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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 14, 1994
PAINE WEBBER GROUP INC.
(Exact Name of Registrant as specified in its charter)
DELAWARE No. 1-7367 No. 13-2760086
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1285 Avenue of the Americas
New York, New York 10019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 713-2000
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Item 5. Other Events.
On January 24, 1994, Paine Webber Group Inc. (the "Registrant")
completed the sale of 2,200,000 AMEX Hong Kong 30 Index Call Warrants
Expiring January 17, 1996 (the "Call Warrants") and 4,100,000 AMEX Hong
Kong 30 Index Put Warrants Expiring January 17, 1996 (the "Put Warrants").
The Call Warrants were issued under the Warrant Agreement,
dated as of January 24, 1994, among the Registrant, Citibank, N.A. as
Warrant Agent and PaineWebber Incorporated as Determination Agent. The Put
Warrants were issued under the Warrant Agreement, dated as of January 24,
1994, among the Registrant, Citibank, N.A. as Warrant Agent and PaineWebber
Incorporated as Determination Agent.
Item 7. Financial Statements, Pro Forma
Financial Information and Exhibits
(c) The following are filed as Exhibits to this Report:
Exhibit
Number Description
1.1 Underwriting Agreement, dated January 14, 1994, among the
Registrant, PaineWebber Incorporated, Oppenheimer & Co., Inc.
and Kemper Securities, Inc. relating to the offer and sale of
the AMEX Hong Kong 30 Index Put Warrants (the "Put Warrants").
1.2 Underwriting Agreement, dated January 14, 1994, among the
Registrant, PaineWebber Incorporated, Oppenheimer & Co., Inc.
and Kemper Securities, Inc. relating to the offer and sale of
the AMEX Hong Kong 30 Index Call Warrants (the "Call
Warrants").
4.1 Warrant Agreement, dated as of January 24, 1994, among the
Registrant, Citibank, N.A. as Warrant Agent and PaineWebber
Incorporated as Determination Agent, relating to the Put
Warrants.
4.2 Warrant Agreement, dated as of January 24, 1994, among the
Registrant, Citibank, N.A. as Warrant Agent and PaineWebber
Incorporated as Determination Agent, relating to the Call
Warrants.
4.3 Form of Warrant Certificate for Put Warrants.
4.4 Form of Warrant Certificate for Call Warrants.
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8.1 Opinion of Sullivan & Cromwell re: tax matters.
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EXHIBIT INDEX
1.1 Underwriting Agreement, dated January 14, 1994, among the
Registrant, PaineWebber Incorporated, Oppenheimer & Co., Inc.
and Kemper Securities, Inc. relating to the offer and sale of
the AMEX Hong Kong 30 Index Put Warrants (the "Put Warrants").
1.2 Underwriting Agreement, dated January 14, 1994, among the
Registrant, PaineWebber Incorporated, Oppenheimer & Co., Inc.
and Kemper Securities, Inc. relating to the offer and sale of
the AMEX Hong Kong 30 Index Call Warrants (the "Call
Warrants").
4.1 Warrant Agreement, dated January 24, 1994, among the
Registrant, Citibank, N.A. as Warrant Agent and PaineWebber
Incorporated as Determination Agent, relating to the Put
Warrants.
4.2 Warrant Agreement, dated January 24, 1994, among the
Registrant, Citibank, N.A. as Warrant Agent and PaineWebber
Incorporated as Determination Agent, relating to the Call
Warrants.
4.3 Form of Warrant Certificate for Put Warrants (filed as
exhibit A to Exhibit 4.1 above).
4.4 Form of Warrant Certificate for Call Warrants (filed as
exhibit A to Exhibit 4.2 above).
8.1 Opinion of Sullivan & Cromwell re: tax matters.
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Exhibit 1.1
PAINE WEBBER GROUP INC.
Stock Index Warrants
UNDERWRITING AGREEMENT
January 14, 1994
PaineWebber Incorporated
Oppenheimer & Co., Inc.
Kemper Securities, Inc.
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Paine Webber Group Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to PaineWebber Incorporated,
Oppenheimer & Co., Inc. and Kemper Securities, Inc. (the "Underwriters"),
for whom PaineWebber Incorporated is acting as representative (the
"Representative"), the aggregate number of the AMEX Hong Kong 30 Index Put
Warrants of the Company set forth in Schedule I hereto (the "Warrants") to
be issued under the Warrant Agreement (the "Warrant Agreement") identified
in Schedule I hereto.
The Company and the Underwriters, in accordance with the
requirements of Schedule E ("Schedule E") of the By-Laws of the National
Association of Securities Dealers, Inc. (the "NASD") and subject to the
terms and conditions stated herein, also hereby confirm the engagement of
the services of the underwriter identified in Schedule I hereto (the
"Independent Underwriter") as a "qualified independent underwriter" within
the meaning of Section 2(l) of Schedule E in connection with the offering
and sale of the Warrants.
1. Sale and Purchase of the Warrants. The Company agrees to
sell to each Underwriter, and each Underwriter, on the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein contained, agrees, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto, the number of Warrants set forth opposite the name of
such Underwriter in Schedule II hereto.
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2. Delivery and Payment. Delivery of the Warrants by the
Company to the Representative for the respective accounts of the several
Underwriters, and payment by the Underwriters of the purchase price
therefor by certified or official bank check or checks payable in New York
Clearing House (next day) funds to the Company, shall take place at the
office, on the date and at the time specified in Schedule I hereto, which
date and time may be postponed as provided in Section 11 hereof or by
agreement between the Representative and the Company (such date and time of
delivery and payment for the Warrants being herein called the "Closing
Date"). The Company shall not be obligated to deliver any of the Warrants
except upon payment for all of the Warrants to be purchased hereunder.
Certificates evidencing the Warrants shall be registered in
such names and shall be in such denominations as the Representative shall
request no later than the close of business on the third business day
before the Closing Date. Such certificates shall be made available to the
Representative for checking and packaging, at such place in New York City
as is designated by the Representative, no later than 10:00 A.M. on the
business day prior to the Closing Date.
3. Registration Statement and Prospectus; Public Offering.
The Company represents and warrants to each Underwriter that the Company
meets the requirements for the use of Form S-3 under the Securities Act of
1933, as amended, and the rules and regulations adopted thereunder (respec-
tively, the "Securities Act" and the "Securities Act Rules"), and has
carefully prepared and filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (the file number of
which is set forth in Schedule I hereto), including a form of prospectus,
for the registration under the Securities Act of the Warrants, and that
such registration statement has become effective. Such registration
statement, as amended at the date of this Agreement, meets the requirements
set forth in Rule 415(a)(1)(i) under the Securities Act and complies in all
other material respects with such Rule. The Company proposes either (i) to
file with the Commission pursuant to Rule 424(b)(2) or (5) under the
Securities Act a supplement to the form of basic prospectus included in
such registration statement relating to the Warrants and the plan of
distribution thereof or (ii) to file with the Commission pursuant to
Rule 424(b)(i) under the Securities Act a form of prospectus supplement
that discloses information previously omitted from the prospectus
supplement filed as part of the effective registration statement in
reliance upon Rule 430A under the Securities Act. The registration
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statement, as amended at the date of this Agreement, including the exhibits
thereto and all documents incorporated therein by reference pursuant to
Item 12 of Form S-3 (the "Incorporated Documents"), is hereinafter referred
to as the "Registration Statement", and the prospectus included in such
Registration Statement, as updated on October 14, 1993 and filed with the
Commission on October 18, 1993 pursuant to Rule 424(b)(5) under the
Securities Act and as supplemented in accordance with the preceding
sentence, including the Incorporated Documents, as first filed with the
Commission pursuant to Rule 424(b), is hereinafter referred to as the
"Prospectus". Any preliminary form of the Prospectus which has heretofore
been filed as part of the Registration Statement or pursuant to Rule 424 or
otherwise under the Securities Act is hereinafter referred to as a
"Preliminary Prospectus". Any reference herein to the Registration
Statement, the Prospectus or any Preliminary Prospectus shall be deemed to
refer to and include the Incorporated Documents which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or
before the date of this Agreement or the issue date of the Prospectus or
any Preliminary Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Prospectus or any Preliminary Prospectus shall
be deemed to refer to and include the filing of any Incorporated Documents
under the Exchange Act after the date of this Agreement or the issue date
of the Prospectus or any Preliminary Prospectus, as the case may be. If
the Company proposes to proceed under clause (ii) above, then the Company
represents and warrants to each Underwriter that the Registration
Statement, on the date that it was declared effective, omitted only that
information described in Rule 430A(a) under the Securities Act.
The Company understands that the Underwriters propose to make a
public offering of the Warrants, as described in the Prospectus, as soon as
the Underwriters deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus and are authorized to distribute
the Prospectus and any amendments or supplements thereto.
4. Independent Underwriter.
(a) The Company hereby confirms its engagement of the
services of the Independent Underwriter as, and the Independent Underwriter
hereby confirms its agreement with the Company to render services as, a
"qualified independent
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underwriter" within the meaning of Section 2(l) of Schedule E with respect
to the offering and sale of the Warrants.
(b) The Independent Underwriter hereby represents and
warrants to, and agrees with, the Company and the other Underwriters that
with respect to the offering and sale of the Warrants as described in the
Prospectus:
(i) The Independent Underwriter constitutes a "qualified
independent underwriter" within the meaning of Section 2(l) of
Schedule E;
(ii) The Independent Underwriter has participated in the
preparation of the Registration Statement and the Prospectus and has
exercised the usual standards of "due diligence" in respect thereto;
(iii) The Independent Underwriter has undertaken the legal
responsibilities and liabilities of an underwriter under the
Securities Act specifically including those inherent in Section 11
thereof;
(iv) Based upon (1) a review of the Company, including an
examination of the Registration Statement, information regarding the
earnings, assets and capital structure of the Company and other
pertinent financial and statistical data, (2) inquiries of and
conferences with the management of the Company, its counsel and
independent public accountants regarding the business and operations
of the Company, (3) consideration of estimates of the business
potential of the Company, assessments of its management, the general
condition of the securities markets at the time of the offering,
financial and operating data concerning other companies in the
Company's industry that have issued similar securities and the market
prices of and demand for such similar securities and (4) such other
studies, analyses and investigations as the Independent Underwriter
has deemed appropriate, and assuming that the offering of the
Warrants is made as contemplated herein and in the Prospectus, the
Independent Underwriter recommends, as of the date of the execution
and delivery of this Agreement, that the public offering price for
the Warrants not exceed the amount set forth in Schedule I hereto,
which price should in no way be considered or relied upon as an
indication of the value of the Warrants; and
(v) Subject to the provisions of Section 6 hereof, the
Independent Underwriter will furnish to the other Underwriters at the
Closing Date a letter, dated
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the date of delivery thereof, in form and substance satisfactory to
such Underwriters, to the effect of clauses (i) through (iv) above.
(c) The Company, the Independent Underwriter and the other
Underwriters agree to comply in all material respects with all of the
requirements of Schedule E applicable to them in connection with the
offering and sale of the Warrants. The Company agrees to cooperate with
the Underwriters, including the Independent Underwriter, to enable the
Underwriters to comply with Schedule E and the Independent Underwriter to
perform the services contemplated by this Agreement.
(d) As compensation for the services of the Independent
Underwriter hereunder, the Company agrees to pay the Independent
Underwriter the amount, if any, set forth on Schedule I hereto on the
Closing Date. In addition, the Company agrees promptly to reimburse the
Independent Underwriter for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with this
Agreement and the services to be rendered as Independent Underwriter
hereunder.
(e) The Independent Underwriter hereby consents to the
references to it as set forth under the caption "Underwriting" or "Plan of
Distribution" in the Prospectus and in any amendment or supplement thereto
made in accordance with Section 7 hereof.
5. Representations and Warranties of the Company. The
Company represents and warrants to each of the Underwriters as follows:
(a) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission; and the
Commission has issued no order preventing or suspending the use of
the Prospectus or any Preliminary Prospectus.
(b) Each Preliminary Prospectus as of its date conformed in
all material respects to the requirements of the Securities Act and
the Securities Act Rules, and did not include any untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; except that this representation does not apply to
statements or omissions in any Preliminary Prospectus made in
reliance on and in
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conformity with information furnished in writing to the Company by
the Representative on behalf of any Underwriter expressly for use in
such Preliminary Prospectus.
(c) On the effective date of the registration statement
relating to the Warrants, such registration statement complied in all
material respects with the requirements of the Securities Act and the
Securities Act Rules and did not include any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and, as of the date hereof, when, before the Closing Date, any
amendment to the Registration Statement becomes effective, when,
before the Closing Date, any Incorporated Document is filed with the
Commission, when any supplement to the Prospectus is filed with the
Commission and on the Closing Date, the Registration Statement, the
Prospectus and any such amendment or supplement will comply in all
material respects with the requirements of the Securities Act and the
Securities Act Rules, the Incorporated Documents will comply in all
material respects with the requirements of the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and no
part of the Registration Statement, the Prospectus or any such
amendment or supplement will include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
except that this representation and warranty does not apply to
statements or omissions in the Registration Statement or Prospectus
(or in amendments or supplements thereto) made in reliance on and in
conformity with information furnished in writing to the Company by
the Representative on behalf of any Underwriter expressly for use
therein.
(d) The certificates delivered pursuant to Section 6(d)
hereof were on the date on which they were delivered, or will be on
the date on which they are to be delivered, in all material respects
true and complete.
(e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Agreement,
except those which have been obtained or which may be required under
the Securities Act and such qualifications as may be required under
state securities or "Blue Sky" laws in
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connection with the purchase and distribution of the Warrants by the
Underwriters, and consummation of such transactions will not result
in the breach of any terms of, or constitute a default under, any
other agreement or undertaking of the Company.
6. Conditions of the Underwriters' and the Independent
Underwriter's Obligations. The obligations of the Underwriters hereunder
to purchase the Warrants on the Closing Date and the obligations of the
Independent Underwriter contained in Section 4 hereof are subject to the
accuracy, on the date of this Agreement and on the Closing Date, of the
representations and warranties of the Company contained herein, to the
accuracy and completeness of all statements made by the Company or by any
of its officers in any certificate delivered to the Underwriters or their
counsel pursuant to this Agreement, to the performance by the Company of
its obligations hereunder and to each of the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
in accordance with Rule 424(b) of the Securities Act Rules within the
applicable time period prescribed for such filing by the Securities
Act Rules and in accordance with Section 7(a) of this Agreement.
(b) No order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to
be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the reasonable
satisfaction of the Representative.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) there
shall not have been any material change in the capital stock or long-
term debt of the Company and its subsidiaries taken as a whole other
than as set forth in or contemplated by the Registration Statement
and Prospectus, (2) there shall not have been any material adverse
change in the general affairs, prospects, management, financial
condition or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement
and Prospectus and (3) the Company and its subsidiaries shall not
have sustained any material loss or inter-
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ference with their business taken as a whole from fire, explosion,
earthquake, flood or other calamity, whether or not covered by
insurance, or from any court, legislative or other governmental
action, order or decree which is not set forth in the Registration
Statement and Prospectus if, in the judgment of the Underwriters, any
such development referred to in clauses (1), (2) or (3) above makes
it impracticable or inadvisable to proceed with the offering and
delivery of the Warrants as contemplated by the Registration
Statement and the Prospectus.
(d) The Underwriters shall have received on the Closing Date
a certificate, dated the date of delivery of such certificate, of a
vice president and the principal financial or accounting officer of
the Company, which shall certify that (1) the signers have carefully
examined the Registration Statement, the Prospectus and this
Agreement; (2) no order suspending the effectiveness of the
Registration Statement or prohibiting the sale of the Warrants has
been issued and no proceedings for such purpose are pending before
or, to the knowledge of such officers, threatened by the Commission;
(3) there has not been any material adverse change in the general
affairs, prospects, management, financial condition or results of
operations of the Company and its subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, other than
as set forth in or contemplated in the Registration Statement and
Prospectus; (4) each of the representations and warranties of the
Company contained in Section 5 of this Agreement is accurate on and
as of the date of delivery of such certificate; and (5) the Company
has performed all covenants and agreements contained in this
Agreement to be performed on its part at or before the date of
delivery of such certificate.
(e) The Underwriters shall have received on the date hereof,
from Ernst & Young, a signed letter, dated the date of delivery,
substantially in the form of Annex A hereto, with such modifications
as may be set forth in Schedule I hereto. The Underwriters also
shall have received on the Closing Date, from such accountants, a
signed letter, dated the date of delivery, confirming that, on the
basis of a review in accordance with the procedures set forth in
their initial letter referred to in the preceding sentence, nothing
has come to their attention during the period from a date (specified
in such initial letter) not more than five days before the date of
this Agreement to a
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specified date not more than five days before the Closing Date that
would require any change in such initial letter.
(f) The Underwriters shall have received on the Closing Date,
from Cravath, Swaine & Moore, counsel for the Company, an opinion,
dated the date of delivery, substantially in the form of Annex B
hereto.
(g) The Underwriters shall have received on the Closing Date,
from Theodore A. Levine, Esq., General Counsel of the Company, an
opinion, dated the date of delivery, substantially in the form of
Annex C hereto.
(h) The Underwriters shall have received on the Closing Date,
from Sullivan & Cromwell, counsel for the Underwriters, an opinion or
opinions, dated the date of delivery, with respect to the
incorporation of the Company, the validity of the Warrants, the
Registration Statement and Prospectus, certain tax matters and such
other matters as you may require, and the Company shall have
furnished to such counsel such documents as they may request for the
purpose of enabling them to pass on such matters.
(i) No order suspending trading or striking or withdrawing
the Warrants from listing or registration under the Exchange Act
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission or by the American
Stock Exchange.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance
with the provisions of this Agreement only if they are in form and scope
reasonably satisfactory to counsel for the Underwriters.
7. Covenants. The Company covenants and agrees with the
Underwriters as follows:
(a) Before the termination of the offering of the Warrants,
not to file any amendment or supplement (including the Prospectus) to
the Registration Statement or the Prospectus unless a copy thereof
shall have first been submitted to the Underwriters within a
reasonable period of time prior to the filing thereof and the
Underwriters shall not have reasonably objected thereto in writing.
Subject to the foregoing sentence, the Company promptly will cause
the Prospectus to be filed with the Commission pursuant to
Rule 424(b) of
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the Securities Act Rules within the applicable time period prescribed
for such filing by the Securities Act Rules.
(b) As soon as the Company is advised thereof, it will advise
the Underwriters (1) when any amendment to the Registration Statement
has become effective, (2) when the Prospectus, any supplement to the
Prospectus or any amended Prospectus has been filed, (3) of the
initiation or threatening of any proceedings for, or receipt by the
Company of any notice with respect to, the suspension of the quali-
fication of the Warrants for sale in any jurisdiction or the issuance
of any order suspending the effectiveness of the Registration
Statement; and (4) of receipt by the Company or any representative or
attorney of the Company of any other communication from the
Commission relating to the Company (except for routine communications
relating to the broker-dealer business of the Company), the
Registration Statement, any Preliminary Prospectus, the Prospectus or
the transactions contemplated by this Agreement. The Company will
make every reasonable effort to prevent the issuance of an order sus-
pending the effectiveness of the Registration Statement and if any
such order is issued to obtain its lifting as soon as possible.
(c) The Company will deliver to the Underwriters, without
charge, (1) signed copies of the Registration Statement and of any
supplements or amendments thereto (including all exhibits filed with
or incorporated by reference in any such document) and (2) as many
conformed copies of the Registration Statement and of any supplements
or amendments thereto (without exhibits) as the Underwriters
reasonably may request.
(d) During such period as a prospectus is required by law to
be delivered by any Underwriter or dealer, the Company will deliver,
without charge, to the Underwriters and dealers, at such office or
offices as the Representative may designate, as many copies of the
Prospectus as the Underwriters reasonably may request.
(e) During the period in which the Prospectus is to be
delivered as provided in the foregoing paragraph, if any event occurs
as a result of which it shall be necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading in any
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material respect, or if during such period it is necessary to amend
or supplement the Prospectus to comply with the Securities Act or the
Securities Act Rules, the Company forthwith will prepare, submit to
the Underwriters, file with the Commission and deliver, without
charge, to the Underwriters and to dealers (whose names and addresses
the Representative will furnish to the Company) to whom Warrants may
have been sold by the Underwriters, and to other dealers upon
request, amendments or supplements to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will
not, in the light of the circumstances existing when the Prospectus,
as so amended or supplemented, is delivered to a purchaser, be mis-
leading in any material respect and will comply with the Securities
Act and the Securities Act Rules. Delivery by the Underwriters of
any such amendments or supplements to the Prospectus shall not
constitute a waiver of any of the conditions set forth in Section 6.
(f) The Company will make generally available to the
Company's security holders, as soon as practicable but in no event
later than 45 days after the end of the 12-month period beginning at
the end of the current fiscal quarter of the Company, an earnings
statement which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Securities Act Rules.
(g) The Company will take such action as the Representative
reasonably may request in order to qualify the Warrants for offer and
sale under the securities or Blue Sky laws of such jurisdictions as
the Representative reasonably may designate; provided that in no
event shall the Company be obligated to subject itself to taxation or
to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or
sale of the Warrants, in any jurisdiction where it is not now so
subject.
(h) For so long as any Warrants shall remain outstanding, the
Company will supply to the Underwriters copies of such financial
statements and other periodic and special reports as the Company may
from time to time distribute generally to its lenders or to the
holders of any of its securities and to furnish to the Underwriters a
copy of each annual or other report it shall be required to file with
the Commission.
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(i) The Company will pay, or reimburse if paid by the
Underwriters, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the performance of the obligations of the Company under
this Agreement including, but not limited to, those relating to
(1) the preparation, printing and filing of the Registration
Statement and exhibits thereto, each Preliminary Prospectus, the
Prospectus and all amendments and supplements to the Registration
Statement and the Prospectus and the printing of this Agreement;
(2) the issuance of the Warrants and the preparation and delivery to
the Underwriters of certificates for the Warrants; (3) the
registration or qualification of the Warrants for offer and sale
under the securities or Blue Sky laws of the various jurisdictions
referred to in paragraph (g) above, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration and qualification and the preparation and printing of
preliminary and supplementary Blue Sky memoranda; (4) the furnishing
(including costs of shipping and mailing) to the Underwriters and to
dealers of copies of each Preliminary Prospectus, the Prospectus and
all amendments or supplements to the Prospectus, and of the other
documents required by this Section to be so furnished; (5) the filing
requirements of the National Association of Securities Dealers, Inc.
in connection with its review of the financing; (6) the furnishing
(including costs of shipping and mailing) of copies of all reports
and information required by paragraph (h) above; (7) any fees charged
by rating agencies in connection with the rating of the Warrants;
(8) the fees and expenses of the warrant agent and determination
agent under the Warrant Agreement; (9) the fees and expenses in
connection with listing the Warrants on the American Stock Exchange
or any other exchange or automated quotation system; and (10) all
transfer taxes, if any, with respect to the sale and delivery of the
Warrants by the Company to the several Underwriters.
(j) The Company will use the proceeds from the sale of the
Warrants substantially as described under "Use of Proceeds" in the
Prospectus subject to any change in circumstances that would make
such uses inappropriate.
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(k) The Company will use its best efforts to effect the
listing of the Warrants on the American Stock Exchange at or before
the Closing Date and to comply with the rules and regulations of such
Exchange.
(1) Until the business day following the Closing Date, the
Company will not offer, sell, contract to sell or otherwise dispose
of any stock index warrants relating to the same or a similar
securities index as the Warrants without the prior written consent of
the Underwriters.
8. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter and each person, if any, who controls each Underwriter within
the meaning of Section 15 of the Securities Act against any and all losses,
claims, damages and liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with, and,
subject to Section 8(e) hereof, any amount paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages, liabilities or actions arising from
the sale of the Warrants in the public offering to any person by such
Underwriter if such untrue statement or omission or alleged untrue
statement or omission (i) was made in such Preliminary Prospectus, the
Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished
in writing to the Company by the Representative on behalf of any
Underwriter expressly for use therein or (2) was made in a Preliminary
Prospectus if the Prospectus corrects the untrue statement or omission or
alleged untrue statement or omission which is the basis of the loss, claim,
damage or liability for which indemnification is sought and a copy of the
Prospectus was not sent or given to such person at or before the
confirmation of the sale to such person in any case where
<PAGE>
<PAGE> 14
such delivery is required by the Securities Act, unless such failure to
deliver the Prospectus was a result of noncompliance by the Company with
Section 7(e) hereof. This indemnity agreement shall be in addition to any
liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act and each director and officer of the
Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company to the Underwriters, but only insofar
as such losses, claims, damage or liabilities arise out of or are based
upon any untrue statement or omission or alleged untrue statement or
omission which was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by the Representative on behalf of such Underwriter expressly
for use therein. This indemnity agreement shall be in addition to any
liability that each Underwriter might otherwise have.
(c) The Company will indemnify and hold harmless the
Independent Underwriter and each person, if any, who controls the
Independent Underwriter within the meaning of Section 15 of the Securities
Act against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other expenses
incurred in connection with, and, subject to Section 8(e) hereof, any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon the Independent
Underwriter's activities as "qualified independent underwriter" with
respect to the offering and sale of the Warrants (but only to the extent
that such activities are not also within the scope of the Independent
Underwriter's activities as an Underwriter hereunder); provided, however,
that such indemnity shall not extend to any losses, claims, damages,
liabilities or actions to the extent that they arise out of or are based
upon the bad faith or gross negligence of the Independent Underwriter in
performing the services referred to in Section 4 hereof. This indemnity
agreement shall be in addition to any liability that the Company might
otherwise have.
<PAGE>
<PAGE> 15
(d) The Company acknowledges that only such information as is
described in Schedule I hereto in the item captioned "Information Furnished
by Underwriters" shall be deemed to be information furnished in writing to
the Company by an Underwriter expressly for use in any Preliminary
Prospectus, the Registration Statement on the Prospectus, and the
Underwriters confirm that such information is correct.
(e) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party of any
such action, suit or proceeding shall not relieve it from any liability
that it may have to any indemnified party otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party, in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (1) the employment of
counsel by such indemnified party has been authorized in writing by the
indemnifying parties, (2) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such
action (in which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified party) or
(3) the indemnifying parties shall not in fact have employed counsel to
assume the defense of such action within a reasonable time after their
receipt of notice of the commencement of such action,
<PAGE>
<PAGE> 16
in each of which cases the fees and expenses of counsel for the indemnified
party shall be at the expense of the indemnifying parties and all such fees
and expenses shall be reimbursed as they are incurred. An indemnifying
party shall not be liable for any settlement of any action or claim
effected without its written consent or, in connection with any proceeding
or related proceeding in the same jurisdiction, for the fees and expenses
of more than one separate counsel for all indemnified parties.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8(a) or (b) is applicable but for any reason is held to be
unavailable from the Company or the Underwriters, as the case may be, the
Company and the Underwriters shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and, subject to
Section 8(d) hereof, any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors
of the Company, who may also be liable for contribution) to which the
Company and the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the
Prospectus bears to the public offering price appearing thereon and the
Company is responsible for the balance. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law, then the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including the items
mentioned in the immediately preceding sentence) to which the Company and
the Underwriters may be subject in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other, as well as
any other relevant equitable considerations (including the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent any misstatement or omission). Notwithstanding the
foregoing, (a) no Underwriter shall be responsible for any amount in excess
of the underwriting discount applicable to the Warrants purchased by such
Underwriter, and (b) no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty
<PAGE>
<PAGE> 17
of such fraudulent misrepresentation. For purposes of this Section, any
person who controls an Underwriter within the meaning of the Securities Act
shall have the same rights to contribution as such Underwriter, and any
person who controls the Company within the meaning of the Securities Act,
each officer of the Company who signed the Registration Statement and each
director of the Company will have the same rights to contribution as the
Company, subject in each case to clauses (a) and (b) of the preceding
sentence. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made under this
Section, notify such party or parties from whom contribution may be sought,
but the omission so to notify such party or parties from whom contribution
may be sought shall not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have hereunder or
otherwise than under this Section. No party shall be liable for
contribution with respect to any action or claim settled without its
written consent.
10. Termination. This Agreement may be terminated by the
Representative or by any Underwriter who has agreed to purchase at least
50% of the Warrants by notifying the Company at any time:
(a) at or before the Closing Date if, in the judgment of the
Representative or any such Underwriter, as the case may be, payment
for and delivery of the Warrants is rendered impracticable or
inadvisable because (1) additional material governmental re-
strictions, not in force and effect on the date of this Agreement,
shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on
the New York Stock Exchange, on the American Stock Exchange or the
Index Exchange specified in Schedule I hereto, or trading in
securities generally shall have been suspended on either such
Exchange or a general banking moratorium shall have been established
by federal or New York authorities; (2) any event shall have occurred
or shall exist that makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement
or Prospectus or that is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the
statements or information contained therein not misleading in any
material respect; or (3) a war involving the United States of America
or other national calamity shall have occurred or shall have
accelerated to such
<PAGE>
<PAGE> 18
an extent as, in the judgment of the Representatives or any such
Underwriters, as the case may be, to affect adversely the
marketability of the Warrants; or
(b) at or before the Closing Date if any of the conditions
specified in Section 6 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its pro-
visions, except as otherwise provided herein, the Company shall not be
under any liability to the Underwriters, and the Underwriters, including
the Independent Underwriter, shall not be under any liability to the
Company, except that (A) if this Agreement is terminated by the
Underwriters because of any reason other than a default by the Underwriters
as described in Section 11, the Company will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by them in connection with the
proposed purchase and sale of the Warrants and (B) no Underwriter who has
failed or refused to purchase the Warrants agreed to be purchased by it
under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, will
be relieved of liability to the Company or to the other Underwriters for
damages occasioned by its default.
11. Default by an Underwriter. If one or more of the
Underwriters fails (other than for a reason sufficient to justify the
termination of this Agreement) to purchase on the Closing Date the Warrants
agreed to be purchased on the Closing Date by such Underwriter or
Underwriters, the Representative may find one or more substitute
underwriters to purchase such Warrants or make such other arrangements as
the Representative deems advisable or one or more of the remaining
Underwriters may agree to purchase such Warrants in such proportions as may
be approved by the Representative, in each case upon the terms set forth in
this Agreement. If no such arrangements have been made within 36 hours
after the Closing Date, and
(a) the number of Warrants to be purchased by the defaulting
Underwriters on the Closing Date does not exceed 10% of the Warrants
that the Underwriters are obligated to purchase on the Closing Date,
each of the nondefaulting Underwriters will be obligated to purchase
such Warrants on the terms set forth in this Agreement in proportion
to their respective obligations under this Agreement, or
<PAGE>
<PAGE> 19
(b) the number of Warrants to be purchased by the defaulting
Underwriters on the Closing Date equals or exceeds 10% of the
Warrants to be purchased by all the Underwriters on the Closing Date,
the Company will be entitled to an additional period of 24 hours
within which to find one or more substitute underwriters reasonably
satisfactory to the Representative to purchase such Warrants on the
terms set forth in this Agreement.
In any such case, either the Representative or the Company will
have the right to postpone the Closing Date for not more than five business
days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or
Prospectus) may be affected by the Representative and the Company. If the
number of Warrants to be purchased on the Closing Date by such defaulting
Underwriters exceeds 10% of the Warrants that the Underwriters are
obligated to purchase on the Closing Date, and none of the nondefaulting
Underwriters or the Company makes arrangements pursuant to this Section
within the period stated for the purchase of the Warrants that the
defaulting Underwriters agreed to purchase, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter to the
Company and without liability on the part of the Company, except, in both
cases, as provided in Sections 4, 7(i), 8, 9 and 10. This Section will not
affect the liability of any defaulting Underwriter to the Company or the
nondefaulting Underwriters arising out of such default. A substitute
underwriter will become an Underwriter for all purposes of this Agreement.
12. Miscellaneous. The reimbursement, indemnification and
contribution agreements contained in Sections 4, 7(i), 8, 9 and 10 and the
representations, warranties and agreements of the Company in this Agreement
shall remain in full force and effect regardless of (a) any termination of
this Agreement, (b) any investigation made by or on behalf of the
Underwriters or any person controlling any Underwriter, or by or on behalf
of the Company, its directors or offices or any person controlling the
Company and (c) delivery of and payment for the Warrants under this Agree-
ment.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors, and, to the
extent expressed herein, for the benefit of persons controlling any of the
Underwriters or the Company, and directors and officers of the Company, and
their respective successors, and no other person, partnership, association
or corporation shall acquire or
<PAGE>
<PAGE> 20
have any right under or by virtue of this Agreement. The term "successors"
shall not include any purchaser of Warrants from the Underwriters merely
because of such purchase.
All notices and communications hereunder shall be in writing,
and mailed or delivered by messenger or facsimile transmission, or by
telephone or telegraph, if subsequently confirmed in writing, to the
Underwriters at the address specified in Schedule I hereto and to the
Company, to its agent for service as such agent's address appears on the
cover page of the Registration Statement.
Any action required or permitted to be taken by the
Representative under this Agreement may be taken by it or by the
Independent Underwriter.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
<PAGE> 21
This Agreement may be executed in multiple counterparts which
together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
PAINE WEBBER GROUP INC.
By /s/ Pierce Smith
Name: Pierce Smith
Title: Treasurer
Confirmed:
PAINEWEBBER INCORPORATED
By /s/ John C. Braddock
Name: John C. Braddock
Title: Vice President
OPPENHEIMER & CO., INC.
By /s/ Richard White
Name: Richard White
Title: Managing Director
KEMPER SECURITIES, INC.
By Gary J. Walther
Name: Gary J. Walther
Title:
<PAGE>
<PAGE>
SCHEDULE I
Representative: PaineWebber Incorporated
Independent Underwriter: Oppenheimer & Co., Inc.
Independent Underwriter's Compensation: None
Date of Underwriting Agreement: January 14, 1994
Registration Statement File Number: 33-33613
Warrant Agreement: To be dated as of January 24, 1994
Number of Warrants: 4,100,000
Index Exchange: The American Stock Exchange Hong Kong 30 Index (The
American Stock Exchange)
Public Offering Price Recommended
by Independent Underwriter: not to exceed $5.125 per
Warrant
Purchase Price: $5.125 per Warrant
Description of Warrants
Offering Price: $5.125 per Warrant
Put or Call Warrants: Put
First Exercise Date: Exercisable Immediately Upon Issuance
Expiration Date: January 17, 1996
Currency in which Warrants Payable: U.S. dollars
Minimum Expiration Value: None
Date, Time and Place for Delivery: January 24, 1994
10:00 A.M., New York time
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Modifications to Letter from Ernst & Young: None
Information Furnished by Underwriters:
(i) The last full paragraph of the cover page of
the Prospectus Supplement concerning the terms
of the offering;
(ii) The third paragraph on page S-2 of the
Prospectus Supplement concerning over-
<PAGE>
<PAGE> 2
allotment and stabilization by the
Underwriters;
(iii) The concession and reallowance figures
appearing in the second paragraph under the
caption "Underwriting" in the Prospectus
Supplement; and
(iv) The third to last and second to last paragraphs
under the caption "Underwriting" in the
Prospectus Supplement.
Address for Notices to Underwriters:
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
with a copy to:
John T. Bostelman
Sullivan & Cromwell
250 Park Avenue
New York, New York 10177
Modifications to Form of Underwriting Agreement: No Option Warrants;
Other immaterial
changes
<PAGE>
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
Number
of Warrants
Name to be Purchased
<S> <C>
PaineWebber Incorporated 1,366,670
Oppenheimer & Co., Inc. 1,366,665
Kemper Securities, Inc. 1,366,665
_________
Total 4,100,000
</TABLE>
<PAGE>
<PAGE> A-1
ANNEX A
Ernst & Young shall furnish a letter or letters, in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Securities Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act
and the related published rules and regulations;
(ii) on the basis of a reading of the amounts set forth
under the caption "Selected Consolidated Financial Data" in the
Prospectus and of the amounts included or incorporated in the
Registration Statement and the Prospectus in response to Item 301 of
Regulation S-K and of the latest unaudited financial statements made
available by the Company and its subsidiaries; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter, a reading of the minutes of the meetings of the
stockholders, directors, audit and executive committees of the
Company and its subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to the date of the most recent financial statements
included or incorporated in the Registration Statement and
Prospectus, nothing came to their attention which caused them to
believe that:
(1) the unaudited amounts set forth under the caption
"Selected Consolidated Financial Data" in the Prospectus and
the amounts included or incorporated in the Registration
Statement and the Prospectus in response to Item 301 of
Regulation S-K, do not agree with the corresponding amounts in
the audited financial statements from which such amounts were
derived; or
<PAGE>
<PAGE> A-2
(2) any unaudited financial statements included or
incorporated in the Registration Statement and Prospectus do
not comply as to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act, or that such unaudited
financial statements are not fairly presented in conformity
with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
consolidated statements incorporated by reference in the
Registration Statement and Prospectus.
(3) with respect to the period subsequent to the date
of the most recent financial statements included or
incorporated in the Registration Statement and Prospectus,
there were any changes, at a specified date not more than five
business days prior to the date of the letter, in the
consolidated term debt or capital stock and additional paid-in
capital of the Company and its subsidiaries as compared with
the amounts shown on the most recent consolidated balance sheet
included or incorporated in the Registration Statement and the
Prospectus, or for the period from the date of the most recent
financial statements included or incorporated in the
Registration Statement and Prospectus to the date of the latest
unaudited financial statements made available by the Company,
there were any decreases, as compared with the corresponding
period in the preceding year, in commission revenues, total
revenues, earnings before taxes on income or the total or per
share amounts of net earnings available to common and common
equivalent shares, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the
<PAGE>
<PAGE> A-3
Company) set forth in the Registration Statement and the Prospectus
and in Exhibit 12 to the Registration Statement, including the
information set forth under the caption "Selected Consolidated
Financial Data" in the Prospectus and the information included or
incorporated in Items 1, 6, 7 and 11 of the Company's annual report
on Form 10-K incorporated in the Registration Statement and the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Registration Statement and the Prospectus in
this letter are to such documents as amended and supplemented at the date
of the letter.
<PAGE>
<PAGE> B-1
ANNEX B
the opinion of Cravath, Swaine & Moore, counsel for the
Company, to the effect that:
(i) The Warrant Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company in accordance with its terms;
(ii) the Warrants have been duly authorized, executed,
authenticated and delivered and are valid and binding obligations of
the Company in accordance with their terms, entitled to the benefits
provided by the Warrant Agreement, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles;
(iii) no consent, approval, authorization or order of any
governmental agency or body or of any court is required for the
execution and delivery of the Warrant Agreement or the issuance of
the Warrants, for the consummation of the transactions contemplated
herein or therein or for the fulfillment of the terms hereof or
thereof, except such as have been obtained under the Securities Act
and such as may be required under the Blue Sky or securities laws of
any jurisdiction in connection with the purchase and distribution of
the Warrants by the Underwriters;
(iv) the Registration Statement has become effective under
the Act as of the date and time specified in such opinion and the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) specified in such opinion on the date specified
therein; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (other than the financial
statements and other financial and statistical information contained
therein as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Securities Act and the Securities Act Rules; and such counsel has
no reason to believe that the registration statement or any
<PAGE>
<PAGE> B-2
amendment thereof at the time it became effective contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as amended
or supplemented, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading;
(v) the Warrants conform to the description thereof in the
Prospectus;
(vi) the Warrants being issued at the Closing Date have
been duly authorized for listing, subject to official notice of
issuance and evidence of satisfactory distribution, on the American
Stock Exchange; and
(vii) this Agreement has been duly authorized, executed and
delivered by the Company.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
<PAGE>
<PAGE> C-1
ANNEX C
The opinion of Theodore A. Levine, Esq., General Counsel of the
Company, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) to the best knowledge of such counsel, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject, other than as set
forth in the Prospectus and other than proceedings incident to the
kind of business conducted by the Company and its subsidiaries which
do not have a substantial potential to affect materially adversely
the Company and its subsidiaries considered as a whole; and to the
best knowledge of such counsel no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iii) to the best knowledge of such counsel, there is no
contract or other document of a character required to be described in
the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
(iv) the documents incorporated by reference in the
Prospectus and each amendment thereof or supplement thereto (other
than the financial statements and other financial and statistical
information contained therein as to which such counsel need express
no opinion) comply as to form in all material respects with the
applicable requirements of the Exchange Act and the rules thereunder;
and such counsel has no reason to believe that such documents, when
they were filed with the Commission, contained any untrue statement
of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; and
(v) neither the execution and delivery of the Warrant
Agreement, the issue and sale of the Warrants, the consummation of
any other of the transactions contemplated herein or therein nor the
fulfillment of
<PAGE>
<PAGE> C-2
the terms hereof of thereof will conflict with, or result in a breach
of, or constitute a default under the current certificate of
incorporation or by-laws of the Company, or the terms of any
indenture or other agreement or instrument known to such counsel and
to which the Company or any of its subsidiaries is a party or bound,
or to the knowledge of such counsel any laws applicable to the
Company or any of its subsidiaries, or any order or regulation known
to such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or any of its subsidiaries.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent he deems proper, on certificates of responsible officers of the
Company and public officials.
<PAGE> 1
Exhibit 1.2
PAINE WEBBER GROUP INC.
Stock Index Warrants
UNDERWRITING AGREEMENT
January 14, 1994
PaineWebber Incorporated
Oppenheimer & Co., Inc.
Kemper Securities, Inc.
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Dear Sirs:
Paine Webber Group Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to PaineWebber Incorporated,
Oppenheimer & Co., Inc. and Kemper Securities, Inc. (the "Underwriters"),
for whom PaineWebber Incorporated is acting as representative (the
"Representative"), the aggregate number of the AMEX Hong Kong 30 Index Call
Warrants of the Company set forth in Schedule I hereto (the "Warrants") to
be issued under the Warrant Agreement (the "Warrant Agreement") identified
in Schedule I hereto.
The Company and the Underwriters, in accordance with the
requirements of Schedule E ("Schedule E") of the By-Laws of the National
Association of Securities Dealers, Inc. (the "NASD") and subject to the
terms and conditions stated herein, also hereby confirm the engagement of
the services of the underwriter identified in Schedule I hereto (the
"Independent Underwriter") as a "qualified independent underwriter" within
the meaning of Section 2(l) of Schedule E in connection with the offering
and sale of the Warrants.
1. Sale and Purchase of the Warrants. The Company agrees to
sell to each Underwriter, and each Underwriter, on the basis of the
representations, warranties and agreements herein contained, but subject to
the terms and conditions herein contained, agrees, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto, the number of Warrants set forth opposite the name of
such Underwriter in Schedule II hereto.
<PAGE>
<PAGE> 2
2. Delivery and Payment. Delivery of the Warrants by the
Company to the Representative for the respective accounts of the several
Underwriters, and payment by the Underwriters of the purchase price
therefor by certified or official bank check or checks payable in New York
Clearing House (next day) funds to the Company, shall take place at the
office, on the date and at the time specified in Schedule I hereto, which
date and time may be postponed as provided in Section 11 hereof or by
agreement between the Representative and the Company (such date and time of
delivery and payment for the Warrants being herein called the "Closing
Date"). The Company shall not be obligated to deliver any of the Warrants
except upon payment for all of the Warrants to be purchased hereunder.
Certificates evidencing the Warrants shall be registered in
such names and shall be in such denominations as the Representative shall
request no later than the close of business on the third business day
before the Closing Date. Such certificates shall be made available to the
Representative for checking and packaging, at such place in New York City
as is designated by the Representative, no later than 10:00 A.M. on the
business day prior to the Closing Date.
3. Registration Statement and Prospectus; Public Offering.
The Company represents and warrants to each Underwriter that the Company
meets the requirements for the use of Form S-3 under the Securities Act of
1933, as amended, and the rules and regulations adopted thereunder (respec-
tively, the "Securities Act" and the "Securities Act Rules"), and has
carefully prepared and filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (the file number of
which is set forth in Schedule I hereto), including a form of prospectus,
for the registration under the Securities Act of the Warrants, and that
such registration statement has become effective. Such registration
statement, as amended at the date of this Agreement, meets the requirements
set forth in Rule 415(a)(1)(i) under the Securities Act and complies in all
other material respects with such Rule. The Company proposes either (i) to
file with the Commission pursuant to Rule 424(b)(2) or (5) under the
Securities Act a supplement to the form of basic prospectus included in
such registration statement relating to the Warrants and the plan of
distribution thereof or (ii) to file with the Commission pursuant to
Rule 424(b)(i) under the Securities Act a form of prospectus supplement
that discloses information previously omitted from the prospectus
supplement filed as part of the effective registration statement in
reliance upon Rule 430A under the Securities Act. The registration
<PAGE>
<PAGE> 3
statement, as amended at the date of this Agreement, including the exhibits
thereto and all documents incorporated therein by reference pursuant to
Item 12 of Form S-3 (the "Incorporated Documents"), is hereinafter referred
to as the "Registration Statement", and the prospectus included in such
Registration Statement, as updated on October 14, 1993 and filed with the
Commission on October 18, 1993 pursuant to Rule 424(b)(5) under the
Securities Act and as supplemented in accordance with the preceding
sentence, including the Incorporated Documents, as first filed with the
Commission pursuant to Rule 424(b), is hereinafter referred to as the
"Prospectus". Any preliminary form of the Prospectus which has heretofore
been filed as part of the Registration Statement or pursuant to Rule 424 or
otherwise under the Securities Act is hereinafter referred to as a
"Preliminary Prospectus". Any reference herein to the Registration
Statement, the Prospectus or any Preliminary Prospectus shall be deemed to
refer to and include the Incorporated Documents which were filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or
before the date of this Agreement or the issue date of the Prospectus or
any Preliminary Prospectus, as the case may be; and any reference herein to
the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, the Prospectus or any Preliminary Prospectus shall
be deemed to refer to and include the filing of any Incorporated Documents
under the Exchange Act after the date of this Agreement or the issue date
of the Prospectus or any Preliminary Prospectus, as the case may be. If
the Company proposes to proceed under clause (ii) above, then the Company
represents and warrants to each Underwriter that the Registration
Statement, on the date that it was declared effective, omitted only that
information described in Rule 430A(a) under the Securities Act.
The Company understands that the Underwriters propose to make a
public offering of the Warrants, as described in the Prospectus, as soon as
the Underwriters deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed each Preliminary Prospectus and are authorized to distribute
the Prospectus and any amendments or supplements thereto.
4. Independent Underwriter.
(a) The Company hereby confirms its engagement of the
services of the Independent Underwriter as, and the Independent Underwriter
hereby confirms its agreement with the Company to render services as, a
"qualified independent
<PAGE>
<PAGE> 4
underwriter" within the meaning of Section 2(l) of Schedule E with respect
to the offering and sale of the Warrants.
(b) The Independent Underwriter hereby represents and
warrants to, and agrees with, the Company and the other Underwriters that
with respect to the offering and sale of the Warrants as described in the
Prospectus:
(i) The Independent Underwriter constitutes a "qualified
independent underwriter" within the meaning of Section 2(l) of
Schedule E;
(ii) The Independent Underwriter has participated in the
preparation of the Registration Statement and the Prospectus and has
exercised the usual standards of "due diligence" in respect thereto;
(iii) The Independent Underwriter has undertaken the legal
responsibilities and liabilities of an underwriter under the
Securities Act specifically including those inherent in Section 11
thereof;
(iv) Based upon (1) a review of the Company, including an
examination of the Registration Statement, information regarding the
earnings, assets and capital structure of the Company and other
pertinent financial and statistical data, (2) inquiries of and
conferences with the management of the Company, its counsel and
independent public accountants regarding the business and operations
of the Company, (3) consideration of estimates of the business
potential of the Company, assessments of its management, the general
condition of the securities markets at the time of the offering,
financial and operating data concerning other companies in the
Company's industry that have issued similar securities and the market
prices of and demand for such similar securities and (4) such other
studies, analyses and investigations as the Independent Underwriter
has deemed appropriate, and assuming that the offering of the
Warrants is made as contemplated herein and in the Prospectus, the
Independent Underwriter recommends, as of the date of the execution
and delivery of this Agreement, that the public offering price for
the Warrants not exceed the amount set forth in Schedule I hereto,
which price should in no way be considered or relied upon as an
indication of the value of the Warrants; and
(v) Subject to the provisions of Section 6 hereof, the
Independent Underwriter will furnish to the other Underwriters at the
Closing Date a letter, dated
<PAGE>
<PAGE> 5
the date of delivery thereof, in form and substance satisfactory to
such Underwriters, to the effect of clauses (i) through (iv) above.
(c) The Company, the Independent Underwriter and the other
Underwriters agree to comply in all material respects with all of the
requirements of Schedule E applicable to them in connection with the
offering and sale of the Warrants. The Company agrees to cooperate with
the Underwriters, including the Independent Underwriter, to enable the
Underwriters to comply with Schedule E and the Independent Underwriter to
perform the services contemplated by this Agreement.
(d) As compensation for the services of the Independent
Underwriter hereunder, the Company agrees to pay the Independent
Underwriter the amount, if any, set forth on Schedule I hereto on the
Closing Date. In addition, the Company agrees promptly to reimburse the
Independent Underwriter for all out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with this
Agreement and the services to be rendered as Independent Underwriter
hereunder.
(e) The Independent Underwriter hereby consents to the
references to it as set forth under the caption "Underwriting" or "Plan of
Distribution" in the Prospectus and in any amendment or supplement thereto
made in accordance with Section 7 hereof.
5. Representations and Warranties of the Company. The
Company represents and warrants to each of the Underwriters as follows:
(a) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission; and the
Commission has issued no order preventing or suspending the use of
the Prospectus or any Preliminary Prospectus.
(b) Each Preliminary Prospectus as of its date conformed in
all material respects to the requirements of the Securities Act and
the Securities Act Rules, and did not include any untrue statement of
a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; except that this representation does not apply to
statements or omissions in any Preliminary Prospectus made in
reliance on and in
<PAGE>
<PAGE> 6
conformity with information furnished in writing to the Company by
the Representative on behalf of any Underwriter expressly for use in
such Preliminary Prospectus.
(c) On the effective date of the registration statement
relating to the Warrants, such registration statement complied in all
material respects with the requirements of the Securities Act and the
Securities Act Rules and did not include any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and, as of the date hereof, when, before the Closing Date, any
amendment to the Registration Statement becomes effective, when,
before the Closing Date, any Incorporated Document is filed with the
Commission, when any supplement to the Prospectus is filed with the
Commission and on the Closing Date, the Registration Statement, the
Prospectus and any such amendment or supplement will comply in all
material respects with the requirements of the Securities Act and the
Securities Act Rules, the Incorporated Documents will comply in all
material respects with the requirements of the Exchange Act and the
rules and regulations adopted by the Commission thereunder, and no
part of the Registration Statement, the Prospectus or any such
amendment or supplement will include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
except that this representation and warranty does not apply to
statements or omissions in the Registration Statement or Prospectus
(or in amendments or supplements thereto) made in reliance on and in
conformity with information furnished in writing to the Company by
the Representative on behalf of any Underwriter expressly for use
therein.
(d) The certificates delivered pursuant to Section 6(d)
hereof were on the date on which they were delivered, or will be on
the date on which they are to be delivered, in all material respects
true and complete.
(e) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by
the Company of the transactions contemplated by this Agreement,
except those which have been obtained or which may be required under
the Securities Act and such qualifications as may be required under
state securities or "Blue Sky" laws in
<PAGE>
<PAGE> 7
connection with the purchase and distribution of the Warrants by the
Underwriters, and consummation of such transactions will not result
in the breach of any terms of, or constitute a default under, any
other agreement or undertaking of the Company.
6. Conditions of the Underwriters' and the Independent
Underwriter's Obligations. The obligations of the Underwriters hereunder
to purchase the Warrants on the Closing Date and the obligations of the
Independent Underwriter contained in Section 4 hereof are subject to the
accuracy, on the date of this Agreement and on the Closing Date, of the
representations and warranties of the Company contained herein, to the
accuracy and completeness of all statements made by the Company or by any
of its officers in any certificate delivered to the Underwriters or their
counsel pursuant to this Agreement, to the performance by the Company of
its obligations hereunder and to each of the following additional
conditions:
(a) The Prospectus shall have been filed with the Commission
in accordance with Rule 424(b) of the Securities Act Rules within the
applicable time period prescribed for such filing by the Securities
Act Rules and in accordance with Section 7(a) of this Agreement.
(b) No order suspending the effectiveness of the Registration
Statement shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the Commission, and any
requests for additional information on the part of the Commission (to
be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the reasonable
satisfaction of the Representative.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) there
shall not have been any material change in the capital stock or long-
term debt of the Company and its subsidiaries taken as a whole other
than as set forth in or contemplated by the Registration Statement
and Prospectus, (2) there shall not have been any material adverse
change in the general affairs, prospects, management, financial
condition or results of operations of the Company and its
subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business, in each case other
than as set forth in or contemplated by the Registration Statement
and Prospectus and (3) the Company and its subsidiaries shall not
have sustained any material loss or inter-
<PAGE>
<PAGE> 8
ference with their business taken as a whole from fire, explosion,
earthquake, flood or other calamity, whether or not covered by
insurance, or from any court, legislative or other governmental
action, order or decree which is not set forth in the Registration
Statement and Prospectus if, in the judgment of the Underwriters, any
such development referred to in clauses (1), (2) or (3) above makes
it impracticable or inadvisable to proceed with the offering and
delivery of the Warrants as contemplated by the Registration
Statement and the Prospectus.
(d) The Underwriters shall have received on the Closing Date
a certificate, dated the date of delivery of such certificate, of a
vice president and the principal financial or accounting officer of
the Company, which shall certify that (1) the signers have carefully
examined the Registration Statement, the Prospectus and this
Agreement; (2) no order suspending the effectiveness of the
Registration Statement or prohibiting the sale of the Warrants has
been issued and no proceedings for such purpose are pending before
or, to the knowledge of such officers, threatened by the Commission;
(3) there has not been any material adverse change in the general
affairs, prospects, management, financial condition or results of
operations of the Company and its subsidiaries taken as a whole,
whether or not arising in the ordinary course of business, other than
as set forth in or contemplated in the Registration Statement and
Prospectus; (4) each of the representations and warranties of the
Company contained in Section 5 of this Agreement is accurate on and
as of the date of delivery of such certificate; and (5) the Company
has performed all covenants and agreements contained in this
Agreement to be performed on its part at or before the date of
delivery of such certificate.
(e) The Underwriters shall have received on the date hereof,
from Ernst & Young, a signed letter, dated the date of delivery,
substantially in the form of Annex A hereto, with such modifications
as may be set forth in Schedule I hereto. The Underwriters also
shall have received on the Closing Date, from such accountants, a
signed letter, dated the date of delivery, confirming that, on the
basis of a review in accordance with the procedures set forth in
their initial letter referred to in the preceding sentence, nothing
has come to their attention during the period from a date (specified
in such initial letter) not more than five days before the date of
this Agreement to a
<PAGE>
<PAGE> 9
specified date not more than five days before the Closing Date that
would require any change in such initial letter.
(f) The Underwriters shall have received on the Closing Date,
from Cravath, Swaine & Moore, counsel for the Company, an opinion,
dated the date of delivery, substantially in the form of Annex B
hereto.
(g) The Underwriters shall have received on the Closing Date,
from Theodore A. Levine, Esq., General Counsel of the Company, an
opinion, dated the date of delivery, substantially in the form of
Annex C hereto.
(h) The Underwriters shall have received on the Closing Date,
from Sullivan & Cromwell, counsel for the Underwriters, an opinion or
opinions, dated the date of delivery, with respect to the
incorporation of the Company, the validity of the Warrants, the
Registration Statement and Prospectus, certain tax matters and such
other matters as you may require, and the Company shall have
furnished to such counsel such documents as they may request for the
purpose of enabling them to pass on such matters.
(i) No order suspending trading or striking or withdrawing
the Warrants from listing or registration under the Exchange Act
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission or by the American
Stock Exchange.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance
with the provisions of this Agreement only if they are in form and scope
reasonably satisfactory to counsel for the Underwriters.
7. Covenants. The Company covenants and agrees with the
Underwriters as follows:
(a) Before the termination of the offering of the Warrants,
not to file any amendment or supplement (including the Prospectus) to
the Registration Statement or the Prospectus unless a copy thereof
shall have first been submitted to the Underwriters within a
reasonable period of time prior to the filing thereof and the
Underwriters shall not have reasonably objected thereto in writing.
Subject to the foregoing sentence, the Company promptly will cause
the Prospectus to be filed with the Commission pursuant to
Rule 424(b) of
<PAGE>
<PAGE> 10
the Securities Act Rules within the applicable time period prescribed
for such filing by the Securities Act Rules.
(b) As soon as the Company is advised thereof, it will advise
the Underwriters (1) when any amendment to the Registration Statement
has become effective, (2) when the Prospectus, any supplement to the
Prospectus or any amended Prospectus has been filed, (3) of the
initiation or threatening of any proceedings for, or receipt by the
Company of any notice with respect to, the suspension of the quali-
fication of the Warrants for sale in any jurisdiction or the issuance
of any order suspending the effectiveness of the Registration
Statement; and (4) of receipt by the Company or any representative or
attorney of the Company of any other communication from the
Commission relating to the Company (except for routine communications
relating to the broker-dealer business of the Company), the
Registration Statement, any Preliminary Prospectus, the Prospectus or
the transactions contemplated by this Agreement. The Company will
make every reasonable effort to prevent the issuance of an order sus-
pending the effectiveness of the Registration Statement and if any
such order is issued to obtain its lifting as soon as possible.
(c) The Company will deliver to the Underwriters, without
charge, (1) signed copies of the Registration Statement and of any
supplements or amendments thereto (including all exhibits filed with
or incorporated by reference in any such document) and (2) as many
conformed copies of the Registration Statement and of any supplements
or amendments thereto (without exhibits) as the Underwriters
reasonably may request.
(d) During such period as a prospectus is required by law to
be delivered by any Underwriter or dealer, the Company will deliver,
without charge, to the Underwriters and dealers, at such office or
offices as the Representative may designate, as many copies of the
Prospectus as the Underwriters reasonably may request.
(e) During the period in which the Prospectus is to be
delivered as provided in the foregoing paragraph, if any event occurs
as a result of which it shall be necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of
the circumstances existing when the Prospectus is delivered to a
purchaser, not misleading in any
<PAGE>
<PAGE> 11
material respect, or if during such period it is necessary to amend
or supplement the Prospectus to comply with the Securities Act or the
Securities Act Rules, the Company forthwith will prepare, submit to
the Underwriters, file with the Commission and deliver, without
charge, to the Underwriters and to dealers (whose names and addresses
the Representative will furnish to the Company) to whom Warrants may
have been sold by the Underwriters, and to other dealers upon
request, amendments or supplements to the Prospectus so that the
statements in the Prospectus, as so amended or supplemented, will
not, in the light of the circumstances existing when the Prospectus,
as so amended or supplemented, is delivered to a purchaser, be mis-
leading in any material respect and will comply with the Securities
Act and the Securities Act Rules. Delivery by the Underwriters of
any such amendments or supplements to the Prospectus shall not
constitute a waiver of any of the conditions set forth in Section 6.
(f) The Company will make generally available to the
Company's security holders, as soon as practicable but in no event
later than 45 days after the end of the 12-month period beginning at
the end of the current fiscal quarter of the Company, an earnings
statement which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Securities Act Rules.
(g) The Company will take such action as the Representative
reasonably may request in order to qualify the Warrants for offer and
sale under the securities or Blue Sky laws of such jurisdictions as
the Representative reasonably may designate; provided that in no
event shall the Company be obligated to subject itself to taxation or
to qualify to do business in any jurisdiction where it is not now so
qualified or to take any action that would subject it to service of
process in suits, other than those arising out of the offering or
sale of the Warrants, in any jurisdiction where it is not now so
subject.
(h) For so long as any Warrants shall remain outstanding, the
Company will supply to the Underwriters copies of such financial
statements and other periodic and special reports as the Company may
from time to time distribute generally to its lenders or to the
holders of any of its securities and to furnish to the Underwriters a
copy of each annual or other report it shall be required to file with
the Commission.
<PAGE>
<PAGE> 12
(i) The Company will pay, or reimburse if paid by the
Underwriters, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses
incident to the performance of the obligations of the Company under
this Agreement including, but not limited to, those relating to
(1) the preparation, printing and filing of the Registration
Statement and exhibits thereto, each Preliminary Prospectus, the
Prospectus and all amendments and supplements to the Registration
Statement and the Prospectus and the printing of this Agreement;
(2) the issuance of the Warrants and the preparation and delivery to
the Underwriters of certificates for the Warrants; (3) the
registration or qualification of the Warrants for offer and sale
under the securities or Blue Sky laws of the various jurisdictions
referred to in paragraph (g) above, including the reasonable fees and
disbursements of counsel for the Underwriters in connection with such
registration and qualification and the preparation and printing of
preliminary and supplementary Blue Sky memoranda; (4) the furnishing
(including costs of shipping and mailing) to the Underwriters and to
dealers of copies of each Preliminary Prospectus, the Prospectus and
all amendments or supplements to the Prospectus, and of the other
documents required by this Section to be so furnished; (5) the filing
requirements of the National Association of Securities Dealers, Inc.
in connection with its review of the financing; (6) the furnishing
(including costs of shipping and mailing) of copies of all reports
and information required by paragraph (h) above; (7) any fees charged
by rating agencies in connection with the rating of the Warrants;
(8) the fees and expenses of the warrant agent and determination
agent under the Warrant Agreement; (9) the fees and expenses in
connection with listing the Warrants on the American Stock Exchange
or any other exchange or automated quotation system; and (10) all
transfer taxes, if any, with respect to the sale and delivery of the
Warrants by the Company to the several Underwriters.
(j) The Company will use the proceeds from the sale of the
Warrants substantially as described under "Use of Proceeds" in the
Prospectus subject to any change in circumstances that would make
such uses inappropriate.
<PAGE>
<PAGE> 13
(k) The Company will use its best efforts to effect the
listing of the Warrants on the American Stock Exchange at or before
the Closing Date and to comply with the rules and regulations of such
Exchange.
(1) Until the business day following the Closing Date, the
Company will not offer, sell, contract to sell or otherwise dispose
of any stock index warrants relating to the same or a similar
securities index as the Warrants without the prior written consent of
the Underwriters.
8. Indemnification.
(a) The Company will indemnify and hold harmless each
Underwriter and each person, if any, who controls each Underwriter within
the meaning of Section 15 of the Securities Act against any and all losses,
claims, damages and liabilities, joint or several (including any reasonable
investigation, legal and other expenses incurred in connection with, and,
subject to Section 8(e) hereof, any amount paid in settlement of, any
action, suit or proceeding or any claim asserted), to which they, or any of
them, may become subject under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that such indemnity shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages, liabilities or actions arising from
the sale of the Warrants in the public offering to any person by such
Underwriter if such untrue statement or omission or alleged untrue
statement or omission (i) was made in such Preliminary Prospectus, the
Registration Statement or the Prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished
in writing to the Company by the Representative on behalf of any
Underwriter expressly for use therein or (2) was made in a Preliminary
Prospectus if the Prospectus corrects the untrue statement or omission or
alleged untrue statement or omission which is the basis of the loss, claim,
damage or liability for which indemnification is sought and a copy of the
Prospectus was not sent or given to such person at or before the
confirmation of the sale to such person in any case where
<PAGE>
<PAGE> 14
such delivery is required by the Securities Act, unless such failure to
deliver the Prospectus was a result of noncompliance by the Company with
Section 7(e) hereof. This indemnity agreement shall be in addition to any
liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act and each director and officer of the
Company who signs the Registration Statement to the same extent as the
foregoing indemnity from the Company to the Underwriters, but only insofar
as such losses, claims, damage or liabilities arise out of or are based
upon any untrue statement or omission or alleged untrue statement or
omission which was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, in
reliance upon and in conformity with information furnished in writing to
the Company by the Representative on behalf of such Underwriter expressly
for use therein. This indemnity agreement shall be in addition to any
liability that each Underwriter might otherwise have.
(c) The Company will indemnify and hold harmless the
Independent Underwriter and each person, if any, who controls the
Independent Underwriter within the meaning of Section 15 of the Securities
Act against any and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and other expenses
incurred in connection with, and, subject to Section 8(e) hereof, any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon the Independent
Underwriter's activities as "qualified independent underwriter" with
respect to the offering and sale of the Warrants (but only to the extent
that such activities are not also within the scope of the Independent
Underwriter's activities as an Underwriter hereunder); provided, however,
that such indemnity shall not extend to any losses, claims, damages,
liabilities or actions to the extent that they arise out of or are based
upon the bad faith or gross negligence of the Independent Underwriter in
performing the services referred to in Section 4 hereof. This indemnity
agreement shall be in addition to any liability that the Company might
otherwise have.
<PAGE>
<PAGE> 15
(d) The Company acknowledges that only such information as is
described in Schedule I hereto in the item captioned "Information Furnished
by Underwriters" shall be deemed to be information furnished in writing to
the Company by an Underwriter expressly for use in any Preliminary
Prospectus, the Registration Statement or the Prospectus, and the
Underwriters confirm that such information is correct.
(e) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against an indemnifying party or
parties under this Section, notify each such indemnifying party of the
commencement of such action, suit or proceeding, enclosing a copy of all
papers served, but the omission so to notify such indemnifying party of any
such action, suit or proceeding shall not relieve it from any liability
that it may have to any indemnified party otherwise than under this
Section. In case any such action, suit or proceeding shall be brought
against any indemnified party and it shall notify the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to
participate in, and, to the extent that it elects by delivering written
notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not
be liable to such indemnified party for any legal or other expenses, except
as provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party, in connection with the
defense thereof. The indemnified party shall have the right to employ its
counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (1) the employment of
counsel by such indemnified party has been authorized in writing by the
indemnifying parties, (2) the indemnified party shall have reasonably
concluded that there may be a conflict of interest between the indemnifying
parties and the indemnified party in the conduct of the defense of such
action (in which case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the indemnified party) or
(3) the indemnifying parties shall not in fact have employed counsel to
assume the defense of such action within a reasonable time after their
receipt of notice of the commencement of such action,
<PAGE>
<PAGE> 16
in each of which cases the fees and expenses of counsel for the indemnified
party shall be at the expense of the indemnifying parties and all such fees
and expenses shall be reimbursed as they are incurred. An indemnifying
party shall not be liable for any settlement of any action or claim
effected without its written consent or, in connection with any proceeding
or related proceeding in the same jurisdiction, for the fees and expenses
of more than one separate counsel for all indemnified parties.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 8(a) or (b) is applicable but for any reason is held to be
unavailable from the Company or the Underwriters, as the case may be, the
Company and the Underwriters shall contribute to the aggregate losses,
claims, damages and liabilities (including any investigation, legal and
other expenses reasonably incurred in connection with, and, subject to
Section 8(d) hereof, any amount paid in settlement of, any action, suit or
proceeding or any claims asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Securities Act,
officers of the Company who signed the Registration Statement and directors
of the Company, who may also be liable for contribution) to which the
Company and the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion represented by the percentage
that the underwriting discount appearing on the cover page of the
Prospectus bears to the public offering price appearing thereon and the
Company is responsible for the balance. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law, then the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including the items
mentioned in the immediately preceding sentence) to which the Company and
the Underwriters may be subject in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company, on the one hand, and the Underwriters, on the other, as well as
any other relevant equitable considerations (including the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent any misstatement or omission). Notwithstanding the
foregoing, (a) no Underwriter shall be responsible for any amount in excess
of the underwriting discount applicable to the Warrants purchased by such
Underwriter, and (b) no person found guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty
<PAGE>
<PAGE> 17
of such fraudulent misrepresentation. For purposes of this Section, any
person who controls an Underwriter within the meaning of the Securities Act
shall have the same rights to contribution as such Underwriter, and any
person who controls the Company within the meaning of the Securities Act,
each officer of the Company who signed the Registration Statement and each
director of the Company will have the same rights to contribution as the
Company, subject in each case to clauses (a) and (b) of the preceding
sentence. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such
party in respect of which a claim for contribution may be made under this
Section, notify such party or parties from whom contribution may be sought,
but the omission so to notify such party or parties from whom contribution
may be sought shall not relieve the party or parties from whom contribution
may be sought from any other obligation it or they may have hereunder or
otherwise than under this Section. No party shall be liable for
contribution with respect to any action or claim settled without its
written consent.
10. Termination. This Agreement may be terminated by the
Representative or by any Underwriter who has agreed to purchase at least
50% of the Warrants by notifying the Company at any time:
(a) at or before the Closing Date if, in the judgment of the
Representative or any such Underwriter, as the case may be, payment
for and delivery of the Warrants is rendered impracticable or
inadvisable because (1) additional material governmental re-
strictions, not in force and effect on the date of this Agreement,
shall have been imposed upon trading in securities generally or
minimum or maximum prices shall have been generally established on
the New York Stock Exchange, on the American Stock Exchange or the
Index Exchange specified in Schedule I hereto, or trading in
securities generally shall have been suspended on either such
Exchange or a general banking moratorium shall have been established
by federal or New York authorities; (2) any event shall have occurred
or shall exist that makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement
or Prospectus or that is not reflected in the Registration Statement
or Prospectus but should be reflected therein in order to make the
statements or information contained therein not misleading in any
material respect; or (3) a war involving the United States of America
or other national calamity shall have occurred or shall have
accelerated to such
<PAGE>
<PAGE> 18
an extent as, in the judgment of the Representatives or any such
Underwriters, as the case may be, to affect adversely the
marketability of the Warrants; or
(b) at or before the Closing Date if any of the conditions
specified in Section 6 shall not have been fulfilled when and as
required by this Agreement.
If this Agreement is terminated pursuant to any of its pro-
visions, except as otherwise provided herein, the Company shall not be
under any liability to the Underwriters, and the Underwriters, including
the Independent Underwriter, shall not be under any liability to the
Company, except that (A) if this Agreement is terminated by the
Underwriters because of any reason other than a default by the Underwriters
as described in Section 11, the Company will reimburse the Underwriters for
all reasonable out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by them in connection with the
proposed purchase and sale of the Warrants and (B) no Underwriter who has
failed or refused to purchase the Warrants agreed to be purchased by it
under this Agreement, without some reason sufficient hereunder to justify
cancellation or termination of its obligations under this Agreement, will
be relieved of liability to the Company or to the other Underwriters for
damages occasioned by its default.
11. Default by an Underwriter. If one or more of the
Underwriters fails (other than for a reason sufficient to justify the
termination of this Agreement) to purchase on the Closing Date the Warrants
agreed to be purchased on the Closing Date by such Underwriter or
Underwriters, the Representative may find one or more substitute
underwriters to purchase such Warrants or make such other arrangements as
the Representative deems advisable or one or more of the remaining
Underwriters may agree to purchase such Warrants in such proportions as may
be approved by the Representative, in each case upon the terms set forth in
this Agreement. If no such arrangements have been made within 36 hours
after the Closing Date, and
(a) the number of Warrants to be purchased by the defaulting
Underwriters on the Closing Date does not exceed 10% of the Warrants
that the Underwriters are obligated to purchase on the Closing Date,
each of the nondefaulting Underwriters will be obligated to purchase
such Warrants on the terms set forth in this Agreement in proportion
to their respective obligations under this Agreement, or
<PAGE>
<PAGE> 19
(b) the number of Warrants to be purchased by the defaulting
Underwriters on the Closing Date equals or exceeds 10% of the
Warrants to be purchased by all the Underwriters on the Closing Date,
the Company will be entitled to an additional period of 24 hours
within which to find one or more substitute underwriters reasonably
satisfactory to the Representative to purchase such Warrants on the
terms set forth in this Agreement.
In any such case, either the Representative or the Company will
have the right to postpone the Closing Date for not more than five business
days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or
Prospectus) may be affected by the Representative and the Company. If the
number of Warrants to be purchased on the Closing Date by such defaulting
Underwriters exceeds 10% of the Warrants that the Underwriters are
obligated to purchase on the Closing Date, and none of the nondefaulting
Underwriters or the Company makes arrangements pursuant to this Section
within the period stated for the purchase of the Warrants that the
defaulting Underwriters agreed to purchase, this Agreement will terminate
without liability on the part of any nondefaulting Underwriter to the
Company and without liability on the part of the Company, except, in both
cases, as provided in Sections 4, 7(i), 8, 9 and 10. This Section will not
affect the liability of any defaulting Underwriter to the Company or the
nondefaulting Underwriters arising out of such default. A substitute
underwriter will become an Underwriter for all purposes of this Agreement.
12. Miscellaneous. The reimbursement, indemnification and
contribution agreements contained in Sections 4, 7(i), 8, 9 and 10 and the
representations, warranties and agreements of the Company in this Agreement
shall remain in full force and effect regardless of (a) any termination of
this Agreement, (b) any investigation made by or on behalf of the
Underwriters or any person controlling any Underwriter, or by or on behalf
of the Company, its directors or officers or any person controlling the
Company and (c) delivery of and payment for the Warrants under this Agree-
ment.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors, and, to the
extent expressed herein, for the benefit of persons controlling any of the
Underwriters or the Company, and directors and officers of the Company, and
their respective successors, and no other person, partnership, association
or corporation shall acquire or
<PAGE>
<PAGE> 20
have any right under or by virtue of this Agreement. The term "successors"
shall not include any purchaser of Warrants from the Underwriters merely
because of such purchase.
All notices and communications hereunder shall be in writing,
and mailed or delivered by messenger or facsimile transmission, or by
telephone or telegraph, if subsequently confirmed in writing, to the
Underwriters at the address specified in Schedule I hereto and to the
Company, to its agent for service as such agent's address appears on the
cover page of the Registration Statement.
Any action required or permitted to be taken by the
Representative under this Agreement may be taken by it or by the
Independent Underwriter.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
<PAGE> 21
This Agreement may be executed in multiple counterparts which
together shall constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
PAINE WEBBER GROUP INC.
By /s/ Pierce Smith
Name: Pierce Smith
Title: Treasurer
Confirmed:
PAINEWEBBER INCORPORATED
By /s/ John C. Braddock
Name: John C. Braddock
Title: Vice President
OPPENHEIMER & CO., INC.
By /s/ Richard White
Name: Richard White
Title: Managing Director
KEMPER SECURITIES, INC.
By Gary J. Walther
Name: Gary J. Walther
Title:
<PAGE>
<PAGE>
SCHEDULE I
Representative: PaineWebber Incorporated
Independent Underwriter: Oppenheimer & Co., Inc.
Independent Underwriter's Compensation: None
Date of Underwriting Agreement: January 14, 1994
Registration Statement File Number: 33-33613
Warrant Agreement: To be dated as of January 24, 1994
Number of Warrants: 2,200,000
Index Exchange: The American Stock Exchange Hong Kong 30 Index (The
American Stock Exchange)
Public Offering Price Recommended
by Independent Underwriter: not to exceed $5.875 per
Warrant
Purchase Price: $5.875 per Warrant
Description of Warrants
Offering Price: $5.875 per Warrant
Put or Call Warrants: Call
First Exercise Date: Exercisable Immediately Upon Issuance
Expiration Date: January 17, 1996
Currency in which Warrants Payable: U.S. dollars
Minimum Expiration Value: None
Date, Time and Place for Delivery: January 24, 1994
10:00 A.M., New York time
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Modifications to Letter from Ernst & Young: None
Information Furnished by Underwriters:
(i) The last full paragraph of the cover page of
the Prospectus Supplement concerning the terms
of the offering;
(ii) The third paragraph on page S-2 of the
Prospectus Supplement concerning over-
<PAGE>
<PAGE> 2
allotment and stabilization by the
Underwriters;
(iii) The concession and reallowance figures
appearing in the second paragraph under the
caption "Underwriting" in the Prospectus
Supplement; and
(iv) The third to last and second to last paragraphs
under the caption "Underwriting" in the
Prospectus Supplement.
Address for Notices to Underwriters:
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
with a copy to:
John T. Bostelman
Sullivan & Cromwell
250 Park Avenue
New York, New York 10177
Modifications to Form of Underwriting Agreement: No Option Warrants;
Other immaterial
changes
<PAGE>
<PAGE> 3
SCHEDULE II
<TABLE>
<CAPTION>
Number
of Warrants
Name to be Purchased
<S> <C>
PaineWebber Incorporated 733,340
Oppenheimer & Co., Inc. 733,330
Kemper Securities, Inc. 733,330
__________
Total
2,200,000
</TABLE>
<PAGE>
<PAGE> A-1
ANNEX A
Ernst & Young shall furnish a letter or letters, in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Securities Act and the
Exchange Act and the respective applicable published rules and regulations
thereunder and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated in the
Registration Statement and the Prospectus and reported on by them
comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and the Exchange Act
and the related published rules and regulations;
(ii) on the basis of a reading of the amounts set forth
under the caption "Selected Consolidated Financial Data" in the
Prospectus and of the amounts included or incorporated in the
Registration Statement and the Prospectus in response to Item 301 of
Regulation S-K and of the latest unaudited financial statements made
available by the Company and its subsidiaries; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter, a reading of the minutes of the meetings of the
stockholders, directors, audit and executive committees of the
Company and its subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and accounting
matters of the Company and its subsidiaries as to transactions and
events subsequent to the date of the most recent financial statements
included or incorporated in the Registration Statement and
Prospectus, nothing came to their attention which caused them to
believe that:
(1) the unaudited amounts set forth under the caption
"Selected Consolidated Financial Data" in the Prospectus and
the amounts included or incorporated in the Registration
Statement and the Prospectus in response to Item 301 of
Regulation S-K, do not agree with the corresponding amounts in
the audited financial statements from which such amounts were
derived; or
<PAGE>
<PAGE> A-2
(2) any unaudited financial statements included or
incorporated in the Registration Statement and Prospectus do
not comply as to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act, or that such unaudited
financial statements are not fairly presented in conformity
with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
consolidated statements incorporated by reference in the
Registration Statement and Prospectus.
(3) with respect to the period subsequent to the date
of the most recent financial statements included or
incorporated in the Registration Statement and Prospectus,
there were any changes, at a specified date not more than five
business days prior to the date of the letter, in the
consolidated term debt or capital stock and additional paid-in
capital of the Company and its subsidiaries as compared with
the amounts shown on the most recent consolidated balance sheet
included or incorporated in the Registration Statement and the
Prospectus, or for the period from the date of the most recent
financial statements included or incorporated in the
Registration Statement and Prospectus to the date of the latest
unaudited financial statements made available by the Company,
there were any decreases, as compared with the corresponding
period in the preceding year, in commission revenues, total
revenues, earnings before taxes on income or the total or per
share amounts of net earnings available to common and common
equivalent shares, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives; and
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the
<PAGE>
<PAGE> A-3
Company) set forth in the Registration Statement and the Prospectus
and in Exhibit 12 to the Registration Statement, including the
information set forth under the caption "Selected Consolidated
Financial Data" in the Prospectus and the information included or
incorporated in Items 1, 6, 7 and 11 of the Company's annual report
on Form 10-K incorporated in the Registration Statement and the
Prospectus, agrees with the accounting records of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Registration Statement and the Prospectus in
this letter are to such documents as amended and supplemented at the date
of the letter.
<PAGE>
<PAGE> B-1
ANNEX B
the opinion of Cravath, Swaine & Moore, counsel for the
Company, to the effect that:
(i) The Warrant Agreement has been duly authorized,
executed and delivered by the Company and is a valid and binding
agreement of the Company in accordance with its terms;
(ii) the Warrants have been duly authorized, executed,
authenticated and delivered and are valid and binding obligations of
the Company in accordance with their terms, entitled to the benefits
provided by the Warrant Agreement, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles;
(iii) no consent, approval, authorization or order of any
governmental agency or body or of any court is required for the
execution and delivery of the Warrant Agreement or the issuance of
the Warrants, for the consummation of the transactions contemplated
herein or therein or for the fulfillment of the terms hereof or
thereof, except such as have been obtained under the Securities Act
and such as may be required under the Blue Sky or securities laws of
any jurisdiction in connection with the purchase and distribution of
the Warrants by the Underwriters;
(iv) the Registration Statement has become effective under
the Act as of the date and time specified in such opinion and the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) specified in such opinion on the date specified
therein; to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued, no proceedings for that purpose have been instituted or
threatened, and the Registration Statement, the Prospectus and each
amendment thereof or supplement thereto (other than the financial
statements and other financial and statistical information contained
therein as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Securities Act and the Securities Act Rules; and such counsel has
no reason to believe that the registration statement or any
<PAGE>
<PAGE> B-2
amendment thereof at the time it became effective contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as amended
or supplemented, contains any untrue statement of a material fact or
omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading;
(v) the Warrants conform to the description thereof in the
Prospectus;
(vi) the Warrants being issued at the Closing Date have
been duly authorized for listing, subject to official notice of
issuance and evidence of satisfactory distribution, on the American
Stock Exchange; and
(vii) this Agreement has been duly authorized, executed and
delivered by the Company.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
<PAGE>
<PAGE> C-1
ANNEX C
The opinion of Theodore A. Levine, Esq., General Counsel of the
Company, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own its properties and conduct its
business as described in the Prospectus;
(ii) to the best knowledge of such counsel, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject, other than as set
forth in the Prospectus and other than proceedings incident to the
kind of business conducted by the Company and its subsidiaries which
do not have a substantial potential to affect materially adversely
the Company and its subsidiaries considered as a whole; and to the
best knowledge of such counsel no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iii) to the best knowledge of such counsel, there is no
contract or other document of a character required to be described in
the Registration Statement or Prospectus, or to be filed as an
exhibit thereto, which is not described or filed as required;
(iv) the documents incorporated by reference in the
Prospectus and each amendment thereof or supplement thereto (other
than the financial statements and other financial and statistical
information contained therein as to which such counsel need express
no opinion) comply as to form in all material respects with the
applicable requirements of the Exchange Act and the rules thereunder;
and such counsel has no reason to believe that such documents, when
they were filed with the Commission, contained any untrue statement
of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; and
(v) neither the execution and delivery of the Warrant
Agreement, the issue and sale of the Warrants, the consummation of
any other of the transactions contemplated herein or therein nor the
fulfillment of
<PAGE>
<PAGE> C-2
the terms hereof of thereof will conflict with, or result in a breach
of, or constitute a default under the current certificate of
incorporation or by-laws of the Company, or the terms of any
indenture or other agreement or instrument known to such counsel and
to which the Company or any of its subsidiaries is a party or bound,
or to the knowledge of such counsel any laws applicable to the
Company or any of its subsidiaries, or any order or regulation known
to such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or any of its subsidiaries.
In rendering such opinion, such counsel may rely as to matters of fact, to
the extent he deems proper, on certificates of responsible officers of the
Company and public officials.
<PAGE>
Exhibit 4.1
PAINE WEBBER GROUP INC.
and
CITIBANK, N.A., Warrant Agent
and
PAINEWEBBER INCORPORATED, Determination Agent
WARRANT AGREEMENT
dated as of January 24, 1994
AMEX Hong Kong 30 Index Put Warrants
Expiring January 17, 1996
<PAGE>
<PAGE> i TABLE OF CONTENTS1/
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 . . . . . . . . . . . . . . . 3
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; Notice
of Exercise . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.02. Exercise and Delivery of
Warrants . . . . . . . . . . . . . . . . . . . . 10
1/ The Table of Contents is not a part of the Warrant Agreement.
<PAGE>
<PAGE> ii
SECTION 2.03. Automatic Exercise of Warrants;
Exercise upon an Extraordinary Event
or Exercise Limitation Event . . . . . . . . . . 21
SECTION 2.04. Limitation of Number of Exercisable
Warrants . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.05. Covenant of the Company . . . . . . . . . . . . . . 29
SECTION 2.06. Return of Money Held Unclaimed for
Two Years . . . . . . . . . . . . . . . . . . . . 29
SECTION 2.07. Return of Global Warrant
Certificate . . . . . . . . . . . . . . . . . . . 29
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder of Warrant May Enforce
Rights . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company . . . . . . . . . 30
SECTION 4.02. Payment of Taxes . . . . . . . . . . . . . . . . . 30
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent . . . . . . . . . . . . . . . . . . . 31
SECTION 5.02. Conditions of Warrant Agent's
Obligations . . . . . . . . . . . . . . . . . . . 31
SECTION 5.03. Resignation and Appointment of
Successor . . . . . . . . . . . . . . . . . . . . 33
<PAGE>
<PAGE> iii
ARTICLE VI
MISCELLANEOUS
SECTION 6.01. Amendment . . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.02. Notices and Demands to the Company,
the Warrant Agent and the
Determination Agent . . . . . . . . . . . . . . . 36
SECTION 6.03. Addresses for Notices . . . . . . . . . . . . . . . 36
SECTION 6.04. Notices to Holders . . . . . . . . . . . . . . . . 36
SECTION 6.05 Obtaining of Approvals . . . . . . . . . . . . . . 36
SECTION 6.06. Persons Having Rights Under This
Agreement . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.07. Inspection of Agreement . . . . . . . . . . . . . . 37
SECTION 6.08. Headings . . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.09. Counterparts . . . . . . . . . . . . . . . . . . . 37
SECTION 6.10. APPLICABLE LAW . . . . . . . . . . . . . . . . . . 37
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
EXHIBIT A - Form of Warrant Certificate
EXHIBIT A-1 - Form of Global Warrant Certificate
EXHIBIT A-2 - Notice of Exercise
[For Warrants Represented by the Global
Warrant Certificate]
EXHIBIT B - Confirmation of Exercise and Notice
of Rejection [For Warrants Represented by
Warrant Certificates]
EXHIBIT B-1 - Confirmation of Exercise and Notice of
Rejection [For Warrants Represented by the
Global Warrant Certificate]
<PAGE>
<PAGE> iv
EXHIBIT C-1 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by Warrant
Certificates]
EXHIBIT C-2 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by the Global
Warrant Certificate]
<PAGE>
<PAGE> 1
WARRANT AGREEMENT
THIS AGREEMENT, dated as of January 24, 1994, 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 put 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 Index (as defined herein) 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 Amount, 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.
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(c) Forty-five calendar days after January 24, 1994, each
Warrantholder will have the option to convert the form in which such
Warrantholder holds his Warrants from definitive to book-entry form (the
"Conversion Option"). The Conversion Option will be available for
forty-five calendar days from March 10, 1994 through April 23, 1994 (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 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 equivalent 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
definitive 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.
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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, 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
any securities 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
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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.
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, representing a like number of
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 a like 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
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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.
(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 equivalent number of 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 irrevocable notice of exercise 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 lost, stolen or
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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 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 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 this Section 1.07 shall be
substantially in the form set forth in Exhibit A-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
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with any rule or regulation of any stock exchange on which the Warrants may
be listed or of any Depository referred to herein, 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 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, which
Warrants shall in all respects be identical to Warrants previously issued
and outstanding under this Agreement, 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, New
York, New York (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
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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 notice of
exercise 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 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 corre-
spondent 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 a like number of unexercised Warrants.
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ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise Amounts;
Notice of Exercise. 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 January 17, 1996 (the "Expiration Date"), and (ii)
the Delisting Date (as defined herein). Except in the case of automatic
exercise, each Warrant shall be irrevocably exercised either (i) in the
case of Warrants represented by Warrant Certificates ("Certificated War-
rants"), 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 the Notice of Exercise (as defined below)
or at such other address as the Warrant Agent may specify from time to
time) of the Warrant Certificate representing such Warrant, with the Notice
of Exercise duly completed and executed by the Registered Holder of such
Warrant (or, in the case of Certificated Warrants held through the
facilities of CEDEL or Euroclear, by CEDEL or 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 a Notice of Exercise to the
Warrant 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 Notices of Exercise 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 that no such
minimum exercise amount shall apply in the case 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 Notice of Exercise shall be unconditional. Except as provided in
Section 2.02(b), the
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Warrant Agent shall be entitled, with no duty of inquiry, to rely conclu-
sively on any Notice of Exercise received by it. "Notice of Exercise"
means an irrevocable notice of exercise to the Warrant Agent at its
address, which notice (A) for Certificated Warrants, shall be on the
reverse of the Warrant Certificate or 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 A-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 American Stock Exchange 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.
SECTION 2.02. Exercise and Delivery of Warrants. (a) Except
in the case of exercise on the Expiration Date or the Delisting Date, or in
the event an Extraordinary Event or Exercise Limitation Event is declared,
or in the case 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 (A) 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 (i) for
Certificated Warrants, the Warrant Certificate representing such Warrant,
with the Notice of Exercise or (ii) for Book-Entry Warrants, the Warrant
with the Notice of Exercise 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
Notice of Exercise after 3:00 p.m., New York City time, on such date, then
such Warrant Certificate or Warrant 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 Warrant Certificate or Warrant together with the Notice of
Exercise or (B) 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 or
Warrant Certificate
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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
Notice of Exercise after 3:00 p.m., New York City time, on any New York
Business Day, 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 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 Notice of Exercise; provided, 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 Notice of Exercise 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 (i) the New York Business Day immediately preceding the Expiration
Date or (ii) the last New York Business Day prior to the effective date on
which the Warrants are delisted from, or permanently suspended from trading
(within the meaning of the Securities Exchange Act of 1934 and the rules
and regulations of the Securities and Exchange Commission thereunder) on,
the American Stock Exchange 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 Notice of Exercise
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 the Delisting Date for purposes of this Agreement. For purposes of
this Agreement, "Index Calculation Date" means
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any day the Index (as herein defined) or any Successor Index (as herein
defined) or is calculated and published.
(b) The Warrant Agent shall, in the case of Warrants other
than Warrants held through CEDEL or Euroclear, following receipt of proper
delivery of a Warrant in accordance with Section 2.02(a), accompanied by a
completed Notice of Exercise, and, in the case of Warrants held through
CEDEL or Euroclear, following receipt of proper delivery of a completed
Notice of Exercise in accordance with Section 2.02(a):
(i) promptly (1) for Certificated Warrants not held through
CEDEL or Euroclear, determine whether such Notice of Exercise 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 Notice of Exercise 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 Notice of
Exercise has been duly completed and is in proper form and (4) for
Book-Entry Warrants held through CEDEL or Euroclear, determine
whether such Notice of Exercise 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 Notice of Exercise 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 (X) shall reject
such Notice of Exercise and shall send to the entity that executed
such Notice of Exercise a notice of rejection substantially in the
form set forth in Exhibit B or Exhibit B-1 hereto, as the case may be,
and, in the case of Certificated Warrants, shall return to the
Registered Holder that submitted such Notice of Exercise, 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 Notice of
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that the Warrant Agent shall deliver a copy of the Notice of Exercise
relating to such 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 Notice of Exercise;
(ii) promptly telephone Euroclear to determine whether
Euroclear anticipates that it will be able to provide a Euroclear
Confirmation with respect to each Warrant held through Euroclear for
which a Notice of Exercise was received;
(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 Notice of Exercise has been received (or shall be
deemed to have been received) of (A) the total number of Warrants
covered by such Notice of Exercise, (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;
(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 is not a New York Business Day, on the next
succeeding New York Business Day), Euroclear Confirmations with
respect to such Warrants, 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 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 timing requirement of timely
delivery of such Euroclear Confirmation) send to the Euroclear
participant that executed such Notice of Exercise 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 B or Exhibit B-1 hereto, as the case may be;
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(v) if any of the Warrants covered by such Notice of Exercise
constitute Contingently Tendered Warrants, the Warrant Agent shall,
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 Reference Index (as defined
herein) for such Warrants and the Spot Index (as defined herein) for
the Index Calculation Date that, but for the provisions of Section
2.02(h), would be the Valuation Date for such Warrants; (B) determine
in accordance with Section 2.02(h) 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 Notice of
Exercise, 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 Book-Entry Warrants, that submitted such
Notice of Exercise a notice of rejection substantially in the form
set forth in Exhibit C-1 or Exhibit C-2 hereto, as appropriate, with
respect to such Warrants and return to the Registered Holder (or the
entity that executed the Notice of Exercise, in the case of
Certificated Warrants held through CEDEL or Euroclear) that submitted
such Notice of Exercise, by first class mail, the Warrant
Certificates (to the extent received, in the case of Warrants held
through CEDEL or Euroclear) evidencing such Warrants, or, in the case
of Book-Entry Warrants (to the extent received, in the case of
Warrants held through CEDEL or 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 Exercised 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 Exercised
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
<PAGE>
<PAGE> 15
Warrant Agent shall not take the actions required by clauses (vii)
and (viii) with respect to such Notice of Exercise 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 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 12:00 noon,
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 New York Business Day following the New York
Business Day next succeeding the Valuate Date) of the Cash Settlement
Value payable in respect of the exercise of such Exercised Warrants,
and send notices of confirmation substantially in the form included
in Exhibit B or Exhibit B-1 hereto, as the case may be, to the
appropriate Registered Holder (or the entity that executed the
related Notice of Exercise, 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
Notice of Exercise; and
(ix) promptly deliver a copy of each Notice of Exercise 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 in such case, the exercise of such Warrants
shall be ignored and either (i) for Certificated Warrants, the Warrant
Certificate evidencing such Warrants (to the extent received, in the case
of
<PAGE>
<PAGE> 16
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 Notice of Exercise, in the case of Certificated Warrants held
through CEDEL or Euroclear) by first class mail or (ii) for Book-Entry
Warrants, the Warrants will 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
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 (a) in the
case of Warrants not held through the facilities of the Depository, CEDEL
or Euroclear, in no event be later than 3:00 p.m., New York City time, on
the fifth New York Business Day following a Valuation Date (or, if the
Valuation Date is not a New York Business Day, on the fifth New York
Business Day following the New York Business Day next succeeding the
Valuation Date) and (b) in the case of Warrants held through the facilities
of the Depository, CEDEL or Euroclear, in 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 (i) 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 Notice of Exercise), after 3:00
p.m., New York City time, but prior to the close of business, on the first
New York Business Day immediately succeeding such Settlement Date or (ii)
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 Notice of Exercise), after 3:00 p.m., New York City time,
but prior to the close of business, on the first New York Business Day
immediately succeeding such Settlement Date. For either clause (i) or (ii)
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
<PAGE>
<PAGE> 17
with the related Notice of Exercise) as provided in Sections 2.01 and
2.02(a) and (b).
(d) The "Cash Settlement Value" of an exercised Warrant shall
be an amount in U.S. dollars equal to the quotient (rounded down to the
nearest cent) of (A) the amount, if any, by which 541.73 (the "Strike
Index") exceeds the closing level of the Index as compiled and published by
the AMEX, on the applicable Valuation Date for such Warrant (the "Spot
Index"), divided by three, divided by (C) the exchange rate of H.K. $7.726
per $1.00; provided, however, that if such amount is less than zero, then
the Cash Settlement Value shall be zero.
The "Index" is the AMEX Hong Kong 30 Index designed, developed,
maintained and operated by the American Stock Exchange (the "AMEX").
References in this Agreement to "U.S. dollars", "U.S.$" or "$" are to the
lawful currency of the United States of America, and references to "Hong
Kong dollars" or "H.K.$" are to the lawful currency of Hong Kong.
(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 hereby appoints PaineWebber Incorporated, and
PaineWebber Incorporated 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 Cash Settlement
Value or the Alternative Settlement Amount, as applicable, of a Warrant.
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 Warrant-
holders 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
<PAGE>
<PAGE> 18
shall at all times be a Determination Agent hereunder until all the
Warrants are no longer outstanding or until moneys 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, which-
ever 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 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) In the event that the Index is not calculated and publicly
announced by the AMEX on a Valuation Date but is calculated and publicly
announced by another person or party not affiliated with the Company and
acceptable to the Company (the "Third Party"), the applicable Cash
Settlement Value shall nevertheless be calculated by reference to the value
of the closing quotation for the Index so announced by the Third Party.
In the event that prior to a Valuation Date the AMEX or the
Third Party makes a material change in the formula for, or the method of
calculating the Index, the Determination Agent shall make such calculations
as may be required to determine the applicable Cash Settlement Value using
the formula and method of calculating the Index as was in effect prior to
such change or modification.
<PAGE>
<PAGE> 19
If on a Valuation Date either the AMEX or any Third Party
discontinues publication of the Index and publishes a successor or
substitute index that the Company determines, in its sole discretion, to be
comparable to the Index (any such index being a "Successor Index"), the
Determination Agent shall determine the Spot Index for any date thereafter
based on the closing level of the Successor Index on such date. If the
AMEX and/or any Third Party discontinues publication of the Index and/or
any Successor Index, the Company will cause the Determination Agent to
determine the applicable Cash Settlement Value based on the formula and
method used in calculating the Index or any Successor Index as in effect on
the date the Index or such Successor Index was last published.
If calculation or publication of the Index or a Successor Index
is modified, discontinued or suspended, as provided in this Section
2.02(g), then the Determination Agent shall promptly notify the Warrant
Agent, and the Warrant Agent shall in turn promptly notify the Warrant-
holders in accordance with Section 6.04 hereof, of such modification,
discontinuance or suspension and of any modification or adjustment to be
made with respect to calculation of the Cash Settlement Value or
Alternative Settlement Amount, as applicable.
The Determination Agent will have no responsibility for good
faith errors or omissions in calculating or disseminating information
regarding the Index, any Successor Index, adjustments or calculations by
the Determination Agent (as provided above) in order to arrive at a
calculation of a stock index comparable to the Index or any Successor
Index, or the Cash Settlement Value or the Alternative Settlement Amount,
as applicable.
(h) Except in the case of an automatic exercise (as provided
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 Notice of Exercise 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), be subject to the condition that the Spot Index that would
otherwise be used to determine the Cash Settlement Value of such Warrants
not be 20 or more points higher than the Reference Index for such Warrants.
"Reference Index", with respect to any Contingently Tendered Warrants,
means the Spot Index on the New York Business Day that such Notice of
Exercise has been received (or shall be deemed to have
<PAGE>
<PAGE> 20
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(h) 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 Notice of Exercise. Each of the Warrant Agent and the
Company shall be entitled to rely conclusively on such Notice of
Exercise, 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 Warrants to the Limit Option; provided 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 Notice of Exercise that
are subject to the Limit Option is an amount that is not less than
500.
(ii) The Reference Index shall be determined by the Warrant
Agent, which determination shall be conclusive and binding for all
purposes relating to such exercise.
(iii) In the event that the Spot Index for the first Index
Calculation Date following the New York Business Day that such Notice
of Exercise has been received (or shall be deemed to have been
received) (i.e., for the day that, but for the provisions of Section
2.02(h), would be the Valuation Date for such Warrants) is 20 or more
points higher than 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 Notice of Exercise had
never been received by the Warrant Agent, and (B) shall not
constitute "Exercised Warrants" for purposes of Section 2.02(b). If
such Spot Index is not 20 or more points higher than 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
<PAGE>
<PAGE> 21
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 Notice of Exercise 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 a Notice of Exercise in proper
form by 3:00 p.m., New York City time, on (i) the New York Business Day
immediately preceding the Expiration Date or (ii) the Delisting Date, as
the case may be, or for which the Warrant Agent has received a Notice of
Exercise in proper form but 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 a Notice of Exercise 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 on 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. On the Valuation Date for such
Warrants (or, if such Valuation Date is not a New York Business Day, on the
next succeeding New York Business Day), the Warrant Agent shall (i)
determine 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
<PAGE>
<PAGE> 22
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 all 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 Limita-
tion 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 fourth 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 fourth 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 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 the 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 in the amount of the aggregate
Cash Settlement Value 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. Warrant Certificates delivered to
the Warrant Agent shall thereafter be promptly canceled by the Warrant
Agent.
<PAGE>
<PAGE> 23
In the case of Book-Entry Warrants subject to automatic
exercise (other than 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, 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 check to be in an amount equal to the
aggregate Cash Settlement Value of the 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 Warrant-
holders, 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 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 Hong Kong Business Day with respect to
which the Spot Index on a Valuation Date is to be determined (the
"Applicable Hong Kong 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 Hong Kong Business
Day on which there is no Extraordinary Event
<PAGE>
<PAGE> 24
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 for 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 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 the greater of (i) the
average of the last sale prices, as available, of the Warrants on the AMEX
(or any successor securities exchange on which the Warrants are listed) on
the
<PAGE>
<PAGE> 25
30 trading days preceding the date on which such Extraordinary Event was
declared; provided that, if the Warrants were not traded on the AMEX (or
such successor securities exchange) on at least 20 of such trading days, no
effect will be given to this clause (i) for the purpose of determining the
Alternative Settlement Amount, and (ii) the amount "X" calculated using the
formula set forth below:
_ _
| |
| T x A |
X = I + |___ ___|
| 2 B |
|_ _|
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 Calculation Date for such Warrants is a date on
which the Index or a Successor Index is calculated and published, for
the purpose of determining such Cash Settlement Value, the Spot Index
will be determined as of such Cancellation Date except that, if the
Spot Index as of such day is less than 90% of the Spot Index as of
the immediately preceding Index Calculation Day, then the Spot Index
will be deemed to be 90% of the Spot Index on such preceding Index
Calculation Day; or
(2) if the Calculation Date for such Warrants is a date on
which the Index or a Successor Index is not calculated or published,
for the purpose of determining such Cash Settlement Value, the Spot
Index will be deemed to be the lesser of (i) the Spot Index as of the
first Index Calculation Day immediately preceding the Cancellation
Date except that, if the Spot Index as of such day is less than 90%
of the Spot Index as of the second Index Calculation Day immediately
preceding such Cancellation Date, 90% of the Spot Index as of such
second Index Calculation Day and (ii) the arithmetic average of four
amounts, being (a) the Spot Index at each of the three successive
Index Calculation Days immediately preceding the Cancellation Date
and (b) the Spot Index at the next Index Calculation Day; 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 which comprise the Index or
any Successor Index on the Index Calculation Day immediately
following such Cancellation
<PAGE>
<PAGE> 26
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. $5.125
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) above 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 Hong Kong Stock
Exchange Ltd. (the "HKSE") of all the stocks which then comprise the
Index or a successor index; or
(ii) the enactment, publication, decree or other promulgation
of any statute, regulation, rule or order
<PAGE>
<PAGE> 27
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 Hong Kong or the
trading of securities generally on the HKSE) 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 HKSE, and (2) an "absence of
trading" on the HKSE will not include any time when the HKSE 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 HKSE of (a) 20%
or more of the stocks which then comprise the Index or a Successor
Index and/or (b) the stocks of any three of the four most highly
capitalized companies included in the stocks which then comprise the
Index or a Successor Index; or
(ii) the suspension or material limitation on the Hong Kong
Futures Exchange Ltd. (the "HK Futures Exchange") or any other major
futures or securities market of trading in futures or options
contracts related to the Hang Seng Index, the Index or a Successor
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 on the Hang Seng Index, the Index
or a
<PAGE>
<PAGE> 28
Successor Index by the HK Futures Exchange or other major futures or
securities market by reason of (x) a price change violating limits set by
the HK Futures Exchange 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 Hang Seng Index, the Index, or a Successor Index (4) an "absence of
trading" on the HK Futures Exchange or a major futures or securities market
on which futures or options contracts related to the Hang Seng Index, the
Index or a Successor Index are traded will not include any time when the HK
Futures Exchange or such futures or securities market, as the case may be,
itself 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 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 of such
holders, Warrants so that no 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
(subject to successive applications of this Section 2.04); provided that
any Remaining Warrant in respect of which a Notice of Exercise was
delivered on a given Notice Date shall be deemed exercised before any other
Warrants in respect of which a Notice of Exercise 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
<PAGE>
<PAGE> 29
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 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 Warrants.
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 AMEX 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 or Alternative Settlement Amount 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 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) or otherwise canceled 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.
<PAGE>
<PAGE> 30
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.
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 which tax or other governmental charge shall be paid by the
appropriate Warrantholder or Registered Holder.
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,
<PAGE>
<PAGE> 31
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 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
<PAGE>
<PAGE> 32
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 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 moneys at any time received by it pursuant to any of
the provisions of this Agreement nor shall it be obligated to
segregate such moneys from other moneys held by it, except as
required by law. The Warrant Agent shall not be responsible for
advancing funds on behalf of the Company.
<PAGE>
<PAGE> 33
(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 authorization,
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 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 moneys 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
<PAGE>
<PAGE> 34
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 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 suc-
cessor 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 origi-
nally named as Warrant Agent hereun-
<PAGE>
<PAGE> 35
der, 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
moneys, 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 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 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 4,100,000 Warrants unless and until the Warrant Agent has received
notice from the AMEX or any successor United States national securities
exchange that the additional Warrants in excess of 4,100,000 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 decreases the Strike
Index, shortens the period of time during which the Warrants may be
exercised, or otherwise
<PAGE>
<PAGE> 36
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 (i) in the case of Certificated
Warrants, the Warrant Agent to the Warrantholders or (ii) 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 AMEX or any successor national securities
exchange and (b) any and all filings or notices under United States Federal
and state securities laws, which
<PAGE>
<PAGE> 37
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 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, 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 in
any number of counterparts, each of which so executed shall be deemed to be
an original; but such counterparts shall together constitute but one and
the same instrument.
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.
<PAGE>
<PAGE> 38
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 /s/ DAVID A. DAMI
Name: David A. Dami
Title: Attorney-in-Fact
CITIBANK, N.A.
By /s/ JOHN REASOR
Name: John Reasor
Title: Assistant Vice President
PAINEWEBBER INCORPORATED
By /s/ JOHN C. BRADDOCK
Name: John C. Braddock
Title: Vice President
<PAGE>
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
No. P- CUSIP No. 695629261
PAINE WEBBER GROUP INC.
AMEX Hong Kong 30 Index Put Warrants
Expiring January 17, 1996
This Warrant Certificate certifies that
, or registered assigns, is the registered holder of
AMEX Hong Kong 30 Index Put Warrants Expiring
January 17, 1996 (the "Warrants"). Upon receipt by the Warrant Agent of
this Warrant Certificate and the notice of exercise on the reverse hereof
(or a notice of exercise 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
(the "Cash Settlement Value") equal to the quotient (rounded down to the
nearest cent) of (A) the amount, if any, by which 541.73 (the "Strike
Index") exceeds the closing level of the AMEX Hong Kong 30 Index (the
"Index"), as compiled and published by the American Stock Exchange
("AMEX"), on the applicable Valuation Date for such Warrant (the "Spot
Index"), divided by (B) three, divided by (C) a fixed Hong Kong dollar/U.S.
dollar exchange rate of H.K.$7.726 per U.S. $1.00; provided, however, that
if such amount is less than or equal to 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 January 17, 1996 (the "Expiration
Date") and (ii) the Delisting Date (as defined herein), at which time the
Warrants shall expire and
<PAGE>
<PAGE> A-2
all Warrants evidenced hereby shall be automatically exercised and
otherwise shall be void. Except in the case 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.
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: January 24, 1994 PAINE WEBBER GROUP INC.
By______________________
Donald B. Marron
Chairman and Chief
Executive Officer
[SEAL]
Attest:
By________________________
Theodore A. Levine
Secretary
Countersigned as of the
date above written:
CITIBANK, N.A.,
as Warrant Agent
By_________________________
Authorized Officer
<PAGE>
<PAGE> A-3
[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 January 24, 1994 (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 notice of exercise
(or a notice of exercise 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]. 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 an exercised Warrant shall be an
amount in U.S. Dollars equal to the quotient (rounded down to the nearest
cent) of (A) the amount, if any, by which 541.73 (the "Strike Index")
exceeds the closing level of the Index, as compiled and published by the
AMEX, on the applicable Valuation Date (as defined herein) for such Warrant
(the "Spot Index"), divided by (B) three, divided by (C) a fixed Hong Kong
dollar/U.S. dollar
<PAGE>
<PAGE> A-4
exchange rate of H.K.$7.726 per U.S. $1.00; provided, however, that if such
amount is less than or equal to zero, then the Cash Settlement Value shall
be zero.
The Company has appointed PaineWebber Incorporated 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 Cash
Settlement Value under certain circumstances or the Alternative Settlement
Amount (as defined herein), as applicable, of a Warrant. 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.
In the event that the Index is not publicly announced by the
AMEX on a Valuation Date, but is publicly announced by another person or
party not affiliated with the Company and acceptable to the Company (the
"Third Party"), the applicable Cash Settlement Value shall nevertheless be
calculated by reference to the value of the closing quotation for the Index
so announced by the Third Party.
In the event that prior to a Valuation Date the AMEX or the
Third Party makes a material change in the formula for or the method of
calculating the Index, the Determination Agent shall make such calculations
as may be required to determine the applicable Cash Settlement Value using
the formula and method of calculating the Index as was in effect prior to
such change or modification.
If on a Valuation Date either the AMEX or any Third Party
discontinues publication of the Index and publishes a successor or
substitute index that the Company determines, in its sole discretion, to be
comparable to the Index (any such index being a "Successor Index"), then
the Determination Agent shall determine the Spot Index for any date
thereafter based on the closing level of the Successor Index on such date.
If the AMEX and/or any Third Party discontinues publication of the Index
and/or any Successor Index, the Company will cause the Determination Agent
to determine the applicable Cash Settlement Value based on the formula and
method used in calculating the Index or any Successor Index as in effect on
the date the Index or such Successor Index was last published.
<PAGE>
<PAGE> A-5
The Determination Agent will have no responsibility for good
faith errors or omissions in calculating or disseminating information
regarding the Index, any Successor Index, adjustments or calculations by
the Determination Agent in order to arrive at a calculation of a stock
index comparable to the Index or any Successor Index, or the Cash
Settlement Value or the Alternative Settlement Amount, as applicable.
Subject to the Warrant Agreement and this Warrant Certificate,
and except in the case of exercise (whether automatic or by notice of
exercise) 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 notice of exercise below
(or a notice of exercise in substantially identical form delivered here-
with), 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 Day on which the Warrant Agent is deemed to have received
such Warrant Certificate together with the notice of exercise 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 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
<PAGE>
<PAGE> A-6
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 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 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 (i) the New York Business Day immediately preceding the
Expiration Date or (ii) the last New York Business Day prior to the
effective date on which the Warrants are delisted from, or permanently
suspended from trading (within the meaning of the Securities Exchange Act
of 1934 and the rules and regulations of the Securities and Exchange
Commission thereunder) on, the American Stock Exchange 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 notice of exercise 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 the Delisting Date for
purposes of the Warrant Agreement and this Warrant Certificate.
If the notice of exercise 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. 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
<PAGE>
<PAGE> A-7
zero, then in such case, the exercise of such Warrants shall be ignored and
the Warrant Certificate evidencing such Warrants will be promptly returned
by the Warrant Agent to the registered holder of the Warrant by first class
mail at the Company's expense and such holder shall be permitted to
re-exercise such Warrants prior to the Expiration Date or the Delisting
Date.
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 the appropriate holders on the fifth 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 fifth 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 holder in the United States (at
the holder's election as specified in the notice of exercise), in an amount
equal to the aggregate Cash Settlement Value of the exercised Warrants.
All Warrant Certificates for which the Warrant Agent has not
received a notice of exercise in proper form by 3:00 p.m., New York City
time, on (i) the New York Business Day preceding the Expiration Date or
(ii) the Delisting Date, as the case may be, or for which the Warrant Agent
has received a notice of exercise in proper form but with respect to which
timely delivery of the relevant Warrant Certificate 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 a notice of
exercise to the Warrant Agent. The Valuation Date for such Warrants shall
be the first Index Calculation Date 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.
<PAGE>
<PAGE> A-8
Payment with respect to automatically exercised Warrants 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 fourth 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 fourth New York Business Day following the
New York Business Day next succeeding such Valuation Date), against receipt
by the Warrant Agent at the Warrant Agent's Office from the 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 exercised (whether automatically or by notice of
exercise) 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 Hong Kong Business Day (as defined herein) with respect
to which the Spot Index on a Valuation Date is to be determined (the
"Applicable Hong Kong 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 Hong Kong 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 Option) on the basis that the Valuation Date for such Warrant shall
be the Cancellation Date and each Warrantholder shall have the
<PAGE>
<PAGE> A-9
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,
calculated by the Determination Agent, which shall be determined by the
Determination Agent, which is the greater of (i) the average of the last
sale prices, as available, of the Warrants on the AMEX (or any successor
securities exchange on which the Warrants are listed) on the 30 trading
days preceding the date on which such Extraordinary Event was declared,
provided that, if the Warrants were not traded on the AMEX (or such
successor securities exchange) on at least 20 of such trading days, no
effect will be given to this clause (i) for the purpose of determining the
Alternative Settlement Amount, and (ii) the amount "X" calculated using the
formula set forth below:
_ _
| |
| T x A |
X = I + |___ ___|
| 2 B |
|_ _|
where
I = the Cash Settlement Value of the Warrants determined as
described above but, subject to the following
modifications:
(1) if the Calculation Date for such Warrants is a date
on which the Index or a Successor Index is calculated and
published, for
<PAGE>
<PAGE> A-10
the purpose of determining such Cash Settlement Value, the Spot
Index will be determined as of such Cancellation Date except
that, if the Spot Index as of such day is less than 90% of the
Spot Index as of the immediately preceding Index Calculation
Day, then the Spot Index will be deemed to be 90% of the Spot
Index on such preceding Index Calculation Day; or
(2) if the Calculation Date for such Warrants is a date
on which the Index or a Successor Index is not calculated or
published, for the purpose of determining such Cash Settlement
Value, the Spot Index will be deemed to be the lesser of (i)
the Spot Index as of the first Index Calculation Day
immediately preceding the Cancellation Date except that, if the
Spot Index as of such day is less than 90% of the Spot Index as
of the second Index Calculation Day immediately preceding such
Cancellation Date, 90% of the Spot Index as of such second
Index Calculation Day and (ii) the arithmetic average of four
amounts, being (a) the Spot Index at each of the three
successive Index Calculation Days immediately preceding the
Cancellation Date and (b) the Spot Index at the next Index
Calculation Day; 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 which comprise the Index or
any Successor Index on the Index Calculation Day 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. $5.125, 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.
<PAGE>
<PAGE> A-11
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 upon which such Alternative Settlement Amount may
be calculated in accordance with the above formula, agreed upon a figure
under clause 2(ii)(b) above 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.
An "Extraordinary Event" shall mean any one of the events,
circumstances or causes listed below:
(i) a suspension or absence of trading on the Hong Kong
Stock Exchange Ltd. (the "HKSE") of all of the stocks which then
comprise the Index or a successor or substitute index that the
Company determines, in its sole discretion, to be comparable to the
Index (a "Successor 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 render it
unlawful for the Company to perform any of its obligations under the
Warrant 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 Hong Kong or the
trading of securities generally on the HKSE) 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.
<PAGE>
<PAGE> A-12
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 HKSE of (a) 20%
or more of the stocks which then comprise the Index or a Successor
Index and/or (b) the stocks of any three of the four most highly
capitalized companies included in the stocks which then comprise the
Index or a Successor Index; or
(ii) the suspension or material limitation on the Hong Kong
Futures Exchange Ltd. (the "HK Futures Exchange") or any other major
futures or securities market of trading in futures or options
contracts related to the Hang Seng Index, the Index or a Successor
Index.
All exercises of Warrants (other than on the Expiration Date or
the Delisting Date or upon cancellation of the Warrants 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 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 of the Warrants would be deemed to have exercised less
than 500 Warrants, then the Warrant Agent shall first select additional of
such holders' Warrants so that no 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
(subject to successive applications of this paragraph); provided that any
Remaining Warrant in respect of which a notice of exercise was delivered on
a given Notice Date shall be deemed exercised before any other Warrants in
respect of which a notice of exercise 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 such New York Business
Day), 250,000 of such Warrants shall be deemed exercised on
<PAGE>
<PAGE> A-13
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 Warrants.
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, 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, representing a like 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.
<PAGE>
<PAGE> A-14
Capitalized terms included herein but not defined herein have
the meanings assigned thereto in the Warrant Agreement.
References herein to "U.S. dollars", "U.S. $" or "$" are to the
lawful currency of the United States of America, and references to "Hong
Kong dollars" or "H.K.$" are to the lawful currency of Hong Kong. As used
herein, a "New York Business Day" means any day other than a Saturday,
Sunday or a day on which either the AMEX 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 "Hong
Kong Business Day" means any day other than a Saturday or a Sunday or a day
on which commercial banks in Hong Kong are not open for a full day of
business; and an "Index Calculation Date" means any day on which the Index
or any Successor 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.
<PAGE>
<PAGE> A-15
NOTICE OF EXERCISE
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 Notice of Exercise 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 Spot Index used to determine the Cash Settlement Value of Contingently
Tendered Warrants exceeds the Reference Index by 20 points or more, a
Notice of Exercise 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
Notice of Exercise 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;
or
[ ] 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.:
<PAGE>
<PAGE> A-16
Account No.: Reference:
; 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: ( )
<PAGE>
<PAGE>
EXHIBIT A-1
[FORM OF GLOBAL WARRANT CERTIFICATE]
No. GP___________________ CUSIP No. 695629261
PAINE WEBBER GROUP INC.
Global Warrant Certificate Representing
AMEX Hong Kong 30 Index Put Warrants
Expiring January 17, 1996
This certifies that CEDE & CO., or registered assigns, is the
registered holder of AMEX Hong Kong 30 Index Put Warrants Expiring
January 17, 1996 (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 (the
"Cash Settlement Value") equal to the quotient (rounded down to the nearest
cent) of (A) the amount, if any, by which 541.73 (the "Strike Index")
exceeds the closing level of the AMEX Hong Kong 30 Index (the "Index"), as
compiled and published by the American Stock Exchange (the "AMEX"), on the
applicable Valuation Date for such Warrant (the "Spot Index"), divided by
(B) three, divided by (C) a fixed Hong Kong dollar/U.S. dollar exchange
rate of H.K.$7.726 per U.S. $1.00; provided, however, that if such amount
is less than or equal to 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 (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 January 17,
1996 (the "Expiration Date") and (ii) the Delisting Date (as defined
herein), at which time the Warrants shall expire and all Warrants evidenced
hereby shall be automatically exercised and otherwise shall be void. The
holder of Warrants evidenced by this Warrant Certificate may exercise them
only upon the delivery of such Warrant free to the Warrant Account (as
defined in the Warrant Agreement) and pursuant to an irrevocable Notice of
Exercise to the Warrant Agent from a Participant (as defined in the Warrant
Agreement) acting on behalf of such Warrantholder. Except in the case of
automatic exercise or
<PAGE>
<PAGE> A-1-2
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 January 24, 1994 (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 Warrant Certificate by the Depository 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, 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 case of exercise (whether automatic or by
notice of exercise), on the Expiration Date or the Delisting Date, or in
the event an Extraordinary Event or Exercise Limitation Event (as such
terms are defined 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 Index Calculation Date (as
defined herein) following the 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, with the Notice of Exercise (as defined in the
Warrant Agreement) (or a Notice of Exercise 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
<PAGE>
<PAGE> A-1-3
shall receive any such Warrant after 3:00 p.m., New York City time, on such
date, then such Warrant 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 Warrant together with the Notice of Exercise 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 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 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 notice of exercise; 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, 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 Notice of Exercise or waive the requirement for timely
delivery of such telex communication. Any Warrant received after 3:00
p.m., New York City time, on (i) the New York Business Day immediately
preceding the Expiration Date or (ii) the last New York Business Day prior
to the effective date on which the Warrants are delisted from, or
permanently suspended from trading (within the meaning of the Securities
Exchange Act of 1934 and the rules and regulations of the Securities and
Exchange Commission thereunder) on, the American Stock Exchange 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
<PAGE>
<PAGE> A-1-4
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 Notice of
Exercise 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 the Delisting Date for purposes of the Warrant
Agreement and this Global Warrant Certificate.
All Warrants for which the Warrant Agent has not received a
Notice of Exercise in proper form by 3:00 p.m., New York City time, on (i)
the New York Business Day preceding the Expiration Date or (ii) the
Delisting Date, as the case may be, or for which the Warrant Agent has
received a notice of exercise in proper form but with respect to which
timely delivery of the related Warrant 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 a Notice of Exercise to
the Warrant Agent. The Valuation Date for such Warrants shall be the first
Index Calculation Date 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 Hong Kong Business Day (as defined herein) with respect
to which the Spot Index on a Valuation Date is to be determined (the
"Applicable Hong Kong Business Day"), then the Cash Settlement Value of
such Warrants in respect on an exercise shall be calculated on the basis
that the Valuation Date shall be the next Index Calculation Date following
an Applicable Hong Kong 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
<PAGE>
<PAGE> A-1-5
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 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 of the Warrants 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 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
Warrantholders would be deemed to have exercised less than 500 Warrants,
then the Warrant Agent shall first select additional of such holders'
Warrants so that no 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 (subject
to successive applications of this paragraph); provided that any Remaining
Warrant in respect of which notice of exercise was delivered on a given
Notice Date shall be deemed exercised before any other Warrants in respect
of which a notice of exercise 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
<PAGE>
<PAGE> A-1-6
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 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
Warrants.
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 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 are 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", "U.S.$" or "$" are to the
lawful currency of the United States of America, and references to "Hong
Kong dollars" or "H.K.$" are to the lawful currency of Hong Kong. As used
herein, a
<PAGE>
<PAGE> A-1-7
"New York Business Day" means any day other than a Saturday, Sunday or a
day on which either the AMEX 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 "Hong Kong
Business Day" means any day other than a Saturday or a Sunday or a day on
which commercial banks in Hong Kong are not open for a full day of
business; and an "Index Calculation Date" means any day on which the AMEX
Index or any Successor Index is calculated and published.
The Warrant Agreement and the terms of the Warrants are subject
to amendment, as provided in the Warrant Agreement.
<PAGE>
<PAGE> A-1-8
THIS GLOBAL WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused this
instrument to be duly executed.
Dated: , 1994 PAINE WEBBER GROUP INC.
By_________________________
Name:
Title:
[Corporate Seal]
Attest:
By__________________________
Assistant Secretary
Countersigned as of the
date above written:
CITIBANK, N.A.,
as Warrant Agent
By__________________________
Authorized Officer
<PAGE>
<PAGE>
EXHIBIT A-2
NOTICE OF EXERCISE
[For Warrants Represented by the Global Warrant Certificate]
Citibank, N.A.
c/o Citicorp Data Distribution Inc.
404 Sette Drive
Paramus, New Jersey 07652
(Facsimile: (201) 262-7521)
(Telephone: (201) 262-5444)
1. We refer to the Warrant Agreement dated as of January 24,
1994 (the "Warrant Agreement"), among Paine Webber Group Inc. (the
"Company"), Citibank, N.A., as warrant agent (the "Warrant Agent"), and
PaineWebber Incorporated, as determination 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 Notice of
Exercise and whose Warrants have been, or will be, 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 Notice of
Exercise must be received by you by 3:00 p.m., New York City time, on a New
York Business Day in order for the Valuation Date for the Tendered Warrants
to be the Index Calculation Date following such New York Business Day and
that, if the Warrants being exercised and this Notice of Exercise 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 the
Warrants are not received by 3:00 p.m., New York City time, on the first
Index Calculation Date following such New York Business Day), the Valuation
Date of the Tendered Warrants shall be the next Index Calculation Date next
succeeding such New York Business Day, in each case subject to certain
provisions of the Warrant Agreement.
2. If you determine that this Notice of Exercise has not been
duly completed or is not in proper form, this Notice of Exercise will be
void and of no effect and will be deemed not to have been delivered.
<PAGE>
<PAGE> A-2-2
3. We hereby direct you to make payment to us of amounts
payable to our clients as a result of the exercise of the Warrants
hereunder as follows:
[ ] By cashier's check or an official bank
check;
or
[ ] By wire transfer to the following U.S.
dollar bank account in the United
States:
(Minimum payments of $100,000 only)
Bank:
Account No.:
ABA Routing No.:
Reference:
4. The Exercised Warrants covered hereby [are] [are not]
subject to the Limit Option.1/
5. Each client on whose behalf we are exercising Warrants
pursuant to this Notice of Exercise 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.]
1/ Separate Notice of Exercise shall be submitted with respect to
Warrants subject to the Limit Option and Warrants not subject to the Limit
Option.
<PAGE>
<PAGE> A-2-3
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: ( )
<PAGE>
<PAGE>
EXHIBIT B
CONFIRMATION OF EXERCISE
[For Warrants Represented by Warrant Certificates]
We hereby confirm receipt of your Notice of Exercise with
respect to Warrants (the "Exercised Warrants") and the
related Warrant Certificates, which we have found to be duly completed and
in proper form. The Valuation Date of the Exercised Warrants was the close
of business on ____________, 19__.
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 cashiers check or an official bank
check] [by wire transfer to the bank account designated in your Irrevocable
Notice of Exercise], in New York Clearing House funds, for payment on the
fifth New York Business Day following the Valuation Date for such Warrants
(or, if such Valuation Date is not a New York Business Day, on the fifth
New York Business Day following the New York Business Day next succeeding
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 January 24,
1994, among Paine Webber Group Inc., Citibank, N.A., and PaineWebber
Incorporated.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By_______________________
Authorized Signature
<PAGE>
<PAGE> B-2
NOTICE OF REJECTION
You are hereby notified that [the Notice of Exercise delivered
by you was determined by us not to have been [duly completed] [in proper
form]] [we did not receive from Euroclear a Euroclear Confirmation that
proper delivery of the Warrants to which the Notice of Exercise delivered
by you relates would be made on a timely basis], as set forth in the
Warrant Agreement, dated as of January 24, 1994, among Paine Webber Group
Inc., Citibank, N.A., and PaineWebber Incorporated. Accordingly, we have
rejected your Notice of Exercise [as being unsatisfactory as to form].
Capitalized terms used but not defined herein have the meanings
assigned thereto in the Warrant Agreement.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By__________________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT B-1
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 Notice of Exercise
with respect to Warrants (the "Exercised Warrants") which were
transferred by you (or on your behalf) to our DTC Participant Account No. [
]. Such 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
______________, 19__.
[As set forth in your Notice of Exercise, 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 Notice of Exercise stated
that the Warrants covered thereby are subject to the Limit Option. The
applicable Reference Index for such Warrants is and the Spot
Index for the date that would otherwise be the Valuation Date for such
Warrants is . Such Spot Index does not exceed such Reference Index
by 20 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 cashiers check or an
official bank check] [by wire transfer to the bank account designated in
your Irrevocable Notice of Exercise], in New York Clearing House funds, for
payment on the sixth New York Business Day following the Valuation Date for
such 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 for such Warrants).
Capitalized terms included herein but not defined
have the meanings assigned thereto in the Warrant Agreement dated as of
January 24, 1994, among Paine Webber Group Inc., Citibank, N.A., as Warrant
Agent, and PaineWebber Incorporated, as Determination Agent.
<PAGE>
<PAGE> B-1-2
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By________________________
Authorized Signature
<PAGE>
<PAGE> B-1-3
NOTICE OF REJECTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
You are hereby notified that [the Notice of Exercise
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. [ ] [we did not receive from Euroclear a Euroclear
Confirmation that proper delivery of the Warrants to which the Notice of
Exercise delivered by you relates would be made on a timely basis], as set
forth in the Warrant Agreement, dated as of January 24, 1994, among
Paine Webber Group Inc., Citibank, N.A., and PaineWebber Incorporated.
Accordingly, we have rejected your Notice of Exercise as being
unsatisfactory as to form.
Capitalized terms used but not defined herein have
the meanings assigned thereto in the Warrant Agreement.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By______________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT C-1
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[For Warrants Represented
by Warrant Certificates]
We refer to your Notice of Exercise dated
, 19 , with respect to Warrants that were subject to
the Limit Option. The applicable Reference Index for such Warrants is
and the Spot Index for the date that would otherwise be the Valuation
Date for such Warrants is . Such Spot Index exceeds the Reference Index
on the Exercise Date (or if such date was not an Index Calculation Date, on
the Index Calculation Date prior to the Exercise Date for such Warrants) by
20 points or more. Accordingly, we have rejected such Notice of Exercise
pursuant to the Limit Option.
Capitalized terms included herein but not defined
have the meanings assigned thereto in the Warrant Agreement dated as of
January 24, 1994, among Paine Webber Group Inc., Citibank, N.A., and
PaineWebber Incorporated.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By_______________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT C-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 Notice of Exercise dated
, 19 , with respect to Warrants that were subject to
the Limit Option. The applicable Reference Index for such Warrants is and
the Spot Index for the date that would otherwise be the Valuation Date for
such Warrants is . Such Spot Index exceeds the Reference Index
on the Exercise Date (or if such date was not an Index Calculation Date, on
the Index Calculation Date prior to the Exercise Date for such Warrants) by
20 points or more. Accordingly, we have rejected such Notice of Exercise
pursuant to the Limit Option.
Capitalized terms included herein but not defined
have the meanings assigned thereto in the Warrant Agreement dated as of
January 24, 1994, among Paine Webber Group Inc., Citibank, N.A., and
PaineWebber Incorporated.
Dated: , 19
CITIBANK, N.A., as Warrant Agent,
By_______________________
Authorized Signature
<PAGE> 1
Exhibit 4.2
PAINE WEBBER GROUP INC.
and
CITIBANK, N.A., Warrant Agent
and
PAINEWEBBER INCORPORATED, Determination Agent
WARRANT AGREEMENT
dated as of January 24, 1994
AMEX Hong Kong 30 Index Call Warrants
Expiring January 17, 1996
<PAGE>
<PAGE> i TABLE OF CONTENTS1/
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 . . . . . . . . . . . . . . . 3
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; Notice
of Exercise . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.02. Exercise and Delivery of
Warrants . . . . . . . . . . . . . . . . . . . . 10
1/ The Table of Contents is not a part of the Warrant Agreement.
<PAGE>
<PAGE> ii
SECTION 2.03. Automatic Exercise of Warrants;
Exercise upon an Extraordinary Event
or Exercise Limitation Event . . . . . . . . . . 21
SECTION 2.04. Limitation of Number of Exercisable
Warrants . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.05. Covenant of the Company . . . . . . . . . . . . . . 28
SECTION 2.06. Return of Money Held Unclaimed for
Two Years . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.07. Return of Global Warrant
Certificate . . . . . . . . . . . . . . . . . . . 29
ARTICLE III
OTHER PROVISIONS RELATING TO
RIGHTS OF WARRANTHOLDERS
SECTION 3.01. Warrantholder of Warrant May Enforce
Rights . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE IV
WARRANTS ACQUIRED BY THE COMPANY;
PAYMENT OF TAXES
SECTION 4.01. Warrants Acquired by the Company . . . . . . . . . 29
SECTION 4.02. Payment of Taxes . . . . . . . . . . . . . . . . . 30
ARTICLE V
CONCERNING THE WARRANT AGENT
SECTION 5.01. Warrant Agent . . . . . . . . . . . . . . . . . . . 30
SECTION 5.02. Conditions of Warrant Agent's
Obligations . . . . . . . . . . . . . . . . . . . 30
SECTION 5.03. Resignation and Appointment of
Successor . . . . . . . . . . . . . . . . . . . . 33
<PAGE>
<PAGE> iii
ARTICLE IV
MISCELLANEOUS
SECTION 6.01. Amendment . . . . . . . . . . . . . . . . . . . . . 34
SECTION 6.02. Notices and Demands to the Company,
the Warrant Agent and the
Determination Agent . . . . . . . . . . . . . . . 35
SECTION 6.03. Addresses for Notices . . . . . . . . . . . . . . . 35
SECTION 6.04. Notices to Holders . . . . . . . . . . . . . . . . 35
SECTION 6.05 Obtaining of Approvals . . . . . . . . . . . . . . 36
SECTION 6.06. Persons Having Rights Under This
Agreement . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.07. Inspection of Agreement . . . . . . . . . . . . . . 36
SECTION 6.08. Headings . . . . . . . . . . . . . . . . . . . . . 36
SECTION 6.09. Counterparts . . . . . . . . . . . . . . . . . . . 37
SECTION 6.10. APPLICABLE LAW . . . . . . . . . . . . . . . . . . 37
TESTIMONIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
EXHIBIT A - Form of Warrant Certificate
EXHIBIT A-1 - Form of Global Warrant Certificate
EXHIBIT A-2 - Notice of Exercise
[For Warrants Represented by the Global
Warrant Certificate]
EXHIBIT B - Confirmation of Exercise and Notice
of Rejection [For Warrants Represented by
Warrant Certificates]
EXHIBIT B-1 - Confirmation of Exercise and Notice of
Rejection [For Warrants Represented by the
Global Warrant Certificate]
<PAGE>
<PAGE> iv
EXHIBIT C-1 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by Warrant
Certificates]
EXHIBIT C-2 - Notice of Rejection Relating to Limit Option
[For Warrants Represented by the Global
Warrant Certificate]
<PAGE>
<PAGE> 1
WARRANT AGREEMENT
THIS AGREEMENT, dated as of January 24, 1994, 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 call 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 Index (as defined herein) 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 Amount, 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.
<PAGE>
<PAGE> 2
(c) Forty-five calendar days after January 24, 1994, each
Warrantholder will have the option to convert the form in which such
Warrantholder holds his Warrants from definitive to book-entry form (the
"Conversion Option"). The Conversion Option will be available for
forty-five calendar days from March 10, 1994 through April 23, 1994 (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 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 equivalent 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
definitive 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.
<PAGE>
<PAGE> 3
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, 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
any securities 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
<PAGE>
<PAGE> 4
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.
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, representing a like number of
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 a like 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
<PAGE>
<PAGE> 5
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.
(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 equivalent number of 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 irrevocable notice of exercise 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 lost, stolen or
<PAGE>
<PAGE> 6
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 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 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 this Section 1.07 shall be
substantially in the form set forth in Exhibit A-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
<PAGE>
<PAGE> 7
with any rule or regulation of any stock exchange on which the Warrants may
be listed or of any Depository referred to herein, 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 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, which
Warrants shall in all respects be identical to Warrants previously issued
and outstanding under this Agreement, 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, New
York, New York (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
<PAGE>
<PAGE> 8
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 notice of
exercise 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 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 corre-
spondent 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 a like number of unexercised Warrants.
<PAGE>
<PAGE> 9
ARTICLE II
DURATION AND EXERCISE OF WARRANTS
SECTION 2.01. Duration of Warrants; Minimum Exercise Amounts;
Notice of Exercise. 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 January 17, 1996 (the "Expiration Date"), and (ii)
the Delisting Date (as defined herein). Except in the case of automatic
exercise, each Warrant shall be irrevocably exercised either (i) in the
case of Warrants represented by Warrant Certificates ("Certificated War-
rants"), 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 the Notice of Exercise (as defined below)
or at such other address as the Warrant Agent may specify from time to
time) of the Warrant Certificate representing such Warrant, with the Notice
of Exercise duly completed and executed by the Registered Holder of such
Warrant (or, in the case of Certificated Warrants held through the
facilities of CEDEL or Euroclear, by CEDEL or 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 a Notice of Exercise to the
Warrant 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 Notices of Exercise 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 that no such
minimum exercise amount shall apply in the case 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 Notice of Exercise shall be unconditional. Except as provided in
Section 2.02(b), the
<PAGE>
<PAGE> 10
Warrant Agent shall be entitled, with no duty of inquiry, to rely conclu-
sively on any Notice of Exercise received by it. "Notice of Exercise"
means an irrevocable notice of exercise to the Warrant Agent at its
address, which notice (A) for Certificated Warrants, shall be on the
reverse of the Warrant Certificate or 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 A-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 American Stock Exchange 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.
SECTION 2.02. Exercise and Delivery of Warrants. (a) Except
in the case of exercise on the Expiration Date or the Delisting Date, or in
the event an Extraordinary Event or Exercise Limitation Event is declared,
or in the case 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 (A) 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 (i) for
Certificated Warrants, the Warrant Certificate representing such Warrant,
with the Notice of Exercise or (ii) for Book-Entry Warrants, the Warrant
with the Notice of Exercise 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
Notice of Exercise after 3:00 p.m., New York City time, on such date, then
such Warrant Certificate or Warrant 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 Warrant Certificate or Warrant together with the Notice of
Exercise or (B) 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 or
Warrant Certificate
<PAGE>
<PAGE> 11
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
Notice of Exercise after 3:00 p.m., New York City time, on any New York
Business Day, 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 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 Notice of Exercise; provided, 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 Notice of Exercise 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 (i) the New York Business Day immediately preceding the Expiration
Date or (ii) the last New York Business Day prior to the effective date on
which the Warrants are delisted from, or permanently suspended from trading
(within the meaning of the Securities Exchange Act of 1934 and the rules
and regulations of the Securities and Exchange Commission thereunder) on,
the American Stock Exchange 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 Notice of Exercise
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 the Delisting Date for purposes of this Agreement. For purposes of
this Agreement, "Index Calculation Date" means
<PAGE>
<PAGE> 12
any day the Index (as herein defined) or any Successor Index (as herein
defined) is calculated and published.
(b) The Warrant Agent shall, in the case of Warrants other
than Warrants held through CEDEL or Euroclear, following receipt of proper
delivery of a Warrant in accordance with Section 2.02(a), accompanied by a
completed Notice of Exercise, and, in the case of Warrants held through
CEDEL or Euroclear, following receipt of proper delivery of a completed
Notice of Exercise in accordance with Section 2.02(a):
(i) promptly (1) for Certificated Warrants not held through
CEDEL or Euroclear, determine whether such Notice of Exercise 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 Notice of Exercise 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 Notice of
Exercise has been duly completed and is in proper form and (4) for
Book-Entry Warrants held through CEDEL or Euroclear, determine
whether such Notice of Exercise 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 Notice of Exercise 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 (X) shall reject
such Notice of Exercise and shall send to the entity that executed
such Notice of Exercise a notice of rejection substantially in the
form set forth in Exhibit B or Exhibit B-1 hereto, as the case may
be, and, in the case of Certificated Warrants, shall return to the
Registered Holder that submitted such Notice of Exercise, 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 Notice of Exercise or the related Warrants; provided,
however,<PAGE>
<PAGE> 13
that the Warrant Agent shall deliver a copy of the Notice of Exercise
relating to such 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 Notice of Exercise;
(ii) promptly telephone Euroclear to determine whether
Euroclear anticipates that it will be able to provide a Euroclear
Confirmation with respect to each Warrant held through Euroclear for
which a Notice of Exercise was received;
(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 Notice of Exercise has been received (or shall be
deemed to have been received) of (A) the total number of Warrants
covered by such Notice of Exercise, (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;
(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 is not a New York Business Day, on the next
succeeding New York Business Day), Euroclear Confirmations with
respect to such Warrants, 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 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 timing requirement of timely
delivery of such Euroclear Confirmation) send to the Euroclear
participant that executed such Notice of Exercise 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 B or Exhibit B-1 hereto, as the case may be;
<PAGE>
<PAGE> 14
(v) if any of the Warrants covered by such Notice of Exercise
constitute Contingently Tendered Warrants, the Warrant Agent shall,
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 Reference Index (as defined
herein) for such Warrants and the Spot Index (as defined herein) for
the Index Calculation Date that, but for the provisions of Section
2.02(h), would be the Valuation Date for such Warrants; (B) determine
in accordance with Section 2.02(h) 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 Notice of
Exercise, 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 Book-Entry Warrants, that submitted such
Notice of Exercise a notice of rejection substantially in the form
set forth in Exhibit C-1 or Exhibit C-2 hereto, as appropriate, with
respect to such Warrants and return to the Registered Holder (or the
entity that executed the Notice of Exercise, in the case of
Certificated Warrants held through CEDEL or Euroclear) that submitted
such Notice of Exercise, by first class mail, the Warrant
Certificates (to the extent received, in the case of Warrants held
through CEDEL or Euroclear) evidencing such Warrants, or, in the case
of Book-Entry Warrants (to the extent received, in the case of
Warrants held through CEDEL or 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 Exercised 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 Exercised
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
<PAGE>
<PAGE> 15
Warrant Agent shall not take the actions required by clauses (vii)
and (viii) with respect to such Notice of Exercise 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 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 12:00 noon,
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 New York Business Day following the New York Business Day
next succeeding the Valuation Date) of the Cash Settlement Value
payable in respect of the exercise of such Exercised Warrants, and
send notices of confirmation substantially in the form included in
Exhibit B or Exhibit B-1 hereto, as the case may be, to the
appropriate Registered Holder (or the entity that executed the
related Notice of Exercise, 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
Notice of Exercise; and
(ix) promptly deliver a copy of each Notice of Exercise 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 in such case, the exercise of such Warrants
shall be ignored and either (i) for Certificated Warrants, the Warrant
Certificate evidencing such Warrants (to the extent received, in the case
of
<PAGE>
<PAGE> 16
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 Notice of Exercise, in the case of Certificated Warrants held
through CEDEL or Euroclear) by first class mail or (ii) for Book-Entry
Warrants, the Warrants will 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
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 (a) in the
case of Warrants not held through the facilities of the Depository, CEDEL
or Euroclear, in no event be later than 3:00 p.m., New York City time, on
the fifth New York Business Day following a Valuation Date (or, if the
Valuation Date is not a New York Business Day, on the fifth New York
Business Day following the New York Business Day next succeeding the
Valuation Date) and (b) in the case of Warrants held through the facilities
of the Depository, CEDEL or Euroclear, in 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 (i) 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 Notice of Exercise), after 3:00
p.m., New York City time, but prior to the close of business, on the first
New York Business Day immediately succeeding such Settlement Date or (ii)
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 Notice of Exercise), after 3:00 p.m., New York City time,
but prior to the close of business, on the first New York Business Day
immediately succeeding such Settlement Date. For either clause (i) or (ii)
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
<PAGE>
<PAGE> 17
the Warrant Agent (together with the related Notice of Exercise) as
provided in Sections 2.01 and 2.02(a) and (b).
(d) The "Cash Settlement Value" of an exercised Warrant shall
be an amount in U.S. dollars equal to the quotient (rounded down to the
nearest cent) of (A) the amount, if any, by which the closing level of the
Index, as compiled and published by the AMEX, on the applicable Valuation
Date for such Warrant (the "Spot Index"), exceeds 541.73 (the "Strike
Index"), divided by (B) three, divided by (C) the exchange rate of H.K.
$7.726 per $1.00; provided, however, that if such amount is less than zero,
then the Cash Settlement Value shall be zero.
The "Index" is the AMEX Hong Kong 30 Index designed, developed,
maintained and operated by the American Stock Exchange (the "AMEX").
References in this Agreement to "U.S. dollars", "U.S.$" or "$" are to the
lawful currency of the United States of America, and references to "Hong
Kong dollars" or "H.K.$" are to the lawful currency of Hong Kong.
(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 hereby appoints PaineWebber Incorporated, and
PaineWebber Incorporated 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 Cash Settlement
Value or the Alternative Settlement Amount, as applicable, of a Warrant.
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 Warrant-
holders 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
<PAGE>
<PAGE> 18
shall at all times be a Determination Agent hereunder until all the
Warrants are no longer outstanding or until moneys 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, which-
ever 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 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) In the event that the Index is not calculated and publicly
announced by the AMEX on a Valuation Date but is calculated and publicly
announced by another person or party not affiliated with the Company and
acceptable to the Company (the "Third Party"), the applicable Cash
Settlement Value shall nevertheless be calculated by reference to the value
of the closing quotation for the Index so announced by the Third Party.
In the event that prior to a Valuation Date the AMEX or the
Third Party makes a material change in the formula for, or the method of
calculating the Index, the Determination Agent shall make such calculations
as may be required to determine the applicable Cash Settlement Value using
the formula and method of calculating the Index as was in effect prior to
such change or modification.
<PAGE>
<PAGE> 19
If on a Valuation Date either the AMEX or any Third Party
discontinues publication of the Index and publishes a successor or
substitute index that the Company determines, in its sole discretion, to be
comparable to the Index (any such index being a "Successor Index"), the
Determination Agent shall determine the Spot Index for any date thereafter
based on the closing level of the Successor Index on such date. If the
AMEX and/or any Third Party discontinues publication of the Index and/or
any Successor Index, the Company will cause the Determination Agent to
determine the applicable Cash Settlement Value based on the formula and
method used in calculating the Index or any Successor Index as in effect on
the date the Index or such Successor Index was last published.
If calculation or publication of the Index or a Successor Index
is modified, discontinued or suspended, as provided in this Section
2.02(g), then the Determination Agent shall promptly notify the Warrant
Agent, and the Warrant Agent shall in turn promptly notify the Warrant-
holders in accordance with Section 6.04 hereof, of such modification,
discontinuance or suspension and of any modification or adjustment to be
made with respect to calculation of the Cash Settlement Value or
Alternative Settlement Amount, as applicable.
The Determination Agent will have no responsibility for good
faith errors or omissions in calculating or disseminating information
regarding the Index, any Successor Index, adjustments or calculations by
the Determination Agent (as provided above) in order to arrive at a
calculation of a stock index comparable to the Index or any Successor
Index, or the Cash Settlement Value or the Alternative Settlement Amount,
as applicable.
(h) Except in the case of an automatic exercise (as provided
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 Notice of Exercise 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), be subject to the condition that the Spot Index that would
otherwise be used to determine the Cash Settlement Value of such Warrants
not be 20 or more points lower than the Reference Index for such Warrants.
"Reference Index", with respect to any Contingently Tendered Warrants,
means the Spot Index on the New York Business Day that such Notice of
Exercise has been received (or shall be deemed to have
<PAGE>
<PAGE> 20
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(h) 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 Notice of Exercise. Each of the Warrant Agent and the
Company shall be entitled to rely conclusively on such Notice of
Exercise, 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 Warrants to the Limit Option; provided 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 Notice of Exercise that
are subject to the Limit Option is an amount that is not less than
500.
(ii) The Reference Index shall be determined by the Warrant
Agent, which determination shall be conclusive and binding for all
purposes relating to such exercise.
(iii) In the event that the Spot Index for the first Index
Calculation Date following the New York Business Day that such Notice
of Exercise has been received (or shall be deemed to have been
received) (i.e., for the day that, but for the provisions of Section
2.02(h), would be the Valuation Date for such Warrants) is 20 or more
points lower than 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 Notice of Exercise had
never been received by the Warrant Agent, and (B) shall not
constitute "Exercised Warrants" for purposes of Section 2.02(b). If
such Spot Index is not 20 or more points lower than 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
<PAGE>
<PAGE> 21
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 Notice of Exercise 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 a Notice of Exercise in proper
form by 3:00 p.m., New York City time, on (i) the New York Business Day
immediately preceding the Expiration Date or (ii) the Delisting Date, as
the case may be, or for which the Warrant Agent has received a Notice of
Exercise in proper form but 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 a Notice of Exercise 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, on 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. On the Valuation Date for such
Warrants (or, if such Valuation Date is not a New York Business Day, on the
next succeeding New York Business Day), the Warrant Agent shall (i)
determine 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
<PAGE>
<PAGE> 22
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 all 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 Limita-
tion 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 fourth 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 fourth 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 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 the 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 in the amount of the aggregate
Cash Settlement Value 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. Warrant Certificates delivered to
the Warrant Agent shall thereafter be promptly canceled by the Warrant
Agent.
<PAGE>
<PAGE> 23
In the case of Book-Entry Warrants subject to automatic
exercise (other than 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, 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 check to be in an amount equal to the
aggregate Cash Settlement Value of the 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 Warrant-
holders, 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 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 Hong Kong Business Day with respect to
which the Spot Index on a Valuation Date is to be determined (the
"Applicable Hong Kong 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 Hong Kong Business
Day on which there is no Extraordinary Event
<PAGE>
<PAGE> 24
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 for 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 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:
<PAGE>
<PAGE> 25
_ _
| |
| T x A |
X = I + |___ ___|
| 2 B |
|_ _|
where
I = the Cash Settlement Value of the Warrants determined as
described under Section 2.02(d), but calculated with a Spot
Index 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 or any Successor Index on the Cancellation Date;
T = U.S. $5.875
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 Spot Index
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.
<PAGE>
<PAGE> 26
(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 Hong Kong Stock
Exchange Ltd. (the "HKSE") of all the stocks which then comprise the
Index or a successor 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 Hong Kong or the
trading of securities generally on the HKSE) 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 HKSE, and (2) an "absence of
trading" on the HKSE will not include any time when the HKSE 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 HKSE of (a) 20%
or more of the stocks which then comprise the Index or a Successor
Index and/or (b) the stocks of any three of the four most highly
capitalized companies included in the stocks which then comprise the
Index or a Successor Index; or
(ii) the suspension or material limitation on the Hong Kong
Futures Exchange Ltd. (the "HK Futures Exchange") or any other major
futures or securities market of trading in futures or options
contracts
<PAGE>
<PAGE> 27
related to the Hang Seng Index, the Index or a Successor 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 on the Hang Seng Index, the Index
or a Successor Index by the HK Futures Exchange or other major futures or
securities market by reason of (x) a price change violating limits set by
the HK Futures Exchange 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 Hang Seng Index, the Index, or a Successor Index (4) an "absence of
trading" on the HK Futures Exchange or a major futures or securities market
on which futures or options contracts related to the Hang Seng Index, the
Index or a Successor Index are traded will not include any time when the HK
Futures Exchange or such futures or securities market, as the case may be,
itself 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 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
<PAGE>
<PAGE> 28
Warrant Agent shall first select additional of such holders, Warrants so
that no 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 (subject to
successive applications of this Section 2.04); provided that any Remaining
Warrant in respect of which a Notice of Exercise was delivered on a given
Notice Date shall be deemed exercised before any other Warrants in respect
of which a Notice of Exercise 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 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 Warrants.
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 AMEX 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 or Alternative Settlement Amount 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 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.
<PAGE>
<PAGE> 29
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) or otherwise canceled 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.
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 which tax or
<PAGE>
<PAGE> 30
other governmental charge shall be paid by the appropriate Warrantholder or
Registered Holder.
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 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
<PAGE>
<PAGE> 31
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 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
<PAGE>
<PAGE> 32
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 moneys at any time received by it pursuant to any of
the provisions of this Agreement nor shall it be obligated to
segregate such moneys from other moneys 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 authorization,
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 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.
<PAGE>
<PAGE> 33
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 moneys 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 herein-
after 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 appoint-
ment 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 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 suc
<PAGE>
<PAGE> 34
cessor 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 origi-
nally 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 moneys, 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 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 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 2,200,000 Warrants
<PAGE>
<PAGE> 35
unless and until the Warrant Agent has received notice from the AMEX or any
successor United States national securities exchange that the additional
Warrants in excess of 2,200,000 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 decreases the Strike
Index, 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) 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 (i) in the case of Certificated
Warrants, the
<PAGE>
<PAGE> 36
Warrant Agent to the Warrantholders or (ii) 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 AMEX or any successor 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 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, 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.
<PAGE>
<PAGE> 37
SECTION 6.09. Counterparts. This Agreement may be executed in
any number of counterparts, each of which so executed shall be deemed to be
an original; but such counterparts shall together constitute but one and
the same instrument.
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.
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 /s/ DAVID A. DAMI
Name: David A. Dami
Title: Attorney-in-Fact
CITIBANK, N.A.
By /s/ JOHN REASOR
Name: John Reasor
Title: Assistant Vice President
PAINEWEBBER INCORPORATED
By /s/ JOHN C. BRADDOCK
Name: John C. Braddock
Title: Vice President
<PAGE>
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
[FACE]
No. C- CUSIP No. 695629279
PAINE WEBBER GROUP INC.
AMEX Hong Kong 30 Index Call Warrants
Expiring January 17, 1996
This Warrant Certificate certifies that
, or registered assigns, is the registered holder of
AMEX Hong Kong 30 Index Call Warrants Expiring
January 17, 1996 (the "Warrants"). Upon receipt by the Warrant Agent of
this Warrant Certificate and the notice of exercise on the reverse hereof
(or a notice of exercise 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
(the "Cash Settlement Value") equal to the quotient (rounded down to the
nearest cent) of (A) the amount, if any, by which the closing level of the
AMEX Hong Kong 30 Index (the "Index"), as compiled and published by the
American Stock Exchange ("AMEX"), on the applicable Valuation Date for such
Warrant (the "Spot Index") exceeds 541.73 (the "Strike Index"), divided by
(B) three, divided by (C) a fixed Hong Kong dollar/U.S. dollar exchange
rate of H.K.$7.726 per U.S. $1.00; provided, however, that if such amount
is less than or equal to 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 January 17, 1996 (the
"Expiration Date") and (ii) the Delisting Date (as defined herein), at
which time the Warrants shall expire and
<PAGE>
<PAGE> A-2
all Warrants evidenced hereby shall be automatically exercised and
otherwise shall be void. Except in the case 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.
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: January 24, 1994 PAINE WEBBER GROUP INC.
By______________________
Donald B. Marron
Chairman and Chief
Executive Officer
[SEAL]
Attest:
By________________________
Theodore A. Levine
Secretary
Countersigned as of the
date above written:
CITIBANK, N.A.,
as Warrant Agent
By_________________________
Authorized Officer
<PAGE>
<PAGE> A-3
[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 January 24, 1994 (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 notice of exercise
(or a notice of exercise 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. 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 an exercised Warrant shall be an
amount in U.S. Dollars equal to the quotient (rounded down to the nearest
cent) of (A) the amount, if any, by which the closing level of the Index,
as compiled and published by the AMEX, on the applicable Valuation Date (as
defined herein) for such Warrant (the "Spot Index") exceeds 541.73 (the
"Strike Index"), divided by (B) three, divided by (C) a fixed Hong Kong
dollar/U.S.
<PAGE>
<PAGE> A-4
dollar exchange rate of H.K.$7.726 per U.S. $1.00; provided, however, that
if such amount is less than or equal to zero, then the Cash Settlement
Value shall be zero.
The Company has appointed PaineWebber Incorporated 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 Cash
Settlement Value under certain circumstances or the Alternative Settlement
Amount (as defined herein), as applicable, of a Warrant. 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.
In the event that the Index is not publicly announced by the
AMEX on a Valuation Date, but is publicly announced by another person or
party not affiliated with the Company and acceptable to the Company (the
"Third Party"), the applicable Cash Settlement Value shall nevertheless be
calculated by reference to the value of the closing quotation for the Index
so announced by the Third Party.
In the event that prior to a Valuation Date the AMEX or the
Third Party makes a material change in the formula for or the method of
calculating the Index, the Determination Agent shall make such calculations
as may be required to determine the applicable Cash Settlement Value using
the formula and method of calculating the Index as was in effect prior to
such change or modification.
If on a Valuation Date either the AMEX or any Third Party
discontinues publication of the Index and publishes a successor or
substitute index that the Company determines, in its sole discretion, to be
comparable to the Index (any such index being a "Successor Index"), then
the Determination Agent shall determine the Spot Index for any date
thereafter based on the closing level of the Successor Index on such date.
If the AMEX and/or any Third Party discontinues publication of the Index
and/or any Successor Index, the Company will cause the Determination Agent
to determine the applicable Cash Settlement Value based on the formula and
method used in calculating the Index or any Successor Index as in effect on
the date the Index or such Successor Index was last published.
<PAGE>
<PAGE> A-5
The Determination Agent will have no responsibility for good
faith errors or omissions in calculating or disseminating information
regarding the Index, any Successor Index, adjustments or calculations by
the Determination Agent in order to arrive at a calculation of a stock
index comparable to the Index or any Successor Index, or the Cash
Settlement Value or the Alternative Settlement Amount, as applicable.
Subject to the Warrant Agreement and this Warrant Certificate,
and except in the case of exercise (whether automatic or by notice of
exercise) 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 notice of exercise below
(or a notice of exercise in substantially identical form delivered here-
with), 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 Day on which the Warrant Agent is deemed to have received
such Warrant Certificate together with the notice of exercise 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 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
<PAGE>
<PAGE> A-6
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 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 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 (i) the New York Business Day immediately preceding the
Expiration Date or (ii) the last New York Business Day prior to the
effective date on which the Warrants are delisted from, or permanently
suspended from trading (within the meaning of the Securities Exchange Act
of 1934 and the rules and regulations of the Securities and Exchange
Commission thereunder) on, the American Stock Exchange 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 notice of exercise 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 the Delisting Date for
purposes of the Warrant Agreement and this Warrant Certificate.
If the notice of exercise 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. 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
<PAGE>
<PAGE> A-7
zero, then in such case, the exercise of such Warrants shall be ignored and
the Warrant Certificate evidencing such Warrants will be promptly returned
by the Warrant Agent to the registered holder of the Warrant by first class
mail at the Company's expense and such holder shall be permitted to
re-exercise such Warrants prior to the Expiration Date or the Delisting
Date.
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 the appropriate holders on the fifth 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 fifth 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 holder in the United States (at
the holder's election as specified in the notice of exercise), in an amount
equal to the aggregate Cash Settlement Value of the exercised Warrants.
All Warrant Certificates for which the Warrant Agent has not
received a notice of exercise in proper form by 3:00 p.m., New York City
time, on (i) the New York Business Day preceding the Expiration Date or
(ii) the Delisting Date, as the case may be, or for which the Warrant Agent
has received a notice of exercise in proper form but with respect to which
timely delivery of the relevant Warrant Certificate 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 a notice of
exercise to the Warrant Agent. The Valuation Date for such Warrants shall
be the first Index Calculation Date 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.
<PAGE>
<PAGE> A-8
Payment with respect to automatically exercised Warrants 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 fourth 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 fourth New York Business Day following the
New York Business Day next succeeding such Valuation Date), against receipt
by the Warrant Agent at the Warrant Agent's Office from the 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 exercised (whether automatically or by notice of
exercise) 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 Hong Kong Business Day (as defined herein) with respect
to which the Spot Index on a Valuation Date is to be determined (the
"Applicable Hong Kong 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 Hong Kong 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 Option) on the basis that the Valuation Date for such Warrant shall
be the Cancellation Date and each Warrantholder shall have the
<PAGE>
<PAGE> A-9
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:
_ _
| |
| T x A |
X = I + |___ ___|
| 2 B |
|_ _|
where
I = the Cash Settlement Value of the Warrants determined as
described above, but calculated with a Spot Index
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 or any Successor Index on
the Cancellation Date;
T = U.S. $5.875, the initial offering price per Warrant;
<PAGE>
<PAGE> A-10
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 upon which such Alternative Settlement Amount may
be calculated in accordance with the above formula, agreed upon a Spot
Index 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.
An "Extraordinary Event" shall mean any one of the events,
circumstances or causes listed below:
(i) a suspension or absence of trading on the Hong Kong
Stock Exchange Ltd. (the "HKSE") of all of the stocks which then
comprise the Index or a successor or substitute index that the
Company determines, in its sole discretion, to be comparable to the
Index (a "Successor 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 render it
unlawful for the Company to perform any of its obligations under the
Warrant Agreement or the Warrants; or
(iii) any outbreak or escalation of hostilities or other
national or international calamity or crisis
<PAGE>
<PAGE> A-11
(including, without limitation, natural calamities which in the
opinion of the Company may materially and adversely affect the
economy of Hong Kong or the trading of securities generally on the
HKSE) 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 HKSE of (a) 20%
or more of the stocks which then comprise the Index or a Successor
Index and/or (b) the stocks of any three of the four most highly
capitalized companies included in the stocks which then comprise the
Index or a Successor Index; or
(ii) the suspension or material limitation on the Hong Kong
Futures Exchange Ltd. (the "HK Futures Exchange") or any other major
futures or securities market of trading in futures or options
contracts related to the Hang Seng Index, the Index or a Successor
Index.
All exercises of Warrants (other than on the Expiration Date or
the Delisting Date or upon cancellation of the Warrants 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 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 of the Warrants would be deemed to have exercised less
than 500 Warrants, then the Warrant Agent shall first select additional of
such holders' Warrants so that no 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
(subject to successive applications of this paragraph); provided that any
Remaining Warrant in respect of which a notice of exercise was
<PAGE>
<PAGE> A-12
delivered on a given Notice Date shall be deemed exercised before any other
Warrants in respect of which a notice of exercise 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 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 Warrants.
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, 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, representing a like number of Warrants, upon surrender to the
Warrant Agent of this Warrant Certificate at the Warrant Agent's Office.
<PAGE>
<PAGE> A-13
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", "U.S. $" or are to the
lawful currency of the United States of America, and references to "Hong
Kong dollars" or "H.K.$" are to the lawful currency of Hong Kong. As used
herein, a "New York Business Day" means any day other than a Saturday,
Sunday or a day on which either the AMEX 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 "Hong
Kong Business Day" means any day other than a Saturday or a Sunday or a day
on which commercial banks in Hong Kong are not open for a full day of
business; and an "Index Calculation Date" means any day on which the Index
or any Successor 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.
<PAGE>
<PAGE> A-14
NOTICE OF EXERCISE
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 Notice of Exercise 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 Spot Index used to determine the Cash Settlement Value of
Contingently Tendered Warrants is lower than the Reference Index by 20
points or more, a Notice of Exercise 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
Notice of Exercise 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;
or
[ ] 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.:
<PAGE>
<PAGE> A-15
Account No.: Reference:
; 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: ( )
<PAGE>
<PAGE>
EXHIBIT A-1
[FORM OF GLOBAL WARRANT CERTIFICATE]
No. GC___________________ CUSIP No. 695629279
PAINE WEBBER GROUP INC.
Global Warrant Certificate Representing
AMEX Hong Kong 30 Index Call Warrants
Expiring January 17, 1996
This certifies that CEDE & CO., or registered assigns, is the
registered holder of AMEX Hong Kong 30 Index Call Warrants
Expiring January 17, 1996 (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
(the "Cash Settlement Value") equal to the quotient (rounded down to the
nearest cent) of (A) the amount, if any, by which the closing level of the
AMEX Hong Kong 30 Index (the "Index"), as compiled and published by the
American Stock Exchange (the "AMEX"), on the applicable Valuation Date for
such Warrant (the "Spot Index") exceeds 541.73 (the "Strike Index"),
divided by (B) three, divided by (C) a fixed Hong Kong dollar/U.S. dollar
exchange rate of H.K.$7.726 per U.S. $1.00; provided, however, that if such
amount is less than or equal to 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 (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 January 17,
1996 (the "Expiration Date") and (ii) the Delisting Date (as defined
herein), at which time the Warrants shall expire and all Warrants evidenced
hereby shall be automatically exercised and otherwise shall be void. The
holder of Warrants evidenced by this Warrant Certificate may exercise them
only upon the delivery of such Warrant free to the Warrant Account (as
defined in the Warrant Agreement) and pursuant to an irrevocable Notice of
Exercise to the Warrant Agent from a Participant (as defined in the Warrant
Agreement) acting on behalf of such Warrantholder. Except in the case of
automatic exercise or
<PAGE>
<PAGE> A-1-2
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 January 24, 1994 (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 Warrant Certificate by the Depository 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, 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 case of exercise (whether automatic or by
notice of exercise), on the Expiration Date or the Delisting Date, or in
the event an Extraordinary Event or Exercise Limitation Event (as such
terms are defined 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 Index Calculation Date (as
defined herein) following the 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, with the Notice of Exercise (as defined in the
Warrant Agreement) (or a Notice of Exercise 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
<PAGE>
<PAGE> A-1-3
shall receive any such Warrant after 3:00 p.m., New York City time, on such
date, then such Warrant 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 Warrant together with the Notice of Exercise 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 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 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 notice of exercise; 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, 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 Notice of Exercise or waive the requirement for timely
delivery of such telex communication. Any Warrant received after 3:00
p.m., New York City time, on (i) the New York Business Day immediately
preceding the Expiration Date or (ii) the last New York Business Day prior
to the effective date on which the Warrants are delisted from, or
permanently suspended from trading (within the meaning of the Securities
Exchange Act of 1934 and the rules and regulations of the Securities and
Exchange Commission thereunder) on, the American Stock Exchange 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
<PAGE>
<PAGE> A-1-4
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 Notice of
Exercise 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 the Delisting Date for purposes of the Warrant
Agreement and this Global Warrant Certificate.
All Warrants for which the Warrant Agent has not received a
Notice of Exercise in proper form by 3:00 p.m., New York City time, on (i)
the New York Business Day preceding the Expiration Date or (ii) the
Delisting Date, as the case may be, or for which the Warrant Agent has
received a notice of exercise in proper form but with respect to which
timely delivery of the related Warrant 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 a Notice of Exercise to
the Warrant Agent. The Valuation Date for such Warrants shall be the first
Index Calculation Date 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 Hong Kong Business Day (as defined herein) with respect
to which the Spot Index on a Valuation Date is to be determined (the
"Applicable Hong Kong Business Day"), then the Cash Settlement Value of
such Warrants in respect on an exercise shall be calculated on the basis
that the Valuation Date shall be the next Index Calculation Date following
an Applicable Hong Kong 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
<PAGE>
<PAGE> A-1-5
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 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 of the Warrants 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 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
Warrantholders would be deemed to have exercised less than 500 Warrants,
then the Warrant Agent shall first select additional of such holders'
Warrants so that no 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 (subject
to successive applications of this paragraph); provided that any Remaining
Warrant in respect of which notice of exercise was delivered on a given
Notice Date shall be deemed exercised before any other Warrants in respect
of which a notice of exercise 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
<PAGE>
<PAGE> A-1-6
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 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
Warrants.
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 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 are 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", "U.S.$" or "$" are to the
lawful currency of the United States of America, and references to "Hong
Kong dollars" or "H.K.$" are to the lawful currency of Hong Kong. As used
herein, a "New York Business Day" means any day other than a Saturday,
<PAGE>
<PAGE> A-1-7
Sunday or a day on which either the AMEX 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 "Hong
Kong Business Day" means any day other than a Saturday or a Sunday or a day
on which commercial banks in Hong Kong are not open for a full day of
business; and an "Index Calculation Date" means any day on which the AMEX
Index or any Successor Index is calculated and published.
The Warrant Agreement and the terms of the Warrants are subject
to amendment, as provided in the Warrant Agreement.
<PAGE>
<PAGE> A-1-8
THIS GLOBAL WARRANT CERTIFICATE SHALL BE GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, Paine Webber Group Inc. has caused this
instrument to be duly executed.
Dated: , 1994 PAINE WEBBER GROUP INC.
By_________________________
Name:
Title:
[Corporate Seal]
Attest:
By__________________________
Assistant Secretary
Countersigned as of the
date above written:
CITIBANK, N.A.,
as Warrant Agent
By__________________________
Authorized Officer
<PAGE>
<PAGE>
EXHIBIT A-2
NOTICE OF EXERCISE
[For Warrants Represented by the Global Warrant Certificate]
Citibank, N.A.
[c/o Citicorp Data Distribution Inc.
404 Sette Drive
Paramus, New Jersey 07652
(Facsimile: (201) 262-7521)
(Telephone: (201) 262-5444)]
1. We refer to the Warrant Agreement dated as of January 24,
1994 (the "Warrant Agreement"), among Paine Webber Group Inc. (the
"Company"), Citibank, N.A., as warrant agent (the "Warrant Agent"), and
PaineWebber Incorporated, as determination 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 Notice of
Exercise and whose Warrants have been, or will be, 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 Notice of
Exercise must be received by you by 3:00 p.m., New York City time, on a New
York Business Day in order for the Valuation Date for the Tendered Warrants
to be the Index Calculation Date following such New York Business Day and
that, if the Warrants being exercised and this Notice of Exercise 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 the
Warrants are not received by 3:00 p.m., New York City time, on the first
Index Calculation Date following such New York Business Day), the Valuation
Date of the Tendered Warrants shall be the next Index Calculation Date next
succeeding such New York Business Day, in each case subject to certain
provisions of the Warrant Agreement.
2. If you determine that this Notice of Exercise has not been
duly completed or is not in proper form, this Notice of Exercise will be
void and of no effect and will be deemed not to have been delivered.
<PAGE>
<PAGE> A-2-2
3. We hereby direct you to make payment to us of amounts
payable to our clients as a result of the exercise of the Warrants
hereunder as follows:
[ ] By cashier's check or an official bank
check;
or
[ ] By wire transfer to the following U.S.
dollar bank account in the United
States:
(Minimum payments of $100,000 only)
Bank:
Account No.:
ABA Routing No.:
Reference:
4. The Exercised Warrants covered hereby [are] [are not]
subject to the Limit Option.1/
5. Each client on whose behalf we are exercising Warrants
pursuant to this Notice of Exercise 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.]
1/ Separate Notice of Exercise shall be submitted with respect to
Warrants subject to the Limit Option and Warrants not subject to the Limit
Option.
<PAGE>
<PAGE> A-2-3
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: ( )
<PAGE>
<PAGE>
EXHIBIT B
CONFIRMATION OF EXERCISE
[For Warrants Represented by Warrant Certificates]
We hereby confirm receipt of your Notice of Exercise with
respect to Warrants (the "Exercised Warrants") and the
related Warrant Certificates, which we have found to be duly completed and
in proper form. The Valuation Date of the Exercised Warrants was the close
of business on ____________, 19__.
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 cashiers check or an official bank
check] [by wire transfer to the bank account designated in your Irrevocable
Notice of Exercise], in New York Clearing House funds, for payment on the
fifth New York Business Day following the Valuation Date for such Warrants
(or, if such Valuation Date is not a New York Business Day, on the fifth
New York Business Day following the New York Business Day next succeeding
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 January 24,
1994, among Paine Webber Group Inc., Citibank, N.A., and PaineWebber
Incorporated.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By_______________________
Authorized Signature
<PAGE>
<PAGE> B-2
NOTICE OF REJECTION
You are hereby notified that [the Notice of Exercise delivered
by you was determined by us not to have been [duly completed] [in proper
form]] [we did not receive from Euroclear a Euroclear Confirmation that
proper delivery of the Warrants to which the Notice of Exercise delivered
by you relates would be made on a timely basis], as set forth in the
Warrant Agreement, dated as of January 24, 1994, among Paine Webber Group
Inc., Citibank, N.A., and PaineWebber Incorporated. Accordingly, we have
rejected your Notice of Exercise [as being unsatisfactory as to form].
Capitalized terms used but not defined herein have the meanings
assigned thereto in the Warrant Agreement.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By__________________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT B-1
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 Notice of Exercise with
respect to Warrants (the "Exercised Warrants") which
were transferred by you (or on your behalf) to our DTC Participant Account
No. [ ]. Such 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 ______________, 19__.
[As set forth in your Notice of Exercise, 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 Notice of Exercise stated
that the Warrants covered thereby are subject to the Limit Option. The
applicable Reference Index for such Warrants is and the Spot
Index for the date that would otherwise be the Valuation Date for such
Warrants is . Such Spot Index is not lower than such Reference
Index by 20 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 cashiers check or an official bank
check] [by wire transfer to the bank account designated in your Irrevocable
Notice of Exercise], in New York Clearing House funds, for payment on the
sixth New York Business Day following the Valuation Date for such 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 for such Warrants).
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement dated as of January 24,
1994, among Paine Webber Group Inc., Citibank, N.A., as Warrant Agent, and
PaineWebber Incorporated, as Determination Agent.
<PAGE>
<PAGE> B-1-2
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By________________________
Authorized Signature
<PAGE>
<PAGE> B-1-3
NOTICE OF REJECTION
[Name of Depository Participant]
[Name of Euroclear Participant]
[Centrale de Livraison de Valeurs
Mobilieres S.A.]
[Address]
You are hereby notified that [the Notice of Exercise 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. [ ] [we did not receive from Euroclear a Euroclear Confirmation that
proper delivery of the Warrants to which the Notice of Exercise delivered
by you relates would be made on a timely basis], as set forth in the
Warrant Agreement, dated as of January 24, 1994, among Paine Webber Group
Inc., Citibank, N.A., and PaineWebber Incorporated. Accordingly, we have
rejected your Notice of Exercise as being unsatisfactory as to form.
Capitalized terms used but not defined herein have the meanings
assigned thereto in the Warrant Agreement.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By______________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT C-1
NOTICE OF REJECTION
RELATING TO LIMIT OPTION
[For Warrants Represented
by Warrant Certificates]
We refer to your Notice of Exercise dated ,
19 , with respect to Warrants that were subject to the
Limit Option. The applicable Reference Index for such Warrants is
and the Spot Index for the date that would otherwise be the
Valuation Date for such Warrants is . Such Spot Index is lower
than the Reference Index on the Exercise Date (or if such date was not an
Index Calculation Date, on the Index Calculation Date prior to the Exercise
Date for such Warrants) by 20 points or more. Accordingly, we have rejected
such Notice of Exercise pursuant to the Limit Option.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement dated as of January 24,
1994, among Paine Webber Group Inc., Citibank, N.A., and PaineWebber
Incorporated.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By_______________________
Authorized Signature
<PAGE>
<PAGE>
EXHIBIT C-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 Notice of Exercise dated ,
19 , with respect to Warrants that were subject to the
Limit Option. The applicable Reference Index for such Warrants is and
the Spot Index for the date that would otherwise be the Valuation Date for
such Warrants is . Such Spot Index is lower than the
Reference Index on the Exercise Date (or if such date was not an Index
Calculation Date, on the Index Calculation Date prior to the Exercise Date
for such Warrants) by 20 points or more. Accordingly, we have rejected
such Notice of Exercise pursuant to the Limit Option.
Capitalized terms included herein but not defined have the
meanings assigned thereto in the Warrant Agreement dated as of January 24,
1994, among Paine Webber Group Inc., Citibank, N.A., and PaineWebber
Incorporated.
Dated: , 19
CITIBANK, N.A., as Warrant
Agent,
By_______________________
Authorized Signature
<PAGE> 1
Exhibit 8.1
SULLIVAN & CROMWELL
125 Broad Street
New York, New York 10004
Telephone: (212) 558-4000
Telecopier: (212) 558-3588
January 14, 1994
Paine Webber Group Inc.,
1285 Avenue of the Americas,
New York, New York 10019.
Ladies and Gentlemen:
We have acted as your special tax counsel in connection with
the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of 2,200,000 American Stock Exchange Hong Kong 30 Index
Call Warrants (the "Call Warrants") of Paine Webber Group Inc. (the
"Company") and 4,100,000 American Stock Exchange Hong Kong 30 Index Put
Warrants (the "Put Warrants") of the Company. We hereby confirm to you our
opinion as set forth under the caption "Certain United States Federal
Income Tax Considerations" in the Call Warrants prospectus supplement,
dated January 14, 1994 and in the Put Warrants prospectus supplement, dated
January 14, 1994 to the prospectus dated October 14, 1993 (collectively the
"Prospectus Supplements"), each relating to the Registration Statement on
Form S-3 (File No. 33-33613) filed by the Company with the Securities and
Exchange Commission.
We hereby consent to the filing with the Securities and
Exchange Commission of this letter as an exhibit to the Registration
Statement of which the Prospectus Supplements are a part, and the reference
to us in the Prospectus Supplements under the caption "Certain United
States Federal Income Tax Considerations". In giving
<PAGE>
<PAGE> 2
such consent, we do not admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act.
Very truly yours,
SULLIVAN & CROMWELL
