Exhibit 4.6
WARRANT TO PURCHASE COMMON
STOCK
THIS WARRANT AND THE SECURITIES
REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS. THIS
INSTRUMENT IS ISSUED SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER PROVISIONS SET FORTH HEREIN AND IN A REGISTRATION RIGHTS
AGREEMENT, COPIES OF WHICH ARE ON FILE WITH THE ISSUER. THE
SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID RESTRICTIONS
HEREIN AND IN SUCH AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN
COMPLIANCE WITH SAID RESTRICTIONS HEREIN AND IN SUCH AGREEMENT, THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAWS, WILL BE VOID.
WARRANT TO PURCHASE 1,370,632
SHARES
OF COMMON STOCK OF
CENTRAL EUROPEAN DISTRIBUTION
CORPORATION
Issue Date: June 30,
2009
This Warrant (this “
Warrant ”) of Central European Distribution
Corporation, a Delaware corporation (the “ Company
”) is being issued to Lion/Rally Cayman 4, a company
incorporated in the Cayman Islands (the “ Recipient
”) pursuant to the Option Agreement (as defined
below).
1. Issuance of Warrant . For
value received, the Company hereby grants to the Recipient and its
permitted successors and assigns (collectively, the “
Holder ”) the right to purchase from the Company up to
1,370,632 shares of the Company’s common stock, par value
$0.01 per share (the “ Common Stock ”) (such
shares underlying this Warrant, the “ Warrant Shares
”), at a per share purchase price equal to $26.00 (the
“ Exercise Price ”), subject to the terms,
conditions and adjustments set forth below in this
Warrant.
2. Expiration of Warrant .
This Warrant shall expire at 11:59 PM, prevailing Eastern time, on
May 31, 2013 (the “ Expiration Date
”).
3. Exercise of Warrant . This Warrant
shall be exercisable pursuant to the terms of this
Section 3 .
3.1 Manner of Exercise
.
(a) This Warrant may only be
exercised by the Holder hereof on May 31, 2013, in accordance
with the terms and conditions hereof, in whole but not in part, by
surrender of this Warrant to the Company at its office maintained
pursuant to Section 9.2(a) hereof, accompanied by a
written exercise notice in the form attached as Exhibit A
hereto (or a reasonable facsimile thereof) duly executed by the
Holder, together with the payment of the aggregate Exercise Price
for the number of Warrant Shares purchased upon exercise of this
Warrant. Upon surrender of this Warrant, the Company shall cancel
this Warrant document.
(b) The aggregate Exercise Price for
the number of Warrant Shares being purchased may only be paid on a
“cashless basis” in the form of Warrant Shares withheld
by the Company from the number of Warrant Shares as to which this
Warrant is exercised, such withheld Warrant Shares having an
aggregate Fair Market Value on the Expiration Date equal to the
aggregate Exercise Price of the Warrant Shares being purchased by
the Holder. For purposes of this Warrant, the term “ Fair
Market Value ” means with respect to a particular date
the volume weighted average trading price of the Common Stock on
and as reported by the principal securities exchange on which the
Common Stock is then listed or admitted to trading for the ten
(10) trading days immediately preceding such date, or, if the
Common Stock is not listed or admitted to trading on any securities
exchange, the fair market value of the Common Stock as determined
in good faith and in a commercially reasonable manner by resolution
of the Board of Directors of the Company, based on the best
information available to it and (if requested by the Holder) having
engaged an independent appraiser in such regard.
For purposes of illustration of a
cashless exercise of this Warrant under this
Section 3.1(b) , the calculation of such exercise shall
be as follows:
X = Y (A-B)/A
where:
X = the number of Warrant Shares to
be issued to the Holder
Y = the number of Warrant Shares
with respect to which this Warrant is being exercised (the “
Exercise Shares ”)
A = the Fair Market Value of the
Common Stock
B = the Exercise Price
(c) Notwithstanding the foregoing,
to the extent this Warrant is not exercised immediately before its
expiration, and if the Fair Market Value of one Warrant Share at
that time is greater than the Exercise Price then in effect, then
this Warrant shall be deemed automatically exercised on a cashless
basis pursuant to Section 3.1(b) , above immediately
prior to its expiration (even if not surrendered at that time);
provided, that the Company may, in its sole discretion, elect to
settle the exercise of this Warrant in cash pursuant to
Section 3.2 . For the purposes of such automatic
exercise, the Fair Market Value of one Warrant Share upon such
expiration shall be determined pursuant to
Section 3.1(b) above. To the extent this Warrant is
deemed to be automatically exercised pursuant to this
Section 3.1(c) , the Company will not be required to
settle such exercise unless and until the Holder surrenders this
Warrant to the Company at its office maintained pursuant to
Section 9.2(a) hereof.
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(d) For purposes of Rule 144 and
sub-section (d)(3)(x) thereof, it is intended, understood, and
acknowledged that such amount of Common Stock that is issued in
exchange for non-cash consideration upon exercise of this Warrant
and in accordance with Section 3.1(b) above shall be
deemed to have been acquired at the time this Warrant was
issued.
3.2 Cash Settlement .
Notwithstanding the foregoing, upon surrender of this Warrant by
the Holder, the Company may, in its sole discretion, elect to
settle the exercise of this Warrant by the Holder by making a
single lump sum cash payment, in lieu of issuing the relevant
number of Warrant Shares, to the Holder, in an amount equal to
(a) the Warrant Shares, multiplied by (b) the excess of
(i) the Fair Market Value of the Common Stock on the date of
exercise, over (ii) the Exercise Price (such amount, the
“ Cash Settlement ”). In the event the Company
elects to settle the exercise of this Warrant pursuant to this
Section 3.2 , the Company shall pay the Holder the Cash
Settlement as soon as reasonably practical after the exercise of
this Warrant, and in any event within five (5) Business Days
thereafter. As used in this Warrant, the term “ Business
Day ” shall mean any day other than a Saturday or Sunday
or a day on which commercial banking institutions in New York, New
York are authorized by law to be closed.
3.3 When Exercise Effective .
The exercise of this Warrant shall be deemed to have been effected
immediately prior to the close of business on the Business Day on
which this Warrant shall have been duly surrendered to the Company
as provided in Sections 3.1 and 11 hereof, and, at
such time, the Holder in whose name any certificate or certificates
for Warrant Shares shall be issuable upon exercise as provided in
Section 3.4 hereof shall be deemed to have become the
holder or holders of record thereof of the number of Warrant Shares
purchased upon exercise of this Warrant.
3.4 Delivery of Common Stock
Certificates . In the event the Company does not elect to
settle the exercise of this Warrant pursuant to
Section 3.2 , then as soon as reasonably practicable
after the exercise of this Warrant and in any event within ten
(10) Business Days thereafter, the Company, at its expense
(including the payment by it of any applicable issue taxes), will
cause to be issued in the name of and delivered to the Holder
hereof or, subject to Sections 8 and 9 hereof, as the Holder (upon
payment by the Holder of any applicable transfer taxes) may direct,
a certificate or certificates (with appropriate restrictive
legends, as applicable) for the number of duly authorized, validly
issued, fully paid and nonassessable Warrant Shares to which the
Holder shall be entitled upon exercise.
3.5 Fractional Warrant Shares
. The Company shall not be required to issue fractional Warrant
Shares on the exercise of this Warrant. If any fraction of a
Warrant Share would, except for the provisions of this
Section 3.5 , be issuable on the exercise of this
Warrant (or specified portion thereof), the Company shall pay to
the Holder a cash payment equal to the pro-rated Fair Market Value
of the Common Stock less the pro-rated Exercise Price of such
fractional Warrant Share.
3.6 Compliance with Law
.
(a) Notwithstanding anything in this
Warrant to the contrary, in no event shall a Holder be entitled to
exercise this Warrant or shall this Warrant otherwise be exercised
unless (i) a registration statement filed under the Securities
Act of 1933, as amended (the “ Securities
3
Act ”), in respect of the issuance of the
Warrant Shares is then effective or (ii) an exemption from the
registration requirements is available under the Securities Act for
the issuance of the Warrant Shares at the time of such exercise.
The Holder shall provide such information as the Company may
reasonably request to confirm that an exemption from the
registration requirements of the Securities Act is available to the
Company in respect of such issuance. As provided herein and
therein, the Holder shall be entitled to the rights, and subject to
the obligations, contained in the Registration Rights Agreement,
dated May 7, 2009, among the Company, Recipient and Lion/Rally
Cayman 5 (the “ Registration Rights Agreement
”). Except as provided in the Registration Rights Agreement,
the Company has no obligation to file any registration statement in
respect of this Warrant or any Warrant Shares.
(b) If any shares of Common Stock
required to be reserved for purposes of exercise of this Warrant
require, under any other Federal or state law or applicable
governing rule or regulation of any national securities exchange,
registration with or approval of any governmental authority, or
listing on any such national securities exchange before such shares
may be issued upon exercise, the Company will at its own expense
use its reasonable efforts to cause such shares to be duly
registered or approved by such governmental authority or listed on
the relevant national securities exchange, as the case may
be.
3.7 Limitations on Settlement by
the Company . The Company represents and warrants that, as of
the date hereof, the aggregate of (i) the number of Warrant
Shares and (ii) only for so long as the Recipient or any
Affiliate of the Recipient is the Holder, the number of shares of
Common Stock otherwise issuable pursuant to Section 5.2.1 of
the Option Agreement (as defined below) and pursuant to the
exercise of any other warrant issued pursuant to the Option
Agreement is equal to or less than the sum of (a) the number
of authorized but unissued shares of Common Stock and (b) the
number of treasury shares of Common Stock, in each case, of the
Company that are not reserved for future issuance in connection
with transactions in the shares of the capital stock of the Company
(other than this Warrant) on the date of this Warrant (such shares,
the “ Available Shares ”). In the event the
Company shall not have delivered the full number of Warrant Shares
otherwise deliverable as a result of the Company not having
sufficient authorized but unissued shares of Common Stock available
at the time or times that this Warrant is exercised (the resulting
deficit, the “ Deficit Shares ”), the Company
shall use reasonable efforts to promptly authorize unissued shares
of Common Stock sufficient to issue to the Holder the full number
of Deficit Shares and to issue and deliver such Deficit Shares
thereafter. In any event, the Company shall be continually
obligated to deliver, from time to time until the full number of
Deficit Shares have been delivered pursuant to this paragraph,
Warrant Shares when, and to the extent, that (i) shares of
Common Stock are repurchased, acquired or otherwise received by the
Company or any of its subsidiaries after the date of exercise of
this Warrant (whether or not in exchange for cash, fair value or
any other consideration), (ii) authorized and unissued shares
of Common Stock reserved for issuance in respect of other
transactions become no longer so reserved or (iii) the Company
additionally authorizes any unissued shares of Common Stock. The
Company shall promptly notify Holder of the occurrence of any of
the foregoing events (including the number of shares of Common
Stock subject to clause (i), (ii) or (iii) and the
corresponding number of shares of Common Stock to be delivered) and
promptly deliver such Warrant Shares thereafter. Except as
contemplated by this Warrant, the Company shall not take any action
to decrease the number of Available Shares below the number of
Warrant Shares.
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3.8 Limitations on Exercise by
the Holder . Notwithstanding anything herein to the contrary
and only for so long as the Recipient, or any Affiliate of the
Recipient, or any Person (or any Affiliate of such Person) that
beneficially owns, directly or indirectly, 5% or more of the
economic interests of Lion/Rally Cayman 6, a company incorporated
in the Cayman Islands, is the Holder, in order to ensure compliance
with Nasdaq Marketplace Rule 4350(i)(1)(c)(i), if, immediately
following the issuance of any Warrant Shares upon exercise of this
Warrant, the Holder and its Affiliates would collectively own 5% or
more of the number of shares of Common Stock outstanding or 5% or
more of the voting power of the Company outstanding (the “
Substantial Shareholder Threshold ”), then the
following shall apply:
(a) such number of Warrant Shares as
may be issued without breaching the Substantial Shareholder
Threshold shall be issued in accordance with the terms of this
Warrant;
(b) the number of Warrant Shares
issuable but not yet issued shall accordingly be reduced by the
number of such shares of CEDC Common Stock permitted to be issued
pursuant to Section 3.8(a) ;
(c) promptly after such time as the
Holder has advised CEDC in writing that the Holder and its
Affiliates collectively own 3.5% or less of the number of shares of
Common Stock outstanding and 3.5% or less of the voting power of
CEDC outstanding, CEDC shall issue a number of Warrant Shares to
the Holder equal to the lesser of:
(i) the number of Warrant Shares
that have not been issued due to the operation of this
Section 3.8 ; and
(ii) the maximum number of Warrant
Shares that may be issued without breaching the Substantial
Shareholder Threshold,
and the number of Warrant Shares
that have not been issued due to the operation of this
Section 3.8 shall accordingly be reduced by the number
of Warrant Shares issued pursuant to this
Section 3.8(c) .
(d) Section 3.8(c) shall
continue to be applied until the number of all Warrant Shares that
have not been issued due to the operation of this
Section 3.8 have been reduced to zero.
As used in this Warrant,
(a) “ Affiliate ” shall mean with respect
to any Person, another Person Controlled directly or indirectly by
such first Person, Controlling directly or indirectly such first
Person or directly or indirectly under common Control with such
first Person, and “ Affiliated ” shall have a
meaning correlative to the foregoing, and (b) “
Control ” (including, with their correlative meanings,
“ Controlled by ”, “ Controlling
” and “ under common Control with ”) shall
mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership
interests, by contract or otherwise) of any other Person, provided
that, in any event, any Person who owns, directly or indirectly, a
majority of the securities having ordinary voting power or
otherwise having the power to elect a majority of the directors or
other governing body of a corporation or having a majority of the
partnership or other ownership interests of any other Person (other
than as a limited partner of such other Person) will be deemed to
control such
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corporation or other Person. The Holder agrees
to provide to the Company such information regarding ownership of
Common Stock by it and its Affiliates as the Company may reasonably
request herewith.
4. Certain Adjustments . For
so long as this Warrant is outstanding:
4.1 Mergers or Consolidations
. If at any time after the date hereof, there shall be a capital
reorganization (other than a combination or subdivision of Common
Stock otherwise provided for herein) resulting in a
reclassification to or change in the securities issuable upon
exercise of this Warrant (a “ Reorganization ”),
or a merger or consolidation of the Company with another
corporation, partnership, limited liability company, or business
organization (a “ Person ” or the “
Persons ”) (other than a merger with another Person in
which the Company is a continuing corporation and which does not
result in any reclassification or change in the securities issuable
upon exercise of this Warrant or a merger effected exclusively for
the purpose of changing the domicile of the Company) (a “
Merger ”), or the sale of all or substantially all of
the assets of the Company (a “ Sale ”), then, as
a part of such Reorganization, Merger or Sale, lawful provision and
adjustment shall be made so that the Holder shall thereafter be
entitled to receive, upon exercise of this Warrant and at the times
provided for and subject to the terms and conditions in this
Warrant, the number of shares of stock or any other equity or debt
securities or property to which the Holder would have been entitled
upon consummation of the Reorganization, Merger or Sale if such
Holder had exercised this Warrant immediately prior to such
Reorganization, Merger or Sale. In any such case, appropriate
adjustment shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the Holder
after the Reorganization, Merger or Sale to the end that the
provisions of this Warrant (including adjustment of the Exercise
Price then in effect and the number of Warrant Shares) shall be
applicable after that event, as near as reasonably may be, in
relation to any shares of stock, securities, property or other
assets thereafter deliverable upon exercise of this Warrant. The
Company will not effect any Reorganization, Merger or Sale unless
prior to the consummation thereof each corporation or entity (other
than the Company) which may be required to deliver any securities
or other property upon the exercise of the Warrant as provided
herein shall assume in a written agreement the obligation to
deliver to the Holder such securities or other property as (in
accordance with the foregoing provisions) the Holder may be
entitled to receive and agreeing and confirming that this Warrant
shall continue in full force and effect, enforceable against the
Company and such corporation or entity in accordance with the terms
thereof and hereof. The foregoing provisions of this
Section 4.1 shall similarly apply to successive
Reorganizations, Mergers and Sales.
4.2 Splits and Subdivisions;
Dividends . In the event the Company should at any time or from
time to time (a) effectuate a split or subdivision of the
outstanding shares of Common Stock, (b) pay a dividend in or
make a distribution payable in additional shares of Common Stock or
other securities that are convertible or exchangeable or
exercisable into shares of Common Stock (“ Common Stock
Equivalents ”), or (c) issue by reclassification of
its Common Stock any other capital stock of the Company, in each
case without payment of any consideration by such holder for the
additional shares of Common Stock or Common Stock Equivalents
(including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of the applicable record
date (or the date of such distribution, split, subdivision or
reclassification if no record date is fixed), the per share
Exercise Price shall be appropriately
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decreased and the number of Warrant Shares shall
be appropriately increased in proportion to such increase (or
potential increase) of outstanding shares; provided, however
, that no adjustment shall be made in the event the split,
subdivision, dividend, distribution or reclassification is not
effectuated. The adjustment pursuant to this
Section 4.2 shall be made successively each time that
any event listed in this Section 4.2 above shall
occur.
4.3 Combination of Shares .
If the number of shares of Common Stock outstanding at any time
after the date hereof is decreased by a combination or reverse
split of the outstanding shares of Common Stock, the per share
Exercise Price shall be appropriately increased and the number of
shares of Warrant Shares shall be appropriately decreased in
proportion to such decrease in outstanding shares as of the
effective date of such combination or reverse split; provided,
however, that no adjustment shall be made in the event such
combination or reverse split is not effectuated.
4.4 Cash Dividends and Other
Distributions . If the Company shall distribute to holders of
Common Stock (a) any dividend or other distribution of cash,
evidences of its indebtedness, or any other properties or
securities (other than any dividend or distribution described in
Section 4.2 ) or (b) any options, warrants, or
other rights to subscribe for or purchase any of the foregoing
(other than any rights, options, warrants, or securities described
below), that, in the case of both clause (a) and clause
(b) together, aggregate on a rolling twelve-month basis to a
Fair Market Value per share of Common Stock as of the trading day
immediately preceding the declaration of such distribution (the
“ FMV Date ”) that exceeds 3% of the Fair Market
Value of one share of Common Stock on the FMV Date, then in each
such case the Exercise Price in effect immediately following the
effective date of such distribution shall be equal to the Exercise
Price immediately prior to such effective date multiplied by the
quotient of (i) the Fair Market Value of one share of Common
Stock on the last trading day preceding the first date on which the
Common
