Document:

Employment Agreement, David W. McGrane

 Exhibit 10.2 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (this “Agreement”) is entered into as of June 27, 2005, between FATS, Inc., a Delaware corporation (the
“Company”) and David W. McGrane (the “Executive”). 
  
 WHEREAS, the Company is the operating subsidiary of Firearms Training Systems, Inc. (the “Parent”), a leading worldwide provider of small and supporting arms training simulators; and 
  
 WHEREAS, the Company desires to employ the Executive to serve as Chief
Operating Officer of the Company, and the Executive desires to be employed by the Company, upon the terms and subject to the conditions set forth herein. 
  
 NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the Company and the Executive hereby agree as follows:

  
 1. Employment. The Company hereby agrees to
employ the Executive and the Executive hereby agrees to be employed by the Company upon the terms and subject to the conditions contained in this Agreement. The term of employment of the Executive by the Company pursuant to this Agreement (the
“Employment Period”) shall commence on June 27, 2005 (the “Effective Date”) and shall end on the third anniversary of the Effective Date, unless earlier terminated pursuant to Section 4 hereof. 
  
 2. Position and Duties; Responsibilities. (a) Position and
Duties. The Company shall employ the Executive during the Employment Period as its Chief Operating Officer. The Executive shall report directly to the Board of Directors of the Parent. During the Employment Period, the Executive shall perform
faithfully and loyally and to the best of the Executive’s abilities the duties assigned to the Executive hereunder and shall devote the Executive’s full business time, attention and effort to the affairs of the Company and its
subsidiaries, and shall use the Executive’s best efforts to promote the interests of the Company, its subsidiaries and the Parent. The Executive may engage in charitable, civic or community activities and, with the prior approval of the Board
of Directors, may serve as a director of any other business corporation, provided that such activities or service do not interfere with the Executive’s duties hereunder or violate the terms of any of the covenants contained in Sections 6, 7, 8,
9 or 10 hereof. 
  
 (b) Responsibilities. Subject to
the powers, authority and responsibilities vested in the Board and in duly constituted committees of the Board, the Executive shall have the authority and responsibility for the Company’s management. The Executive shall also perform such other
duties (not inconsistent with the position of Chief Operating Officer) on behalf of the Company and its subsidiaries as may from time to time be authorized or directed by the Chief Executive Officer. 

 3. Compensation. (a) Base Salary. During the Employment Period, the Company shall
pay to the Executive a base salary at the rate of $275,000.00 per annum (“Base Salary”), payable in accordance with the Company’s executive payroll policy. Such Base Salary shall be reviewed annually and shall be subject to such
changes as determined by the Compensation Committee of the Board (the “Compensation Committee”). 
  
 (b) Annual Bonus. During the Employment Period, the Company shall provide the Executive the opportunity to earn an annual merit-based bonus of up
to fifty percent (50%) of this Base Salary, based upon the Company’s performance, the Executive’s individual performance and the Company prospects and liquidity position (the “Annual Bonus”). The actual amount of such Annual
Bonus shall be determined by the Board after the end of the Company’s fiscal year, in its sole discretion; provided, however, that in no event may the Executive receive an Annual Bonus in excess of fifty percent (50%) of the
Executive’s Base Salary. In addition, in the event of a Sale of the Parent (defined as the acquisition of fifty-one percent (51%) or more of the Parent’s common stock outstanding by a single party), Executive will be entitled to receive
the maximum Annual Bonus of fifty percent (50%) of his Base Salary for the fiscal year in which the Sale of the Parent takes place as long as he remains employed by the Company through the end of that fiscal year or is terminated by the Company
other than for Cause. Payment of the Annual Bonus in such circumstances will not reduce any payments to which the Executive is entitled pursuant to Section 4 of this Agreement. 
  
 (c) Stock Options. In his prior Employment Agreement dated August 9, 2002, the Executive received a grant of
non-qualified stock options under the Firearms Training System, Inc. Stock Option Plan as follows: 
  
 (i) The Executive was granted an option to purchase from the Parent 2,100,000 of the company’s common shares currently outstanding.
The options bear a strike price of $0.40 per share. 
  
 (ii) After January 1, 2004, the options vest in equal twenty percent (20%) portions on an annual basis over a five (5) year waiting period commencing on January 1, 2004 (i.e., the first vesting date was January 1, 2005 and the final vesting
date is January 1, 2009). Other vesting terms and conditions will be substantially similar to those contained in the Company’s existing option grants, including becoming 100% vested and exercisable upon the Sale of the Parent. 
  
 (d) Other Benefits. During the Employment Period, the Executive shall
be entitled to participate in the Company’s employee benefit plans that are generally available from time to time to executives of the Company, including group medical, dental, life, accidental death and dismemberment, short-term disability,
long-term disability, business travel accident plans, sick leave, vacation, and the profit sharing retirement plan (all such benefits being hereinafter referred to as the “Employee Benefits”). 
  
 (e) Expense Reimbursement. During the Employment Period, the Company
shall reimburse the Executive, in accordance with the Company’s policies and procedures, for all proper documented expenses incurred by the Executive in the performance of the Executive’s duties hereunder. 
  

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 4. Termination. (a) Death. Upon the death of the Executive, this Agreement shall
automatically terminate and all rights of the Executive and the Executive’s heirs, executors and administrators to compensation and other benefits under this Agreement shall cease immediately, except that the Executive’s heirs, executors
or administrators, as the case may be, shall be entitled to: 
  
 (i) accrued Base Salary through and including the Executive’s date of death; 
  
 (ii) the Annual Bonus, if any, that the Executive would have received for the fiscal year in which his death occurs had he remained
employed through the end of such year, reduced pro rata for that portion of such fiscal year not completed by the Executive and payable at such time as the Executive would have received such Annual Bonus had he remained employed through the end of
such fiscal year; and 
  
 (iii) other Employee
Benefits to which the Executive was entitled on the date of death in accordance with the terms of the plans and programs of the Company. 
  
 (b) Disability. The Company may, at its option, terminate this Agreement upon written notice to the Executive if the Executive, because of physical
or mental incapacity or disability, fails to perform the essential functions of the Executive’s position, with or without reasonable accommodation, required of the Executive hereunder for a continuous period of one hundred twenty (120) days or
any one hundred eighty (180) days within any twelve (12) month period. In the event of any dispute regarding the existence of the Executive’s incapacity or disability hereunder, the matter shall be resolved by the determination of a physician,
qualified to practice medicine in the state of the Executive’s Residence, to be selected by the Board. The Executive shall have the right to require a second opinion from a physician qualified to practice medicine in the state of the
Executive’s residence, as selected by the Executive. If the initial and second opinions are inconsistent, the matter shall be resolved by a third opinion from a physician licensed to practice medicine as selected by the agreement between the
Company and the Executive. Upon such termination, all obligations of the Company hereunder shall cease immediately, except that the Executive shall be entitled to: 
  
 (i) accrued Base Salary through and including the effective date of the Executive’s termination of
employment; 
  
 (ii) the Annual Bonus, if any,
that the Executive would have received for the fiscal year in which the Executive’s termination of employment occurs had he remained employed through the end of such year, reduced pro rata for that portion of such fiscal year not completed by
the Executive and payable at such time as the Executive would have received such Annual Bonus had he remained employed through the end of such fiscal year; and 
  

(iii) other Employee Benefits to which the Executive is entitled upon termination of employment in accordance with the terms of the
plans and programs of the Company. 
  
 (c)
Cause. (i) The Company may, at its option, terminate the Executive’s employment under this Agreement for Cause (as hereinafter defined) upon written notice 

  

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to the Executive (the “Cause Notice”). Any such termination for Cause shall be authorized by the Board. The Cause Notice shall state the particular
action(s) or inaction(s) giving rise to termination for Cause. 
  
 (ii) As used in this Agreement, the term “Cause” shall mean any one or more of the following: 
  
 (A) The Executive’s commission of a felony or any other crime involving moral turpitude, fraud, misrepresentation, embezzlement, or
theft, 
  
 (B) The Executive’s engaging in
any other activity that is harmful (including alcoholic or other self-induced affliction), in a material respect, to the Company, any of its subsidiaries or the Parent, monetarily or otherwise, as determined by a majority of the Board; 

 
 (C) The Executive’s material malfeasance (including,
without limitation, any intentional act of fraud or theft), misconduct, or gross negligence in connection with the performance of his duties hereunder; 
  
 (D) The Executive’s significant violation of any statutory or common law duty of loyalty to the Company, any of its subsidiaries or
the Parent; 
  
 (E) The Executive’s material
breach of this Agreement or of a material policy of the Company or the Parent (including, without limitation, disclosure or misuse of any confidential or competitively sensitive information or trade secrets of the Company, any of its subsidiaries or
the Parent); 
  
 (F) The Executive’s refusal
or failure to carry out directives or instructions of the majority of the Board that are consistent with the scope and nature of the Executive’s duties and responsibilities set forth herein; or 
  
 (G) Any breach by the Executive of any one or more of the
covenants contained in Section 6, 7, 8, 9 or 10 hereof. 
  
 (iii) With respect to E and F above, the Executive shall have ten days after the Cause Notice is given to cure the particular action(s) or inaction(s), to the extent a cure is possible. If the Executive so effects a
cure to the satisfaction of the Board, the Cause Notice shall be deemed rescinded and of no force or effect. 
  
 (iv) The exercise of the right of the Company to terminate this Agreement pursuant to this Section 4(c) shall not abrogate the rights or
remedies of the Company in respect of the breach giving rise to such termination. 
  
 (v) If the Company terminates the Executive’s employment for Cause, all obligations of the Company hereunder shall cease, except that
the Executive shall be entitled to the payments and benefits specified in Sections 4(b)(i) and 4(b)(iii) hereof. 
  

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 (d) Termination Without Cause. The Company may, at its option, terminate the Executive’s
employment under this Agreement upon written notice to the Executive for a reason other than a reason set forth in Section 4(a), 4(b) or 4(c). Any such termination shall be authorized by the Board. If the Company terminates the Executive’s
employment for any such reason, all obligations of the Company hereunder shall cease immediately, except that the Executive shall be entitled to: 
  
 (i) accrued Base Salary through and including the date of the Executive’s termination of employment; 
  
 (ii) other Employee Benefits to which the Executive is
entitled upon termination of employment in accordance with the terms of the plans and programs of the Company; and 
  
 (iii) an amount equal to the Executive’s Annual Base Salary as in effect immediately prior to the Executive’s termination of
employment, payable in twelve (12) equal monthly installments following the Executive’s termination of employment with the Company. 
  
 (e) Voluntary Termination for Good Reason. If the Executive reasonably believes he has Good Reason (as defined below) to terminate employment he
must give the Board sixty (60) days prior written notice (or such shorter period as may be permitted by the Board) and a reasonable opportunity to cure, which shall be a minimum of thirty (30) days. If the Board fails to cure the Good Reason within
such reasonable time, the Executive may voluntarily terminate his employment with the Company prior to the end of the Employment Period. If the Executive voluntarily terminates his employment pursuant to this Section 4(e), the Executive shall be
entitled to receive the payments and benefits specified by Section 4(d), payable in accordance with and subject to the conditions of such Section. For purposes of this Agreement, “Good Reason” shall mean (i) the assignment to the Executive
of duties inconsistent with the position of President and Chief Executive Officer of the Company, or (ii) the assignment of the Executive to a position of lesser dignity or (iii) any Voluntary Termination by the Executive on any date that is at
least six months following the closing of a Sale of the Parent and no more than one year following such event. Any dispute which may arise concerning whether a voluntary termination of employment by the Executive is for Good Reason shall be resolved
by an arbitrator appointed pursuant to Section 15. 
  
 (f)
Other Voluntary Termination. Upon 60 days prior written notice to the Company (or such shorter period as may be permitted by the Board), the Executive may voluntarily terminate the Executive’s employment with the Company for any reason.
If the Executive voluntarily terminates the Executive’s employment pursuant to this Section 4(f), all obligations of the Company hereunder shall cease immediately, except that the Executive shall be entitled to the payments and benefits
specified in Sections 4(d)(i) and 4(d)(ii) hereof. 
  
 5.
Federal and State Withholding. The Company shall deduct from the amounts payable to the Executive pursuant to this Agreement the amount of all required federal, state and local withholding taxes in accordance with all applicable federal
employment taxes. 
  

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 6. Noncompetition; Nonsolicitation. (a) General. The Executive acknowledges that in
the course of the Executive’s employment with the Company the Executive has and will become familiar with trade secrets and other confidential information concerning the Company, its subsidiaries and the Parent and that the Executive’s
services will be of special, unique and extraordinary value to the Company, its subsidiaries and the Parent. 
  
 (b) Noncompetition. The Executive agrees that during the period of the Executive’s employment with the Company, the period, if any, during
which the Executive is receiving payments from the Company pursuant to Section 4, and for a period of two years thereafter the Executive shall not in any manner, directly or indirectly, through any person, firm or corporation, alone or as a member
of a partnership or as an officer, director, stockholder, investor or employee of or consultant or other agent to any other corporation or enterprise or otherwise, engage or be engaged, or assist any other person, firm, corporation or enterprise in
engaging or being engaged, in any business, in which the Executive was involved or had knowledge, being conducted by, or contemplated by, the Company or any of its subsidiaries as of the termination of the Executive’s employment in any
geographic area in which the Company, any of its subsidiaries or the Parent is then conducting or is contemplating conducting such business. 
  
 (c) Nonsolicitation. The Executive further agrees that during the period of the Executive’s employment with the Company, the period if any
during which the Executive is receiving payments from the Company pursuant to Section 4, and for a period of three years thereafter, the Executive shall not (i) in any manner, directly or indirectly, induce or attempt to induce any employee of the
Company, any of its subsidiaries or the Parent to terminate or abandon his or her employment for any purpose whatsoever or (ii) in connection with any business to which Section 6(b) applies, call on, service, solicit or otherwise do business with
any customer of the Company, any of its subsidiaries or the Parent; provided, however, the Executive may solicit business with any customer of the Company, any of its subsidiaries or the Parent to the extent that such business is unrelated to the
business conducted or contemplated being conducted between the Company, its subsidiaries or the Parent and their customers.\ 
  
 (d) Exceptions. Nothing in this Section 6 shall prohibit the Executive from being (i) a stockholder in a mutual fund or a diversified investment
company or (ii) an owner of not more than two percent of the outstanding stock of any class of a corporation, any securities of which are publicly traded, so long as the Executive has no active participation in the business of such corporation.

  
 (e) Reformation. If, at any time of enforcement of this
Section 6, a court or an arbitrator holds that the restrictions stated herein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall
be substituted for the stated period, scope or area and that the court or arbitrator shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. This Agreement shall not authorize a
court or arbitrator to increase or broaden any of the restrictions in this Section 6. 
  
 7. Nondisparagement. The Executive agrees that during the Executive’s employment with the Company and thereafter, the Executive shall not directly (or through any 

  

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other person or entity) make any public or private statements (whether oral or in writing) that are derogatory or damaging to the Company or the Parent,
including, but not limited to its businesses, activities, operations, affairs, reputation or prospects or any of their officers, employees, or current or former directors or shareholders. The Company also agrees that during the Executive’s
employment with the Company and thereafter, the Company shall not at any time make any defamatory public or private statements, whether oral or in writing, concerning the Executive. 
  
 8. Confidentiality. The Executive shall not, at any time during the Employment Period or thereafter, make use
of or disclose, directly or indirectly, any (i) trade secret or other confidential or secret information of the Company, any of its subsidiaries or the Parent or (ii) other technical, business, proprietary or financial information of the Company,
any of its subsidiaries or the Parent not available to the public generally (“Confidential Information”), except to the extent that such Confidential Information (a) becomes a matter of public record or is published in a newspaper,
magazine or other periodical or on electronic or other media available to the general public, other than as a result of any act or omission of the Executive, (b) is required to be disclosed by any law, regulation or order of any court or regulatory
commission, department or agency, provided that the Executive gives prompt notice of such requirement to the Company to enable the Company to seek an appropriate protective order, or (c) is required to be used or disclosed by the Executive to
perform properly the Executive’s duties under this Agreement. Promptly following the termination of the Employment Period, the Executive shall surrender to the Company all records, memoranda, notes, plans, reports, computer tapes and software
and other documents and data which constitute Confidential Information which the Executive may then possess or have under the Executive’s control (together with all copies thereof). 
  
 9. Standstill. The Executive hereby agrees that, unless specifically requested in writing in advance by the
Board, the Executive will not at any time during the period of the Executive’s employment with the Company, the period, if any, during which the Executive is receiving payments from the Company pursuant to Section 4, and for a period of three
years thereafter (and the Executive will not at any time during such period assist or encourage others to) participate, directly or indirectly in any activity that, if consummated, would result in a Change in Control of the Parent. For purposes of
this Section 9, a Change in Control of the Parent shall mean (a) any sale or other disposition of all or substantially all of the assets of the Parent, (b) any acquisition of more than 40% of the then outstanding shares of common stock of the
Parent, (c) any merger in which the existing stockholders of the Parent fail to own 50% or more of the corporation resulting from such merger or (d) any change in the membership of the Board such that the individuals who, as of the date of this
Agreement, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided, however, that any individual who becomes a director of the Parent subsequent to
the date of this Agreement whose election, or nomination for election by the Parent’s stockholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board shall be deemed a member of the Incumbent
Board; and provided further, that no individual who was initially elected as a director of the Parent as a result of an actual or threatened election contest, as such terms are used in Rule 14a-l 1 of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or any other actual or threatened solicitation of proxies or consents by or on behalf of any individual, entity or group, including any “person” within the meaning of Section
13(d) of the Exchange Act, other than the Board shall be deemed a member of the Incumbent Board. 
  

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 10. Inventions. The Executive agrees to disclose fully and promptly to the Company in
writing, upon the Company’s request, all discoveries and improvements, patentable or otherwise, trade secrets and ideas, writings and copyrightable material which may be conceived by the Executive or developed or acquired by the Executive
during the Employment Period or the six-month period thereafter and which may pertain directly or indirectly to the business of the Company, any of its subsidiaries or the Parent (collectively, “Inventions”). All Inventions shall
constitute works made for hire owned by the Company and shall be the exclusive property of the Company. To the extent any Invention does not constitute a work made for hire, the Executive hereby assigns to the Company, without further consideration,
the Executive’s entire right, title and interest in and to such Invention, under patent, copyright, trade secret and trademark law, in perpetuity or for the longest period otherwise permitted by law. The Executive shall, upon the Company’s
request, execute, acknowledge and deliver to the Company all instruments and do all other acts which are necessary or in the Company’s opinion desirable to evidence more fully transfer of ownership of any Invention to the Company, or to enable
the Company, any of its subsidiaries or the Parent, to file and prosecute applications for, and to acquire, maintain and enforce, all patents, trademarks and copyrights in all countries. 
  
 11. Enforcement. The parties hereto agree that the Company, its subsidiaries and the Parent would be damaged
irreparably in the event that any provision of Section 6, 7, 8, 9 or 10 of this Agreement were not performed in accordance with its terms or were otherwise breached and that money damages would be an inadequate remedy for any such nonperformance or
breach. Accordingly, the Company and the Parent and their successors and permitted assigns shall be entitled, in addition to other rights and remedies existing in their favor, to an injunction or injunctions to prevent any breach or threatened
breach of any of such provisions and to enforce such provisions specifically (without posting a bond or other security). The Executive agrees that the Executive will submit to the personal jurisdiction of the courts of the State of Delaware in any
action by the Company or the Parent enforce an arbitration award against the Executive or to obtain interim injunctive or other relief pending an arbitration decision. 
  
 12. Representations. The Executive represents and warrants to the Company that (a) the execution, delivery and
performance of this Agreement by the Executive does not and will not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which the Executive is a party or by which the Executive
is bound, (b) the Executive is not a party to or bound by any employment agreement, noncompetition agreement or confidentiality agreement with any other person or entity and (c) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of the Executive, enforceable in accordance with its terms. 
  
 13. Survival. Sections 6, 7, 8, 9 and 10 of this Agreement shall survive and continue in full force and effect in accordance with their
respective terms, notwithstanding any termination of the Employment Period. 
  
 14. Arbitration. Except as otherwise set forth in Section 12 hereof, any dispute or controversy between the. Company or the Parent and the Executive, whether arising 

  

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out of or relating to this Agreement, the breach of this Agreement, or otherwise, shall be settled by arbitration in the State of Delaware administered by
the American Arbitration Association, with any such dispute or controversy arising under this Agreement being so administered in accordance with its Commercial Rules then in effect, and judgment on the award rendered by the arbitrator maybe entered
in any court having jurisdiction thereof. The arbitrator shall have the authority to award any remedy or relief that a court of competent jurisdiction could order or grant, including, without limitation, the issuance of an injunction. However,
either party may, without inconsistency with this arbitration provision, apply to any court having jurisdiction over such dispute or controversy and seek interim provisional, injunctive or other equitable relief until the arbitration award is
rendered or the controversy is otherwise resolved. Except as necessary in court proceedings to enforce this arbitration provision or an award rendered hereunder, or to obtain interim relief, neither a party nor an arbitrator may disclose the
existence, content or results of any arbitration hereunder without the prior written consent of the Company and the Executive. The Company and the Executive acknowledge that this Agreement evidences a transaction involving interstate commerce.
Notwithstanding any choice of law provision included in this Agreement, the United States Federal Arbitration Act shall govern the interpretation and enforcement of this arbitration provision. 
  
 15. Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a) delivered personally or by overnight courier to the following address of the other party hereto (or such other address for such party as shall be specified by notice given
pursuant to this Section) or (b) sent by facsimile to the following facsimile number of the other party hereto (or such other facsimile number for such party as shall be specified by notice given pursuant to this Section), with the confirmatory copy
delivered by overnight courier to the address of such party pursuant to this Section 16: 
  
 If to the Company, to: 
  
 FATS, Inc. 
 7340 McGinnis Ferry Road 
 Suwanee, Georgia 30174 
 Attention: Chief Financial Officer 
  
 With copies to: 
  
 Scott Perekslis

 Managing Director 
 Centre Partners Management LLC 
 30 Rockefeller Plaza 
 New York, New York 10020 
  
 If to the Executive, to: 
  
 David W. McGrane 
 4959 Tarry Glen Drive 
 Suwanee, GA 30024 
  

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 16. Severability. Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement or the validity, legality or enforceability of such provision in any other jurisdiction, but this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 
  
 17. Entire Agreement. This Agreement, and the agreements referenced herein, constitute the entire agreement and understanding between the
parties with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may have related in any manner to the subject matter hereof.

  
 18. Successors and Assigns. This Agreement shall
be enforceable by the Executive and the Executive’s heirs, executors, administrators and legal representatives, and by the Company and its successors and assigns. 
  
 19. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the
internal laws of the State of Delaware without regard to principles of conflict of laws. 
  
 20. Amendment and Waiver. The provisions of this Agreement may be amended or waived only by the written agreement of the Company and the Executive, and no course of conduct or failure or delay in
enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement. 
  
 21. Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original and both of which
together shall constitute one and the same instrument. 
  

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 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

  

			
	FATS, INC.
		
	By:	 	 /s/ Ronavan R. Mohling

	Title:	 	Chairman & CEO
	
	DAVID W. MCGRANE
	
	 /s/ David W. McGrane

  

 11Form of Registration Rights Agreement

 Exhibit 10.1 
  
 REGISTRATION RIGHTS AGREEMENT 
  

REGISTRATION RIGHTS AGREEMENT dated as of
                         , 2005 (this “Agreement”), among (i) CENTRAL EUROPEAN DISTRIBUTION
CORPORATION, a Delaware corporation (the “Company”), and (ii) BOTAPOL MANAGEMENT B.V., a company incorporated in the Netherlands, and TAKIRRA INVESTMENT CORPORATION N.V., a limited liability company organized under the laws of the
Netherlands Antilles (“Takirra”) (each, a “Shareholder” and collectively, the “Shareholders”). 
  
 WHEREAS, on the date hereof, the Shareholders have been issued the number of shares of common stock, par value $0.01 per share, of the Company
(“Common Stock”) set forth on Schedule A attached hereto, in connection with the Company’s purchase from the Shareholders of all of the issued and outstanding shares of Botapol Holding B.V. pursuant to that certain Share
Sale Agreement dated as of                     , 2005 (the “Purchase Agreement”); 
  
 WHEREAS, the shares of Common Stock issued to the Shareholders have not been
registered under the Securities Act (as hereinafter defined) or any state securities laws; and the certificates representing such shares of Common Stock bear a legend restricting their transfer; and 
  
 WHEREAS, in connection with the foregoing, the Company has agreed, subject to
the terms, conditions and limitations set forth in this Agreement, to provide the Shareholders with certain registration rights in respect of shares of Common Stock. 
  
 NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows:

  
 ARTICLE I 
  
 DEFINITIONS 
  
 1.1. Definitions. Capitalized words and phrases used and not otherwise
defined in this Agreement shall have the following meanings: 
  
 “Commission” means the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Holder” means each Shareholder, and each Person who is a Permitted Transferee of any Shareholder.

  
 “Lock-Up Period” means the period starting on
the date hereof and ending on the one-year anniversary of the date hereof. 

 “Permitted Transferee” means any corporation, partnership, limited liability company or
other entity controlled by, controlling or under common control with any Shareholder; provided that that (a) the Transfer is effected in accordance with applicable federal and state securities laws, (b) such transferee or assignee acquires at
least 25% of the Registrable Securities held by a Shareholder as of the date of this Agreement (adjusted for stock splits and stock consolidations after the date of this Agreement), (c) such transferee or assignee becomes a party to this Agreement
or agrees in writing to be subject to the terms hereof to the same extent as if it were the Holder hereunder, and (d) the Company is given written notice by the Holder of said Transfer, stating the name and address of said transferee and identifying
the securities with respect to which such registration rights are being transferred. 
  
 “Person” means any individual, corporation, partnership, trust or other entity of any nature whatsoever. 
  
 “register”, “registered”, and “registration”, when used with respect to the capital stock of the
Company, mean a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act which has been declared or ordered effective in accordance with the Securities Act. 
  
 “Registrable Securities” means (i) the shares of Common
Stock issued to the Shareholders in connection with the Purchase Agreement, (ii) any Common Stock issued (or issuable upon the conversion or exercise of any warrant, right, option or other convertible security which is issued) as a dividend or other
distribution with respect to, or in exchange for, or in replacement of, the Common Stock referred to in clause (i) above, and (iii) any Common Stock issued by way of a stock split of the Common Stock referred to in clauses (i) or (ii) above. Shares
of Common Stock shall cease to be Registrable Securities when (A) a registration statement with respect to the sale of such shares of Common Stock shall have become effective under the Securities Act pursuant to Section 2.1 or Section 3.1 of this
Agreement, (B) such shares of Common Stock shall have been sold or otherwise distributed pursuant to Rule 144 (or any successor provision) under the Securities Act, (C) such securities are eligible for sale or other distribution under Rule 144(k),
(D) such shares of Common Stock are Transferred in accordance with Section 9.1(b) or are otherwise no longer held by the Holders, or (E) such shares of Common Stock shall have ceased to be outstanding. 
  
 “Registration Expenses” means all registration,
qualification, filing, printing, messenger and delivery fees and expenses and all reasonable fees and disbursements of legal counsel, accountants and other advisors relating to the registration of Registrable Securities pursuant to this Agreement,
relating to causing such registration to be declared effective pursuant to this Agreement, and relating to causing such registration to remain effective for the time periods set forth in this Agreement. 
  
 “Securities Act” means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder. 
  
 “Transfer” means any transfer, sale, gift, assignment, distribution, conveyance, pledge, hypothecation, encumbrance or other voluntary or involuntary transfer of title or beneficial interest, whether
or not for value, including, without limitation, any disposition by operation of law or any grant of a derivative or economic interest therein. 
  

 -2- 

 ARTICLE II 
  
 DEMAND REGISTRATION 
  
 2.1. Demand Registration. If, at any time after the expiration of the Lock-Up Period, the Holders of all Registrable Securities, acting together,
make a written request to the Company requesting that the Company register under the Securities Act all or any part of the issued and outstanding Registrable Securities (a “Demand Registration”), then, subject to the restrictions
contained herein, the Company shall file a registration statement under the Securities Act with the Commission, and cause such Registrable Securities to be registered under the Securities Act, in accordance with Article VI below; provided,
however, that the Company shall not be obligated to file a registration statement, nor to cause such Registrable Securities to be registered, pursuant to this Section 2.1 (a) in any particular state in which the Company would be required to
execute a general consent to service of process (unless the Company is subject to the jurisdiction of the courts of such state prior to the date of the written request made pursuant hereto), or (b) for any offering having an aggregate offering price
(before deduction of underwriting discounts and expenses of sale) of less than $10,000,000. 
  
 2.2. Number of Demand Registrations. The Holders shall be entitled to request two (2) Demand Registrations, but not more than one Demand Registration in any period of 365 days; provided, that a Demand
Registration shall not be deemed to have been effected for purposes of Sections 2.1 and 2.2 if (i) the Company fails to comply with its obligations set forth in Section 5.1(b), (ii) Holders of Registrable Securities included in such registration
have withdrawn sufficient shares from such registration such that the remaining holders requesting registration would not have been able to request registration under the provisions of Section 2.1, or (iii) the offering of Registrable Securities
pursuant to such registration becomes subject to any stop order, injunction or other order or requirement of the Commission (other than any such stop order, injunction, or other requirement of the Commission prompted by any act or omission of
Holders of Registrable Securities) and such stop order, injunction or other order or requirement of the Commission continues in effect for more than 20 days. 
  
 2.3. Expenses. With respect to each Demand Registration, the Holders shall pay, and shall reimburse the Company for, all Registration Expenses
incurred in connection with such Demand Registration, including all underwriting or brokerage discounts, commissions, fees and expenses and all fees and expenses of counsel and other advisors hired by the Holders. 
  
 2.4. Underwriting. If the Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, then they shall so advise the Company as a part of their request. In such case, the Holders shall negotiate with an underwriter selected by them and approved by the Company, which
approval shall not be unreasonably withheld, with regard to the underwriting of such requested registration; provided, however, that if a majority in interest of the Holders have not agreed with such underwriter as to the terms and
conditions of such underwriting within twenty (20) days following commencement of such negotiations, a majority in interest of the Holders may select an underwriter of their choice. The right of the 
  

 -3- 

 Holders to include Registrable Securities in such registration shall be conditioned upon (i) the Holders’
participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise agreed by a majority in interest of the Holders requesting such registration), (ii) the entry of the
participating Holders (together with the Company and other holders distributing their securities through such underwriting) into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting, and
(iii) the completion and execution by the participating Holders of all questionnaires, powers of attorney, indemnities and other documents required under the terms of such underwriting arrangements; provided, (A) that all of the
representations by the Company to and for the benefit of such underwriter shall also be made to and for the benefit of such Holders of Registrable Securities, (B) that, to the extent it is customary in underwriting agreements relating to offerings
of the type contemplated by the Holders, all of the other agreements on the part of the Company to and for the benefit of such underwriter shall also be made to and for the benefit of such Holders of Registrable Securities, (C) that any of the
conditions precedent to the obligations of such underwriters under such underwriting agreement shall also be conditions precedent to the obligations of such Holders of Registrable Securities, and (D) that no Holder shall be required to make any
representations or warranties to or agreements with the Company or the underwriter(s) other than representations, warranties or agreements regarding such Holder, the Registrable Securities of such Holder and such Holder’s intended method of
distribution and any other representations required by law or reasonably required by the underwriter(s). For the avoidance of doubt, no Holder shall be required to give any representation, warranty or agreement as to whether or not the registration
statement under which the Registrable Securities are registered, or any preliminary prospectus, final prospectus or summary prospectus contained therein, or amendment or supplement thereto, contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made not misleading, or words to a similar effect. If any Holder of Registrable Securities disapproves of the terms of
the underwriting, such Holder may elect to withdraw all of its Registrable Securities by written notice to the Company, the managing underwriter and the other Holder; provided that such registration shall be counted as a Demand Registration
for the purposes of calculating the remaining number of Demand Registrations to which the Holders are entitled pursuant to Section 2.2 of this Agreement unless all the Holders withdraw their Registrable Securities pursuant to this sentence. The
securities so withdrawn shall also be withdrawn from registration. 
  
 2.5. Priority. Notwithstanding any other provision of this Article II, if the managing underwriter advises the Company in writing that the marketability of the offering would be adversely affected by the number of securities included
in such offering, then the Company shall so advise all Holders, and the number of shares of Registrable Securities that may be included in the registration and underwriting shall be reduced as required by the underwriter(s), and the Company shall
include in such registration the maximum number of Registrable Securities permitted by the underwriter to be included therein, pro rata among the respective Holders thereof on the basis of the amount of Registrable Securities requested to be
included in such registration by each such Holder; provided, however, that securities to be included in such registration statement as a result of piggyback registration rights of others as well as any securities to be offered by the
Company, its directors, officers and employees shall be excluded from the registration statement prior to the exclusion of any Registrable Securities held by the Holders. 
  

 -4- 

 2.6. Registration on Form S-3. If, at the time of delivery of a request to the Company pursuant to
Section 2.1, the Company is a registrant entitled to use Form S-3 or any successor thereto to register shares of Common Stock, then the Company shall use its commercially reasonable efforts to effect the Demand Registration on Form S-3 or any
successor thereto. 
  
 ARTICLE III 
  
 PIGGYBACK REGISTRATION 
  
 3.1. Notice of Registration. (a) If, at any time after the expiration
of the Lock-Up Period, the Company proposes to register any of its Common Stock under the Securities Act, either for its own account or for the account of any Person other than the Holders, but not including a registration (i) relating to employee
stock option or purchase plans, (ii) relating to a transaction pursuant to Rule 145 under the Securities Act, or (iii) pursuant to a registration form which does not include substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities (a “Piggyback Registration”), then the Company will: 
  
 (X) give written notice thereof to the Holders at least 30 days prior to the filing of such registration statement (“Piggyback Notice”)
setting forth the date on which the Company proposes to file such registration statement and advising each Holder of its right to have Registrable Securities included in such registration; and 
  
 (Y) use its commercially reasonable efforts to include in such Piggyback
Registration up to the number of the Registrable Securities which the Holders request in writing to be so included within 20 days after receipt of the Piggyback Notice. 
  
 (b) If the Piggyback Registration relates, either wholly or partially, to the registration of shares of Common Stock held by
other stockholders, and if the Company intends to register less than all of the shares of Common Stock held by such other stockholders, then the percentage of Registrable Securities held by each Holder that will be included in the Piggyback
Registration will be no greater than the highest percentage of Common Stock that is being included for the other stockholders. 
  
 3.2. Expenses. If the Company proposes to register any securities in a Piggyback Registration for its own account, then the Company will pay the
Registration Expenses relating to any such Piggyback Registration, and the Holders will pay any incremental expenses, if any, resulting from the inclusion of the Registrable Securities in such Piggyback Registration. In all other Piggyback
Registrations, the Holders shall pay their pro rata share of the Registration Expenses based on the number of Registrable Securities being included in such Piggyback Registration as a percentage of the total number of shares of Common Stock being
included in such Piggyback Registration. In no event shall the Company be responsible for any underwriting or brokerage discounts, commissions, fees or expenses, or any fees and expenses of counsel or other advisors hired by the Holders or by any
other Person. 
  

 -5- 

 3.3. Underwriting. If the distribution of shares of Common Stock covered by a Piggyback
Registration is to be underwritten, then the Piggyback Notice will disclose this fact. In such case, the right of the Holders to include Registrable Securities in such registration shall be conditioned upon (i) the Holders’ participation in
such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein, (ii) the entry of the participating Holders (together with the Company and other holders distributing their
securities through such underwriting) into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company, and (iii) the completion and execution by the participating Holders of all
questionnaires, powers of attorney, indemnities and other documents required under the terms of such underwriting arrangements; provided, however, that the Company shall use reasonable commercial efforts to ensure that no
underwriter(s) requires any Holder to make any representations or warranties to, or agreements with, any underwriter(s) in a registration other than customary representations, warranties and agreements relating to such Holder’s title to the
Registrable Securities and authority to enter into the underwriting agreement, or such representations, warranties and agreements required by law or reasonably required by the underwriter(s). For the avoidance of doubt, no Holder shall be required
to give any representation, warranty or agreement as to whether or not the registration statement under which the Registrable Securities are registered, or any preliminary prospectus, final prospectus or summary prospectus contained therein, or
amendment or supplement thereto, contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made not misleading, or words
to a similar effect. 
  
 3.4. Priority. If the underwriter
of the registered public offering referred to in Section 3.3 shall advise the Company in writing that the marketability of the offering would be adversely affected by the number of securities included in such offering, then the Company shall advise
the Holders and securities shall be included in such offering in the following priority: first, the Common Stock proposed to be registered for the account of the Company, if any; second, the Common Stock proposed to be registered for
the account of any stockholder of the Company, if any, who caused such registration to be effected pursuant to a demand registration right granted to such stockholder; third, the Common Stock (including Registrable Securities) requested to be
included in such registration by the Holders (as modified by Section 3.1(b)) and by all other stockholders of the Company, allocated among the Holders and such other stockholders in accordance with the number of shares of Common Stock that each was
originally permitted to include in such Piggyback Registration; fourth, the other securities requested to be included in such registration. If any Holder disapproves of the terms of any such underwriting, such Holder may withdraw therefrom by
written notice to the Company and the underwriter, delivered at least 20 days prior to the effective date of the registration statement, without prejudice. Any securities excluded or withdrawn pursuant to the provisions of this Section 3.4 shall be
withdrawn from and shall not be included in such Piggyback Registration. 
  
 3.5. Termination. The Company shall have the right to terminate or withdraw any Piggyback Registration initiated by it under this Article IV prior to the effectiveness of such registration whether or not any
Holder has elected to include Registrable Securities in such registration. 
  

 -6- 

 ARTICLE IV 
  
 PERMITTED DELAYS IN REGISTRATION 
  
 4.1. Suspension of Company Obligations. Notwithstanding anything to the contrary set forth in this Agreement, the
Company’s obligation under Articles II and III of this Agreement to file any registration statement and to cause Registrable Securities to be registered as provided therein shall be suspended in the event that (i) the Company is currently
engaged in an underwritten primary offering (other than an offering described in Section 3.1(a)(i), (ii) or (iii)), or (ii) a registration statement for a public offering of the Company’s securities was declared effective within the previous
120 days. The Company’s entitlement to such suspension shall continue only for so long as an event described in (i) or (ii) of the preceding sentence, or the effect thereof, is continuing, not to exceed 90 days. In addition, the Company’s
obligation under Articles II and III of this Agreement to file any registration statement, to cause Registrable Securities to be registered, and to maintain the effectiveness of such registration statement shall be suspended (and, to the extent
applicable, the Holders shall suspend the disposition of any Registrable Securities pursuant to a then currently effective registration statement) in the event that, in the good faith opinion of the Company’s Board of Directors, as certified to
the Holders by the President of the Company, effecting or maintaining the effectiveness of the registration of Registrable Securities would be seriously detrimental to any material financing, acquisition, merger, disposition of assets, disposition
of stock or other comparable transaction then being pursued by the Company or would require the Company to make public disclosure of information which could have a material adverse effect upon the Company. The Company’s entitlement to such
suspension shall continue only for so long as an event described in the previous sentence, or the effect thereof, is continuing, not to exceed 75 days. The Company shall promptly notify the Holders in writing of the existence of any suspension event
set forth in this Section 4.1. The Company shall be entitled to suspend its obligation to file any registration statement, to cause Registrable Securities to be registered, and, if applicable, to maintain the effectiveness of such registration
statement pursuant to this Section 4.1 once during any 365-day period. 
  
 ARTICLE V 
  
 REGISTRATION PROCEDURES

  
 5.1. Registration Procedures. Whenever the Company
is obligated to register the Registrable Securities pursuant to this Agreement, the Company shall use its commercially reasonable efforts to: 
  
 (a) prepare and file with the Commission a registration statement with respect to such Holder’s Registrable Securities as expeditiously as possible,
and in any event within 90 days of receiving the appropriate request from the Holders, and to include in such registration statement the Registrable Securities which the Company has been requested to register; 
  
 (b) cause all such Registrable Securities to be registered under the
Securities Act as expeditiously as possible, and in any event within 120 days of filing such registration statement, and, subject to Section 4.1, to cause such registration statement to remain effective 
  

 -7- 

 until the distribution described in the registration statement relating thereto has been completed or until the
securities registered thereunder are eligible for sale or other distribution under Rule 144(k) or are no longer held by the Holders; 
  
 (c) furnish the Holders, their underwriters, if any, and their respective counsel, at such times so as to permit their reasonable review, the opportunity
to review the registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and to consider in good faith incorporating any comments reasonably requested by the Holders,
their underwriters, if any, and their respective counsel, provided that the Holders’, the underwriters’, if any, and their respective counsels’ review of such documents shall not delay the filing of the registration statement
so long as such parties have been provided a reasonable time to review the same; 
  
 (d) make available for inspection by the Holders any documents as are customary for similar “due diligence” examinations afforded to selling security holders in secondary offerings; provided that the
Company shall have no obligation to provide any materials that the Company’s Board of Directors reasonably believes constitutes a trade secret or proprietary information without a customary confidentiality agreement; 
  
 (e) make available for reasonable inspection by, or give reasonable access
to, any underwriter participating in any disposition of Registrable Securities all pertinent financial and other records, pertinent corporate documents and properties of the Company, and to cause its senior management to participate in such
management presentations and roadshows as such underwriters may reasonably request (provided that such managers are given reasonable advanced notice of such presentations and roadshows and that such managers shall only be obligated to participate in
two roadshows, one per Demand Registration) and to cause the Company’s directors, officers and employees to supply all information reasonably requested by any such underwriter in connection with the offering thereunder; 
  
 (f) furnish to the Holder and to the underwriters of the securities being
registered such number of copies of the registration statement, preliminary prospectus, final prospectus and other documents incident thereto as such underwriters and the Holder from time to time may reasonably request; 
  
 (g) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration
statement; 
  
 (h) register or qualify the Registrable Securities
covered by such registration statement under such other securities laws or state blue sky laws of such U.S. jurisdictions as shall be reasonably requested by the Holder for the distribution of the Registrable Securities covered by the registration
statement; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions or to subject itself to taxation in any such states or jurisdictions
wherein it would not but for the requirements of this paragraph (h) be required to do so; 
  

 -8- 

 (i) enter into customary agreements (including an underwriting agreement in customary form and substance
reasonably satisfactory to the Company, the Holders and the managing underwriter or underwriters of the public offering of such securities, if the offering is to be underwritten, in whole or in part); 
  
 (j) promptly notify the Holders at any time when a prospectus relating
thereto covered by such registration statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing and, at the request of any Holder, promptly prepare
and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue
statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; provided that, upon receipt of such notice from
the Company, the Holders will forthwith discontinue disposition of its Registrable Securities pursuant to the registration statement covering such Registrable Securities until the Holders receive the copies of the supplemented or amended prospectus
covering such Registrable Securities (and the Holders shall return to the Company all copies of the unsupplemented or unamended prospectus covering such Registrable Securities); 
  
 (k) furnish the following documents at the request of the Holders (either on the date that any Registrable Securities are to
be delivered to the underwriters for sale in connection with a registration pursuant to this Agreement if such securities are being sold through underwriters, or on the date that the registration statement becomes effective if such securities are
not being sold through underwriters), (i) a signed opinion, dated such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders and (ii) letters dated such date and additionally, the date the offering is priced, from the independent certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters, if any, and to the Holders; provided that the underwriter(s) deliver a representation letter, if
so requested by such accountants, covering such matters as are customarily required as a precondition to the delivery of such accountant comfort letters; 
  
 (l) comply with all applicable rules and regulations of the Commission and make available to its security holders, as soon as reasonably practicable, but
not later than 18 months after the effective date of the registration statement, an earnings statement covering the period of at least 12 months beginning with the first full month after the effective date of such registration statement, which
earnings statements shall satisfy the provisions of Section 11(a) of the Securities Act; and 
  
 (m) list all Registrable Securities covered by such registration statement on the Nasdaq or on such other securities exchange on which shares of Common Stock are then currently listed. 
  

 -9- 

 ARTICLE VI 
  
 INDEMNIFICATION 
  
 6.1. Indemnification by the Company. In the event of any registration of any Registrable Securities pursuant to this Agreement under the Securities
Act, the Company will indemnify and hold harmless each participating Holder, each of its directors, officers and controlling persons, if any, each other Person who participates as an underwriter for the Holders in the offering or sale of such
securities and each other Person (including its officers and directors) who controls any such underwriter within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such participating
Holder or any such Person, underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based on any untrue statement or alleged untrue statement of any material fact contained in the registration statement under which such Registrable Securities were registered under the Securities Act, in any preliminary
prospectus, final prospectus or summary prospectus contained therein, or in any amendment or supplement thereto, or by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading and shall reimburse such Holder, such Holder’s directors, officers and controlling persons, such Person participating as an underwriter for the Holders
in the offering or sale of such securities and each other Person (including its officers and directors) who controls any such underwriter within the meaning of the Securities Act for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage or liability (or action or proceeding, whether commenced or threatened, in respect thereof); provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such
registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any participating Holder or any other Person who
participates as an underwriter in the offering or sale of such securities or any of their controlling persons, in either case, specifically stating that it is for use in the preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of any participating Holder or any such underwriter or controlling person and shall survive the transfer of such securities by the Holder. 
  
 6.2. Indemnification by Participating Holders. Each of the
participating Holders whose Registrable Securities are included or are to be included in any registration statement, as a condition to including Registrable Securities in such registration statement, hereby agrees, severally but not jointly, to
indemnify, hold harmless and reimburse (in the same manner and to the same extent as set forth in Section 6.1) the Company, each director of the Company, each officer of the Company and each other Person, if any, who controls the Company within the
meaning of the Securities Act, and each other Person who participates as an underwriter in the offering or sale of such securities and each other Person who controls any such underwriter within the meaning of the Securities Act with respect to any
such loss, claim, 
  

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 damage or liability (or action or proceeding, whether commenced or threatened, in respect thereof) and any legal or other
expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage or liability (or action or proceeding, whether commenced or threatened, in respect thereof) which arises out of or is based on any untrue
statement or alleged untrue statement of a material fact in or omission or alleged omission to state a material fact from such registration statement, preliminary prospectus, final prospectus or summary prospectus, or any amendment or supplement
thereto, if such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by any participating Holder specifically stating that it is
for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; provided, however, that the indemnity agreement contained in this Section 6.2 shall not
apply to amounts paid in settlement of any loss, claim, damage or liability (or action or proceeding in respect thereof) or expense if such settlement is reached without the consent of such Holder; and provided, further, that the liability of
each Holder hereunder shall be limited to the proportion of any such loss, claim, damage, liability or expense that is equal to the proportion that the net proceeds from the sale of the shares sold by the Holder under such registration statement
bears to the total net proceeds from the sale of all securities sold thereunder, but not in any event to exceed the net proceeds received by the Holder from the sale of Registrable Securities covered by the registration statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer, or any such underwriter or controlling person and shall survive the transfer of such securities by any
participating Holder. 
  
 6.3. Notices of Claims. Promptly
after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Section 6.1 or 6.2, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action; provided, however, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations
under Section 6.1 or 6.2, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in such indemnified party’s reasonable
judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying
party similarly notified to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof other than reasonable costs of investigation; provided that the
indemnified party may participate in such defense at the indemnified party’s expense and provided, further, that all indemnified parties shall have the right to employ one counsel to represent them if, in the reasonable judgment
of such indemnified parties, it is advisable for them to be represented by separate counsel by reason of having legal defenses which are different from or in addition to those available to the indemnifying party, and in that event the reasonable
fees and expenses of such one counsel shall be paid by the indemnifying party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and 
  

 -11- 

 expenses of more than one counsel for the indemnified parties with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of
such additional counsel for the indemnified parties. No indemnifying party shall consent to entry of any judgment or enter into any settlement without the consent of the indemnified party which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. No indemnifying party shall be subject to any liability for any settlement made without its consent, which consent
shall not be unreasonably withheld. 
  
 6.4. Contribution.
If, for any reason, the foregoing indemnity is unavailable, or is insufficient to hold harmless an indemnified party, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of the expense,
loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other (determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the indemnifying party or the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission), as well as any other relevant equitable considerations. The amount paid or payable by a party as a result of the expense, loss, claim, damage or liability referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 6.4 were
determined by pro rata allocation or by any other means of allocation, unless such contribution takes into account the equitable considerations referred to in this paragraph. No indemnified party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation. 
  
 ARTICLE VII 
  
 INFORMATION BY PARTICIPATING HOLDERS 
  
 7.1. Information Regarding Participating Holders. If any Registrable Securities are included in any registration, each participating Holder shall
promptly furnish to the Company and any applicable underwriter such information regarding such Holder and the distribution proposed by such Holder as the Company or such underwriter may reasonably request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in this Agreement. 
  

 -12- 

 ARTICLE VIII 
  
 RULE 144 SALES 
  
 8.1. Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the Commission which may permit the
sale of Registrable Securities to the public without registration or through short form registration forms, the Company agrees to use its commercially reasonable efforts to: 
  
 (a) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities
Act; 
  
 (b) file with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and the Exchange Act; and 
  
 (c) furnish to each Holder, so long as such Holder owns any Registrable Securities, upon request, a written statement by the Company that it has complied
with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed by the Company as such Holder may reasonably
request in availing itself of any rule or regulation of the Commission permitting such Holder to sell any such securities without registration. 
  
 ARTICLE IX 
  
 RESTRICTIONS ON TRANSFER 
  
 9.1. Restrictions on Transferability. (a) During the Lock-Up Period, the shares of Common Stock held by the Holders may not be Transferred, in whole or in part, except to a Permitted Transferee or in accordance
with Section 9.1(b). After the Lock-Up Period, the shares of Common Stock held by the Holders may be Transferred, in whole or in part, to (i) a Permitted Transferee or (ii) a Person who is not a competitor of the Company and who, after such
Transfer, will not beneficially own (as that term is defined in Section 13 of the Securities Act) more than 3.0% of the issued and outstanding shares of Common Stock, unless the Company consents in writing to such a Transfer that would result in the
beneficial ownership of more than 3.0% of the issued and outstanding shares of Common Stock by such Person; provided that, in the case of clause (ii) above: 
  
 (i) there is in effect a registration statement under the Securities Act covering such proposed Transfer and
such Transfer is made in accordance with such registration statement; or 
  
 (ii) such Transfer is eligible under Rule 144 or such Transfer is otherwise made in accordance with applicable securities law, and the Holder shall have notified the Company of the proposed Transfer and shall have
furnished the Company with a detailed statement of the circumstances surrounding the proposed Transfer. 
  

 -13- 

 (b) The shares of Common Stock held by the Holders may be transferred at any time, in whole or in part,
(i) pursuant to a tender offer within the meaning of the Exchange Act for any or all of the shares of Common Stock of the Company, (ii) in connection with any plan of reorganization, restructuring, bankruptcy, insolvency, merger or consolidation,
reclassification, recapitalization, or, in each case, similar corporate event of the Company, or (iii) an involuntary transfer pursuant to operation of law. 
  
 9.2. Restrictions on Sales During Registration Periods. In addition to the restrictions set forth in Section 9.1, each Holder agrees not to offer,
sell (including pursuant to Rule 144), distribute, short sale, loan, grant an option for the purchase, enter into any swap or hedge agreement, or otherwise Transfer any Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, during the 15 days prior to and the 90 days after the effective date of any underwritten public offering of the Company’s securities, unless the Company’s Board of Directors and the underwriters managing such public
offering otherwise agree; provided, however, that such restriction shall not apply to any Registrable Securities, if any, included in the registration statement related to such underwritten public offering unless all executive officers
and directors of the Company shall also have agreed not to effect any offer, sale, distribution, short sale, loan, grant an option for the purchase, enter into any swap or hedge agreement, or otherwise Transfer any Common Stock or any securities
convertible or exchangeable for Common Stock under the circumstances and pursuant to the terms set forth in this Section 9.2. The Holders shall not take any action with respect to any distribution deemed to be made pursuant to any Demand
Registration or Piggyback Registration that would constitute a violation of Regulation M under the Exchange Act. 
  
 9.3. No Participation in Other Securities Offerings. The rights granted by the Company hereunder shall be the exclusive rights granted to Holders
with respect to Registrable Securities. Except as otherwise provided herein, the Holders shall have no rights to participate in any offering of securities by the Company to third parties, whether such offering is effected pursuant to registration
under the Securities Act or pursuant to an exemption from registration thereunder. 
  
 ARTICLE X 
  
 TERMINATION 
  
 10.1. Termination. This
Agreement and the rights provided hereunder shall terminate and be of no further force and effect with respect to each Holder on the date such Holder shall no longer hold any Registrable Securities. This Section 10.1 shall not, however, apply to the
provisions of Article VI of this Agreement, which shall survive the termination of this Agreement. 
  

 -14- 

 ARTICLE XI 
  
 MISCELLANEOUS 
  
 11.1. Successors and Assigns. Subject to the provisions of Section 9.1, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors, assigns and transferees of the parties. If any successor, assignee or transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such Person shall be conclusively deemed to have agreed to be bound by all of the terms and provisions hereof.

  
 11.2. Notices. All notices and other communications
provided for hereunder shall be in writing and sent by registered or certified mail, return receipt requested, postage prepaid or delivered in person or by courier, telecopier or electronic mail, and shall be deemed to have been duly given on the
date on which personally delivered to, or actually received by, the party to whom such notice is to be given at its address set forth below, or at such other address for the party as shall be specified by notice given pursuant hereto: 
  

			
	(a)	  	if to the Company, to:
		
	 	  	Central European Distribution Company
	 	  	Two Bala Plaza
	 	  	Suite #300
	 	  	Bala Cynwyd, PA 19004
	 	  	United States of America
	 	  	Attn: William V. Carey, President
		
	 	  	with a copy to:
		
	 	  	Dickstein Shapiro Morin & Oshinsky, LLP
	 	  	1177 Avenue of the Americas, 41st Floor
	 	  	New York, NY 10036
	 	  	United States of America
	 	  	Attn: Malcolm I. Ross, Esq.
		
	(b)	  	If to the Holders, to:
		
	 	  	Botapol Management B.V.
	 	  	Watstraat 61,
	 	  	2723 RB Zoetermeer
	 	  	The Netherlands
		
	 	  	and
		
	 	  	Takirra Investment Corporation N.V.
	 	  	Fokkerweg 26, Unit 301
	 	  	Curaçao
	 	  	The Netherlands Antilles

  

 -15- 

			
	 	  	with a copy to:
		
	 	  	Linklaters Paris
	 	  	25, rue Marignan
	 	  	75008 Paris
	 	  	France
	 	  	Attn: Patrick Rignell/Thomas N. O’Neill III

  
 11.3. Governing
Law. This Agreement and any controversy or claim arising out of or relating to this Agreement shall be governed by the laws of the State of New York, without giving effect to the principles of conflicts of laws. 
  
 11.4. Entire Agreement; Amendments and Waivers. This Agreement
constitutes the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions whether oral or written, of the parties. No supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by all parties. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall
such waiver constitute a continuing waiver unless otherwise expressly provided. 
  
 11.5. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Copies of
executed counterparts transmitted by telecopy or other electronic transmission service shall be considered original executed counterparts. 
  
 11.6. Severability. In the event that any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement. 
  
 11.7. Headings. The headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be part of
or to affect the meaning or interpretation of this Agreement. 
  
 11.8. Gender and Other References. Unless the context clearly indicates otherwise, the use of any gender pronoun in this Agreement shall be deemed to include all other genders, and singular references shall include the plural and
vice versa. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 -16- 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above
written. 
  

			
	CENTRAL EUROPEAN DISTRIBUTION CORPORATION
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	BOTAPOL MANAGEMENT B.V.
		
	By:	 	  

	Name:	 	 
	Title:	 	 
	
	TAKIRRA INVESTMENT CORPORATION N.V.
		
	By:	 	  

	Name:	 	 
	Title:	 	 

 Schedule A 
  

			
	 Name of Shareholder

	 	 Number of Shares of Common Stock

	 Botapol Management B.V.
	 	 
		
	 Takirra Investment Corporation N.V.
	 	 
	 	 	TOTAL:

  

 A-1

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