EXHIBIT 3.2
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
AETNA CAPITAL L.L.C.
This Amended and Restated Limited Liability
Company Agreement of Aetna Capital L.L.C. (the "Company") is
made as of April __, 1994, among Aetna Life and Casualty
Company ("Aetna") and Aetna Capital Holdings, Inc. ("Aetna
Capital"), as initial Members (as defined below) of the
Company and the Persons (as defined below) who become
Members of the Company in accordance with the provisions
hereof.
WHEREAS, Aetna and Aetna Capital have heretofore
formed a limited liability company pursuant to the Delaware
Limited Liability Company Act, 6 Del.C. section 18-101, et seq.,
as amended from time to time (the "Delaware Act"), by filing
a Certificate of Formation of the Company with the office of
the Secretary of State of the State of Delaware on March 23,
1994, and entering into a Limited Liability Company
Agreement of the Company dated as of March 23, 1994 (the
"Original Limited Liability Company Agreement"); and
WHEREAS, the Members desire to continue the
Company as a limited liability company under the Delaware
Act and to amend and restate the Original Limited Liability
Company Agreement in its entirety.
NOW, THEREFORE, in consideration of the agreements
and obligations set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Members hereby agree as
follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. The terms defined in
this Article I shall, for the purposes of this Agreement,
have the meanings herein specified.
"Agreement" means this Amended and Restated
Limited Liability Company Agreement, as amended, modified,
supplemented or restated from time to time.
"Certificate" means the Certificate of Formation
and any and all amendments thereto and restatements thereof
filed on behalf of the Company with the office of the
Secretary of State of the State of Delaware pursuant to the
Delaware Act.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any corresponding federal tax
statute enacted after the date of this Agreement. A
reference to a specific section (section) of the Code refers not
only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date
of this Agreement, as such specific section or corresponding
provision is in effect on the date of application of the
provisions of this Agreement containing such reference.
"Common Member" means a Member that holds one or
more Common Securities.
"Common Securities" means the Common Interests in
the Company.
"Company Dividend Junior Securities" shall have
the meaning set forth in Section 9.3 of this Agreement.
"Company Dividend Parity Securities" shall have
the meaning set forth in Section 9.3 of this Agreement.
"Company Liquidation Parity Securities" shall have
the meaning set forth in Section 15.5 of this Agreement.
"Debentures" means the Debentures evidencing the
loans to Aetna from the Company of the proceeds of the
issuances of Interests and related capital contributions.
"Guarantee" means the Payment and Guarantee
Agreement to be entered into by Aetna for the benefit of the
Preferred Members.
"Indenture" means the Indenture pursuant to which
the Debentures will be issued.
"Interest" means a limited liability company
interest in the Company, including the right of the holder
thereof to any and all benefits to which a Member may be
entitled as provided in this Agreement, together with the
obligations of a Member to comply with all of the terms and
provisions of this Agreement.
"Liquidation Distribution" shall have the meaning
set forth in Section 15.5 of this Agreement.
"LP Act" means the Delaware Revised Uniform
Limited Partnership Act, 6 Del C. section 17 101, et seq., as
amended from time to time.
"Managing Members" means Aetna Life and Casualty
Company and Aetna Capital Holdings, Inc., in their capacity
as the Members of the Company that hold all of the
outstanding Common Securities.
"Member" means any Person that holds an Interest
in the Company. For purposes of the Delaware Act, the
Managing Members and the Preferred Members shall constitute
separate classes or groups of Members.
"Person" means any individual, corporation,
association, partnership (general or limited), joint
venture, trust, estate, limited liability company, or other
legal entity or organization.
"Preferred Certificate" means a certificate
evidencing the Preferred Securities held by a Preferred
Member.
"Preferred Member" means a Member that holds one
or more Preferred Securities.
"Preferred Securities" means the Preferred
Interests in the Company.
"Tax Matters Partner" means the Managing Member
designated as such in Section 11.1 hereof.
"Third Party Creditors" shall have the meaning set
forth in Section 13.1 of this Agreement.
Section 1.2 Headings. The headings and
subheadings in this Agreement are included for convenience
and identification only and are in no way intended to
describe, interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof.
ARTICLE II
CONTINUATION AND TERM; ADMISSION OF MEMBERS
Section 2.1 Continuation.
(a) The Members hereby agree to continue the
Company as a limited liability company under and pursuant to
the provisions of the Delaware Act and agree that the
rights, duties and liabilities of the Members shall be as
provided in the Delaware Act, except as otherwise provided
herein.
(b) Upon the execution of this Agreement, Aetna
and Aetna Capital shall continue to be Members of the
Company.
(c) Either Managing Member, as an authorized
person within the meaning of the Delaware Act, shall
execute, deliver and file any and all amendments to and
restatements of the Certificate.
Section 2.2 Name. The name of the Company
heretofore formed and continued hereby is Aetna Capital
L.L.C. The business of the Company may be conducted upon
compliance with all applicable laws under any other name
designated by the Managing Members.
Section 2.3 Term. The term of the Company
commenced on the date the Certificate was filed in the
office of the Secretary of State of the State of Delaware
and shall continue until March 23, 2104, unless dissolved
before such date in accordance with the provisions of this
Agreement.
Section 2.4 Registered Agent and Office. The
Company's registered agent and office in Delaware shall be
RL&F Service Corp., One Rodney Square, 10th Floor, Tenth and
King Streets, Wilmington, New Castle County, Delaware 19801.
At any time, the Managing Members may designate another
registered agent and/or registered office.
Section 2.5 Principal Place of Business. The
principal place of business of the Company shall be at 151
Farmington Avenue, Hartford, Connecticut 06156. The
Managing Members may change the location of the Company's
principal place of business.
Section 2.6 Qualification in Other Jurisdictions.
The Managing Members shall cause the Company to be
qualified, formed or registered under assumed or fictitious
name statutes or similar laws in any jurisdiction in which
the Company transacts business. Either Managing Member, as
an authorized person within the meaning of the Delaware Act,
shall execute, deliver and file any certificates (and any
amendments and/or restatements thereof) necessary for the
Company to qualify to do business in a jurisdiction in which
the Company may wish to conduct business.
Section 2.7 Admission of Members.
(a) A Person shall be admitted as a Member, or
shall become an assignee of an Interest or other rights or
powers of a Member to the extent assigned, and shall become
bound by the terms of this Agreement, without execution of
this Agreement, if such Person (or a representative
authorized by such Person orally, in writing or by other
action such as payment for an Interest) complies with the
conditions for becoming a Member or assignee, as the case
may be, as set forth in Section 2.7(b) and requests (which
request shall be deemed to have been made by such Person
effective upon payment for its Interest) that the records of
the Company reflect such admission or assignment.
The Company shall be promptly notified by any
assignor of any assignment. The Company will reflect
admission of a Member in the records of the Company as soon
as is reasonably practicable after either of the following
events: (i) in the case of a person acquiring an Interest
directly from the Company, at the time of payment therefor,
and (ii) in the case of an assignment, upon notification
thereof (the Company being entitled to assume, in the
absence of knowledge to the contrary, that proper payment
has been made by the assignee).
(b) Whether acquiring an Interest directly from
the Company or by assignment, a Person shall be admitted as
a Member upon the acquisition or assignment, as the case may
be, of such Interest and the reflection of such Person's
admission as a Member in the records of the Company. The
consent of any other Member shall not be required for the
admission of a Member.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The primary purpose of the
Company is to issue Interests and to loan the proceeds from
the issuance thereof and the related capital contributions
to Aetna. Subject to the foregoing, the Company may carry
on any lawful business, purpose or activity other than
conducting a financial or insurance business within the
meaning of Section 7704(d)(2) of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND SECURITIES
Section 4.1 Form of Contribution. The
contribution of a Member to the Company may, as determined
by the Managing Members in their discretion, be in cash, or
a promissory note or other obligation to contribute cash.
Section 4.2 Contributions by the Common Members.
The Common Members shall make such contributions to the
Company, either in connection with the purchase of Common
Securities or otherwise, so as to cause their Common
Securities to be entitled to at least 21% of all interest in
the capital, income, gain, loss, deduction, credit and
distributions of the Company at all times.
Section 4.3 Contributions by the Preferred
Members. The Preferred Members shall make such
contributions to the Company in accordance with the
applicable terms of Section 7.1 of this Agreement.
Preferred Members, in their capacity as Members of the
Company, shall not be required to make any additional
contributions to the Company and shall have no additional
liability solely by reason of being Preferred Members in
excess of their share of the Company's assets and
undistributed profits.
Section 4.4 Allocation of Profits and Losses.
The profits and losses of the Company shall, subject to the
applicable terms of Section 9.1 of this Agreement and of any
series of Preferred Securities (including the preferential
allocation of profits and losses, if any), be allocated
entirely to the Common Members.
Section 4.5 Allocation of Distributions. The
distributions of the Company shall, subject to the
applicable terms of Section 9.1 of this Agreement and of any
series of Preferred Securities (including the preferential
allocation of distributions, if any), be allocated entirely
to the Common Members.
Section 4.6 Securities. A Preferred Member's
Interest in the Company shall be represented by the
Preferred Securities held by such Preferred Member. A
Common Member's Interest in the Company shall be represented
by the Common Securities held by such Common Member. Each
Member hereby agrees that its Interest in the Company and in
its Preferred Securities or Common Securities, as the case
may be, shall for all purposes be personal property. A
Member has no interest in specific Company property.
ARTICLE V
MEMBERS
Section 5.1 Powers of Members. The Members shall
have the power to exercise any and all rights or powers
granted to the Members pursuant to the express terms of this
Agreement.
Section 5.2 Partition. Each Member waives any
and all rights that it may have to maintain an action for
partition of the Company's property.
Section 5.3 Resignation. The Managing Members
shall have no right to resign from the Company. Any other
Member may only resign from the Company prior to the
dissolution and winding up of the Company upon the
assignment of its Interests (including any redemption,
repurchase, exchange or other acquisition by the Company),
as the case may be, in accordance with the provisions of
this Agreement. A resigning Member shall not be entitled to
receive any distribution and shall not otherwise be entitled
to receive the fair value of its Interest except as
otherwise expressly provided for in this Agreement.
ARTICLE VI
MANAGEMENT
Section 6.1 Management of the Company. Except as
otherwise provided herein, the business and affairs of the
Company shall be managed, and all actions required under
this Agreement shall be determined, solely and exclusively
by the Managing Members, which shall have all rights and
powers on behalf and in the name of the Company to perform
all acts necessary and desirable to the objects and purposes
of the Company. Without limiting the generality of the
foregoing, the Managing Members, in their capacity as Common
Member and not by virtue of any delegation of management
power from any Member, shall have the power to:
(a) authorize and engage in transactions and
dealings on behalf of the Company, including transactions
and dealings with any Member (including any Managing Member)
or any affiliate of any Member (including, without
limitation, making loans to Aetna);
(b) call meetings of Members or any class or
series thereof;
(c) issue Interests, including Common Securities,
Preferred Securities and classes and series thereof, in
accordance with this Agreement;
(d) pay all expenses incurred in forming the
Company;
(e) borrow money on behalf of the Company, issue
or guarantee evidences of indebtedness and obtain lines of
credit, loan commitments and letters of credit for the
account of the Company and secure the same by mortgage,
pledge or other lien on any assets of the Company;
(f) lend money, with or without security, to any
person, including any Members (including any Managing
Member) or any affiliate thereof;
(g) determine and make distributions (hereinafter
sometimes referred to as "dividends"), in cash or otherwise,
on Interests, in accordance with the provisions of this
Agreement and of the Delaware Act;
(h) establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including with respect to allocations,
dividends and voting rights;
(i) establish or set aside in their discretion
any reserve or reserves for contingencies and for any other
proper Company purpose;
(j) redeem, repurchase or exchange on behalf of
the Company Interests which may be so redeemed, repurchased
or exchanged;
(k) appoint (and dismiss from appointment)
officers, attorneys and agents on behalf of the Company, and
employ (and dismiss from employment) any and all persons
providing legal, accounting or financial services to the
Company, or such other employees or agents as the Managing
Members deem necessary or desirable for the management and
operation of the Company, including, without limitation, any
Member (including any Managing Member) or any affiliate of
any Member;
(l) incur and pay all expenses and obligations
incident to the operation and management of the Company,
including, without limitation, the services referred to in
the preceding paragraph, taxes, interest, travel, rent,
insurance, supplies, salaries and wages of the Company's
employees and agents;
(m) acquire and enter into any contract of
insurance necessary or desirable for the protection or
conservation of the Company and its assets or otherwise in
the interest of the Company as the Managing Members shall
determine;
(n) open accounts and deposit, maintain and
withdraw funds in the name of the Company in banks, savings
and loan associations, brokerage firms or other financial
institutions;
(o) effect a dissolution of the Company and act
as liquidating trustee or the person winding up the
Company's affairs, all in accordance with the provisions of
this Agreement and of the Delaware Act;
(p) bring and defend on behalf of the Company
actions and proceedings at law or equity before any court or
governmental, administrative or otherwise regulatory agency,
body or commission or otherwise;
(q) prepare and cause to be prepared reports,
statements and other relevant information for distribution
to Members as may be required or determined to be
appropriate by the Managing Members from time to time;
(r) prepare and file all necessary returns and
statements and pay all taxes, assessments and other
impositions applicable to the assets of the Company; and
(s) execute all other documents or instruments,
perform all duties and powers and do all things for and on
behalf of the Company in all matters necessary or desirable
or incidental to the foregoing.
The expression of any power or authority of the
Managing Members in this Agreement shall not in any way
limit or exclude any other power or authority which is not
specifically or expressly set forth in this Agreement.
Section 6.2 Reliance by Third Parties. Persons
dealing with the Company are entitled to rely conclusively
upon the power and authority of the Managing Members herein
set forth.
Section 6.3 No Management by any Preferred
Members. Except as otherwise expressly provided herein, no
Preferred Member shall take part in the day-to-day
management, operation or control of the business and affairs
of the Company. The Preferred Members, in their capacity as
Preferred Members of the Company, shall not be agents of the
Company and shall not have any right, power or authority to
transact any business in the name of the Company or to act
for or on behalf of or to bind the Company.
Section 6.4 Preferred Members May Appoint a
Trustee. Subject to the terms and conditions set forth in
Section 8.1(b) of this Agreement, the Preferred Members
shall have the right to appoint a trustee, and any trustee
so appointed shall have the power, to declare and pay
dividends on Preferred Securities.
Section 6.5 Business Transactions of a Managing
Member with the Company. The Managing Members or their
affiliates may lend money to, borrow money from, act as
surety, guarantor or endorser for, guarantee or assume one
or more specific obligations of, provide collateral for, and
transact other business with, the Company and, subject to
other applicable law, shall have the same rights and
obligations with respect to any such matter as persons who
are not Managing Members or affiliates thereof.
Section 6.6 Outside Businesses. Any Member or
affiliate thereof may engage in or possess an interest in
other business ventures of any nature or description,
independently or with others, similar or dissimilar to the
business of the Company, and the Company and the Members
shall have no rights by virtue of this Agreement in and to
such independent ventures or the income or profits derived
therefrom, and the pursuit of any such venture, even if
competitive with the business of the Company, shall not be
deemed wrongful or improper. No Member or affiliate thereof
shall be obligated to present any particular investment
opportunity to the Company even if such opportunity is of a
character that, if presented to the Company, could be taken
by the Company, and any Member or affiliate thereof shall
have the right to take for its own account (individually or
as a partner or fiduciary) or to recommend to others any
such particular investment opportunity.
ARTICLE VII
COMMON SECURITIES AND PREFERRED SECURITIES
Section 7.1 Common Securities and Preferred
Securities.
(a) The Interests in the Company shall initially
be divided into two classes, Common Securities and Preferred
Securities.
(b) The Preferred Securities may be issued from
time to time in one or more series with such relative
rights, powers, preferences and privileges as may from time
to time be established in a written action or actions of the
Managing Members providing for the issue of such series as
hereinafter provided. Authority is hereby expressly granted
to the Managing Members, subject to the provisions of this
Agreement, to authorize the issue of one or more series of
Preferred Securities, and with respect to each such series
to establish by a written action or actions providing for
the issue of such series:
(i) the maximum number of Preferred Securities to
constitute such series and the distinctive designation
thereof;
(ii) whether the Preferred Securities of such
series shall have voting rights in addition to those
set forth in this Agreement and, if so, the terms of
such voting rights;
(iii) the periodic dividend rate, if any, on the
Preferred Securities of such series, the conditions and
dates upon which such dividends shall be payable, the
dates from which such dividends shall accrue, the
preference or relation which such dividends have with
respect to dividends payable on any other class or
classes of Interests or on any other series of
Preferred Securities, and whether such dividends shall
be cumulative or noncumulative;
(iv) whether the Preferred Securities of such
series shall be subject to redemption by the Company,
and, if made subject to redemption, the times and other
terms and conditions of such redemption (including the
amount and kind of consideration to be received upon
such redemption);
(v) any rights in addition to those set forth in
this Agreement of the holders of Preferred Securities
of such series upon the liquidation, dissolution or
winding up of the Company;
(vi) whether or not the Preferred Securities of
such series shall be subject to the operation of a
retirement or sinking fund, and, if so, the extent to
and manner in which any such retirement or sinking fund
shall be applied to the purchase or redemption of the
Preferred Securities of such series for retirement or
to other Company purposes and the terms and provisions
relative to the operation thereof;
(vii) whether or not the Preferred Securities of
such series shall be convertible into, or exchangeable
for, Interests of any other class or classes, or of any
other series of Preferred Securities, or securities of
any other kind, including those issued by the Managing
Member or any of its affiliates, and if so convertible
or exchangeable, the price or prices or the rate or
rates of conversion or exchange and the method, if any,
of adjusting the same;
(viii) any limitations and restrictions in addition
to those set forth in this Agreement to be effective
while any Preferred Securities of such series are
outstanding upon the payment of periodic dividends or
other distributions on, and upon the purchase,
redemption or other acquisition by the Company of,
Common Securities or any other series of Preferred
Securities;
(ix) any conditions or restrictions in addition to
those set forth in this Agreement upon the issue of any
additional Interests (including additional Preferred
Securities of such series or of any other series
ranking on a parity with or prior to the Preferred
Securities of such series as to periodic dividends or
distribution of assets on liquidation, dissolution or
winding up);
(x) the times, prices and other terms and
conditions for the offering of the Preferred
Securities;
(xi) the allocation of preferential profits or
losses, if any; and
(xii) any other relative rights, powers and duties
as shall not be inconsistent with this Section 7.1.
In connection with the foregoing and without
limiting the generality thereof, the Managing Members are
hereby expressly authorized without the vote or approval of
any Member, to take any action to create under the
provisions of this Agreement a series of Preferred
Securities that was not previously outstanding. Without the
vote or approval of any Member, the Managing Members may
execute, swear to, acknowledge, deliver, file and record
whatever documents may be required in connection with the
issue from time to time of Preferred Securities in one or
more series as shall be necessary, convenient or desirable
to reflect the issue of such series. The Managing Members
shall do all things it deems to be appropriate or necessary
to comply with the Delaware Act and is authorized and
directed to do all things it deems to be necessary or
permissible in connection with any future issuance,
including compliance with any statute, rule, regulation or
guideline of any federal, state or other governmental agency
or any securities exchange.
Any action or actions taken by the Managing
Members pursuant to the provisions of this paragraph (b)
shall be deemed an amendment and supplement to and part of
this Agreement.
(c) All Preferred Securities shall rank senior to
the Common Securities in respect of the right to receive
dividends and the right to receive payments out of the
assets of the Company upon voluntary or involuntary
dissolution and winding up of the Company. All Preferred
Securities redeemed, purchased or otherwise acquired by the
Company (including Preferred Securities surrendered for
conversion or exchange) shall be canceled and thereupon
restored to the status of authorized but unissued Preferred
Securities undesignated as to series.
(d) No holder of Common Securities or of
Preferred Securities shall be entitled as a matter of right
to subscribe for or purchase, or have any preemptive right
with respect to, any part of any new or additional issue of
Preferred Securities of any series whatsoever, or of
securities convertible into any Preferred Securities of any
series whatsoever, whether now or hereafter authorized and
whether issued for cash or other consideration or by way of
dividend.
(e) Common Securities shall be non-assignable and
non-transferable, and may only be issued to and held by the
Managing Members. Any transfer or purported transfer of any
Common Security shall be null and void. Preferred
Securities shall be freely assignable and transferable.
(f) Any Person purchasing Preferred Securities
shall be admitted to the Company as a Preferred Member upon
compliance with Section 2.7.
Section 7.2 Persons Deemed Preferred Members.
The Company may treat the Person in whose name any Preferred
Certificate shall be registered on the books and records of
the Company as a Preferred Member and the sole holder of
such Preferred Certificate for purposes of receiving
dividends and for all other purposes whatsoever and,
accordingly shall not be bound to recognize any equitable or
other claims to or interest in such Preferred Certificate on
the part of any other Person, whether or not the Company
shall have actual or other notice thereof.
ARTICLE VIII
VOTING AND MEETINGS
Section 8.1 Voting Rights of Holders of Preferred
Securities.
(a) Except as shall be otherwise established
herein or in the action or actions of the Managing Members
providing for the issue of any series of Preferred
Securities and except as otherwise required by the Delaware
Act, the Preferred Members holding such Preferred Securities
shall have, with respect to such Preferred Securities, no
right or power to vote on any question or matter or in any
proceeding or to be represented at, or to receive notice of,
any meeting of Members.
(b) If (i) the Company fails to pay dividends in
full on the Preferred Securities of any series for 18
consecutive monthly dividend periods; (ii) a Debenture Event
of Default (as defined in the Indenture) occurs and is
continuing; or (iii) Aetna is in default on any of its
payment obligations under the Guarantee, then the Members
holding a majority in stated liquidation preference of the
outstanding Preferred Securities of such series, in the case
of clause (i) above, and the Members holding a majority in
stated liquidation preference of all outstanding Preferred
Securities, in the case of clauses (ii) and (iii) above,
together with Members holding any other Interests having the
right to vote for appointment of a trustee in such event,
acting as a single class, will be entitled to appoint and
authorize a trustee to enforce the Company's rights under
the Indenture against Aetna, enforce the obligations
undertaken by Aetna under the Guarantee and declare and pay
dividends on the Preferred Securities of such series in the
case of clause (i) above. For purposes of determining
whether the Company has failed to pay dividends in full for
18 consecutive monthly dividend periods, dividends shall be
deemed to remain in arrears, notwithstanding any payments in
respect thereof, until full cumulative dividends have been
or contemporaneously are declared and paid with respect to
all monthly dividend periods terminating on or prior to the
date of payment of such full cumulative dividends. Not
later than 30 days after such right to appoint a trustee
arises, the Managing Members will convene a meeting for the
above purpose. If the Managing Members fail to convene such
meeting within such 30-day period, the Members holding 10%
in stated liquidation preference of the outstanding
Preferred Securities of such series, in the case of clause
(i) above, and the Members holding 10% in stated liquidation
preference of all outstanding Preferred Securities, in the
case of clauses (ii) and (iii) above, and such other
Interests, acting as a single class, will be entitled to
convene such meeting. Any trustee so appointed shall vacate
office immediately, subject to the applicable terms of any
Interests the holders of which were entitled to appoint such
trustee, if the Company shall have paid in full all
accumulated and unpaid dividends on the Preferred Securities
of such series, in the case of clause (i) above, or such
default Aetna shall have been cured, in the case of clause
(ii) or (iii) above.
(c) If any resolution is proposed to be adopted
by the securityholders of the Company providing for, or the
Managing Members propose to take any action to effect:
(i) any variation or abrogation of the powers,
preferences and special rights of the Preferred
Securities of any series by way of amendment of this
Agreement or otherwise (including, without limitation,
the authorization or issuance of any Interests in the
Company ranking, as to participation in the profits or
assets of the Company, senior to the Preferred
Securities) which variation or abrogation adversely
affects the holders of Preferred Securities of such
series,
(ii) the dissolution, winding up, liquidation or
termination of the Company, or
(iii) the commencement of any bankruptcy,
insolvency, reorganization or other similar proceeding
involving the Company,
then the Members holding outstanding Preferred Securities of
the series, the rights, preferences or privileges of which
are proposed to be amended in the case of any resolution or
action described in clause (i) above, and the Members
holding any outstanding Preferred Securities, in the case of
any resolution or action described in clauses (ii) or (iii)
above, (and, in the case of any resolution or action
described in clause (i) above which would adversely affect
the powers, preferences or special rights of any Company
Dividend Parity Securities or any Company Liquidation Parity
Securities, such Company Dividend Parity Securities or such
Company Liquidation Parity Securities, as the case may be,
or, in the case of any resolution or action described in
clause (ii) above, all Company Liquidation Parity Securities
or, in the case of any resolution or action described in
clause (iii) above, all Members holding outstanding
Preferred Securities, Company Dividend Parity Securities and
any Company Liquidation Parity Securities other than Members
holding any such securities that are also creditors of Aetna
or any of its subsidiaries) will be entitled to vote
together as a class on such resolution or action of the
Managing Members (but not any other resolution or action)
and such resolution or action shall not be effective except
with the approval of the Members holding a majority in
stated liquidation preference of such outstanding
securities; provided that no such resolution or action
shall, without the consent of each Preferred Member affected
thereby, (1) change the terms established pursuant to
Section 7.1(c)(iii), (iv), (v), (vi), (vii), (viii) or (xi)
in a manner adverse to such Preferred Member or (2) reduce
the above-stated percentage of stated liquidation preference
necessary to approve such resolution or action or (3) amend
the provisions of Section 7.1(b); provided, further however,
that no such approval shall be required under clauses (i)
and (ii) if the dissolution, winding up, liquidation or
termination of the Company is proposed or initiated upon the
initiation of proceedings, or after proceedings have been
initiated, for the bankruptcy, insolvency or liquidation of
either Managing Member or upon the withdrawal, resignation
or expulsion of either Managing Member from the Company.
The powers, preferences or special rights of the
Preferred Securities of any series will be deemed not to be
varied by the creation or issue of, and no vote will be
required for the creation or issue of, any further Interests
in the Company ranking pari passu with or junior to the
Preferred Securities of any series with respect to voting
rights or rights to participate in the profits or assets of
the Company.
(d) Notwithstanding that Members holding
Preferred Securities of any series are entitled to vote or
consent under any of the circumstances described in this
Agreement, any of the Preferred Securities of any series
that are owned by Aetna or any entity owned more than fifty
percent by Aetna, either directly or indirectly, shall not
be entitled to vote or consent and shall, for the purposes
of such vote or consent, be treated as if they were not
outstanding.
Section 8.2 Voting Rights of Holders of Common
Securities. Except as otherwise provided herein or by the
Managing Members in accordance with Section 7.1 in respect
of any series of Preferred Securities and except as
otherwise provided by the Delaware Act, all voting rights of
the Company shall be vested exclusively in the Common
Members. The Common Securities shall entitle the Common
Members to one vote for each such Common Security held upon
all matters upon which Common Members have the right to
vote. All Common Members shall have the right to vote
separately as a class on any matter on which the Common
Members have the right to vote regardless of the voting
rights of any other Member.
Section 8.3 Meetings of the Members.
(a) Meetings of the Members of any class or
series or of all classes or series of Interests may be
called at any time by the Managing Members or as provided by
any applicable terms of any Preferred Securities. Except to
the extent otherwise provided, the following provisions
shall apply to meetings of Members.
(b) Members may vote in person or by proxy at
such meeting. Whenever a vote, consent or approval of
Members is permitted or required under this Agreement, such
vote, consent or approval may be given at a meeting of
Members or by written consent.
(c) Each Member may authorize any Person to act
for it by proxy on all matters in which a Member is entitled
to participate, including waiving notice of any meeting, or
voting or participating at a meeting. Every proxy must be
signed by the Member or its attorney-in-fact. Every proxy
shall be revocable at the pleasure of the Member executing
it.
(d) Each meeting of Members shall be conducted by
the Managing Members or by such other Person that the
Managing Members may designate.
(e) The Managing Members will cause a notice of
any meeting at which Preferred Members holding Preferred
Securities of a series are entitled to vote pursuant to
Section 8.1(b) and (c) of this Agreement, or of any matter
upon which action may be taken by written consent of such
Preferred Members, to be mailed to each Preferred Member of
record of the Preferred Securities of such series. Each
such notice will include a statement setting forth (i) the
date of such meeting or the date by which such action is to
be taken, (ii) a description of any action proposed to be
taken at such meeting on which such Preferred Members are
entitled to vote or of such matters upon which written
consent is sought and (iii) instructions for the delivery of
proxies or consents.
(f) Subject to Section 8.3(e), the Managing
Members, in their sole discretion, shall establish all other
provisions relating to meetings of Members, including notice
of the time, place or purpose of any meeting at which may
matter is to be voted on by any Members, waiver of any such
notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to
the exercise of any such right to vote.
ARTICLE IX
DIVIDENDS
Section 9.1 Dividends. Preferred Members shall
receive periodic dividends, if any, in accordance with the
applicable terms of the Preferred Securities, as and when
declared by the Managing Members and Common Members shall
receive periodic dividends, subject Section 9.3 of this
Agreement and the applicable terms of any series of
Preferred Securities, and to the provisions of the Delaware
Act, as and when declared by the Managing Members, in their
discretion out of funds legally available therefor.
Section 9.2 Limitations on Distributions.
Notwithstanding any provision to the contrary contained in
this Agreement, the Company shall not make a distribution
(including a dividend) to any Member on account of its
Interest in the Company if such distribution would violate
Section 18-607 of the Delaware Act or other applicable law.
Section 9.3 Certain Restrictions on the Payment
of Dividends. If dividends have not been paid in full on
the Preferred Securities of any series, the Company shall
not:
(i) pay, or declare and set aside for payment,
any dividends on the Preferred Securities of any other
series or any other Interests in the Company ranking
pari passu with the Preferred Securities of such series
with respect to participation in profits of the Company
("Company Dividend Parity Securities"), unless the
amount of any dividends declared on any Company
Dividend Parity Securities is paid on the Company
Dividend Parity Securities and the Preferred Securities
of such series on a pro rata basis on the date such
dividends are paid on such Company Dividend Parity
Securities, so that the ratio of
(x) (A) the aggregate amount paid as
dividends on the Preferred Securities of such
series to (B) the aggregate amount paid as
dividends on the Company Dividend Parity
Securities is the same as the ratio of
(y) (A) the aggregate amount of all
accumulated arrears of unpaid dividends on the
Preferred Securities of such series to (B) the
aggregate amount of all accumulated arrears of
unpaid dividends on the Company Dividend Parity
Securities;
(ii) pay, or declare and set aside for payment,
any dividends on any Interests in the Company ranking
junior to the Preferred Securities of such series as to
dividends ("Company Dividend Junior Securities"); or
(iii) redeem, purchase or otherwise acquire any
Company Dividend Parity Securities or Company Dividend
Junior Securities;
until, in each case, such time as all accumulated arrears of
unpaid dividends on the Preferred Securities of such series
shall have been paid or set aside for payment in full for
all dividend periods terminating on or prior to, in the case
of clauses (i) and (ii), such payment, and in the case of
clause (iii), the date of such redemption, purchase or other
acquisition.
Section 9.4 Distributions in Kind. A Member, in
the discretion of the Managing Members and in accordance
with any applicable agreement, instrument, action or terms
of the Interests, may receive distributions from the Company
in any form other than cash, and may be compelled to accept
a distribution of any asset in kind from the Company such
that the percentage of the asset distributed to him equals a
percentage of that asset which is equal to the percentage in
which the Member shares in distributions from the Company.
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Books and Records; Accounting.
The Managing Members shall keep or cause to be kept at the
address of the Managing Members (or at such other place as
the Managing Members shall advise the other Members in
writing) true and full books and records regarding the
status of the business and financial condition of the
Company.
Section 10.2 Financial Statements. After the end
of each fiscal year, the Managing Members shall, as soon as
practicable and in any event within 90 days of the close of
the fiscal year, cause to be prepared and made available
upon request of any Preferred Member the unaudited financial
statements of the Company prepared in accordance with
generally accepted accounting principles.
Section 10.3 Fiscal Year. The fiscal year of the
Company for federal income tax and accounting purposes
shall, except as otherwise required in accordance with the
Code, end on December 31 of each year.
ARTICLE XI
TAX MATTERS
Section 11.1 Company Tax Returns. (a) The
Managing Members shall cause to be prepared and timely filed
all tax returns required to be filed for the Company. The
Managing Members may, in their discretion, make or refrain
from making any federal, state or local income or other tax
elections for the Company that they deem necessary or
advisable, including, without limitation, any election under
Section 754 of the Code or any successor provision.
(b) Aetna is hereby designated as the Company's
"Tax Matters Partner" under Code Section 6231(a)(7) and
shall have all the powers and responsibilities of such
position as provided in the Code. Aetna is specifically
directed and authorized to take whatever steps Aetna, in its
discretion, deems necessary or desirable to perfect such
designation, including filing any forms or documents with
the Internal Revenue Service and taking such other action as
may from time to time be required under the regulations
issued under the Code. Expenses incurred by the Tax Matters
Partner, in its capacity as such will be borne by the
Company.
Section 11.2 Tax Reports. After the end of each
fiscal year, the Managing Members shall, as promptly as
practicable and in any event within 90 days of the close of
the fiscal year, cause to be prepared and made available
upon request of any Preferred Member cause to be prepared
and transmitted to each member federal income tax form K-1
or any other forms which are necessary or advisable.
Section 11.3 Taxation as Partnership. The
Company shall be treated as a partnership for U.S. federal
income tax purposes.
ARTICLE XII
EXPENSES
Section 12.1 Expenses. Except as otherwise
provided in this Agreement, the Company shall be responsible
for all and shall pay all expenses out of funds of the
Company determined by the Managing Members to be available
for such purpose, provided that such expenses or obligations
are those of the Company or are otherwise incurred by the
Managing Members in connection with this Agreement,
including, without limitation:
(a) all expenses incurred by the Managing Members
or its affiliates in organizing the Company;
(b) all costs and expenses related to the
business of the Company and all routine administrative
expenses of the Company, including the maintenance of
books and records of the Company, the preparation and
dispatch to the Members of checks, financial reports,
tax returns and notices required pursuant to this
Agreement and the holding of any meetings of the
Members;
(c) all expenses incurred in connection with any
indebtedness or guarantees of the Company or any
proposed or definitive credit facility or other credit
arrangement;
(d) all expenses incurred in connection with any
litigation involving the Company (including the cost of
any investigation and preparation) and the amount of
any judgment or settlement paid in connection therewith
(other than expenses incurred by the Managing Member in
connection with any litigation brought by or on behalf
of any Member against the Managing Member);
(e) all expenses for indemnity or contribution
payable by the Company to any Person;
(f) all expenses incurred in connection with the
collection of amounts due to the Company from any
person;
(g) all expenses incurred in connection with the
preparation of amendments to this Agreement; and
(h) all expenses incurred in connection with the
liquidation, dissolution and winding up of the Company.
ARTICLE XIII
LIABILITY
Section 13.1 Liability of Common Members. Each
Common Member, by acquiring its Interest and being admitted
to the Company as a Common Member, is liable to the
creditors of the Company (other than to Members holding
other classes or series of Interests, in their capacity as
Members) (hereinafter referred to each as a "Third Party
Creditor," and collectively as the "Third Party Creditors")
to the same extent that a general partner of a limited
partnership formed under the LP Act is liable under Section
17-403(b) of the LP Act to creditors of the limited
partnership (other than the other partners in their capacity
as partners), as if the Company was a limited partnership
formed under the LP Act and the Common Members were general
partners of the limited partnership. In furtherance but not
in limitation of the generality of the foregoing, each
Common Member, (i) is liable for any and all debts,
obligations and other liabilities of the Company, whether
arising under contract or by tort, statute, operation of law
or otherwise, enforceable directly and absolutely against
each Common Member by each Third Party Creditor, and (ii) is
deemed to and does assume, as a surety and not as a
guarantor, each debt, obligation or other liability of the
Company to all Third Party Creditors.
Section 13.2 Liability of Preferred Members.
(a) Except as otherwise provided in Section 13.1,
(i) the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be
solely the debts, obligations and liabilities of the Company
and (ii) no Member shall be obligated personally for any
such debt, obligation or liability of the Company solely by
reason of being a Preferred Member of the Company.
(b) Except as otherwise expressly provided in
Section 13.1, a Member, in its capacity as such, shall have
no liability in excess of (i) the amount of its capital
contributions, (ii) its share of any assets and
undistributed profits of the Company, and (iii) the amount
of any distributions wrongfully distributed to it.
ARTICLE XIV
ASSIGNMENT OF INTERESTS
Section 14.1 Assignment of Interests.
Notwithstanding anything to the contrary under this
Agreement, Common Securities shall be non-assignable and
non-transferable, and may only be issued to a Managing
Member and held by the Managing Member to which such Common
Security was originally issued. Preferred Securities shall
be freely assignable and transferable, subject to the
provisions of Section 2.7.
Section 14.2 Right of Assignee to Become a
Member. An assignee shall become a Member upon compliance
with the provisions of Section 2.7.
Section 14.3 Events of Cessation of Membership.
A Person shall cease to be a Member only upon the lawful
assignment of its Interests (including any redemption,
exchange or other repurchase by the Company or the Managing
Members), and the compliance, in cases other than any such
redemption, exchange or repurchase, of the assignee with the
provisions of Section 2.7.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 No Dissolution. The Company shall
not be dissolved by the admission of Members in accordance
with the terms of this Agreement. Except as provided in
Section 15.2(c), the death, retirement, resignation,
expulsion, bankruptcy or dissolution of a Member, or the
occurrence of any other event which terminates the continued
membership of a Member in the Company, shall not cause the
Company to be dissolved and its affairs wound up so long as
the Company at all times has at least two Members. Upon the
occurrence of any such event, the business of the Company
shall be continued without dissolution.
Section 15.2 Events Causing Dissolution. The
Company shall be dissolved and its affairs shall be wound up
upon the occurrence of any of the following events:
(a) the expiration of the term of the Company, as
provided in Section 2.3 hereof;
(b) any Managing Member makes an assignment for
the benefit of creditors, files a voluntary petition in
bankruptcy, is adjudged bankrupt or insolvent, or has
entered against it an order for relief, in any
bankruptcy or insolvency proceeding, files a petition
or answer seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or other similar relief under any statute,
law or regulation, files an answer or other pleading
admitting or failing to contest the material
allegations of a petition filed against it in any
proceeding of this nature, seeks, consents or
acquiesces in the appointment of a trustee, receiver or
liquidator of any Managing Member of any substantial
part of its properties, or 120 days after the
commencement of any proceeding against any Managing
Member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or
similar relief under any statute, law or regulation, if
the proceeding has not been dismissed, or if within 90
days after the appointment without its consent or
acquiescence of a trustee, receiver or liquidator of
any Managing Member or of all or any substantial part
of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any
such stay, the appointment is not vacated;
(c) upon the withdrawal, resignation, expulsion,
dissolution, winding up or liquidation of any Managing
Member or the occurrence of any other event that
terminates the continued membership of such Managing
Member;
(d) a decision made by the Managing Members
(subject to the voting rights of Preferred Members set
forth in Section 8.1) to dissolve the Company;
(e) the entry of a decree of judicial dissolution
under Section 18-802 of the Delaware Act; or
(f) the written consent of all Members.
Section 15.3 Notice of Dissolution. Upon the
dissolution of the Company, the Managing Members shall
promptly notify the Members of such dissolution.
Section 15.4 Liquidation. Upon dissolution of
the Company, the Managing Members, as liquidating trustees,
shall immediately commence to wind up the Company's affairs;
provided, however, that a reasonable time shall be allowed
for the orderly liquidation of the assets of the Company and
the satisfaction of liabilities to creditors so as to enable
the Members to minimize the normal losses attendant upon a
liquidation. The proceeds of liquidation shall be
distributed, as realized, in the manner provided in Section
18-804 of the Delaware Act, subject to the applicable terms
of any series of Preferred Securities.
Section 15.5 Certain Restrictions on Liquidation
Payments. In the event of any voluntary or involuntary
dissolution, winding up, liquidation or termination of the
Company, Members holding Preferred Securities of each series
at the time outstanding will be entitled to receive out of
the assets of the Company legally available for distribution
to Members, before any distribution of assets is made to
Common Members or Members holding any other class of
Interests in the Company ranking junior to the Preferred
Securities with respect to participation in assets of the
Company, but together with Members holding Preferred
Securities of any other series or any other Interests in the
Company outstanding ranking pari passu with the Preferred
Securities with respect to participation in the assets of
the Company ("Company Liquidation Parity Securities"), an
amount equal, in the case of Members holding Preferred
Securities of such series, to the aggregate of the stated
liquidation preference for Preferred Securities of such
series as set forth in the actions taken by the Managing
Members providing for the issue of such series and all
accumulated and unpaid dividends (whether or not declared)
to the date of payment (the "Liquidation Distribution").
If, upon any such liquidation, the Liquidation Distributions
can be paid only in part because the Company has
insufficient assets available to pay in full the aggregate
Liquidation Distributions and the aggregate maximum
liquidation distributions on the Company Liquidation Parity
Securities, then the amounts payable directly by the Company
on the Preferred Securities of such series and on such
Company Liquidation Parity Securities shall be paid on a pro
rata basis, so that the ratio of
(i)(x) the aggregate amount paid as
Liquidation Distributions on the Preferred
Securities of such series to (y) the aggregate
amount paid as liquidation distributions on the
Company Liquidation Parity Securities is the same
as the ratio of
(ii)(x) the aggregate Liquidation
Distributions to (y) the aggregate maximum
liquidation distributions on the Company
Liquidation Parity Securities.
Section 15.6 Termination. The Company shall
terminate when all of the assets of the Company have been
distributed in the manner provided for in this Article XV,
and the Certificate shall have been canceled in the manner
required by the Delaware Act.
ARTICLE XVI
MISCELLANEOUS
Section 16.1 Amendments. Except as otherwise
provided in this Agreement or by any applicable terms of any
Preferred Securities (other than Section 14.1 of this
Agreement), this Agreement may be amended by, and only by, a
written instrument executed by the Managing Members.
Section 16.2 Successors; Counterparts. This
Agreement (a) shall be binding as to the executors,
administrators, estates, heirs and legal successors, or
nominees or representatives, of the Members and (b) may be
executed in several counterparts with the same effect as if
the parties executing the several counterparts had all
executed one counterpart.
Section 16.3 Governing Law; Severability. This
Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect
to the principles of conflict of laws thereof. In
particular, this Agreement shall be construed to the maximum
extent possible to comply with all of the terms and
conditions of the Delaware Act. If, nevertheless, it shall
be determined by a court of competent jurisdiction that any
provisions or wording of this Agreement shall be invalid or
unenforceable under the Delaware Act or other applicable
law, such invalidity or unenforceability shall not
invalidate the entire Agreement. In that case, this
Agreement shall be construed as to limit any term or
provision so as to make it enforceable or valid within the
requirements of applicable law, and, in the event such term
or provisions cannot be so limited, this Agreement shall be
construed to omit such invalid or unenforceable provisions.
If it shall be determined by a court of competent
jurisdiction that any provision relating to the
distributions and allocations of the Company or to any fee
payable by the Company is invalid or unenforceable, this
Agreement shall be construed or interpreted so as (a) to
make it enforceable or valid and (b) to make the
distributions and allocations as closely equivalent to those
set forth in this Agreement as is permissible under
applicable law.
Section 16.4 Filings. Following the execution
and delivery of this Agreement, the Managing Members shall
promptly prepare any documents required to be filed and
recorded under the Delaware Act, and the Managing Members
shall promptly cause each such document to be filed and
recorded in accordance with the Delaware Act and, to the
extent required by local law, to be filed and recorded or
notice thereof to be published in the appropriate place in
each jurisdiction in which the Company may hereafter
establish a place of business. The Managing Members shall
also promptly cause to be filed, recorded and published such
statements of fictitious business name and any other
notices, certificates, statements or other instruments
required by any provision of any applicable law of the
United States or any state or other jurisdiction which
governs the conduct of its business from time to time.
Section 16.5 Power of Attorney. Each Preferred
Member does hereby constitute and appoint each Managing
Member as its true and lawful representative and
attorney-in-fact, in its name, place and stead to make, execute,
sign, deliver and file (a) any amendment of the Certificate
required because of an amendment to this Agreement or in
order to effectuate any change in the membership of the
Company, (b) this Agreement, (c) any amendments to this
Agreement and (d) all such other instruments, documents and
certificates which may from time to time be required by the
laws of the United States of America, the State of Delaware
or any other jurisdiction, or any political subdivision of
agency thereof, to effectuate, implement and continue the
valid and subsisting existence of the Company or to dissolve
the Company or for any other purpose consistent with this
Agreement and the transactions contemplated hereby.
The power of attorney granted hereby is coupled
with an interest and shall (a) survive and not be affected
by the subsequent death, incapacity, disability,
dissolution, termination or bankruptcy of the Preferred
Member granting the same or the transfer of all or any
portion of such Preferred Member's Interest and (b) extend
to such Preferred Member's successors, assigns and legal
representatives.
Section 16.6 Additional Documents. Each
Preferred Member, upon the request of the Managing Members,
agrees to perform all further acts and execute, acknowledge
and deliver any documents that may be reasonably necessary
to carry out the provisions of this Agreement.
Section 16.7 Notices. All notices, requests and
other communications to any party hereunder shall be in
writing (including telecopier or similar writing) and shall
be given to such party (and any other person designated by
such party) at its address or telecopier number set forth in
a schedule filed with the records of the Company or such
other address or telecopier number as such party may
hereafter specify for the purpose of notice to the Managing
Members (if such party is not a Managing Member) or to all
the other Members (if such party is a Managing Member).
Each such notice, request or other communication shall be
effective (a) if given by telecopier, when transmitted to
the number specified pursuant to this Section and the
appropriate confirmation is received, (b) if given by mail,
72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid, or
(c) if given by any other means, when delivered at the
address specified pursuant to this Section.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above stated.
AETNA LIFE AND CASUALTY
COMPANY
By:
Name:
Title:
AETNA CAPITAL HOLDINGS, INC.
By:
Name:
Title: