EXHIBIT EX99(k)(3)
NO.________ PRINCIPAL AMOUNT
US$________
▇▇▇▇▇▇▇▇ (UK) COMPANY
____% MANDATORILY REDEEMABLE DEBT SECURITY
DUE 2047
▇▇▇▇▇▇▇▇ (UK) COMPANY, a special purpose company incorporated with
unlimited liability under the laws of England and Wales (the "Company," which
term includes any successor corporation), for value received, hereby promises to
pay to the bearer (the "Holder") of this Mandatorily Redeemable Debt Security
(this "Security") upon presentation and surrender of this Security to the
Company or its agent at an office or agency maintained for such purpose in the
Borough of Manhattan, The City of New York, the Mandatory Redemption Amount (as
defined herein) and to pay interest to the Holder upon presentation of this
Security to the Company or its agent at such office or agency or at an office or
agency maintained for such purpose in Luxembourg on the principal amount of US
Dollars (US$__________) (the "Principal Amount") at a rate of _____% per annum
quarterly in arrears on January 15, April 15, July 15 and October 15 of each
year (each such date, an "Interest Payment Date"), from September ____, 1998
(the "Issue Date") until the Interest Payment Date immediately preceding the
Mandatory Redemption Date (as defined herein). The interest payable on each
Interest Payment Date shall be the interest accrued (i) in the case of the first
Interest Payment Date, from and including the Issue Date to but excluding such
first Interest Payment Date and (ii) in the case of each subsequent Interest
Payment Date, from and including the immediately preceding Interest Payment Date
to but excluding such subsequent Interest Payment Date. The amount of interest
payable on any Interest Payment Date shall be computed on the basis of a 360-day
year of twelve 30-day months. Notwithstanding anything herein to the contrary,
(a) other than in connection with an Exchange Event that is the redemption or
Buy-Back of the ANZ Preference Shares for cost, no interest shall accrue or be
payable for the period from and including the Interest Payment Date immediately
preceding the Mandatory Redemption Date or in respect of any Interest Payment
Date that occurs on the Mandatory Redemption Date, (b) in no event shall the
Holder have any right at law or equity to enforce payment of, or to take any
legal action or other proceeding to recover or collect, the interest payable on
any Interest Payment Date prior to the tenth Business Day after such Interest
Payment Date, (c) the payment and delivery to the Holder by the Company of the
Mandatory Redemption Amount or the Subject Jersey Preference Shares and Interest
Portion (if any) (each as defined below), as applicable, as provided herein
shall constitute full satisfaction of all of the Company's obligations under
this Security and (d) from and after such payment and delivery, the Holder shall
have no further claims of any kind against the Company in respect of this
Security, including any claim for interest previously due but not then paid.
All payments of cash hereunder shall be payable in any coin or
currency of the United States of America that at the time of payment is legal
tender for the payment of public and private debts. All payments of principal
and/or interest in respect of this Security shall be
made subject to deduction of any United Kingdom tax required to be withheld at
source and the Company shall not be required to pay any additional amount in
respect of withholding; provided however, that the Company may at its sole
option pay such additional amount as additional interest hereon. Except as used
in relation to the term "Business Day," all references herein to times or dates
shall be to such times and dates in The City of New York.
If any Interest Payment Date is not a Business Day, then the interest
payable on such date need not be paid on such date but instead may be paid on
the next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay). A "Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday or Friday which is not a day on which banking
institutions in Sydney, Australia, New York, New York or any other city or
cities in which the principal place of business of any ANZ Borrower is located
from time to time (initially Wellington, New Zealand) are authorized or obliged
by law or executive order to close.
1. Mandatory Redemption. Upon, or, if the Exchange Event is the
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redemption or Buy-Back of the ANZ Preference Shares for cash, immediately prior
to, the occurrence of an Exchange Event, this Security shall be redeemed on the
Exchange Date (the "Mandatory Redemption Date"), automatically and without any
action on the part of the Company, the Holder or any other person, in whole and
not in part, at a redemption price equal to the Principal Amount of this
Security plus, if the Exchange Event is the redemption or Buy-Back of the ANZ
Preference Shares for cash, the accrued interest hereon at the interest rate set
forth above from and including the Interest Payment Date immediately preceding
the Mandatory Redemption Date to but excluding the Mandatory Redemption Date
(such interest being the "Interest Portion" and such redemption price being the
"Mandatory Redemption Amount"). If the Exchange Event is the redemption or Buy-
Back of the ANZ Preference Shares for cash and the Dollar Value on the Mandatory
Redemption Date is equal to or less than the Dollar Value on any date on which
ANZ Preference Shares are originally issued (a "Qualifying Exchange Event"), the
Company shall pay the Holder in immediately available funds the Mandatory
Redemption Amount against presentation and surrender of this Security to the
Company or an agent of the Company appointed by the Company for such purpose on
or after the Mandatory Redemption Date. In the case of any Exchange Event other
than a Qualifying Exchange Event, upon presentation and surrender of this
Security to the Company or an agent of the Company appointed by the Company for
such purpose on or after the Mandatory Redemption Date, the Company will pay the
Interest Portion, if any, in immediately available funds to the Holder, the
Mandatory Redemption Amount (exclusive of the Interest Portion, if any) will be
applied, automatically and without any action on the part of the Company, the
Holder or any other person, to purchase from the Company on behalf of the Holder
Jersey Preference Shares with an aggregate stated liquidation value equal to the
Principal Amount of this Security (the "Subject Jersey Preference Shares"), and
the Company will deliver the Subject Jersey Preference Shares to the Holder free
and clear of any liens or other encumbrances other than those created by the
Jersey Preference Shares Security and Pledge Agreement. The Holder, by its
purchase of this Security, acknowledges and irrevocably and unconditionally
waives any right it might have, in the case of any Exchange Event other than a
Qualifying Exchange Event, to receive such Mandatory Purchase Amount in cash
prior to such application pursuant to the preceding sentence and agrees that
delivery of the Subject Jersey Preference Shares pursuant to the preceding
sentence shall fully and unconditionally discharge the obligation of the Company
to pay the Mandatory Purchase Amount in cash or otherwise.
2
On and after the Mandatory Redemption Date, (i) the Principal Amount of
this Security shall cease to be payable, (ii) the interest hereon shall cease to
accrue and be payable, and (iii) this Security shall thereafter represent only
the right to receive the Mandatory Redemption Amount or the Subject Jersey
Preference Shares and the Interest Portion (if any), as applicable.
In the event that the Mandatory Redemption Date occurs on a day that is not
a Business Day, then payment of the Mandatory Redemption Amount or the Subject
Jersey Preference Shares and the Interest Portion (if any), as applicable, may
be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay).
2. Notice and Redemption Procedures. Notice of the redemption
--------------------------------
hereof and all other notices to the Holder will be valid if published in a
leading newspaper having general circulation in Luxembourg (which is expected to
be the Luxemburger Wort). Any such notice shall be deemed to have been given on
the date of such publication or, if published more than once or on different
dates, on the first date on which publication is made. The Holder will be deemed
for all purposes to have notice of the contents of any notice given to the
Holder in accordance with the terms hereof.
3. Ranking. The indebtedness evidenced by this Security shall be
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unsubordinated senior indebtedness of the Company.
4. Amendments and Waivers. Modifications and amendments of the
----------------------
terms of this Security may be made with the consent of the holders of not less
than a majority of the TrUEPrS; provided, however, that, no such modification or
amendment may, without the consent of 100% of the holders of the TrUEPrs,
modify, amend or otherwise affect the amount or timing of interest payments on
this Security or the Principal Amount, the amount, form or timing of the
consideration payable upon the redemption of this Security (including, without
limitation, the rights and obligations of the Holder to receive the Subject
Jersey Preference Shares) or otherwise adversely affect in any material respect
the rights of the holders of TrUEPrs or cause an Exchange Event to occur.
Modifications and amendments may be made without the consent of any holder of
the TrUEPrS to cure any ambiguity, defect or inconsistency in this Security;
provided that, such action will not adversely affect in any material respect the
rights of the holders of the TrUEPrS or cause an Exchange Event to occur. The
failure of the Holder at any time to exercise any right hereunder shall not
constitute a waiver of the Holder's right to exercise any right at any other
time.
5. Prescription. Claims to payment of principal and interest will
------------
become void unless presentation of this Security is made within a period of two
years from the date on which such payment first became due.
6. Undertakings of the Company. The Company hereby undertakes that,
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for so long as any obligations of the Company remain under this Security, it
will not (i) sell or otherwise transfer the ordinary shares or nominal shares,
if any, of the Jersey Subsidiary owned by it to any person (other than pursuant
to, and in accordance with the terms of, the Jersey Ordinary Share Purchase
Agreement) or (ii) commence a proceeding for an order for the winding up of the
Jersey Subsidiary or for the appointment of a provisional liquidator,
liquidator, administrator, controller or similar official in respect of the
Jersey Subsidiary or all or substantially all of its property and it will (x)
3
use its best efforts to prevent the issuance of any other order for the winding
up of the Jersey Subsidiary or for any other appointment of a provisional
liquidator, liquidator, administrator, controller or similar official in
respect of the Jersey Subsidiary or all or substantially all of its property
and (y) exercise its voting rights to ensure that:
(a) the Jersey Subsidiary will not change its Memorandum and Articles
of Association (unless such change has been consented to by the
record holders of more than 50% of the TrUEPrs or, in the opinion
of competent legal counsel selected by the Trust, such change
would not have a material adverse impact on the rights of the
holders of the TrUEPrS and, in either case, will not cause an
Exchange Event to occur);
(b) the Jersey Subsidiary will not change its business purpose
(as specified in its Memorandum and Articles of Association); and
(c) (i) the Jersey Subsidiary will not commence a proceeding for an
order for the winding up of the Jersey Subsidiary or for the
appointment of a provisional liquidator, liquidator,
administrator, controller or similar official in respect of the
Jersey Subsidiary or all or substantially all of its property, and
(ii) the Jersey Subsidiary will use its best efforts to prevent
the issuance of any other order for the winding up of the Jersey
Subsidiary or for any appointment of a provisional liquidator,
liquidator, administrator, controller or similar official in
respect of the Jersey Subsidiary or all or substantially all of
its property.
7. Miscellaneous. This Security and all obligations of the Company
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hereunder together with the rights and remedies of the Holder hereunder, inure
to the benefit of the Holder and their successors and assigns.
This Security will not be subject to any sinking fund.
This Security shall be governed by, construed and enforced in
accordance with the laws of the State of New York, without giving effect to the
conflicts of law provisions thereof.
No provision of this Security shall alter or impair the obligation of
the Company, which is absolute and unconditional, (i) to pay (A) the Mandatory
Redemption Amount and (B) any interest that is due and payable on this Security
and of which, prior to the Mandatory Redemption Date, the Holder has the right
to enforce payment, in either case at the time and place and at the rate and in
the currency herein prescribed or (ii) to pay the Interest Portion (if any)
payable, or to deliver the Subject Jersey Preference Shares, upon redemption of
this Security, as applicable.
Any undefined term in this Security shall have the meaning ascribed to
it in Schedule A attached hereto.
This Security is transferable by delivery. This Security may be
exchanged for like securities of similar tenor in denominations of US$1,000,000
and integral multiples of $100,000
4
in excess thereof upon presentation to the Company or an agent of the Company
appointed by the Company for such purpose and payment of any governmental or
other charges due in connection with such exchange.
The Company shall treat the Holder as the legal and beneficial owner
of this Security for all purposes. Payments made by or on behalf of the Company
to the Holder in respect of the interest due and payable hereon, the principal
hereof and all other amounts due hereunder in accordance with the terms hereof
shall fully discharge the Company's obligations with respect thereto under this
Security.
The Company hereby further irrevocably agrees with the Holder that the
Company's obligations contained herein may be enforced against the Company by
judicial proceedings instituted in any state or federal court in the Borough of
Manhattan, The City of New York, New York. Subject only to the further
provisions of this Security, the Company hereby submits to the non-exclusive
jurisdiction of such courts for any such proceedings to the full extent
permitted by law solely in respect of the interpretation and enforcement of the
provisions hereof. For the purposes of this paragraph, the Company hereby
appoints CT Corporation System, as its agent to accept legal process in any
proceedings, which appointment shall be irrevocable, except that the Company may
revoke such appointment by simultaneously appointing another agent in the County
and State of New York pursuant to the same conditions, and will cause such new
agent to accept in writing such appointment and will deliver an executed copy of
such acceptance to the Holder.
5
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
▇▇▇▇▇▇▇▇ (UK) COMPANY
By:
------------------------
Name:
Title:
Attest:
By:
---------------------------
Name:
Title:
6
SCHEDULE A
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"ADSs" means the American Depositary Shares each of which represents
four ANZ Preference Shares.
"ANZ" means Australia and New Zealand Banking Group Limited, a
corporation organized under the laws of the State of Victoria, Commonwealth of
Australia, or any surviving entity or subsequent surviving entity of ANZ.
"ANZ Borrower" means each direct or indirect wholly owned subsidiary
of ANZ and/or ANZ or a branch of ANZ, in each case to whom an ANZ Loan has been
made or assigned.
"ANZ Loan" means each outstanding loan made by the Distribution Trust
to an ANZ Borrower, each of which matures on or about October 15, 2052.
"ANZ Loan Agreement" means each agreement between the Distribution
Trust and an ANZ Borrower pursuant to which an ANZ Loan is made.
"ANZ Preference Shares" means the fully paid non-cumulative preference
shares, liquidation preference US$6.25 per share, issued by ANZ, and any other
securities issued in exchange or substitution for, or as a distribution on or
otherwise in respect of, such shares whether by or as a result of a
recapitalization, split, combination, reclassification or scheme of arrangement
or otherwise.
"APRA" means the Australian Prudential Regulation Authority, or any
successor or replacement body to which ANZ is required to report the capital
adequacy ratios referred to in the definition of Exchange Event.
"Collateral Agent" means The Bank of New York or its successor as
permitted under the Jersey Preference Shares Security and Pledge Agreement or
appointed pursuant to Section 2.05(a) of the Trust Agreement.
"Debt Securities" means the Mandatorily Redeemable Debt Securities due
2047 issued by the Company.
"Distribution Trust" means the business trust established under the
laws of the State of Delaware pursuant to a distribution trust agreement among
the depositor, the distribution trustees, the administrators thereof, the
Company and the ANZ Australian Affiliate named therein.
"Dollar Value" means the value, for purposes of calculating United
Kingdom tax on capital gains, of one U.S. dollar or the equivalent thereof in
any successor legal currency of the United States in terms of British pounds or
the equivalent thereof in any successor legal currency of the United Kingdom
(i.e., expressed as (Pounds)/US$1.00).
Sch. A-1
"Exchange Date" is the date specified as such with respect to any
particular Exchange Event in the definition thereof.
"Exchange Event" means the earliest to occur of any of the following
dates or events shall constitute an "Exchange Event" as of the "Exchange Date"
indicated below:
(i) October 15, 2047 or the date of any earlier redemption or mandatory
repurchase ("Buy-Back") of the ANZ Preference Shares for cash, in
which case the Exchange Date will be the earlier of such dates;
(ii) any date selected by ANZ in its absolute discretion, in which case the
Exchange Date will be such date;
(iii) the failure of the Trust to receive for any reason on or within
three Business Days after an Interest Payment Date the interest then
due on the Debt Securities in full without deduction or withholding
for any taxes, duties or other charges, in which case the Exchange
Date will be the fourth Business Day following such Interest Payment
Date;
(iv) any date on which the Tier 1 Capital Ratio or the Total Capital
Adequacy Ratio of ANZ (either as reported quarterly by ANZ to APRA or
as determined at any time by APRA in its absolute discretion) is below
4% or 8%, respectively, or, in each case, such lesser percentage as
may be prescribed by APRA for ANZ at the time (the applicable
percentage in each such case being the "Required Percentage"), and is
not increased by ANZ to at least the Required Percentage within 90
days after the date on which ANZ makes such quarterly report or
receives notice from APRA of such determination by APRA, as
applicable, in which case the Exchange Date will be the Business Day
immediately following the expiration of such 90-day period;
(v) any change in (A) the legal ownership of the securities (other than
the Debt Securities) issued by, (B) any provision of the constituent
documents of (unless such change has been consented to by the record
holders of more than 50% of the TrUEPrS or, in the opinion of
competent legal counsel selected by the Trust, such change would not
have a material adverse effect on the rights of the holders of the
TrUEPrS), or (C) the business purpose (or, solely with respect to the
Jersey Charitable Trust, the powers of the trustees thereof) (as
specified in the constituent documents) of, any of the Company, the
Jersey Holding Company, the Jersey Charitable Trust or the Jersey
Subsidiary, in which case the Exchange Date will be the date on which
the change occurs;
(vi) any change in the business purpose (as specified in the constituent
documents) of the Distribution Trust, in which case the Exchange Date
will be the date on which the change occurs;
(vii) the common securities of the Distribution Trust cease to be wholly-
owned, directly or indirectly, by ANZ or a direct or indirect
wholly-owned subsidiary or branch of ANZ, in which case the Exchange
Date will be the date on which the
Sch. A-2
common securities of the Distribution Trust cease to be wholly-owned,
direct or indirect, by ANZ or a direct or indirect wholly-owned
subsidiary or branch of ANZ;
(viii) the ANZ Borrower ceases to be ANZ or a directly or indirectly
wholly-owned subsidiary or branch of ANZ, in which case the Exchange
Date will be the date on which the ANZ Borrower ceases to be ANZ or a
direct or indirect wholly-owned subsidiary or branch of ANZ;
(ix) (A) a proceeding is commenced by ANZ, the Company, the Jersey Holding
Company, the Jersey Charitable Trust, the Jersey Subsidiary, the
Distribution Trust or the ANZ Borrower (each, a "Relevant Entity") or
a person that controls the Relevant Entity for an order that the
Relevant Entity be wound up or for the appointment of a provisional
liquidator, liquidator, administrator, controller or similar official
in respect of the Relevant Entity or all or substantially all of its
property, in which case the Exchange Date will be the date on which
the proceeding is filed; (B) a proceeding is commenced by any other
person for an order that a Relevant Entity be wound up or for the
appointment of a provisional liquidator, liquidator, administrator,
controller or similar official in respect of the Relevant Entity or
all or substantially all of its property (unless such proceeding is
discontinued or dismissed within 21 days of its having been filed), in
which case the Exchange Date will be the Business Day immediately
following the expiration of such 21-day period; (C) a provisional
liquidator, liquidator, administrator, controller or similar official
is appointed whether by a court or otherwise in respect of any
Relevant Entity or all or substantially all of its property (unless
any such appointment is revoked or set aside within 21 days of such
appointment), in which case the Exchange Date will be the Business Day
immediately following the expiration of such 21-day period; or (D) the
Trust dissolves in accordance with the terms hereof or for any other
reason, in which case the Exchange Date will be the Business Day
immediately preceding the effective date of such dissolution; and
(x) the Collateral Agent fails, at any time, to have a valid first,
perfected and enforceable security interest in, and lien on, the
Jersey Preference Shares and the ADSs representing the ANZ Preference
Shares, and any redemption proceeds from any of the foregoing, and
such failure is not remedied on or before ten Business Days after
written notice of such failure is given to the Company or the Jersey
Subsidiary, as the case may be, by the Collateral Agent as
contemplated by the Security and Pledge Agreements, in which case the
Exchange Date will be the Business Day immediately following the
expiration of such ten Business Day period.
Notwithstanding the foregoing, the ANZ Borrower may, with the consent
of the Distribution Trust, assign the ANZ Loan or the Distribution Trust may
replace the ANZ Loan with another loan, in each case, to the Company or to
another direct or indirect wholly-owned subsidiary or branch office of the
Company with prospective payment terms identical to, and other terms
substantially the same as, those of the ANZ Loan, in which case the Company or
Sch. A-3
such other subsidiary or branch office and loan will be deemed to be the ANZ
Borrower and the ANZ Loan, respectively, and any such action will not constitute
an Exchange Event.
"Jersey Charitable Trust" means The ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Trust, a
charitable trust established under the laws of, and domiciled in, Jersey, the
Channel Islands, which holds all of the Jersey Holding Company's ordinary
shares.
"Jersey Holding Company" means ▇▇▇▇▇▇▇▇ (Holdings) Limited, an exempt
company established under the laws of, and domiciled in, Jersey, the Channel
Islands, which holds all of the Company's ordinary shares.
"Jersey Preference Shares" means the fully paid, non-dividend paying
preference shares, liquidation preference US$25 per share, issued by the Jersey
Subsidiary.
"Jersey Preference Shares Security and Pledge Agreement" means the
Jersey Preference Shares Security and Pledge Agreement dated as of the first
Issue Date among the Trust, the Company and the Collateral Agent, securing the
obligations of the Company under the Debt Securities, each as amended pursuant
to the terms thereof.
"Jersey Subsidiary" means ▇▇▇▇▇▇▇▇ (Investments) Limited, a company
incorporated with limited liability under the laws of, and domiciled in, Jersey,
the Channel Islands.
"Paying Agent" means The Bank of New York or its successor as
permitted under Section 6.6 of the Paying Agent Agreement or appointed pursuant
to Section 2.05(a) of the Trust Agreement.
"Paying Agent Agreement" means the Paying Agent Agreement dated as of
the first Issue Date between the Paying Agent and the Trust and any substitute
agreement therefor entered into pursuant to Section 2.05(a) of the Trust
Agreement.
"Security and Pledge Agreements" means, collectively, the ADRs
Security and Pledge Agreement dated as of the first Issue Date among the Trust,
the Company, the Jersey Subsidiary and the Collateral Agent, securing the
respective obligations of the Company under this agreement and the Jersey
Subsidiary under the Jersey Preference Shares, and the Jersey Preference Shares
Security and Pledge Agreement dated as of the first Issue Date among the Trust,
the Company and the Collateral Agent, securing the obligations of the Company
under this Agreement, each as amended pursuant to the terms thereof.
"Tier 1 capital" means capital which is regarded as "tier 1 capital"
for the purposes of the capital adequacy guidelines of APRA.
"Tier 1 Capital Ratio" means the ratio of Tier 1 capital to risk
weighted assets (on a consolidated group basis) prescribed by APRA in its
capital adequacy guidelines for Australian banks, as modified from time to time.
Sch. A-4
"Total Capital Adequacy Ratio" means the total capital adequacy ratio
as prescribed by APRA in its capital adequacy guidelines for Australian banks,
as modified from time to time.
"TrUEPrS" means Trust Units Exchangeable for Preference Shares, each
representing a Holder's proportionate share of an undivided beneficial interest
in the assets of the Trust and right to receive a pro rata portion of any
distribution upon the occurrence of an Exchange Event or the payment of any non-
cumulative dividends on the TrUEPrS.
"Trust" means ANZ Exchangeable Preferred Trust, a business trust
created under the law of the State of Delaware and governed by the Trust
Agreement.
"Trust Agreement" means a Second Amended and Restated Trust Agreement,
dated as of September __, 1998, by and among ML IBK Positions, Inc., as
sponsor, the Trustees named therein, and the Holders from time to time,
constituting the Trust.
Sch. A-5
