As
filed with the Securities and Exchange Commission on June 22, 2009
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
T-3
APPLICATION
FOR QUALIFICATION OF INDENTURES
UNDER
THE TRUST INDENTURE ACT OF 1939
E*TRADE
Financial Corporation
(Name
of Applicant)
135
East 57th Street
New
York, New York 10022
(Address
of Principal Executive Offices)
SECURITIES
TO BE ISSUED UNDER THE
INDENTURE
TO BE QUALIFIED
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Class
A Senior Convertible Debentures due 2019
Class
B Senior Convertible Debentures due 2019
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Up
to $1,745,515,000 aggregate principal amount
Up
to $1,745,515,000 aggregate principal
amount
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Approximate
date of proposed public offering:
June
22, 2009
Name
and address of agent for service:
Karl
A. Roessner
General
Counsel and Corporate Secretary
E*TRADE
Financial Corporation
135
East 57th Street
New
York, New York 10022
(212)
583-0604
With
copies to:
Bruce
K. Dallas
Davis
Polk & Wardwell
1600
El Camino Real
Menlo
Park, California 94025
(650)
752-2022
TABLE
OF CONTENTS
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Page
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General
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1
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Affiliations
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2
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Management
and Control
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2
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Underwriters
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3
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Capital
Securities
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4
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Indenture
Securities
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4
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Signature
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11
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GENERAL
1. General
Information
(a) Form of organization: E*TRADE
Financial Corporation (the “Company” or “Applicant”), a Delaware
corporation.
(b) State or other sovereign power under
the laws of which organized: See the information
provided in response to Section 1(a).
2. Securities
Act Exemption Applicable
Pursuant
to the terms and subject to the conditions set forth in the Offering Memorandum
and Consent Solicitation Statement, dated June 22, 2009 (the “Offering
Memorandum”), and the accompanying Letter of Transmittal and Consent, dated June
22, 2009, and Notice of Guaranteed Delivery, dated June 22, 2009, the Company
intends to exchange (the “Exchange Offer”): (i) any and all of its 8% Senior
Notes due 2011 (CUSIP No. 269246 AF1) (the “2011 Notes”) and (ii) up to $310
million aggregate principal amount of its outstanding 12.5% Springing Lien Notes
due 2017 (CUSIP Nos. 269246 AS3, 269246 AT1 and 269246 AV6) (the “2017 Notes”)
held by Holders other than Citadel Equity Fund Ltd. and its affiliates
(“Citadel”) and up to $1 billion aggregate principal amount of such notes held
by Citadel for the exchange consideration described below. The 2011
Notes and the 2017 Notes are referred to collectively as the “Notes” and persons
or entities in whose name the Notes are registered as “Holders.”
In
exchange for each $1,000 principal amount of Notes that is properly tendered and
accepted, Holders will receive $1,000 principal amount of either Class A Senior
Convertible Debentures due 2019 (the “Class A Debentures”) or Class B Senior
Convertible Debentures due 2019 (the “Class B Debentures,” and together with the
Class A Debentures, the “Debentures”). Holders
tendering Notes prior to the Early Tender Deadline will be entitled to receive
Class A Debentures in the exchange, while Holders tendering Notes after the
Early Tender Deadline will be entitled to receive Class B Debentures in the
exchange, in each case assuming such Notes are accepted for
exchange. The terms of the Class A Debentures and the Class B
Debentures will be identical except for the initial conversion
price. The Debentures will not bear interest and will be convertible
into shares of the Company’s common stock. The initial conversion
price for the Class A Debentures will be $1.0340. The initial
conversion price for the Class B Debentures will be $1.5510, or 150% of the
initial conversion price applicable to the Class A Debentures.
If the
Exchange Offer is completed, the Debentures will be governed by the indenture
(the “Indenture”) to be qualified under this Application for Qualification on
Form T-3. For more detailed information regarding the Indenture,
please see Item 8 of this Application. The complete terms of the
Exchange Offer are contained in the Offering Memorandum and related documents
incorporated by reference herein to Exhibits T3E.1 through T3E.4.
The
Company intends to rely on Section 3(a)(9) of the Securities Act of 1933, as
amended (“the Securities Act”) to exempt the Exchange Offer from the
registration requirements of the Securities Act. No sales of securities of the
same class as the Debentures have been or are to be made by the Company by or
through an underwriter at or about the same time as the Exchange Offer for which
the exemption is claimed. No consideration has been, or is to be,
given, directly or indirectly, to any person in connection with the transaction,
except for customary fees and payments to be made in respect of preparation,
printing and mailing of the Offering Memorandum and related documents, the
payments of the fees and expenses of the Company’s legal advisors, the
engagement of MacKenzie Partners, Inc. as information and exchange agent for the
Exchange Offer, a customary financial advisor services fee made to a nationally
recognized investment bank for advisory services rendered in connection with the
Exchange Offer and the engagement of The Bank of New York Mellon as the Trustee
under the Indenture (the “Trustee”). No Holder of the outstanding securities has
made or will be requested to make any cash payment to the Company in connection
with the Exchange Offer.
AFFILIATIONS
3. Affiliates
Furnish
a list or diagram of all affiliates of the applicants and indicate the
respective percentages of voting securities or other bases of
control.
(a) Subsidiaries
of the Company
A diagram
of the wholly-owned direct or indirect domestic subsidiaries of the Company as
of June 9, 2009 is contained in Exhibit 99.1 and incorporated by reference
herein.
A diagram
of the wholly-owned direct or indirect foreign subsidiaries of the Company as of
December 31, 2008 is contained in Exhibit 99.2 and incorporated by reference
herein.
(b) Certain
directors and executive officers of the Company may be deemed to be “affiliates”
of the Company by virtue of their positions with the Company. See Item 4,
“Directors and Executive Officers.”
(c) Certain
persons may be deemed to be “affiliates” of the Company by virtue of their
holdings of the voting securities of the Company. See Item 5, “Principal Owners
of Voting Securities.”
MANAGEMENT
AND CONTROL
4. Directors
and Executive Officers
List
the names and complete mailing addresses of all directors and executive officers
of the applicants and all persons chosen to become directors and executive
officers. Indicate all offices held or to be held by each person
named.
The
following table lists the names and offices held by all directors and executive
officers of the Company as of June 22, 2009. The mailing address of each
director and executive officer is: c/o E*TRADE Financial Corporation, 135 East
57th
Street, New York, NY 10022.
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Donald
H. Layton
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Chairman
of the Board and Chief Executive Officer
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Michael
J. Curcio
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EVP
& President, E*TRADE Securities
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Gregory
A. Framke
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EVP
& Chief Information and Operations Officer
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Bruce
P. Nolop
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Chief
Financial Officer
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Nicholas
A. Utton
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EVP
& Chief Marketing Officer
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Robert
A. Druskin
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Director
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Ronald
D. Fisher
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Director
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Kenneth
Griffin
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Director
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George
A. Hayter
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Director
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Frederick
W. Kanner
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Director
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Michael
K. Parks
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Director
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C.
Cathleen Raffaeli
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Director
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Lewis
E. Randall
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Director
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Joseph
L. Sclafani
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Director
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Donna
L. Weaver
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Director
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Stephen
H. Willard
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Director
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5. Principal
Owners of Voting Securities
Furnish
the following information as to each person owning 10 percent or more of the
voting securities of the applicants.
Presented
below is certain information regarding each person known by the Company to
beneficially own 10% or more of its voting securities as of June 17,
2009:
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Percentage
of
Voting
Securities
Owned(1)
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Citadel
Investment Group, L.L.C.
131 S. Dearborn Street, 32nd
Floor
Chicago, Illinois
60603
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Common
Stock
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89,163,729(2)
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14.5%
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(1)
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Percentage
of shares beneficially owned are based on 615,352,215 shares of common
stock outstanding as of June 11,
2009.
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(2)
As disclosed in the
Exchange Agreement between the Company and Citadel Equity Fund Ltd. dated as of
June 17, 2009 (filed as Exhibit 10.1 of the Company’s Current Report on Form 8-K
filed June 17, 2009).
UNDERWRITERS
6. Underwriters
Give
the name and complete mailing address of (a) each person who, within three
years prior to the date of filing the application, acted as an underwriter of
any securities of the obligor which were outstanding on the date of filing the
application, and (b) each proposed principal underwriter of the securities
proposed to be offered. As to each person specified in (a), give the title
of each class of securities underwritten.
(a) The
following chart sets forth the name and mailing address of each person who,
within three years prior to the date of filing this Application, acted as an
underwriter of the Company’s securities and the title of each security
underwritten:
Underwriter’s
Name and Mailing Address
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J.P.
Morgan Securities Inc.
383 Madison Avenue
New York, NY
10179
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Common
Stock
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Sandler
O’Neill & Partners, L.P.
919 Third Avenue, 6th
Floor
New York, NY
10022
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Common
Stock
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E*TRADE
Securities LLC
135 East 57th
Street
New York, NY
10022
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Common
Stock
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(b) No
person is acting as an underwriter of the Debentures proposed to be offered
pursuant to the Exchange Offer and issued pursuant to the
Indenture.
CAPITAL
SECURITIES
7. Capitalization
(a)
Furnish the following information as to each authorized class of securities of
the applicant.
As of May
31, 2009, the Company had the following securities authorized and
outstanding:
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Common
Stock, $0.01 par value per share
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1,200,000,000
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610,306,151
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Preferred
Stock
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1,000,000
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None
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8.0%
Senior Notes due 2011
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$500,000,000
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$435,515,000
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7.375%
Senior Notes due 2013
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$600,000,000
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$414,665,000
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7.875%
Senior Notes due 2015
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$300,000,000
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$243,177,000
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12.5%
Springing Lien Notes due 2017
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$1,936,000,000
(not including capitalized interest)
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$2,185,562,500
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(b)
Give a brief outline of the voting
rights of each class of voting securities referred in paragraph
(a) above.
Each
share of the common stock of the Company issued and outstanding has one vote
with respect to all matters submitted to a vote of Stockholders. There are no
other outstanding securities with voting rights.
INDENTURE
SECURITIES
8. Analysis
of Indenture Provisions
Insert
at this point the analysis of indenture provisions required under
Section 305(a)(2) of the Trust Indenture Act of 1939, as
amended.
The
Debentures will be issued under the Indenture to be entered into between the
Company and the Trustee. The following analysis is not a complete description of
the Indenture provisions discussed and is qualified in its entirety by reference
to the terms of the Indenture, a form of which is attached as Exhibit T3C hereto
and incorporated by reference herein. The Company has not entered into the
Indenture as of the date of this filing, and the terms of the Indenture are
subject to change prior to its execution. Capitalized terms used below but not
defined herein have the meanings assigned to them in the Indenture.
(a) Events
of Default; Withholding of Notice
The
following events will be defined as “Events of Default” in the
Indenture:
(1) default
in the payment of principal of any Debenture when the same becomes due and
payable at maturity, upon required repurchase, upon acceleration or
otherwise;
(2) failure
by the Company to comply with its obligation to convert the Debentures into
shares of common stock or reference property as applicable upon exercise of a
Holder’s conversion right;
(3) failure
by the Company to comply with its obligations under Article V (Consolidation,
Merger or Sale of Assets) of the Indenture;
(4) failure
by the Company to issue a Fundamental Change Repurchase Right Notice in
accordance with Section 3.01 (Repurchase at the Option of the Holder Upon a
Fundamental Change) or to comply with its notice requirements under Section 4.11
(Limitation on Asset Sales);
(5) the
Company or any subsidiary guarantor defaults in the performance of or breaches
any other covenant or agreement in the Indenture or under the Debentures (other
than a default specified in paragraphs (1), (2), (3) or (4) above) and such
default or breach continues for a period of 30 consecutive days after written
notice by the Trustee or the Holders of 25% or more in aggregate principal
amount of the Debentures;
(6) there
occurs with respect to any issue or issues of Indebtedness of the Company or any
significant subsidiary having an outstanding principal amount of $20 million or
more in the aggregate for all such issues of all such persons, whether such
Indebtedness now exists or shall hereafter be created, (A) an event of default
that has caused the holder thereof to declare such Indebtedness to be due and
payable prior to its stated maturity and such Indebtedness has not been
discharged in full or such acceleration has not been rescinded or annulled
within 30 days of such acceleration or (B) the failure to make a principal
payment at the final (but not any interim) fixed maturity and such defaulted
payment shall not have been made, waived or extended;
(7) any
final judgment or order (not covered by insurance), that is non-appealable, for
the payment of money in excess of $20 million in the aggregate for all such
final judgments or orders against all such persons (treating any deductibles,
self-insurance or retention as not so covered) shall be rendered against the
Company or any significant subsidiary and shall not be paid or discharged, and
there shall be any period of 30 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments
or orders outstanding and not paid or discharged against all such persons to
exceed $20 million during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not be in
effect;
(8) a
court having jurisdiction in the premises enters a decree or order for (A)
relief in respect of the Company or any significant subsidiary in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (B) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Company or any
significant subsidiary or for all or substantially all of the property and
assets of the Company or any significant subsidiary or (C) the winding up or
liquidation of the affairs of the Company or any significant subsidiary and, in
each case, such decree or order shall remain unstayed and in effect for a period
of 60 consecutive days;
(9) the
Company or any significant subsidiary (A) commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consents to the entry of an order for relief in an involuntary case
under any such law, (B) consents to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Company or any significant subsidiary or for all or
substantially all of the property and assets of the Company or any significant
subsidiary or (C) effects any general assignment for the benefit of
creditors;;
(10)
failure by any broker dealer regulated subsidiary that is a significant
subsidiary to meet the minimum capital requirements imposed by applicable
regulatory authorities, and such condition continues for a period of 30 days
after the Company or such broker dealer regulated subsidiary first becomes aware
of such failure;
(11)
failure by any bank regulated subsidiary that is a significant subsidiary
to be at least “adequately capitalized,” as defined in regulations of applicable
regulatory authorities; provided that an Event of Default under this clause (10)
shall not have occurred until (x) 45 days from the time that such bank regulated
subsidiary has notice or is deemed to have notice of such failure unless a
capital restoration plan has been filed the with OTS within that time (y) the
expiration of a 90-day period commencing on the earlier of the date of initial
submission of a capital restoration plan to the OTS (unless such capital plan is
approved by the OTS before the expiration of such 90-day period or, if the OTS
has notified the Company that it needs additional time to determine whether to
approve such capital plan, in which case such 90-day period shall be extended
until the OTS determines whether to approve such capital plan, such capital plan
is approved by the OTS upon the expiration of such extended
period);
(12)
if the Company or any of its subsidiaries that holds capital stock of a broker
dealer regulated subsidiary that is a significant subsidiary shall become
ineligible to hold such capital stock by reason of a statutory disqualification
or otherwise;
(13)
the SEC shall revoke the registration of any broker dealer regulated subsidiary
that is a significant subsidiary as a broker-dealer under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) or any such broker dealer
regulated subsidiary shall fail to maintain such registration;
(14)
the examining authority (as defined in Rule 15c3-1 of the Exchange Act) for any
broker dealer regulated subsidiary that is a significant subsidiary shall
suspend (and shall not reinstate within 10 days) or shall revoke such broker
dealer regulated subsidiary’s status as a member organization
thereof;
(15)
the occurrence of any event of acceleration in a subordination agreement, as
defined in Appendix D to Rule 15c3-1 of the Exchange Act, to which the Company
or any broker dealer regulated subsidiary that is a significant subsidiary is a
party;
(16) any
subsidiary guarantor that is a significant subsidiary repudiates its obligations
under its Debenture Guarantee or, except as permitted by the Indenture, any
Debenture Guarantee is determined to be unenforceable or invalid or shall for
any reason cease to be in full force and effect; or
(17)
failure of the Company to comply with its “Maintenance of Capitalization”
covenant.
If an
Event of Default (other than an Event of Default specified in paragraphs (8) or
(9) above that occurs with respect to the Company or any subsidiary guarantor)
occurs and is continuing under the Indenture, the Trustee or the Holders of at
least 25% in aggregate principal amount of the Debentures, then outstanding, by
written notice to the Company (and to the Trustee if such notice is given by the
Holders), may, and the Trustee at the request of such Holders shall, declare the
principal of the Debentures to be immediately due and payable. Upon a
declaration of acceleration, such principal shall be immediately due and
payable. In the event of a declaration of acceleration because an Event of
Default set forth in paragraph (6) above has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default triggering such Event of Default pursuant to paragraph (6)
above shall be remedied or cured by the Company or the relevant significant
subsidiary or waived by the holders of the relevant Indebtedness within 60 days
after the declaration of acceleration with respect thereto. If an
Event of Default specified in paragraphs (8) and (9) above occurs with respect
to the Company, the principal of the Debentures then outstanding shall
automatically become and be immediately due and payable without any declaration
or other act on the part of the Trustee or any Holder. The Holders of
at least a majority in principal amount of the outstanding Securities by written
notice to the Company and to the Trustee, may waive all past defaults and
rescind and annul a declaration of acceleration and its consequences if (x) all
existing Events of Default, other than the nonpayment of the principal of the
Debentures that have become due solely by such declaration of acceleration, have
been cured or waived and (y) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction.
With
respect to the Debentures, the Holders of at least a majority in aggregate
principal amount of the outstanding Debentures may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Debentures not joining in the giving of such direction and may
take any other action it deems proper that is not inconsistent with any such
direction received from Holders of Debentures of that series.
A Holder
of any Debenture of any series may not institute any proceeding, judicial or
otherwise, with respect to this Indenture or that series of Debentures, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) the
Holder gives the Trustee written notice of a continuing Event of
Default;
(2) the
Holders of at least 25% in aggregate principal amount of outstanding Debentures
make a written request to the Trustee to pursue the remedy;
(3) such
Holder or Holders offer the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(4) the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and
(5) the
Holders of a majority in aggregate principal amount of the outstanding
Debentures under the Indenture do not give the Trustee a direction that is
inconsistent with the request within such 60-day period.
However,
such limitations do not apply to the right of any Holder of a Debenture to
receive payment of the principal of such Debenture or to bring suit for the
enforcement of any such payment, on or after the due date expressed in the
Debentures, which right shall not be impaired or affected without the consent of
the Holder.
The
Company covenants that if default is made in the payment of the principal of any
Debenture at the maturity thereof, the Company will, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal at the rate borne by the
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If an
Event of Default occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
The
Indenture provides that if any default occurs and is continuing and is
known to the Trustee, the Trustee will mail notice of the default to each
Holder within 90 days after it occurs, unless the Default has been cured;
provided that, except in the case of a default in the payment of the principal
of any Debenture or a conversion default, the Trustee may withhold the
notice if and so long as a committee of trust officers of the Trustee in good
faith determines that withholding the notice is in the interest of the
Holders. In addition, the Company is required to deliver to the Trustee, within
120 days after the end of each fiscal year, a certificate indicating whether the
signers thereof know of any default that occurred during the previous year. The
Company is also required to deliver to the Trustee, within 30 days after the
occurrence thereof, written notice of any events that would constitute a
default, the status of those events and what action the Company is taking or
proposing to take in respect thereof.
(b) Authentication
and Delivery of New Notes; Use of Proceeds
The
Debentures shall be executed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, Chief Financial Officer, President or one of its
Vice Presidents, Treasurer or Assistant Treasurer, or the Secretary or any
Assistant Secretary. The signature of any of these officers on the Debentures
may be manual or facsimile.
At any
time and from time to time after the execution and delivery of the Indenture,
the Company may deliver Debentures executed by the Company to the Trustee for
authentication; and the Trustee shall authenticate and deliver such Debentures
as in the Indenture provided and not otherwise.
There
will be no proceeds from the issuance of the Debentures because the Debentures
are being issued in exchange for the Notes.
(c) Release
and Substitution of Property Subject to the Lien of the Indenture
The
Debentures are not secured by any lien on property.
(d) Satisfaction
and Discharge of the Indenture
The
Company’s obligations under the Debentures and the Indenture, and each
subsidiary guarantor’s obligations under its Debentures Guarantee, will
terminate if:
(i) either:
(A) all
Debentures that have been authenticated and delivered (other than (1) destroyed,
lost or stolen Debentures that have been replaced, and (2) Debentures for whose
payment money or Debentures have theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the Trustee for
cancellation and the Company has paid all sums payable under the Indenture;
or
(B)
all Debentures have become due and payable, and the Company has irrevocably
deposited with the Trustee, as trust funds in trust solely for the benefit of
the Holders, or delivered to the Holders, as applicable, money or U.S.
Government Obligations, or shares of common stock deliverable upon conversion,
as applicable, sufficient, to pay principal, premium, if any, and shares of
common stock deliverable upon conversion, if applicable, on the Debentures to
the date of maturity or repurchase and all other sums payable under the
Indenture;
(ii) no
Default or Event of Default shall have occurred and be continuing on the date of
such deposit and such deposit will not result in a breach or violation of, or
constitute a default under the Indenture or any other instrument to which the
Company or any subsidiary guarantor is a party or by which the Company or any
subsidiary guarantor is bound;
(iii) the
Company has delivered irrevocable instructions to the Trustee to apply the
deposited money toward the payment of the Debentures at maturity or the
repurchase date, as applicable; and
(iv) the
Company delivers to the Trustee an officers’ certificate and an opinion of
counsel, in each case stating that all conditions precedent provided for herein
relating to the satisfaction and discharge of the Indenture have been complied
with.
The
Company may, subject as provided in the Indenture, be released from their
respective obligations to comply with, and shall have no liability in respect of
any term, condition or limitation, set forth in Sections 4.03 (Limitation of
Indebtedness and Issuances of Preferred Stock), 4.04 (Limitation on Restricted
Payments), 4.05 (Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries or Regulated Subsidiaries), 4.06 (Limitation
on the Issuance and Sale of Capital Stock of Restricted Subsidiaries or
Regulated Subsidiaries), 4.07 (Future Subsidiary Guarantees), 4.08 (Limitation
on Transactions with Shareholders and Affiliates), 4.09 (Limitation on Liens),
4.10 (Limitation on Sale-Leaseback Transactions), 4.11 (Limitation on Asset
Sales), 4.13 (Limitation on Lines of Business), and 4.19 (Maintenance of
Capitalization), clauses (c) and (d) of Section 5.01 (Consolidation, Merger and
Sale of Assets), clauses (c) and (d) of Section 6.01 (Events of Default) with
respect to such clauses (c) and (d) of Section 5.01 and Section 4.11, clause (e)
of Section 6.01 with respect to such above-mentioned covenants contained in
Article 4, and clauses (f) and (g) of Section 6.01 shall not constitute an Event
of Default under Section 6.01 if:
(a) the
Company has irrevocably deposited in trust with the Trustee, as trust funds
solely for the benefit of the Holders, money and/or U.S. government obligations
or a combination thereof sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certificate
thereof delivered to the Trustee, without consideration of any reinvestment, to
pay principal of, premium, if any, on the Debentures to maturity or repurchase,
as the case may be, provided that any repurchase before maturity has been
irrevocably provided for under arrangements satisfactory to the
Trustee;
(b) immediately
after giving effect to such deposit on a pro forma basis, no Event of Default,
or event that after the giving of notice or lapse of time or both would become
an Event of Default, shall have occurred and be continuing on the date of such
deposit or during the period ending on the 123rd day after the date of such
deposit, and such deposit shall not result in a breach or violation of, or
constitute a default under, any 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;
(c) the
Company has delivered to the Trustee an opinion of counsel to the effect that
the defeasance trust is not required to register as an investment company under
the Investment Company Act of 1940 and, after the passage of 123 days following
the deposit, the trust fund will not be subject to the effect of Section 547 of
the United States Bankruptcy Code or Section 15 of the New York Debtor and
Creditor Law;
(d) the
Company has delivered to the Trustee an officers’ certificate and an opinion of
counsel, in each case stating that all conditions precedent provided for herein
relating to the defeasance have been complied with; and
(e) the
Company has delivered to the Trustee an opinion of counsel to the effect that
the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and defeasance and will be subject to
federal income tax on the same amount and in the same manner and at the same
times as would otherwise have been the case if such deposit and defeasance had
not occurred.
Except as specifically stated above,
none of the Company’s obligations under the Indenture, including without
limitation, the Company’s obligation to convert the Debentures pursuant to
Article 12 (Conversion of Securities), will be discharged.
(e) Evidence
Required to be Furnished by the Company to the Trustee as to Compliance with the
Conditions and Covenants Provided for in the Indenture
The
Indenture provides that the Company will deliver to the Trustee within 15 days
after the filing of the same with the Securities and Exchange Commission, copies
of the quarterly and annual reports and of the information, documents and other
reports, if any, which the Company is required to file with the Securities and
Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act.
Notwithstanding that the Company may not be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, the Company will file
with the Securities and Exchange Commission, to the extent permitted, and
provide the Trustee and Holders with such annual reports and such information,
documents and other reports specified in Sections 13 and 15(d) of the Exchange
Act, provided that the Company need not file such reports or other information
if, and so long as, it would not be required to do so pursuant to Rule 12h-5
under the Exchange Act. The Company will also comply with the other provisions
of Section 314(a) of the TIA. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee’s
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on officers’
certificates).
In
connection with a consolidation, merger or sale of assets, the Company shall
deliver to the Trustee an officers’ certificate and an opinion of counsel, each
stating that such transaction and, such supplemental indenture complies with the
applicable provisions of the Indenture and that all conditions precedent in the
Indenture relating to such transaction have been complied with.
Officers
of the Company must certify, on or before a date not more than 120 days after
the end of each fiscal year, that a review has been conducted of the activities
of the Company and its Restricted Subsidiaries and Regulated Subsidiaries and
the Company’s and its Restricted Subsidiaries’ and its Regulated Subsidiaries’
performance under this Indenture and that, to their knowledge, the Company has
fulfilled all obligations hereunder, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default and the nature
and status thereof. The Company will also be obligated to deliver to the
Trustee, within 30 days after the occurrence thereof, written notice of any
events that would constitute a default, the status of those events and what
action the Company is taking or proposes to take in respect
thereof. Such certificate shall contain a certification from the
principal executive officer, principal financial officer or principal accounting
officer of the Company as to his or her knowledge of the Company’s compliance
with all conditions and covenants under this Indenture. Such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture. If
any of
the officers of the Company signing such certificate has knowledge of such a
Default or Event of Default, the certificate shall describe any such Default or
Event of Default and its status. The first certificate to be delivered shall be
for the first fiscal year beginning after the execution of this
Indenture.
The
Company shall also deliver to the Trustee, within 90 days after the end of each
fiscal year, beginning with the fiscal year in which this Indenture was
executed, a certificate signed by the Company’s independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Securities as they relate to accounting
matters, (ii) that they have read the most recent officers’ certificate
delivered to the Trustee pursuant to the preceding paragraph and (iii) whether,
in connection with their audit examination, anything came to their attention
that caused them to believe that the Company was not in compliance with any of
the terms, covenants, provisions or conditions of Article 4 (“Covenants”) and
Section 5.01 (“Consolidation, Merger and Sale of Assets”) of this Indenture as
they pertain to accounting matters and, if any Default or Event of Default has
come to their attention, specifying the nature and period of existence thereof;
provided that such independent certified public accountants shall not be liable
in respect of such statement by reason of any failure to obtain knowledge of any
such Default or Event of Default that would not be disclosed in the course of an
audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination. The Company shall not be
required to comply with the foregoing clause (b) with respect to any fiscal year
if such compliance would be contrary to the recommendations of the American
Institute of Certified Public Accountants so long as the Company delivers to the
Trustee within 90 days after the end of such fiscal year an officer’s
certificate stating that such compliance would be so contrary and any facts
particular to the Company that may have caused such compliance to be so
contrary.
9. Other
Obligors
Give
the name and complete mailing address of any person, other than the applicants,
who is an obligor upon indentured securities.
The obligors
on the Debentures are the Company and its subsidiary guarantors, if any.
Contents of application for
qualification. This application for qualification comprises:
(a) Pages
numbered 1 to 11, consecutively.
(b) The
statement of eligibility and qualification on Form T−1 of The Bank of New York
Mellon, as Trustee under the Indenture to be qualified (included as Exhibit 25.1
hereto).
(c) The
following Exhibits in addition to those filed as part of the Form T−1 statement
of eligibility and qualification of the Trustee:
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Exhibit
T3A.1
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Certificate
of Incorporation of the Company (incorporated by reference to Exhibit 3.2
of the Company’s Current Report on Form 8-K filed May 22,
2008).
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| |
|
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Exhibit
T3B.1
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Restated
Bylaws of the Company (incorporated by reference to Exhibit 3.3 to the
Company’s Annual Report on Form 10-K filed November 9, 2000 and Exhibit
3.2 to the Company’s Current Report on Form 8-K filed May 22,
2008).
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| |
|
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Exhibit
T3C
|
Form
of Indenture between the Company and The Bank of New York Mellon, as
Trustee
|
| |
|
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Exhibit
T3D
|
Not
applicable.
|
| |
|
| Exhibit
T3E.1* |
Offering
Memorandum and Consent Solicitation Statement dated June 22,
2009 |
| |
|
| Exhibit
T3E.2* |
Letter
of Transmittal dated June 22, 2009 |
| |
|
| Exhibit
T3E.3* |
Notice
of Guaranteed Delivery dated June 22, 2009 |
| |
|
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Exhibit
T3E.4
|
Press
Release of the Company dated June 17, 2009 (incorporated by reference to
Exhibit 99.2 to the Company’s Current Report on Form 8-K filed June 17,
2009)
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| |
|
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Exhibit
T3F
|
Cross−reference
sheet showing the location in the Indenture of the provisions inserted
therein pursuant to Sections 310 through 318(a), inclusive, of the Trust
Indenture Act of 1939 is not
|
| |
filed
herein since none of the provisions of the Form of Indenture between the
Company and the Bank of New York Mellon, as Trustee were inserted pursuant
to Sections 310 through 318(a) of the Trust Indenture Act of 1939, as
amended because those provisions have not required such insertion since
the effective date of the Trust Indenture Reform Act of 1990. |
| |
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Exhibit
25.1*
|
Statement
of eligibility and qualification of the Trustee on Form
T−1.
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| |
|
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Exhibit
99.1*
|
Wholly-owned
direct or indirect domestic subsidiaries of the Company as of June 9,
2009.
|
| |
|
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Exhibit
99.2*
|
Wholly-owned
direct or indirect foreign subsidiaries of the Company as of December 31,
2008.
|
| |
|
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*
|
Filed
herewith.
|
SIGNATURE
Pursuant
to the requirements of the Trust Indenture Act of 1939, the Applicant, E*TRADE
Financial Corporation, a corporation organized and existing under the laws of
Delaware, has duly caused this Application to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of New York and State of New York, on the 22nd day of
June, 2009.
|
E*TRADE
Financial Corporation
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|
| |
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By:
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/s/
Donald H. Layton
|
|
|
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Name:
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Donald
H. Layton
|
|
|
|
Title:
|
Chairman
& CEO
|
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Attest:
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By:
|
/s/
Karl A. Roessner
|
|
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Name:
|
Karl
A. Roessner
|
|
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Title:
|
EVP
& General Counsel
|