Exhibit 10.1

CONFORMED COPY

 

From:    Central European Distribution Corporation (“CEDC”)    ul. Bobrowiecka 6
   02-728 Warszawa    Poland To:    Lion/Rally Cayman 7 (“Cayman 7”)    c/o
Stuarts Corporate Services Ltd.    PO Box 2510    Grand Cayman KY1-1104   
Cayman Islands    Lion/Rally Cayman 6 (“Cayman 6”)    c/o Stuarts Corporate
Services Ltd.    PO Box 2510    Grand Cayman KY1-1104    Cayman Islands

29 July 2009

Dear Sirs

 

1 We refer to the following:

 

1.1 the option agreement relating to shares in Cayman 6 dated 7 May 2009 made
between Lion/Rally Cayman 4, Lion/Rally Cayman 5, Cayman 7 and CEDC (the “Option
Agreement”);

 

1.2 the governance and shareholders agreement dated 7 May 2009 made between
Lion/Rally Cayman 8, Cayman 7, Lion/Rally Cayman 4, Lion/Rally Cayman 5, Cayman
6 and CEDC (the “GSA”);

 

1.3 the proposed acquisition by Cayman 6 of all the shares and CPECs in the
capital of Lion/Rally Lux 1 held by each of: (i) Euro Energy Overseas Ltd.,
(ii) Altek Consulting Inc., (iii) Genora Consulting Inc. and (iv) Lidstel Ltd on
the terms of the agreement set out at Schedule 1 (the “Minority Purchase”); and

 

1.4 the proposed issue, in connection with the Minority Purchase, of 30,000,000
A ordinary shares by Cayman 6 to Cayman 7 for the consideration of US$30,000,000
(the “Cayman 6 Subscription”).

 

2 Each party acknowledges receipt of good consideration from one another and
hereby agrees as set out in this letter agreement.

 

3 Subject to the conditions set out below (the “Conditions”), CEDC irrevocably
agrees and commits to subscribe, in cash, for additional limited partnership
interests in Cayman 7 for a value of US$30,000,000 (the “Cayman 7
Subscription”), no later than Closing as set out in the Sale and Purchase
Agreement (as defined below) and not before the satisfactions of the condition
set out in paragraph 4.2.

 

4 The Conditions shall be:

 

4.1 due execution and delivery of the sale and purchase agreement in relation to
the Minority Purchase (the “Sale and Purchase Agreement”) by all parties to it;
and

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4.2 the parties to this letter executing or procuring the relevant party
executes all documentation attached at Schedule 2 or as may otherwise be
reasonably required to ensure that CEDC shall have obtained additional limited
partnership interests in Cayman 7 for a value of US$30,000,000.

 

5 Cayman 7 agrees to comply with its obligations set out in Clause 14.3 of the
Option Agreement within 30 days of completion of the Minority Purchase.

 

6 Cayman 7 irrevocably agrees and commits to apply the monies received under the
Cayman 7 Subscription towards the monies payable by it under the Cayman 6
Subscription.

 

7 The Parties irrevocably agree that the courts of England shall have exclusive
jurisdiction over any dispute or claim arising out of or in connection with this
letter or its subject matter or formation (including non-contractual claims). No
Party shall be entitled to commence proceedings in any court in any jurisdiction
other than England.

 

8 This letter and all matters (including, without limitation, any contractual or
non-contractual obligation) arising from or connected with it are governed by,
and will be construed in accordance with, English law.

 

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Please confirm your agreement with the terms of this letter by signing and
returning to us the enclosed duplicate copy.

 

   

 

/s/ BILL CAREY

    for and on behalf of     Central European Distribution Corporation    
Agreed and accepted:    

/s/ HAYLEY TANGUY

   

/s/ HAYLEY TANGUY

for and on behalf of     for and on behalf of Lion/Rally Cayman 6     Lion/Rally
Cayman 7     acting by its general partner     Lion/Rally Cayman 8

 

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SCHEDULE 1

SALE AND PURCHASE AGREEMENT

 

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DATED 29 JULY 2009

LION/RALLY CAYMAN 6

EURO ENERGY OVERSEAS LTD.

ALTEK CONSULTING INC.

GENORA CONSULTING INC.

LIDSTEL LTD.

PASALBA LTD

and

LION/RALLY LUX 1

 

 

SALE AND PURCHASE AGREEMENT

 

 

LOGO [g96264ex10_1pg005.jpg]

 

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TABLE OF CONTENTS

 

          Page 1.    Interpretation    8 2.    Sale and Purchase    10 3.   
Consideration    10 4.    Closing    10 5.    Sellers’ Warranties and
Acknowledgments    11 6.    Buyer’s Warranties and Acknowledgements    11 7.   
Effect of Closing    11 8.    Rights of First Refusal    11 9.    Remedies and
Waivers    12 10.    No representations    12 11.    Assignment    12 12.   
Termination    12 13.    Further Assurances    13 14.    Variation    13 15.   
Notices    13 16.    Announcements    15 17.    Confidentiality    16 18.   
Costs and Expenses    17 19.    Invalidity    17 20.    Third Party Rights    17
21.    Counterparts    17 22.    Entire Agreement    17 23.    Currency    18
24.    Language    18

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25.    Settlement – No admission of liability    18 26.    Choice of Governing
Law and Arbitration    18 SCHEDULE 1 SALES SECURITIES AND CONSIDERATION PAYABLE
   21 SCHEDULE 2 DEFINITIONS    22 SCHEDULE 3 CLOSING DELIVERABLES    25
SCHEDULE 4 WARRANTIES    26

 

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THIS SHARE SALE AND PURCHASE AGREEMENT (the “Agreement”) is entered into on
29 July 2009 among:

 

(1) LION/RALLY CAYMAN 6, a company incorporated in the Cayman Islands whose
registered office is at c/o Stuarts Corporate Services Ltd., PO Box 2510 Grand
Cayman KY1-1104, Cayman Island (the “Buyer”);

 

(2) EURO ENERGY OVERSEAS LTD., company number 409772, a company incorporated in
the British Virgin Islands whose registered office is at Pasea Estate, Road
Town, Tortola, British Virgin Islands (“Euro Energy”);

 

(3) ALTEK CONSULTING INC., company number 1452663, a company incorporated in the
British Virgin Islands whose registered office is at Drake Chambers, Road Town,
Tortola, British Virgin Islands (“Altek”);

 

(4) GENORA CONSULTING INC., company number 034381, a company incorporated in the
Seychelles whose registered office is at Office 14, First Floor, Trinity House,
Victoria, Mahe, Seychelles (“Genora”);

 

(5) LIDSTEL LTD., company number 1004931, a company incorporated in the British
Virgin Islands whose registered office is at Commonwealth Trust Limited, Drake
Chambers, Tortola, British Virgin Islands (“Lidstel”),

the parties (2) to (5) (the “Sellers”);

 

(6)

PASALBA LIMITED, a company incorporated under the laws of Cyprus, having its
registered office at Theklas Lysioti 35 Eagle Star House, 5th Floor, P.C. 3030
Limassol, Republic of Cyprus, registered with the Cyprus Registrar of Companies
under registration number HE 202291 (“Pasalba”); and

 

(7) LION/RALLY LUX 1 (the “Company”), a Société Anonyme incorporated in
Luxembourg, registered with the Luxembourg Trade and Companies Register under
number B139.056, having its registered office at 13-15 Avenue de la Liberté,
L-1931 Luxembourg.

WHEREAS 300,000 Redeemable Shares, 29,535,954 CPECs and 164,046 YFCPECs in the
Company (the “Sale Securities”) are held by the Sellers.

WHEREAS the Sellers wish to sell and the Buyer wishes to buy the Sale Securities
on the terms hereof.

WHEREBY IT IS AGREED as follows:

 

1. Interpretation

 

1.1 In this Agreement, unless otherwise specified:

 

  1.1.1 capitalised terms shall have the meanings set out in Schedule 2;

 

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  1.1.2 references to clauses, sub-clauses, paragraphs, sub-paragraphs, and
Schedules are references respectively to clauses, sub-clauses, paragraphs and
sub-paragraphs of, and to schedules to, this Agreement;

 

  1.1.3 a reference to any statute or statutory provision shall be construed as
a reference to the same as it may have been, or may from time to time be,
amended, modified or re-enacted except to the extent that any amendment or
modification made or coming into effect of any statute or statutory provision
after the date of this Agreement would increase or alter the liability of a
party under this Agreement;

 

  1.1.4 headings to clauses and Schedules are for convenience only and do not
affect the interpretation of this Agreement;

 

  1.1.5 the Schedules form part of this Agreement and shall have the same force
and effect as if expressly set out in the body of this Agreement, and any
reference to this Agreement shall include a reference to the Schedules;

 

  1.1.6 references to this Agreement or any other document, or to any specified
provision of this Agreement or any other document, are to this Agreement or that
document or provision as in force for the time being, as amended, modified,
supplemented, varied, assigned or novated, from time to time;

 

  1.1.7 references to a “company” shall be construed so as to include any
company, corporation or other body corporate, wherever and however incorporated
or established, together with its successors and assigns;

 

  1.1.8 references to a “person” shall be construed so as to include any
individual, firm, company, government, state or agency of a state or any joint
venture, association or partnership (whether or not having separate legal
personality), together with its successors and assigns;

 

  1.1.9 words importing the singular include the plural and vice versa, words
importing a gender include every gender;

 

  1.1.10 reference to “include” “includes” and “including” will be deemed to be
followed by “, without limitation,” unless the context requires otherwise;

 

  1.1.11 references to a “party” or “parties” means a party or the parties to
this Agreement;

 

  1.1.12 references to writing shall include any modes of reproducing words in a
legible and non-transitory form;

 

  1.1.13 references to “US dollars,” “dollars” or to “US$” shall be construed as
references to the lawful currency for the time being of the United States of
America; and

 

  1.1.14 general words shall not be given a restrictive interpretation by reason
of their being preceded or followed by words indicating a particular class of
acts, matters or things.

 

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2. Sale and Purchase

 

2.1 Subject to the terms of this Agreement, on the Closing Date each Seller
shall sell and the Buyer shall purchase the Sale Securities in the amounts set
out in columns B, C and D on the same row as the name of the relevant Seller in
Schedule 1, free from any Encumbrances except for the Pledges.

 

2.2 Title to, beneficial ownership of, and any risk attaching to, the Sale
Securities shall pass to the Buyer on the Closing Date (the “Transfer”), subject
to but immediately upon payment of the Consideration in accordance with clause
3.

 

3. Consideration

 

3.1 The consideration for the purchase of the Sale Securities shall be an
aggregate amount equal to thirty million US dollars net of withholding tax and
transfer taxes, stamp, ad valorem and other similar taxes (the “Consideration”)
of which each Seller shall receive the amount equal to the figure set out in
column E and on the same row as its name in Schedule 1. For the avoidance of
doubt, the amount of the Consideration is final and not subject to any
adjustment. Neither the Buyer nor any of the Sellers shall take any step after
the execution of this Agreement to question and/or dispute the amount of the
Consideration (whether in order to reduce or to increase it) in any manner
whatsoever.

 

3.2 The payment of Consideration shall be effected by electronic transfer for
same day value to the Lidstel Account. Lidstel is authorised to receive the
Consideration on behalf of the Sellers and payment to Lidstel shall be a good
and sufficient discharge of the Buyer’s obligation to pay the Consideration and
the Buyer will not be further concerned as to the application of the moneys so
paid. Lidstel shall allocate the funds between each Seller so that each Seller
shall receive the amount equal to the figure set out in column E and on the same
row as its name in Schedule 1.

 

4. Closing

 

4.1 Closing shall take place seven Business Days after the date hereof, or on
such date as is mutually agreed in writing between the Sellers and the Buyer
(the “Closing Date”).

 

4.2 Closing shall take place at the offices of the Buyer’s Solicitors, at which
the Sellers and the Buyer shall take the actions set out in Schedule 3
(including without limitation the payment of the Consideration) in the order
listed therein.

 

4.3 At Closing, all of the actions and transactions contemplated by Schedule 3
shall and shall be deemed to occur simultaneously.

 

4.4 On Closing and subject to, but immediately upon the occurrence of the
Transfer, the Buyer will automatically accede as additional pledgor to the
Pledge Agreements and hereby agrees to be bound by the terms of such agreements
with respect to the Redeemable Shares, the CPECs and the YFCPECs with effect as
of the Transfer, and the Sellers will simultaneously be released from their
obligations under the Pledge Agreements. For the avoidance of doubt, Pasalba
Limited and, to the extent applicable, the other parties, expressly acknowledge
and agree to the above. It is hereby confirmed that following the Transfer, the
Pledge Agreements will constitute a continuing, first ranking security over the
assets pledged thereunder.

 

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4.5 On Closing, the Sellers shall confirm in writing to the Company the date of
the Transfer and that all the Sale Securities have been transferred on such
date, in order to enable the Company to update its registers of securities. Upon
receipt of such confirmation, the Company shall register the Buyer as holder of
the Sale Securities in the respective registers of securities held by the
Company and the Company shall further record (i) the release of the Pledges that
had been previously granted by the Sellers only in favour of Pasalba Limited and
(ii) the pledge granted by the Buyer over the Sale Securities in favour of
Pasalba Limited as set out in clause 4.4. above. Immediately upon the Sellers’
Solicitor providing written confirmation to the Buyer’s Solicitor that the
Consideration has been deposited into the Lidstel Account, the Parties shall
expressly grant power to any director of the Company (each an “Attorney”),
acting individually and with full power of substitution, to amend and execute
the above registers in order to record the transfer of the Sale Securities and
to do all such acts and things as may be ancillary thereto and/or necessary
and/or useful and/or desirable in the sole opinion of the Attorney in connection
with or for the purpose of giving full effect to this Agreement.

 

5. Sellers’ Warranties and Acknowledgments

 

5.1 Each of the Sellers warrants severally but not jointly to the Buyer in the
terms set out in Part A of Schedule 4 as of the Closing Date. Save in relation
to fraud, the Buyer’s right to make a claim for breach of any of the Warranties
set out in section 1 of Part A of Schedule 4 shall be limited to such claims
commenced within three calendar years of the date hereof.

 

5.2 The Warranties are separate and independent and shall not be limited by
reference to or inference from any other Warranty, or any other term of this
Agreement or any document referred to in it.

 

6. Buyer’s Warranties and Acknowledgements

 

6.1 The Buyer warrants to the Sellers in the terms set out in Part B of Schedule
4 as of the Closing Date.

 

6.2 The Warranties are separate and independent and shall not be limited by
reference to or inference from any other Warranty, or any other term of this
Agreement or any document referred to in it.

 

7. Effect of Closing

Any provision of this Agreement which is capable of being performed after (but
which has not been performed at or before) Closing, and all Warranties and other
undertakings contained in or entered into pursuant to this Agreement shall
remain in full force and effect notwithstanding Closing.

 

8. Rights of First Refusal

The Buyer waives its rights set out in clause 5.4 of the Shareholders’ Agreement
to the extent necessary for the completion of the Transfer as contemplated by
this Agreement. For the avoidance of doubt, the Buyer shall constitute the Lion
Group for the purposes of the Shareholders’ Agreement. In accordance with
article 40 of the Luxembourg law of August 10, 1915 concerning commercial
companies, as amended

 

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and article 1690 of the Luxembourg civil code, the Transfer of the Sale
Securities is approved by the Company, and any notification requirements with
respect thereto are hereby waived.

 

9. Remedies and Waivers

 

9.1 No delay or omission on the part of any party to this Agreement in
exercising any right, power or remedy provided under this Agreement or any other
documents referred to herein shall impair such right, power or remedy, or
operate as a waiver thereof.

 

9.2 The single or partial exercise of any right, power or remedy provided under
this Agreement shall not preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.

 

10. No representations

No party shall be liable (in equity or tort or in any other way) in respect of
any misrepresentation made in connection herewith or in connection with any
other document which is entered into by the parties or any of them in connection
with this Agreement save to the extent that the same constitutes a Claim under
the Warranties.

 

11. Assignment

 

11.1 No party shall assign, or purport to assign, all or any part of the benefit
of, or its rights or benefits under, this Agreement (including the Warranties
and any causes of action arising in connection with any of them), no party shall
make a declaration of trust in respect of or enter into any arrangement whereby
it agrees to hold in trust for any other person all or any part of the benefit
of, or its rights or benefits under, this Agreement (including the Warranties
and any causes of action arising in connection with any of them) and no party
shall sub-contract or enter into any arrangement whereby another person is to
perform any or all of its obligations under this Agreement, in each case without
the prior written consent of the other party.

 

11.2 Any assignment of this Agreement, or any right or obligation arising under
it, shall be void.

 

12. Termination

 

12.1 This Agreement:

 

  12.1.1 may be terminated at any time by mutual written consent of the Sellers
and the Buyer; and

 

  12.1.2 shall terminate upon written notice by any party to be given to each
other party if Closing shall not have occurred on or prior to the tenth Business
Day after the date hereof or on such later date as is mutually agreed in writing
between the Seller and the Buyer in accordance with clause 4.1.

 

12.2

If this Agreement terminates in accordance with clause 12.1, and without
limiting any party’s right to claim damages (or such other remedies as may be
available at law or in equity including specific performance) in respect of
antecedent breaches (including

 

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failure to close), all obligations of the parties under this Agreement shall end
(except for the provisions of clauses 15, 16, 17, 18 and 26), but (for the
avoidance of doubt) all rights and liabilities of the parties which have accrued
before termination shall continue to exist, it being specified for the avoidance
of doubt that the releases and waivers provided for in clause 25 shall be deemed
null from the date hereof.

 

13. Further Assurances

 

13.1 Each of the parties shall from time to time at its own cost, on being
required to do so by the other parties, now or at any time in the future, do or
procure the doing of all such acts and/or execute or procure the execution of
all such documents in a form reasonably satisfactory to the party concerned as
they may reasonably consider necessary to transfer the Sale Securities to the
Buyer and otherwise give full effect to this Agreement.

 

13.2 Without limitation to clause 13.1 but subject always to clause 17, each of
the Sellers and the Buyer agrees that it shall, upon a reasonable request from
any other party or from any Competent Authority, promptly co-operate with and
provide all necessary information reasonably requested by any such Competent
Authority in respect of its proper and lawful enquiries in connection with this
Agreement and the arrangements relating thereto from any such Competent
Authority.

 

14. Variation

This Agreement may only be varied in writing signed by each of the parties.

 

15. Notices

 

15.1 Any notice or other communication given or made under or in connection with
the matters contemplated by this Agreement shall be in writing.

 

15.2 Any such notice or other communication shall be addressed as provided in
clause 15.3 and, if so addressed, shall be deemed to have been duly given or
made as follows:

 

  15.2.1 if sent by personal delivery, upon delivery at the address of the
relevant party;

 

  15.2.2 if sent by international courier, upon receipt of a confirmation of
delivery; and

 

  15.2.3 if sent by facsimile, upon receipt of a confirmation of transmission,

PROVIDED THAT if, in accordance with the above provisions, any such notice or
other communication would otherwise be deemed to be given or made outside
Working Hours, such notice or other communication shall be deemed to be given or
made at the start of Working Hours on the next Business Day (or at the start of
Working Hours on that day if the relevant notice or other communication would
otherwise be deemed to have been given before Working Hours on a Business Day).

 

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15.3 The relevant addressee and facsimile number of each party for the purposes
of this Agreement, subject to clause 15.4, are:

 

Name of party:

  

For the attention of:

  

Facsimile No.:

Euro Energy

   Dr Andres Baumgartner    +41 44 217 47 00

Altek

   Elena Timoshenkova    +7 499 975 30 96

Genora

   Elena Timoshenkova    +7 499 975 30 96

Lidstel

   Melina Howard    +35 2 24 67 88 05

Buyer

   Hayley Tanguy    +44 1481 749749

The Company

   Richard Brekelmans    +35 2 26 89 0121

Pasalba Limited

   Arjan Schaapman    +357 25 818 790

The addresses of the Sellers, the Buyer, the Company and Pasalba Limited are as
set out at the commencement of this Agreement.

Any notice or other communication to the Seller shall be addressed as above,
with a copy to:

Hogan & Hartson MNP

69 avenue Franklin Roosevelt

75008 Paris

France

Attn: Xenia Legendre

Fax number: +33 1 55 73 23 10

 

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Any notice or other communication to the Buyer, the Company or Pasalba Limited
shall be addressed as above, with a copy to each of:

 

Lion Capital LLP    Weil, Gotshal & Manges 21 Grosvenor Place    One South Place
London SW1X 7HF    London EC2M 2WG United Kingdom    United Kingdom For the
attention of: Javier Ferrán/James Cocker    For the attention of: Michael
Francies/Ian Hamilton Fax number: +44 20 7201 2222    Fax number: +44 20 7903
0990

 

15.4 Either party may notify the other of a change to its name, relevant
addressee, address or fax number for the purposes of clause 15.3 PROVIDED THAT
such notification shall only be effective on:

 

  15.4.1 the date specified in the notification as the date on which the change
is to take place; or

 

  15.4.2 if no date is specified or the date specified is less than five clear
Business Days after the date on which notice is given, the date falling five
clear Business Days after notice of any such change has been given.

 

16. Announcements

 

16.1 Subject to clause 16.2, no announcement concerning the sale of the Sale
Securities or any ancillary matter shall be made by any party (and each of the
Sellers and the Buyer shall procure that no member of their respective Groups
shall make any such announcement) without the prior written approval of the
other party, such approval not to be unreasonably withheld or delayed.

 

16.2 Either party may make an announcement, or permit or allow any other member
of its Group to make an announcement, concerning the sale of the Sale Securities
or any ancillary matter if and to the extent required by:

 

  16.2.1 the law of any relevant jurisdiction;

 

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  16.2.2 any securities exchange or regulatory or governmental body to which
such party or Group member is subject or submits, wherever situated, whether or
not the requirement for information has the force of law;

in which case the party concerned shall take all such steps as may be reasonable
and practicable in the circumstances to agree the contents of such announcement
with the other parties before making (or as the case may be permitting or
allowing) such announcement.

 

16.3 The restrictions contained in this clause 16 shall continue to apply after
the termination of this Agreement or Closing for a period of one year.

 

17. Confidentiality

 

17.1 Subject to clause 17.2, each party shall treat as strictly confidential all
information received or obtained as a result of entering into or performing this
Agreement which relates to:

 

  17.1.1 the provisions of this Agreement;

 

  17.1.2 the negotiations relating to this Agreement;

 

  17.1.3 the subject matter of this Agreement; or

 

  17.1.4 any other party.

 

17.2 Notwithstanding clause 17.1, any party may disclose Confidential
Information if and to the extent that:

 

  17.2.1 it is required by the law of any relevant jurisdiction;

 

  17.2.2 it is required by any securities exchange or regulatory or governmental
body to which it is subject or submits, wherever situated, whether or not the
requirement for information has the force of law;

 

  17.2.3 it is disclosed on a strictly confidential basis to the professional
advisers, auditors and bankers of that party;

 

  17.2.4 the information has come into the public domain through no fault of
that party or any of its Affiliates;

 

  17.2.5 each other party has given its prior written approval to the
disclosure; or

 

  17.2.6 such disclosure is required to enable that party to enforce its rights
under this Agreement,

PROVIDED THAT (unless contrary to law or the direction of any governmental
authority) any such information disclosed pursuant to clauses 17.2.1 or 17.2.2
shall be disclosed only after notice to and consultation with the other party,
to the extent that such notice and consultation is reasonably practicable in the
circumstances.

 

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17.3 All of the parties hereby agree that they shall not use Confidential
Information for any purpose other than the performance of their obligations
under this Agreement or in connection with the Business or in connection with
the enforcement of their rights hereunder.

 

17.4 The restrictions contained in this clause 17 shall continue to apply after
the termination of this Agreement or Closing for a period of one year.

 

18. Costs and Expenses

Each party shall pay its own costs and expenses in relation to the preparation,
negotiation and execution of this Agreement and the negotiations leading up to
the same, and each party shall be responsible for the costs and expenses of its
own advisors.

 

19. Invalidity

If at any time any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any competent jurisdiction, such
provision shall not affect or impair:

 

19.1 the legality, validity or enforceability in that jurisdiction of any other
provision of this Agreement; or

 

19.2 the legality, validity or enforceability under the law of any other
jurisdiction of such provision or any other provision of this Agreement.

 

20. Third Party Rights

The parties to this Agreement do not intend that any term of this Agreement
should be enforceable by any person who is not a party to this Agreement.

 

21. Counterparts

This Agreement may be executed in counterparts, and by the parties on separate
counterparts, but shall not be effective until each party has executed at least
one counterpart. Each counterpart shall constitute an original of this
Agreement, but the counterparts shall together constitute but one and the same
instrument.

 

22. Entire Agreement

This Agreement (and all other documents which are entered into by the parties or
any of them in connection with this Agreement) contain the whole agreement
between the parties relating to the subject matter of this Agreement and such
other documents at the date hereof. Each party acknowledges that it has not been
induced to enter this Agreement by, and in agreeing to enter into this Agreement
it has not relied on, any representation or warranty except as expressly stated
or referred to in this Agreement and/or any such other document and, so far as
permitted by law (and except in the case of fraud) the parties hereby waive any
remedy in respect of (and acknowledges

 

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that no other party nor any of its agents, directors, officers or employees have
given) any such representations or warranties which are not expressly stated or
referred to in this Agreement and/or any such other document.

 

23. Currency

For the avoidance of doubt, all payments made pursuant to this Agreement shall
be denominated in US dollars.

 

24. Language

All portions of this Agreement are prepared in the English language only.

 

25. Settlement – No admission of liability

 

25.1 The Buyer, the Sellers and the Company agree to settle the dispute(s) which
have arisen and prevent any future contestation relating to or in connection
with the resolutions of the board of directors of the Company dated 6 May 2009
and 7 May 2009, related share capital increase of the Company, issuing of new
shares and convertible preferred equity certificates, and the previous and
subsequent subscription offers.

 

25.2 As of the date of this Agreement, the Sellers agree and undertake to waive
and relinquish (and discontinue, as the case may be), and not to initiate or
otherwise commence, any and all actions, judicial proceedings, suits, demands,
claims and rights, against the Company, and/or any of the current or former
shareholder(s) of the Company, and/or any of the current or former directors,
officers or agents of the Company, which may be either directly or indirectly
arise out of or in connection with (i) the current or former conduct of the
activities of the Company; or (ii) the decisions taken by the board of directors
of the Company (including, without limitation, the aforementioned resolutions of
the board of directors of the Company dated 6 May 2009 and 7 May 2009, the
related share capital increase of the Company, the issuing of new shares and
convertible preferred equity certificates, and the previous and subsequent
subscription offers); or (iii) any action taken or document signed as a result
of such decisions; or (iv) the omission to take action where appropriate.

 

25.3 This Agreement does not and shall not constitute an admission of liability
by any of the parties.

 

26. Choice of Governing Law and Arbitration

This Agreement shall be governed by and construed in accordance with the laws of
Luxembourg without giving effect to applicable conflict of laws provisions. All
disputes arising in connection with this Agreement shall be submitted to the
Courts of the City of Luxembourg.

 

18

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IN WITNESS WHEREOF the parties have entered in to this Agreement the day and
year first before written.

 

SIGNED by    )      

for and on behalf of

   )    .    LION/RALLY CAYMAN 6    )      

SIGNED by

   )      

for and on behalf of

   )         EURO ENERGY OVERSEAS LTD.    )      

SIGNED by

   )      

for and on behalf of

   )         ALTEK CONSULTING INC.    )      

SIGNED by

   )      

for and on behalf of

   )         GENORA CONSULTING INC.    )      

SIGNED by

   )      

for and on behalf of

   )        

LIDSTEL LTD.

   )      

SIGNED by

   )      

for and on behalf of

   )         PASALBA LTD.    )      

 

19

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SIGNED by

   )      

as Director A for and on behalf of

   )        

LION/RALLY LUX 1 S.A.

   )      

SIGNED by

   )      

as Director B for and on behalf of

   )         LION/RALLY LUX 1 S.A.    )      

 

20

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SCHEDULE 1

SALES SECURITIES AND CONSIDERATION PAYABLE

 

A

 

B

 

C

 

D

 

E

Seller

 

Number of

shares to be

transferred to

the Buyer

 

Number of

CPECs to be

transferred to

the Buyer

 

Number of

YFCPECs to

be transferred

to the Buyer

 

Amount

of consideration

to be received

from the

Buyer/USD

Euro Energy

  200,000   19,690,636   109,364   20,000,000

Altek

  20,000   1,969,064   10,936   2,000,000

Genora

  20,000   1,969,063   10,937   2,000,000

Lidstel

  60,000   5,907,191   32,809   6,000,000

 

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SCHEDULE 2

DEFINITIONS

In this Agreement:

“Affiliate” means a person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
person specified, where “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of a
person, through the ownership of voting securities, by contract, as trustee,
executor or otherwise. In the case of the Seller, “Affiliate” includes the
direct or indirect ultimate beneficial holders of shares of Seller and any
person controlled by such holders;

“Business Day” means a day (other than a Saturday or a Sunday) on which banks
are open for business in London;

“Buyer’s Group” means the Buyer and its respective Affiliates and “member of the
Buyer’s Group” means any and all of the Buyer and its respective Affiliates and,
for the avoidance of doubt, from and after Closing shall include the Company;

“Buyer’s Solicitors” mean Weil Gotshal & Manges;

“CEDC” means Central European Distribution Corporation, a Delaware corporation
whose registered office is at 2 Bala Plaza, Suite 300, Bala Cynwyd,
Pennsylvania, 19004, USA;

“Claim” means a claim for breach of any of the warranties;

“Closing” means the completion of the sale and purchase of the Sale Securities
as set out in clause 4;

“Closing Date” has the meaning set out in clause 4.1;

 

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“Competent Authority” means any court of law or tribunal, any government,
governmental or quasi-governmental agency, department, authority or regulatory
body, any Tax Authority and any local authority, in each case within the Russian
Federation;

“Confidential Information” means the confidential information as described in
clause 17;

“CPECs” means the convertible preferred equity certificates, initially issued by
the Company on 8 July 2008;

“Encumbrance” means any interest or equity of any person (including any right to
acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien,
assignment, hypothecation, security, title, retention or any other security
agreement or arrangement;

“Group” means the Buyer’s Group or the Sellers’ Group as the case may be;

“Law” includes all applicable legislation, statutes, directives, regulations,
judgments, decisions, licenses, permits, consents, decrees, notices, directives,
policies, orders, by-laws and other legislative measures or decisions, treaties,
conventions and other agreements between states, or between states and
supranational bodies and rules of common or civil law, in each case, having the
force of law and having effect in, any jurisdiction;

“Lidstel Account” means the account of Lidstel with Credit Agricole Luxembourg
S.A., 39 Allee Scheffer L-2520 Luxembourg, with account number 1029020, with
account holder LI1029020 and IBAN LU07 1230 0102 9020 0001;

“Lion Group” has the meaning set out in the Shareholders’ Agreement;

 

23

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“Pledge Agreements” means, together, (i) the Luxembourg law share pledge
agreement entered into on 9 July 2008 between the parties referred to therein
(among which the Sellers) as pledgors, Pasalba Limited as pledgee and the
Company and (ii) the Luxembourg law CPECs pledge agreement entered into on
9 July 2008 between the parties referred to therein (among which the Sellers) as
pledgors, Pasalba Limited as pledgee and the Company;

“Pledges” means the pledges granted pursuant to the Pledge Agreements;

“Redeemable Shares” means the redeemable shares issued by the Company and having
a par value of one US dollar each;

“Sellers’ Group” means the Sellers and their Affiliates, and a “member of the
Sellers’ Group” means any and all of the Sellers and their Affiliates and, for
the avoidance of doubt, from and after Closing shall exclude the Company;

“Sellers’ Solicitor” means Hogan & Hartson MNP;

“Shareholders’ Agreement” means the shareholders’ agreement concerning the
Company entered into between (i) Lion/Rally Cayman 2, (ii) The Initial Seller
Parties (as defined therein), (iii) the Company and (iv) Lion Capital (Guernsey)
Limited, dated 9 July 2008;

“Tax” means all forms of taxation and statutory, governmental, state, federal,
provincial, local, government or municipal charges, duties, imposts,
contributions, levies, withholdings or liabilities wherever chargeable and
whether of the UK or any other jurisdiction; and any penalty, fine, surcharge,
interest, charges or costs relating thereto;

“Warranties” means the warranties set out in Schedule 4; and

“YFCPECs” means the yield free convertible preferred equity certificates of a
par value of one US dollar each, initially issued by the Company on 8 July 2008.

 

24

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SCHEDULE 3

CLOSING DELIVERABLES

At Closing, each Seller and the Buyer shall take the following actions
simultaneously but notionally in the order listed below:

 

1. The Buyer shall deliver to the Sellers a copy of a resolution (certified by a
duly appointed officer as true and correct) of the appropriate management body
of the Buyer authorising the execution of, and the performance by it of this
Agreement and its obligations thereunder.

 

2. Pasalba shall deliver to the Sellers a copy of a resolution (certified by a
duly appointed officer as true and correct) of the appropriate management body
of Pasalva authorising the execution of, and the performance by it of this
Agreement and its obligations thereunder, including without limitation the
transfer of the pledged Sale Securities and the release of the Sellers.

 

3. The Company shall deliver to the Sellers a copy of a resolution (certified by
a duly appointed officer as true and correct) of the appropriate management body
of the Company authorising the execution of, and the performance by it of this
Agreement and its obligations thereunder.

 

4. Each Seller shall deliver to the Buyer an original or a copy of a resolution
(certified by a duly appointed officer as true and correct) of the appropriate
management body of that Seller and each relevant member of the Seller’s Group
consenting to the transaction envisaged in this Agreement; and authorising the
execution of and the performance by that Seller.

 

5. The Buyer shall pay into the Lidstel Account the Consideration.

 

6. The Sellers’ Solicitor shall provide to the Buyer’s Solicitor written
confirmation of the deposit of the Consideration into the Lidstel Account.

 

25

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SCHEDULE 4

WARRANTIES

PART A (SELLER’S WARRANTIES)

 

1. Ownership of the Shares

 

1.1 The Seller legally and beneficially owns all of the Sale Securities free
from any Encumbrances except the Pledges that are set out in columns B, C and D
on the same row as its name in Schedule 1.

 

1.2 Other than the Pledges, there is no agreement or commitment to give or
create Encumbrances on or over the Sale Securities as set out in columns B, C
and D on the same row as the Seller’s name in Schedule 1 or any of them and no
claim has been made by any person to be entitled to any.

 

2. Capacity of the Seller

 

2.1 The Seller has the requisite capacity, power and authority to enter into and
perform its obligations under this Agreement.

 

2.2 The Seller has taken all necessary corporate action required by its
constitutional or organisational documents to permit it to enter into and
perform its obligations under this Agreement.

 

2.3 This Agreement constitutes, when executed, binding obligations of the
Seller, as applicable, in accordance with their respective terms.

 

2.4 The execution and delivery by the Seller of this Agreement and the
performance by it of its obligations under this Agreement will not (or with the
giving of notice or lapse of time would not):

 

  2.4.1 result in a breach of any provision of the constitutional or
organisational documents of the Seller;

 

  2.4.2 result in a breach of any order, judgment or decree of any court or
governmental agency to which that Seller is a party or by which the Seller is
bound or any contractual commitment to which the Seller is bound.

 

 

26

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PART B (BUYER’S WARRANTIES)

 

3. Capacity of the Buyer

 

3.1 The Buyer has the requisite capacity, power and authority to enter into and
perform its obligations under this Agreement.

 

3.2 The Buyer has taken all necessary corporate action required by its
constitutional or organisational documents to permit it to enter into and
perform its obligations under this Agreement.

 

3.3 This Agreement constitutes, when executed, constitute binding obligations of
the Buyer, as applicable, in accordance with their respective terms.

 

3.4 The execution and delivery by the Buyer of this Agreement and the
performance by the Buyer of its obligations under this Agreement will not (or
with the giving of notice or lapse of time would not):

 

  3.4.1 result in a breach of any provision of the constitutional or
organisational documents of the Buyer;

 

  3.4.2 result in a breach of any order, judgment or decree of any court or
governmental agency to which the Buyer is a party or by which the Buyer is bound
or any contractual commitment to which the Buyer’s Group is bound.

 

27

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SCHEDULE 2

FUNDING DOCUMENTATION

 

28

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LION/RALLY CAYMAN 6

(the “Company”)

 

 

WRITTEN RESOLUTIONS OF THE SHAREHOLDERS

OF THE COMPANY MADE ON             2009

 

 

The undersigned, being the sole shareholder of the Company entitled to attend
and vote at general meetings of the Company do hereby RESOLVE AS A SPECIAL
RESOLUTION THAT:

 

(i) the authorised share capital of the Company be increased from US$492,500,100
to US$522,500,000 by the creation of 30,000,000 A Ordinary shares of par value
US$1.00 each to rank pari passu with the existing A Ordinary shares of the
Company; and

 

(ii) immediately following the increase in the authorised share capital of the
Company, the existing Memorandum and Articles of Association of the Company, be
and are hereby replaced in their entirety with new Memorandum and Articles of
Association reflecting the increase in authorised share capital, a copy of which
is annexed hereto.

 

  LION/RALLY CAYMAN 4     By  

 

    Authorised Signatory     LION/RALLY CAYMAN 5     By  

 

    Authorised Signatory    

LION/RALLY CAYMAN 8

 

as general partner for LION/RALLY CAYMAN 7 L.P.

    By  

 

    Authorised Signatory  

 

29

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Lion/RALLY CAYMAN 8 (the “Company”)

 

 

MINUTES OF A MEETING OF THE DIRECTORS OF THE COMPANY

HELD AT                      AT     AM/PM ON                      2009

 

 

 

Present:

   Robert Jones    Hayley Tanguy

In attendance:

By agreement, Hayley Tanguy acted as Chairman of the meeting.

OPENING OF MEETING

The Chairman declared the meeting open.

NOTICE AND QUORUM

The Chairman noted that all of the Directors had received due notice of the
meeting and that the meeting was quorate and, accordingly, the meeting could
proceed to business.

DIRECTORS’ INTERESTS

Hayley Tanguy and Robert Jones declared their interest in the business to be
discussed in the meeting in that they are directors of Lion/Rally Cayman 6.

PARTNERSHIP

The Chairman noted that the Company acts as general partner of Lion/ Rally
Cayman 7 L.P. (the “Partnership”). It was noted that the Partnership was
established on 1 May 2008 as an exempted limited partnership formed under the
Exempted Limited Partnership Law (as amended).

It was proposed that Central European Distribution Corporation make a further
subscription of US$30,000,000 into the Partnership to acquire US$30,000,000 in
limited partnership interests. A letter of application was tabled before the
meeting (the “Letter”).

IT WAS RESOLVED THAT the subscription by Central European Distribution
Corporation on the terms of the Letter and the form of the Letter be approved on
behalf of the Company and that upon receipt of funds Central European
Distribution Corporation be noted in the Register of Limited Partners of the
Partnership as having contributed, as limited partner, a further US$30 million
of capital to the Partnership.

SUBSCRIPTION FOR SHARES IN LION/RALLY CAYMAN 6

 

30

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The Chairman noted that the Company as general partner of the Partnership was
proposing to subscribe for and on behalf of the Partnership for 30,000,000 A
ordinary shares of a par value of US$1.00 each in the capital of Lion/Rally
Cayman 6 in consideration for a cash sum of US$30 million. A letter of
application was tabled before the meeting (the “Subscription Letter”).

Upon motion duly made, seconded and carried unanimously, IT WAS RESOLVED that:

 

1. in the opinion of the Directors, the subscription by the Company as general
partner of the Partnership for and on behalf of the Partnership for 30,000,000 A
ordinary shares of a par value of US$1.00 each in the capital of Lion/Rally
Cayman 6 in consideration for a cash sum of US$30 million and entry into and
performance by the Company as general partner of the Partnership of its
obligations under the Subscription Letter would be in the Company’s and the
Partnership’s commercial interests;

 

2. the transactions contemplated by the Subscription Letter be approved;

 

3. the Company enter into the Subscription Letter;

 

4. the form of the Subscription Letter be approved on behalf of the Company
subject to such amendments and additions thereto as the Directors, acting
jointly or severally, in their absolute discretion and opinion deem appropriate,
the signature of any one Director on the Subscription Letter being due evidence
for all purposes of the approval of any such amendment or addition and the final
terms thereof on behalf of the Company;

 

5. the Company do give, make, sign, execute and deliver all such notes, deeds,
agreements, letters, notices, certificates, acknowledgements, instructions, fee
letters and other documents (whether of a like nature or not) (the “Ancillary
Documents”) as may in the sole opinion and absolute discretion of the Directors
be considered necessary or desirable for the purpose of compliance with any
condition necessary or desirable for the purpose of compliance with any
condition precedent or the coming into effect of or otherwise giving effect to,
consummating or completing or procuring the performance and completion of all or
any of the transactions contemplated by or referred to in the Subscription
Letter (including exercising its votes as shareholder of Lion/Rally Cayman 6 to
increase the share capital of Lion/Rally Cayman 6) and the Company do all such
acts and things as might in the opinion and absolute discretion of the Directors
be necessary or desirable for the purposes stated above;

 

6. the Ancillary Documents be in such form as the Directors, jointly or
severally, in their absolute discretion and opinion approve, the signature of
any one Director on any of the Ancillary Documents being due evidence for all
purposes of his approval of the terms thereof on behalf of the Company; and

 

31

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7. the Subscription Letter and Ancillary Documents, where required to be
executed by the Company, be executed by the signature thereof of any one
Director and where required to be sealed, by affixing thereto of the Seal of the
Company, witnessed as required by the Articles of Association of the Company.

GENERAL AUTHORISATION

Upon motion duly made, seconded and carried unanimously, IT WAS RESOLVED that,
in connection with the actions contemplated by the foregoing resolutions, each
of the Directors and officers be, and such other persons as are authorised by
any of them be, and each hereby is, authorised, in the name and on behalf of the
Company, to do such further acts and things as any Director or officer or such
duly authorised other person shall deem necessary or appropriate in connection
with, or to carry out the actions contemplated by, the foregoing resolutions,
including to do and perform (or cause to be done and performed), in the name and
on behalf of the Company, all such acts and to make, execute, deliver, issue or
file (or cause to be made, executed, delivered or filed) with any person
including any governmental authority or agency, all such agreements, documents,
instruments, certificates, consents and waivers, and all amendments to any such
agreements, documents, instruments or certificates, and to pay, or cause to be
paid, all such payments, as any of them may deem necessary or advisable to carry
out the intent of the foregoing resolutions, the authority for the taking of any
such action and the execution and delivery of such of the foregoing to be
conclusively evidenced thereby.

RATIFICATION OF PRIOR ACTIONS

Upon motion duly made, seconded and carried unanimously, IT WAS RESOLVED that
any and all actions of the Company, or of any Director or officer, taken in
connection with the actions contemplated by the foregoing resolutions prior to
the execution hereof be and hereby are ratified, confirmed, approved and adopted
in all respects as fully as if such action(s) had been presented to for
approval, and approved by, all the Directors prior to such action being taken.

CLOSE OF MEETING

There being no further business, the meeting then terminated.

 

Chairman  

 

 

32

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LION/RALLY CAYMAN 8

c/o Stuarts Corporate Services Ltd.

PO Box 2510

Grand Cayman KY1-1104

Cayman Islands

July 2009

Board of Directors

Lion/Rally Cayman 6 (the “Company”)

c/o Stuarts Corporate Services Ltd.

PO Box 2510

George Town

Grand Cayman

KY1-1104

Cayman Islands

Dear Sirs

As general partner for Lion/Rally Cayman 7 L.P, we hereby apply to subscribe for
30,000,000 A ordinary shares of par value US$1.00 each in the Company to be
issued fully paid for a consideration of US$30,000,000 with the consideration
being satisfied in cash upon completion of such subscription and issue.

Yours faithfully

Lion/Rally Cayman 8

 

33

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Central European Distribution Corporation

ul. Bobrowiecka 6

02-723 Warszawa

Poland

July 2009

Board of Directors

Lion/Rally Cayman 8

As general partner for Lion/Rally Cayman 7 L.P.

(the “Partnership”)

c/o Stuarts Corporate Services Ltd.

PO Box 2510

George Town

Grand Cayman

KY1-1104

Cayman Islands

Dear Sirs

As limited partner and upon the terms and subject to the conditions of the
Partnership Agreement relating to the Partnership, we hereby contribute to the
capital of the Partnership an additional US$30,000,000 with such contribution
being satisfied in cash.

Yours faithfully

Central European Distribution Corporation

 

34