[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
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Name:
Title: