As filed with the Securities and Exchange Commission on October 6, 1994
Registration No. 33-52819
No. 33-52819-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
AETNA CAPITAL L.L.C. AETNA LIFE AND CASUALTY COMPANY
(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its charter)
Delaware Connecticut
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
52-1871702 06-0843808
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
c/o Jean M. Waggett Jean M. Waggett
Vice President and Vice President and
Corporate Secretary Corporate Secretary
Aetna Life and Casualty Company Aetna Life and Casualty Company
151 Farmington Avenue 151 Farmington Avenue
Hartford, Connecticut 06156 Hartford, Connecticut 06156
(203) 273-0123 (203) 273-0123
(Address, including zip code, (Address, including zip code, and
and telephone number, including telephone number, including area code,
area code, of Registrant's principal of Registrant's principal executive
executive offices and agent for service) offices and agent for service)
__________
Copy of Correspondence to:
<TABLE>
<S> <C> <C>
Kirk P. Wickman Robert S. Risoleo Richard J. Sandler
Counsel Sullivan & Cromwell Davis Polk & Wardwell
Aetna Life and Casualty Company 125 Broad Street 450 Lexington Avenue
151 Farmington Avenue New York, New York 10004 New York, New York 10017
Hartford, Connecticut 06156 (212) 558-4000 (212) 450-4000
(203) 273-0123
</TABLE>
__________
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: ( )
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: (X)
__________
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT TO COMPLETION, DATED OCTOBER 6, 1994
Aetna Capital L.L.C.
Preferred Securities
guaranteed to the extent set forth herein by
Aetna Life and Casualty Company
__________
Aetna Capital L.L.C., a Delaware limited liability company (the "Company"),
may offer from time to time, in one or more series, its authorized but
unissued Preferred Limited Liability Company Interests (the "Preferred
Securities"). All of the Common Limited Liability Company Interests (the
"Common Securities") of the Company are owned directly or indirectly by Aetna
Life and Casualty Company, a Connecticut insurance corporation ("AL&C"). The
payment of dividends declared by the Company, to the extent the Company has
cash on hand legally available therefor, and payments on liquidation or
redemption with respect to the Preferred Securities are guaranteed (the
"Guarantee") by AL&C to the extent set forth herein. No portion of the
dividends received by a holder of the Preferred Securities will be eligible
for the dividends received deduction for federal income tax purposes. The
Guarantee will rank subordinate and junior in right of payment to all other
liabilities of AL&C and pari passu with the most senior preferred stock issued
by AL&C. Concurrently with the issuance of each series of Preferred
Securities, the Company will loan the proceeds from the issuance thereof and
of the related issuance of Common Securities and capital contributions to AL&C
and to evidence such loans AL&C will issue and deliver to the Company a series
of AL&C's subordinated debentures (the "Debentures") with terms corresponding
to the terms of the related series of Preferred Securities. The Debentures
will be unsecured and subordinate and junior in right of payment to Senior
Debt (as defined herein) of AL&C. See "Aetna Capital L.L.C.", "Description of
the Guarantee" and "Description of the Debentures and the Subordinated
Indenture" for a description of various contractual backup obligations of AL&C
relating to the Preferred Securities. The aggregate stated liquidation
preference of the Preferred Securities of all series to be issued under the
registration statement of which this Prospectus forms a part will not exceed
$500,000,000.
The terms of the Preferred Securities of a particular series will be
determined at the time of sale. The specific designation, liquidation
preference per security, initial public offering price, dividend rate (or
method of calculation thereof), dates on which dividends will be payable,
voting rights, any redemption or exchange provisions and the other rights,
preferences, privileges, limitations and restrictions relating to the
Preferred Securities of the particular series in respect of which this
Prospectus is being delivered, to the extent any such terms differ from the
terms set forth herein or are otherwise not set forth herein, will be set
forth in the Prospectus Supplement pertaining to such series (the "Prospectus
Supplement").
The Preferred Securities may be sold for public offering to or through
underwriters or dealers or may be sold through agents designated from time to
time or directly by the Company. See "Plan of Distribution". The names of
any such underwriters, dealers or agents involved in the sale of the Preferred
Securities of the particular series in respect of which this Prospectus is
being delivered, the number of Preferred Securities to be purchased by any
such underwriters and any applicable commissions or discounts will be set
forth in the Prospectus Supplement. The proceeds to the Company will also be
set forth in the Prospectus Supplement.
__________
See "Certain Investment Considerations" for certain considerations relevant to
an investment in the Preferred Securities, including circumstances under which
payment of dividends on the Preferred Securities may be deferred.
__________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
__________
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in
this Prospectus in connection with the offer contained in this Prospectus and,
if given or made, such information or representations must not be relied upon
as having been authorized by AL&C, the Company or any underwriters, agents or
dealers. This Prospectus does not constitute an offer to sell or solicitation
of an offer to buy securities in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale hereunder shall, under any circumstances, create an
implication that there has been no change in the affairs of AL&C and its
subsidiaries or the Company since the date hereof or that the information
contained herein is correct at any time subsequent to the date hereof.
This Prospectus may not be used to consummate sales of Preferred Securities
unless accompanied by a Prospectus Supplement.
__________
The date of this Prospectus is , 1994.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
AVAILABLE INFORMATION
AL&C is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy and information statements and
other information filed by AL&C can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of
the Commission: Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional
Office, 7 World Trade Center, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission
at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. AL&C's
common stock is listed on the New York Stock Exchange, the Pacific Stock
Exchange and on the Swiss exchanges in Basel, Geneva and Zurich, and such
reports, proxy and information statements and other information concerning AL&C
may also be inspected at the offices of the New York Stock Exchange, Inc., 20
Broad Street, New York, New York 10005, and the Pacific Stock Exchange, 301
Pine Street, San Francisco, California 94104.
The Company and AL&C have filed with the Commission a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the securities offered hereby (the "Registration Statement").
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. Reference is made to the
Registration Statement and to the exhibits relating thereto for further
information with respect to AL&C, the Company and the securities offered
hereby.
No separate financial statements of the Company have been included
herein. The Company and AL&C do not consider that such financial statements
would be material to holders of the Preferred Securities because the Company
is a newly formed special purpose entity and has no operating history. See
"Aetna Capital L.L.C.". The Company is a limited liability company formed
under the laws of Delaware and will be managed by AL&C and Aetna Capital
Holdings, Inc., in their capacity as the members of the Company that own all
of the Company's Common Securities (the "Managing Members"). AL&C directly or
indirectly owns all of the Common Securities, which are nontransferable.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to
Section 13 of the Exchange Act under File No. 1-5704 and are incorporated by
reference into this Prospectus and made a part hereof:
1. Aetna's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993;
2. Aetna's Quarterly Report on Form 10-Q for the quarter ended March
31, 1994;
3. Aetna's Quarterly Report on Form 10-Q for the quarter ended June 30,
1994; and
4. Aetna's Current Report on Form 8-K dated October 5, 1994.
All documents filed by AL&C with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof
and prior to the termination of the offering described herein shall hereby be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained
herein or in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein or in any Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
AL&C will provide without charge to each person to whom this Prospectus
is delivered, on written or oral request of such person, a copy of any or all
of the foregoing documents incorporated by reference into this Prospectus
(without exhibits to such documents other than exhibits specifically
incorporated by reference into such documents). Requests for such copies
should be directed to the office of the Corporate Secretary, Aetna Life and
Casualty Company, 151 Farmington Avenue, Hartford, CT 06156, telephone (203)
273-3977.
AETNA LIFE AND CASUALTY COMPANY
AL&C and its subsidiaries ("Aetna") constitute one of the nation's
largest insurance/financial services organizations based on its assets at
December 31, 1993. Based on 1993 premium rankings, Aetna also is one of the
nation's largest stock insurers of property-casualty lines and one of the
largest writers of group health and managed care products, and group life,
annuity and pension products.
AL&C was organized in 1967 as a Connecticut insurance corporation. The
business of Aetna is conducted through five reportable segments: health and
life insurance and services; financial services; commercial property-casualty
insurance and services; personal property-casualty insurance; and
international.
The principal executive offices of AL&C are located at 151 Farmington
Avenue, Hartford, Connecticut 06156; its telephone number is (203) 273-0123.
AETNA CAPITAL L.L.C.
The Company is a limited liability company formed under the laws of
Delaware. AL&C owns directly or indirectly all of the Common Securities of
the Company, which securities are nontransferable. The Company's principal
executive offices are located at 151 Farmington Avenue, Hartford, Connecticut
06156, telephone: (203) 273-0123. The principal executive offices of the
Managing Members are located at 151 Farmington Avenue, Hartford, Connecticut
06156, telephone: (203) 273-0123. The Company exists solely for the purpose
of issuing Preferred Securities and Common Securities and lending the proceeds
from the issuance thereof and related capital contributions to AL&C.
Pursuant to the Company's Amended and Restated Limited Liability Company
Agreement (the "L.L.C. Agreement"), the members of the Company that own Common
Securities have unlimited liability for the debts, obligations and liabilities
of the Company in the same manner as a general partner of a Delaware limited
partnership (which do not include obligations to holders of Preferred
Securities in their capacity as such), to the extent not fully satisfied and
discharged by the Company. That liability on the part of such members is for
the benefit of, and is enforceable by, the liquidating trustee of the Company
in the event of its dissolution and is for the benefit of third parties to whom
the Company owes such debts, obligations and liabilities. The holders of
Preferred Securities, in their capacity as members of the Company, are not
liable for the debts, obligations or liabilities of the Company (subject to
their obligation to repay any funds wrongfully distributed to them).
Each holder of Preferred Securities will be furnished annually with
unaudited financial statements of the Company as soon as available after the
end of the Company's fiscal year.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth Aetna's ratio of earnings to combined
fixed charges and preferred stock dividends for the periods indicated.
<TABLE>
<CAPTION>
Six Months Years Ended December 31,
Ended --------------------------------------------
June 30, 1994 1993 1992 1991 1990 1989
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<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Combined
Fixed Charges and Preferred
Stock Dividends....... 3.88 (a) 0.42(a) 2.13 3.03 4.05
<FN>
___________
(a) Earnings were inadequate to cover fixed charges by $1.1 billion in 1993
and $112.8 million in 1992.
</TABLE>
For purposes of computing the ratio of earnings to combined fixed
charges and preferred stock dividends, "earnings" represent consolidated
earnings from continuing operations before income taxes, cumulative effect
adjustments and extraordinary items plus fixed charges and minority interest.
"Fixed charges" consist of interest (and the portion of rental expense deemed
representative of the interest factor). Preferred stock dividends, which are
not deductible for income tax purposes, have been increased to a taxable
equivalent basis. This adjustment has been calculated by using the effective
tax rate for the applicable year. All shares of AL&C's preferred stock were
redeemed in 1989.
CERTAIN INVESTMENT CONSIDERATIONS
Prospective purchasers of Preferred Securities should carefully review
the information contained elsewhere in this Prospectus and the related
Prospectus Supplement and should particularly consider the following matters:
Dependence on AL&C; Subordination of AL&C's Obligations
The Company's ability to pay amounts due on the Preferred
Securities is solely dependent upon AL&C's ability to make payments on
the related Debentures when and as required. AL&C's obligations under
the Subordinated Indenture are subordinate and junior in right of
payment to all Senior Debt of AL&C and its obligations under the
Guarantee are subordinate and junior in right of payment to all other
liabilities of AL&C. As of June 30, 1994, AL&C had approximately $1.1
billion of Senior Debt outstanding. There are no provisions in the
Preferred Securities, the Subordinated Indenture or the Guarantee that
limit AL&C's ability to incur additional indebtedness, including
indebtedness that ranks senior to the Guarantee and the Debentures. See
"Description of the Guarantee -- Status of the Guarantee" and
"Description of the Debentures and the Subordinated Indenture --
Subordination". In addition, since AL&C is a holding company, the
rights of AL&C, and hence the right of creditors of AL&C (including the
holders of Debentures and, to the extent of the Guarantee, the holders
of Preferred Securities), to participate in any distribution of the
assets of any subsidiary upon its liquidation or reorganization or
otherwise is necessarily subject to the prior claims of creditors of the
subsidiary, except to the extent that claims of AL&C itself as a
creditor of the subsidiary may be recognized.
Option to Extend Interest Payment Period
AL&C has the right under the Debentures of any series to extend
interest payment periods for up to 60 months (which right may be
exercised from time to time), and, as a consequence, monthly dividends
on the Preferred Securities of the related series can be deferred (but
will continue to accumulate) by the Company during any such extended
interest payment period. In the event that AL&C exercises this right,
AL&C will not be permitted to declare dividends on any shares of its
preferred or common stock, and therefore, the possibility of an
extension of a payment period is, in the view of the Company and AL&C,
remote. See "Description of the Debentures and the Subordinated
Indenture -- Interest".
Tax Consequences of Extended Interest Payment Period
Should AL&C exercise its right to extend the interest payment
period with respect to the Debentures of any series, beneficial owners
of Preferred Securities of the related series will be required to
include interest accruing on the Debentures of such series in gross
income for U.S. federal income tax purposes in advance of the receipt of
cash, and any beneficial owners who dispose of Preferred Securities of
such series prior to the record date for payment of dividends following
such period will not receive such dividends from the Company or AL&C.
See "Taxation -- Potential Extension of Payment Period".
USE OF PROCEEDS
The proceeds from the sale of the Preferred Securities will be loaned to
AL&C and, except as may otherwise be set forth in the applicable Prospectus
Supplement, will be used for general corporate purposes.
DESCRIPTION OF THE PREFERRED SECURITIES
The following is a summary of certain terms and provisions of the
Preferred Securities of any series. Certain terms and provisions of the
Preferred Securities of a particular series will be summarized in the
Prospectus Supplement relating to the Preferred Securities of such series. If
so indicated in the Prospectus Supplement, the terms and provisions of the
Preferred Securities of a particular series may differ from the terms set
forth below. The summaries set forth below and in the applicable Prospectus
Supplement address the material terms of the Preferred Securities of any
particular series but do not purport to be complete and are subject to, and
qualified in their entirety by reference to, the L.L.C. Agreement and the
written actions taken or to be taken by the Managing Members pursuant to the
L.L.C. Agreement and the Delaware Limited Liability Company Act (the "L.L.C.
Act"), establishing the rights, preferences, privileges, limitations and
restrictions relating to the Preferred Securities of any series or of a
particular series. A copy of the form of the L.L.C. Agreement has been filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part.
General
The Company is authorized to issue Common Securities and Preferred
Securities. The Preferred Securities may be issued in one or more series or
classes, with such dividend rights, liquidation preference per security,
redemption or exchange provisions, voting rights and other rights,
preferences, privileges, limitations and restrictions as shall be set forth in
the L.L.C. Agreement and the written action providing for the issuance thereof
adopted by the Managing Members. All of the Preferred Securities will rank
pari passu with each other with respect to participation in profits and
assets.
The Preferred Securities of any series will be issued in registered form
only without dividend coupons. Registration of, and registration of transfers
of, the Preferred Securities of any series will be by book-entry only. See
"Book-Entry-Only Issuance; The Depository Trust Company". The Preferred
Securities of any series will have the dividend rights, rights upon
liquidation, redemption and exchange provisions and voting rights set forth
below, unless otherwise provided in the Prospectus Supplement relating to the
Preferred Securities of a particular series. Reference is made to the
Prospectus Supplement relating to the Preferred Securities of a particular
series for specific terms thereof, to the extent such specific terms differ
from the terms set forth herein or are otherwise not set forth herein, which
may include (i) the designation of the Preferred Securities of such series,
(ii) the price at which the Preferred Securities of such series will be
issued, (iii) the dividend rate (or method of calculation thereof) and the
dates on which dividends will be payable, (iv) the voting rights, (v) any
redemption or exchange provisions, (vi) the stated liquidation preference,
(vii) any other rights, preferences, privileges, limitations and restrictions
relating to the Preferred Securities of such series and (viii) the terms upon
which the proceeds from the sale of the Preferred Securities of such series
will be loaned to AL&C.
Dividends
Dividends on the Preferred Securities will be cumulative. Cumulative
dividends on any series of Preferred Securities will accrue from the date set
forth in the Prospectus Supplement relating to such series and, except in the
event that AL&C exercises its right to extend the interest payment period for
the Debentures of the related series in the manner described under
"Description of the Debentures and the Subordinated Indenture -- Interest"
below, will be payable monthly in arrears on the last day of each calendar
month of each year, commencing on the date specified in the Prospectus
Supplement relating to such series. In the event that AL&C extends the
interest payment period for any series of Debentures, dividend payments on the
related series of Preferred Securities will be deferred during such extended
interest payment period.
The dividend rate on Preferred Securities of a particular series (or the
method of calculation thereof) will be specified in the Prospectus Supplement
relating to such series. The amount of dividends payable for any full monthly
dividend period will be computed on the basis of twelve 30-day months and a
360-day year and, for any period shorter than a full monthly dividend period,
will be computed on the basis of the actual number of days elapsed in such
period. If the interest payment period for the Debentures of any series is
extended in the manner described under "Description of the Debentures and the
Subordinated Indenture -- Interest" below, then the rate at which dividends on
the related series of Preferred Securities accumulate shall be increased by an
amount such that the aggregate amount of dividends that accumulates on all
outstanding Preferred Securities of such series during such interest extension
period is equal to the aggregate amount of interest (including interest
payable on unpaid interest) that accrues during such interest extension period
on the portion of such outstanding Debentures that evidence the loan to AL&C
of the proceeds of the issuance of the outstanding Preferred Securities of
such series. The Company may only pay dividends on Preferred Securities to
the extent it has funds legally available therefor. See "Description of the
Guarantee" and "Description of the Debentures and the Subordinated Indenture"
below.
Dividends on the Preferred Securities of any series will be declared by
the Managing Members of the Company to the extent that the Managing Members
reasonably anticipate that at the time such payments are due the Company will
have (i) funds legally available for the payment of such dividends and (ii)
cash on hand sufficient to permit such payments. It is anticipated that the
Company's funds will be limited to payments under the Debentures to be issued
by AL&C to evidence the loans to be made by the Company to AL&C of the
proceeds from the issuance of the Preferred Securities and the Common
Securities and the related capital contributions. See "Description of the
Debentures and the Subordinated Indenture".
Dividends declared on the Preferred Securities of any series will be
payable to the record holders thereof as they appear on the register for the
Preferred Securities of such series on the relevant record dates which, so
long as the Preferred Securities remain in book-entry-only form, will be,
unless otherwise specified in the Prospectus Supplement relating to each such
series, one Business Day (as hereinafter defined) prior to the relevant
payment dates. Subject to any applicable fiscal or other laws and
regulations, each such payment will be made as described under "Book-Entry-Only
Issuance; The Depository Trust Company" below. Unless otherwise specified in
the Prospectus Supplement, if the Preferred Securities of any series do not
remain in book-entry-only form, the record dates for such series will be the
fifteenth day of the month in which the relevant payment date occurs. In the
event that any date on which dividends are payable on the Preferred Securities
of any series is not a Business Day, then payment of the dividend payable on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. A "Business Day"
shall mean any day other than a day on which banking institutions in The City
of New York are authorized or required by law to close.
Except as described herein and in the Prospectus Supplement relating to
the Preferred Securities of a particular series, holders of the Preferred
Securities will have no other right to participate in the profits of the
Company.
Certain Restrictions on the Company
If dividends have not been paid in full on the Preferred Securities of
any series, the Company shall not:
(i) pay, or declare and set aside for payment, any dividends on
the Preferred Securities of any other series or any other limited
liability company interests in the Company ranking pari passu with the
Preferred Securities of such series with respect to participation in
profits of the Company ("Company Dividend Parity Securities"), unless
the amount of any dividends declared on any Company Dividend Parity
Securities is paid on the Company Dividend Parity Securities and the
Preferred Securities of such series on a pro rata basis on the date such
dividends are paid on such Company Dividend Parity Securities, so that
the ratio of
(x) (A) the aggregate amount paid as dividends on the
Preferred Securities of such series to (B) the aggregate amount
paid as dividends on the Company Dividend Parity Securities is the
same as the ratio of
(y) (A) the aggregate amount of all accumulated arrears of
unpaid dividends on the Preferred Securities of such series to (B)
the aggregate amount of all accumulated arrears of unpaid
dividends on the Company Dividend Parity Securities;
(ii) pay, or declare and set aside for payment, any dividends on
any limited liability company interest in the Company ranking junior to
the Preferred Securities of such series as to dividends ("Company
Dividend Junior Securities"); or
(iii) redeem, purchase or otherwise acquire any Company Dividend
Parity Securities or Company Dividend Junior Securities;
until, in each case, such time as all accumulated arrears of unpaid dividends
on the Preferred Securities of such series shall have been paid or set aside
for payment in full for all dividend periods terminating on or prior to, in
the case of clauses (i) and (ii), such payment, and in the case of clause
(iii), the date of such redemption, purchase or other acquisition. So long as
the Preferred Securities of any series are represented by one or more global
certificates, dividends on such series of Preferred Securities shall have been
paid in full with respect to any dividend payment date for such series when
the amount of dividends payable on such date has been paid to The Depository
Trust Company ("DTC") or its successor securities depository. See
"Book-Entry-Only Issuance; The Depository Trust Company".
Redemption or Exchange
The Preferred Securities of any series will be redeemable at the option
of the Company and subject to the prior consent of AL&C, in whole or in part
from time to time, on or after the date specified in the Prospectus Supplement
relating to such series, at the stated liquidation preference per security for
such series, plus accumulated and unpaid dividends (whether or not declared)
(the "Redemption Price") to the date fixed for redemption (the "Redemption
Date"). The Preferred Securities of any series may also be redeemed at the
option of the Company on such other terms and conditions as may be set forth
in the Prospectus Supplement relating to such series.
If at any time after the issuance of the Preferred Securities of any
series, the Company is or, in the opinion of counsel (which counsel is not an
employee of AL&C or the Company), would be required to pay Additional Amounts
(as defined below) with respect to any Preferred Securities of such series,
the Company may, upon not less than 30 nor more than 60 days' notice to the
holders of Preferred Securities of such series with respect to which such
Additional Amounts are required to be paid, redeem such Preferred Securities
at the Redemption Price. In connection with any such redemption, the Company
shall, so long as the Preferred Securities remain in book-entry-only form, (i)
cause the global certificate representing all of the Preferred Securities of
such series to be withdrawn from DTC or its successor securities depository,
(ii) issue share certificates in definitive form representing Preferred
Securities of such series and (iii) redeem the Preferred Securities of such
series with respect to which such Additional Amounts are required to be paid.
In addition, if there shall have occurred after the date of the
Prospectus Supplement relating to any series of Preferred Securities a change
in any applicable U.S. law or regulation or in the interpretation thereof
(including but not limited to the enactment or imminent enactment of any
legislation, the publication of any judicial decisions, regulatory rulings,
regulatory procedures, or notices or announcements (including notices or
announcements of intent to adopt such procedures or regulations), or a change
in the official position or in the interpretation of any law or regulation by
any legislative body, court, governmental authority or regulatory body,
irrespective of the manner in which such change is made known), and the
Company and AL&C shall have been advised by legal counsel (which counsel is
not an employee of AL&C or the Company) that, as a result of such change,
there exists more than an insubstantial risk that (i) AL&C will be precluded
from deducting the interest paid on the Debentures relating to the Preferred
Securities of such series for federal income tax purposes or (ii) the Company
will be subject to federal income tax with respect to the interest received on
such Debentures, then the Company may, upon not less than 30 nor more than 60
days' notice to the holders of Preferred Securities of such series, either (a)
redeem the Preferred Securities of such series, in whole or in part, at the
Redemption Price or (b) exchange the Preferred Securities of such series for
Debentures of the related series having an aggregate principal amount and
accrued and unpaid interest equal to the Redemption Price and having an
interest rate thereon equal to the dividend rate on such Preferred Securities.
Under current United States federal income tax law and interpretation,
an exchange of Preferred Securities of any series for the Debentures of the
related series would not be a taxable event to holders of the Preferred
Securities of such series. In the event of a change to such law or
interpretation, an exchange of Preferred Securities of any series for the
Debentures of the related series may be a taxable event to holders of the
Preferred Securities.
After the date fixed for any exchange of Preferred Securities of any
series for the related series of Debentures, (i) the Preferred Securities of
such series will no longer be deemed to be outstanding, (ii) any global
certificate or certificates representing Preferred Securities of such series
held by DTC or its nominee will be exchanged for a registered global
certificate or certificates representing the Debentures of such series to be
delivered upon such exchange, (iii) any certificates representing Preferred
Securities of such series not held by DTC or its nominee and not surrendered
for exchange will be deemed to represent Debentures of such series having a
principal amount and accrued and unpaid interest equal to the Redemption Price
of such Preferred Securities until such certificates are surrendered to the
Company or its agent for exchange (and until such certificates are so
surrendered, no payments of interest or principal will be made with respect to
such Debentures) and (iv) all rights of the holders of the Preferred
Securities of such series will cease, except the right of such holders to
receive the related series of Debentures upon surrender of certificates
representing Preferred Securities.
The Preferred Securities of any series will also be redeemed at the
Redemption Price with the proceeds from the repayment by AL&C when due of the
series of Debentures relating to such Preferred Securities or upon any
optional redemption by AL&C of such Debentures as described under "Description
of the Debentures and the Subordinated Indenture -- Optional Redemption".
Notwithstanding the foregoing, the Preferred Securities of any series will not
be redeemed if (i) in lieu of repaying any series of Debentures when due or
optionally redeeming such Debentures, AL&C is permitted by the Company to
exchange such Debentures for new Debentures or (ii) AL&C repays such
Debentures when due or optionally redeems such Debentures but is permitted by
the Company to reborrow the proceeds from such repayment or redemption which
reborrowing will be evidenced by new Debentures; provided that the Company
will only permit AL&C to so exchange any series of Debentures for new
Debentures or reborrow the proceeds from the repayment or redemption thereof
if the Company owns all of such Debentures and the following conditions are
satisfied (which satisfaction, in the case of clauses (f) through (j), shall
be determined in the judgment of the Managing Members and the Company's
financial advisor (selected by the Managing Members and who shall be
unaffiliated with AL&C and shall be among the 30 largest investment banking
firms, measured by total capital, in the United States at the time of the
issuance of the new Debentures that will evidence the new loan to be made in
connection with such exchange or reborrowing)): (a) AL&C is not bankrupt,
insolvent or in liquidation, (b) AL&C is not in default in the payment of any
interest or principal under the Subordinated Indenture, (c) AL&C has made
timely payments on the series of Debentures being exchanged, repaid or
redeemed for the immediately preceding 24 months (and has not elected to
extend any interest payment period for such Debentures during such 24 month
period), (d) such new loan will mature no later than the earlier of (1) the
49th anniversary of the date of the initial issuance of such Debentures and
(2) the 30th anniversary of the date such new loan is made, (e) the Company is
not in arrears on payments of dividends on the Preferred Securities of the
series relating to such Debentures, (f) AL&C is expected to be able to make
timely payment of principal of and interest on such new loan, (g) such new
loan is being made on terms, and under circumstances, that are consistent with
those which a lender would then require for a loan to an unrelated party, (h)
such new loan is being made at a rate sufficient to provide payments equal to
or greater than the amount of dividend payments required under the Preferred
Securities of such series, (i) such new loan is being made for a term that is
consistent with market circumstances and AL&C's financial condition and (j)
immediately prior to the making of such new loan, the senior unsecured
long-term debt of AL&C is (or if no such debt is outstanding, would be) rated
not less than BBB (or the equivalent) by Standard & Poor's Corporation and
Baa2 (or the equivalent) by Moody's Investors Service, Inc. and the
subordinated unsecured long-term debt of AL&C (or, if more than one issue of
such subordinated debt is outstanding, the most junior of such issues) is (or
if no such debt is outstanding, would be) rated not less than BBB- (or the
equivalent) by Standard & Poor's Corporation and Baa3 by Moody's Investors
Service, Inc. (or if either of such rating organizations is not then rating
AL&C's senior or subordinated unsecured long-term debt, as the case may be,
the equivalent of such ratings by any other "nationally recognized statistical
rating organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Securities Act).
The Company may not redeem any Preferred Securities of any series unless
all accumulated arrears of unpaid dividends have been paid on all Preferred
Securities of all series for all monthly dividend periods terminating on or
prior to the date of redemption.
In the event that fewer than all the outstanding Preferred Securities of
a particular series are to be redeemed, the Preferred Securities of such
series to be redeemed will be selected as described under "Book-Entry-Only
Issuance; The Depository Trust Company" below.
If the Company gives a notice of redemption in respect of Preferred
Securities of a particular series, then, by 12:00 noon, New York time, on the
applicable Redemption Date, the Company will, so long as the Preferred
Securities are in book-entry-only form, irrevocably deposit with DTC or its
successor securities depository funds sufficient to pay the applicable
Redemption Price and will give DTC or its successor securities depository
irrevocable instructions and authority to pay the Redemption Price to the
holders thereof. See "Book-Entry-Only Issuance; The Depository Trust
Company". If the Preferred Securities of any series are no longer in
book-entry-only form, the Company will irrevocably deposit with the paying
agent for the Preferred Securities of such series funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their Preferred Security certificates. Notwithstanding the
foregoing, with respect to Preferred Securities of any series called for
redemption, dividends payable on or prior to the redemption date for such
Preferred Securities shall be payable to the holders of such Preferred
Securities on the relevant record dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such
deposit, all rights of holders of such Preferred Securities of a series so
called for redemption will cease, except the right of the holders of such
securities to receive the Redemption Price, but without interest, and such
securities will cease to be outstanding. In the event that any date on which
any payment in respect of the redemption of Preferred Securities of any series
is payable is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay),
except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day. In the event
that payment of the Redemption Price in respect of Preferred Securities of any
series is improperly withheld or refused and not paid either by the Company or
by AL&C pursuant to the Guarantee, dividends on such securities will continue
to accrue, at the then applicable rate, from the Redemption Date originally
established by the Company for such securities to the date such Redemption
Price is actually paid, in which case the actual payment date will be the date
fixed for redemption for purposes of calculating the Redemption Price.
Subject to the foregoing and applicable law (including, without
limitation, U.S. federal securities laws) AL&C or its subsidiaries may at any
time and from time to time purchase outstanding Preferred Securities of any
series by tender, in the open market or by private agreement.
Liquidation Distribution
In the event of any voluntary or involuntary dissolution of the Company
other than in connection with the exchange of all series of Preferred
Securities outstanding for the related series of Debentures in the manner
described under "Redemption or Exchange" above, the holders of Preferred
Securities of each series at the time outstanding will be entitled to receive
out of the assets of the Company legally available for distribution to
securityholders, before any distribution of assets is made to holders of
Common Securities in the Company or any other class of limited liability
company interests in the Company ranking junior to the Preferred Securities
with respect to participation in assets of the Company, but together with the
holders of Preferred Securities of any other series or any other limited
liability company interests in the Company outstanding ranking pari passu with
the Preferred Securities with respect to participation in the assets of the
Company ("Company Liquidation Parity Securities"), an amount equal, in the
case of the holders of the Preferred Securities of such series, to the stated
liquidation preference for Preferred Securities of such series as set forth in
the Prospectus Supplement relating to such series and all accumulated and
unpaid dividends (whether or not declared) to the date of payment (the
"Liquidation Distribution"). If, upon any such dissolution, the Liquidation
Distributions can be paid only in part because the Company has insufficient
assets available to pay in full the aggregate Liquidation Distributions and
the aggregate maximum liquidation distributions on the Company Liquidation
Parity Securities, then the amounts payable directly by the Company on the
Preferred Securities of such series and on such Company Liquidation Parity
Securities shall be paid on a pro rata basis, so that the ratio of
(i) (x) the aggregate amount paid as Liquidation
Distributions on the Preferred Securities of such series to (y)
the aggregate amount paid as liquidation distributions on the
Company Liquidation Parity Securities is the same as the ratio of
(ii) (x) the aggregate Liquidation Distributions to (y) the
aggregate maximum liquidation distributions on the Company
Liquidation Parity Securities.
Pursuant to the L.L.C. Agreement, the Company will be dissolved and its
affairs wound up (i) when the period fixed for the life of the Company
expires, (ii) if the Managing Members by resolution require the Company to be
dissolved (subject to the voting rights of the holders of Preferred Securities
described under "Voting Rights" below), (iii) if either Managing Member is
bankrupt, insolvent or liquidated or withdraws, resigns or is expelled from
the Company, (iv) upon the entry of a decree of judicial dissolution under the
L.L.C. Act or (v) with the written consent of all holders of limited liability
company interests in the Company.
Merger, Consolidation, etc. of the Company
The Company may not consolidate or merge with or into or convey,
transfer or lease its properties and assets substantially as an entirety to
any corporation or other body, except with the prior approval of the holders
of not less than 66 2/3% of the stated liquidation preference of the
outstanding Preferred Securities or as described below. The Company may,
without the consent of the holders of the Preferred Securities, consolidate or
merge with or into, or convey, transfer or lease its assets substantially as
an entirety to, a limited liability company or limited partnership or trust
organized as such under the laws of any state of the United States of America
or the District of Columbia; provided that (i) such successor entity either
(x) expressly assumes all of the obligations of the Company under the
Preferred Securities or (y) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities
(the "Successor Securities") so long as the Successor Securities rank, with
respect to participation in the profits or assets of the successor entity, at
least as high as the Preferred Securities rank with respect to participation
in the profits or assets of the Company, (ii) AL&C expressly acknowledges such
successor entity as the holder of the Debentures relating to the Preferred
Securities, (iii) such merger, consolidation, conveyance, transfer or lease
does not cause the Preferred Securities or Successor Securities, if any, to be
delisted (or, in the case of any Successor Securities, fail to be listed) by
any national securities exchange or other organization on which the Preferred
Securities are then listed, (iv) such merger, consolidation, conveyance,
transfer or lease does not cause the Preferred Securities or Successor
Securities, if any, to be downgraded by any "nationally recognized statistical
rating organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Securities Act, (v) such merger, consolidation,
conveyance, transfer or lease does not adversely affect the powers,
preferences and other special rights of holders of Preferred Securities or
Successor Securities, if any, in any material respect and (vi) prior to such
merger, consolidation, conveyance, transfer or lease AL&C has received an
opinion of counsel (which counsel is not an employee of AL&C or the Company)
to the effect that (w) such merger, consolidation, conveyance, transfer or
lease will not cause the Company or such successor entity to become an
"investment company" required to be registered under the Investment Company
Act of 1940, as amended, (x) holders of outstanding Preferred Securities will
not recognize any gain or loss for federal income tax purposes as a result of
such merger, consolidation, conveyance, transfer or lease, (y) such successor
entity will not be treated as a corporation for federal income tax purposes
and (z) such merger, consolidation, conveyance, transfer or lease will not
adversely affect the limited liability of holders of Preferred Securities.
Voting Rights
If (i) the Company fails to pay dividends in full on the Preferred
Securities of any series for 18 consecutive monthly dividend periods; (ii) an
Event of Default (as defined in the Subordinated Indenture) with respect to
any series of Debentures that has not been exchanged for the related series
of Preferred Securities occurs and is continuing; or (iii) AL&C is in default
on any of its payment obligations under the Guarantee, then the holders of a
majority in stated liquidation preference of the outstanding Preferred
Securities of such series, in the case of clause (i) above, and the holders of
a majority in stated liquidation preference of all outstanding Preferred
Securities, in the case of clauses (ii) and (iii) above, together with the
holders of any other limited liability company interests in the Company having
the right to vote for the appointment of a trustee in such event, acting as a
single class, will be entitled to appoint and authorize a trustee to enforce
the Company's rights under the Subordinated Indenture against AL&C, enforce
the obligations undertaken by AL&C under the Guarantee and, to the extent
permitted by law, declare and pay dividends on the Preferred Securities of
such series in the case of clause (i) above (but only in the event that the
Company's failure to pay dividends is not a consequence of AL&C's exercise of
any right it may have to extend the interest payment period for the related
series of Debentures in the manner described under "Description of the
Debentures and the Subordinated Indenture -- Interest"), and AL&C has agreed
to execute and deliver such documents as may be necessary or appropriate for
the trustee to enforce such rights and obligations. For purposes of
determining whether the Company has failed to pay dividends in full for 18
consecutive monthly dividend periods, dividends shall be deemed to remain in
arrears, notwithstanding any payments in respect thereof, until full
cumulative dividends have been or contemporaneously are declared and paid with
respect to all monthly dividend periods terminating on or prior to the date of
payment of such full cumulative dividends.
In furtherance of the foregoing, and without limiting the powers of any
trustee so appointed and for the avoidance of any doubt concerning the powers
of the trustee, any trustee, in its own name and as trustee of an express
trust, may institute a proceeding, including, without limitation, any suit in
equity, an action at law or other judicial or administrative proceeding, to
enforce the Company's creditor rights directly against AL&C to the same extent
as the Company and on behalf of the Company, and may prosecute such proceeding
to judgment or final decree, and enforce the same against AL&C and collect,
out of the property, wherever situated, of AL&C the monies adjudged or decreed
to be payable in the manner provided by law.
Not later than 30 days after the right to appoint a trustee arises,
the Managing Members will convene a meeting to appoint such a trustee. If the
Managing Members fail to convene such meeting within such 30-day period, the
holders of 10% in stated liquidation preference of the outstanding Preferred
Securities of the series with respect to which dividends have not been paid,
in the case of clause (i) of the first paragraph under "Voting Rights", and
the holders of 10% in stated liquidation preference of all outstanding
Preferred Securities, in the case of clauses (ii) and (iii) of such paragraph,
and such other limited liability company interests that are entitled to vote,
acting as a single class, will be entitled to convene such meeting. Any
trustee so appointed shall vacate office immediately, subject to the terms of
such other limited liability company interests, if the Company shall have paid
in full all accumulated and unpaid dividends on the Preferred Securities of
the series with respect to which dividends have not been paid, in the case of
clause (i) of the first paragraph under "Voting Rights" or such default by
AL&C shall have been cured, in the case of clause (ii) or (iii) of such
paragraph. Notwithstanding the appointment of any such trustee, AL&C shall
retain all rights under the Subordinated Indenture, including any right AL&C
may have to extend the interest payment period of the Debentures as provided
under "Description of the Debentures and the Subordinated Indenture --
Interest."
If any resolution is proposed to be adopted by the securityholders of
the Company providing for, or the Managing Members propose to take any action
to effect, (x) any variation or abrogation of the powers, preferences and
special rights of the Preferred Securities of any series by way of amendment
of the L.L.C. Agreement or otherwise (including, without limitation, the
authorization or issuance of any limited liability company interests in the
Company ranking, as to participation in the profits or assets of the Company,
senior to the Preferred Securities) which variation or abrogation adversely
affects the holders of Preferred Securities of such series, (y) the
dissolution of the Company or (z) the commencement of any bankruptcy,
insolvency, reorganization or other similar proceeding involving the Company,
then the holders of outstanding Preferred Securities of the series, the powers,
preferences or special rights of which are proposed to be amended in the case
of any action described in clause (x) above, and the holders of all
outstanding Preferred Securities, in the case of any action described in
clause (y) or (z) above, (and, in the case of any action described in clause
(x) above which would adversely affect the powers, preferences or special
rights of any Company Dividend Parity Securities or any Company Liquidation
Parity Securities, such Company Dividend Parity Securities or such Company
Liquidation Parity Securities, as the case may be, or, in the case of any
action described in clause (y) above, all Company Liquidation Parity
Securities or, in the case of any action described in clause (z) above, all
holders of outstanding Preferred Securities, any Company Dividend Parity
Securities and any Company Liquidation Parity Securities other than holders of
any such securities that are also creditors of AL&C or any of its
subsidiaries) will be entitled to vote together as a class on such resolution
or action of the Managing Members (but not any other resolution or action) and
such resolution or action shall not be effective except with the approval of
the holders of a majority in stated liquidation preference of such outstanding
securities (or, under certain circumstances, 100% in stated liquidation
preference of such outstanding securities); provided, however, that no such
approval shall be required under clauses (x) and (y) if the dissolution of the
Company is proposed or initiated upon the occurrence of any of the events
specified in clauses (i), (iii), (iv) or (v) of the last paragraph under
"Liquidation Distribution" above or in connection with the exchange of all
series of Preferred Securities outstanding for the related series of
Debentures.
The powers, preferences or special rights of the Preferred Securities of
any series will be deemed not to be varied by the creation or issue of, and no
vote will be required for the creation or issue of, any further limited
liability company interests in the Company ranking pari passu with or junior
to the Preferred Securities of any series with respect to voting rights and
rights to participate in the profits or assets of the Company.
Any required approval of holders of Preferred Securities may be given at
a meeting of such holders convened for such purpose or pursuant to written
consent. The Managing Members will cause a notice of any meeting at which
holders of the Preferred Securities of a series are entitled to vote, or of
any matter upon which action may be taken by written consent of such holders,
to be mailed to each holder of record of the Preferred Securities of such
series. Each such notice will include a statement setting forth (i) the date
of such meeting or the date by which such action is to be taken, (ii) a
description of any action proposed to be taken at such meeting on which such
holders are entitled to vote or of such matters upon which written consent is
sought and (iii) instructions for the delivery of proxies or consents.
Notwithstanding that holders of Preferred Securities of any series are
entitled to vote or consent under any of the circumstances described above,
any of the Preferred Securities of any series that are owned by AL&C or any
entity owned more than 50% by AL&C, either directly or indirectly, shall not
be entitled to vote or consent and shall, for the purposes of such vote or
consent, be treated as if they were not outstanding.
Except as described herein and in the Prospectus Supplement relating to
the Preferred Securities of a particular series, holders of Preferred
Securities will have no other voting rights.
Additional Amounts
All payments in respect of the Preferred Securities by the Company will
be made without withholding or deduction for or on account of any present or
future taxes, duties, assessments or governmental charges of whatever nature
imposed or levied upon or as a result of such payment by or on behalf of the
United States of America, any state thereof or any other jurisdiction through
which or from which such payment is made, or any authority therein or thereof
having power to tax, unless the withholding or deduction of such taxes,
duties, assessments or governmental charges is required by law. In that
event, the Company will pay as a dividend such additional amounts as may be
necessary in order that the net amounts received by the holders of the
Preferred Securities after such withholding or deduction will equal the amount
which would have been receivable in respect of such Preferred Securities in
the absence of such withholding or deduction ("Additional Amounts"), except
that no such Additional Amounts will be payable with respect to Preferred
Securities:
(a) if the holder or beneficial owner thereof is liable for such
taxes, duties, assessments or governmental charges in respect of such
Preferred Securities by reason of such holder's or owner's having some
connection with the United States, any state thereof or any other
jurisdiction through which or from which such payment is made
(including, without limitation, actual or constructive ownership, past
or present, of 10% or more of the total combined voting power of all
classes of stock entitled to vote of AL&C), other than being a holder or
beneficial owner of such Preferred Securities, or
(b) if the Company has notified such holder of the obligation to
withhold taxes and requested but not received from such holder or
beneficial owner a declaration of non-residence, a valid taxpayer
identification number or other claim for exemption (or information or
certification required to support such claim), and such withholding or
deduction would not have been required had such declaration, taxpayer
identification number or claim been received.
Book-Entry-Only Issuance; The Depository Trust Company
DTC, New York, New York, will act as securities depository for the
Preferred Securities. The Preferred Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee). One or more fully-registered global Preferred Security
certificates will be issued for each series of Preferred Securities,
representing all of the Preferred Securities of such series, and will be
deposited with DTC.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code,
and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement
among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct participants include
securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations ("Direct Participants"). DTC
is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc., and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship
with a Direct Participant, either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on
file with the Commission.
Purchases of Preferred Securities under the DTC system must be made by
or through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser
of each Preferred Security ("Beneficial Owner") is in turn to be recorded on
the Direct and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchase, but Beneficial Owners
are expected to receive written confirmations providing details of their
transactions, as well as periodic statements of their holdings, from the
Direct or Indirect Participant through which the Beneficial Owners purchased
Preferred Securities. Transfers of ownership interests in the Preferred
Securities are to be accomplished by entries made on the books of Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in Preferred Securities,
except in the event that use of the book-entry system for the Preferred
Securities is discontinued.
To facilitate subsequent transfers, all Preferred Securities deposited
by Participants with DTC are registered in the name of Cede & Co. The deposit
of Preferred Securities with DTC and their registration in the name of Cede &
Co. effect no change in beneficial ownership. DTC has no knowledge of the
actual Beneficial Owners of the Preferred Securities; DTC's records reflect
only the identity of the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. If less than all of the
Preferred Securities of any series are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in such
series to be redeemed.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will consent
or vote with respect to Preferred Securities. Under its usual procedures, DTC
would mail an Omnibus Proxy to the Company as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the Preferred Securities
are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Dividend payments on the Preferred Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payments on
such payable date. Payments by Participants to Beneficial Owners will be
governed by standing instructions and customary practices and will be the
responsibility of such Participants and not of DTC, the Company or AL&C,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of dividends to DTC will be the responsibility of the
Company, disbursement of such payments to Direct Participants will be the
responsibility of DTC and disbursement of such payments to the Beneficial
Owners will be the responsibility of the Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Preferred Securities of any series at any time by giving
reasonable notice to the Company and AL&C. Under such circumstances, in the
event that a successor securities depository is not obtained, Preferred
Security certificates for such series will be printed and delivered.
Additionally, in the event that the Company were to redeem only a portion of
the Preferred Securities of any series because the Company is required to pay
Additional Amounts with respect to such Preferred Securities to be redeemed,
the Company may cause the global certificate or certificates representing all
of the Preferred Securities of such series to be withdrawn from DTC (or its
successor securities depository) and may issue certificates in definitive form
representing such Preferred Securities. Thereafter, such Preferred Securities
subject to such requirement to pay Additional Amounts would be redeemed.
The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that the Company believes to be
reliable, but neither the Company nor AL&C has independently verified such
information.
Registrar, Transfer Agent and Paying Agent; Transfers and Exchanges
First Chicago Trust Company of New York will act as registrar, transfer
agent and paying agent for the Preferred Securities but the Company may
designate an additional or substitute registrar, transfer agent and paying
agent at any time.
In the event that the Preferred Securities of any series do not remain
in book-entry-only form, the following provisions will apply to the Preferred
Securities of such series:
Registration of transfers of Preferred Securities of any series will be
effected without charge by or on behalf of the Company, but upon payment (with
the giving of such indemnity as the Company or AL&C may require) in respect of
any tax or other governmental charges which may be imposed in connection
therewith.
Exchanges of Preferred Securities of any series for the related series
of Debentures will be effected without charge by or on behalf of the Company,
but upon payment (with the giving of such indemnity as the Company or AL&C may
require) in respect of any tax or other governmental charges which may be
imposed in connection with the issuance of any Debenture in the name of any
person other than the registered holder of the Preferred Security for which
the Debenture is being exchanged or for any reason other than such exchange.
The Company will not be required to register or cause to be registered
the transfer of Preferred Securities of a particular series after such
Preferred Securities have been called for redemption or exchange.
Miscellaneous
Unless otherwise specified in the Prospectus Supplement for any series
of Preferred Securities, the Preferred Securities will not be subject to any
sinking fund provisions. Holders of Preferred Securities of any series have
no preemptive rights.
AL&C and the Company will enter into an agreement as to expenses and
liabilities (the "Expense Agreement") pursuant to which AL&C will agree to
guarantee the payment of any liabilities incurred by the Company other than
obligations to holders of Preferred Securities, which will be separately
guaranteed to the extent set forth in the Guarantee. See "Description of the
Guarantee". The Expense Agreement will expressly provide that it is for the
benefit of, and is enforceable by, third parties to whom the Company owes such
obligations. A copy of the form of Expense Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
DESCRIPTION OF THE GUARANTEE
Set forth below is condensed information concerning the guarantee (the
"Guarantee") which will be executed and delivered by AL&C for the benefit of
the holders from time to time of Preferred Securities. This summary contains
all material information concerning the Guarantee but does not purport to be
complete. References to provisions of the Guarantee are qualified in their
entirety by reference to the text of the Payment and Guarantee Agreement, a
form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
General
AL&C will irrevocably and unconditionally agree, to the extent set forth
herein, to pay in full, to the holders of the Preferred Securities of any
series, the Guarantee Payments (as defined below) (except to the extent paid
by the Company or by AL&C to any trustee appointed by such holders (as
described under "Description of the Preferred Securities -- Voting Rights")),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Company may have or assert. The following payments to the extent
not paid by the Company (the "Guarantee Payments") will be subject to the
Guarantee (without duplication): (i) any accumulated and unpaid dividends
(including any Additional Amounts payable by the Company) which have been
theretofore declared on the Preferred Securities of any series to the extent
the Company has cash on hand legally available therefor, (ii) the Redemption
Price (including all accumulated and unpaid dividends) to the extent the
Company has cash on hand legally available therefor with respect to Preferred
Securities of any series called for redemption by the Company and (iii) upon
the liquidation of the Company other than in connection with the exchange of
all series of Preferred Securities outstanding for the related series of
Debentures in the manner described under "Description of the Preferred
Securities -- Redemption or Exchange", the lesser of (a) the aggregate of the
stated liquidation preference of the Preferred Securities and all accumulated
and unpaid dividends thereon (whether or not declared) to the date of payment
and (b) the amount of assets of the Company legally available for distribution
to holders of Preferred Securities in liquidation.
Certain Covenants of AL&C
In the Guarantee, AL&C will covenant that, so long as Preferred
Securities of any series remain outstanding, AL&C will not declare or pay any
dividend on, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of AL&C's capital stock or make any guarantee payments with
respect to the foregoing (other than (i) payments under the Guarantee, (ii)
acquisitions of shares of AL&C's common stock in connection with the
satisfaction by AL&C of its obligations under any employee benefit plans and
(iii) redemptions of any share purchase rights (the "Rights") issued by AL&C
pursuant to AL&C's Share Purchase Rights Plan adopted on October 27, 1989, as
amended from time to time (the "Rights Plan") or the declaration of a dividend
of similar share purchase rights in the future), if at such time AL&C will be
in default with respect to its payment obligations under the Guarantee or
there shall have occurred an Event of Default under the Subordinated Indenture
with respect to any series of Debentures that has not been exchanged for the
related series of Preferred Securities.
In the Guarantee, AL&C will also covenant that, so long as Preferred
Securities of any series remain outstanding, it will (i) not cause or permit
any Common Securities of the Company to be transferred, (ii) maintain direct
or indirect ownership of all outstanding securities of the Company other than
(x) the Preferred Securities of any series and (y) any other securities issued
by the Company (other than the Common Securities) so long as the issuance
thereof to persons other than AL&C or any of its subsidiaries would not cause
the Company to become an "investment company" required to be registered under
the Investment Company Act of 1940, as amended, (iii) cause at least 21% of
the total value of the Company and at least 21% of all interests in the
capital, income, gain, loss, deduction and credit of the Company to be
represented by Common Securities, (iv) not voluntarily dissolve, wind up or
liquidate the Company (other than in connection with the exchange of all
series of Preferred Securities outstanding for the related series of
Debentures in the manner described under "Description of the Preferred
Securities -- Redemption or Exchange") or either of the Managing Members, (v)
cause AL&C and Aetna Capital Holdings, Inc. to remain the Managing Members of
the Company and timely perform all of their respective duties as Managing
Members of the Company (including the duty to declare and pay dividends on the
Preferred Securities as described under "Description of the Preferred
Securities -- Dividends") and (vi) use reasonable efforts to cause the Company
to remain a limited liability company and otherwise continue to be treated as a
partnership for U.S. federal income tax purposes; provided that AL&C may
permit the Company to consolidate or merge with or into or convey, transfer or
lease its assets substantially as an entirety to, a limited liability company
or limited partnership or trust organized as such under the laws of any state
of the United States of America or the District of Columbia upon the terms and
subject to the conditions set forth under "Description of the Preferred
Securities -- Merger, Consolidations, etc. of the Company" above.
Additional Amounts
All Guarantee Payments will be made without withholding or deduction for
or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed or levied upon or as a result
of such payment by or on behalf of the United States of America, any state
thereof or any other jurisdiction through which or from which such payment is
made, or any authority therein or thereof having power to tax, unless the
withholding or deduction of such taxes, duties, assessments or governmental
charges is required by law. In that event, AL&C will pay such additional
amounts as may be necessary in order that the net amounts received by the
holders of the Preferred Securities after such withholding or deduction will
equal the amount which would have been receivable in respect of such Preferred
Securities in the absence of such withholding or deduction ("Guarantee
Additional Amounts"), except that no such Guarantee Additional Amounts will be
payable with respect to Preferred Securities:
(a) if the holder or beneficial owner thereof is liable for such
taxes, duties, assessments or governmental charges in respect of such
Preferred Securities by reason of such holder's or owner's having some
connection with the United States, any state thereof or any other
jurisdiction through which or from which such payment is made
(including, without limitation, actual or constructive ownership, past
or present, of 10% or more of the total combined voting power of all
classes of stock entitled to vote of AL&C), other than being a holder or
beneficial owner of such Preferred Securities, or
(b) if the Company or AL&C has notified such holder of the
obligation to withhold taxes and requested but not received from such
holder or beneficial owner a declaration of non-residence, a valid
taxpayer identification number or other claim for exemption (or
information or certification required to support such claim), and such
withholding or deduction would not have been required had such
declaration, taxpayer identification number or claim been received.
Amendments and Assignment
Except with respect to any changes which do not adversely affect the
rights of holders of Preferred Securities (in which case no vote will be
required), the Guarantee may be amended only with the prior approval of the
holders of a majority in stated liquidation preference of all Preferred
Securities of all series then outstanding. The manner of obtaining any such
approval of holders of the Preferred Securities will be as set forth under
"Description of the Preferred Securities -- Voting Rights". Except in
connection with a consolidation, merger or sale involving AL&C as may be
permitted under "Description of the Debentures and the Subordinated Indenture
- -- Miscellaneous," AL&C shall not have the right to assign the Guarantee
without the prior consent of the holders of a majority in stated liquidation
preference of all Preferred Securities then outstanding. All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of AL&C and shall inure to the benefit
of the holders of the Preferred Securities then outstanding.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and effect as
to the Preferred Securities of any series upon full payment of the Redemption
Price of all Preferred Securities of such series or upon the exchange of all
Preferred Securities of such series for the related series of Debentures, and
shall terminate completely upon full payment of the amounts payable upon
liquidation of the Company. The Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any holder of Preferred
Securities of any series must restore payment of any sums paid under the
Preferred Securities of such series or the Guarantee.
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of AL&C and will
rank (i) subordinate and junior in right of payment to all other liabilities
of AL&C, (ii) pari passu with the most senior preferred stock now or hereafter
issued by AL&C and with any guarantee now or hereafter entered into by AL&C in
respect of any preferred or preference stock or interest of any affiliate of
AL&C and (iii) senior to AL&C's common stock.
The Guarantee will constitute a guarantee of payment and not of
collection. A holder of Preferred Securities may enforce the Guarantee
directly against AL&C, and AL&C will waive any right or remedy to require that
any action be brought against the Company or any other person or entity before
proceeding against AL&C. The Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the
Company.
Governing Law
The Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
DESCRIPTION OF THE DEBENTURES AND THE SUBORDINATED INDENTURE
Set forth below is condensed information concerning the Debentures that
will evidence the loans to be made by the Company to AL&C of the proceeds of
the issuance of (i) Preferred Securities of each series and (ii) the Company's
Common Securities and related capital contributions ("Common Securities
Payments") and the Subordinated Indenture (the "Subordinated Indenture")
between AL&C and The First National Bank of Chicago, as trustee (the
"Trustee"). References to provisions of the Subordinated Indenture are
qualified in their entirety by reference to the text of the Subordinated
Indenture, a form of which has been filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. All Debentures will be
issued under the Subordinated Indenture.
General
The Subordinated Indenture does not limit the aggregate principal amount
of Debentures which may be issued thereunder and provides that the Debentures
may be issued thereunder from time to time in one or more series. The
aggregate dollar amount of the Debentures relating to Preferred Securities of
any series will be set forth in the Prospectus Supplement for such series and
will be equal to the sum of the aggregate liquidation preference of the
Preferred Securities of such series and the related Common Securities
Payments. Unless otherwise specified in the Prospectus Supplement for the
related series of Preferred Securities, the Debentures will not be subject to
any sinking fund provisions.
The entire principal amount of the Debentures relating to the Preferred
Securities of any series will become due and payable, together with any
accrued and unpaid interest thereon, including Additional Interest (as herein
defined), if any, on the earlier of (i) the date that is the 30th anniversary
of the issuance of such Preferred Securities (subject to AL&C's right to
exchange such Debentures for new Debentures or reborrow the proceeds from the
repayment of such Debentures upon the terms and subject to the conditions set
forth under "Description of the Preferred Securities -- Redemption or
Exchange") and (ii) the date upon which the Company is dissolved; provided
that, in the event that such Preferred Securities are exchanged for such
Debentures in the manner described under "Description of Preferred Securities
- -- Redemption or Exchange" such Debentures will mature on the date set forth
in clause (i), whether or not the Company shall have dissolved in connection
with such exchange.
In the event of any exchange of Preferred Securities of any series for
Debentures relating to such series, (i) the Debentures of such series will no
longer mature upon the dissolution of the Company, (ii) the Debentures of such
series will not be subject to an election by AL&C to exchange the Debentures
of such series for new Debentures or to redeem or repay the loans evidenced by
the Debentures of such series and reborrow the proceeds from such redemption
or repayment, (iii) AL&C will use its best efforts to have the Debentures of
such series listed on the same exchange as that on which the Preferred
Securities of such series are listed and (iv) AL&C's obligation to pay
Additional Interest (other than Additional Interest, if any, accrued and
unpaid to such date of exchange) shall cease.
The Subordinated Indenture does not contain any provisions that limit
AL&C's ability to incur indebtedness or that afford holders of Debentures
protection in the event of a highly leveraged or similar transaction involving
AL&C.
Mandatory Prepayment
If the Company redeems Preferred Securities of any series for cash in
accordance with the terms thereof, the Debentures relating to such series will
become due and payable in a principal amount equal to the aggregate stated
liquidation preference of the Preferred Securities of such series so redeemed
(together with any accrued but unpaid interest, including Additional Interest,
if any, on the portion being prepaid). Any payment pursuant to this provision
shall be made prior to 12:00 noon, New York time, on the date of such
redemption or at such other time on such earlier date as the Company and AL&C
shall agree.
Optional Redemption
AL&C shall have the right to redeem the Debentures relating to the
Preferred Securities of a series, without premium or penalty, in whole or in
part (together with any accrued but unpaid interest, including Additional
Interest, if any, on the portion being redeemed) at any time following the
date, if any, set forth in the Prospectus Supplement for such series. In
addition, if AL&C or any of its subsidiaries purchases Preferred Securities of
any series by tender, in the open market or by private agreement, AL&C shall
have the right to redeem Debentures of the related series, without premium or
penalty, in an amount not to exceed the aggregate stated liquidation
preference of the Preferred Securities so purchased, together with any accrued
and unpaid interest thereon, including Additional Interest, if any, on the
portion being redeemed.
So long as the Preferred Securities of any series are outstanding AL&C
shall also have the right to redeem the related series of Debentures without
premium or penalty, in whole or in part (together with any accrued but unpaid
interest, including Additional Interest, if any, on the portion being
redeemed), if there shall have occurred after the date of the Prospectus
Supplement relating to such series of Preferred Securities a change in any
applicable U.S. law or regulation or in the interpretation thereof (including
but not limited to the enactment or imminent enactment of any legislation, the
publication of any judicial decisions, regulatory rulings, regulatory
procedures, or notices or announcements (including notices or announcements of
intent to adopt such procedures or regulations), or a change in the official
position or in the interpretation of any law or regulation by any legislative
body, court, governmental authority or regulatory body, irrespective of the
manner in which such change is made known), and AL&C shall have been advised
by legal counsel (which counsel is not an employee of AL&C or the Company)
that, as a result of such change, there exists more than an insubstantial risk
that (i) AL&C will be precluded from deducting the interest paid on such
Debentures for federal income tax purposes or (ii) the Company will be subject
to federal income tax with respect to the interest received on such Debentures.
In addition, if at any time after the issuance of the Preferred
Securities of any series, AL&C is or, in the opinion of counsel (which counsel
is not an employee of AL&C or the Company) would be required to pay Additional
Interest with respect to the Debentures of the related series, AL&C shall have
the right to redeem without premium or penalty, in whole or in part (together
with accrued but unpaid interest, including Additional Interest, if any, on
the portion being redeemed) the Debentures of such series; provided that in
the event that AL&C is required to pay Additional Interest as a consequence of
the Company's being required to pay Additional Amounts, then AL&C may only
redeem Debentures of such series in a principal amount not to exceed the
aggregate stated liquidation preference of the Preferred Securities with
respect to which such Additional Amounts are required to be paid.
The Debentures relating to Preferred Securities of any series may also
be redeemed at the option of AL&C on such terms and conditions as may be set
forth in the Prospectus Supplement relating to such series.
If AL&C gives a notice of redemption in respect of the Debentures of a
particular series, then, by 12:00 noon, New York time, on the applicable
redemption date, AL&C will deposit with the Trustee or with a paying agent
funds sufficient to pay the applicable redemption price, together with any
accrued and unpaid interest. If notice of redemption shall have been given
and funds deposited as required, then upon the applicable redemption date the
Debentures so called for redemption shall cease to bear interest and such
securities shall no longer be considered outstanding. In the event that any
date on which any payment in respect of the redemption of Debentures of any
series is payable is not a Business Day, then payment of the redemption price
and any accrued and unpaid interest payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the redemption price in
respect of any Debentures called for redemption is not paid upon the surrender
thereof for redemption, interest on such securities will continue to accrue,
at the then applicable rate, from the redemption date originally established
by AL&C for such securities to the date such redemption price is actually
paid. Notwithstanding the foregoing, with respect to any Debentures called
for redemption, installments of interest due and payable on or prior to the
redemption date for such Debentures shall be payable to the holders of such
Debentures on the relevant record dates.
Interest
The interest rate on the Debentures relating to Preferred Securities of
a series (or the method of determination thereof) will be set forth in the
Prospectus Supplement for such series and interest will accrue thereon from
the date they are issued until maturity. Except as described below, such
interest shall be payable monthly in arrears on the last day of each calendar
month, commencing on the date specified in the Prospectus Supplement relating
to such series to the persons in whose names such Debentures are registered on
the relevant record date which, subject to certain exceptions and unless
otherwise specified in such Prospectus Supplement, will be the close of
business on the Business Day next preceding the relevant interest payment
date. In the event that the Debentures of any series are exchanged for the
related series of Preferred Securities and the Debentures of such series are
not in book-entry-only form at any time after such exchange, unless otherwise
specified in the Prospectus Supplement for such series of Preferred
Securities, the record dates for such series of Debentures will be, subject to
certain exceptions, the fifteenth day of the month in which the relevant
interest payment date occurs. The amount of interest payable for any full
monthly dividend period will be computed on the basis of twelve 30-day months
and a 360-day year and, for any period shorter than a full monthly dividend
period, will be computed on the basis of the actual number of days elapsed in
such period. In the event that any date on which interest is payable on the
Debentures relating to the Preferred Securities of any series is not a
Business Day, then payment of the interest payable on such date will be made
on the next succeeding day which is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business
Day is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
AL&C shall have the right at any time or times during the term of such
Debentures, so long as AL&C is not in default in the payment of interest under
the Subordinated Indenture, to extend the interest payment period for such
Debentures up to 60 months, at the end of which period AL&C will pay all
interest then accrued and unpaid on such Debentures (together with interest
thereon at the rate specified for such Debentures to the extent permitted by
applicable law); provided that any such extended interest period may only be
selected with respect to such Debentures if an extended interest period of
identical length is simultaneously selected for the Debentures of all series
outstanding. Prior to the termination of any such extended interest payment
period AL&C may further extend the interest payment period for such
Debentures; provided that such extended interest payment period for such
Debentures, together with all such further extensions thereof, may not exceed
60 months. Following the termination of any extended interest payment period,
if AL&C has paid all accrued and unpaid interest required by such Debentures
for such period, then AL&C shall have the right to again extend the interest
payment period up to 60 months as herein described. While the Company holds
the Debentures of any series, AL&C shall give the Company notice of its
selection of any extended interest payment period for such Debentures one
Business Day prior to the earlier of (i) the date the related dividend on the
related series of Preferred Securities is payable and (ii) the date on which
the Company is required to give notice of the record or payment date of such
dividend to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of such series of Preferred Securities, but in any
event not less than two Business Days prior to such record date. AL&C will
cause the Company to give such notice of AL&C's selection of any extended
interest payment period to the holders of the related series of Preferred
Securities. After the Debentures of a series have been exchanged for the
related series of Preferred Securities, AL&C shall give the holders of such
Debentures notice of its selection of any extended interest payment period for
such Debentures not less than two Business Days prior to the record date for
the first interest payment for which such extension will be effective.
During any extended interest period, AL&C shall not pay or declare any
dividends on, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (i) acquisitions of shares of
AL&C's common stock in connection with the satisfaction by AL&C of its
obligations under any employee benefit plans and (ii) redemptions of any
Rights issued by AL&C under the Rights Plan or the declaration of a dividend
of similar share purchase rights in the future).
Additional Interest
In addition, so long as the Debentures of any series have not been
exchanged for the related series of Preferred Securities, if at any time
following the date of issue of the related series of Preferred Securities, (i)
the Company shall be required to pay any Additional Amounts or (ii) the
Company shall be required to pay, with respect to its income derived from the
interest payments on such Debentures, any amounts for or on account of any
taxes, duties, assessments or governmental charges of whatever nature imposed
by the United States, or any other taxing authority, then, in any such case,
AL&C will pay as interest such additional amounts ("Additional Interest") as
may be necessary in order that the net amounts received and retained by the
Company after paying such Additional Amounts or after the payment of such
taxes, duties, assessments or governmental charges shall result in the
Company's having such funds as it would have had in the absence of the payment
of such taxes, duties, assessments or governmental charges.
Method and Place of Payment; Registration and Transfer
While the Company holds the Debentures of any series, principal of and
interest (including Additional Interest, if any) on such Debentures shall be
payable in lawful money of the United States, at such place and to such
account as may be designated by the Company. After the Debentures of any
series have been exchanged for the related series of Preferred Securities,
principal of and interest on such Debentures shall be payable in lawful money
of the United States at the office or agency of AL&C maintained for such
purposes in the city of Hartford; provided, however, that at the option of
Aetna, payment of interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Debenture register.
In the event that the Debentures of any series are not in
book-entry-only form following the exchange of such Debentures for the related
series of Preferred Securities, registrations of transfers or exchanges
thereof will be effected without charge, but upon payment in respect of any
tax or other governmental charges which may be imposed in connection
therewith. In addition, AL&C will not be required to register the transfer or
exchange of such Debentures during a period beginning 15 days before and
ending on the day of the mailing of a notice of redemption of any of such
Debentures or to register the transfer or exchange of any of such Debentures
so selected for redemption, except the unredeemed portion thereof.
Set-off
Notwithstanding anything to the contrary in the Subordinated Indenture
or Debentures, AL&C shall have the right to set-off any payment it is
otherwise required to make thereunder with and to the extent AL&C has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee.
Subordination
The Subordinated Indenture will provide that AL&C and the holders of the
Debentures covenant and agree (and each holder of Preferred Securities by
acceptance thereof agrees) that each of the Debentures is subordinate and
junior in right of payment to all Senior Debt as provided in the Subordinated
Indenture. The term "Senior Debt" means the principal of (and premium, if
any) and interest, if any (including interest accruing on or after the filing
of any petition in bankruptcy or for reorganization relating to AL&C to the
extent that such claim for post-petition interest is allowed in such
proceeding) on Debt, whether incurred on or prior to the date of the
Subordinated Indenture or thereafter incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is provided that such obligations are not superior in right of payment to
the Debentures or to other Debt which is pari passu with, or subordinated to
the Debentures; provided, however, that Senior Debt shall not be deemed to
include the Debentures. The term "Debt" means (without duplication and
without regard to any portion of principal amount that has not accrued and to
any interest component thereof (whether accrued or imputed) that is not due
and payable) with respect to AL&C, whether recourse is to all or a portion of
the assets of AL&C and whether or not contingent, (i) every obligation of AL&C
for money borrowed, (ii) every obligation of AL&C evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses, (iii)
every reimbursement obligation of AL&C with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of AL&C,
(iv) every obligation of AL&C issued or assumed as the deferred purchase price
of property or services (but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business), (v) every capital
lease obligation of AL&C, and (vi) every obligation of the type referred to in
clauses (i) through (v) of another person and all dividends of another person
the payment of which, in either case, AL&C has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
In the event of (i) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, arrangement, reorganization, debt restructuring
or other similar case or proceeding in connection with any insolvency or
bankruptcy proceeding, relative to AL&C or to its assets, or (ii) any
liquidation, dissolution or other winding up of AL&C, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or (iii)
any assignment for the benefit of creditors or any other marshalling of assets
and liabilities of AL&C, then and in any such event specified in (i), (ii) or
(iii) above (each such event, if any, herein sometimes referred to as a
"Proceeding") the holders of Senior Debt shall be entitled to receive payment
in full of all amounts due or to become due on or in respect of all Senior
Debt, or provision shall be made for such payment in cash or cash equivalents
or otherwise in a manner satisfactory to the holders of Senior Debt, before
the holders of the Debentures are entitled to receive any payment or
distribution of any kind or character, whether in cash, property or securities
(including any payment or distribution which may be payable or deliverable by
reason of the payment of any other Debt of AL&C subordinated to the payment of
the Debentures, such payment or distribution being hereinafter referred to as
"Junior Subordinated Payment"), on account of principal of or interest on the
Debentures and the holders of Senior Debt shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, including any Junior
Subordinated Payment, which may be payable or deliverable in respect of the
Debentures in any such Proceeding.
In the event that, notwithstanding the foregoing, the holders of the
Debentures shall have received any payment or distribution of assets of AL&C
of any kind or character, whether in cash, property or securities, including
any Junior Subordinated Payment, before all Senior Debt is paid in full or
payment thereof is provided for in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, and if such fact shall, at
or prior to the time of such payment or distribution, have been made known to
such holders, then and in such event such payment or distribution shall be
paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other person making payment
or distribution of assets of AL&C for application to the payment of all Senior
Debt remaining unpaid, to the extent necessary to pay all Senior Debt in full,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
In the event that any Debentures are declared due and payable before
their stated maturity (other than in connection with any mandatory prepayment
of any Debentures in the manner described under "Mandatory Prepayment" above),
then and in such event the holders of the Senior Debt outstanding at the time
such Debentures so become due and payable shall be entitled to receive payment
in full of all amounts due on or in respect of such Senior Debt, or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, before the holders of the
Debentures are entitled to receive any payment (including any payment which
may be payable by reason of any Junior Subordinated Payments) by AL&C on
account of the principal of or interest on the Debentures. In the event that,
notwithstanding the foregoing, AL&C shall make any payment to the holders of
the Debentures prohibited by the foregoing, and if such fact shall, at or
prior to the time of such payment, have been made known to such holders, then
and in such event such payment shall be paid over and delivered forthwith to
AL&C.
In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on any Senior Debt, or in the
event that any event of default with respect to any Senior Debt shall have
occurred and be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such default in
payment or event of default shall have been cured or waived or shall have
ceased to exist and such acceleration shall have been rescinded or annulled,
or in the event any judicial proceeding shall be pending with respect to any
such default in payment or such event of default, then no payment (including
any payment which may be payable by reason of any Junior Subordinated
Payments) shall be made by AL&C on account of principal of or interest on the
Debentures. In the event that, notwithstanding the foregoing, AL&C shall make
any payment to the holders of the Debentures prohibited by the foregoing, and
if such fact shall, at or prior to the time of such payment, have been made
known to such holders, then and in such event such payment shall be paid over
and delivered forthwith to AL&C.
Subject to the payment in full of all Senior Debt, or the provision of
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, the holders of the Debentures shall be
subrogated to the extent of the payments or distributions made to the holders
of such Senior Debt (equally and ratably with the holders of all Debt of AL&C
which by its express terms is subordinated to Debt of AL&C to substantially
the same extent as the Debentures are subordinated to the Senior Debt and is
entitled to like rights of subrogation by reason of any payments or
distributions made to holders of such Senior Debt) to the rights of the
holders of such Senior Debt to receive payments and distributions of cash,
property and securities applicable to the Senior Debt until the principal of
and interest on the Debentures shall be paid in full.
By reason of such subordination, in the event of liquidation or
insolvency, creditors of AL&C who are not holders of Senior Debt may recover
less, ratably, than holders of Senior Debt and may recover more ratably, than
the holders of the Debentures with respect to the Debentures. In addition,
since AL&C is a holding company, the rights of AL&C and hence the rights of
creditors of AL&C (including the rights of holders of the Debentures) to
participate in any distribution of the assets of any subsidiary upon its
liquidation or reorganization or otherwise is necessarily subject to the prior
claims of creditors of the subsidiary, except to the extent that claims of
AL&C itself as a creditor of the subsidiary may be recognized.
Covenants
In the Subordinated Indenture, AL&C will covenant for the benefit of the
holders of each series of Debentures that, so long as the related series of
Preferred Securities remains outstanding, AL&C will not declare or pay any
dividend on, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of AL&C's capital stock or make any guarantee payments with
respect to the foregoing (other than (i) payments under the Guarantee, (ii)
acquisitions of shares of AL&C's common stock in connection with the
satisfaction by AL&C of its obligations under any employee benefit plans and
(iii) redemptions of any Rights issued by AL&C pursuant to the Rights Plan or
the declaration of a dividend of similar share purchase rights in the future),
if at such time AL&C is in default with respect to its payment obligations
under the Guarantee or there shall have occurred an Event of Default under the
Subordinated Indenture with respect to such series of Debentures.
In the Subordinated Indenture, AL&C will also covenant for the benefit
of the holders of the Debentures of any series, that, so long as the related
series of Preferred Securities remains outstanding, it will (i) not cause or
permit any Common Securities of the Company to be transferred, (ii) maintain
direct or indirect ownership of all outstanding securities of the Company
other than (x) the Preferred Securities of any series and (y) any other
securities issued by the Company (other than the Common Securities) so long as
the issuance thereof to persons other than AL&C or any of its subsidiaries
would not cause the Company to become an "investment company" required to be
registered under the Investment Company Act of 1940, as amended, (iii) cause
at least 21% of the total value of the Company and at least 21% of all
interests in the capital, income, gain, loss, deduction and credit of the
Company to be represented by Common Securities, (iv) not voluntarily dissolve,
wind up or liquidate the Company (other than in connection with the exchange
of all series of Preferred Securities outstanding for the related series of
Debentures in the manner described under "Description of the Preferred
Securities -- Redemption or Exchange") or either of the Managing Members, (v)
cause AL&C and Aetna Capital Holdings, Inc. to remain the Managing Members of
the Company and timely perform all of their respective duties as Managing
Members of the Company (including the duty to declare and pay dividends on the
Preferred Securities as described under "Description of the Preferred
Securities -- Dividends"), and (vi) use reasonable efforts to cause the
Company to remain a limited liability company and otherwise continue to be
treated as a partnership for U.S. federal income tax purposes; provided that
AL&C may permit the Company to consolidate or merge with or into or convey,
transfer or lease its assets substantially as an entirety to, a limited
liability company or limited partnership or trust organized as such under the
laws of any state of the United States of America or the District of Columbia
upon the terms and subject to the conditions set forth under "Description of
the Preferred Securities -- Merger, Consolidations, etc. of the Company" above.
Events of Default
If one or more of the following events (each an "Event of
Default") shall occur and be continuing with respect to the Debentures of any
series:
(a) failure to pay any principal of any Debentures when due
(whether or not payment is prohibited by the provisions described above
under "Subordination" or otherwise);
(b) failure to pay any interest on any Debentures, including any
Additional Interest, when due and such failure continues for a period of
10 days, if the Debentures of such series have not been exchanged for
the related series of Preferred Securities, and 30 days, if such
Debentures have been so exchanged (whether or not payment is prohibited
by the provisions described above under "Subordination" or otherwise);
provided that a valid extension of the interest payment period by AL&C
shall not constitute a default in the payment of interest for this
purpose;
(c) failure by AL&C to perform in any material respect any other
covenant in the Subordinated Indenture for the benefit of the holders of
the Debentures of such series continued for a period of 60 days, if the
Debentures of such series have not been exchanged for the related series
of Preferred Securities, and 90 days, if such Debentures have been so
exchanged, after written notice to AL&C from the Trustee or to AL&C and
the Trustee from the holders of at least 25% in aggregate principal
amount of the Debentures of such series or, if such Debentures have not
been exchanged for the related series of Preferred Securities, 25% in
aggregate stated liquidation preference of the related series of
Preferred Securities; or
(d) certain events of bankruptcy, insolvency or liquidation of
AL&C;
then the Trustee or the holders of at least 25% in aggregate principal amount
of the Debentures of such series may declare the principal amount of all
Debentures of such series and all accrued interest thereon (including any
Additional Interest and any interest subject to an extension election) to be
due and payable immediately; provided, however, that under certain
circumstances the holders of a majority in aggregate principal amount of such
Debentures (with the consent of the holders of a majority in aggregate stated
liquidation preference of the related series of Preferred Securities if such
series of Preferred Securities is then outstanding) may rescind or annul such
declaration and its consequences.
Under the terms of the Preferred Securities, the holders of the series
of Preferred Securities related to any series of Debentures with respect to
which an Event of Default has occurred will have the rights referred to under
"Description of the Preferred Securities -- Voting Rights", including the
right to appoint a trustee, which trustee shall be authorized to exercise the
Company's right to accelerate the principal amount of such Debentures and to
enforce the Company's other creditor rights under such Debentures; provided
that any trustee so appointed shall vacate office immediately if any such
Event of Default shall have been cured by AL&C. In addition, in the event
AL&C fails to pay any principal of or interest on any series of Debentures
held by the Company when due, holders of the related series of Preferred
Securities shall, under certain circumstances, be entitled to enforce the
Company's right to receive such payments under such Debentures directly
against AL&C.
Following the exchange of any series of Preferred Securities for the
related series of Debentures, the holders of a majority in principal amount of
such series of Debentures will have the right, subject to certain limitations,
to 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 with respect to such series of Debentures and to waive certain
defaults.
Following the exchange of any series of Preferred Securities for the
related series of Debentures, no holder of a Debenture of such series will
have any right to institute any proceeding with respect to the Subordinated
Indenture or for any remedy thereunder, unless such holder shall have
previously given to the Trustee written notice of a continuing Event of
Default with respect to the Debentures of such series and unless also the
holders of at least 25% in aggregate principal amount of the Debentures of
such series shall have made written request, and offered indemnity to the
Trustee in form and substance reasonably satisfactory to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the holders of a majority in aggregate principal amount of the Debentures
of such series a direction inconsistent with such request and shall have
failed to institute such proceeding within 60 days. However, such limitations
do not apply to a suit instituted by a holder of a Debenture for enforcement
of payment of the principal of or interest on such Debenture on or after the
respective due dates expressed in such Debenture.
The Subordinated Indenture provides that, in case an Event of Default
with respect to any series of Debentures shall occur and be continuing after
the exchange of such series of Debentures for the related series of Preferred
Securities, the Trustee shall exercise such of its rights and powers under the
Subordinated Indenture, and use the same degree of care and skill in its
exercise, as a prudent man would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee will
be under no obligation to exercise any of its rights or powers under the
Subordinated Indenture at the request of any of the holders of Debentures
unless they shall have offered to the Trustee security or indemnity in form
and substance reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request.
Modification and Waiver
Modifications and amendments of the Subordinated Indenture may be made
by AL&C and the Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of each series of the Debentures which
is affected by the modification or amendment; provided, however, that no such
modification or amendment may, without the consent of each such holder of
Debentures affected thereby: (i) change the maturity of the principal of or
interest on any such Debenture; (ii) reduce the principal amount of or the
interest rate on any such Debenture; (iii) change the place or currency of
payment of principal of or the interest on any such Debenture; (iv) impair the
right to institute suit for the enforcement of any such payment on or with
respect to such Debenture; (v) reduce the percentage of holders of Debentures
necessary to modify or amend the Subordinated Indenture; (vi) modify the
subordination provisions in a manner adverse to the holders of such
Debentures; or (vii) modify the foregoing requirements or reduce the
percentage of outstanding Debentures necessary to waive compliance with
certain provisions of the Subordinated Indenture or for waiver of certain
defaults.
So long as the Company holds the Debentures of any series, it may not
waive compliance or waive any default in compliance by AL&C with certain
restrictive provisions of the Subordinated Indenture or modify or amend the
Subordinated Indenture without the approval of the same percentage of the
holders of Preferred Securities of the related series as would be required if
the holders of such Preferred Securities then held such Debentures.
The holders of at least a majority of the aggregate principal amount of
the Debentures of any series (with the consent of the holders of a majority in
stated liquidation preference of the related series of Preferred Securities in
the event such series of Preferred Securities is then outstanding) may, on
behalf of all holders of that series, waive compliance by AL&C with certain
restrictive provisions of the Subordinated Indenture and waive any past
default under the Subordinated Indenture, except a default in the payment of
principal or interest or in the performance of certain covenants.
Defeasance and Covenant Defeasance
The Subordinated Indenture provides that AL&C may elect either (A) to
defease and be discharged from any and all obligations with respect to the
Debentures of any series (except for the obligations to exchange or register
the transfer of the Debentures of any series, to replace temporary or
mutilated, destroyed, lost or stolen Debentures of any series, to maintain an
office or agency in respect of the Debentures, and to hold monies for payments
in trust) ("defeasance"), or (B) to be released from its obligations with
respect to the Debentures of any series concerning the restrictions and any
covenants applicable to the Debentures of any series (including the provisions
described under "Subordination" herein) which are subject to covenant
defeasance ("covenant defeasance"), and the occurrence of an event described
in clause (c) under "Events of Default" (with respect to covenants subject to
covenant defeasance) shall no longer be an Event of Default, upon irrevocable
deposit with the Trustee (or other qualifying trustee), in trust for such
purpose, of money, and/or U.S. Government Obligations (as defined in the
Subordinated Indenture) which through the payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of and interest, if any, on the Debentures of such series, and
any mandatory sinking fund or analogous payments thereon, on the scheduled due
dates therefor. Such a trust may only be established if, among other things,
(i) AL&C has delivered to the Trustee an opinion of counsel (as specified in
the Subordinated Indenture) to the effect that the holders of such Debentures
will not recognize income, gain or loss for federal income tax purposes as a
result of such defeasance or covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance
had not occurred, (ii) no Event of Default or event which with the giving of
notice or lapse of time, or both, would become an Event of Default under the
Subordinated Indenture shall have occurred and be continuing on the date of
such deposit, (iii) no default in the payment of principal of (or premium, if
any) or interest, if any, on any Senior Debt beyond any applicable grace
period shall have occurred and be continuing, and (iv) no other default with
respect to any Senior Debt shall have occurred and be continuing and shall
have resulted in the acceleration of such Senior Debt.
AL&C may exercise its defeasance option with respect to Debentures of
any series notwithstanding its prior exercise of its covenant defeasance
option. If AL&C exercises its defeasance option, payment of such Debentures
may not be accelerated because of an Event of Default. If AL&C exercises its
covenant defeasance option, payment of such Debentures may not be accelerated
by reference to the covenants noted under clause (B) above. In the event AL&C
omits to comply with its remaining obligations with respect to such Debentures
under the Subordinated Indenture after exercising its covenant defeasance
option and such Debentures are declared due and payable because of the
occurrence of any Event of Default, the amount of money and U.S. Government
Obligations on deposit with the Trustee may be insufficient to pay amounts due
on the Debentures of such series at the time of the acceleration resulting
from such Event of Default. However, AL&C will remain liable in respect of
such payments.
Global Securities
If immediately prior to any exchange of Debentures of any series for the
related Preferred Securities, such Preferred Securities are represented by one
or more global securities held by DTC, such Debentures, upon such exchange,
will be represented by one or more global securities registered in the name of
DTC or its nominee that will be deposited with DTC. Unless and until it is
exchanged in whole or in part for such Debentures in definitive registered
form, a global security may not be registered for transfer or exchange except
as a whole by DTC to a nominee for DTC.
For a description of DTC and DTC's book-entry system, see "Description
of the Preferred Securities -- Book-Entry-Only Issuance; The Depository Trust
Company". As of the date of this Prospectus, the description therein of DTC's
book-entry system and DTC's practices as they relate to purchases, transfers,
notices and payments with respect to the Preferred Securities apply in all
material respects to any debt obligations represented by one or more global
securities held by DTC.
Governing Law
The Debentures and the Subordinated Indenture will be governed by and
construed in accordance with the laws of the State of New York.
The Trustee
The Subordinated Indenture contains limitations on the right of the
Trustee, as a creditor of AL&C, to obtain payment of claims in certain cases,
or to realize on certain property received in respect of any such claim as
security or otherwise. In addition, the Trustee may be deemed to have a
conflicting interest and may be required to resign as Trustee if at the time
of a default under the Subordinated Indenture it is a creditor of AL&C.
The Trustee or its affiliates may act as depositary for funds of, make
loans to and perform other services for, or may be a customer of, Aetna in the
ordinary course of business.
Miscellaneous
AL&C shall have the right at all times to assign any of its rights or
obligations under the Subordinated Indenture to a direct or indirect wholly
owned subsidiary of AL&C other than any subsidiary that is an insurance
company; provided that, in the event of any such assignment, AL&C shall remain
jointly and severally liable for all such obligations. AL&C may not otherwise
assign any of its obligations under the Subordinated Indenture. Except as
described above under "Description of the Preferred Securities -- Redemption
or Exchange", the Company may not assign any of its rights under the
Subordinated Indenture without the prior written consent of AL&C. Subject to
the foregoing, the Subordinated Indenture shall be binding upon and inure to
the benefit of AL&C and the holders of the Debentures from time to time and
their respective successors and assigns.
The Subordinated Indenture will provide that AL&C may not consolidate
with or merge into any other person or sell its property and assets as, or
substantially as, an entirety to any person and may not permit any person to
merge into or consolidate with AL&C unless (i) either AL&C will be the
resulting or surviving entity or any successor or purchaser is a corporation,
partnership or trust organized under the laws of the United States of America,
any State or the District of Columbia, and any such successor or purchaser
expressly assumes AL&C's obligations under the Subordinated Indenture and (ii)
immediately after giving effect to the transaction no Event of Default shall
have occurred and be continuing.
AL&C will be required to furnish to the Trustee annually a statement by
certain officers of AL&C as to the compliance with all conditions and
covenants of the Subordinated Indenture. The Subordinated Indenture provides
that the Trustee may withhold notice to the holders of the Debentures of any
default (except in payment of principal or interest) if it considers it in the
interest of the holders of the Debentures to do so.
TAXATION
In the opinion of Davis Polk & Wardwell, counsel to AL&C and the
Company, the following summary accurately describes the material United States
federal income tax consequences of the purchase, ownership and disposition of
Preferred Securities and Debentures. Unless otherwise stated, it deals only
with Preferred Securities and Debentures held as capital assets by initial
purchasers who acquire the Preferred Securities at the original offering price
("Initial Purchasers"), and not with special classes of holders, such as
dealers in securities or currencies, life insurance companies, persons holding
Preferred Securities and Debentures as a hedge or hedged against currency
risks or as part of a straddle, or persons whose functional currency is not
the U.S. dollar. This summary is based on tax laws in effect in the United
States, regulations thereunder and administrative and judicial interpretations
thereof, as of the date hereof, all of which are subject to change (possibly
on a retroactive basis). This summary deals only with holders who purchase
Preferred Securities of any series, and is subject to additional discussion of
material United States federal income tax consequences that may appear in a
Prospectus Supplement delivered in connection with a particular series of
Preferred Securities.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS FOR THE GENERAL
INFORMATION OF PROSPECTIVE PURCHASERS. HOWEVER, SUCH PROSPECTIVE PURCHASERS
OF PREFERRED SECURITIES ARE ADVISED TO CONSULT THEIR OWN TAX ADVISORS AS TO
THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE PURCHASE,
ACQUISITION, OWNERSHIP AND DISPOSITION OF PREFERRED SECURITIES AND DEBENTURES
IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, AS WELL AS THE EFFECT OF ANY
STATE, LOCAL OR OTHER TAX LAWS.
Income from the Preferred Securities and Debentures
The Company will be treated as a partnership for federal income tax
purposes. Each holder of Preferred Securities (a "Securityholder") will be
required to include in gross income the Securityholder's distributive share of
the Company's net income which will generally be equal to the amount of
interest received or accrued on the Debentures. See "Potential Extension of
Payment Period of the Debentures" below. Any amount so included in a
Securityholder's gross income will increase his tax basis in the Preferred
Securities, and the amount of cash dividends to the Securityholder will reduce
such Securityholder's tax basis in the Preferred Securities. No portion of
the amounts received on the Preferred Securities will be eligible for the
dividends received deduction.
The Company does not presently intend to make an election under Section
754 of the Internal Revenue Code of 1986, as amended (the "Code"). As a
result, a subsequent purchaser of Preferred Securities will not be permitted
to adjust its taxable income from the Company to reflect any difference
between its purchase price for the Preferred Securities and the Company's
underlying tax basis for its assets.
The interest payments on the Debentures will be treated as "original
issue discount" under Treasury Regulations. Each holder of Debentures (a
"Debenture Holder") will be required to include the interest on the Debentures
in income as it accrues, in accordance with a constant yield method based on a
compounding of interest, before the receipt of the interest. The Debenture
Holder's tax basis in the Debentures will be increased by accrued interest
previously included as income by the Debenture Holder and reduced by the
payment of such interest.
Market Discount and Bond Premium of the Debentures
Debenture Holders other than Initial Purchasers may be considered to
have acquired the Debentures with market discount, acquisition premium or
amortizable bond premium. Such holders are advised to consult their own tax
advisors as to the income tax consequences of the acquisition, ownership and
disposition of the Debentures.
Disposition of the Preferred Securities
Gain or loss will be recognized on a sale, exchange or other disposition
of the Preferred Securities (including a distribution of cash in redemption of
all of a Securityholder's Preferred Securities but excluding the exchange of
Preferred Securities for Debentures) equal to the difference between the
amount realized and the Securityholder's tax basis in the Preferred Securities
disposed of. In the case of a cash distribution in partial redemption of a
Securityholder's Preferred Securities, no loss will be recognized, the
Securityholder's tax basis in the Preferred Securities will be reduced by the
amount of the distribution, and the Securityholder will recognize gain to the
extent, if any, that the amount of the distribution exceeds the
Securityholder's tax basis in the Preferred Securities. Gain or loss
recognized by a Securityholder on the sale or exchange of Preferred Securities
held for more than one year will generally be taxable as long-term capital
gain or loss. In certain circumstances, a portion of the proceeds received
upon a disposition of a Preferred Security by a purchaser other than an
Initial Purchaser may be treated as ordinary income.
Disposition or Retirement of the Debentures
Upon the sale, exchange or retirement of the Debentures, a Debenture
Holder will recognize taxable gain or loss equal to the difference between the
amount realized on the sale, exchange or retirement and such holder's adjusted
tax basis in the Debentures. Subject to the discussion above under "Market
Discount and Bond Premium of the Debentures", such gain or loss will be
capital gain or loss.
Exchange of the Preferred Securities for Debentures of AL&C
A distribution by the Company of the Debentures of AL&C in exchange for
the Preferred Securities as described under the caption "Description of the
Preferred Securities -- Redemption or Exchange", will be non-taxable and, if
the only interest of the Securityholder in the Company is the Preferred
Securities transfered in such exchange, will result in the Securityholder
receiving an aggregate tax basis in the Debentures equal to such
Securityholder's aggregate tax basis in its Preferred Securities. A Debenture
Holder's holding period in the Debentures so received in exchange for
Preferred Securities will include the period for which such Preferred
Securities were held by the Debenture Holder.
Potential Extension of Payment Period of the Debentures
Under the terms of the Debentures, AL&C may be permitted to extend the
interest payment period up to 60 months. In the event that AL&C exercises
this right, AL&C may not declare dividends on any share of its preferred or
common stock, and therefore, the likelihood of extension of the payment period
is, in the view of the Company and AL&C, remote. In the event that the
payment period is extended before the Preferred Securities are exchanged for
the Debentures, the Company will continue to accrue income, which will be
allocated, but not distributed, to beneficial owners on the last day of each
calendar month. As a result, beneficial owners during an extended interest
payment period will include interest in gross income in advance of the receipt
of cash and any such owners who dispose of Preferred Securities prior to the
record date for the payment of dividends following such extended interest
payment period will include interest in gross income but will not receive from
the Company any cash related thereto.
The tax basis of a Preferred Security will be increased by the amount of
any interest that is included in income without a receipt of cash, and will be
decreased again when such holders of record subsequently receive cash from the
Company.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the
United States, a foreign corporation, a non-resident alien individual, a
foreign partnership or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law:
(i) payments by the Company or any of its paying agents to any
holder of a Preferred Security who or which is a United States Alien
Holder and payments of principal or interest by AL&C on the Debentures
to any holder of a Debenture who or which is a United States Alien
Holder will not be subject to United States federal withholding tax;
provided that (a) the beneficial owner of the Preferred Security or
Debenture, as the case may be, does not actually or constructively own
10% or more of the total combined voting power of all classes of stock
of AL&C entitled to vote, (b) the beneficial owner of the Preferred
Security or Debenture, as the case may be, is not a controlled foreign
corporation that is related to AL&C through stock ownership, and (c)
either (A) the beneficial owner of the Preferred Security or Debenture
certifies to the Company or its agent, under penalties of perjury, that
it is not a United States holder and provides its name and address or
(B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of
its trade or business (a "Financial Institution") and holds the
Preferred Security or Debenture certifies to the Company or its agent
under penalties of perjury that such statement has been received from
the beneficial owner by it or by a Financial Institution between it and
the beneficial owner and furnishes the Company or its agent with a copy
thereof; and
(ii) a United States Alien Holder of a Preferred Security or
Debenture will not be subject to United States federal withholding tax
on any gain realized upon the sale or other disposition of a Preferred
Security or Debenture.
Company Information Returns
Within 90 days after the close of every taxable year of the Company, the
Managing Members of the Company will furnish or cause to be furnished to each
holder of the Preferred Securities a Schedule K-1 setting forth such
Securityholder's allocable share of income for the Company's taxable year.
Any person who holds Preferred Securities as a nominee for another
person is required to furnish to the Company (a) the name, address and
taxpayer identification number of the beneficial owner and the nominee; (b)
notice of whether each beneficial owner is (i) a person who is not a United
States person, (ii) a foreign government, an international organization or any
wholly owned agency or instrumentality of either of the foregoing, or (iii) a
tax-exempt entity; (c) the amount and description of Preferred Securities
held, acquired or transferred for the beneficial owner; and (d) certain
information including the dates of acquisitions and transfers, methods of
acquisition and the costs thereof, as well as net proceeds from transfers.
Brokers and financial institutions are required to furnish additional
information, including whether they are a United States person and certain
information on Preferred Securities they acquire, hold or transfer for their
own account. A penalty of $50 is imposed for each failure to report the above
information to the Company, up to a maximum of $100,000 per calendar year for
all failures.
PLAN OF DISTRIBUTION
The Company may sell Preferred Securities (i) through underwriters, (ii)
through dealers, (iii) through agents or (iv) directly to purchasers. The
Prospectus Supplement relating to the Preferred Securities of a particular
series will set forth the terms of such offering, including the names of any
underwriters, dealers or agents involved in the sale of such Preferred
Securities, the number of Preferred Securities of such series to be purchased
by any underwriters and any applicable commissions or discounts. The
estimated proceeds to the Company from such series of Preferred Securities
will also be set forth in the Prospectus Supplement.
If underwriters are used in the sale, the Preferred Securities being
sold will be acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Unless otherwise set forth in the Prospectus Supplement
relating to the Preferred Securities of a particular series, the obligations
of the underwriters to purchase such Preferred Securities will be subject to
certain conditions precedent and the underwriters will be obliged to purchase
all of such Preferred Securities if any of such Preferred Securities are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If dealers are used in the sale, unless otherwise indicated in the
Prospectus Supplement relating to the Preferred Securities of a particular
series, the Company will sell such Preferred Securities to the dealers as
principals. The dealers may then resell such Preferred Securities to the
public at varying prices to be determined by such dealers at the time of
resale.
Preferred Securities of a particular series may also be sold through
agents designated by the Company from time to time or directly by the Company.
Any agent involved in the offering and sale of any such Preferred Securities
will be named, and any commissions payable by the Company or AL&C to such
agent will be set forth, in the Prospectus Supplement relating to the Preferred
Securities of such series. Unless otherwise indicated in such Prospectus
Supplement, any such agent will act on a best efforts basis for the period of
its appointment.
Underwriters, dealers and agents may be entitled under agreements
entered into with the Company or AL&C to indemnification by the Company or
AL&C against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments which the
underwriters, dealers or agents may be required to make in respect thereof.
Underwriters, dealers and agents may be customers of, engage in transactions
with, or perform services for, the Company or Aetna in the ordinary course of
business.
The Preferred Securities may or may not be listed on a national
securities exchange or a foreign securities exchange. No assurances can be
given that there will be a market for the Preferred Securities.
VALIDITY OF SECURITIES
The validity of the Preferred Securities will be passed upon on behalf
of the Company by Davis Polk & Wardwell, special counsel to AL&C and the
Company. The validity of the Guarantee and the Debentures will be passed upon
on behalf of AL&C by Zoe Baird, Senior Vice President and General Counsel of
AL&C, and Davis Polk & Wardwell, special counsel to AL&C. The validity of the
Guarantee, the Preferred Securities and the Debentures will be passed upon on
behalf of any agents or underwriters by Sullivan & Cromwell. Davis Polk &
Wardwell and Sullivan & Cromwell will rely upon the opinion of Zoe Baird as to
certain matters governed by Connecticut law. As of September 30, 1994,
Zoe Baird beneficially owned 793, and had options to purchase 19,000 shares of
AL&C's common stock.
EXPERTS
The consolidated financial statements and schedules of Aetna as of
December 31, 1993 and 1992, and for each of the years in the three year period
ended December 31, 1993, incorporated by reference in this Prospectus and
elsewhere in the Registration Statement have been audited by KPMG Peat Marwick
LLP, independent certified public accountants, as indicated in their reports
with respect thereto, and are incorporated by reference herein in reliance
upon the authority of said firm as experts in accounting and auditing. The
reports of KPMG Peat Marwick LLP on the December 31, 1993 consolidated
financial statements and schedules refer to a change in 1993 in the Company's
method of accounting for certain investments in debt and equity securities,
reinsurance of short-duration and long-duration contracts, postemployment
benefits, workers' compensation life table indemnity reserves and
retrospectively rated reinsurance contracts and a change in 1992 in the
Company's methods of accounting for income taxes and postretirement benefits
other than pensions.
With respect to the unaudited interim financial information incorporated
or which may be incorporated by reference in this Prospectus, the independent
certified public accountants have reported and may report, as the case may be,
that they applied limited procedures in accordance with professional standards
for a review of such information. However, any separate report included in
AL&C's Quarterly Reports on Form 10-Q and incorporated by reference herein
will state that they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on any
report on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act for any report on the
unaudited interim financial information because that report is not a "report"
or a "part" of the Registration Statement prepared or certified by the
accountants within the meaning of Sections 7 and 11 of the Securities Act.
ERISA MATTERS
Set forth below is a summary of the material fiduciary considerations
required to be disclosed with respect to pension plans, profit-sharing plans,
Individual Retirement Accounts and other employee benefit plans ("ERISA
Plans") subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the employee benefit provisions of the Code. This
summary is based on the current provisions of ERISA and regulations and
rulings thereunder, which may be changed by future legislative, administrative
or judicial actions. This discussion should not be construed as legal advice
and ERISA Plan fiduciaries proposing to invest in the Preferred Securities
should consult with and rely upon their own advisors in evaluating these
matters.
Prohibited Transactions
Section 406 of ERISA provides that plan fiduciaries are prohibited from
causing a plan to engage in certain types of transactions with certain persons
or entities that are parties in interest. AL&C and certain affiliates of AL&C
may each be considered a "party in interest" within the meaning of ERISA or a
"disqualified person" within the meaning of the Code with respect to ERISA
Plans. Due to the ownership by AL&C directly or indirectly of all of the
Common Securities, as well as the nature of the Guarantee and the ability of
the Company under certain circumstances to exchange the Preferred Securities
for Debentures, prohibited transactions within the meaning of ERISA or the
Code, may arise, for example, if Preferred Securities are acquired by an ERISA
Plan with respect to which AL&C or any of its affiliates is a service
provider, unless such Preferred Securities are acquired pursuant to an
exemption for transactions effected on behalf of such ERISA Plan by a
"qualified professional asset manager" or pursuant to any other available
exemption.
Plan Assets
In addition, if the assets of the Company were deemed to be plan assets
of ERISA Plans that are shareholders, an ERISA Plan's investment in the
Preferred Securities might be deemed to constitute a delegation under ERISA of
the duty to manage plan assets by a fiduciary of such ERISA Plan. Thus, the
fiduciary responsibility provisions of ERISA could extend to the Company's
actions and certain transactions involving the operation of the Company might
be deemed to constitute prohibited transactions under ERISA and the Code. The
U.S. Department of Labor (the "DOL") has issued a final regulation with regard
to whether the underlying assets of an entity in which ERISA Plans acquire
equity interests would be deemed to be plan assets. The regulation provides
that the underlying assets of an entity will not be considered to be plan
assets if the equity interests acquired by ERISA Plans are "publicly-offered
securities" -- that is, they are (1) widely held (i.e., owned by more than 100
investors independent of AL&C and of each other), (2) freely transferable and
(3) sold as part of an offering pursuant to an effective registration
statement under the Securities Act and then timely registered under Section
12(b) or 12(g) of the Exchange Act. It is expected that the Preferred
Securities will meet the criteria of "publicly-offered securities" above. The
Company expects (although no assurances can be given) that the Preferred
Securities will be held by at least 100 independent investors, there will be
no restrictions imposed on the transfer of the Preferred Securities and the
Preferred Securities will be sold as part of an offering pursuant to an
effective registration statement under the Securities Act and then will be
timely registered under the Exchange Act.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting compensation. Except for the Registration Fee, all amounts are
estimates.
Registration Fee................................ $ 172,415
Accounting Fees and Expenses.................... 70,000
Blue Sky Fees and Expenses...................... 27,500
Legal Fees and Expenses......................... 650,000
Printing and Engraving Fees..................... 90,000
Rating Agency Fees.............................. 250,000
Stock Exchange Listing Fees..................... 100,000
Trustee Fees.................................... 20,000
Miscellaneous................................... 45,085
-----------
Total................................. $ 1,425,000
===========
Item 15. Indemnification of Directors and Officers.
AL&C is a Connecticut corporation. Section 33-320a of the Connecticut
General Statutes ("C.G.S.") provides that a Connecticut corporation shall,
under certain circumstances, indemnify its directors, officers, employees,
agents and certain other persons.
Subsection (b) of C.G.S. Section 33-320a provides that a corporation
shall indemnify any shareholder, director, officer, employee or agent of the
corporation or an eligible outside party, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation), against
judgments, fines, penalties, amounts paid in settlement and reasonable
expenses (including attorneys' fees) actually incurred by such person in
connection with such action, suit or proceeding provided (1) that such person
was successful on the merits in the defense of such action, suit or
proceeding, or (2) that it shall be concluded that such person acted in good
faith and in a manner he reasonably believed to be in the best interests of
the corporation and, with respect to any criminal action or proceeding,
provided that such person had no reason to believe his conduct was unlawful,
or (3) a court shall have determined that in view of all the circumstances,
such person is fairly and reasonably entitled to be indemnified, and then for
such amount as the court shall determine; except that, in connection with an
alleged claim based upon the purchase or sale of securities, the corporation
shall only indemnify such person after a court shall have determined that in
view of all the circumstances, he is fairly and reasonably entitled to be
indemnified, and then for such amount as the court shall determine.
Subsection (c) of C.G.S. Section 33-320a provides that, where a director
or officer was or is a party or was threatened to be made a party to a
proceeding by or in the right of the corporation, the corporation shall
indemnify him against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the proceeding or any appeal
therein, in relation to matters as to which he is finally adjudged not to have
breached his duty to the corporation. The corporation shall also indemnify a
director or officer if a court determines that in view of all the
circumstances, such person is fairly and reasonably entitled to be
indemnified; however, in such a situation, the individual shall only be
indemnified for such amount as the court determines to be appropriate.
Furthermore, the statute provides that the corporation shall not indemnify a
director or officer for amounts paid to the corporation, to a plaintiff or to
counsel for a plaintiff in settling or otherwise disposing of a threatened or
pending action, with or without court approval, or for expenses incurred in
defending a threatened action or a pending action which is settled or
otherwise disposed of without court approval.
C.G.S. Section 33-320a is an exclusive statute. A corporation cannot
indemnify a director or officer to an extent either greater or less than that
authorized by the statute; provided, however, that the statute specifically
authorizes a corporation to procure insurance providing greater indemnification
rights than those set out in C.G.S. Section 33-320a.
Consistent with the statute, AL&C has procured insurance from several
carriers for its directors and officers which supplements the indemnification
rights provided to those individuals by C.G.S. Section 33-320a. Unlike the
statute, these policies do not require an after-the-fact determination of good
faith in order for the insured director or officer to receive the benefits
provided under the policies nor do they require affirmative judicial or
corporate action as a prerequisite to the insurance company's duty to defend
(and pay for the defense of) the insured director or officer under the
policies. Furthermore, the insurance policies cover directors and officers
for any acts not specifically excluded for which the director or officer is
not eligible for indemnification under C.G.S. Section 33-320a to the extent
such coverage does not violate public policy.
Section 5 of AL&C's Certificate of Incorporation limits the personal
liability of directors for monetary damages to the corporation and its
shareholders for a breach of duty as a director to the amount of the
compensation received by the director for serving the corporation during the
year of the alleged breach of duty.
Reference is made to the Underwriting Agreement filed as Exhibit 1 to
this Registration Statement for certain provisions relating to the
indemnification of directors and officers of AL&C against certain liabilities,
including liabilities under the Securities Act.
Item 16. Exhibits.
* 1 -- Form of Underwriting Agreement
* 3.1 -- Certificate of Formation of Aetna Capital L.L.C.
3.2 -- Form of Amended and Restated Limited Liability Company
Agreement of Aetna Capital L.L.C.
3.3 -- Form of Written Action relating to the creation of a series of
Preferred Securities
4.1 -- Form of Preferred Security Certificate
4.2 -- Form of Payment and Guarantee Agreement by Aetna Life and
Casualty Company
4.3 -- Form of Debenture (included in Exhibit 4.4)
4.4 -- Form of Subordinated Indenture between The First National Bank
of Chicago, as trustee and Aetna Life and Casualty Company
5.1 -- Opinion of Zoe Baird, Senior Vice President and General Counsel
of Aetna Life and Casualty Company
5.2 -- Opinion of Davis Polk & Wardwell
8.1 -- Opinion of Davis Polk & Wardwell as to tax matters
10.1 -- Form of Agreement as to Expenses and Liabilities between Aetna
Capital L.L.C. and Aetna Life and Casualty Company
12 -- Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Stock Dividends (incorporated by reference to Aetna
Life and Casualty Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1994 filed on August 15, 1994 (File
No. 1-5704))
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of Zoe Baird, Senior Vice President and General Counsel
of Aetna Life and Casualty Company (included in Exhibit 5.1)
23.3 -- Consent of Davis Polk & Wardwell (included in Exhibit 5.2)
23.4 -- Consent of Davis Polk & Wardwell (included in Exhibit 8.1)
*24 -- Powers of Attorney
*25 -- Statement of Eligibility of the Trustee under the Trust
Indenture Act
28 -- Information from Reports Furnished to State Insurance Regulatory
Authorities (incorporated herein by reference to Aetna Life and
Casualty Company's 1993 Annual Report on Form 10-K, filed on
March 18, 1994 (File No. 1-5704))
______________________
* Previously filed.
Item 17. Undertakings.
Each of the Registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by a Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of AL&C's Annual Report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be
a new Registration Statement relating to the Securities offered therein, and
the offering of such Securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) To provide to the underwriter at the closing specified in the
underwriting agreements, certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
Insofar as indemnification (other than pursuant to the insurance
described in Item 15 above) for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions specified in the first paragraph of
Item 15 of this Registration Statement or otherwise, the Registrants have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in said Act and is
therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of
expenses incurred or paid by a director, officer or controlling person of the
Registrants in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification
by them is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Aetna
Capital L.L.C. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hartford, State of
Connecticut on October 5, 1994.
AETNA CAPITAL L.L.C.
(Registrant)
By Aetna Life and Casualty Company,
as Managing Member
By /s/ ROBERT E. BROATCH
-----------------------
Robert E. Broatch
Senior Vice President,
Finance and Corporate Controller
of Aetna Life and Casualty Company
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed below by the
following persons in the capacities indicated on October 5, 1994.
Signature Title
--------- -----
* President and Chief Executive Officer
- ----------------------- of Aetna Life and Casualty Company
Ronald E. Compton (Principal Executive Officer)
/s/ ROBERT E. BROATCH Senior Vice President, Finance
- ----------------------- and Corporate Controller of Aetna
Robert E. Broatch Life and Casualty Company
(Principal Financial Officer and
Principal Accounting Officer)
*By /s/ KIRK P. WICKMAN
- -----------------------
Kirk P. Wickman
(Attorney-in-fact)
Pursuant to the requirements of the Securities Act of 1933, Aetna Life
and Casualty Company certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Hartford, State of
Connecticut on October 5, 1994.
AETNA LIFE AND CASUALTY COMPANY
(Registrant)
By /s/ ROBERT E. BROATCH
-----------------------
Robert E. Broatch
Senior Vice President,
Finance and Corporate Controller
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed below by the
following persons in the capacities indicated on October 5, 1994.
Signature Title
--------- -----
* Chairman, President, Chief Executive
- ----------------------- Officer and Director
Ronald E. Compton (Principal Executive Officer)
/s/ ROBERT E. BROATCH Senior Vice President,
- ----------------------- Finance and Corporate Controller
Robert E. Broatch (Principal Financial Officer and
Principal Accounting Officer)
* Director
- -----------------------
Wallace Barnes
* Director
- -----------------------
John F. Donahue
* Director
- -----------------------
William H. Donaldson
* Director
- -----------------------
Barbara Hackman Franklin
* Director
- -----------------------
Earl G. Graves
* Director
- -----------------------
Gerald Greenwald
Director
- -----------------------
Michael H. Jordan
* Director
- -----------------------
Jack D. Kuehler
* Director
- -----------------------
Frank R. O'Keefe, Jr.
* Director
- -----------------------
David M. Roderick
*By /s/ KIRK P. WICKMAN
- -----------------------
Kirk P. Wickman
(Attorney-in-Fact)
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description Pages
- ------- ----------- ------------
*1 -- Form of Underwriting Agreement
*3.1 -- Certificate of Formation of Aetna Capital L.L.C
3.2 -- Form of Amended and Restated Limited Liability Company
Agreement of Aetna Capital L.L.C.
3.3 -- Form of Written Action relating to the creation of a
Series of Preferred Securities
4.1 -- Form of Preferred Security Certificate
4.2 -- Form of Payment and Guarantee Agreement by Aetna Life
and Casualty Company
4.3 -- Form of Debenture (included in Exhibit 4.4)
4.4 -- Form of Subordinated Indenture between The First
National Bank of Chicago, as trustee and Aetna Life
and Casualty Company
5.1 -- Opinion of Zoe Baird, Senior Vice President and
General Counsel of Aetna Life and Casualty Company
5.2 -- Opinion of Davis Polk & Wardwell
8.1 -- Opinion of Davis Polk & Wardwell as to tax matters
10.1 -- Form of Agreement as to Expenses and Liabilities
between Aetna Capital L.L.C. and Aetna Life and
Casualty Company
12 -- Computation of Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends (incorporated
by reference to Aetna Life and Casualty Company's
Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994 filed on August 15, 1994 (File No. 1-5704))
23.1 -- Consent of KPMG Peat Marwick LLP
23.2 -- Consent of Zoe Baird, Senior Vice President and General
Counsel of Aetna Life and Casualty Company
(included in Exhibit 5.1)
23.3 -- Consent of Davis Polk & Wardwell (included in Exhibit 5.2)
23.4 -- Consent of Davis Polk & Wardwell (included in Exhibit 8.1)
*24 -- Powers of Attorney
*25 -- Statement of Eligibility of the Trustee under the
Trust Indenture Act
28 -- Information from Reports Furnished to State Insurance
Regulatory Authorities (incorporated herein by
reference to Aetna Life and Casualty Company's 1993
Annual Report on Form 10-K, filed on March 18, 1994
(File No. 1-5704))
____________________
* Previously filed.
EXHIBIT 3.2
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
AETNA CAPITAL L.L.C.
This Amended and Restated Limited Liability Company Agreement
of Aetna Capital L.L.C. (the "Company") is made as of , 1994, among
Aetna Life and Casualty Company ("Aetna") and Aetna Capital Holdings, Inc.
("Aetna Capital"), as initial Members (as defined below) of the Company and
the Persons (as defined below) who become Members of the Company in accordance
with the provisions hereof.
WHEREAS, Aetna and Aetna Capital have heretofore formed a
limited liability company pursuant to the Delaware Limited Liability Company
Act, 6 Del.C. Section 18-101, et seq., as amended from time to time (the
"Delaware Act"), by filing a Certificate of Formation of the Company with the
office of the Secretary of State of the State of Delaware on March 23, 1994,
and entering into a Limited Liability Company Agreement of the Company dated
as of March 23, 1994 (the "Original Limited Liability Company Agreement"); and
WHEREAS, the Members desire to continue the Company as a
limited liability company under the Delaware Act and to amend and restate the
Original Limited Liability Company Agreement in its entirety.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Members
hereby amend and restate the Original Limited Liability Company Agreement in
its entirety and agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. The terms defined in this Article I
shall, for the purposes of this Agreement, have the meanings herein specified.
"Additional Amounts" shall have the meaning set forth in
Section 9.4 of this Agreement.
"Affiliate" means with respect to a specified Person, any
Person that directly or indirectly controls, is controlled by, or is under
common control with, the specified Person. As used in this definition, the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Limited Liability
Company Agreement of the Company, as amended, modified, supplemented or
restated from time to time.
"Certificate" means the Certificate of Formation and any and
all amendments thereto and restatements thereof filed on behalf of the Company
with the office of the Secretary of State of the State of Delaware pursuant to
the Delaware Act.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding federal tax statute enacted after the date
of this Agreement. A reference to a specific section (Section) of the Code
refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Agreement,
as such specific section or corresponding provision is in effect on the date
of application of the provisions of this Agreement containing such reference.
"Common Member" means a Member that holds one or more Common
Securities.
"Common Securities" means the Interests in the Company which
represent common limited liability company interests in the Company and are
described in this Agreement.
"Company Dividend Junior Securities" shall have the meaning set
forth in Section 9.3 of this Agreement.
"Company Dividend Parity Securities" shall have the meaning set
forth in Section 9.3 of this Agreement.
"Company Liquidation Parity Securities" shall have the meaning
set forth in Section 15.5 of this Agreement.
"Covered Person" means the Managing Members, any Affiliate of
the Managing Members or any officers, directors, shareholders, partners,
employees, representatives or agents of the Managing Members, or any employee
or agent of the Company or its Affiliates.
"Debentures" means the Debentures evidencing the loans to Aetna
from the Company of the proceeds of the issuances of Interests and related
capital contributions.
"Guarantee" means the Payment and Guarantee Agreement to be
entered into by Aetna for the benefit of the Preferred Members, as amended
from time to time.
"Indemnified Person" means each Common Member, any Affiliate of
such Common Member or any officers, directors, shareholders, partners,
employees, representatives or agents of such Common Member, or any employee or
agent of the Company or its Affiliates.
"Indenture" means the Subordinated Indenture between Aetna and
The First National Bank of Chicago, as trustee, pursuant to which the
Debentures will be issued, as amended or supplemented from time to time.
"Interest" means a limited liability company interest in the
Company, including the right of the holder thereof to any and all benefits to
which a Member may be entitled as provided in this Agreement, together with the
obligations of a Member to comply with all of the terms and provisions of this
Agreement.
"Liquidation Distribution" shall have the meaning set forth in
Section 15.5 of this Agreement.
"LP Act" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del C. Section 17-101, et seq., as amended from time to time.
"Managing Members" means Aetna and Aetna Capital, in their
capacity as the Members that hold all of the outstanding Common Securities.
"Member" means any Person that holds an Interest in the Company
and is admitted as a member of the Company pursuant to the provisions of this
Agreement, in its capacity as a member of the Company. For purposes of the
Delaware Act, the Managing Members and the Preferred Members shall constitute
separate classes or groups of Members.
"Person" means any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
"Preferred Certificate" means a certificate evidencing the
Preferred Securities held by a Preferred Member.
"Preferred Member" means a Member that holds one or more
Preferred Securities.
"Preferred Securities" means the Interests which represent
preferred limited liability company interests in the Company and are described
in this Agreement.
"Tax Matters Partner" means the Managing Member designated as
such in Section 11.1 hereof.
"Third Party Creditors" shall have the meaning set forth in
Section 13.1 of this Agreement.
Section 1.2 Headings. The headings and subheadings in this
Agreement are included for convenience and identification only and are in no
way intended to describe, interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof.
ARTICLE II
CONTINUATION AND TERM; ADMISSION OF MEMBERS
Section 2.1 Continuation.
(a) The Members hereby agree to continue the Company as a
limited liability company under and pursuant to the provisions of the Delaware
Act and agree that the rights, duties and liabilities of the Members shall be
as provided in the Delaware Act, except as otherwise provided herein.
(b) Upon the execution of this Agreement, Aetna and Aetna
Capital shall continue to be Members and shall each be designated as a Common
Member and shall together be the holders of all of the Common Securities.
(c) Either Managing Member, as an authorized person within the
meaning of the Delaware Act, shall execute, deliver and file any and all
amendments to and restatements of the Certificate.
Section 2.2 Name. The name of the Company heretofore formed
and continued hereby is Aetna Capital L.L.C. The business of the Company may
be conducted upon compliance with all applicable laws under any other name
designated by the Managing Members.
Section 2.3 Term. The term of the Company commenced on the
date the Certificate was filed in the office of the Secretary of State of the
State of Delaware and shall continue until March 23, 2104, unless dissolved
before such date in accordance with the provisions of this Agreement.
Section 2.4 Registered Agent and Office. The Company's
registered agent and office in Delaware shall be RL&F Service Corp., One
Rodney Square, 10th Floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware 19801. At any time, the Managing Members may designate
another registered agent and/or registered office.
Section 2.5 Principal Place of Business. The principal place
of business of the Company shall be at 151 Farmington Avenue, Hartford,
Connecticut 06156. The Managing Members may change the location of the
Company's principal place of business; provided that such change has no
material adverse effect upon any Member.
Section 2.6 Qualification in Other Jurisdictions. The
Managing Members shall cause the Company to be qualified, formed or registered
under assumed or fictitious name statutes or similar laws in any jurisdiction
in which the Company conducts business and in which such qualification,
formation or registration is required by law or deemed advisable by the
Managing Members. Either Managing Member, as an authorized person within the
meaning of the Delaware Act, shall execute, deliver and file any certificates
(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in a jurisdiction in which the Company may wish to
conduct business.
Section 2.7 Admission of Members.
(a) Subject to Section 2.1(b), a Person shall be admitted as a
Member and shall become bound by the terms of this Agreement, without
execution of this Agreement, if such Person (or a representative authorized by
such Person orally, in writing or by other action such as payment for an
Interest) complies with the conditions for becoming a Member as set forth in
Section 2.7(b) and requests (which request shall be deemed to have been made
upon acquisition of an Interest directly from the Company or upon an
assignment of an Interest from another Person) that the records of the Company
reflect such admission.
The Company shall be promptly notified of any assignment. The
Company will reflect the admission of a Member in the records of the Company
as soon as is reasonably practicable after either of the following events:
(i) in the case of a Person acquiring an Interest directly from the Company,
at the time of payment therefor, and (ii) in the case of an assignment, upon
notification thereof (the Company being entitled to assume, in the absence of
knowledge to the contrary, that proper payment has been made by the assignee).
(b) Whether acquiring an Interest directly from the Company or
by assignment, a Person shall be admitted as a Member upon the acquisition or
assignment, as the case may be, of such Interest and the reflection of such
Person's admission as a Member on the registration books maintained by or on
behalf of the Company. The consent of any other Member shall not be required
for the admission of a Member.
Section 2.8 Merger, Consolidation, etc. of the Company. The
Company may not consolidate or merge with or into or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except with the prior approval of Holders of not less than 66-2/3%
of the stated liquidation preference of the outstanding Preferred Securities
or except as set forth in this Section 2.8. The Company may, without the
consent of Preferred Members, consolidate or merge with or into, or convey,
transfer or lease its assets substantially as an entirety to, a limited
liability company or limited partnership or trust organized as such under the
laws of any state of the United States of America or the District of Columbia;
provided that (i) such successor entity either (x) expressly assumes all of
the obligations of the Company under the Preferred Securities or (y)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so
long as the Successor Securities rank, with respect to participation in the
profits or assets of the successor entity, at least as high as the Preferred
Securities rank with respect to participation in the profits or assets of the
Company, (ii) Aetna expressly acknowledges such successor entity as the holder
of the Debentures relating to the Preferred Securities, (iii) such merger,
consolidation, conveyance, transfer or lease does not cause the Preferred
Securities or the Successor Securities, if any, to be delisted (or, in the
case of any Successor Securities, to fail to be listed) by any national
securities exchange or other organization on which the Preferred Securities
are then listed, (iv) such merger, consolidation, conveyance, transfer or
lease does not cause the Preferred Securities or Successor Securities, if any,
to be downgraded by any "nationally recognized statistical rating
organization," as that term is defined by the Securities and Exchange
Commission for purposes of Rule 436(g)(2) under the Securities Act of 1933, as
amended, (v) such merger, consolidation, conveyance, transfer or lease does not
adversely affect the powers, preferences and other special rights of Preferred
Members or the holders of the Successor Securities, if any, in any material
respect and (vi) prior to such merger, consolidation, conveyance, transfer or
lease Aetna has received an opinion of counsel (which counsel is not an
employee of Aetna or the Company) to the effect that (w) such merger,
consolidation, conveyance, transfer or lease will not cause the Company or
such successor entity to become an "investment company" required to be
registered under the Investment Company Act of 1940, as amended, (x) Preferred
Members will not recognize any gain or loss for federal income tax purposes as
a result of such merger, consolidation, conveyance, transfer or lease, (y)
such successor entity will not be treated as a corporation for federal income
tax purposes and (z) such merger, consolidation, conveyance, transfer or lease
will not adversely affect the limited liability of holders of Preferred
Securities.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The sole purpose of the Company is to
issue Interests and to loan the proceeds from the issuance thereof and the
related capital contributions to Aetna. The Company shall have the power and
authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to or for the furtherance of the purpose
of the Company as set forth herein.
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND SECURITIES
Section 4.1 Form of Contribution. The contribution of a
Member to the Company may, as determined by the Managing Members in their
discretion, be in cash, or a promissory note or other legal consideration.
Section 4.2 Contributions by the Common Members. The Common
Members shall make such contributions to the Company, either in connection
with the purchase of Common Securities or otherwise, so as to cause their
Common Securities to be entitled to at least 21% of all interest in the
capital, income, gain, loss, deduction, credit and distributions of the
Company at all times.
Section 4.3 Contributions by the Preferred Members. The
Preferred Members shall make such contributions to the Company in accordance
with the applicable terms of Section 7.1 of this Agreement. Preferred
Members, in their capacity as Members of the Company, shall not be required to
make any additional contributions to the Company and shall have no additional
liability solely by reason of being Preferred Members in excess of their share
of the Company's assets and undistributed profits (subject to their obligation
to return distributions wrongfully distributed to them as required by
applicable law).
Section 4.4 Allocation of Profits and Losses. The profits and
losses of the Company (other than the allocation of profits to Preferred
Members in amounts equal to the accrued dividends or distributions on their
Preferred Securities) shall, subject to the applicable terms of Section 9.1 of
this Agreement and of any series of Preferred Securities, be allocated
entirely to the Common Members.
Section 4.5 Allocation of Distributions. The distributions of
the Company shall, subject to the applicable terms of Sections 7.1, 9.1, 9.2,
9.3 and 15.4 of this Agreement and of any series of Preferred Securities
(including the preferential allocation of distributions, if any), be allocated
entirely to the Common Members.
Section 4.6 Interests as Personal Property. Each Member
hereby agrees that its Interest shall for all purposes be personal property.
A Member has no interest in specific Company property.
ARTICLE V
MEMBERS
Section 5.1 Powers of Members. The Members shall have the
power to exercise any and all rights or powers granted to the Members pursuant
to the express terms of this Agreement.
Section 5.2 Partition. Each Member waives any and all rights
that it may have to maintain an action for partition of the Company's property.
Section 5.3 Resignation. The Managing Members shall have no
right to resign from the Company. Any other Member may only resign from the
Company prior to the dissolution and winding up of the Company upon the
assignment of its Interest (including any redemption, repurchase, exchange or
other acquisition by the Company of such Interest) in accordance with the
provisions of this Agreement. A resigning Member shall not be entitled to
receive any distribution and shall not otherwise be entitled to receive the
fair value of its Interest except as otherwise expressly provided for in this
Agreement.
ARTICLE VI
MANAGEMENT
Section 6.1 Management of the Company. Except as otherwise
provided herein, the business and affairs of the Company shall be managed, and
all actions required under this Agreement shall be determined, solely and
exclusively by the Managing Members, which shall have all rights and powers on
behalf and in the name of the Company to perform all acts necessary and
desirable to the objects and purposes of the Company. Without limiting the
generality of the foregoing, the Managing Members, in their capacity as Common
Members and not by virtue of any delegation of management power from any
Member, shall have the power on behalf of the Company to:
(a) authorize and engage in transactions and dealings on
behalf of the Company, including transactions and dealings with any Member
(including any Managing Member) or any Affiliate of any Member (including,
without limitation, making loans to Aetna);
(b) call meetings of Members or any class or series thereof;
(c) issue Interests, including Common Securities, Preferred
Securities and classes and series thereof, in accordance with this Agreement;
(d) pay all expenses incurred in forming the Company;
(e) lend money, with or without security, to Aetna or any
Affiliate thereof that is not an insurance company;
(f) determine and make distributions (hereinafter sometimes
referred to as "dividends"), in cash or otherwise, on Interests, in accordance
with the provisions of this Agreement and of the Delaware Act;
(g) establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including with
respect to allocations, dividends and voting rights;
(h) establish or set aside in their discretion any reserve or
reserves for contingencies and for any other proper company purpose;
(i) redeem, repurchase or exchange on behalf of the Company
Interests which may be so redeemed, repurchased or exchanged;
(j) appoint (and dismiss from appointment) attorneys and
agents on behalf of the Company, and employ (and dismiss from employment) any
and all persons providing legal, accounting or financial services to the
Company, or such other employees or agents as the Managing Members deem
necessary or desirable for the management and operation of the Company,
including, without limitation, any Member (including any Managing Member) or
any Affiliate of any Member;
(k) incur and pay all expenses and obligations incident to
the operation and management of the Company, including, without limitation,
the services referred to in the preceding paragraph, taxes, interest, travel,
rent, insurance, supplies, salaries and wages of the Company's employees and
agents;
(l) acquire and enter into any contract of insurance
necessary or desirable for the protection or conservation of the Company and
its assets or otherwise in the interest of the Company as the Managing Members
shall determine;
(m) open accounts and deposit, maintain and withdraw funds in
the name of the Company in banks, savings and loan associations, brokerage
firms or other financial institutions;
(n) effect a dissolution of the Company and act as
liquidating trustee or the Person winding up the Company's affairs, all in
accordance with the provisions of this Agreement and of the Delaware Act;
(o) bring and defend on behalf of the Company actions and
proceedings at law or equity before any court or governmental, administrative
or other regulatory agency, body or commission or otherwise;
(p) prepare and cause to be prepared reports, statements and
other relevant information for distribution to Members as may be required or
determined to be appropriate by the Managing Members from time to time;
(q) prepare and file all necessary returns and statements and
pay all taxes, assessments and other impositions applicable to the assets of
the Company; and
(r) execute all other documents or instruments, perform all
duties and powers and do all things for and on behalf of the Company in all
matters necessary or desirable or incidental to the foregoing.
The expression of any power or authority of the Managing
Members in this Agreement shall not in any way limit or exclude any other
power or authority which is not specifically or expressly set forth in this
Agreement.
Section 6.2 Reliance by Third Parties. Persons dealing with
the Company are entitled to rely conclusively upon the power and authority of
the Managing Members herein set forth.
Section 6.3 No Management by any Preferred Members. Except as
otherwise expressly provided herein, no Preferred Member shall take part in
the day-to-day management, operation or control of the business and affairs
of the Company. The Preferred Members, in their capacity as Preferred Members
of the Company, shall not be agents of the Company and shall not have any
right, power or authority to transact any business in the name of the Company
or to act for or on behalf of or to bind the Company.
Section 6.4 Preferred Members May Appoint a Trustee. Subject
to the terms and conditions set forth in Section 8.1(b) of this Agreement, the
Preferred Members shall have the right to appoint a trustee, and any trustee
so appointed shall have the power to enforce the Company's rights under the
Indenture and, to the extent permitted by law, declare and pay dividends on
Preferred Securities. Without limiting the powers of any trustee so appointed
and for the avoidance of any doubt concerning the powers of the trustee, any
trustee, in its own name and as trustee of an express trust, may institute a
proceeding, including, without limitation, any suit in equity, an action at
law or other judicial or administrative proceeding, to enforce the Company's
creditor rights directly against Aetna to the same extent as the Company and
on behalf of the Company, and may prosecute such proceeding to judgment or
final decree, and enforce the same against Aetna and collect, out of the
property, wherever situated, of Aetna, the monies adjudged or decreed to be
payable in the manner provided by law. The Managing Members agree to execute
and deliver such documents as may be necessary or appropriate for the trustee
to exercise such powers.
Section 6.5 Business Transactions of a Managing Member with
the Company. The Managing Members or their Affiliates may lend money to,
borrow money from, act as surety, guarantor or endorser for, guarantee or
assume one or more obligations of, provide collateral for, and transact other
business with, the Company and, subject to applicable law, shall have the same
rights and obligations with respect to any such matter as persons who are not
Managing Members or Affiliates thereof.
Section 6.6 Outside Businesses. Any Member or Affiliate
thereof may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Company, and the Company and the Members shall have no
rights by virtue of this Agreement in and to such independent ventures or the
income or profits derived therefrom, and the pursuit of any such venture, even
if competitive with the business of the Company, shall not be deemed wrongful
or improper. No Member or Affiliate thereof shall be obligated to present any
particular investment opportunity to the Company even if such opportunity is
of a character that, if presented to the Company, could be taken by the
Company, and any Member or Affiliate thereof shall have the right to take for
its own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment opportunity.
Section 6.7 Actions by Managing Members. Notwithstanding any
provision to the contrary, any action that the Managing Members are authorized
to take hereunder or under the Delaware Act may be taken by the Managing
Members, acting together, or either Managing Member, acting alone.
ARTICLE VII
COMMON SECURITIES AND PREFERRED SECURITIES
Section 7.1 Common Securities and Preferred Securities.
(a) The Interests in the Company shall initially be divided
into two classes, Common Securities and Preferred Securities.
(b) The Preferred Securities may be issued from time to time
in one or more series with such relative rights, powers, preferences,
limitations and restrictions as may from time to time be established in a
written action or actions of the Managing Members providing for the issue of
such series as hereinafter provided. Authority is hereby expressly granted to
the Managing Members, subject to the provisions of this Agreement, to
authorize the issue of one or more series of Preferred Securities, and with
respect to each such series to establish by a written action or actions
providing for the issue of such series:
(i) the maximum number of Preferred Securities to constitute
such series and the distinctive designation thereof;
(ii) whether the Preferred Securities of such series shall have
voting rights in addition to those set forth in this Agreement and,
if so, the terms of such voting rights;
(iii) the periodic dividend rate (or method of calculation
thereof), if any, on the Preferred Securities of such series, the
conditions and dates upon which such dividends shall be payable and
the ability of the Company, if any, to extend the dividend payment
period for the Preferred Securities of such series, the dates from
which such dividends shall accrue, the preference or relation which
such dividends have with respect to dividends payable on any other
class or classes of Interests or on any other series of Preferred
Securities, and whether such dividends shall be cumulative or
noncumulative;
(iv) whether the Preferred Securities of such series shall be
subject to redemption by the Company, and, if made subject to
redemption, the times and other terms and conditions of such
redemption (including the amount and kind of consideration to be
received upon such redemption);
(v) any rights in addition to those set forth in this
Agreement of the Preferred Members that hold Preferred Securities of
such series upon the dissolution of the Company;
(vi) whether or not the Preferred Securities of such series
shall be subject to the operation of a retirement or sinking fund,
and, if so, the extent to and manner in which any such retirement or
sinking fund shall be applied to the purchase or redemption of the
Preferred Securities of such series for retirement and the terms and
provisions relative to the operation thereof;
(vii) whether or not the Preferred Securities of such series
shall be convertible into, or exchangeable for, Interests of any
other class or classes, or of any other series of Preferred
Securities, or securities of any other kind, including those issued
by the Managing Member or any of its Affiliates, and if so convertible
or exchangeable, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same;
(viii) any limitations and restrictions in addition to those set
forth in this Agreement to be effective while any Preferred
Securities of such series are outstanding upon the payment of
periodic dividends or other distributions on, and upon the purchase,
redemption or other acquisition by the Company of, Common Securities
or any other series of Preferred Securities;
(ix) any conditions or restrictions in addition to those set
forth in this Agreement upon the issue of any additional Interests
(including additional Preferred Securities of such series or
Interests of any other series ranking on a parity with or prior to the
Preferred Securities of such series as to periodic dividends or
distribution of assets on dissolution);
(x) the times, prices and other terms and conditions for the
offering of the Preferred Securities;
(xi) the preferential allocation of profits or losses, if any;
and
(xii) any other relative rights, powers and duties as shall not
be inconsistent with this Section 7.1.
In connection with the foregoing and without limiting the
generality thereof, the Managing Members are hereby expressly authorized
without the vote or approval of any other Member, to take any action to create
under the provisions of this Agreement a series of Preferred Securities that
was not previously outstanding. Without the vote or approval of any other
Member, the Managing Members may execute, swear to, acknowledge, deliver, file
and record whatever documents may be required in connection with the issue
from time to time of Preferred Securities in one or more series as shall be
necessary, convenient or desirable to reflect the issue of such series. The
Managing Members shall do all things they deem to be appropriate or necessary
to comply with the Delaware Act and are authorized and directed to do all
things they deem to be necessary or permissible in connection with any future
issuance, including compliance with any statute, rule, regulation or guideline
of any federal, state or other governmental agency or any securities exchange.
Any action or actions taken by the Managing Members pursuant to
the provisions of this paragraph (b) shall be deemed an amendment and
supplement to and part of this Agreement.
(c) All Preferred Securities shall rank senior to the Common
Securities in respect of the right to receive dividends and the right to
receive payments out of the assets of the Company upon voluntary or involuntary
dissolution and winding up of the Company. All Preferred Securities redeemed,
purchased or otherwise acquired by the Company (including Preferred Securities
surrendered for conversion or exchange) shall be cancelled and thereupon
restored to the status of authorized but unissued Preferred Securities
undesignated as to series.
(d) No holder of Common Securities or of Preferred Securities
shall be entitled as a matter of right to subscribe for or purchase, or have
any preemptive right with respect to, any part of any new or additional issue
of Preferred Securities of any series whatsoever, or of securities convertible
into any Preferred Securities of any series whatsoever, whether now or
hereafter authorized and whether issued for cash or other consideration or by
way of dividend.
(e) Common Securities shall not be evidenced by any
certificate or other written instrument, but shall only be evidenced by this
Agreement. Subject to Section 2.8, Common Securities shall be non-assignable
and non-transferable, and may only be issued to and held by the Managing
Members. Any transfer or purported transfer of any Common Security shall be
null and void except as permitted by Section 2.8. Preferred Securities shall
be freely assignable and transferable.
(f) Any Person purchasing Preferred Securities shall be
admitted to the Company as a Preferred Member upon compliance with Section 2.7.
Section 7.2 Persons Deemed Preferred Members. The Company
may treat the Person in whose name any Preferred Certificate shall be
registered on the books and records of the Company as a Preferred Member and
the sole holder of such Preferred Certificate for purposes of receiving
dividends and for all other purposes whatsoever and, accordingly shall not be
bound to recognize any equitable or other claims to or interest in such
Preferred Certificate on the part of any other Person, whether or not the
Company shall have actual or other notice thereof.
ARTICLE VIII
VOTING AND MEETINGS
Section 8.1 Voting Rights of Holders of Preferred Securities.
(a) Except as shall be otherwise established herein or in the
action or actions of the Managing Members providing for the issue of any
series of Preferred Securities and except as otherwise required by the Delaware
Act, the Preferred Members holding such Preferred Securities shall have, with
respect to such Preferred Securities, no right or power to vote on any
question or matter or in any proceeding or to be represented at, or to receive
notice of, any meeting of Members.
(b) If (i) the Company fails to pay dividends in full on the
Preferred Securities of any series for 18 consecutive monthly dividend
periods; (ii) an Event of Default (as defined in the Indenture) occurs and is
continuing with respect to any series of Debentures that has not been
exchanged for the related series of Preferred Securities; or (iii) Aetna is in
default on any of its payment obligations under the Guarantee, then the Members
holding a majority in stated liquidation preference of the outstanding
Preferred Securities of such series, in the case of clause (i) above, and the
Members holding a majority in stated liquidation preference of all outstanding
Preferred Securities, in the case of clauses (ii) and (iii) above, together
with Members holding any other Interests having the right to vote for
appointment of a trustee in such event (other than any Common Member, in its
capacity as such), acting as a single class, will be entitled to appoint and
authorize a trustee to enforce the Company's rights under the Indenture
against Aetna, enforce the obligations undertaken by Aetna under the Guarantee
and declare and pay dividends on the Preferred Securities of such series in the
case of clause (i) above (but only in the event that the Company's failure to
pay dividends is not a consequence of Aetna's exercise of any right it may
have to extend the interest payment period for the related series of
Debentures). For purposes of determining whether the Company has failed to
pay dividends in full for 18 consecutive monthly dividend periods, dividends
shall be deemed to remain in arrears, notwithstanding any payments in respect
thereof, until full cumulative dividends have been or contemporaneously are
declared and paid with respect to all monthly dividend periods terminating on
or prior to the date of payment of such full cumulative dividends. Not later
than 30 days after the right to appoint a trustee arises, the Managing Members
will convene a meeting to appoint such a trustee. If the Managing Members
fail to convene such meeting within such 30-day period, the Members holding
10% in stated liquidation preference of the outstanding Preferred Securities
of the series with respect to which dividends have not been paid, in the case
of clause (i) above, and the Members holding 10% in stated liquidation
preference of all outstanding Preferred Securities, in the case of clauses
(ii) and (iii) above, and such other Interests that are entitled to vote,
acting as a single class, will be entitled to convene such meeting. Any
trustee so appointed shall vacate office immediately, subject to the
applicable terms of any Interests the holders of which were entitled to
appoint such trustee, if the Company shall have paid in full all accumulated
and unpaid dividends on the Preferred Securities of the series with respect to
which dividends have not been paid, in the case of clause (i) above, or such
default Aetna shall have been cured, in the case of clause (ii) or (iii)
above. Notwithstanding the appointment of any such trustee, Aetna shall
retain all rights under the Indenture, including any rights it may have to
extend the interest payment period of any Debentures.
(c) If any resolution is proposed to be adopted by the Members
providing for, or the Managing Members propose to take any action to effect:
(i) any variation or abrogation of the powers, preferences and
special rights of the Preferred Securities of any series by way of
amendment of this Agreement or otherwise (including, without
limitation, the authorization or issuance of any Interests in the
Company ranking, as to participation in the profits or assets of the
Company, senior to the Preferred Securities) which variation or
abrogation adversely affects the holders of Preferred Securities of
such series,
(ii) the dissolution of the Company, or
(iii) the commencement of any bankruptcy, insolvency,
reorganization or other similar proceeding involving the Company,
then the Members holding outstanding Preferred Securities of the series, the
powers, preferences or special rights of which are proposed to be amended in
the case of any resolution or action described in clause (i) above, and the
Members holding any outstanding Preferred Securities, in the case of any
resolution or action described in clause (ii) or (iii) above, (and, in the
case of any resolution or action described in clause (i) above which would
adversely affect the powers, preferences or special rights of any Company
Dividend Parity Securities or any Company Liquidation Parity Securities, such
Company Dividend Parity Securities or such Company Liquidation Parity
Securities, as the case may be, or, in the case of any resolution or action
described in clause (ii) above, all Company Liquidation Parity Securities or,
in the case of any resolution or action described in clause (iii) above, all
Members holding outstanding Preferred Securities, any Company Dividend Parity
Securities and any Company Liquidation Parity Securities (other than Members
holding any such securities that are also creditors of Aetna or any of its
subsidiaries) will be entitled to vote together as a class on such resolution
or action of the Managing Members (but not any other resolution or action) and
such resolution or action shall not be effective except with the approval of
the Members holding a majority in stated liquidation preference of such
outstanding securities; provided that no such resolution or action shall,
without the consent of each Preferred Member affected thereby, (1) change the
terms of such Preferred Member's Preferred Securities established pursuant to
Section 7.1(b)(iii), (iv), (v), (vi), (vii), (viii) or (xi) or Section 9.3 or
15.5 in a manner adverse to such Preferred Member or (2) reduce the
above-stated percentage of stated liquidation preference necessary to approve
such resolution or action or (3) amend the provisions of this Section 8.1(c);
provided, further however, that no such approval shall be required under
clauses (i) and (ii) if the dissolution of the Company is proposed or
initiated upon the occurrence of any of the events specified in Section 15.2
(a) through (c) and (e) through (f).
The powers, preferences or special rights of the Preferred
Securities of any series will be deemed not to be varied by the creation or
issue of, and no vote will be required for the creation or issue of, any
further Interests in the Company ranking pari passu with or junior to the
Preferred Securities of any series with respect to voting rights or rights to
participate in the profits or assets of the Company.
(d) Notwithstanding any provision to the contrary herein, the
first sentence of Section 14.1 of this Agreement may only be amended with the
consent of each Preferred Member; provided that, to the fullest extent
permitted by applicable law, any such amendment shall not permit the Preferred
Members to approve any transferee of Common Securities.
(e) Notwithstanding that Members holding Preferred Securities
of any series are entitled to vote or consent under any of the circumstances
described in this Agreement, any of the Preferred Securities of any series
that are owned by Aetna or any entity owned more than fifty percent by Aetna,
either directly or indirectly, shall not be entitled to vote or consent and
shall, for the purposes of such vote or consent, be treated as if they were not
outstanding.
Section 8.2 Voting Rights of Holders of Common Securities.
Except as otherwise provided herein or by the Managing Members in accordance
with Section 7.1 in respect of any series of Preferred Securities and except as
otherwise provided by the Delaware Act, all voting rights of the Company shall
be vested exclusively in the Common Members. The Common Securities shall
entitle the Common Members to vote in proportion to their percentage ownership
interest in the Company upon all matters upon which Common Members have the
right to vote. All Common Members shall have the right to vote separately as
a class on any matter on which the Common Members have the right to vote
regardless of the voting rights of any other Member.
Section 8.3 Meetings of the Members.
(a) Meetings of the Members of any class or series or of all
classes or series of Interests may be called at any time by the Managing
Members or as provided by any applicable terms of any Preferred Securities.
Except to the extent otherwise provided, the following provisions shall apply
to meetings of Members.
(b) Members may vote in person or by proxy at such meeting.
Whenever a vote, consent or approval of Members is permitted or required under
this Agreement, such vote, consent or approval may be given at a meeting of
Members or by written consent.
(c) Each Member may authorize any Person to act for it by
proxy on all matters in which a Member is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Member or its attorney-in-fact. Every proxy shall
be revocable at the pleasure of the Member executing it at any time before it
is voted.
(d) Each meeting of Members shall be conducted by the
Managing Members or by such other Person that the Managing Members may
designate.
(e) Any required approval of Preferred Members holding
Preferred Securities of a series may be given at a separate meeting of such
Preferred Members convened for such purpose or at a meeting of Members of the
Company or pursuant to written consent. The Managing Members will cause a
notice of any meeting at which Preferred Members holding Preferred Securities
of a series are entitled to vote pursuant to Section 8.1(b) or (c) of this
Agreement, or of any matter upon which action may be taken by written consent
of such Preferred Members, to be mailed to each Preferred Member of record of
the Preferred Securities of such series. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any action proposed to be taken
at such meeting on which such Preferred Members are entitled to vote or of
such matters upon which written consent is sought and (iii) instructions for
the delivery of proxies or consents.
(f) Subject to Section 8.3(e), the Managing Members, in their
sole discretion, shall establish all other provisions relating to meetings of
Members, including notice of the time, place or purpose of any meeting at
which any matter is to be voted on by any Members, waiver of any such notice,
action by consent without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE IX
DIVIDENDS
Section 9.1 Dividends. (a) Preferred Members shall receive
periodic dividends, if any, in accordance with the applicable terms of the
Preferred Securities, as and when declared by the Managing Members, and Common
Members shall receive periodic dividends, subject to Section 9.3 of this
Agreement, the applicable terms of any series of Preferred Securities and to
the provisions of the Delaware Act, as and when declared by the Managing
Members, in their discretion out of funds legally available therefor.
(b) Dividends on the Preferred Securities shall be declared by
the Managing Members to the extent that the Managing Members reasonably
anticipate that at the time of payment the Company will have, and must be paid
by the Company to the extent that at the time of proposed payment it has, (i)
funds legally available for the payment of such dividends and (ii) cash on
hand sufficient to permit such payments.
(c) A Preferred Member shall not be entitled to receive any
dividend with respect to the Preferred Securities of any series, irrespective
of whether such dividend has been declared by the Managing Members, prior to
the date on which such dividend is payable and until such time as the Company
has received the interest payment on the related series of Debentures for the
interest payment date corresponding to such dividend payment date and such
monies are available for distribution to the Preferred Member pursuant to the
terms of this Agreement and the Delaware Act, and notwithstanding any
provision of Section 18-606 of the Delaware Act to the contrary, until such
time, a Preferred Member shall not have the status of a creditor of the
Company, or the remedies available to a creditor of the Company.
Section 9.2 Limitations on Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution (including a dividend) to any Member on account of its
Interest if such distribution would violate Section 18-607 of the Delaware Act
or other applicable law.
Section 9.3 Certain Restrictions on the Payment of Dividends.
If dividends have not been paid in full on the Preferred Securities of any
series, the Company shall not:
(i) pay, or declare and set aside for payment, any dividends
on the Preferred Securities of any other series or any other
Interests in the Company ranking pari passu with the Preferred
Securities of such series with respect to participation in profits of
the Company ("Company Dividend Parity Securities"), unless the amount
of any dividends declared on any Company Dividend Parity Securities
is paid on the Company Dividend Parity Securities and the Preferred
Securities of such series on a pro rata basis on the date such
dividends are paid on such Company Dividend Parity Securities, so
that the ratio of
(x) (A) the aggregate amount paid as dividends on the
Preferred Securities of such series to (B) the aggregate amount
paid as dividends on the Company Dividend Parity Securities is
the same as the ratio of
(y) (A) the aggregate amount of all accumulated arrears
of unpaid dividends on the Preferred Securities of such series
to (B) the aggregate amount of all accumulated arrears of
unpaid dividends on the Company Dividend Parity Securities;
(ii) pay, or declare and set aside for payment, any dividends on
any Interests in the Company ranking junior to the Preferred
Securities of such series as to dividends ("Company Dividend Junior
Securities"); or
(iii) redeem, purchase or otherwise acquire any Company Dividend
Parity Securities or Company Dividend Junior Securities;
until, in each case, such time as all accumulated arrears of unpaid dividends
on the Preferred Securities of such series shall have been paid or set aside
for payment in full for all dividend periods terminating on or prior to, in
the case of clauses (i) and (ii), such payment, and in the case of clause
(iii), the date of such redemption, purchase or other acquisition.
Section 9.4. All payments in respect of the Preferred
Securities of any series by the Company shall be made without withholding or
deduction for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed or levied upon
or as a result of such payment by or on behalf of the United States of
America, any state thereof or any other jurisdiction through which or from
which such payment is made, or any authority therein or thereof having power to
tax, unless the withholding or deduction of such taxes, duties, assessments or
governmental charges is required by law. In that event, the Company will pay
as a dividend such additional amounts as may be necessary in order that the net
amounts received by Preferred Members holding Preferred Securities after such
withholding or deduction will equal the amount which would have been
receivable in respect of such Preferred Securities in the absence of such
withholding or deduction ("Additional Amounts"), except that no such
Additional Amounts will be payable with respect to Preferred Securities of any
series:
(a) if the holder or beneficial owner thereof is liable for
such taxes, duties, assessments or governmental charges in respect of
such Preferred Securities by reason of such holder's or owner's having
some connection with the United States, any state thereof or any
other jurisdiction through which or from which such payment is made
(including, without limitation, actual or constructive ownership,
past or present, of 10% or more of the total combined voting power of
all classes of stock entitled to vote of Aetna), other than being a
holder or beneficial owner of such Preferred Securities, or
(b) if the Company has notified such holder of the obligation
to withhold taxes and requested but not received from such holder or
beneficial owner a declaration of non-residence, a valid taxpayer
identification number or other claim for exemption (or information or
certification required to support such claim), and such withholding
or deduction would not have been required had such declaration,
taxpayer identification number or claim been received.
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Books and Records; Accounting. The Managing
Members shall keep or cause to be kept at the address of the Managing Members
(or at such other place as the Managing Members shall advise the other Members
in writing) true and full books and records regarding the status of the
business and financial condition of the Company.
Section 10.2 Financial Statements. The Managing Members
shall, as soon as available after the end of each fiscal year, cause to be
prepared and mailed to each Preferred Member of record the unaudited financial
statements of the Company for such fiscal year prepared in accordance with
generally accepted accounting principles.
Section 10.3 Fiscal Year. The fiscal year of the Company for
federal income tax and accounting purposes shall, except as otherwise required
in accordance with the Code, end on December 31 of each year.
Section 10.4 Limitation on Access to Records. Notwithstanding
any provision of this Agreement, the Managing Members may, to the maximum
extent permitted by law, keep confidential from the Preferred Members any
information the disclosure of which the Managing Members reasonably believe is
not in the best interest of the Company or could damage the Company or its
business or which the Company or the Managing Members are required by law or
by an agreement with any Person to keep confidential.
ARTICLE XI
TAX MATTERS
Section 11.1 Company Tax Returns. (a) The Managing Members
shall cause to be prepared and timely filed all tax returns required to be
filed for the Company. The Managing Members may, in their discretion, make or
refrain from making any federal, state or local income or other tax elections
for the Company that they deem necessary or advisable, including, without
limitation, any election under Section 754 of the Code or any successor
provision.
(b) Aetna is hereby designated as the Company's "Tax Matters
Partner" under Code Section 6231(a)(7) and shall have all the powers and
responsibilities of such position as provided in the Code. Aetna is
specifically directed and authorized to take whatever steps Aetna, in its
discretion, deems necessary or desirable to perfect such designation,
including filing any forms or documents with the Internal Revenue Service and
taking such other action as may from time to time be required under the
regulations issued under the Code. Expenses incurred by the Tax Matters
Partner, in its capacity as such will be borne by the Company.
Section 11.2 Tax Reports. The Managing Members shall, as
promptly as practicable and in any event within 90 days of the end of each
fiscal year, cause to be prepared and mailed to each Preferred Member of
record federal income tax form K-1 and any other forms which are necessary or
advisable.
Section 11.3 Taxation as Partnership. The Company shall be
treated as a partnership for U.S. federal income tax purposes.
ARTICLE XII
EXPENSES
Section 12.1 Expenses. Except as otherwise provided in this
Agreement, the Company shall be responsible for all and shall pay all expenses
out of funds of the Company determined by the Managing Members to be available
for such purpose, provided that such expenses or obligations are those of the
Company or are otherwise incurred by the Managing Members in connection with
this Agreement, including, without limitation:
(a) all costs and expenses related to the business of the
Company and all routine administrative expenses of the Company,
including the maintenance of books and records of the Company, the
preparation and dispatch to the Members of checks, financial reports,
tax returns and notices required pursuant to this Agreement and the
holding of any meetings of the Members;
(b) all expenses incurred in connection with any litigation
involving the Company (including the cost of any investigation and
preparation) and the amount of any judgment or settlement paid in
connection therewith (other than expenses incurred by the Managing
Member in connection with any litigation brought by or on behalf of
any Member against the Managing Member);
(c) all expenses for indemnity or contribution payable by the
Company to any Person;
(d) all expenses incurred in connection with the collection
of amounts due to the Company from any person;
(e) all expenses incurred in connection with the preparation
of amendments to this Agreement; and
(f) all expenses incurred in connection with the dissolution,
winding up or termination of the Company.
ARTICLE XIII
LIABILITY
Section 13.1 Liability of Common Members. Each Common Member,
by acquiring its Interest and being admitted to the Company as a Common
Member, shall be liable to the creditors of the Company (other than to Members
holding other classes or series of Interests, in their capacity as Members)
(hereinafter referred to individually as a "Third Party Creditor," and
collectively as the "Third Party Creditors") to the same extent that a general
partner of a limited partnership formed under the LP Act is liable under
Section 17-403(b) of the LP Act to creditors of the limited partnership (other
than the other partners in their capacity as partners), as if the Company were
a limited partnership formed under the LP Act and the Common Members were
general partners of the limited partnership. In furtherance but not in
limitation of the generality of the foregoing, each Common Member (i) is
liable for any and all debts, obligations and other liabilities of the
Company, whether arising under contract or by tort, statute, operation of law
or otherwise, enforceable directly and absolutely against each Common Member
by each Third Party Creditor and (ii) is deemed to and does assume, as a
surety and not as a guarantor, each debt, obligation or other liability of the
Company to all Third Party Creditors.
Section 13.2 Liability of Preferred Members.
(a) Except as otherwise provided by the Delaware Act, (i) the
debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company and, to the extent set forth in Section 13.1, the
Common Members and (ii) no Preferred Member shall be obligated personally for
any such debt, obligation or liability of the Company solely by reason of
being a Preferred Member of the Company.
(b) A Preferred Member, in its capacity as such, shall have
no liability in excess of (i) the amount of its capital contributions, (ii)
its share of any assets and undistributed profits of the Company, (iii) any
amounts required to be paid by such Preferred Member in the written action or
actions creating the series of Preferred Securities held by such Preferred
Member and (iv) the amount of any distributions wrongfully distributed to it.
ARTICLE XIV
ASSIGNMENT OF INTERESTS
Section 14.1 Assignment of Interests. Notwithstanding
anything to the contrary in this Agreement other than Section 2.8, Common
Securities shall be non-assignable and non-transferable, and may only be
issued to a Managing Member and held by the Managing Member to which such
Common Security was originally issued. Preferred Securities shall be freely
assignable and transferable, subject to the provisions of Section 2.7.
Section 14.2 Right of Assignee to Become a Member. An
assignee shall become a Member upon compliance with the provisions of Section
2.7.
Section 14.3 Events of Cessation of Membership. A Person
shall cease to be a Member upon the lawful assignment of its Interests
(including any redemption, exchange or other repurchase by the Company or the
Managing Members) or as otherwise provided herein.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 No Dissolution. The Company shall not be
dissolved by the admission of Members in accordance with the terms of this
Agreement. Except as provided in Sections 15.2(b) and (c), the death,
retirement, resignation, expulsion, bankruptcy or dissolution of a Member, or
the occurrence of any other event which terminates the continued membership of
a Member in the Company, shall not cause the Company to be dissolved and its
affairs wound up so long as the Company at all times has at least two Members.
Upon the occurrence of any such event, the business of the Company shall be
continued without dissolution.
Section 15.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(a) the expiration of the term of the Company, as provided in
Section 2.3 hereof;
(b) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging either of the Managing
Members a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of either of the Managing Members under any applicable
Federal or State bankruptcy or similar law, and such decree or order
shall have continued undischarged and unstayed for a period of 90
days; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, trustee,
assignee, sequestrator or similar official in bankruptcy or
insolvency of either of the Managing Members or of all or
substantially all of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and such decree
or order shall have continued undischarged and unstayed for a period
of 90 days or either of the Managing Members shall institute
proceedings to be adjudicated a voluntary bankrupt, or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization, arrangement,
adjustment or composition under any applicable Federal or State
bankruptcy or similar law, or shall consent to the filing of any such
petition, or shall consent to the appointment of a receiver,
liquidator, trustee, assignee, sequestrator or similar official in
bankruptcy or insolvency of either of the Managing Members or of all
or substantially all of its property, or shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due and its willingness to be
adjudged a bankrupt, or corporate action shall be taken by either of
the Managing Members in furtherance of any of the aforesaid purposes;
(c) upon the retirement, resignation, expulsion, dissolution,
winding up or liquidation of any Managing Member or the occurrence of
any other event that terminates the continued membership of such
Managing Member under the Delaware Act;
(d) a decision made by the Managing Members (subject to the
voting rights of Preferred Members set forth in Section 8.1) to
dissolve the Company;
(e) the entry of a decree of judicial dissolution under
Section 18-802 of the Delaware Act;
(f) at the election of the Managing Members, in connection
with the exchange of all series of Preferred Securities outstanding
(in accordance with the terms of the written action establishing each
such series of Preferred Securities) for the related series of
Debentures; or
(g) the written consent of all Members.
Section 15.3 Notice of Dissolution. Upon the dissolution of
the Company, the Managing Members shall promptly notify the Members of such
dissolution.
Section 15.4 Liquidation. Upon dissolution of the Company,
the Managing Members or, in the event that the dissolution is caused by an
event described in Sections 15.2(b) and (c) and there are no Managing Members,
a Person or Persons who may be approved by the Preferred Members holding not
less than a majority in aggregate liquidation preference of the Preferred
Securities, as liquidating trustees, shall immediately commence to wind up the
Company's affairs; provided, however, that a reasonable time shall be allowed
for the orderly liquidation of the assets of the Company and the satisfaction
of liabilities to creditors so as to enable the Members to minimize the normal
losses attendant upon a liquidation. The proceeds of liquidation shall be
distributed, as realized, in the manner provided in Section 18-804 of the
Delaware Act, subject to the applicable terms of any series of Preferred
Securities.
Section 15.5 Certain Restrictions on Liquidation Payments. In
the event of any voluntary or involuntary dissolution of the Company other
than in connection with the exchange of all series of Preferred Securities
outstanding (in accordance with the terms of the written action establishing
each such series of Preferred Securities) for the related series of
Debentures, Members holding Preferred Securities of each series at the time
outstanding will be entitled to receive out of the assets of the Company
legally available for distribution to Members, before any distribution of
assets is made to Common Members or Members holding any other class of
Interests in the Company ranking junior to the Preferred Securities with
respect to participation in assets of the Company, but together with Members
holding Preferred Securities of any other series or any other Interests in the
Company outstanding ranking pari passu with the Preferred Securities with
respect to participation in the assets of the Company ("Company Liquidation
Parity Securities"), an amount equal, in the case of Members holding Preferred
Securities of such series, to the stated liquidation preference for Preferred
Securities of such series as set forth in the actions taken by the Managing
Members providing for the issue of such series and all accumulated and unpaid
dividends (whether or not declared) to the date of payment (the "Liquidation
Distribution"). If, upon any such liquidation, the Liquidation Distributions
can be paid only in part because the Company has insufficient assets available
to pay in full the aggregate Liquidation Distributions and the aggregate
maximum liquidation distributions on the Company Liquidation Parity
Securities, then the amounts payable directly by the Company on the Preferred
Securities of such series and on such Company Liquidation Parity Securities
shall be paid on a pro rata basis, so that the ratio of
(i) (x) the aggregate amount paid as Liquidation
Distributions on the Preferred Securities of such series to (y)
the aggregate amount paid as liquidation distributions on the
Company Liquidation Parity Securities is the same as the ratio
of
(ii) (x) the aggregate Liquidation Distributions to (y)
the aggregate maximum liquidation distributions on the Company
Liquidation Parity Securities.
Section 15.6 Termination. The Company shall terminate when
all of the assets of the Company have been distributed in the manner provided
for in this Article XV, and the Certificate shall have been cancelled in the
manner required by the Delaware Act.
ARTICLE XVI
MISCELLANEOUS
Section 16.1 Amendments. Except as otherwise provided in this
Agreement or by any applicable terms of any Preferred Securities, this
Agreement may be amended by, and only by, a written instrument executed by the
Managing Members.
Section 16.2 Successors; Counterparts. This Agreement (a)
shall be binding as to the executors, administrators, estates, heirs and legal
successors, or nominees or representatives, of the Members and (b) may be
executed in several counterparts with the same effect as if the parties
executing the several counterparts had all executed one counterpart.
Section 16.3 Governing Law; Severability. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflict of laws thereof.
In particular, this Agreement shall be construed to the maximum extent
possible to comply with all of the terms and conditions of the Delaware Act.
If, nevertheless, it shall be determined by a court of competent jurisdiction
that any provisions or wording of this Agreement shall be invalid or
unenforceable under the Delaware Act or other applicable law, such invalidity
or unenforceability shall not invalidate the entire Agreement. In that case,
this Agreement shall be construed so as to limit any term or provision so as
to make it enforceable or valid within the requirements of applicable law,
and, in the event such term or provisions cannot be so limited, this Agreement
shall be construed to omit such invalid or unenforceable provisions. If it
shall be determined by a court of competent jurisdiction that any provision
relating to the distributions and allocations of the Company or to any fee
payable by the Company is invalid or unenforceable, this Agreement shall be
construed or interpreted so as (a) to make it enforceable or valid and (b) to
make the distributions and allocations as closely equivalent to those set
forth in this Agreement as is permissible under applicable law.
Section 16.4 Filings. Following the execution and delivery of
this Agreement, the Managing Members shall promptly prepare any documents
required to be filed and recorded under the Delaware Act, and the Managing
Members shall promptly cause each such document to be filed and recorded in
accordance with the Delaware Act and, to the extent required by local law, to
be filed and recorded or notice thereof to be published in the appropriate
place in each jurisdiction in which the Company may hereafter establish a
place of business. The Managing Members shall also promptly cause to be
filed, recorded and published such statements of fictitious business name and
any other notices, certificates, statements or other instruments required by
any provision of any applicable law of the United States or any state or other
jurisdiction which governs the conduct of its business from time to time.
Section 16.5 Power of Attorney. Each Preferred Member does
hereby constitute and appoint each Managing Member as its true and lawful
representative and attorney-in-fact, in its name, place and stead to make,
execute, sign, deliver and file (a) any amendment of the Certificate required
because of an amendment to this Agreement or in order to effectuate any change
in the membership of the Company, (b) any amendments to this Agreement made in
accordance with the terms hereof and (c) all such other instruments, documents
and certificates which may from time to time be required by the laws of the
United States of America, the State of Delaware or any other jurisdiction, or
any political subdivision of agency thereof, to effectuate, implement and
continue the valid and subsisting existence of the Company or to dissolve the
Company or for any other purpose consistent with this Agreement and the
transactions contemplated hereby.
The power of attorney granted hereby is coupled with an
interest and shall (a) survive and not be affected by the subsequent death,
incapacity, disability, dissolution, termination or bankruptcy of the Preferred
Member granting the same or the transfer of all or any portion of such
Preferred Member's Interest and (b) extend to such Preferred Member's
successors, assigns and legal representatives.
Section 16.6 Exculpation.
(i) No Covered Person shall be liable to the Company or
any Member for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Covered Person
in good faith on behalf of the Company and in a manner
reasonably believed to be within the scope of authority
conferred on such Covered Person by this Agreement.
(ii) A Covered Person shall be fully protected in
relying in good faith upon the records of the Company and upon
such information, opinions, reports or statements presented to
the Company by any Person as to matters the Covered Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Company, including information,
opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
Section 16.7 Indemnification. To the fullest extent permitted
by applicable law, an Indemnified Person shall be entitled to indemnification
from the Company for any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Company and in a manner
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Agreement; provided, however, that any indemnity
under this Section 16.7 shall be provided out of and to the extent of Company
assets only, and no Member shall have any personal liability on account
thereof.
Section 16.8 Additional Documents. Each Preferred Member,
upon the request of the Managing Members, agrees to perform all further acts
and execute, acknowledge and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement.
Section 16.9 Notices. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:
(i) If given to the Company, in care of the Managing
Members at the Company's mailing address set forth below:
c/o Aetna Life and Casualty Company
151 Farmington Avenue
RE4C
Hartford, Connecticut 06156
Facsimile No.: (203) 275-2661
Attention: Treasurer
(ii) If given to any Member, at the address set forth on
the registration books maintained by or on behalf of the
Company.
Each such notice, request or other communication shall be effective (a) if
given by telecopier, when transmitted to the number specified in such
registration books and the appropriate confirmation is received, (b) if given
by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid, or (c) if given by any
other means, when delivered at the address specified in such registration
books.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above stated.
AETNA LIFE AND CASUALTY
COMPANY
By:
Name: ______________________
Title:______________________
AETNA CAPITAL HOLDINGS, INC.
By:
Name: ______________________
Title:______________________
EXHIBIT 3.3
Terms of the Preferred Securities, Series [ ]
DATED AS OF , 199[ ]
WRITTEN ACTION OF THE MANAGING MEMBERS
PURSUANT TO SECTION 7.1 OF THE AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF AETNA CAPITAL L.L.C.
The undersigned, constituting all of the Managing Members of
Aetna Capital L.L.C., a Delaware limited liability company (the "Company"),
pursuant to Section 7.1 of the Amended and Restated Limited Liability Company
Agreement of the Company (the "Agreement") dated as of , 1994 by
and among the Managing Members and the Persons who become Members of the
Company in accordance with the provisions thereof, do hereby authorize the
issue of, and establish the relative rights, powers, preferences, limitations
and restrictions of, a series of Preferred Securities as follows:
1. Definitions. All terms defined in the Agreement and not
otherwise defined herein shall have for purposes hereof the meanings provided
for therein. The following additional terms have the respective meanings
specified below:
"Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or required by law to
close.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities dated as of , 1994 between Aetna Life and Casualty
Company, a Connecticut insurance corporation ("Aetna"), and the Company, as
amended from time to time.
"Guarantee" means the Payment and Guarantee Agreement dated as
of , 1994, executed and delivered by Aetna for the benefit of the
holders from time to time of the Series [ ] Preferred Securities and other
Preferred Securities of the Company, as amended from time to time.
"Redemption Price" means, with respect to any date fixed for
redemption of any Series [ ] Preferred Security, the stated liquidation
preference of such Series [ ] Preferred Security, plus accumulated and unpaid
dividends (whether or not declared) to such date.
"Series [ ] Debentures" means the $ aggregate
principal amount (or up to $ aggregate principal amount if and to the
extent the over-allotment option granted by the Company to the Underwriters of
the Series [ ] Preferred Securities is exercised) of Aetna's Series [ ]
Debentures due [ ] issued pursuant to the Subordinated Indenture and any
other debentures issued under the Subordinated Indenture in exchange for
Aetna's Series [ ] Debentures due [ ] upon the terms and subject to the
conditions set forth in Section 6(e) hereof.
"Subordinated Indenture" means the Indenture, dated as of
, 1994, between Aetna and The First National Bank of Chicago, as Trustee,
as amended or supplemented from time to time (including the officers'
certificate establishing the terms of the Series [ ] Debentures).
2. Designation. of a series of Preferred
Securities (or up to of a series of Preferred Securities if and to
the extent the over-allotment option granted by the Company to the
underwriters of the Series [ ] Preferred Securities is exercised) with a
liquidation preference of $[ ] per Preferred Security are hereby authorized
and designated as "Preferred Securities, Series [ ]" (hereinafter called the
"Series [ ] Preferred Securities").
3. Voting. Except as otherwise provided in the Delaware
Limited Liability Company Act, 6 Del.C. Section 18-101, et seq., as amended,
the Agreement (including, without limitation, Section 8.1 thereof) or this
Written Action, Preferred Members holding the Series [ ] Preferred Securities
shall have, with respect to such Series [ ] Preferred Securities, no right or
power to vote on any question or matter or in any proceeding or to be
represented at, or to receive notice of, any meeting of Members.
4. Periodic Dividends. (a) Periodic dividends on the
Series [ ] Preferred Securities shall be cumulative. Such Dividends will
accumulate and be cumulative whether or not they have been declared and
whether or not there are profits, surplus or other funds of the Company legally
available for the payment of dividends. Dividends shall accrue from
, 199[ ] and, except in the event that Aetna exercises its right to extend the
interest payment period for the Series [ ] Debentures in the manner described
in the Subordinated Indenture, shall be payable monthly in arrears on the last
day of each calendar month of each year, commencing on , 199[ ].
(b) The dividend payable on the Series [ ] Preferred
Securities shall be [describe method of determination thereof] [at a rate of
%] of the liquidation preference of the Series [ ] Preferred Securities. The
amount of dividends payable for any full monthly dividend period shall be
computed on the basis of twelve 30-day months and a 360-day year and, for any
period shorter than a full monthly dividend period, shall be computed on the
basis of the actual number of days elapsed in such period. If the interest
payment period on the Series [ ] Debentures is extended in the manner
described in the Subordinated Indenture, then the rate at which dividends on
the Series [ ] Preferred Securities accumulate shall be increased by an amount
such that the aggregate amount of dividends that accumulates on all
outstanding Series [ ] Preferred Securities during such interest extension
period is equal to the aggregate amount of interest (including interest
payable on unpaid interest) that accrues during such interest extension period
on the portion of such outstanding Series [ ] Debentures that evidence the
loan to Aetna of the proceeds of the issuance of the outstanding Series [ ]
Preferred Securities. The Company shall only pay dividends to the extent it
has funds legally available to make such payments.
(c) Dividends declared on the Series [ ] Preferred Securities
shall be payable to the record holders thereof as they appear on the register
for the Series [ ] Preferred Securities maintained by or on behalf of the
Company on the relevant record date, which shall be one Business Day prior to
the relevant payment date; provided that in the event that the Series [ ]
Preferred Securities do not remain in book-entry-only form, the relevant record
date shall be [the fifteenth day of the month in which the relevant payment
date occurs]. If any date on which dividends are payable on the Series [ ]
Preferred Securities is not a Business Day, then the payment of the dividend
payable on such date shall be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
(d) Except as described in the Agreement and in this Written
Action, the Series [ ] Preferred Securities shall have no other right to
participate in the profits of the Company.
5. Ranking; Liquidation. (a) The Series [ ] Preferred
Securities shall, with respect to dividend rights and rights on dissolution,
rank (i) pari passu with all other series of Preferred Securities issued by
the Company and (ii) prior to any other Interests of the Company, including
the Common Securities.
(b) In the event of any voluntary or involuntary dissolution
of the Company other than in connection with the exchange of each series of
Preferred Securities for the related series of Debentures, Preferred Members
holding Series [ ] Preferred Securities shall be entitled to receive for each
Series [ ] Preferred Security a liquidation preference of $[ ] plus
accumulated and unpaid dividends (whether or not declared) to the date of
payment.
6. Redemption or Exchange. (a) The Series [ ] Preferred
Securities shall be redeemable at the option of the Company and subject to the
prior consent of Aetna, in whole or in part from time to time, on or after
, 199[ ], upon not less than 30 nor more than 60 days' notice to the
Preferred Members holding Series [ ] Preferred Securities, at the Redemption
Price.
(b) If the Company is or, in the opinion of counsel (which
counsel is not an employee of AL&C or the Company), would be required to pay
Additional Amounts with respect to the Series [ ] Preferred Securities, the
Company may, upon not less than 30 nor more than 60 days' notice to the
Preferred Members holding Series [ ] Preferred Securities with respect to
which such Additional Amounts are required to be paid, redeem such Series [ ]
Preferred Securities at the Redemption Price.
(c) If there shall have occurred after , 199[ ], a
change in any applicable U.S. law or regulation or in the interpretation
thereof (including but not limited to the enactment or imminent enactment of
any legislation, the publication of any judicial decisions, regulatory rulings,
regulatory procedures, or notices or announcements (including notices or
announcements of intent to adopt such procedures or regulations), or a change
in the official position or in the interpretation of any law or regulation by
any legislative body, court, governmental authority or regulatory body,
irrespective of the manner in which such change is made known), and the
Company and Aetna shall have been advised by legal counsel (which counsel is
not an employee of Aetna or the Company) that, as a result of such change,
there exists more than an insubstantial risk that (i) Aetna will be precluded
from deducting the interest paid on the Series [ ] Debentures for federal
income tax purposes or (ii) the Company will be subject to federal income tax
with respect to the interest received on the Series [ ] Debentures, then the
Company may, upon not less than 30 nor more than 60 days' notice to the
Preferred Members holding Series [ ] Preferred Securities, either (a) redeem
the Series [ ] Preferred Securities, in whole or in part, at the Redemption
Price or (b) exchange the Series [ ] Preferred Securities for Series [ ]
Debentures having an aggregate principal amount and accrued and unpaid
interest equal to the Redemption Price and having an interest rate thereon
equal to the dividend rate on the Series [ ] Preferred Securities.
(d) After the date fixed for any exchange of Series [ ]
Preferred Securities for Series [ ] Debentures, (i) the Series [ ] Preferred
Securities will no longer be deemed to be outstanding, (ii) certificates
representing Series [ ] Debentures will be issued to holders of certificates
representing Series [ ] Preferred Securities, upon surrender of such
certificates to the Company or its agent for exchange, (iii) any certificates
representing Series [ ] Preferred Securities not so surrendered for exchange
will be deemed to represent Series [ ] Debentures having a principal amount
and accrued and unpaid interest equal to the Redemption Price of such Series [
] Preferred Securities until such certificates are so surrendered (and until
such certificates are so surrendered, no payments of interest or principal
will be made with respect to such Series [ ] Debentures) and (iv) all rights
of Preferred Members holding Series [ ] Preferred Securities will cease,
except the right of such Preferred Members to receive Series [ ] Debentures
upon surrender of certificates representing Series [ ] Preferred Securities.
(e) The Series [ ] Preferred Securities shall be redeemed at
the Redemption Price with the proceeds from the repayment by Aetna when due of
the Series [ ] Debentures or upon any optional redemption by Aetna of such
Series [ ] Debentures. Notwithstanding the foregoing, the Series [ ]
Preferred Securities will not be redeemed if (i) in lieu of repaying the
Series [ ] Debentures when due or optionally redeeming such Series [ ]
Debentures, Aetna is permitted by the Company to exchange such Series [ ]
Debentures for new Debentures or (ii) Aetna repays such Series [ ] Debentures
when due or optionally redeems such Series [ ] Debentures but is permitted by
the Company to reborrow the proceeds from such repayment or redemption which
reborrowing will be evidenced by new Debentures; provided that the Company will
only permit Aetna to so exchange the Series [ ] Debentures for new Debentures
or reborrow the proceeds from the repayment or redemption thereof if the
Company owns all of the Series [ ] Debentures and the following conditions are
satisfied (which satisfaction, in the case of clauses (f) through (j), shall
be determined in the judgment of the Managing Members and the Company's
financial advisor (selected by the Managing Members and who shall be
unaffiliated with Aetna and shall be among the 30 largest investment banking
firms, measured by total capital, in the United States at the time of the
issuance of the new Debentures that will evidence the new loan to be made in
connection with such exchange or reborrowing)), (a) Aetna is not bankrupt,
insolvent or in liquidation, (b) Aetna is not in default in the payment of any
interest or principal under the Subordinated Indenture, (c) Aetna has made
timely payments on the Series [ ] Debentures (and has not elected to extend
the interest payment period for the Series [ ] Debentures in the manner
described in the Subordinated Indenture) for the immediately preceding 24
months (and has not elected to extend any interest payment period for the
Series [ ] Debentures during such 24 month period), (d) such new loan will
mature no later than the earlier of (1) the 49th anniversary of the date of
the initial issuance of the Series [ ] Debentures and (2) the 30th anniversary
of the date such new loan is made, (e) the Company is not in arrears on
payments of dividends on the Series [ ] Preferred Securities, (f) Aetna is
expected to be able to make timely payment of principal of and interest on
such new loan, (g) such new loan is being made on terms, and under
circumstances, that are consistent with those which a lender would then
require for a loan to an unrelated party, (h) such new loan is being made at a
rate sufficient to provide payments equal to or greater than the amount of
dividend payments required under the Series [ ] Preferred Securities, (i) such
new loan is being made for a term that is consistent with market circumstances
and Aetna's financial condition and (j) immediately prior to the making of such
new loan, the senior unsecured long-term debt of Aetna is (or if no such debt
is outstanding, would be) rated not less than BBB (or the equivalent) by
Standard & Poor's Corporation and Baa2 (or the equivalent) by Moody's
Investors Service, Inc. and the subordinated unsecured long-term debt of Aetna
(or, if more than one issue of such subordinated debt is outstanding, the most
junior of such issues) is (or if no such debt is outstanding, would be) rated
not less than BBB- (or the equivalent) by Standard & Poor's Corporation and
Baa3 by Moody's Investors Service, Inc. (or if either of such rating
organizations is not then rating Aetna's senior or subordinated unsecured
long-term debt, as the case may be, the equivalent of such ratings by any
other "nationally recognized statistical rating organization," as that term is
defined by the Securities and Exchange Commission for purposes of Rule
436(g)(2) under the Securities Act of 1933, as amended).
(f) The Company may not redeem any Series [ ] Preferred
Securities unless all accumulated arrears of unpaid dividends have been paid
on all Preferred Securities of all series for all monthly dividend periods
terminating on or prior to the date of redemption.
(g) If the Company gives a notice of redemption in respect of
any Series [ ] Preferred Securities, then, by 12:00 noon, New York time, on
the date fixed for redemption, the Company will, so long as the Series [ ]
Preferred Securities are in book-entry-only form, irrevocably deposit with the
securities depository for the Series [ ] Preferred Securities funds sufficient
to pay the applicable Redemption Price and will give such depository
irrevocable instructions and authority to pay the Redemption Price to the
holders thereof. If the Series [ ] Preferred Securities are no longer in
book-entry-only form, the Company will irrevocably deposit with the paying
agent for the Series [ ] Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their Series [ ] Preferred Security certificates.
Notwithstanding the foregoing, dividends payable on or prior to the redemption
date for any Series [ ] Preferred Securities called for redemption shall be
payable to the holders of such Series [ ] Preferred Securities on the relevant
record dates for the payments thereof. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of Preferred Members holding Series [ ] Preferred Securities so called
for redemption will cease, except the right of such Preferred Members to
receive the Redemption Price, but without interest, and such securities will
cease to be outstanding. In the event that any date on which any payment in
respect of the redemption of any Series [ ] Preferred Securities is payable is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of any Series [ ] Preferred Securities called for
redemption is improperly withheld or refused and not paid either by the
Company or by Aetna pursuant to the Guarantee, dividends on such Series [ ]
Preferred Securities will continue to accrue, at the then applicable rate,
from the Redemption Date originally established by the Company for such Series
[ ] Preferred Securities to the date such Redemption Price is actually paid,
in which case the actual payment date will be the date fixed for redemption
for purposes of calculating the Redemption Price.
(h) Subject to the foregoing and applicable law (including,
without limitation, U.S. federal securities laws) Aetna or its subsidiaries
may at any time and from time to time purchase outstanding Series [ ] Preferred
Securities by tender, in the open market or by private agreement.
7. Sinking Fund. The Series [ ] Preferred Securities
[shall] [shall not] be subject to the operation of a retirement or sinking
fund.
8. Guarantee of Liabilities. It shall be a condition
precedent to the issuance of the Series [ ] Preferred Securities that Aetna
execute the Guarantee and the Expense Agreement.
9. Book-Entry-Only Issuance. (a) The Depository Trust
Company, New York, New York ("DTC"), will initially act as securities
depository for the Series [ ] Preferred Securities. The Series [ ] Preferred
Securities will be issued only as fully-registered securities registered in
the name of Cede & Co. (DTC's partnership nominee).
(b) Redemption notices shall be sent to Cede & Co. If less
then all of the Series [ ] Preferred Securities are being redeemed, such
securities shall be redeemed in accordance with DTC's then current practice.
(c) DTC may discontinue providing its services as securities
depository with respect to the Series [ ] Preferred Securities by giving
reasonable notice to the Company as provided in the agreement between the
Company and DTC. Under such circumstances, if a successor securities
depositary is not obtained, the Company at its expense shall cause
certificates for Series [ ] Preferred Securities to be printed and delivered
as promptly as practicable.
(d) In the event that the Series [ ] Preferred Securities do
not remain in book-entry-only form, the following provisions will apply:
(1) Registration of transfers of Series [ ] Preferred
Securities will be effected without charge by or on behalf of
the Company, but upon payment (with the giving of such
indemnity as the Company or Aetna may require) in respect of any
tax or other governmental charges which may be imposed in
connection therewith.
(2) Exchanges of Series [ ] Preferred Securities for
Series [ ] Debentures will be effected without charge by or on
behalf of the Company, but upon payment (with the giving of such
indemnity as the Company or Aetna may require) in respect of
any tax or other governmental charges which may be imposed in
connection with the issuance of any Series [ ] Debenture in the
name of any person other than the registered holder of the
Series [ ] Preferred Security for which the Series [ ]
Debenture is being exchanged or for any reason other than such
exchange.
(3) The Company will not be required to register or
cause to be registered the transfer of Series [ ] Preferred
Securities after such Preferred Securities have been called for
redemption or exchange.
10. Authorization of Agreements. The Company, and either
Managing Member on behalf of the Company, may enter into and perform the
Expense Agreement and the Underwriting Agreement without any further act, vote
or approval of any Member.
11. Registrar and Transfer Agent. The Company hereby appoints
[ ] as its initial registrar, transfer agent and Paying
Agent for the Series [ ] Preferred Securities.
12. Governing Law. This Written Action shall be governed by
and construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, the undersigned Managing Members of the
Company have hereto set their hands as of the day and year first above written.
AETNA LIFE AND CASUALTY
COMPANY
By:___________________________
Name:
Title:
AETNA CAPITAL HOLDINGS, INC.
By:___________________________
Name:
Title:
EXHIBIT 4.1
Certificate Number of
Number Shares
1 00,000,000
CUSIP NO.
CERTIFICATE EVIDENCING LIMITED LIABILITY COMPANY INTERESTS
PREFERRED SECURITIES, SERIES
OF
AETNA CAPITAL L.L.C.
Aetna Capital L.L.C., a Delaware limited liability company (the "Company"),
hereby certifies that Cede & Co. (the "Holder") is the registered owner of
0,000,000 preferred limited liability company interests in the Company of a
series designated the Preferred Securities, Series (the "Securities").
The Securities are fully paid and nonassessable limited liability company
interests in the Company, as to which the members of the Company who hold the
Securities (the "Preferred Securityholders") in their capacity as members of
the Company will have no liability solely by reason of being Preferred
Securityholders in excess of their share of the Company's assets and
undistributed profits (subject to the obligation of a Preferred Securityholder
to repay any funds wrongfully distributed to it), and are transferable on the
books and records of the Company, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form for
transfer. The powers, preferences and special rights and restrictions of the
Securities are set forth in, and this Certificate and the Securities
represented hereby are issued and shall in all respects be subject to the
terms and provisions of, the Amended and Restated Limited Liability Company
Agreement of the Company, dated as of , 1994, as the same may be
amended from time to time (the "Limited Liability Company Agreement") and the
written action of the Managing Members of the Company authorizing the issuance
of the Securities and determining the powers, preferences and special rights
and restrictions, regarding dividends, voting, redemption, exchange, return of
capital and otherwise, and other matters relating to the Securities (the
"Securities Terms"), copies of which Limited Liability Company Agreement and
Securities Terms are on file at the principal office of the Company. The
Company will furnish a copy of such Limited Liability Company Agreement and
Securities Terms to each Preferred Securityholder without charge upon written
request to the Company at its principal place of business or registered
office, as the case may be. Each Preferred Securityholder is entitled to the
benefits of the Payment and Guarantee Agreement of Aetna Life and Casualty
Company ("Aetna") dated , 1994 (the "Guarantee") to the extent
provided therein and is entitled to enforce the rights of the Company under
the related series of debentures (the "Debentures") issued by Aetna to the
Company pursuant to the Subordinated Indenture dated , 1994 between
Aetna and The First National Bank of Chicago, as trustee (the "Subordinated
Indenture"), to the extent provided therein. The Company will furnish a copy
of such Guarantee and Subordinated Indenture to each Preferred Securityholder
without charge upon written request to the Company at its principal place of
business.
Each Preferred Securityholder, by accepting this Certificate, is deemed to
have (i) agreed that the Debentures are subordinate and junior in right of
payment to all Senior Debt (as defined in the Subordinated Indenture) as and
to the extent provided in the Subordinated Indenture and (ii) agreed that the
Guarantee is subordinate and junior in right of payment to all liabilities of
Aetna and pari passu with the most senior preferred or preference stock of any
series now or hereafter issued by Aetna and pari passu with any guarantee now
or hereafter entered into by Aetna in respect of any preferred or preference
stock or interest of any affiliate of Aetna, as and to the extent provided in
the Guarantee.
IN WITNESS WHEREOF, this certificate has been signed on behalf of the Company
by a duly authorized officer of one of its Managing Members and on behalf of
Aetna, as Guarantor, by a duly authorized officer thereof.
AETNA CAPITAL L.L.C.
BY AETNA LIFE AND CASUALTY
COMPANY,
AS MANAGING MEMBER
By: _________________________
By: AETNA LIFE AND CASUALTY
COMPANY, AS GUARANTOR
By: _________________________
EXHIBIT 4.2
PAYMENT AND GUARANTEE AGREEMENT
THIS PAYMENT AND GUARANTEE AGREEMENT (the "Guarantee"), dated
as of , 1994, is executed and delivered by Aetna Life and Casualty
Company, a Connecticut insurance corporation ("Aetna"), for the benefit of the
Holders (as defined below) from time to time of the Preferred Securities (as
defined below) of Aetna Capital L.L.C., a Delaware limited liability company
(the "Issuer").
WHEREAS, the Issuer intends to issue its common limited
liability company interests (the "Common Securities") to and receive related
capital contributions from Aetna and Aetna Capital Holdings, Inc., a
Connecticut corporation (the "Common Securities Payments"), and to issue and
sell from time to time, in one or more series, preferred limited liability
company interests (the "Preferred Securities") with such powers, preferences
and special rights and limitations and restrictions as are set forth in a
written action or actions (the "Actions") of the Managing Members (as defined
below) providing for the issue of such series;
WHEREAS, the Issuer will purchase the Debentures (as defined
below) issued pursuant to the Subordinated Indenture (as defined below) with
the proceeds from the issuance and sale of the Preferred Securities and the
Common Securities Payments; and
WHEREAS, Aetna desires hereby to irrevocably and
unconditionally agree to the extent set forth herein to pay to the Holders the
Guarantee Payments (as defined below) on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by each Holder
of the Preferred Securities, which purchase Aetna hereby agrees shall benefit
Aetna and which purchase Aetna acknowledges will be made in reliance upon the
execution and delivery of this Guarantee, Aetna executes and delivers this
Guarantee for the benefit of the Holders.
ARTICLE I
As used in this Guarantee, the terms set forth below shall have
the following meanings:
"Additional Amounts" shall mean, with respect to the Preferred
Securities of any series, any additional amounts that the Issuer is required
to pay as dividends to Holders of the Preferred Securities of such series
pursuant to the Actions establishing the Preferred Securities of such series
in the event that the Issuer is required by law to withhold or deduct for or
on account of any present or future taxes, duties, assessments or governmental
charges of whatever nature imposed or levied upon or as a result of any
payments by the Issuer in respect of the Preferred Securities of such series
by or on behalf of the United States of America, any state thereof or any other
jurisdiction through which or from which such payment is made, or any
authority therein or thereof having power to tax.
"Debenture" shall mean the debentures issued by Aetna to the
Issuer pursuant to the Subordinated Indenture that will evidence the loans to
be made by the Issuer to Aetna from time to time of the proceeds received by
the Issuer from the issuance and sale of the Preferred Securities and the
Common Securities Payments.
"Event of Default" shall have the meaning set forth in the
Subordinated Indenture.
"Guarantee Additional Amounts" shall have the meaning specified
in Article IV.
"Guarantee Payments" shall mean, with respect to any series of
Preferred Securities, the following payments, without duplication, to the
extent not paid by the Issuer: (i) any accumulated and unpaid dividends
(including Additional Amounts payable by the Issuer) which have been
theretofore declared on the Preferred Securities of such series to the extent
the Company has cash on hand legally available therefor, (ii) the Redemption
Price to the extent the Company has cash on hand legally available therefor
with respect to any Preferred Securities of such series called for redemption
by the Issuer and (iii) upon the liquidation of the Issuer other than in
connection with the exchange of each series of Preferred Securities
outstanding for the related series of Preferred Securities, the lesser of (a)
the Liquidation Distribution (as defined below) with respect to Preferred
Securities of such series and (b) the amount of assets of the Issuer legally
available for distribution to Holders of Preferred Securities of such series
in liquidation.
"Holder" shall mean any member of the Issuer from time to time
holding any Preferred Securities of any series; provided, however, that in
determining whether the Holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include Aetna or any entity owned 50% or more by Aetna,
either directly or indirectly.
"Liquidation Distribution" shall mean, with respect to any
series of Preferred Securities, the aggregate of the stated liquidation
preference of such series of Preferred Securities and all accumulated and
unpaid dividends (whether or not declared) with respect to such series to the
date of payment.
"L.L.C. Agreement" shall mean the Issuer's Amended and Restated
Limited Liability Company Agreement dated as of , 1994, as amended
from time to time.
"Managing Members" shall mean Aetna and Aetna Capital Holdings,
Inc., in their capacity as the members of the Issuer that hold all of the
Issuer's outstanding Common Securities.
"Redemption Price" shall mean, with respect to any series of
Preferred Securities, the aggregate stated liquidation preference of all
Preferred Securities of such series plus accumulated and unpaid dividends
(whether or not declared) with respect to such series to the date fixed for
redemption.
"Subordinated Indenture" shall mean the subordinated indenture
dated as of , 1994 between Aetna and The First National Bank of
Chicago, as trustee, as amended or supplemented from time to time.
ARTICLE II
Section 2.01. Aetna irrevocably and unconditionally agrees, to
the extent set forth herein, to pay in full to the Holders of each series of
Preferred Securities the Guarantee Payments with respect to such series of
Preferred Securities, as and when due (except to the extent paid by the Issuer
or paid by Aetna to any trustee appointed by such Holders pursuant to Article
VIII of the L.L.C. Agreement), regardless of any defense, right of set-off or
counterclaim which the Issuer may have or assert. This Guarantee is
continuing, irrevocable, unconditional and absolute.
Section 2.02. Aetna hereby waives notice of acceptance of
this Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
Section 2.03. The obligations, covenants, agreements and
duties of Aetna under this Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities of any series to be performed or observed by the
Issuer;
(b) the extension of time for the payment by the Issuer of
all or any portion of the dividends, Redemption Price, Liquidation
Distributions or any other sums payable under the terms of the
Preferred Securities of any series or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities of such series;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders of Preferred Securities of any series to enforce,
assert or exercise any right, privilege, power or remedy conferred on
such Holders pursuant to the terms of the Preferred Securities of
such series, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, any of the
Preferred Securities; or
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, Aetna with respect to the happening of any of the foregoing.
Section 2.04. This is a guarantee of payment and not of
collection. A Holder may enforce this Guarantee directly against Aetna, and
Aetna waives any right or remedy to require that any action be brought against
the Issuer or any other person or entity before proceeding against Aetna.
Subject to Section 2.05 hereof, all waivers herein contained shall be without
prejudice to the Holders' right at the Holders' option to proceed against the
Issuer, whether by separate action or by joinder.
Section 2.05. Aetna shall be subrogated to all (if any)
rights of the Holders against the Issuer in respect of any amounts paid to the
Holders by Aetna under this Guarantee and shall have the right to waive
payment of any amount of dividends in respect of which payment has been made
to the Holders by Aetna pursuant to Section 2.01 hereof; provided, however,
that Aetna shall not (except to the extent required by mandatory provisions of
law) exercise any rights which it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of a
payment under this Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Guarantee. If any amount shall be paid to Aetna
in violation of the preceding sentence, Aetna agrees to pay over such amount
to the Holders.
Section 2.06. Aetna acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with respect to the
Preferred Securities and that Aetna shall be liable as principal and sole
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (f), inclusive, of Section 2.03 hereof.
ARTICLE III
Section 3.01. So long as any Preferred Securities of any
series remain outstanding, Aetna shall not declare or pay any dividend on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any
of its capital stock or make any guarantee payments with respect to the
foregoing (other than (i) payments under this Guarantee, (ii) acquisitions of
shares of Aetna's common stock in connection with the satisfaction by Aetna of
its obligations under any employee benefit plans and (iii) redemptions of any
share purchase rights issued by Aetna pursuant to Aetna's Share Purchase
Rights Plan adopted on October 27, 1989, as amended from time to time or the
declaration of a dividend of similar share purchase rights in the future), if
at such time Aetna shall be in default with respect to its payment obligations
hereunder or if there shall have occurred and be continuing an Event of
Default with respect to any Debentures related to the Preferred Securities then
outstanding.
Section 3.02. So long as any Preferred Securities of any
series remain outstanding, Aetna shall: (i) not cause or permit any Common
Securities to be transferred; (ii) maintain direct or indirect 100% ownership
of all outstanding securities of the Issuer other than (x) the Preferred
Securities of any series and (y) any other securities issued by the Issuer
(other than the Common Securities) so long as the issuance thereof to persons
other than Aetna or any of its subsidiaries would not cause the Issuer to
become an "investment company" required to be registered under the Investment
Company Act of 1940, as amended; (iii) cause at least 21% of the total value
of the Issuer and at least 21% of all interests in the capital, income, gain,
loss, deduction and credit of the Issuer to be represented by Common
Securities; (iv) not voluntarily dissolve, wind up or liquidate the Issuer
other than in connection with the exchange of all series of Preferred
Securities outstanding for the related series of Preferred Securities or
either of the Managing Members; (v) cause Aetna and Aetna Capital to remain
the Managing Members of the Issuer and timely perform all of their respective
duties as Managing Members (including the duty to declare and pay dividends on
the Preferred Securities); and (vi) use reasonable efforts to cause the Issuer
to remain a limited liability company and otherwise continue to be treated as a
partnership for United States federal income tax purposes; provided that Aetna
may permit the Issuer to consolidate or merge with or into or convey, transfer
or lease its assets substantially as an entirety to a limited liability company
or limited partnership or trust organized as such under the laws of any state
of the United States of America, provided that: (A) the holders of not less
than 66 2/3% of the stated liquidation preference of the outstanding Preferred
Securities approves of such merger, consolidation, conveyance, transfer or
lease; or (B) (i) such successor entity either (x) expressly assumes all of
the obligations of the Issuer under the Preferred Securities or (y)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so
long as the Successor Securities rank, with respect to participation in the
profits or assets of the successor entity, at least as high as the Preferred
Securities rank with respect to participation in the profits or assets of the
Issuer, (ii) Aetna expressly acknowledges such successor entity as the holder
of the Debentures relating to the Preferred Securities, (iii) such merger,
consolidation, conveyance, transfer or lease does not cause the Preferred
Securities or Successor Securities, if any, to be delisted (or in the case of
any Successor Securities, to fail to be listed) by any national securities
exchange or other organization on which the Preferred Securities are then
listed, (iv) such merger, consolidation, conveyance, transfer or lease does
not cause the Preferred Securities or Successor Securities, if any, to be
downgraded by any "nationally recognized statistical rating organization," as
that term is defined by the Securities and Exchange Commission for purposes of
Rule 436(g)(2) under the Securities Act of 1933, as amended, (v) such merger,
consolidation, conveyance, transfer or lease does not adversely affect the
powers, preferences and other special rights of Holders of Preferred
Securities or Successor Securities, if any, in any material respect and (vi)
prior to such merger, consolidation, conveyance, transfer or lease Aetna has
received an opinion of counsel (which counsel is not an employee of Aetna or
the Issuer) to the effect that (w) such merger, consolidation, conveyance,
transfer or lease will not cause the Issuer or such successor entity to become
an "investment company" required to be registered under the Investment Company
Act of 1940, as amended, (x) Holders of outstanding Preferred Securities will
not recognize any gain or loss for federal income tax purposes as a result of
such merger, consolidation, conveyance, transfer or lease (y) such merger,
consolidation, conveyance, transfer or lease will not be treated as a
corporation for federal income tax purposes and (z) such merger or
consolidation will not adversely affect the limited liability of Holders.
Section 3.03. The Guarantee will constitute an unsecured
obligation of Aetna and will rank (i) subordinate and junior in right of
payment to all other liabilities of Aetna, (ii) pari passu with the most
senior preferred stock now or hereafter issued by Aetna and with any guarantee
now or hereafter entered into by Aetna in respect of any preferred or
preference stock or interest of any affiliate of Aetna and (iii) senior to
Aetna's common stock.
ARTICLE IV
All Guarantee Payments shall be made without withholding or
deduction for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed or levied upon
or as a result of such payment by or on behalf of the United States of
America, any state thereof or any other jurisdiction through which or from
which such payment is made, or any authority therein or thereof having power
to tax, unless the withholding or deduction of such taxes, duties, assessments
or governmental charges is required by law. In that event, Aetna will pay
such additional amounts as may be necessary in order that the net amounts
received by the Holders of the Preferred Securities of such series after such
withholding or deduction will equal the amount which would have been
receivable in respect of such Preferred Securities in the absence of such
withholding or deduction ("Guarantee Additional Amounts"), except that no such
Guarantee Additional Amounts will be payable with respect to Preferred
Securities:
(i) if the Holder or beneficial owner thereof is liable for
such taxes, duties assessments or governmental charges in respect of
such Preferred Securities by reason of such Holder's or owner's having
some connection with the United States, any state thereof or any
other jurisdiction through which or from which such payment is made
(including, without limitation, actual or constructive ownership, past
or present, of 10% or more of the total combined voting power of all
classes of stock entitled to vote of Aetna), other than being a
holder or beneficial owner of such Preferred Securities, or
(ii) if the Issuer or Aetna has notified such Holder of the
obligation to withhold taxes and requested but not received from such
Holder or beneficial owner a declaration of non-residence, a valid
taxpayer identification number or other claim for exemption (or
information or certification required to support such claim), and
such withholding or deduction would not have been required had such
declaration, taxpayer identification number or claim been received.
ARTICLE V
This Guarantee shall terminate and be of no further force and
effect as to any series of Preferred Securities upon full payment of the
Redemption Price of all Preferred Securities of such series or upon the
exchange of all Preferred Securities of such series for the related series of
Debentures and shall terminate completely upon full payment of the amounts
payable to Holders upon liquidation of the Issuer; provided, however, that this
Guarantee shall continue to be effective or shall be reinstated, as the case
may be, if at any time any Holder must restore payment of any sums paid under
the Preferred Securities of such series or under this Guarantee for any reason
whatsoever.
ARTICLE VI
Section 6.01. All guarantees and agreements contained in
this Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of Aetna and shall inure to the benefit of the Holders.
Except in connection with a consolidation, merger or sale involving Aetna that
is permitted under the Subordinated Indenture, Aetna shall not assign its
obligations hereunder without the prior approval of Holders of not less than a
majority in stated liquidation preference of all Preferred Securities of all
series then outstanding voting as a single class.
Section 6.02. Except with respect to any changes which do
not adversely affect the rights of Holders (in which case no vote will be
required), this Guarantee may only be amended by an instrument in writing
signed by Aetna with the prior approval of the Holders of not less than a
majority in stated liquidation preference of all Preferred Securities of all
series then outstanding voting as a single class. Such approval shall be
obtained in the manner set forth in Article VIII of the L.L.C. Agreement.
Section 6.03. Any notice, request or other communication
required or permitted to be given hereunder to Aetna shall be given in writing
by delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed to
Aetna, as follows (and if so given, shall be deemed given when mailed or upon
receipt of an answer-back, if sent by telex), to wit:
Aetna Life and Casualty Company
151 Farmington Avenue
Hartford, Connecticut 06156
Facsimile No.: (203) 275-2661
Attention: Treasurer
(with a copy to the attention of the General/Counsel
(203) 273-8340)
Any notice, request or other communication required or
permitted to be given hereunder to the Holders shall be given by Aetna in the
same manner as notices sent by the Issuer to the Holders.
Section 6.04. The masculine and neuter genders used herein
shall include the masculine, feminine and neuter genders.
Section 6.05. This Guarantee is solely for the benefit of
the Holders and is not separately transferable from the Preferred Securities.
Section 6.06. THIS GUARANTEE SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS GUARANTEE is executed as of the day and year first above
written.
Aetna Life and Casualty
Company
By ___________________________
Name:
Title:
EXHIBIT 4.4
AETNA LIFE AND CASUALTY COMPANY
TO
THE FIRST NATIONAL BANK OF CHICAGO, TRUSTEE
__________
SUBORDINATED INDENTURE
Dated as of , 1994
__________
Debentures
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
AETNA LIFE AND CASUALTY COMPANY
Reconciliation and tie between certain Sections of
this Indenture, dated as of , 1994, and
Sections 310 through 318, inclusive, of
the Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
Section 310 (a)(1).................................. 609
(a)(2).................................. 609
(a)(3).................................. Not Applicable
(a)(4).................................. Not Applicable
(b) .................................. 608
610
Section 311 (a)..................................... 613
(b)..................................... 613
Section 312 (a)..................................... 701
702(a)
(b)..................................... 702(b)
(c)..................................... 702(c)
Section 313 (a)..................................... 703(a)
(b)..................................... 703(a)
(c)..................................... 703(a)
(d)..................................... 703(b)
Section 314 (a)..................................... 704
(a)(4).................................. 101
1004
(b)..................................... Not Applicable
(c)(1).................................. 102
(c)(2).................................. 102
(c)(3).................................. Not Applicable
(d)..................................... Not Applicable
(e)..................................... 102
Section 315 (a)..................................... 601
(b)..................................... 602
(c)..................................... 601
(d)..................................... 601
(e)..................................... 516
Section 316 (a)..................................... 101
(a)(1)(A)............................... 503
504
514
(a)(1)(B)............................... 515
(a)(2).................................. Not Applicable
(b)..................................... 510
(c)..................................... 104(c)
Section 317 (a)(1).................................. 505
(a)(2).................................. 506
(b)..................................... 1003
Section 318 (a)..................................... 107
___________________
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
PARTIES.................................................................... 1
RECITALS OF THE COMPANY.................................................... 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.............................................. 1
Act...................................................... 2
Additional Amounts....................................... 2
Additional Interest...................................... 2
Authenticating Agent..................................... 2
Board of Directors....................................... 3
Board Resolution......................................... 3
Business Day............................................. 3
Capital.................................................. 3
Commission............................................... 3
Common Security.......................................... 3
Common Stock............................................. 3
Company.................................................. 4
Company Request.......................................... 4
Company Order............................................ 4
Corporate Trust Office................................... 4
corporation.............................................. 4
Covenant Defeasance...................................... 4
Debenture................................................ 4
Debenture Register....................................... 4
Debenture Registrar...................................... 4
Debt..................................................... 4
Defaulted Interest....................................... 5
Defeasance............................................... 5
Depositary............................................... 5
Event of Default......................................... 5
Exchange Act............................................. 5
Floating or Adjustable Rate Debenture.................... 5
Floating or Adjustable Rate Provision.................... 5
Global Debenture......................................... 5
Guarantee................................................ 5
Holder................................................... 6
Indenture................................................ 6
Interest Payment Date.................................... 6
Junior Subordinated Payment.............................. 6
L.L.C. Agreement......................................... 6
Managing Members......................................... 6
Maturity................................................. 6
Notice of Default........................................ 6
Officers' Certificate.................................... 6
Opinion of Counsel....................................... 7
Outstanding.............................................. 7
Paying Agent............................................. 8
Person................................................... 8
Place of Payment......................................... 8
Predecessor Debenture.................................... 8
Preferred Security....................................... 8
Proceeding............................................... 8
Redemption Date.......................................... 9
Redemption Price......................................... 9
Regular Record Date...................................... 9
Responsible Officer...................................... 9
Security Exchange........................................ 9
Senior Debt.............................................. 9
Special Record Date...................................... 10
Stated Maturity.......................................... 10
Subsidiary............................................... 10
Trustee.................................................. 10
Trust Indenture Act...................................... 10
U.S. Government Obligations.............................. 10
Vice President........................................... 10
Written Action........................................... 10
Section 102. Compliance Certificates and Opinions..................... 11
Section 103. Form of Documents Delivered to Trustee................... 11
Section 104. Acts of Holders; Record Dates............................ 12
Section 105. Notices, Etc., to Trustee and Company.................... 14
Section 106. Notice to Holders; Waiver................................ 15
Section 107. Conflict with Trust Indenture Act........................ 15
Section 108. Effect of Headings and Table of Contents................. 16
Section 109. Successors and Assigns................................... 16
Section 110. Separability Clause...................................... 16
Section 111. Benefits of Indenture.................................... 16
Section 112. Governing Law............................................ 16
Section 113. Legal Holidays........................................... 16
Section 114. Personal Immunity from Liability for Incorporators,
Stockholders, Etc........................................ 17
ARTICLE TWO
Debenture Form
Section 201. Forms Generally.......................................... 17
Section 202. Form of Face of Debenture................................ 18
Section 203. Form of Reverse of Debenture............................. 20
Section 204. Form of Legend for Global Debentures..................... 23
Section 205. Form of Trustee's Certificate of
Authentication........................................... 23
ARTICLE THREE
The Debentures
Section 301. Amount Unlimited; Issuable in Series..................... 24
Section 302. Denominations............................................ 27
Section 303. Execution, Authentication, Delivery and
Dating................................................... 27
Section 304. Temporary Debentures..................................... 29
Section 305. Registration, Registration of Transfer and
Exchange................................................. 30
Section 306. Mutilated, Destroyed, Lost and Stolen
Debentures............................................... 32
Section 307. Payment of Interest; Interest Rights
Preserved................................................ 33
Section 308. Persons Deemed Owners.................................... 35
Section 309. Cancellation............................................. 35
Section 310. Computation of Interest.................................. 36
Section 311. Additional Interest...................................... 36
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.................. 36
Section 402. Application of Trust Fund................................ 38
ARTICLE FIVE
Remedies
Section 501. Events of Default........................................ 39
Section 502. Acceleration of Maturity................................. 42
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.................................................. 45
Section 504. Trustee May File Proofs of Claim......................... 46
Section 505. Trustee May Enforce Claims Without Possession of
Debentures............................................... 47
Section 506. Application of Money Collected........................... 47
Section 507. Limitation on Suits...................................... 48
Section 508. Unconditional Right of Holders to Receive Principal,
Premium Interest......................................... 49
Section 509. Restoration of Rights and Remedies....................... 49
Section 510. Rights and Remedies Cumulative........................... 49
Section 511. Delay or Omission Not Waiver............................. 50
Section 512. Control by Holders....................................... 50
Section 513. Waiver of Past Defaults.................................. 51
Section 514. Undertaking for Costs.................................... 51
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities...................... 52
Section 602. Notice of Defaults....................................... 52
Section 603. Certain Rights of Trustee................................ 53
Section 604. Not Responsible for Recitals or Issuance of
Debentures............................................... 54
Section 605. May Hold Debentures...................................... 55
Section 606. Money Held in Trust...................................... 55
Section 607. Compensation and Reimbursement........................... 55
Section 608. Disqualification; Conflicting Interests.................. 56
Section 609. Corporate Trustee Required; Eligibility.................. 56
Section 610. Resignation and Removal; Appointment of
Successor................................................ 56
Section 611. Acceptance of Appointment by Successor................... 58
Section 612. Merger, Conversion, Consolidation or Succession to
Business................................................. 60
Section 613. Preferential Collection of Claims Against
Company.................................................. 60
Section 614. Appointment of Authenticating Agent...................... 60
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and
Addresses of Holders..................................... 62
Section 702. Preservation of Information; Communications to
Holders.................................................. 63
Section 703. Reports by Trustee....................................... 63
Section 704. Reports by Company....................................... 64
ARTICLE EIGHT
Consolidation, Merger, or Sale of Assets
Section 801. Company May Consolidate, Etc., Only on Certain
Terms.................................................... 64
Section 802. Successor Substituted.................................... 65
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of
Holders.................................................. 66
Section 902. Supplemental Indentures with Consent of
Holders.................................................. 67
Section 903. Execution of Supplemental Indentures..................... 69
Section 904. Effect of Supplemental Indentures........................ 69
Section 905. Conformity with Trust Indenture Act...................... 70
Section 906. Reference in Debentures to Supplemental
Indentures............................................... 70
Section 907. Waiver of Compliance by Holders.......................... 70
Section 908. Subordination Unimpaired................................. 70
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest............... 71
Section 1002. Maintenance of Office or Agency.......................... 71
Section 1003. Money for Debentures Payments to Be Held in
Trust.................................................... 72
Section 1004. Statement by Officers as to Default...................... 73
Section 1005. Limitations on Dividends and Other Payments on Capital
Stock.................................................... 73
Section 1006. Limitations on Conduct of Capital and Other
Limitations.............................................. 74
Section 1007. Stock Exchange Listing................................... 75
ARTICLE ELEVEN
Redemption of Debentures
Section 1101. Applicability of Article................................. 76
Section 1102. Election to Redeem; Notice to Trustee.................... 76
Section 1103. Selection by Trustee of Debentures to Be
Redeemed................................................. 76
Section 1104. Notice of Redemption..................................... 77
Section 1105. Deposit of Redemption Price.............................. 78
Section 1106. Debentures Payable on Redemption Date.................... 78
Section 1107. Debentures Redeemed in Part.............................. 78
ARTICLE TWELVE
Defeasance and Covenant Defeasance
Section 1201. Company's Option to Effect Defeasance or
Covenant Defeasance...................................... 79
Section 1202. Defeasance and Discharge................................. 79
Section 1203. Covenant Defeasance...................................... 80
Section 1204. Conditions to Defeasance or Covenant
Defeasance............................................... 80
Section 1205. Deposited Money and U.S. Government Obligations to be
Held In Trust; Other Miscellaneous Provisions............ 83
Section 1206. Reinstatement............................................ 84
ARTICLE THIRTEEN
Sinking Funds
Section 1301. Applicability of Article................................. 84
Section 1302. Satisfaction of Sinking Fund Payments
with Debentures.......................................... 85
Section 1303. Redemption of Debentures for Sinking Fund................ 85
ARTICLE FOURTEEN
Subordination of Debentures
Section 1401. Debentures Subordinate to Senior Debt.................... 85
Section 1402. Payment Over of Proceeds Upon Dissolution,
Etc...................................................... 86
Section 1403. Prior Payment to Senior Debt Upon
Acceleration of Debentures............................... 88
Section 1404. No Payment When Senior Debt in Default................... 88
Section 1405. Payment Permitted If No Default.......................... 89
Section 1406. Subrogation to Rights of Holders of Senior
Debt..................................................... 89
Section 1407. Provisions Solely to Define Relative Rights.............. 90
Section 1408. Trustee to Effectuate Subordination...................... 91
Section 1409. No Waiver of Subordination Provisions.................... 91
Section 1410. Notice to Trustee........................................ 92
Section 1411. Reliance on Judicial Order or Certificate of Liquidating
Agent.................................................... 93
Section 1412. Trustee Not Fiduciary For Holders of Senior
Debt..................................................... 93
Section 1413. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights...................................... 93
Section 1414. Article Applicable to Paying Agents...................... 93
Section 1415. Defeasance of This Article Fourteen...................... 94
ARTICLE FIFTEEN
Miscellaneous
Section 1501. Assignment; Binding Effect.................................. 94
Section 1502. Third Party Beneficiaries................................... 94
Section 1503. Set-off..................................................... 95
- --------------------
NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
INDENTURE, dated as of , 1994, between AETNA LIFE AND
CASUALTY COMPANY, a Connecticut insurance corporation (herein called the
"Company"), having its principal office at 151 Farmington Avenue, Hartford,
Connecticut 06156, and THE FIRST NATIONAL BANK OF CHICAGO, a national
association duly organized and existing under the laws of the United States of
America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its debentures,
notes or other evidences of indebtedness (herein called the "Debentures"), to
be issued in one or more series to evidence its indebtedness resulting from
the loans to be made to the Company of the proceeds from the issuance from
time to time by Aetna Capital L.L.C., a Delaware limited liability company
("Capital"), of preferred limited liability company interests in Capital (the
"Preferred Securities"), in one or more series, and common limited liability
company interests in Capital (the "Common Securities") and related capital
contributions.
All things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures or of series thereof,
as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act or the Securities Act of 1933, as amended,
either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally
accepted accounting principles, and, except as otherwise herein
expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as
are generally accepted at the date of such computation;
(4) the words "Article" and "Section" refer to an Article
and Section, respectively, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not
to any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amounts" when used with respect to the Preferred
Securities of any series means any additional amounts that Capital is required
to pay as dividends to holders of the Preferred Securities of such series
pursuant to the Written Action establishing the Preferred Securities of such
series in the event that Capital is required by law to withhold or deduct for
or on account of any present or future taxes, duties, assessments or
governmental charges of whatever nature imposed or levied upon or as a result
of payments by Capital in respect of the Preferred Securities of such series
by or on behalf of the United States of America, any state thereof or any
other jurisdiction through which or from which such payment is made, or any
authority therein or thereof having power to tax.
"Additional Interest" has the meaning specified in Section
311.
"Authenticating Agent" means any Person authorized by the
Trustee pursuant to Section 614 to act on behalf of the Trustee to
authenticate Debentures of one or more series.
"Board of Directors" means either (i) the board of directors
of the Company, the executive committee of such board of directors or any
other duly authorized committee of directors and/or officers appointed by such
board of directors or executive committee, or (ii) one or more duly authorized
officers of the Company to whom the board of directors of the Company or a
committee thereof has delegated the authority to act with respect to the
matters contemplated by this Indenture.
"Board Resolution" means (i) a copy of a resolution
certified by the Corporate Secretary or an Assistant Corporate Secretary of
the Company to have been duly adopted by the Board of Directors or a committee
thereof and to be in full force and effect on the date of such certification
or (ii) a certificate signed by the authorized officer or officers of the
Company to whom the board of directors of the Company or a committee thereof
has delegated its authority (as described in the definition of Board of
Directors), and in each case, delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in The
City of New York are authorized or required by law or executive order to
close.
"Capital" means the Person named as "Capital" in the first
recital of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Capital" shall mean such successor Person.
"Commission" means the Securities and Exchange Commission,
as from time to time constituted, created under the Exchange Act, or, if at
any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Security" has the meaning stated in the first
recital of this Indenture.
"Common Stock" means the Company's common capital stock,
without par value.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by (i) any two of the following
individuals: the Chairman, a Vice Chairman, the President, a Group Executive
or a Vice President, or (ii) by one of the foregoing individuals and by any
other Vice President, the Treasurer, an Assistant Treasurer, the Corporate
Secretary or an Assistant Corporate Secretary or any other individual
authorized by the Board of Directors for such purpose, and delivered to the
Trustee.
"Corporate Trust Office" means the principal office of the
Trustee located at 1 North State Street, 9th Floor, Chicago, Illinois 60602 at
which at any particular time its corporate trust business shall be
administered.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"Covenant Defeasance" has the meaning specified in Section
1203.
"Debenture" has the meaning stated in the first recital of
this Indenture and more particularly means the Debentures of any series,
issued from time to time, by the Company pursuant to this Indenture.
"Debenture Register" and "Debenture Registrar" have the
respective meanings specified in Section 305.
"Debt" means (without duplication and without regard to any
portion of principal amount that has not accrued and to any interest component
thereof (whether accrued or imputed) that is not due and payable) with respect
to any Person, whether recourse is to all or a portion of the assets of such
Person and whether or not contingent, (i) every obligation of such Person for
money borrowed, (ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations incurred
in connection with the acquisition of property, assets or businesses, (iii)
every reimbursement obligation of such Person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of
such Person, (iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business),
(v) every capital lease obligation of such Person and (vi) every obligation of
the type referred to in clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable, directly or indirectly, as obligor
or otherwise.
"Defaulted Interest" has the meaning specified in Section
307.
"Defeasance" has the meaning specified in Section 1202.
"Depositary" means, with respect to Debentures of any series
issuable in whole or in part in the form of one or more Global Debentures, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Debentures as contemplated by Section 301.
"Event of Default" has the meaning set forth in Section 501
hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute thereto.
"Floating or Adjustable Rate Debenture" means any Debenture
which provides for interest thereon at a periodic rate that may vary from time
to time over the term thereof in accordance with a Floating or Adjustable Rate
Provision.
"Floating or Adjustable Rate Provision" means a formula or
provision, specified in or pursuant to a Board Resolution or an indenture
supplemental hereto, providing for the determination, whether pursuant to
objective factors or pursuant to the sole discretion of any Person (including
the Company), and periodic adjustment of the interest rate borne by a Floating
or Adjustable Rate Debenture.
"Global Debenture" means a Debenture that evidences all or
part of the Debentures of any series and is authenticated and delivered to,
and registered in the name of, the Depositary for such Debentures or a nominee
thereof.
"Guarantee" means the Payment and Guarantee Agreement
executed and delivered by the Company for the benefit of the holders from time
to time of the Preferred Securities, as amended from time to time.
"Holder" means a Person in whose name a Debenture is
registered in the Debenture Register.
"Indenture" means this instrument as originally executed or
as it may from time to time be supplemented or amended by one or more
indentures supplemental hereto entered into pursuant to the applicable
provisions hereof, including, for all purposes of this instrument, and any
such supplemental indenture, the provisions of the Trust Indenture Act that
are deemed to be a part of and govern this instrument and any such
supplemental indenture, respectively. The term "Indenture" shall also
include the terms of particular series of Debentures established as
contemplated by Section 301.
"Interest Payment Date", when used with respect to any
Debenture, means the Stated Maturity of an instalment of interest on such
Debenture.
"Junior Subordinated Payment" has the meaning specified in
Section 1402.
"L.L.C. Agreement" means the Amended and Restated Limited
Liability Company Agreement of Capital dated as of , 1994 by and among
the members of Capital, as amended from time to time.
"Managing Members" means the Company and Aetna Capital
Holdings, Inc., in their capacity as the members of Capital that hold all of
Capital's outstanding Common Securities.
"Maturity", when used with respect to any Debenture, means
the date on which the principal of such Debenture or an instalment of
principal becomes due and payable as therein or herein provided, whether at
the Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Notice of Default" means a written notice of the kind
specified in Section 501(3).
"Officers' Certificate" means a certificate signed by (i)
any two of the following individuals: the Chairman, a Vice Chairman, the
President, a Group Executive or a Vice President, or (ii) by one of the
foregoing individuals and by any other Vice President, the Treasurer, an
Assistant Treasurer, the Corporate Secretary or an Assistant Corporate
Secretary, of the Company, or any other individual authorized by the Board of
Directors for such purpose, and delivered to the Trustee. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of or counsel to the Company, or who may be other counsel
reasonably satisfactory to the Trustee.
"Outstanding", when used with respect to Debentures, means,
as of the date of determination, all Debentures theretofore authenticated and
delivered under this Indenture, except:
(i) Debentures theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Debentures for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such
Debentures; provided that, if such Debentures are to be
redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory
to the Trustee has been made;
(iii) Debentures as to which Defeasance has been effected
pursuant to Section 1202; and
(iv) Debentures which have been paid pursuant to Section 306
or in exchange for or in lieu of which other Debentures have been
authenticated and delivered pursuant to this Indenture, other than
any such Debentures in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such
Debentures are held by a bona fide purchaser in whose hands such
Debentures are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures
owned by the Company or any other obligor upon the Debentures or any
Subsidiary of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Debentures which the Trustee knows
to be so owned shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Debentures and that the pledgee is not the Company or any
other obligor upon the Debentures or any Subsidiary of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or any premium or interest on any Debentures on behalf of
the Company.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Debentures
of any series, means the place or places where the principal of and any
premium and interest on the Debentures of that series are payable as specified
as contemplated by Section 301.
"Predecessor Debenture" of any particular Debenture means
every previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Debenture.
"Preferred Security" has the meaning stated in the first
recital of this Indenture.
"Proceeding" has the meaning specified in Section 1402.
"Redemption Date", when used with respect to any Debenture
to be redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Debenture
to be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Debentures of any series means the date specified
for that purpose as contemplated by Section 301.
"Responsible Officer", when used with respect to the
Trustee, means the chairman or any vice-chairman of the board of directors,
the chairman or any vice-chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of his or her knowledge of and familiarity with the
particular subject.
"Security Exchange" when used with respect to the Debentures
of any series, means an exchange by Capital of Debentures of such series for
Preferred Securities of the related series pursuant to the Written Action
establishing the Preferred Securities of such series.
"Senior Debt" means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to the Company to
the extent that such claim for post-petition interest is allowed in such
proceeding), on Debt of the Company, whether incurred on or prior to the date
of the Indenture or thereafter incurred, unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are not superior in right of payment to the
Debentures or to other Debt which is pari passu with, or subordinated to the
Debentures or to other securities of the Company which are junior to the
Debentures; provided, however, that Senior Debt shall not be deemed to include
the Debentures.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Debenture
or any instalment of principal thereof or interest thereon, means the date
specified in such Debenture as the fixed date on which the principal of such
Debenture or such instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the voting
power of which is controlled, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting power" means the
power to vote for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Debentures of any series shall mean the Trustee with respect to
Debentures of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939
as in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"U.S. Government Obligations" has the meaning specified in
Section 1204.
"Vice President", when used with respect to the Company or
the Trustee, means any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
"Written Action" when used with respect to the Preferred
Securities of any series, means a written action of the Managing Members
pursuant to the L.L.C. Agreement, establishing the terms of the Preferred
Securities of such series.
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee such certificates and opinions as may be required
under the Trust Indenture Act. Each such certificate or opinion shall be
given in the form of an Officers' Certificate, if to be given by an officer of
the Company, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture (excluding certificates
provided for in Section 1004) shall include
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, such individual has made such examination or
investigation as is necessary to enable such individual to express
an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect
to some matters and one or more other such Persons as to other matters, and
any such Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which its certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Any certificate, statement or opinion of an officer of the
Company or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate, opinion or representation by an accountant or
firm of accountants in the employ of the Company, unless such officer or
counsel, as the case may be, knows, or in the exercise of reasonable care
should know, that the certificate, opinion or representation with respect to
such accounting matters upon which its certificate, statement or opinion may
be based is erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him or her the execution
thereof. Where such execution is by a signer acting in a capacity other than
such signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Debentures of any series entitled to
give or take any request, demand, authorization, direction, notice, consent,
waiver or other action, or to vote on any action, authorized or permitted to
be given or taken by Holders of Outstanding Debentures of such series. If not
set by the Company prior to the first solicitation of a Holder of Debentures
of such series made by any Person in respect of any such action, or, in the
case of any such vote, prior to such vote, the record date for any such action
or vote shall be the 30th day (or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 701) prior to such
first solicitation or vote, as the case may be. With regard to any record
date for action to be taken by the Holders of one or more series of
Debentures, only the Holders of Debentures of such series on such date (or
their duly designated proxies) shall be entitled to give or take, or vote on,
the relevant action.
(d) The ownership of Debentures shall be proved by the
Debenture Register or by a certificate of the Debenture Registrar.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Debenture shall bind every
future Holder of the same Debenture and the Holder of every Debenture issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
(f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with regard to any particular
Debenture may do so with regard to all or any part of the principal amount of
such Debenture or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of such
principal amount.
Section 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Steven Wagner, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this
instrument, Attention: Senior Vice President - Finance, or at any
other address previously furnished in writing to the Trustee by
the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at its address as it appears in the
Debenture Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such notice;
provided, however, that the Company or the Trustee, upon a good faith
determination that mailing is in the circumstances impractical, may give such
notice by any other method which, in the reasonable belief of the Company or,
in the case of the Trustee, of the Company and the Trustee, is likely to be
received by the Holders. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable to give such notice
by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose
hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
a provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Debentures
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Debentures, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders and, to the extent specifically set forth
herein, the holders of Senior Debt and Preferred Securities, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
Section 112. Governing Law.
This Indenture and the Debentures shall be governed by and
construed in accordance with the laws of the State of New York, but without
regard to principles of conflicts of laws.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of any Debenture shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Debentures
(other than a provision of the Debentures of any series which specifically
states that such provision shall apply in lieu of this Section)) payment of
interest or principal (and premium, if any) need not be made on such date, but
may be made on the next succeeding Business Day (and no interest shall accrue
with respect to such payment for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be), except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such Interest Payment Date or
Redemption Date, or at the Stated Maturity, as the case may be.
Section 114. Personal Immunity from Liability for Incorporators,
Stockholders, Etc.
No recourse shall be had for the payment of the principal of
or premium, if any, or interest, if any, on any Debenture, or for any claim
based thereon, or otherwise in respect of any Debenture, or based on or in
respect of this Indenture or any indenture supplemental hereto, against any
incorporator, or against any past, present or future stockholder, director or
officer, as such, of the Company or of any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being expressly
waived and released as a condition of, and as consideration for, the execution
of this Indenture and the issue of the Debentures.
ARTICLE TWO
Debenture Form
Section 201. Forms Generally.
The Debentures of each series shall be in substantially the
form set forth in this Article, or in such other form as shall be established
by or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistent herewith, be
determined by the officers executing such Debentures, as evidenced by their
execution of the Debentures. If the form of Debentures of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Corporate
Secretary or an Assistant Corporate Secretary of the Company and delivered to
the Trustee at or prior to the delivery of the Company Order contemplated by
Section 303 for the authentication and delivery of such Debentures.
The definitive Debentures shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Debentures, as evidenced by their
execution of such Debentures.
Section 202. Form of Face of Debenture.
[Insert any legend required by the Internal Revenue Code and
the regulations thereunder.]
AETNA LIFE AND CASUALTY COMPANY
No. $
AETNA LIFE AND CASUALTY COMPANY, a Connecticut insurance
corporation (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received,
hereby promises to pay to ,
or registered assigns, the principal sum of
Dollars on , and to pay interest thereon [if the Security is to bear
interest at a fixed rate, insert -- the rate of ....% per annum [if the
Security is a Floating or Adjustable Rate Security, insert -- a rate per
annum [computed-determined] in accordance with the [insert defined name of
Floating or Adjustable Rate Provision] set forth below] plus Additional
Interest, if any, accruing from or from the most recent Interest Payment
Date to which interest has been paid or duly provided for and (to the
extent that the payment of such interest shall be legally enforceable) at
the rate of % per annum on any overdue principal and premium and on any
overdue instalment of interest or Additional Interest. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose
name this Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the or (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to
be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Debenture (or one or more Predecessor
Debentures) is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Debentures of this series not less than
10 days prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
The indebtedness evidenced by this Debenture is, to the
extent provided in the Indenture, subordinate and subject in right of payment
to the prior payment in full of all Senior Debt, and this Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder
of this Debenture, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.
[If the Securities are Floating or Adjustable Rate
Securities with respect to which the principal of or any premium or interest
may be determined with reference to an index, insert the text of the Floating
or Adjustable Rate Provision.]
Payment of the principal of (and premium, if any) and
interest on this Debenture will be made at the office or agency of the Company
maintained for that purpose in , in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Debenture
Register. Notwithstanding the foregoing, so long as the Holder of this
Debenture is Capital, the payment of the principal of (and premium, if any)
and interest (including Additional Interest, if any) on this Debenture will be
made at such place and to such account as may be designated by Capital.
Reference is hereby made to the further provisions of this
Debenture set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Debenture shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed under its corporate seal.
Dated:
AETNA LIFE AND CASUALTY
COMPANY
By______________________
Attest:
Section 203. Form of Reverse of Debenture.
This Debenture is one of a duly authorized issue of
securities of the Company (herein called the "Debentures), issued and to be
issued in one or more series under an Indenture, dated as of , 1994
(herein called the "Indenture"), between the Company and The First National
Bank of Chicago, as Trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Trustee and the Holders of the Debentures and, to the
extent specifically set forth in the Indenture, the holders of Senior Debt and
Preferred Securities, and of the terms upon which the Debentures are, and are
to be, authenticated and delivered. This Debenture is one of the series
designated on the face hereof, limited in aggregate principal amount
to $ .
[If the Debentures are subject to redemption, insert the
terms upon which such Debentures may be redeemed.]
[If applicable, insert the following: In the event of
redemption of this Debenture in part only, a new Debenture or Debentures of
this series and of like tenor for the unredeemed portion hereof will be issued
in the name of the Holder hereof upon the cancellation hereof.]
The Indenture contains provisions for defeasance at any time
of (1) the entire indebtedness of this Debenture or (2) certain restrictive
covenants and Events of Default with respect to this Debenture, in each case
upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Debentures of this
series shall occur and be continuing, the principal of the Debentures of this
series and accrued interest thereon (including Additional Interest, if any)
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Debentures of
each series to be affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures at the time Outstanding of each
series to be affected (and, prior to a Security Exchange with respect to the
Debentures of any series affected thereby, the consent of the holders of not
less than a majority in stated liquidation preference of the Preferred
Securities of the related series). The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Debentures of each series at the time Outstanding, on behalf of the Holders of
all Debentures of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences (except that prior to a Security Exchange with respect to
the Debentures of such series, any such waiver will also require the consent
of the holders of specified percentages of the stated liquidation preference
of the Preferred Securities of the related series). Any such consent or
waiver by the Holder of this Debenture shall be conclusive and binding upon
such Holder and upon all future Holders of this Debenture and of any Debenture
issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Debenture.
Subject to Section 1503 of the Indenture, no reference
herein to the Indenture (other than such Section) and no provision of this
Debenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and
interest on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Debenture is registerable
in the Debenture Register, upon surrender of this Debenture for registration
of transfer at the office or agency of the Company in any place where the
principal of and any premium and interest on this Debenture are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Debenture Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees; provided that prior to a Security
Exchange with respect to the Debentures of this series, the Debentures of this
series may not be transferred without the written consent of the Company.
The Debentures of this series are issuable only in
registered form without coupons in denominations of $25.00 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Debentures of this series are exchangeable for
a like aggregate principal amount of Debentures of this series and of like
tenor of a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Debenture is registered as the
owner hereof for all purposes, whether or not this Debenture is overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
No recourse shall be had for the payment of the principal of
(and premium, if any) or interest (including Additional Interest, if any) on
this Debenture, or for any claim based hereon, or otherwise in respect hereof,
or based on or in respect of the Indenture or any indenture supplemental
thereto, against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
All terms used in this Debenture which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Section 204. Form of Legend for Global Debentures.
Every Global Debenture authenticated and delivered hereunder
shall bear a legend in substantially the following form or such other legends
as may be required:
This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of
a Depositary or a nominee thereof. This Debenture may not be
transferred to, or registered or exchanged for Debentures
registered in the name of, any Person other than the Depositary or
a nominee thereof and no such transfer may be registered, except
in the limited circumstances described in the Indenture. Every
Debenture authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, this Debenture
shall be a Global Debenture subject to the foregoing, except in
such limited circumstances.
Section 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Debentures of the series designated
therein referred to in the within-mentioned Indenture.
.............................,
As Trustee
By...........................
Authorized Officer
ARTICLE THREE
The Debentures
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Debentures which may be
authenticated and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution or established in
one or more indentures supplemental hereto, prior to the issuance of
Debentures of any series,
(1) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from Debentures of any
other series);
(2) any limit upon the aggregate principal amount of the
Debentures of the series which may be authenticated and delivered
under this Indenture (except for Debentures authenticated and
delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Debentures of the series pursuant to Sections
304, 305, 306, 906 or 1107 and except for any Debentures which,
pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Debenture of the
series shall be payable, if other than the Person in whose name
that Debenture (or one or more Predecessor Debentures) is
registered at the close of business on the Regular Record Date for
such interest;
(4) the date or dates on which the principal of the
Debentures of the series is payable;
(5) the rate or rates at which the Debentures of the series
shall bear interest, if any, or the Floating or Adjustable Rate
Provision pursuant to which such rates shall be determined, the
date or dates from which such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable and the
Regular Record Date for any interest payable on any Interest
Payment Date;
(6) the place or places where the principal of and any
premium and interest on Debentures of the series shall be payable;
(7) the period or periods within which, the price or prices
at which (including premium, if any) and the terms and conditions
upon which Debentures of the series may be redeemed or prepaid, in
whole or in part, at the option of the Company pursuant to a
sinking fund or otherwise;
(8) the obligation, if any, of the Company to redeem or
purchase Debentures of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and
the terms and conditions upon which Debentures of the series shall
be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $25.00 and any integral
multiple thereof, the denominations in which Debentures of the
series shall be issuable;
(10) the ability of the Company, if any, to reborrow the
proceeds from any redemption or repayment of the Debentures of
that series or to exchange any Debentures of that series for
Debentures of a different series;
(11) the ability of the Company, if any, to extend the
interest payment period for the Debentures of the series;
(12) if the amount of payments of principal of or any premium
or interest on any Debentures of the series may be determined with
reference to one or more indices, the manner in which such amounts
shall be determined;
(13) if and as applicable, that the Debentures of the series
shall be issuable in whole or in part in the form of one or more
Global Debentures and, in such case, the Depositary or
Depositaries for such Global Debenture or Global Debentures and
any circumstance other than those set forth in Section 305 in
which any such Global Debenture may be transferred to, and
registered and exchanged for Debentures registered in the name
of, a Person other than the Depositary for such Global
Debenture or a nominee thereof and in which any such transfer
may be registered;
(14) any other event or events of default applicable with
respect to the Debentures of the series in addition to those
provided in Section 501;
(15) any other covenant or warranty included for the benefit
of Debentures of the series in addition to (and not inconsistent
with) those included in this Indenture for the benefit of
Debentures of all series, or any other covenant or warranty
included for the benefit of Debentures of the series in lieu of
any covenant or warranty included in this Indenture for the
benefit of Debentures of all series, or any provision that any
covenant or warranty included in this Indenture for the benefit of
Debentures of all series shall not be for the benefit of
Debentures of the series, or any combination of such covenants,
warranties or provisions;
(16) any restriction or condition on the transferability of
the Debentures of the series;
(17) any authenticating or paying agents, registrars or
any other agents with respect to the Debentures of the series; and
(18) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 901(5)).
All Debentures of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided in
or pursuant to the Board Resolution referred to above or in any such indenture
supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of such action shall be delivered
to the Trustee.
Section 302. Denominations.
The Debentures of each series shall be issuable in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such provisions with
respect to the Debentures of any series, the Debentures of such series shall
be issuable in denominations of $25.00 and any integral multiple thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Debentures shall be executed on behalf of the Company by
its Chairman, a Vice Chairman, its President, any Group Executive, any Vice
President, its Treasurer or Assistant Treasurer, under its corporate seal
reproduced thereon attested by its Corporate Secretary or one of its Assistant
Corporate Secretaries. The signature of any of these officers on the
Debentures may be manual or facsimile.
The seal of the Company may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on
the Debentures. Debentures bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Debentures or did not hold such offices at the date of such Debentures. Minor
typographical and other minor errors in the text of any Debenture or minor
defects in the seal or facsimile signature on any Debenture shall not affect
the validity or enforceability of such Debenture if it has been duly
authenticated and delivered by the Trustee.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Debentures of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Debentures, and the
Trustee in accordance with the Company Order shall authenticate and deliver
such Debentures. If the form or terms of the Debentures of the series have
been established in or pursuant to one or more Board Resolutions as permitted
by Sections 201 and 301, in authenticating such Debentures, and accepting the
additional responsibilities under this Indenture in relation to such
Debentures, the Trustee shall be entitled to receive, and (subject to Section
601) shall be fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Debentures has been established by
or pursuant to Board Resolution as permitted by Section 201, that
such form has been established in conformity with the provisions
of this Indenture;
(b) if the terms of such Debentures have been established
by or pursuant to Board Resolution as permitted by Section 301,
that such terms have been established in conformity with the
provisions of this Indenture; and
(c) that such Debentures, when authenticated and delivered
by the Trustee and issued by the Company in the manner and subject
to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights generally or the rights of creditors of
insurance companies generally and to general equity principles.
The Trustee shall have the right to decline to authenticate
and deliver any Debentures under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if the
Trustee in good faith by its board of directors, executive committee, or a
trust committee of directors or responsible officers of the Trustee shall
determine that such action would expose the Trustee to personal liability to
existing Holders of Debentures.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Debentures of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Board Resolution
otherwise required pursuant to Section 301 or the Company Order and Opinion of
Counsel otherwise required pursuant to such preceding paragraph at or prior to
the time of authentication of each Debenture of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Debenture of such series to be issued.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Debenture a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Debenture shall be conclusive evidence, and the only
evidence, that such Debenture has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Debenture shall have been
authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Debenture to the Trustee for
cancellation as provided in Section 309, for all purposes of this Indenture
such Debenture shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
Section 304. Temporary Debentures.
Pending the preparation of definitive Debentures of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Debentures which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Debentures in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Debentures may determine, as evidenced by their execution of
such Debentures.
If temporary Debentures of any series are issued, the
Company will cause definitive Debentures of that series to be prepared without
unreasonable delay. After the preparation of definitive Debentures of such
series, the temporary Debentures of such series shall be exchangeable for
definitive Debentures of such series upon surrender of the temporary
Debentures of such series at the office or agency of the Company in a Place of
Payment for that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Debentures of any series, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor one or more definitive Debentures of the same series, of any
authorized denominations and of a like aggregate principal amount and tenor.
Until so exchanged the temporary Debentures of any series shall in all
respects be entitled to the same benefits under this Indenture as definitive
Debentures of such series and tenor.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee a register (the register maintained in such office and
in any other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Debenture Register") in which,
subject to such reasonable regulations as it or the Trustee may prescribe, the
Company shall provide for the registration of Debentures and of transfers of
Debentures. The Trustee is hereby appointed "Debenture Registrar" for the
purpose of registering Debentures and transfers of Debentures as herein
provided.
Upon surrender for registration of transfer of any Debenture
of any series at the office or agency in a Place of Payment for that series,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Debentures of the same series, of any authorized denominations and of a like
aggregate principal amount and tenor; provided that prior to a Security
Exchange with respect to the Debentures of such series, the Debentures of such
series may not be transferred without the written consent of the Company.
At the option of the Holder, Debentures of any series may be
exchanged for other Debentures of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Debentures to be exchanged at such office or agency.
Whenever any Debentures are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Debentures which
the Holder making the exchange is entitled to receive.
All Debentures issued upon any registration of transfer or
exchange of Debentures shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Debentures surrendered upon such registration of transfer or
exchange.
Every Debenture presented or surrendered for registration of
transfer, exchange, redemption or payment shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Debenture Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Debentures, but the Company or the Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Debentures, other than exchanges pursuant to Section 304, 906 or 1107 not
involving any transfer.
Unless otherwise required by the rules of any stock exchange
on which the Debentures are listed or of any quotation system through which
the Debentures are traded, neither the Company nor the Trustee shall be
required (i) to issue, register the transfer of or exchange Debentures of any
series during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Debentures of that series
selected for redemption under Section 1103 and ending at the close of business
on the day of such mailing, or (ii) to register the transfer of or exchange
any Debenture so selected for redemption in whole or in part, except the
unredeemed portion of any Debenture being redeemed in part.
Notwithstanding any other provision in this Indenture, no
Global Debenture may be transferred to, or registered or exchanged for
Debentures registered in the name of, any Person other than the Depositary for
such Global Debenture or any nominee thereof, and no such transfer may be
registered, unless (1) such Depositary (A) notifies the Company and the
Trustee that it is unwilling or unable to continue as Depositary for such
Global Debenture or (B) ceases to be a clearing agency registered under the
Exchange Act, (2) the Company executes and delivers to the Trustee a Company
Order that such Global Debenture shall be so transferable, registrable and
exchangeable, and such transfers shall be registrable, (3) there shall have
occurred and be continuing an Event of Default with respect to the Debentures
evidenced by such Global Debenture or (4) there shall exist such other
circumstances, if any, as have been specified for this purpose as contemplated
by Section 301. Notwithstanding any other provision in this Indenture, a
Global Debenture to which the restriction set forth in the preceding sentence
shall have ceased to apply may be transferred only to, and may be registered
and exchanged for Debentures registered only in the name or names of, such
Person or Persons as the Depositary for such Global Debenture shall have
directed and no transfer thereof other than such a transfer may be registered.
Every Debenture authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Debenture to which the restriction set forth in the first sentence of the
preceding paragraph shall apply, whether pursuant to this Section, Section
304, 306, 906 or 1107 or otherwise, shall be authenticated and delivered in
the form of, and shall be, a Global Debenture.
Section 306. Mutilated, Destroyed, Lost and Stolen Debentures.
If there shall be delivered to the Company and the Trustee
(i) a mutilated Debenture or (ii) evidence to their satisfaction of the
destruction, loss or theft of any Debenture and in either case such security
or indemnity as may be required by either of them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Debenture has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such mutilated, destroyed, lost or stolen Debenture, a
new Debenture of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen
Debenture has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section,
the Company or the Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee)
connected therewith.
Every new Debenture of any series issued pursuant to this
Section in lieu of any destroyed, lost or stolen Debenture shall constitute an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Debenture shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Debentures of that series duly
issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Debentures.
Section 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Debentures, interest on any Debenture which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Debenture (or one or more
Predecessor Debentures) is registered at the close of business on the Regular
Record Date for such interest.
Any interest on any Debenture of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures of such
series (or their respective Predecessor Debentures) are registered
at the close of business on a Special Record Date for the payment
of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Debenture
of such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in
this Clause provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 15 days after the
receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record
Date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class
postage prepaid, to each Holder of Debentures of such series at
its address as it appears in the Debenture Register, not less than
10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Debentures of such series
(or their respective Predecessor Debentures) are registered at the
close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest
on the Debentures of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on
which such Debentures may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company
to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Debenture delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Debenture shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Debenture.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Debenture for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Debenture is registered as the owner
of such Debenture for the purpose of receiving payment of principal of and any
premium and (subject to Section 307) any interest on such Debenture and for
all other purposes whatsoever, whether or not such Debenture be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Section 309. Cancellation.
All Debentures surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Debentures
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Debentures
previously authenticated hereunder which the Company has not issued and sold,
and all Debentures so delivered shall be promptly cancelled by the Trustee.
No Debentures shall be authenticated in lieu of or in exchange for any
Debentures cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Debentures held by the Trustee
shall be disposed of as directed by a Company Order. Acquisition by the
Company of any Debenture shall not operate as a redemption or satisfaction of
the indebtedness represented by such Debenture unless and until the same is
delivered to the Trustee for cancellation.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Debentures of any series, interest on the Debentures of each series shall
be computed on the basis of a 360-day year of twelve 30-day months and, for
any period shorter than a full monthly period, shall be computed on the basis
of the actual number of days elapsed in such period.
Section 311. Additional Interest.
Except as otherwise provided as contemplated by Section 301
with respect to any series of Debentures, if at any time prior to a Security
Exchange with respect to such series of Debentures, (i) Capital shall be
required to pay any Additional Amounts with respect to the related series of
Preferred Securities or (ii) Capital shall be required to pay, with respect to
its income derived from the interest payments on such series of Debentures,
any amounts for or on account of any taxes, duties, assessments or governmental
charges of whatever nature imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as interest such
additional amounts ("Additional Interest") as may be necessary in order that
the net amounts received and retained by Capital after paying such Additional
Amounts or after the payment of such taxes, duties, assessments or
governmental charges shall result in Capital's having such funds as it would
have had in the absence of the payment of such taxes, duties, assessments or
governmental charges.
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of
further effect (except as to any surviving rights of registration of transfer
or exchange of Debentures of a series herein expressly provided for) with
respect to Debentures of any series, and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to a series, when
(1) either
(A) all Debentures of such series theretofore authenticated
and delivered (other than (i) Debentures which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306 and (ii) Debentures of such series for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation;
or
(B) all such Debentures of such series not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee in trust for
the purpose (A) money in an amount, or (B) U.S. Government
Obligations that through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof,
sufficient to pay and discharge the entire indebtedness on such
Debentures of such series not theretofore delivered to the Trustee
for cancellation, for principal of (and premium, if any) and
interest to the date of such deposit (in the case of Debentures of
such series which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture with respect to such
series have been complied with.
In the event there are Debentures of two or more series
outstanding hereunder, the Trustee shall be required to execute an instrument
acknowledging satisfaction and discharge of this Indenture only if requested
to do so with respect to Debentures of a particular series as to which it is
Trustee and if the other conditions thereto are met. In the event that there
are two or more Trustees hereunder, then the effectiveness of any such
instrument shall be conditioned upon receipt of such instruments from all
Trustees hereunder.
Notwithstanding the satisfaction and discharge of this
Indenture with respect to a particular series, the obligations of the Company
to the Trustee under Section 607, the obligations of the Trustee to any
Authenticating Agent under Section 614 and, if money shall have been deposited
with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003 shall survive until there are no Debentures Outstanding with respect to a
particular series and the obligations of the Company and the Trustee with
respect to all other series of Debentures shall survive.
Section 402. Application of Trust Fund.
Subject to provisions of the last paragraph of Section 1003,
all amounts deposited with the Trustee pursuant to Section 401 shall be held
in trust and applied by it, in accordance with the provisions of the Debentures
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal and any
premium and interest for whose payment such funds have been deposited with the
Trustee. Money deposited pursuant to this section not in violation of this
Indenture shall not be subject to claims of the holders of Senior Debt under
Article Fourteen.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default" whenever used with respect to Debentures
of a series means any one of the following events and such other events as may
be established with respect to the Debentures of such series as contemplated
by Section 301 hereof (whether or not it shall be occasioned by the provisions
of Article Fourteen):
(1) Default in the payment of any instalment of interest
(including any Additional Interest) upon any Debentures issued
under this Indenture as and when the same shall become due and
payable, and continuance of such default for a period of 10 days,
in the event such Default occurs prior to a Security Exchange with
respect to such Debentures, and 30 days, in the event such Default
occurs on or after such a Security Exchange; provided that a valid
extension of the interest payment period by the Company for any
Debentures shall not constitute a default in the payment of
interest for this purpose; or
(2) Default in the payment of the principal of or premium,
if any, on any Debentures issued under this Indenture as and when
the same shall become due and payable either at maturity, upon
redemption, by declaration or otherwise; or
(3) Failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or
agreements on the part of the Company contained in this Indenture
for the benefit of the holders of Debentures of such series and
written notice of such failure, stating that such notice is a
"Notice of Default" hereunder, and requiring the Company to remedy
the same, shall have been given by registered or certified mail,
return receipt requested, to the Company by the Trustee, or to the
Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Outstanding Debentures of such
series or, prior to a Security Exchange with respect to Debentures
of such series, 25% in aggregate stated liquidation preference of
the related series of Preferred Stock and such failure shall have
continued unremedied for a period of 60 days, in the event such
Default occurs prior to a Security Exchange with respect to the
Debentures of such series, and 90 days, in the event such Default
occurs after such a Security Exchange after the date of the
Company's receipt of such Notice of Default; or
(4) A decree or order by a court having jurisdiction in
the premises shall have been entered adjudging the Company a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of
the Company under any applicable Federal or State bankruptcy or
similar law, and such decree or order shall have continued
undischarged and unstayed for a period of 90 days; or a decree or
order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, trustee, assignee,
sequestrator or similar official in bankruptcy or insolvency of
the Company or of all or substantially all of its property, or for
the winding up or liquidation of its affairs, shall have been
entered, and such decree or order shall have continued
undischarged and unstayed for a period of 90 days; or
(5) The Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing
of a bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking reorganization, arrangement, adjustment
or composition under any applicable Federal or State bankruptcy or
similar law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver, liquidator,
trustee, assignee, sequestrator or similar official in bankruptcy
or insolvency of the Company or of all or substantially all of its
property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its
debts generally as they become due and its willingness to be
adjudged a bankrupt, or corporate action shall be taken by the
Company in furtherance of any of the aforesaid purposes.
After a Security Exchange with respect to the Debentures of
any series, upon receipt by the Trustee of any Notice of Default pursuant to
this Section 501 with respect to the Debentures of such series, a record date
shall automatically and without any other action by any Person be set for the
purpose of determining the holders of Outstanding Debentures of such series
entitled to join in such Notice of Default, which record date shall be the
close of business on the day the Trustee receives such Notice of Default. The
Holders of Outstanding Debentures of such series on such record date (or their
duly appointed agents), and only such Persons, shall be entitled to join in
such Notice of Default, whether or not such Holders remain Holders after such
record date; provided that, unless such Notice of Default shall have become
effective by virtue of Holders of at least 25% in principal amount of
Outstanding Debentures of such series on such record date (or their duly
appointed agents) having joined therein on or prior to the 90th day after such
record date, such Notice of Default shall automatically and without any action
by any Person be cancelled and of no further effect. Nothing in this
paragraph shall prevent a Holder (or a duly appointed agent thereof) from
giving, before or after the expiration of such 90-day period, a Notice of
Default contrary to or different from, or, after the expiration of such
period, identical to, a Notice of Default that has been cancelled pursuant to
the proviso to the preceding sentence, in which event a new record date in
respect thereof shall be set pursuant to this paragraph.
Section 502. Acceleration of Maturity.
(a) If an Event of Default with respect to the Debentures
of any series at the time Outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in principal amount
of the Outstanding Debentures of such series may declare the principal amount
of all of the Debentures of that series to be due and payable immediately, by
a notice in writing to the Company (and to the Trustee if given by Holders),
and upon any such declaration such principal amount and all accrued interest
thereon (including any Additional Interest and any interest subject to an
interest extension election for such Debentures) shall become immediately due
and payable.
At any time after such a declaration of acceleration with
respect to Debentures of any series has been made and before a judgment or
decree for payment of the money due has been obtained by Capital or, after a
Security Exchange with respect to the Debentures of such series, the Trustee
as hereinafter in this Article provided, the Holders of a majority in
principal amount of the Outstanding Debentures of that series (with the
consent of the holders of a majority in stated liquidation preference of the
Preferred Securities of the related series in the event such Preferred
Securities have not been exchanged for such Debentures), by written notice to
the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest (including any Additional
Interest) on all Debentures of that series,
(B) the principal of (and premium, if any, on) any
Debentures of that series which have become due otherwise
than by such declaration of acceleration, any interest
thereon at the rate or rates prescribed therefor in such
Debentures and any Additional Interest,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Debentures, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel except such costs and expenses as are a result of
negligence or bad faith on the part of the Trustee;
and
(2) all Events of Default with respect to Debentures of
that series, other than the non-payment of the principal of and
interest, if any, on the Debentures of that series which have
become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
After a Security Exchange with respect to the Debentures of
any series, upon receipt by the Trustee of any declaration of acceleration, or
any rescission and annulment of any such declaration, pursuant to this Section
502 with respect to Debentures of such series, a record date shall
automatically and without any other action by any Person be set for the
purpose of determining the Holders of Outstanding Debentures of such series
entitled to join in such declaration, or rescission and annulment, as the case
may be, which record date shall be the close of business on the day the
Trustee receives such declaration, or rescission and annulment, as the case
may be. The Holders of Outstanding Debentures of such series on such record
date (or their duly appointed agents), and only such Persons, shall be
entitled to join in such declaration, or rescission and annulment, as the case
may be, whether or not such Holders remain Holders after such record date;
provided that, unless such declaration, or rescission and annulment, as the
case may be, shall have become effective by virtue of Holders of at least 25%,
in the case of any declaration of acceleration, or a majority, in the case of
any rescission or annulment, in principal amount of Outstanding Debentures of
such series on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such declaration,
or rescission and annulment, as the case may be, shall automatically and
without any action by any Person be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder (or a duly appointed agent
thereof) from giving, before or after the expiration of such 90-day period, a
declaration of acceleration, or a rescission and annulment of any such
declaration, contrary to or different from, or, after the expiration of such
period, identical to, a declaration, or rescission and annulment, as the case
may be, that has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date in respect thereof shall be set
pursuant to this paragraph.
(b) If, prior to a Security Exchange with respect to the
Debentures of any series, an Event of Default with respect to the Debentures
of such series of a character specified in clause (1) or (2) of Section 501
shall have occurred and be continuing and Capital shall have failed to pay any
dividends on the Preferred Securities of the related series on any dividend
payment date (other than as a result of any valid extension of any interest
payment period by the Company for the Debentures of such series) or to pay any
portion of the redemption price of Preferred Securities of such series called
for redemption, then any holder of Preferred Securities of such series may
enforce directly against the Company Capital's right hereunder to receive
payments of principal and interest on the Debentures of such series, but only
in an amount sufficient to enable Capital to pay such dividends or redemption
price.
(c) The Company expressly acknowledges that under the
circumstances set forth in the L.L.C Agreement, the holders of Preferred
Securities have the right to appoint a trustee if an Event of Default has
occurred and is continuing, which trustee shall be authorized to exercise
Capital's rights under this Indenture and the Company agrees to cooperate with
such trustee; provided that any trustee so appointed shall vacate office
immediately in accordance with the L.L.C. Agreement if all Events of Default
giving rise to such right of appointment have been cured by the Company.
In furtherance of the foregoing and without limiting the
powers of any trustee so appointed and for the avoidance of any doubt
concerning the powers of the trustee, the Company acknowledges that any
trustee, in its own name and as trustee of an express trust, may institute a
proceeding, including, without limitation, any suit in equity, an action at
law or other judicial or administrative proceeding, to enforce Capital's
rights directly against the Company to the same extent as Capital and on
behalf of Capital, and may prosecute such proceeding to judgment or final
decree, and enforce the same against the Company and collect, out of the
property, wherever situated, of Company the monies adjudged or decreed to be
payable in the manner provided by law.
(d) Except as provided in this Section 502, holders of any
series Preferred Securities shall have no rights to enforce any obligations of
the Company under this Indenture.
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if, after a Security Exchange
with respect to the Debentures of any series,
(1) default is made in the payment of any interest on any
Debenture of such series when such interest becomes due and payable
(except for a valid extension of any interest period pursuant to
the terms of the Debentures of such series) and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Debenture of such series at the Maturity
thereof,
the Company will, upon written demand of the Trustee, pay to it, for the
benefit of the Holders of such Debentures, the whole amount then due and
payable on such Debentures for principal and any premium and interest and, to
the extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue interest, at
the rate or rates prescribed therefor in such Debentures, 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 except such
costs and expenses, as are a result of negligence or bad faith on the part of
the Trustee. Until such demand is made by the Trustee, the Company may pay
the principal of and premium, if any, and interest, if any, on the Debentures
of such series to the Holders thereof, whether or not the Debentures of such
series are overdue.
If, after a Security Exchange with respect to the Debentures
of any series, an Event of Default with respect to Debentures of such series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Debentures of such
series 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.
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company
(or any other obligor upon the Debentures), its property or its creditors
after a Security Exchange with respect to the Debentures of any series, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture
Act in order to have claims of the Holders of Debentures of such series and the
Trustee allowed in any such proceeding. In particular, the Trustee shall be
authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar
official in any such judicial proceeding is hereby authorized by each Holder
of Debentures of such series to make such payments to the Trustee and, in the
event that the Trustee shall consent to the making of such payments directly
to the Holders of Debentures of such series, to pay to the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 607 except such costs and expenses, as are a result of
negligence or bad faith on the part of the Trustee.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Debentures or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, after a Security Exchange
with respect to Debentures of any series on behalf of the Holders of
Debentures of such series, vote for the election of a trustee in bankruptcy or
similar official and be a member of a creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without Possession of
Debentures.
All rights of action and claims under this Indenture or the
Debentures may be prosecuted and enforced by the Trustee without the
possession of any of the Debentures or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
except such costs and expenses, as are a result of negligence or bad faith on
the part of the Trustee, be for the ratable benefit of the Holders of the
Debentures in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Subject to Article Fourteen, any money collected by the
Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or any premium or interest, upon
presentation of the Debentures and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid
for principal of and any premium and interest on the Debentures in
respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Debentures for
principal and any premium and interest, respectively; and
THIRD: To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.
Section 507. Limitation on Suits.
Prior to a Security Exchange with respect to the Debentures
of any series, Capital shall, with respect to the Debentures of such series,
have the right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder.
After a Security Exchange with respect to the Debentures of
any series, no Holder of any Debenture of that series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Debentures of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Debentures of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory in form and substance to the
Trustee against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Debentures of
that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the
Holder of any Debenture shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) any interest on such Debenture on the Stated Maturity
or Maturities expressed in such Debenture (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment and such rights shall not be impaired without the consent of such
Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debentures in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Debentures to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Subject to Section 507, every right
and remedy given by this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed expedient,
by the Trustee or by the Holders, as the case may be.
Section 512. Control by Holders.
After a Security Exchange with respect to the Debentures of
any series, the Holders of a majority in principal amount of the Outstanding
Debentures of such series shall have the right to 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, with respect to the
Debentures of such series, provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Upon receipt by the Trustee of any such direction with
respect to Debentures of any series, a record date shall be set for
determining the Holders of Outstanding Debentures of such series entitled to
join in such direction, which record date shall be the close of business on
the day the Trustee receives such direction. The Holders of Outstanding
Debentures of such series on such record date (or their duly appointed
agents), and only such Persons, shall be entitled to join in such direction,
whether or not such Holders remain Holders after such record date; provided
that, unless such direction shall have become effective by virtue of Holders
of at least a majority in principal amount of Outstanding Debentures of such
series on such record date (or their duly appointed agents) having joined
therein on or prior to the 90th day after such record date, such direction
shall automatically and without any action by any Person be cancelled and of
no further effect. Nothing in this paragraph shall prevent a Holder (or a
duly appointed agent thereof) from giving, before or after the expiration of
such 90-day period, a direction contrary to or different from, or, after the
expiration of such period, identical to, a direction that has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date in respect thereof shall be set pursuant to this paragraph.
Section 513. Waiver of Past Defaults.
Prior to a Security Exchange with respect to the Debentures
of any series, Capital may not waive any past default hereunder with respect
to such series and its consequences without the consent of the holders of not
less than a majority in stated liquidation preference of the Preferred
Securities of the related series; provided that Capital may not waive any
default (1) in the payment of the principal of or any premium or interest on
any Debenture or (2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified without the consent of the Holder of each
Outstanding Debenture of such series affected without, in each case, the
consent of each holder of Preferred Securities of such series.
After a Security Exchange with respect to the Debentures of
any series, the Holders of not less than a majority in principal amount of the
Outstanding Debentures of such series may on behalf of the Holders of all the
Debentures of such series waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal of or any premium or
interest on any Debenture of such series, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the
consent of the Holder of each Outstanding Debenture of such series
affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, a court may require any party litigant
in such suit to file an undertaking to pay the costs of such suit, and may
assess costs against any such party litigant, in the manner and to the extent
provided in the Trust Indenture Act; provided that neither this Section nor
the Trust Indenture Act shall be deemed to authorize any court to require such
an undertaking or to make such an assessment in any suit instituted by the
Company.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
Section 602. Notice of Defaults.
If a default occurs hereunder with respect to Debentures of
any series, the Trustee shall give the Holders of Debentures of such series
notice of such default as and to the extent provided by the Trust Indenture
Act; provided, however, that in the case of any default of the character
specified in Section 501(3) with respect to Debentures of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Debentures of such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party
or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the Trustee
security or indemnity reasonably satisfactory in form and
substance to the Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(f) prior to the occurrence of an Event of Default and
after the remedy or waiver of all Events of Default, the Trustee
shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or
other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall upon
reasonable notice to the Company be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney at a time and place acceptable to the Company; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
Section 604. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Debentures. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Debentures or the proceeds thereof.
Section 605. May Hold Debentures.
The Trustee, any Authenticating Agent, any Paying Agent, any
Debenture Registrar or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Debentures and, subject
to Sections 608 and 613, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Debenture Registrar or such other agent.
Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its written request for all reasonable
expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture
(including the reasonable compensation, and reasonable expenses
and disbursements of its agents and outside counsel), except any
such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the reasonable costs and expenses of
defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties
hereunder.
Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided
by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall
be a Person that is eligible pursuant to the Trust Indenture Act to act as
such and has a combined capital and surplus of at least $50,000,000 or is a
subsidiary of a corporation which shall be a Person that has a combined
capital and surplus of at least $50,000,000 and which unconditionally
guarantees the obligations of the Trustee hereunder. If such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Debentures of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 611 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Debentures of such series.
(c) The Trustee may be removed at any time with respect to
the Debentures of any series by Act of the Holders of a majority in principal
amount of the Outstanding Debentures of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Debenture for at least six months
may, on behalf of itself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Debentures and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, with respect to the Debentures of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or Trustees
with respect to the Debentures of that or those series (it being understood
that any such successor Trustee may be appointed with respect to the
Debentures of one or more or all of such series and that at any time there
shall be only one Trustee with respect to the Debentures of any particular
series) and shall comply with the applicable requirements of Section 611. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Debentures
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Debentures of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee with
respect to the Debentures of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with
respect to the Debentures of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a Debenture of such
series for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Debentures of such
series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Debentures of any series and
each appointment of a successor Trustee with respect to the Debentures of any
series to all Holders of Debentures of such series in the manner provided in
Section 106. Each notice shall include the name of the successor Trustee with
respect to the Debentures of such series and the address of its Corporate
Trust Office.
Section 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Trustee with respect to all Debentures, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Debentures of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with respect to
the Debentures of such series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer the rights, powers, trust and duties of the retiring
Trustee with respect to the Debentures of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Debentures, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of
that or those series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustee co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become effective to
the extent provided therein and each such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Debentures of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Debentures of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraphs (a) and (b) of this Section, as the case may be.
(d) No successor shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Debentures
shall have been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Debentures so authenticated with the same effect as if such successor Trustee
had itself authenticated such Debentures.
Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Debentures), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor).
Section 614. Appointment of Authenticating Agent.
The Trustee may with the consent of the Company appoint an
Authenticating Agent or Agents with respect to one or more series of
Debentures which shall be authorized to act on behalf of the Trustee to
authenticate Debentures of such series issued upon original issue and upon
exchange, registration of transfer or partial redemption thereof or pursuant
to Section 306, and Debentures so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes
as if authenticated by the Trustee hereunder. Wherever reference is made in
this Indenture to the authentication and delivery of Debentures by the Trustee
or the Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized
and doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee or the
Company may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company
or the Trustee, as the case may be. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Debentures of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Debenture Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 607.
If an appointment with respect to one or more series is made
pursuant to this Section, the Debentures of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Debentures of the series designated
therein referred to in the within-mentioned Indenture.
........................,
As Trustee
By......................,
As Authenticating Agent
By......................,
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and
Addresses of Holders.
After a Security Exchange with respect to Debentures of any
series, the Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not later than 10 days after each
Regular Record Date in each year, a list for such series of
Debentures, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders of Debentures of such
series as of the preceding Regular Record Date, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any
such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in
its capacity as Debenture Registrar.
Section 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Debenture Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and privileges of the Trustee, shall
be as provided by the Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of either of them shall be held accountable by
reason of any disclosure of information as to names and addresses of Holders
made pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. To the extent that any such report is required by the Trust
Indenture Act with respect to any 12 month period, such report shall cover the
12 month period ending July 15 and shall be transmitted by the next succeeding
September 15.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Debentures are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Debentures are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided that
any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed
with the Trustee within 15 days after the same is so required to be filed with
the Commission.
ARTICLE EIGHT
Consolidation, Merger, or Sale of Assets
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any
other Person or sell its properties and assets as, or substantially as, an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:
(1) in case the Company shall consolidate with or merge
into another Person or sell its properties and assets as, or
substantially as, an entirety to any Person, the Person formed by
such consolidation or into which the Company is merged or the
Person which purchases the properties and assets of the Company
as, or substantially as, an entirety shall be a corporation,
partnership or trust, shall be organized and validly existing
under the laws of the United States of America, any State thereof
or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of and any premium and interest on all
the Debentures and the performance or observance of every covenant
of this Indenture on the part of the Company to be performed or
observed, by supplemental indenture satisfactory in form to the
Trustee, executed and delivered to the Trustee, by the Person (if
other than the Company) formed by such consolidation or into which
the Company shall have been merged or by the corporation which
shall have acquired the Company's assets;
(2) immediately after giving effect to such transaction, no
Event of Default shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, or sale and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions
precedent herein provided for relating to such transaction have
been complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any sale of the properties and assets of the
Company as, or substantially as, an entirety in accordance with Section 801,
the successor Person formed by such consolidation or into which the Company is
merged or to which such sale is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company
herein, and thereafter, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Debentures.
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants
of the Company herein and in the Debentures; or
(2) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Debentures (and if such
covenants are to be for the benefit of less than all series of
Debentures, stating that such covenants are expressly being
included solely for the benefit of such series) or to surrender
any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the issuance of Debentures in bearer form, registrable
or not registrable as to principal, and with or without interest
coupons, or to permit or facilitate the issuance of Debentures in
uncertificated form; or
(5) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Debentures,
including, without limitation, with respect to any of the
provisions set forth in Article Fourteen, provided that any such
addition, change or elimination (i) shall neither (A) apply to any
Debenture of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such
provision nor (B) modify the rights of the Holder of any such
Debenture with respect to such provision or (ii) shall become
effective only when there is no such Debenture Outstanding; or
(6) to secure the Debentures of any series; or
(7) to establish the form or terms of Debentures of any
series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Debentures of one or more series and to add to or change any of
the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by
more than one Trustee, pursuant to the requirements of Section
611(b); or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided that such action
pursuant to this clause (9) shall not adversely affect the
interests of the Holders of Debentures of any series in any
material respect; or
(10) to conform to any mandatory provisions of law.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority
of principal amount of the Outstanding Debentures of each series affected by
such supplemental indenture (and, prior to a Security Exchange with respect to
the Debentures of such series, the consent of the holders of not less than a
majority in stated liquidation preference of the Preferred Securities of the
related series), by Act of said Holders (and, prior to such a Security
Exchange, by a written action of the holders of such Preferred Securities)
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Debentures of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Debenture
affected thereby (and, prior to a Security Exchange with respect to the
Debentures of any series affected thereby, the consent of the holders of each
Preferred Security of the related series),
(1) change the Stated Maturity of the principal of, or any
instalment of principal of or interest on, any Debenture, or reduce
the principal amount thereof or the rate of interest thereon
(including any change in the Floating or Adjustable Rate Provision
pursuant to which such rate is determined that would reduce such
rate for any period) or any premium payable upon the redemption
thereof, or change any Place of Payment where, or the coin or
currency in which, any Debenture or any premium or interest thereon
is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or modify the provisions of this Indenture with respect to
the subordination of the Debentures of any series in a manner
adverse to the Holders, or
(2) reduce the percentage in principal amount of the
Outstanding Debentures of any series, the consent of whose Holders
is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder
and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section
513 or Section 907, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Debenture affected thereby, provided, however, that
this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee"
and concomitant changes in this Section and Section 907, or the
deletion of this proviso, in accordance with the requirements of
Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Debentures, or which modifies the
rights of the Holders of Debentures of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debentures of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by,
any supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Debentures theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Debentures to Supplemental Indentures.
Debentures of any series authenticated and delivered after
the execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Debentures of such series.
Section 907. Waiver of Compliance by Holders.
Anything in this Indenture to the contrary notwithstanding,
any of the acts which the Company is required to do, or is prohibited from
doing, by any of the provisions of this Indenture may, to the extent that such
provisions might be changed or eliminated by a supplemental indenture pursuant
to Section 902 upon consent of Holders of not less than a majority in
aggregate principal amount of the then Outstanding Debentures of the series
affected (and, prior to a Security Exchange with respect to the Debentures of
such series, holders of at least a majority in stated liquidation preference
of the Preferred Securities of the related series), be omitted or done by the
Company, if there is obtained the prior consent or waiver of the Holders of at
least a majority in aggregate principal amount of the then Outstanding
Debentures of such series (and, prior to a Security Exchange with respect to
the Debentures of such series, holders of at least a majority in stated
liquidation preference of the Preferred Securities of the related series).
Section 908. Subordination Unimpaired.
No provision in any supplemental indenture that affects the
superior position of the holders of Senior Debt shall be effective against
holders of Senior Debt without the consent of any such affected holder.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Debentures that it will duly and punctually pay or cause to be paid
the principal of and any premium and interest (including any Additional
Interest) on the Debentures of that series in accordance with the terms of the
Debentures and this Indenture.
Section 1002. Maintenance of Office or Agency.
After a Security Exchange with respect to the Debentures of
any series, so long as any Debentures are Outstanding, the Company will
maintain in each Place of Payment for the Debentures of that series an office
or agency where Debentures of that series may be presented or surrendered for
payment, where Debentures of that series may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Company
in respect of the Debentures of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where the Debentures of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Debentures of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
Section 1003. Money for Debentures Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Debentures, it will, on or before each due date
of the principal of or any premium or interest on any of the Debentures of
that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal and any premium and
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and, after a Security Exchange with
respect to the Debentures of that series, will promptly notify the Trustee of
its action or failure so to act.
Whenever the Company shall have one or more Paying Agents
for any series of Debentures, it will, prior to each due date of the principal
of or any premium or interest on any Debentures of that series, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) after a Security Exchange with respect to the Debentures of that
series, the Company will promptly notify the Trustee of its action or failure
so to act.
The Company will cause each Paying Agent for any series of
Debentures other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will (i) comply with
the provisions of the Trust Indenture Act applicable to it as a Paying Agent
and (ii) during the continuance of any default by the Company (or any other
obligor upon the Debentures of that series) in the making of any payment in
respect of the Debentures of that series, and upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Debentures of that series.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose,
pay, or by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held
by the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of or any
premium or interest on any Debenture of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Debenture
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of
general circulation in the Borough of Manhattan, the City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee within 120 days
after the end of each fiscal year of the Company ending after the date hereof,
a certificate signed by the Company's principal executive officer, principal
financial officer or principal accounting officer stating whether or not to the
best knowledge of the signer thereof the Company is in compliance with all
terms, conditions and covenants of this Indenture (without regard to any
period of grace or requirement of notice provided hereunder) and if the signer
has obtained knowledge of any continuing default by the Company in the
performance, observation or fulfillment of any such term, condition or
covenant, specifying each such default and the nature thereof.
Section 1005. Limitations on Dividends and Other Payments on Capital
Stock.
Prior to a Security Exchange with respect to Debentures of
any series, the Company agrees for the benefit of the Holders of Debentures of
such series that it shall not declare or pay any dividend on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Company's capital stock or make any guarantee payments with respect to the
foregoing (other than (i) payments under the Guarantee, (ii) acquisitions of
shares of Common Stock in connection with the satisfaction by the Company of
its obligations under any employee benefit plans and (iii) redemptions of any
share purchase rights issued by the Company pursuant to the Company's Share
Purchase Rights Plan adopted on October 27, 1989, as amended from time to
time, or the declaration of a dividend of similar share purchase rights in the
future), if at such time the Company is in default with respect to its payment
obligations under the Guarantee or there shall have occurred an Event of
Default with respect to the Debentures of such series.
Section 1006. Limitations on Conduct of Capital and Other
Limitations.
Prior to a Security Exchange with respect to Debentures of
any series, the Company agrees for the benefit of the Holders of Debentures of
such series that it shall (i) not cause or permit any Common Securities of
Capital to be transferred, (ii) maintain direct or indirect ownership of all
outstanding securities of Capital other than (x) the Preferred Securities of
any series and (y) any other securities issued by Capital (other than the
Common Securities) so long as the issuance thereof to Persons other than the
Company or any of its Subsidiaries would not cause Capital to become an
"investment company" required to be registered under the Investment Company
Act of 1940, as amended, (iii) cause at least 21% of the total value of
Capital and at least 21% of all interests in the capital, income, gain, loss,
deduction and credit of Capital to be represented by Common Securities, (iv)
not voluntarily dissolve, wind up or liquidate Capital (other than in
connection with the exchange of all series of Preferred Securities outstanding
for the related series of Debentures) or either of the Managing Members, (v)
cause the Company and Aetna Capital Holdings, Inc. to remain the Managing
Members of Capital and timely perform all of their respective duties as
Managing Members of Capital (including the duty to declare and pay dividends
on the Preferred Securities), and (vi) use reasonable efforts to cause Capital
to remain a limited liability company and otherwise continue to be treated as
a partnership for U.S. federal income tax purposes; provided that the Company
may permit Capital, to consolidate or merge with or into or convey, transfer or
lease its assets substantially as an entirety to, a limited liability company
or limited partnership or trust organized as such under the laws of any state
of the United States of America or the District of Columbia, provided that:
(A) the holders of not less than 66 2/3% of the stated liquidation preference
of the outstanding Preferred Securities approves of such merger,
consolidation, conveyance, transfer or lease; or (B) (i) such successor entity
either (x) expressly assumes all of the obligations of Capital under the
Preferred Securities or (y) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities
(the "Successor Securities") so long as the Successor Securities rank, with
respect to participation in the profits or assets of the successor entity, at
least as high as the Preferred Securities rank with respect to participation
in the profits or assets of Capital, (ii) the Company expressly acknowledges
such successor entity as the holder of the Debentures relating to the
Preferred Securities, (iii) such merger, consolidation, conveyance, transfer
or lease does not cause the Preferred Securities or Successor Securities, if
any, to be delisted (or, in the case any Successor Securities, fail to be
listed) by any national securities exchange or other organization on which the
Preferred Securities are then listed, (iv) such merger, consolidation,
conveyance, transfer or lease does not cause the Preferred Securities or
Successor Securities, if any, to be downgraded by any "nationally recognized
statistical rating organization," as that term is defined by the Securities and
Exchange Commission for purposes of Rule 436(g)(2) under the Securities Act of
1933, as amended, (v) such merger, consolidation, conveyance, transfer or
lease does not adversely affect the powers, preferences and other special
rights of holders of Preferred Securities or Successor Securities, if any, in
any material respect and (vi) prior to such merger, consolidation, conveyance,
transfer or lease the Company has received an opinion of counsel (which
counsel is not an employee of the Company or Capital) to the effect that (w)
such merger, consolidation, conveyance, transfer or lease will not cause
Capital or such successor entity to become an "investment company" required to
be registered under the Investment Company Act of 1940, as amended, (x)
holders of outstanding Preferred Securities will not recognize any gain or
loss for federal income tax purposes as a result of the merger, consolidation,
conveyance, transfer or lease, (y) such successor entity will not be treated
as a corporation for federal income tax purposes and (z) such merger,
consolidation, conveyance, transfer or lease will not adversely affect the
limited liability of holders of Preferred Securities.
Section 1007. Stock Exchange Listing.
In the event of a Security Exchange with respect to
Debentures of any series, the Company will use its best efforts to have the
Debentures of such series listed on the same exchange as that on which the
Preferred Securities of the related series were listed immediately prior to
such Security Exchange.
ARTICLE ELEVEN
Redemption of Debentures
Section 1101. Applicability of Article.
Debentures of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 301 for Debentures of any
series) in accordance with this Article.
Section 1102. Election to Redeem; Notice to Trustee.
At any time after a Security Exchange with respect to
Debentures of any series, in case of any redemption at the election of the
Company of less than all the Debentures of such series, the Company shall, at
least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date, of the principal amount of Debentures of such series to
be redeemed and, if applicable, of the tenor of the Debentures to be redeemed.
In the case of any redemption of Debentures prior to the expiration of any
restriction on such redemption provided in the terms of such Debentures or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 1103. Selection by Trustee of Debentures to Be Redeemed.
At any time after a Security Exchange with respect to
Debentures of any series, if less than all the Debentures of such series are
to be redeemed (unless all of the Debentures of such series and of a specified
tenor are to be redeemed), the particular Debentures to be redeemed shall be
selected not more than 45 days prior to the Redemption Date by the Trustee,
from the Outstanding Debentures of such series not previously called for
redemption, by such method as the Trustee shall deem fair and appropriate and
which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Debentures of that series or any integral
multiple thereof) of the principal amount of Debentures of such series of a
denomination larger than the minimum authorized denomination for Debentures of
that series. If less than all of the Debentures of such series and of a
specified tenor are to be redeemed, the particular Debentures to be redeemed
shall be selected not more than 45 days prior to the Redemption Date by the
Trustee, from the Outstanding Debentures of such series and specified tenor
not previously called for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of
the Debentures selected for redemption and, in the case of any Debentures
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Debentures
shall relate, in the case of any Debentures redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debentures which has been
or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Debentures to be redeemed, at its address
appearing in the Debenture Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Debentures of any
series are to be redeemed, the identification (and, in the case of
partial redemption of any Debentures, the principal amounts) of
the particular Debentures to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Debenture to be redeemed and,
if applicable, that interest thereon will cease to accrue on and
after said date,
(5) the place or places where such Debentures are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is
the case.
Notice of redemption of Debentures to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
By 12:00 noon (New York time) on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment
Date) accrued interest on, all the Debentures which are to be redeemed on that
date.
Section 1106. Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Debentures so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Debentures shall cease to bear interest. Upon
surrender of any such Debenture for redemption in accordance with said notice,
such Debenture shall be paid by the Company at the Redemption Price, together
with accrued interest to the Redemption Date; provided, however, that, unless
otherwise specified as contemplated by Section 301, instalments of interest
whose Stated Maturity is on or prior to the Redemption Date shall be payable
to the Holders of such Debentures, or one or more Predecessor Debentures,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.
If any Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debenture.
Section 1107. Debentures Redeemed in Part.
Prior to a Security Exchange with respect to the Debentures
of any series, any Debenture of such series which is to be redeemed only in
part shall be surrendered at the place designated by the Company for such
purpose, and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Debenture without service charge, a new
Debenture or Debentures of the same series and of like tenor, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Debenture so surrendered.
After a Security Exchange with respect to the Debentures of
any series, any Debenture of such series which is to be redeemed only in part
shall be surrendered at a Place of Payment therefor (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder of such Debenture without service charge, a new Debenture or Debentures
of the same series and of like tenor, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Debenture so
surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
Section 1201. Company's Option to Effect Defeasance or
Covenant Defeasance.
The Company may elect, at any time, to have either Section
1202 or Section 1203 applied to the Outstanding Debentures of any series, upon
compliance with the conditions set forth below in this Article Twelve.
Section 1202. Defeasance and Discharge.
Upon the Company's exercise of the option provided in
Section 1201 to have this Section 1202 applied to the Outstanding Debentures
of any series, the Company shall be deemed to have been discharged from its
obligations, and the provisions of Article Fourteen shall cease to be
effective, with respect to the Outstanding Debentures of such series as
provided in this Section on and after the date the conditions set forth in
Section 1204 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by the Outstanding
Debentures of such series and to have satisfied all its other obligations
under the Debentures of such series and this Indenture insofar as the
Debentures of such series are concerned (and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging the same), subject
to the following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of Debentures of such series to receive,
solely from the trust fund described in Section 1204 and as more fully set
forth in such Section, payments in respect of the principal of and any premium
and interest on such Debentures of such series when payments are due, (2) the
Company's obligations with respect to the Debentures of such series under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, including, without limitation, its
rights under Section 607 and (4) this Article Twelve. Subject to compliance
with this Article Twelve, the Company may exercise its option provided in
Section 1201 to have this Section 1202 applied to the Outstanding Debentures
of any series notwithstanding the prior exercise of its option provided in
Section 1201 to have Section 1203 applied to the Outstanding Debentures of
such series.
Section 1203. Covenant Defeasance.
Upon the Company's exercise of the option provided in
Section 1201 to have this Section 1203 applied to the outstanding Debentures
of any series, (1) the Company shall be released from its obligations under
Section 1005 and Section 801 and (2) the occurrence of any event specified in
Section 501(3) (with respect to Section 801 and Section 1005) shall be deemed
not to be or result in an Event of Default, and (3) the provisions of Article
Fourteen shall cease to be effective, in each case with respect to the
Outstanding Debentures of such series as provided in this Section on and after
the date the conditions set forth in Section 1204 are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance
means that the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such specified
Section (to the extent so specified in the case of Section 501(3)), whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Debentures of such series shall be unaffected thereby.
Section 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of
either Section 1202 or Section 1203 to the Outstanding Debentures of any
series:
(1) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee that
satisfies the requirements contemplated by Section 609 and agrees
to comply with the provisions of this Article Twelve applicable to
it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Outstanding
Debentures of such series, (i) money in an amount, or (ii) U.S.
Government Obligations that through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of
any payment, money in an amount, or (iii) a combination thereof,
in each case sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or any such
other qualifying trustee) to pay and discharge, the principal of
and any premium and interest on the Debentures of such series on
the respective Stated Maturities, in accordance with the terms of
this Indenture and the Debentures of such series. As used herein,
"U.S. Government Obligation" means (x) any security that is (i) a
direct obligation of the United States of America for the payment
of which full faith and credit of the United States of America is
pledged or (ii) an obligation of a Person controlled or supervised
by and acting as an agency or instrumentality for the United
States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (i) or (ii), is not
callable or redeemable at the option of the issuer thereof, and
(y) any depositary receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act of 1933, as amended) as custodian
with respect to any specific payment of principal of or interest
on any such U.S. Government Obligation specified in Clause (x) and
held by such custodian for the account of the holder of such
depositary receipt, or with respect to any specific payment of
principal of or interest on any such U.S. Government Obligation,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the
Holder of such depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the
specific payment of principal or interest evidenced by such
depositary receipt.
(2) In the case of an election under Section 1202, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that the Holders of the Outstanding Debentures of such
series will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to
be effective with respect to the Debentures of such series and
will be subject to Federal income tax on the same amount, in the
same manner and at the same times as would be the case if such
deposit, Defeasance and discharge were not to occur.
(3) In the case of an election under Section 1203, the
Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holder of the Outstanding Debentures of
such series will not recognize gain or loss for Federal income tax
purposes as result of the deposit and Covenant Defeasance to be
effected with respect to the Debentures of such series and will be
subject to Federal income tax on the same amount, in the same
manner and at the same times as would be the case if such deposit
and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an
Officers' Certificate to the effect that the Debentures of such
series, if then listed on any securities exchange, will not be
delisted as a result of such deposit.
(5) No Event of Default or event that (after notice or
lapse of time or both) would become an Event of Default shall have
occurred and be continuing at the time of such deposit or, with
regard to any event specified in Sections 501(4) and 501(5), at
any time on or prior to the 90th day after the date of such deposit
(it being understood that this condition shall not be deemed
satisfied until after such 90th day).
(6) The Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
all conditions precedent with respect to such Defeasance or
Covenant Defeasance have been complied with.
(7) Such Defeasance or Covenant Defeasance shall not
result in the trust arising from such deposit constituting an
investment company within the meaning of the Investment Company
Act of 1940, as amended, unless such trust shall be qualified
under such Act or exempt from regulation thereunder.
(8) At the time of such deposit: (A) no default in the
payment of principal of (or premium, if any) or interest on any
Senior Debt shall have occurred and be continuing or (B) no other
event of default with respect to any Senior Debt shall have
occurred and be continuing and shall have resulted in such Senior
Debt becoming or being declared due and payable prior to the date
on which it would otherwise have become due and payable, or, in
the case of either Clause (A) or Clause (B) above, each such
default or event of default shall have been cured or waived or
shall have ceased to exist.
Section 1205. Deposited Money and U.S. Government Obligations to be
Held In Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee (solely for
purposes of this Section and Section 1206, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section
1204 in respect of the Debentures of any series shall be held in trust and
applied by the Trustee, in accordance with the provisions of the Debentures of
such series and this Indenture, to the payment, either directly or through any
such Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Holders of Debentures of such series, of all
sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other funds
except to the extent required by law. Money so held in trust shall not be
subject to the provisions of Article Fourteen.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
receive in respect thereof other than any such tax, fee or other charge that
by law is for the account of the Holders of Outstanding Debentures.
Anything in this Article Twelve to the contrary
notwithstanding, the Trustee shall deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it
as provided in Section 1204 with respect to Debentures of any series that, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Defeasance or Covenant Defeasance with respect to the
Debentures of such series.
Section 1206. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any
money in accordance with this Article Twelve with respect to the Debentures of
any series by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the Company's obligations under this Indenture and the Debentures of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to this Article Twelve with respect to Debentures of such series
until such time as the Trustee or Paying Agent is permitted to apply all money
held in trust pursuant to Section 1205 with respect to Debentures of such
series in accordance with this Article Twelve; provided, however, that if the
Company makes any payment of principal of or any premium or interest on any
Debenture of such series following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of Debentures of such
series to receive such payment from the money so held in trust.
ARTICLE THIRTEEN
Sinking Funds
Section 1301. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Debentures of a series except as otherwise
specified as contemplated by Section 301 for Debentures of such series.
The minimum amount of any sinking fund payment provided for
by the terms of Debentures of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Debentures of any series is herein referred to as
an "optional sinking fund payment". If provided for by the terms of
Debentures of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 1302. Each sinking fund payment
shall be applied to the redemption of Debentures of any series as provided for
by the terms of Debentures of such series.
Section 1302. Satisfaction of Sinking Fund Payments
with Debentures.
The Company (1) may deliver Outstanding Debentures of a
series (other than any previously called for redemption) and (2) may apply as
a credit Debentures of a series which have been acquired or redeemed either at
the election of the Company pursuant to the terms of such Debentures or
through the application of permitted optional sinking fund payments pursuant
to the terms of such Debentures or otherwise, in each case in satisfaction of
all or any part of any sinking fund payment with respect to the Debentures of
such series required to be made pursuant to the terms of such Debentures as
provided for by the terms of such series; provided that such Debentures have
not been previously so credited. Such Debentures shall be received and
credited for such purpose by the Trustee at the Redemption Price specified in
such Debentures for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.
Section 1303. Redemption of Debentures for Sinking Fund.
Not less than 45 days prior to each sinking fund payment
date for any series of Debentures, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Debentures of that series pursuant to Section 1302 and will also deliver to
the Trustee any Debentures to be so delivered. Not less than 15 nor more than
45 days before each such sinking fund payment date the Trustee shall select
the Debentures to be redeemed upon such sinking fund payment date in the
manner specified in Section 1103 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner
provided in Section 1104. Such notice having been duly given, the redemption
of such Debentures shall be made upon the terms and in the manner stated in
Sections 1106 and 1107.
ARTICLE FOURTEEN
Subordination of Debentures
Section 1401. Debentures Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a
Debenture, by its acceptance thereof, likewise covenants and agrees, that, to
the extent and in the manner hereinafter set forth in this Article (subject to
the provisions of Article Four and Article Twelve), the payment of the
principal of (and premium, if any) and interest on each and all of the
Debentures are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all amounts then due and payable in
respect of all Senior Debt.
Section 1402. Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, arrangement, reorganization,
debt restructuring or other similar case or proceeding in connection with any
insolvency or bankruptcy proceeding, relative to the Company or to its assets,
or (b) any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company, then and in any such
event specified in (a), (b) or (c) above (each such event, if any, herein
sometimes referred to as a "Proceeding") the holders of Senior Debt shall be
entitled to receive payment in full of all amounts due or to become due on or
in respect of all Senior Debt, or provision shall be made for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Senior Debt, before the Holders of the Debentures are entitled to receive
any payment or distribution of any kind or character, whether in cash,
property or securities (including any payment or distribution which may be
payable or deliverable by reason of the payment of any other Debt of the
Company subordinated to the payment of the Debentures, such payment or
distribution being hereinafter referred to as "Junior Subordinated Payment"),
on account of principal of (or premium, if any) or interest on the Debentures
or on account of the purchase or other acquisition of Debentures by the
Company or any Subsidiary and to that end the holders of Senior Debt shall be
entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
including any Junior Subordinated Payment, which may be payable or deliverable
in respect of the Debentures in any such Proceeding.
In the event that, notwithstanding the foregoing provisions
of this Section, the Trustee or the Holder of any Debenture shall have
received any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, including any Junior
Subordinated Payment, before all Senior Debt is paid in full or payment
thereof is provided for in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, and if such fact shall, at or prior
to the time of such payment or distribution, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such
payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of the Company
for application to the payment of all Senior Debt remaining unpaid, to the
extent necessary to pay all Senior Debt in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt. Any
taxes that have been withheld or deducted from any payment or distribution in
respect of the Debentures, or any taxes that ought to have been withheld or
deducted from any such payment or distribution that have been remitted to the
relevant taxing authority, shall not be considered to be an amount that the
Trustee or the Holder of any Debenture receives for purposes of this Section.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which
securities are subordinated in right of payment to all then outstanding Senior
Debt to substantially the same extent as the Debentures are so subordinated as
provided in this Article. The consolidation of the Company with, or the
merger of the Company into, another Person or the liquidation or dissolution
of the Company following the sale of all or substantially all of its
properties and assets as an entirety to another Person or the liquidation or
dissolution of the Company following the sale of all or substantially all of
its properties and assets as an entirety to another Person upon the terms and
conditions set forth in Article Eight shall not be deemed a Proceeding for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by sale such
properties and assets as an entirety, as the case may be, shall, as a part of
such consolidation, merger, or sale comply with the conditions set forth in
Article Eight.
Section 1403. Prior Payment to Senior Debt Upon
Acceleration of Debentures.
In the event that any Debentures are declared due and
payable before their Stated Maturity (other than in connection with any
mandatory prepayment of the Debentures of any series in connection with the
redemption of any Preferred Securities of the related series), then and in
such event the holders of the Senior Debt outstanding at the time such
Debentures so become due and payable shall be entitled to receive payment in
full of all amounts due on or in respect of such Senior Debt, or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, before the Holders of the
Debentures are entitled to receive any payment (including any payment which
may be payable by reason of any Junior Subordinated Payments) by the Company
on account of the principal of (or premium, if any) or interest on the
Debentures or on account of the purchase or other acquisition of Debentures by
the Company or any Subsidiary; provided, however, that nothing in this Section
shall prevent the satisfaction of any sinking fund payment in accordance with
Article Thirteen by delivering and crediting pursuant to Section 1302
Debentures which had been acquired (upon redemption or otherwise) prior to such
declaration of acceleration.
In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of any Debenture
prohibited by the foregoing provisions of this Section, and if such fact
shall, at or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any
payment with respect to which Section 1402 would be applicable.
Section 1404. No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default
in the payment of principal of (or premium, if any) or interest on any Senior
Debt, or in the event that any event of default with respect to any Senior
Debt shall have occurred and be continuing and shall have resulted in such
Senior Debt becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, unless and until such
default in payment or event of default shall have been cured or waived or shall
have ceased to exist and such acceleration shall have been rescinded or
annulled, or (b) in the event any judicial proceeding shall be pending with
respect to any such default in payment or such event of default, then no
payment (including any payment which may be payable by reason of any Junior
Subordinated Payments) shall be made by the Company on account of principal of
(or premium, if any) or interest on the Debentures or on account of the
purchase or other acquisition of Debentures by the Company or any Subsidiary;
provided, however, that nothing in this Section shall prevent the satisfaction
of any sinking fund payment in accordance with Article Thirteen by delivering
and crediting pursuant to Section 1302 Debentures which have been acquired
(upon redemption or otherwise) prior to such default in payment or event of
default.
In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of any Debenture
prohibited by the foregoing provisions of this Section, and if such fact
shall, at or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any
payment with respect to which Section 1402 would be applicable.
Section 1405. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this
Indenture or in any of the Debentures shall prevent (a) the Company, at any
time except during the pendency of any Proceeding referred to in Section 1402
or under the conditions described in Sections 1403 and 1404, from making
payments at any time of principal of (and premium, if any) or interest on the
Debentures, or (b) the application by the Trustee of any money deposited with
it hereunder to the payment of or on account of the principal of (and premium,
if any) or interest on the Debentures or the retention of such payment by the
Holders, if, at the time of such application by the Trustee, it did not have
knowledge that such payment would have been prohibited by the provisions of
this Article.
Section 1406. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt, or the
provision for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, the Holders of the
Debentures shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Debt pursuant to the provisions of this
Article (equally and ratably with the holders of all indebtedness of the
Company which by its express terms is subordinated to indebtedness of the
Company to substantially the same extent as the Debentures are subordinated to
the Senior Debt and is entitled to like rights of subrogation by reason of any
payments or distributions made to holders of such Senior Debt) to the rights
of the holders of such Senior Debt to receive payments and distributions of
cash, property and securities applicable to the Senior Debt until the
principal of (and premium, if any) and interest on the Debentures shall be
paid in full. If the Trustee or the Holders of the Debentures are not for any
reason entitled to be subrogated to the rights of holders of Senior Debt in
respect of such payment or distribution, then the Trustee or the Holders of
the Debentures may require each holder of Senior Debt to whom any such payment
or distribution is made as a condition to such payment or distribution to
assign its Senior Debt to the extent of such payment or distribution and all
rights with respect thereto to the Trustee on behalf of the Holders. Such
assignment shall not be effective until such time as all Senior Debt has been
paid in full or payment thereof provided for. For purposes of such
subrogation or assignment, no payments or distributions to the holders of the
Senior Debt of any cash, property or securities to which the Holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Debt by Holders of the Debentures or the Trustee, shall,
as among the Company, its creditors other than holders of Senior Debt, and the
Holders of the Debentures, be deemed to be a payment or distribution by the
Company to or on account of the Senior Debt.
Section 1407. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely
for the purpose of defining the relative rights of the Holders of the
Debentures on the one hand and the holders of Senior Debt on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Debentures is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the
Debentures, the obligations of the Company, which are absolute and
unconditional (and which, subject to the rights under this Article of the
holders of Senior Debt, are intended to rank equally with all other general
unsecured obligations of the Company), to pay to the Holders of the Debentures
the principal of (and premium, if any) and interest on the Debentures as and
when the same shall become due and payable in accordance with their terms; or
(b) affect the relative rights against the Company of the Holders of the
Debentures and creditors of the Company other than the holders of Senior Debt;
or (c) prevent the Trustee or the Holder of any Debenture from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture including, without limitation, filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article of the holders
of Senior Debt to receive cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
Section 1408. Trustee to Effectuate Subordination.
Each Holder of a Debenture by his or her acceptance thereof
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
provided in this Article and appoints the Trustee his or her attorney-in-fact
for any and all such purposes.
Section 1409. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof that any such holder may have
or be otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Debentures, without incurring responsibility to the Holders of the Debentures,
and without impairing or releasing the subordination provided in this Article
or the obligations hereunder of the Holders of the Debentures to the holders
of Senior Debt, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter
or increase, Senior Debt, or otherwise amend or supplement in any manner
Senior Debt or any instrument evidencing the same or any agreement under which
Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing Senior Debt; (iii)
release any Person liable in any manner for the collection of Senior Debt; and
(iv) exercise or refrain from exercising any rights against the Company and
any other Person.
Section 1410. Notice to Trustee.
The Company shall give prompt written notice to the Trustee
of any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Debentures. Notwithstanding
the provisions of this Article or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts
which would prohibit the making of any payment to or by the Trustee in respect
of the Debentures, unless and until the Trustee shall have received written
notice thereof from the Company or a holder of Senior Debt or from any
trustee, agent or representative therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Section 601,
shall be entitled in all respects to assume that no such facts exist;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium,
if any) or interest on any Debenture), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the contrary which may
be received by it within two Business Days prior to such date.
Subject to the provisions of Section 601, the Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or herself to be a holder of Senior Debt (or a trustee,
agent or representative therefor) to establish that such notice has been given
by a holder of Senior Debt (or a trustee, agent or representative therefor).
In the event that the Trustee determines in good faith that further evidence
is required with respect to the right of any Person as a holder of Senior Debt
to participate in any payment or distribution pursuant to this Article, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
Section 1411. Reliance on Judicial Order or Certificate of
Liquidating Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Section
601, and the Holders of the Debentures shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of
creditors, agent or other Person making such payment or distribution, delivered
to the Trustee or to the Holders of Debentures, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
Section 1412. Trustee Not Fiduciary For Holders of Senior Debt.
The Trustee, in its capacity as trustee under this
Indenture, shall not be deemed to owe any fiduciary duty to the holders of
Senior Debt and shall not be liable to any such holders if it shall in good
faith mistakenly pay over or distribute to Holders of Debentures or to the
Company or to any other Person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article or
otherwise.
Section 1413. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of
Senior Debt, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
Section 1414. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the
term "Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying
Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article in addition to or in place of the
Trustee.
Section 1415. Defeasance of This Article Fourteen.
The subordination of the Debentures provided by this Article
Fourteen is expressly made subject to the provisions for defeasance or
covenant defeasance in Article Twelve and, anything herein to the contrary
notwithstanding, upon the effectiveness of any such defeasance or covenant
defeasance, the Debentures then outstanding shall thereupon cease to be
subordinated pursuant to this Article Fourteen.
ARTICLE FIFTEEN
Miscellaneous
Section 1501. Assignment; Binding Effect.
The Company shall have the right at all times to assign any
of its rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Company other than any Subsidiary that is an
insurance company; provided that, in the event of any such assignment, the
Company shall remain jointly and severally liable for all such obligations.
The Company may not otherwise assign any of its obligations under this
Indenture. Except as otherwise provided in this Indenture, Capital may not
assign any of its rights under this Indenture without the prior written
consent of the Company. Subject to the foregoing, this Indenture shall be
binding upon and inure to the benefit of the Company and the Holders and, to
the extent specifically set forth herein, the holders of Senior Debt and
Preferred Securities, from time to time of the Debentures and their respective
successors and assigns.
Section 1502. Third Party Beneficiaries.
The Company hereby acknowledges that, to the extent
specifically set forth herein, prior to a Security Exchange with respect to
the Debentures of any series, the holders of the Preferred Securities of the
related series shall expressly be third party beneficiaries of this Indenture.
Section 1503. Set-off.
Notwithstanding anything to the contrary herein, prior to
any Security Exchange with respect to the Debentures of any series, the
Company shall have the right to set-off any payment with respect to the
Debentures of such series with and to the extent the Company has theretofore
made, or is concurrently on the date of such payment making, a payment under
the Guarantee with respect to Preferred Securities of the related series.
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same
instrument.
_____________________________
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
AETNA LIFE AND CASUALTY
COMPANY
By......................
Attest:
........................
THE FIRST NATIONAL BANK
OF CHICAGO
By......................
Attest:
........................
STATE OF CONNECTICUT )
) ss.:
COUNTY OF HARTFORD )
On the .... day of ..........., 1994, before me personally
came ..........................., to me known, who, being by me duly sworn,
did depose and say that (s)he is .................... of AETNA LIFE AND
CASUALTY COMPANY, one of the corporations described in and which executed the
foregoing instrument; that (s)he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that (s)he
signed her/his name thereto by like authority.
........................
STATE OF ILLINOIS )
) ss.:
COUNTY OF )
On the .... day of ..........., 1994, before me personally
came ..........................., to me known, who, being by me duly sworn,
did depose and say that (s)he is .................... of THE FIRST NATIONAL
BANK OF CHICAGO, one of the corporations described in and which executed the
foregoing instrument; that (s)he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation, and that (s)he
signed her/his name thereto by like authority.
........................
EXHIBIT 5.1
October 4, 1994
Aetna Life and Casualty Company
151 Farmington Avenue
Hartford, Connecticut 06156
I am Senior Vice President and General Counsel of Aetna Life
and Casualty Company, a Connecticut insurance corporation (the "Company"). In
connection with the registration under the Securities Act of 1933, as amended
(the "Securities Act"), of $500,000,000 of preferred securities of Aetna
Capital L.L.C., a Delaware limited liability company ("Aetna Capital"), (the
"Preferred Securities") and certain obligations which may be incurred by the
Company in connection with the Preferred Securities, including subordinated
debentures of the Company (the "Debentures") and a guarantee by the Company
contained in a guarantee and payment agreement (the "Guarantee Agreement"),
I have examined or caused to be examined necessary or appropriate corporate
records, certificates and other documents, and questions of law for the
purposes of this opinion.
Upon the basis of such examination, I advise you that, in my opinion:
1. The Debentures will constitute valid and legally binding
obligations of the Company subject to (a) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally and
the rights of creditors of insurance companies generally and (b) general
principles of equity (regardless of whether considered in a proceeding at law
or in equity) when the following conditions are met: (i) the registration
statement has become effective under the Securities Act; (ii) the indenture
relating to the Debentures has been duly executed and delivered; (iii) the
terms of the Debentures and of their issuance have been duly established in
conformity with the indenture relating to the Debentures so as not to violate
any applicable law or result in a default under or breach of any agreement or
instrument binding upon the Company and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
the Company; and (iv) the Debentures have been duly executed and authenticated
in accordance with the indenture relating to the Debentures, and duly issued
and paid for as contemplated by the registration statement and any prospectus
supplement relating thereto.
2. The Guarantee Agreement will constitute a valid and
legally binding agreement of the Company, subject to (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors' rights
generally and the rights of creditors of insurance companies generally and (b)
general principles of equity (regardless of whether considered in a proceeding
at law or in equity) when the following conditions are met: (i) the
registration statement has become effective under the Securities Act; (ii) the
Guarantee Agreement has been duly executed and delivered; (iii) the Guarantee
Agreement when so executed and delivered does not violate any applicable law
or result in a default under or breach of any agreement or instrument binding
upon the Company and complies with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company; and (iv)
the Preferred Securities entitled to the benefits of the Guarantee Agreement
have been duly issued and sold as contemplated by the registration statement
and any prospectus supplement relating thereto.
I note that the approvals currently required under Section
38a-136 of the Connecticut General Statutes for the Company to issue the
Debentures to Aetna Capital and enter into the Guarantee Agreement have been
obtained from the Commissioner of Insurance of the State of Connecticut.
The foregoing opinion is limited to the Federal laws of the
United States and the laws of the State of Connecticut and I do not express
any opinion as to the effect of the laws of any other jurisdiction.
In my examination or the examination which I caused to be made,
the legal capacity of all natural persons, the genuineness of all signatures,
the authenticity of all documents submitted to me as originals, the conformity
to original documents of all documents submitted to me as certified or
photostatic copies and the authenticity of the originals of such latter
documents were assumed. As to any facts material to the opinion expressed
herein which were not independently established or verified, I have relied
upon oral or written statement and representations of officers and other
representatives of the Company and others.
I hereby consent to the filing of this opinion as Exhibit 5.1
to the registration statement and to reference made to me under the heading
"Validity of Securities" in the prospectus. In giving such consent, I do not
thereby admit that I am in the category of persons whose consent is required
under Section 7 of the Securities Act.
Very truly yours
/s/ Zoe Baird
EXHIBIT 5.2
October 6, 1994
Aetna Life and Casualty Company
151 Farmington Avenue
Hartford, Connecticut 06156
Aetna Capital L.L.C.
c/o Aetna Life and Casualty Company
151 Farmington Avenue
Hartford, Connecticut 06156
Ladies and Gentlemen:
We have acted as special counsel to Aetna Life and Casualty
Company, a Connecticut insurance corporation ("Aetna") and Aetna Capital
L.L.C., a Delaware limited liability company (the "Company"), in connection
with the preparation of the Registration Statement on Form S-3 (Registration
Nos. 33-52819 and 33-52819-01) (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the contemplated issuance by
the Company from time to time of up to $500,000,000 aggregate public offering
price of preferred limited liability company interests (the "Preferred
Securities"). Concurrently with the issuance of each series of Preferred
Securities, the Company will loan the proceeds from the issuance thereof and
of the related issuance of common limited liability company interests in the
Company and related capital contributions to Aetna and to evidence such loans
Aetna will issue and deliver to the Company a series of Aetna's subordinated
debentures (the "Debentures"), issued pursuant to a Subordinated Indenture
between Aetna and The First National Bank of Chicago, as trustee (as amended
or supplemented, the "Indenture"), with terms corresponding to the terms of
the related series of Preferred Securities. The payment of dividends declared
by the Company, to the extent the Company has cash on hand legally available
therefor, and payments on liquidation or redemption with respect to the
Preferred Securities are guaranteed (the "Guarantee") by Aetna to the extent
set forth in the Registration Statement.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary for the purpose of rendering this opinion.
On the basis of the foregoing, we are of the opinion that:
(1) When (i) the Registration Statement has become effective
under the Securities Act, (ii) the Indenture has been duly executed and
delivered, (iii) the terms of the Debentures and of their issuance and sale
have been duly established in conformity with the Indenture so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon Aetna and so as to comply with any
requirement or restriction imposed by any court or governmental or regulatory
body having jurisdiction over the Company and (iv) the Debentures have been
duly executed and authenticated in accordance with the Indenture and duly
issued and sold as contemplated by the Registration Statement and any
prospectus supplement relating thereto, the Debentures will constitute valid
and legally binding obligations of Aetna enforceable in accordance with their
terms, subject to (a) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or hereafter in effect relating
to or affecting creditors' rights generally and the rights of creditors of
insurance companies generally, and (b) general principles of equity
(regardless of whether considered in a proceeding at law or in equity).
(2) When (i) the Registration Statement has become effective
under the Securities Act, (ii) the terms of the Preferred Securities and of
their issuance and sale have been duly established in a written action (the
"Action") in conformity with the Amended and Restated Limited Liability
Company Agreement of the Company (the "LLC Agreement") so as not to violate
any applicable law, the requirements of the LLC Agreement or result in a
default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by any
court or governmental or regulatory body having jurisdiction over the Company,
(iii) the LLC Agreement and the Action have been duly executed and delivered,
(iv) each holder of a Preferred Security (a "Preferred Member") acquires such
Preferred Security and pays for such Preferred Security acquired by it, in
accordance with the LLC Agreement and the Registration Statement, (v) the
books and records of the Company set forth the names and addresses of all
persons to be admitted as members of the Company, their contributions to the
Company and the agreed value of the contributions of each member of the
Company and (vi) the Preferred Securities are issued and sold to the Preferred
Members in accordance with the Registration Statement and the LLC Agreement,
the Preferred Securities will be validly issued and will be fully paid and
non-assessable limited liability company interests in the Company, as to which
the Preferred Members will have no liability solely by reason of being
Preferred Members in excess of their obligations to make payments provided for
in the LLC Agreement and their share of the Company's assets and undistributed
profits (subject to the obligation of a Preferred Member to repay any funds
wrongfully distributed to it).
(3) When (i) the Registration Statement has become effective
under the Securities Act, (ii) the Guarantee has been duly executed and
delivered by Aetna, (iii) the Guarantee Agreement as so executed and delivered
does not violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon Aetna and complies with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over Aetna and (iv) the Preferred Securities entitled to the
benefits of the Guarantee Agreement have been duly issued and sold as
contemplated by the Registration Statement and any prospectus supplement
relating thereto, the Guarantee will constitute a valid and legally binding
agreement of Aetna, subject to (1) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other laws now or hereafter in effect
relating to or affecting creditors' rights generally and the rights of
creditors of insurance companies generally and (2) general principles of
equity (regardless of whether considered in a proceeding at law or in equity).
We are members of the Bar of the State of New York and the
foregoing opinion is limited to the laws of the States of New York and
Delaware and the federal laws of the United States of America. To the extent
that the foregoing opinion expresses conclusions as to matters of the laws of
the State of Connecticut, we have, with your permission and without any
independent investigation, relied on the opinion of Zoe Baird, Senior Vice
President and General Counsel of Aetna.
We hereby consent to the use of this opinion as an exhibit to
the Registration Statement and to the reference to our name under the heading
"Validity of Securities." In giving such consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section
7 of the Securities Act.
Very truly yours,
/s/ Davis Polk & Wardwell
EXHIBIT 8.1
(212) 450-4606
October 6, 1994
Aetna Life and Casualty Company
Aetna Capital L.L.C.
151 Farmington Avenue
Hartford, Connecticut 06156
Re: Shelf Registration - Aetna Capital L.L.C.
("Aetna Capital") Preferred Securities
------------------------------------------
Dear Sirs:
We have acted as counsel for Aetna Life and Casualty Company
("AL&C") and Aetna Capital in connection with the registration of Aetna
Capital Preferred Securities (the "Preferred Securities"). In connection
therewith, we have prepared the discussion set forth under the caption
"Taxation" (the "Discussion") in the prospectus (the "Prospectus") that is
part of the Registration Statement on Form S-3 filed by AL&C and Aetna Capital
with the Securities and Exchange Commission on October 6, 1994.
In rendering our opinion, we have relied upon, among other
things, (i) certain representations and covenants of AL&C and Aetna Capital
and (ii) the opinion of Richards, Layton & Finger, P.A. Assuming the proceeds
of the offering of the Preferred Securities are loaned to AL&C as described in
the Prospectus under the caption "Use of Proceeds", we hereby confirm our
opinion as set forth in the Discussion, which is a summary of the material
United States federal income tax consequences to the holders of the Preferred
Securities of the purchase, ownership and disposition of the Preferred
Securities and related debentures.
We hereby consent to the use of our name under the caption
"Taxation" in the Prospectus. The issuance of such consent does not concede
that we are an "expert" for the purposes of the Securities Act of 1933.
Very truly yours,
/s/ Davis Polk & Wardwell
EXHIBIT 10.1
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of , 1994, between Aetna Life and
Casualty Company, a Connecticut insurance corporation ("Aetna"), and Aetna
Capital L.L.C., a Delaware limited liability company ("Capital").
WHEREAS, Capital intends to issue its common limited liability
company interests (the "Common Securities") to and receive related capital
contributions from Aetna and Aetna Capital Holdings, Inc. and to issue and
sell from time to time, in one or more series, preferred limited liability
company interests (the "Preferred Securities") with such powers, preferences
and special rights and restrictions as are set forth in a written action or
actions of the managing members of Capital providing for the issue of such
series;
WHEREAS, Aetna will directly or indirectly own all of the
Common Securities of Capital;
NOW, THEREFORE, in consideration of the purchase by each holder
of the Preferred Securities, which purchase Aetna hereby agrees shall benefit
Aetna and which purchase Aetna acknowledges will be made in reliance upon the
execution and delivery of this Agreement, Aetna and Capital hereby agree as
follows:
Section 1.01. Guarantee by Aetna. Subject to the terms and
conditions hereof, Aetna hereby irrevocably and unconditionally guarantees to
each person or entity to whom Capital is now or hereafter becomes indebted or
liable (the "Beneficiaries") (other than obligations to holders of any
Preferred Securities or any other limited liability company interests in
Capital, in such holders' capacities as holders of such Preferred Securities
or other limited liability company interests) the full payment, when and as
due, of any and all indebtedness and liabilities of Capital to such
Beneficiaries (collectively, the "Obligations"). This Agreement is intended
to be for the benefit of, and to be enforceable by, all such Beneficiaries,
whether or not such Beneficiaries have received notice hereof.
Section 1.02. Term of Agreement. This Agreement shall
terminate and be of no further force and effect upon the later of (i) the date
on which full payment has been made of all amounts payable to all holders of
all series of the Preferred Securities (whether upon redemption, liquidation,
exchange or otherwise) and (ii) the date on which there are no Beneficiaries
remaining; provided, however, that this Agreement shall continue to be
effective or shall be reinstated, as the case may be, if at any time any
holder of Preferred Securities of any series or any Beneficiary must restore
payment of any sums paid under the Preferred Securities of such series, under
any Obligation, under the Payment and Guarantee Agreement dated the date
hereof and executed and delivered by Aetna or under this Agreement for any
reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.
Section 1.03. Waiver of Notice. Aetna hereby waives notice of
acceptance of this Agreement and of any Obligation to which it applies or may
apply, and Aetna hereby waives presentment, demand for payment, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
Section 1.04. No Impairment. The obligations, covenants,
agreements and duties of Aetna under this Agreement shall in no way be
affected or impaired by reason of the happening from time to time of any of
the following:
(a) the extension of time for the payment by Capital of all
or any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the
part of the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the Obligations
or any action on the part of Capital granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for
the benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, Capital or
any of the assets of Capital.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, Aetna with respect to the happening of any of the foregoing.
Section 1.05. Enforcement. A Beneficiary may enforce this
Agreement directly against Aetna and Aetna waives any right or remedy to
require that any action be brought against Capital or any other person or
entity before proceeding against Aetna.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements
contained in this Agreement shall bind the successors, assigns, receivers,
trustees and representatives of Aetna and shall inure to the benefit of the
Beneficiaries.
Section 2.02. Amendment. So long as there remains any
Beneficiary or any Preferred Securities of any series are outstanding, this
Agreement shall not be modified or amended in any manner adverse to such
Beneficiary or to the holders of the Preferred Securities.
Section 2.03. Notices. Any notice, request or other
communication required or permitted to be given hereunder shall be given in
writing by delivering the same against receipt therefor by facsimile
transmission (confirmed by mail), telex or by registered or certified mail,
addressed as follows (and if so given, shall be deemed given when mailed or
upon receipt of an answer-back, if sent by telex), to wit:
Aetna Capital L.L.C.
c/o Aetna Life and Casualty Company
151 Farmington Avenue
Hartford, Connecticut 06156
Facsimile No.: (203) 275-2661
Attention: Treasurer
Aetna Life and Casualty Company
151 Farmington Avenue
Hartford, Connecticut 06156
Facsimile No.: (203) 275-2661
Attention: Treasurer
(with a copy to the attention
of the General Counsel
(203) 273-8340)
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
THIS AGREEMENT is executed as of the day and year first above
written.
AETNA LIFE AND CASUALTY COMPANY
By ___________________________
Name:
Title:
AETNA CAPITAL L.L.C.
By Aetna Life and Casualty Company,
as Managing Member
By ____________________________
Name:
Title:
Consent of Independent Auditors
EXHIBIT 23.1
The Board of Directors
Aetna Life and Casualty Company
We consent to incorporation by reference in the Registration
Statement on Form S-3 of Aetna Life and Casualty Company of our reports dated
February 8, 1994, relating to the consolidated balance sheets of Aetna Life
and Casualty Company and Subsidiaries as of December 31, 1993 and 1992 and the
related consolidated statements of income, shareholders' equity, and cash
flows and related schedules for each of the years in the three-year period
ended December 31, 1993, which reports appear in or are incorporated by
reference in the December 31, 1993 annual report on Form 10-K of Aetna Life
and Casualty Company.
Our reports refer to changes in 1993 in the company's
accounting for certain investments in debt and equity securities, reinsurance
of short-duration and long-duration contracts, post-employment benefits,
workers' compensation life table indemnity reserves and retrospectively rated
reinsurance contracts and to changes in 1992 in the company's accounting for
income taxes and postretirement benefits other than pensions.
We also consent to the reference to our firm under the heading
"Experts" in the Prospectus.
/s/ KPMG Peat Marwick LLP
Hartford, Connecticut
October 6, 1994
