made in reliance upon and in conformity with information relating to the Selling Stockholder furnished to the Company in writing by the Selling Stockholder expressly for use in such Pricing Disclosure Package, it being understood and agreed that the only such information furnished by the Selling Stockholder consists of the information about the Selling Stockholder set forth in the “Selling Stockholder” section of the Preliminary Prospectus.
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(f)
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Other than the Registration Statement, the Preliminary Prospectus and the Prospectus, the Selling Stockholder (including its agents and representatives, other than the Underwriter in its capacity as such) has not made, used, prepared, authorized, approved or referred to and will not prepare, make, use, authorize, approve or refer to any Permitted Free Writing Prospectus, other than (i) any document not constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the documents listed on Annex B hereto, each electronic road show and any other written communications approved in writing in advance by the Company and the Underwriter.
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(g)
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As of the applicable effective date of the Registration Statement and any post-effective amendment thereto, the Registration Statement and any such post-effective amendment complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Selling Stockholder makes no representation and warranty with respect to any statements or omissions other than statements made in reliance upon and in conformity with information relating to the Selling Stockholder furnished to the Company in writing by the Selling Stockholder through the Underwriter expressly for use in the Registration Statement, the Pricing Disclosure Package and the
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Prospectus and any amendment or supplement thereto, it being understood and agreed that the only such information furnished by the Selling Stockholder consists of the information about the Selling Stockholder set forth in the “Selling Stockholder” section of the Preliminary Prospectus.
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(a)
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For so long as the delivery of a prospectus is required (whether physically or through compliance with Rule 172 under the Securities Act or any similar rule) in connection with the offering or sale of the Shares (the “Prospectus Delivery Period”), before amending or supplementing the Registration Statement or the Prospectus (in each case, other than due to the filing of an Incorporated Document), (i) to furnish to the Underwriter a copy of each such proposed amendment or supplement within a reasonable period of time before filing any such amendment or supplement with the Commission, (ii) that the Company shall not use or file any such proposed amendment or supplement to which the Underwriter reasonably objects, unless the Company’s legal counsel has advised the Company that filing such document is required by law, and (iii) that the Company shall not use or file any Permitted Free Writing Prospectus to which the Underwriter reasonably objects, unless the Company’s legal counsel has advised the Company that the use or filing of such document is required by applicable law.
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(b)
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To file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the Securities Act; to file any Permitted Free Writing Prospectus to the extent required by Rule 433 under the Securities Act; to provide copies of the Pricing Disclosure Package, the Prospectus and each Permitted Free Writing Prospectus (to the extent not previously delivered or filed on the Commission’s Next-Generation EDGAR System or any successor system thereto (collectively, “EDGAR”)) to the Underwriter via e-mail in “pdf” format on such filing date to e-mail accounts designated by the Underwriter; and, at the Underwriter’s request, to furnish copies of the Pricing Disclosure Package and the Prospectus to each exchange or market on which sales were effected as may be required by the rules or regulations of such exchange or market.
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(c)
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During the Prospectus Delivery Period, to file timely all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, and during such same period to advise the Underwriter, promptly after the Company receives notice thereof, (i) of the time when any amendment to the Registration Statement has been filed or has become effective or any supplement to any Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus, any Permitted Free Writing Prospectus or any amended Prospectus has been filed with the Commission, (ii) of the issuance by the Commission of any stop order or any order preventing or suspending the use of any prospectus (including any
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Preliminary Prospectus) relating to the Shares or the initiation or threatening of any proceeding for that purpose, pursuant to Section 8A of the Securities Act, (iii) of any objection by the Commission to the use of Form S-3ASR by the Company pursuant to Rule 401(g)(2) under the Securities Act, (iv) of the suspension of the qualification of the Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, (v) of any request by the Commission for the amendment of the Registration Statement or the amendment or supplementation of any Preliminary Prospectus, the Prospectus or for additional information, (vi) of the occurrence of any event as a result of which any Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus as then amended or supplemented includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing when such Preliminary Prospectus, the Pricing Disclosure Package, the Prospectus or any such Permitted Free Writing Prospectus is delivered to a purchaser, not misleading and (vii) of the receipt by the Company of any notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto.
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(d)
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In the event of the issuance of any such stop order or of any such order preventing or suspending the use of any such prospectus or suspending any such qualification, or of any notice of objection pursuant to Rule 401(g)(2) under the Securities Act, to use promptly its commercially reasonable efforts to obtain its withdrawal.
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(e)
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To furnish such information as may be required and otherwise to cooperate in qualifying the Shares for offering and sale under the securities or blue sky laws of such states as the Underwriter may reasonably designate and to maintain such qualifications in effect so long as required for the distribution of the Shares; provided that the Company shall not be required to qualify as a foreign corporation, become a dealer of securities, or become subject to taxation in, or to consent to the service of process under the laws of, any such state.
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(f)
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To make available to the Underwriter at its offices in New York City, without charge, as soon as practicable after the Registration Statement becomes effective, and thereafter from time to time to furnish to the Underwriter, as many copies of the Pricing Disclosure Package and the Prospectus (or of the Pricing Disclosure Package or the Prospectus as amended or supplemented if the Company shall have made any amendments or supplements thereto and documents incorporated by reference therein after the effective date of the Registration Statement) and each Permitted Free Writing Prospectus as the Underwriter may reasonably request during the Prospectus Delivery Period; and for so long as this Agreement is in effect, the Company shall prepare and file promptly such amendment or amendments to the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus as may be necessary to comply with the requirements of Section 10(a)(3) of the Securities Act.
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(g)
|
If during the Prospectus Delivery Period, any event shall occur or condition shall exist as a result of which it is necessary in the reasonable opinion of counsel to the Underwriter or counsel to the Company, to further amend or supplement the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus as then amended or supplemented in order that the Pricing Disclosure Package, the Prospectus or any such Permitted Free Writing Prospectus will not include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading, in light of the circumstances existing at the time the Pricing Disclosure Package, the Prospectus or any such Permitted Free Writing Prospectus is delivered to a purchaser, or if it shall be necessary, in the reasonable opinion of either such counsel, to amend or supplement the Registration Statement, the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus in order to comply with the requirements of the Securities Act, in the case of such a determination by counsel to the Company, notice shall be given promptly, and confirmed in writing, to the Underwriter to cease the solicitation of offers to purchase the Shares, and, in either case, the Company shall promptly prepare and file with the Commission such amendment or supplement, whether by filing documents pursuant to the Securities Act, the Exchange Act or otherwise, as may be necessary to correct such untrue statement or omission or to make the Registration Statement, the Pricing Disclosure Package, the Prospectus or any such Permitted Free Writing Prospectus comply with such requirements.
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(h)
|
To generally make available to its security holders as soon as reasonably practicable, but not later than 90 days after the close of the period covered thereby, an earnings statement (in a form complying with the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act) covering the twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the “effective date” (as defined in Rule 158) of the Registration Statement.
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(i)
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If the Underwriter has purchased Class A Debentures, upon delivery prior to 6:00 P.M., New York City time on any of one or more business days (any of such days, a “Notice Date”) to the Conversion Agent, as defined in the Indenture, with a copy to the Company, of any complete and manually signed irrevocable written notice pursuant to Section 12.02(b) of the Indenture, to cause the Conversion Agent to deliver such shares of Common Stock issuable pursuant to such written notice through the facilities of DTC to the Underwriter on or before 10:00 A.M., New York City time, on the third business day following the relevant Notice Date.
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(j)
|
Not to, and to cause its subsidiaries not to, take, directly or indirectly, any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Shares; provided that nothing herein
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shall prevent the Company from filing or submitting reports under the Exchange Act or issuing press releases in the ordinary course of business.
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(k)
|
Except as otherwise agreed between the Company and the Underwriter, to pay all costs, expenses, fees and taxes in connection with (A) the preparation and filing of the Registration Statement (including registration fees pursuant to Rule 456(b)(1)(i) under the Securities Act), the Preliminary Prospectus, the Prospectus, any Permitted Free Writing Prospectus and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to the Underwriter and to dealers (including costs of mailing and shipment), (B) the registration and delivery of the Shares, (C) the preparation, printing and delivery to the Underwriter of this Agreement, the Shares, and such other documents as may be required in connection with the offer, purchase, sale, issuance or delivery of the Shares and any cost associated with electronic delivery of any of the foregoing by the Underwriter to investors, (D) the qualification of the Shares for offering and sale under state laws and the determination of their eligibility for investment under state law as aforesaid (including the reasonable legal fees and filing fees and other disbursements of counsel to the Underwriter in connection therewith) and the printing and furnishing of copies of any blue sky surveys or legal investment surveys to the Underwriter, (E) the listing of the Shares on the Exchange and any registration thereof under the Exchange Act, (F) any filing for review of the public offering of the Shares by FINRA, (G) the fees and disbursements of counsel to the Company and of the Company’s independent registered public accounting firm, (H) the cost of preparing the certificates for the Shares, (I) the costs and charges of any transfer agent or registrar or paying agent and (J) the performance of the Company’s other obligations hereunder; provided that the Underwriter shall be responsible for any transfer taxes on resale of Shares by it, any costs and expenses associated with the sale and marketing of the Shares and fees and disbursements of its counsel other than as specifically provided above or elsewhere in this Agreement.
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(l)
|
Not to distribute any offering material in connection with the offer and sale of the Shares, other than the Registration Statement, the Pricing Disclosure Package, the Prospectus, any Permitted Free Writing Prospectus and other materials permitted by the Securities Act or the rules and regulations promulgated thereunder.
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(m)
|
To retain, pursuant to reasonable procedures developed in good faith, copies of each Permitted Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Securities Act.
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(n)
|
[Reserved].
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(o)
|
For a period ending on the earlier of (i) 90 days after the date of the Prospectus or (ii) the second business day following the date of the Company’s press release announcing its results for the quarter ending June 30, 2011, not to (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option,
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right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise, without the prior written consent of the Underwriter, other than (A) the Shares to be sold hereunder, (B) any options or other awards (including without limitation restricted stock or restricted stock units), or shares of Common Stock issued with respect to such options and other awards, granted under Company stock plans or otherwise in equity compensation arrangements with directors, officers, employees and consultants of the Company and its subsidiaries and (C) any shares of Common Stock issued in connection with exchange transactions for the Company’s 12.5% Springing Lien Notes due 2017, 8% Senior Notes due 2011, 7.375% Senior Notes due 2013 and 7.875% Senior Notes due 2015 (including any shares of Common Stock issued upon conversion, exercise or exchange of any securities issued in such exchange transactions, including the issuance and conversion, exercise and exchange of the Convertible Debentures).
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(a)
|
if to Underwriter:
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(b)
|
if to the Company:
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Very truly yours,
E*TRADE FINANCIAL CORPORATION
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By:
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/s/ Matthew Audette | |
Name: Matthew Audette | |||
Title: Chief Financial Officer | |||
CITADEL EQUITY FUND LTD. | |||
By: | Citadel Advisors LLC,
its Portfolio Manager
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||
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By:
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/s/ Adam C. Cooper | |
Name: ADAM C. COOPER | |||
Title: Authorized Signatory | |||
Accepted as of the
date first above written:
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|||||
MORGAN STANLEY & CO. INCORPORATED | |||||
By: |
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Name: Taylor Wright | |||||
Title: Managing Director
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1585 Broadway
New York, New York 10036
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Very truly yours,
[NAME OF STOCKHOLDER]
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By:
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/s/ | |
Name:
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Title:
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