-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PO3r5U4cQYSQu8ETO/zzpXwOvJ+HZmbtsu2fBQxuT6nWyHSRlTqsoDouR0reDjil rdPGAttZHjwVSIF8NhY2dg== 0000950157-97-000421.txt : 19970929 0000950157-97-000421.hdr.sgml : 19970929 ACCESSION NUMBER: 0000950157-97-000421 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970911 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19970911 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MORGAN J P & CO INC CENTRAL INDEX KEY: 0000068100 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 132625764 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-05885 FILM NUMBER: 97678853 BUSINESS ADDRESS: STREET 1: 60 WALL ST CITY: NEW YORK STATE: NY ZIP: 10260 BUSINESS PHONE: 2124832323 MAIL ADDRESS: STREET 1: P O BOX 271 STREET 2: C/O WILLIAM D HALL CITY: WILMINGTON STATE: DE ZIP: 19899 8-K 1 FORM 8-K ========================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- FORM 8-K --------------------------- 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) ========================================================================== 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: None. (c) Exhibits: 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)). 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 ------------------- Name: Gene A. Capello Title: Vice President and Assistant General Counsel 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)). EX-99.3B 2 AMENDED & RESTATED LIMITED LIABILITY CO. AGRE 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 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, 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 ("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. 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 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 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. 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 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 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 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 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. 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 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 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. (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. 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 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 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 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. (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. 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 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); (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. 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 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 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 the parties executing the several counterparts had all executed one counterpart. Section 16.3. Governing Law; Severability. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the principles of conflict of laws thereof. In particular, this Agreement shall be construed to the maximum extent possible to comply with all of the terms and conditions of the Delaware Act. If, nevertheless, it shall be determined by a court of competent jurisdiction that any provisions or wording of this Agreement shall be invalid or unenforceable under the Delaware Act or other applicable law, such invalidity or unenforceability shall not invalidate the entire Agreement. In that case, this Agreement shall be construed so as to limit any term or provision so as to make it enforceable or valid within the requirements of applicable law, and, in the event such term or provisions cannot be so limited, this Agreement shall be construed to omit such invalid or unenforceable provisions. If it shall be determined by a court of competent jurisdiction that any provision relating to the distributions and allocations of the Company or to any fee payable by the Company is invalid or unenforceable, this Agreement shall be construed or interpreted so as (a) to make it enforceable or valid and (b) to make the distributions and allocations as closely equivalent to those set forth in this Agreement as is permissible under applicable law. Section 16.4. Filings. Following the execution and delivery of this Agreement, the Managing Members shall promptly prepare any documents required to be filed and recorded under the Delaware Act, and the Managing Members shall promptly cause each such document to be filed and recorded in accordance with the Delaware Act and, to the extent required by local law, to be filed and recorded or notice thereof to be published in the appropriate place in each jurisdiction in which the Company may hereafter establish a place of business. The Managing Members shall also promptly cause to be filed, recorded and published such statements of fictitious business name and any other notices, certificates, statements or other instruments required by any provision of any applicable law of the United States or any state or other jurisdiction which governs the conduct of its business from time to time. Section 16.5. Power of Attorney. Each Preferred Member does hereby constitute and appoint each Managing Member as its true and lawful representative and attorney-in-fact, in its name, place and stead to make, execute, sign, deliver and file (a) any amendment of the Certificate required because of an amendment to this Agreement or in order to effectuate any change in the membership of the Company, (b) any amendments to this Agreement made in accordance with the terms hereof and (c) all such other instruments, documents and certificates which may from time to time be required by the laws of the United States of America, the State of Delaware or any other jurisdiction, or any political subdivision 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 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 (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 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 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 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. (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. (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 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 (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: 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 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: ------------------------- EX-99.4B 3 FORM OF GUARANTEE AGREEMENT [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. 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. "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; (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 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, 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 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. 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: EX-99.4C 4 FORM OF RELATED NOTE GUARANTEE AGREEMENT [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 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. 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; (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 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 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. 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: EX-99.4D 5 FORM OF NOTE AGREEMENT [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 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 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 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, 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. 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 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 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. 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: -----END PRIVACY-ENHANCED MESSAGE-----