1
Exhibit 4.13
================================================================================
AETNA INC.
AETNA SERVICES, INC.
GUARANTEE AGREEMENT
------------------
Dated as of __________, 199_
------------------
================================================================================
2
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of __________, 199_, is executed and
delivered by AETNA SERVICES, INC., a corporation duly organized and validly
existing under the laws of the State of Connecticut (herein called the
"Company"), having its principal office at 151 Farmington Avenue, Hartford,
Connecticut 06156, AETNA INC., a corporation duly organized and existing under
the laws of the State of Connecticut ("Aetna," and together with the Company,
the "Guarantors"), having its principal office at 151 Farmington Avenue,
Hartford, Connecticut 06156, and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association duly organized and existing under the laws of the United
States of America, as the initial Guarantee Trustee (as defined herein) for the
benefit of the Holders (as defined herein) from time to time of the Preferred
Securities (as defined herein) of Aetna Capital Trust ___, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______________, 199_ among the trustees of the
Issuer named therein, the Company, as Sponsor, Aetna and the Holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer may issue up to _______________ aggregate liquidation amount of its
_____% Preferred Securities (the "Preferred Securities") representing undivided
beneficial interests in the assets of the Issuer and having the terms set forth
in Exhibit B to the Declaration, of which $_____________ liquidation amount of
Preferred Securities are being issued as of the date hereof. Up to the remaining
$______________ liquidation amount of Preferred Securities may be issued by the
Issuer if and to the extent that the over-allotment option in the Underwriting
Agreement (as defined in the Declaration) is exercised by the Underwriters named
therein.
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantors desire to irrevocably and unconditionally, jointly and severally
agree, to the extent set forth herein, to pay to the Holders of the Preferred
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the initial purchasers
thereof of Preferred Securities, which purchase the Guarantors hereby agree
shall benefit the Guarantors, the Guarantors execute and deliver this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
3
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) Capitalized terms used in this Guarantee
Agreement but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Commission" means the Securities and Exchange Commission.
"Common Securities" means the securities representing undivided beneficial
interests in the assets of the Issuer, having the terms set forth in Exhibit C
to the Declaration.
"Covered Person" means any Holder of Preferred Securities.
"Debentures" means the series of Junior Subordinated Debentures issued by
the Company under the Indenture to the Property Trustee, guaranteed by Aetna,
and entitled the "_____% Junior Subordinated Debentures due ____".
2
4
"Distributions" means the periodic distributions and other payments
payable to Holders of Preferred Securities in accordance with the terms of the
Preferred Securities set forth in Exhibit B to the Declaration.
"Event of Default" means a default by the Guarantors on any of their
payment or other obligations under this Guarantee Agreement.
"Financing Entity" means any trust, partnership or other entity affiliated
with the Company or Aetna which is a financing vehicle of the Company or Aetna,
including Aetna Capital L.L.C., a Delaware limited liability company.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions and the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price"), with respect
to the Preferred Securities called for redemption by the Issuer but only if and
to the extent that in each case either Guarantor has made a payment to the
Property Trustee of interest or principal on the Debentures and (ii) upon a
voluntary or involuntary dissolution, winding-up or termination of the Issuer
(other than in connection with the distribution of Debentures to Holders or the
redemption of all the Preferred Securities upon the maturity or redemption of
the Debentures as provided in the Declaration), the lesser of (a) the aggregate
of the liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, to the extent the Issuer has funds
available therefor, or (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution").
"Guarantee Trustee" means The First National Bank of Chicago until a
Successor Guarantee Trustee has been appointed and accepted such appointment
pursuant to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include either Guarantor or any entity directly or indirectly controlling or
controlled by or under direct or indirect common control with either Guarantor.
"Indemnified Person" means the Guarantee Trustee, any Affiliate of the
Guarantee Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives or agents of the Guarantee Trustee.
3
5
"Indenture" means the Junior Subordinated Indenture dated as of __, 199_
among and between the Company, Aetna and The First National Bank of Chicago, as
trustee, as supplemented by the [ ] Supplemental Indenture thereto dated as of
___________ 199___, pursuant to which the Debentures are to be issued.
"Majority in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class, who are the record
owners of Preferred Securities whose liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) represents more than 50% of the liquidation amount of all
outstanding Preferred Securities.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Securities" has the meaning set forth in the first WHEREAS
clause above.
"Property Trustee" means the Person acting as Property Trustee under
the Declaration.
"Redemption Price" means the amount payable on redemption of the Preferred
Securities in accordance with the terms of the Preferred Securities.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
officer of the Guarantee Trustee assigned to administer corporate trust matters
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"66-2/3% in liquidation amount of the Preferred Securities" means, except
as otherwise required by the Trust Indenture Act, Holder(s) of outstanding
Preferred Securities voting together as a single class who are the record owners
of Preferred Securities whose liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid
4
6
Distributions to the date upon which the voting percentages are determined)
represents 66-2/3% or more of the liquidation amount of all Preferred
Securities.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as a Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.01. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions;
(b) if and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by ss.ss. 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control; and
(c) the application of the Trust Indenture Act to this Guarantee Agreement
shall not affect the nature of the Preferred Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer.
SECTION 2.02. Lists of Holders of Preferred Securities.
(a) The Guarantors shall provide the Guarantee Trustee with such
information as is required under ss. 312(a) of the Trust Indenture Act at the
times and in the manner provided in ss. 312(a); and
(b) the Guarantee Trustee shall comply with its obligations under ss.ss.
310(b), 311 and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports By The Guarantee Trustee. Within 60 days after May
15 of each year, the Guarantee Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by ss. 313 of the Trust
Indenture Act, if any, in the form, in the manner and at the times provided by
ss. 313 of the
5
7
Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of ss. 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Guarantee Trustee. The Guarantors shall
provide to the Guarantee Trustee, the Commission and the Holders of the
Preferred Securities, as applicable, such documents, reports and information as
required by ss. 314(a)(1)-(3) (if any) of the Trust Indenture Act and the
compliance certificates required by ss. 314(a)(4) and (c) of the Trust Indenture
Act, any such certificates to be provided in the form, in the manner and at the
times required by ss. 314(a)(4) and (c) of the Trust Indenture Act (provided
that any certificate to be provided pursuant to ss. 314(a)(4) of the Trust
Indenture Act shall be provided within 120 days of the end of each fiscal year
of the Issuer).
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantors shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee Agreement
which relate to any of the matters set forth in ss. 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given pursuant to ss.
314(c) shall comply with ss. 314(e) of the Trust Indenture Act.
SECTION 2.06. Events of Default; Waiver. (a) Subject to Section 2.6(b),
Holders of Preferred Securities may by vote of at least a Majority in
liquidation amount of the Preferred Securities, (A) direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon by the Guarantee
Trustee or (B) on behalf of the Holders of all Preferred Securities waive any
past Event of Default and its consequences. Upon such waiver, any such default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
(b) The right of any Holder of Preferred Securities to receive payment of
the Guarantee Payments in accordance with this Guarantee Agreement, or to
institute suit for the enforcement of any such payment, shall not be impaired
without the consent of each such Holder.
SECTION 2.07. Disclosure of Information. The disclosure of information as
to the names and addresses of the Holders of the Preferred Securities in
accordance with ss. 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, shall not be deemed to be a violation
of any existing law, or any law hereafter enacted which does not specifically
refer to ss. 312 of the Trust Indenture Act, nor shall the Guarantee Trustee be
held
6
8
accountable by reason of mailing any material pursuant to a request made under
ss. 312(b) of the Trust Indenture Act.
SECTION 2.08. Conflicting Interest. The Declaration shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee in trust for the
benefit of the Holders of the Preferred Securities. The Guarantee Trustee shall
not transfer its right, title and interest in the Guarantee Agreement to any
Person except a Successor Guarantee Trustee on acceptance by such Successor
Guarantee Trustee of its appointment to act as Guarantee Trustee or to a Holder
of Preferred Securities exercising his or her rights pursuant to Section 5.4.
The right, title and interest of the Guarantee Trustee to the Guarantee
Agreement shall vest automatically in each Person who may hereafter be appointed
as Guarantee Trustee in accordance with Article IV. Such vesting and cessation
of title shall be effective whether or not conveyancing documents have been
executed and delivered.
(b) If an Event of Default occurs and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders of the
Preferred Securities.
(c) This Guarantee Agreement and all moneys received by the Property
Trustee hereunder in respect of the Guarantee Payments will not be subject to
any right, charge, security interest, lien or claim of any kind in favor of, or
for the benefit of that Guarantee Trustee or its agents or their creditors.
(d) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the holders
of the Preferred Securities, as their names and addresses appear upon the
register, notice of all Events of Default known to the Guarantee Trustee, unless
such defaults shall have been cured before the giving of such notice; provided,
that, the Guarantee Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust committee
of directors and/or Responsible Officers, of the Guarantee Trustee in good faith
determine that
7
9
the withholding of such notice is in the interests of the Holders of the
Preferred Securities. The Guarantee Trustee shall not be deemed to have
knowledge of any default except any default as to which the Guarantee Trustee
shall have received written notice or a Responsible Officer charged with the
administration of this Guarantee Agreement shall have obtained written notice.
(e) The Guarantee Trustee shall not resign as a Trustee unless a Successor
Guarantee Trustee has been appointed and accepted that appointment in accordance
with Article IV.
SECTION 3.02. Certain Rights and Duties of the Guarantee Trustee. (a) The
Guarantee Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Guarantee
Agreement, and no implied covenants shall be read into this Guarantee Agreement
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6(a)), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Guarantee
Agreement, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Guarantee Agreement, and no implied covenants or
obligations shall be read into this Guarantee Agreement against the
Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to
the Guarantee Trustee and conforming to the requirements of this
Guarantee Agreement; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to
8
10
be furnished to the Guarantee Trustee, the Guarantee Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Preferred Securities as provided herein
relating to the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee, or exercising any trust or
power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
ground for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Guarantee Agreement or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Subject to the provisions of Section 3.2(a) and (b):
(i) whenever in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and rely
upon a certificate, which shall comply with the provisions of ss. 314(e)
of the Trust Indenture Act, signed by any authorized officers of the
Guarantors;
(ii) the Guarantee Trustee (A) may consult with counsel (which may
be counsel to either Guarantor or any of its Affiliates and may include
any of its employees) selected by it in good faith and with due care and
the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in reliance thereon and in accordance with such advice and opinion and (B)
shall have the right at any time to seek instructions concerning the
9
11
administration of this Guarantee Agreement from any court of competent
jurisdiction;
(iii) the Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Guarantee Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed by it in good faith and with due care;
(iv) the Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holders of Preferred Securities, unless
such Holders shall have offered to the Guarantee Trustee reasonable
security and indemnity against the costs, expenses (including its
attorneys' fees and expenses) and liabilities that might be incurred by it
in complying with such request or direction; provided that nothing
contained in this clause (iv) shall relieve the Guarantee Trustee of the
obligation, upon the occurrence of an Event of Default (which has not been
cured or waived) to exercise such of the rights and powers vested in it by
this Guarantee Agreement, and to use the same degree of care and skill in
this exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; and
(v) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities and the
signature of the Guarantee Trustee or its agents alone shall be sufficient
and effective to perform any such action; and no third party shall be
required to inquire as to the authority of the Guarantee Trustee to so
act, or as to its compliance with any of the terms and provisions of this
Guarantee Agreement, both of which shall be conclusively evidenced by the
Guarantee Trustee's or its agent's taking such action.
SECTION 3.03. Not Responsible for Recitals or Issuance. The recitals
contained in this Guarantee shall be taken as the statements of the Guarantors
and the Guarantee Trustee does not assume any responsibility for their
correctness. The Guarantee Trustee makes no representations as to the validity
or sufficiency of this Guarantee Agreement.
10
12
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.01. Qualifications. (a) There shall at all times be a Guarantee
Trustee which shall:
(i) not be an Affiliate of either Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least $50,000,000, and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the supervising
or examining authority referred to above, then for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
If at any time the Guarantee Trustee shall cease to satisfy the
requirements of clauses (i)-(ii) above, the Guarantee Trustee shall immediately
resign in the manner and with the effect set out in Section 4.2. If the
Guarantee Trustee has or shall acquire any "conflicting interest" within the
meaning of ss. 310(b) of the Trust Indenture Act, the Guarantee Trustee and the
Guarantors shall in all respects comply with the provisions of ss. 310(b) of the
Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by either Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance with Section
4.2(a) until a Successor Guarantee Trustee possessing the qualifications to act
as Guarantee Trustee under Section 4.1(a) has been appointed and has accepted
such appointment by written instrument executed by such Successor Guarantee
Trustee and delivered to the Guarantors and the Guarantee Trustee being removed.
11
13
(c) The Guarantee Trustee appointed to office shall hold office until his
successor shall have been appointed or until its removal or resignation.
(d) The Guarantee Trustee may resign from office (without need for prior
or subsequent accounting) by an instrument (a "Resignation Request") in writing
signed by the Guarantee Trustee and delivered to the Guarantors, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that no such resignation of the Guarantee
Trustee shall be effective until a Successor Guarantee Trustee possessing the
qualifications to act as Guarantee Trustee under Section 4.1(a) has been
appointed and has accepted such appointment by instrument executed by such
Successor Guarantee Trustee and delivered to Guarantors and the resigning
Guarantee Trustee.
(e) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantors of a Resignation Request, the resigning Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon after such notice, if any,
as it may deem proper and prescribe, appoint a Successor Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.01. Guarantee. The Guarantors irrevocably and unconditionally,
jointly and severally agree to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by the Issuer) regardless of
any defense, right of set-off or counterclaim which the Issuer may have or
assert. The Guarantors' obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantors to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.02. Waiver of Notice. The Guarantors hereby waive notice of
acceptance of this Guarantee Agreement and of any liability to which it applies
or may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantors, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
12
14
SECTION 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantors under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures), Redemption Price, Liquidation Distribution (as defined in the
Declaration) or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantors hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantors with respect to the happening of any of the
foregoing.
13
15
SECTION 5.04. Enforcement of Guarantee. The Guarantors and the Guarantee
Trustee expressly acknowledge that (i) this Guarantee Agreement will be
deposited with the Guarantee Trustee to be held for the benefit of the Holders;
(ii) the Guarantee Trustee has the right to enforce this Guarantee Agreement on
behalf of the Holders; (iii) Holders representing not less than a Majority in
liquidation amount of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available in
respect of this Guarantee Agreement including the giving of directions to the
Guarantee Trustee, or exercising any trust or other power conferred upon the
Guarantee Trustee under this Guarantee Agreement, and (iv) if the Guarantee
Trustee fails to enforce this Guarantee Agreement, any Holder of Preferred
Securities may institute a legal proceeding directly against either or both of
the Guarantors to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Issuer, the Guarantee Trustee,
or any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not merely of collection. This Guarantee Agreement will
not be discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer).
SECTION 5.06. Subrogation. The Guarantors shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantors under this Guarantee Agreement; provided, however,
that the Guarantors shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantors in violation
of the preceding sentence, the Guarantors agree to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. Independent Obligations. The Guarantors acknowledge that
their obligations hereunder are independent of the obligations of the Issuer
with respect to the Preferred Securities and that each of the Guarantors shall
be liable (on a joint and several basis with one another) as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
14
16
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.01. Limitation of Transactions. So long as any Preferred
Securities remain outstanding, neither Guarantor shall declare or pay any
dividend on, or redeem, purchase, acquire or make a distribution or liquidation
payment with respect to, any of its capital stock or make any guarantee payments
with respect to the foregoing (other than (i) payments under this Guarantee
Agreement or the equivalent guarantee agreements respecting preferred securities
of Aetna Capital Trust_____,_____or_____, (ii) acquisitions of shares of a
Guarantor's common stock in connection with the satisfaction by such Guarantor
of its obligations under any employee benefit plan, (iii) stock repurchases in
the open market, (iv) redemptions of any share purchase rights issued by a
Guarantor or the declaration of a dividend of share purchase rights, (v) accrued
dividends (and cash in lieu of fractional shares) upon the conversion of any
preferred stock of such Guarantor as may be outstanding from time to time, in
each case in accordance with the terms of such stock and (vi) stock dividends
paid by a Guarantor or any dividends paid by the Company provided the Company is
a direct or indirect wholly owned subsidiary of the Guarantor), if at such time
(a) the Guarantors shall be in default with respect to their payment obligations
hereunder, (b) there shall have occurred and be continuing an event of default
under the Declaration or (c) the Company shall have given notice of its
election of an Extended Interest Payment Period (as defined in the Indenture)
and such period, or any extension thereof, is continuing. In addition, so long
as any Preferred Securities remain outstanding, each Guarantor (i) will remain
the sole direct or indirect owner of all of the outstanding Common Securities
and shall not cause or permit the Common Securities to be transferred except to
the extent such transfer is permitted under Section 9.1(c) of the Declaration;
provided that any permitted successor of a Guarantor under the Indenture may
succeed to the Guarantor's direct or indirect ownership of the Common Securities
and (ii) will use reasonable efforts to cause the Issuer to continue to be
treated as a grantor trust for United States federal income tax purposes except
in connection with a distribution of Debentures as provided in the Declaration.
SECTION 6.02. Subordination. This Guarantee Agreement will constitute an
unsecured obligation of each of the Guarantors and will rank (i) pari passu in
right of payment with any guarantee of a Guarantor issued in respect of any
Preferred Securities of Aetna Capital Trust I, Aetna Capital Trust II, Aetna
Capital Trust III or Aetna Capital Trust IV or issued in respect of any
preferred securities of any Financing Entity, (ii) subordinate and junior in
right of payment to all other liabilities of such Guarantor, including the
Debentures in the case of the Company and the guarantees of the Debentures in
the case of Aetna, except those made pari passu or subordinate by their terms,
and (iii) senior to all capital stock now or hereafter issued by such Guarantor
and to any guarantee now or hereafter entered into by such Guarantor in respect
of any of its capital stock. Each Guarantor's obligations under this Guarantee
Agreement will rank pari passu with respect to obligations under other guarantee
agreements which it may enter into from time to time to the extent that such
agreements shall be entered into in substantially the
15
17
form hereof and provide for comparable guarantees by such Guarantor of payment
on preferred securities issued by other Aetna Capital Trusts.
ARTICLE 7
TERMINATION
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and be
of no further force and effect upon full payment of the Redemption Price of all
Preferred Securities, or upon the distribution of Debentures to Holders of
Preferred Securities and Common Securities in exchange for all of the Preferred
Securities and Common Securities, or upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Guarantee Agreement will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid with respect to the Preferred Securities or this Guarantee
Agreement.
ARTICLE 8
LIMITATION OF LIABILITY; INDEMNIFICATION
SECTION 8.01. Exculpation. (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to either Guarantor or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Guarantee Agreement or by
law, except that an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of either Guarantor and upon such information, opinions,
reports or statements presented to either Guarantor by any Person as to matters
the Indemnified 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 either Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or
16
18
any other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.02. Indemnification. (a) To the fullest extent permitted by
applicable law, the Guarantors, jointly and severally, shall indemnify and hold
harmless each Indemnified Person from and against 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 and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Guarantee Agreement, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence or
willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses (including
legal fees) incurred by an Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Guarantors prior to the final disposition of such claim, demand, action, suit or
proceeding upon receipt by the Guarantors of an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined that the
Indemnified Person is not entitled to be indemnified as authorized in Section
8.2(a).
(c) The provisions of this Section 8.02 shall survive the termination of
this Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assignees,
receivers, trustees and representatives of each of the Guarantors and shall
inure to the benefit of the Holders of the Preferred Securities then
outstanding. Except in connection with a consolidation, merger or sale involving
the Guarantors that is permitted under the Indenture, the Guarantors shall not
assign their obligations hereunder.
SECTION 9.02. Amendments. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than 66-2/3% in liquidation amount of the
Preferred Securities. The provisions of Section 12.2 of the Declaration
concerning meetings of Holders shall apply to the giving of such approval.
17
19
SECTION 9.03. Notices. Any notice, request or other communication required
or permitted to be given hereunder shall be in writing, duly signed by the party
giving such notice, and delivered, telecopied or mailed by first class mail as
follows:
(a) if given to the Guarantors, to the address set forth below or such
other address as the Guarantors may give notice of to the Holders:
Aetna Inc.
Aetna Services, Inc.
151 Farmington Avenue
Hartford, Connecticut 06156
Attention: Corporate Secretary
Facsimile No: 860-273-[ ]
(b) if given to the Guarantee Trustee, to the address set forth below or
such other address as the Guarantee Trustee may give notice to the Holders:
The First National Bank of Chicago
153 West 51st Street
5th Floor, Suite 4015
New York, NY 10019
Attention: Corporate Trust
Administration
(c) if given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.04. Genders. The masculine, feminine and neuter genders
used herein shall include the masculine, feminine and neuter genders.
SECTION 9.05. Benefit. This Guarantee Agreement is solely for the benefit
of the Holders and subject to Section 3.1(a) is not separately transferable from
the Preferred Securities.
18
20
SECTION 9.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS).
SECTION 9.07. Counterparts. This Guarantee Agreement may be executed in
counterparts, each of which shall be an original; but such counterparts shall
together constitute one and the same instrument.
SECTION 9.08. Exercise of Overallotment Option. If and to the extent that
Preferred Securities are issued by the Issuer upon exercise of the overallotment
option referred to the second WHEREAS clause, the Guarantors agree to give
prompt notice thereof to the Guarantee Trustee but the failure to give such
notice shall not relieve the Guarantors of any of their obligations hereunder.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
AETNA SERVICES, INC.
By:____________________________
Name:
Title:
AETNA INC.
By:____________________________
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO,
As Guarantee Trustee
By:____________________________
Name:
Title:
19
21
STATE OF )
COUNTY OF )
BEFORE ME, the undersigned authority, on this day of ________, 199_,
personally appeared _______________ of Aetna Services, Inc., known to me (or
proved to me by introduction upon the oath of a person known to me) to be the
person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he/she executed the same as the act of such trust for
the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF __________, 199_.
[SEAL]
- --------------------------------
NOTARY PUBLIC
Print Name:_____________________
Commission Expires:_____________
20
22
STATE OF )
COUNTY OF )
BEFORE ME, the undersigned authority, on this day of ________, 199_,
personally appeared _______________ of Aetna Inc., known to me (or proved to me
by introduction upon the oath of a person known to me) to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he/she executed the same as the act of such trust for the purposes
and consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF __________, 199_.
[SEAL]
- --------------------------------
NOTARY PUBLIC
Print Name:_____________________
Commission Expires:_____________
21
23
STATE OF )
COUNTY OF )
BEFORE ME, the undersigned authority, on this day of ________, 199_,
personally appeared _______________ of The First National Bank of Chicago, known
to me (or proved to me by introduction upon the oath of a person known to me) to
be the person and officer whose name is subscribed to the foregoing instrument,
and acknowledged to me that he/she executed the same as the act of such trust
for the purposes and consideration herein expressed and in the capacity therein
stated.
GIVEN UNDER MY HAND AND SEAL THIS ____ DAY OF __________, 199_.
[SEAL]
- --------------------------------
NOTARY PUBLIC
Print Name:_____________________
Commission Expires:_____________
22