EXHIBIT 10.10
Aetna Services, Inc. / Aetna Health Care
Term Sheet
Formal agreements reflecting the transactions set forth herein will be
entered into between the parties prior to the Distribution Date (as defined in
the Distribution Agreement between Aetna Inc. and Aetna U.S. Healthcare Inc.
(the "Distribution Agreement"). The terms set forth below summarize the major
points which have been discussed, but are not intended to be the entirety of
the terms of the proposed transactions described herein (collectively, the
"Transactions"), which shall be reflected in the definitive agreements
contemplated below. The terms set forth herein are in all respects subject to
compliance with the terms and conditions of the Ground Lease, the Master Lease,
the Assignment and the Sublease (as defined herein). This Term Sheet forms part
of the Distribution Agreement and has no binding effect except to the extent
contemplated in the Distribution Agreement and the Agreement and Plan of
Restructuring and Merger among ING America Insurance Holdings, Inc., ANB
Acquisition Corp., Aetna Inc. and, for limited purposes only, ING Groep N.V.
Terms used herein but not defined shall have the meaning ascribed to them in
the Sublease.
Background: CityPlace Limited Partnership (the "Master Lessor") is
the lessee of certain land (the "Land") under a ground
lease ("Ground Lease") and owner of a building thereon
known as CityPlace I (the "Building") in Hartford,
Connecticut. Master Lessor subleased ("Master Lease")
the Land and leased the Building to Urban Investment
and Development ("Urban"), which in turn further
subleased the Land and Building to Aetna Life and
Casualty Company (the "Sublease"). The positions of
Urban were subsequently assigned ("Assignment") to
Aetna Life and Casualty Company, which is now known as
Aetna Services, Inc. ("Aetna Services"). Aetna
Services is a wholly owned subsidiary of its publicly
traded parent, Aetna Inc., which has guaranteed the
obligations of Aetna Services under the Sublease.
Aetna Services is, therefore, lessee of the Building
and sublessee of the Land from Master Lessor and
further sublessee of such interests from itself (none
of the estates are merged). Following the Merger, all
obligations of Aetna Inc. and Aetna Services shall
remain in full force and effect.
Lease of Travelers
Space to Aetna Health
Care: 1. Prior to or on the Distribution Date, Aetna
Services shall enter into a lease (the "Healthcare
Lease") for the period commencing April 1, 2004 and
terminating October 31, 2008 with Aetna U.S.
Healthcare Inc. ("AUSHC") or one of AUSHC's wholly
owned subsidiaries (any of which is referred to herein
as "Aetna Healthcare", it being understood that in the
event the lessee is a
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subsidiary, AUSHC would execute a guaranty, acceptable
to Aetna Services, of the obligations of the
subsidiary) of that certain space in the Building (the
"Travelers Space"), currently leased to Travelers
Indemnity Company ("Travelers") as lessee under that
certain Lease between Aetna Life and Casualty Company
(now known as Aetna Services) and Travelers dated as
of March 28, 1996 (the "Travelers Lease"). The terms
and conditions of the Healthcare Lease (except with
respect to term and rent in the renewal period) would
be substantially the same as those contained in the
Travelers Lease. The term will commence on April 1,
2004 and extend until October 31, 2008 at an annual
Base Rent of $15.50 per square foot, plus escalations
for expenses using the base year of calendar 1997
(hereinafter referred to as "Rent").
Aetna Healthcare would have the right to sublet any of
the Travelers Space with the consent of Aetna
Services, which consent would not be unreasonably
withheld or delayed. Any sublease rent paid to Aetna
Healthcare (by Travelers or any other sublessee of
Aetna Healthcare) would be retained by Aetna
Healthcare, which would be obligated to Aetna Services
solely for the Rent.
Aetna Services would agree that as of the Distribution
Date, Aetna Healthcare would have the right to
negotiate with Travelers directly regarding any matter
pertaining to the period after March 31, 2004. In
addition, any matter arising under the Travelers Lease
with respect to the period from April 1, 2004 through
October 31, 2008 would be subject to the consent of
Aetna Healthcare.
2. Simultaneously with the commencement of the term of
the Healthcare Lease, Aetna Services would assign its
interest in the Travelers Lease to Aetna Healthcare.
Upon such assignment, Healthcare would (a) assume
Aetna Services' obligations with respect to the
Travelers Space, and (b) indemnify Aetna Services with
respect to any liabilities relating thereto arising
after such date.
3. Aetna Healthcare would have the right to assign its
interest in the Healthcare Lease to a third party with
the consent of Aetna Services, which consent would not
be unreasonably withheld or delayed; provided,
however, that no such assignment would relieve or
release Aetna Healthcare from its obligations under
the Healthcare Lease.
Extension Option and
Purchase Option: Aetna Services and Aetna Healthcare agree to enter
into an agreement (the "Option Agreement") setting
forth certain rights and obligations of each party
with respect to (i) the option to
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purchase the interests of Master Lessor in and to the
Land and Building (the "Purchase Option") and (ii) the
option to extend the term of the Sublease
(collectively, the "Options"), as such Options are more
particularly described in the Sublease. The terms of
such Option Agreement shall include, without
limitation, the following provisions:
1. Aetna Services would agree that upon its receipt of
notice from Aetna Healthcare, or its designee, Aetna
Services shall, pursuant to the Sublease, subject to
the conditions set forth herein, exercise one or both
of the Options. Pursuant to such notice, Aetna
Healthcare would agree to indemnify and hold Aetna
Services harmless with respect to any financial
liability or obligations arising from the exercise of
the Options or arising from any actions taken pursuant
to the Option Agreement, and provide the security (the
"Security") described below.
a. With respect to any exercise of the Sublease
extension right, Aetna Services would have no
obligation to exercise such option unless Aetna
Healthcare delivers, in form and substance reasonably
acceptable to Aetna Services, documentation whereby
the Master Lessor, and any other party whose consent
would be necessary, (i) acknowledges that the
replacement tenant during the extension term will not
be Aetna Services, (ii) approves the replacement
tenant and (iii) releases Aetna Services from
liability with respect to the Land and Building for
the period beyond October 31, 2008 to the extent as if
Aetna Services was no longer a lessee of the Land or
Building.
b. With respect to any exercise of the Purchase
Option, Aetna Services would have no obligation to
exercise such option unless (i) Aetna Healthcare
delivers the Security to Aetna Services for the
payment of all obligations which may arise from the
exercise of such Purchase Option, including, without
limitation, the amount of the purchase price and any
attendant closing costs and (ii) Aetna Healthcare also
provides the necessary documentation to complete such
purchase, including, without limitation, as provided
in Section 14 of the Sublease, together with powers of
attorney which would enable Aetna Services to
complete the purchase without liability to Aetna
Services. Upon the closing under the Purchase Option,
Aetna Healthcare would release Aetna Services with
respect to all liabilities relating to the Land and
Building.
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It is understood that the purchase price under the
Purchase Option may not be determined at the time of
exercise of the option. In such event, security for
the purchase price shall initially be computed on the
basis of Aetna Healthcare's reasonable estimate of
fair market value; upon final determination of the
purchase price, the Security will be computed based on
the actual price, with necessary adjustments to the
initial Security to be promptly finalized by Aetna
Services or Aetna Healthcare, as appropriate. In the
event that Aetna Healthcare determines, after exercise
of the option, that the purchase price is
unacceptable, Aetna Services will, upon direction of
Aetna Healthcare, withdraw the exercise of the
Purchase Option (as permitted in the Sublease). The
form of Security will be subject to the reasonable
consent of Aetna Services. Earnings on any such
Security would remain as part of such Security. In the
event that Aetna Healthcare defaults with respect to
its obligations regarding the completion of the
closing of the Purchase Option, the Security could be
used by Aetna Services to satisfy any liabilities
Aetna Services may have arising from the exercise of
the Purchase Option. If no such default occurs, the
Security and all earnings thereon would be delivered
to Aetna Healthcare (or its designee)
contemporaneously with the closing of the Purchase
Option transaction.
c. Aetna Services and Aetna Healthcare agree that
Aetna Services shall have no liability with respect to
periods beyond October 31, 2008 and the parties hereto
will execute reasonably acceptable final documents
which reflect that agreement, subject to the
requirements set forth herein.
2. Aetna Healthcare would have the right to assign its
rights with respect to the Options under the Option
Agreement with the consent of Aetna Services, which
consent would not be unreasonably withheld or delayed.
3. In the event that Aetna Services is requested to
consent to any matter pertaining to the Land or
Building (each, a "Property Matter") which will solely
affect the period beyond October 31, 2008, Aetna
Services agrees (a) to deliver written notice of any
such matter to Aetna Healthcare, and (b) to take only
such action with respect to such issues as directed by
Aetna Healthcare. Any decision with respect to any such
consent which will solely affect the period prior to
October 31, 2008 will be made by Aetna Services. To the
extent a Property Matter relates to the periods both
prior to and after October 31, 2008, any decision made
with respect thereto would be required to be mutually
acceptable to Aetna Services and Aetna Healthcare. The
parties agree in reaching such decisions that the
obligations and benefits pertaining to each such period
would be equitably apportioned.
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5. Upon the exercise of the Purchase Option, the
Premises will be transferred to Aetna Healthcare or
its designee.
6. Aetna Services agrees that it shall not transfer
its interests under the Sublease or the Healthcare
Lease without the prior written consent of Aetna
Healthcare, which consent would not be unreasonably
withheld or delayed.
7. All agreements contemplated herein will be binding
upon the successors and assigns of the parties
thereto.
Closing: Immediately prior to the Distribution Time (as defined
in the Distribution Agreement).
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