EXHIBIT 1
AETNA CAPITAL L.L.C.
AETNA LIFE AND CASUALTY COMPANY
Preferred Securities
_______________
Underwriting Agreement
( ), 199_
To the Underwriters
to be named in the applicable
Pricing Agreement
supplemental hereto
Ladies and Gentlemen:
From time to time Aetna Capital L.L.C., a limited
liability company formed under the laws of Delaware (the
"Company") and Aetna Life and Casualty Company, a
Connecticut insurance corporation ("Aetna"), as guarantor
and provider of certain backup obligations, propose to enter
into one or more Pricing Agreements (each a "Pricing
Agreement") in the form of Annex I hereto, with such
additions and deletions as the parties thereto may determine
and subject to the terms and conditions stated herein and
therein, pursuant to which the Company will issue to the
firms named in Schedule I to the applicable Pricing
Agreement (such firms constituting the "Underwriters" with
respect to such Pricing Agreement and the securities
specified therein) its Preferred Limited Liability Company
Interests (the "Preferred Securities"), in one or more
series, guaranteed by Aetna to the extent set forth in the
prospectus and registration statement described herein and
to sell such Preferred Securities (with respect to such
Pricing Agreement, the "Firm Designated Preferred
Securities"). If specified in such Pricing Agreement, the
Company may grant to the Underwriters the right to purchase
at their election an additional number of Preferred
Securities, specified in such Pricing Agreement as provided
in Section 3 hereof (the "Optional Designated Preferred
Securities"). The Firm Designated Preferred Securities and
any Optional Designated Preferred Securities are
collectively called the "Designated Preferred Securities."
The terms and rights of any particular issuance of
Designated Preferred Securities shall be as specified in the
Pricing Agreement relating thereto (to the extent not set
forth in the registration statement or prospectus with
respect thereto) and in or pursuant to the resolution or
resolutions adopted by Aetna and Aetna Capital Holdings,
Inc., in their capacity as the members (the "Managing
Members") of the Company that hold all of the Common Limited
Liability Company Interests (the "Common Securities"). The
Company will loan the proceeds of the offering of the
Designated Preferred Securities to Aetna, such loan to be
evidenced by a series of debentures (the "Debentures") to be
issued by Aetna pursuant to the indenture (the "Indenture")
identified in Schedule II to the Pricing Agreement.
1. Particular sales of Designated Preferred
Securities may be made from time to time to the Underwriters
of such Designated Preferred Securities, for whom the firms
designated as representatives of the Underwriters of such
Designated Preferred Securities in the Pricing Agreement
relating thereto will act as representatives (the
"Representatives"). The term "Representatives" also refers
to a single firm acting as sole representative of the
Underwriters and to Underwriters who act without any firm
being designated as their representative. Except as
incorporated by reference into a Pricing Agreement, this
Underwriting Agreement shall not be construed as an
obligation of the Company to issue any Preferred Securities
or sell any Preferred Securities or as an obligation of any
of the Underwriters to purchase any of the Preferred
Securities. The obligation of the Company to issue any
Preferred Securities and to sell any Preferred Securities
and the obligation of any of the Underwriters to purchase
any of the Preferred Securities shall be evidenced by the
Pricing Agreement with respect to the Designated Preferred
Securities specified therein.
Each Pricing Agreement shall specify, among other
things, the number of Firm Designated Preferred Securities,
the maximum number of Optional Designated Preferred
Securities, if any, the initial public offering price of
such Firm and Optional Designated Preferred Securities or
the manner of determining such price, the purchase price to
the Underwriters of such Designated Preferred Securities,
the amount of any compensation to be paid to the
Underwriters by Aetna for their services thereunder
("Underwriters' Compensation"), the names of the
Underwriters of such Designated Preferred Securities, the
names of the Representatives of such Underwriters, the
number of such Designated Preferred Securities to be
purchased by each Underwriter and the commission, if any,
payable to the Underwriters with respect thereto and shall
set forth the date, time and manner of delivery of such Firm
and Optional Preferred Securities and payment therefor. The
Pricing Agreement shall also specify (to the extent not set
forth in the registration statement or prospectus with
respect thereto) the terms of such Designated Preferred
Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or
any other rapid transmission device designed to produce a
written record of communications transmitted. The
obligations of the Underwriters under this Agreement and
each Pricing Agreement shall be several and not joint.
2. Each of the Company and Aetna, jointly and
severally, represents and warrants to, and agrees with, each
of the Underwriters that:
(a) A registration statement in respect of
the Preferred Securities has been filed with the
Securities and Exchange Commission (the "Commission");
such registration statement and any post-effective
amendments thereto, each in the form heretofore
delivered or to be delivered to the Representatives
(with exhibits thereto) for delivery to each of the
other Underwriters (without exhibits thereto), have
been declared effective by the Commission in such form;
no other document with respect to such registration
statement or document incorporated by reference therein
has been filed or transmitted for filing with the
Commission prior to the effective date of the registraion
statement; and no stop order suspending the effectiveness
of such registration statement has been issued
and no proceeding for that purpose has been initiated
or, to the knowledge of the Company or Aetna,
threatened by the Commission. Any preliminary
prospectus included in such registration statement or
filed with the Commission pursuant to Rule 424(a) of
the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act"), is
hereinafter collectively called a "Preliminary
Prospectus"; the various parts of such registration
statement, including all exhibits thereto and the
information, if any, deemed to be part of such
registration statement at the time of effectiveness
pursuant to Rule 430A under the Act, but excluding Form
T-1, each as amended at the time such part of the
registration statement became effective are hereinafter
collectively called the "Registration Statement"; the
prospectus relating to the Preferred Securities, in the
form in which it has most recently been filed, or
transmitted for filing, with the Commission on or prior
to the date of this Agreement, is hereinafter called
the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents
incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such
Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed with
the Commission after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any
annual report of Aetna filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the effective date
of the Registration Statement that is incorporated by
reference in the Registration Statement; and any
reference to the Prospectus as amended or supplemented
shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated
Preferred Securities in the form in which it is
first filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof,
including any documents incorporated by reference
therein as of the date of such filing;
(b) The Registration Statement and the
Prospectus conform, and any further amendments or
supplements to the Registration Statement or the
Prospectus will conform, in all material respects to
the requirements of the Act and the Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder
and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein
or necessary to make the statements therein (i) in the
case of the Registration Statement, not misleading and
(ii) in the case of the Prospectus, in light of the
circumstances under which they were made, not
misleading; provided, however, that this representation
and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with
information furnished in writing to the Company or
Aetna by an Underwriter of Designated Preferred
Securities through the Representatives for use in the
Prospectus as amended or supplemented relating to such
Designated Preferred Securities;
(c) Aetna has been duly incorporated and is
validly existing as an insurance corporation in good
standing under the laws of the State of Connecticut;
(d) The Company has been duly formed and is
validly existing as a limited liability company in good
standing under the laws of the Delaware;
(e) The Preferred Securities have been duly
authorized and, when the terms of the Designated Preferred
Securities have been established by resolutions
adopted by the Managing Members and issued and
delivered and paid for pursuant to this Agreement and
the Pricing Agreement with respect to such Designated
Preferred Securities, such Designated Preferred
Securities will be validly issued, fully paid and
non-assessable limited liability company interests in the
Company, as to which the members of the Company who
hold such Designated Preferred 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 any obligation of a
Preferred Securityholder to repay any funds wrongfully
distributed to it); and the Designated Preferred
Securities will conform, in all material respects, to
the descriptions thereof contained in the Prospectus as
amended or supplemented with respect to such Designated
Preferred Securities;
(f) The Limited Liability Company Agreement
of the Company ("L.L.C. Agreement"), which is in
substantially the form filed as an exhibit to the
Registration Statement, constitutes a valid and legally
binding agreement of the Company, enforceable against
the Company by the members of the Company that hold
Preferred Securities in accordance with its terms,
subject to (1) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws
now or hereafter in effect relating to or affecting
creditors' rights generally, (2) general principles of
equity (regardless of whether considered in a
proceeding at law or in equity); and (3) applicable
laws relating to fiduciary duties;
(g) Each of the guarantee of certain
obligations of the Company by Aetna for the benefit of
the holders from time to time of the Preferred
Securities (the "Guarantee Agreement") and the
guarantee by Aetna of certain liabilities of the
Company for the benefit of persons other than such
holders (the "Expense Agreement"), each of which is
substantially in the form filed as an exhibit to the
Registration Statement, has been duly authorized,
executed and delivered by Aetna and, in the case of the
Expense Agreement, the Company, and constitutes a valid
and legally binding agreement of Aetna enforceable
against Aetna in accordance with its terms, subject to
(1) bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors'
rights 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); and each of the
Guarantee Agreement and the Expense Agreement conforms,
in all material respects, to the description thereof
contained in the Prospectus as amended or supplemented
with respect to the Designated Preferred Securities;
(h) The Debentures have been duly authorized
by Aetna, and, when the Debentures are issued,
executed, authenticated, delivered and paid for in
accordance with the Indenture, such Debentures will be
duly issued, executed and delivered and will constitute
valid and legally binding obligations of Aetna
enforceable against Aetna in accordance with their
terms, subject to (1) 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 (2) general principles of equity (regardless of
whether considered in a proceeding at law or in
equity); the Indenture, which will be substantially in
the form filed as an exhibit to the Registration
Statement, has been duly authorized by the Company and,
at the Time of Delivery (as defined in Section 4
hereof) for such Designated Preferred Securities, the
Indenture will be duly qualified under the Trust
Indenture Act and, assuming due authorization,
execution and delivery by the trustee under such
Indenture (the "Trustee"), the Indenture will
constitute a valid and legally binding instrument of
Aetna enforceable against Aetna in accordance with its
terms, subject to (1) 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 (2) general principles of equity (regardless of
whether considered in a proceeding at law or in
equity); and the Indenture conforms, and the Debentures
will conform, in all material respects, to the
descriptions thereof contained in the Prospectus as
amended or supplemented with respect to such Designated
Preferred Securities;
(i) The issue and sale of the Designated
Preferred Securities and the performance by the Company
and Aetna of their respective obligations under this
Agreement, any Pricing Agreement, the Indenture, the
Debentures, the Guarantee Agreement, the Expense
Agreement and each Over-allotment Option (as defined in
Section 3 hereof), if any, and the consummation of the
transactions herein and therein contemplated will not
(1) conflict with or result in a breach or violation by
the Company or Aetna of any of the terms or provisions
of, or constitute a default by the Company or Aetna
under, any indenture, mortgage, deed of trust, loan
agreement or other similar agreement or instrument to
which the Company or Aetna is a party or by which the
Company or Aetna is bound or to which any of the
property or assets of the Company or Aetna is subject,
except, in all such cases, for such conflicts,
breaches, violations or defaults as would not have a
material adverse effect on the financial condition of
Aetna and its subsidiaries taken as a whole or would
not have a material adverse effect on the issuance or
sale of the Designated Preferred Securities, or (2)
result in any violation of (A) the provisions of the
Certificate of Formation of the Company or the L.L.C.
Agreement or the Certificate of Incorporation or
By-Laws of Aetna or (B) any statute of the United States
or the State of Connecticut or Delaware or any order,
rule or regulation of any court or governmental agency
or body of the United States or the State of Connecticut
or Delaware having jurisdiction over the Company or
Aetna or any of their respective properties; provided,
however that in the case of clause (B) of this
paragraph 2(i), this representation and warranty shall
not extend to such violations as would not have a material
adverse effect on the financial condition of Aetna
and its subsidiaries taken as a whole or would not have
a material adverse effect on the issuance or sale of
the Designated Preferred Securities; provided further,
that insofar as this representation and warranty relates
to the performance by the Company and Aetna of
each of their respective obligations under this Agreement,
the Pricing Agreement relating to the Designated
Preferred Securities, the Designated Preferred
Securities, the Indenture, the Debentures, the
Guarantee Agreement and the Expense Agreement, such
performance is subject to 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;
(j) No consent, approval, authorization,
order, registration, filing or qualification of or with
any court or governmental agency or body of the United
States or the States of Connecticut or Delaware is
required for the issue and sale of the Preferred
Securities or the consummation by the Company or Aetna
of the transactions contemplated by this Agreement, any
Pricing Agreement, the Indenture, the Debentures, the
Guarantee Agreement or the Expense Agreement or any
Over-allotment Option, except such as have been, or
will have been prior to the Time of Delivery obtained
under the Act or the Trust Indenture Act or from the
Connecticut Insurance Commissioner and such consents,
approvals, authorizations, orders, registrations,
filings or qualifications as may be required under
state securities or Blue Sky laws or insurance
securities laws of any such jurisdiction in connection
with the purchase and distribution of the Designated
Preferred Securities by the Underwriters, and except
those which, if not obtained, will not have a material
adverse effect on the financial condition of Aetna and
its subsidiaries taken as a whole or would not have a
material adverse effect on the issuance or sale of the
Designated Preferred Securities; and
(k) The Common Securities issued to the
Managing Members have been duly authorized and are
validly issued.
3. Upon the execution of the Pricing Agreement
applicable to any Designated Preferred Securities the
several Underwriters propose to offer the Firm Designated
Preferred Securities for sale upon the terms and conditions
set forth in the Prospectus as amended or supplemented.
The Company may specify in the Pricing Agreement
applicable to any Designated Preferred Securities that the
Company thereby grants to the Underwriters the right (an
"Over-allotment Option") to purchase at their election up to
the number of Optional Designated Preferred Securities set
forth in such Pricing Agreement, at the terms set forth in
the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Designated Preferred
Securities. Any such election to purchase Optional
Designated Preferred Securities may be exercised only by
written notice from the Representatives to the Company and
Aetna, given within a period specified in the Pricing
Agreement, setting forth the aggregate number of Optional
Designated Preferred Securities to be purchased and the date
on which such Optional Designated Preferred Securities are
to be delivered, as determined by the Representatives but in
no event earlier than the First Time of Delivery (as defined
in Section 4 hereof) or, unless the Representatives, Aetna
and the Company otherwise agree in writing, earlier than or
later than the respective number of business days after the
date of such notice set forth in such Pricing Agreement.
The number of Optional Designated Preferred
Securities to be added to the number of Firm Designated
Preferred Securities to be purchased by each Underwriter as
set forth in Schedule I to the Pricing Agreement applicable
to such Designated Preferred Securities shall be, in each
case, the number of Optional Designated Preferred Securities
which each of the Company and Aetna has been advised by the
Representatives have been attributed to such Underwriter,
provided that, if each of the Company and Aetna has not been
so advised, the number of Optional Designated Preferred
Securities to be so added shall be, in each case, that
proportion of Optional Designated Preferred Securities which
the number of Firm Designated Preferred Securities to be
purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Designated Preferred
Securities (rounded as the Representatives may determine to
the nearest 100 securities). The total number of Designated
Preferred Securities to be purchased by all the Underwriters
pursuant to such Pricing Agreement shall be the aggregate
number of Firm Designated Preferred Securities set forth in
Schedule I to such Pricing Agreement plus the aggregate
number of the Optional Designated Preferred Securities which
the Underwriters elect to purchase.
4. Unless otherwise specified in the applicable
Pricing Agreement, global certificates for the Firm
Designated Preferred Securities and Optional Designated
Preferred Securities to be purchased by each Underwriter
pursuant to such Pricing Agreement, registered in the name
"Cede & Co.," shall be delivered by or on behalf of the
Company to the Representatives for the account of such
Underwriter, against payment by such Underwriter or on its
behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the
Company or, if so requested by the Company, by wire transfer
to a bank account specified by the Company and specified in
Schedule II, in the funds specified in such Pricing
Agreement. The place, time and date of delivery of and
payment for Firm Designated Preferred Securities and
Optional Designated Preferred Securities shall be as
specified in such Pricing Agreement or at such other place,
time and date as the Representatives, Aetna and the Company
may agree upon in writing. Such time and date for delivery
of Firm Designated Preferred Securities pursuant to the
Pricing Agreement relating thereto is herein called the
"First Time of Delivery," such time and date for delivery of
Optional Designated Preferred Securities, if not the First
Time of Delivery, is herein called the "Second Time of
Delivery," and each such time and date is herein called the
"Time of Delivery."
5. Each of the Company and Aetna, jointly and
severally, agrees with each of the Underwriters of any
Designated Preferred Securities:
(a) To prepare the Prospectus as amended and
supplemented in relation to the applicable Designated
Preferred Securities and to file such Prospectus pursuant
to Rule 424(b) under the Act not later than the
Commission's close of business on the second business
day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated
Preferred Securities or, if applicable, such other time
as may be required by Rule 424(b); to advise the
Representatives promptly of any proposal to amend or
supplement the Registration Statement or Prospectus as
amended or supplemented after the date of the Pricing
Agreement relating to such Designated Preferred
Securities and prior to the Time of Delivery for such
Designated Preferred Securities, and afford the
Representatives a reasonable opportunity to comment on
any such proposed amendment or supplement; to advise
the Representatives of any such amendment or supplement
promptly after such Time of Delivery for so long as the
delivery of a prospectus is required under the Act in
connection with the offering or sale of such Designated
Preferred Securities; to file promptly all reports and
any definitive proxy or information statements required
to be filed by Aetna or the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a
prospectus is required under the Act in connection with
the offering or sale of such Designated Preferred
Securities, and during such same period to advise the
Representatives, promptly after the Company or Aetna
receives notice thereof, of the time when any amendment
to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission;
for so long as the delivery of a prospectus is required
under the Act in connection with the offering or sale
of the Designated Preferred Securities, to advise the
Representatives promptly of the issuance by the Commission
of any stop order or of any order preventing or
suspending the use of any prospectus relating to the
Designated Preferred Securities, of the suspension of
the qualification of such Designated Preferred
Securities for offering or sale in any jurisdiction or
of the initiation or, if known to the Company or Aetna,
the threatening of any proceeding for any such purpose,
or of any request by the Commission for amending or
supplementing the Registration Statement or Prospectus;
and, in the event of the issuance of any such stop
order or of any such order preventing or suspending the
use of any prospectus relating to the Designated
Preferred Securities or suspending any such qualification,
to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to endeavor
to take such action as the Representatives may reasonably
request to qualify such Designated Preferred
Securities for offering and sale under the securities
laws of such jurisdictions of the United States, Puerto
Rico and Guam as the Representatives may reasonably
request and such other jurisdictions as the Company,
Aetna and the Representatives may agree and to comply
with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long
as may be necessary to complete the distribution of
such Designated Preferred Securities, provided that in
connection therewith the Company and Aetna shall not be
required to qualify as a foreign corporation or to file
a general consent to service of process in any
jurisdiction, and provided further that in connection
therewith the Company and Aetna shall not be required
to qualify such Designated Preferred Securities for
offering and sale under the securities laws of any such
jurisdiction for a period in excess of nine months
after the initial time of issue of the Prospectus as
amended or supplemented relating to such Designated
Preferred Securities;
(c) To furnish the Underwriters with copies
of the Prospectus as amended or supplemented in such
quantities as the Representatives may from time to time
reasonably request, and, if the delivery of a prospectus
is required at any time in connection with the
offering or sale of the Designated Preferred Securities
and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or
supplemented would include an untrue statement of a
material fact or omit to state any material fact
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary
during such same period to amend or supplement the
Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and to file
such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as
many copies as the Representatives may from time to
time reasonably request of any amended Prospectus or a
supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
provided, however, that in case any Underwriter is
required under the Act to deliver a prospectus in
connection with the offering or sale of the Designated
Preferred Securities at any time more than nine months
after the date of the Pricing Agreement relating to the
Designated Preferred Securities, the costs of such
preparation and furnishing such amended or supplemented
Prospectus shall be borne by the Underwriters of such
Designated Preferred Securities;
(d) In the case of Aetna, to make generally
available to its securityholders as soon as
practicable, but in any event not later than eighteen
months after the effective date of the Registration
Statement (as defined in Rule 158(c)), an earning
statement of Aetna and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder
(including, at the option of Aetna, Rule 158);
(e) During the period beginning from the
date of the Pricing Agreement for such Designated
Preferred Securities and continuing to and including
the First Time of Delivery for such Designated
Preferred Securities, not to offer, sell, contract to
sell or otherwise dispose of in the United States any
preferred limited liability company interests in the
Company, which are substantially similar to such
Designated Preferred Securities, without the prior
written consent of the Representatives, which consent
shall not be unreasonably withheld; and
(f) To use its best efforts to list, subject
to notice of issuance, the Designated Preferred
Securities on The New York Stock Exchange, Inc.
6. Each of the Company and Aetna, jointly and
severally, covenants and agrees with the several Underwriters
that the Company and Aetna will pay or cause to be
paid the following: (i) the fees, disbursements and
expenses of the Company's and Aetna's counsel and
accountants in connection with the registration of the
Preferred Securities under the Act and all other expenses in
connection with the Company's and Aetna's preparation,
printing and filing of the Registration Statement, any
Preliminary Prospectus and, subject to the proviso of
Section 5(c), the Prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereof to
the Underwriters and dealers; (ii) the cost of printing or
otherwise producing any Agreement among Underwriters, this
Agreement, any Pricing Agreement, any Blue Sky and Legal
Investment Memoranda and any other documents in connection
with the offering, purchase, sale and delivery of the
Designated Preferred Securities; (iii) all expenses in
connection with the qualification of the Designated
Preferred Securities for offering and sale under state
securities laws as provided in Section 5(b) hereof,
including the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification
and in connection with the Blue Sky and legal investment
surveys; (iv) any fees charged by securities rating services
for rating the Designated Preferred Securities; (v) any
filing fees incident to any required review by the National
Association of Securities Dealers, Inc. of the terms of the
sale of the Designated Preferred Securities; (vi) any cost
of preparing certificates representing the Designated
Preferred Securities; (vii) the cost and charges of any
transfer agent or registrar or dividend disbursing agent;
(viii) the fees and expenses of any Trustee and any agent of
any Trustee and the fees and disbursements of counsel for
any Trustee in connection with any Indenture and the
Debentures; and (ix) all other costs and expenses incident
to the performance of each of the Company's and Aetna's
obligations hereunder and under any Over-allotment Option
which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as
provided in this Section, Section 8 and Section 11 hereof,
the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer
taxes on resale of any of the Designated Preferred
Securities by them, and any advertising expenses connected
with any offers they may make.
The foregoing provisions of this Section 6 shall
be without prejudice to each of the Company's and Aetna's
rights under any separate agreements between the Company and
Aetna and their attorneys, accountants and vendors with
respect to such fees, disbursements, expenses and costs.
7. The obligations of the Underwriters of any
Designated Preferred Securities under the Pricing Agreement
relating to such Designated Preferred Securities shall be
subject, in the discretion of the Representatives, to the
condition that all representations and warranties and other
statements of each of the Company and Aetna in or
incorporated by reference in the Pricing Agreement relating
to such Designated Preferred Securities are, at and as of
the respective Time of Delivery for such Designated
Preferred Securities, true and correct, the condition that
each of the Company and Aetna shall have performed in all
material respects all of its obligations hereunder
theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented
in relation to the applicable Designated
Preferred Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by
the rules and regulations under the Act and in
accordance with Section 5(a) hereof; no stop order
suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or,
to the knowledge of the Company or Aetna, threatened by
the Commission;
(b) Sullivan & Cromwell, counsel for the
Underwriters, shall have furnished to the Representatives
such opinion or opinions, dated the respective
Time of Delivery for such Designated Preferred
Securities, with respect to the incorporation of Aetna
and the Company, the Guarantee Agreement, the Expense
Agreement, the Indenture, the Registration Statement,
the Prospectus as amended or supplemented, the
Investment Company Act of 1940, as amended, the
validity of such Designated Preferred Securities and
the Debentures and other related matters as the
Representatives may reasonably request, and such
counsel shall have received such papers and information
as they may reasonably request to enable them to pass
upon such matters;
(c) Zoe Baird, Senior Vice President and
General Counsel of Aetna, shall have furnished to the
Representatives such counsel's written opinion, dated
the respective Time of Delivery for such Designated
Preferred Securities, in form and substance satisfactory
to the Representatives, to the effect that:
(i) Aetna has been duly incorporated
and is validly existing as an insurance
corporation in good standing under the laws of the
State of Connecticut;
(ii) To the best of such counsel's
knowledge, Aetna is qualified to do business, and
is in good standing, as a foreign insurance corporation
under the laws of the State of Pennsylvania
and the District of Columbia or, if not so
qualified and in good standing in either such
jurisdiction, such failure to be so qualified and
in good standing, as of the date of such opinion,
will not have a material adverse effect on the
financial condition of Aetna and its subsidiaries
taken as a whole;
(iii) Each of Aetna Life Insurance
Company and The Aetna Casualty and Surety Company
has been duly incorporated and is validly existing
as an insurance corporation in good standing under
the laws of the State of Connecticut, and all of
the outstanding shares of capital stock of each
such subsidiary have been duly authorized and
validly issued and are fully paid and
nonassessable, and (except for directors' qualifying
shares, if any) are owned directly or indirectly
by Aetna;
(iv) To the best of such counsel's
knowledge and other than as set forth or
contemplated in the Prospectus, there are no legal or
governmental proceedings pending or threatened
involving Aetna or any of its subsidiaries of a
character required to be disclosed in the
Registration Statement or Prospectus which are not
adequately disclosed in the Registration Statement
or Prospectus;
(v) This Agreement and the Pricing
Agreement with respect to the Designated Preferred
Securities have been duly authorized, executed and
delivered by Aetna;
(vi) Each of the Guarantee Agreement
and the Expense Agreement has been duly authorized,
executed and delivered by Aetna and, in the
case of the Expense Agreement, assuming the due
authorization, execution and delivery thereof by
the Company, constitutes a valid and legally
binding agreement of Aetna enforceable in
accordance with its terms, subject to (1)
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 (2)
general principles of equity (regardless of
whether considered in a proceeding at law or in
equity);
(vii) The Debentures have been duly
authorized by Aetna, and, when the Debentures are
issued, executed, authenticated, delivered and
paid for in accordance with the Indenture, such
Debentures will be duly issued, executed and
delivered and will constitute valid and legally
binding obligations of Aetna enforceable against
Aetna in accordance with their terms, subject to
(1) 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 (2) general principles of equity
(regardless of whether considered in a proceeding
at law or in equity);
(viii) The Indenture has been duly
authorized, executed and delivered by Aetna and,
assuming the due authorization, execution and
delivery thereof by the Trustee, the Indenture
constitutes a valid and legally binding instrument
of Aetna enforceable against Aetna in accordance
with its terms, subject to (1) 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 (2) general
principles of equity (regardless of whether
considered in a proceeding at law or in equity);
and the Indenture has been duly qualified under
the Trust Indenture Act;
(ix) The issue and sale of the
Designated Preferred Securities being delivered at
such Time of Delivery and the performance by Aetna
of its obligations under the Indenture, the
Debentures, the Guarantee Agreement, the Expense
Agreement, this Agreement, and the Pricing
Agreement with respect to the Designated Preferred
Securities will not (1) conflict with or result in
a breach or violation by Aetna of any of the terms
or provisions of, or constitute a default by Aetna
under, any indenture, mortgage, deed of trust,
loan agreement or other similar agreement or
instrument known to such counsel to which Aetna is
a party or by which Aetna is bound or to which any
of the property or assets of Aetna is subject,
except, in all such cases, for such conflicts,
breaches, violations or defaults as would not have
a material adverse effect on the financial
condition of Aetna and its subsidiaries taken as a
whole or would not have a material adverse effect
in the issuance or sale of the Designated
Preferred Securities, and (2) result in any violation
of (A) the provisions of the Certificate of
Incorporation or By-Laws of Aetna or (B) any statute
of the United States or the State of
Connecticut or any order, rule or regulation known to
such counsel of any court or governmental agency
or body of the United States or the State of
Connecticut having jurisdiction over Aetna or any of
its properties, except with respect to clause (B)
of this Paragraph (ix)(2), such violations as
would not have a material adverse effect on the
financial condition of Aetna and its subsidiaries
taken as a whole or would not have a material
adverse effect on the issuance or sale of the
Designated Preferred Securities (and except that
for purposes of this paragraph (ix) such counsel
need not express any opinion as to any violation
of any fraudulent transfer laws or other antifraud
laws or as to any violation of any federal or
state securities laws or blue sky or insurance
laws; provided further, that insofar as
performance by Aetna of its obligations under the
Indenture, the Debentures, the Guarantee
Agreement, the Expense Agreement, this Agreement
and the Pricing Agreement relating to the
Designated Preferred Securities is concerned, such
counsel need not express any opinion as to
bankruptcy, insolvency, reorganization, 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);
(x) The documents incorporated by
reference in the Prospectus as amended or
supplemented (other than the financial statements and
related notes, information as to reserves, the
financial statement schedules and the other
financial and statistical data included therein or
omitted therefrom, as to which such counsel need
express no opinion), when they became effective or
were filed with the Commission, as the case may
be, complied as to form in all material respects
with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations
of the Commission thereunder; and
(xi) Under the laws of the State of
Connecticut and under the federal laws of the
United States, no consent, approval, authorization,
order, registration, filing or qualification
of or with any court or governmental agency or
body is required for the issue and sale of the
Designated Preferred Securities being delivered at
such Time of Delivery in accordance with this
Agreement or the Pricing Agreement relating to the
Designated Preferred Securities, except for such
consents, approvals, authorizations, orders,
registrations, filings or qualifications as have
been obtained under the Act or the Trust Indenture
Act or from the Connecticut Insurance Commissioner
and such consents, approvals, authorizations,
orders, registrations, filings or qualifications
as may be required under state securities or Blue
Sky laws or insurance securities laws of any such
jurisdiction in connection with the purchase and
sale and distribution of the Designated Preferred
Securities by the Underwriters, and except those
which, if not obtained, will not have a material
adverse effect on the financial condition of Aetna
and its subsidiaries taken as a whole.
In addition, such counsel shall state that such
counsel does not know of any contract or other document (i)
of a character required to be filed as an exhibit to the
Registration Statement or to any of the documents incorporated
by reference into the Prospectus as amended or
supplemented which is not so filed, (ii) required to be
incorporated by reference into the Prospectus as amended or
supplemented which is not so incorporated by reference or
(iii) required to be described in the Registration Statement
or the Prospectus as amended or supplemented which is not so
described.
In rendering this opinion required by subsection
(c) of this Section, Ms. Baird may state that she is
admitted to the Bar of the State of Connecticut and she does
not express any opinion as to the laws of any other
jurisdiction other than the federal laws of the United
States of America, Ms. Baird may rely (A) as to any matter
to which you consent (which consent shall not be
unreasonably withheld), to the extent specified in such
opinion, upon the opinions of other counsel in good standing
whom such counsel believes to be reliable, provided that Ms.
Baird shall state that she and you are justified in relying
on such opinions and (B) as to matters of fact, upon certificates
of officers and representatives of Aetna and of
public officials, and may state that she has not verified
independently the accuracy or completeness of information or
documents furnished to such counsel with respect to the
Registration Statement or the Prospectus.
(d) Davis Polk & Wardwell, special counsel
for the Company and Aetna, shall have furnished to the
Representatives their written opinion, dated the
respective Time of Delivery for such Designated
Preferred Securities, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Company has been duly formed
and is validly existing as a limited liability
company in good standing under the laws of
Delaware;
(ii) The Designated Preferred Securities
being delivered at such Time of Delivery have been
duly authorized and validly issued and are fully
paid and non-assessable limited liability company
interests in the Company, as to which 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 any obligation of a Preferred
Securityholder to repay any funds wrongfully
distributed to it); and the Preferred Securities
conform, in all material respects, to the
descriptions thereof contained in the Prospectus
as amended or supplemented with respect to such
Designated Preferred Securities;
(iii) The Common Securities issued to the
Managing Members have been duly authorized and are
validly issued;
(iv) The L.L.C. Agreement constitutes a
valid and legally binding agreement of the
Company, enforceable against the Company by the
members of the Company that hold Preferred
Securities in accordance with its terms, subject
to (1) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar
laws now or hereafter in effect relating to or
affecting creditors' rights generally, (2) general
principles of equity (regardless of whether
considered in a proceeding at law or in equity)
and (3) applicable law relating to fiduciary
duties;
(v) This Agreement and the Pricing
Agreement with respect to such Designated
Preferred Securities have been duly executed and
delivered by each of Aetna and the Company;
(vi) Each of the Guarantee Agreement and
the Expense Agreement have been duly authorized,
executed and delivered by Aetna and, in the case
of the Expense Agreement, the Company and
constitutes a valid and legally binding agreement
of Aetna enforceable against Aetna and in
accordance with its terms, 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);
(vii) The Debentures have been duly
authorized by Aetna, and, when the Debentures are
issued, executed, authenticated, delivered and
paid for in accordance with the Indenture, such
Debentures will be duly issued, executed and
delivered and will constitute valid and legally
binding obligations of Aetna enforceable against
Aetna in accordance with their terms, subject to
(1) 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 (2) general principles of equity
(regardless of whether considered in a proceeding
at law or in equity);
(viii) The Indenture has been duly
authorized, executed and delivered by Aetna and,
assuming the due authorization, execution and,
delivery thereof by the Trustee, the Indenture
constitutes a valid and legally binding instrument
of Aetna enforceable against Aetna in accordance
with its terms, subject to (1) 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 (2) general
principles of equity (regardless of whether
considered in a proceeding at law or in equity);
and the Indenture has been duly qualified under
the Trust Indenture Act;
(ix) The issue and sale of the Designated
Preferred Securities being delivered at such Time
of Delivery and the performance by the Company of
its obligations under this Agreement and the
Pricing Agreement with respect to the Designated
Preferred Securities will not (1) conflict with or
result in a breach or violation by the Company of
any of the terms or provisions of, or constitute a
default by the Company under, any indenture, mortgage,
deed of trust, loan agreement or other
similar agreement or instrument known to such
counsel to which the Company is a party or by
which the Company is bound or to which any of the
property or assets of the Company is subject,
except, in all such cases, for such conflicts,
breaches, violations or defaults as would not have
a material adverse effect on the financial
condition of the Company or would not have a
material adverse effect in the issuance or sale of
the Designated Preferred Securities, and (2) result
in any violation of (A) the provisions of the
Certificate of Formation of the Company or the
L.L.C. Agreement or (B) any statute of Delaware or
any order, rule or regulation known to such
counsel of any court or governmental agency or
body of Delaware having jurisdiction over the
Company or any of its properties, except with
respect to clause (B) of this Paragraph (ix)(2),
such violations as would not have a material
adverse effect on the financial condition of the
Company or would not have a material adverse
effect on the issuance or sale of the Designated
Preferred Securities (and except that for purposes
of this paragraph (ix) such counsel need not
express any opinion as to any violation of any
fraudulent transfer laws or other antifraud laws;
provided further, that insofar as performance by
the Company of its obligations under this Agreement
and the Pricing Agreement relating to the
Designated Preferred Securities is concerned, such
counsel need not express any opinion as to
bankruptcy, insolvency, reorganization, moratorium
and other similar laws now or hereafter in effect
relating to or affecting creditors' rights
generally);
(x) Under the laws of Delaware, no
consent, approval, authorization, order, registration,
filing or qualification of or with any
court or governmental agency or body is required
for the issue and sale of the Designated Preferred
Securities being delivered at such Time of
Delivery in accordance with this Agreement or the
Pricing Agreement relating to the Designated
Preferred Securities being delivered at such Time
of Delivery;
(xi) The Company is not an "investment
company" within the meaning of the Investment
Company Act of 1940, as amended;
(xii) The statements contained in the
Prospectus under the captions "Description of the
Preferred Securities," "Description of the
Guarantee," "Description of the Debentures and the
Subordinated Indenture," "Taxation", and "Plan of
Distribution" and the corresponding sections in
any prospectus supplement relating to the
description of the Designated Preferred Securities
or their distribution, insofar as such statements
constitute summaries of certain provisions of the
documents or U.S. tax laws referred to therein,
accurately summarize the material provisions of
such documents or U.S. tax laws required to be
stated therein; and
(xiii) (1) such counsel is of the
opinion that the Registration Statement, as
amended, and the Prospectus, as amended or
supplemented, as of the First Time of Delivery for
the Designated Preferred Securities (other than
the financial statements and related notes,
information as to reserves, the financial
statement schedules and the other financial data
included therein or omitted therefrom, as to which
such counsel need express no opinion), comply as
to form in all material respects with the Act and
the Trust Indenture Act and the rules and
regulations of the Commission thereunder, (2)
nothing has come to the attention of such counsel
that would cause such counsel to believe that the
Registration Statement or the Prospectus, as
amended or supplemented, as of the date of the
Pricing Agreement with respect to the Designated
Preferred Securities and the First Time of Delivery
for the Designated Preferred Securities (other
than the financial statements and related notes,
information as to reserves, the financial
statement schedules and the other financial data
included therein or omitted therefrom, as to which
such counsel need express no belief), contained or
contains an untrue statement of a material fact or
omitted or omits to state a material fact
necessary to make the statements therein, in the
light of the circumstances under which they were
made, not misleading.
With respect to clause (xiii) of subsection (d) of
this Section, Davis Polk & Wardwell may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and
any amendments or supplements thereto and review and
discussion of the contents thereof, but are without
independent check or verification except as specified. In
rendering the opinion required by subsection (d) of this
Section, Davis Polk & Wardwell may rely upon the accuracy of
matters (A) involving the application of laws of any
jurisdiction other than the United States or New York and as
to any other matter to which you consent (which consent
shall not be unreasonably withheld), to the extent specified
in such opinion, upon the opinions of other counsel
reasonably satisfactory to you (including without
limitation, as to matters of Connecticut law, on the opinion
of Zoe Baird, Senior Vice President and General Counsel of
Aetna and as to matters of Delaware law, on the opinion of
Richards, Layton & Finger, P.A.), and (B) of fact upon
certificates of officers and representatives of the Company
and Aetna and of public officials.
(e) On the date of the Pricing Agreement for
such Designated Preferred Securities and at the
respective Time of Delivery for such Designated
Preferred Securities, KPMG Peat Marwick shall have
furnished to the Representatives a letter, dated the
date of the Pricing Agreement and a letter dated the
First Time of Delivery, respectively, to the effect set
forth in Annex II hereto, and with respect to such
letter dated such First Time of Delivery, as to such
other matters as the Representatives may reasonably
request and in form and substance satisfactory to the
Representatives;
(f) Since the respective dates as of which
information is given in the Prospectus as amended or
supplemented as of the date of the Pricing Agreement
until the respective Time of Delivery of the Designated
Preferred Securities there shall not have been any
adverse change or a development involving a prospective
material adverse change in the financial position,
stockholders' equity or results of operations of Aetna
and its subsidiaries considered as a whole, otherwise
than as set forth or contemplated in such Prospectus as
amended or supplemented, the effect of which, in any
such case described above, is in the reasonable
judgment of the Representatives, after consultation
with the Company and Aetna, so material and adverse as
to make it impracticable to proceed with the public
offering or the delivery of the Designated Preferred
Securities on the terms and in the manner contemplated
in such Prospectus as amended or supplemented;
(g) On or after the date of the Pricing
Agreement relating to the Designated Preferred
Securities until the respective Time of Delivery of the
Designated Preferred Securities, no downgrading shall
have occurred in the rating accorded Aetna's debt
securities or preferred stock by either the Standard &
Poor's Corporation or Moody's Investors Service, Inc.;
(h) On or after the date of the Pricing
Agreement relating to the Designated Preferred
Securities until the respective Time of Delivery of the
Designated Preferred Securities, there shall not have
occurred any of the following: (i) a suspension or
material limitation in trading in securities generally
on the New York Stock Exchange; (ii) a general
moratorium on commercial banking activities in New York
declared by either Federal or New York state
authorities; or (iii) the outbreak or material
escalation of hostilities involving the United States
or the declaration by the United States of a national
emergency or war, if the effect of any of the above
such events, in the reasonable judgment of the
Representatives, after consultation with the Company
and Aetna, makes it impracticable to proceed with the
public offering or the delivery of the Designated
Preferred Securities on the terms and in the manner
contemplated by the Prospectus as amended or
supplemented; and
(i) Aetna shall have furnished or caused to
be furnished to the Representatives at the respective
Time of Delivery for the Designated Preferred
Securities a certificate or certificates of the Group
Executive - Finance and Administration or the Senior
Vice President - Finance or the Treasurer as to the
accuracy of the representations and warranties of the
Company and Aetna herein at and as of such Time of
Delivery, as to the performance by the Company and
Aetna of all of their obligations hereunder to be
performed at or prior to such Time of Delivery, as to
the matters set forth in subsections (a) and (f) of
this Section and as to such other matters as the
Representatives may reasonably request.
8. (a) Each of the Company and Aetna,
jointly and severally, will indemnify and hold harmless
each Underwriter against any losses, claims, damages or
liabilities to which such Underwriter may become
subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented
and any other prospectus relating to the Designated
Preferred Securities, or any amendment or supplement
thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein (i) in the case of the Registration
Statement, not misleading and (ii) in the case of any
Prospectus, in light of the circumstances in which they
were made, not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with
investigating or defending any such action or claim as
such expenses are incurred; provided, however, that
neither the Company nor Aetna shall be liable in any
such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the
Designated Preferred Securities, or any such amendment
or supplement, in reliance upon and in conformity with
written information furnished to the Company or Aetna
by any Underwriter of Designated Preferred Securities
through the Representatives for inclusion therein; and
provided, further, that neither the Company nor Aetna
shall be liable to any Underwriter under the indemnity
agreement in this subsection (a) with respect to any
Preliminary Prospectus or any preliminary prospectus
supplement to the extent that any such loss, claim,
damage or liability of such Underwriter results from
the fact such Underwriter sold Designated Preferred
Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such
sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents
incorporated by reference) in any case where such
delivery is required by the Act if the Company or Aetna
has previously furnished copies thereof to such
Underwriter (or to the Representatives) and the loss,
claim, damage or liability of such Underwriter results
from an untrue or alleged untrue statement or omission
or alleged omission of a material fact contained in the
Preliminary Prospectus or any preliminary prospectus
supplement which was corrected in the Prospectus (or
the Prospectus as amended or supplemented).
(b) Each Underwriter will indemnify and hold
harmless the Company and Aetna against any losses,
claims, damages or liabilities to which the Company or
Aetna may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue
statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus
relating to the Designated Preferred Securities, or any
amendment or supplement thereto, or arise out or are
based upon the omission or alleged omission to state
therein a material fact required to be stated therein
or necessary to make the statements therein (i) in the
case of the Registration Statement, not misleading and
(ii) in the case of any Prospectus, in light of the
circumstances under which they were made, not
misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in
any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus
as amended or supplemented and any other prospectus
relating to the Designated Preferred Securities, or any
such amendment or supplement, in reliance upon and in
conformity with written information furnished to the
Company or Aetna by such Underwriter through the
Representatives for inclusion therein; and will
reimburse the Company and Aetna for any legal or other
expenses reasonably incurred by the Company or Aetna in
connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified
party under subsection (a) or (b) above of notice of
the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection,
notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any
liability which it may have to any indemnified party
otherwise than under such subsection. In case any such
action shall be brought against any indemnified party
and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that
it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such
indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its
election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified
party under such subsection for any legal expenses of
other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in
connection with the defense thereof other than
reasonable costs of investigation. In no event shall
any indemnifying party be liable for the fees and
expenses of more than one counsel (in addition to local
counsel) separate from their own counsel for all
indemnified parties in connection with any one action
or separate but similar or related actions in the same
jurisdiction arising out of the same general
allegations or circumstances. In no event shall an
indemnifying party be liable with respect to any action
or claim settled without its written consent. No
indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of
which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes
an unconditional release of such indemnified party from
all liability on claims that are the subject matter of
such proceeding.
(d) If the indemnification provided for in
this Section 8 is unavailable to or insufficient to
hold harmless an indemnified party under subsection (a)
or (b) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred
to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute
to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative
benefits received by the Company and Aetna on the one
hand and the Underwriters of the Designated Preferred
Securities on the other from the offering of the
Designated Preferred Securities to which such loss,
claim, damage or liability (or action in respect
thereof) relates. If, however, the allocation provided
by the immediately preceding sentence is not permitted
by applicable law or if the indemnified party is not
entitled to receive the indemnification provided for in
subsection (a) above because of the second proviso
thereof or if the indemnified party failed to give the
notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion
as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company and
Aetna on the one hand and the Underwriters of the
Designated Preferred Securities on the other in
connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as any other
relevant equitable considerations. The relative
benefits received by the Company and Aetna on the one
hand and such Underwriters on the other shall be deemed
to be in the same proportion as the total proceeds from
such offering (before deducting expenses) received by
the Company less the total underwriting compensation
paid by Aetna bear to the total underwriting discounts
and commissions received by such Underwriters. The
relative fault shall be determined by reference to,
among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to
information supplied by the Company and Aetna on the
one hand or such Underwriters on the other and the
parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission, including with respect to any
Underwriter, the extent to which such losses, claims,
damages or liabilities (or actions in respect thereof)
with respect to any Preliminary Prospectus or any
preliminary prospectus supplement result from the fact
that the Underwriter sold Designated Preferred
Securities to a person to whom there was not sent or
given, at or prior to the written confirmation of such
sale, a copy of the Prospectus (excluding documents
incorporated by reference) or of the Prospectus as then
amended or supplemented (excluding documents
incorporated by reference), if the Company or Aetna
have previously furnished copies thereof to such
Underwriters. The Company, Aetna and the Underwriters
agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the
Underwriters were treated as one entity for such
purpose) or by any other method of allocation which
does not take account of the equitable considerations
referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions
in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions
of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the
amount by which the total price at which the applicable
Designated Preferred Securities underwritten by it and
distributed to the public were offered to the public
exceeds the amount of any damages (other than amounts
paid or incurred without the consent of the
indemnifying party as provided in this Section 8) which
such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the
Underwriters of Designated Preferred Securities in this
subsection (d) to contribute are several in proportion
to their respective underwriting obligations with
respect to such Designated Preferred Securities and not
joint. No indemnifying party will be liable for
contribution with respect to any action or claim
settled without its written consent.
(e) The obligations of the Company and Aetna
under this Section 8 shall be in addition to any
liability which the Company and Aetna may otherwise
have and shall extend or not extend, as the case may
be, upon the same terms and conditions, to each person,
if any, who controls any Underwriter within the meaning
of the Act; and the obligations of the Underwriters
under this Section 8 shall be in addition to any
liability which the respective Underwriters may
otherwise have and shall extend or not extend, as the
case may be, upon the same terms and conditions, to
each officer and director of Aetna and the Company and
to each person, if any, who controls Aetna or the
Company within the meaning of the Act.
9. (a) If any Underwriter shall default in
its obligation to purchase the Firm Designated
Preferred Securities or Optional Designated Preferred
Securities which it has agreed to purchase under the
Pricing Agreement relating to such Preferred
Securities, the Representatives may in their discretion
arrange for themselves or another party or other
parties to purchase such Preferred Securities on the
terms contained herein. If within thirty-six hours
after such default by any Underwriter the
Representatives do not arrange for the purchase of such
Firm Designated Preferred Securities or Optional
Designated Preferred Securities, as the case may be,
then the Company and Aetna shall be entitled to a
further period of thirty-six hours within which to
procure another party or other parties reasonably
satisfactory to the Representatives to purchase such
Preferred Securities on such terms. In the event that,
within the respective prescribed period, the
Representatives notify the Company and Aetna that they
have so arranged for the purchase of such Preferred
Securities, or the Company or Aetna notifies the
Representatives that it has so arranged for the purchase of
such Preferred Securities, the Representatives, Aetna
or the Company shall have the right to postpone the
Time of Delivery for such Preferred Securities for a
period of not more than seven days in order to effect
whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements,
and the Company and Aetna agree to file promptly
any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The
term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with
like effect as if such person had originally been a
party to the Pricing Agreement with respect to such
Designated Preferred Securities.
(b) If, after giving effect to any arrangements
for the purchase of the Firm Designated Preferred
Securities or Optional Designated Preferred Securities,
as the case may be, of a defaulting Underwriter or
Underwriters by the Representatives, the Company or
Aetna as provided in subsection (a) above, the aggregate
amount of Designated Preferred Securities which
remains unpurchased does not exceed one-tenth of the
aggregate number of Firm Designated Preferred
Securities or Optional Designated Preferred Securities,
as the case may be, to be purchased at the respective
Time of Delivery, then the Company and Aetna shall have
the right to require each non-defaulting Underwriter to
purchase the number of Firm Designated Preferred
Securities or Optional Designated Preferred Securities,
as the case may be, which such Underwriter agreed to
purchase under the Pricing Agreement relating to such
Designated Preferred Securities and, in addition, to
require each non-defaulting Underwriter to purchase its
pro rata share (based on the number of Firm Designated
Preferred Securities or Optional Designated Preferred
Securities, as the case may be, which such Underwriter
agreed to purchase under such Pricing Agreement) of the
Firm Designated Preferred Securities or the Optional
Designated Preferred Securities, as the case may be, of
such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from
liability for its default.
(c) If, after giving effect to any arrangements
for the purchase of the Firm Designated Preferred
Securities or the Optional Designated Preferred
Securities, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives,
Aetna or the Company as provided in subsection (a)
above, the aggregate number of Firm Designated
Preferred Securities or the Optional Designated
Preferred Securities, as the case may be, which remains
unpurchased exceeds one-tenth of the aggregate number
of Firm Designated Preferred Securities or Optional
Designated Preferred Securities, as the case may be, to
be purchased at the respective Time of Delivery, as
referred to in subsection (b) above, or if the Company
or Aetna shall not exercise the right described in
subsection (b) above to require non-defaulting
Underwriters to purchase Firm Designated Preferred
Securities or Optional Designated Preferred Securities,
as the case may be, of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to
such Firm Designated Preferred Securities or
Over-allotment Option relating to such Optional Designated
Preferred Securities, as the case may be, shall
thereupon terminate, without liability on the part of
any non-defaulting Underwriter, Aetna or the Company,
except for the expenses to be borne by the Company,
Aetna and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements,
representations, warranties and other statements of the
Company and Aetna and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of
any Underwriter or any controlling person of any
Underwriter, or the Company or Aetna, or any officer or
director or controlling person of the Company or Aetna, and
shall survive delivery of and payment for the Designated
Preferred Securities.
11. If any Pricing Agreement or Over-allotment
Option shall be terminated pursuant to Section 9 hereof,
neither Aetna nor the Company shall then be under any
liability to any Underwriter with respect to the Firm
Designated Preferred Securities or Optional Designated
Preferred Securities with respect to which such Pricing
Agreement shall have been terminated except as provided in
Section 6 and Section 8 hereof; but, if for any other reason
Designated Preferred Securities are not delivered by or on
behalf of the Company and Aetna as provided herein, the
Company and Aetna will reimburse the Underwriters through
the Representatives for all reasonable out-of-pocket
expenses approved in writing by the Representatives,
including reasonable fees and disbursements of counsel,
reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such
Designated Preferred Securities, but neither Aetna nor the
Company shall then be under further liability to any
Underwriter with respect to such Designated Preferred
Securities, except as provided in Section 6 and Section 8
hereof.
12. In all dealings hereunder, the Representatives
of the Underwriters of Designated Preferred Securities
shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any
Underwriter made or given by such Representatives jointly or
by such of the Representatives, if any, as may be designated
for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements
hereunder shall be in writing, and if to the Underwriters
shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Representatives as set
forth in the Pricing Agreement; and if to the Company or
Aetna shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company and Aetna set
forth in the Registration Statement; Attention: Corporate
Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission
to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company
and Aetna by the Representatives upon request. Any such
statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement and each Pricing Agreement
shall be binding upon, and inure solely to the benefit of,
the Underwriters, the Company and Aetna and, to the extent
provided in Section 8 and Section 10 hereof, the officers
and directors of the Company and Aetna and each person who
controls the Company and Aetna or any Underwriter, and their
respective heirs, executors, administrators, successors and
assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any such Pricing
Agreement. No purchaser of any of the Preferred Securities
from any Underwriter shall be deemed a successor or assign
by reason merely of such purchase.
14. Time shall be of the essence for each Pricing
Agreement. As used herein, "business day" shall mean any
day when the Commission's office in Washington, D.C. is open
for business.
15. This Agreement and each Pricing Agreement
shall be governed by and construed in accordance with the
internal laws (and not the conflict of law provisions) of
the State of New York.
16. This Agreement and each Pricing Agreement may
be executed by any one or more of the parties hereto and
thereto in any number of counterparts, each of which shall
be deemed to be an original, but all such respective
counterparts shall together constitute one and the same
instrument.
Very truly yours,
AETNA CAPITAL L.L.C.
By: Aetna Life and Casualty Company,
as Managing Member
By: _______________________
Name:
Title:
AETNA LIFE AND CASUALTY COMPANY
By: ___________________________
Name:
Title:
ANNEX I
PRICING AGREEMENT
Goldman, Sachs & Co.
As Representatives
of the several
Underwriters named in Schedule I hereto,
________, 1994
Ladies and Gentlemen:
Aetna Capital L.L.C., a limited liability company
formed under the laws of Delaware (the "Company"), proposes,
subject to the terms and conditions stated herein and in the
Underwriting Agreement, dated ________, 1994 (the
"Underwriting Agreement"), to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the
Preferred Securities specified in Schedule II hereto (the
"Designated Preferred Securities" consisting of Firm
Designated Preferred Securities and any Optional Designated
Preferred Securities the Underwriters may elect to purchase)
of ( )% Cumulative Monthly Income Preferred Securities,
Series A, of the Company, guaranteed by Aetna Life and
Casualty Company, a Connecticut insurance corporation
("Aetna"), to the extent set forth in the Prospectus and
Registration Statement relating to the Preferred Securities.
Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall
be deemed to be a part of this Agreement to the same extent
as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein
shall be deemed to have been made at and as of the date of
this Pricing Agreement, except that each representation and
warranty that refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the
Underwriting Agreement in relation to the Prospectus (as
therein defined), and also a representation and warranty as
of the date of this Pricing Agreement in relation to the
Prospectus as amended or supplemented relating to the
Designated Preferred Securities which are the subject of
this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein,
terms defined in the Underwriting Agreement are used herein
as therein defined. The Representatives designated to act
on behalf of each of the Underwriters of the Designated
Preferred Securities pursuant to Section 12 of the
Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth
at the end of Schedule II hereto.
An amendment to the Registration Statement, or a
supplement to the Prospectus, as the case may be, relating
to the Designated Preferred Securities, in the form
heretofore delivered to you is now proposed to be filed with
the Commission.
Subject to the terms and conditions set forth
herein and in the Underwriting Agreement incorporated herein
by reference, (a) the Company agrees to issue and to sell to
each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the
Company, at the time and place and at the purchase price to
the Underwriters set forth in Schedule II hereto, the number
of Firm Designated Preferred Securities set forth opposite
the name of such Underwriter in Schedule I hereto and, (b)
in the event and to the extent that the Underwriters shall
exercise the election to purchase Optional Designated
Preferred Securities, as provided below, the Company agrees
to issue and sell to each of the Underwriters, and each of
the Underwriters agrees, severally and not jointly, to
purchase from the Company at the purchase price to the
Underwriters set out in Schedule II hereto that portion of
the number of Optional Designated Preferred Securities as to
which such election shall have been exercised.
The Company hereby grants to each of the
Underwriters the right to purchase at their election up to the
number of Optional Designated Preferred Securities set forth
opposite the name of such Underwriter in Schedule I hereto
on the terms referred to in the paragraph above for the sole
purpose of covering over-allotments in the sale of the Firm
Designated Preferred Securities. Any such election to
purchase Optional Designated Preferred Securities may be
exercised by written notice from the Representatives to the
Company and Aetna given within a period of ___ calendar days
after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Designated Preferred Securities
to be purchased and the date on which such Optional
Designated Preferred Securities are to be delivered, as
determined by the Representatives but in no event earlier
than the First Time of Delivery or, unless the
Representatives, Aetna and the Company otherwise agree in writing,
no earlier than two or later than ten business days after
the date of such notice.
If the foregoing is in accordance with your
understanding, please sign and return to us counterparts hereof,
and upon acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding
agreement between each of the Underwriters, the Company and
Aetna. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is or will be pursuant
to the authority set forth in a form of Agreement among
Underwriters, the form of which shall be submitted to the
Company and Aetna for examination upon request.
AETNA CAPITAL L.L.C.
By: Aetna Life and Casualty
Company, as Managing
Member
By: ___________________
Name:
Title:
AETNA LIFE AND CASUALTY COMPANY
By: ___________________________
Name:
Title:
Accepted as of the
date hereof:
Goldman, Sachs & Co.
On behalf of each of
the Underwriters
By: ______________________________
Name:
Title: Attorney-in-Fact
SCHEDULE I
NUMBER OF FIRM MAXIMUM NUMBER OF
DESIGNATED OPTIONAL DESIGNATED
PREFERRED PREFERRED SECURITIES
SECURITIES WHICH
UNDERWRITER TO BE PURCHASED MAY BE PURCHASED
GOLDMAN, SACHS
& CO.
TOTAL _________ ____________ ___________
SCHEDULE II
Title of Designated Preferred Securities: ( )% Cumulative
Monthly Income Preferred Securities, Series __:
Date of Resolution Adopted by the Managing Members to Fix
the Terms and Conditions of the Designated Preferred
Securities:
________, 199_
Number of Designated Preferred Securities:
Number of Firm Designated Preferred Securities:
Maximum Number of Optional Designated Preferred
Securities:
Initial Offering Price to Public:
$______ per security, plus accrued dividends, if any,
from ___________________, 199_
Purchase Price by Underwriters (including the Optional
Designated Preferred Securities):
$______ per security, plus accrued dividends, if any,
from ___________________, 199_
Underwriters' Compensation:
$_____ per security
Specified Funds for Payment of Purchase Price and
Underwriters' Compensation:
((New York) Clearing House Funds)
(Immediately Available Funds)
Indenture:
Indenture dated , 1994 between Aetna and ,
as Trustee
Trustee:
Dividend Rate:
_____% per annum
Dividend Payment Dates:
(insert language from Prospectus
and Prospectus Supplement)
Liquidation Preference:
Redemption and Exchange Provisions:
The Designated Preferred Securities may be
redeemed, in whole or in part at the option of the Company
with Aetna's consent on or after _______, ______ at $______
per security, plus accumulated and unpaid dividends to the
date fixed for redemption (the "Redemption Price").
(insert additional language from Prospectus
and Prospectus Supplement)
(Other possible redemption provisions)
(First) Time of Delivery:
________, 19__
Closing Location:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
(Other Terms)*:
* A description of particular tax, accounting or
other unusual features of the Designated Preferred
Securities should be set forth, or referenced to an attached
and accompanying description, if necessary to ensure
agreement as to the terms of the Designated Preferred
Securities to be purchased and sold. Such a description
might appropriately be in the form in which such features
will be described in the Prospectus Supplement for the
offering.
ANNEX II
Pursuant to Section 7(e) of the Underwriting
Agreement, the accountants shall furnish letters to the
Underwriters to the effect that:
(i) They are independent certified
public accountants with respect to Aetna and its
subsidiaries within the meaning of the Act and the
applicable published rules and regulations
thereunder;
(ii) In their opinion, the financial
statements and any supplementary financial
information and schedules audited by them and
included or incorporated by reference in the
Registration Statement or the Prospectus comply as
to form in all material respects with the
applicable accounting requirements of the Act or
the Exchange Act, as applicable, and the related
published rules and regulations thereunder; and,
if applicable, they have made a review in
accordance with standards established by the
American Institute of Certified Public Accountants
of the consolidated interim financial statements
and selected financial data derived from audited
financial statements of Aetna for the periods
specified in such letter, as indicated in their
reports thereon, copies of which have been
furnished to the representatives of the
Underwriters (the "Representatives");
(iii) The unaudited selected financial
information with respect to the consolidated
results of operations and financial position of
Aetna for the five most recent fiscal years
included in the Prospectus and included or incorporated
by reference in Item 6 of Aetna's Annual
Report on Form 10-K for the most recent fiscal
year agrees with the corresponding amounts (after
restatement where applicable) in the audited
consolidated financial statements for five such
fiscal years which were included or incorporated
by reference in Aetna's Annual Reports on Form 10-K
for such fiscal years;
(iv) On the basis of limited procedures,
not constituting an audit in accordance
with generally accepted auditing standards,
consisting of a reading of the unaudited financial
statements and other information referred to
below, a reading of the latest available interim
financial statements of Aetna and its subsidiaries,
inspection of the minute books of Aetna
and its subsidiaries since the date of the latest
audited financial statements included or
incorporated by reference in the Prospectus,
inquiries of officials of Aetna and its subsidiaries
responsible for financial and accounting
matters and such other inquiries and procedures as
may be specified in such letter, nothing came to
their attention that caused them to believe that:
(a) the unaudited condensed
consolidated statements of income, consolidated
balance sheets and consolidated statements of
cash flows included or incorporated by reference
in Aetna's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus
do not comply as to form in all material
respects with the applicable accounting
requirements of the Exchange Act as it
applies to Form 10-Q and the related
published rules and regulations thereunder or,
if no report has been issued by such accountants
on the consolidated interim financial
statements as set forth in (ii) above, based
on a review under the applicable professional
standards that any material modifications
should be made to such condensed consolidated
financial statements for them to be in
conformity with generally accepted accounting
principles;
(b) any other unaudited income
statement data and balance sheet items
included in the Prospectus do not agree with
the corresponding items in the unaudited
consolidated financial statements from which
such data and items were derived, and any
such unaudited data and items were not
determined on a basis substantially
consistent with the basis for the corresponding
amounts in the audited consolidated financial
statements included or incorporated by
reference in Aetna's Annual Report on Form
10-K for the most recent fiscal year;
(c) the unaudited financial
statements which were not included in the
Prospectus but from which were derived the
unaudited condensed financial statements
referred to in clause (a) above and any
unaudited income statement data and balance
sheet items included in the Prospectus and
referred to in Clause (b) above were not
determined on a basis substantially
consistent with the basis for the audited
financial statements included or incorporated
by reference in Aetna's Annual Report on Form
10-K for the most recent fiscal year; and
(d) as of a specified date not
more than five business days prior to the
date of such letter, there have been any
changes in the consolidated Common Stock
(other than issuances of common stock
pursuant to employee benefit plans, upon
exercise of options and stock appreciation
rights, upon earn-outs of performance shares
and upon conversions of convertible securities),
which were outstanding on the date of
the latest balance sheet included or incorporated
by reference in the Prospectus) or any
increase in the consolidated Long-Term Debt
of Aetna and its subsidiaries, as compared
with amounts shown in the latest balance
sheet included or incorporated by reference
in the Prospectus, except in each case for
changes or increases which the Prospectus
discloses have occurred or may occur or which
are described in such letter;
(v) In addition to the audit referred
to in their report(s) included or incorporated by
reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and
other procedures referred to in paragraphs (iii)
and (iv) above, they have carried out certain
specified procedures, not constituting an audit in
accordance with generally accepted auditing
standards, with respect to certain amounts,
percentages and financial information specified by
the Representatives which are derived from the
general accounting records of Aetna and its
subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference),
or in Part 11 of, or in exhibits and schedules to,
the Registration Statement specified by the
Representatives or in documents incorporated by
reference in the Prospectus specified by the
Representatives, and have compared certain of such
amounts, percentages and financial information
with the accounting records of or schedules prepared
by Aetna and its subsidiaries and have found
them to be in agreement; and
(vi) If pro forma financial statements
and other pro forma financial information (the
"Pro Forma Disclosure") are required to be
included in the Registration Statement, such
letter shall further state that although they are
unable to and do not express any opinion on such
Pro Forma Disclosure or on the pro forma
adjustments applied to the historical amounts
included in that statement, for purposes of such
letter they have:
(a) read the Pro Forma Disclosure;
(b) made inquiries of certain
officials of Aetna who have responsibility
for financial and accounting matters about
the basis for their determination of the pro
forma adjustments and whether the Pro Forma
Disclosure above complies in form in all
material respects with the applicable
accounting requirements of Rule 11-02 of
Regulation S-X; and
(c) proved the arithmetic accuracy
of the application of the pro forma adjustments
to the historical amounts in the
Pro Forma Disclosure; and
on the basis of such procedures, and such other
inquiries and procedures as may be specified in
such letter, nothing came to their attention that
caused them to believe that the Pro Forma
Disclosure included in the Registration Statement
does not comply in form in all material respects
with the applicable requirements of Rule 11-02 of
Regulation S-X and that the pro forma adjustments
have not been properly applied to the historical
amounts in the compilation of that statement
All references in this Annex II to the Prospectus
shall be deemed to refer to the Prospectus (including the
documents incorporated by reference therein) as defined in
the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes
of such letter and to the Prospectus as amended or
supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated
Preferred Securities for purposes of the letter delivered at
the Time of Delivery for such Designated Preferred
Securities.