-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OOaJ+zOo7TQwm/Lln7rdMPW6LiVzbN9KSy1Rvsxg9hsscT8v6OmXgt3/+bYoPkEL GUEeBX1eg3Mg591j5DDn6w== 0000950109-02-001533.txt : 20020415 0000950109-02-001533.hdr.sgml : 20020415 ACCESSION NUMBER: 0000950109-02-001533 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020322 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTRAL EUROPEAN DISTRIBUTION CORP CENTRAL INDEX KEY: 0001046880 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-BEER, WINE & DISTILLED ALCOHOLIC BEVERAGES [5180] IRS NUMBER: 541865271 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-24341 FILM NUMBER: 02582932 BUSINESS ADDRESS: STREET 1: PALM TOWER BUILDING STREET 2: 1343 MAIN STREET SUITE 301 CITY: SARASOTA STATE: FL ZIP: 34236 BUSINESS PHONE: 9413301558 MAIL ADDRESS: STREET 1: PALM TOWER BUILDING STREET 2: 1343 MAIN STREET SUITE 301 CITY: SARASOTA STATE: FL ZIP: 34236 10-K/A 1 d10ka.txt FORM 10-K AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Form 10-K/A (Amendment No. 1) ANNUAL REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2001 Commission File Number 0-24341 CENTRAL EUROPEAN DISTRIBUTION CORPORATION (Exact name of registrant as specified in its charter) Delaware 54-1865271 (State or other jurisdiction (I.R.S. employer of incorporation or organization) identification no.) 1343 Main Street, Suite 301, Sarasota, Florida 34236 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (941) 330-1558 Securities registered pursuant to Section 12(b) of the Act: Not Applicable Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.01 per share (Title of Class) Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of the Form 10-K or any amendment to this Form 10-K. [ ] The aggregate market value of the voting stock held by non-affiliates of the registrant (based on the closing price of the registrant's common stock on the Nasdaq National Stock Market) on March 8, 2002 was $34,813,761.* As of March 8, 2002, the registrant had 4,490,901 shares of common stock outstanding. Documents Incorporated by Reference Portions of the proxy statement for the annual meeting of stockholders to be held on April 29, 2002 are incorporated by reference into Part III. ___________ * Solely for purposes of this calculation, all directors and executive officials of the registrant and all stockholders beneficially owning more than 5% of the registrant's common stock are considered to be affiliates. EXPLANATORY NOTE The registrant is amending Part IV, Item 14(a)(3), of its Form 10-K for the fiscal year ending December 31, 2001, to include Exhibits 10.7, 10.8, 10.9 and 10.10. PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8K (a)(1) The following consolidated financial statements of the Company and report of independent auditors are included in Item 8 of this annual report on Form 10-K. Report of Independent Auditors. Consolidated Balance Sheets at December 31, 2000 and 2001. Consolidated Statements of Income for the years ended December 31, 1999, 2000 and 2001. Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1999, 2000, and 2001. Consolidated Statements of Cash Flows for the years ended December 31, 1999, 2000 and 2001. Notes to Consolidated Financial Statements. (a)(2) Schedules All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission either have been included in the Company's consolidated financial statements or the notes thereto, are not required under the related instructions or are inapplicable, and therefore have been omitted. (a)(3) The following exhibits are either provided with this Form 10-K or are incorporated herein by reference. Exhibit Number Exhibit Description - ------ ------------------- 2.1 Contribution Agreement among Central European Distribution Corporation and William V. Carey, William V. Carey Stock Trust, Estate of William O. Carey and Jeffrey Peterson dated November 28, 1997 (Filed as Exhibit 2.1 to the Registration Statement on Form SB-2, File No. 333-42387, with the Commission on December 17, 1997 [the "1997 Registration Statement"] and incorporated herein by reference.) 3.1 Certificate of Incorporation (Filed as Exhibit 3.1 to the 1997 Registration Statement and incorporated herein by reference.) 3.2 Bylaws (Filed as Exhibit 3.2 to the 1997 Registration Statement and incorporated herein by reference.) 4.1 Form of Common Stock Certificate (Filed as Exhibit 4.1 to the 1997 Registration Statement and incorporated herein by reference.) 4.2 Form of Warrant Agreement and attached form of Representatives' Warrant (Filed as Exhibit 4.2 to Amendment No. 1 on Form S-1 to Form SB-2 Registration Statement, File No. 333-42387, with the Commission on April 17, 1998 [the "First 1998 Registration Statement"] and incorporated herein by reference.) 10.1 1997 Stock Incentive Plan (Filed as Exhibit 10.1 to the 1997 Registration Statement and incorporated herein by reference.) 10.1(a) Amendment to 1997 Stock Incentive Plan (Filed as 10.1(a) to Amendment No. 2 to Form S-1 Registration Statement, File No. 333-42387, with the Commission on May 19, 1998 [the "Second 1998 Registration Statement"] and incorporated herein by reference.) 10.2 Employment agreement with William V. Carey and CEDC dated as of August 1, 2001 (Filed as Exhibit 10.2 to the Company's annual report on Form 10-K filed on March 15, 2002 and incorporated herein by reference.) 10.3 Employment agreement with Neil Crook and the Company (Filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q filed on May 15, 2000 and incorporated herein by reference.) 10.4 Employment agreement with Neil Crook and Carey Agri International Poland Sp. z o.o. (Filed as Exhibit 10.4 to the Company's annual report on Form 10-K filed on March 15, 2002 and incorporated herein by reference.) 10.5 Employment agreement with Evangelos Evangelou and CEDC dated September 16, 2001 (Filed as Exhibit 10.5 to the Company's annual report on Form 10-K filed on March 15, 2002 and incorporated herein by reference.) 10.6 Executive Bonus Plan. (Filed as Exhibit 10.6 to the Company's annual report on Form 10-K filed on March 15, 2002 and incorporated herein by reference.) 10.7 Distribution contract with Polmos Bialystok. 10.8 Distribution contract with Polmos Poznan. 10.9 Distribution contract with Polmos Zielona Gora. 10.10 Distribution contract with UDV/Guiness Poland Sp. z.o.o. dated October 16, 2000. 10.12 Distribution Agreement with Unicom Bols Group dated April 1, 1998. (Filed as Exhibit 10.13 to the Company's annual report on Form 10-K for year ended December 31, 2000, and incorporated herein by reference.) 10.15 Lease Agreement for warehouse at Bokserska Street 66a, Warsaw, Poland (Filed as Exhibit 10.14 in the Company annual report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference.) 11 Statement re compensation of per share earnings, refer to Note 9 (Notes to the Consolidated Financials) 21 Subsidiaries of the Company 99 Consent of Ernst & Young (b) Reports on form 8-K in the last quarter of 2001 No report on Form 8-K were filed by the Company in the last quarter of 2001 (c) Exhibits The response to this portion of Item 14 is submitted in the response to Item 14 (a) (3). (d) Financial Statement Schedules None. SIGNATURES Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Central European Distribution Corporation By: /s/ William V. Carey ------------------------ William V. Carey Chairman, President, and Chief Executive Officer Date: March 22, 2002 Pursuant to the requirements of the Securities Exchange Act of 1933, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated below.
Signature Title Date --------- ----- ---- /s/ William V. Carey Chairman, President and Chief Executive March 22, 2002 - -------------------- Officer (Principal executive officer) -------------- William V. Carey /s/ Jeffrey Peterson Vice Chairman and Executive Vice President March 22, 2002 - -------------------- -------------- Jeffrey Peterson /s/ Neil Crook Vice President and Chief Financial Officer March 22, 2002 - -------------------- (Principal financial and accounting officer) -------------- Neil Crook /s/ James T. Grossmann Director March 22, 2002 - ---------------------- -------------- James T. Grossmann /s/ Tony Housh Director March 22, 2002 - --------------------- -------------- Tony Housh /s/ Jan W. Laskowski Director March 22, 2002 - -------------------- -------------- Jan W. Laskowski /s/ Joe M. Richardson Director March 22, 2002 - --------------------- -------------- Joe M. Richardson
EX-10.7 3 dex107.txt DISTRIBUTION CONTRACT WITH POLMOS BIALYSTOK Exhibit 10.7 ------------ AGREEMENT concluded on 16.09.1996 between: Przedsiebiorstwo Przemyslu Spirytusowego "POLMOS" in Bialystok, ul. Elewatorska 20, later called "Seller", represented by: 1. Director of the Enterprise - Jan Malachowski 2. Associate Commercial Director - Henryk Wnorowski and "CAREY AGRI INTERNATIONAL - POLAND" Sp. z o.o. 03-802 Warsaw, ul. Lubelska 13 later called "Purchaser" represented by: 1. William Vernon Carey (S) 1 The subject of the agreement is the sale of spirit products by the Seller for the benefit of the Purchaser and resale of return packaging by the Purchaser to the benefit of the Seller. (S) 2 A condition for starting co-operation is for the Seller to submit: . a set of documents required by the Seller, referred to in detail in the Appendix to the agreement, . relevant collateral of claims for the benefit of the Seller for spirit products received therefrom. (S) 3 The Purchaser shall submit detailed orders for spirit products by telephone or in writing to the Marketing and Sales Department of the Seller. (S) 4 1. The Seller commits itself to supply the Purchaser with spirit products at its own cost and in quantities and assortment agreed to with the Purchaser. 2. The Purchaser is required to ensure a return load for the vehicle of return packaging (bottles and transport cases). 3. The value of returned packaging shall be assigned to the account of the oldest unpaid invoices. (S) 5 1. Return packaging shall be collected by the return route of the vehicle supplying the spirit products. 2. Bottles and plastic boxes only from spirit products are subject to resale: . standardised bottles 0,5 l; 0,25 l; 0,75 l, . `Polonez' bottles 0,5 l, . "Angular" bottles 0,5 l, . plastic transport cases for 0,25 l and 0,5 l alcoholic beverage bottles, . plastic transport cases for alcoholic beverage bottles with a capacity of 0,75 l "for water" with the wording "UZDROWISKA POLSKIE" 3. Bottles should be supplied in plastic boxes adapted to bottle size, segregated according to type. A given box bottles can only contain bottles of one size. Supplies not meeting these requirements will not be accepted. 4. Resold packaging should meet the following quality requirements: . bottles should be clean, whole, without defects, foreign odours, cap or seal remainders, . there can be no bottles that contained oil or chemical products, . plastic cases should be clean, whole, with notches or cracks. 5. The quality acceptance of bottles and boxes shall take place at the Seller's warehouse. Bottles and cases not meeting the requirements according to point 2, 3 and 4 shall be placed in the Seller's warehouse for deposit, which the Purchaser shall be notified of. The deposit should be picked up within one month. In the alternative it will be liquidated, without payment for bottles, cases or broken glass. 6. The Seller shall set the price of return packaging. The Seller shall inform the Purchaser of any price change for return packaging in a separate letter. (S) 6 Spirit products shall be invoiced according to producer prices. (S) 7 The agreement performance date is deemed as the date of conveying spirit products to the carrier or authorised representative of the Purchaser, in the event of accepting goods by its own transport. (S) 8 1. Conveyance of goods to the Purchaser takes place based on a copy of the VAT invoice. 2. In the event discrepancies are determined in the course of loading between the good supplied and the contents of the invoice, the Purchaser shall prepare a report with the participation of the carrier and send it by registered mail to the Seller. 3. If transport damage is determined upon unloading, the carrier shall prepare a damage report, with the participation of the Seller. Settlement of transport damage takes place between the Purchaser and carrier. For this purpose the Purchaser is required to compete necessary documents, that is an original damage report, waybill and bill / note issued to the carrier containing the damage assessment and send them immediately to the address of the carrier, located in the damage report. (S) 9 The Seller commits itself to accept as returns defective products revealed during their conveyance to the purchaser. Originally sealed with damaged excise banderols or without banderols as well as products with intact excise banderols possessing the defects below shall be subject to return: 1. products with damaged labels or without labels; 2. products with impurities or different colour of the liquid, 3. bottles with factory damaged caps, 4. bottles with leaks of liquid at the seam (connection of two bottle halves), 5. empty bottles and not completely full bottles, originally sealed with intact banderols. Returns of defective products shall take place by the return route or at the next delivery based on the settlement document of the Purchaser. The document should include the VAT invoice number based on which the products were supplied, name, size and quantity of missing products as well as defects. (S) 10 1. The payment of amounts due for spirit products should take place within the term indicated in the VAT invoice to the account of PPS "POLMOS" w Bialymstoku at the: Bank Inicjatyw Gospodarczych SA Oddzial w Bialymstoku, ul. Szosa Polnocno- Obwodowa 5; Account number: 420404-01889001-2511-1 or in the Polski Bank Inwestycyjny SA Oddzial w Bialymstoku ul. Warszawska 14, Account number: 708010- 148018-2511 From the account of the Purchaser in the Bank Rozwoju Exportu SA O/Warszawa, Account number 400002-282953-2511-1. 2. Payment by virtue of completed spirit product purchases, to the extent not made on transfer documents printed by the Seller shall be "automatically assigned" to credit the oldest invoices. 3. Non-payment or delayed payment by the Purchaser authorises the Seller to refrain from further deliveries of spirit products without incurring liability for non-performance of the agreement. 4. The non-timely payment of invoices by the Purchaser results in the charging of statutory interest imposed by the Seller. (S) 11 1. The Purchaser commits itself to notify the Seller of decisions and facts having an impact on its financial situation and to permit the Seller's employees access to documents, reports and information depicting the economic and financial situation of the firm. 2. The Purchaser commits itself to immediately notify the Seller of any change in the name, address and head offices of the firm as well as any changes associated with its legal status. (S) 12 In all matters not governed by this agreement, regulations of the Civil Code shall apply. (S) 13 1. This agreement is concluded for an indefinite term, applying a one-month term of notice by each of the parties. 2. The agreement is subject to immediate termination if document authorising the Purchaser to purchase spirit products cease to be valid, or in the event the Seller acquires information on the insolvency of the Purchaser. (S) 14 The Economic Court in Bialystok shall resolve disputes resulting from this agreement. (S) 15 The agreement was drafted in two identical copies, one for each of the parties. The agreement is effective from 16.09.1996. Seller: Purchaser: EX-10.8 4 dex108.txt DISTRIBUTION CONTRACT WITH POLMOS POZNAN Exhibit 10.8 ------------ WHOLESALE AGREEMENT concluded on 01.07.1998 in POZNAN between: Poznanskie Zaklady Przemyslu Spirytusowego "POLMOS" in Poznan ul. Komandoria 5, hereinafter referred to as the "Seller", represented by: Facility Manager - Janusz Kujawinski, M.S. Deputy Manager - Janusz Majchrzak, M.A. and CAREY AGRI INT. POLAND SP. Z O.O., ul. LUBELSKA 13, 03-802 WARSZAWA hereinafter referred to as the "Purchaser" represented by: WILLIAM CAREY - CHAIRMAN OF THE MANAGEMENT BOARD conducting activities in the scope of spirit product wholesale through wholesale warehouses listed in the current permission to conduct activities in the scope of spirit product turnover in Poland. (S) 1 1. Object of the agreement comprises wholesale of spirit products manufactured by the Seller, in domestic turnover. 2. Limit of spirit product delivery quantities in "trade credit" is defined as the quantity approved by the Seller on the basis of submitted guarantees: a/ bank guarantee b/ deposit mortgage c/ registry lien d/ receivables insurance e/ blank bill f/ other guarantees agreed by the parties. (S) 2 Spirit product sales are going to be conducted on the basis of written, phone or direct orders made by the Purchaser. (S) 3 The Seller is going to sell the products at net prices + VAT resulting from the current price list of the Seller. (S) 4 1. The Seller in compliance with the agreed order, if the delivery is larger than 350 packages, delivers the merchandise at his own expense and through his own means to the wholesale warehouse designated on the Purchaser's wholesale permit. 2. In the case of ordering a delivery of a smaller quantity than the quantity defined in par.1 the ordered products will be collected by the Purchaser through his own means and at his own expense. 3. The Seller repurchases returnable packages (plastic containers and bottles) only in the quantities required to satisfy his current needs. 4. The Purchaser may decide not to use Seller's product delivery services and to collect the products using his own transport vehicles at his won cost in the case of collecting quantities smaller than 350 packages. If the quantity of products exceeds 350 packages the Purchaser has the right to be reimbursed with the costs of transport. Costs of transport are defined by the seller on the basis of current average rates of PZPS POLMOS. (S) 5 1. An authorized representative of the Purchaser collects the merchandise from the carrier "at the car's door", confirming the compliance of accepted merchandise with the transport documents - by signing (full name and stamp) the delivery confirmation provided by the carrier to the Seller. If any discrepancies between the accepted merchandise and the delivery confirmation, the Purchaser and the carrier together prepare a protocol determining the actual quantity of the merchandise accepted by the Purchaser and other possible reservations. 2. If the merchandise is collected by the Purchaser using his own means of transport the merchandise is accepted on the loading ramp of the Seller by a representative of the Purchaser, who confirms the completing the order by signing a copy of delivery confirmation (full name, personal ID no.). The basis for releasing merchandise is the power of attorney to collect merchandise issued by an authorized representative of the Purchaser. (S) 6 1. Risk of damages occurring during the transport and costs of insuring the dispatch are borne by the Seller sending the merchandise to the Purchaser. 2. The Purchaser bears the risk of damages during the transport and insurance costs of the dispatch if he collects the merchandise using his own means of transport. (S) 7 1. The Seller ensures quality of sold products in compliance with the Polish norms. 2. In case of any possible complaints regarding the product quality, the Purchaser should draft a complaint protocol immediately after the defect is identified providing the number and date of the delivery document, leaving the complained products at the Seller's disposal. Complaint related issues are governed by applicable provisions of the civil code. Complaints made after the period defined in the provisions of the civil code shall not be taken into consideration by the Seller. (S) 8 The Purchaser shall pay dues for the collected merchandise in the amounts and on dates defined in the invoice in compliance with the rules provided in appendix 1 and 2 to this agreement, constituting an integral part of this agreement. 1. The Purchaser obligates to provide the Seller with the following documents at least once a year: - - permit for conducting activities in the scope of domestic wholesale of spirit products, - - current extract from the court registry or certificate of entry in the commercial registry, - - financial reports on company activities i.e. balance sheet, statement of income, F-01, - - bank opinion, - - certificates of the Tax Office and ZUS of Seller's lack of financial arrears. 2. Information about changes in the scope of: - - company legal status, - - the permit for conducting alcohol wholesale activities, or losing the alcoholsale license have to be provide immediately by the Purchaser to the Seller. (S) 10 1. This agreement is concluded for indefinite time. It may be terminated with one-month period of notice. ` 2. This agreement may be terminated immediately if the Purchaser breaches its provisions or loses permits mentioned in (S)9 par.1 or fails to provide a new permit if the current permit has expired. 3. Any amendments or supplements of this agreement require the form of an annex agreed by both parties. (S) 11 The parties agree that if this agreement constitutes a continuation of their collaboration, any documents related with financial guarantee submitted with the preceding agreement and annexes are still valid. (S) 12 Issues not provided for by this agreement are governed by the provisions of the Civil Code. (S) 13 This agreement was drafted in two identical copies one for each of the parties. (S) 14 This agreement enters in force on July 1st, 1998. SELLER PURCHASER EX-10.9 5 dex109.txt DISTRIBUTION CONTRACT WITH POLMOS ZIELONA GORA Exhibit 10.9 ------------ Marketing - Promotion Agreement for alcohol product sales concluded on 21.08.00 in Zielona Gora between: Lubuska Wytwornia Wodek Gatunkowych "Polmos" in Zielona Gora joint-stock company, ul. Jednosci 59, 65-018 Zielona Gora hereinafter referred to as the "Seller", represented by: 1. Chairman of the Management Board - Chief Executive Officer - Ryszard Jakubiuk, M.S. 2. Member of the Management Board - Sales Manager - dr. Bogdan Slusarz and "CAREY AGRI INTERNATIONAL POLAND" Sp. z o.o., ul. Lubelska 13, 03-802 Warsaw hereinafter referred to as the "Purchaser", represented by: Chairman of the Management Board - William Carey WITH THE FOLLOWING PROVISIONS: - ------------------------------ (S) 1 The object of this agreement, is to define the basis for collaboration of the parties in the scope of distribution and promotion of alcohol products, defined in appendix no.1. (S) 2 The Purchaser obligates to acquire orders and sell the products owned by the Seller at his own expense and on his own behalf. (S) 3 On the basis of this agreement, the Purchaser obligates to: 1) maintain in his wholesale warehouses, continuous sales of the Brands owned by the Seller. 2) offer a complete assortment of Brands, owned by the Seller, to his receivers and to involve in the promotion of the Brands. 3) conduct a market research and probe the market in terms of critical opinions and expectations of the consumers. (S) 4 1. For net turnover, achieved in an accounting period - a calendar month - the Purchaser will receive a commission remuneration from the Seller according to the following turnover levels: - - between PLN 100,000 - PLN 250,000 - 1% - - between PLN 250,001 - PLN 500,000 - 1.5% - - between PLN 500,001 - PLN 700,000 - 2.0% - - between PLN 700,001 - PLN 1,000,000 - 2.5% - - above PLN 1,000,000 - 3% 2. For achieving monthly net turnover at the level of at least PLN 3,000,000 for the entire CEDC group the Purchaser shall receive a commission remuneration in the amount of 3%. Calculation of the commission due to each company (Carey, MTC and PHA) will be based on the actual amount of turnover. Then the provisions of (S)4 par. 1 void. (S) 5 1. In order to strengthen the market position of the Brands defined in appendix no.1 point I, owned by the Seller, and to obtain increase in sales the Purchaser shall conduct marketing-promoting activities aimed at strengthening their position in retail points of sale, achieving monthly net turnover in Own Brands at the level of at least 550,000.- including Wodka Luksusowa at the level of at least PLN 400,000.- 2. For the Brands positioning on shelves in the supplied retail network the Purchaser will receive from the Seller the amount of PLN 11,000.- and additionally for marketing support for Wodka Luksusowa the amount of PLN 12,000.- constituting a compensation of costs borne by the Purchaser related with the fees for shelving space. If the turnover achieved exceed the amount agreed in (S)5 par. 1 the amount of the marketing fee shall be increased proportionally (i.e. if the increase in turnover exceeds e.g. 10% then the marketing fee is also going to be increased by 10%.) 3. Marketing fee is going to be settled on the basis of agreed net turnover separately for Own Brands and for Wodka Luksusowa. 4. If the net turnover of Own Brand and Wodka Luksusowa is not achieved the marketing fee shall not be paid. 5. The marketing fee will be transferred by the Seller after the end of each month on the basis of a VAT invoice, issued by the Purchaser, in the period of 14 days after it is received by the Seller. 6. Provisions of par. 1, 2, 3 and 4 are valid between September 1st, 2000 and December 31st, 2000. (S) 6 The Purchaser obligates to offer and sell Wodka Luksusowa to retailers for prices not lower than those defined in the manufacturer's price list and to refrain from dumping practices on the domestic market. Dumping practices may result in immediate termination of this agreement without any rights to compensation. (S) 7 As a part of sales intensification, for selected products in all alcohol strengths and volume the Seller is going to provide the Purchaser with an upfront discount on the invoice on the day of purchaser in the following amounts: - - Wodka Luksusowa - 3% - - Pan Tadeusz, Polska Wodka, Wodka Krolewska, Gin Lubuski - 2% (S) 8 In case of a purchaser of products against a prepayment, the Purchaser is going to provide the Seller with a discount in the amount of 3% of the complete invoice value. (S) 9 The Purchaser is going to accept full responsibility for the purchased products, obligating to settle due payments for following deliveries in the period of 65 days, after the date of invoice. The date the due amount is received at the Sellers account is going to be treated as the date of payment. (S) 10 Full commission remuneration defined in (S) 4 of this agreement applies only to invoices paid on time. In case of a default in the payment of dues for the purchased products in a given accounting period the Seller shall decrease the percentage of the due commission according to the following formula: Period of default Commission reduction - -------------------------------------------------------------------------------- between 1 and 10 days 0% - -------------------------------------------------------------------------------- between 11 and 15 days 25% - -------------------------------------------------------------------------------- between 16 and 21 days 50% - -------------------------------------------------------------------------------- more than 21 days 100% - -------------------------------------------------------------------------------- (S) 11 Purchaser's due commission will be payable in the period of 14 days after the date of receiving a VAT invoice for monthly accounting periods, after the conditions provided in (S)(S) 4, 9, 10 are met. (S) 12 The Purchaser declares that he shall not inform other spirit product manufacturers about the provisions of this agreement. This agreement is confidential. Informing third parties about the conditions of the collaboration may constitute a basis for agreement termination without notice. (S) 13 This agreement was concluded for indefinite time and may be terminated by each of the parties with a monthly period of notice. In case of a gross breach of the agreement by any of the parties the agreement may be terminated immediately. (S) 14 Issues not provided for by this agreement are governed by applicable provisions of the civil code. (S) 15 Competent court in Zielona Gora shall settle all disputes resulting from this agreement. (S) 16 Any amendments and supplements of this agreement require the written form in order to be valid. (S) 17 This agreement was drafted in two identical copies, one for each of the parties. (S) 18 This agreement enters in force after September 1st, 2000. Seller Purchaser EX-10.10 6 dex1010.txt DISTRIBUTION CONTRACT WITH UDV/GUINESS POLAND Exhibit 10.10 ------------- Distribution Agreement hereinafter referred to as the Agreement, concluded in Warsaw on October 16th, 2000 between: UDV Polska limited liability company domiciled in Warsaw, ul. Wooska 16, registered in the District Court of the capital city of Warsaw, 16th Commercial Registry Department under RHB number 37069, with initial capital in the amount of PLN 11,358,137, with Management Board in the following composition: Christian Van Der Haagen, Ingrid Tatham, Piotr amojda and Mirosawa Gorniesiewicz, represented by: Piotr amojda - Finance Director and Miroslawa Gorniesiewicz - Sales Director, hereinafter referred to as the Company, and CAREY AGRI domiciled in WARSAW registered in District Court of the capital city of Warsaw, 16th Commercial Registry Department under RHB number 23244 with initial capital in the amount of PLN 33,567,150, with Management Board in the following composition: J. PETERSON, W.V. CAREY, E. EVANGELOU, E. KUSNIEREK, represented by WILLIAM V. CAREY, or ....... conducting commercial activities as firm ..... domiciled in ..., entered into commercial registry of the Office under number ....., hereinafter referred to as the Distributor whereas Polska Sp. z o.o. is a company operating on the Polish market, a distributor of world class alcohol products, and that the party intends to start a collaboration and as a part of the collaboration to strengthen the position of UDV products on the Polish market, to the mutual benefit of the Parties THE PARTIES HAVE AGREED AS FOLLOWS: - ----------------------------------- (S)1 Definitions "Price List" - list of products offered by the Company containing the current prices. "Products" - products offered by the Company, listed in the Price List, available in the Company's warehouse and sold by the Company to the Distributor for prices including customs duties and other import fees as well as the excise tax and VAT tax. "Parties" - the Company and the Distributor jointly, the Company and the Distributor may be referred to separately as the "Party." "Territory" - is the territory of the Republic of Poland covered by the Distributor's commercial network. (S)2 Object of the Agreement 1. On October 16th, 2000 the Company grants the right to use the name of Authorized Distributor of UDV Polska Products to the Distributor. 2. The status of an Authorized Distributor of UDV Polska Products will be valid only during the period of this agreement. 3. The Company may grant the status of an Authorized Distributor of UDC Polska Products also to other entities selling the Products at the Territory. The Distributor shall not issue any claims towards the Company in such case. 4. No particular region of the territory is assigned to the Distributor. (S) 3 Distributor's Rights and Duties 1. The Distributor has the right to use the title of "Authorized Distributor of UDV Polska Products." 2. The Distributor has the right to participate in all pan-national promotional campaigns organized by the Company and aimed at the Distributors. 3. The Distributor will receive available support in the scope of promotional materials, supporting the sale of Products. 4. During the period of the Agreement the Distributor is obligated to: a) procure Products only and exclusively from the Company warehouse, b) maintain a reserve of all Products at a level satisfying all current and expected levels of sale, including completing orders submitted to the Distributor by the Company's sales representatives, c) provide the Company representative [at his request] with current warehouse stock data as well as information regarding the Product sales, d) sell and distribute the Products on the territory covered with proper diligence, f) to refrain from making offers and selling Products to retailers supplied directly by the Company. Current information on retailers supplied directly by the Company may be obtained from a UDV representative. (S) 4 Protection of Company' Intellectual Property 1. No provision of this agreement may constitute a basis for transferring any rights to trademarks, product names, advertising slogans or Product copyrights exclusively owned by the Company to the Distributor. 2. The Distributor obligates to keep information and documents obtained in any way from the Company confidential. Using, disclosing or transferring information and/or documents constituting Company secret shall constitute a sufficient basis for immediate termination of collaboration and to request repairing damages done and to use other rights assigned by the law or this Agreement. (S) 5 Period of the Agreement 1. This agreement shall be concluded for indefinite period. 2. This agreement may be terminated by each of the parties with one-month period of notice. On the date of agreement termination the Distributor loses the all rights granted to an Authorized Distributor of UDV Polska Products. (S) 6 Procedures 1. During the signing of this Agreement the Distributor is obligated to provide the Company with the following documents: a) Minister of Economy's permission for spirit product wholesale turnover, b) Tax Office's certificate of lack of tax arrears, c) decision about assigning a NIP number together with a VAT tax status declaration, d) current bank opinion, in which the primary bank account of the Distributor is kept, e) F-01 report and balance sheet (F-02) for the current and preceding year with appendices, f) certificate of competent ZUS branch about lack of social security premium arrears, g) in the case of commercial code companies - extract from the commercial registry, in the case of civil partnership - company agreement and certificate of entry in the registry of commercial activities, in the case of a natural person conducting commercial activities - confirmation of entry in the registry of commercial activities. 2. Every quarter of a year (by 30th day of the month following a given quarter) the Distributor is obligated to provide a Company representative with a quarterly F-01 report, and every year by the end of February - with a F-02 report. 3. The Company obligates to keep all information and documents obtained from the Distributor confidential. 4. The date of receiving the dues on the Company's bank account will be treated as the date of payment. 5. The Company sets the minimum quantity of single order at 60 carton boxes. 6. Risk of accidental loss or damaging the merchandise is transferred to the Distributor the moment the merchandise is released to him. From that time on the Distributor is responsible for possible destruction or damaging of the Products. (S) 7 Final Provisions 1. This Agreement is an agreement binding both Parties and waives all possible arrangements and agreements concluded earlier by and between the Parties. 2. Any disputes resulting from the execution of the Agreement, impossible to be solved amicably, shall be settled in common court in the domicile of the Company. 3. Issues not provided for by this Agreement are governed by the provisions of the Civil Code. 4. This Agreement was drafted in two identical copies one for each of the Parties and duly signed by authorized representatives of both Parties. COMPANY DISTRIBUTOR (stamp and signature) (stamp and signature) Annex no. 1 to agreement of 16/10/00 regarding the form of guarantee of receivables. 1. Total amount of receivables due to the Company from the Distributor resulting from the purchase of Products may not exceed PLN 8,000,000 (gross) ("credit limit"). 2. The Company reserves a right to change the amount of credit limit in justified instances. 3. As a form of a guaranteeing Company's receivables the Company shall receive a blank bill with a bill declaration from the Distributor at the signing of the agreement. 4. In justified instances the Company may request the Distributor to provide an additional guarantee. This annex was drafted in two identical copies one for each of the parties. COMPANY DISTRIBUTOR (stamp and signature) (stamp and signature) Annex no. 2 to the agreement of 16/10/00 regarding the discount system for Smirnoff Red, Smirnoff Citrus, Smirnoff Berry products. 1. Object of the annex The object of the annex are discounts granted by the Company for Smirnoff Red, Smirnoff Citrus, Smirnoff Berry products. 2. Types of discounts 1. Discount for turnover --------------------- The Distributor receives the following discounts depending on the average monthly net purchase in the period of preceding 12 months. . under PLN 29,999 0% . PLN 30,000 - PLN 59,999 2% . PLN 60,000 - PLN 119,999 2.5% . PLN 120,000 - PLN 199,999 3% . PLN 200,000 - PLN 299,999 3.5% . PLN 300,000 - PLN 499,999 4% . over PLN 500,000 4.5% This type of discount is granted on the invoice for the period between signing the agreement and June 30th, 2001. After this date the discount value will be subjected to verification and shall be granted for the following period of at least one quarter of a year. The Company reserves a right to change the discount thresholds. The Company obligates to inform about changing the discount thresholds with a 14-day period of notice. 2. Discount of accomplishing the sales plan ---------------------------------------- The Distributor will receive a discount for accomplishing the sales plan in the quarterly amount of 2% of invoiced net turnover for accomplishing the sales plan. The discount is paid out retrospectively (rectifying invoice) by the 14th working day following the quarter to which the sales plan applied. The payment of the entire discount depends on accomplishing the minimum of 100% of the quarterly sales plan of Smirnoff Red vodka. The sales plan will be defined for individual entities within the CEDC group. The plan will be considered to be accomplished if it is accomplished by the entire CEDC group jointly. 3. Business Development Fund (FRB) ------------------------------- The Distributor will receive 1% discount supporting the Product distribution in the gas station as well as bar and restaurant distribution channel. The discount is granted on the invoice. In the month preceding a following quarter a joint agreement (between the Company representatives and the Distributor) is reached determining the Distributor's activities in the scope of Product distribution support. The Distributor obligates to present quarterly sales results, a complete list of receivers and activities in these channels. 4. Period of payment ----------------- The valid period of payment for products covered in this Annex is the period of 50 days after the date of issuing the invoice. This annex was drafted in two identical copies one for each of the Parties. COMPANY DISTRIBUTOR (stamp and signature) (stamp and signature) Annex no. 3 to agreement of 16/10/00 regarding the discount system for imported products in the sales offer of UDV Polska. 1. Object of the annex The object of the annex includes daily discounts granted for products imported by the Company and for the Malibu brand. 2. Types of discounts 1. Discount for turnover --------------------- The Distributor receives the following discounts depending on monthly net purchases in the period of preceding 12 months. Average monthly net purchasers in the preceding 12 months: Discount . under PLN 49,999 1% . PLN 50,000 - PLN 69,999 1.5% . PLN 70,000 - PLN 89,999 2% . PLN 90,000 - PLN 109,999 2.5% . PLN 110,000 - PLN 129,999 3% . PLN 130,000 - PLN 149,999 3.5% . PLN 150,000 - PLN 169,999 4% . PLN 170,000 - PLN 199,999 4.5% . over PLN 200,000 5% This type of discount is granted on the invoice for the period between signing the agreement and June 30th, 2001. After this date the discount value will be subjected to verification and shall be granted for the following period of at least one quarter of a year. The Company reserves a right to change the discount thresholds. The Company obligates to inform about changing the discount thresholds with a 14-day period of notice. 2. Discount for accomplishing the sales plan ----------------------------------------- The Distributor receives an additional discount for all products imported by the Company and for the Malibu brand in the amount of 2% of the value of invoiced net turnover, for accomplished quantity sales plan for Johnnie Walker Red Label. The sales plan will be determined for individual entities within the CEDC group. The Plan will considered to be accomplished if the entire CEDC group accomplishes it jointly. Discount for accomplishing the sale plan is paid retrospectively (rectifying invoice) by the 14th working day following the quarter to which the sale plan applies. The payment of the entire discount for the accomplishing the sales plan depends on accomplishing the minimum of 100% of the quarterly sales plan. 3. Business Development Plan (FRB) ------------------------------- The Distributor receives 1% of the discount used for supporting distribution of Products in the gas station as well as bar and restaurant channels. The Discount is granted on the invoice. In the month preceeding a quarter of a year an joint agreement (between a Company representative and the Distributor) is reached determining the Distributor's activities in the scope of supporting the Products distribution. The Distributor obligates to provide quarterly sales results, a complete list of receivers and activities in these channels. 4. Period of payment ----------------- The valid period of payment for products covered in this Annex is the period of 40 days after the date of issuing the invoice. This annex was drafted in two identical copies one for each of the Parties. COMPANY DISTRIBUTOR (stamp and signature) (stamp and signature) Annex no. 4 to agreement of 16/10/00 regarding payments 1. In the case of defaulting with payments for more than 5 days by any of the entities within the CEDC group, the Company reserves a right to suspend deliveries to the entire CEDC group till the time the debt is settled. Statutory interest will be charged on each invoice not paid in the period of 5 days after the maturity date for the entire period of default i.e. from the maturity date. This annex was drafted in two identical copies one for each of the Parties. COMPANY DISTRIBUTOR (stamp and signature) (stamp and signature) Annex no. 5 to agreement of 16/10/00 regarding Product sale prices 1. Object of the annex The object of the annex is to agree the Distributor's price policy for the Products. 2. General provisions 1. Product prices binding the Parties are determined on the basis of the Company's current price list. 2. If the Company changes the price list it is obligated to inform (by fax or letter) the Distributor about the planned change of prices 14 days before the new price list enters in force. 3. The Distributor is obligated to comply with the retail unit price (provided on the invoice for the retailer) at a level not higher than the price recommended by the Company. 4. The Company reserves a right to examine invoices documenting the sale of Products. This annex was drafted in two identical copies one for each of the Parties. COMPANY DISTRIBUTOR (stamp and signature) (stamp and signature) Annex no. 6 agreement of 16/10/00 regarding terms of deliveries and complaints regarding products of incomplete value purchased from the Company. 1. Object of the annex The object of the annex is the procedure of deliveries and complaints regarding products purchased from the Company. 1. Merchandise delivery procedure 1. Orders are submitted to the Company Representative or Customer Service Department each working day before 13:00. Orders are completed within the credit limit defined in Annex no.1. 2. The carrier company receives instructions regarding a client's order by 16:00 of the same day. 3. Orders from wholesale warehouses located within 100km radius around Warsaw are completed in the period of 24 hours from the time the instructions are transferred to the carrier. 4. Orders from wholesale warehouses located outside the 100km radius around Warsaw are completed in the period of 48 hours from the time the instructions are transferred to the carrier. 5. If the deliveries are not made on time the "Delivery Date Complaint" form constituting appendix no.1 to this annex should be completed and sent to UDV to the fax number 022 640-92-09. 2. Merchandise return and complaint procedure 1. The distributor is obligated to verify the compliance of merchandise received with the order and waybill issued by the Company as well as to generally inspect the merchandise in terms of quality. 2. Merchandise of incomplete value is returned by the Distributor to the Company's driver at the time of accepting the merchandise or during the following delivery. Merchandise may be returned only with Company form "Quality Defect Complaint", which constitutes appendix no.2 to this Annex. Lack of completed form "Quality Defect Complaint" results in rejecting the complaint. 3. Merchandise may be returned in the period of 3 months after the date of product purchase. Return document must contain number and date of the waybill issued by the Company to which the return applies as well as other remaining information contained in the "Quality Defect Complaint" form. Compliant must be submitted to a Company representative who is obligated to inspect the product and after approval to sign the complaint document. Then after completing the document photocopies have to be returned to the Company's sales representative, who has to send it to UDV Customer Service Department. 4. The complaint is examined in the period of seven days after the date of returning the merchandise to the Company's warehouse. If it is accepted the Customer Service Department issues a rectifying invoice. If the complaint is rejected the merchandise is returned to the Distributor in the following delivery. 5. If a delivery lacks merchandise, despite it being listed on the waybill the "Quality Defect Complaint" form has to be completed in the driver's presence and after being signed by the carrier the form must be sent to UDV to the following fax no. 022 640-92-09. 6. This annex was drafted in two identical copies one for each of the Parties. COMPANY DISTRIBUTOR (stamp and signature) (stamp and signature) -----END PRIVACY-ENHANCED MESSAGE-----