EXHIBIT 3.2
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
AETNA CAPITAL L.L.C.
This Amended and Restated Limited Liability Company Agreement
of Aetna Capital L.L.C. (the "Company") is made as of , 1994, among
Aetna Life and Casualty Company ("Aetna") and Aetna Capital Holdings, Inc.
("Aetna Capital"), as initial Members (as defined below) of the Company and
the Persons (as defined below) who become Members of the Company in accordance
with the provisions hereof.
WHEREAS, Aetna and Aetna Capital have heretofore formed a
limited liability company pursuant to the Delaware Limited Liability Company
Act, 6 Del.C. Section 18-101, et seq., as amended from time to time (the
"Delaware Act"), by filing a Certificate of Formation of the Company with the
office of the Secretary of State of the State of Delaware on March 23, 1994,
and entering into a Limited Liability Company Agreement of the Company dated
as of March 23, 1994 (the "Original Limited Liability Company Agreement"); and
WHEREAS, the Members desire to continue the Company as a
limited liability company under the Delaware Act and to amend and restate the
Original Limited Liability Company Agreement in its entirety.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Members
hereby amend and restate the Original Limited Liability Company Agreement in
its entirety and agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions. The terms defined in this Article I
shall, for the purposes of this Agreement, have the meanings herein specified.
"Additional Amounts" shall have the meaning set forth in
Section 9.4 of this Agreement.
"Affiliate" means with respect to a specified Person, any
Person that directly or indirectly controls, is controlled by, or is under
common control with, the specified Person. As used in this definition, the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Limited Liability
Company Agreement of the Company, as amended, modified, supplemented or
restated from time to time.
"Certificate" means the Certificate of Formation and any and
all amendments thereto and restatements thereof filed on behalf of the Company
with the office of the Secretary of State of the State of Delaware pursuant to
the Delaware Act.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any corresponding federal tax statute enacted after the date
of this Agreement. A reference to a specific section (Section) of the Code
refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Agreement,
as such specific section or corresponding provision is in effect on the date
of application of the provisions of this Agreement containing such reference.
"Common Member" means a Member that holds one or more Common
Securities.
"Common Securities" means the Interests in the Company which
represent common limited liability company interests in the Company and are
described in this Agreement.
"Company Dividend Junior Securities" shall have the meaning set
forth in Section 9.3 of this Agreement.
"Company Dividend Parity Securities" shall have the meaning set
forth in Section 9.3 of this Agreement.
"Company Liquidation Parity Securities" shall have the meaning
set forth in Section 15.5 of this Agreement.
"Covered Person" means the Managing Members, any Affiliate of
the Managing Members or any officers, directors, shareholders, partners,
employees, representatives or agents of the Managing Members, or any employee
or agent of the Company or its Affiliates.
"Debentures" means the Debentures evidencing the loans to Aetna
from the Company of the proceeds of the issuances of Interests and related
capital contributions.
"Guarantee" means the Payment and Guarantee Agreement to be
entered into by Aetna for the benefit of the Preferred Members, as amended
from time to time.
"Indemnified Person" means each Common Member, any Affiliate of
such Common Member or any officers, directors, shareholders, partners,
employees, representatives or agents of such Common Member, or any employee or
agent of the Company or its Affiliates.
"Indenture" means the Subordinated Indenture between Aetna and
The First National Bank of Chicago, as trustee, pursuant to which the
Debentures will be issued, as amended or supplemented from time to time.
"Interest" means a limited liability company interest in the
Company, including the right of the holder thereof to any and all benefits to
which a Member may be entitled as provided in this Agreement, together with the
obligations of a Member to comply with all of the terms and provisions of this
Agreement.
"Liquidation Distribution" shall have the meaning set forth in
Section 15.5 of this Agreement.
"LP Act" means the Delaware Revised Uniform Limited Partnership
Act, 6 Del C. Section 17-101, et seq., as amended from time to time.
"Managing Members" means Aetna and Aetna Capital, in their
capacity as the Members that hold all of the outstanding Common Securities.
"Member" means any Person that holds an Interest in the Company
and is admitted as a member of the Company pursuant to the provisions of this
Agreement, in its capacity as a member of the Company. For purposes of the
Delaware Act, the Managing Members and the Preferred Members shall constitute
separate classes or groups of Members.
"Person" means any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
"Preferred Certificate" means a certificate evidencing the
Preferred Securities held by a Preferred Member.
"Preferred Member" means a Member that holds one or more
Preferred Securities.
"Preferred Securities" means the Interests which represent
preferred limited liability company interests in the Company and are described
in this Agreement.
"Tax Matters Partner" means the Managing Member designated as
such in Section 11.1 hereof.
"Third Party Creditors" shall have the meaning set forth in
Section 13.1 of this Agreement.
Section 1.2 Headings. The headings and subheadings in this
Agreement are included for convenience and identification only and are in no
way intended to describe, interpret, define or limit the scope, extent or
intent of this Agreement or any provision hereof.
ARTICLE II
CONTINUATION AND TERM; ADMISSION OF MEMBERS
Section 2.1 Continuation.
(a) The Members hereby agree to continue the Company as a
limited liability company under and pursuant to the provisions of the Delaware
Act and agree that the rights, duties and liabilities of the Members shall be
as provided in the Delaware Act, except as otherwise provided herein.
(b) Upon the execution of this Agreement, Aetna and Aetna
Capital shall continue to be Members and shall each be designated as a Common
Member and shall together be the holders of all of the Common Securities.
(c) Either Managing Member, as an authorized person within the
meaning of the Delaware Act, shall execute, deliver and file any and all
amendments to and restatements of the Certificate.
Section 2.2 Name. The name of the Company heretofore formed
and continued hereby is Aetna Capital L.L.C. The business of the Company may
be conducted upon compliance with all applicable laws under any other name
designated by the Managing Members.
Section 2.3 Term. The term of the Company commenced on the
date the Certificate was filed in the office of the Secretary of State of the
State of Delaware and shall continue until March 23, 2104, unless dissolved
before such date in accordance with the provisions of this Agreement.
Section 2.4 Registered Agent and Office. The Company's
registered agent and office in Delaware shall be RL&F Service Corp., One
Rodney Square, 10th Floor, Tenth and King Streets, Wilmington, New Castle
County, Delaware 19801. At any time, the Managing Members may designate
another registered agent and/or registered office.
Section 2.5 Principal Place of Business. The principal place
of business of the Company shall be at 151 Farmington Avenue, Hartford,
Connecticut 06156. The Managing Members may change the location of the
Company's principal place of business; provided that such change has no
material adverse effect upon any Member.
Section 2.6 Qualification in Other Jurisdictions. The
Managing Members shall cause the Company to be qualified, formed or registered
under assumed or fictitious name statutes or similar laws in any jurisdiction
in which the Company conducts business and in which such qualification,
formation or registration is required by law or deemed advisable by the
Managing Members. Either Managing Member, as an authorized person within the
meaning of the Delaware Act, shall execute, deliver and file any certificates
(and any amendments and/or restatements thereof) necessary for the Company to
qualify to do business in a jurisdiction in which the Company may wish to
conduct business.
Section 2.7 Admission of Members.
(a) Subject to Section 2.1(b), a Person shall be admitted as a
Member and shall become bound by the terms of this Agreement, without
execution of this Agreement, if such Person (or a representative authorized by
such Person orally, in writing or by other action such as payment for an
Interest) complies with the conditions for becoming a Member as set forth in
Section 2.7(b) and requests (which request shall be deemed to have been made
upon acquisition of an Interest directly from the Company or upon an
assignment of an Interest from another Person) that the records of the Company
reflect such admission.
The Company shall be promptly notified of any assignment. The
Company will reflect the admission of a Member in the records of the Company
as soon as is reasonably practicable after either of the following events:
(i) in the case of a Person acquiring an Interest directly from the Company,
at the time of payment therefor, and (ii) in the case of an assignment, upon
notification thereof (the Company being entitled to assume, in the absence of
knowledge to the contrary, that proper payment has been made by the assignee).
(b) Whether acquiring an Interest directly from the Company or
by assignment, a Person shall be admitted as a Member upon the acquisition or
assignment, as the case may be, of such Interest and the reflection of such
Person's admission as a Member on the registration books maintained by or on
behalf of the Company. The consent of any other Member shall not be required
for the admission of a Member.
Section 2.8 Merger, Consolidation, etc. of the Company. The
Company may not consolidate or merge with or into or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except with the prior approval of Holders of not less than 66-2/3%
of the stated liquidation preference of the outstanding Preferred Securities
or except as set forth in this Section 2.8. The Company may, without the
consent of Preferred Members, consolidate or merge with or into, or convey,
transfer or lease its assets substantially as an entirety to, a limited
liability company or limited partnership or trust organized as such under the
laws of any state of the United States of America or the District of Columbia;
provided that (i) such successor entity either (x) expressly assumes all of
the obligations of the Company under the Preferred Securities or (y)
substitutes for the Preferred Securities other securities having substantially
the same terms as the Preferred Securities (the "Successor Securities") so
long as the Successor Securities rank, with respect to participation in the
profits or assets of the successor entity, at least as high as the Preferred
Securities rank with respect to participation in the profits or assets of the
Company, (ii) Aetna expressly acknowledges such successor entity as the holder
of the Debentures relating to the Preferred Securities, (iii) such merger,
consolidation, conveyance, transfer or lease does not cause the Preferred
Securities or the Successor Securities, if any, to be delisted (or, in the
case of any Successor Securities, to fail to be listed) by any national
securities exchange or other organization on which the Preferred Securities
are then listed, (iv) such merger, consolidation, conveyance, transfer or
lease does not cause the Preferred Securities or Successor Securities, if any,
to be downgraded by any "nationally recognized statistical rating
organization," as that term is defined by the Securities and Exchange
Commission for purposes of Rule 436(g)(2) under the Securities Act of 1933, as
amended, (v) such merger, consolidation, conveyance, transfer or lease does not
adversely affect the powers, preferences and other special rights of Preferred
Members or the holders of the Successor Securities, if any, in any material
respect and (vi) prior to such merger, consolidation, conveyance, transfer or
lease Aetna has received an opinion of counsel (which counsel is not an
employee of Aetna or the Company) to the effect that (w) such merger,
consolidation, conveyance, transfer or lease will not cause the Company or
such successor entity to become an "investment company" required to be
registered under the Investment Company Act of 1940, as amended, (x) Preferred
Members will not recognize any gain or loss for federal income tax purposes as
a result of such merger, consolidation, conveyance, transfer or lease, (y)
such successor entity will not be treated as a corporation for federal income
tax purposes and (z) such merger, consolidation, conveyance, transfer or lease
will not adversely affect the limited liability of holders of Preferred
Securities.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1 Purpose. The sole purpose of the Company is to
issue Interests and to loan the proceeds from the issuance thereof and the
related capital contributions to Aetna. The Company shall have the power and
authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to or for the furtherance of the purpose
of the Company as set forth herein.
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND SECURITIES
Section 4.1 Form of Contribution. The contribution of a
Member to the Company may, as determined by the Managing Members in their
discretion, be in cash, or a promissory note or other legal consideration.
Section 4.2 Contributions by the Common Members. The Common
Members shall make such contributions to the Company, either in connection
with the purchase of Common Securities or otherwise, so as to cause their
Common Securities to be entitled to at least 21% of all interest in the
capital, income, gain, loss, deduction, credit and distributions of the
Company at all times.
Section 4.3 Contributions by the Preferred Members. The
Preferred Members shall make such contributions to the Company in accordance
with the applicable terms of Section 7.1 of this Agreement. Preferred
Members, in their capacity as Members of the Company, shall not be required to
make any additional contributions to the Company and shall have no additional
liability solely by reason of being Preferred Members in excess of their share
of the Company's assets and undistributed profits (subject to their obligation
to return distributions wrongfully distributed to them as required by
applicable law).
Section 4.4 Allocation of Profits and Losses. The profits and
losses of the Company (other than the allocation of profits to Preferred
Members in amounts equal to the accrued dividends or distributions on their
Preferred Securities) shall, subject to the applicable terms of Section 9.1 of
this Agreement and of any series of Preferred Securities, be allocated
entirely to the Common Members.
Section 4.5 Allocation of Distributions. The distributions of
the Company shall, subject to the applicable terms of Sections 7.1, 9.1, 9.2,
9.3 and 15.4 of this Agreement and of any series of Preferred Securities
(including the preferential allocation of distributions, if any), be allocated
entirely to the Common Members.
Section 4.6 Interests as Personal Property. Each Member
hereby agrees that its Interest shall for all purposes be personal property.
A Member has no interest in specific Company property.
ARTICLE V
MEMBERS
Section 5.1 Powers of Members. The Members shall have the
power to exercise any and all rights or powers granted to the Members pursuant
to the express terms of this Agreement.
Section 5.2 Partition. Each Member waives any and all rights
that it may have to maintain an action for partition of the Company's property.
Section 5.3 Resignation. The Managing Members shall have no
right to resign from the Company. Any other Member may only resign from the
Company prior to the dissolution and winding up of the Company upon the
assignment of its Interest (including any redemption, repurchase, exchange or
other acquisition by the Company of such Interest) in accordance with the
provisions of this Agreement. A resigning Member shall not be entitled to
receive any distribution and shall not otherwise be entitled to receive the
fair value of its Interest except as otherwise expressly provided for in this
Agreement.
ARTICLE VI
MANAGEMENT
Section 6.1 Management of the Company. Except as otherwise
provided herein, the business and affairs of the Company shall be managed, and
all actions required under this Agreement shall be determined, solely and
exclusively by the Managing Members, which shall have all rights and powers on
behalf and in the name of the Company to perform all acts necessary and
desirable to the objects and purposes of the Company. Without limiting the
generality of the foregoing, the Managing Members, in their capacity as Common
Members and not by virtue of any delegation of management power from any
Member, shall have the power on behalf of the Company to:
(a) authorize and engage in transactions and dealings on
behalf of the Company, including transactions and dealings with any Member
(including any Managing Member) or any Affiliate of any Member (including,
without limitation, making loans to Aetna);
(b) call meetings of Members or any class or series thereof;
(c) issue Interests, including Common Securities, Preferred
Securities and classes and series thereof, in accordance with this Agreement;
(d) pay all expenses incurred in forming the Company;
(e) lend money, with or without security, to Aetna or any
Affiliate thereof that is not an insurance company;
(f) determine and make distributions (hereinafter sometimes
referred to as "dividends"), in cash or otherwise, on Interests, in accordance
with the provisions of this Agreement and of the Delaware Act;
(g) establish a record date with respect to all actions to be
taken hereunder that require a record date to be established, including with
respect to allocations, dividends and voting rights;
(h) establish or set aside in their discretion any reserve or
reserves for contingencies and for any other proper company purpose;
(i) redeem, repurchase or exchange on behalf of the Company
Interests which may be so redeemed, repurchased or exchanged;
(j) appoint (and dismiss from appointment) attorneys and
agents on behalf of the Company, and employ (and dismiss from employment) any
and all persons providing legal, accounting or financial services to the
Company, or such other employees or agents as the Managing Members deem
necessary or desirable for the management and operation of the Company,
including, without limitation, any Member (including any Managing Member) or
any Affiliate of any Member;
(k) incur and pay all expenses and obligations incident to
the operation and management of the Company, including, without limitation,
the services referred to in the preceding paragraph, taxes, interest, travel,
rent, insurance, supplies, salaries and wages of the Company's employees and
agents;
(l) acquire and enter into any contract of insurance
necessary or desirable for the protection or conservation of the Company and
its assets or otherwise in the interest of the Company as the Managing Members
shall determine;
(m) open accounts and deposit, maintain and withdraw funds in
the name of the Company in banks, savings and loan associations, brokerage
firms or other financial institutions;
(n) effect a dissolution of the Company and act as
liquidating trustee or the Person winding up the Company's affairs, all in
accordance with the provisions of this Agreement and of the Delaware Act;
(o) bring and defend on behalf of the Company actions and
proceedings at law or equity before any court or governmental, administrative
or other regulatory agency, body or commission or otherwise;
(p) prepare and cause to be prepared reports, statements and
other relevant information for distribution to Members as may be required or
determined to be appropriate by the Managing Members from time to time;
(q) prepare and file all necessary returns and statements and
pay all taxes, assessments and other impositions applicable to the assets of
the Company; and
(r) execute all other documents or instruments, perform all
duties and powers and do all things for and on behalf of the Company in all
matters necessary or desirable or incidental to the foregoing.
The expression of any power or authority of the Managing
Members in this Agreement shall not in any way limit or exclude any other
power or authority which is not specifically or expressly set forth in this
Agreement.
Section 6.2 Reliance by Third Parties. Persons dealing with
the Company are entitled to rely conclusively upon the power and authority of
the Managing Members herein set forth.
Section 6.3 No Management by any Preferred Members. Except as
otherwise expressly provided herein, no Preferred Member shall take part in
the day-to-day management, operation or control of the business and affairs
of the Company. The Preferred Members, in their capacity as Preferred Members
of the Company, shall not be agents of the Company and shall not have any
right, power or authority to transact any business in the name of the Company
or to act for or on behalf of or to bind the Company.
Section 6.4 Preferred Members May Appoint a Trustee. Subject
to the terms and conditions set forth in Section 8.1(b) of this Agreement, the
Preferred Members shall have the right to appoint a trustee, and any trustee
so appointed shall have the power to enforce the Company's rights under the
Indenture and, to the extent permitted by law, declare and pay dividends on
Preferred Securities. Without limiting the powers of any trustee so appointed
and for the avoidance of any doubt concerning the powers of the trustee, any
trustee, in its own name and as trustee of an express trust, may institute a
proceeding, including, without limitation, any suit in equity, an action at
law or other judicial or administrative proceeding, to enforce the Company's
creditor rights directly against Aetna to the same extent as the Company and
on behalf of the Company, and may prosecute such proceeding to judgment or
final decree, and enforce the same against Aetna and collect, out of the
property, wherever situated, of Aetna, the monies adjudged or decreed to be
payable in the manner provided by law. The Managing Members agree to execute
and deliver such documents as may be necessary or appropriate for the trustee
to exercise such powers.
Section 6.5 Business Transactions of a Managing Member with
the Company. The Managing Members or their Affiliates may lend money to,
borrow money from, act as surety, guarantor or endorser for, guarantee or
assume one or more obligations of, provide collateral for, and transact other
business with, the Company and, subject to applicable law, shall have the same
rights and obligations with respect to any such matter as persons who are not
Managing Members or Affiliates thereof.
Section 6.6 Outside Businesses. Any Member or Affiliate
thereof may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Company, and the Company and the Members shall have no
rights by virtue of this Agreement in and to such independent ventures or the
income or profits derived therefrom, and the pursuit of any such venture, even
if competitive with the business of the Company, shall not be deemed wrongful
or improper. No Member or Affiliate thereof shall be obligated to present any
particular investment opportunity to the Company even if such opportunity is
of a character that, if presented to the Company, could be taken by the
Company, and any Member or Affiliate thereof shall have the right to take for
its own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment opportunity.
Section 6.7 Actions by Managing Members. Notwithstanding any
provision to the contrary, any action that the Managing Members are authorized
to take hereunder or under the Delaware Act may be taken by the Managing
Members, acting together, or either Managing Member, acting alone.
ARTICLE VII
COMMON SECURITIES AND PREFERRED SECURITIES
Section 7.1 Common Securities and Preferred Securities.
(a) The Interests in the Company shall initially be divided
into two classes, Common Securities and Preferred Securities.
(b) The Preferred Securities may be issued from time to time
in one or more series with such relative rights, powers, preferences,
limitations and restrictions as may from time to time be established in a
written action or actions of the Managing Members providing for the issue of
such series as hereinafter provided. Authority is hereby expressly granted to
the Managing Members, subject to the provisions of this Agreement, to
authorize the issue of one or more series of Preferred Securities, and with
respect to each such series to establish by a written action or actions
providing for the issue of such series:
(i) the maximum number of Preferred Securities to constitute
such series and the distinctive designation thereof;
(ii) whether the Preferred Securities of such series shall have
voting rights in addition to those set forth in this Agreement and,
if so, the terms of such voting rights;
(iii) the periodic dividend rate (or method of calculation
thereof), if any, on the Preferred Securities of such series, the
conditions and dates upon which such dividends shall be payable and
the ability of the Company, if any, to extend the dividend payment
period for the Preferred Securities of such series, the dates from
which such dividends shall accrue, the preference or relation which
such dividends have with respect to dividends payable on any other
class or classes of Interests or on any other series of Preferred
Securities, and whether such dividends shall be cumulative or
noncumulative;
(iv) whether the Preferred Securities of such series shall be
subject to redemption by the Company, and, if made subject to
redemption, the times and other terms and conditions of such
redemption (including the amount and kind of consideration to be
received upon such redemption);
(v) any rights in addition to those set forth in this
Agreement of the Preferred Members that hold Preferred Securities of
such series upon the dissolution of the Company;
(vi) whether or not the Preferred Securities of such series
shall be subject to the operation of a retirement or sinking fund,
and, if so, the extent to and manner in which any such retirement or
sinking fund shall be applied to the purchase or redemption of the
Preferred Securities of such series for retirement and the terms and
provisions relative to the operation thereof;
(vii) whether or not the Preferred Securities of such series
shall be convertible into, or exchangeable for, Interests of any
other class or classes, or of any other series of Preferred
Securities, or securities of any other kind, including those issued
by the Managing Member or any of its Affiliates, and if so convertible
or exchangeable, the price or prices or the rate or rates of
conversion or exchange and the method, if any, of adjusting the same;
(viii) any limitations and restrictions in addition to those set
forth in this Agreement to be effective while any Preferred
Securities of such series are outstanding upon the payment of
periodic dividends or other distributions on, and upon the purchase,
redemption or other acquisition by the Company of, Common Securities
or any other series of Preferred Securities;
(ix) any conditions or restrictions in addition to those set
forth in this Agreement upon the issue of any additional Interests
(including additional Preferred Securities of such series or
Interests of any other series ranking on a parity with or prior to the
Preferred Securities of such series as to periodic dividends or
distribution of assets on dissolution);
(x) the times, prices and other terms and conditions for the
offering of the Preferred Securities;
(xi) the preferential allocation of profits or losses, if any;
and
(xii) any other relative rights, powers and duties as shall not
be inconsistent with this Section 7.1.
In connection with the foregoing and without limiting the
generality thereof, the Managing Members are hereby expressly authorized
without the vote or approval of any other Member, to take any action to create
under the provisions of this Agreement a series of Preferred Securities that
was not previously outstanding. Without the vote or approval of any other
Member, the Managing Members may execute, swear to, acknowledge, deliver, file
and record whatever documents may be required in connection with the issue
from time to time of Preferred Securities in one or more series as shall be
necessary, convenient or desirable to reflect the issue of such series. The
Managing Members shall do all things they deem to be appropriate or necessary
to comply with the Delaware Act and are authorized and directed to do all
things they deem to be necessary or permissible in connection with any future
issuance, including compliance with any statute, rule, regulation or guideline
of any federal, state or other governmental agency or any securities exchange.
Any action or actions taken by the Managing Members pursuant to
the provisions of this paragraph (b) shall be deemed an amendment and
supplement to and part of this Agreement.
(c) All Preferred Securities shall rank senior to the Common
Securities in respect of the right to receive dividends and the right to
receive payments out of the assets of the Company upon voluntary or involuntary
dissolution and winding up of the Company. All Preferred Securities redeemed,
purchased or otherwise acquired by the Company (including Preferred Securities
surrendered for conversion or exchange) shall be cancelled and thereupon
restored to the status of authorized but unissued Preferred Securities
undesignated as to series.
(d) No holder of Common Securities or of Preferred Securities
shall be entitled as a matter of right to subscribe for or purchase, or have
any preemptive right with respect to, any part of any new or additional issue
of Preferred Securities of any series whatsoever, or of securities convertible
into any Preferred Securities of any series whatsoever, whether now or
hereafter authorized and whether issued for cash or other consideration or by
way of dividend.
(e) Common Securities shall not be evidenced by any
certificate or other written instrument, but shall only be evidenced by this
Agreement. Subject to Section 2.8, Common Securities shall be non-assignable
and non-transferable, and may only be issued to and held by the Managing
Members. Any transfer or purported transfer of any Common Security shall be
null and void except as permitted by Section 2.8. Preferred Securities shall
be freely assignable and transferable.
(f) Any Person purchasing Preferred Securities shall be
admitted to the Company as a Preferred Member upon compliance with Section 2.7.
Section 7.2 Persons Deemed Preferred Members. The Company
may treat the Person in whose name any Preferred Certificate shall be
registered on the books and records of the Company as a Preferred Member and
the sole holder of such Preferred Certificate for purposes of receiving
dividends and for all other purposes whatsoever and, accordingly shall not be
bound to recognize any equitable or other claims to or interest in such
Preferred Certificate on the part of any other Person, whether or not the
Company shall have actual or other notice thereof.
ARTICLE VIII
VOTING AND MEETINGS
Section 8.1 Voting Rights of Holders of Preferred Securities.
(a) Except as shall be otherwise established herein or in the
action or actions of the Managing Members providing for the issue of any
series of Preferred Securities and except as otherwise required by the Delaware
Act, the Preferred Members holding such Preferred Securities shall have, with
respect to such Preferred Securities, no right or power to vote on any
question or matter or in any proceeding or to be represented at, or to receive
notice of, any meeting of Members.
(b) If (i) the Company fails to pay dividends in full on the
Preferred Securities of any series for 18 consecutive monthly dividend
periods; (ii) an Event of Default (as defined in the Indenture) occurs and is
continuing with respect to any series of Debentures that has not been
exchanged for the related series of Preferred Securities; or (iii) Aetna is in
default on any of its payment obligations under the Guarantee, then the Members
holding a majority in stated liquidation preference of the outstanding
Preferred Securities of such series, in the case of clause (i) above, and the
Members holding a majority in stated liquidation preference of all outstanding
Preferred Securities, in the case of clauses (ii) and (iii) above, together
with Members holding any other Interests having the right to vote for
appointment of a trustee in such event (other than any Common Member, in its
capacity as such), acting as a single class, will be entitled to appoint and
authorize a trustee to enforce the Company's rights under the Indenture
against Aetna, enforce the obligations undertaken by Aetna under the Guarantee
and declare and pay dividends on the Preferred Securities of such series in the
case of clause (i) above (but only in the event that the Company's failure to
pay dividends is not a consequence of Aetna's exercise of any right it may
have to extend the interest payment period for the related series of
Debentures). For purposes of determining whether the Company has failed to
pay dividends in full for 18 consecutive monthly dividend periods, dividends
shall be deemed to remain in arrears, notwithstanding any payments in respect
thereof, until full cumulative dividends have been or contemporaneously are
declared and paid with respect to all monthly dividend periods terminating on
or prior to the date of payment of such full cumulative dividends. Not later
than 30 days after the right to appoint a trustee arises, the Managing Members
will convene a meeting to appoint such a trustee. If the Managing Members
fail to convene such meeting within such 30-day period, the Members holding
10% in stated liquidation preference of the outstanding Preferred Securities
of the series with respect to which dividends have not been paid, in the case
of clause (i) above, and the Members holding 10% in stated liquidation
preference of all outstanding Preferred Securities, in the case of clauses
(ii) and (iii) above, and such other Interests that are entitled to vote,
acting as a single class, will be entitled to convene such meeting. Any
trustee so appointed shall vacate office immediately, subject to the
applicable terms of any Interests the holders of which were entitled to
appoint such trustee, if the Company shall have paid in full all accumulated
and unpaid dividends on the Preferred Securities of the series with respect to
which dividends have not been paid, in the case of clause (i) above, or such
default Aetna shall have been cured, in the case of clause (ii) or (iii)
above. Notwithstanding the appointment of any such trustee, Aetna shall
retain all rights under the Indenture, including any rights it may have to
extend the interest payment period of any Debentures.
(c) If any resolution is proposed to be adopted by the Members
providing for, or the Managing Members propose to take any action to effect:
(i) any variation or abrogation of the powers, preferences and
special rights of the Preferred Securities of any series by way of
amendment of this Agreement or otherwise (including, without
limitation, the authorization or issuance of any Interests in the
Company ranking, as to participation in the profits or assets of the
Company, senior to the Preferred Securities) which variation or
abrogation adversely affects the holders of Preferred Securities of
such series,
(ii) the dissolution of the Company, or
(iii) the commencement of any bankruptcy, insolvency,
reorganization or other similar proceeding involving the Company,
then the Members holding outstanding Preferred Securities of the series, the
powers, preferences or special rights of which are proposed to be amended in
the case of any resolution or action described in clause (i) above, and the
Members holding any outstanding Preferred Securities, in the case of any
resolution or action described in clause (ii) or (iii) above, (and, in the
case of any resolution or action described in clause (i) above which would
adversely affect the powers, preferences or special rights of any Company
Dividend Parity Securities or any Company Liquidation Parity Securities, such
Company Dividend Parity Securities or such Company Liquidation Parity
Securities, as the case may be, or, in the case of any resolution or action
described in clause (ii) above, all Company Liquidation Parity Securities or,
in the case of any resolution or action described in clause (iii) above, all
Members holding outstanding Preferred Securities, any Company Dividend Parity
Securities and any Company Liquidation Parity Securities (other than Members
holding any such securities that are also creditors of Aetna or any of its
subsidiaries) will be entitled to vote together as a class on such resolution
or action of the Managing Members (but not any other resolution or action) and
such resolution or action shall not be effective except with the approval of
the Members holding a majority in stated liquidation preference of such
outstanding securities; provided that no such resolution or action shall,
without the consent of each Preferred Member affected thereby, (1) change the
terms of such Preferred Member's Preferred Securities established pursuant to
Section 7.1(b)(iii), (iv), (v), (vi), (vii), (viii) or (xi) or Section 9.3 or
15.5 in a manner adverse to such Preferred Member or (2) reduce the
above-stated percentage of stated liquidation preference necessary to approve
such resolution or action or (3) amend the provisions of this Section 8.1(c);
provided, further however, that no such approval shall be required under
clauses (i) and (ii) if the dissolution of the Company is proposed or
initiated upon the occurrence of any of the events specified in Section 15.2
(a) through (c) and (e) through (f).
The powers, preferences or special rights of the Preferred
Securities of any series will be deemed not to be varied by the creation or
issue of, and no vote will be required for the creation or issue of, any
further Interests in the Company ranking pari passu with or junior to the
Preferred Securities of any series with respect to voting rights or rights to
participate in the profits or assets of the Company.
(d) Notwithstanding any provision to the contrary herein, the
first sentence of Section 14.1 of this Agreement may only be amended with the
consent of each Preferred Member; provided that, to the fullest extent
permitted by applicable law, any such amendment shall not permit the Preferred
Members to approve any transferee of Common Securities.
(e) Notwithstanding that Members holding Preferred Securities
of any series are entitled to vote or consent under any of the circumstances
described in this Agreement, any of the Preferred Securities of any series
that are owned by Aetna or any entity owned more than fifty percent by Aetna,
either directly or indirectly, shall not be entitled to vote or consent and
shall, for the purposes of such vote or consent, be treated as if they were not
outstanding.
Section 8.2 Voting Rights of Holders of Common Securities.
Except as otherwise provided herein or by the Managing Members in accordance
with Section 7.1 in respect of any series of Preferred Securities and except as
otherwise provided by the Delaware Act, all voting rights of the Company shall
be vested exclusively in the Common Members. The Common Securities shall
entitle the Common Members to vote in proportion to their percentage ownership
interest in the Company upon all matters upon which Common Members have the
right to vote. All Common Members shall have the right to vote separately as
a class on any matter on which the Common Members have the right to vote
regardless of the voting rights of any other Member.
Section 8.3 Meetings of the Members.
(a) Meetings of the Members of any class or series or of all
classes or series of Interests may be called at any time by the Managing
Members or as provided by any applicable terms of any Preferred Securities.
Except to the extent otherwise provided, the following provisions shall apply
to meetings of Members.
(b) Members may vote in person or by proxy at such meeting.
Whenever a vote, consent or approval of Members is permitted or required under
this Agreement, such vote, consent or approval may be given at a meeting of
Members or by written consent.
(c) Each Member may authorize any Person to act for it by
proxy on all matters in which a Member is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Member or its attorney-in-fact. Every proxy shall
be revocable at the pleasure of the Member executing it at any time before it
is voted.
(d) Each meeting of Members shall be conducted by the
Managing Members or by such other Person that the Managing Members may
designate.
(e) Any required approval of Preferred Members holding
Preferred Securities of a series may be given at a separate meeting of such
Preferred Members convened for such purpose or at a meeting of Members of the
Company or pursuant to written consent. The Managing Members will cause a
notice of any meeting at which Preferred Members holding Preferred Securities
of a series are entitled to vote pursuant to Section 8.1(b) or (c) of this
Agreement, or of any matter upon which action may be taken by written consent
of such Preferred Members, to be mailed to each Preferred Member of record of
the Preferred Securities of such series. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any action proposed to be taken
at such meeting on which such Preferred Members are entitled to vote or of
such matters upon which written consent is sought and (iii) instructions for
the delivery of proxies or consents.
(f) Subject to Section 8.3(e), the Managing Members, in their
sole discretion, shall establish all other provisions relating to meetings of
Members, including notice of the time, place or purpose of any meeting at
which any matter is to be voted on by any Members, waiver of any such notice,
action by consent without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE IX
DIVIDENDS
Section 9.1 Dividends. (a) Preferred Members shall receive
periodic dividends, if any, in accordance with the applicable terms of the
Preferred Securities, as and when declared by the Managing Members, and Common
Members shall receive periodic dividends, subject to Section 9.3 of this
Agreement, the applicable terms of any series of Preferred Securities and to
the provisions of the Delaware Act, as and when declared by the Managing
Members, in their discretion out of funds legally available therefor.
(b) Dividends on the Preferred Securities shall be declared by
the Managing Members to the extent that the Managing Members reasonably
anticipate that at the time of payment the Company will have, and must be paid
by the Company to the extent that at the time of proposed payment it has, (i)
funds legally available for the payment of such dividends and (ii) cash on
hand sufficient to permit such payments.
(c) A Preferred Member shall not be entitled to receive any
dividend with respect to the Preferred Securities of any series, irrespective
of whether such dividend has been declared by the Managing Members, prior to
the date on which such dividend is payable and until such time as the Company
has received the interest payment on the related series of Debentures for the
interest payment date corresponding to such dividend payment date and such
monies are available for distribution to the Preferred Member pursuant to the
terms of this Agreement and the Delaware Act, and notwithstanding any
provision of Section 18-606 of the Delaware Act to the contrary, until such
time, a Preferred Member shall not have the status of a creditor of the
Company, or the remedies available to a creditor of the Company.
Section 9.2 Limitations on Distributions. Notwithstanding any
provision to the contrary contained in this Agreement, the Company shall not
make a distribution (including a dividend) to any Member on account of its
Interest if such distribution would violate Section 18-607 of the Delaware Act
or other applicable law.
Section 9.3 Certain Restrictions on the Payment of Dividends.
If dividends have not been paid in full on the Preferred Securities of any
series, the Company shall not:
(i) pay, or declare and set aside for payment, any dividends
on the Preferred Securities of any other series or any other
Interests in the Company ranking pari passu with the Preferred
Securities of such series with respect to participation in profits of
the Company ("Company Dividend Parity Securities"), unless the amount
of any dividends declared on any Company Dividend Parity Securities
is paid on the Company Dividend Parity Securities and the Preferred
Securities of such series on a pro rata basis on the date such
dividends are paid on such Company Dividend Parity Securities, so
that the ratio of
(x) (A) the aggregate amount paid as dividends on the
Preferred Securities of such series to (B) the aggregate amount
paid as dividends on the Company Dividend Parity Securities is
the same as the ratio of
(y) (A) the aggregate amount of all accumulated arrears
of unpaid dividends on the Preferred Securities of such series
to (B) the aggregate amount of all accumulated arrears of
unpaid dividends on the Company Dividend Parity Securities;
(ii) pay, or declare and set aside for payment, any dividends on
any Interests in the Company ranking junior to the Preferred
Securities of such series as to dividends ("Company Dividend Junior
Securities"); or
(iii) redeem, purchase or otherwise acquire any Company Dividend
Parity Securities or Company Dividend Junior Securities;
until, in each case, such time as all accumulated arrears of unpaid dividends
on the Preferred Securities of such series shall have been paid or set aside
for payment in full for all dividend periods terminating on or prior to, in
the case of clauses (i) and (ii), such payment, and in the case of clause
(iii), the date of such redemption, purchase or other acquisition.
Section 9.4. All payments in respect of the Preferred
Securities of any series by the Company shall be made without withholding or
deduction for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed or levied upon
or as a result of such payment by or on behalf of the United States of
America, any state thereof or any other jurisdiction through which or from
which such payment is made, or any authority therein or thereof having power to
tax, unless the withholding or deduction of such taxes, duties, assessments or
governmental charges is required by law. In that event, the Company will pay
as a dividend such additional amounts as may be necessary in order that the net
amounts received by Preferred Members holding Preferred Securities after such
withholding or deduction will equal the amount which would have been
receivable in respect of such Preferred Securities in the absence of such
withholding or deduction ("Additional Amounts"), except that no such
Additional Amounts will be payable with respect to Preferred Securities of any
series:
(a) if the holder or beneficial owner thereof is liable for
such taxes, duties, assessments or governmental charges in respect of
such Preferred Securities by reason of such holder's or owner's having
some connection with the United States, any state thereof or any
other jurisdiction through which or from which such payment is made
(including, without limitation, actual or constructive ownership,
past or present, of 10% or more of the total combined voting power of
all classes of stock entitled to vote of Aetna), other than being a
holder or beneficial owner of such Preferred Securities, or
(b) if the Company has notified such holder of the obligation
to withhold taxes and requested but not received from such holder or
beneficial owner a declaration of non-residence, a valid taxpayer
identification number or other claim for exemption (or information or
certification required to support such claim), and such withholding
or deduction would not have been required had such declaration,
taxpayer identification number or claim been received.
ARTICLE X
BOOKS AND RECORDS
Section 10.1 Books and Records; Accounting. The Managing
Members shall keep or cause to be kept at the address of the Managing Members
(or at such other place as the Managing Members shall advise the other Members
in writing) true and full books and records regarding the status of the
business and financial condition of the Company.
Section 10.2 Financial Statements. The Managing Members
shall, as soon as available after the end of each fiscal year, cause to be
prepared and mailed to each Preferred Member of record the unaudited financial
statements of the Company for such fiscal year prepared in accordance with
generally accepted accounting principles.
Section 10.3 Fiscal Year. The fiscal year of the Company for
federal income tax and accounting purposes shall, except as otherwise required
in accordance with the Code, end on December 31 of each year.
Section 10.4 Limitation on Access to Records. Notwithstanding
any provision of this Agreement, the Managing Members may, to the maximum
extent permitted by law, keep confidential from the Preferred Members any
information the disclosure of which the Managing Members reasonably believe is
not in the best interest of the Company or could damage the Company or its
business or which the Company or the Managing Members are required by law or
by an agreement with any Person to keep confidential.
ARTICLE XI
TAX MATTERS
Section 11.1 Company Tax Returns. (a) The Managing Members
shall cause to be prepared and timely filed all tax returns required to be
filed for the Company. The Managing Members may, in their discretion, make or
refrain from making any federal, state or local income or other tax elections
for the Company that they deem necessary or advisable, including, without
limitation, any election under Section 754 of the Code or any successor
provision.
(b) Aetna is hereby designated as the Company's "Tax Matters
Partner" under Code Section 6231(a)(7) and shall have all the powers and
responsibilities of such position as provided in the Code. Aetna is
specifically directed and authorized to take whatever steps Aetna, in its
discretion, deems necessary or desirable to perfect such designation,
including filing any forms or documents with the Internal Revenue Service and
taking such other action as may from time to time be required under the
regulations issued under the Code. Expenses incurred by the Tax Matters
Partner, in its capacity as such will be borne by the Company.
Section 11.2 Tax Reports. The Managing Members shall, as
promptly as practicable and in any event within 90 days of the end of each
fiscal year, cause to be prepared and mailed to each Preferred Member of
record federal income tax form K-1 and any other forms which are necessary or
advisable.
Section 11.3 Taxation as Partnership. The Company shall be
treated as a partnership for U.S. federal income tax purposes.
ARTICLE XII
EXPENSES
Section 12.1 Expenses. Except as otherwise provided in this
Agreement, the Company shall be responsible for all and shall pay all expenses
out of funds of the Company determined by the Managing Members to be available
for such purpose, provided that such expenses or obligations are those of the
Company or are otherwise incurred by the Managing Members in connection with
this Agreement, including, without limitation:
(a) all costs and expenses related to the business of the
Company and all routine administrative expenses of the Company,
including the maintenance of books and records of the Company, the
preparation and dispatch to the Members of checks, financial reports,
tax returns and notices required pursuant to this Agreement and the
holding of any meetings of the Members;
(b) all expenses incurred in connection with any litigation
involving the Company (including the cost of any investigation and
preparation) and the amount of any judgment or settlement paid in
connection therewith (other than expenses incurred by the Managing
Member in connection with any litigation brought by or on behalf of
any Member against the Managing Member);
(c) all expenses for indemnity or contribution payable by the
Company to any Person;
(d) all expenses incurred in connection with the collection
of amounts due to the Company from any person;
(e) all expenses incurred in connection with the preparation
of amendments to this Agreement; and
(f) all expenses incurred in connection with the dissolution,
winding up or termination of the Company.
ARTICLE XIII
LIABILITY
Section 13.1 Liability of Common Members. Each Common Member,
by acquiring its Interest and being admitted to the Company as a Common
Member, shall be liable to the creditors of the Company (other than to Members
holding other classes or series of Interests, in their capacity as Members)
(hereinafter referred to individually as a "Third Party Creditor," and
collectively as the "Third Party Creditors") to the same extent that a general
partner of a limited partnership formed under the LP Act is liable under
Section 17-403(b) of the LP Act to creditors of the limited partnership (other
than the other partners in their capacity as partners), as if the Company were
a limited partnership formed under the LP Act and the Common Members were
general partners of the limited partnership. In furtherance but not in
limitation of the generality of the foregoing, each Common Member (i) is
liable for any and all debts, obligations and other liabilities of the
Company, whether arising under contract or by tort, statute, operation of law
or otherwise, enforceable directly and absolutely against each Common Member
by each Third Party Creditor and (ii) is deemed to and does assume, as a
surety and not as a guarantor, each debt, obligation or other liability of the
Company to all Third Party Creditors.
Section 13.2 Liability of Preferred Members.
(a) Except as otherwise provided by the Delaware Act, (i) the
debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company and, to the extent set forth in Section 13.1, the
Common Members and (ii) no Preferred Member shall be obligated personally for
any such debt, obligation or liability of the Company solely by reason of
being a Preferred Member of the Company.
(b) A Preferred Member, in its capacity as such, shall have
no liability in excess of (i) the amount of its capital contributions, (ii)
its share of any assets and undistributed profits of the Company, (iii) any
amounts required to be paid by such Preferred Member in the written action or
actions creating the series of Preferred Securities held by such Preferred
Member and (iv) the amount of any distributions wrongfully distributed to it.
ARTICLE XIV
ASSIGNMENT OF INTERESTS
Section 14.1 Assignment of Interests. Notwithstanding
anything to the contrary in this Agreement other than Section 2.8, Common
Securities shall be non-assignable and non-transferable, and may only be
issued to a Managing Member and held by the Managing Member to which such
Common Security was originally issued. Preferred Securities shall be freely
assignable and transferable, subject to the provisions of Section 2.7.
Section 14.2 Right of Assignee to Become a Member. An
assignee shall become a Member upon compliance with the provisions of Section
2.7.
Section 14.3 Events of Cessation of Membership. A Person
shall cease to be a Member upon the lawful assignment of its Interests
(including any redemption, exchange or other repurchase by the Company or the
Managing Members) or as otherwise provided herein.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 15.1 No Dissolution. The Company shall not be
dissolved by the admission of Members in accordance with the terms of this
Agreement. Except as provided in Sections 15.2(b) and (c), the death,
retirement, resignation, expulsion, bankruptcy or dissolution of a Member, or
the occurrence of any other event which terminates the continued membership of
a Member in the Company, shall not cause the Company to be dissolved and its
affairs wound up so long as the Company at all times has at least two Members.
Upon the occurrence of any such event, the business of the Company shall be
continued without dissolution.
Section 15.2 Events Causing Dissolution. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following events:
(a) the expiration of the term of the Company, as provided in
Section 2.3 hereof;
(b) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging either of the Managing
Members a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of either of the Managing Members under any applicable
Federal or State bankruptcy or similar law, and such decree or order
shall have continued undischarged and unstayed for a period of 90
days; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, trustee,
assignee, sequestrator or similar official in bankruptcy or
insolvency of either of the Managing Members or of all or
substantially all of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and such decree
or order shall have continued undischarged and unstayed for a period
of 90 days or either of the Managing Members shall institute
proceedings to be adjudicated a voluntary bankrupt, or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization, arrangement,
adjustment or composition under any applicable Federal or State
bankruptcy or similar law, or shall consent to the filing of any such
petition, or shall consent to the appointment of a receiver,
liquidator, trustee, assignee, sequestrator or similar official in
bankruptcy or insolvency of either of the Managing Members or of all
or substantially all of its property, or shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due and its willingness to be
adjudged a bankrupt, or corporate action shall be taken by either of
the Managing Members in furtherance of any of the aforesaid purposes;
(c) upon the retirement, resignation, expulsion, dissolution,
winding up or liquidation of any Managing Member or the occurrence of
any other event that terminates the continued membership of such
Managing Member under the Delaware Act;
(d) a decision made by the Managing Members (subject to the
voting rights of Preferred Members set forth in Section 8.1) to
dissolve the Company;
(e) the entry of a decree of judicial dissolution under
Section 18-802 of the Delaware Act;
(f) at the election of the Managing Members, in connection
with the exchange of all series of Preferred Securities outstanding
(in accordance with the terms of the written action establishing each
such series of Preferred Securities) for the related series of
Debentures; or
(g) the written consent of all Members.
Section 15.3 Notice of Dissolution. Upon the dissolution of
the Company, the Managing Members shall promptly notify the Members of such
dissolution.
Section 15.4 Liquidation. Upon dissolution of the Company,
the Managing Members or, in the event that the dissolution is caused by an
event described in Sections 15.2(b) and (c) and there are no Managing Members,
a Person or Persons who may be approved by the Preferred Members holding not
less than a majority in aggregate liquidation preference of the Preferred
Securities, as liquidating trustees, shall immediately commence to wind up the
Company's affairs; provided, however, that a reasonable time shall be allowed
for the orderly liquidation of the assets of the Company and the satisfaction
of liabilities to creditors so as to enable the Members to minimize the normal
losses attendant upon a liquidation. The proceeds of liquidation shall be
distributed, as realized, in the manner provided in Section 18-804 of the
Delaware Act, subject to the applicable terms of any series of Preferred
Securities.
Section 15.5 Certain Restrictions on Liquidation Payments. In
the event of any voluntary or involuntary dissolution of the Company other
than in connection with the exchange of all series of Preferred Securities
outstanding (in accordance with the terms of the written action establishing
each such series of Preferred Securities) for the related series of
Debentures, Members holding Preferred Securities of each series at the time
outstanding will be entitled to receive out of the assets of the Company
legally available for distribution to Members, before any distribution of
assets is made to Common Members or Members holding any other class of
Interests in the Company ranking junior to the Preferred Securities with
respect to participation in assets of the Company, but together with Members
holding Preferred Securities of any other series or any other Interests in the
Company outstanding ranking pari passu with the Preferred Securities with
respect to participation in the assets of the Company ("Company Liquidation
Parity Securities"), an amount equal, in the case of Members holding Preferred
Securities of such series, to the stated liquidation preference for Preferred
Securities of such series as set forth in the actions taken by the Managing
Members providing for the issue of such series and all accumulated and unpaid
dividends (whether or not declared) to the date of payment (the "Liquidation
Distribution"). If, upon any such liquidation, the Liquidation Distributions
can be paid only in part because the Company has insufficient assets available
to pay in full the aggregate Liquidation Distributions and the aggregate
maximum liquidation distributions on the Company Liquidation Parity
Securities, then the amounts payable directly by the Company on the Preferred
Securities of such series and on such Company Liquidation Parity Securities
shall be paid on a pro rata basis, so that the ratio of
(i) (x) the aggregate amount paid as Liquidation
Distributions on the Preferred Securities of such series to (y)
the aggregate amount paid as liquidation distributions on the
Company Liquidation Parity Securities is the same as the ratio
of
(ii) (x) the aggregate Liquidation Distributions to (y)
the aggregate maximum liquidation distributions on the Company
Liquidation Parity Securities.
Section 15.6 Termination. The Company shall terminate when
all of the assets of the Company have been distributed in the manner provided
for in this Article XV, and the Certificate shall have been cancelled in the
manner required by the Delaware Act.
ARTICLE XVI
MISCELLANEOUS
Section 16.1 Amendments. Except as otherwise provided in this
Agreement or by any applicable terms of any Preferred Securities, this
Agreement may be amended by, and only by, a written instrument executed by the
Managing Members.
Section 16.2 Successors; Counterparts. This Agreement (a)
shall be binding as to the executors, administrators, estates, heirs and legal
successors, or nominees or representatives, of the Members and (b) may be
executed in several counterparts with the same effect as if the parties
executing the several counterparts had all executed one counterpart.
Section 16.3 Governing Law; Severability. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflict of laws thereof.
In particular, this Agreement shall be construed to the maximum extent
possible to comply with all of the terms and conditions of the Delaware Act.
If, nevertheless, it shall be determined by a court of competent jurisdiction
that any provisions or wording of this Agreement shall be invalid or
unenforceable under the Delaware Act or other applicable law, such invalidity
or unenforceability shall not invalidate the entire Agreement. In that case,
this Agreement shall be construed so as to limit any term or provision so as
to make it enforceable or valid within the requirements of applicable law,
and, in the event such term or provisions cannot be so limited, this Agreement
shall be construed to omit such invalid or unenforceable provisions. If it
shall be determined by a court of competent jurisdiction that any provision
relating to the distributions and allocations of the Company or to any fee
payable by the Company is invalid or unenforceable, this Agreement shall be
construed or interpreted so as (a) to make it enforceable or valid and (b) to
make the distributions and allocations as closely equivalent to those set
forth in this Agreement as is permissible under applicable law.
Section 16.4 Filings. Following the execution and delivery of
this Agreement, the Managing Members shall promptly prepare any documents
required to be filed and recorded under the Delaware Act, and the Managing
Members shall promptly cause each such document to be filed and recorded in
accordance with the Delaware Act and, to the extent required by local law, to
be filed and recorded or notice thereof to be published in the appropriate
place in each jurisdiction in which the Company may hereafter establish a
place of business. The Managing Members shall also promptly cause to be
filed, recorded and published such statements of fictitious business name and
any other notices, certificates, statements or other instruments required by
any provision of any applicable law of the United States or any state or other
jurisdiction which governs the conduct of its business from time to time.
Section 16.5 Power of Attorney. Each Preferred Member does
hereby constitute and appoint each Managing Member as its true and lawful
representative and attorney-in-fact, in its name, place and stead to make,
execute, sign, deliver and file (a) any amendment of the Certificate required
because of an amendment to this Agreement or in order to effectuate any change
in the membership of the Company, (b) any amendments to this Agreement made in
accordance with the terms hereof and (c) all such other instruments, documents
and certificates which may from time to time be required by the laws of the
United States of America, the State of Delaware or any other jurisdiction, or
any political subdivision of agency thereof, to effectuate, implement and
continue the valid and subsisting existence of the Company or to dissolve the
Company or for any other purpose consistent with this Agreement and the
transactions contemplated hereby.
The power of attorney granted hereby is coupled with an
interest and shall (a) survive and not be affected by the subsequent death,
incapacity, disability, dissolution, termination or bankruptcy of the Preferred
Member granting the same or the transfer of all or any portion of such
Preferred Member's Interest and (b) extend to such Preferred Member's
successors, assigns and legal representatives.
Section 16.6 Exculpation.
(i) No Covered Person shall be liable to the Company or
any Member for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Covered Person
in good faith on behalf of the Company and in a manner
reasonably believed to be within the scope of authority
conferred on such Covered Person by this Agreement.
(ii) A Covered Person shall be fully protected in
relying in good faith upon the records of the Company and upon
such information, opinions, reports or statements presented to
the Company by any Person as to matters the Covered Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Company, including information,
opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
Section 16.7 Indemnification. To the fullest extent permitted
by applicable law, an Indemnified Person shall be entitled to indemnification
from the Company for any loss, damage or claim incurred by such Indemnified
Person by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Company and in a manner
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Agreement; provided, however, that any indemnity
under this Section 16.7 shall be provided out of and to the extent of Company
assets only, and no Member shall have any personal liability on account
thereof.
Section 16.8 Additional Documents. Each Preferred Member,
upon the request of the Managing Members, agrees to perform all further acts
and execute, acknowledge and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement.
Section 16.9 Notices. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail,
as follows:
(i) If given to the Company, in care of the Managing
Members at the Company's mailing address set forth below:
c/o Aetna Life and Casualty Company
151 Farmington Avenue
RE4C
Hartford, Connecticut 06156
Facsimile No.: (203) 275-2661
Attention: Treasurer
(ii) If given to any Member, at the address set forth on
the registration books maintained by or on behalf of the
Company.
Each such notice, request or other communication shall be effective (a) if
given by telecopier, when transmitted to the number specified in such
registration books and the appropriate confirmation is received, (b) if given
by mail, 72 hours after such communication is deposited in the mails with
first class postage prepaid, addressed as aforesaid, or (c) if given by any
other means, when delivered at the address specified in such registration
books.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above stated.
AETNA LIFE AND CASUALTY
COMPANY
By:
Name: ______________________
Title:______________________
AETNA CAPITAL HOLDINGS, INC.
By:
Name: ______________________
Title:______________________