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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 11, 1997
J.P. MORGAN & CO. INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 13-2625764
(State or other jurisdiction of 1-5885 (IRS Employer
incorporation) (Commission File No.) Identification No.)
60 Wall Street
New York, NY 10260-0060
(Address of principal executive offices)
(212) 483-2323
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On February 21, 1996, J.P. Morgan & Co. Incorporated, a Delaware
corporation (the "Registrant"), and J.P. Morgan Index Funding Company, LLC,
a Delaware limited liability company (the "Company"), filed with the
Securities and Exchange Commission (the "SEC") a registration statement
(Registration Nos. 333-01121 and 333- 01121-01) (the "Registration
Statement") relating to the issuance by the Company of commodity-indexed
preferred securities which are guaranteed to a certain extent by the
Registrant. The Registration Statement was amended by pre-effective
amendment number 1 filed with the SEC on April 15, 1996, pre-effective
amendment number 2 filed with the SEC on May 15, 1996, post-effective
amendment number 1 filed with the SEC on October 2, 1996, and
post-effective amendment number 2 filed with the SEC on November 18, 1996.
The Registrant hereby amends the following exhibits to the Registration
Statement: Exhibit 3(b), the Amended and Restated Limited Liability Company
Agreement of the Company; Exhibit 4(a)(1), the Form of Certificate of
Securities for Preferred Securities (included in Exhibit 3(b)); Exhibit
4(b), the Form of Guarantee Agreement; Exhibit 4(c), the Form of Related
Note Guarantee Agreement; Exhibit 4(d), the Form of Related Note; and
Exhibit 4(g), the Form of Certificate for Securities for Preferred
Securities (included in Exhibit 3(b)), in each case as attached hereto and
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of Businesses Acquired:
None.
(b) Pro Forma Financial Information:
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None.
(c) Exhibits:
Exhibit No. Description
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Exhibit 3(b) -- Amended and Restated Limited Liability Company
Agreement of J.P. Morgan Index Funding Company, LLC.
Exhibit 4(a)(1) -- Form of Certificate of Securities for Preferred
Securities (included in Exhibit 3(b)).
Exhibit 4(b) -- Form of Guarantee Agreement.
Exhibit 4(c) -- Form of Related Note Guarantee Agreement.
Exhibit 4(d) -- Form of Related Note.
Exhibit 4(g) -- Form of Certificate for Securities for Preferred
Securities (included in Exhibit 3(b)).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
J.P. MORGAN & CO. INCORPORATED
Date: September 11, 1997
By:
/s/ Gene A. Capello
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Name: Gene A. Capello
Title: Vice President and Assistant
General Counsel
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Exhibit Index
The following exhibits are filed herewith:
Exhibit No. Description
Exhibit 3(b) -- Amended and Restated Limited Liability Company
Agreement of J.P. Morgan Index Funding Company,
LLC.
Exhibit 4(a)(1) -- Form of Certificate of Securities for Preferred
Securities (included in Exhibit 3(b)).
Exhibit 4(b) -- Form of Guarantee Agreement.
Exhibit 4(c) -- Form of Related Note Guarantee Agreement.
Exhibit 4(d) -- Form of Related Note.
Exhibit 4(g) -- Form of Certificate for Securities for Preferred
Securities (included in Exhibit 3(b)).
AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT of J.P. MORGAN INDEX FUNDING COMPANY, LLC (the
"Company"), made as of September 10, 1997, among J.P. MORGAN
& CO. INCORPORATED, a Delaware corporation ("J.P. Morgan"),
and J.P. MORGAN VENTURES CORPORATION, a Delaware corporation
and a wholly owned subsidiary of J.P. Morgan ("JPM
Ventures"), 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 terms hereof.
WHEREAS J.P. Morgan and JPM Ventures 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
November 21, 1995;
WHEREAS, J.P. Morgan and JPM Ventures entered into a limited
liability company agreement dated as of February 20, 1996 (the "Original
LLC Agreement");
WHEREAS, J.P. Morgan and JPM Ventures entered into an amended and
restated limited liability company agreement dated as of May 15, 1996 for
the purpose of amending and restating the Original LLC Agreement;
WHEREAS J.P. Morgan and JPM Ventures wish to amend and restate
the amended and restated limited liability company agreement dated as of
May 15, 1996, in the form hereof; and
WHEREAS the Members desire to provide for the operation of the
Company as a limited liability company under the Delaware Act and pursuant
to the terms hereof.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and
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valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members hereby agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1. Definitions. The terms defined in this Article I
shall, for the purposes of this Agreement, have the meanings herein
specified.
"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 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" shall mean the Interests in the Company which
represent common limited liability company interests in the Company and are
described in this Agreement.
"Covered Person" means the Managing Members, any Affiliate of the
Managing Members or any officers,
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directors, shareholders, partners, employees, representatives or agents of
the Managing Members, or any employee or agent of the Company or its
Affiliates.
"Early Redemption Value", with respect to any Indexed Preferred
Securities of any series or any related Common Securities, shall have the
meaning, if any, set forth in the Written Action of the Company
establishing such series and Common Securities.
"Face Amount" means, with respect to any Preferred Security, the
initial stated principal amount thereof.
"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.
"Indexed Preferred Security" means any Preferred Security the
stated liquidation preference or redemption value, as applicable, of which
varies or may vary from the Face Amount thereof.
"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 J.P. Morgan and JPM Ventures, 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.
"Notes" means the Notes evidencing the loans from time to time
from the Company to Morgan Guaranty Trust Company of New York, a trust
company, with full banking powers organized under the laws of the State of
New York
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("Morgan Guaranty"), of the proceeds of the issuances of Interests and, at
the option of the Company, related capital contributions.
"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, in such capacity.
"Preferred Securities" shall mean the Interests which represent
preferred limited liability company interests in the Company and are
described in this Agreement.
"Principal Amount" means, at any time with respect to any Indexed
Preferred Security, the Redemption Value, the applicable Early Redemption
Value or the stated liquidation preference, as applicable, of such Indexed
Preferred Security, as if determined as of such time pursuant to the terms
of such Indexed Preferred Security.
"Redemption Value," with respect to any Indexed Preferred
Securities of any series or any related Common Securities, shall have the
meaning, if any, set forth in the Written Action of the Company
establishing such series and such Common Securities.
"Related Note Guarantee" shall mean the Related Note Guarantee of
J.P. Morgan for the benefit of the Company with respect to the Related
Notes.
"Tax Matters Partner" means the Managing Member designated as
such in Section 11.1 hereof.
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.
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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, J.P. Morgan and JPM
Ventures 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 J.P. Morgan Index Funding Company, LLC. 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 November 21, 2105, 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 J.P. Morgan & Co.
Incorporated, 902 Market Street, City of Wilmington, County of New Castle,
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 60 Wall Street, New York, New York
10260-0060. 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 Juris dictions. 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
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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 for such Interest).
(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, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as
an entirety to any corporation or other entity, except with the prior
approval of Holders of not less than 66-2/3% of the Principal Amount 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
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laws of any state of the United States of America or the District of
Columbia; provided that (i) such successor entity either (a) expressly
assumes all of the obligations of the Company under the Preferred
Securities or (b) 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 assets of the successor entity consisting
of the relevant Related Note and the proceeds thereof, at least as high as
the Preferred Securities rank with respect to participation in the assets
of the Company consisting of the relevant Related Note and the proceeds
thereof, (ii) Morgan Guaranty expressly acknowledges such successor entity
as the holder of the Note or Notes relating to any outstanding 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 any such 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 other
than, in the case of any such merger with or into a trust, the fact that
the Preferred Securities will represent an interest in the assets of such
trust consisting of the relevant Related Note and the proceeds thereof and
(vi) prior to such merger, consolidation, conveyance, transfer or lease
J.P. Morgan has received an opinion of counsel (which counsel is not an
employee of J.P. Morgan or the Company) to the effect that (I) such merger,
consolidation, conveyance, transfer or lease will not require the Company
or such successor entity to register as an "investment company" under the
Investment Company Act of 1940, as amended, (II) 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, (III) such
successor entity will not be treated as an association taxable as a
corporation for federal income tax purposes and (IV) such merger,
consolidation, conveyance, transfer or lease will not adversely affect the
limited liability of holders of Preferred Securities.
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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 from Common Members to Morgan Guaranty. 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, 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 0.001% 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 as are
required by 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. Allocations of Profits and Losses. The profits of
the Company for any month from each Related Note shall be allocated among
the related series of Preferred Securities and the related Common
Securities in proportion to the distributions payable to such Preferred
Securities and Common Securities, respectively. The profits so allocable to
a particular series of Preferred Securities or the related Common
Securities shall be allocated to those persons who hold the Preferred
Securities or the related
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Common Securities on the record date for payment of dividends for that
month. All losses of the Company for any month from each Related Note shall
be allocated among the related series of Preferred Securities and the
related Common Securities in a manner that reflects the persons bearing the
economic burden of such loss. Such allocations may be adjusted by the
Managing Members as appropriate to cause the taxable income allocated to
any such series to conform to the distributions on such series, if required
because the use of this monthly convention is prohibited by applicable laws
or if otherwise necessary or appropriate to cause the allocations to
reflect the economic substance of the Preferred Securities.
Section 4.5. 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
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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, the making of loans to Morgan
Guaranty);
(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 J. P. Morgan, Morgan
Guaranty or any Affiliate of either;
(f) determine and make distributions (whether denominated as
"dividends" or otherwise), 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 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
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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) in its capacity
as employee or agent 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, including any Affiliate of the
Company;
(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 in 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 Company
or 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, 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
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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 Voting Rights. Subject to the
terms and conditions set forth in ex.1(b) of this Agreement, the
Preferred Members shall have the right, upon the occurrence of certain
circumstances, to vote to cause the Company to take certain actions.
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.
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Section 6.7. Actions by Managing Members. Not withstanding 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 by 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
issuance 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 issuance of one or more series of
Preferred Securities, and with respect to each such series to establish by
a written action or actions (each, a "written action") providing for the
issuance of such series:
(i) the maximum number of Preferred Securities to constitute such
series, the aggregate initial principal amount, the Face Amount (if
any) 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 or other distribution rate (or method
of calculation thereof), if any, on the Preferred Securities of such
series and any related Common Securities, the conditions and dates
upon which such dividends or other distributions shall be payable and
the ability of the Company, if any, to extend the dividend or other
distribution payment period for the Preferred Securities of such
series and any related Common Securities, the dates from which such
dividends or other distributions shall accrue, the preference or
relation which such dividends or other distributions have with respect
to dividends or other distributions payable on any other class or
classes of Interests or on any other series of Preferred Securities
and any
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related Common Securities, and whether such dividends or other
distributions shall be cumulative or noncumulative;
(iv) whether the Preferred Securities of such series and any
related Common Securities shall be subject to redemption by the
holders thereof or 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, or the method of calculation thereof);
(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 and
any related Common Securities 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 and
any related Common Securities for retirement and the terms and
provisions relative to the operation thereof;
(vii) whether or not the Preferred Securities of such series and
any related Common Securities 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 a 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 and any related Common Securities are outstanding upon
the payment of periodic dividends or other distributions on, and upon
the purchase, redemption or other acquisition by the Company of, other
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 and any
related Common Securities or Interests of any other series ranking on
<PAGE>
a parity with or prior to the Preferred Securities of such series and
any related Common Securities 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 and any related Common
Securities;
(xi) the preferential allocation of profits or losses, if any;
(xii) the Principal Amount (or the method of calculation thereof)
of such Preferred Securities and any related Common Securities to be
paid upon Stated Maturity (if any) thereof; and
(xiii) any other relative rights, powers and duties as shall not
be inconsistent with this Section 7.1.
Except as set forth in paragraph 7.1(c) below, the payment terms
of any series of Preferred Securities will be identical to the payment
terms of the related Common Securities. The related Common Securities will
be issued in a face amount such that the face amount of such related Common
Securities represents 0.001% of the sum of (x) the face amount of the
Preferred Securities of such series and (y) the face amount of such related
Common Securities. 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 and to issue
related Common Securities. 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
issuance from time to time of Preferred Securities and any related Common
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.
<PAGE>
(c) The Preferred Securities of any series shall rank pari passu
with the related Common Securities of such series in respect of the right
to receive dividends or other distributions and in respect of the right to
receive payments out of the assets of the Company upon voluntary or
involuntary dissolution and winding up of the Company unless an Event of
Default under the Note relating to such Securities shall have occurred and
be continuing, in which case the Preferred Securities shall have priority
over the Common Securities in respect of the right to receive dividends or
other distributions or payments. All Preferred Securities redeemed,
purchased or otherwise acquired by the Company (including Preferred
Securities surrendered for conversion or exchange) shall be canceled and
thereupon restored to the status of authorized but unissued Preferred
Securities undesignated as to series.
(d) No holder of Common Securities or of Preferred Securities
shall be entitled as a matter of right to subscribe for or purchase, or
have any preemptive right with respect to, any part of any new or
additional issue of Preferred Securities of any series whatsoever or any
related Common Securities, 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. 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 or other distributions 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.
<PAGE>
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 or other
distributions in full on the Preferred Securities of any series for 30 days
following the date on which such payment was due in accordance with the
terms of such Preferred Securities; or (ii) an Event of Default (as defined
in any Note) occurs and is continuing with respect to such Note, then the
Members holding a majority in Principal Amount of the outstanding Preferred
Securities of such series, together with Members holding any other
Interests having the right to vote in such event (other than any Common
Member, in its capacity as such), acting as a single class, will be
entitled to cause the Company (A) to enforce the Company's rights under the
applicable Note or Notes against Morgan Guaranty, (B) in the case of clause
(i) above, declare and pay dividends or other distributions on the
Preferred Securities of such series and (C) in the case of clause (ii)
above, to enforce the Company's rights under the Related Note Guarantee
with respect to the Preferred Securities of such series. For purposes of
determining whether the Company has failed to pay dividends in full within
30 days of the applicable payment date, dividends or other distributions
shall be deemed to remain in arrears, notwithstanding any payments in
respect thereof, until full cumulative dividends or other distributions
have been or contemporaneously are declared and paid with respect to all
dividend or other distribution periods terminating on or prior to the date
of payment of such full cumulative dividends or other distributions. Not
later than 30 days after the right to vote arises, the Managing Members
will solicit such vote. If the Managing Members fail to solicit such vote
within such 30-day period, the Members holding 10% in Principal Amount of
the outstanding Preferred Securities of the series with respect to which
dividends or other distributions have not been paid and such other
Interests that are entitled to vote, acting as a single class, will be
entitled to convene such meeting. Any such voting rights shall cease
immediately, subject to the applicable terms of any Interests the holders
of which were entitled to such
<PAGE>
voting rights, if, in the case of clause (i) above, the Company shall have
paid in full all accumulated and unpaid dividends or other distributions on
the Preferred Securities of the series with respect to which dividends or
other distributions have not been paid or if, in the case of clause (ii)
above, such default of Morgan Guaranty shall have been cured.
(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, in the case of any resolution or action described in clause (i)
above, the Members holding outstanding Preferred Securities of the series
the powers, preferences or special rights of which are proposed to be
amended and, in the case of any resolution or action described in clause
(ii) or (iii) above, the Members holding any outstanding Preferred
Securities or any Common Securities 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
Principal Amount 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.l(b)(iii), (iv), (v), (vi),
(vii), (viii), (xi) or (xii) or Section 15.5 in a manner adverse to such
Preferred Member, (2) reduce the above-stated percentage of Principal
Amount 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
<PAGE>
events specified in Section 15.2(a) through (c) or (e) through (f). The
powers, preferences or special rights of the Securities of any series will
be deemed not to be varied by the creation or issuance of, and no vote will
be required for the creation or issuance of, any Securities of any other
series.
(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.
(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 J.P. Morgan or any entity owned more than fifty percent
by J.P. Morgan, 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) Meet ings 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:
(i) 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.
(ii) 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
<PAGE>
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.
(iii) Each meeting of Members shall be conducted by the Managing
Members or by such other Person that the Managing Members may
designate.
(b) 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(c)(i) or (ii) 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.
(c) Subject to Section 8.3(b), 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 AND OTHER DISTRIBUTIONS
Section 9.1. Dividends or Other Distributions. (a) Preferred
Members and Common Members shall receive periodic dividends or other
distributions, if any, in accordance with the applicable terms of the
Preferred Securities and the related Common Securities, as applicable, as
and when declared by the Managing Members in accordance with the Written
Action establishing any Series of Preferred Securities and related Common
Securities, in their discretion, out of funds legally available therefor.
<PAGE>
(b) Dividends or other distributions on the Preferred Securities
and the related Common Securities shall be declared by the Managing Members
to the extent that the Managing Members reasonably anticipate that as of
the time of payment the Company will have, and such dividends or other
distributions must be paid by the Company to the extent that at the time of
proposed payment it has, (i) funds received from Morgan Guaranty in respect
of the related Note which are legally available for the payment of such
dividends or other distributions and (ii) cash on hand sufficient to permit
such payments.
(c) A Preferred Member and a Common Member shall not be entitled
to receive any dividend or other distribution with respect to the Preferred
Securities of any series and the related Common Securities, as applicable,
irrespective of whether such dividend or other distribution has been
declared by the Managing Members, prior to the date on which such dividend
or other distribution is payable and until such time as the Company has
received the interest payment on the related Note for the interest payment
date corresponding to such dividend or other distribution payment date and
such monies are available for distribution to the Preferred Member and the
Common 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 and a Common 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.
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.
<PAGE>
Section 10.2. 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 10.3. 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. Tax Positions. The Company intends to take the
position for Federal income tax reporting purposes that it is a "grantor
trust" for Federal income tax purposes. If the Company is determined not to
be a grantor trust (or if counsel provides a written opinion to the Company
that such a reporting position is unreasonable), the Company shall take the
position that it is a partnership for Federal income tax purposes. Except
as expressly required by this Agreement, the Company shall take no action
inconsistent with such positions. Holders of Preferred Securities, by
acquiring Preferred Securities, agree to take tax reporting positions
consistent with the Company's tax reporting position.
Section 11.2. 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 will cause the Company to make the
election under section 761(a) of the Code to be excluded from the
application of Subchapter K of the Code. The Managing Members may, in their
discretion, make or refrain from making any other 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) If the Company is determined to be a partnership for Federal
income tax purposes, J.P. Morgan 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. J.P.
Morgan is specifically directed and authorized
<PAGE>
to take whatever steps J.P. Morgan, 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 by the Code or any regulations issued
thereunder. Expenses incurred by the Tax Matters Partner, in its capacity
as such, will be borne by the Company.
Section 11.3. Tax Reports. The Managing Members shall, as
promptly as practicable and in any event on a timely basis, cause to be
prepared and mailed to each Preferred Member of record federal income tax
reporting forms which are necessary or, in the discretion of the Managing
Members, advisable.
ARTICLE XII
EXPENSES
Section 12.1. Expenses. Except as otherwise provided in this
Agreement or any Written Action of the Managing Members, the Company shall
be responsible for all expenses of the Company, and shall pay all such
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 any Managing
Member in connection with any litigation brought by or on behalf of
any Member against such Managing Member);
(c) all expenses for indemnity or contribution payable by the
Company to any Person (including any Managing Member);
<PAGE>
(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 Members. (a) Except as otherwise
provided by the Delaware Act, 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, no Common Member
and no Preferred Member shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Common
Member or a Preferred Member, as applicable, of the Company.
(b) A Preferred Member or a Common 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. Notwith standing 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.
<PAGE>
Section 14.3. Events of Cessation of Membership. A Person (other
than a Managing Member, in its capacity as such) 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
<PAGE>
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 redemption of all series of Preferred Securities outstanding (in
accordance with the terms of the written action establishing each such
series of Preferred Securities); 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 (i) the dissolution is caused by an
event described in Section 15.2(b) or (c) and (ii) there are no Managing
Members, a Person or Persons who may be approved by the Preferred Members
holding not less than a majority in Principal Amount 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
<PAGE>
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,
Members holding Preferred Securities of any series outstanding at such time
and Members holding related Common Securities will be entitled to receive
out of the assets of the Company legally available for distribution to
Members, on a pro rata basis, all amounts available for distribution (the
"Liquidation Distribution"); provided, that if an Event of Default under
the Note relating to such series of Securities shall have occurred and be
continuing, Members holding Preferred Securities of such series shall have
priority over Members holding related Common Securities of such series with
respect to any such Liquidation Distribution.
Section 15.6. Termination. The Company shall terminate when all
of the assets of the Company have been distributed in the manner provided
for in this Article XV, and the Certificate shall have been canceled in the
manner required by the Delaware Act.
ARTICLE XVI
MISCELLANEOUS
Section 16.1. Amendments. Except as otherwise provided in this
Agreement or by any applicable terms of any Preferred Securities, this
Agreement may only be amended by a written instrument executed by the
Managing Members including, without limitation, any amendment to (i) cure
any ambiguity, (ii) correct or supplement any provision in this Agreement
that may be inconsistent with any other provision of this Agreement, (iii)
add to the covenants, restrictions or obligations of J.P. Morgan (iv)
conform to changes in, or a change in interpretation or application of,
certain requirements of the 1940 Act by the Commission and (v) conform to
certain requirements of the Code with respect to the characterization of
the Company as a grantor trust or partnership for U.S. Federal income tax
purposes, so long as such amendment does not adversely affect the rights,
preferences or privileges of the holders Preferred Securities.
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
<PAGE>
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
<PAGE>
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 or 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. (a) 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.
(b) 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
<PAGE>
of the Company's 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 J.P. Morgan & Co. Incorporated
60 Wall Street New York, NY 10260-0060
Facsimile No.: (212) 648-2157 Attention:
Commodities Desk
(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
<PAGE>
(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.
J.P. MORGAN & CO.
INCORPORATED,
by: /s/ Gene A. Capello
--------------------------
Name: Gene A. Capello
Title: Vice President and
Assistant General Counsel
J.P. MORGAN VENTURES
CORPORATION,
by: /s/ Brian Watson
---------------------------
Name: Brian Watson
Title: Executive Director
<PAGE>
EXHIBIT [ ]
Terms of the Preferred Securities, Series [ ]
DATED AS OF , 199[ ]
WRITTEN ACTION OF THE MANAGING MEMBERS
PURSUANT TO SECTION 7.1 OF THE
LIMITED LIABILITY COMPANY AGREEMENT
OF J.P. MORGAN INDEX FUNDING COMPANY, LLC
The undersigned, constituting all of the Managing Members of J.P
Morgan Index Funding Company, LLC, a Delaware limited liability company
(the "Company"), pursuant to Section 7.1 of the Limited Liability Company
Agreement of the Company (the "Agreement") dated as of September 10, 1997,
by and among the Managing Members and the Persons who become Members of the
Company in accordance with the provisions thereof, do hereby authorize the
issuance of, and establish the relative rights, powers, preferences,
limitations and restrictions of, a series of Preferred Securities as
follows:
1. Definitions. All capitalized terms used but not defined herein
shall have the meanings assigned to them in the Agreement. The following
additional terms have the respective meanings specified below:
"Business Day" means any day other than a day on which banking
institutions in The City of New York are permitted or required by
applicable law to close.
"Expense Agreement" means the Agreement as to Expenses and
Liabilities dated as of , 1997 between J.P. Morgan & Co. Incorporated, a
Delaware corporation ("J.P. Morgan"), and the Company, as amended from time
to time.
"Guarantee" means the Guarantee Agreement dated as of , 1997,
executed and delivered by J.P. Morgan for the benefit of the holders from
time to time of the Preferred Securities of the Company, as amended from
time to time.
"Principal Amount" means [method for calculation] [stated
liquidation preference].
"Redemption Price" means, with respect to any date fixed for
redemption (whether pursuant to optional redemption by the holders thereof
or otherwise) of any Series [ ] Preferred Security or related Common
Security, the Principal Amount of such Series [ ] Preferred Security
<PAGE>
or related Common Security, plus accumulated and unpaid dividends (whether
or not declared) to such date.
"Series [ ] Note" means the $ initial principal amount (or up to
initial principal amount if and to the extent the over-allotment option
granted by the Company to the Underwriters of the Series [ ] Preferred
Securities is exercised) Series [ ] Note due [ ] of Morgan Guaranty and any
other Notes issued in exchange for Morgan Guaranty's [ ] Series [ ] Note
due [ ] upon the terms and subject to the conditions set forth in Section
6(e) hereof.
2. Designation. of a series of Preferred Securities (or up to of
a series of Preferred Securities if and to the extent the over-allotment
option granted by the Company to the underwriters of the Series [ ]
Preferred Securities is exercised) with a Face Amount of $[ ] per Preferred
Security are hereby authorized and designated as "Preferred Securities,
Series[ ]" (hereinafter called the "Series [ ] Preferred Securities").
3. Voting. Except as otherwise provided in the Delaware Limited
Liability Company Act, 6 Del. C. Section 18-101, et seq., as amended, the
Agreement (including, without limitation, Section 8.1 thereof) or this
Written Action, Preferred Members holding the Series [ ] Preferred
Securities shall have, with respect to such Series [ ] Preferred
Securities, no right or power to vote on any question or matter or in any
proceeding or to be represented at, or to receive notice of, any meeting of
Members.
4. Periodic Dividends. (a) Periodic Dividends on the Series [ ]
Preferred Securities shall be cumulative. Such Dividends will accumulate
and be cumulative whether or not they have been declared and whether or not
there are profits, surplus or other funds of the Company legally available
for the payment of dividends. Dividends shall accrue from , 199[ ] and
shall be payable [monthly] in arrears on the last day of [each calendar
month] of each year, commencing on , 199[ ].
(b) The dividend payable on the Series [ ] Preferred Securities
shall be [describe method of determination thereof] [at a rate of %] of the
Face Amount [Principal Amount] of the Series [ ] Preferred Securities. The
amount of dividends payable for any full [monthly] dividend period shall be
computed on the basis of twelve 30-day months and a 360-day year and, for
any period shorter than a full [monthly] dividend period, shall be computed
on the basis of the actual number of days elapsed
<PAGE>
in such period. The Company shall only pay dividends to the extent it has
funds legally available to make such payments.
(c) Dividends declared on the Series [ ] Preferred Securities
shall be payable to the record holders thereof as they appear on the
register for the Series [ ] Preferred Securities maintained by or on behalf
of the Company on the relevant record date, which shall be one Business Day
prior to the relevant payment date; provided that in the event that the
Series [ ] Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be [the fifteenth day of the month in which the
relevant payment date occurs]. If any date on which dividends are payable
on the Series [ ] Preferred Securities is not a Business Day, then the
payment of the dividend payable on such date shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(d) Except as described in the Agreement and in this Written
Action, the Series [ ] Preferred Securities shall have no other right to
participate in the profits of the Company.
5. Ranking; Liquidation. (a) The Series [ ] Preferred Securities
shall, with respect to dividend rights and rights on dissolution, rank pari
passu with the related Common Securities, unless an Event of Default under
the Series [ ] Note shall have occurred and be continuing, in which case
the right to receive dividends and rights on dissolution of the Preferred
Members holding Series [ ] Preferred Securities shall be prior to the
rights of Common Members holding the related Common Securities with respect
to such payments.
(b) In the event of any voluntary or involuntary dissolution of
the Company, Preferred Members holding Series [ ] Preferred Securities
shall be entitled to receive for each Series [ ] Preferred Security the
Principal Amount plus accumulated and unpaid dividends (whether or not
declared) to the date of payment.
6. Redemption or Exchange. (a) The Series [ ] Preferred
Securities shall be redeemable at the option of the holders thereof, in
whole or in part [from time to time], on or after , 199[ ], upon [not less
than nor more than ] notice to [DTC] [the Company], at the Redemption
Price.
<PAGE>
(b) If there shall have occurred after , 199[ ], a change in any
applicable U.S. law or regulation or in the interpretation thereof
(including but not limited to the enactment or imminent enactment of any
legislation, the publication of any judicial decisions, regulatory rulings,
regulatory procedures, or notices or announcements (including notices or
announcements of intent to adopt such procedures or regulations), or a
change in the official position or in the interpretation of any law,
exemption or regulation by any legislative body, court, governmental
authority or regulatory body, irrespective of the manner in which such
change is made known) (any such change relating to taxes, a "Tax Event"
and, any such change relating to the Investment Company Act of 1940, as
amended, an "Investment Company Event", and together with a Tax Event, a
"Special Event"), and the Company and J.P. Morgan shall have been advised
by legal counsel (which counsel shall not be an employee of J.P. Morgan or
the Company) that, as a result of such change, there exists more than an
insubstantial risk that, in the case of a Tax Event, (i) Morgan Guaranty
will be precluded from deducting the interest paid on the Series [ ] Note
for federal income tax purposes, (ii) the Company will be subject to
federal income tax with respect to the interest received on the Series [ ]
Note, (iii) the contingent principal in excess of the face amount, if any,
payable on the Series [ ] Note is not, or would not be, deductible by
Morgan Guaranty for federal income tax purposes or (iv) the Company would
be subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges or, in the case of an Investment
Company Event, the Company is or will be considered an "investment company"
that is required to be registered as such under the Investment Company Act
of 1940, as amended, then within 90 days following the occurrence and
during the continuance of any such Special Event, J.P. Morgan shall have
the right to direct Morgan Guaranty to redeem the Series [ ] Note in whole
or in an amount sufficient to cause the discontinuance of such Special
Event, in either case in cash, or, in the case of a Tax Event, to allow the
Series [ ] Note to remain outstanding and to indemnify the Company for any
taxes payable by the Company as a result of such Tax Event. In the event
that Morgan Guaranty shall redeem the Series [ ] Note, the Company will
redeem at the Redemption Price a principal amount of the Series [ ]
Preferred Securities and the related Common Securities equal to the
principal amount of the Series [ ] Note so redeemed. If a Tax Event shall
have occurred and be continuing and J.P. Morgan shall have elected to allow
the Series [ ] Note to remain outstanding and provided that the Company
shall received indemnification by J.P. Morgan for all taxes payable by the
Company as a result of such Tax Event, then the Company may allow the
Series [ ] Preferred Securities and the related Common Securities to remain
outstanding.
<PAGE>
(c) The Series [ ] Preferred Securities shall be redeemed at the
Redemption Price with the proceeds from the repayment by Morgan Guaranty
when due of the Series [ ] Note or upon any redemption by Morgan Guaranty
of such Series [ ] Note pursuant to the terms thereof.
(d) If the Company or any holder of Series [ ] Preferred
Securities gives a notice of redemption in respect of any Series [ ]
Preferred Securities as provided herein, then, by 12:00 noon, New York
time, on the date fixed for redemption, the Company will, so long as the
Series [ ] Preferred Securities are in book-entry-only form, irrevocably
deposit with the securities depository for the Series [ ] Preferred
Securities funds sufficient to pay the applicable Redemption Price and will
give such depository irrevocable instructions and authority to pay the
Redemption Price to the holders thereof. If the Series [ ] Preferred
Securities are no longer in book-entry-only form, the Company will
irrevocably deposit with the paying agent for the Series [ ] Preferred
Securities funds sufficient to pay the applicable Redemption Price and will
give such paying agent irrevocable instructions and authority to pay the
Redemption Price to the holders thereof upon surrender of their Series [ ]
Preferred Security certificates. Notwithstanding the foregoing, dividends
payable on or prior to the redemption date for any Series [ ] Preferred
Securities called for redemption shall be payable to the holders of such
Series [ ] Preferred Securities on the relevant record dates for the
payments thereof. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
Preferred Members holding Series [ ] Preferred Securities so called for
redemption will cease, except the right of such Preferred Members to
receive the Redemption Price, but without interest, and such securities
will cease to be outstanding. In the event that any date on which any
payment in respect of the redemption of any Series [ ] Preferred Securities
is payable is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day.
In the event that payment of the Redemption Price in respect of any Series
[ ] Preferred Securities called for redemption is improperly withheld or
refused and not paid either by the Company or by J.P. Morgan pursuant to
the Guarantee, dividends on such Series [ ] Preferred Securities will
continue to accrue, at the then applicable rate, from the Redemption Date
originally established by the Company for such Series [ ] Preferred Securities
to the date such Redemption Price is actually paid, in which case the actual
payment will be the date
<PAGE>
fixed for redemption for purposes of calculating the Redemption Price.
(e) Subject to the foregoing and applicable law (including
without limitation, U.S. federal securities laws) J.P. Morgan or its
subsidiaries may at any time and from time to time purchase outstanding
Series [ ] Preferred Securities by tender, in the open market or by private
agreement.
7. Sinking Fund. The Series [ ] Preferred Securities [shall]
[shall not] be subject to the operation of a retirement or sinking fund.
8. Guarantee of Liabilities. It shall be a condition precedent to
the issuance of the Series [ ] Preferred Securities that J.P. Morgan
execute the Guarantee and the Expense Agreement.
9. Book-Entry-Only Issuance. (a) The Depository Trust Company,
New York, New York ("DTC"), will initially act as securities depository for
the Series [ ] Preferred Securities. The Series [ ] Preferred Securities
will be issued only as fully-registered securities registered in the name
of [Cede & Co. (DTC's partnership nominee)].
(b) Redemption notices shall be sent to Cede & Co. If less then
all of the Series [ ] Preferred Securities are being redeemed, such
securities shall be redeemed in accordance with DTC's then-current
practice.
(c) DTC may discontinue providing its services as securities
depository with respect to the Series [ ] Preferred Securities by giving
reasonable notice to the Company as provided in the agreement between the
Company and DTC. Under such circumstances, if a successor securities
depositary is not obtained, the Company at its expense shall cause
certificates for Series [ ] Preferred Securities to be printed and
delivered as promptly as practicable.
(d) In the event that the Series [ ] Preferred Securities do not
remain in book-entry-only form, the following provisions will apply:
(i) registration of transfers of Series [ ] Preferred Securities
will be effected without charge by or on behalf of the Company, but
upon payment (with the giving of such indemnity as the Company or J.P.
Morgan may require) in respect of any tax or other governmental
charges which may be imposed in connection therewith; and
<PAGE>
(ii) the Company will not be required to register or cause to be
registered the transfer of Series [ ] Preferred Securities after such
Preferred Securities have been called for redemption or exchange.
10. Authorization of Agreements. The Company, and either Managing
Member on behalf of the Company, may enter into and perform the Expense
Agreement and the Underwriting Agreement without any further act, vote or
approval of any Member.
11. Registrar and Transfer Agent. The Company hereby appoints [ ]
as its initial registrar, transfer agent and Paying Agent for the Series [
] Preferred Securities.
12. Governing Law. This Written Action shall be governed by and
construed in accordance with the laws of the State of Delaware without
giving effect to the principles of conflict of laws thereof.
IN WITNESS WHEREOF, the undersigned Managing Members of the
Company have hereto set their hands as of the day and year first above
written.
J.P. MORGAN & CO.
INCORPORATED,
By:
------------------------
Name:
Title:
J.P. MORGAN VENTURES
CORPORATION,
By:
------------------------
Name:
Title:
<PAGE>
EXHIBIT [ ]
Certificate Number
Number of Shares
----------- ---------
1 00,000,000
CUSIP NO.
CERTIFICATE EVIDENCING LIMITED LIABILITY COMPANY INTERESTS
PREFERRED SECURITIES, SERIES [ ]
OF
J.P. MORGAN INDEX FUNDING COMPANY, LLC
J.P. Morgan Index Funding Company, LLC, a Delaware limited
liability company (the "Company"), hereby certifies that [Cede & Co.] (the
"Holder") is the registered owner of 0,000,000 preferred limited liability
company interests in the Company of a series designated the [ ]% Preferred
Securities, Series [ ] (the "Securities"). The Securities are fully paid
and nonassessable limited liability company interests in the Company, as to
which the members of the Company who hold the Securities (the "Preferred
Securityholders") in their capacity as members of the Company will have no
liability solely by reason of being Preferred Securityholders in excess of
their share of the Company's assets and undistributed profits (subject to
the obligation of a Preferred Securityholder to repay any funds wrongfully
distributed to it), and are transferable on the books and records of the
Company, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The powers,
preferences and special rights and restrictions of the Securities are set
forth in, and this Certificate and the Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of,
the Limited Liability Company Agreement of the Company, dated as of
September 10, 1997, as the same may be amended from time to time (the "LLC
Agreement") and the written action of the Managing Members of the Company
authorizing the issuance of the Securities and determining the powers,
preferences and special rights and restrictions, regarding dividends,
voting, redemption, exchange, return of capital and otherwise, and other
matters relating to the Securities (the "Securities Terms"), copies of
which LLC Agreement and Securities Terms are on file at the principal
office of the Company. The Company will furnish a copy of such LLC
Agreement and Securities Terms to each Preferred Securityholder without
charge upon written request to the Company at its principal place of
business or registered office, as the case may be. Each Preferred
Securityholder
<PAGE>
is entitled to the benefits of the Guarantee Agreement of J.P. Morgan & Co.
Incorporated ("J.P. Morgan"), dated , 1997 (the "Guarantee") to
the extent provided therein and is entitled to enforce the rights of the
Company under the related Note (the "Note") issued by Morgan Guaranty Trust
Company of New York ("Morgan Guaranty") to the Company to the extent
provided therein. The Company will furnish a copy of such Guarantee to each
Preferred Securityholder without charge upon written request to the Company
at its principal place of business.
Each Preferred Securityholder, by accepting this Certificate, is
deemed to have agreed that each of the Guarantee and the Senior Note
Guarantee Agreement, dated as of [ ], executed and delivered by J.P. Morgan
for the benefit of the Company (the "Senior Note Guarantee"), is
subordinate and junior in right of payment to all liabilities of J.P.
Morgan and pari passu with the most senior preferred or preference stock of
any series now or hereafter issued by J.P. Morgan and pari passu with any
guarantee now or hereafter entered into by J. P. Morgan in respect of any
preferred or preference stock or interest of any affiliate of J.P. Morgan,
as and to the extent provided in the Guarantee or the Senior Note
Guarantee, as applicable.
IN WITNESS WHEREOF, this certificate has been signed on behalf of
the Company by a duly authorized officer of one of its Managing Members and
on behalf of J.P. Morgan, as Guarantor, by a duly authorized officer
thereof.
J.P. MORGAN INDEX FUNDING
COMPANY, LLC
By J.P. MORGAN & CO.
INCORPORATED,
as Managing Member,
By:
-------------------------
By J.P. MORGAN & CO.
INCORPORATED, as
Guarantor
By:
-------------------------
[FORM OF] GUARANTEE AGREEMENT
[FORM OF] GUARANTEE AGREEMENT (the "Guarantee"), dated
as of , 199[ ], executed and delivered by J.P. Morgan & Co.
Incorporated, a Delaware corporation ("J.P. Morgan"), for
the benefit of the Holders (as defined below) from time to
time of the Preferred Securities (as defined below) of J.P.
Morgan Index Funding Company, LLC, a Delaware limited
liability company (the "Company").
WHEREAS, the Company intends to issue its common limited
liability company interests (the "Common Securities") to and receive
related capital contributions from J.P. Morgan and J.P. Morgan Ventures
Corporation ("JPM Ventures"), and to issue and sell from time to time, in
one or more series, preferred limited liability company interests (any such
interests issued prior to the merger or consolidation of the Company with
any other entity, the "Preferred Securities") with such rights,
preferences, privileges, limitations and restrictions as are set forth in a
written resolution or resolutions (a "Written Action") by the Managing
Members (as defined below) providing for the issue of such series;
WHEREAS, the Company will purchase Related Notes (as defined
below) from Morgan Guaranty Trust Company of New York, a trust company with
full banking powers organized under the laws of the State of New York
("Morgan Guaranty") with the proceeds from the issuance and sale of each
series of Preferred Securities and, at the option of the Company, related
Common Securities; and
WHEREAS, J.P. Morgan desires hereby to irrevocably and
unconditionally agree to the extent set forth herein to pay to the Holders
the Guarantee Payments (as defined below) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder
of the Preferred Securities, which purchase J.P. Morgan hereby agrees shall
benefit J.P. Morgan and which purchase J.P. Morgan acknowledges will be
made in reliance upon the execution and delivery of this guarantee, J.P.
Morgan executes and delivers this Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
As used in this Guarantee, the terms set forth below shall have
the following meanings:
"Guarantee Payments" shall mean, with respect to any series of
Preferred Securities, the following payments, without duplication, to the
extent not paid by the Company: (i) any accumulated and unpaid
distributions which have been theretofore declared on the Preferred
Securities of such series, to the extent Morgan Guaranty has made a
corresponding payment on the relevant Related Note, out of funds legally
available therefor, (ii) the Preferred Redemption Price (including all
accumulated and unpaid distributions), to the extent Morgan Guaranty has
made a corresponding payment on the relevant Related Note, payable out of
funds legally available therefor with respect to any Preferred Securities
of such series called for redemption upon redemption thereof and (iii) upon
the liquidation of the Company, the lesser of (a) the Liquidation
Distribution (as defined below) with respect to such series and (b) the
amount of assets of the Company legally available for distribution to
Holders of Preferred Securities of such series in liquidation.
"Holder" shall mean any member of the Company from time to time
holding any Preferred Securities of any series in such capacity; 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 J.P. Morgan or any entity
owned 50% or more by J.P. Morgan, either directly or indirectly.
"Liquidation Distribution" shall mean, with respect to any series
of Preferred Securities, the aggregate Principal Amount of such series of
Preferred Securities and all accumulated and unpaid distributions (whether
or not declared) with respect to such series to but excluding the date of
payment.
"LLC Agreement" shall mean the Company's Amended and Restated
Limited Liability Company Agreement dated as of September 10, 1997, as
amended from time to time.
"Managing Members" shall mean J.P. Morgan and JPM Ventures, in
their capacity as the members of the Company that hold all of the Company's
outstanding Common Securities.
<PAGE>
"Preferred Redemption Price" shall mean, with respect to any
series of Preferred Securities, the aggregate Principal Amount of all
Preferred Securities of such series plus accumulated and unpaid
distributions (whether or not declared) with respect to such series to but
excluding the date of redemption.
"Principal Amount" shall mean, at any time with respect to any
Preferred Security of any series, the Redemption Value, the applicable
Early Redemption Value or the stated liquidation preference thereof, as
applicable, as determined in accordance with the Written Action creating
such series of Preferred Securities.
"Related Note" shall mean any obligation or obligations of Morgan
Guaranty in which the proceeds from the issuance of any series of Preferred
Securities and, at the option of the Company, related Common Securities are
invested.
ARTICLE II
SECTION 2.01. J.P. Morgan irrevocably and unconditionally agrees,
to the extent set forth herein, to pay in full to the Holders of each
series of Preferred Securities the Guarantee Payments with respect to such
series of Preferred Securities, as and when due (except to the extent paid
by the Company), regardless of any defense, right of set-off or
counterclaim which the Company may have or assert. This Guarantee is
continuing, irrevocable, unconditional and absolute.
SECTION 2.02. J.P. Morgan hereby waives notice of acceptance of
this Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 2.03. The obligations, covenants, agreements and duties
of J.P. Morgan under this Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Company of any express or implied
agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Company;
<PAGE>
(b) the extension of time for the payment by the Company of all
or any portion of the distributions, Preferred Redemption Price,
liquidation distributions 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 Company
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 Company or any of the assets of the Company;
(e) any invalidity of, or defect or deficiency in, any of the
Preferred Securities; or
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, J.P. Morgan with respect to the happening of any of the
foregoing.
SECTION 2.04. This is a guarantee of payment and not of
collection. A Holder may enforce this Guarantee directly against J.P.
Morgan, and J.P. Morgan waives any right or remedy to require that any
action be brought against the Company or any other person or entity before
proceeding against J.P. Morgan. Subject to Section 2.05 hereof, all waivers
herein contained shall be without prejudice to the Holders' right at the
Holders' option to proceed against the Company, whether by separate action
or by joinder.
SECTION 2.05. J.P. Morgan shall be subrogated to all (if any)
rights of the Holders against the Company in respect of any amounts paid to
the Holders by J.P. Morgan under this Guarantee and the Company shall not
be required to make payment to the Company of any amount of Guarantee
Payments in respect of which payment has theretofore been
<PAGE>
made by J.P. Morgan pursuant to Section 2.01 hereof; provided, however,
that J.P. Morgan shall not (except to the extent required by mandatory
provisions of law) exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of a payment under this Guarantee, if, at the time of any
such payment, any amounts are due and unpaid under this Guarantee. If any
amount shall be paid to J.P. Morgan in violation of the preceding sentence,
J.P. Morgan agrees to pay over such amount to the Holders for application
to the Guarantee Payments then due hereunder, if any, or to offset payments
due to the Holders by the Company.
SECTION 2.06. J.P. Morgan acknowledges that its obligations
hereunder are independent of the obligations of the Company with respect to
the Preferred Securities and that J.P. Morgan shall be liable as principal
and sole debtor hereunder to make Guarantee Payments pursuant to the terms
of this Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (f), inclusive, of Section 2.03 hereof.
ARTICLE III
SECTION 3.01. So long as any Preferred Securities of any series
remain outstanding, except in connection with a merger of the Company into
a trust sponsored by J.P. Morgan or Morgan Guaranty, J.P. Morgan shall: (i)
not cause or permit any Common Securities to be transferred; (ii) maintain
direct or indirect 100% ownership of all outstanding securities of the
Company other than the Preferred Securities of any series; (iii) not
voluntarily dissolve, wind up, liquidate or terminate the Company or either
of the Managing Members; (iv) cause J.P. Morgan and JPM Ventures to remain
the Managing Members of the Company and timely perform all of their
respective duties as Managing Members (including the duty to declare and
pay dividends on the Preferred Securities); (v) not incur or permit to
exist any indebtedness of the Company; and (vi) not take any actions
inconsistent with the treatment of the Company as a partnership for United
States Federal income tax purposes. So long as any Preferred Securities
remain outstanding, J.P. Morgan will not declare or pay dividends on, or
redeem, purchase, acquire or make a distribution or liquidation payment
with respect to, any of its common stock or preferred stock or make any
Guarantee Payment with respect thereto if at such time J.P. Morgan shall be
in default with respect to its Guarantee Payments or other payment
obligations hereunder; provided, however,
<PAGE>
that the foregoing restrictions shall not apply to (a) dividends,
redemptions, purchases, acquisitions, distributions or payments made by
J.P. Morgan by way of issuance of shares of its capital stock, (b) payments
of accrued dividends by J.P. Morgan upon the redemption, exchange or
conversion of any preferred stock of J.P. Morgan as may be outstanding from
time to time in accordance with the terms of such preferred stock, (c) cash
payments made by J.P. Morgan in lieu of delivering fractional shares upon
the redemption, exchange or conversion of any preferred stock of J.P.
Morgan as may be outstanding from time to time in accordance with the terms
of such preferred stock, (d) repurchases, redemptions or other acquisitions
of shares of capital stock of J.P. Morgan in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit
of employees, officers, directors of consultants, or (e) any declaration of
a dividend in connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of such rights pursuant thereto.
SECTION 3.02. The Guarantee will constitute an unsecured
obligation of J.P. Morgan and will rank (i) subordinate and junior in right
of payment to all other liabilities of J.P. Morgan, (ii) pari passu with
the most senior preferred stock outstanding as of the date hereof of J.P.
Morgan and (iii) senior to J.P. Morgan's common stock. J.P. Morgan's
obligations under this Guarantee 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 form hereof and provided for comparable guarantees by
J.P. Morgan of payment on other preferred securities issued by the Company
or any trust sponsored by J.P. Morgan.
ARTICLE IV
This Guarantee shall terminate and be of no further force and
effect as to any series of Preferred Securities upon full payment of the
Preferred Redemption Price of such series, and shall terminate completely
upon full payment of the amounts payable to Holders upon liquidation of the
Company; provided, however, that this Guarantee shall continue to be
effective or shall be reinstated, as the case may be, if at any time any
Holder must restore payment of any sums paid under the Preferred Securities
of such series or under this Guarantee for any
<PAGE>
reason whatsoever. J.P. Morgan agrees to indemnify each Holder and hold it
harmless against any loss it may suffer in such circumstances.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained in this
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of J.P. Morgan and shall inure to the benefit of the
Holders. J.P. Morgan shall not assign its obligations hereunder without the
prior approval of Holders of not less than a majority in Principal Amount
of all Preferred Securities of all series then outstanding voting as a
single class.
SECTION 5.02. Except with respect to any changes or waivers (a)
which do not adversely affect the rights of Holders including any changes
necessary in connection with the merger or consolidation of the Company
into a trust sponsored by J.P. Morgan or Morgan Guaranty or (b) necessary
in order to subject this Guarantee to the Trust Indenture Act of 1939, as
amended, including to appoint an indenture trustee hereunder (in which
cases no vote will be required), this Guarantee may only be amended or
waived by instrument in writing signed by J.P. Morgan with the prior
approval of the Holders of not less than a majority in Principal Amount of
all Preferred Securities of each affected series then outstanding, voting
as a single class. Such approval shall be obtained in the manner set forth
in Article VIII of the LLC Agreement.
SECTION 5.03. Any notice, request or other communication required
or permitted to be given hereunder to J.P. Morgan shall be given in writing
by mail or by facsimile transmission (followed by mail), addressed to J.P.
Morgan, as follows:
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, NY 10260-0060
Facsimile No.: (212) 648-5175
Attention: Assistant Secretary
Any notice, request or other communication required or permitted
to be given hereunder to the Holders shall be given by J.P. Morgan in the
same manner as notices sent by the Company to the Holders.
<PAGE>
8 SECTION 5.04. This Guarantee is solely for the benefit of the
Holders and is not separately transferable from the Preferred Securities.
SECTION 5.05. THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, this Guarantee is executed as of the day and
year first above written.
J.P. MORGAN & CO.
INCORPORATED,
By
----------------------------
Name:
Title:
[FORM OF] RELATED NOTE GUARANTEE AGREEMENT
[FORM OF] RELATED NOTE GUARANTEE AGREEMENT (the
"Related Note Guarantee"), dated as of , 199[ ], executed
and delivered by J.P. Morgan & Co. Incorporated, a Delaware
corporation ("J.P. Morgan"), for the benefit of the J.P.
Morgan Index Funding Company, LLC, a Delaware limited
liability company (the "Company"), as the holder from time
to time of the Related Notes (as defined below).
WHEREAS, the Company intends to issue its common limited
liability company interests (the "Common Securities") to and receive
related capital contributions from J.P. Morgan and J.P. Morgan Ventures
Corporation ("JPM Ventures"), and to issue and sell from time to time, in
one or more series, preferred limited liability company interests (any such
securities issued prior to the merger or consolidation of the Company with
any other entity, the "Preferred Securities") with such rights,
preferences, privileges, limitations and restrictions as are set forth in a
written resolution or resolutions (each, a "Written Action") by the
Managing Members (as defined below) providing for the issuance of such
series;
WHEREAS, the Company will purchase from Morgan Guaranty Trust
Company of New York, a trust company with full banking powers organized
under the laws of the State of New York and a wholly-owned subsidiary of
J.P. Morgan ("Morgan Guaranty"), one or more related notes (the "Related
Notes") with the proceeds from the issuance and sale of each series of
Preferred Securities and, at the option of the Company, related Common
Securities, the distribution and principal repayment terms of which Related
Note shall mirror the related series of Preferred Securities; and
WHEREAS, J.P. Morgan desires hereby to irrevocably and
unconditionally agree to the extent set forth herein to pay to the Company
the Related Note Guarantee Payments (as defined below) and to make certain
other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by the Company
of the Related Notes, which purchase J.P. Morgan hereby agrees shall
benefit J.P. Morgan and which purchase J.P. Morgan acknowledges will be
made in reliance
<PAGE>
upon the execution and delivery of this Related Note Guarantee, J.P. Morgan
executes and delivers this Related Note Guarantee for the benefit of the
Company.
ARTICLE I
As used in this Related Note Guarantee, the terms set forth below
shall have the following meanings:
"Related Note Guarantee Payments" shall mean, with respect to any
Related Note, the following payments, without duplication, to the extent
not paid by Morgan Guaranty: (i) any accrued and unpaid interest on such
Related Note and (ii) the Related Note Redemption Price (including all
accrued and unpaid interest) payable with respect to such Related Note to
be redeemed, in whole or in part, upon redemption thereof.
"LLC Agreement" shall mean the Company's Limited Liability
Company Agreement dated as of September 10, 1997, and effective as of
November 21, 1995, as amended from time to time.
"Managing Members" shall mean J.P. Morgan and JPM Ventures, in
their capacity as the members of the Company that hold all of the Company's
outstanding Common Securities.
"Principal Amount" shall mean, at any time with respect to any
Preferred Security of any series and, if applicable, the related Common
Securities, the Redemption Value, the applicable Early Redemption Value or
stated liquidation preference thereof, as applicable, determined in
accordance with the Written Action creating such series of Preferred
Securities.
"Related Note Redemption Price" shall mean, with respect to any
Related Note at any time, an amount equal to the aggregate Principal Amount
of all Preferred Securities of the related series and, if applicable,
related Common Securities to be redeemed at such time, plus accrued and
unpaid interest with respect to such Related Note to but excluding the date
of redemption.
<PAGE>
ARTICLE II
SECTION 2.01. J.P. Morgan irrevocably and unconditionally agrees,
to the extent set forth herein, to pay in full, to the Company the Related
Note Guarantee Payments with respect to each Related Note, as and when due
(except to the extent paid by the Morgan Guaranty), regardless of any
defense, right of set-off or counterclaim which the Morgan Guaranty may
have or assert. This Related Note Guarantee is continuing, irrevocable,
unconditional and absolute.
SECTION 2.02. J.P. Morgan hereby waives notice of acceptance of
this Related Note Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
SECTION 2.03. The obligations, covenants, agreements and duties
of J.P. Morgan under this Related Note Guarantee shall in no way be
affected or impaired by reason of the happening from time to time of any of
the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by Morgan Guaranty of any express or
implied agreement, covenant, term or condition relating to the Related
Notes to be performed or observed by Morgan Guaranty;
(b) the extension of time for the payment by Morgan Guaranty of
all or any portion of the interest payments, the Related Note
Redemption Price or any other sums payable under the terms of the
Related Notes or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the
Related Notes;
(c) any failure, omission, delay or lack of diligence on the part
of the Company to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Company pursuant to the terms of the
Related Notes, or any action on the part of Morgan Guaranty granting
indulgence or extension of any kind;
<PAGE>
(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,
Morgan Guaranty or any of the assets of Morgan Guaranty;
(e) any invalidity of, or defect or deficiency in, any of the
Related Notes; or
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred.
There shall be no obligation of the Company to give notice to, or obtain
consent of, J.P. Morgan with respect to the happening of any of the
foregoing.
SECTION 2.04. This is a guarantee of payment and not of
collection. The Company may enforce this Guarantee directly against J.P.
Morgan, and J.P. Morgan waives any right or remedy to require that any
action be brought against Morgan Guaranty or any other person or entity
before proceeding against J.P. Morgan. Subject to Section 2.05 hereof, all
waivers herein contained shall be without prejudice to the Company's right
at the Company's option to proceed against Morgan Guaranty, whether by
separate action or by joinder.
SECTION 2.05 J.P. Morgan shall be subrogated to all (if any)
rights of the Company against Morgan Guaranty in respect of any amounts
paid to the Company by J.P. Morgan under this Related Note Guarantee and
Morgan Guaranty shall not be required to make payment to the Company of any
amount of Related Note Guarantee Payments in respect of which payment has
theretofore been made by J.P. Morgan pursuant to Section 2.01 hereof;
provided, however, that J.P. Morgan shall not (except to the extent
required by mandatory provisions of law) exercise any rights which it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of a payment under this Related Note
Guarantee, if, at the time of any such payment, any amounts are due and
unpaid under this Related Note Guarantee. If any amount shall be paid to
J.P. Morgan in violation of the preceding sentence, J.P. Morgan agrees to
pay over such amount to the Company for application to
<PAGE>
the Related Note Guarantee Payments then due hereunder, if any, or to
amounts due the Company from Morgan Guarantee under the relevant Related
Note.
SECTION 2.06. J.P. Morgan acknowledges that its obligations
hereunder are independent of the obligations of Morgan Guaranty with
respect to the Related Notes and that J.P. Morgan shall be liable as
principal and sole debtor hereunder to make Related Note Guarantee Payments
pursuant to the terms of this Related Note Guarantee notwithstanding the
occurrence of any event referred to in subsections (a) through (f),
inclusive, of Section 2.03 hereof.
ARTICLE III
The Related Note Guarantee will constitute an unsecured
obligation of J.P. Morgan and will rank (i) subordinate and junior in right
of payment to all other liabilities of J.P. Morgan, (ii) pari passu with
the most senior preferred stock outstanding as of the date hereof of J.P.
Morgan and (iii) senior to J.P. Morgan's common stock.
ARTICLE IV
This Related Note Guarantee shall terminate and be of no further
force and effect as to any Related Note upon full payment of the Related
Note Redemption Price with respect to such Related Note; provided, however,
that this Related Note Guarantee shall continue to be effective or shall be
reinstated, as the case may be, if at any time the Company must restore
payment of any sums paid under such Related Note or under this Related Note
Guarantee for any reason whatsoever. J.P. Morgan agrees to indemnify the
Company and hold it harmless against any loss it may suffer in such
circumstances.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained in this
Related Note Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of J.P. Morgan and shall inure to the benefit
of the Company and its successors. J.P. Morgan shall not assign its
<PAGE>
obligations hereunder without the prior approval of the Company.
SECTION 5.02. This Related Note Guarantee may be amended or
waived only with the prior approval of the Company; provided that no such
amendment or waiver shall adversely affect the holders of the Preferred
Securities without the consent of at least a majority in Principal Amount
of all Preferred Securities of each affected series then outstanding,
voting as a single class.
SECTION 5.03. Any notice, request or other communication required
or permitted to be given hereunder to J.P. Morgan shall be given in writing
by mail or by facsimile transmission (followed by mail), addressed to J.P.
Morgan, as follows:
J.P. Morgan & Co. Incorporated
60 Wall Street
New York, NY 10260-0060
Facsimile No.: (212) 648-5175
Attention: Assistant Secretary
Any notice, request or other communication required or permitted
to be given hereunder to the Company shall be given by J.P. Morgan in the
same manner as notices sent by Morgan Guaranty to the Company.
SECTION 5.04. This Related Note Guarantee is solely for the
benefit of the Company and is not separately transferable from the Related
Notes.
SECTION 5.05. Merger. Upon the consummation of the merger of the
Company into a trust sponsored by J.P. Morgan (the "Trust"), the Trust
shall succeed to all rights of the Company under this Related Note
Guarantee. Under certain circumstances, holders of not less than a majority
in Principal Amount of Preferred Securities of any series voting as a
separate class shall have the right to direct the property trustee of the
Trust to enforce the Trust's rights under this Related Note Guarantee.
<PAGE>
SECTION 5.06. THIS RELATED NOTE GUARANTEE SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
IN WITNESS WHEREOF, this Related Note Guarantee is executed as of
the day and year first above written.
J.P. MORGAN & CO.
INCORPORATED,
By
-------------------------
Name:
Title:
[FORM OF] NOTE AGREEMENT (this "Note") made as of ,
199[ ], between MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a
trust company with full banking powers organized under the
laws of the State of New York (the "Bank") and J.P. MORGAN
INDEX FUNDING COMPANY, LLC, a Delaware limited liability
Company (the "Company").
WHEREAS, the Company has issued and sold certain of its common
limited liability company interests (the "Common Securities") and certain
of its preferred limited liability company interests (the "Preferred
Securities") having an aggregate initial principal amount of [ ] and
bearing interest at a rate of [ %] per annum, and with such rights,
preferences, privileges, limitations and restrictions as are set forth in a
written resolution or resolutions (each, a "Written Action") dated [ , 199
] by the Managing Members of the Company providing for the issuance of such
series of Preferred Securities and related Common Securities; and
WHEREAS, the Company desires to loan the proceeds of such
issuance and sale of Preferred Securities and Common Securities
(collectively, the "Related Securities") to the Bank on the terms and
conditions set forth herein, which terms and conditions shall substantially
mirror the Company's obligations under the Related Securities.
NOW, THEREFORE, in consideration of the loan of such proceeds,
which the Bank hereby acknowledges to be adequate and sufficient, the Bank
executes and delivers this Note for the benefit of the Company.
1. General. (a) This Note is a duly authorized debt security of
the Bank, designated as its [ ]% Note Due [ , ] (the "Stated Maturity") in
an initial principal amount of $[ ].
(b) THIS NOTE IS NOT A DEPOSIT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
(c) This Note is non-transferable and shall be registered in the
name of J.P. Morgan Index Funding Company, LLC (the "Company"). The Company
may (to the fullest extent permitted by applicable laws) be treated at all
times, by
<PAGE>
all persons and for all purposes as the absolute owner of this Note
regardless of any notice of ownership, theft or loss or of any writing
thereon.
2. Payments and Paying Agencies. (a) The amount of principal
payable at any time upon any redemption or at the Stated Maturity of this
Note, as applicable, shall be the aggregate outstanding principal amount
payable at the applicable time with respect to all Related Securities the
proceeds of the sale of which were loaned to the Bank in consideration of
this Note, determined in accordance with the Written Action relating
thereto, attached hereto as Annex I.
(b) Interest shall accrue on this Note at a rate of [ ]% per
annum and shall be payable at the dates (each such date, an "Interest
Payment Date") and times set forth in the Written Action attached hereto as
Annex I, subject to the terms and conditions contained therein.
(c) The Bank hereby promises to pay all amounts referred to in
paragraphs (a) and (b) of this Section 2 when and as the corresponding
amounts are due and payable by the Company to the holders of Related
Securities pursuant to the terms thereof. Principal of this Note will be
payable against surrender of this Note, and interest will be payable at the
corporate trust office of the Bank located at 55 Exchange Place, New York,
New York 10280-0023.
3. Redemption. This Note matures on the Stated Maturity and will
be subject to redemption prior to maturity as described below.
The Company shall have the right to call the principal amount of
this Note for redemption prior to each [ ] of each year prior to the Stated
Maturity in an aggregate principal amount sufficient to allow the Company
to pay to any or all of the holders of the Preferred Securities who have
exercised their right to redeem the Preferred Securities and, if
applicable, a pro rata portion of the related Common Securities, an amount
equal to the Early Redemption Value (as defined in the Prospectus
Supplement described below) plus accrued and unpaid dividends on such
Related Securities to but excluding the date of redemption. In addition,
within 90 days following the occurrence and during the continuance of
certain taxrelated events (a "Tax Event") or events related to the
<PAGE>
Investment Company Act of 1940, as amended (an "Investment Company Event",
and together with a Tax Event, a "Special Event"), the Bank shall have the
right to redeem this Note in whole or in an amount sufficient to cause the
discontinuance of such Special Event, in either case in cash, or, in the
case of a Tax Event, to allow this Note to remain outstanding and to
indemnify the Company for any taxes payable by the Company as a result of
such Tax Event. In the event that the Bank shall redeem this Note in whole
or in part, the Company will redeem a principal amount of the Preferred
Securities and the related Common Securities equal to the principal amount
of this Note so redeemed. If a Tax Event shall have occurred and be
continuing and J.P. Morgan & Co. Incorporated ("J.P. Morgan") shall have
elected to direct the Bank to allow this Note to remain outstanding and
provided that the Company shall received indemnification by J.P. Morgan for
all taxes payable by the Company as a result of such Tax Event, then the
Company may allow the Preferred Securities and the related Common
Securities to remain outstanding. Notwithstanding the foregoing, if there
is available to the Company the opportunity to eliminate, within such
90-day period, the Special Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure, that has no adverse effect on the Company, J.P. Morgan,
the Bank or the holders of the Preferred Securities, the Company will
pursue such measure in lieu of redemption; provided that the Bank shall
have no right to redeem this Note while the Company is pursuing any such
ministerial action or reasonable measure unless the Special Event shall not
have been so eliminated by the 85th day following the occurrence thereof,
in which case J.P. Morgan shall be permitted to direct the Bank to provide,
and the Bank shall be permitted to so provide, notice to the Company of the
redemption of this Note. The parties hereto agree that the terms Tax Event
and Investment Company Event shall have the meanings assigned to such terms
in the Prospectus Supplement dated [ ], 199[ ] (the "Prospectus
Supplement") relating to the Preferred Securities and filed with the
Securities and Exchange Commission (the "SEC") to the Prospectus dated
November 18, 1996 and filed with the SEC (Registration Nos. 333-01121 and
333-01121-01) and that such definitions are hereby incorporated herein by
reference and made a part of this Note.
In the event of a Market Disruption Event (as defined in the
Prospectus Supplement and incorporated herein
<PAGE>
by reference), under certain circumstances, payment of the Redemption Value
(as defined in the Prospectus Supplement) to the holder of the Preferred
Securities could be delayed for an indefinite period, in which case no
interest or dividends on the Preferred Securities will accrue or be payable
thereon beyond the Stated Maturity. If such circumstances occur, the Stated
Maturity of this Note would be similarly delayed and no interest will be
payable on this Note beyond the Stated Maturity.
4. The indebtedness evidenced by this Note, including the
principal and interest, is pari passu with all unsecured, unsubordinated
creditors of the Bank.
The holder of this Note by its acceptance hereof agrees to and
shall be bound by the provisions of this paragraph 4.
5. Events of Default. The occurrence of any of the following
events shall constitute an event of default (herein referred to as an
"Event of Default") hereunder with respect to this Note:
(a) default in the payment of any interest on this Note as
and when the same shall become due and payable, which default
continues for a period of 30 days; or
(b) default in the due and punctual payment of the principal
of this Note as and when the same shall become due and payable;
or
(c) default on the part of the Bank in the performance of
any other of the covenants or agreements on its part in this Note
or in the Fiscal and Paying Agency Agreement, which default
continues for a period of 90 days after the date on which written
notice, by registered or certified mail, of such failure
requiring the Bank to remedy the same shall have been received by
the Bank from the Company specifying such failure and requiring
the same to be remedied and stating that such is a "notice of
default" hereunder; or
(d) decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment
of a conservator or receiver or liquidator in any insolvency
proceedings,
<PAGE>
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of the Bank 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 remained in force undischarged or unstayed for a period of
60 days; or
(e) the Bank shall have consented to the appointment of a
conservator or receiver or liquidator, in any insolvency,
readjustment of debt, marshalling of assets and liabilities or
similar proceedings of the Bank or of all or substantially all of
its property; or
(f) the Bank shall have filed a petition to take advantage
of any applicable insolvency or reorganization statute or
voluntarily generally suspended payment of its obligations.
In case one or more of the Events of Default specified above
shall have occurred and be continuing with respect to this Note, then and
in each and every such case, unless all the principal of this Note is due
and payable immediately, upon the declaration of the Company the same shall
become and shall be immediately due and payable, anything contained in this
Note to the contrary notwithstanding. In case the Company shall have
proceeded to enforce any right as set forth herein and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Company, then and in every such case the Bank
and the Company shall be restored to their respective several positions and
rights hereunder, and all rights, remedies and powers of the Bank and the
Company shall continue as though no such proceeding had been taken.
The Company shall be entitled to file such proof of claim, claim,
petition or other document as may be necessary or advisable in order to
have the claims of such holder allowed in any insolvency proceedings,
receivership, conservatorship, reorganization, readjustment of debt,
marshalling of assets and liabilities, liquidation, winding-up or other
similar proceedings of the Bank as a whole or affecting its property.
<PAGE>
6. Certain Covenants of the Bank. The Bank hereby agrees that,
for so long as this Note shall remain outstanding:
(a) The Bank will maintain an office or agency in the
Borough of Manhattan, The City of New York, where this Note may
be presented for payment and notices and demands to or upon the
Bank in respect of this Note may be served; and
(b) The Bank will not merge or consolidate with or sell or
convey all or substantially all of its assets as an entirety to
any other corporation or association, unless (i) either (A) the
Bank shall be the surviving corporation in the case of a merger
or (B) the surviving, resulting or transferee corporation or
association (the "successor corporation") shall expressly assume
the due and punctual payment of the principal of and interest on
this Note, according to its tenor and the due and punctual
performance of all of the covenants and obligations of the Bank
under this Note and (ii) the Bank or such successor corporation,
as the case may be, shall not, immediately after such merger,
consolidation, sale or conveyance, be in default in the
performance of any covenants or obligations of the Bank under
this Note.
Upon any merger, consolidation, sale or conveyance as provided
above, the successor corporation shall succeed to and be substituted for,
and may exercise every right and power of and be subject to all the
obligations of the Bank under this Note with the same effect as if the
successor corporation had been named as the Bank herein and, in the case of
any such sale or conveyance of assets, the Bank shall be released from its
liability as obligor under this Note.
7. Replacement of Note. (a) In case this Note shall become
mutilated, defaced or be apparently destroyed, lost or stolen, the Bank
shall execute and the corporate trust office of the Bank shall authenticate
and deliver a new Note in exchange and substitution for the mutilated or
defaced Note, or in lieu and in substitution for the apparently destroyed,
lost or stolen Note. In every such case the Company shall furnish to the
Bank such security or indemnity as may be required by them to indemnify and
defend and to save each of them and any agent of the Bank harmless
<PAGE>
and, in every case of destruction, loss or theft evidence to their
satisfaction of the apparent destruction, loss or theft of such Note and of
the ownership thereof. Upon the issuance of any substitute Note, the Bank
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith.
8. Modifications and Amendments; Waiver. Modifications and
amendments to these Terms and Conditions may be made without the consent of
the holders of the Preferred Securities, to: (1) evidence succession of
another corporation or association to the Bank and the assumption by such a
party of the obligations of the Bank under this Note in the event in the
event of a merger, consolidation or sale of assets in accordance with the
terms hereof; (2) add further covenants, restrictions or conditions for the
protection of holders of this Note; (3) reduce or increase the principal
amount hereof solely with respect to the portion of this Note relating to
the Common Securities of the Company; or (4) cure ambiguities or correct
this Note in case of defects or inconsistencies in the provisions hereof or
supplement this Note with other provisions, so long as any such cure,
correction or supplement does not adversely affect the interest of the
holder of this Note in any material respect. The Bank and the Company may,
with the consent of the holders of not less than a majority in principal
amount of the outstanding Preferred Securities, enter into written
modifications to this Note; provided, that no such amendment may, without
the consent of the all holders of all Preferred Securities, (1) reduce the
amount of Preferred Securities the holders of which must consent to any
amendment, supplement or waiver of this Note, (2) extend the final maturity
of this Note, or reduce the rate or extend the time of payment of interest
hereon, or reduce the principal amount hereof (except as provided in the
previous sentence), (3) alter the method of calculation of the amount paid
at final maturity hereof or (4) make the principal hereof or interest
hereon payable in any coin or currency other than that provided in this
Note. Any modifications or amendments to these Terms and Conditions as
provided in the clauses above will be conclusive and binding on the holder
of this Note, whether or not its has given consent.
No provision of this Note shall alter or impair the obligation of
the Bank, which is absolute and unconditional, to pay the principal of and
interest on this
<PAGE>
Note at the places, at the respective times, at the rate
and in the coin or currency herein prescribed.
9. Non-business Days; Calculation of Interest. (a) In any case
where the date of maturity of the principal of or payment of interest on
this Note shall be, in the Borough of Manhattan, The City of New York, a
Saturday, a Sunday, a legal holiday or a day on which banking institutions
are authorized or obligated by law to close, then payment of principal or
interest on this Note need not be made on such date at such place but may
be made on the next succeeding day which, in the Borough of Manhattan, The
City of New York, is not a Saturday, a Sunday, a legal holiday or a day on
which banking institutions are authorized or obligated by law to close,
with the same force and effect as if made on the date of maturity of the
principal of, or any applicable Interest Payment Date with respect to, this
Note, and no interest shall accrue for the period after such date.
(b) Interest shall be calculated on the basis of 360-day year of
twelve 30-day months.
10. Merger. Upon the merger or consolidation of the Company with
any trust sponsored by J.P. Morgan (the "Trust"), the Trust shall succeed
to all rights of the Company under this Note. Under certain circumstances,
the holders of not less than a majority in principal amount of the
Preferred Securities shall have the right to direct the property trustee of
the Trust to enforce the Trust's rights under this Note.
11. Governing Law. This Note shall be construed in accordance
with and governed by the laws of the State of New York.
12. Descriptive Headings. The descriptive headings appearing in
these Terms and Conditions are for the convenience of reference only and
shall not alter, limit or define the provisions hereof.
IN WITNESS WHEREOF, this Note Agreement is executed and delivered
as of the date first above written.
<PAGE>
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
by:
--------------------------
Name:
Title:
J.P. MORGAN INDEX FUNDING
COMPANY, LLC,
by J.P. MORGAN & CO.
INCORPORATED, as Managing
Member,
by:
--------------------------
Name:
Title:
