Exhibit 4.2
WARRANT AGREEMENT
BY AND AMONG
CENTRAL EUROPEAN DISTRIBUTION CORPORATION,
XXXXX XXXXXX & CO., INC.
AND
FINE EQUITIES, INC.
DATED AS OF ______ , 1998
WARRANT AGREEMENT
WARRANT AGREEMENT dated as of ____, 1998 by and among CENTRAL EUROPEAN
DISTRIBUTION CORPORATION, a Delaware corporation (the "Company"), XXXXX XXXXXX &
CO., INC. ("Xxxxx Xxxxxx") and FINE EQUITIES, INC. ("Fine Equities" and together
with Xxxxx Xxxxxx, the "Representatives") (the Company and the Representatives
are referred to collectively herein as the "Parties").
The Company proposes to issue to the Representatives warrants as
hereinafter described (the "Warrants") to purchase up to an aggregate of 250,000
shares (the "Shares") of common stock, par value $.01 per share, of the Company
(the "Common Stock"), subject to adjustment as provided in Section 8 hereof,
each Warrant entitling the holder ("Holder") thereof to purchase one Share. All
capitalized terms used herein and not otherwise defined herein shall have the
same meanings as in that certain underwriting agreement, of even date herewith,
by and among the Company and the several underwriters named therein (the
"Underwriting Agreement").
NOW, THEREFORE, in consideration of the following promises and mutual
agreements and for other good and valuable consideration, the Parties agree as
follows:
1. ISSUANCE OF WARRANTS; FORM OF WARRANT. On the Closing Date the
Company will issue, sell and deliver the Warrants to the Representatives or
their respective bona fide officers for an aggregate price of $250. The
Warrants shall be issued to the Representatives or such designees in the amounts
set forth on Schedule I hereto. The form of Warrant Certificate and the form of
election to purchase Shares to be attached thereto shall be substantially as set
forth on Exhibit A hereto. The Warrants shall be executed on behalf of the
Company by the manual or facsimile signature of the present or any future
President or any Vice President of the Company, under its corporate seal,
affixed or in facsimile, and attested by the manual or facsimile signature of
the present or any future Secretary or Assistant Secretary of the Company.
2. REGISTRATION. The Warrants shall be numbered and shall be registered
in a Warrant register (the "Warrant Register"). The Company shall be entitled
to treat the registered holder of any Warrant on the Warrant Register as the
owner in fact thereof for all purposes and shall not be bound to recognize any
equitable or other claim to or interest in such Warrant on the part of any other
person, and shall not be liable for any registration or transfer of Warrants
which are registered or are to be registered in the name of a fiduciary or the
nominee of a fiduciary unless made with the actual knowledge that a fiduciary or
nominee is committing a breach of trust in requesting such registration or
transfer, or with such knowledge of such facts that its participation therein
amounts to bad faith. The Warrants shall be registered initially in the names of
the Representatives (in the amounts set forth in Schedule I hereto) in such
denominations as the Representatives may request in writing from the Company;
provided, however, that any Representative may designate that all or a portion
of its Warrants be issued in varying amounts directly to its bona fide officers
and not to such Representative. Such designation will only be made by a
Representative if it determines that such issuances would not violate the
interpretation of the Board of Governors of the National Association of
Securities Dealers, Inc. (the "NASD"), relating to the review of corporate
financing arrangements.
3. TRANSFER OF WARRANTS. The Warrants will not be sold, transferred,
assigned or hypothecated, in part or in whole, prior to the first anniversary of
the effective date of the Registration Statement, and thereafter only upon
delivery of the Warrant Certificate duly endorsed by the Holder or by its duly
authorized attorney or representative, or accompanied by proper evidence of
succession, assignment or authority to transfer. In all cases of transfer by an
attorney, the original power of attorney, duly approved, or an official copy
thereof, duly certified, shall be deposited with the Company. In case of
transfer by executors, administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be produced, and may be
required to be deposited with the Company in its discretion. Upon any
registration of transfer, the Company shall deliver a new Warrant or Warrants to
the persons entitled thereto. Any of the Warrants may be exchanged at the
option of its Holder for other Warrants of different denominations, of like
tenor and representing in the aggregate the right to purchase a like number of
Shares upon surrender to the Company or its duly authorized agent. The Company
may require payment of a sum sufficient to cover all taxes and other
governmental charges that may be imposed in connection with any voluntary
transfer, exchange or other disposition of the Warrants. However, the Company
shall have no obligation to cause Warrants to be transferred on its books to any
person, if such transfer would violate the Securities Act of 1933, as amended
(the "Act"), or applicable state securities laws.
4. TERM OF WARRANTS; EXERCISE OF WARRANTS.
(a) TERM OF WARRANTS. Each Warrant entitles the registered owner
thereof to purchase one fully paid and nonassessable Share at a purchase price
of $____ per Share (as adjusted from time to time pursuant to the provisions
hereof, the "Exercise Price") at any time from the first anniversary of the
effective date of the Registration Statement until 5:00 p.m., New York City
time, on ______, 2003 (the "Warrant Expiration Date").
(b) EXERCISE OF WARRANTS. The Exercise Price and the number of Shares
issuable upon the exercise of the Warrants are subject to adjustment upon the
occurrence of certain events, pursuant to the provisions of Section 8 of this
Agreement. Subject to the provisions of this Agreement, and in addition to the
right to surrender Warrants without any cash payment as set forth in subsection
(c) below, each Holder shall have the right, which may be exercised as set forth
in such Warrants, to purchase from the Company (and the Company shall issue and
sell to such Holder) the number of fully-paid and nonassessable Shares specified
in such Warrants, upon surrender to the Company, or its duly authorized agent,
of such Warrants, with the form of election to purchase attached thereto duly
completed and signed, with signatures guaranteed by a member firm of a national
securities exchange, a commercial bank (not a savings bank or savings and loan
association) or trust company located in the United States or a member of the
NASD and upon payment to the Company of the Exercise Price, as adjusted in
accordance with the provisions of Section 8 of this Agreement, for the number of
Shares in respect of which such Warrants are then exercised. No adjustment shall
be made for any cash dividends payable out of consolidated earnings or retained
earnings on any Shares issuable upon exercise of a Warrant. Upon each surrender
of Warrants and payment of the Exercise Price, the Company shall issue and cause
to be delivered with all reasonable dispatch, but in no event later than three
(3) trading days following such surrender, to or upon the
-2-
written order of the Holder of such Warrants and in such name or names as such
Holder may designate, a certificate or certificates for the number of full
Shares so purchased upon the exercise of such Warrants, together with cash, as
provided in Section 9 of this Agreement, in respect of any fractional Shares
otherwise issuable upon such surrender. Such certificate or certificates shall
be deemed to have been issued and any person so designated to be named therein
shall be deemed to have become a holder of record of such Shares as of the date
of the surrender of Warrants and payment of the Exercise Price as aforesaid;
provided, however, that if, at the date of surrender of such Warrants, the
transfer books for the shares of Common Stock or other class of securities
issuable upon the exercise of such Warrants shall be closed, the certificates
for the Shares shall be issuable as of the date on which such books shall next
be opened (whether before, on or after the Warrant Expiration Date) and until
such date the Company shall be under no duty to deliver any certificate for such
Shares; provided, further, however, that the transfer books of record, unless
otherwise required by law, shall not be closed at any one time for a period
longer than twenty (20) days. The rights of purchase represented by the Warrants
shall be exercisable, at the election of the Holder(s) thereof, either in full
or from time to time in part and, in the event that any Warrant is exercised in
respect of less than all of the Shares issuable upon such exercise at any time
prior to the Warrant Expiration Date, a new Warrant or Warrants will be issued
for the remaining number of Shares specified in the Warrant so surrendered.
(c) PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price may be
made in cash, by wire transfer of immediately available funds or by certified
check or official bank check payable to the order of the Company. In addition
and in lieu of any cash payment, the Holder of any Warrants shall have the right
at any time and from time to time to exercise such Warrants in full or in part
by surrendering any such Warrant in exchange for the number of Shares equal to
the product of (x) the number of shares as to which such Warrant is being
exercised multiplied by (y) a fraction, the numerator of which is the Market
Price (as defined in Section 8(d) below) per Share less the Exercise Price and
the denominator of which is such Market Price.
5. PAYMENT OF TAXES. The Company will pay all documentary stamp taxes,
if any, attributable to the issuance of Shares upon the exercise of Warrants;
provided, however, that the Company shall not be required to pay any taxes
payable in respect of any transfer involved in the issue or delivery of any
certificates for Shares in a name other than that of the Holder of Warrants in
respect of which such Shares are issued.
6. MUTILATED OR MISSING WARRANTS. In case any of the Warrants shall be
mutilated, lost, stolen or destroyed, the Company shall issue and deliver in
exchange and substitution for and upon cancellation of the mutilated Warrant, or
in lieu of and substitution for the Warrant lost, stolen or destroyed, a new
Warrant of like tenor and representing an equivalent right or interest, but only
upon receipt of evidence reasonably satisfactory to the Company of such
mutilation, loss, theft or destruction of such Warrant and indemnity, if
requested, reasonably satisfactory to the Company. An applicant for such
substitute Warrants shall also comply with such other reasonable regulations and
pay such other reasonable charges and expenses as the Company may prescribe.
-3-
7. RESERVATION OF SHARES, ETC. The Company has reserved, and shall at
all times keep reserved, out of the authorized and unissued Common Stock, a
number of shares sufficient to provide for the exercise of the rights of
purchase represented by the outstanding Warrants. American Stock Transfer and
Trust Company, transfer agent for the Shares (the "Transfer Agent"), and any
subsequent transfer agent for the Company's securities issuable upon the
exercise of the Warrants will be irrevocably authorized and directed at all
times until the Warrant Expiration Date to reserve such number of authorized and
unissued shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's securities issuable upon the
exercise of the Warrants. The Company will supply the Transfer Agent or any
subsequent transfer agent with duly executed certificates for such purpose and
will itself provide or make available any cash distributable as provided in
Section 9 of this Agreement. All Warrants surrendered in the exercise of the
rights thereby evidenced shall be canceled, and such canceled Warrants shall
constitute sufficient evidence of the number of Shares that have been issued
upon the exercise of such Warrants. No Shares shall be subject to reservation
in respect of unexercised Warrants after the Warrant Expiration Date.
8. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF SHARES. The Exercise
Price and the number and kind of securities issuable upon exercise of each
Warrant shall be subject to adjustment from time to time upon the happening of
certain events, as follows:
(a) If the Company (i) declares a dividend on its Common Stock in
shares of Common Stock or makes a distribution in shares of Common Stock, (ii)
subdivides its outstanding shares of Common Stock, (iii) combines its
outstanding shares of Common Shares into a smaller number of shares or (iv)
issues by reclassification of its Common Stock other securities of the Company
(including any such reclassification in connection with a consolidation or
merger in which the Company is the surviving entity), the number of Shares
purchasable upon exercise of each Warrant immediately prior thereto shall be
adjusted so that the Holder of each Warrant shall be entitled to receive the
kind and number of Shares or other securities of the Company which such Holder
would have owned or have been entitled to receive after the happening of any of
the events described above, had such Warrant been exercised immediately prior to
the happening of such event or any record date with respect thereto. Such
adjustment shall be made whenever any of the events listed above shall occur.
An adjustment made pursuant to this paragraph (a) shall become effective
immediately after the effective date of such event retroactive to immediately
after the record date, if any, for such event.
(b) If the Company issues rights, options or warrants to all holders
of its Common Stock, without any charge to such holders, entitling them to
subscribe for or to purchase Common Stock at a price per share lower than the
then current Market Price per share at the record date mentioned below (as
defined in paragraph (d) below), the number of Shares thereafter purchasable
upon exercise of each Warrant shall be determined by multiplying the number of
Shares theretofore purchasable upon exercise of each Warrant by a fraction, of
which the numerator shall be the number of shares of Common Stock outstanding on
such record date plus the number of additional shares of Common Stock offered
for subscription or purchase, and of which the denominator shall be the
-4-
number of shares of Common Stock outstanding on such record date plus the number
of shares which the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at the then current Market Price per
share. Such adjustment shall be made whenever such rights, options or warrants
are issued, and shall become effective retroactively to immediately after the
record date for the determination of shareholders entitled to receive such
rights, options or warrants.
(c) If the Company distributes to all holders of its Common Stock
shares of stock other than Common Stock or evidences of its indebtedness or
assets (excluding cash dividends payable out of consolidated earnings or
retained earnings and dividends or distributions referred to in paragraph (a)
above) or rights, options or warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock
(excluding those referred to in paragraph (b) above), then in each case the
number of Shares thereafter issuable upon the exercise of each Warrant shall be
determined by multiplying the number of Shares theretofore issuable upon the
exercise of each Warrant, by a fraction, of which the numerator shall be the
current Market Price per share (as defined in paragraph (d) below) on the record
date mentioned below in this paragraph (c), and of which the denominator shall
be the current Market Price per share on such record date, less the then fair
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive) of the portion of the shares of stock
other than Common Stock or assets or evidences of indebtedness so distributed or
of such subscription rights, options or warrants, or of such convertible or
exchangeable securities applicable to one Share. Such adjustment shall be made
whenever any such distribution is made, and shall become effective on the date
of distribution retroactive to immediately after the record date for the
determination of shareholders entitled to receive such distribution.
(d) For the purpose of any computation under paragraphs (b) and (c)
of this Section 8, the current "Market Price" per share at any date shall be the
average of the per share daily closing prices for Common Stock for fifteen (15)
consecutive trading days commencing twenty (20) trading days before the date of
such computation. The closing price for each day shall be the last reported sale
price regular way or, in case no such reported sale takes place on such day, the
average of the closing bid and asked prices regular way for such day, in either
case on the principal national securities exchange on which shares of Common
Stock are listed or admitted to trading, or if the are not listed or admitted to
trading on any national securities exchange, but are traded in the over-the-
counter market, the closing sale per share of Common Stock or, in case no sale
is publicly reported, the average of the representative closing bid and asked
quotations for shares of Common Stock on the NASDAQ NMS or SmallCap Stock
Markets or any comparable system, or if shares of Common Stock are not listed on
the NASDAQ Stock Market or a comparable system, the closing sale price per share
of the Common Stock or, in case no sale is publicly reported, the average of the
closing bid and asked prices as furnished by two members of the NASD selected
from time to time by the Company for that purpose.
(e) No adjustment in the number of Shares purchasable hereunder shall
be required unless such adjustment would require an increase or decrease of at
least one percent (1%) in the
-5-
number of Shares purchasable upon the exercise of each Warrant; provided,
however, that any adjustments which by reason of this paragraph (e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations shall be made to the nearest one
thousandth of a share.
(f) Whenever the number of Shares purchasable upon exercise of each
Warrant is adjusted, as herein provided, the Exercise Price shall be adjusted by
multiplying the Exercise Price in effect immediately prior to such adjustment by
a fraction, of which the numerator shall be the number of Shares purchasable
upon the exercise of each Warrant immediately prior to such adjustment, and of
which the denominator shall be the number of shares so purchasable immediately
thereafter.
(g) For the purpose of this Section 8, the term "Common Stock" shall
mean (i) the class of stock designated as the Common Stock of the Company at the
date of this Agreement or (ii) any other class of stock resulting from
successive changes or reclassifications of shares of such class of stock
consisting solely of changes in par value, or from no par value to par value, or
from par value to no par value. If at any time, as a result of an adjustment
made pursuant to paragraph (a) above, the Holders become entitled to purchase
any shares of capital stock of the Company other than Common Stock, thereafter
the number of such other shares so purchasable upon exercise of each Warrant and
the Exercise Price of such shares shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Shares contained in paragraphs (a) through (f),
inclusive, and paragraphs (h) through (m), inclusive, of this Section 8, and the
provisions of Sections 4, 5, 7 and 10 hereof, with respect to the Shares, shall
apply on like terms to any such other shares.
(h) Upon the expiration of any rights, options, warrants or
conversion rights or exchange privileges, if any thereof have not been
exercised, the Exercise Price and the number of Shares purchasable upon the
exercise of each Warrant shall, upon such expiration, be readjusted and shall
thereafter be such as they would have been had they originally been adjusted (or
had the original adjustment not been required, as the case may be) as if (i) the
only Shares so issued were the Shares, if any, actually issued or sold upon the
exercise of such rights, options, warrants or conversion rights or exchange
privileges and (ii) such Shares, if any were issued or sold for the
consideration actually received by the Company upon such exercise plus the
aggregate consideration, if any, actually received by the Company for the
issuance, sale or grant of all of such rights, options, warrants or conversion
rights or exchange privileges whether or not exercised; provided, however, that
no such readjustment shall have the effect of decreasing the number of shares
issuable upon the exercise of each Warrant or increasing the Exercise Price by
an amount in excess of the amount of the adjustment initially made in respect of
the issuance, sale or grant of such rights, options, warrants or conversion
rights or exchange privileges.
(i) The Company may, at its option at any time during the term of the
Warrants, reduce the then current Exercise Price to any amount deemed
appropriate by the Board of Directors of the Company.
-6-
(j) Whenever the number of Shares issuable upon the exercise of each
Warrant or the Exercise Price of such Shares is adjusted, as herein provided,
the Company shall promptly mail by first class-mail, postage prepaid, to each
Holder notice of such adjustment or adjustments. The Company shall retain a firm
of independent public accountants (who may be the regular accountants employed
by the Company) to make any computation required by this Section 8 and shall
cause such accountants to prepare a certificate setting forth the number of
Shares issuable upon the exercise of each Warrant and the Exercise Price of such
Shares after such adjustment, setting forth a brief statement of the facts
requiring such adjustment and setting forth the computation by which such
adjustment was made. Such certificate shall be conclusive as to the correctness
of such adjustment and each Holder shall have the right to inspect such
certificate during reasonable business hours.
(k) Except as provided in this Section 8, no adjustment in respect of
any dividends shall be made during the term of a Warrant or upon the exercise of
a Warrant.
(l) If the Company consolidates with or merges into another
corporation or if the Company sells or conveys all or substantially all its
property to another corporation, the Company or such successor or purchasing
corporation (or an affiliate of such successor or purchasing corporation), as
the case may be, agrees that each Holder shall have the right thereafter upon
payment of the Exercise Price in effect immediately prior to such action to
purchase upon exercise of each Warrant the kind and amount of shares and other
securities and property (including cash) which such Holder would have owned or
been entitled to receive after the happening of the consolidation, merger, sale
or conveyance had such Warrant been exercised immediately prior to such action.
The provisions of this paragraph (l) shall apply to successive consolidations,
mergers, sales or conveyances.
(m) Notwithstanding any adjustment in the Exercise Price or the
number or kind of shares purchasable upon the exercise of the Warrants pursuant
to this Agreement, certificates for Warrants issued prior or subsequent to such
adjustment may continue to express the same price and number and kind of shares
as are initially issuable pursuant to this Agreement.
9. FRACTIONAL INTERESTS. The Company shall not be required to issue
fractions of Shares on the exercise of Warrants. If more than one Warrant is
presented for exercise in full at the same time by the same Holder, the number
of Shares issuable upon the exercise thereof shall be computed on the basis of
the aggregate number of Shares issuable on exercise of the Warrants so
presented. If any fraction of a Share would, except for the provisions of this
Section 9, be issuable on the exercise of any Warrant (or specified portions
thereof), the Company shall purchase such fraction for an amount in cash equal
to the same fraction of the current Market Price per share (determined as
provided in Section 8(d) of this Agreement) on the date of exercise.
10. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION RIGHTS. The Company covenants and agrees with
the Representatives and any other or subsequent Holders of the Registrable
Securities (as defined in
-7-
paragraph (f) of this Section 10) that, upon the written request of the then
Holder(s) of at least a majority of the Warrants or the Registrable Securities,
or both, which were originally issued to the Representative or its designees,
made at any time within the period commencing one (1) year and ending five (5)
years after the Effective Date, the Company will file as promptly as practicable
and, in any event, within 60 days after receipt of such written request, at its
expense (other than the fees of counsel and sales commissions for such Holders),
no more than once, a post-effective amendment (the "Amendment") to the Company's
Registration Statement on Form S-1, Registration No. 333-_____ as filed with the
Securities and Exchange Commission on April __, 1998 or a new registration
statement on an appropriate form under the Act, registering or qualifying the
Registrable Securities for sale in accordance with the intended method of sale
or other disposition described in such request. Within fifteen (15) days after
receiving any such notice, the Company shall give notice to the other Holders of
the Registrable Securities advising that the Company is proceeding with such
Amendment, registration statement and offering to include the Registrable
Securities of such Holders. The Company shall not be obligated to any other such
Holder unless that other Holder accepts such offer by notice in writing to the
Company within twenty (20) days thereafter. The Company will use its best
efforts, through its officers, directors, auditors and counsel in all matters
necessary or advisable, to file and cause such Amendment or registration
statement to become effective as promptly as practicable (but in any event
within 90 days of the initial filing of such Amendment or registration
statement) and for a period of 24 months thereafter to reflect in the Amendment
or registration statement financial statements which are prepared in accordance
with Section 10(a)(3) of the Act and any facts or events arising that,
individually, or in the aggregate, represent a fundamental or material change in
the information set forth in the Amendment or registration statement to enable
any Holders of the Warrants to sell such Registrable Securities. The Holders may
sell the Registrable Securities pursuant to the Amendment or registration
statement without exercising the Warrants. If any registration pursuant to this
paragraph (a) is an underwritten offering, the Holders of a majority of the
Registrable Securities to be included in such registration shall be entitled to
select the underwriter or managing underwriter (in the case of a syndicated
offering) of such offering.
(b) PIGGYBACK REGISTRATION RIGHTS. The Company covenants and agrees
with the Representatives and any other Holders or subsequent Holders of the
Registrable Securities that if, at any time within the period commencing one (1)
year and ending five (5) years after the Effective Date, it proposes to file a
registration statement with respect to any class of equity or equity-related
security (other than in connection with an offering to the Company's employees
or in connection with an acquisition, merger or similar transaction) under the
Act in a primary registration on behalf of the Company and/or in a secondary
registration on behalf of holders of such securities and the registration form
to be used may be used for registration of the Registrable Securities, the
Company will give prompt written notice (which, in the case of a registration
statement or notification pursuant to the exercise of demand registration rights
other than those provided in Section 10(a) of this Agreement, shall be within
ten (10) business days after the Company's receipt of notice of such exercise
and, in any event, at least 30 days prior to such filing) to the Holders of
Registrable Securities (regardless whether some of the Holders have theretofore
availed themselves of the right provided in Section 10(a) of this Agreement) at
the addresses appearing on the records of the Company of its intention to file a
registration statement and will offer to include in such registration statement
any of the
-8-
Registrable Securities, subject to paragraphs (i) and (ii) of this paragraph
(b), such number of Registrable Securities with respect to which the Company has
received written requests for inclusion therein within twenty (20) days after
the giving of notice by the Company. All registrations requested pursuant to
this paragraph (b) are referred to herein as "Piggyback Registrations". All
Piggyback Registrations pursuant to this paragraph (b) will be made solely at
the Company expense.
(i) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback
Registration includes an underwritten primary registration for the
Company, and the underwriter(s) for such offering determine in good
faith and advise the Company in writing that in their opinion the
number of Registrable Securities requested to be included in such
registration exceeds the number that can be sold in such offering
without materially adversely affecting the distribution of such
securities by the Company, the Company will include in such
registration (A) first, the securities that the Company proposes to
sell, (B) second, the Registrable Securities requested to be included
in such registration, apportioned pro rata among the Holders of
Registrable Securities and (C) third, securities of the holders of
other securities requesting registration.
(ii) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback
Registration consists only of an underwritten secondary registration
for holders of securities of the Company (other than pursuant to
Section 10(a)), and the underwriters for such offering advise the
Company in writing that in their opinion the number of Registrable
Securities requested to be included in such registration exceeds the
number which can be sold in such offering without materially adversely
affecting the distribution of such securities by the Company, the
Company will include in such registration (A) first, the securities
requested to be included therein by the holders requesting such
registration and the Registrable Securities requested to be included
in such registration, pro rata among all such holders on the basis of
the number of shares requested to be included by each such holder and
(B) second, other securities requested to be included in such
registration.
Notwithstanding the foregoing, if any such underwriter determines in good
faith and advises the Company in writing that the distribution the Registrable
Securities requested to be included in the registration concurrently with the
securities being registered by the Company would material adversely affect the
distribution of such securities by the Company, then the Holders of such
Registrable Securities shall delay their offering and sale for such period
ending on the earliest of (1) 90 days following the effective date of the
Company's registration statement, (2) the day upon which the underwriting
syndicate, if any, for such offering has been disbanded or, (3) such date as the
Company, managing underwriter and Holders of Registrable Securities otherwise
agree. If such a delay occurs, the Company shall file such supplements, post-
effective amendments and take any other steps necessary to permit such Holders
to make their proposed offering and sale for a period of the later of 180 days
immediately following the end of such delay or the period of time in which the
registration statement is otherwise effective. If any party disapproves of the
terms of any such
-9-
underwriting, it may elect to withdraw therefrom by written notice to the
Company and the Underwriters.
(c) OTHER REGISTRATION RIGHTS. In addition to the rights above
provided, the Company will cooperate with the then Holders of the Registrable
Securities in preparing and signing any registration statement, in addition to
the registration statements discussed above, required in order to sell or
transfer the Registrable Securities and will supply all information required
therefor, but such additional registration statement shall be at the then
Holders' cost and expense; provided, however, that if the Company elects to
register or qualify additional shares of Common Stock, the cost and expense of
such registration statement will be pro rated between the Company and the
Holders of the Registrable Securities according to the aggregate sales price of
the securities being issued. However, the Company will not be required to file
a registration statement pursuant to this paragraph (c) (i) at a time when the
audited financial statements required to be included therein are not available,
which time shall be limited to the period commencing 45 days after the end of
the Company's last fiscal year and ending 90 days after the end of such fiscal
year, or (ii) within 90 days after completion of a public offering by the
Company of any of its Common Shares or equity-related securities or (iii) if, in
the reasonable opinion of the Company it would adversely impact the Company in
its capital raising plans or otherwise (in which latter case filing may be
delayed no longer than 90 days).
(d) ACTION TO BE TAKEN BY THE COMPANY. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b) or
(c) of this Section 10, the Company agrees to:
(i) Bear the expenses of any registration or qualification
under paragraphs (a) or (b) of this Section 10, including, but not
limited to, legal, accounting and printing fees; provided, however,
that in no event shall the Company be obligated to pay (A) any fees
and disbursements of special counsel for Holders of Registrable
Securities, or (B) any underwriters' discount or commission in respect
of such Registrable Securities and (C) any stock transfer taxes
attributable to the sale of the Registrable Securities; and
(ii) Use its best efforts to register or qualify the
Registrable Securities for offer or sale under state securities or
Blue Sky laws of such jurisdictions in which the Underwriters or such
Holders shall reasonably request; provided, however, that no
qualification shall be required in any jurisdiction where, as a result
thereof, the Company would be subject to service of general process or
to taxation as a foreign corporation doing business in such
jurisdiction to which it is not then subject, and to do all other acts
necessary or advisable to enable the holders to consummate the
proposed sale, transfer or other disposition of such securities in any
jurisdiction.
(e) ACTION TO BE TAKEN BY THE HOLDERS. In connection with the
registration of Registrable Securities in accordance with paragraphs (a), (b) or
(c) of this Section 10, the Company's
-10-
obligation shall be conditioned as to each such public offering upon a timely
receipt by the Company in writing of:
(i) Information as to the terms of such public offering
furnished by or on behalf of each Holder intending to make a public
offering of such Holder's Registrable Securities; and
(ii) Such other information as the Company may reasonably
require from such Holders, or any underwriter for any of them, for
inclusion in such Registration Statement.
(f) For purposes of this Section 10, (i) the term "Holder" shall
include holders of Shares, and (ii) the term "Registrable Securities" shall mean
the Shares, if issued.
11. NOTICES TO HOLDERS.
(a) Nothing in this Agreement or in any Warrants shall be construed
as conferring upon the Holders the right to vote or to receive dividends or to
consent or to receive notice as shareholders in respect of the meetings of
shareholders or the election of directors of the Company or any other matter, or
any rights whatsoever as shareholders of the Company prior to the exercise
hereof; provided, however, that in the event that any meeting of shareholders
shall be called, the Company shall cause a notice thereof to be sent by first-
class mail, postage prepaid, at least twenty (20) days prior to the date fixed
as a record date or the date of closing the transfer books in relation to such
meeting, to each registered Holder of Warrants at such Holder's address
appearing on the Warrant Register.
(b) If the Company intends to make any distribution on its Common
Shares (or other securities which may be issuable in lieu thereof upon the
exercise of Warrants), including, without limitation, any such distribution to
be made in connection with a consolidation or merger in which the Company is the
surviving entity, or to issue subscription rights or warrants to holders of its
Common Shares, the Company shall cause a notice of its intention to make such
distribution to be sent by first-class mail, postage prepaid, at least twenty
(20) days prior to the date fixed as a record date or the date of closing the
transfer books in relation to such distribution, to each registered Holder of
Warrants at such Holder's address appearing on the Warrant Register, but failure
to mail or to receive such notice or any defect therein or in the mailing
thereof shall not affect the validity of any action taken in connection with
such distribution.
12. NOTICES. Any notice pursuant to this Agreement to be given by the
Holder of any Warrant or the holder of any Share to the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed as follows or to such other address as the Company may designate by
notice given in accordance with this Section 12, to the Holders of Warrants or
the holders of Shares:
-00-
Xxxxxxx Xxxxxxxx Distribution Corporation
000 Xxxxx Xxxxx Xxxxxx, #000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn.: President
Notices or demands authorized by this Agreement to be given or made by the
Company to or by the Holder of any Warrant or the holder of any Share shall be
sufficiently given or made (except as otherwise provided in this Agreement) if
sent by first-class mail, postage prepaid, addressed to such Holder or such
holder of Shares at the address of such Holder or such holder of Shares as shown
on the Warrant Register or the books of the Company, as the case may be.
13. GOVERNING LAW. This Agreement and each Warrant issued hereunder shall
be governed by and construed in accordance with the substantive laws of the
State of New York. The Company hereby agrees to accept service of process by
notice given to it pursuant to the provisions of Section 12 hereof.
14. 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 together shall constitute one and the same instrument.
-12-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed as of the day, month and year first above written.
CENTRAL EUROPEAN DISTRIBUTION
CORPORATION
By:_______________________________________
Its:
XXXXX XXXXXX & CO., INC.
By:_______________________________________
Its:
FINE EQUITIES, INC.
By:_______________________________________
Its:
-13-
SCHEDULE I
NAME OF UNDERWRITER NUMBER OF WARRANTS
------------------- ------------------
Xxxxx Xxxxxx & Co., Inc.
Fine Equities, Inc. __________________
TOTAL 250,000
-14-
EXHIBIT A
[FORM OF FACE OF WARRANT CERTIFICATE]
No. W _____ Warrants
VOID AFTER _______, 2002
WARRANT CERTIFICATE FOR PURCHASE
OF COMMON STOCK
CENTRAL EUROPEAN DISTRIBUTION CORPORATION
This certifies that FOR VALUE RECEIVED _____________ or registered assigns
(the "Registered Holder") is the owner of the number of Warrants ("Warrants")
specified above. Each Warrant represented hereby initially entitles the
Registered Holder to purchase, subject to the terms and conditions set forth in
this Warrant Certificate and the Warrant Agreement (as hereinafter defined), one
fully paid and nonassessable share of common stock, par value $.01 per share
("Common Stock"), of Central European Distribution Corporation, a Delaware
corporation (the "Company"), at any time from the first anniversary of the
Registration Statement (as defined in the Warrant Agreement) until the
Expiration Date (as hereinafter defined), upon the presentation and surrender of
this Warrant Certificate with the Subscription Form on the reverse hereof duly
executed, at the corporate office of American Stock Transfer & Trust Company as
Warrant Agent, or its successor (the "Warrant Agent"), accompanied by payment of
$____ (the "Purchase Price") in lawful money of the United States of America in
cash or by official bank or certified check made payable to Central European
Distribution Corporation or otherwise as provided in the Warrant Agreement.
This Warrant Certificate and each Warrant represented hereby are issued
pursuant to and are subject in all respects to the terms and conditions set
forth in the Warrant Agreement (the "Warrant Agreement"), dated _____, 1998, by
and among the Company, Xxxxx Xxxxxx & Co., Inc. and Fine Equities, Inc.
In the event of certain contingencies provided for in the Warrant
Agreement, the Purchase Price and the number of shares of Common Stock subject
to purchase upon the exercise of each Warrant represented hereby are subject to
modification or adjustment.
Each Warrant represented hereby is exercisable at the option of the
Registered Holder, but no fractional shares of Common Stock will be issued. In
the case of the exercise of less than all the Warrants represented hereby, the
Company shall cancel this Warrant Certificate upon the surrender hereof and
shall execute and deliver a new Warrant Certificate or Warrant Certificates of
like tenor, which the Warrant Agent shall countersign, for the balance of such
Warrants.
The term "Expiration Date" shall mean 5:00 P.M. (New York time) on _____,
2002. If such date shall in the State of New York be a holiday or a day on which
banks are authorized to close, then
-i-
the Expiration Date shall mean 5:00 P.M. (New York time) the next following day
which in the State of New York is not a holiday or a day on which banks are
authorized to close.
The Company shall not be obligated to deliver any securities pursuant to
the exercise of the Warrants represented hereby unless a registration statement
under the Securities Act of 1933, as amended, with respect to such securities is
effective. The Company has covenanted and agreed that it will file a
registration statement and will use its best efforts to cause the same to become
effective and to keep such registration statement current while any of the
Warrants are outstanding. The Warrants represented hereby shall not be
exercisable by a Registered Holder in any state where such exercise would be
unlawful.
This Warrant Certificate is exchangeable, upon the surrender hereof by the
Registered Holder at the corporate office of the Warrant Agent, for a new
Warrant Certificate or Warrant Certificates of like tenor representing an equal
aggregate number of Warrants, each of such new Warrant Certificates to represent
such number of Warrants as shall be designated by such Registered Holder at the
time of such surrender. At any time prior to the Expiration Date, upon due
presentment with a $___ transfer fee per certificate in addition to any tax or
other governmental charge imposed in connection therewith, for registration of
transfer of this Warrant Certificate at such office, a new Warrant Certificate
or Warrant Certificates representing an equal aggregate number of Warrants will
be issued to the transferee in exchange therefor, subject to the limitations
provided in the Warrant Agreement.
Prior to the exercise of any Warrant represented hereby, the Registered
Holder shall not be entitled to any rights of a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided in the Warrant Agreement.
Prior to due presentment for registration of transfer hereof, the Company
and the Warrant Agent may deem and treat the Registered Holder as the absolute
owner hereof and of each Warrant represented hereby (notwithstanding any
notations of ownership or writing hereon made by anyone other than a duly
authorized officer of the Company or the Warrant Agent) for all purposes and
shall not be affected by any notice to the contrary.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York without reference to principles of
conflict of laws.
This Warrant Certificate is not valid unless countersigned by the Warrant
Agent.
-ii-
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or in facsimile, by two of its officers thereunto duly
authorized and a facsimile of its corporate seal to be imprinted hereon.
CENTRAL EUROPEAN DISTRIBUTION
CORPORATION
Dated:
By:________________________________
By:________________________________
[seal]
Countersigned:
_________________________________
as Warrant Agent
By: ______________________________
Authorized Officer
-iii-
[FORM OF REVERSE OF WARRANT CERTIFICATE]
TRANSFER FEE: $___ PER CERTIFICATE ISSUED
SUBSCRIPTION FORM
To Be Executed by the Registered Holder
in Order to Exercise Warrants
The undersigned Registered Holder hereby irrevocably elects to
exercise________ Warrants represented by this Warrant Certificate, and to
purchase the securities issuable upon the exercise of such Warrants, and
requests that certificates for such securities shall be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
_______________________________
_______________________________
_______________________________
_______________________________
[please print or type name and address]
and be delivered to
_______________________________
_______________________________
_______________________________
_______________________________
[please print or type name and address]
and if such number of Warrants shall not be all the Warrants evidenced by this
Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.
-iv-
Dated: X__________________________________
___________________________________
___________________________________
Address
___________________________________
Taxpayer Identification Number
___________________________________
Signature Guaranteed
___________________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A MEMBER OF THE MEDALLION STAMP PROGRAM.
-v-
ASSIGNMENT
To Be Executed by the Registered Holder
in Order to Assign Warrants
FOR VALUE RECEIVED, _____________________ hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER
OF TRANSFEREE
_______________________________
_______________________________
_______________________________
_______________________________
[please print or type name and address]
______ of the Warrants represented by this Warrant Certificate, and hereby
irrevocably constitutes and appoints _____________ Attorney to transfer this
Warrant Certificate on the books of the Company, with full power of substitution
in the premises.
Dated:________________ X______________________________
Signature Guaranteed
______________________________
THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO THE
NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE
GUARANTEED BY A MEMBER OF THE MEDALLION STAMP PROGRAM.
-vi-
