Document:

Exhibit
      10.2 

     

    
 

    SECURITIES
      PURCHASE AGREEMENT

     

    This Securities
      Purchase Agreement (this
“Purchase Agreement”) is made as of the
      29th day of November, 2007, by and among E*TRADE Financial Corporation (the
“Company”), Investment Partners (A), LLC
      (“IP(A)”) and the additional investors listed on Schedule A
      hereto.  Each of IP(A) and the investors listed on Schedule A hereto
      is herein referred to as an “Investor”.

    

    Reference
      is made to (i) the Master Investment and Securities Purchase Agreement dated
      as
      of November 29, 2007 by and between Wingate Capital Ltd.
      (“Wingate”) and the Company (the
“Master Investment Agreement”) and (ii)
      the Registration Rights Agreement dated as of November 29, 2007 by and between
      Wingate and the Company (the “Registration Rights
      Agreement”).  Capitalized terms used but not defined herein
      have the respective meanings given to such terms in the Master Investment
      Agreement.

    

    In
      consideration of the promises and of the mutual covenants and agreements
      contained herein and for other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, the Company and the Investors,
      intending to be legally bound, hereby agree as follows:

    

    
      	
              1.  

            	
              At
                the Initial Closing (or as promptly as practicable thereafter in
                the case
                of stock certificates): (i) the Company will deliver (A) to IP(A)
                certificates for 2,420,215 shares of Common Stock and executed Springing
                Lien Notes in the aggregate principal amount of $50,000,000, (B)
                to each
                other Investor certificates for the shares of Common Stock in the
                applicable amount set forth in Schedule A registered in the name
                of such
                Investor and executed Springing Lien Notes in the applicable aggregate
                principal amount set forth in Schedule A registered in the name of
                such
                Investor which shall be reflected in one or more global notes representing
                the Springing Lien Notes and held by The Depository Trust Corporation
                or
                its nominee (or a custodian on its behalf) and (C) a commitment fee
                to
                IP(A) of $1,428,572, and a commitment fee to the other Investors
                in the
                aggregate amount of $1,428,572; and (ii) each Investor, in full payment
                for such shares of the Purchased Common Stock and such Springing
                Lien
                Notes, will deliver the applicable cash consideration for such securities
                set forth in Schedule A (or in the case of IP(A), $50,000,000) by
                wire
                transfer of immediately available funds to the account designated
                by the
                Company.  Notwithstanding the foregoing, as mutually agreed
                between the Company and each Investor, such Investor’s commitment fee may
                be netted against the applicable cash consideration payable by such
                Investor (in which case the Investor shall remit to the Company an
                amount
                equal to such cash consideration less such commitment
                fee).

            

    

     

    
      	
              2.  

            	
              The
                Company hereby: (i) makes to the Investors the same representations
                and
                warranties made by the Company to Wingate in Section 3.01 of the
                Master
                Investment Agreement to the same extent as made by the Company to
                Wingate
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        	
                 

              	
                (and
                  as if each reference to “this Agreement” in such Section were a reference
                  to this Purchase Agreement and each reference to “Ancillary Document” in
                  such Section were a reference to the Registration Rights Agreement
                  and
                  Indenture only); (ii) agrees, for the benefit of the Investors,
                  to the
                  obligations set forth in Sections 4.01, 4.04(d), 4.05, 4.08 (as
                  if each
                  Investor were a “Purchaser” for purposes of such Section), 4.09 and 4.10
                  (with respect to the Securities issued to the Investors pursuant
                  to this
                  Purchase Agreement), 4.12 and 4.14 of the Master Investment Agreement
                  and
                  (iii) agrees that the Investors shall be treated as “Purchaser
                  Indemnitees” for purposes of the indemnification provisions in Section
                  6.09 of the Master Investment Agreement with respect to any
                  misrepresentation, breach of warranty or breach of covenant or
                  obligation
                  under this Purchase Agreement by the Company (it being acknowledged
                  and
                  agreed by the Investors, for the avoidance of doubt, that they
                  shall be
                  responsible for their pro rata share of the Deductible and shall
                  be
                  subject to their pro rata share of the cap provided for in Section
                  6.09(d)
                  of the Master Investment Agreement, calculated based on the aggregate
                  purchase price payable by the Investors for the Springing Lien
                  Notes
                  pursuant to this Purchase Agreement as a proportion of the aggregate
                  purchase price payable by Purchaser for the Springing Lien Notes
                  issuable
                  to Purchaser pursuant to the Master Investment
                  Agreement).

              

      

       

    

    
      	
              3.  

            	
              Each
                of the Investors hereby: (i) makes to the Company the same representations
                and warranties made by the Purchaser to the Company in Section 3.02
                of the
                Master Investment Agreement (other than Section 3.02(i)) and the
                same
                acknowledgements as made by the Purchaser to the Company in Section
                4.04(a), (b) and (c) of the Master Investment Agreement, in each
                case as
                if each Investor were a “Purchaser” for purposes of such Sections and to
                the same extent as made by Purchaser to the Company (and as if each
                reference to “this Agreement” in such Section were a reference to this
                Purchase Agreement and each reference to “Ancillary Document” in such
                Section were a reference to the Registration Rights Agreement and
                Indenture only); (ii) agrees to the obligation set forth in Section
                4.01
                of the Master Investment Agreement and (iii) agrees to indemnify
                the
                Company Indemnitees with respect to any misrepresentation, breach
                of
                warranty or breach of covenant or obligation under this Purchase
                Agreement
                by any Investor to the same extent as the indemnity provided by the
                Purchaser to the Company Indemnitees in Section 6.09(b) of the Master
                Investment Agreement.

            

    

     

    
      	
              4.  

            	
              Each
                Investor hereby acknowledges and agrees that, by its execution of
                this
                Purchase Agreement, such Investor shall be deemed to be a party to
                the
                Registration Rights Agreement as of the date hereof and shall have
                all of
                the rights and observe all of the obligations of a “Holder” (as defined in
                the Registration Rights Agreement)
                thereunder.

            

    

    

    Sections
      6.01, 6.02, 6.03, 6.05, 6.06, and Sections 6.10 through 6.19 (other than Section
      6.16), of the Master Investment Agreement shall apply to this Purchase
      Agreement, mutatis mutandis.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS
      WHEREOF, the parties hereto have executed this Purchase Agreement on the day
      and
      year first above written.

     

     

    
      	
              E*TRADE
                FINANCIAL CORPORATION  

            
	 
	 
	 
	
              By:

            	/s/
              Robert J. Simmons	 
	 	
              Name:

            	Robert
              J. Simmons	 
	 	
              Title:

            	Chief
              Financial Officer	 

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
              INVESTMENT
                PARTNERS (A), LLC

              BY:       BAA
                CO-INVESTMENT FUND

              (GENPAR),
                LLC, ITS MANAGER

               

              BY:     BLACKROCK
                ALTERNATIVE

              ADVISORS
                GP HOLDINGS, LLC, ITS SOLE

              MEMBER

               

              BY:     BLACKROCK
                FINANCIAL

              MANAGEMENT,
                INC., ITS MANAGING

              MEMBER

                

            
	
              By:

            	/s/
              Bryan K. White	 
	 	
              Name: 

            	Bryan
              K. White	 
	 	
              Title:

            	Managing
              Director	 
	 	 	 	 
	 	 	 	 
	
              By:

            	/s/
              Marie M. Bender	 
	 	
              Name:

            	Marie
              M. Bender	 
	 	
              Title: 

            	Managing
              Director	 

    

    

     

    
      	
              BLACKROCK
                FINANCIAL MANAGEMENT, INC.

              in
                its capacity as Sub-Adviser to, agent for and solely 

              with
                respect to the assets of each of the entities listed on Schedule
                A

                

            
	
              By:

            	/s/
              Mark Williams	 
	 	
              Name:

            	Mark
              Williams	 
	 	
              Title:  

            	Managing
              DirectorExhibit
        10.3

       

      EXECUTION
        VERSION

       

       

      ABS
        Purchase Agreement

      

      This
        Agreement (this “Agreement”), dated as of November 29, 2007,
        constitutes the understanding and agreement by and among Citadel Equity
        Fund Ltd. (“CEFL”), an affiliate of Citadel Limited
        Partnership (“Citadel”), E*TRADE
        Bank (the “Bank”),
E*TRADE Global
        Asset Management, Inc.
        (“ETGAM”, and together with the Bank, the
“Sellers”), and E*TRADE Financial
Corporation
        (the “Company”) regarding
        the acquisition by CEFL of all of the Sellers’ Asset-Backed Securities
        (“ABS”) portfolio (including CMOs, CDOs and other asset-backed
        instruments) listed on Schedule A hereto (the “Portfolio”, and
        each line-item of which is a “Position”).

       

      1.           Transfer.
         In consideration of the Purchase Price (as hereinafter defined) and the
        premises set forth herein and for other good and valuable consideration,
        the
        receipt and sufficiency of which are hereby acknowledged, effective as of
        the
        Initial Closing Date (as defined in the Investment and Securities Purchase
        Agreement, dated as of November 29, 2007 by and between Wingate Capital Ltd.
        and
        the Company (the “Investment Agreement”)) (the
“Effective Date”), the Sellers hereby sell, transfer,
        assign
        and convey to CEFL, free and clear of all liens, claims, encumbrances or
        rights
        of third parties of any kind, all right, title and interest in and to the
        Portfolio and the Positions and CEFL hereby purchases from the Sellers all
        right, title and interest in and to, and assumes the obligations of the Sellers
        in respect of, the Portfolio and Positions, in each case on the terms and
        subject to the conditions set forth herein (the
“Transfer”).

       

      2.           Purchase
        Price.  The “Purchase Price” means (a) eight
        hundred million dollars ($800,000,000), plus (b) any and all interest which,
        as
        of the Effective Date, is accrued and unpaid for the Positions (except with
        respect to those ABS CDOs and TRUPS CDOs listed on Schedule B hereto) with
        respect to the periods prior to 12:01 a.m. New York City time on November
        18,
        2007 (the “Accrued Interest Amount”), less (c) any and all
        principal and interest payments which, as of the Effective Date, have been
        received directly or indirectly by the Sellers for the Positions with respect
        to
        the periods between 12:01 a.m. New York City time on November 18, 2007 and
        12:01
        a.m. New York City time on the Effective Date (the “Principal and
        Interest Amount”).

       

      3.           Closing.  Upon
        the terms and subject to the conditions herein (including, but not limited
        to,
        the terms of paragraph 8, regarding the Mechanics of the Transfer of Positions
        and the Movement of Cash), on the Effective Date, CEFL shall pay, or shall
        cause
        to be paid to the Sellers: (a) eight hundred million dollars ($800,000,000)
        plus, (b) the Estimated Accrued Interest Amount.  These payments shall
        be made as follows:

       

      (i)
        CEFL
        shall pay, or shall cause to be paid to the Bank, (a) seven hundred ninety
        million seven hundred twenty-five thousand six dollars and ninety cents
        ($790,725,006.90) plus, (b) the Estimated Accrued Interest Amount for the
“Bank”
Positions which is equal to nine million seven hundred sixty-four thousand
        seven
        hundred thirty-eight dollars and sixty-seven cents ($9,764,738.67);
        and

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (ii)
        CEFL
        shall pay, or shall cause to be paid to ETGAM, (a) nine million two hundred
        seventy-four thousand nine hundred ninety-three dollars and ten cents
        ($9,274,993.10) plus, (b) the Estimated Accrued Interest Amount for the “ETGAM”
Positions which is equal to thirty-three thousand seven hundred thirty-four
        dollars and forty-four cents ($33,734.44).

       

      To
        the
        extent that the Effective Date Payment is not made completely in connection
        with
        the DVP/RVP settlement process set forth in paragraph 8, then any remaining
        portions of the Effective Date Payment will be made by wire transfer of
        immediately available funds to the Bank’s and/or ETGAM’s accounts designated
        below immediately following the completion of such settlement
        process.

       

      In
        addition to the foregoing payments, on the Effective Date, the Sellers shall
        pay, or shall cause to be paid to CEFL, the Estimated Principal and Interest
        Amount by wire transfer of immediately available funds to an account designated
        below by CEFL.

       

      “Estimated
        Accrued Interest Amount” means $9,798,473.11, which is a good faith
        estimate by CEFL and the Sellers of the Accrued Interest
        Amount.  “Estimated Principal and Interest Amount”
means $18,035,093.85, which is a good faith estimate by
        CEFL and the Sellers of
        the Principal and Interest Amount received or likely to be received by the
        Sellers.  “Effective Date Payment” means eight
        hundred million dollars ($800,000,000) plus, (x) the Estimated Accrued Interest
        Amount less (y) the Estimated Principal and Interest Amount.

       

      
        	
                 

              	
                4.

              	
                Purchase
                  Price Adjustment.

              

      

       

      (a)           Purchase
        Price Adjustment Statement.  Within thirty (30) days after the
        Effective Date, the Sellers shall prepare and deliver to CEFL a statement
        of the
        Principal and Interest Amount, which statement shall separately identify
“Bank”
Positions and “ETGAM” Positions.  Within forty-five (45) days after
        the Effective Date, CEFL shall prepare and deliver to the Sellers a statement
        of
        the Accrued Interest Amount and the Principal and Interest Amount, which
        statement shall separately identify “Bank” Positions and “ETGAM” Positions
        (which may include adjustments to the Principal and Interest Amount provided
        by
        the Sellers if such adjustments are necessary to correct the information)
        as of
        the Effective Date for purposes of calculating the adjustment to the Effective
        Date Payment (the “Purchase Price Adjustment
        Statement”).    CEFL shall have reasonable access
        to any documents, schedules or work papers of the Sellers related to the
        Principal and Interest Amount.

       

      (b)           Review.  The
        Sellers shall have fifteen (15) days after delivery of the Purchase Price
        Adjustment Statement to review the Purchase Price Adjustment
        Statement.  If the Sellers fail to deliver to CEFL a written objection
        to the Purchase Price Adjustment Statement within such fifteen (15) day period,
        the Purchase Price Adjustment Statement shall be deemed to be agreed to by
        the
        Sellers and will be final and binding upon the parties.  If the
        Sellers  disagree with the determination of the adjustment to the
        Effective Date Payment under the Purchase Price Adjustment Statement, the
        Sellers must notify CEFL in writing of such disagreement within such fifteen
        (15) day period, which notice shall describe the nature of any such disagreement
        in reasonable detail, identify the specific items involved and the dollar
        amount
        of each such disagreement and provide reasonable supporting documentation
        for
        each such disagreement.  

       

      
        
          
          

        

        
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      During
        the
        fifteen (15) day period of its review, the Sellers shall have reasonable
        access
        to any documents, schedules or work papers used in the preparation of the
        Purchase Price Adjustment Statement.

       

      (c)           Dispute
        Resolution.  The Sellers and CEFL agree to negotiate in good faith
        to resolve any such disagreement and any resolution agreed to in writing
        by the
        Sellers and CEFL shall be final and binding upon the parties.  If the
        Sellers and CEFL are unable to resolve all disagreements properly identified
        by
        the Sellers pursuant to Section 4(c) hereof within twenty (20) days after
        delivery to CEFL of written notice of such disagreement, then the disputed
        matters shall be referred for final determination to arbitration.  The
        Sellers and CEFL shall jointly select an arbiter from an accounting firm
        of
        national standing that is not the independent auditor of either the Sellers
        or
        CEFL (or their respective affiliates); if the Sellers and CEFL are unable
        to
        select such an arbiter within five (5) days after the end of such twenty
        (20)
        day period, the American Arbitration Association shall make such
        selection.  The person so selected shall be referred to herein as the
“Arbitrator”.  The Arbitrator shall deliver to the
        Sellers and CEFL, as promptly as practicable after its appointment and in
        any
        event within thirty (30) days after its appointment, a written report setting
        forth the resolution of any such disagreement determined in accordance with
        the
        terms herein.  Such report shall be final and binding upon the Sellers
        and CEFL.  The fees, expenses and costs of the Arbitrator shall be
        borne equally by the Sellers and CEFL.

       

      (d)           The
        “Final Accrued Interest Amount” and the “Final
        Principal and Interest Amount” means the Accrued Interest Amount (with
        respect to “Bank” Positions and “ETGAM” Positions) and the Principal and
        Interest Amount (with respect to “Bank” Positions and “ETGAM” Positions)
        respectively, each as either (a) set forth in the Purchase Price Adjustment
        Statement (if the Sellers do not object within the fifteen (15) day period),
        (b)
        mutually agreed upon by the Sellers and CEFL or (c) finally determined by
        the
        Arbitrator.

       

      (e)           Purchase
        Price Adjustment.  In the event that the Estimated Principal and
        Interest Amount (with respect to “Bank” Positions and/or “ETGAM” Positions, as
        the case may be) is greater than the Final Principal and Interest Amount
        (with
        respect to “Bank” Positions and/or “ETGAM” Positions, as the case may be), CEFL
        shall pay the applicable Seller an amount equal to the difference between
        the
        applicable Estimated Principal and Interest Amount and the applicable Final
        Principal and Interest Amount in accordance with Section 4 hereof.  In
        the event that the applicable Final Principal and Interest Amount is greater
        than the applicable Estimated Principal and Interest Amount, the applicable
        Seller shall pay CEFL an amount equal to the difference between the applicable
        Final Principal and Interest Amount and the applicable Estimated Principal
        and
        Interest Amount in accordance with Section 4 hereof.  In the event
        that the applicable Estimated Accrued Interest Amount is greater than the
        applicable Final Accrued Interest Amount, the applicable Seller shall pay
        CEFL
        an amount equal to the difference between the applicable Estimated Accrued
        Interest Amount and the applicable Final Accrued Interest Amount in accordance
        with Section 4 hereof.  In the event that the applicable Final Accrued
        Interest Amount is greater than the applicable Estimated Accrued Interest
        Amount, CEFL shall pay the applicable Seller an amount equal to the difference
        between the applicable Final Accrued Interest Amount and the applicable
        Estimated Accrued Interest Amount in accordance with Section 4
        hereof.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (f)           Payment.  Any
        adjustment to the Effective Date Payment shall be paid by the Sellers or
        CEFL,
        as applicable, by wire transfer of immediately available funds to an account
        designated by the party receiving such payment within five (5) Business Days
        (as
        hereinafter defined) after the final determination of the adjustment to the
        Effective Date Payment. “Business Day” means a day other than a
        Saturday, a Sunday or any other day on which commercial banks in the State
        of
        New York are authorized or obligated to be closed.

       

      5.           Post-Closing
        Principal and Interest Payments.  Any and all principal and
        interest payments received by the Sellers or its affiliates for the Positions
        after 12:01 a.m. New York City time on the Effective Date shall be held in
        trust
        thereby and shall be paid promptly by the Sellers to CEFL, by wire transfer
        of
        immediately available funds to an account designated by CEFL within five
        (5)
        Business Days after CEFL receives notice from the Sellers of such principal
        and
        interest payments.

       

      6.           Portfolio.  The
        Portfolio consists of the Positions listed by CUSIP, original size, and/or
        size
        as of the end of September, 2007, on Schedule A.  Each of the Sellers
        and the Company represents and warrants (a) that Schedule A accurately reflects
        the Positions in all respects set forth therein (e.g., the CUSIP,
        Original Face Amount, September 30 Face Amount, nature of exposure, and the
        like), (b) that there are no Over-The-Counter (OTC) derivative or forward
        positions contained within the Portfolio (including, but not limited to,
        credit
        default swaps), (c) that no novations or assignments are necessary to vest
        CEFL
        with full right, title and interest in the Positions, (d) that there are
        no
        short positions contained within the Portfolio, and (e) that the Positions
        will
        be delivered to CEFL by the Sellers free and clear of any liens, pledges
        and
        other encumbrances.

       

      7.           Trade
        Breaks.  If Citadel identifies any “trade breaks” (such as errors
        in the instrument, CUSIP,  nature of exposure (such as short rather
        than long), Original or Current Face Amount, or the like) resulting in
        differences in the composition of any Position being transferred from the
        information set forth in Schedule A, the Sellers and the Company shall, at
        CEFL’s election, (a) take such action as may be necessary to conform such
        Position to the information set forth in Schedule A, and to place CEFL in
        the
        position it would have been in had the Position been as represented (such
        as by
        replacing the Position with a conforming Position) or (b) pay CEFL the greater
        of the difference between the fair market value that the Position would have
        had
        if the Position had been as identified in Schedule A and the fair market
        value
        as actually received on (i) the Effective Date or (ii) the date on which
        Citadel
        notifies the Sellers of the trade break, it being understood that Citadel
        will
        begin managing the risk associated with each Position as reflected on Schedule
        A
        on behalf of CEFL immediately upon the execution of this
        Agreement.  Notwithstanding the foregoing, Citadel is not entitled to
        be put in a better financial position than it would have been in had there
        been
        no trade break.

       

      In
        the
        event that the parties have a dispute regarding any claimed trade break,
        each
        party may seek resolution of such dispute in accordance with the terms of
        the
        Investment Agreement.

       

      8.           Mechanics
        of the Transfer of Positions and the Movement of Cash.  The
        Sellers, as promptly as practicable, shall take any and all actions necessary
        to
        effect the transfer

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      of
        the
        Positions to CEFL on the terms contemplated hereby (including but not limited
        to
        executing any documents and instruments reasonably required by CEFL and
        providing appropriate instructions, and procuring the consent of third parties)
        via (a) the DTC for DTC-eligible securities or such other custodian as
        designated by CEFL; (b) physical delivery to CEFL’s designated custodian for
        non-DTC-eligible securities, or (c) such other acceptable processes as the
        parties may agree.  The Company and the Sellers, jointly and
        severally, will hold CEFL harmless from any costs or losses of the Positions
        incurred as the result of any inability to transfer such Positions on the
        terms
        contemplated hereby. The parties will endeavor to settle
        the transfer of the Positions via the
        Delivery-Versus-Payment/Receive-Versus-Payment (DVP/RVP) method.  For
        these settlement purposes only, the parties will agree to dollar values for
        each
        Position so that each Position will move versus cash. The parties will make
        all
        commercially reasonable efforts to settle these cash versus Position transfers
        on the Effective Date, but recognize that it may take more than one business
        day
        to complete.

       

      9.           Cooperation.  The
        parties will use their reasonable best efforts to cooperate with each other
        in
        effectuating this Agreement, including but not limited to executing any
        necessary instruments and other documents and providing appropriate
        instructions.  To the extent not already provided, the Sellers will
        immediately provide CEFL with copies of the most current back office and
        other
        files containing details relating to the Positions and will provide them
        in such
        file and other format as requested by CEFL.

       

      10.           Certain
        Information.  The Sellers acknowledge that because it desires to
        sell, transfer, assign and convey to CEFL all of its Positions in the Portfolio,
        it is possible that CEFL may have information about one or more of the
        Positions, issuers or reference entities of Positions that is not publicly
        available and that may be material (“Excluded
        Information”).  The Sellers acknowledge and agree that it has
        not requested that Excluded Information be disclosed to it and that Excluded
        Information is not being disclosed to it.  The Sellers hereby
        irrevocably and unconditionally waive any right that it may have to the
        disclosure of any such Excluded Information in connection with this
        transaction.  The Sellers further agree that CEFL shall not be
        obligated to refrain from using any such Excluded Information in connection
        with
        this transaction, and that the parties shall not have any liability to each
        other with respect to any such non-disclosure or use of Excluded Information
        in
        connection with this transaction or any related transaction.

       

      11.           Representations
        and Warranties of CEFL.  CEFL represents and warrants that (a) it
        has the power and authority to execute and deliver this Agreement and to
        consummate the transactions contemplated hereby, (b) the execution, delivery
        and
        performance by it of this Agreement and the consummation by it of the
        transactions contemplated hereby have been duly authorized, (c) this Agreement,
        when delivered in accordance with the terms hereof, assuming the due execution
        and delivery of this Agreement by the Sellers and the Company, shall have
        been duly executed and delivered by it and shall be a valid and binding
        obligation of it, enforceable against it in accordance with its terms, except
        to
        the extent that enforceability may be subject to applicable bankruptcy,
        insolvency, reorganization, moratorium or similar laws affecting the enforcement
        of creditors’ rights generally and to general equitable principles, and (d) no
        action, consent or approval of, registration or filing with or any other
        action
        by any governmental authority, regulatory authority, self-regulatory authority,
        exchange or clearing

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      organization
        or any other third party will be required to be made, taken or obtained by
        it
        for the purchase and assumption by, or transfer to, it of the Portfolio pursuant
        to this Agreement on the terms contained herein, other than those that have
        already been properly made, taken or obtained by CEFL.

       

      12.           Representations
        and Warranties of the Sellers and the Company.  Each
        of the Sellers and the Company represents and warrants that (a) it has the
        power
        and authority to execute and deliver this Agreement and, to consummate the
        transactions contemplated hereby, (b) the execution, delivery and performance
        by
        it of this Agreement and the consummation by it of the transactions contemplated
        hereby have been duly authorized, (c) this Agreement, when delivered in
        accordance with the terms hereof, assuming the due execution and delivery
        of
        this Agreement by CEFL, shall have been duly executed and delivered by it
        and
        shall be a valid and binding obligation of it, enforceable against it in
        accordance with its terms, except to the extent that enforceability may be
        subject to applicable bankruptcy, insolvency, reorganization, moratorium
        or
        similar laws affecting the enforcement of creditors’ rights generally and to
        general equitable principles, (d) the consummation of the Transfer as provided
        herein will transfer to CEFL all of the right, title and interest in the
        Positions and the Portfolio free and clear of any liens, claims, encumbrances
        or
        rights of third parties of any kind, (e) the Transfer is being made by the
        Sellers in compliance with all applicable laws and regulations, and (f) no
        action, consent or approval of, registration or filing with or any other
        action
        by any governmental authority, regulatory authority, self-regulatory authority,
        exchange or clearing organization or any other third party will be required
        to
        be made, taken or obtained by it for the sale, transfer, assignment and
        conveyance by the Sellers of the Portfolio to CEFL pursuant to this Agreement
        on
        the terms contained herein, other than those that have already been properly
        made, taken or obtained by the Sellers or the Company.

       

      13.           No
        Third Party Beneficiaries.  No person other than the parties
        hereto shall have any rights with respect to the matters contemplated hereby
        and
        there are no third party beneficiaries hereto, except for the Citadel
        Indemnitees (as hereinafter defined) pursuant to Section 14.

       

      14.            Indemnity.  (a)
        The Sellers and the Company, jointly and severally, shall indemnify and defend
        each of CEFL, Citadel and each of their respective officers, directors,
        employees, agents and affiliates (the “Citadel Indemnitees”),
        to the fullest extent lawful, from and against any and all actions, suits,
        claims, proceedings, damages, losses, deficiencies, liabilities, penalties,
        fines, interest, costs, damages, judgments, amounts paid in settlement and
        expenses (including, without limitation, the cost and expenses of any
        litigations, actions, judgments and settlements related thereto, and the
        reasonable costs and expenses of attorneys and accountants incurred in the
        investigation or defense thereof or the enforcement of rights hereunder)
        (collectively, “Losses”) arising out of or resulting from (i)
        any breach of any representation or warranty made by the Sellers or the Company
        under this Agreement, (ii) any breach by the Sellers or the Company of any
        covenant, obligation or other agreement contained in this Agreement (including,
        without limitation, Sections 6 and 12 hereof), or (iii) any third party or
        governmental claim, action, suit, proceeding or investigation, whether civil,
        criminal, administrative or investigative, arising out of or otherwise relating
        to the transactions contemplated by this Agreement (including, but not limited
        to, any such claim, action, suit,

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      proceeding
        or investigation initiated by or on behalf of any investors, clients or
        customers of the Sellers or the Company). Notwithstanding anything to the
        contrary set forth in this Agreement, (x) except for fraud, the aggregate
        amount
        of Losses for which the Company and Sellers are obligated to indemnify the
        Citadel Indemnitees in respect of claims under Section 14(a)(i) shall not
        exceed
        $800,000,000 and (y) CEFL and Citadel agree, prior to asserting any
        indemnification claims hereunder against the Bank, to use commercially
        reasonable efforts to seek satisfaction of such indemnification claim from
        the
        Company (it being understood that the use of such reasonably commercial efforts
        shall not waive any rights of CEFL and Citadel against the Bank or limit
        any
        obligations and liabilities of the Bank hereunder).

       

      (b)
        CEFL
        and Citadel jointly and severally, shall indemnify and defend each of the
        Sellers, the Company and each of their respective officers, directors,
        employees, agents and affiliates (the “Company Indemnitees”),
        to the fullest extent lawful, from and against any and all Losses arising
        out of
        or resulting from (i) any breach of any representation or warranty made by
        CEFL
        under this Agreement or (ii) any breach by CEFL of any covenant, obligation
        or
        other agreement contained in this Agreement.  Notwithstanding anything
        to the contrary set forth in this Agreement, except for fraud, the aggregate
        amount of Losses for which CEFL and Citadel are obligated to indemnify the
        Company Indemnitees in respect of claims under Section 14(b)(i) shall not
        exceed
        $800,000,000.

       

      15.           Securities
        Contract.  This Agreement is intended to be a “securities
        contract” within the meaning of section 741 of title 11 of the United States
        Code.  It is also intended to be a "qualified financial contract"
        within the meaning of section 1821(e)(8) of title 12 of the United States
        Code
        and the Company agrees to maintain this Agreement and the evidence of authority
        in its official books and records.

       

      16.           Choice
        of Law.  This Agreement shall be governed by and construed in
        accordance with the laws of the State of New York applicable to agreements
        made
        and to be performed within such State without regard to principles of conflict
        of laws.

       

      17.           Notice.  Except
        as provided elsewhere herein, notices hereunder shall be sent by express
        courier, e-mail, or hand delivery to the addresses indicated below:

       

      Citadel
        Equity Fund Ltd.

      c/o
        Citadel Limited Partnership

      131
        South
        Dearborn Street

      Chicago,
        Illinois 60603

       

      with
        a copy (which shall not constitute
        notice) to:

      

      Attention:  Legal
        Department

      E-Mail:
        CitadelAgreementNotice@Citadelgroup.com

      

      Wire
        instructions:

      

      Bank
        of
        New York

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      ABA:
        021000018

      Citadel
        Equity Fund

      Account:
        8900472545

      

      DTC:

      

      DTC
        ID:  0775

      a/c:  CEFL

      

      

      E*TRADE
        Bank

      Attn:
        Back
        Office Services, 15th Floor

      Ballston
        Tower

      671
        North Glebe Rd.

      Arlington,
        VA 22203

      

      E*TRADE
        Global Asset Management, Inc.

      Attn:
        Back
        Office Services, 15th Floor

      Ballston
        Tower

      671
        North Glebe Rd.

      Arlington,
        VA 22203

      

      E*TRADE
        Financial Corporation

      671
        N.
        Glebe Road

      Arlington,
        VA 22203

      
        	
              	
                Attention: 
                  

              	
                 Arlen
                  W. Gelbard, Esq.

                 Chief Administrative Officer &
                  General Counsel

              

      

                        

      with
        a
        copy (which shall not constitute notice) to:

      

      Davis
        Polk
& Wardwell

      450
        Lexington Avenue

      New
        York,
        NY 10017

      
        
          	
                	
                  Attention: 
                    

                	
                   Daniel
                    G. Kelly, Jr.

                   John D.
                    Amorosi

                

        

        Fax:  (212)
          450-3800

      

      

      Wire
        instructions:

       

      E*TRADE
        Bank:

      ABA
        #
        256072691 

      ETRADE
        BANK

      Acct
        #
        1000303

      Acct
        Name:
        E*TRADE Bank

      

      E*TRADE
        Global Asset Management, Inc.:

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      ABA
        #
        256072691 

      ETRADE
        BANK

      Acct
        #
        2000020145

      Acct
        Name:
        ETGAM

      

      DTC:

      

      E*TRADE
        Bank:

      Agent
        Bank:  48614

      Inst.
        ID:  48614

      DTC
        Part.
        #:  2225

      

      MidWest
        ID:  TBCM

      Telebank
        Sub Account:  TBNK

      Mortgage
        Sub Account:
        ETMG

      

      E*TRADE
        Global Asset Management, Inc.:

      Agent
        Bank:  48609

      Inst.
        ID:  48609

      DTC
        Part.
        #:  2226

       

      18.            Consent
        to Jurisdiction; Waiver of Jury Trial.  Any judicial proceeding
        brought against any party regarding any dispute arising out of this Agreement
        or
        any matter related hereto may be brought in the courts of the State of New
        York,
        or in the United States District Court for the Southern District of New York,
        in
        each case located in the Borough of Manhattan, and, by execution and delivery
        of
        this Agreement, each such party accepts the exclusive jurisdiction of such
        courts solely for such purpose.  Each party hereto hereby agrees that
        service of any process, summons, notice or document by U.S. registered mail
        addressed to CEFL, the Sellers or the Company at the addresses listed above
        or
        at such other address as each party may provide to the others from time to
        time,
        as applicable, shall be effective service of process for any action, suit
        or
        proceeding brought against such addressee in any such court.  Each
        party hereto hereby irrevocably and unconditionally waives any objection
        to the
        laying of venue of any such suit, action or proceeding brought in any such
        court
        and any claim that any such suit, action or proceeding brought in any such
        court
        has been brought in an inconvenient forum.  Each party hereto agrees
        that a final judgment relating to it in any such suit, action or proceeding
        brought in any such court shall be conclusive and binding upon it and may
        be
        enforced in any other courts to whose jurisdiction such party is or may be
        subject, by suit upon each judgment.  EACH PARTY HEREBY IRREVOCABLY
        WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
        (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING
        TO
        THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF SUCH
        PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT
        HEREOF.

       

      19.           Severability.  In
        the event that any provision or portion of this Agreement is determined to
        be
        invalid, illegal or unenforceable for any reason, in whole or in part, the
        

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      remaining
        provisions of this Agreement shall be unaffected thereby and shall remain
        in
        full force and effect to the fullest extent permitted by applicable
        law.

       

      20.           Entire
        Agreement.  This Agreement (including the Exhibits) and the
        Investment Agreement, constitutes the entire agreement between the parties
        hereto relating to the subject matter contained herein, and supersedes and
        replaces all prior writings, discussions and rights relating hereto and thereto;
        and no obligation of any kind relating hereto is assumed by or implied against
        any party hereto except for those obligations expressly stated
        herein.  This Agreement may only be amended by a written
        instrument signed by the parties hereto.

       

      21.           Survival.  The
        representations and warranties contained in this Agreement shall survive
        the
        conclusion of the Transfer.

       

      22.           Counterparts.  This
        Agreement may be executed in counterparts (including by facsimile or similar
        means of electronic transmission), and any party hereto may execute any such
        counterpart, each of which when executed and delivered shall be deemed to
        be an
        original and all of which counterparts taken together shall constitute but
        one
        and the same instrument.

       

      *   *   *   *   *

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

                 IN
        WITNESS WHEREOF, this Agreement has been executed by the parties hereto or
        by
        their respective duly authorized officers, all as of the date first above
        written.

       

       

      
        	 	
                Citadel
                  Equity Fund Ltd.

              
	 	 	 	 	 
	 	 	 	 	 
	 	By: 
                	 /s/
                Adam Cooper	 
	 	 	
                Name: 
                  

              	Adam
                Cooper	 
	 	 	
                Title:

              	Senior
                Managing Director and General Counsel	 

      

      

      
         

        
          	 	
                  E*TRADE
                    Bank

                
	 	 	 	 	 
	 	 	 	 	 
	 	By: 
                  	 /s/
                  Arlen W. Gelbard	 
	 	 	
                  Name: 
                    

                	Arlen
                  W. Gelbard	 
	 	 	
                  Title:

                	President
                  and COO	 

        

        

        
           

          
            	 	
                    E*TRADE
                      Global Asset Management, Inc.

                  
	 	 	 	 	 
	 	 	 	 	 
	 	By: 
                    	 /s/
                    Michael Hlushak	 
	 	 	
                    Name: 
                      

                  	Michael
                    Hlushak	 
	 	 	
                    Title:

                  	President
                    and CEO	 

          

          
             

             

            
              	 	
                      E*TRADE
                        Financial Corporation

                    
	 	 	 	 	 
	 	 	 	 	 
	 	By: 
                      	 /s/
                      R. Jarrett Lilien	 
	 	 	
                      Name: 
                        

                    	R.
                      Jarrett Lilien	 
	 	 	
                      Title:

                    	President
                      and COO

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