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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PAINE WEBBER GROUP INC.
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(Exact name of registrant as specified in its charter)
Delaware 13-2760086
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1285 Avenue of the Americas, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
Japan Export Index The Chicago Board Options Exchange
Call Warrants Expiring
October __, 1997
Japan Export Index The Chicago Board Options Exchange
Put Warrants Expiring
October __, 1997
Securities to be registered pursuant to Section 12(g) of the
Act:
None
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(Title of class)
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2
Item 1. Description of Registrant's Securities to be Registered.
For a description of the Japan Export Index Call Warrants Expiring
October __, 1997 (the "Call Warrants") and the Japan Export Index Put
Warrants Expiring October __, 1997 (the "Put Warrants" and, together
with the Call Warrants, the "Warrants"), to be registered hereunder,
reference is made to the information under the headings "Risk Factors"
and "Description of the Warrants" on pages 3 through 9 and on pages 11
through 14, respectively, of the Registrant's prospectus dated October
14, 1993 (the "Prospectus"), and the information under the headings
"Prospectus Summary", "Risk Factors Relating to the Warrants" and
"Description of the Warrants" on pages S-3 through S-8, S-10 through
S-16 and S-22 through S-35, respectively, of the Registrant's
preliminary prospectus supplement dated October 10, 1995, relating to
the Call Warrants and the Registrant's preliminary prospectus supplement
dated October 10, 1995, relating to the Put Warrants (collectively, the
"Preliminary Prospectus Supplements"). The Prospectus and Preliminary
Prospectus Supplements, listed herein as Exhibit 5 and Exhibit 6, are
incorporated by reference to the same documents filed pursuant to Rule
424(b)(5) under the Securities Act of 1933, as amended (the "1933 Act"),
on October 10, 1995, relating to the Registrant's Registration Statement
on Form S-3 (No. 33-33613), with the Securities and Exchange
Commission. The descriptions of the Warrants included in the
Prospectus and Preliminary Prospectus Supplements are hereby
incorporated herein and made part of this Registration Statement in
their entirety.
Item 2. Exhibits
1. Forms of Warrant Certificates relating to the Call Warrants
(included as Exhibits A and B-1 to Exhibit 2).
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3
2. Form of Warrant Agreement relating to the Call Warrants among the
Registrant, Citibank, N.A., as Warrant Agent, and PaineWebber
Incorporated, as Determination Agent, including as Exhibits A and
B-1 thereto the forms of Call Warrant Certificates.
3. Forms of Warrant Certificates relating to the Put Warrants
(included as Exhibits A and B-1 to Exhibit 4).
4. Form of Warrant Agreement relating to the Put Warrants among the
Registrant, Citibank, N.A., as Warrant Agent, and PaineWebber
Incorporated, as Determination Agent, including as Exhibits A and
B-1 thereto the forms of Put Warrant Certificates.
5. Prospectus and Preliminary Prospectus Supplement relating to the
Call Warrants (incorporated by reference to the same documents
filed on October 10, 1995, pursuant to Rule 424(b)(5) under the
1933 Act and relating to the Registrant's Registration Statement
on Form S-3 (No. 33-33613)).
6. Prospectus and Preliminary Prospectus Supplement relating to the
Put Warrants (incorporated by reference to the same documents
filed on October 10, 1995, pursuant to Rule 424(b)(5) under the
1933 Act and relating to the Registrant's Registration Statement
on Form S-3 (No. 33-33613)).
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4
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: October 20, 1995
PAINE WEBBER GROUP INC.
by
/s/ Pierce R. Smith
---------------------
Name: Pierce R. Smith
Title: Treasurer
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5
INDEX TO EXHIBITS
Exhibit
Number Exhibits
- ------- --------
2 Form of Warrant Agreement relating to the
Call Warrants among the Registrant,
Citibank, N.A., as Warrant Agent, and
PaineWebber Incorporated, as Determination
Agent, including as Exhibits A and B-1
thereto the forms of Call Warrant
Certificates.
4 Form of Warrant Agreement relating to the
Put Warrants among the Registrant,
Citibank, N.A., as Warrant Agent, and
PaineWebber Incorporated, as Determination
Agent, including as Exhibits A and B-1
thereto the forms of Put Warrant
Certificates.
EXHIBIT 2
BROWN & WOOD DRAFT OF 10/18
================================================================================
PAINE WEBBER GROUP INC.
and
CITIBANK, N.A., Warrant Agent
and
PAINEWEBBER INCORPORATED, Determination Agent
________________________________
WARRANT AGREEMENT
dated as of October __, 1995
________________________________
Japan Export Index Call Warrants
Expiring October __, 1997
================================================================================
TABLE OF CONTENTS*
Page
----
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANT CERTIFICATES AND
GLOBAL WARRANT CERTIFICATE
SECTION 1.01. Issuance of Warrants . . . . . . . . . . . 1
SECTION 1.02. Form, Execution and Delivery of Warrant
Certificates . . . . . . . . . . . . . . 2
SECTION 1.03. Warrant Certificates . . . . . . . . . . . 3
SECTION 1.04. Registration of Transfers and Exchanges. . 4
SECTION 1.05. Mutilated or Missing Warrant
Certificates . . . . . . . . . . . . . . 5
SECTION 1.06. Registered Holders . . . . . . . . . . . . 6
SECTION 1.07. Global Warrant Certificate . . . . . . . . 6
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise
Amounts; Exercise Notice . . . . . . . . 8
SECTION 2.02. Exercise and Delivery of Warrants. . . . . 9
SECTION 2.03. Automatic Exercise of Warrants; Exercise
upon an Extraordinary Event or
Exercise Limitation Event. . . . . . . . 18
SECTION 2.04. Limitation of Number of Exercisable
Warrants . . . . . . . . . . . . . . . . 24
SECTION 2.05. Covenant of the Company. . . . . . . . . . 25
SECTION 2.06. Return of Money Held Unclaimed for Two
Years. . . . . . . . . . . . . . . . . . 25
SECTION 2.07. Return of Global Warrant Certificate . . . 25
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder of Warrant May Enforce
Rights . . . . . . . . . . . . . . . . . 26
- --------------
* The Table of Contents is not a part of the Warrant Agreement.
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Page
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ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company . . . . . 26
SECTION 4.02. Payment of Taxes . . . . . . . . . . . . . 26
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. . . . . . . . . . . . . . . 27
SECTION 5.02. Conditions of Warrant Agent's
Obligations. . . . . . . . . . . . . . . 27
SECTION 5.03. Resignation and Appointment of
Successor. . . . . . . . . . . . . . . . 29
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. . . . . . . . . . . . . . . . . 31
SECTION 6.02. Notices and Demands to the Company, the
Warrant Agent and the Index Spot Price
Reference Agent. . . . . . . . . . . . . 31
SECTION 6.03. Addresses for Notices. . . . . . . . . . . 31
SECTION 6.04. Notices to Holders . . . . . . . . . . . . 32
SECTION 6.05. Obtaining of Approvals . . . . . . . . . . 32
SECTION 6.06. Persons Having Rights Under This
Agreement. . . . . . . . . . . . . . . . 32
SECTION 6.07. Inspection of Agreement. . . . . . . . . . 32
SECTION 6.08. Headings . . . . . . . . . . . . . . . . . 32
SECTION 6.09. Counterparts . . . . . . . . . . . . . . . 32
SECTION 6.10. APPLICABLE LAW . . . . . . . . . . . . . . 32
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . 34
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . 34
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B-1 - Form of Global Warrant Certificate
EXHIBIT B-2 - Exercise Notice [For Warrants Represented by
the Global Warrant Certificate]
EXHIBIT C-1 - Confirmation of Exercise and Notice of
Rejection [For Warrants Represented by
Warrant Certificates]
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EXHIBIT C-2 - Confirmation of Exercise and Notice of
Rejection [For Warrants Represented by the
Global Warrant Certificate]
EXHIBIT D-1 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by Warrant
Certificates]
EXHIBIT D-2 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by the Global
Warrant Certificate]
iii
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WARRANT AGREEMENT, dated as of October __, 1995, among PAINE WEBBER GROUP
INC., a corporation organized and existing under the laws of the State of
Delaware (the "Company"), CITIBANK, N.A., a national banking association
organized and existing under the laws of the United States of America (the
"Warrant Agent"), and PAINEWEBBER INCORPORATED, a corporation organized and
existing under the laws of the State of Delaware (the "Determination Agent").
WHEREAS the Company proposes to sell warrants (the "Warrants" or,
individually, a "Warrant") representing the right to receive from the Company
the amount, if any, in U.S. dollars determined by reference to increases in the
Japan Export Index (as defined herein, the "Index") on the terms and conditions
set forth in this Agreement; and
WHEREAS the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer and exercise of the Warrants, and the Company desires to set
forth herein, among other things, the provisions of the Warrants and the terms
and conditions on which they may be issued, transferred, exercised and canceled;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANT CERTIFICATES AND
GLOBAL WARRANT CERTIFICATE
SECTION 1.01. Issuance of Warrants. (a) The Warrants will constitute
direct, unconditional and unsecured obligations of the Company and will rank on
a parity with the Company's other unsecured contractual obligations and with the
Company's unsecured and unsubordinated debt.
(b) Each Warrant shall represent the right, subject to the provisions
contained herein, to receive the Cash Settlement Value or the Alternative
Settlement Value, as the case may be (each as defined herein), of such Warrant.
In no event shall a registered or beneficial holder of a Warrant (each a
"Warrantholder") be entitled to receive any interest on any Cash Settlement
Value or Alternative Settlement Amount.
(c) Forty-five calendar days after the date of this
Agreement each Warrantholder will have the option to convert the
form in which such Warrantholder holds his Warrants from
certificated to book-entry form (the "Conversion Option"). The
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Conversion Option will be available for forty-five calendar days
from _______ __, 1995, through _______ __, 1995 (the "Conversion
Option Period"). To utilize the Conversion Option a
Warrantholder must deliver or arrange to deliver his Warrants to
an entity (a "Participant") entitled to execute, clear and settle
transactions through the Depository (as defined herein) through
which such Warrantholder's beneficial interest after electing the
Conversion Option will be maintained, who will then deposit the
Warrants with the Depository or its nominee. Once a
Warrantholder has elected the Conversion Option such
Warrantholder may hold his Warrants only in book-entry form and
will not be able to change his election or withdraw from the
book-entry system during the Conversion Option Period or
thereafter. Accordingly, except as hereinafter provided,
ownership of the Warrants in certificated form will no longer be
available to Warrantholders who have elected the Conversion
Option and ownership of the Warrants surrendered under the
Conversion Option will be represented by a single certificate
(the "Global Warrant Certificate"); provided, however, that if
the Depository is at any time unwilling or unable to continue as
securities depository for the Warrants and a successor Depository
is not appointed by the Company within 90 days, the Company will
reissue Warrant Certificates (as defined herein) in exchange for
the Global Warrant Certificate. In addition, the Company may at
any time determine not to have the Warrants represented by a
Global Warrant Certificate and, in such event, will issue Warrant
Certificates in exchange for the Global Warrant Certificate. In
either instance, and in accordance with the provisions of this
Agreement, each Warrantholder will be entitled to have a number
of Warrants equal to such Warrantholder's beneficial interest in
the Global Warrant Certificate registered in the name of the
Warrantholder and will be entitled to physical delivery of such
Warrants in certificated form by a Participant. The provisions
of Section 1.07 shall apply only if and when the Conversion
Option is utilized and a Global Warrant Certificate is issued
hereunder. Unless the context shall otherwise require, and
subject to the provisions of Section 1.07, all references in this
Agreement to the Warrant Certificates (other than in Sections
1.02, 1.03, 1.04, 1.05, 1.06 and 1.07) shall include the Global
Warrant Certificate in the event that the Global Warrant
Certificate is issued.
(d) After the last day of the Conversion Option Period,
Warrantholders shall not be entitled to hold Warrants in
certificated form through CEDEL or Euroclear (as such terms are
defined herein).
SECTION 1.02. Form, Execution and Delivery of Warrant
Certificates. (a) The Warrants, whenever issued, shall be
represented by certificates in registered form substantially in
the form set forth in Exhibit A hereto (the "Warrant
Certificates"), with such appropriate insertions, omissions,
2
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substitutions and other variations as are required or permitted
by this Agreement, and may represent any number of whole
Warrants. The Warrant Certificates may have imprinted or
otherwise reproduced thereon such letters, numbers or other marks
of identification or designation and such legends or endorsements
as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval)
and which are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto, or with any rule or
regulation of any stock exchange on which the Warrants may be
listed, or of the Depository, or to conform to usage. Warrant
Certificates shall be signed on behalf of the Company by its
chairman, its president or one of its vice presidents and under
its corporate seal reproduced thereon and attested by its
secretary or an assistant secretary. The signature of any of
such officers may be either manual or facsimile. Typographical
and other minor errors or defects in any such signature shall not
affect the validity or enforceability of any Warrant Certificate
that has been duly countersigned and delivered by the Warrant
Agent.
(b) In case any officer of the Company who shall have
signed a Warrant Certificate, either manually or by facsimile
signature, shall cease to be such officer before such Warrant
Certificate shall have been countersigned and delivered by the
Warrant Agent to the Company or delivered by the Company, such
Warrant Certificate nevertheless may be countersigned and
delivered as though the person who signed such Warrant
Certificate had not ceased to be such officer of the Company; and
the Warrant Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such
Warrant Certificate, shall be a proper officer of the Company to
sign such Warrant Certificate, although at the date of the
execution of this Warrant Agreement any such person was not such
officer.
SECTION 1.03. Warrant Certificates. Each Warrant
Certificate, when signed on behalf of the Company in accordance
with Section 1.02, shall be delivered to the Warrant Agent, which
shall manually countersign and deliver the same to or upon the
order of the Company. Each Warrant Certificate shall be dated
the date of its countersignature. A Warrant Certificate shall
not be valid for any purpose, and no Warrant evidenced thereby
shall be exercisable, unless and until such Warrant Certificate
has been countersigned by the manual signature of the Warrant
Agent. Such countersignature by the Warrant Agent upon any
Warrant Certificate signed by the Company in accordance with
Section 1.02 shall be conclusive evidence that the Warrant
Certificate so countersigned has been duly issued hereunder.
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SECTION 1.04. Registration of Transfers and Exchanges.
(a) Except as otherwise provided herein or in the Warrant
Certificate, the Warrant Agent shall from time to time register
the transfer of any outstanding Warrant Certificates upon the
records to be maintained by it for that purpose (the "Warrant
Register") at the Warrant Agent's Office (as defined herein),
subject to such reasonable regulations as the Company or the
Warrant Agent may prescribe, upon surrender thereof, duly
endorsed, or accompanied by a written instrument or instruments
of transfer in form satisfactory to the Warrant Agent and the
Company, duly executed by, the registered holder(s) thereof or by
the duly appointed legal representative thereof or by a duly
authorized attorney, such signature to be guaranteed by a bank or
trust company with a correspondent office in The City of New York
or by a member of a national securities exchange. Upon any such
registration of transfer, a new Warrant Certificate shall be
issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Warrant Agent.
(b) At the option of a Warrantholder, Warrant Certificates
may be exchanged for other Warrant Certificates, of like tenor
and representing an equal number of unexercised Warrants, upon
surrender to the Warrant Agent of the Warrant Certificates to be
exchanged at its offices maintained for such purpose (the
location of which shall be provided to the Company), which shall
be south of Chambers Street in the Borough of Manhattan, The City
of New York (the "Warrant Agent's Office"), and which are, on the
date of this Agreement, 111 Wall Street, New York, New York
10043, Attention: Corporate Trust Department, or at the office of
any successor Warrant Agent (as provided in Section 5.03). Upon
surrender of any Warrant Certificate for exchange, the Warrant
Agent shall cancel such Warrant Certificate, and the Company
shall execute, and the Warrant Agent shall countersign and
deliver, in accordance with Sections 1.02 and 1.03, one or more
new Warrant Certificates of like tenor and representing an equal
number of unexercised Warrants.
(c) Warrant Certificates issued upon transfer or exchange
pursuant to Section 1.04(a) or (b) shall be valid obligations of
the Company, evidencing the same obligations of the Company as
the Warrant Certificates surrendered for transfer or exchange,
and entitled to the same benefits under this Agreement as were
such Warrant Certificates prior to such surrender.
(d) Except as provided in Section 1.05, no service charge
shall be made for any registration of transfer or exchange of
Warrant Certificates, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or
exchange of Warrant Certificates, other than exchanges pursuant
to this Section 1.04 not involving any transfer.
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(e) In the event that upon any exercise of Warrants
evidenced by a Warrant Certificate the number of Warrants
exercised shall be less than the total number of Warrants
evidenced by such Warrant Certificate, there shall be issued to
the holder thereof or his assignee a new Warrant Certificate
evidencing the number of Warrants not exercised.
SECTION 1.05. Mutilated or Missing Warrant Certificates.
(a) If any Warrant Certificate is mutilated, lost, stolen or
destroyed, the Company may in its discretion execute, and the
Warrant Agent may countersign and deliver, in exchange and
substitution for and upon cancellation of the mutilated Warrant
Certificate, or in lieu of the Warrant Certificate lost, stolen
or destroyed, a new Warrant Certificate of like tenor and
representing an equal number of unexercised Warrants, bearing an
identification number not contemporaneously outstanding, but only
(in case of loss, theft or destruction) upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such loss,
theft or destruction of such Warrant Certificate and security or
indemnity, if requested, also satisfactory to them. Applicants
for such substitute Warrant Certificates shall also comply with
such other reasonable regulations and pay such other reasonable
charges as the Company or the Warrant Agent may prescribe.
(b) In case any such mutilated, lost, stolen or destroyed
Warrant Certificate has been or is about to be exercised, or
deemed to be exercised, the Company in its absolute discretion
may, instead of issuing a new Warrant Certificate, direct the
Warrant Agent to treat the same as if it had received an Exercise
Notice (as defined herein) in proper form in respect thereof, as
provided herein, or as being subject to automatic exercise, as
the case may be.
(c) Each new Warrant Certificate issued pursuant to this
Section 1.05 in lieu of any mutilated, lost, stolen or destroyed
Warrant Certificate shall be an original, additional contractual
obligation of the Company, whether or not, in the case of any
lost, stolen or destroyed Warrant Certificate, such Warrant
Certificate shall at any time be enforceable by anyone, and shall
be entitled to the same benefits under this Agreement as the
Warrant Certificate that was mutilated, lost, stolen or
destroyed.
(d) Upon the issuance of any new Warrant Certificate in
accordance with this Section 1.05, the Company 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 (including the fees and expenses of the
Warrant Agent) connected therewith.
(e) The provisions of this Section 1.05 are exclusive and
shall preclude (to the extent lawful) any other rights and
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remedies with respect to the replacement or payment of mutilated,
lost, stolen or destroyed Warrant Certificates.
SECTION 1.06. Registered Holders. Prior to due presentment
for registration of transfer, the Company, the Warrant Agent, and
any agent of the Company or the Warrant Agent, may deem and treat
the person in whose name a Warrant Certificate shall be
registered in the Warrant Register (a "Registered Holder") as the
absolute owner of the Warrants evidenced thereby (notwithstanding
any notation of ownership or other writing thereon) for any
purpose whatsoever, and as the person entitled to exercise the
rights represented by the Warrants evidenced thereby, and neither
the Company nor the Warrant Agent, nor any agent of the Company
or the Warrant Agent, shall be affected by any notice to the
contrary. This Section 1.06 shall be without prejudice to the
rights of Warrantholders as described elsewhere herein.
SECTION 1.07. Global Warrant Certificate. (a) Any Global
Warrant Certificate issued in accordance with Section 1.01 shall
be substantially in the form set forth in Exhibit B-1 hereto,
with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Agreement,
and may represent any number of whole Warrants. The Global
Warrant Certificate may have imprinted or otherwise reproduced
thereon such letters, numbers or other marks of identification or
designation and such legends or endorsements as the officers of
the Company executing the same may approve (execution thereof to
be conclusive evidence of such approval) and which are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation
made pursuant thereto, or with any rule or regulation of any
stock exchange on which the Warrants may be listed, or of the
Depository, or to conform to usage. The Global Warrant
Certificate shall be signed on behalf of the Company upon the
same conditions, in substantially the same manner and with the
same effect as the Warrant Certificates.
(b) The Warrant Agent is authorized, from time to time
during the Conversion Option Period, upon receipt of a Global
Warrant Certificate from the Company, duly executed on behalf of
the Company, to countersign such Global Warrant Certificate. The
Global Warrant Certificate shall be manually countersigned and
dated the date of its countersignature by the Warrant Agent and
shall not be valid for any purpose unless so countersigned. The
Warrant Agent shall deliver the Global Warrant Certificate to or
upon the order of the Company against receipt of an appropriate
amount of Certificated Warrants (such Certificated Warrants shall
be destroyed or otherwise disposed of in accordance with
instructions provided by the Company). One or more Global
Warrant Certificates may be executed by the Company and delivered
to the Warrant Agent on or after the date of execution of this
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Agreement; provided that only one Global Warrant Certificate
shall be outstanding at any one time.
The Company reserves the right to issue, from time to time
after the date of execution of this Agreement, additional
Warrants, and in connection therewith the Global Warrant
Certificate may be exchanged for a new Global Warrant Certificate
to reflect the issuance by the Company of such additional
Warrants. To effect such an exchange the Company shall deliver
to the Warrant Agent a new Global Warrant Certificate duly
executed on behalf of the Company as provided in Section 1.02.
The Warrant Agent shall authenticate the new Global Warrant
Certificate as provided in this Section and shall deliver the new
Global Warrant Certificate to the Depository in exchange for, and
upon receipt of, the Global Warrant Certificate then held by the
Depository. The Warrant Agent shall cancel the Global Warrant
Certificate delivered to it by the Depository, destroy such
Global Warrant Certificate and provide a certificate of
destruction to the Company.
(c) The Global Warrant Certificate will initially be
registered in the name of a nominee of The Depository Trust
Company (the "Depository", which term, as used herein, includes
any successor securities depository selected by the Company).
The Warrant holdings of the Participants will be recorded on the
books of the Depository. The holdings of customers of the
Participants and the identity of the Warrantholders will be
reflected on the books and records of such Participants and will
not be known to the Warrant Agent, the Company or the Depository.
The Global Warrant Certificate will be held by the Depository or
its agent.
The Company may from time to time select a new entity to act
as Depository with respect to the Warrants and, if such selection
is made, the Company shall promptly give the Warrant Agent notice
to such effect identifying the new Depository, and the Global
Warrant Certificate shall be delivered to the Warrant Agent and
shall be transferred to the new Depository as provided below as
promptly as possible. Appropriate changes may be made in the
forms of the Global Warrant Certificate, the Exercise Notice and
the related notices to be delivered in connection with an
exercise to reflect the selection of the new Depository.
(d) Except as otherwise provided herein or in the Global
Warrant Certificate, the Warrant Agent shall from time to time
register the transfer of the Global Warrant Certificate in its
records (which may be maintained electronically), subject to such
reasonable regulations as the Company or the Warrant Agent may
prescribe, only to the Depository, to another nominee of the
Depository, to a successor Depository or to a nominee of a
successor Depository, upon surrender of such Global Warrant
Certificate, duly endorsed, or accompanied by a written
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instrument or instruments of transfer in form satisfactory to the
Warrant Agent and the Company, duly executed by the Registered
Holder thereof or by the duly appointed legal representative
thereof, or by its duly authorized attorney, such signature to be
guaranteed by a bank or trust company with a correspondent office
in The City of New York or by a member of a national securities
exchange. Upon any such registration of transfer, a new Global
Warrant Certificate shall be issued to the transferee and the
surrendered Global Warrant Certificate shall be canceled by the
Warrant Agent.
The Global Warrant Certificate may be transferred as
provided above at the option of the holder thereof, when
surrendered to the Warrant Agent's Office, or at the office of
any successor Warrant Agent (as provided in Section 5.03), for
another Global Warrant Certificate of like tenor and representing
an equal number of unexercised Warrants.
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise
Amounts; Exercise Notice. Subject to the limitations set forth
herein and in Section 2.03, each Warrant may be irrevocably
exercised in whole but not in part, at or prior to 3:00 p.m., New
York City time, on any New York Business Day (as defined herein)
from its date of issuance until 3:00 p.m., New York City time, on
the earlier of (i) the New York Business Day immediately
preceding October __, 1997 (the "Expiration Date") and (ii) the
Delisting Date (as defined herein). Except in the event of
automatic exercise, each Warrant shall be irrevocably exercised
either (i) in the case of Warrants represented by Warrant
Certificates ("Certificated Warrants"), including Certificated
Warrants held through CEDEL (as defined herein) or Euroclear (as
defined herein), by surrender to the Warrant Agent (at its
address as set forth in such Exercise Notice (as defined herein)
or at such other address as the Warrant Agent may specify from
time to time) of the Warrant Certificate representing such
Warrant, with the Exercise Notice duly completed and executed by
the Registered Holder of such Warrant (or, in the case of Warrant
Certificates held through the facilities of CEDEL or Euroclear,
by CEDEL as a Euroclear participant, as the case may be) or (ii)
in the case of Warrants represented by the Global Warrant
Certificate ("Book-Entry Warrants"), upon receipt by the Warrant
Agent of such Warrant delivered free on the records of the
Depository to the Warrant Agent's Depository Participant Account
(entitled Citibank, N.A. Corporate Trust Warrant Agent Account,
No. [2659], or such other account at the Depository as the
Warrant Agent shall designate in writing to the Depository) (the
"Warrant Account") pursuant to an Exercise Notice to the Warrant
8
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Agent from a Participant, in the case of Book-Entry Warrants held
through the Depository, CEDEL, in the case of such Warrants held
through CEDEL, or a Euroclear participant, in the case of such
Warrants held through Euroclear, acting, directly or indirectly,
on behalf of the Warrantholder; provided, however, that Exercise
Notices are subject to rejection by the Warrant Agent as provided
herein. Not fewer than 500 Warrants in either certificated or
book-entry form may be exercised by or on behalf of any one
Warrantholder at any one time, except in the event of automatic
exercise on the Expiration Date or the Delisting Date, or in the
case of cancellation of the Warrants as a result of an
Extraordinary Event (as defined herein). Each Exercise Notice
shall be unconditional. Except as provided in Section 2.02(b),
the Warrant Agent shall be entitled, with no duty of inquiry, to
rely conclusively on any Exercise Notice received by it.
"Exercise Notice" means an irrevocable notice of exercise to the
Warrant Agent at its address, which notice (A) for Warrant
Certificates, shall be on the reverse of the Warrant Certificate
or on such other form as the Company and the Warrant Agent may
approve, and (B) for Book-Entry Warrants, shall be substantially
in the form set forth in Exhibit B-2 hereto or such other form as
the Company and the Warrant Agent may approve and may be given by
facsimile transmission. For purposes of this Agreement, "New
York Business Day" means any day other than a Saturday, Sunday or
a day on which either the Chicago Board Options Exchange (the
"CBOE") or the New York Stock Exchange (the "NYSE") is not open
for securities trading or commercial banks in New York City are
required or authorized by law or executive order to remain
closed.
SECTION 2.02. Exercise and Delivery of Warrants. (a) Except
in the event of automatic exercise on the Expiration Date or the
Delisting Date, or in the event of an Extraordinary Event or
Exercise Limitation Event is declared, or in the event of a
postponement pursuant to Section 2.04, or as a result of the
exercise of a number of Warrants exceeding the limits on exercise
set forth in Section 2.04, the valuation date (the "Valuation
Date") for a Warrant shall be the first Index Calculation Date
(as defined herein) following the applicable Exercise Date (as
defined herein). The "Exercise Date" for a Warrant will be the
New York Business Day on which the Warrant Agent has received (i)
in the case of Warrants other than those held through the
facilities of Centrale de Livraison de Valeurs Mobilieres S.A.
("CEDEL") or the Euroclear System ("Euroclear"), either (A) for
Certificated Warrants, the Warrant Certificate representing such
Warrant with the Exercise Notice duly completed and executed or
(B) for Book-Entry Warrants, the Warrant with the Exercise Notice
duly completed and executed, in either case, at or prior to 3:00
p.m., New York City time (the "Notice Date"); and if the Warrant
Agent shall receive any such Warrant Certificate or Warrant or
Exercise Notice after 3:00 p.m., New York City time, on such New
York Business Day, then such Warrant Certificate or Warrant shall
9
<PAGE>
be deemed to have been received at or prior to 3:00 p.m., New
York City time, on the New York Business Day next succeeding such
Index Calculation Date (which shall be considered the Notice
Date), and in such event the Valuation Date shall be the next
Index Calculation Date following the New York Business Day on
which the Warrant Agent is deemed to have received such Warrant
Certificate or Warrant together with the Exercise Notice or (ii)
in the case of Warrants held through the facilities of CEDEL or
Euroclear, the Exercise Notice (by facsimile transmission) at or
prior to 3:00 p.m., New York City time, provided that the Warrant
is received by the Warrant Agent by 3:00 p.m., New York City
time, on the applicable Valuation Date; and if the Warrant Agent
shall receive such Exercise Notice after 3:00 p.m., New York City
time, on any Index Calculation Date, then the Exercise Notice
shall be deemed to have been received at or prior to 3:00 p.m.,
New York City time, on the next succeeding New York Business Day
(which shall be considered the Notice Date), and in such event
the Valuation Date shall be the next Index Calculation Date
following the New York Business Day on which the Warrant Agent is
deemed to have received such Exercise Notice; provided, however,
that if the Warrant Agent receives the Warrant or Warrant
Certificate after 3:00 p.m., New York City time, on the Valuation
Date, then the Exercise Date for such Warrant shall be the day on
which such Warrant is received or, if such day is not a New York
Business Day, the next succeeding New York Business Day, and the
Valuation Date for such Warrant shall be the first Index
Calculation Date following such Exercise Date; provided further,
however, that in the case of exercises by Euroclear participants,
Euroclear must, by tested telex to the Warrant Agent by 9:00
a.m., New York City time, on the Valuation Date, confirm (a
"Euroclear Confirmation") that the Warrants will be received by
the Warrant Agent by 3:00 p.m., New York City time, on such Date.
If such Euroclear Confirmation is received after 9:00 a.m., New
York City time, on the Valuation Date, the Company will be
entitled to direct the Warrant Agent to reject the related
Exercise Notice or waive the requirement for timely delivery of
such Euroclear Confirmation. Any Warrant Certificate or Warrant
received after 3:00 p.m., New York City time, on the earlier of
(1) the New York Business Day immediately preceding the
Expiration Date and (2) the last New York Business Day prior to
the effective date on which the Warrants are delisted from, or
permanently suspended from trading on (within the meaning of the
Securities Exchange Act of 1934 and the rules and regulations of
the Securities and Exchange Commission thereunder), the CBOE and
not accepted at the same time for listing on another United
States national securities exchange (such New York Business Day
being the "Delisting Date") (or, in the case of Warrants held
through the facilities of CEDEL or Euroclear, after 3:00 p.m.,
New York City time, on the first Index Calculation Date following
such dates), shall be deemed not to have been delivered and the
related Exercise Notice shall be void and of no effect; provided,
however, that if the Company first receives notice of such
10
<PAGE>
delisting or suspension of the Warrants on the same day on which
such Warrants are delisted or suspended, such day will be deemed
the Delisting Date for purposes of this Agreement. For purposes
of this Agreement, "Index Calculation Date" means any day on
which the Tokyo Stock Exchange is open for trading and Index is
calculated and published.
(b) The Warrant Agent shall, in the case of Warrants other
than those held through CEDEL or Euroclear, following receipt of
proper delivery of a Warrant in accordance with Section 2.02(a),
accompanied by a completed Exercise Notice, and, in the case of
Warrants held through CEDEL or Euroclear, following receipt of
proper delivery of a completed Exercise Notice in accordance with
Section 2.02(a):
(i) promptly (1) for Certificated Warrants not held
through CEDEL or Euroclear, determine whether such Exercise
Notice has been duly completed and is in proper form duly
executed by the Registered Holder thereof or by the duly
appointed legal representative thereof or by a duly
authorized attorney, (2) for Certificated Warrants held
through CEDEL or Euroclear, determine whether such Exercise
Notice has been duly completed and is in proper form duly
executed by CEDEL or the Euroclear participant tendering
such Warrant, as applicable, (3) for Book-Entry Warrants not
held through CEDEL or Euroclear, determine whether such
Exercise Notice has been duly completed and is in proper
form and (4) for Book-Entry Warrants held through CEDEL or
Euroclear, determine whether such Exercise Notice has been
duly completed and is in proper form duly executed by CEDEL
or the Euroclear participant tendering such Warrant, as
applicable; and if the Warrant Agent determines that the
Exercise Notice has not been duly completed or is not in
proper form or, in the case of Certificated Warrants, has
not been so executed, the Warrant Agent promptly shall (X)
reject such Exercise Notice and shall send to the entity
that executed such Exercise Notice a notice of rejection
substantially in the form set forth in Exhibit C-1 or
Exhibit C-2 hereto, as appropriate, and, in the case of
Certificated Warrants, return to the Registered Holder that
submitted such Exercise Notice, by first class mail, the
Warrant Certificates evidencing such Warrants (to the extent
received, in the case of Warrants held through CEDEL or
Euroclear), or, in the case of Book-Entry Warrants, shall
redeliver such Warrants (to the extent received in the case
of Warrants held through CEDEL or Euroclear) free through
the facilities of the Depository to the account from which
they were transferred to the Warrant Agent and (Y) in either
case, shall not take the actions required by clauses
(ii)-(ix) below with respect to such Exercise Notice or the
related Warrants; provided, however, that the Warrant Agent
shall deliver a copy of the Exercise Notice relating to such
11
<PAGE>
Warrants to the Company as required by Section 2.02(b)(ix)
below and the Company may waive any defect in the form of
such Exercise Notice;
(ii) with respect to each Warrant held through
Euroclear for which an Exercise Notice was received,
promptly telephone Euroclear to determine whether Euroclear
anticipates that it will be able to provide a Euroclear
Confirmation as required by Section 2.02(a);
(iii) notify the Company and the Determination Agent
(and such other parties (not to exceed two) as the Company
shall designate in writing) by 5:00 p.m., New York City
time, on the New York Business Day that such Exercise Notice
has been received (or shall be deemed to have been received)
of (A) the total number of Warrants covered by such Exercise
Notice, (B) the number of such Warrants subject to the Limit
Option (as defined herein) ("Contingently Tendered
Warrants"), (C) the number of such Warrants not subject to
the Limit Option and (D) the number of such Warrants, if
any, as to which Euroclear has not advised the Warrant Agent
that it anticipates being able to provide a Euroclear
Confirmation as required by Section 2.02(a);
(iv) with respect to Warrants held through Euroclear,
determine whether the Warrant Agent has received by 9:00
a.m., New York City time, on the Valuation Date relating to
such Warrants or if the Valuation Date relating to such
Warrants is not a New York Business Day, on the next
succeeding New York Business Day, Euroclear Confirmations
with respect to such Warrants as required by Section
2.02(a), and if the Warrant Agent has not received any such
Euroclear Confirmation by such time, notify the Company (and
such other parties (not to exceed two) as the Company shall
designate in writing) by 10:00 a.m., New York City time, on
such Valuation Date or if the Valuation Date relating to
such Warrants is not a New York Business Day, on the next
succeeding New York Business Day, of the number of such
Warrants in respect of which the Warrant Agent has not
received such Euroclear Confirmations and (except to the
extent the Company has notified the Warrant Agent that it
has waived the requirement of timely delivery of such
Euroclear Confirmation) send to the Euroclear participant
that executed such Exercise Notice for which no related
Euroclear Confirmation was received (at the address
specified in such notice) a notice of rejection
substantially in the form set forth in Exhibit C-2 hereto;
(v) if any of the Warrants covered by such Exercise
Notice constitute Contingently Tendered Warrants, the
Warrant Agent shall, by 5:00 p.m., New York City time, on
the Valuation Date or if the Valuation Date relating to such
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<PAGE>
Warrants is not a New York Business Day, on the next
succeeding New York Business Day, (A) obtain from the
Determination Agent the Reference Index (as defined herein)
for such Warrants and the Index Spot Price (as defined
herein) for the Index Calculation Date that, but for the
provisions of Section 2.02(g), would be the Valuation Date
for such Warrants, (B) determine in accordance with Section
2.02(g) whether such Contingently Tendered Warrants will be
subject to exercise after giving effect to the Limit Option
and, if such Warrants will not be subject to exercise, send
to the Registered Holder (or the entity that executed the
Exercise Notice in the case of Certificated Warrants held
through CEDEL or Euroclear), in the case of Certificated
Warrants, or to the Participant, in the case of the
Book-Entry Warrants, that submitted such Exercise Notice a
notice of rejection substantially in the form set forth in
Exhibit D-1 or Exhibit D-2 hereto, as appropriate, with
respect to such Warrants and, in the case of Certificated
Warrants, return to the Registered Holder (or the entity
that executed the Exercise Notice in the case of
Certificated Warrants held through CEDEL or Euroclear) that
submitted such Exercise Notice, by first class mail, the
Warrant Certificates evidencing such Warrants, or, in the
case of Book-Entry Warrants (to the extent received in the
case of Warrants held through CEDEL and Euroclear),
redeliver the Warrants free through the facilities of the
Depository to the account of such Participant and (C) notify
the Company and the Determination Agent as to whether such
Contingently Tendered Warrants will be subject to exercise;
(vi) by 5:00 p.m., New York City time, on the
Valuation Date (or, if such Valuation Date is not a New York
Business Day, on the next succeeding New York Business Day)
(A) determine the sum of (1) the number of such Warrants not
subject to the Limit Option (i.e., the number of Warrants
determined pursuant to clause (iii)(C) above) plus (2) the
number of such Warrants that are Contingently Tendered
Warrants that will be subject to exercise notwithstanding
the Limit Option (i.e., the number of Warrants so identified
pursuant to clause (v)(B) above) (all of such Warrants, the
"Exercised Warrants") and (B) notify the Company and the
Determination Agent of the total number of Exercised
Warrants so determined (if such number is zero, the Warrant
Agent shall not take the actions required by clauses (vii)
and (viii) with respect to such Exercise Notice or the
related Warrants);
(vii) calculate the Cash Settlement Value of the
exercised Warrants (excluding any Warrants held through
CEDEL or Euroclear as to which timely delivery of the
related Warrant has not been made) as of their Valuation
Date) in the manner set forth in Section 2.02(d) by no later
13
<PAGE>
than 5:00 p.m., New York City time, on the New York Business
Day next succeeding the Valuation Date (or, if such
Valuation Date is not a New York Business Day, on the next
succeeding New York Business Day) (unless the Cash
Settlement Value shall be calculated by the Determination
Agent);
(viii) notify the Company (and such other parties (not
to exceed two) as the Company shall designate in writing) by
5:00 p.m., New York City time, on the New York Business Day
next succeeding the Valuation Date (or, if such Valuation
Date is not a New York Business Day, on the next succeeding
New York Business Day) of the Cash Settlement Value payable
in respect of the Exercised Warrants, and send notices of
confirmation substantially in the form included in Exhibit
C-1 or Exhibit C-2 hereto, as appropriate, to the
appropriate Registered Holder (or the entity that executed
the related Exercise Notice, in the case of Certificated
Warrants held through CEDEL or Euroclear) or Participant
specifying therein the reference number assigned by the
Warrant Agent to each accepted Exercise Notice; and
(ix) promptly deliver a copy of each Exercise Notice
to the Company and advise the Company of such other matters
relating to the Exercised Warrants as the Company shall
reasonably request. Any notice to be given to the Company
by the Warrant Agent pursuant to this Section 2.02 or
Section 2.03 shall be by telephone (promptly confirmed in
writing) or telecopy.
Except in the case of Warrants subject to automatic exercise
and for Warrants that upon exercise entitle the holder thereof to
receive an Alternative Settlement Amount in lieu of the Cash
Settlement Value, if on any Valuation Date the Cash Settlement
Value for any Warrants then exercised would be zero, then the
attempted exercise of such Warrants shall be void and of no
effect and either (i) for Certificated Warrants, the Warrant
Certificate evidencing such Warrants (to the extent received, in
the case of Warrants held through CEDEL or Euroclear) shall be
promptly returned by the Warrant Agent to the Registered Holder
(or the entity that executed the related Exercise Notice, in the
case of Certificated Warrants held through CEDEL or Euroclear) by
first class mail or (ii) for Book-Entry Warrants, the Warrants
shall be transferred by the Warrant Agent back to the Participant
that submitted them free on the records of the Depository (to the
extent received in the case of Warrants held through CEDEL or
Euroclear) and, in either case, such Warrantholder shall be
permitted to re-exercise such Warrants prior to the Expiration
Date or the Delisting Date, as the case may be.
(c) Provided that the Company has made adequate funds
available to the Warrant Agent in a timely manner, which shall in
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<PAGE>
no event be later than 3:00 p.m., New York City time, on the
sixth New York Business Day following a Valuation Date (or, if
the Valuation Date is not a New York Business Day, on the sixth
New York Business Day following the New York Business Day next
succeeding the Valuation Date) (the "Settlement Date"), the
Warrant Agent will be responsible for making its payment
available either (A) for Certificated Warrants, to each
appropriate Registered Holder in the form of a cashier's check or
an official bank check, or (in the case of payments of at least
$100,000) by wire transfer to a U.S. dollar account maintained by
such Registered Holder in the United States (at such Registered
Holder's election as specified in the applicable Exercise
Notice), after 3:00 p.m., New York City time, but prior to the
close of business, on such Settlement Date or (B) for Book-Entry
Warrants, to each appropriate Participant in the form of a
cashier's check or an official bank check, or (in the case of
payments of at least $100,000) by wire transfer to a U.S. dollar
account maintained by such Participant in the United States (at
the Participant's election as specified in the Exercise Notice),
after 3:00 p.m., New York City time, but prior to the close of
business, on such Settlement Date. For either clause (A) or (B)
above, such payment shall be in the amount of the aggregate Cash
Settlement Value in respect of the Warrant Certificates or
Warrants that were delivered to the Warrant Agent (together with
the related Exercise Notice) as provided in Sections 2.01 and
2.02(a) and (b).
(d) The "Cash Settlement Value" of an exercised Warrant
will equal an amount in U.S. dollars equal to the product, if
positive, of _______ multiplied by the quotient (rounded down to
the nearest cent) of (A) the amount, if any, by which the Index
Spot Price for the applicable Valuation Date exceeds __________
(the "Index Strike Index"), divided by (B) a fixed Japanese
yen/U.S. dollar exchange rate of yen_____ per U.S.$1.00; provided,
however, that if such amount is less than zero, then the Cash
Settlement Value shall be zero.
The "Index Spot Price" on any Valuation Date will be
determined by the Determination Agent and will equal the closing
level of the Index (as calculated by the CBOE) on the Valuation
Date relating to such Exercise Date.
The Index Spot Price used to determine the Cash Settlement
Value on any Valuation Date will be rounded to the second decimal
place (e.g., 84.00), rounding up if the next succeeding decimal
place, without regard to rounding, is five or higher. Any such
Cash Settlement Value will be rounded downwards, if necessary, to
the nearest cent. In no event shall a Warrantholder be entitled
to any interest on any Cash Settlement Value.
The "Index" is a new stock index initially comprised of 40
stocks of companies that are estimated to be the largest Japanese
15
<PAGE>
export companies, as measured by total annual yen-dominated
export revenue during the last five (5) years, whose stocks are
listed on the First Section of the Tokyo Stock Exchange and which
have a stock market capitalization of greater than 100 billion
Japanese yen, whose daily trading volume averaged over 100
million Japanese yen per day over the last 250 trading days and
whose export revenue as a percentage of total revenues totalled
more than 20% during the last five (5) years. The Index was
designed by Nomura Securities International, Inc. and is
calculated, published and disseminated by the CBOE, in its sole
discretion.
References in this Agreement to "U.S. dollars" or "U.S. $"
are to the lawful currency of the United States of America.
References to "Japanese yen" or "yen" are to the lawful currency of
Japan.
(e) In the event a Global Warrant Certificate is issued,
the Warrant Agent shall cause its records, which may be kept
electronically, to be marked to reflect the reduction in the
number of Warrants represented by the Global Warrant Certificate
by the number of Warrants that were delivered to the Warrant
Account and for which payment has been made as provided in
Section 2.02(c) promptly after such delivery and payment. Absent
manifest error, the Warrant Agent's records shall be conclusive
evidence of such matters.
(f) The Company has appointed PaineWebber and PaineWebber
accepts such appointment, to be the Company's Determination Agent
to make such calculations as may be required upon the occurrence
of any of the circumstances described in Section 2.02(g) or 2.03,
including, without limitation, calculation of the Index Spot
Price and any Reference Index. The Determination Agent shall act
as an independent expert and not as an agent of the Company, and,
unless otherwise provided by this Agreement, its calculations and
determinations under this Agreement shall, absent manifest error,
be final and binding on the Company, the Warrant Agent, the
Warrantholders and any Participant. Any such calculations will
be made available to a Warrantholder for inspection at the
Warrant Agent's Office.
The Company agrees, for the benefit of the Warrantholders
from time to time of the Warrants, that there shall at all times
be a Determination Agent hereunder until all the Warrants are no
longer outstanding or until monies for the payment of all
outstanding Warrants, if any, shall have been paid to the Warrant
Agent and shall have been returned to the Company as provided in
Section 2.06, whichever occurs earlier. Resignation, removal and
appointment of the Determination Agent shall be in accordance
with the procedures set forth for the resignation, removal and
appointment of the Warrant Agent, as provided in Section 5.03,
except that a successor Determination Agent need not be a banking
16
<PAGE>
institution with offices south of Chambers Street in the Borough
of Manhattan, The City of New York, and may only be appointed if
such successor has been nominated by the Company and approved by
the predecessor Determination Agent.
The Company agrees promptly to pay the Determination Agent
the compensation to be agreed upon with the Company for all
services rendered by the Determination Agent hereunder. The
Company also agrees to indemnify the Determination Agent for, and
to hold it harmless against, any loss, liability, cost or expense
(including reasonable attorneys' fees and expenses) incurred by
the Determination Agent by reason of its being made a party to a
suit or claim arising out of this Agreement; provided, however,
that such indemnity shall in no event apply to the extent that
any such loss, liability, cost or expense is a result of the
negligence, bad faith or breach of this Agreement on its part in
connection with the services rendered by it hereunder. The
indemnity obligation of the Company shall continue
notwithstanding the termination of this Agreement or the
resignation or removal of the Determination Agent.
(g) Except in the event of an automatic exercise (as
described in Section 2.03 below) and except upon the occurrence
of an Extraordinary Event as a result of which an Alternative
Settlement Amount is payable (as provided in Section 2.03 below),
in connection with any exercise of Warrants, the related Exercise
Notice may specify that such exercise (including any exercise
following a postponed Valuation Date pursuant to Section 2.03(b)
if the Cash Settlement Value is to be paid with respect to such
Warrants) is subject to the condition that the Index Spot Price
that would otherwise be used to determine the Cash Settlement
Value of such Warrants used to determine the Cash Settlement
Value of such Warrants shall not have declined by 15 or more
points from the Reference Index for such Warrants. "Reference
Index", with respect to any Contingently Tendered Warrants, means
the Index Spot Price on the New York Business Day that such
Exercise Notice has been received (or shall be deemed to have
been received) (or, if such New York Business Day is not an Index
Calculation Date, on the first Index Calculation Date preceding
such New York Business Day). The option of a Warrantholder to
condition an exercise of Warrants as provided in this Section
2.02(g) is herein referred to as the "Limit Option". If a
Warrantholder elects the Limit Option in connection with any
exercise of Warrants, the following provisions shall apply:
(i) To be valid, such election must be specified in
the related Exercise Notice. Each of the Warrant Agent and
the Company shall be entitled to rely conclusively on such
Exercise Notice, as received by the Warrant Agent, in
determining whether such election has been validly made. In
connection with any exercise of 500 or more Warrants, a
Warrantholder may elect to subject only a portion of such
17
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Warrants to the Limit Option; provided, however, that the
number of such Warrants subject to the Limit Option and the
number of such Warrants not subject to the Limit Option
shall in each case not be less than 500. Registered Holders
and Participants shall be required to certify that the
number of Warrants exercised on behalf of any Warrantholder
pursuant to the related Exercise Notice that is subject to
the Limit Option is not less than 500.
(ii) The Reference Index shall be determined by the
Determination Agent, which determination shall be conclusive
and binding for all purposes relating to such exercise.
(iii) In the event that the Index Spot Price for the
first New York Business Day following the New York Business
Day that such Exercise Notice has been received (or shall be
deemed to have been received) (i.e., for the day that, but
for the provisions of this Section 2.02(g), would be the
Valuation Date for such Warrants) has declined by 15 or more
points from the Reference Index for such Warrants, such
Warrants (A) shall not be subject to exercise and shall be
treated for all purposes of this Agreement and the Warrant
Certificates and Global Warrant Certificate as if the
related Exercise Notice had never been received by the
Warrant Agent, and (B) shall not constitute "Exercised
Warrants" for purposes of Section 2.02(b). If such Index
Spot Price has not declined by 15 or more points from such
Reference Index, such Warrants shall be subject to exercise
as provided in this Section 2.02 and shall be deemed to be
"Exercised Warrants" for such purposes. The Warrant Agent's
determination shall be conclusive and binding for all
purposes relating to such Warrants.
(iv) Except as provided in Section 2.03(b), the Limit
Option (based on the Reference Index as determined for the
New York Business Day that such Exercise Notice has been
received (or shall be deemed to have been received) or, if
applicable, the first Index Calculation Date preceding such
New York Business Day) shall continue to be applicable to
any Exercised Warrant for which the Valuation Date has been
postponed as a result of the occurrence of an Extraordinary
Event or an Exercise Limitation Event until the Warrants are
canceled as provided in Section 2.03(b) or until the
Expiration Date or the Delisting Date.
SECTION 2.03. Automatic Exercise of Warrants; Exercise upon
an Extraordinary Event or Exercise Limitation Event. (a) All
Warrants for which the Warrant Agent has not received an Exercise
Notice in proper form at or prior to 3:00 p.m., New York City
time, on the earlier of (i) the New York Business Day preceding
the Expiration Date and (ii) the Delisting Date, or for which the
Warrant Agent has received an Exercise Notice in proper form but
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<PAGE>
with respect to which timely delivery of the relevant Warrants
has not been made, and which have not been canceled prior to such
time, will be deemed automatically exercised on such date without
any requirement of an Exercise Notice to the Warrant Agent. The
Exercise Date for such Warrants shall be the Expiration Date or
the Delisting Date, as the case may be, or, if such date is not a
New York Business Day, the next succeeding New York Business Day,
and the Valuation Date for such Warrants shall be the first Index
Calculation Date following the Exercise Date for such Warrants.
The Warrant Agent shall by 5:00 p.m., New York City time, on
the Expiration Date or the Delisting Date, as the case may be,
or, if such date is not a New York Business Day, the next
succeeding New York Business Day, notify the Company (and such
other parties (not to exceed two) as the Company shall designate
in writing) of the number of Warrants to be automatically
exercised on such day. The Warrant Agent shall (i) by 3:00 p.m.,
New York City time, on the New York Business Day next succeeding
the Valuation Date, calculate for such Warrants the Cash
Settlement Value (in the manner provided in Section 2.02(d)) of
the Warrants to be automatically exercised, (ii) by 5:00 p.m.,
New York City time, on the New York Business Day next succeeding
such Valuation Date, notify the Company (and such other parties
(not to exceed two) as the Company shall designate in writing) of
the Cash Settlement Value payable in respect of such exercised
Warrants and (iii) advise the Company of such other matters
relating to the exercised Warrants as the Company shall
reasonably request.
If the Company determines that an Extraordinary Event or an
Exercise Limitation Event (as defined herein) has occurred and is
continuing on the Expiration Date or the Delisting Date, the
Company shall so notify the Warrant Agent and the Determination
Agent, and the Cash Settlement Value with respect to the
exercised Warrants shall be equal to, and be calculated in the
same manner as, an "Alternative Settlement Amount", in accordance
with Section 2.03(b) herein (treating the Expiration Date or the
Delisting Date, as the case may be, as the date on which the
Warrants were canceled for the purposes of Section 2.03(b)).
With respect to Warrants subject to automatic exercise
(other than Book-Entry Warrants and Warrants subject to postponed
exercise following the occurrence of an Extraordinary Event or an
Exercise Limitation Event as described in Section 2.03(b)), the
Company shall make available to the Warrant Agent, not later than
3:00 p.m., New York City time, on the sixth New York Business Day
following the Valuation Date for automatically exercised Warrants
(or if such Valuation Date is not a New York Business Day, on the
sixth New York Business Day following the New York Business Day
next succeeding the Valuation Date) (in any such case, the
"Automatic Settlement Date"), funds in an amount equal to, and
for the payment of, the aggregate Cash Settlement Value of such
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Warrants. Subject to such funds having been made available as
provided in the preceding sentence, the Warrant Agent will be
responsible for making its payment available to each appropriate
Registered Holder in the form of a cashier's check or an official
bank check, or (in the case of payments of at least $100,000) by
wire transfer to a U.S. dollar account maintained by such
Registered Holder in the United States (at such Registered
Holder's election), after 3:00 p.m., New York City time, but
prior to the close of business, on the Automatic Settlement Date,
against receipt by the Warrant Agent at the Warrant Agent's
Office from such Registered Holder of its Warrant Certificates.
Such payment shall be equal to the aggregate Cash Settlement
Value of the Warrants in respect of the Warrants, evidenced by
such Warrant Certificates that were exercised automatically on
the Expiration Date or the Delisting Date, as the case may be.
All Warrant Certificates delivered to the Warrant Agent shall
thereafter be promptly canceled by the Warrant Agent.
With respect to Book-Entry Warrants subject to automatic
exercise (other than Book-Entry Warrants and Warrants subject to
postponed exercise following the occurrence of an Extraordinary
Event or an Exercise Limitation Event as described in Section
2.03(b)), the Company shall make available to the Warrant Agent,
not later than 3:00 p.m., New York City time, on the Automatic
Settlement Date, funds in an amount equal to, and for the payment
of, the aggregate Cash Settlement Value of such Warrants.
Subject to such funds having been made available as provided in
the preceding sentence, the Warrant Agent will be responsible for
making funds available to the Depository in accordance with
procedures agreed upon between the Depository and the Warrant
Agent, against receipt of the Global Warrant Certificate, after
3:00 p.m., New York City time, but prior to the close of
business, on the Automatic Settlement Date, such funds to be in
an amount equal to the aggregate Cash Settlement Value of the
Book-Entry Warrants subject to such automatic exercise.
The Company will advise the Warrant Agent as soon as
practicable of the date of any expected delisting or permanent
suspension of trading of the Warrants and will immediately inform
the Warrant Agent after the Company has received notice that such
delisting or suspension has occurred, but in no event will notice
of such delisting or suspension be given to the Warrant Agent
later than 9:30 a.m., New York City time, on the New York
Business Day following the date that such delisting or suspension
occurs. The Company will use its best efforts to notify the
Warrantholders, or cause the Warrantholders to be notified, as
promptly as practicable of any expected delisting or suspension
of trading of the Warrants.
(b) Upon the occurrence of an Extraordinary Event or an
Exercise Limitation Event, the Company shall use its best efforts
to notify the Warrant Agent and the Determination Agent promptly
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that an Extraordinary Event or Exercise Limitation Event, as the
case may be, has occurred and shall promptly notify the
Warrantholders, through publication in a United States newspaper
with a national circulation, or through other means deemed
appropriate by the Company ("Publication"), that an Extraordinary
Event or an Exercise Limitation Event has occurred. Anything in
this Agreement to the contrary notwithstanding, if the Company
determines that an Extraordinary Event or Exercise Limitation
Event has occurred and is continuing on the Tokyo Business Day
(as hereinafter defined) with respect to which the Index Spot
Price on a Valuation Date is to be determined (the "Applicable
Index Business Day"), then the Cash Settlement Value of any
Warrants shall be calculated on the basis that the Valuation Date
shall be the next Index Calculation Date following an Applicable
Index Business Day on which there is no Extraordinary Event or
Exercise Limitation Event; provided, however, that if the Cash
Settlement Value of such Warrants is not calculated on or prior
to the Expiration Date or the Delisting Date, then the
Warrantholders shall receive the Alternative Settlement Amount in
lieu of the Cash Settlement Value which shall be calculated as if
such Warrants had been canceled on the Expiration Date or the
Delisting Date, as the case may be.
If the Company determines that an Extraordinary Event has
occurred and is continuing, and if it is expected by the Company
to continue, the Company may immediately cancel the Warrants by
notifying the Warrant Agent of such cancellation (the date such
notice is given being the "Cancellation Date"), and each
Warrantholder's rights with respect to the Warrants and under
this Agreement shall thereupon cease; provided, however, that
each Warrant shall be exercised (even if such Warrant would not
otherwise be exercisable on such Date because of the Limit
Option) on the basis that the Valuation Date for such Warrant
shall be the Cancellation Date and each Warrantholder shall have
the right to receive an Alternative Settlement Amount (as defined
herein) with respect to its Warrants. The Company shall use its
best efforts to promptly notify the Warrantholders through
Publication of such cancellation.
With respect to all Warrants as to which the Valuation Date
has been postponed or which have been canceled as described
above, the company shall make available to the Warrant Agent not
later than 3:00 p.m., New York City time, on the third New York
Business Day following the date on which the Cash Settlement
Value or Alternative Settlement Amount, as the case may be, has
been calculated (the "Alternative Settlement Date"), funds in an
amount equal to, and or the payment of, the aggregate Cash
Settlement Value or Alternative Settlement Amount, as applicable,
of such Warrants. Subject to such funds having been made
available as provided in the preceding sentence, the Warrant
Agent will be responsible for making a payment (i) in the case of
Certificated Warrants, to each Registered Holder that submitted a
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warrant Certificate for exercise or (ii) in the case of Book-
Entry Warrants, to the Depository, after 3:00 p.m., New York City
time, but prior to the close of business on, the Alternative
Settlement Date, in an amount equal to the aggregate Cash
Settlement Value or Alternative Settlement Amount of such
exercised Warrants.
The "Alternative Settlement Amount" shall be an amount
determined by the Determination Agent, which is equal to the
amount "X" calculated using the formula set forth below:
X = I + T x A
-------
2 B
where
I =the Cash Settlement Value of the Warrants determined as
described under Section 2.02(d), but calculated with an
Index Spot Price determined by the Determination Agent
which, subject to approval by the Company (such approval not
to be unreasonably withheld), in the reasonable opinion of
the Determination Agent, fairly reflects the value of the
stocks which comprise the Index on the Cancellation Date;
T =U.S. $ , the initial offering price per Warrant;
A =the total number of days from but excluding the Cancellation
Date for such Warrants to and including the Expiration Date;
and
B =the total number of days from but excluding the date the
Warrants were initially sold to and including the Expiration
Date.
For purposes of determining "I" in the above formula, in the
event that the Determination Agent and the Company are required,
but have not, after good faith consultation with each other and
within five days following the first day on which such
Alternative Settlement Amount may be calculated in accordance
with the above formula, agreed upon an Index Spot Price which
fairly reflects the value of the stocks which comprise the Index
on the Cancellation Date, then the Determination Agent shall
promptly nominate a third party, subject to approval by the
Company (such approval not to be unreasonably withheld), to
determine such figure and calculate the Alternative Settlement
Amount in accordance with the above formula. Such party shall
act as an independent expert and not as an agent of the Company
or the Determination Agent, and its calculation and determination
of the Alternative Settlement Amount shall, absent manifest
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error, be final and binding on the Company, the Warrant Agent,
the Determination Agent and the Warrantholders. Any such
calculations will be made available to a Warrantholder for
inspection at the Warrant Agent's Office. Neither the Company
nor such third party shall have any responsibility for good faith
errors or omissions in calculating the Alternative Settlement
Amount.
(c) For purposes of this Agreement, an "Extraordinary
Event" shall mean any one of the events, circumstances or causes
listed below:
(i) a suspension or absence of trading on the TSE
Exchange Ltd. (the "TSE") of all the stocks which then comprise
the Index; or
(ii) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any
court or any other U.S. or non-U.S. governmental authority which
would make it unlawful for the Company to perform any of its
obligations under this Agreement or the Warrants; or
(iii) any outbreak or escalation of hostilities or
other national or international calamity or crisis (including,
without limitation, natural calamities which in the opinion of
the Company may materially and adversely affect the economy of
Japan or the trading of securities generally on the TSE) which
has or will have a material adverse effect on the ability of the
Company to perform its obligations under the Warrants or to
modify the hedge of its position with respect to the Index.
For the purposes of determining whether an Extraordinary
Event has occurred: (1) a limitation on the hours or number of
days of trading will not constitute an Extraordinary Event if it
results from an announced change in the regular business hours of
the TSE and (2) an "absence of trading" on the TSE will not
include any time when the TSE itself is closed for trading under
ordinary circumstances.
(d) For purposes of this Agreement, an "Exercise Limitation
Event" shall mean any one of the events, circumstances or causes
listed below:
(i) a suspension or absence of trading on the TSE of
20% or more of the stocks which then comprise the Index; or
(ii) the suspension or material limitation on the
Singapore International Monetary Exchange, Ltd. ("SIMEX"), Osaha
Securities Exchange ("OSE") or any other major futures or
securities market (which as of the date of this Agreement
includes only SIMEX, OSE or the CBOE, but which in the Company's
judgment may change in the future) of trading in future and
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<PAGE>
option contracts related to the Index, the Tokyo Stock Price
Index ("TOPIX"), the Nikkei 225 Index or the Nikkei 300 Index.
For the purposes of determining whether an Exercise
Limitation Event has occurred: (1) a limitation on the hours or
number of days of trading will not constitute an Exercise
Limitation Event if it results from an announced change in the
regular business hours of the relevant exchange, (2) a decision
to permanently discontinue trading in the relevant contract will
not constitute an Exercise Limitation Event, (3) a suspension in
trading in a futures or options contract referred to in clauses
(i) and (ii) above, by reason of (x) a price change violating
limits set by the TSE, SIMEX, OSE or the CBOE or such futures or
securities market, (y) an imbalance of orders relating to such
contracts or (z) a disparity in bid and ask quotes relating to
such contracts will constitute a suspension or material
limitation of trading in futures or options contracts related to
the Index, (4) an "absence of trading" on the TSE will not
include any time when the TSE is closed for trading under
ordinary circumstances and (5) the occurrence of an Extraordinary
Event described in clause (i) of the definition of Extraordinary
Event will not constitute, and will supersede the occurrence of,
an Exercise Limitation Event.
SECTION 2.04. Limitation of Number of Exercisable Warrants.
All exercises of Warrants (other than on the Expiration Date or
the Delisting Date or upon cancellation of the Warrants as
provided in Section 2.03(b)) shall be subject, at the Company's
option, to the limitation that not more than 1,000,000 Warrants
in total may be exercised on any Exercise Date and not more than
250,000 Warrants may be exercised by or on behalf of any person
or entity, either individually or in concert with any other
person or entity, on any Exercise Date. If any New York Business
Day would otherwise, under the terms hereof, be the Exercise Date
in respect of more than 1,000,000 Warrants, then upon the
Company's exercising such option (by giving notice thereof to the
Warrant Agent not later than 5:00 p.m., New York City time, on
the New York Business Day immediately following such Exercise
Date), 1,000,000 of such Warrants shall be deemed exercised on
such Exercise Date (selected by the Warrant Agent on a pro rata
basis, but if, as a result of such pro rata selection, any
Registered Holders would be deemed to have exercised less than
500 Warrants, then the Warrant Agent shall first select
additional Warrants of such Registered Holders so that no such
Registered Holder shall be deemed to have exercised less than 500
Warrants), and the remainder of such Warrants (the "Remaining
Warrants") shall be deemed exercised on the following New York
Business Day (notwithstanding the minimum exercise requirement of
Section 2.01 and subject to successive applications of this
Section 2.04); provided, however, that any Remaining Warrant in
respect of which an Exercise Notice was delivered on a given
Notice Date shall be deemed exercised before any other Warrants
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in respect of which an Exercise Notice was delivered on a later
Notice Date. If any individual Warrantholder attempts to
exercise more than 250,000 Warrants on any New York Business Day,
then at the Company's election (as notified to the Warrant Agent
by giving notice thereof to the Warrant Agent not later than 5:00
p.m., New York City time, on the New York Business Day following
such New York Business Day) 250,000 of such Warrants shall be
deemed exercised on such New York Business Day and the remainder
shall be deemed exercised on the following New York Business Day
(subject to successive applications of this Section 2.04). The
date on which any Warrant is deemed exercised under the preceding
sentences shall for all purposes of this Agreement be the
"Exercise Date" in respect of such Warrant.
SECTION 2.05. Covenant of the Company. The Company
covenants, for the benefit of the Warrantholders, that it will
not seek the delisting of the Warrants from, or suspension of
their trading on, the CBOE unless the Company has, at the same
time, arranged for listing on another United States national
securities exchange.
SECTION 2.06. Return of Money Held Unclaimed for Two Years.
Except as otherwise provided herein, any money deposited with or
paid to the Warrant Agent for the payment of the Cash Settlement
Value or Alternative Settlement Amount of any Warrants and not
applied but remaining unclaimed for two years after the date upon
which such Cash Settlement Value shall have become due and
payable shall be repaid by the Warrant Agent to the Company and
the holders of such Warrants shall thereafter look only to the
Company for any payment which such holders may be entitled to
collect and all liability of the Warrant Agent with respect to
such money shall thereupon cease; provided, however, that the
Warrant Agent, before making any such repayment, may at the
expense of the Company notify (i) in the case of Certificated
Warrants, the Registered Holders or (ii) in the case of
Book-Entry Warrants, the Participants concerned, that said money
has not been so applied and remains unclaimed and that after a
date named in the notification any unclaimed balance of said
money then remaining will be returned to the Company.
SECTION 2.07. Return of Global Warrant Certificate. In the
event a Global Warrant Certificate is issued, at such time as all
of the Warrants evidenced by such Certificate have been exercised
(including pursuant to an automatic exercise) and all payments to
the Participants made as provided herein, the Warrant Agent shall
destroy the canceled Global Warrant Certificate (unless
instructed by the Company to deliver the Global Warrant
Certificate to the Company) and shall provide a certificate of
destruction to the Company.
ARTICLE III
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OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder of Warrant May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any
Warrantholder, without the consent of the Warrant Agent, may, in
and for its own behalf, enforce, and may institute and maintain,
any suit, action or proceeding against the Company suitable to
enforce, or otherwise in respect of, its right to exercise, and
to receive payment for, its Warrants as provided in this
Agreement.
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company. In the
event the Company shall purchase or otherwise acquire Warrants,
such Warrants may, at the option of the Company, be (i) in the
case of Certificated Warrants, delivered to the Warrant Agent,
and if so delivered, the Warrant Agent shall promptly note the
cancellation of such Warrants on the records of the Warrant Agent
or (ii) in the case of Book-Entry Warrants, surrendered free
through a Participant to the Depository for credit to the account
of the Warrant Agent maintained at the Depository, and if so
credited, the Warrant Agent shall promptly note the cancellation
of such Warrants by notation on the records of the Warrant Agent.
In the case of Book-Entry Warrants, such Warrants may also, at
the option of the Company, be resold by the Company directly or
to or through any of its affiliates in lieu of being surrendered
to the Depository. No Warrant Certificate shall be countersigned
in lieu of or in exchange for any Warrant which is canceled as
provided herein, except as otherwise expressly permitted by this
Agreement.
Any canceled Warrant Certificate held by the Warrant Agent
under this Agreement shall be destroyed by the Warrant Agent
unless otherwise directed by the Company, and the Warrant Agent
shall deliver a certificate of destruction to the Company
evidencing the same.
SECTION 4.02. Payment of Taxes. The Company will pay all
stamp, withholding and other duties, if any, attributable to the
initial issuance of Warrants; provided, however, that, anything
in this Agreement to the contrary notwithstanding, the Company
shall not be required to pay any tax or other governmental charge
which may be payable in respect of any transfer involving any
beneficial or record interest in, or ownership interest of, any
Warrants, Warrant Certificates or Global Warrant Certificate,
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<PAGE>
which tax or other governmental charge shall be paid by the
appropriate Warrantholder or Registered Holder.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. (a) The Company hereby
appoints Citibank, N.A. ("Citibank") as Warrant Agent of the
Company in respect of the Warrants upon the terms and subject to
the conditions set forth herein; and Citibank hereby accepts such
appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in this Agreement and
such further powers and authority to act on behalf of the Company
as the Company may hereafter grant to or confer upon it. All of
the terms and provisions with respect to such powers and
authority contained in any Warrant Certificates or the Global
Warrant Certificate are subject to and governed by the terms and
provisions hereof.
(b) Citibank covenants and agrees to maintain an office,
staffed by qualified personnel, with adequate facilities for the
discharge of its responsibilities under this Agreement,
including, without limitation, the computation of the Cash
Settlement Value and the timely settlement of the Warrants upon
exercise thereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations.
The Warrant Agent accepts its obligations herein set forth upon
the terms and conditions hereof, including the following, to all
of which the Company agrees and to all of which the rights
hereunder of the holders from time to time of the Warrants shall
be subject:
(a) The Company agrees promptly to pay the Warrant
Agent the compensation to be agreed upon with the Company
for all services rendered by the Warrant Agent and to
reimburse the Warrant Agent for its reasonable out-of-pocket
expenses (including attorneys' fees and expenses) incurred
by the Warrant Agent without negligence, bad faith or breach
of this Agreement on its part in connection with the
services rendered by it hereunder. The Company also agrees
to indemnify the Warrant Agent for, and to hold it harmless
against, any loss, liability or expense (including
reasonable attorneys' fees and expenses) incurred without
negligence, bad faith or breach of this Agreement on the
part of the Warrant Agent, arising out of or in connection
with its acting as such Warrant Agent hereunder, as well as
the reasonable costs and expenses of defending against any
claim of liability in the premises.
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(b) In acting under this Agreement, the Warrant Agent
is acting solely as agent of the Company and does not assume
any obligation or relationship of agency or trust for or
with any of the owners or holders of the Warrants.
(c) The Warrant Agent may consult with counsel
satisfactory to it, and the opinion of such counsel shall be
full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in
good faith and in accordance with the opinion of such
counsel.
(d) The Warrant Agent shall be protected and shall
incur no liability for or in respect of any action taken or
thing suffered by it in reliance upon any notice, direction,
consent, certificate, affidavit, statement or other paper or
document reasonably believed by it to be genuine and to have
been presented or signed by the proper parties.
(e) The Warrant Agent, and its officers, directors and
employees, may become the owner of, or acquire any interest
in, any Warrants or other obligations of the Company, with
the same rights that it or they would have if it were not
the Warrant Agent hereunder and, to the extent permitted by
applicable law, it or they may engage or be interested in
any financial or other transaction with the Company and may
act on, or as depository, trustee or agent for, any
committee or body of holders of Warrants or other
obligations of the Company as freely as if it were not the
Warrant Agent hereunder.
(f) The Warrant Agent shall not be under any liability
for interest on any monies at any time received by it
pursuant to any of the provisions of this Agreement nor
shall it be obligated to segregate such monies from other
monies held by it, except as required by law. The Warrant
Agent shall not be responsible for advancing funds on behalf
of the Company.
(g) The Warrant Agent shall not be under any
responsibility with respect to the validity or sufficiency
of this Agreement or the execution and delivery hereof
(except the due execution and delivery hereof by the Warrant
Agent) or with respect to, the validity or execution of the
Warrant Certificates or the Global Warrant Certificate
(except its countersignature thereof).
(h) The recitals contained herein and in the Warrant
Certificates or the Global Warrant Certificate (except as to
the Warrant Agent's countersignature thereon) shall be taken
as the statements of the Company, and the Warrant Agent
assumes no responsibility for the correctness of the same.
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(i) The Warrant Agent shall be obligated to perform
such duties as are herein specifically set forth, and no
implied duties or obligations shall be read into this
Agreement against the Warrant Agent. The Warrant Agent
shall not be under any obligation to take any action
hereunder likely to involve it in any expense or liability,
the payment of which is not, in its reasonable opinion,
assured to it. The Warrant Agent shall not be accountable
or under any duty or responsibility for the application by
the Company of any proceeds. The Warrant Agent shall have
no duty or responsibility in case of any default by the
Company in the performance of its covenants or agreements
contained in any Warrant Certificate or the Global Warrant
Certificate or in the case of the receipt of any written
demand from a holder of a Warrant with respect to such
default, including, without limiting the generality of the
foregoing, any duty or responsibility to initiate or attempt
to initiate any proceedings at law or otherwise or, except
as provided in Section 6.02 hereof, to make any demand upon
the Company.
SECTION 5.03. Resignation and Appointment of Successor.
(a) The Company agrees, for the benefit of the holders from time
to time of the Warrants, that there shall at all times be a
Warrant Agent hereunder until all the Warrants are no longer
outstanding or until monies for the payment of all outstanding
Warrants, if any, shall have been paid to the Warrant Agent and
shall have been returned to the Company as provided in Section
2.06, whichever occurs earlier.
(b) The Warrant Agent may at any time resign as such agent
by giving written notice to the Company of such intention on its
part, specifying the date on which its desired resignation shall
become effective, subject to the appointment of a successor
Warrant Agent and acceptance of such appointment by such
successor Warrant Agent as hereinafter provided. The Warrant
Agent hereunder may be removed at any time by the filing with it
of an instrument in writing signed by or on behalf of the Company
and specifying such removal and the date when it shall become
effective. Such resignation or removal shall take effect upon
the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a banking institution
organized under the laws of the United States of America or one
of the states thereof and having an office south of Chambers
Street in the Borough of Manhattan, The City of New York) and the
acceptance of such appointment by such successor Warrant Agent.
In the event a successor Warrant Agent has not been appointed and
accepted its duties within 90 days of the Warrant Agent's notice
of resignation, the Warrant Agent may apply to any court of
competent jurisdiction for the designation of a successor Warrant
Agent. The obligation of the Company under Section 5.02(a) shall
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<PAGE>
continue to the extent set forth therein notwithstanding the
resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall give notice
of its intent to resign, or shall be removed, or shall become
incapable of acting, or shall be adjudged a bankrupt or
insolvent, or make an assignment for the benefit of its
creditors, or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or
shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver or custodian of it or of all or any
substantial part of its property shall be appointed, or if any
public officer shall have taken charge or control of the Warrant
Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, a successor Warrant
Agent, qualified as aforesaid, shall be promptly appointed by the
Company by an instrument in writing, filed with the successor
Warrant Agent. Upon the appointment as aforesaid of a successor
Warrant Agent and acceptance by the latter of such appointment,
the Warrant Agent so superseded shall cease to be Warrant Agent
hereunder.
(d) Any successor Warrant Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and to the
Company an instrument accepting such appointment hereunder, and
thereupon such successor Warrant Agent, without any further act,
deed or conveyance, shall become vested with all the authority,
rights, powers, trust, immunities, duties and obligations of such
predecessor with like effect as if originally named as Warrant
Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become
obligated to transfer, deliver and pay over, and such successor
Warrant Agent shall be entitled to receive, all monies,
securities and other property on deposit with or held by such
predecessor (including, without limitation, the Warrant Register)
as Warrant Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder
may be merged or converted or any corporation with which the
Warrant Agent may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Warrant
Agent shall be a party, or any corporation to which the Warrant
Agent shall sell or otherwise transfer all or substantially all
the corporate trust assets and business of the Warrant Agent,
provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the
execution or filing of any paper or any further act on the part
of any of the parties hereto.
ARTICLE VI
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MISCELLANEOUS
SECTION 6.01. Amendment. (a) This Agreement and the terms
of the Warrants may be amended by the Company, the Warrant Agent
and the Determination Agent, without the consent of the
Warrantholders, for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective or inconsistent
provision contained herein or therein or in any other manner
which the Company may deem necessary or desirable and which, as
determined by the Company in its sole discretion, will not
adversely affect the interests of the holders of the Warrants.
Notwithstanding anything in this Section 6.01 to the contrary,
this Agreement may not be amended to provide for the
countersigning by the Warrant Agent of Warrant Certificates
evidencing in the aggregate in excess of 1,000,000 Warrants
unless and until the Warrant Agent has received notice from the
CBOE or any successor United States national securities exchange
that the additional Warrants in excess of 1,000,000 have been
approved for listing on such exchange.
(b) The Company, the Warrant Agent and the Determination
Agent may modify or amend this Agreement, with the consent of
Warrantholders holding not less than a majority in number of the
then outstanding Warrants affected by such modification or
amendment, for any purpose; provided, however, that no such
modification or amendment that increases the Index Strike Price,
shortens the period of time during which the Warrants may be
exercised, or otherwise materially and adversely affects the
exercise rights of the Warrantholders or reduces the percentage
of the number of outstanding Warrants, the consent of whose
holders is required for modification or amendment of this
Agreement, may be made without the consent of each Warrantholder
affected thereby.
SECTION 6.02. Notices and Demands to the Company, the
Warrant Agent and the Determination Agent. If the Warrant Agent
or the Determination Agent shall receive any notice or demand
addressed to the Company by any Warrantholder pursuant to the
provisions of this Agreement, the Warrant Agent or the
Determination Agent, as the case may be, shall promptly forward
such notice or demand to the Company.
SECTION 6.03. Addresses for Notices. Any communications to
the Warrant Agent with respect to this Agreement shall be
addressed to Citibank, N.A., 120 Wall Street, New York, New York
10043, Attention: Corporate Trust Department (telephone: (212)
412-6209; facsimile: (212) 480-1613), and any communications to
the Company with respect to this Agreement shall be addressed to
Paine Webber Group Inc., 1285 Avenue of the Americas, New York,
New York 10019, Attention: Secretary (telephone: (212) 713-6277;
facsimile: (212) 713-6119), and any communications to the
Determination Agent with respect to this Agreement shall be
31
<PAGE>
addressed to PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, Attention: John Braddock
(telephone: (212) 713-3508; facsimile: (212) 582-1650 (or such
other address as shall be specified in writing by the Warrant
Agent, the Company or the Determination Agent, respectively).
SECTION 6.04. Notices to Holders. The Company may cause to
have notice given to the holders of Warrants by providing the
Warrant Agent with a form of notice to be distributed by (a) in
the case of Certificated Warrants, the Warrant Agent to the
Warrantholders or (b) in the case of Book Entry Warrants, the
Depository with a form of such notice to be distributed by the
Depository to Participants in accordance with the custom and
practices of the Depository.
SECTION 6.05. Obtaining of Approvals. The Company will
from time to time take all action which may be necessary to
obtain and keep effective (a) any and all permits, consents and
approvals of governmental agencies and authorities and the CBOE
or any successor United States national securities exchange and
(b) any and all filings or notices under United States Federal
and state securities laws, which may be or become required in
connection with the issuance, sale, trading, transfer or delivery
of the Warrant Certificates, the Global Warrant Certificate or
the exercise of the Warrants.
SECTION 6.06. Persons Having Rights Under This Agreement.
Nothing in this Agreement expressed or implied and nothing that
may be inferred from any of the provisions hereof is intended, or
shall be construed, to confer upon, or give to, any person or
corporation other than the Company, the Warrant Agent, the
Determination Agent, the registered holder of the Global Warrant
Certificate and the Warrantholders any right, remedy or claim
under or by reason of this Agreement or of any covenant,
condition, stipulation, promise or agreement hereof; and all
covenants, conditions, stipulations, promises and agreements
contained in this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, the Determination
Agent, and their respective successors, the registered holder of
the Global Warrant Certificate and of the Warrantholders.
SECTION 6.07. Inspection of Agreement. A copy of this
Agreement shall be available at all reasonable times at the
Warrant Agent's Office for inspection by the Warrantholders,
Participants or any person certified by any Participant to be an
indirect participant of the Depository or any person certified by
any Participant to be a Warrantholder, in each case, on behalf of
whom such Participant holds Warrants.
SECTION 6.08. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for
32
<PAGE>
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
SECTION 6.09. Counterparts. This Agreement may be executed
by the parties hereto in any number of counterparts, each of
which counterpart, when so executed and delivered, shall be
deemed to be an original, but all such counterparts taken
together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this
Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart of this Agreement.
SECTION 6.10. APPLICABLE LAW. THIS AGREEMENT AND EACH
WARRANT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
33
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto as of the day and year first above written.
PAINE WEBBER GROUP INC.,
by _________________________
Name: David A. Dami
Title: By Power of Attorney
CITIBANK, N.A.,
by _________________________
Name: John W. Reasor
Title: Vice President
PAINEWEBBER INCORPORATED
by _________________________
Name: John C. Braddock
Title: First Vice President
34
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
Number ____ CUSIP No. ___________
PAINE WEBBER GROUP INC.
1,000,000 Japan Export Index Call Warrants
Expiring October __, 1997
This Warrant Certificate certifies that __________________,
or registered assigns, is the registered holder of _____________
Japan Export Index Call Warrants Expiring October __, 1997 (the
"Warrants"). Upon receipt by the Warrant Agent of this Warrant
Certificate and the Exercise Notice on the reverse hereof (or an
Exercise Notice in substantially identical form delivered
herewith), duly completed and executed, at the offices of the
Warrant Agent in the Borough of Manhattan, The City of New York,
each Warrant entitles the beneficial owner thereof (each a
"Warrantholder") to receive, subject to the conditions set forth
herein and in the Warrant Agreement, from Paine Webber Group Inc.
(the "Company") the cash settlement value in U.S. dollars
(rounded down to the nearest cent) (the "Cash Settlement Value")
which is the greater of (i) zero and (ii) the amount equal to the
product, if positive, of _______ multiplied by the quotient
(rounded down to the nearest cent) of (A) the amount, if any, by
which the Index Spot Price for the applicable Valuation Date
exceeds __________ (the "Index Strike Index"), divided by (B) a
fixed Japanese yen/U.S. dollar exchange rate of yen_____ per
U.S.$1.00; provided, however, that if such amount is less than
zero, then the Cash Settlement Value shall be zero. In no event
shall a Warrantholder be entitled to any interest on any Cash
Settlement Value.
Subject to the terms of the Warrant Agreement, each Warrant
may be irrevocably exercised, in whole but not in part, at or
prior to 3:00 p.m., New York City time, on any New York Business
Day from its date of issuance until 3:00 p.m., New York City
time, on the earlier of (i) the New York Business Day immediately
preceding October __, 1997 (the "Expiration Date") and (ii) the
Delisting Date (as defined herein), after which time the Warrants
shall expire and all Warrants evidenced hereby shall be
automatically exercised and shall otherwise be void. Except in
the event of automatic exercise of the Warrants as set forth
herein and in the Warrant Agreement, or as otherwise provided in
the Warrant Agreement, not fewer than 500 Warrants may be
A-1
<PAGE>
exercised by or on behalf of any one Warrantholder at any one
time.
Reference is hereby made to the further provisions of this
Warrant Certificate set forth on the reverse hereof and such
further provisions shall for all purposes have the same effect as
though fully set forth at this place.
This Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused this
instrument to be duly executed.
Dated: ___________________ PAINE WEBBER GROUP INC.,
by
______________________
Donald B. Marron
Chairman and Chief
Executive Officer
[SEAL]
Attest:
by:
______________________
Theodore A. Levine
Secretary
Countersigned for authentication
purposes only as of the date
above written:
CITIBANK, N.A.,
as Warrant Agent
by
_________________
Authorized Officer
A-2
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
PAINE WEBBER GROUP INC.
The Warrants evidenced by this Warrant Certificate are part
of a duly authorized issue of Warrants issued by the Company
pursuant to a Warrant Agreement, dated as of October __, 1995
(the "Warrant Agreement"), among the Company, Citibank, N.A. (the
"Warrant Agent") and PaineWebber Incorporated (the "Determination
Agent") and is subject to the terms and provisions contained in
the Warrant Agreement, to all of which terms and provisions each
Warrantholder consents by acceptance of this Warrant Certificate
and which Warrant Agreement is hereby incorporated by reference
in and made a part of this Warrant Certificate. A copy of the
Warrant Agreement is on file at the Warrant Agent's Office (as
defined herein).
The Warrants constitute direct, unconditional and unsecured
obligations of the Company and rank on a parity with the
Company's other unsecured contractual obligations and with the
Company's unsecured and unsubordinated debt.
Subject to the provisions hereof and of the Warrant
Agreement, each Warrant may be irrevocably exercised, in whole
but not in part, at or prior to 3:00 p.m., New York City time, on
any New York Business Day (as defined herein) from its date of
issuance until 3:00 p.m., New York City time, on the earlier of
(i) the New York Business Day immediately preceding the
Expiration Date and (ii) the Delisting Date (as defined herein).
The holder of Warrants evidenced by this Warrant Certificate may
exercise them by surrendering this Warrant Certificate and
attached Exercise Notice (or an Exercise Notice in substantially
identical form), duly completed and executed, to the Warrant
Agent's offices in the Borough of Manhattan, The City of New York
(the "Warrant Agent's Office"), which are, on the date hereof,
located at 111 Wall Street, New York, New York 10043, Attention:
Corporate Trust Department. Except in the event of automatic
exercise of the Warrants as set forth herein and in the Warrant
Agreement, or as otherwise provided in the Warrant Agreement, not
fewer than 500 Warrants may be exercised by or on behalf of any
one Warrantholder at any one time.
The "Cash Settlement Value" of a Warrant will equal an
amount in U.S. dollars (rounded down to the nearest cent) which
is the greater of (i) zero and (ii) the amount equal to the
product, if positive, of _______ multiplied by the quotient
(rounded down to the nearest cent) of (A) the amount, if any, by
which the Index Spot Price for the applicable Valuation Date
exceeds __________ (the "Index Strike Index"), divided by (B) a
fixed Japanese yen/U.S. dollar exchange rate of yen_____ per
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<PAGE>
U.S.$1.00; provided, however, that if such amount is less than
zero, then the Cash Settlement Value shall be zero. The "Index
Spot Price" on any Valuation Date will be determined by the
Determination Agent and will equal the closing level of the Index
(as calculated by the Chicago Board Options Exchange (the
"CBOE")) on the Valuation Date relating to such Exercise Date.
The Index Spot Price used to determine the Cash Settlement
Value on any Valuation Date will be rounded to the second decimal
place (e.g., 84.00), rounding up if the next succeeding decimal
place, without regard to rounding, is five or higher. Any such
Cash Settlement Value will be rounded downwards, if necessary, to
the nearest cent.
The Company has appointed PaineWebber Incorporated
("PaineWebber") to be its Determination Agent to make such
calculations as may be required upon the occurrence of certain
circumstances, as described in the Warrant Agreement and herein,
including, without limitation, calculation of the Index Spot
Price and any Reference Index. The Determination Agent shall act
as an independent expert and not as an agent of the Company, and,
unless otherwise provided by the Warrant Agreement, its
calculations and determinations under the Warrant Agreement and
this Warrant Certificate shall, absent manifest error, be final
and binding on the Company, the Warrant Agent and the
Warrantholders.
Subject to the Warrant Agreement and this Warrant
Certificate, and except in the case of exercise (whether
automatic or by Exercise Notice) on the Expiration Date or the
Delisting Date, or in the event an Extraordinary Event or
Exercise Limitation Event (as such terms are defined herein) is
declared, or in the case of a postponement due to there being
exercised a number of Warrants in excess of the maximum permitted
number on a given day, the valuation date (the "Valuation Date")
for a Warrant shall be the first Index Calculation Date (as
defined herein) following the applicable Exercise Date (as
defined in the Warrant Agreement) on which the Warrant Agent has
received (i) in the case of Warrants other than those held
through the facilities of Centrale de Livraison de Valeurs
Mobilieres S.A. ("CEDEL") or the Euroclear System ("Euroclear"),
the Warrant Certificate representing such Warrant, with the
Exercise Notice below (or an Exercise Notice in substantially
identical form delivered herewith), duly completed and executed,
at or prior to 3:00 p.m., New York City time (the "Notice Date");
and if the Warrant Agent shall receive any such Warrant
Certificate after 3:00 p.m., New York City time, on such date,
then such Warrant Certificate shall be deemed to have been
received at or prior to 3:00 p.m., New York City time, on the
next succeeding New York Business Day (which shall be considered
the Notice Date), and in such event the Valuation Date shall be
the next Index Calculation Date following the New York Business
A-4
<PAGE>
Day on which the Warrant Agent is deemed to have received such
Warrant Certificate together with the Exercise Notice or (ii) in
the case of Warrants held through the facilities of CEDEL or
Euroclear, the notice of exercise (by facsimile transmission) at
or prior to 3:00 p.m., New York City time; provided that the
Warrant Certificate is received by the Warrant Agent by 3:00
p.m., New York City time, on the Index Calculation Date next
succeeding the Exercise Date; and if the Warrant Agent shall
receive such notice of exercise after 3:00 p.m., New York City
time, on such date, then the notice of exercise after 3:00 p.m.,
New York City time, on such date, then the notice of exercise
shall be deemed to have been received at or prior to 3:00 p.m.,
New York City time, on the next succeeding New York Business Day
(which shall be considered the Notice Date), and in such even the
Valuation Date shall be the next Index Calculation Date following
the New York Business Day on which the Warrant Agent is deemed to
have received such notice of exercise; provided, however, that if
the Warrant Agent receives the Warrant Certificate after 3:00
p.m., New York City time, on the Valuation Date, then the
Exercise Date for such Warrant shall be the day on which such
Warrant Certificate is received or, if such day is not a New York
Business Day, the next succeeding New York Business Day, and the
Valuation Date for such Warrant shall be the first Index
Calculation Date following such Exercise Date; provided, further,
however, in the case of exercises by Euroclear participants,
Euroclear must be tested telex to the Warrant Agent by 9:00 a.m.,
New York City time, on the Valuation Date confirm that the
Warrants will be received by the Warrant Agent on such Date,
provided that if such telex communication is received after 9:00
a.m., New York City time, on the Valuation Date, the Company will
be entitled to direct the Warrant Agent to reject the related
Notice of Exercise or waive the requirement for timely delivery
of such telex communication. Any Warrant Certificate received
after 3:00 p.m., New York City time, on the earlier of (i) the
New York Business Day immediately preceding the Expiration Date
and (ii) the last New York Business Day prior to the effective
date on which the Warrants are delisted from, or permanently
suspended from trading on (within the meaning of the Securities
Exchange Act of 1934 and the rules and regulations of the
Securities and Exchange Commission thereunder), the CBOE and not
accepted at the same time for listing on another United States
national securities exchange (such New York Business Day being
the "Delisting Date") (or in the case of Warrants held through
the facilities of CEDEL or Euroclear, after 3:00 p.m., New York
City time, on the first Index Calculation Date following such
dates), shall be deemed not to have been delivered and the
related Exercise Notice shall be void and of no effect; provided,
however, that if the Company first receives notice of such
delisting or suspension of the Warrants on the same day on which
such Warrants are delisted or suspended, such day will be deemed
the Delisting Date for purposes of the Warrant Agreement and this
Warrant Certificate.
A-5
<PAGE>
If the Exercise Notice is not rejected as provided in the
Warrant Agreement, then the Warrant Agent or the Determination
Agent, as the case may be, will determine the Cash Settlement
Value of the exercised Warrants in accordance with the terms of
the Warrant Agreement. Any exercise of the Warrants will be
irrevocable, except as provided in the immediately succeeding
sentence and for the limited circumstances in which an exercise
may be treated as contingent pursuant to the Limit Option, as
provided in the Warrant Agreement. Except in the case of
Warrants subject to automatic exercise and for Warrants that upon
exercise entitle the holder(s) thereof to receive an Alternative
Settlement Amount in lieu of the Cash Settlement Value, if on any
Valuation Date the Cash Settlement Value for any Warrants then
exercised would be zero, then in such case, the exercise of such
Warrants shall be void and of no effect and the Warrant
Certificate evidencing such Warrants will be promptly returned by
the Warrant Agent to the Registered Holder by first class mail at
the Company's expense and such Warrantholder shall be permitted
to re-exercise such Warrants prior to the Expiration Date or the
Delisting Date, as the case may be.
Except in the case of Warrants subject to automatic exercise
and for Warrants that upon exercise entitle the holder thereof to
receive an Alternative Settlement Amount in lieu of the Cash
Settlement Value, payment shall be made available to each
appropriate Registered Holder on the sixth New York Business Day
following the Valuation Date for such Warrants (or if the
Valuation Date is not a New York Business Day, on the sixth New
York Business Day following the New York Business Day next
succeeding the Valuation Date) in the form of a cashier's check
or an official bank check, or (in the case of payments of at
least $100,000) by wire transfer to a U.S. dollar bank account
maintained by such Registered Holder in the United States (at
such Registered Holder's election as specified in the Exercise
Notice), in an amount equal to the aggregate Cash Settlement
Value of the exercised Warrants.
All Warrants for which the Warrant Agent has not received an
Exercise Notice in proper form at or prior to 3:00 p.m., New York
City time, on the earlier of (i) the New York Business Day
preceding the Expiration Date and (ii) the Delisting Date, or for
which the Warrant Agent has received an Exercise Notice in proper
form but with respect to which timely delivery of the relevant
Warrant Certificate has not been made, will be deemed
automatically exercised on such date without any requirement of
an Exercise Notice to the Warrant Agent. The Valuation Date for
such Warrants shall be the first New York Business Day following
the Expiration Date or the Delisting Date, as the case may be.
If the Company determines that an Extraordinary Event or an
Exercise Limitation Event has occurred and is continuing on the
Expiration Date or the Delisting Date, the Cash Settlement Value
A-6
<PAGE>
with respect to the exercised Warrants shall be equal to, and be
calculated in the same manner as, an Alternative Settlement
Amount (treating the Expiration Date or the Delisting Date, as
the case may be, as the date on which the Warrants were
canceled), as provided below and in the Warrant Agreement.
Payment with respect to automatically exercised Warrants
shall be made available to each appropriate Registered Holder in
the form of a cashier's check or an official bank check, or (in
the case of payments of at least $100,000) by wire transfer to a
U.S. dollar account maintained by such Registered Holder in the
United States (at such Registered Holder's election), on the
sixth New York Business Day following the Valuation Date for
automatically exercised Warrants (or if such Valuation Date is
not a New York Business Day, on the sixth New York Business Day
following the New York Business Day next succeeding the Valuation
Date), against receipt by the Warrant Agent at the Warrant
Agent's Office from the Registered Holder of its Warrant
Certificates. Such payment shall be in the amount of the
aggregate Cash Settlement Value in respect of the Warrants,
evidenced by the Warrant Certificates, that were automatically
exercised on the Expiration Date or the Delisting Date, as the
case may be.
Anything in the Warrant Agreement or in this Warrant
Certificate to the contrary notwithstanding, if the Company
determines that an Extraordinary Event or an Exercise Limitation
Event has occurred and is continuing on the Tokyo Business Day
(as defined herein) with respect to which the Index Spot Price on
a Valuation Date is to be determined (the "Applicable Index
Business Day") then the Cash Settlement Value of such Warrants in
respect of an exercise shall be calculated on the basis that the
Valuation Date shall be the next Index Calculation Date following
an Applicable Index Business Day on which there is no
Extraordinary Event or Exercise Limitation Event; provided,
however, that if the Cash Settlement Value of such Warrants is
not calculated on or prior to the Expiration Date or the
Delisting Date, then the Warrantholders will receive the
Alternative Settlement Amount in lieu of the Cash Settlement
Value which shall be calculated as if the Warrants had been
canceled on the Expiration Date or the Delisting Date, as the
case may be.
If the Company determines that an Extraordinary Event has
occurred and is continuing and if it is expected by the Company
to continue, the Company may immediately cancel the Warrants by
notifying the Warrant Agent of such cancellation (the date such
Warrants are canceled being the "Cancellation Date"), and each
Warrantholder's rights with respect to the Warrants and under the
Warrant Agreement shall thereupon cease; provided, however, that
each Warrant shall be exercised (even if such Warrant would not
otherwise be exercisable on such Date because of the Limit
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<PAGE>
Option) on the basis that the Valuation Date for such Warrant
shall be the Cancellation Date and each Warrantholder shall have
the right to receive an Alternative Settlement Amount with
respect to its Warrants. The Company shall use its best efforts
to notify the Warrantholders promptly of such cancellation.
With respect to all Warrant Certificates as to which the
Valuation Date has been postponed or which have been canceled as
described above, payment shall be made available to the
appropriate registered holders of the Warrants in the form of a
cashier's check or an official bank check, or (in the case of
payments of at least $100,000) by wire transfer to a U.S. dollar
bank account maintained by such holder in the United States (at
such holder's election), on the third New York Business Day
following the date on which the Cash Settlement Value or
Alternative Settlement Amount, as the case may be, has been
calculated, against receipt by the Warrant Agent at the Warrant
Agent's Office from such holder of its Warrant Certificates.
Such payment shall be in the amount of the aggregate Cash
Settlement Value or Alternative Settlement Amount, as the case
may be, in respect of the Warrants evidenced by such Warrant
Certificates.
A-8
<PAGE>
The "Alternative Settlement Amount" shall be an amount
determined by the Determination Agent, which is equal to the
amount "X" calculated using the formula set forth below:
X = I + T x A
-------
2 B
where
I = the Cash Settlement Value of the Warrants determined as
described under Section 2.02(d), but calculated with an
Index Spot Price determined by the Determination Agent
which, subject to approval by the Company (such approval not
to be unreasonably withheld), in the reasonable opinion of
the Determination Agent, fairly reflects the value of the
stocks which comprise the Index on the Cancellation Date;
T = U.S. $ , the initial offering price per Warrant;
A = the total number of days from but excluding the Cancellation
Date for such Warrants to and including the Expiration Date;
and
B = the total number of days from but excluding the date the
Warrants were initially sold to and including the Expiration
Date.
For purposes of determining "I" in the above formula, in the
event that the Determination Agent and the Company are required,
but have not, after good faith consultation with each other and
within five days following the first day on which such
Alternative Settlement Amount may be calculated in accordance
with the above formula, agreed upon an Index Spot Price which
fairly reflects the value of the stocks which comprise the Index
on the Cancellation Date, then the Determination Agent shall
promptly nominate a third party, subject to approval by the
Company (such approval not to be unreasonably withheld), to
determine such figure and calculate the Alternative Settlement
Amount in accordance with the above formula. Such party shall
act as an independent expert and not as an agent of the Company
or the Determination Agent, and its calculation and determination
of the Alternative Settlement Amount shall, absent manifest
error, be final and binding on the Company, the Warrant Agent,
the Determination Agent and the Warrantholders. Any such
calculations will be made available to a Warrantholder for
inspection at the Warrant Agent's Office. Neither the Company
nor such third party shall have any responsibility for good faith
errors or omissions in calculating the Alternative Settlement
Amount.
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<PAGE>
An "Extraordinary Event" shall mean any one of the events,
circumstances or causes listed below:
(i) a suspension or absence of trading on the TSE
Exchange Ltd. (the "TSE") of all the stocks which then comprise
the Index; or
(ii) the enactment, publication, decree or other
promulgation of any statute, regulation, rule or order of any
court or any other U.S. or non-U.S. governmental authority which
would make it unlawful for the Company to perform any of its
obligations under this Agreement or the Warrants; or
(iii) any outbreak or escalation of hostilities or
other national or international calamity or crisis (including,
without limitation, natural calamities which in the opinion of
the Company may materially and adversely affect the economy of
Japan or the trading of securities generally on the TSE) which
has or will have a material adverse effect on the ability of the
Company to perform its obligations under the Warrants or to
modify the hedge of its position with respect to the Index.
An "Exercise Limitation Event" shall mean any one of the
events, circumstances or causes listed below:
(i) a suspension or absence of trading on the TSE of
20% or more of the stocks which then comprise the Index; or
(ii) the suspension or material limitation on the
Singapore International Monetary Exchange, Ltd. ("SIMEX"), Osaha
Securities Exchange ("OSE") or any other major futures or
securities market (which as of the date of this Agreement
includes only SIMEX, OSE or the CBOE, but which in the Company's
judgment may change in the future) of trading in future and
option contracts related to the Index, the Tokyo Stock Price
Index ("TOPIX"), the Nikkei 225 Index or the Nikkei 300 Index.
All exercises of Warrants (other than on the Expiration Date
or the Delisting Date or upon cancellation as described above)
shall be subject, at the Company's option, to the limitation that
not more than 1,000,000 Warrants in total may be exercised on any
Exercise Date and not more than 250,000 Warrants may be exercised
by or on behalf of any person or entity, either individually or
in concert with any other person or entity, on any Exercise Date.
If any New York Business Day would otherwise, under the terms
hereof, be the Exercise Date in respect of more than 1,000,000
Warrants, then upon the Company's exercising such option (by
giving notice thereof to the Warrant Agent not later than 5:00
p.m., New York City time, on the New York Business Day
immediately following such Exercise Date), 1,000,000 of such
Warrants shall be deemed exercised on such Exercise Date
(selected by the Warrant Agent on a pro rata basis, but if, as a
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<PAGE>
result of such pro rata selection, any Registered Holders would
be deemed to have exercised less than 500 Warrants, then the
Warrant Agent shall first select additional Warrants of such
Registered Holders so that no such Registered Holder shall be
deemed to have exercised less than 500 Warrants), and the
remainder of such Warrants (the "Remaining Warrants") shall be
deemed exercised on the following New York Business Day
(notwithstanding the minimum exercise requirement in the Warrant
Agreement and subject to successive applications of this
paragraph); provided, however, that any Remaining Warrant in
respect of which an Exercise Notice was delivered on a given
Notice Date shall be deemed exercised before any other Warrants
in respect of which an Exercise Notice was delivered on a later
Notice Date. If any individual Warrantholder attempts to
exercise more than 250,000 Warrants on any New York Business Day,
then at the Company's election (as notified to the Warrant Agent
by giving notice thereof to the Warrant Agent not later than 5:00
p.m., New York City time, on the New York Business Day
immediately following such New York Business Day) 250,000 of such
Warrants shall be deemed exercised on such New York Business Day
and the remainder shall be deemed exercised on the following New
York Business Day (subject to successive applications of this
paragraph). The date on which any Warrant is deemed exercised
under the preceding sentences shall for all purposes of this
Warrant Certificate be deemed to be the "Exercise Date" in
respect of such Warrant.
Prior to due presentment for registration of transfer, the
Company, the Warrant Agent, and any agent of the Company or the
Warrant Agent, may deem and treat the registered owner hereof as
the absolute owner of the Warrants evidenced hereby (notwith-
standing any notation of ownership or other writing hereon) for
any purpose whatsoever, and as the person entitled to exercise
the rights represented by the Warrants evidenced hereby, and
neither the Company nor the Warrant Agent, nor any agent of the
Company or the Warrant Agent, shall be affected by any notice to
the contrary.
The Warrant Agent shall, in accordance with the Warrant
Agreement, from time to time register the transfer of this
Warrant Certificate upon the records to be maintained by it for
that purpose at the Warrant Agent's Office upon surrender hereof,
duly endorsed, or accompanied by a written instrument or instru-
ments of transfer in form satisfactory to the Warrant Agent and
the Company, duly executed by the Registered Holder(s) hereof or
by their duly appointed legal representative or duly authorized
attorney, such signature to be guaranteed by a bank or trust
company with a correspondent office in The City of New York or by
a member of a national securities exchange. Upon any such
registration of transfer, a new Warrant Certificate shall be
issued to the transferee(s).
A-11
<PAGE>
As provided in the Warrant Agreement and subject to certain
limitations, this Warrant Certificate may be exchanged for other
Warrant Certificates, of like tenor and representing an equal
number of Warrants, upon surrender to the Warrant Agent of this
Warrant Certificate at the Warrant Agent's Office.
No service charge shall be made for any registration of
transfer or exchange of this Warrant Certificate, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
registration of transfer or exchange of this Warrant Certificate,
other than exchanges pursuant to the Warrant Agreement not
involving any transfer.
Capitalized terms included herein but not defined herein
have the meanings assigned thereto in the Warrant Agreement.
References herein to "U.S. dollars" or "U.S. $" are to the
lawful currency of the United States of America. References
herein to "Japanese yen" or "yen" are to the lawful currency of
Japan. As used herein, a "New York Business Day" means any day
other than a Saturday, Sunday or a day on which either the CBOE
or the New York Stock Exchange is not open for securities trading
or commercial banks in New York City are required or authorized
by law or executive order to remain closed; a "Tokyo Business
Day" means any day other than a Saturday or Sunday or a day on
which commercial banks in Tokyo are not open for a full day of
business; and an "Index Calculation Date" means any day on which
the TSE is open for trading and the Index is calculated and
published.
The Warrant Agreement and the terms of the Warrants are
subject to amendment, as provided in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
A-12
<PAGE>
Exercise Notice
Citibank, N.A.
Corporate Trust Department, 5th Floor
111 Wall Street
New York, New York 10043
1. This Notice / / DOES / / DOES NOT relate to "Contingently
Tendered Warrants" subject to a Limit Option, as provided for in
the Warrant Agreement. If this Exercise Notice relates to 500 or
more Warrants and any of such Warrants are Contingently Tendered
Warrants, __________ of such Warrants are Contingently Tendered
Warrants and __________ are not. If the Index Spot Price used to
determine the Cash Settlement Value of Contingently Tendered
Warrants is less than the Reference Index by 15 or more points,
an Exercise Notice with respect to such Contingently Tendered
Warrants shall be void and of no effect (and shall be disregarded
for all purposes of the Warrant Agreement).
2. Subject to paragraph 1, the undersigned (the "Owner")
hereby irrevocably exercises __________ Warrants (the "Exercised
Warrants") and delivers to you herewith a Warrant Certificate or
Certificates, registered in the Owner's name, representing a
number of Warrants at least equal to the number of Exercised
Warrants. Each beneficial owner of Warrants that is exercising
Warrants pursuant to this Exercise Notice is exercising no fewer
than 500 Warrants.
3. The Owner hereby directs the Warrant Agent (a) to pay
the Cash Settlement Value, if any, with respect to the Exercised
Warrants:
/ / By cashier's check or an official bank check;
/ / By wire transfer to the following U.S. dollar bank
account in the United States:
(Minimum payments of $100,000 only)
Bank: _________________________________________
ABA Routing No.: ______________________________
Account No.: __________ Reference: ___________
A-13
<PAGE>
; and (b) if the number of Exercised Warrants is less than the
number of Warrants represented by the enclosed Warrant
Certificate, to deliver a Warrant Certificate representing the
unexercised Warrants to _________________________________.
Dated: _______________, 19__
_____________________________
(Owner)
by
________________________
Authorized Signature
Address: ___________________
Telephone: (___)_____________
A-14
<PAGE>
EXHIBIT B-1
[FORM OF GLOBAL WARRANT CERTIFICATE]
No. _______ CUSIP No. _______
PAINE WEBBER GROUP INC.
1,000,000 Japan Export Index Call Warrants
Expiring October __, 1997
This certifies that CEDE & Co., or registered assigns, is
the registered holder of ___________ Japan Export Index Call
Warrants Expiring October __, 1997 (the "Warrants"). Each
Warrant entitles the beneficial owner thereof (each a
"Warrantholder") to receive, subject to the conditions set forth
herein and in the Warrant Agreement, from Paine Webber Group Inc.
(the "Company") the cash settlement value in U.S. dollars
(rounded down to the nearest cent) (the "Cash Settlement Value")
which is the greater of (i) zero and (ii) the amount equal to the
product, if positive, of _______ multiplied by the quotient
(rounded down to the nearest cent) of (A) the amount, if any, by
which the Index Spot Price for the applicable Valuation Date
exceeds __________ (the "Index Strike Index"), divided by (B) a
fixed Japanese yen/U.S. dollar exchange rate of yen_____ per
U.S.$1.00; provided, however, that if such amount is less than
zero, then the Cash Settlement Value shall be zero. The "Index
Spot Price" on any Valuation Date will be determined by the
Determination Agent and will equal the closing level of the Japan
Export Index (as calculated by the Chicago Board Options Exchange
(the "CBOE")) on the Valuation Date relating to such Exercise
Date.
The Index Spot Price used to determine the Cash Settlement
Value on any Valuation Date will be rounded to the second decimal
place (e.g., 84.00), rounding up if the next succeeding decimal
place, without regard to rounding, is five or higher. Any such
Cash Settlement Value will be rounded downwards, if necessary, to
the nearest cent. In no event shall a Warrantholder be entitled
to any interest on any Cash Settlement Value.
Subject to the terms of the Warrant Agreement, each Warrant
may be irrevocably exercised, in whole but not in part, at or
prior to 3:00 p.m., New York City time, on any New York Business
Day from its date of issuance until 3:00 p.m., New York City
time, on the earlier of (i) the New York Business Day immediately
preceding October __, 1997 (the "Expiration Date") and (ii) the
Delisting Date (as defined herein), after which time the Warrants
shall expire and all Warrants evidenced hereby shall be void.
The holder of Warrants evidenced by this Global Warrant
Certificate may exercise them only upon delivery of such Warrant
B-1-1
<PAGE>
free to the Warrant Account and pursuant to an irrevocable
Exercise Notice to the Warrant Agent from a Participant acting on
behalf of such Warrantholder. Except in the event of automatic
exercise or cancellation of the Warrants, as set forth herein and
in the Warrant Agreement, not fewer than 500 Warrants may be
exercised by or on behalf of any one Warrantholder at any one
time.
This Global Warrant Certificate shall not be valid unless
countersigned by the Warrant Agent.
The Warrants evidenced by this Global Warrant Certificate
are part of a duly authorized issue of Warrants issued by the
Company pursuant to a Warrant Agreement, dated as of October __,
1995 (the "Warrant Agreement"), among the Company, Citibank, N.A.
(the "Warrant Agent") and PaineWebber Incorporated (the
"Determination Agent"), and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which
terms and provisions the Warrantholders, the entities through
which such Warrantholders hold their beneficial interests in the
Warrants and the registered holder of this Global Warrant
Certificate consent by acceptance of this Global Warrant
Certificate by the Depository and which Warrant Agreement is
hereby incorporated by reference in and made a part of this
Global Warrant Certificate. A copy of the Warrant Agreement is
on file at the Warrant Agent's Office, which is located at 111
Wall Street, 5th Floor, New York, New York 10043.
The Warrants constitute direct, unconditional and unsecured
obligations of the Company and rank on a parity with the
Company's other unsecured contractual obligations and with the
Company's unsecured and unsubordinated debt.
Subject to the Warrant Agreement and this Global Warrant
Certificate, and except in the event of exercise (whether
automatic or by Exercise Notice) on the Expiration Date or the
Delisting Date, or in the event of an Extraordinary Event or
Exercise Limitation Event (as such terms as used in the Warrant
Agreement) is declared, or in the case of a postponement due to
there being exercised a number of Warrants in excess of the
maximum permitted number on a given day, the valuation date (the
"Valuation Date") for a Warrant shall be the first New York
Business Day (as defined herein) next succeeding the New York
Business Day (the "Exercise Date") on which the Warrant Agent has
received (i) in the case of Warrants other than those held
through the facilities of Centrale de Livraison de Valeurs
Mobilieres S.A. ("CEDEL") or the Euroclear System ("Euroclear"),
the Warrant, with the Exercise Notice (or an Exercise Notice in
substantially identical form), duly completed and executed, at or
prior to 3:00 p.m., New York City time (the "Notice Date"); and
if the Warrant Agent shall receive any such Warrant after 3:00
p.m., New York City time, on such date, then such Warrant shall
B-1-2
<PAGE>
be deemed to have been received at or prior to 3:00 p.m., New
York City time, on the next succeeding New York Business Day
(which shall be considered the Notice Date), and in such event
the Valuation Date shall be the next New York Business Day
following the New York Business Day on which the Warrant Agent is
deemed to have received such Warrant together with the Exercise
Notice or (ii) in the case of Warrants held through the
facilities of CEDEL or Euroclear, the Exercise Notice (by
facsimile transmission) at or prior to 3:00 p.m., New York City
time; provided that the Warrant is received by the Warrant Agent
by 3:00 p.m., New York City time, on the New York Business Day
next succeeding the Exercise Date; and if the Warrant Agent shall
receive such Exercise Notice after 3:00 p.m., New York City time,
on such date, then the Exercise Notice shall be deemed to have
been received at or prior to 3:00 p.m., New York City time, on
the next succeeding New York Business Day (which shall be
considered the Notice Date), and in such event the Valuation Date
shall be the next New York Business Day following the New York
Business Day on which the Warrant Agent is deemed to have
received such Exercise Notice; provided, however, that if the
Warrant Agent receives the Warrant after 3:00 p.m., New York City
time, on the Valuation Date, then the Exercise Date for such
Warrant shall be the day on which such Warrant is received or, if
such day is not a New York Business Day, the next succeeding New
York Business Day, and the Valuation Date for such Warrant shall
be the first New York Business Day following such Exercise Date;
provided further, however, in the case of exercises by Euroclear
participants, Euroclear must, by tested telex to the Warrant
Agent by 9:00 a.m., New York City time, on the Valuation Date,
confirm that the Warrants will be received by the Warrant Agent
on such date, provided that if such telex communication is
received after 9:00 a.m., New York City time, on the Valuation
Date, the Company will be entitled to direct the Warrant Agent to
reject the related Exercise Notice or waive the requirement for
timely delivery of such telex communication. Any Warrant
received after 3:00 p.m., New York City time, on the earlier of
(a) the New York Business Day immediately preceding the
Expiration Date and (b) the last New York Business Day prior to
the effective date on which the Warrants are delisted from, or
permanently suspended from trading on (within the meaning of the
Securities Exchange Act of 1934 and the rules and regulations of
the Securities and Exchange Commission thereunder), the CBOE and
not accepted at the same time for listing on another United
States national securities exchange (such New York Business Day
being the "Delisting Date") (or, in the case of Warrants held
through the facilities of CEDEL or Euroclear, after 3:00 p.m.,
New York City time, on the first New York Business Day following
such dates), shall be deemed not to have been delivered and the
related Exercise Notice shall be void and of no effect; provided,
however, that if the Company first receives notice of the
delisting or suspension of the Warrants on the same day on which
such Warrants are delisted or suspended, such day will be deemed
B-1-3
<PAGE>
the Delisting Date for purposes of the Warrant Agreement and this
Global Warrant Certificate.
All Warrants for which the Warrant Agent has not received an
Exercise Notice in proper form by 3:00 p.m., New York City time,
on the earlier of (i) the New York Business Day preceding the
Expiration Date and (ii) the Delisting Date, or for which the
Warrant Agent has received an Exercise Notice in proper form but
with respect to which timely delivery of the related Warrant has
not been made, will be deemed automatically exercised on such
date without any requirement of an Exercise Notice to the Warrant
Agent. The Valuation Date shall be the first New York Business
Day following the Expiration Date or the Delisting Date, as the
case may be.
If the Company determines that an Extraordinary Event or an
Exercise Limitation Event has occurred and is continuing on the
Expiration Date or the Delisting Date, the Cash Settlement Value
with respect to the exercised Warrants shall be equal to, and be
calculated in the same manner as, an Alternative Settlement
Amount (treating the Expiration Date or the Delisting Date, as
the case may be, as the date on which the Warrants were
canceled), as provided below and in the Warrant Agreement.
Anything in the Warrant Agreement or in this Global Warrant
Certificate to the contrary notwithstanding, if the Company
determines that an Extraordinary Event or an Exercise Limitation
Event has occurred and is continuing on the Tokyo Business Day
(as defined herein) with respect to which the Index Spot Price on
a Valuation Date is to be determined (the "Applicable Index
Business Day") then the Cash Settlement Value of such Warrants in
respect of an exercise shall be calculated on the basis that the
Valuation Date shall be the next Index Calculation Date following
an Applicable Index Business Day on which there is no
Extraordinary Event or Exercise Limitation Event; provided,
however, that if the Cash Settlement Value of such Warrants is
not calculated on or prior to the Expiration Date or the
DeListing Date, then the Warrantholder will receive the
Alternative Settlement Amount inn lieu of the Cash Settlement
Value which shall be calculated as if the Warrants had been
canceled on the Expiration Date or the Delisting Date, as the
case may be.
If the Company determines that an Extraordinary Event has
occurred and is continuing and if it is expected by the Company
to continue, the Company may immediately cancel the Warrants by
notifying the Warrant Agent of such cancellation (the date such
Warrants are canceled being the "Cancellation Date"), and each
Warrantholder's rights with respect to the Warrants and under the
Warrant Agreement shall thereupon cease; provided, however, that
each Warrant shall be exercised (even if such Warrant would not
otherwise be exercisable on such Date because of the Limit
B-1-4
<PAGE>
Option) on the basis that the Valuation Date for such Warrant
shall be the Cancellation Date and each Warrantholder shall have
the right to receive an Alternative Settlement Amount with
respect to its Warrants. The Company shall use its best efforts
to notify the Warrantholders promptly of such cancellation.
All exercises of Warrants (other than on the Expiration Date
or the Delisting Date or upon cancellation at the Warrant as
described above) shall be subject, at the Company's option, to
the limitation that not more than 1,000,000 Warrants in total may
be exercised on any Exercise Date and not more than 250,000
Warrants may be exercised by or on behalf of any person or
entity, either individually or in concert with any other person
or entity, on any Exercise Date. If any New York Business Day
would otherwise, under the terms hereof be the Exercise Date in
respect of more than 1,000,000 Warrants, then upon the Company's
exercising such option (by giving notice thereof to the Warrant
Agent not later than 5:00 p.m., New York City time, on the
Business Day immediately following such Exercise Date), 1,000,000
of such Warrants shall be deemed exercised on such Exercise Date
(selected by the Warrant Agent on a pro rata basis, but if, as a
result of such pro rata selection, any Registered Holders would
be deemed to have exercised less than 500 Warrants, then the
Warrant Agent shall first select additional Warrants of such
Registered Holders so that no such Registered Holder shall be
deemed to have exercised less than 500 Warrants), and the
remainder of such Warrants (the "Remaining Warrants") shall be
deemed exercised on the following New York Business Day
(notwithstanding the minimum exercise requirement in the Warrant
Agreement and subject to successive applications of this
paragraph); provided, however, that any Remaining Warrant in
respect of which an Exercise Notice was delivered on a given
Notice Date shall be deemed exercised before any other Warrants
in respect of which an Exercise Notice was delivered on a later
Notice Date. If any individual Warrantholder attempts to
exercise more than 250,000 Warrants on any New York Business Day,
then at the Company's election (as notified to the Warrant Agent
by giving notice thereof to the Warrant Agent not later than 5:00
p.m., New York City time, on the New York Business Day following
such New York Business Day) 250,000 of such Warrants shall be
deemed exercised on such New York Business Day and the remainder
shall be deemed exercised on the following New York Business Day
(subject to successive applications of this paragraph). The date
on which any Warrant is deemed exercised under the preceding
sentences shall for all purposes of this Global Warrant
Certificate be deemed to be the "Exercise Date" in respect of
such Warrant.
Prior to due presentment for registration of transfer, the
Company, the Warrant Agent, and any agent of the Company or the
Warrant Agent, may deem and treat the registered owner hereof as
the absolute owner of the Warrants evidenced hereby
B-1-5
<PAGE>
(notwithstanding any notation of ownership or other writing
hereon) for any purpose whatsoever, and as the person entitled to
exercise the rights represented by the Warrants evidenced hereby,
and neither the Company nor the Warrant Agent, nor any agent of
the Company or the Warrant Agent, shall be affected by any notice
to the contrary.
The Warrant Agent shall, in accordance with the Warrant
Agreement, from time to time register the transfer of this Global
Warrant Certificate in its records (which may be maintained
electronically) to be maintained by it for that purpose at the
Warrant Agent's Office upon surrender hereof, duly endorsed, or
accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent, duly executed by the
registered holder hereof or by the duly appointed legal
representative or duly authorized attorney thereof, such
signature to be guaranteed by a bank or trust company with a
correspondent office in The City of New York or by a member of a
national securities exchange. Upon any such registration of
transfer, a new Global Warrant Certificate shall be issued to the
transferee(s).
Exercises of Warrants may be subject to the Limit Option as
provided in the Warrant Agreement.
Capitalized terms included herein but not defined herein
have the meanings assigned thereto in the Warrant Agreement.
References herein to "U.S. dollars" or "U.S.$" are to the
lawful currency of the United States of America. References
herein to "Japanese yen" or "yen" are to the lawful currency of
Japan. As used herein, a "New York Business Day" means any day
other than a Saturday, Sunday or a day on which either the CBOE
or the New York Stock Exchange is not open for securities trading
or commercial banks in New York City are required or authorized
by law or executive order to remain closed; a "Tokyo Business
Day" means any day other than a Saturday or Sunday or a day on
which commercial banks in Tokyo are not open for a full day of
business; and an "Index Calculation Date" means any day on which
the TSE is open for trading and the Index is calculated and
published.
The Warrant Agreement and the terms of the Warrants are
subject to amendment, as provided in the Warrant Agreement.
THIS GLOBAL WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
B-1-6
<PAGE>
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused this
instrument to be duly executed.
Dated: _______, 19__ PAINE WEBBER GROUP INC.,
By:
-----------------------
Name:
Title:
[Corporate Seal]
Attest:
- -------------------------------
Assistant Secretary
Countersigned for authentication
purposes only as of the date
above written:
CITIBANK, N.A.,
as Warrant Agent,
By:
---------------------------
Authorized Officer
B-1-7
<PAGE>
EXHIBIT B-2
Exercise Notice
[For Warrants Represented by the
Global Warrant Certificate]
Citibank, N.A.
c/o Citicorp Data Distribution Inc.
404 Sette Drive
Paramus, New Jersey 07652
1. We refer to the Warrant Agreement, dated as of
October __, 1995 (the "Warrant Agreement"), among Paine Webber
Group Inc. (the "Company"), Citibank, N.A., as warrant agent (the
"Warrant Agent"), and PaineWebber Incorporated, as index spot
price reference agent (the "Determination Agent"). On behalf of
certain beneficial owners, each of whom is exercising no fewer
than 500 Warrants that are covered by this Exercise Notice and
whose Warrants have been transferred to the Warrant Agent's DTC
Participant Account-Citibank, N.A. Corporate Trust Warrant Agent
Account, No. 2659 (the "Warrant Account"), we hereby irrevocably
exercise __________ Warrants (the "Tendered Warrants"). We
hereby acknowledge that the Warrants being exercised and this
Exercise Notice must be received by you by 3:00 p.m., New York
City time, on a New York Business Day (or, in the case of
Warrants held through the facilities of Centrale de Livraison de
Valeurs Mobilieres S.A. ("CEDEL") or the Euroclear System
("Euroclear"), the Warrants must be received by such time on the
next succeeding New York Business Day) in order for the Valuation
Date for the Tendered Warrants to be the New York Business Day
following such New York Business Day and that, if the Warrants
being exercised and this Exercise Notice are received by you
after 3:00 p.m., New York City time, on a New York Business Day
(or, in the case of Warrants held through CEDEL or Euroclear, if
Warrants are not received by 3:00 p.m., New York City time, on
the first New York Business Day following such New York Business
Day), the Valuation Date of the Tendered Warrants shall be the
next New York Business Day next succeeding such New York Business
Day, in each case subject to certain provisions of the Warrant
Agreement.
2. If you determine that this Exercise Notice has not been
duly completed, or is not in proper form, this Exercise Notice
will be void and of no effect and will be deemed not to have been
delivered.
3. We hereby direct you to make payment to us of amounts
payable to our clients as a result of the exercise of the
B-2-1
<PAGE>
Warrants hereunder by wire transfer to the following U.S. dollar
bank account in the United States:
Bank: ___________________________
ABA Routing No.: _________________
Account No.: _____ Reference: ____
4. The Exercised Warrants covered hereby [are] [are not]
subject to the Limit Option.**
5. Each client on whose behalf we are exercising Warrants
pursuant to this Exercise Notice has certified to us that it is
not exercising in excess of 250,000 Warrants on behalf of any
single person or entity.
[For Participants] [6. We hereby certify that we are a
Participant of The Depository Trust Company (the "Depository")
with the present right to use and receive its services.]
- --------------
** Separate Notices of Exercise shall be submitted with respect
to Warrants subject to the Limit Option and Warrants not
subject to the Limit Option.
B-2-2
<PAGE>
Capitalized terms used but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
Dated: ________________, 19__
[NAME OF DEPOSITORY PARTICIPANT]
[Participant Number]
[NAME OF EUROCLEAR PARTICIPANT]
[CENTRALE DE LIVRAISON DE VALEURS
MOBILIERES S.A.]
by
_____________________________
Authorized Signature
Address: _________________________
Telephone: (___) ___-_____________
B-2-3
<PAGE>
EXHIBIT C-1
CONFIRMATION OF EXERCISE
[For Warrants Represented by Warrant Certificates]
We hereby confirm receipt of your Exercise Notice with
respect to _______________________ Warrants (the "Exercised
Warrants") and the related Warrant Certificates, which Notice we
have found to be duly completed and in proper form. The
Valuation Date of the Exercised Warrants was the close of
business on ___________________ in New York City.
[As set forth in your Exercise Notice, none of the Warrants
covered thereby is subject to the Limit Option. Accordingly, for
purposes hereof, all such Warrants shall constitute Exercised
Warrants, which number we hereby confirm to be __________.] [Your
Exercise Notice stated that the Warrants covered thereby are
subject to the Limit Option. The applicable Reference Index for
such Warrants is __________________ and the Index Spot Price for
the date that would otherwise be the Valuation Date for such
Warrants is __________________. Such Index Spot Price is not
less than such Reference Index by 15 or more points.
Accordingly, for purposes hereof, all such Warrants shall
constitute Exercised Warrants. We hereby confirm the number of
such Exercised Warrants to be ________________.]
We hereby confirm that the aggregate Cash Settlement Value
of the Exercised Warrants is $_______________ ($________ per
Warrant), which will be made available to you [in the form of a
cashier's check or an official bank check] [by wire transfer to
the bank account designated in your Exercise Notice] for payment
on the sixth New York Business Day following the Valuation Date
for such Warrants.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement, dated as of
October __, 1995, among Paine Webber Group Inc., Citibank, N.A.
and PaineWebber Incorporated.
Dated: __________________, 19__
CITIBANK, N.A., as Warrant Agent,
by
_______________________
Authorized Signature
C-1-1
<PAGE>
NOTICE OF REJECTION
[For Warrants Represented by Warrant Certificates]
You are hereby notified that the Exercise Notice delivered
by you was determined by us not to have been [duly completed] [in
proper form], as set forth in the Warrant Agreement (the "Warrant
Agreement"), dated as of October __, 1995, among Paine Webber
Group Inc., Citibank, N.A. and PaineWebber Incorporated.
Accordingly, we have rejected your Exercise Notice as being
unsatisfactory as to form.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement.
Dated: _________________, 19__
CITIBANK, N.A., as Warrant Agent,
by
________________________
Authorized Signature
C-1-2
<PAGE>
EXHIBIT C-2
CONFIRMATION OF EXERCISE
[For Warrants Represented by the Global Warrant Certificate]
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
We hereby confirm receipt of your Exercise Notice with
respect to _________________ Warrants (the "Exercised Warrants")
which were transferred by you to our DTC Participant Account No.
2659. We have found such Notice to be duly completed and in
proper form, and we have verified, in the manner provided in the
Warrant Agreement (the "Warrant Agreement"), dated as of October
__, 1995, among Paine Webber Group Inc., Citibank, N.A. and
PaineWebber Incorporated, that you are a Depository Participant.
The Valuation Date of the Exercised Warrants was the close of
business on ______________ in New York City.
[As set forth in your Exercise Notice, none of the Warrants
covered thereby is subject to the Limit Option. Accordingly, for
purposes hereof, all such Warrants shall constitute Exercised
Warrants, which number we hereby confirm to be
__________________.] [Your Exercise Notice stated that the
Warrants covered thereby are subject to the Limit Option. The
applicable Reference Index for such Warrants is ____________ and
the Index Spot Price for the date that would otherwise be the
Valuation Date for such Warrants is _________________. Such
Index Spot Price is not less than such Reference Index by 15 or
more points. Accordingly, for purposes hereof, all such Warrants
shall constitute Exercised Warrants. We hereby confirm the
number of such Exercised Warrants to be ______________.]
We hereby confirm that the aggregate Cash Settlement Value
of the Exercised Warrants is $__________ ($________ per Warrant),
which will be made available to you by wire transfer to the bank
account designated in your Exercise Notice for payment on the
sixth New York Business Day following the Valuation Date for such
Warrants.
C-2-1
<PAGE>
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement.
Dated: ____________, 19__
CITIBANK, N.A., as Warrant Agent,
by
_______________________
Authorized Signature
C-2-2
<PAGE>
NOTICE OF REJECTION
[For Warrants Represented by the Global Warrant Certificate]
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
You are hereby notified that [the Exercise Notice delivered
by you was determined by us not to have been [duly completed] [in
proper form]] [such Warrants were not transferred to our DTC
Participant Account No. 2659 on a timely basis as provided in the
Warrant Agreement] [we did not receive from Euroclear a Euroclear
Confirmation that proper delivery of the Warrants to which the
Exercise Notice delivered by you relates would be made on a
timely basis], as set forth in the Warrant Agreement (the
"Warrant Agreement"), dated as of October __, 1995, among Paine
Webber Group Inc., Citibank, N.A. and PaineWebber Incorporated.
Accordingly, we have rejected your Exercise Notice as being
unsatisfactory as to form.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement.
Dated: _________________, 19__
CITIBANK, N.A., as Warrant Agent,
by
________________________
Authorized Signature
C-2-3
<PAGE>
EXHIBIT D-1
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[For Warrants Represented by Warrant Certificates]
We refer to your Exercise Notice dated __________ 19__, with
respect to _______ Warrants that were subject to the Limit
Option. The applicable Reference Index for such Warrants is
_______ and the Index Spot Price for the date that would
otherwise be the Valuation Date for such Warrants is ______.
Such Index Spot Price is less than the Reference Index for such
Warrants by 15 or more points. Accordingly, we have rejected
such Exercise Notice pursuant to the Limit Option.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement, dated as of
May 1, 1995, among Paine Webber Group Inc., Citibank, N.A. and
PaineWebber Incorporated.
Dated: ____________________, 19__
CITIBANK N.A., as Warrant Agent,
by
_______________________
Authorized Signature
D-1-1
<PAGE>
EXHIBIT D-2
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[For Warrants Represented by the Global Warrant Certificate]
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
We refer to your Exercise Notice dated ___________ 19__,
with respect to __________ Warrants that were subject to the
Limit Option. The applicable Reference Index for such Warrants
is __________ and the Index Spot Price for the date that would
otherwise be the Valuation Date for such Warrants is ______.
Such Index Spot Price is less than the Reference Index for such
Warrants by 15 or more points. Accordingly, we have rejected
such Exercise Notice pursuant to the Limit Option.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement, dated as of
October __, 1995, among Paine Webber Group Inc., Citibank, N.A.
and PaineWebber Incorporated.
Dated: ______________, 19__
CITIBANK, N.A., as Warrant Agent,
by
_______________________
Authorized Signature
D-2-1
BROWN & WOOD DRAFT OF 10/18
===========================================================================
PAINE WEBBER GROUP INC.
and
CITIBANK, N.A., Warrant Agent
and
PAINEWEBBER INCORPORATED, Determination Agent
________________________________
WARRANT AGREEMENT
dated as of October __, 1995
________________________________
Japan Export Index Put Warrants
Expiring October __, 1997
===========================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANT CERTIFICATES AND
GLOBAL WARRANT CERTIFICATE
SECTION 1.01. Issuance of Warrants . . . . . . . . . . . 1
SECTION 1.02. Form, Execution and Delivery of Warrant
Certificates . . . . . . . . . . . . . . 2
SECTION 1.03. Warrant Certificates . . . . . . . . . . . 3
SECTION 1.04. Registration of Transfers and Exchanges. . 3
SECTION 1.05. Mutilated or Missing Warrant
Certificates . . . . . . . . . . . . . . 5
SECTION 1.06. Registered Holders . . . . . . . . . . . . 6
SECTION 1.07. Global Warrant Certificate . . . . . . . . 6
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise
Amounts; Exercise Notice . . . . . . . . 8
SECTION 2.02. Exercise and Delivery of Warrants. . . . . 9
SECTION 2.03. Automatic Exercise of Warrants;
Exercise upon an Extraordinary Event
or Exercise Limitation Event . . . . . . 17
SECTION 2.04. Limitation of Number of Exercisable
Warrants . . . . . . . . . . . . . . . . 19
SECTION 2.05. Covenant of the Company. . . . . . . . . . 20
SECTION 2.06. Return of Money Held Unclaimed for Two
Years. . . . . . . . . . . . . . . . . . 20
SECTION 2.07. Return of Global Warrant Certificate . . . 20
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder of Warrant May Enforce
Rights . . . . . . . . . . . . . . . . . 20
- --------------------
* The Table of Contents is not a part of the Warrant Agreement.
i
<PAGE>
Page
----
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company . . . . . 26
SECTION 4.02. Payment of Taxes . . . . . . . . . . . . . 26
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. . . . . . . . . . . . . . . 27
SECTION 5.02. Conditions of Warrant Agent's
Obligations. . . . . . . . . . . . . . . 27
SECTION 5.03. Resignation and Appointment of
Successor. . . . . . . . . . . . . . . . 29
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. . . . . . . . . . . . . . . . . 31
SECTION 6.02. Notices and Demands to the Company, the
Warrant Agent and the Index Spot Price
Reference Agent. . . . . . . . . . . . . 31
SECTION 6.03. Addresses for Notices. . . . . . . . . . . 31
SECTION 6.04. Notices to Holders . . . . . . . . . . . . 32
SECTION 6.05. Obtaining of Approvals . . . . . . . . . . 32
SECTION 6.06. Persons Having Rights Under This
Agreement. . . . . . . . . . . . . . . . 32
SECTION 6.07. Inspection of Agreement. . . . . . . . . . 32
SECTION 6.08. Headings . . . . . . . . . . . . . . . . . 32
SECTION 6.09. Counterparts . . . . . . . . . . . . . . . 32
SECTION 6.10. APPLICABLE LAW . . . . . . . . . . . . . . 32
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . 34
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 34
EXHIBIT A - Form of Warrant Certificate
EXHIBIT B-1 - Form of Global Warrant Certificate
EXHIBIT B-2 - Exercise Notice [For Warrants Represented by
the Global Warrant Certificate]
EXHIBIT C-1 - Confirmation of Exercise and Notice of
Rejection [For Warrants Represented by
Warrant Certificates]
ii
<PAGE>
EXHIBIT C-2 - Confirmation of Exercise and Notice of
Rejection [For Warrants Represented by the
Global Warrant Certificate]
EXHIBIT D-1 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by Warrant
Certificates]
EXHIBIT D-2 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by the Global
Warrant Certificate]
iii
<PAGE>
WARRANT AGREEMENT, dated as of October __, 1995, among PAINE WEBBER GROUP
INC., a corporation organized and existing under the laws of the State of
Delaware (the "Company"), CITIBANK, N.A., a national banking association
organized and existing under the laws of the United States of America (the
"Warrant Agent"), and PAINEWEBBER INCORPORATED, a corporation organized and
existing under the laws of the State of Delaware (the "Determination Agent").
WHEREAS the Company proposes to sell warrants (the "Warrants" or,
individually, a "Warrant") representing the right to receive from the Company
the amount, if any, in U.S. dollars determined by reference to decreases in
the Japan Export Index (as defined herein, the "Index") on the terms and
conditions set forth in this Agreement; and
WHEREAS the Company desires the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer and exercise of the Warrants, and the Company desires to
set forth herein, among other things, the provisions of the Warrants and the
terms and conditions on which they may be issued, transferred, exercised and
canceled;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
ISSUANCE OF WARRANTS AND FORM,
EXECUTION, DELIVERY AND REGISTRATION
OF WARRANT CERTIFICATES AND
GLOBAL WARRANT CERTIFICATE
SECTION 1.01. Issuance of Warrants. (a) The Warrants will constitute
direct, unconditional and unsecured obligations of the Company and will rank
on a parity with the Company's other unsecured contractual obligations and
with the Company's unsecured and unsubordinated debt.
(b) Each Warrant shall represent the right, subject to the provisions
contained herein, to receive the Cash Settlement Value or the Alternative
Settlement Value, as the case may be (each as defined herein), of such
Warrant. In no event shall a registered or beneficial holder of a Warrant
(each a "Warrantholder") be entitled to receive any interest on any Cash
Settlement Value or Alternative Settlement Amount.
(c) Forty-five calendar days after the date of this Agreement each
Warrantholder will have the option to convert the form in which such
Warrantholder holds his Warrants from certificated to book-entry form (the
"Conversion Option"). The
<PAGE>
Conversion Option will be available for forty-five calendar days from _______
__, 1995, through _______ __, 1995 (the "Conversion Option Period"). To
utilize the Conversion Option a Warrantholder must deliver or arrange to
deliver his Warrants to an entity (a "Participant") entitled to execute, clear
and settle transactions through the Depository (as defined herein) through
which such Warrantholder's beneficial interest after electing the Conversion
Option will be maintained, who will then deposit the Warrants with the
Depository or its nominee. Once a Warrantholder has elected the Conversion
Option such Warrantholder may hold his Warrants only in book-entry form and
will not be able to change his election or withdraw from the book-entry system
during the Conversion Option Period or thereafter. Accordingly, except as
hereinafter provided, ownership of the Warrants in certificated form will no
longer be available to Warrantholders who have elected the Conversion Option
and ownership of the Warrants surrendered under the Conversion Option will be
represented by a single certificate (the "Global Warrant Certificate");
provided, however, that if the Depository is at any time unwilling or unable
to continue as securities depository for the Warrants and a successor
Depository is not appointed by the Company within 90 days, the Company will
reissue Warrant Certificates (as defined herein) in exchange for the Global
Warrant Certificate. In addition, the Company may at any time determine not
to have the Warrants represented by a Global Warrant Certificate and, in such
event, will issue Warrant Certificates in exchange for the Global Warrant
Certificate. In either instance, and in accordance with the provisions of
this Agreement, each Warrantholder will be entitled to have a number of
Warrants equal to such Warrantholder's beneficial interest in the Global
Warrant Certificate registered in the name of the Warrantholder and will be
entitled to physical delivery of such Warrants in certificated form by a
Participant. The provisions of Section 1.07 shall apply only if and when the
Conversion Option is utilized and a Global Warrant Certificate is issued
hereunder. Unless the context shall otherwise require, and subject to the
provisions of Section 1.07, all references in this Agreement to the Warrant
Certificates (other than in Sections 1.02, 1.03, 1.04, 1.05, 1.06 and 1.07)
shall include the Global Warrant Certificate in the event that the Global
Warrant Certificate is issued.
(d) After the last day of the Conversion Option Period, Warrantholders
shall not be entitled to hold Warrants in certificated form through CEDEL or
Euroclear (as such terms are defined herein).
SECTION 1.02. Form, Execution and Delivery of Warrant Certificates. (a)
The Warrants, whenever issued, shall be represented by certificates in
registered form substantially in the form set forth in Exhibit A hereto (the
"Warrant Certificates"), with such appropriate insertions, omissions,
2
<PAGE>
substitutions and other variations as are required or permitted by this
Agreement, and may represent any number of whole Warrants. The Warrant
Certificates may have imprinted or otherwise reproduced thereon such letters,
numbers or other marks of identification or designation and such legends or
endorsements as the officers of the Company executing the same may approve
(execution thereof to be conclusive evidence of such approval) and which are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto,
or with any rule or regulation of any stock exchange on which the Warrants may
be listed, or of the Depository, or to conform to usage. Warrant Certificates
shall be signed on behalf of the Company by its chairman, its president or one
of its vice presidents and under its corporate seal reproduced thereon and
attested by its secretary or an assistant secretary. The signature of any of
such officers may be either manual or facsimile. Typographical and other
minor errors or defects in any such signature shall not affect the validity or
enforceability of any Warrant Certificate that has been duly countersigned and
delivered by the Warrant Agent.
(b) In case any officer of the Company who shall have signed a Warrant
Certificate, either manually or by facsimile signature, shall cease to be such
officer before such Warrant Certificate shall have been countersigned and
delivered by the Warrant Agent to the Company or delivered by the Company,
such Warrant Certificate nevertheless may be countersigned and delivered as
though the person who signed such Warrant Certificate had not ceased to be
such officer of the Company; and the Warrant Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution
of such Warrant Certificate, shall be a proper officer of the Company to sign
such Warrant Certificate, although at the date of the execution of this
Warrant Agreement any such person was not such officer.
SECTION 1.03. Warrant Certificates. Each Warrant Certificate, when
signed on behalf of the Company in accordance with Section 1.02, shall be
delivered to the Warrant Agent, which shall manually countersign and deliver
the same to or upon the order of the Company. Each Warrant Certificate shall
be dated the date of its countersignature. A Warrant Certificate shall not be
valid for any purpose, and no Warrant evidenced thereby shall be exercisable,
unless and until such Warrant Certificate has been countersigned by the manual
signature of the Warrant Agent. Such countersignature by the Warrant Agent
upon any Warrant Certificate signed by the Company in accordance with Section
1.02 shall be conclusive evidence that the Warrant Certificate so
countersigned has been duly issued hereunder.
3
<PAGE>
SECTION 1.04. Registration of Transfers and Exchanges. (a) Except as
otherwise provided herein or in the Warrant Certificate, the Warrant Agent
shall from time to time register the transfer of any outstanding Warrant
Certificates upon the records to be maintained by it for that purpose (the
"Warrant Register") at the Warrant Agent's Office (as defined herein), subject
to such reasonable regulations as the Company or the Warrant Agent may
prescribe, upon surrender thereof, duly endorsed, or accompanied by a written
instrument or instruments of transfer in form satisfactory to the Warrant
Agent and the Company, duly executed by, the registered holder(s) thereof or
by the duly appointed legal representative thereof or by a duly authorized
attorney, such signature to be guaranteed by a bank or trust company with a
correspondent office in The City of New York or by a member of a national
securities exchange. Upon any such registration of transfer, a new Warrant
Certificate shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Warrant Agent.
(b) At the option of a Warrantholder, Warrant Certificates may be
exchanged for other Warrant Certificates, of like tenor and representing an
equal number of unexercised Warrants, upon surrender to the Warrant Agent of
the Warrant Certificates to be exchanged at its offices maintained for such
purpose (the location of which shall be provided to the Company), which shall
be south of Chambers Street in the Borough of Manhattan, The City of New York
(the "Warrant Agent's Office"), and which are, on the date of this Agreement,
111 Wall Street, New York, New York 10043, Attention: Corporate Trust
Department, or at the office of any successor Warrant Agent (as provided in
Section 5.03). Upon surrender of any Warrant Certificate for exchange, the
Warrant Agent shall cancel such Warrant Certificate, and the Company shall
execute, and the Warrant Agent shall countersign and deliver, in accordance
with Sections 1.02 and 1.03, one or more new Warrant Certificates of like
tenor and representing an equal number of unexercised Warrants.
(c) Warrant Certificates issued upon transfer or exchange pursuant to
Section 1.04(a) or (b) shall be valid obligations of the Company, evidencing
the same obligations of the Company as the Warrant Certificates surrendered
for transfer or exchange, and entitled to the same benefits under this
Agreement as were such Warrant Certificates prior to such surrender.
(d) Except as provided in Section 1.05, no service charge shall be made
for any registration of transfer or exchange of Warrant Certificates, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Warrant Certificates, other than exchanges pursuant to
this Section 1.04 not involving any transfer.
4
<PAGE>
(e) In the event that upon any exercise of Warrants evidenced by a
Warrant Certificate the number of Warrants exercised shall be less than the
total number of Warrants evidenced by such Warrant Certificate, there shall be
issued to the holder thereof or his assignee a new Warrant Certificate
evidencing the number of Warrants not exercised.
SECTION 1.05. Mutilated or Missing Warrant Certificates. (a) If any
Warrant Certificate is mutilated, lost, stolen or destroyed, the Company may
in its discretion execute, and the Warrant Agent may countersign and deliver,
in exchange and substitution for and upon cancellation of the mutilated
Warrant Certificate, or in lieu of the Warrant Certificate lost, stolen or
destroyed, a new Warrant Certificate of like tenor and representing an equal
number of unexercised Warrants, bearing an identification number not
contemporaneously outstanding, but only (in case of loss, theft or
destruction) upon receipt of evidence satisfactory to the Company and the
Warrant Agent of such loss, theft or destruction of such Warrant Certificate
and security or indemnity, if requested, also satisfactory to them.
Applicants for such substitute Warrant Certificates shall also comply with
such other reasonable regulations and pay such other reasonable charges as the
Company or the Warrant Agent may prescribe.
(b) In case any such mutilated, lost, stolen or destroyed Warrant
Certificate has been or is about to be exercised, or deemed to be exercised,
the Company in its absolute discretion may, instead of issuing a new Warrant
Certificate, direct the Warrant Agent to treat the same as if it had received
an Exercise Notice (as defined herein) in proper form in respect thereof, as
provided herein, or as being subject to automatic exercise, as the case may
be.
(c) Each new Warrant Certificate issued pursuant to this Section 1.05 in
lieu of any mutilated, lost, stolen or destroyed Warrant Certificate shall be
an original, additional contractual obligation of the Company, whether or not,
in the case of any lost, stolen or destroyed Warrant Certificate, such Warrant
Certificate shall at any time be enforceable by anyone, and shall be entitled
to the same benefits under this Agreement as the Warrant Certificate that was
mutilated, lost, stolen or destroyed.
(d) Upon the issuance of any new Warrant Certificate in accordance with
this Section 1.05, the Company 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 (including the fees and expenses of the Warrant
Agent) connected therewith.
(e) The provisions of this Section 1.05 are exclusive and shall preclude
(to the extent lawful) any other rights and
5
<PAGE>
remedies with respect to the replacement or payment of mutilated, lost, stolen
or destroyed Warrant Certificates.
SECTION 1.06. Registered Holders. Prior to due presentment for
registration of transfer, the Company, the Warrant Agent, and any agent of the
Company or the Warrant Agent, may deem and treat the person in whose name a
Warrant Certificate shall be registered in the Warrant Register (a "Registered
Holder") as the absolute owner of the Warrants evidenced thereby
(notwithstanding any notation of ownership or other writing thereon) for any
purpose whatsoever, and as the person entitled to exercise the rights
represented by the Warrants evidenced thereby, and neither the Company nor the
Warrant Agent, nor any agent of the Company or the Warrant Agent, shall be
affected by any notice to the contrary. This Section 1.06 shall be without
prejudice to the rights of Warrantholders as described elsewhere herein.
SECTION 1.07. Global Warrant Certificate. (a) Any Global Warrant
Certificate issued in accordance with Section 1.01 shall be substantially in
the form set forth in Exhibit B-1 hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement, and may represent any number of whole Warrants. The Global
Warrant Certificate may have imprinted or otherwise reproduced thereon such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the officers of the Company executing the same may
approve (execution thereof to be conclusive evidence of such approval) and
which are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto, or with any rule or regulation of any stock exchange on which the
Warrants may be listed, or of the Depository, or to conform to usage. The
Global Warrant Certificate shall be signed on behalf of the Company upon the
same conditions, in substantially the same manner and with the same effect as
the Warrant Certificates.
(b) The Warrant Agent is authorized, from time to time during the
Conversion Option Period, upon receipt of a Global Warrant Certificate from
the Company, duly executed on behalf of the Company, to countersign such
Global Warrant Certificate. The Global Warrant Certificate shall be manually
countersigned and dated the date of its countersignature by the Warrant Agent
and shall not be valid for any purpose unless so countersigned. The Warrant
Agent shall deliver the Global Warrant Certificate to or upon the order of the
Company against receipt of an appropriate amount of Certificated Warrants
(such Certificated Warrants shall be destroyed or otherwise disposed of in
accordance with instructions provided by the Company). One or more Global
Warrant Certificates may be executed by the Company and delivered to the
Warrant Agent on or after the date of execution of this
6
<PAGE>
Agreement; provided that only one Global Warrant Certificate shall be
outstanding at any one time.
The Company reserves the right to issue, from time to time after the date
of execution of this Agreement, additional Warrants, and in connection
therewith the Global Warrant Certificate may be exchanged for a new Global
Warrant Certificate to reflect the issuance by the Company of such additional
Warrants. To effect such an exchange the Company shall deliver to the Warrant
Agent a new Global Warrant Certificate duly executed on behalf of the Company
as provided in Section 1.02. The Warrant Agent shall authenticate the new
Global Warrant Certificate as provided in this Section and shall deliver the
new Global Warrant Certificate to the Depository in exchange for, and upon
receipt of, the Global Warrant Certificate then held by the Depository. The
Warrant Agent shall cancel the Global Warrant Certificate delivered to it by
the Depository, destroy such Global Warrant Certificate and provide a
certificate of destruction to the Company.
(c) The Global Warrant Certificate will initially be registered in the
name of a nominee of The Depository Trust Company (the "Depository", which
term, as used herein, includes any successor securities depository selected by
the Company). The Warrant holdings of the Participants will be recorded on the
books of the Depository. The holdings of customers of the Participants and
the identity of the Warrantholders will be reflected on the books and records
of such Participants and will not be known to the Warrant Agent, the Company
or the Depository. The Global Warrant Certificate will be held by the
Depository or its agent.
The Company may from time to time select a new entity to act as
Depository with respect to the Warrants and, if such selection is made, the
Company shall promptly give the Warrant Agent notice to such effect
identifying the new Depository, and the Global Warrant Certificate shall be
delivered to the Warrant Agent and shall be transferred to the new Depository
as provided below as promptly as possible. Appropriate changes may be made in
the forms of the Global Warrant Certificate, the Exercise Notice and the
related notices to be delivered in connection with an exercise to reflect the
selection of the new Depository.
(d) Except as otherwise provided herein or in the Global Warrant
Certificate, the Warrant Agent shall from time to time register the transfer
of the Global Warrant Certificate in its records (which may be maintained
electronically), subject to such reasonable regulations as the Company or the
Warrant Agent may prescribe, only to the Depository, to another nominee of the
Depository, to a successor Depository or to a nominee of a successor
Depository, upon surrender of such Global Warrant Certificate, duly endorsed,
or accompanied by a written
7
<PAGE>
instrument or instruments of transfer in form satisfactory to the Warrant
Agent and the Company, duly executed by the Registered Holder thereof or by
the duly appointed legal representative thereof, or by its duly authorized
attorney, such signature to be guaranteed by a bank or trust company with a
correspondent office in The City of New York or by a member of a national
securities exchange. Upon any such registration of transfer, a new Global
Warrant Certificate shall be issued to the transferee and the surrendered
Global Warrant Certificate shall be canceled by the Warrant Agent.
The Global Warrant Certificate may be transferred as provided above at the
option of the holder thereof, when surrendered to the Warrant Agent's Office, or
at the office of any successor Warrant Agent (as provided in Section 5.03), for
another Global Warrant Certificate of like tenor and representing an equal
number of unexercised Warrants.
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise Amounts; Exercise
Notice. Subject to the limitations set forth herein and in Section 2.03, each
Warrant may be irrevocably exercised in whole but not in part, at or prior to
3:00 p.m., New York City time, on any New York Business Day (as defined
herein) from its date of issuance until 3:00 p.m., New York City time, on the
earlier of (i) the New York Business Day immediately preceding October __,
1997 (the "Expiration Date") and (ii) the Delisting Date (as defined herein).
Except in the event of automatic exercise, each Warrant shall be irrevocably
exercised either (i) in the case of Warrants represented by Warrant
Certificates ("Certificated Warrants"), including Certificated Warrants held
through CEDEL (as defined herein) or Euroclear (as defined herein), by
surrender to the Warrant Agent (at its address as set forth in such Exercise
Notice (as defined herein) or at such other address as the Warrant Agent may
specify from time to time) of the Warrant Certificate representing such
Warrant, with the Exercise Notice duly completed and executed by the
Registered Holder of such Warrant (or, in the case of Warrant Certificates
held through the facilities of CEDEL or Euroclear, by CEDEL as a Euroclear
participant, as the case may be) or (ii) in the case of Warrants represented
by the Global Warrant Certificate ("Book-Entry Warrants"), upon receipt by the
Warrant Agent of such Warrant delivered free on the records of the Depository
to the Warrant Agent's Depository Participant Account (entitled Citibank, N.A.
Corporate Trust Warrant Agent Account, No. [2659], or such other account at
the Depository as the Warrant Agent shall designate in writing to the
Depository) (the "Warrant Account") pursuant to an Exercise Notice to the
Warrant
8
<PAGE>
Agent from a Participant, in the case of Book-Entry Warrants held through the
Depository, CEDEL, in the case of such Warrants held through CEDEL, or a
Euroclear participant, in the case of such Warrants held through Euroclear,
acting, directly or indirectly, on behalf of the Warrantholder; provided,
however, that Exercise Notices are subject to rejection by the Warrant Agent
as provided herein. Not fewer than 500 Warrants in either certificated or
book-entry form may be exercised by or on behalf of any one Warrantholder at
any one time, except in the event of automatic exercise on the Expiration Date
or the Delisting Date, or in the case of cancellation of the Warrants as a
result of an Extraordinary Event (as defined herein). Each Exercise Notice
shall be unconditional. Except as provided in Section 2.02(b), the Warrant
Agent shall be entitled, with no duty of inquiry, to rely conclusively on any
Exercise Notice received by it. "Exercise Notice" means an irrevocable notice
of exercise to the Warrant Agent at its address, which notice (A) for Warrant
Certificates, shall be on the reverse of the Warrant Certificate or on such
other form as the Company and the Warrant Agent may approve, and (B) for
Book-Entry Warrants, shall be substantially in the form set forth in Exhibit
B-2 hereto or such other form as the Company and the Warrant Agent may approve
and may be given by facsimile transmission. For purposes of this Agreement,
"New York Business Day" means any day other than a Saturday, Sunday or a day
on which the either the Chicago Board Options Exchange (the "CBOE") or the New
York Stock Exchange (the "NYSE") is not open for securities trading or
commercial banks in New York City are required or authorized by law or
executive order to remain closed.
SECTION 2.02. Exercise and Delivery of Warrants. (a) Except in the event
of automatic exercise on the Expiration Date or the Delisting Date, or in the
event of an Extraordinary Event or Excercise Limitation Event is declared, or
in the event of a postponement pursuant to Section 2.04, or as a result of the
exercise of a number of Warrants exceeding the limits on exercise set forth in
Section 2.04, the valuation date (the "Valuation Date") for a Warrant shall be
the first Index Calculation Date (as defined herein) following the applicable
Exercise Date (as defined herein). The "Exercise Date" for a Warrant will be
the New York Business Day on which the Warrant Agent has received (i) in the
case of Warrants other than those held through the facilities of Centrale de
Livraison de Valeurs Mobilieres S.A. ("CEDEL") or the Euroclear System
("Euroclear"), either (A) for Certificated Warrants, the Warrant Certificate
representing such Warrant with the Exercise Notice duly completed and executed
or (B) for Book-Entry Warrants, the Warrant with the Exercise Notice duly
completed and executed, in either case, at or prior to 3:00 p.m., New York
City time (the "Notice Date"); and if the Warrant Agent shall receive any such
Warrant Certificate or Warrant or Exercise Notice after 3:00 p.m., New York
City time, on such New York Business Day, then such Warrant Certificate or
Warrant shall
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be deemed to have been received at or prior to 3:00 p.m., New York City time,
on the New York Business Day next succeeding such New York Business Day (which
shall be considered the Notice Date), and in such event the Valuation Date
shall be the next Index Calculation Date following the New York Business Day
on which the Warrant Agent is deemed to have received such Warrant Certificate
or Warrant together with the Exercise Notice or (ii) in the case of Warrants
held through the facilities of CEDEL or Euroclear, the Exercise Notice (by
facsimile transmission) at or prior to 3:00 p.m., New York City time, provided
that the Warrant is received by the Warrant Agent by 3:00 p.m., New York City
time, on the applicable Valuation Date; and if the Warrant Agent shall receive
such Exercise Notice after 3:00 p.m., New York City time on any Index
Calculation Date, then the Exercise Notice shall be deemed to have been
received at or prior to 3:00 p.m., New York City time, on the next succeeding
New York Business Day (which shall be considered the Notice Date), and in such
event the Valuation Date shall be the next Index Calculation Date following
the New York Business Day on which the Warrant Agent is deemed to have
received such Exercise Notice; provided, however, that if the Warrant Agent
receives the Warrant after 3:00 p.m., New York City time, on the Valuation
Date, then the Exercise Date for such Warrant shall be the day on which such
Warrant is received or, if such day is not a New York Business Day, the next
succeeding New York Business Day, and the Valuation Date for such Warrant
shall be the first Index Calculation Date following such Exercise Date;
provided further, however, that in the case of exercises by Euroclear
participants, Euroclear must, by tested telex to the Warrant Agent by 9:00
a.m., New York City time, on the Valuation Date, confirm (a "Euroclear
Confirmation") that the Warrants will be received by the Warrant Agent by 3:00
p.m., New York City time, on such Date. If such Euroclear Confirmation is
received after 9:00 a.m., New York City time, on the Valuation Date, the
Company will be entitled to direct the Warrant Agent to reject the related
Exercise Notice or waive the requirement for timely delivery of such Euroclear
Confirmation. Any Warrant Certificate or Warrant received after 3:00 p.m.,
New York City time, on the earlier of (1) the New York Business Day
immediately preceding the Expiration Date and (2) the last New York Business
Day prior to the effective date on which the Warrants are delisted from, or
permanently suspended from trading on (within the meaning of the Securities
Exchange Act of 1934 and the rules and regulations of the Securities and
Exchange Commission thereunder), the CBOE and not accepted at the same time
for listing on another United States national securities exchange (such New
York Business Day being the "Delisting Date") (or, in the case of Warrants
held through the facilities of CEDEL or Euroclear, after 3:00 p.m., New York
City time, on the first Index Calculation Date following such dates), shall be
deemed not to have been delivered and the related Exercise Notice shall be
void and of no effect; provided, however, that if the Company first receives
notice of such delisting or suspension of the
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Warrants on the same day on which such Warrants are delisted or suspended,
such day will be deemed the Delisting Date for purposes of this Agreement.
For purposes of this Agreement, "Index Calculation Date" means any day on
which the Tokyo Stock Exchange is open for trading and Index is calculated and
published.
(b) The Warrant Agent shall, in the case of Warrants other than those
held through CEDEL or Euroclear, following receipt of proper delivery of a
Warrant in accordance with Section 2.02(a), accompanied by a completed
Exercise Notice, and, in the case of Warrants held through CEDEL or Euroclear,
following receipt of proper delivery of a completed Exercise Notice in
accordance with Section 2.02(a):
(i) promptly (1) for Certificated Warrants not held through CEDEL
or Euroclear, determine whether such Exercise Notice has been duly
completed and is in proper form duly executed by the Registered Holder
thereof or by the duly appointed legal representative thereof or by a
duly authorized attorney, (2) for Certificated Warrants held through
CEDEL or Euroclear, determine whether such Exercise Notice has been duly
completed and is in proper form duly executed by CEDEL or the Euroclear
participant tendering such Warrant, as applicable, (3) for Book-Entry
Warrants not held through CEDEL or Euroclear, determine whether such
Exercise Notice has been duly completed and is in proper form and (4) for
Book-Entry Warrants held through CEDEL or Euroclear, determine whether
such Exercise Notice has been duly completed and is in proper form duly
executed by CEDEL or the Euroclear participant tendering such Warrant, as
applicable; and if the Warrant Agent determines that the Exercise Notice
has not been duly completed or is not in proper form or, in the case of
Certificated Warrants, has not been so executed, the Warrant Agent
promptly shall (X) reject such Exercise Notice and shall send to the
entity that executed such Exercise Notice a notice of rejection
substantially in the form set forth in Exhibit C-1 or Exhibit C-2 hereto,
as appropriate, and, in the case of Certificated Warrants, return to the
Registered Holder that submitted such Exercise Notice, by first class
mail, the Warrant Certificates evidencing such Warrants (to the extent
received, in the case of Warrants held through CEDEL or Euroclear), or,
in the case of Book-Entry Warrants, shall redeliver such Warrants (to the
extent received in the case of Warrants held through CEDEL or Euroclear)
free through the facilities of the Depository to the account from which
they were transferred to the Warrant Agent and (Y) in either case, shall
not take the actions required by clauses (ii)-(ix) below with respect to
such Exercise Notice or the related Warrants; provided, however, that the
Warrant Agent shall deliver a copy of the Exercise Notice relating to
such
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Warrants to the Company as required by Section 2.02(b)(ix) below and the
Company may waive any defect in the form of such Exercise Notice;
(ii) with respect to each Warrant held through Euroclear for which
an Exercise Notice was received, promptly telephone Euroclear to
determine whether Euroclear anticipates that it will be able to provide a
Euroclear Confirmation as required by Section 2.02(a);
(iii) notify the Company and the Determination Agent (and such
other parties (not to exceed two) as the Company shall designate in
writing) by 5:00 p.m., New York City time, on the New York Business Day
that such Exercise Notice has been received (or shall be deemed to have
been received) of (A) the total number of Warrants covered by such
Exercise Notice, (B) the number of such Warrants subject to the Limit
Option (as defined herein) ("Contingently Tendered Warrants"), (C) the
number of such Warrants not subject to the Limit Option and (D) the
number of such Warrants, if any, as to which Euroclear has not advised
the Warrant Agent that it anticipates being able to provide a Euroclear
Confirmation as required by Section 2.02(a);
(iv) with respect to Warrants held through Euroclear, determine
whether the Warrant Agent has received by 9:00 a.m., New York City time,
on the Valuation Date relating to such Warrants or if the Valuation Date
relating to such Warrants is not a New York Business Day, on the next
succeeding New York Business Day, Euroclear Confirmations with respect to
such Warrants as required by Section 2.02(a), and if the Warrant Agent
has not received any such Euroclear Confirmation by such time, notify the
Company (and such other parties (not to exceed two) as the Company shall
designate in writing) by 10:00 a.m., New York City time, on such
Valuation Date or if the Valuation Date relating to such Warrants is not
a New York Business Day, on the next succeeding New York Business Day, of
the number of such Warrants in respect of which the Warrant Agent has not
received such Euroclear Confirmations and (except to the extent the
Company has notified the Warrant Agent that it has waived the requirement
of timely delivery of such Euroclear Confirmation) send to the Euroclear
participant that executed such Exercise Notice for which no related
Euroclear Confirmation was received (at the address specified in such
notice) a notice of rejection substantially in the form set forth in
Exhibit C-2 hereto;
(v) if any of the Warrants covered by such Exercise Notice
constitute Contingently Tendered Warrants, the Warrant Agent shall, by
5:00 p.m., New York City time, on the Valuation Date or if the Valuation
Date relating to such
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<PAGE>
Warrants is not a New York Business Day, on the next succeeding New York
Business Day, (A) obtain from the Determination Agent the Reference Index
(as defined herein) for such Warrants and the Index Spot Price (as
defined herein) for the Index Calculation Date that, but for the
provisions of Section 2.02(g), would be the Valuation Date for such
Warrants, (B) determine in accordance with Section 2.02(g) whether such
Contingently Tendered Warrants will be subject to exercise after giving
effect to the Limit Option and, if such Warrants will not be subject to
exercise, send to the Registered Holder (or the entity that executed the
Exercise Notice in the case of Certificated Warrants held through CEDEL
or Euroclear), in the case of Certificated Warrants, or to the
Participant, in the case of the Book-Entry Warrants, that submitted such
Exercise Notice a notice of rejection substantially in the form set forth
in Exhibit D-1 or Exhibit D-2 hereto, as appropriate, with respect to
such Warrants and, in the case of Certificated Warrants, return to the
Registered Holder (or the entity that executed the Exercise Notice in the
case of Certificated Warrants held through CEDEL or Euroclear) that
submitted such Exercise Notice, by first class mail, the Warrant
Certificates evidencing such Warrants, or, in the case of Book-Entry
Warrants (to the extent received in the case of Warrants held through
CEDEL and Euroclear), redeliver the Warrants free through the facilities
of the Depository to the account of such Participant and (C) notify the
Company and the Determination Agent as to whether such Contingently
Tendered Warrants will be subject to exercise;
(vi) by 5:00 p.m., New York City time, on the Valuation Date (or,
if such Valuation Date is not a New York Business Day, on the next
succeeding New York Business Day) (A) determine the sum of (1) the number
of such Warrants not subject to the Limit Option (i.e., the number of
Warrants determined pursuant to clause (iii)(C) above) plus (2) the
number of such Warrants that are Contingently Tendered Warrants that will
be subject to exercise notwithstanding the Limit Option (i.e., the number
of Warrants so identified pursuant to clause (v)(B) above) (all of such
Warrants, the "Exercised Warrants") and (B) notify the Company and the
Determination Agent of the total number of Exercised Warrants so
determined (if such number is zero, the Warrant Agent shall not take the
actions required by clauses (vii) and (viii) with respect to such
Exercise Notice or the related Warrants);
(vii) calculate the Cash Settlement Value of the exercised Warrants
(excluding any Warrants held through CEDEL or Euroclear as to which
timely delivery of the related Warrant has not been made) as of their
Valuation Date in the manner set forth in Section 2.02(d) by no later
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<PAGE>
than 5:00 p.m., New York City time, on the New York Business Day next
succeeding the Valuation Date (or, if such Valuation Date is not a New
York Business Day, on the next succeeding New York Business Day) (unless
the Cash Settlement Value shall be calculated by the Determination
Agent);
(viii) notify the Company (and such other parties (not to exceed
two) as the Company shall designate in writing) by 5:00 p.m., New York
City time, on the New York Business Day next succeeding the Valuation
Date (or, if such Valuation Date is not a New York Business Day, on the
next succeeding New York Business Day) of the Cash Settlement Value
payable in respect of the Exercised Warrants, and send notices of
confirmation substantially in the form included in Exhibit C-1 or Exhibit
C-2 hereto, as appropriate, to the appropriate Registered Holder (or the
entity that executed the related Exercise Notice, in the case of
Certificated Warrants held through CEDEL or Euroclear) or Participant
specifying therein the reference number assigned by the Warrant Agent to
each accepted Exercise Notice; and
(ix) promptly deliver a copy of each Exercise Notice to the Company
and advise the Company of such other matters relating to the Exercised
Warrants as the Company shall reasonably request. Any notice to be given
to the Company by the Warrant Agent pursuant to this Section 2.02 or
Section 2.03 shall be by telephone (promptly confirmed in writing) or
telecopy.
Except in the case of Warrants subject to automatic exercise and for
Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value, if on any
Valuation Date the Cash Settlement Value for any Warrants then exercised would
be zero, then the attempted exercise of such Warrants shall be void and of no
effect and either (i) for Certificated Warrants, the Warrant Certificate
evidencing such Warrants (to the extent received, in the case of Warrants held
through CEDEL or Euroclear) shall be promptly returned by the Warrant Agent to
the Registered Holder (or the entity that executed the related Exercise
Notice, in the case of Certificated Warrants held through CEDEL or Euroclear)
by first class mail or (ii) for Book-Entry Warrants, the Warrants shall be
transferred by the Warrant Agent back to the Participant that submitted them
free on the records of the Depository (to the extent received in the case of
Warrants held through CEDEL or Euroclear) and, in either case, such
Warrantholder shall be permitted to re-exercise such Warrants prior to the
Expiration Date or the Delisting Date, as the case may be.
(c) Provided that the Company has made adequate funds available to the
Warrant Agent in a timely manner, which shall in
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<PAGE>
no event be later than 3:00 p.m., New York City time, on the sixth New York
Business Day following a Valuation Date (or, if the Valuation Date is not a
New York Business Day, on the sixth New York Business Day following the New
York Business Day next succeeding the Valuation Date) (the "Settlement Date"),
the Warrant Agent will be responsible for making its payment available either
(A) for Certificated Warrants, to each appropriate Registered Holder in the
form of a cashier's check or an official bank check, or (in the case of
payments of at least $100,000) by wire transfer to a U.S. dollar account
maintained by such Registered Holder in the United States (at such Registered
Holder's election as specified in the applicable Exercise Notice), after 3:00
p.m., New York City time, but prior to the close of business, on such
Settlement Date or (B) for Book-Entry Warrants, to each appropriate
Participant in the form of a cashier's check or an official bank check, or (in
the case of payments of at least $100,000) by wire transfer to a U.S. dollar
account maintained by such Participant in the United States (at the
Participant's election as specified in the Exercise Notice), after 3:00 p.m.,
New York City time, but prior to the close of business, on such Settlement
Date. For either clause (A) or (B) above, such payment shall be in the amount
of the aggregate Cash Settlement Value in respect of the Warrant Certificates
or Warrants that were delivered to the Warrant Agent (together with the
related Exercise Notice) as provided in Sections 2.01 and 2.02(a) and (b).
(d) The "Cash Settlement Value" of an exercised Warrant will equal an
amount in U.S. dollars equal to the product, if positive, of _______
multiplied by the quotient (rounded down to the nearest cent) of (A) the
amount, if any, by which __________ (the "Index Strike Price") exceeds the
Index Spot Price for the applicable Valuation Date, divided by (B) a fixed
Japanese yen/U.S. dollar exchange rate of yen _____ per U.S.$1.00; provided,
however, that if such amount is less than zero, then the Cash Settlement Value
shall be zero.
The "Index Spot Price" on any Valuation Date will be determined by the
Determination Agent and will equal the closing level of the Index (as
calculated by the CBOE) on the Valuation Date relating to such Exercise Date.
The Index Spot Price used to determine the Cash Settlement Value on any
Valuation Date will be rounded to the second decimal place (e.g., 84.00),
rounding up if the next succeeding decimal place, without regard to rounding,
is five or higher. Any such Cash Settlement Value will be rounded downwards,
if necessary, to the nearest cent. In no event shall a Warrantholder be
entitled to any interest on any Cash Settlement Value.
The "Index" is a new stock index initially comprised of 40 stocks of
companies that are estimated to be the largest Japanese
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<PAGE>
export companies, as measured by total annual yen-dominated export revenue
during the last five (5) years, whose stocks are listed on the First Section
of the Tokyo Stock Exchange and which have a stock market capitalization of
greater than 100 billion Japanese yen, whose daily trading volume averaged
over 100 million Japanese yen per day over the last 250 trading days and whose
export revenue as a percentage of total revenues totalled more than 20% during
the last five (5) years. The Index was designed by Nomura Securities
International, Inc. and is calculated, published and disseminated by the CBOE,
in its sole discretion.
References in this Agreement to "U.S. dollars" or "U.S. $" are to the
lawful currency of the United States of America. References to "Japanese yen"
or "yen" are to the lawful currency of Japan.
(e) In the event a Global Warrant Certificate is issued, the Warrant
Agent shall cause its records, which may be kept electronically, to be marked
to reflect the reduction in the number of Warrants represented by the Global
Warrant Certificate by the number of Warrants that were delivered to the
Warrant Account and for which payment has been made as provided in Section
2.02(c) promptly after such delivery and payment. Absent manifest error, the
Warrant Agent's records shall be conclusive evidence of such matters.
(f) The Company has appointed PaineWebber and PaineWebber accepts such
appointment, to be the Company's Determination Agent to make such calculations
as may be required upon the occurrence of any of the circumstances described
in Section 2.02(g) or 2.03, including, without limitation, calculation of the
Index Spot Price and any Reference Index. The Determination Agent shall act
as an independent expert and not as an agent of the Company, and, unless
otherwise provided by this Agreement, its calculations and determinations
under this Agreement shall, absent manifest error, be final and binding on the
Company, the Warrant Agent, the Warrantholders and any Participant. Any such
calculations will be made available to a Warrantholder for inspection at the
Warrant Agent's Office.
The Company agrees, for the benefit of the Warrantholders from time to
time of the Warrants, that there shall at all times be a Determination Agent
hereunder until all the Warrants are no longer outstanding or until monies for
the payment of all outstanding Warrants, if any, shall have been paid to the
Warrant Agent and shall have been returned to the Company as provided in
Section 2.06, whichever occurs earlier. Resignation, removal and appointment
of the Determination Agent shall be in accordance with the procedures set
forth for the resignation, removal and appointment of the Warrant Agent, as
provided in Section 5.03, except that a successor Determination Agent need not
be a banking
16
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institution with offices south of Chambers Street in the Borough of Manhattan,
The City of New York, and may only be appointed if such successor has been
nominated by the Company and approved by the predecessor Determination Agent.
The Company agrees promptly to pay the Determination Agent the
compensation to be agreed upon with the Company for all services rendered by
the Determination Agent hereunder. The Company also agrees to indemnify the
Determination Agent for, and to hold it harmless against, any loss, liability,
cost or expense (including reasonable attorneys' fees and expenses) incurred
by the Determination Agent by reason of its being made a party to a suit or
claim arising out of this Agreement; provided, however, that such indemnity
shall in no event apply to the extent that any such loss, liability, cost or
expense is a result of the negligence, bad faith or breach of this Agreement
on its part in connection with the services rendered by it hereunder. The
indemnity obligation of the Company shall continue notwithstanding the
termination of this Agreement or the resignation or removal of the
Determination Agent.
(g) Except in the event of an automatic exercise (as described in
Section 2.03 below) and except upon the occurrence of an Extraordinary Event
as a result of which an Alternative Settlement Amount is payable (as provided
in Section 2.03 below), in connection with any exercise of Warrants, the
related Exercise Notice may specify that such exercise (including any exercise
following a postponed Valuation Date pursuant to Section 2.03(b) if the Cash
Settlement Value is to be paid with respect to such Warrants) is subject to
the condition that the Index Spot Price that would otherwise be used to
determine the Cash Settlement Value of such Warrants used to determine the
Cash Settlement Value of such Warrants shall not have increased by 15 or more
points from the Reference Index for such Warrants. "Reference Index", with
respect to any Contingently Tendered Warrants, means the Index Spot Price on
the New York Business Day that such Exercise Notice has been received (or
shall be deemed to have been received) (or, if such New York Business Day is
not an Index Calculation Date, on the first Index Calculation Date preceding
such New York Business Day). The option of a Warrantholder to condition an
exercise of Warrants as provided in this Section 2.02(g) is herein referred to
as the "Limit Option". If a Warrantholder elects the Limit Option in
connection with any exercise of Warrants, the following provisions shall
apply:
(i) To be valid, such election must be specified in the related
Exercise Notice. Each of the Warrant Agent and the Company shall be
entitled to rely conclusively on such Exercise Notice, as received by the
Warrant Agent, in determining whether such election has been validly
made. In connection with any exercise of 500 or more Warrants, a
Warrantholder may elect to subject only a portion of such
17
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Warrants to the Limit Option; provided, however, that the number of such
Warrants subject to the Limit Option and the number of such Warrants not
subject to the Limit Option shall in each case not be less than 500.
Registered Holders and Participants shall be required to certify that the
number of Warrants exercised on behalf of any Warrantholder pursuant to
the related Exercise Notice that is subject to the Limit Option is not
less than 500.
(ii) The Reference Index shall be determined by the Determination
Agent, which determination shall be conclusive and binding for all
purposes relating to such exercise.
(iii) In the event that the Index Spot Price for the first New York
Business Day following the New York Business Day that such Exercise
Notice has been received (or shall be deemed to have been received)
(i.e., for the day that, but for the provisions of this Section 2.02(g),
would be the Valuation Date for such Warrants) has increased by 15 or
more points from the Reference Index for such Warrants, such Warrants (A)
shall not be subject to exercise and shall be treated for all purposes of
this Agreement and the Warrant Certificates and Global Warrant
Certificate as if the related Exercise Notice had never been received by
the Warrant Agent, and (B) shall not constitute "Exercised Warrants" for
purposes of Section 2.02(b). If such Index Spot Price has not increased
by 15 or more points from such Reference Index, such Warrants shall be
subject to exercise as provided in this Section 2.02 and shall be deemed
to be "Exercised Warrants" for such purposes. The Warrant Agent's
determination shall be conclusive and binding for all purposes relating
to such Warrants.
(iv) Except as provided in Section 2.03(b), the Limit Option (based
on the Reference Index as determined for the New York Business Day that
such Exercise Notice has been received (or shall be deemed to have been
received) or, if applicable, the first Index Calculation Date preceding
such New York Business Day) shall continue to be applicable to any
Exercised Warrant for which the Valuation Date has been postponed as a
result of the occurrence of an Extraordinary Event or an Exercise
Limitation Event until the Warrants are canceled as provided in Section
2.03(b) or until the Expiration Date or the Delisting Date.
SECTION 2.03. Automatic Exercise of Warrants; Exercise upon an
Extraordinary Event or Exercise Limitation Event. (a) All Warrants for which
the Warrant Agent has not received an Exercise Notice in proper form at or
prior to 3:00 p.m., New York City time, on the earlier of (i) the New York
Business Day preceding the Expiration Date and (ii) the Delisting Date, or for
which the Warrant Agent has received an Exercise Notice in proper form but
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with respect to which timely delivery of the relevant Warrants has not been
made, and which have not been canceled prior to such time, will be deemed
automatically exercised on such date without any requirement of an Exercise
Notice to the Warrant Agent. The Exercise Date for such Warrants shall be the
Expiration Date or the Delisting Date, as the case may be, or, if such date is
not a New York Business Day, the next succeeding New York Business Day, and
the Valuation Date for such Warrants shall be the first Index Calculation Date
following the Exercise Date for such Warrants.
The Warrant Agent shall by 5:00 p.m., New York City time, on the
Expiration Date or the Delisting Date, as the case may be, or, if such date is
not a New York Business Day, the next succeeding New York Business Day, notify
the Company (and such other parties (not to exceed two) as the Company shall
designate in writing) of the number of Warrants to be automatically exercised
on such day. The Warrant Agent shall (i) by 3:00 p.m., New York City time, on
the New York Business Day next succeeding the Valuation Date, calculate for
such Warrants the Cash Settlement Value (in the manner provided in Section
2.02(d)) of the Warrants to be automatically exercised, (ii) by 5:00 p.m., New
York City time, on the New York Business Day next succeeding such Valuation
Date, notify the Company (and such other parties (not to exceed two) as the
Company shall designate in writing) of the Cash Settlement Value payable in
respect of such exercised Warrants and (iii) advise the Company of such other
matters relating to the exercised Warrants as the Company shall reasonably
request.
If the Company determines that an Extraordinary Event or an Exercise
Limitation Event (as defined herein) has occurred and is continuing on the
Expiration Date or the Delisting Date, the Company shall so notify the Warrant
Agent and the Determination Agent, and the Cash Settlement Value with respect
to the exercised Warrants shall be equal to, and be calculated in the same
manner as, an "Alternative Settlement Amount", in accordance with Section
2.03(b) herein (treating the Expiration Date or the Delisting Date, as the
case may be, as the date on which the Warrants were canceled for the purposes
of Section 2.03(b)).
With respect to Warrants subject to automatic exercise (other than
Book-Entry Warrants and Warrants subject to postponed exercise following the
occurrence of an Extraordinary Event or an Exercise Limitation Event as
described in Section 2.03(b)), the Company shall make available to the Warrant
Agent, not later than 3:00 p.m., New York City time, on the sixth New York
Business Day following the Valuation Date for automatically exercised Warrants
(or if such Valuation Date is not a New York Business Day, on the sixth New
York Business Day following the New York Business Day next succeeding the
Valuation Date) (in any such case, the "Automatic Settlement Date"), funds in
an amount equal to, and for the payment of, the aggregate Cash Settlement
Value of such
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Warrants. Subject to such funds having been made available as provided in the
preceding sentence, the Warrant Agent will be responsible for making its
payment available to each appropriate Registered Holder in the form of a
cashier's check or an official bank check, or (in the case of payments of at
least $100,000) by wire transfer to a U.S. dollar account maintained by such
Registered Holder in the United States (at such Registered Holder's election),
after 3:00 p.m., New York City time, but prior to the close of business, on
the Automatic Settlement Date, against receipt by the Warrant Agent at the
Warrant Agent's Office from such Registered Holder of its Warrant
Certificates. Such payment shall be equal to the aggregate Cash Settlement
Value of the Warrants in respect of the Warrants, evidenced by such Warrant
Certificates that were exercised automatically on the Expiration Date or the
Delisting Date, as the case may be. All Warrant Certificates delivered to the
Warrant Agent shall thereafter be promptly canceled by the Warrant Agent.
With respect to Book-Entry Warrants subject to automatic exercise (other
than Book-Entry Warrants and Warrants subject to postponed exercise following
the occurrence of an Extraordinary Event or an Exercise Limitation Event as
described in Section 2.03(b)), the Company shall make available to the Warrant
Agent, not later than 3:00 p.m., New York City time, on the Automatic
Settlement Date, funds in an amount equal to, and for the payment of, the
aggregate Cash Settlement Value of such Warrants. Subject to such funds having
been made available as provided in the preceding sentence, the Warrant Agent
will be responsible for making funds available to the Depository in accordance
with procedures agreed upon between the Depository and the Warrant Agent,
against receipt of the Global Warrant Certificate, after 3:00 p.m., New York
City time, but prior to the close of business, on the Automatic Settlement
Date, such funds to be in an amount equal to the aggregate Cash Settlement
Value of the Book-Entry Warrants subject to such automatic exercise.
The Company will advise the Warrant Agent as soon as practicable of the
date of any expected delisting or permanent suspension of trading of the
Warrants and will immediately inform the Warrant Agent after the Company has
received notice that such delisting or suspension has occurred, but in no
event will notice of such delisting or suspension be given to the Warrant
Agent later than 9:30 a.m., New York City time, on the New York Business Day
following the date that such delisting or suspension occurs. The Company will
use its best efforts to notify the Warrantholders, or cause the Warrantholders
to be notified, as promptly as practicable of any expected delisting or
suspension of trading of the Warrants.
(b) Upon the occurrence of an Extraordinary Event or an Exercise
Limitation Event, the Company shall use its best efforts to notify the Warrant
Agent and the Determination Agent promptly
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that an Extraordinary Event or Exercise Limitation Event, as the case may be,
has occurred and shall promptly notify the Warrantholders, through publication
in a United States newspaper with a national circulation, or through other
means deemed appropriate by the Company ("Publication"), that an Extraordinary
Event or an Exercise Limitation Event has occurred. Anything in this
Agreement to the contrary notwithstanding, if the Company determines that an
Extraordinary Event or Exercise Limitation Event has occurred and is
continuing on the Tokyo Business Day (as hereinafter defined) with respect to
which the Index Spot Price on a Valuation Date is to be determined (the
"Applicable Index Business Day"), then the Cash Settlement Value of any
Warrants shall be calculated on the basis that the Valuation Date shall be the
next Index Calculation Date following an Applicable Index Business Day on
which there is no Extraordinary Event or Exercise Limitation Event; provided,
however, that if the Cash Settlement Value of such Warrants is not calculated
on or prior to the Expiration Date or the Delisting Date, then the
Warrantholders shall receive the Alternative Settlement Amount in lieu of the
Cash Settlement Value which shall be calculated as if such Warrants had been
canceled on the Expiration Date or the Delisting Date, as the case may be.
If the Company determines that an Extraordinary Event has occurred and is
continuing, and if it is expected by the Company to continue, the Company may
immediately cancel the Warrants by notifying the Warrant Agent of such
cancellation (the date such notice is given being the "Cancellation Date"),
and each Warrantholder's rights with respect to the Warrants and under this
Agreement shall thereupon cease; provided, however, that each Warrant shall be
exercised (even if such Warrant would not otherwise be exercisable on such
Date because of the Limit Option) on the basis that the Valuation Date for
such Warrant shall be the Cancellation Date and each Warrantholder shall have
the right to receive an Alternative Settlement Amount (as defined herein) with
respect to its Warrants. The Company shall use its best efforts to promptly
notify the Warrantholders through Publication of such cancellation.
With respect to all Warrants as to which the Valuation Date has been
postponed or which have been canceled as described above, the company shall
make available to the Warrant Agent not later than 3:00 p.m., New York City
time, on the third New York Business Day following the date on which the Cash
Settlement Value or Alternative Settlement Amount, as the case may be, has
been calculated (the "Alternative Settlement Date"), funds in an amount equal
to, and or the payment of, the aggregate Cash Settlement Value or Alternative
Settlement Amount, as applicable, of such Warrants. Subject to such funds
having been made available as provided in the preceding sentence, the Warrant
Agent will be responsible for making a payment (i) in the case of Certificated
Warrants, to each Registered Holder that submitted a
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warrant Certificate for exercise or (ii) in the case of Book-Entry Warrants,
to the Depository, after 3:00 p.m., New York City time, but prior to the close
of business on, the Alternative Settlement Date, in an amount equal to the
aggregate Cash Settlement Value or Alternative Settlement Amount of such
exercised Warrants.
The "Alternative Settlement Amount" shall be an amount determined by the
Determination Agent, which is equal to the amount "X" calculated using the
formula set forth below:
X = I + T x A
-----
2B
where
I = the Cash Settlement Value of the Warrants determined as described under
Section 2.02(d), but subject to the following modifications:
(1) if the Cancellation Date for such Warrants is a date on which
the Index is calculated and published, for the purpose of determining
such Cash Settlement Value, the Index will be determined as of such
Cancellation Date except that, if the Index Spot Price as of the
Cancellation date is less than 90% of the Index Spot Price as of the
immediately preceding Index Calculation Date, then the Index Spot Price
will be deemed to be 90% of the Index Spot Price on such preceding Index
Calculation Date; or
(2) if the Cancellation Date for such Warrants is a date on which
the Index is not calculated or published, for the purpose of determining
such Cash Settlement Value, the Index Spot Price will be deemed to be the
lesser of (i) the Index Spot Price as of the first Index Calculation Date
immediately preceding the Cancellation Date except that, if the Index
Spot Price as of such day is less than 90% of the Index Spot Price as of
the second Index Calculation Date immediately preceding such Cancellation
Date, 90% of the Index Spot Price as of such second Index Calculation
Date and (ii) the arithmetic average of four amounts, being (a) the Index
Spot Price at each of the three successive Index Calculation Dates
immediately preceding the Cancellation Date and (b) the Index Spot Price
at the next Index Calculation Date; provided that if an Extraordinary
Event described in clause (i) of the definition of Extraordinary Event
continues for 30 consecutive days immediately following such Cancellation
Date, then the Determination Agent shall calculate an amount which, in
its reasonable
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opinion, fairly reflects the value of the stocks comprising the Index on
the Index Calculation Date immediately following such Cancellation Date
which, subject to approval by the Company (such approval not to be
unreasonably withheld), shall for purposes of calculating the amount
under this clause (2)(ii) be treated as the figure arrived at under
clause (2)(ii)(b);
T = U.S. $ , the initial offering price per Warrant;
A = the total number of days from but excluding the Cancellation Date for
such Warrants to and including the Expiration Date; and
B = the total number of days from but excluding the date the Warrants were
initially sold to and including the Expiration Date.
For purposes of determining "I" in the above formula, in the event that
the Determination Agent and the Company are required, but have not, after good
faith consultation with each other and within five days following the first
day on which such Alternative Settlement Amount may be calculated in
accordance with the above formula, agreed upon a figure under clause
(2)(ii)(b) which fairly reflects the value of the stocks which comprise the
Index on the Cancellation Date, then the Determination Agent shall promptly
nominate a third party, subject to approval by the Company (such approval not
to be unreasonably withheld), to determine such figure and calculate the
Alternative Settlement Amount in accordance with the above formula. Such
party shall act as an independent expert and not as an agent of the Company or
the Determination Agent, and its calculation and determination of the
Alternative Settlement Amount shall, absent manifest error, be final and
binding on the Company, the Warrant Agent, the Determination Agent and the
Warrantholders. Any such calculations will be made available to a
Warrantholder for inspection at the Warrant Agent's Office. Neither the
Company nor such third party shall have any responsibility for good faith
errors or omissions in calculating the Alternative Settlement Amount.
(c) For purposes of this Agreement, an "Extraordinary Event" shall mean
any one of the events, circumstances or causes listed below:
(i) a suspension or absence of trading on the TSE Exchange Ltd.
(the "TSE") of all the stocks which then comprise the Index; or
(ii) the enactment, publication, decree or other promulgation of
any statute, regulation, rule or order of any court or any other U.S. or
non-U.S. governmental authority which
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would make it unlawful for the Company to perform any of its obligations under
this Agreement or the Warrants; or
(iii) any outbreak or escalation of hostilities or other national
or international calamity or crisis (including, without limitation, natural
calamities which in the opinion of the Company may materially and adversely
affect the economy of Japan or the trading of securities generally on the TSE)
which has or will have a material adverse effect on the ability of the Company
to perform its obligations under the Warrants or to modify the hedge of its
position with respect to the Index.
For the purposes of determining whether an Extraordinary Event has
occurred: (1) a limitation on the hours or number of days of trading will not
constitute an Extraordinary Event if it results from an announced change in
the regular business hours of the TSE and (2) an "absence of trading" on the
TSE will not include any time when the TSE itself is closed for trading under
ordinary circumstances.
(d) For purposes of this Agreement, an "Exercise Limitation Event" shall
mean any one of the events, circumstances or causes listed below:
(i) a suspension or absence of trading on the TSE of 20% or more
of the stocks which then comprise the Index; or
(ii) the suspension or material limitation on the Singapore
International Monetary Exchange, Ltd. ("SIMEX"), Osaha Securities Exchange
("OSE") or any other major futures or securities market (which as of the date
of this Agreement includes only SIMEX, OSE or the CBOE, but which in the
Company's judgment may change in the future) of trading in future and option
contracts related to the Index, the Tokyo Stock Price Index ("TOPIX"), the
Nikkei 225 Index or the Nikkei 300 Index.
For the purposes of determining whether an Exercise Limitation Event has
occurred: (1) a limitation on the hours or number of days of trading will not
constitute an Exercise Limitation Event if it results from an announced change
in the regular business hours of the relevant exchange, (2) a decision to
permanently discontinue trading in the relevant contract will not constitute
an Exercise Limitation Event, (3) a suspension in trading in a futures or
options contract referred to in clauses (i) and (ii) above, by reason of (x) a
price change violating limits set by the TSE, SIMEX, OSE or the CBOE or such
futures or securities market, (y) an imbalance of orders relating to such
contracts or (z) a disparity in bid and ask quotes relating to such contracts
will constitute a suspension or material limitation of trading in futures or
options contracts related to the Index, (4) an "absence of trading" on the TSE
will not include any time when the TSE is closed for trading under
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<PAGE>
ordinary circumstances and (5) the occurrence of an Extraordinary Event
described in clause (i) of the definition of Extraordinary Event will not
constitute, and will supersede the occurrence of, an Exercise Limitation
Event.
SECTION 2.04. Limitation of Number of Exercisable Warrants. All
exercises of Warrants (other than on the Expiration Date or the Delisting Date
or upon cancellation of the Warrants as provided in Section 2.03(b)) shall be
subject, at the Company's option, to the limitation that not more than
1,000,000 Warrants in total may be exercised on any Exercise Date and not more
than 250,000 Warrants may be exercised by or on behalf of any person or
entity, either individually or in concert with any other person or entity, on
any Exercise Date. If any New York Business Day would otherwise, under the
terms hereof, be the Exercise Date in respect of more than 1,000,000 Warrants,
then upon the Company's exercising such option (by giving notice thereof to
the Warrant Agent not later than 5:00 p.m., New York City time, on the New
York Business Day immediately following such Exercise Date), 1,000,000 of such
Warrants shall be deemed exercised on such Exercise Date (selected by the
Warrant Agent on a pro rata basis, but if, as a result of such pro rata
selection, any Registered Holders would be deemed to have exercised less than
500 Warrants, then the Warrant Agent shall first select additional Warrants of
such Registered Holders so that no such Registered Holder shall be deemed to
have exercised less than 500 Warrants), and the remainder of such Warrants
(the "Remaining Warrants") shall be deemed exercised on the following New York
Business Day (notwithstanding the minimum exercise requirement of Section 2.01
and subject to successive applications of this Section 2.04); provided,
however, that any Remaining Warrant in respect of which an Exercise Notice was
delivered on a given Notice Date shall be deemed exercised before any other
Warrants in respect of which an Exercise Notice was delivered on a later
Notice Date. If any individual Warrantholder attempts to exercise more than
250,000 Warrants on any New York Business Day, then at the Company's election
(as notified to the Warrant Agent by giving notice thereof to the Warrant
Agent not later than 5:00 p.m., New York City time, on the New York Business
Day following such New York Business Day) 250,000 of such Warrants shall be
deemed exercised on such New York Business Day and the remainder shall be
deemed exercised on the following New York Business Day (subject to successive
applications of this Section 2.04). The date on which any Warrant is deemed
exercised under the preceding sentences shall for all purposes of this
Agreement be the "Exercise Date" in respect of such Warrant.
SECTION 2.05. Covenant of the Company. The Company covenants, for the
benefit of the Warrantholders, that it will not seek the delisting of the
Warrants from, or suspension of their trading on, the CBOE unless the Company
has, at the same
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time, arranged for listing on another United States national securities
exchange.
SECTION 2.06. Return of Money Held Unclaimed for Two Years. Except as
otherwise provided herein, any money deposited with or paid to the Warrant
Agent for the payment of the Cash Settlement Value or Alternative Settlement
Amount of any Warrants and not applied but remaining unclaimed for two years
after the date upon which such Cash Settlement Value shall have become due and
payable shall be repaid by the Warrant Agent to the Company and the holders of
such Warrants shall thereafter look only to the Company for any payment which
such holders may be entitled to collect and all liability of the Warrant Agent
with respect to such money shall thereupon cease; provided, however, that the
Warrant Agent, before making any such repayment, may at the expense of the
Company notify (i) in the case of Certificated Warrants, the Registered
Holders or (ii) in the case of Book-Entry Warrants, the Participants
concerned, that said money has not been so applied and remains unclaimed and
that after a date named in the notification any unclaimed balance of said
money then remaining will be returned to the Company.
SECTION 2.07. Return of Global Warrant Certificate. In the event a
Global Warrant Certificate is issued, at such time as all of the Warrants
evidenced by such Certificate have been exercised (including pursuant to an
automatic exercise) and all payments to the Participants made as provided
herein, the Warrant Agent shall destroy the canceled Global Warrant
Certificate (unless instructed by the Company to deliver the Global Warrant
Certificate to the Company) and shall provide a certificate of destruction to
the Company.
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder of Warrant May Enforce Rights.
Notwithstanding any of the provisions of this Agreement, any Warrantholder,
without the consent of the Warrant Agent, may, in and for its own behalf,
enforce, and may institute and maintain, any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, its right
to exercise, and to receive payment for, its Warrants as provided in this
Agreement.
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ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company. In the event the
Company shall purchase or otherwise acquire Warrants, such Warrants may, at
the option of the Company, be (i) in the case of Certificated Warrants,
delivered to the Warrant Agent, and if so delivered, the Warrant Agent shall
promptly note the cancellation of such Warrants on the records of the Warrant
Agent or (ii) in the case of Book-Entry Warrants, surrendered free through a
Participant to the Depository for credit to the account of the Warrant Agent
maintained at the Depository, and if so credited, the Warrant Agent shall
promptly note the cancellation of such Warrants by notation on the records of
the Warrant Agent. In the case of Book-Entry Warrants, such Warrants may also,
at the option of the Company, be resold by the Company directly or to or
through any of its affiliates in lieu of being surrendered to the Depository.
No Warrant Certificate shall be countersigned in lieu of or in exchange for
any Warrant which is canceled as provided herein, except as otherwise
expressly permitted by this Agreement.
Any canceled Warrant Certificate held by the Warrant Agent under this
Agreement shall be destroyed by the Warrant Agent unless otherwise directed by
the Company, and the Warrant Agent shall deliver a certificate of destruction
to the Company evidencing the same.
SECTION 4.02. Payment of Taxes. The Company will pay all stamp,
withholding and other duties, if any, attributable to the initial issuance of
Warrants; provided, however, that, anything in this Agreement to the contrary
notwithstanding, the Company shall not be required to pay any tax or other
governmental charge which may be payable in respect of any transfer involving
any beneficial or record interest in, or ownership interest of, any Warrants,
Warrant Certificates or Global Warrant Certificate, which tax or other
governmental charge shall be paid by the appropriate Warrantholder or
Registered Holder.
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent. (a) The Company hereby appoints Citibank,
N.A. ("Citibank") as Warrant Agent of the Company in respect of the Warrants
upon the terms and subject to the conditions set forth herein; and Citibank
hereby accepts such appointment. The Warrant Agent shall have the powers and
authority granted to and conferred upon it in this Agreement and
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<PAGE>
such further powers and authority to act on behalf of the Company as the
Company may hereafter grant to or confer upon it. All of the terms and
provisions with respect to such powers and authority contained in any Warrant
Certificates or the Global Warrant Certificate are subject to and governed by
the terms and provisions hereof.
(b) Citibank covenants and agrees to maintain an office, staffed by
qualified personnel, with adequate facilities for the discharge of its
responsibilities under this Agreement, including, without limitation, the
computation of the Cash Settlement Value and the timely settlement of the
Warrants upon exercise thereof.
SECTION 5.02. Conditions of Warrant Agent's Obligations. The Warrant
Agent accepts its obligations herein set forth upon the terms and conditions
hereof, including the following, to all of which the Company agrees and to all
of which the rights hereunder of the holders from time to time of the Warrants
shall be subject:
(a) The Company agrees promptly to pay the Warrant Agent the
compensation to be agreed upon with the Company for all services rendered
by the Warrant Agent and to reimburse the Warrant Agent for its
reasonable out-of-pocket expenses (including attorneys' fees and
expenses) incurred by the Warrant Agent without negligence, bad faith or
breach of this Agreement on its part in connection with the services
rendered by it hereunder. The Company also agrees to indemnify the
Warrant Agent for, and to hold it harmless against, any loss, liability
or expense (including reasonable attorneys' fees and expenses) incurred
without negligence, bad faith or breach of this Agreement on the part of
the Warrant Agent, arising out of or in connection with its acting as
such Warrant Agent hereunder, as well as the reasonable costs and
expenses of defending against any claim of liability in the premises.
(b) In acting under this Agreement, the Warrant Agent is acting
solely as agent of the Company and does not assume any obligation or
relationship of agency or trust for or with any of the owners or holders
of the Warrants.
(c) The Warrant Agent may consult with counsel satisfactory to it,
and the opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion of such
counsel.
(d) The Warrant Agent shall be protected and shall incur no
liability for or in respect of any action taken or
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<PAGE>
thing suffered by it in reliance upon any notice, direction, consent,
certificate, affidavit, statement or other paper or document reasonably
believed by it to be genuine and to have been presented or signed by the
proper parties.
(e) The Warrant Agent, and its officers, directors and employees,
may become the owner of, or acquire any interest in, any Warrants or
other obligations of the Company, with the same rights that it or they
would have if it were not the Warrant Agent hereunder and, to the extent
permitted by applicable law, it or they may engage or be interested in
any financial or other transaction with the Company and may act on, or as
depository, trustee or agent for, any committee or body of holders of
Warrants or other obligations of the Company as freely as if it were not
the Warrant Agent hereunder.
(f) The Warrant Agent shall not be under any liability for interest
on any monies at any time received by it pursuant to any of the
provisions of this Agreement nor shall it be obligated to segregate such
monies from other monies held by it, except as required by law. The
Warrant Agent shall not be responsible for advancing funds on behalf of
the Company.
(g) The Warrant Agent shall not be under any responsibility with
respect to the validity or sufficiency of this Agreement or the execution
and delivery hereof (except the due execution and delivery hereof by the
Warrant Agent) or with respect to, the validity or execution of the
Warrant Certificates or the Global Warrant Certificate (except its
countersignature thereof).
(h) The recitals contained herein and in the Warrant Certificates
or the Global Warrant Certificate (except as to the Warrant Agent's
countersignature thereon) shall be taken as the statements of the
Company, and the Warrant Agent assumes no responsibility for the
correctness of the same.
(i) The Warrant Agent shall be obligated to perform such duties as
are herein specifically set forth, and no implied duties or obligations
shall be read into this Agreement against the Warrant Agent. The Warrant
Agent shall not be under any obligation to take any action hereunder
likely to involve it in any expense or liability, the payment of which is
not, in its reasonable opinion, assured to it. The Warrant Agent shall
not be accountable or under any duty or responsibility for the
application by the Company of any proceeds. The Warrant Agent shall have
no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained in any Warrant
Certificate or the Global Warrant
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Certificate or in the case of the receipt of any written demand from a
holder of a Warrant with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or,
except as provided in Section 6.02 hereof, to make any demand upon the
Company.
SECTION 5.03. Resignation and Appointment of Successor. (a) The Company
agrees, for the benefit of the holders from time to time of the Warrants, that
there shall at all times be a Warrant Agent hereunder until all the Warrants
are no longer outstanding or until monies for the payment of all outstanding
Warrants, if any, shall have been paid to the Warrant Agent and shall have
been returned to the Company as provided in Section 2.06, whichever occurs
earlier.
(b) The Warrant Agent may at any time resign as such agent by giving
written notice to the Company of such intention on its part, specifying the
date on which its desired resignation shall become effective, subject to the
appointment of a successor Warrant Agent and acceptance of such appointment by
such successor Warrant Agent as hereinafter provided. The Warrant Agent
hereunder may be removed at any time by the filing with it of an instrument in
writing signed by or on behalf of the Company and specifying such removal and
the date when it shall become effective. Such resignation or removal shall
take effect upon the appointment by the Company, as hereinafter provided, of a
successor Warrant Agent (which shall be a banking institution organized under
the laws of the United States of America or one of the states thereof and
having an office south of Chambers Street in the Borough of Manhattan, The
City of New York) and the acceptance of such appointment by such successor
Warrant Agent. In the event a successor Warrant Agent has not been appointed
and accepted its duties within 90 days of the Warrant Agent's notice of
resignation, the Warrant Agent may apply to any court of competent
jurisdiction for the designation of a successor Warrant Agent. The obligation
of the Company under Section 5.02(a) shall continue to the extent set forth
therein notwithstanding the resignation or removal of the Warrant Agent.
(c) In case at any time the Warrant Agent shall give notice of its
intent to resign, or shall be removed, or shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or make an assignment for the
benefit of its creditors, or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall admit in
writing its inability to pay or meet its debts as they mature, or if a
receiver or custodian of it or of all or any substantial part of its property
shall be appointed, or if any public officer shall have taken charge or
control of the Warrant Agent or of its property or affairs for the purpose of
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<PAGE>
rehabilitation, conservation or liquidation, a successor Warrant Agent,
qualified as aforesaid, shall be promptly appointed by the Company by an
instrument in writing, filed with the successor Warrant Agent. Upon the
appointment as aforesaid of a successor Warrant Agent and acceptance by the
latter of such appointment, the Warrant Agent so superseded shall cease to be
Warrant Agent hereunder.
(d) Any successor Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to its predecessor and to the Company an instrument
accepting such appointment hereunder, and thereupon such successor Warrant
Agent, without any further act, deed or conveyance, shall become vested with
all the authority, rights, powers, trust, immunities, duties and obligations
of such predecessor with like effect as if originally named as Warrant Agent
hereunder, and such predecessor, upon payment of its charges and disbursements
then unpaid, shall thereupon become obligated to transfer, deliver and pay
over, and such successor Warrant Agent shall be entitled to receive, all
monies, securities and other property on deposit with or held by such
predecessor (including, without limitation, the Warrant Register) as Warrant
Agent hereunder.
(e) Any corporation into which the Warrant Agent hereunder may be merged
or converted or any corporation with which the Warrant Agent may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Warrant Agent shall be a party, or any corporation
to which the Warrant Agent shall sell or otherwise transfer all or
substantially all the corporate trust assets and business of the Warrant
Agent, provided that it shall be qualified as aforesaid, shall be the
successor Warrant Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties hereto.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment. (a) This Agreement and the terms of the
Warrants may be amended by the Company, the Warrant Agent and the
Determination Agent, without the consent of the Warrantholders, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective or inconsistent provision contained herein or therein or in any
other manner which the Company may deem necessary or desirable and which, as
determined by the Company in its sole discretion, will not adversely affect
the interests of the holders of the Warrants. Notwithstanding anything in this
Section 6.01 to the contrary, this Agreement may not be amended to provide for
the countersigning by the Warrant Agent of Warrant Certificates
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evidencing in the aggregate in excess of 1,000,000 Warrants unless and until
the Warrant Agent has received notice from the CBOE or any successor United
States national securities exchange that the additional Warrants in excess of
1,000,000 have been approved for listing on such exchange.
(b) The Company, the Warrant Agent and the Determination Agent may
modify or amend this Agreement, with the consent of Warrantholders holding not
less than a majority in number of the then outstanding Warrants affected by
such modification or amendment, for any purpose; provided, however, that no
such modification or amendment that increases the Index Strike Price, shortens
the period of time during which the Warrants may be exercised, or otherwise
materially and adversely affects the exercise rights of the Warrantholders or
reduces the percentage of the number of outstanding Warrants, the consent of
whose holders is required for modification or amendment of this Agreement, may
be made without the consent of each Warrantholder affected thereby.
SECTION 6.02. Notices and Demands to the Company, the Warrant Agent and
the Determination Agent. If the Warrant Agent or the Determination Agent
shall receive any notice or demand addressed to the Company by any
Warrantholder pursuant to the provisions of this Agreement, the Warrant Agent
or the Determination Agent, as the case may be, shall promptly forward such
notice or demand to the Company.
SECTION 6.03. Addresses for Notices. Any communications to the Warrant
Agent with respect to this Agreement shall be addressed to Citibank, N.A., 120
Wall Street, New York, New York 10043, Attention: Corporate Trust Department
(telephone: (212) 412-6209; facsimile: (212) 480-1613), and any communications
to the Company with respect to this Agreement shall be addressed to Paine
Webber Group Inc., 1285 Avenue of the Americas, New York, New York 10019,
Attention: Secretary (telephone: (212) 713-6277; facsimile: (212) 713-6119),
and any communications to the Determination Agent with respect to this
Agreement shall be addressed to PaineWebber Incorporated, 1285 Avenue of the
Americas, New York, New York 10019, Attention: John Braddock (telephone: (212)
713-3508; facsimile: (212) 582-1650 (or such other address as shall be
specified in writing by the Warrant Agent, the Company or the Determination
Agent, respectively).
SECTION 6.04 Notices to Holders. The Company may cause to have notice
given to the holders of Warrants by providing the Warrant Agent with a form of
notice to be distributed by (a) in the case of Certificated Warrants, the
Warrant Agent to the Warrantholders or (b) in the case of Book Entry Warrants,
the Depository with a form of such notice to be distributed by the Depository
to Participants in accordance with the custom and practices of the Depository.
32
<PAGE>
SECTION 6.05. Obtaining of Approvals. The Company will from time to
time take all action which may be necessary to obtain and keep effective (a)
any and all permits, consents and approvals of governmental agencies and
authorities and the CBOE or any successor United States national securities
exchange and (b) any and all filings or notices under United States Federal
and state securities laws, which may be or become required in connection with
the issuance, sale, trading, transfer or delivery of the Warrant Certificates,
the Global Warrant Certificate or the exercise of the Warrants.
SECTION 6.06. Persons Having Rights Under This Agreement. Nothing in
this Agreement expressed or implied and nothing that may be inferred from any
of the provisions hereof is intended, or shall be construed, to confer upon,
or give to, any person or corporation other than the Company, the Warrant
Agent, the Determination Agent, the registered holder of the Global Warrant
Certificate and the Warrantholders any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise
or agreement hereof; and all covenants, conditions, stipulations, promises and
agreements contained in this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent, the Determination Agent, and their
respective successors, the registered holder of the Global Warrant Certificate
and of the Warrantholders.
SECTION 6.07. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the Warrant Agent's Office for
inspection by the Warrantholders, Participants or any person certified by any
Participant to be an indirect participant of the Depository or any person
certified by any Participant to be a Warrantholder, in each case, on behalf of
whom such Participant holds Warrants.
SECTION 6.08. Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 6.09. Counterparts. This Agreement may be executed by the
parties hereto in any number of counterparts, each of which counterpart, when
so executed and delivered, shall be deemed to be an original, but all such
counterparts taken together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 6.10. APPLICABLE LAW. THIS AGREEMENT AND EACH WARRANT SHALL BE
GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
33
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
PAINE WEBBER GROUP INC.,
by _________________________
Name: David A. Dami
Title: By Power of Attorney
CITIBANK, N.A.,
by _________________________
Name: John W. Reasor
Title: Vice President
PAINEWEBBER INCORPORATED
by _________________________
Name: John C. Braddock
Title: First Vice President
34
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
Number ____ CUSIP No. ___________
PAINE WEBBER GROUP INC.
1,000,000 Japan Export Index Put Warrants
Expiring October __, 1997
This Warrant Certificate certifies that __________________, or registered
assigns, is the registered holder of _____________ Japan Export Index Put
Warrants Expiring October __, 1997 (the "Warrants"). Upon receipt by the
Warrant Agent of this Warrant Certificate and the Exercise Notice on the
reverse hereof (or an Exercise Notice in substantially identical form
delivered herewith), duly completed and executed, at the offices of the
Warrant Agent in the Borough of Manhattan, The City of New York, each Warrant
entitles the beneficial owner thereof (each a "Warrantholder") to receive,
subject to the conditions set forth herein and in the Warrant Agreement, from
Paine Webber Group Inc. (the "Company") the cash settlement value in U.S.
dollars (rounded down to the nearest cent) (the "Cash Settlement Value") which
is the greater of (i) zero and (ii) the amount equal to the product, if
positive, of _______ multiplied by the quotient (rounded down to the nearest
cent) of (A) the amount, if any, by which __________ (the "Index Strike
Price") exceeds the Index Spot Price for the applicable Valuation Date,
divided by (B) a fixed Japanese yen/U.S. dollar exchange rate of yen _____ per
U.S.$1.00; provided, however, that if such amount is less than zero, then the
Cash Settlement Value shall be zero. In no event shall a Warrantholder be
entitled to any interest on any Cash Settlement Value.
Subject to the terms of the Warrant Agreement, each Warrant may be
irrevocably exercised, in whole but not in part, at or prior to 3:00 p.m., New
York City time, on any New York Business Day from its date of issuance until
3:00 p.m., New York City time, on the earlier of (i) the New York Business Day
immediately preceding October __, 1997 (the "Expiration Date") and (ii) the
Delisting Date (as defined herein), after which time the Warrants shall expire
and all Warrants evidenced hereby shall be automatically exercised and shall
otherwise be void. Except in the event of automatic exercise of the Warrants
as set forth herein and in the Warrant Agreement, or as otherwise provided in
the Warrant Agreement, not fewer than 500 Warrants may be
A-1
<PAGE>
exercised by or on behalf of any one Warrantholder at any one time.
Reference is hereby made to the further provisions of this Warrant
Certificate set forth on the reverse hereof and such further provisions shall
for all purposes have the same effect as though fully set forth at this place.
This Warrant Certificate shall not be valid unless countersigned by the
Warrant Agent.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused this instrument to
be duly executed.
Dated: ___________________ PAINE WEBBER GROUP INC.,
by
______________________
Donald B. Marron
Chairman and Chief
Executive Officer
[SEAL]
Attest:
by:
______________________
Theodore A. Levine
Secretary
Countersigned for authentication
purposes only as of the date
above written:
CITIBANK, N.A.,
as Warrant Agent
by
_________________
Authorized Officer
A-2
<PAGE>
[FORM OF WARRANT CERTIFICATE]
[REVERSE]
PAINE WEBBER GROUP INC.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued by the Company pursuant to a Warrant
Agreement, dated as of October __, 1995 (the "Warrant Agreement"), among the
Company, Citibank, N.A. (the "Warrant Agent") and PaineWebber Incorporated
(the "Determination Agent") and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions each
Warrantholder consents by acceptance of this Warrant Certificate and which
Warrant Agreement is hereby incorporated by reference in and made a part of
this Warrant Certificate. A copy of the Warrant Agreement is on file at the
Warrant Agent's Office (as defined herein).
The Warrants constitute direct, unconditional and unsecured obligations
of the Company and rank on a parity with the Company's other unsecured
contractual obligations and with the Company's unsecured and unsubordinated
debt.
Subject to the provisions hereof and of the Warrant Agreement, each
Warrant may be irrevocably exercised, in whole but not in part, at or prior to
3:00 p.m., New York City time, on any New York Business Day (as defined
herein) from its date of issuance until 3:00 p.m., New York City time, on the
earlier of (i) the New York Business Day immediately preceding the Expiration
Date and (ii) the Delisting Date (as defined herein). The holder of Warrants
evidenced by this Warrant Certificate may exercise them by surrendering this
Warrant Certificate and attached Exercise Notice (or an Exercise Notice in
substantially identical form), duly completed and executed, to the Warrant
Agent's offices in the Borough of Manhattan, The City of New York (the
"Warrant Agent's Office"), which are, on the date hereof, located at 111 Wall
Street, New York, New York 10043, Attention: Corporate Trust Department.
Except in the event of automatic exercise of the Warrants as set forth herein
and in the Warrant Agreement, or as otherwise provided in the Warrant
Agreement, not fewer than 500 Warrants may be exercised by or on behalf of any
one Warrantholder at any one time.
The "Cash Settlement Value" of a Warrant will equal an amount in U.S.
dollars (rounded down to the nearest cent) which is the greater of (i) zero
and (ii) the amount equal to the product, if positive, of _______ multiplied
by the quotient (rounded down to the nearest cent) of (A) the amount, if any,
by which __________ (the "Index Strike Price") exceeds the Index Spot Price
for the applicable Valuation Date, divided by (B) a fixed Japanese yen/U.S.
dollar exchange rate of yen _____ per
A-3
<PAGE>
U.S.$1.00; provided, however, that if such amount is less than zero, then the
Cash Settlement Value shall be zero. The "Index Spot Price" on any Valuation
Date will be determined by the Determination Agent and will equal the closing
level of the Japan Export Index (as calculated by the Chicago Board Options
Exchange (the "CBOE")) on the Valuation Date relating to such Exercise Date.
The Index Spot Price used to determine the Cash Settlement Value on any
Valuation Date will be rounded to the second decimal place (e.g., 84.00),
rounding up if the next succeeding decimal place, without regard to rounding,
is five or higher. Any such Cash Settlement Value will be rounded downwards,
if necessary, to the nearest cent.
The Company has appointed PaineWebber Incorporated ("PaineWebber") to be
its Determination Agent to make such calculations as may be required upon the
occurrence of certain circumstances, as described in the Warrant Agreement and
herein, including, without limitation, calculation of the Index Spot Price and
any Reference Index. The Determination Agent shall act as an independent
expert and not as an agent of the Company, and, unless otherwise provided by
the Warrant Agreement, its calculations and determinations under the Warrant
Agreement and this Warrant Certificate shall, absent manifest error, be final
and binding on the Company, the Warrant Agent and the Warrantholders.
Subject to the Warrant Agreement and this Warrant Certificate, and except
in the case of exercise (whether automatic or by Exercise Notice) on the
Expiration Date or the Delisting Date, or in the event an Extraordinary Event
or Exercise Limitation Event (as such terms are defined herein) is declared,
or in the case of a postponement due to there being exercised a number of
Warrants in excess of the maximum permitted number on a given day, the
valuation date (the "Valuation Date") for a Warrant shall be the first Index
Calculation Date (as defined herein) following the applicable Exercise Date
(as defined in the Warrant Agreement) on which the Warrant Agent has received
(i) in the case of Warrants other than those held through the facilities of
Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") or the Euroclear
System ("Euroclear"), the Warrant Certificate representing such Warrant, with
the Exercise Notice below (or an Exercise Notice in substantially identical
form delivered herewith), duly completed and executed, at or prior to 3:00
p.m., New York City time (the "Notice Date"); and if the Warrant Agent shall
receive any such Warrant Certificate after 3:00 p.m., New York City time, on
such date, then such Warrant Certificate shall be deemed to have been received
at or prior to 3:00 p.m., New York City time, on the next succeeding New York
Business Day (which shall be considered the Notice Date), and in such event
the Valuation Date shall be
A-4
<PAGE>
the next Index Calculation Date following the New York Business Day on which
the Warrant Agent is deemed to have received such Warrant Certificate together
with the Exercise Notice or (ii) in the case of Warrants held through the
facilities of CEDEL or Euroclear, the notice of exercise (by facsimile
transmission) at or prior to 3:00 p.m., New York City time; provided that the
Warrant Certificate is received by the Warrant Agent by 3:00 p.m., New York
City time, on the Index Calculation Date next succeeding the Exercise Date;
and if the Warrant Agent shall receive such notice of exercise after 3:00
p.m., New York City time, on such date, then the notice of exercise after 3:00
p.m., New York City time, on such date, then the notice of exercise shall be
deemed to have been received at or prior to 3:00 p.m., New York City time, on
the next succeeding New York Business Day (which shall be considered the
Notice Date), and in such even the Valuation Date shall be the next Index
Calculation Date following the New York Business Day on which the Warrant
Agent is deemed to have received such notice of exercise; provided, however,
that if the Warrant Agent receives the Warrant Certificate after 3:00 p.m.,
New York City time, on the Valuation Date, then the Exercise Date for such
Warrant shall be the day on which such Warrant Certificate is received or, if
such day is not a New York Business Day, the next succeeding New York Business
Day, and the Valuation Date for such Warrant shall be the first Index
Calculation Date following such Exercise Date; provided, further, however, in
the case of exercises by Euroclear participants, Euroclear must be tested
telex to the Warrant Agent by 9:00 a.m., New York City time, on the Valuation
Date confirm that the Warrants will be received by the Warrant Agent on such
Date, provided that if such telex communication is received after 9:00 a.m.,
New York City time, on the Valuation Date, the Company will be entitled to
direct the Warrant Agent to reject the related Notice of Exercise or waive the
requirement for timely delivery of such telex communication. Any Warrant
Certificate received after 3:00 p.m., New York City time, on the earlier of
(i) the New York Business Day immediately preceding the Expiration Date and
(ii) the last New York Business Day prior to the effective date on which the
Warrants are delisted from, or permanently suspended from trading on (within
the meaning of the Securities Exchange Act of 1934 and the rules and
regulations of the Securities and Exchange Commission thereunder), the CBOE
and not accepted at the same time for listing on another United States
national securities exchange (such New York Business Day being the "Delisting
Date") (or in the case of Warrants held through the facilities of CEDEL or
Euroclear, after 3:00 p.m., New York City time, on the first Index Calculation
Date following such dates), shall be deemed not to have been delivered and the
related Exercise Notice shall be void and of no effect; provided, however,
that if the Company first receives notice of such delisting or suspension of
the Warrants on the same day on which such Warrants are delisted or suspended,
such day will be deemed
A-5
<PAGE>
the Delisting Date for purposes of the Warrant Agreement and this Warrant
Certificate.
If the Exercise Notice is not rejected as provided in the Warrant
Agreement, then the Warrant Agent or the Determination Agent, as the case may
be, will determine the Cash Settlement Value of the exercised Warrants in
accordance with the terms of the Warrant Agreement. Any exercise of the
Warrants will be irrevocable, except as provided in the immediately succeeding
sentence and for the limited circumstances in which an exercise may be treated
as contingent pursuant to the Limit Option, as provided in the Warrant
Agreement. Except in the case of Warrants subject to automatic exercise and
for Warrants that upon exercise entitle the holder(s) thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value, if on any
Valuation Date the Cash Settlement Value for any Warrants then exercised would
be zero, then in such case, the exercise of such Warrants shall be void and of
no effect and the Warrant Certificate evidencing such Warrants will be
promptly returned by the Warrant Agent to the Registered Holder by first class
mail at the Company's expense and such Warrantholder shall be permitted to
re-exercise such Warrants prior to the Expiration Date or the Delisting Date,
as the case may be.
Except in the case of Warrants subject to automatic exercise and for
Warrants that upon exercise entitle the holder thereof to receive an
Alternative Settlement Amount in lieu of the Cash Settlement Value, payment
shall be made available to each appropriate Registered Holder on the sixth New
York Business Day following the Valuation Date for such Warrants (or if the
Valuation Date is not a New York Business Day, on the sixth New York Business
Day following the New York Business Day next succeeding the Valuation Date) in
the form of a cashier's check or an official bank check, or (in the case of
payments of at least $100,000) by wire transfer to a U.S. dollar bank account
maintained by such Registered Holder in the United States (at such Registered
Holder's election as specified in the Exercise Notice), in an amount equal to
the aggregate Cash Settlement Value of the exercised Warrants.
All Warrants for which the Warrant Agent has not received an Exercise
Notice in proper form at or prior to 3:00 p.m., New York City time, on the
earlier of (i) the New York Business Day preceding the Expiration Date and
(ii) the Delisting Date, or for which the Warrant Agent has received an
Exercise Notice in proper form but with respect to which timely delivery of
the relevant Warrant Certificate has not been made, will be deemed
automatically exercised on such date without any requirement of an Exercise
Notice to the Warrant Agent. The Valuation Date for such Warrants shall be
the first New York Business Day following the Expiration Date or the Delisting
Date, as the case may be.
A-6
<PAGE>
If the Company determines that an Extraordinary Event or an Exercise
Limitation Event has occurred and is continuing on the Expiration Date or the
Delisting Date, the Cash Settlement Value with respect to the exercised
Warrants shall be equal to, and be calculated in the same manner as, an
Alternative Settlement Amount (treating the Expiration Date or the Delisting
Date, as the case may be, as the date on which the Warrants were canceled), as
provided below and in the Warrant Agreement.
Payment with respect to automatically exercised Warrants shall be made
available to each appropriate Registered Holder in the form of a cashier's
check or an official bank check, or (in the case of payments of at least
$100,000) by wire transfer to a U.S. dollar account maintained by such
Registered Holder in the United States (at such Registered Holder's election),
on the sixth New York Business Day following the Valuation Date for
automatically exercised Warrants (or if such Valuation Date is not a New York
Business Day, on the sixth New York Business Day following the New York
Business Day next succeeding the Valuation Date), against receipt by the
Warrant Agent at the Warrant Agent's Office from the Registered Holder of its
Warrant Certificates. Such payment shall be in the amount of the aggregate
Cash Settlement Value in respect of the Warrants, evidenced by the Warrant
Certificates, that were automatically exercised on the Expiration Date or the
Delisting Date, as the case may be.
Anything in the Warrant Agreement or in this Warrant Certificate to the
contrary notwithstanding, if the Company determines that an Extraordinary
Event or an Exercise Limitation Event has occurred and is continuing on the
Tokyo Business Day (as defined herein) with respect to which the Index Spot
Price on a Valuation Date is to be determined (the "Applicable Index Business
Day") then the Cash Settlement Value of such Warrants in respect of an
exercise shall be calculated on the basis that the Valuation Date shall be the
next Index Calculation Date following an Applicable Index Business Day on
which there is no Extraordinary Event or Exercise Limitation Event; provided,
however, that if the Cash Settlement Value of such Warrants is not calculated
on or prior to the Expiration Date or the Delisting Date, then the
Warrantholders will receive the Alternative Settlement Amount in lieu of the
Cash Settlement Value which shall be calculated as if the Warrants had been
canceled on the Expiration Date or the Delisting Date, as the case may be.
If the Company determines that an Extraordinary Event has occurred and is
continuing and if it is expected by the Company to continue, the Company may
immediately cancel the Warrants by notifying the Warrant Agent of such
cancellation (the date such Warrants are canceled being the "Cancellation
Date"), and each Warrantholder's rights with respect to the Warrants and under
the Warrant Agreement shall thereupon cease; provided, however, that
A-7
<PAGE>
each Warrant shall be exercised (even if such Warrant would not otherwise be
exercisable on such Date because of the Limit Option) on the basis that the
Valuation Date for such Warrant shall be the Cancellation Date and each
Warrantholder shall have the right to receive an Alternative Settlement Amount
with respect to its Warrants. The Company shall use its best efforts to
notify the Warrantholders promptly of such cancellation.
With respect to all Warrant Certificates as to which the Valuation Date
has been postponed or which have been canceled as described above, payment
shall be made available to the appropriate registered holders of the Warrants
in the form of a cashier's check or an official bank check, or (in the case of
payments of at least $100,000) by wire transfer to a U.S. dollar bank account
maintained by such holder in the United States (at such holder's election), on
the third New York Business Day following the date on which the Cash
Settlement Value or Alternative Settlement Amount, as the case may be, has
been calculated, against receipt by the Warrant Agent at the Warrant Agent's
Office from such holder of its Warrant Certificates. Such payment shall be in
the amount of the aggregate Cash Settlement Value or Alternative Settlement
Amount, as the case may be, in respect of the Warrants evidenced by such
Warrant Certificates.
The "Alternative Settlement Amount" shall be an amount determined by the
Determination Agent, which is equal to the amount "X" calculated using the
formula set forth below:
X = I + T x A
-----
2B
where
I = Cash Settlement Value of the Warrants determined as described under
Section 2.02(d), but subject to the following modifications:
(1) if the Cancellation Date for such Warrants is a date on which
the Index is calculated and published, for the purpose of determining
such Cash Settlement Value, the Index will be determined as of such
Cancellation Date except that, if the Index Spot Price as of the
Cancellation date is less than 90% of the Index Spot Price as of the
immediately preceding Index Calculation Date, then the Index Spot Price
will be deemed to be 90% of the Index Spot Price on such preceding Index
Calculation Date; or
A-8
<PAGE>
(2) if the Cancellation Date for such Warrants is a date on which
the Index is not calculated or published, for the purpose of determining
such Cash Settlement Value, the Index Spot Price will be deemed to be the
lesser of (i) the Index Spot Price as of the first Index Calculation Date
immediately preceding the Cancellation Date except that, if the Index
Spot Price as of such day is less than 90% of the Index Spot Price as of
the second Index Calculation Date immediately preceding such Cancellation
Date, 90% of the Index Spot Price as of such second Index Calculation
Date and (ii) the arithmetic average of four amounts, being (a) the Index
Spot Price at each of the three successive Index Calculation Dates
immediately preceding the Cancellation Date and (b) the Index Spot Price
at the next Index Calculation Date; provided that if an Extraordinary
Event described in clause (i) of the definition of Extraordinary Event
continues for 30 consecutive days immediately following such Cancellation
Date, then the Determination Agent shall calculate an amount which, in
its reasonable opinion, fairly reflects the value of the stocks
comprising the Index on the Index Calculation Date immediately following
such Cancellation Date which, subject to approval by the Company (such
approval not to be unreasonably withheld), shall for purposes of
calculating the amount under this clause (2)(ii) be treated as the figure
arrived at under clause (2)(ii)(b);
T = U.S. $ , the initial offering price per Warrant;
A = the total number of days from but excluding the Cancellation Date
for such Warrants to and including the Expiration Date; and
B = the total number of days from but excluding the date the Warrants
were initially sold to and including the Expiration Date.
For purposes of determining "I" in the above formula, in the event that
the Determination Agent and the Company are required, but have not, after good
faith consultation with each other and within five days following the first
day on which such Alternative Settlement Amount may be calculated in
accordance with the above formula, agreed upon a figure under clause
(2)(ii)(b) which fairly reflects the value of the stocks which comprise the
Index on the Cancellation Date, then the Determination Agent shall promptly
nominate a third party, subject to approval by the Company (such approval not
to be unreasonably withheld), to determine such figure and calculate the
Alternative Settlement Amount in accordance with the above formula. Such
party shall act as an independent expert and not as an agent of the Company or
the Determination Agent, and its calculation and determination of the
Alternative Settlement
A-9
<PAGE>
Amount shall, absent manifest error, be final and binding on the Company, the
Warrant Agent, the Determination Agent and the Warrantholders. Any such
calculations will be made available to a Warrantholder for inspection at the
Warrant Agent's Office. Neither the Company nor such third party shall have
any responsibility for good faith errors or omissions in calculating the
Alternative Settlement Amount.
An "Extraordinary Event" shall mean any one of the events, circumstances
or causes listed below:
(i) a suspension or absence of trading on the TSE Exchange Ltd.
(the "TSE") of all the stocks which then comprise the Index; or
(ii) the enactment, publication, decree or other promulgation of
any statute, regulation, rule or order of any court or any other U.S. or
non-U.S. governmental authority which would make it unlawful for the Company
to perform any of its obligations under this Agreement or the Warrants; or
(iii) any outbreak or escalation of hostilities or other national
or international calamity or crisis (including, without limitation, natural
calamities which in the opinion of the Company may materially and adversely
affect the economy of Japan or the trading of securities generally on the TSE)
which has or will have a material adverse effect on the ability of the Company
to perform its obligations under the Warrants or to modify the hedge of its
position with respect to the Index.
An "Exercise Limitation Event" shall mean any one of the events,
circumstances or causes listed below:
(i) a suspension or absence of trading on the TSE of 20% or more
of the stocks which then comprise the Index; or
(ii) the suspension or material limitation on the Singapore
International Monetary Exchange, Ltd. ("SIMEX"), Osaha Securities Exchange
("OSE") or any other major futures or securities market (which as of the date
of this Agreement includes only SIMEX, OSE or the CBOE, but which in the
Company's judgment may change in the future) of trading in future and option
contracts related to the Index, the Tokyo Stock Price Index ("TOPIX"), the
Nikkei 225 Index or the Nikkei 300 Index.
All exercises of Warrants (other than on the Expiration Date or the
Delisting Date or upon cancellation as described above) shall be subject, at
the Company's option, to the limitation that not more than 1,000,000 Warrants
in total may be exercised on any Exercise Date and not more than 250,000
Warrants may be exercised by or on behalf of any person or entity, either
individually or in concert with any other person or entity, on any Exercise
Date.
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<PAGE>
If any New York Business Day would otherwise, under the terms hereof, be the
Exercise Date in respect of more than 1,000,000 Warrants, then upon the
Company's exercising such option (by giving notice thereof to the Warrant
Agent not later than 5:00 p.m., New York City time, on the New York Business
Day immediately following such Exercise Date), 1,000,000 of such Warrants
shall be deemed exercised on such Exercise Date (selected by the Warrant Agent
on a pro rata basis, but if, as a result of such pro rata selection, any
Registered Holders would be deemed to have exercised less than 500 Warrants,
then the Warrant Agent shall first select additional Warrants of such
Registered Holders so that no such Registered Holder shall be deemed to have
exercised less than 500 Warrants), and the remainder of such Warrants (the
"Remaining Warrants") shall be deemed exercised on the following New York
Business Day (notwithstanding the minimum exercise requirement in the Warrant
Agreement and subject to successive applications of this paragraph); provided,
however, that any Remaining Warrant in respect of which an Exercise Notice was
delivered on a given Notice Date shall be deemed exercised before any other
Warrants in respect of which an Exercise Notice was delivered on a later
Notice Date. If any individual Warrantholder attempts to exercise more than
250,000 Warrants on any New York Business Day, then at the Company's election
(as notified to the Warrant Agent by giving notice thereof to the Warrant
Agent not later than 5:00 p.m., New York City time, on the New York Business
Day immediately following such New York Business Day) 250,000 of such Warrants
shall be deemed exercised on such New York Business Day and the remainder
shall be deemed exercised on the following New York Business Day (subject to
successive applications of this paragraph). The date on which any Warrant is
deemed exercised under the preceding sentences shall for all purposes of this
Warrant Certificate be deemed to be the "Exercise Date" in respect of such
Warrant.
Prior to due presentment for registration of transfer, the Company, the
Warrant Agent, and any agent of the Company or the Warrant Agent, may deem and
treat the registered owner hereof as the absolute owner of the Warrants
evidenced hereby (notwithstanding any notation of ownership or other writing
hereon) for any purpose whatsoever, and as the person entitled to exercise the
rights represented by the Warrants evidenced hereby, and neither the Company
nor the Warrant Agent, nor any agent of the Company or the Warrant Agent,
shall be affected by any notice to the contrary.
The Warrant Agent shall, in accordance with the Warrant Agreement, from
time to time register the transfer of this Warrant Certificate upon the
records to be maintained by it for that purpose at the Warrant Agent's Office
upon surrender hereof, duly endorsed, or accompanied by a written instrument
or instruments of transfer in form satisfactory to the Warrant Agent and
A-11
<PAGE>
the Company, duly executed by the Registered Holder(s) hereof or by their duly
appointed legal representative or duly authorized attorney, such signature to
be guaranteed by a bank or trust company with a correspondent office in The
City of New York or by a member of a national securities exchange. Upon any
such registration of transfer, a new Warrant Certificate shall be issued to
the transferee(s).
As provided in the Warrant Agreement and subject to certain limitations,
this Warrant Certificate may be exchanged for other Warrant Certificates, of
like tenor and representing an equal number of Warrants, upon surrender to the
Warrant Agent of this Warrant Certificate at the Warrant Agent's Office.
No service charge shall be made for any registration of transfer or
exchange of this Warrant Certificate, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of this
Warrant Certificate, other than exchanges pursuant to the Warrant Agreement
not involving any transfer.
Capitalized terms included herein but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
References herein to "U.S. dollars" or "U.S. $" are to the lawful
currency of the United States of America. References herein to "Japanese yen"
or "yen" are to the lawful currency of Japan. As used herein, a "New York
Business Day" means any day other than a Saturday, Sunday or a day on which
either the CBOE or the New York Stock Exchange is not open for securities
trading or commercial banks in New York City are required or authorized by law
or executive order to remain closed; a "Tokyo Business Day" means any day
other than a Saturday or Sunday or a day on which commercial banks in Tokyo
are not open for a full day of business; and an "Index Calculation Date" means
any day on which the TSE is open for trading and the Index is calculated and
published.
The Warrant Agreement and the terms of the Warrants are subject to
amendment, as provided in the Warrant Agreement.
THIS WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
A-12
<PAGE>
Exercise Notice
Citibank, N.A.
Corporate Trust Department, 5th Floor
111 Wall Street
New York, New York 10043
1. This Notice / / DOES / / DOES NOT relate to "Contingently Tendered
Warrants" subject to a Limit Option, as provided for in the Warrant Agreement.
If this Exercise Notice relates to 500 or more Warrants and any of such
Warrants are Contingently Tendered Warrants, __________ of such Warrants are
Contingently Tendered Warrants and __________ are not. If the Index Spot
Price used to determine the Cash Settlement Value of Contingently Tendered
Warrants is less than the Reference Index by 15 or more points, an Exercise
Notice with respect to such Contingently Tendered Warrants shall be void and
of no effect (and shall be disregarded for all purposes of the Warrant
Agreement).
2. Subject to paragraph 1, the undersigned (the "Owner") hereby
irrevocably exercises __________ Warrants (the "Exercised Warrants") and
delivers to you herewith a Warrant Certificate or Certificates, registered in
the Owner's name, representing a number of Warrants at least equal to the
number of Exercised Warrants. Each beneficial owner of Warrants that is
exercising Warrants pursuant to this Exercise Notice is exercising no fewer
than 500 Warrants.
3. The Owner hereby directs the Warrant Agent (a) to pay the Cash
Settlement Value, if any, with respect to the Exercised Warrants:
/ / By cashier's check or an official bank check;
/ / By wire transfer to the following U.S. dollar bank
account in the United States:
(Minimum payments of $100,000 only)
Bank: _________________________________________
ABA Routing No.: ______________________________
Account No.: __________ Reference: ___________
A-13
<PAGE>
; and (b) if the number of Exercised Warrants is less than the number of
Warrants represented by the enclosed Warrant Certificate, to deliver a Warrant
Certificate representing the unexercised Warrants to _________________________.
Dated: _______________, 19__
_____________________________
(Owner)
by
________________________
Authorized Signature
Address: ___________________
Telephone: (___)_____________
A-14
<PAGE>
EXHIBIT B-1
[FORM OF WARRANT CERTIFICATE]
No. _______ CUSIP No. _______
PAINE WEBBER GROUP INC.
1,000,000 Japan Export Index Put Warrants
Expiring October __, 1997
This certifies that CEDE & Co., or registered assigns, is the registered
holder of ____________ Japan Export Index Put Warrants Expiring October __,
1997 (the "Warrants"). Each Warrant entitles the beneficial owner thereof
(each a "Warrantholder") to receive, subject to the conditions set forth
herein and in the Warrant Agreement, from Paine Webber Group Inc. (the
"Company") the cash settlement value in U.S. dollars (rounded down to the
nearest cent) (the "Cash Settlement Value") which is the greater of (i) zero
and (ii) the amount equal to the product, if positive, of _______ multiplied
by the quotient (rounded down to the nearest cent) of (A) the amount, if any,
by which __________ (the "Index Strike Price") exceeds the Index Spot Price
for the applicable Valuation Date, divided by (B) a fixed Japanese yen/U.S.
dollar exchange rate of yen _____ per U.S.$1.00; provided, however, that if
such amount is less than zero, then the Cash Settlement Value shall be zero.
The "Index Spot Price" on any Valuation Date will be determined by the
Determination Agent and will equal the closing level of the Japan Export Index
(as calculated by the Chicago Board Options Exchange (the "CBOE")) on the
Valuation Date relating to such Exercise Date.
The Index Spot Price used to determine the Cash Settlement Value on any
Valuation Date will be rounded to the second decimal place (e.g., 84.00),
rounding up if the next succeeding decimal place, without regard to rounding,
is five or higher. Any such Cash Settlement Value will be rounded downwards,
if necessary, to the nearest cent. In no event shall a Warrantholder be
entitled to any interest on any Cash Settlement Value.
Subject to the terms of the Warrant Agreement, each Warrant may be
irrevocably exercised, in whole but not in part, at or prior to 3:00 p.m., New
York City time, on any New York Business Day from its date of issuance until
3:00 p.m., New York City time, on the earlier of (i) the New York Business Day
immediately preceding October __, 1997 (the "Expiration Date") and (ii) the
Delisting Date (as defined herein), after which time the Warrants shall expire
and all Warrants evidenced hereby shall be void. The holder of Warrants
evidenced by this Global Warrant Certificate may exercise them only upon
delivery of such Warrant
B-1-1
<PAGE>
free to the Warrant Account and pursuant to an irrevocable Exercise Notice to
the Warrant Agent from a Participant acting on behalf of such Warrantholder.
Except in the event of automatic exercise or cancellation of the Warrants, as
set forth herein and in the Warrant Agreement, not fewer than 500 Warrants may
be exercised by or on behalf of any one Warrantholder at any one time.
This Global Warrant Certificate shall not be valid unless countersigned
by the Warrant Agent.
The Warrants evidenced by this Global Warrant Certificate are part of a
duly authorized issue of Warrants issued by the Company pursuant to a Warrant
Agreement, dated as of October __, 1995 (the "Warrant Agreement"), among the
Company, Citibank, N.A. (the "Warrant Agent") and PaineWebber Incorporated
(the "Determination Agent"), and is subject to the terms and provisions
contained in the Warrant Agreement, to all of which terms and provisions the
Warrantholders, the entities through which such Warrantholders hold their
beneficial interests in the Warrants and the registered holder of this Global
Warrant Certificate consent by acceptance of this Global Warrant Certificate
by the Depository and which Warrant Agreement is hereby incorporated by
reference in and made a part of this Global Warrant Certificate. A copy of
the Warrant Agreement is on file at the Warrant Agent's Office, which is
located at 111 Wall Street, 5th Floor, New York, New York 10043.
The Warrants constitute direct, unconditional and unsecured obligations
of the Company and rank on a parity with the Company's other unsecured
contractual obligations and with the Company's unsecured and unsubordinated
debt.
Subject to the Warrant Agreement and this Global Warrant Certificate, and
except in the event of exercise (whether automatic or by Exercise Notice) on
the Expiration Date or the Delisting Date, or in the event of an Extraordinary
Event or Exercise Limitation Event (as such terms as used in the Warrant
Agreement) is declared, or in the case of a postponement due to there being
exercised a number of Warrants in excess of the maximum permitted number on a
given day, the valuation date (the "Valuation Date") for a Warrant shall be
the first New York Business Day (as defined herein) next succeeding the New
York Business Day (the "Exercise Date") on which the Warrant Agent has
received (i) in the case of Warrants other than those held through the
facilities of Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") or
the Euroclear System ("Euroclear"), the Warrant, with the Exercise Notice (or
an Exercise Notice in substantially identical form), duly completed and
executed, at or prior to 3:00 p.m., New York City time (the "Notice Date");
and if the Warrant Agent shall receive any such Warrant after 3:00 p.m., New
York City time, on such date, then such Warrant shall
B-1-2
<PAGE>
be deemed to have been received at or prior to 3:00 p.m., New York City time,
on the next succeeding New York Business Day (which shall be considered the
Notice Date), and in such event the Valuation Date shall be the next New York
Business Day following the New York Business Day on which the Warrant Agent is
deemed to have received such Warrant together with the Exercise Notice or (ii)
in the case of Warrants held through the facilities of CEDEL or Euroclear, the
Exercise Notice (by facsimile transmission) at or prior to 3:00 p.m., New York
City time; provided that the Warrant is received by the Warrant Agent by 3:00
p.m., New York City time, on the New York Business Day next succeeding the
Exercise Date; and if the Warrant Agent shall receive such Exercise Notice
after 3:00 p.m., New York City time, on such date, then the Exercise Notice
shall be deemed to have been received at or prior to 3:00 p.m., New York City
time, on the next succeeding New York Business Day (which shall be considered
the Notice Date), and in such event the Valuation Date shall be the next New
York Business Day following the New York Business Day on which the Warrant
Agent is deemed to have received such Exercise Notice; provided, however, that
if the Warrant Agent receives the Warrant after 3:00 p.m., New York City time,
on the Valuation Date, then the Exercise Date for such Warrant shall be the
day on which such Warrant is received or, if such day is not a New York
Business Day, the next succeeding New York Business Day, and the Valuation
Date for such Warrant shall be the first New York Business Day following such
Exercise Date; provided further, however, in the case of exercises by
Euroclear participants, Euroclear must, by tested telex to the Warrant Agent
by 9:00 a.m., New York City time, on the Valuation Date, confirm that the
Warrants will be received by the Warrant Agent on such date, provided that if
such telex communication is received after 9:00 a.m., New York City time, on
the Valuation Date, the Company will be entitled to direct the Warrant Agent
to reject the related Exercise Notice or waive the requirement for timely
delivery of such telex communication. Any Warrant received after 3:00 p.m.,
New York City time, on the earlier of (a) the New York Business Day
immediately preceding the Expiration Date and (b) the last New York Business
Day prior to the effective date on which the Warrants are delisted from, or
permanently suspended from trading on (within the meaning of the Securities
Exchange Act of 1934 and the rules and regulations of the Securities and
Exchange Commission thereunder), the CBOE and not accepted at the same time
for listing on another United States national securities exchange (such New
York Business Day being the "Delisting Date") (or, in the case of Warrants
held through the facilities of CEDEL or Euroclear, after 3:00 p.m., New York
City time, on the first New York Business Day following such dates), shall be
deemed not to have been delivered and the related Exercise Notice shall be
void and of no effect; provided, however, that if the Company first receives
notice of the delisting or suspension of the Warrants on the same day on which
such Warrants are delisted or suspended, such day will be deemed
B-1-3
<PAGE>
the Delisting Date for purposes of the Warrant Agreement and this Global
Warrant Certificate.
All Warrants for which the Warrant Agent has not received an Exercise
Notice in proper form by 3:00 p.m., New York City time, on the earlier of (i)
the New York Business Day preceding the Expiration Date and (ii) the Delisting
Date, or for which the Warrant Agent has received an Exercise Notice in proper
form but with respect to which timely delivery of the related Warrant has not
been made, will be deemed automatically exercised on such date without any
requirement of an Exercise Notice to the Warrant Agent. The Valuation Date
shall be the first New York Business Day following the Expiration Date or the
Delisting Date, as the case may be.
If the Company determines that an Extraordinary Event or an Exercise
Limitation Event has occurred and is continuing on the Expiration Date or the
Delisting Date, the Cash Settlement Value with respect to the exercised
Warrants shall be equal to, and be calculated in the same manner as, an
Alternative Settlement Amount (treating the Expiration Date or the Delisting
Date, as the case may be, as the date on which the Warrants were canceled), as
provided below and in the Warrant Agreement.
Anything in the Warrant Agreement or in this Global Warrant Certificate
to the contrary notwithstanding, if the Company determines that an
Extraordinary Event or an Exercise Limitation Event has occurred and is
continuing on the Tokyo Business Day (as defined herein) with respect to which
the Index Spot Price on a Valuation Date is to be determined (the "Applicable
Index Business Day") then the Cash Settlement Value of such Warrants in
respect of an exercise shall be calculated on the basis that the Valuation
Date shall be the next Index Calculation Date following an Applicable Index
Business Day on which there is no Extraordinary Event or Exercise Limitation
Event; provided, however, that if the Cash Settlement Value of such Warrants
is not calculated on or prior to the Expiration Date or the DeListing Date,
then the Warrantholder will receive the Alternative Settlement Amount inn lieu
of the Cash Settlement Value which shall be calculated as if the Warrants had
been canceled on the Expiration Date or the Delisting Date, as the case may
be.
If the Company determines that an Extraordinary Event has occurred and is
continuing and if it is expected by the Company to continue, the Company may
immediately cancel the Warrants by notifying the Warrant Agent of such
cancellation (the date such Warrants are canceled being the "Cancellation
Date"), and each Warrantholder's rights with respect to the Warrants and under
the Warrant Agreement shall thereupon cease; provided, however, that each
Warrant shall be exercised (even if such Warrant would not otherwise be
exercisable on such Date because of the Limit
B-1-4
<PAGE>
Option) on the basis that the Valuation Date for such Warrant shall be the
Cancellation Date and each Warrantholder shall have the right to receive an
Alternative Settlement Amount with respect to its Warrants. The Company shall
use its best efforts to notify the Warrantholders promptly of such
cancellation.
All exercises of Warrants (other than on the Expiration Date or the
Delisting Date or upon cancellation at the Warrant as described above) shall
be subject, at the Company's option, to the limitation that not more than
1,000,000 Warrants in total may be exercised on any Exercise Date and not more
than 250,000 Warrants may be exercised by or on behalf of any person or
entity, either individually or in concert with any other person or entity, on
any Exercise Date. If any New York Business Day would otherwise, under the
terms hereof be the Exercise Date in respect of more than 1,000,000 Warrants,
then upon the Company's exercising such option (by giving notice thereof to
the Warrant Agent not later than 5:00 p.m., New York City time, on the
Business Day immediately following such Exercise Date), 1,000,000 of such
Warrants shall be deemed exercised on such Exercise Date (selected by the
Warrant Agent on a pro rata basis, but if, as a result of such pro rata
selection, any Registered Holders would be deemed to have exercised less than
500 Warrants, then the Warrant Agent shall first select additional Warrants of
such Registered Holders so that no such Registered Holder shall be deemed to
have exercised less than 500 Warrants), and the remainder of such Warrants
(the "Remaining Warrants") shall be deemed exercised on the following New York
Business Day (notwithstanding the minimum exercise requirement in the Warrant
Agreement and subject to successive applications of this paragraph); provided,
however, that any Remaining Warrant in respect of which an Exercise Notice was
delivered on a given Notice Date shall be deemed exercised before any other
Warrants in respect of which an Exercise Notice was delivered on a later
Notice Date. If any individual Warrantholder attempts to exercise more than
250,000 Warrants on any New York Business Day, then at the Company's election
(as notified to the Warrant Agent by giving notice thereof to the Warrant
Agent not later than 5:00 p.m., New York City time, on the New York Business
Day following such New York Business Day) 250,000 of such Warrants shall be
deemed exercised on such New York Business Day and the remainder shall be
deemed exercised on the following New York Business Day (subject to successive
applications of this paragraph). The date on which any Warrant is deemed
exercised under the preceding sentences shall for all purposes of this Global
Warrant Certificate be deemed to be the "Exercise Date" in respect of such
Warrant.
Prior to due presentment for registration of transfer, the Company, the
Warrant Agent, and any agent of the Company or the Warrant Agent, may deem and
treat the registered owner hereof as the absolute owner of the Warrants
evidenced hereby
B-1-5
<PAGE>
(notwithstanding any notation of ownership or other writing hereon) for any
purpose whatsoever, and as the person entitled to exercise the rights
represented by the Warrants evidenced hereby, and neither the Company nor the
Warrant Agent, nor any agent of the Company or the Warrant Agent, shall be
affected by any notice to the contrary.
The Warrant Agent shall, in accordance with the Warrant Agreement, from
time to time register the transfer of this Global Warrant Certificate in its
records (which may be maintained electronically) to be maintained by it for
that purpose at the Warrant Agent's Office upon surrender hereof, duly
endorsed, or accompanied by a written instrument or instruments of transfer in
form satisfactory to the Warrant Agent, duly executed by the registered holder
hereof or by the duly appointed legal representative or duly authorized
attorney thereof, such signature to be guaranteed by a bank or trust company
with a correspondent office in The City of New York or by a member of a
national securities exchange. Upon any such registration of transfer, a new
Global Warrant Certificate shall be issued to the transferee(s).
Exercises of Warrants may be subject to the Limit Option as provided in
the Warrant Agreement.
Capitalized terms included herein but not defined herein have the
meanings assigned thereto in the Warrant Agreement.
References herein to "U.S. dollars" or "U.S.$" are to the lawful currency
of the United States of America. References herein to "Japanese yen" or "yen"
are to the lawful currency of Japan. As used herein, a "New York Business
Day" means any day other than a Saturday, Sunday or a day on which either the
CBOE or the New York Stock Exchange is not open for securities trading or
commercial banks in New York City are required or authorized by law or
executive order to remain closed; a "Tokyo Business Day" means any day other
than a Saturday or Sunday or a day on which commercial banks in Tokyo are not
open for a full day of business; and an "Index Calculation Date" means any day
on which the TSE is open for trading and the Index is calculated and
published.
The Warrant Agreement and the terms of the Warrants are subject to
amendment, as provided in the Warrant Agreement.
THIS GLOBAL WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
B-1-6
<PAGE>
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused this instrument to
be duly executed.
Dated: _______, 19__ PAINE WEBBER GROUP INC.,
By:
---------------------------
Name:
Title:
[Corporate Seal]
Attest:
- -----------------------------
Assistant Secretary
Countersigned for authentication
purposes only as of the date
above written:
CITIBANK, N.A.,
as Warrant Agent,
By:
------------------------
Authorized Officer
B-1-7
<PAGE>
EXHIBIT B-2
Exercise Notice
[For Warrants Represented by the
Global Warrant Certificate]
Citibank, N.A.
c/o Citicorp Data Distribution Inc.
404 Sette Drive
Paramus, New Jersey 07652
1. We refer to the Warrant Agreement, dated as of October __, 1995 (the
"Warrant Agreement"), among Paine Webber Group Inc. (the "Company"), Citibank,
N.A., as warrant agent (the "Warrant Agent"), and PaineWebber Incorporated, as
index spot price reference agent (the "Determination Agent"). On behalf of
certain beneficial owners, each of whom is exercising no fewer than 500
Warrants that are covered by this Exercise Notice and whose Warrants have been
transferred to the Warrant Agent's DTC Participant Account-Citibank, N.A.
Corporate Trust Warrant Agent Account, No. 2659 (the "Warrant Account"), we
hereby irrevocably exercise __________ Warrants (the "Tendered Warrants"). We
hereby acknowledge that the Warrants being exercised and this Exercise Notice
must be received by you by 3:00 p.m., New York City time, on a New York
Business Day (or, in the case of Warrants held through the facilities of
Centrale de Livraison de Valeurs Mobilieres S.A. ("CEDEL") or the Euroclear
System ("Euroclear"), the Warrants must be received by such time on the next
succeeding New York Business Day) in order for the Valuation Date for the
Tendered Warrants to be the New York Business Day following such New York
Business Day and that, if the Warrants being exercised and this Exercise
Notice are received by you after 3:00 p.m., New York City time, on a New York
Business Day (or, in the case of Warrants held through CEDEL or Euroclear, if
Warrants are not received by 3:00 p.m., New York City time, on the first New
York Business Day following such New York Business Day), the Valuation Date of
the Tendered Warrants shall be the next New York Business Day next succeeding
such New York Business Day, in each case subject to certain provisions of the
Warrant Agreement.
2. If you determine that this Exercise Notice has not been duly
completed, or is not in proper form, this Exercise Notice will be void and of
no effect and will be deemed not to have been delivered.
3. We hereby direct you to make payment to us of amounts payable to our
clients as a result of the exercise of the
B-2-1
<PAGE>
Warrants hereunder by wire transfer to the following U.S. dollar bank account
in the United States:
Bank: ___________________________
ABA Routing No.: _________________
Account No.: _____ Reference: ____
4. The Exercised Warrants covered hereby [are] [are not] subject to the
Limit Option.
5. Each client on whose behalf we are exercising Warrants pursuant to
this Exercise Notice has certified to us that it is not exercising in excess
of 250,000 Warrants on behalf of any single person or entity.
[For Participants] [6. We hereby certify that we are a Participant of
The Depository Trust Company (the "Depository") with the present right to use
and receive its services.]
- ---------------------
** Separate Notices of Exercise shall be submitted with respect to Warrants
subject to the Limit Option and Warrants not subject to the Limit Option.
B-2-2
<PAGE>
Capitalized terms used but not defined herein have the meanings assigned
thereto in the Warrant Agreement.
Dated: ________________, 19__
[NAME OF DEPOSITORY PARTICIPANT]
[Participant Number]
[NAME OF EUROCLEAR PARTICIPANT]
[CENTRALE DE LIVRAISON DE VALEURS
MOBILIERES S.A.]
by
_____________________________
Authorized Signature
Address: _________________________
Telephone: (___) ___-_____________
B-2-3
<PAGE>
EXHIBIT C-1
CONFIRMATION OF EXERCISE
[For Warrants Represented by Warrant Certificates]
We hereby confirm receipt of your Exercise Notice with respect to
_______________________ Warrants (the "Exercised Warrants") and the related
Warrant Certificates, which Notice we have found to be duly completed and in
proper form. The Valuation Date of the Exercised Warrants was the close of
business on ___________________ in New York City.
[As set forth in your Exercise Notice, none of the Warrants covered
thereby is subject to the Limit Option. Accordingly, for purposes hereof, all
such Warrants shall constitute Exercised Warrants, which number we hereby
confirm to be __________.] [Your Exercise Notice stated that the Warrants
covered thereby are subject to the Limit Option. The applicable Reference
Index for such Warrants is __________________ and the Index Spot Price for the
date that would otherwise be the Valuation Date for such Warrants is
__________________. Such Index Spot Price is not more than such Reference
Index by 15 or more points. Accordingly, for purposes hereof, all such
Warrants shall constitute Exercised Warrants. We hereby confirm the number of
such Exercised Warrants to be ________________.]
We hereby confirm that the aggregate Cash Settlement Value of the
Exercised Warrants is $_______________ ($________ per Warrant), which will be
made available to you [in the form of a cashier's check or an official bank
check] [by wire transfer to the bank account designated in your Exercise
Notice] for payment on the sixth New York Business Day following the Valuation
Date for such Warrants.
Capitalized terms included herein but not defined have the meanings
assigned thereto in the Warrant Agreement, dated as of October __, 1995, among
Paine Webber Group Inc., Citibank, N.A. and PaineWebber Incorporated.
Dated: __________________, 19__
CITIBANK, N.A., as Warrant Agent,
by
_______________________
Authorized Signature
C-1-1
<PAGE>
NOTICE OF REJECTION
[For Warrants Represented by Warrant Certificates]
You are hereby notified that the Exercise Notice delivered by you was
determined by us not to have been [duly completed] [in proper form], as set
forth in the Warrant Agreement (the "Warrant Agreement"), dated as of October
__, 1995, among Paine Webber Group Inc., Citibank, N.A. and PaineWebber
Incorporated. Accordingly, we have rejected your Exercise Notice as being
unsatisfactory as to form.
Capitalized terms included herein but not defined have the meanings
assigned thereto in the Warrant Agreement.
Dated: _________________, 19__
CITIBANK, N.A., as Warrant Agent,
by
________________________
Authorized Signature
C-1-2
<PAGE>
EXHIBIT C-2
CONFIRMATION OF EXERCISE
[For Warrants Represented by the Global Warrant Certificate]
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
We hereby confirm receipt of your Exercise Notice with respect to
_________________ Warrants (the "Exercised Warrants") which were transferred
by you to our DTC Participant Account No. 2659. We have found such Notice to
be duly completed and in proper form, and we have verified, in the manner
provided in the Warrant Agreement (the "Warrant Agreement"), dated as of
October __, 1995, among Paine Webber Group Inc., Citibank, N.A. and
PaineWebber Incorporated, that you are a Depository Participant. The Valuation
Date of the Exercised Warrants was the close of business on ______________ in
New York City.
[As set forth in your Exercise Notice, none of the Warrants covered
thereby is subject to the Limit Option. Accordingly, for purposes hereof, all
such Warrants shall constitute Exercised Warrants, which number we hereby
confirm to be __________________.] [Your Exercise Notice stated that the
Warrants covered thereby are subject to the Limit Option. The applicable
Reference Index for such Warrants is ____________ and the Index Spot Price for
the date that would otherwise be the Valuation Date for such Warrants is
_________________. Such Index Spot Price is not more than such Reference
Index by 15 or more points. Accordingly, for purposes hereof, all such
Warrants shall constitute Exercised Warrants. We hereby confirm the number of
such Exercised Warrants to be ______________.]
We hereby confirm that the aggregate Cash Settlement Value of the
Exercised Warrants is $__________ ($________ per Warrant), which will be made
available to you by wire transfer to the bank account designated in your
Exercise Notice for payment on the sixth New York Business Day following the
Valuation Date for such Warrants.
C-2-1
<PAGE>
Capitalized terms included herein but not defined have the meanings
assigned thereto in the Warrant Agreement.
Dated: ____________, 19__
CITIBANK, N.A., as Warrant Agent,
by
_______________________
Authorized Signature
C-2-2
<PAGE>
NOTICE OF REJECTION
[For Warrants Represented by the Global Warrant Certificate]
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
You are hereby notified that [the Exercise Notice delivered by you was
determined by us not to have been [duly completed] [in proper form]] [such
Warrants were not transferred to our DTC Participant Account No. 2659 on a
timely basis as provided in the Warrant Agreement] [we did not receive from
Euroclear a Euroclear Confirmation that proper delivery of the Warrants to
which the Exercise Notice delivered by you relates would be made on a timely
basis], as set forth in the Warrant Agreement (the "Warrant Agreement"), dated
as of October __, 1995, among Paine Webber Group Inc., Citibank, N.A. and
PaineWebber Incorporated. Accordingly, we have rejected your Exercise Notice
as being unsatisfactory as to form.
Capitalized terms included herein but not defined have the meanings
assigned thereto in the Warrant Agreement.
Dated: _________________, 19__
CITIBANK, N.A., as Warrant Agent,
by
________________________
Authorized Signature
C-2-3
<PAGE>
EXHIBIT D-1
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[For Warrants Represented by Warrant Certificates]
We refer to your Exercise Notice dated __________ 19__, with respect to
_______ Warrants that were subject to the Limit Option. The applicable
Reference Index for such Warrants is _______ and the Index Spot Price for the
date that would otherwise be the Valuation Date for such Warrants is ______.
Such Index Spot Price is more than the Reference Index for such Warrants by 15
or more points. Accordingly, we have rejected such Exercise Notice pursuant
to the Limit Option.
Capitalized terms included herein but not defined have the meanings
assigned thereto in the Warrant Agreement, dated as of May 1, 1995, among
Paine Webber Group Inc., Citibank, N.A. and PaineWebber Incorporated.
Dated: ____________________, 19__
CITIBANK N.A., as Warrant Agent,
by
_______________________
Authorized Signature
D-1-1
<PAGE>
EXHIBIT D-2
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[For Warrants Represented by the Global Warrant Certificate]
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
We refer to your Exercise Notice dated ___________ 19__, with respect to
__________ Warrants that were subject to the Limit Option. The applicable
Reference Index for such Warrants is __________ and the Index Spot Price for
the date that would otherwise be the Valuation Date for such Warrants is
______. Such Index Spot Price is more than the Reference Index for such
Warrants by 15 or more points. Accordingly, we have rejected such Exercise
Notice pursuant to the Limit Option.
Capitalized terms included herein but not defined have the meanings
assigned thereto in the Warrant Agreement, dated as of October __, 1995, among
Paine Webber Group Inc., Citibank, N.A. and PaineWebber Incorporated.
Dated: ______________, 19__
CITIBANK, N.A., as Warrant Agent,
by
_______________________
Authorized Signature
D-2-1
